Topic: hmm mining profitability this year? Will it drop like oil price?We need an OPEC? (Read 1227 times)

Really...
That argument about overfishing of your was not bs...right?
Once we fish all the fish, next year we will have the same amount, right, cause the Easterbunny will just make more!!

But let's see...

If you want to play with arbitrary data, then how about his?
Holding bitcoins for the last 3 months and you're down 50% whit if you would have bought miners at that time you would have already made a profit.

Next difficulty estimate:   3,508,548,055,741   +6.62%

Seems like peak oil..mining is nowhere near, even with another 10% drop in price since we last talked.

Hmmm mining supply increases and halving for ltc/btc is in late 2019/2020. However, btc difficulty doubling in 2 months from 1.4T to 2.8T is a halving on its own lol. Btc didnt double in price but difficulty did. Threat of new supply from dragonmint and new stronger asics are ever existing and higher since there are more players now. Any rise in btc is countered by rise in difficulty since mining equipment is in high available supply and quick delivery unlike in the past when they were sold out. Oh well. Even if btc shoots up, the holders will make money. The miners will not because tons of miners can be sold and delivered quickly. People will collectively buy with the hope and assumption that difficulty will not rise so much but it will. And it wont be is the same craze as when ant S9 was selling at 5-7K usd on ebay when btc is at 18-20k because there are avail miners from manufacturers now.


Dots... I guess no point arguing with u since u hell bent on winning an argument with bs. It is already clear cut that mining has taken a turn for the worst, as predicted.... People cant even sell coupons for miners at 25% of coupon price lol. The miners can be delivered in the same month now, not 3 months. Holding bitcoin instead of mining in the last 8 months makes like 200+ % more and the trend is expected to continue. Anyways, good luck to u buddy.

How about we do it like this...
Since it's obvious predictions should be made before the event, and you say that miners are not selling anymore, mining is dead, can you tell us at what hashrate (of difficulty) bitcoin mining will have its peak?
This should be really interesting.

Now back to the OPEC story and comparison...
If you think that losing 2% market share to stabilize the price and let your competitor just make more money while you lose millions it's the best idea than I would have to concede defeat on this.
Saudi Arabia has proven in the past why making cuts to drive price up is a really bad idea.
But this time the whole OPEC will feel it... hot and heavy, deep and deeper.

PS.
I'm asking for another piece of info from you, sorry for being greedy...
How many people in this world (that are not into mining), do you think CARE about the finances of bitcoin miners if they do profit or not and how many about it being decentralized?

Huh? wat u talking about. All my predictions have been right. Made good money off oil too. If they dont have OPEC, oil price would be under 30-40 dollars now (like in the past) and higher cost producers would make losses while lower cost producers would make little money. However, there is OPEC, and now everyone makes money...more for lower cost producers, less for higher cost producers. It is a win-win situation.

We dont have an OPEC for mining and as u can see, mining is bad now, just as predicted. Asics are not selling lol.
Newbie miners may not break even.
Older miners make lesser. No winner. Newbies lose more.

U are funny. There is no way miners can be sold for 10 bucks or too much lower lol. Lower miner prices easily mean oversupply again and thus lower profits pet miner. Same problem, not a solution. It is the same as wat happen with the antminer D3. From 5k to 1.45k per miner (depending on batch) but guess wat, it makes 50-120 bucks per month now and many wont break even lol. The 8% recent increase is small and is probably from new miners deployed that ordered in 3 months ago. People are not ordering now or will order very little as u can see.

When difficulty rise from 1.4T to 2.8T, that means u get half the bitcoin rate. This isnt good for the older miners but it is far worst for the newbie miners. Oh well, good luck to those newbie miners. I see alot of cursing so far. Why would u wanna see chaos for newbie miners?? Even the newbie miners dont want this chaos and losses. It would have been better if there was an OPEC for mining as it would protect the newbie miners from bad decisions.

Home miners are not killed by large scale farming actually. The efficiency gap isnt the issue. Being early is far more important than being late here.

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(Moderator's note: This post was edited by frodocooper to trim the quote from stompix.)

Oh , wait!!!!
So, since your other topic was about the necessity of having an OPEC like cartel this is like you admitting defeat.
OPEC and Russia cut their production to drive up the oil price while shale producers are just raking up profits.
Nice!!!!

