Topic: Do any of these ASIC's actually make a ROI? (Read 3461 times)

Pig Farms and Miners Unite.

Free electricity and shit might be the right way to go.

When BFL began the "two more weeks" campaign back in fall of 2012, there were zero ASICs in the market. It wasn't until early 2013 that Avalon and ASICMiner began to deliver. Since that time, we have seen BFL actually deliver some product and Bitfury roll out a lot of chips to their customers. KNC and CoinTerra also look likely to deliver some product.

It is therefore very unlikely that the hash rate will stagnate like it did in the fall of 2012. In fact, BFL could stop delivering completely and it probably wouldn't dent the growth rate.

The 7950 can mine litecoins and other coins. So even when ASICs did finally get shipped, GPUs by then had a work-around in place to extend their profitable life.

So again just because marketers claim one thing will be obsolete in two weeks does not always mean they are right.

By the time the two weeks rolls around, especially if it turns out to be a lot longer than two weeks, things can change.

Some private farm could be about to turn on massive numbers of already-built 28nm chips, we just don't know and cannot know.

But historically the FUD-trolls claiming in "two weeks" this that or the other old tech would no longer make profit have been wrong.

We wasted a year not buying mining gear because in "two weeks" BFL's superior product would arrive.

We wasted how much of what thinking Avalon would ship chips in 8 to 10 weeks.

-MarkM-

I mean the margin on GPU was less for ATI than what ASIC manufacturers are taking right now. I'm not saying buying GPU is a better investment than buying ASIC but it was when there was no ASIC.

Today, manufacturers are squeezing maximum profit out of miners. This leave the miners vulnerable for when a vendor will choose to lower his selling price since their margin is so high and they need to compete.

How could Avalon sold their batch #1-2 at $1500 when batch #3 was like $10K+? Someone is making a killing there and it's not the miners. Even BFL raised their price and lowered their Gh/s on their "products" after the April hype.

It's how they soothe the pain of loss. It hurts when you make an investment and lose. Deep down they know they lost. But if they can pretend like they made a profit, they won't feel as bad.

Really?  a 700MH 7950 at $300 is $430/GH.   A bitfury asic today at the expensive rate of $108 is $40/GH.  In october, when they're closer to $25, they'll be under $10/GH.

I think the problem is that ASIC are way overpriced compared to GPU. This combined with the April hype make most (if not all) ASIC a bad investment. When, I first started mining in early 2012 it was possible to get more BTC then invested solely buying GPU if your electricity cost was low and you knew how to optimise your rig.

The biggest problem in guessing whether there will be ROI is all the bullshit and all the delays.

A long long time ago it was clear that GPUs would not make ROI because BFL was going to ship ASICs in "two weeks".

Somehow nonetheless people still keep managing to make money with GPUs.

So mostly I guess it depends on whether you actually believe that any or all of the vapourware that has been announced is going to ship.

For a long long time people who ignored all the speculation about supposedly to be shipped in the future hardware have done rather well going ahead and buying stuff that would not have made ROI had all the vapourware actually been shipped "on time".

Any of these ASICS can probably make ROI if none of the others end up actually shipping, or if they get delayed long enough.

Even USB block eruptors started looking a lot better once Avalon turned out not to be shipping chips than they had looked back when people imagined Avalon was going to ship "on time".

-MarkM-

Which has absolutely nothing to do with the topic "Do any of these ASIC's actually make a ROI?"

There are lots of non-ecnonomic reasons to mine.  There is a difference between saying "if you don't make a profit you are stupid" and saying "the claim you are profitable even if you lose BTC (100 BTC to buy a miner which nets 99 BTC) because the exchange rate might go up is stupid".

I'm still trying to figure how Josh and al. justify buying a mining device that will mine less BTC than it's price in BTC but I can't.

I really tried hard to understand their logic but that doesn't make any sense to me.

I should point out that the topic is "Do any of these ASIC's actually make a ROI?" and not "Should I mine at all?"

Well its silly to argue anyway I guess since I do want to mine and do still want my Klondike 16 boards built and so on and so on.

I should just jump on the bandwagon telling everyone hell yeah mining won't pay, mining is for idiots, forget mining, if you think crypto coins are good buy them but don't waste your time screwing around with this whole mining thing.

I am partly influenced personally by the fact I made far more CPU mining BBQcoins, a purportedly worthless coin, than I did on any other coin. So to me the ability to mine coins nobody is selling has proven itself to be the most profitable approach, historically.

