Topic: How to dabble before diving right in (Read 896 times)

Everyone should do this before starting.  It sadly is a common mistake getting electricity off internet and it does not have fee's and taxes on it.  Easiest way is to get electricity bill and divide it out, you can see it with that. (works unless on a tier system where different pricing depending on usage).

But best of luck.    I'm glad it sounded like you found out before buying.

I just wanted to thank everyone for their help.  My brother called the power co. and after fees and taxes, the cost per kWh is actually much higher.  It's pretty clear from both the discussion here and with the assistance of the calculators that in our case, it would be a great way to slowly throw money away.  We will be continuing our search of a good endeavor that we can join in on together and enjoy.

Thanks again for taking the time to help me out!

As both Phil and Danny have stated, you're pretty much borderline with that power cost.  Also, keep in mind that 2016 will see the block reward go from 25 coins per block to 12.5 coins per block.  Nobody can predict what will happen to the price or difficulty; however, that halving is a definite.

While the sale of gear certainly needs to be factored into things, there is no straight up timeline that can be given on when to do so.  There are too many factors that come into play, and each of them would have an impact on your decision to replace the older gear.

Hope you've been able to get some good information here and welcome to the world of Bitcoin

the number of machine is proportionate to the roi, so no matter how many machine you want to buy, the roi will be the same, if the machine are all the same

what is matter is the electricity and the efficiency in play, anyway it's better to buy the miners when they cost less, since even if the roi is the same you risk less as initial investment

and remember that you can always sell long before you achieve roi, so roi time can actually be halved

Coinwarz is good for current period. If you want just today in current difficulty go for it not a bad calculator.  But it lacks difficulty change.

This difficulty change becomes huge over time.  So bitwisdom is much better in the long haul of mining to use, and at different difficulty change amounts.  Coinwarz cannot match that.

It is a terrible calculator, mostly because it assumes a constant difficulty value. The results are not even close to reality. Use this one: https://bitcoinwisdom.com/bitcoin/calculator, but only use a default value if you know is correct for you.

There's no way to know for certain ahead of time exactly how quickly the mining difficulty will increase, but you can take a look here and make your own predictions:
https://blockchain.info/charts/difficulty?timespan=2year&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=

If you are correct in your predictions, you'll have a good idea of how profitable you'll be.  If you're wrong, then you'll either be more profitable or less profitable than you expected.

The problem you're likely to run into is that difficulty will go up so fast, that your equipment will be generating less than the costs of running them (electricity, cooling, maintenance, etc).  Therefore, when newer more efficient equipment comes out you'll want to re-coup some of the investment by selling the used equipment and then use that revenue plus whatever you've made from using the equipment since you bought it to buy the newer faster equipment.

It really is an arms race.  As everyone gets better equipment, the only way you can continue to be profitable is to also get better equipment.  Since everyone feels that way, everyone tries to be first in line to get the new equipment, and then hopes to get enough use out of it before too many others are running that same equipment and driving up the difficulty.  Wash, rinse, repeat.

Do you mean that every two months, we would need to sell the machines on the used market and purchase the newer and more efficient hardware to see any real return?

You should research some pools and learn about their payment system and their fees. Pools have different payment schemes and some may be more profitable than others. Some pools have fees and some don't.

The difficulty is determined by the entire Bitcoin network. It adjust every 2016 blocks (roughly every 2 weeks) so that the interval between blocks is 10 minutes. It rarely goes down, most of the time the difficulty stays relatively level or it goes up.

Also, one thing to keep in mind is that sometime in mid-2016 the block reward will halve from 25 BTC to 12.5 BTC per block. That will also affect your estimates.

Thank you Danny and Phillip for your help.  I'll try to give you a better idea of where we stand in regards to the location.


$.10491 currently


There is 240 service to the bays.


We were considering purchasing the APW3-12-1600-B2 suggested and offered at the Bitmain site: https://bitmaintech.com/productDetail.htm?pid=000201505040743496917U7kGsCm0694

It states that it can power two S5's but I've not yet been able to figure out if it would do the same for two S7's.  Do you have any experience with these?

your internet is fine. but the power cost puts you in a borderline profit .  I am not sure if you should jump in at that price level.

it would be easy for me to tell you do it if you pay lower power cost.

at ten cents a kwatt you may need to sell off gear in two months.

selling off gear to a super low cost power guy needs to be part of your method of profit.

this is becasue your power cost is middle not low.

Thank you both very much for taking the time to help.  It's greatly appreciated.

I have been working with the profit calculator at coinwarz.com but have not shared any of my input simply because I don't know what to input for some entries, specifically pool fees, block reward and bitcoin difficulty.  I did fill in what I did know, leaving the others at default and this was the result:  http://imgur.com/apiROXd

My intention with this thread is to find out exactly what else I need to pin down to get a better idea of ROI for our specific situation. Is researching pools and picking one the next step for me or does that fall after something else?


