Topic: It is 2020 time for a new diff thread. - page 11. (Read 14827 times)

Sp they would need to structure it as multiple small companies and be covered that way.

13 companies would do the trick. Point is a large buy of newer gear can work even with the import tax.

I did the case of price rise to 13 k and diff moving about 20% up.

It is superior to mine then to buy and hold in that case.

One of the reasons is after two years the holder still has all the original coins held and is subject to a large loss if price tanks.

he large miner has paid off all the gear and the gear will earn more coins if price tanks as diff will drop as it did in the oct 2018 to feb 2019 time period.

Well there *is* a limit to what is allowed as section 179 relief is strictly for small business. Total allowed for 2020 is $3,630,000 in equipment purchases. And yes, import taxes are deductible. AFAIK for business purchases they always have been.

Thank you I read it and It look like the import tax is also deductible.

So the company buying 25+6 = 31 million in gear has a write-off on the first 31 million in coins mined.
A write off on the infrastructure built. Which has to be 2-4 million to build and wire the site .
A write off on the power cost say 3 cents a kwatt

so lets say they got 14000 units for the 25,000,000

that is 14,000 x 3.5 = 49,000 kwatts an hour or 1470 usd an hour . round to 1500 an hour or 36,000 a day power bill. or 13,140,000 year power bill.

So

31.0
13.1
3.9
48 million first year. I won't get into the idea that the gear and the build may need to be deducted over 1,2,3,4 ,5 years.

14,000 units at 110 th = 1,540,000. th or 1540 ph or 1.54 eh

right now this is 0.00000791 x  1540000 = 12.18 coins a day at viabtc.  now over the next year it will decline or stay the same  or rise.

So lets do  14 , 12 , 10. coins a day

5110 coins if diff declines
4380 coins if diff is flat.  52,560,000 in earnings with flat price and flat diff 48,000,000 write off 4.256 mill profit plus you still have the gear

3650 coins if diff rises.   43,800,000 in earnings with flat price and rising diff means a paper loss of 4.2 mill you can write it off on other earnings  so that loss is reduced and you are out of pocket  by about 2.8 million but you still have the gear.

sticking with diff rise and earning 3650 coins but price rises to 13000

you earned 47,450,000 net loss of 550,000 write it off you have true loss of 350,000 and have the gear.

if you held coins 48 mill = 12,000 coins price rise to 13,000 means they are worth 52,000,000 and you can hold them you are up 4,000,000

but the next year.

the mining company has 14,000 units and just has a power bill.

if you say diff rises but price is flat at 13,000

they may earn 3,000 coins in year 2 and 3,000 x 13,000 = 39,000,000 - 13,000,000 for power = 26,000,000 profit

so at year two the miner has the gear and has turned 26,000,000 profit.

the holder has coins 12,000 of them and is 4,000,000 ahead .

remember in both cases 48 mill was sunk in the first year.

now if you are the miner after 2 years the sunk in money is paid you have a current yearly cost of 13 mill for the power.

if you are the holder you have 52 million worth of coins 4,000 coins which you paid 48 million for them

but you held the coins so your at risk money is 52 million if they are lost or stolen or a huge crash in price.

the miner has the gear and infrastructure paid off and 2,000 coins

the out of pocket is paid off.  he only has 2,000 coins at risk So in the case where diff rises twice over 2 years

and price rises slowly to 13,000 the miner kills the holder.

In the US, 100% of mining gear and any other equipment for a business can be deducted. ref https://www.section179.org/section_179_deduction/

I need to do some research I don't know how to write off import taxes if I do say 25 and add 6 in port cost is 31m I am not sure of write off rules on gear.

A truck for a business can be deprecated not sure about mining gear rules on depreciation.

How are they going to import say a 25M worth of mining gears that are made in China and avoid paying import taxes? I do understand that if it's a personal business and you are buying 10-20 gears that might work, I know Bitmain ships "some" of their miner from Malaysia, but such a huge order will most likey come from Shenzen, even if it was shipped to Malayisia and then to the U.S.

If I understand what you wrote correctly it means mining for individuals is better than holding because import tax can be avoided, but for business it isn't as good, can you do the same math with the tariffs added to the equation for 2 scnerios?

1: Btc from 10k to 7k.
2: Btc from 10k to 13k.

Okay buy a bitcoin for 10000 sell for 7000 in under a year is a short term capital gains loss of 3000.

the max amount you can deduct in a year on a short term capital gains loss is 3000 .

so there is a limit for the deduction.