Really it was all the actual time and thought I put in that paid, no turnkey buy it and plug it in magic box made me my profits, I profited by having the skills, time and equipment to work the outer edges the masses would not or could not.

-MarkM-

Of course, you could convert your BTC to USD and then to lottery tickets if you thought the lottery would return more than just holding BTC. That is still more than just 1 bet. First you have to bet that the USD/BTC exchange rate will not fall. Second, you have to bet that your lottery odds will pay off. The second bet has nothing to do with mining and should not be considered as part of the mining payoff.

Launching a whole new cryptocurrency based on SHA256 is also a risky proposition and involves many unknowns. It is true that you could profit from doing so, but that is not the same as saying you should count on such a thing happening as part of your value proposition.

Similarly, playing the market in electricity caries risks as well. Some enterprising soul at MIT might discover a cheap to manufacture highly efficient solar cell that provides cheap and limitless power for the entire human race. This would disrupt all previous methods to produce electricity and would make stockpiling electricity pointless.
 

The value of those coins are essentially zero.  I know you are the merged mining champion and merged mining is the solution to all problems but it doesn't change the economics.

Currencies are fungible so anytime someone says x BTC just think of it is as BTC equivalent.  If you mine 5 coins and their combined value is x BTC then it is no different than mining x BTC.  If you don't like to use BTC consider the five coins as x DVC equivalent or x XYZ equivalent.  It doesn't change anything.

If you spend 100 BTC on a rig that will produce <100 BTC equivalent (even including the rounding error merged mined coins) then you have a negative ROI.  
It doesn't matter if your intent is to makes lots of USD or buy lots of porches with the proceeds.  If you want lots of USD then 100 BTC is better than <100 BTC.
It doesn't matter if you spend USD, BTC, ounces of gold, or DVC.  The unit mines produces (mainly) BTC so however you pay it has an equivalent price in BTC.


Saying I will spend 100 BTC to mine 99 or less BTC (including the value of the near worthless merged mined coins) and it doesn't matter because I only care about USD makes no sense.  It doesn't matter what the future exchange rate is. 

Future exchange rate drops to $10 per BTC
Hold 100 BTC = 100 * $10 = $1,000 
Buy miner for 100 BTc and mine 99 BTC = 99 * $10 = $990
100 BTC is better than 99 BTC
$1,000 is better than $990

Future exchange rate drops to $1,000 per BTC
Hold 100 BTC = 100 * $1,000 = $100,000 
Buy miner for 100 BTc and mine 99 BTC = 99 * $1,000 = $99,000
100 BTC is better than 99 BTC
$100,000 is better than $99,000

Bitcoins are irrelevant though, if it is dollars, or geistgeld, or icecream cones or whatever that you are after.

Heck you could look at it all from the point of view of a person who has electricity to spend instead of a person who has fiat or bitcoins or geistgeld or whatever to spend.

I have a certain amount of electricity and I want to turn it into more electricity.

I could buy a device that can mine any SHA256 coin or even merge a bunch of SHA256 coins, and use it to burn electricity to produce stuff I can sell for more electricity than I put into it.

This fixation on bitcoins ignores the versatility of the device, heck I could launch a whole new SHA256 coin to mine with the device if I thought that would buy me more electricity than mining some already existing SHA256 coin...

-MarkM-

There is still the argument that the network needs to be protected by as many people as possible, mining, ideally not in pools but still ok if many pools exist. BTC sitting in cold storage is only worth $$$$$ if the BTC network is alive and healthy. So there is a feedback loop justifying mining without even hitting ROI as it helps protect the value of the same miner's BTC stash.
 

There is one good reason. That reason is to determine if they overpaid for their BTC. If someone today paid $10,000 per BTC, you would laugh at him. He would patiently explain to you that BTC would always rise with respect to USD and therefore he was sure to make his money back. Sure enough, 2 years later the price of BTC cracks $10,000 and that same individual then gloats endlessly about his $10,000 BTC that have finally returned a positive ROI. You try to explain to him that he could have bought his BTC for $140 each, but your explanations fall on deaf ears because at that point he refuses to engage in "judgement by hindsight".

1) You presume that BTC will always rise with respect to USD. If BTC drops back to $5 each, then no you will not earn a positive ROI when only measured in USD.

2) BTC does not vary with respect to time to USD, it varies with respect to market sentiment. BTC can rise slowly or quickly, and it can fall slowly or quickly, and it can remain the same price for extended periods of time.