Ps, you enjoyed your stop at the gas station when oil was at 130$?
I'm happy with it coming back at 30$.



Since difficulty is jumping, bitcoinity showing 8% it seems like people are still buying and plugin those in.
Mining will be dead when you would make a difference by mining via CPU.
Till that moment bitcoin mining is still alive and kicking.

And from my point of view and my personal opinion how things should be, the sooner miners are sold at 10$ a piece and mining will not be an industry the better.
Right now If I would want just to secure the network I would have to pay an extra 2000$ just for the miner and then hope for half of it back on profits.

I would rather spend 50$ on a miner and take the hit on all the electricity it consumes and mine just as a hobby.
But home miners were killed by large scale farming.
And once this changes then we will have real decentralization. Can't wait for it.

Look at the amount they have to sell.  They're dumping them.

Well, their competitors are also selling around the same price. I guess they going for more profit margins rather than volume.

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(Moderator's note: This post was edited by frodocooper to remove a quote from, and a response to, a deleted post.)

Not sure but that possibility does exist. I hope not.


It is pretty dead. U can buy miners and get it delivered in 4 weeks now, not 3 months. U can get them at a discount on ebay or from asic manufacturers. They are not SOLD OUT now LOL. Hard to image those miner were going for 5-7k USD back then on ebay. If u wanna buy from bitmain, do PM me, i have good discount on coupons . Bitmain has been giving everyone tons of coupons.


Take a look here.
https://bitinfocharts.com/comparison/bitcoin-difficulty.html

Bitcoin difficulty is 0.3T in Jan 2017
It is 1.4T in mid Dec 2017
It is 2.8T in mid Feb 2018

In just 2 months from Dec 2017 to Feb 2018, difficulty doubled, increasing by 1.4T, which is more than the difficulty increase of 11 months from Jan 2017 to Dec 2017.
It is currently at 3.0T. Basically, the increase slowed because bitcoin price has not increased much but difficulty has increased alot. Profitability dropped greatly.


GPU mining is abit more profitable than bitcoin mining now. It used to be such that bitcoin mining made twice as much as GPU mining since GPU is safer and have far longer warranty of 2-5 years, not 6 months. Well, there are only 2 gpu manufacturers and thus no oversupply, unlike asics.


Fyi, I didnt say shale is dead. Shale lives but oil price is dead. Oil price used  to be above 100 and it collapsed. It is now near 65 and that is ONLY due to OPEC (and Russia) cutting ALOT of supply. It was 28 bucks 2 years ago due to oversupply. If asic sales were limited, profit from mining will go up too.


So, current ASIC manufactures have the capacity to increase it by 0.7T per month if they could sell all their asics. The last thing needed is more asic manufacturers. In the past, asics sold when the breakeven was about 3-4 months. There are only 6 months warranty after all. Now, with the new 2.3k pricing, u are looking at say 9-10 months at current difficulty. With old pricing, it would still be about 7 months at current difficulty. Miners only have 6 months warranty and more importantly, this is not factoring in additional difficulty increases which can be alot higher now than last year. It has been alot more profitable to buy bitcoin rather than mine bitcoin and this trend will probably continue since difficulty can skyrocket so easily. I didnt even factor setup costs, rental costs or new more efficient miners making older miners earn less. At these numbers, unfortunately, there will be alot of new miners who dont break even. The older ones who mined in the better months should be fine.

They are selling it for 2300 instead of 1400(November price). I wouldn't call that dumping.

Correct about what?
About this one below?


Weird that transactions are getting through so somebody is mining blocks and difficulty is going up..so it's quite the opposite.
Bitcoinity is showing a 7% increase for this period.. so no , not dead yet



This major pop that has occurred....what was it again?

Really you sound just like those guys that were saying shale is dead, shale is bankrupt, shale industry debt will be the reason banks will enter another recession because of the huge sums accumulated, and so on. I suppose I don;t have to tell you nothing like that happened.

If you believe in BTC, mine on!

