Topic: Is mining gear efficiency a strong reason for difficulty increment? - page 2. (Read 467 times)

Think a 80,000 foot building wired and hooked up to run 12 megawatts  all done back in 2017.  before sept of 2017  and this guy made serious coin on the sept-dec runup.

let him have  3 cent power.

Last spring  he jumped on s17's which were  well under 1800   usd he put them in  filled the 12 megawatts  for only  1800 x 5000 = 9,000,000

he now has 1800 x 53 = 95,400 th or  95.4ph  running since april or may.  I do not know hwo this guy is but I am certain  there are setups like this.

They are far ahead of the curve.

That is a good point. Back in 2016 there were not nearly as many huge mines already running. Now we've got 50ET of S9s already running and the only cost for those industrial miners to upgrade is new gear price and a bit of labor.

Worldwide mining is more and more industrial.

Worldwide power is about 2-5 cents a kwatts for good industrial rates.

So base  big farms  on 2-5 cent numbers.

Add in building
add in wires
add in internet.
add in  cooling
add in cost of gear.

say  that is 2 cents for big guys.

so  4-7 cents  is what you need to make on  your gear per kwatt.

there is always pressure to the 4-7 cent earning range. 

And of course  on the other side  speculators traders ya da ya da ya da.

plus  less coins enter the market.

In  dec 2017  diff was 1.4 and coins were 20000    best gear = 100 watts a th
in sept 2019  diff is 12.7 and coins are 8000         best gear = 37 watts a th

If I am an established big miner

I have 1 new cost that would be new gear.

my building = done
my wires = done

so if I get 3 cent power on   the s17 pro  it cost   2.225 x 24 = 54 kwatts x 3 cent = 1.62 a day  it makes 53 x  0.00001920 = 0.0010176 btc or 8.24 -1.62 =

6.62 a day  this guy  drags  the profit down for anyone that can't match him.

his building is in place
his cooling is in place
his wires are setup.

If my small farm in clifton was all s17 pro  I would have 2.5ph vs 1.0ph.  I make money with  my 1.0ph  but I would make 2.5x  what I make now.

These whale farms drag price down.  At least my guess is that.

I think it's more related to popularity and the perceived risk of investing in mining. Back in 2016, I think it was a much harder sell than today to get investors to put big $ into large industrial farms. Then the run up to 20K happened in 2017, fees were out of control, and miners were making a killing. It got a lot of news coverage, and more legitimacy.

The fact that S9s are still profitable for 5 cent power after 3 years also would help convince investors to spend on new gear even with longer ROI time.

As for the price of gear right now, asic manufacturers currently can't get as much chip fab capacity as they'd like so it is limiting the amount of new hardware available. Limited supply = higher prices. If they had all the chip manufacturing capacity they wanted, prices would be lower, and diff would be rising even faster.

Sorry can't give a great reply but the s9 at the time was still like a 100w/th miner or worse I believe. Didn't it only get down to these levels after a firmware release in the last year or so. This is also an interesting factor, imagine where Diff would have been had Bitmain not hoarded it to themselves for so long.

Personally i don't think it's the efficiency alone.  It's more what the efficiency and experience have allowed them to do. My largest most compact miner is 65TH. That used to take 4 machines to achieve; if they all fired 100%For a non commercial purchaser. If you then add in the adoption and interest in mining since then production levels have skyrocketed which has more impact than the other 2 combined.

I was checking mining difficulty and saw it hanging at about 12.75t , which is a 100% increment from the 6.5t mark last May, Bitcoin price was trading at 4600$ then and now it's at 8200$ so that is also nearly double as well, although technically , price moves way faster the difficulty (in both directions), by going through the different subjects on the forum and else where,and reading what people have to say about it , i think that most people think that new gen miners are the main cause for this non-stop difficulty spikes.

That makes sense, but I have a huge problem with the way the numbers match, if we go back in time and check this very date May 31, 2016, which was the release date for Antminer S9.

At that time we had :

Bitcoin price             = 436$
Difficulty                  = 0.2t
Best Gear efficiency  = 85w/th
Price per TH             =150$
Profit per TH            =1.2$ / day
1000$ investment     =280$ return per month

Currently we have :

Bitcoin price             = 8200$      >  18x UP
Difficulty                  = 12.74t      >  63x UP
Best Gear efficiency  = 45w/th     >  2x   UP
Price per TH             =55$           > 3x   Down
Profit per TH            =0.18$ /day > 6x Down
1000$ investment    =90$ return per month

The strange thing about these numbers that since May 2016 (4 years) mining efficiency has only doubled from S9 to the most effiecnt gear of today S17e/S17pro etc., while diff is 63 times higher,  I don't see how mining efficiency matters here ! anyone cares to explain ??

in total ,mining now is 3 times less profitable than it was 4 years ago despite the fact that efficiency has only doubled once, this indicates that people are willing to earn peanuts from mining, and with these numbers in hand it is safe to assume that probably the majority of miners will end up losing money in the long run if they kept buying gears at high prices.

What do you think the minimum profit per th are we ever going to get to?