3)There is in fact no guarantee at all that BTC will ever attain a $250 exchange rate again. For instance, BTC 2.0 could come out with vastly improved features that causes everyone to migrate to the new currency. Or a fatal flaw in the math could result in the total debasement of BTC as a store of value.

Yeah but similarly there is presumably no rational explanation for measuring a device which produces i0coin, groupcoin, coiledcoin or geistgeld in any other unit other than one of those.

For a lot of people these devices are devices which produce dollars, thus to them there is no good reason for measuring them in any unit other than dollars.

They might not care at all whether they end up on any given day merged mining all the merged mined coins, or mining one of the standalone SHA256 coins, and will be willing even to change what they mine from day to day depending on which coin or merge of coins offers the most dollars that day.

If I pick just one SHA256 coin to buy, instead of buying a device that can mine any of them or even mine many of them all at once, I am less diversified.

If I buy some of each, even in proportion to what various statistics tell me I could mine of each right now, I still have to worry about whether today it happens to be better to mine, and thus, presumably, to buy, a standalone SHA256 coin that cannot be merged or some particular merge of many types of coins. Since I have to worry anyway about which coin or merge of coins happens to be best on a given day I already am having to track what would be best to mine, so even if I decide to buy instead of mining I already face all the work a miner needs to do of tracking exactly what specifically to mine from day to day or hour to hour.

Plus if I buy there is a paper trail showing which bitcoins I own in many cases or at least in some cases, so by buying I could end up weakening the pseudonymity that some regard as part of the appeal of bitcoin in the first place.

Further, lets say I do decide that I want to buy thousands of coiledcoins and geistgeld each day instead of merged-mining them, where do I buy them?

If I had bought instead of mining, where would I have bought my hoards of i0coins and groupcoins that, thanks to (merged) mining instead of buying, I accumulated in the period during which neither was on any exchanges?

-MarkM-

The only time profits will come again is when hardware companies charge resonable rates for their hardware. Until people stop buying their hardware at these ridiculous mark ups, its almost useless buying a miner unless bitcoin skyrockets.

Think about this KNC is going to cut their prices almost in half in October, that only shows they are charging insane mark ups on their products. It probably costs them $100max, say worst case $500 to produce a unit, they sell that unit for 10x-15x more. These guys have profit margins of 1000-1500%!!!

Its like Apple selling its iphones for $5, 000, in the real world this would never happen, in the bitcoin world with retards abound its common practice.

I think that applies only if you assume that the number of miners stays the same and they only upgrade equipement. If bitcoin takes off and we get into a whole new level of success, we could see the rate move up even faster as consecutively more numerous and better funded miners come along. If bitcoin really "works" it's not crazy to think of lots of people building office park sized mining rigs. It's like the 'oil rush' where people start drilling everywhere and everyone seems to be getting rich. There are still a lot of people to be brought into the fold yet. Eventually it will slow down, but I think that is a very very long way off.

Absolutely. When a Fury-28^tm comes along in 2014, we'll see the network reach a maturation point. These crazy performance charts we're watching grow now, will shift towards a Moore's law-like gradual improvement phase and mining will stabilize. Until then, it's the Wild Wild West of Bitcoin.

I like '58 better

I have just 1 simple question for you... can you show me proof that the BTC you had on Jun 23, 2012 and the subsequent BTC you earned from then until now was never spent on anything?  If so, I will accept your argument about buying BTC.

Fixed.

Put it in a paper wallet, locked in a safety deposit box.  If you can buy (or just keep) 100 BTC or buy a miner which will only produce 50 BTC.  It is a pretty heavy "stupid tax" to say "I might spend my BTC so it is better to mine and lose half the BTC guaranteed but maybe the half I don't lose might go up 200% so I can profit". 

If someone has that little willpower well they likely will spend/sell their BTC as they mine it and thus some increased exchange rate won't help.  While mining a rising exchange rate won't help your margins over an extended period of time.  When the exchange rate rises the ROI% rises so more hashing power is deployed. 

The only way the "I hope the exchange rate goes up" miner could benefit (even in the bogus USD metric) is by mining and holding the BTC.  If the miner can mine and hold BTC why can't he just buy and hold BTC?

There is no rational explanation for measuring a device which produces BTC in any unit other than BTC.  If a miner doesn't produce a net revenue (after electrical cost) in BTC which is greater than the purchase price in BTC then the mining was a loss.  Anyone can simply buy BTC instead.