There's a reason why Bitmain is dumping s9's on the market....new stuff is incoming (and is probably mining already)

Looking at the current mining situation.
Sigh, I did not want to be correct about this

Dude, mining is more predictable because there are more maufacturers and stronger machines now, thus more difficulty.
Difficulty is so high with lesser machines and weaker ones last year. This year has more manufacturers and stronger machines being sold....

Just as it's hard to predict BTC price it's hard to predict mining. You're right there's a ton of attention being given to it right now, but just like the herd mentality that drove BTC to 20k and then sold at 7k there's tons of people buying miners and then realizing they are too loud, they're too hot, they got scammed, etc. etc. In addition how much of all those new operations are actually mining moving from existing locations or even from overseas? No way to tell, so while yes, I agree that hashrate is going up and in turn difficulty. I believe that some hard times will shake loose a big portion of the herd and things will settle in to a better environment.

The *same* can be said for the market. So personally I remain bullish on both.

In general, it is more likely to get worse because :

1- Ebit and canaan have stronger machines this year. Difficulty is going to rise.
2- There are alot of news sources saying how great mining and using ridiculous numbers and assumptions. In other words, there is huge hype. Kodak's has a crazy offer where users payi 3400 to lease an antminer S9. It was apparently a success hit with investors lol and their stock price went up alot. I see tons of these articles in my flipboard
3- There are possible new entrants like dragonmint which has collected a few months of orders. These people may be real.
4 -Bitmain,etc seems to be having miners for sale. There will still be people buying due to point 2.

I wrote these sort of topics awhile back, hoping for some solution but I guess not. Mining is not gonna be breaking even for many if this continues. Alot of people will scream scam later. It is not a scam but it does not make sense. Sadly, there will be alot of pain and losses, like the D3 and those obelisk miner guys.

I suggest u dont buy GPU either because there is TOO MUCH HYPE news about how GPU mining is great. My flipboard alone has these daily. It is insane. There is also risk of ethereum going proof of stake this year.

I really hope to be wrong on all this.

At ten cent power it is 400 days with the assumption price matches diff.

300 fully flat price flat diff.

Never with flat price and 2% diff.

Looks like gpus are better at the moment

Please tell me how you calculated 20 months?

hell if you buy an s9 now and start mining you need about 20 months to ROI
and this is IF the bitcoin price and difficulty stays the same

Yep, and I mentioned that is the problem. Do not assume that price will go up 10 times in a year like it did last year....
Very unlikely this year. The major pop has occurred.

That's because difficulty skyrocketed and manufacturers doubled their prices while bitcoin went the opposite direction and took a nosedive straight to the bottom! A perfect storm against miners.

Man, I hate to be right on this. Mining is so dead now.

And I hope it remains that way lol

Companies like fidelity are already into mining as of last year. They would go into mining because they want to make more money. It can be juz a small side investment from them, not a major core biz. The knowhow to do isnt so difficult and a few million to these companies isnt much.

Isn't there already a cartel named Bitmain?

U are not making sense. There is no consumer. This is not like a product where higher supply leads to lower prices. More mining equipment will not affect btc prices period......


No dude, more mining equipment means more difficulty. People will run their machines even if it makes 50 dollars a month profit to get something back, like with the D3 now. So, higher electricity home miners will make 50 a month on an S9 and the lower electricity players will make 100 a month. That is still bad considering the machine cost 2300-2600 a month. It will take too long to roi and alot can happen before those long months pass.

Big businesses will never get into mining. If they are already making 100M+ why in the world would they want to go into mining? Switching from a known successful business to something unknown with variables you can't control is dumber than dumb. It takes way too long to get your ROI mining. Smart businesses would rather sell you the miners and make the quicker profits. That's why Bitmain and the other manufacturers are more than happy to sell everyone miners at inflated prices.

Oh but there is.
Quoting Costanza..."What Consumer? I'm the consumer".

I want to buy a miner, I'm a buyer, I'm a consumer. You want to restrict that because me making money would mean you losing money. Simple as that.

And yes, heavier competition always leads to better prices, you mentioned OPEC..what better example?
AMD and Intel?

Also you seem to lack a bit of understanding of basic economics.


Let me ask you something, do you mine BTC with a gpu? no because it's a waste of money and electricity
Would a thousand miners mine mazacoin? No, because the reward is so low they would waste money and electricity
Would a billion miners mine BTC ? Of course not.
They would understand it's unprofitable and they would turn they miners off ... and a miner turned off does not consume electricity and of course does not waste electricity.

