Topic: expected return on investment with ASIC's (Read 3964 times)

My pleasure. Organofcorti does indeed a needed service to our community

organofcorti!!  

Thanks for obliging!!



Thats whats up!! More people should pony up... The neighborhood pool watch is a community asset as far as im concerned!
Im sure ill be donating again in the future.





Im leaning towards this analogy but im a lil bit more flexible ... at the same time i have the same gut feeling that may lead me to rethink the whole batch #4 series.


As organofcorti said a big part of the formula is the deployment date, not the "its on the way date", or possible ship date! Im talking about this thing is in front of me mining date! I think Avalon understands this well hence releasing info regarding b2, b3 let alone b4 shipping might just be shooting themselves in the foot.  ( who knows, maybe avalon is on vacation like someone said.. or maybe they are still building their assembly line. Its a huge blind spot for us for sure tho.)

 I think they have a lot to consider, hell batch 2/3/4 might all be ready to go and they are testing and or mining with them until they have better determined the volume of asics coming online from competitors and the diy crowd that just sank teeth into avalon asic chips..

Are Avalon asic chips "supposed" to arrive before or after b2/b3/4?? I havent really been keeping up.. but i think this analogy has really opened up my eyes a bit for me and i may go head first into one of these diy threads.. i think "burning" has been making some headway.  Im sure there are pros and cons to consider there as well.

 Did avalon give more than a days notice before the other batches went on sale. Then demand was a lil under 4k as far as the poll but who knows after considering the difficulty what the demand is now.  Somehow im leaning towards it not selling out in an hour.. I wonder how long we will have to reanalyze before a decision making point is forced upon us.

Anyway i dont find it a coincidence that we are without "timing". The Avalon "IN MY HANDS MINING" date at this time maybe more valuable then the miner its-self!


Thanks again organofcorti and Rampion too for asking the question i was thinking and for donating to "our" cause.







Best Regard,
Zedicus

Don't underestimate greed and stupidity. The ASICMINER blades where auctioned at a price which will NEVER ROI (75BTC for 10GHs)

Pricing will heavily influence sales - if they go too high with a price, not many will be sold.

If the deployment date is 1st June, I have a fair degree of certainty that Avalon 3 won't return its costs in the first sixty days. After that, I have no idea.

Sorry Organo... the microsingle (usingle) is my nomenclature... BFL have given up on the jalapeño branding and have acknowledged they are using their old single board and case but only 1 or 2 chips (they are a bit vague on this).

Frankly I find it easier to type usingle than jalapeño anyway.

Sooo getting back on ASIC ROI discussion (Asic ROIds?).... is the probability good that will B3 return their costs in BTC if run for 6 months (ignoring exch rate and electricity)?

What sayeth all...

The model includes deployment times and hashrates for Avalon 2 and 3 that are as accurate as far as I can tell. The model is so far on target with the ASICMiner / Bitfountain deployment. It's just BFL shipping dates and hashrates of which I'm uncertain.

What the hell's a "microsingle"? Is that like a Jalapeno? Have the bastards gone and changed nomenclature on me?

According to what BFL has been saying, it sounds like they will be averaging microsingles at 60 to 100 a week (~12 a day) for the next couple of weeks at least.  Who knows when they will be able to bring up the capacity, but with BFL, I believe later rather than sooner.  

Avalon B2 and B3 will put some serious hashing power onto the network (~90Th/s).  If the Avalon ROI pricing calculation doesn't factor in their own success, then the price for B4 will be way to high to make sense.  Sure, I would love to buy into .4BTC/1Gh, but I agree, this seems like wishful thinking.

As much as I would like to get into Batch 4, I don't think it makes sense personally until they ship out B2 and B3 so their pricing formula would be closer to accurate.  

We are projecting a fair way past the point for which I have confidence in my estimates, so a gut feeling is probably as good As soon as the Avalon 4 pricing and shipping schedule is made public I'll post a more accurate update. Who knows, maybe BFL ASICs won't start deploying in bulk after May 15th, in which case you could afford to pay a bit more.

I'm not a math person, so I've took a while to understand your charts

Anyhow I think I arrived to the same conclusion as you did, with my excel and my "hand made" projections: reasonable price for Avalon batch #4 would be around 0.4BTC per GHs. And still the risk would be high, as we are seeing how the delays are seem unavoidable.  If they price batch #4 that way (0.4BTC/0.5BTC per GHs), I'm ready to do a consistent investment. But I'm afraid it will be higher, I have the gut feeling it will be double than that... Which makes ROI very difficult if not impossible.

Your posts and insights are one of the most useful sources of information around - so no need to thank me. Thanks to you!

Aw shucks, you didn't have to do that! But I appreciate it anyway

Thanks for that, I did not read the post - 0.03 donation on your way

Did you read the post? There's no simple answer, although I do give my opinion. Plus I can't accurately model July yet, although I did create a chart for you anyway.

I'll give  you the conclusion:

Hi organofcorti, you did not answer regarding what's in your opinion a reasonable price for Avalon batch #4 (45GHs) if it arrives to customers hands in July. I'd appreciate your opinion on that...