We'll see a continued trend of early purchasers getting their equipment first (say KnCMiner day 1, day 2 folks) mine it for 3-4 weeks or so to recoup purchase price, and then sell it for what they bought it for or close to get their "ROI". They'll join the trend of Avalon owners and BFL owners who know they can make money faster selling it rather than waiting for coins that will never be dug up by them.

"ASIC in hand" demands a higher price and faster delivery in all the free market spots you look for Bitcoin miners.

At 10x current difficulty, it would be 30% for Avalon, but still only 3% for Bitfury.


320-360 GH/s @ 250 watts, AT THE WALL.

I guess it depends on what you mean by "a while".   In the next 3 months your right power is a non-issue.  That is why ASICMiner/Avalon route was the superior one.  They beat BFL to market despite BFL soaking up massive amounts of cash obtained under false pretenses.


Still the hashrate is relatively low and will continue to grow rapidly in the near term.  5,000 TH/s by December isn't impossible.  At that point using your numbers the Avalon and Bitfury are spending 30% and 3% respectively on power.  For the same amount of hashpower the Bitfury is making 32% more net revenue.

As an extreme example at 6 PH/s (not unreasonable by very early 2014) a user in a high power area (say 30 cent per kWh) would need to spend >100% of gross revenue on power unless the exchange rate rises.  Now you may say nobody spending 30 cents per kWh should be mining and I agree but many people assumed these are ASICs, power won't matter.

So it all depends on how fast the network hashrate will grow.  However I agree for 2013 power isn't really that big of an issue even under the worst case scenario, but 2014 is a whole different story. The nominal numbers don't really matter.  Power was important for GPUs and in time the ASIC powered network will use just as much power as the GPU powered one did (normalized for exchange rate).  There is one critical difference though the difference in efficiency between the best and worst GPU rigs (excluding NVidia) is maybe 3x.  Right now among ASIC devices in the field it is already 8x and if Cointerra meets their estimate it will be more like 12x once they ship.  Normalized for process size Bitfury is the most efficient design, so if a Fury-28* shows linear improvement to efficiency it would be closer to 20x.  That is huge and because of that I would say power efficiency is MORE important for ASICs.

Electrical break even difficulty by device efficiency: https://bitcointalksearch.org/topic/break-even-difficulty-by-hardware-efficiency-power-cost-value-of-btc-281279

* Fury-28 pretty catchy huh? If you like that name guys I wouldn't mind some chips as a gift.

I'm not sure about that.  4KW per TH is not nothing.

Its is much much easier, at least for me to buy mining hardware with USD to get BTC, than it is for me to just purchase BTC. Plus mining is fun for a tinkerer like me.

Then why bother mining? Just buy BTC and you'll make a better profit holding it than mining. Considering exchange rates is just a way to hide from the actual negative ROI.

Paying $1000 (10btc @ $100) to mine $1500 (7.5btc @ $200) is a bad deal. You have a false $500 profit.

Let's look at buying BTC instead: Buy 10btc @ $100, wait till the exchange rate goes to $200, you now have $2000. You have a true $1000 profit.

The only positive ROI for a miner is more BTC generated than it cost to purchase it. Apples to apples. BTC in vs BTC out.

Someday that will be a factor, but not for a while.

Let's look at the power hungry Avalon.

80 GH/s, 65M difficulty = $74/day income
700 watts, $.15/kwh = $2.5/day expense

Electricity costs 3% of the income. That's pretty low.

Or how about the Bitfury that is now shipping.

360 GH/s, 65M difficulty = $330/day income
250 watts, $.15/kwh = $1/day expense

Bitfury has 10 times the efficiency of the Avalon. .3% of the income goes to electricity. That really is 'almost nothing'.

Depends on which crowd you're hanging with.  The "I paid BTC to mine BTC" will never get their BTC investment back on well over 75% of items ordered and not received at this point in time with the other 25% looking shakier by the day and never on the current in-stock USB ripoffs.  The people who understand BTC = USD and varies with time will understand that yes, with patience they will eventually have a positive RoI in USD spent vs USD received.  Now, the people from the former group I just mentioned will argue that you should just BUY BTC and sit on it.  That's all well and good for the 10% or so of the populace with the wherewithal to atually do that, but I doubt the majority could handle it.

Thats only for hobby miners who don't care about their electricity bill or don't pay it. If you're working seriously in mining, you have to factor in power costs. It's not 'almost nothing'.