Yes, there is nothing to say bitcoin must exist. If btc dont exist, mining wont either. But thats not related to this topic though.

There is nothing that says Bitcoin MUST continue to exist. I can't think of many currencies that are designed to make money for anybody. They are a convenience in place of a barter system.

It's not obvious that it will be prove to be particularly successful as a currency.

There is no "consumer" in this case. Oversupply means all miners lose money. This is not a case where heavier competition leads to better price for consumers, such as a consumer product. Mining difficulty will not affect bitcoin price. Oversupply in this case would mean electricity gets wasted because it makes no profit.


If there are too many miners, the manufacturers cannot sell mining equipment either because the profit will be like 100 USD a month and no one is willing to pay even 1300-1600 USD for a 100 per month machine.
And u wont wanna go into mining because it makes no sense.


The reason oversupply can occur is because there are multiple manufacturers and when the machine is ordered, it can come 2-3 months later. So, people will order when they see the mining profit rate as quite good but by the time it comes 2-3 months later, the return on investment would be a very long time or possibly an impossible time.

Not necessarily. Cartels like OPEC arent illegal and they serve a purpose, one that makes sense. This will make alot of sense too. Oversupply would mean no miner makes money bro and it would be a huge waste. It would just be a huge waste of electricity.

Just because there are more, it doesn't mean that it's a good thing.
And in case of OPEC we have seen why it's better not to have one, a feeling I'm experiencing every time at the gas station



It doesn't work that way and I couldn't care less for their profits and losses.
Oversupply is good for the customer and as long as I am a customer I couldn't be happier.

How would you react if the ISP in your town would say, we can only provide internet for 33% of the houses there?
There rest...GFY!




I don't see what is wrong with this "worst case scenario".
Is there a law that investment in bitcoin mining should be profitable? No.
So you can't mine , don't mine.
But don't try to stop me from entering mining because you can't make money out of it.

It is possible that there is a shortage because too many companies are buying? There has been too much coverage about mining by news sources.

The difference of electricity cost between a home miner with say good 10 cents per kwh electricity cost and a big commercial miner with 5 cents electricity cost is about 50 USD per S9.

So, if the home miner makes ZERO profit on an S9, the commercial guy makes 50 USD per miner profit. But at 50 USD, the cost of ROI for a 2300-2500 USD machine (without shipping and tax yet), is about 46-50 months lol. U cant ROI because too many things happen during that period. No one wins really.

The commercial miner has it better but they need higher returns too.

Im pretty sure the main reason behind the shortage of miners from BITMAIN and the others is exactly because they try to keep the difficulty from not going up too fast. There could be several good strategic reasons for them to "create" this shortage situation, but I hardly think its because they dont have enough funds to buy more chips...

I agree, the difficulty increased from 1.2 Trillion to 2.2 Trillion in just 90 days. More and more people are getting into mining. The next 90 days I see it increasing by at least 1.5 Trillion. The following 90 days, at least 2 trillion increase. By the end of 2018, difficulty should be in the 10 trillion to 12 trillion range. Just my guess.

Hmmm yeah, it is difficult to get this done but btc price has been stagnating and dropping for awhile. If price stagnates for this year but btc difficulty keeps increasing, it is no good for any miner.

There is always a balance, an optimal graph for this to maximise profit for all parties. Sigh, u are right, this is difficult to occur.

The major oversupply scenario is very possible if u consider that btc mining industry is only so big....and that every big company out there, not related to mining, can easily pour millions or billions into it with ease. The amount of miners deployed could be a few times more perhaps. It is not that difficult to set up a mining facility after all....

Dude, there are many cartels out there, not just OPEC. Oil or mining biz doesnt matter. Problem here is just supply and profits. Oversupply kills everything. The manufacturers bitmain/ebit/canaan are also MAJOR miners also yes.

So, if all 3 manufacturers sell lots of miners, their profits from selling machines would be bigger BUT their profits from mining will be small.

If all 3 manufacturers sell lesser miners, their profits from selling machines would be smaller BUT their mining profits would be bigger.