Well, it was much appreciated. More so than a beer would have been, even if you'd been able to send me beercoins. Here's the best I could do to help you figure out a good price for an ASIC miner. If you don't understand anything just post in the comments.

http://organofcorti.blogspot.com/2013/04/915-fair-price-for-asic-miner.html

A taster:

organofcorti I meant to buy you a beer earlier, the Neighbourhood Pool Watch is awesome.

Thanks for donating youre time to the community..

I just sent 0.03436 / $5.01 to  youre donations bin:--->>  12QxPHEuxDrs7mCyGSx1iVSozTwtquDB3r







Its not much just a small thank you.





Best Regard,
Zedicus

Great, thank you!

Sorry Rampion, I didn't see that. I'll have a look at it when I get home tonight.

How about it organofcorti! Im standing next to Rampion with the same sea of questions roaring in my head!

Do you mind obliging ... Thanks in advance, i can safely say "we" appreciate youre efforts.

loshia, I don't think I've ever thought you were trying to get into a fight at any point. You're always polite and your criticism is always welcome.

I'd been assuming that when I wrote "at the current exchange rate" people would infer that for other USD BTC prices the max mining difficulty would be different. Perhaps I didn't make my comment as clear as I could.

I admire your models and i am not trying to get in fight with you. I do also have some stats background. Yes you can simulate the price and everything in life but it depends on human behaviour also which is hard to simulate

Best

I've become really curious about the two prominent dips in the Past Network Difficulty. 

The first one is kind of obvious, after the June 2011 $32 spike a number of miners simply switched off as they saw their profits evaporating.
The second one was caused by the block reward halving in December 2012, a number of miners got out as their rewards were cut in half. 

But could we see a third significant dip in network difficulty moving forward?  The total amount of hashpower contributed by non-ASIC devices is somewhere in the ballpark of 20 TH/s.  As more ASICs come online there will only be an incentive to turn off the GPU's and to a lesser extent, FPGA's.  Even ASIC owners may be astonished at the rise in network difficulty, but even at 100 million difficulty (1e8) an Avalon owner will still be churning out 1/3 of a bitcoin a day. 

By the time the network reaches a difficulty factor of 1 billion (1e9) we'll see interesting things happen in the mining world.  A 67 gH/s Avalon, top tier tech by todays standards, will only churn out 0.03 BTC per day.  Either newer and faster machines will have to debut, or gone are the days when you could plop down a couple grand for a machine that would mint you a substantial sum of BTC.  Such level of scarcity might make it far more desirable to simply buy a couple grand worth of BTC itself

At current exchange rate, as mentioned above. I have some old charts but they only went up to an exchange rate of $20 and plenty of people thought I was wasting time taking it that far. Ah well. Have to generate new charts.

The first ones buying the shovels will make a lot of money. But at the end of the day the only ones doing a LOT of money will be the ones selling the shovels.

You are not taking into account BTC price organofcorti:) That is unknown variable for sure.

However what you are saying sounds reasonable but in general gold rush will end only when gold ends. There will be a lot to come  

Organofcorti, I deeply respect your projections and therefore your well educated opinion: what would you believe to be a reasonable pricing for Avalon batch #4, if official shipping date is "early June" and therefore most likely delivery date in July?

With reasonable I mean a pricing that will very likely allow a ROI + some profits (in BTC, as it's impossible to know the exchange rate in X months)

I'm debating with myself if doing a considerable investment in Avalon batch #4 (disclaimer: I could have a very reasonable electrical cost)

If more efficient ASIC miners are not offered, the network hashrate will plateau when we hit very high difficulty out as those with higher electricity costs start to switch off. At the current exchange rate, a 67Ghps Avalon will run at a loss in California when mining difficulty reaches ~ 3 billion.

That depends on you dude
Take wise decisions and they will pay out. Acting stupid will lead all of us to failure

what if when you get the asic's running your return is so low you will never make your ROI? will you continue to order/build/deploy miners?

Level Out ?

All guy's here are ordering (including me) like crazy. Some are ordering now BFL. when do you think they are going to get their BFL units ordered now? It will level out if we level out or if BTC collapses. I do not want second to happen for sure but chances for the first one to happen are almost 0  

Just look at new ASIC scams threads about 40 pages to level out. If they were not scams? The rule of the game is that if someone wants a steady profit of X the reinvestment of Y is a must. I am talking about mining strictly here. Speculations is another story

don't you think the difficulty will level out at some point? after august-dec maybe? and at the point the cost to run the miners may exceed the return

If any investment in BTC hardware turns into years it can be considered dead or infinity in terms of roi. So i would say if you do not get BTC ROI in 5-7 months max consider that it will take forever amusing the difficulty will be raising quickly. In day one having asic in your hands you has to be able to get your roi "on paper" for 3-4 months max. they will turn to 7-8 eventually but you will not loose.

Difficulty will most likely 10 fold in less than 6 months.

http://organofcorti.blogspot.com/2013/04/914-asic-earnings-23-april-2013.html

After looking at the data around the expected hash rate & difficulty - what is the estimated ROI? I'd say 3 to 5 years