We currently have no expectation only because I'm doing my research so I can determine what would be reasonable to expect.  I do understand that you need more information and will do my best to provide it.  I can offer this now and would appreciate if you could tell me what I'm lacking.

Power: .10491 per KwH
Internet: $35 monthly (10mbps up & down) We're not sure if more is needed.
Hardware:  $4,000 Current price of the S7 is $1,403.55 and we were planning to start with two. Additional cost for PSU, router, cabling.
Workspace: No cost.  The rental bays are currently empty and costing him money monthly.  They've been available for lease for over three years but there's nothing going on in this area, hence his suggestion to use the space for this endeavor.

Your input on what I need to do next to refine my analysis would be greatly appreciated.  Do I need to research pools so I can determine the fees or is there something that needs to be decided beforehand? Would picking the pool also determine the bitcoin difficulty?

Thanks for your time!

Danny has covered it pretty well.
I well try to add some helpful info.

 Is your power cost under ten cents a kwatt?
Do you have 240 volt power?

if the two above are true and you buy two s-7 antminers you may make money.

if you have dirt cheap power five cents a kwatt your chances are better.

if your power cost is 15 cents or more per kwatt it will be hard to proflt.

240 volt power is helpful if you do not own psu s.
The s-7 likes a good psu.

atx psu s are short cables. so you need two per s-7

Treat it like a business.

It's a very competitive business.  Unless you have a competitive advantage, you're likely to do worse with mining than you would simply buying bitcoins.

Keep in mind that mining is just a way to buy bitcoins indirectly.  You pay for hardware, storage space, cooling, electricity, and maintenance.  Then in exchange you later receive some number of bitcoins that you can sell if you want to.  The question you need to figure out in order to decide if you're really maximizing your profits is: If you spent that same amount of money on just buying the bitcoins directly at the time that the money was being spent, would you have gotten more bitcoins to sell at the time you sold them or less?  If you'd have gotten more by just buying directly, then clearly you're wasting money and effort on a process that is reducing the number of bitcoins you have available to sell.

First you should make sure you understand what all your fixed costs are.  Then you should start looking into what your revenues are likely to be.  There is a lot of risk here. You are making an investment into hardware that could be obsolete in a few months.  Depending on how many other people get involved in mining and what hardware they are using, you are likely to see the number of bitcoins that you receive each day shrink over time. You need to try to make an accurate prediction of how much the mining difficulty will change each month. This means being aware of what newer more efficient hardware is being released and how quickly the manufacturer plans on distributing it. Then you need to decide if it makes more sense to continue to spend money running the equipment that you have, or if it would be more profitable to spend that money on the more efficient hardware.

Note that miners with access to cheaper electricity can run more hash power profitably.  Miners with the earliest access to more efficient hardware can run more hash power profitably as long as they can get that hardware cheap enough.  This means that miners that have higher electricity costs, pay more for hardware, or get their hardware later are likely to find it much more difficult to maintain profits.

If you can show a analysis or a plan detailing all the variables and expectations, then there is something to comment on. Otherwise, you are just sinking money into something that you know nothing about and you are likely to lose money.

If you don't want to do that and you really want to start now, then start small to limit your losses.

People like to say that the only way to make money is with a large operation, but that is not necessarily the case because the economy of scale advantages that a large operation has are relatively small.

There are several mining profitability calculators that you can use. The profit you make depends on the fees you need to pay to maintain hardware at a location, including rent, utilities, and most importantly, electricity. Profits also depend on the current exchange rate. Since the exchange rate has gone up recently, it is more profitable to mine now than it was in the past when Bitcoin was around $200. You probably won't be making any profit for a few months though, most of what you make will be going towards paying off the initial investment and paying off the other costs that mining incurs.

Hi there everyone!

My brother and I have begun talking about mining as a way to do something together while potentially making some money from it.  We're in a somewhat beneficial position for doing something like this as he's got some vacant commercial property sitting on a fat network and with all utility connections.  I'm trying to do all of my homework before purchasing some machines but having fallen down the rabbit hole of contrary information on the web, the more I read, the less confident I am of where we stand.

I've read opinions on dedicated BCM blogs, forums and media ranging from "forget it, it's no longer viable for a private startup" to "why aren't you doing this yet?" so I thought I would ask the knowledgeable members on the forum what the feasibility of the following setup would be.

I'm basically following the startup guide at bitcoinminingdotcom / getting-started.  We are considering starting out with two S7 batch 8 machines.  We'll join a pool and set up a wallet. Our intention is to roll any profit into additional machines.

My question is, do people do this or is it a wasted effort until you have X number of machines?  We don't mind not making much of anything initially, but we'd hate to start this, invest in the machines and setting up the network and environment to find that we would need to purchase 20 more machines before seeing any kind of return.

I apologize for such a painfully simplistic first post but would appreciate any insight or suggestions that you might be able to provide. If I've left out some needed additional info, please just let me know.  I'd be happy to provide it.

Thanks for your time!