If all 3 manufacturers sell way too many miners, their profits from selling profita would be huge but their mining profits will be nothing or close to it. This is possible, assuming bitcoin price stagnates.

Thus, there is a need to find an optimal point somewhere, one where profit is maximised for manufacturers and customers. Oversupply kills it for everyone in any industry.

The worst case scenario is if too many machines get produced and bitcoin price stagnates, we could see higher electricity price miners switch off their unprofitable machines and low cost miners make say 50-100 usd per month per machine? Problem is that at that price, it could take 23-46 months to get a return on investment on the machine alone....and in such a long time, there is still risk that new machines may make current ones obsolete.

I'm reading this and I might start pinching myself.For real?

We have solved all problems not what is left to do is creating a mining cartel and restrict access to miners?
No offense, but are you out of your mind?
Is not enough that bitmain sometimes acts like it's in competition with the ten plagues of Egypt now we should encourage them?

The difference between OPEC and bitmain&co is huge.
First, those were countries these are companies.  A private company is interested only in profits they don't care one bit about the policies of the government and their strategies.
Second, OPEC was about oil, no matter what Japan might have tried they just couldn't produce oil.
When it comes to asics, nothing can stop a private company from producing miners, ss long as there is going to be profit, they will try to produce them.

Bitmain - they are rogue and hate Bitcoin. They love their Bcash token instead. They don't have Bitcoin future in high regard. They can rather sabotage Bitcoin and let it tank than help it.
Bitfury - they don't sell their miners to the public, they are secretive, very unlikely they will create cartel with Bitmain and others, why would they change their policy?
Canaan - I can see them actually cooperating with someone else
Pangolinminer, Halong Mining, Ebit - new companies, rising fast, I can see them easily doing deal with other manufacturers for mutual benefit.

Yes, bitcoin is not essential in people's lives. But that doesnt matter here.....

Cartels will work here because there are only 3 major manufacturers. Limiting supply via a cartel would mean controlling difficulty and thus, profitability for miners.

In general, cartel's only work when there is no good substitute for a product that folks need or want.  For most of the world, Bitcoin isn't an actual factor in their lives. If the entire Bitcoin industry evaporated overnight, the overall effect on the world would me minuscule. OPEC was able to control a product for which there was no viable substitute, at that time. Fast forward some 45 years, and you find that OPEC doesn't have nearly the control they once did.

I realize that for some folks on these forums, Bitcoin is their livelihood, but they have to realize that their "product" (i.e. mining) is more akin to a commodity (lots of alternatives), or possible a luxury good (i.e. the FOMO crowd).

I wonder if there was ever a thought given to a "Tulip growers cartel" back a few hundred years ago?

There is no such thing as free electricity though.

The thing is bitcoin mining is small compared to other industries. If big companies juz come in with abit more capital, it is possible for mining to be u profitable even for everyone, even with free electricity. News sources have added too much hype and interest into mining.

For big miners, wouldnt it be in their best interest to make 300 dollars per machine rather than 50-100 dollars per machine??
There will make alot more.

Thus, bitmain/canaan avalon/ebit should sit down and talk about how to not release too many machines (limit supply), rather than all 3 release so many that everyone earns alot less....including bitmain/canaan/ebit who are big miners themselves yes. They need to come together and make a cartel, like how OPEC did in the oil industry to control profits....and i hope they dont forget the to sell to the small miners too. In any case, I dont see how it can work out if they keep attracting more companies to come in. Btc mining has a low barrier to entry and almost every company out there can do it if they want to.

I hope to be wrong though. It might be best that they create a btc mining cartel.

Just my 2 cents

In 2017, btc rose from 1k to about 20k, about 20 times. Mining difficulty rose alot.

This year, avalon and ebit will release newer stronger models for btc. Bitmain still sells S9 as normal.
Thus, we should expect mining difficulty to increase abit more than usual due to the stronger models.


That being said, it is very unlikely that bitcoin will rise 20 times this year again but it is likely that the machines will still be sold by manufacurers for profit.

Thus, btc mining might turn unprpfitable later in the year or give very low profit.....kinda like the D3 and kinda like wat happen to OIL prices when shale oil producers pumped out too much oil.


As a miner, I really hope to be wrong. What do u guys think?