I see power costs talked about, but has anyone done the math?  Most of these ASICs take so little power that the power portion is almost nothing.  Free power doesn't really matter when you're talking about pennies on every gigahash.

I, for one, do not think the difficulty will stop adjusting at this rate for a long time.  I also do not think the price of a BTC will trend upward.  I think the days of making any more than a small amount on any less than a very large investment, are coming to an end, if not over already.

It is tough at the moment as BTC market price has not risen quick enough to offset the dramatic rise in network hashpower.

Though the ASIC market is quickly being saturated by competition, which will help drive hardware prices down at least. Hopefully Bitcoin will rally again soon, and all will be well. And at some point ASICs will reach a market saturation point which will be marked by the power curve flattening out a bit, though it doesn't seem it will for some time yet as all of this new ASIC hardware ships out over the next few months.

Mining is in a state of extreme flux at the moment and in the middle of a technical revolution to 4th gen hardware, which means it will just have to be messy and uncertain for now. Though long term, I suspect the playing field will level itself out in time.

It is possible to ROI in a decent time frame with enough starting capital, but those looking to mine professionally need to understand once they take the plunge they are in for the long haul now.

The time to make quick ROI is certainly over.

However, the rate of difficulty increase will eventually slow down, though nobody really knows when. When that happens, it may be possible to continue cover the electric costs of ASIC mining and eke out modest earnings month after month for quite some time. Depending on price paid, efficiency and electric costs, you might just be able to recover the cost of the ASIC hardware and continue to make small profits mining beyond the break even point.

At least, that was what happened with GPUs. A few months of insane profits in early 2011, followed by almost 2 years of small profits.

I'm not so sure about that. As long as Bitcoin goes up in value, ASICS are money printing machines. Big miners must always constantly reinvest to make profits (selling older machines used to hobbyiests- or kids in the basement w/ free power) So there will always be demand, and INCENTIVE to massively boost your hashrate. Now we see people putting a million or two dollars into mining, next year we might see people putting tens of millions into it, a few years after that maybe hundreds of millions. If bitcoin takes off, getting a slice of that transaction fee pie is gonna be equivalent to levying a tax and I wouldn't be surprised to see even governments getting involved in that, especially if there are still a few coins to be mined.

I wouldn't be surprised if we DO keep growing at 20% for a long time yet.

Difficulty is not going down.  If someone has expensive electricity their rig is worth more selling it used to someone with cheap electricity then going idle.  Unlike with GPU where rigs could leave the system by people selling GPU on ebay to non miners, ASIC rigs only have one purpose.  So an Avalon isn't going dark until it is no longer break even profitable for even the miners with the cheapest of cheap electricity that is massively higher hashrate.

We wont see 20%+ rise in difficulty forever. It has to slow down and stop sometimes. I predict because of preorders, we will see difficulty drop a bit next year, because some with expensive electricity realise how much they pay more to mine a coin

So if you have cheap or free electricity you can make +ROI

when i started to use that calculator it was giving me positive ROI figures scoped out from october onward, now its been adjusted...as more entrants are expected to enter into the bitcoin arena and offer hashing....difficulty will continue to rise against the fixed bitcoin 'pie' Like the guy above said - mine with it until april 2014 then switchover to alt-coins or if btc jumps up a lot in price like over 500 bucks then continue to mine btc for a few more months.  If others also follow and decide to switch over to alts, that will stabilize difficulty I believe.

If you got the balls to gamble, do it. If you lose sleep over it, dont 

Im sure value will go up this year. How much, dunno.

But i'v got orders out for a few units around and im sure they'll make ROI at some point (i got free power, so that helps).

No worries, btc will hit 500 this year

After finding this nifty site: http://mining.thegenesisblock.com/  and checking out lots of ASICS, it looks if you buy now, wait for delivery, nothing will make it's ROI.

Of course I subscribe to the idea that you are better off just buying the Bitcoins now versus investing into an ASIC. However, I already have Bitcoins (bought long, long, long ago) and I'm relatively Fiat Broke, so if I were to go an ASIC route, I would be spending Bitcoins anyway. I have held off till now because it seems like it's a smarter idea to wait for when ASICS can be purchased and delivered via 2 day shipping. Meaning, I can pretty much know what the difficulty will be when I receive my machine. At this point, even the conservative estimates make it look like top of the line miners won't arrive in time to pay for themselves.

What are others thinking?