Ie buy 2 coins at 20,000 sell for 14000 and you can deduct only 3 k this year and 3 k next year.

lets say your tax bracket is 33%.  you have a 1000 tax break two years in a row. vs a 2000 break in one year.

gets more complex as every state has different rules on cap gains / losses

in New Jersey you pay on a cap gain on a sale coin
and fuck you on a cap loss on a sale of coin

so my NJ tax bill gets zero benefit from sales of coin at a loss. and is higher on sales of coin at a gain.

My federal bill is about 25% rate.

My state bill is about 6% rate.

More to this on mining if the power bill is good enough gear always earns money unless it breaks.

So if I buy 20000 in gear have it malaysia built and shipped I pay zero import tax.

so 20,000 k is cost of goods say power is 1/2 the coins say i earn 4 coins in a year.

make coins drop to 7k.  i paid 34,000 gear and power year one I earned 28,000 in coins.

a business loss of 6k . but i own the gear and possess 2 coins

the other way i paid 20 k for. 2 coins . a loss of 6k on paper

in both cases i lay out 20k
in both cases i hold the coins

in the gear case i have gear and 2 of 4 coins
in the coin case i have coins

now does 20k buy enough gear to earn four coins in a year?

i will check I checked

so in my case.

buy 2 coins at 10k 1 year later they are worth 7k. or i turned 20k into 14k

or buy 20k in s17 pro  in one year they mine 2.9 btc so a year later

i turned 20k into 20 s17pro and 1.45 in btc worth 10k.

first case if i do not sell the coins no tax issues. no reporting paper loss of 6k

second case i paid 1.45 of the coin to mine

so tax wise my cost is 20k+ 10k as the coin dropped in value.

or a cost of 30k.  i own all the gear and the coin i held is worth 10k.

if i have paid for gear before i added this gear and if it makes money.

i can write off my losses in year one of the 20 x s17 pro.

all of the above is a case where coins drop from 10k to 7k and i added 20k to whatever i had.

Doesn't that depend on the tax system? I mean you already pay 25% upfront when you import mining gears to the U.S, so even your gears turn out to be unprofitable 2 months later, you have simply lost 25%.

Another advantage of buying Bitcoin over mining is that Bitcoin doesn't become obsolete or defective, mining is a very high risk, your whole farm can catch fire, it has operational costs, security, maintenance, downtime, theft, etc.

Also, mining profit is a "taxable event", the moment you get those sweet payouts in your wallet, whatever amount you received is taxed based on the fiat value of the time the pool sent you the payouts, also once you sell your mined bitcoins you are taxed again, but when you buy bitcoin with USD you are not taxed until you sell, and if you sell at a loss you could use "tax-loss harvesting". Correct me if I am wrong.

I don't know enough about U.S taxes, I just read about recently in an attempt to figure out the U.S election effects on Bitcoins and how different tax rules could be applied.

The tax advantages for buying gear vs coins directly are huge.
So if you have a good power deal buying gear allows some safety margins that buying coins do not allow.

As far as we know Bitmain hasn't shipped anything in a while, how are new gears being installed this weekend? whatever is in the article is actually based on their previous july article, there is no proof that they received those S19s, perhaps they only received the M31s+ from MicroBT.


The market cap of this stock is just about 100M, so that's just about 10M increase which is really NOTHING, almost all crypto coins including the shittiest once made much more than that the past week but coindesk.com has to write about it because they need content to keep the profit comning.

I also don't understand why would anyone invest in a company that is about to spend 25% of it's value on expensive mining gears that need above 18 months to ROI (a terrible business model as far a mining i concerned) unless they are counting on a massive bull market for Bitcoin and in the case, isn't buying BTC directly a better bet?

Back to difficulty.


we are 54 blocks ahead, BTC is making it's 3rd attempt to break the 12k level (very likely to break it and move to 14k), at current prices and difficulty S9 makes profit at 5 cents/kWh and less

5 cents = $0.35 per day
4 cents = $0.60 per day
3 cents = $0.90 per day

I think most of the fresh hashrate came from those old S9s.

Looks like listed companies having to do with Bitcoin, gets a bump up in their stock price!

you know if we hit a pair of long blocks we could get very close to 0.0

it is nice to see this. lets do it again.

edit :

1 more block to go.

34 blocks to go, we are only 14 blocks ahead, so we won't have a negative adjustment, we also can't have anything above 1%, Bitcoin price is close to $12,000 as I type ($11891 on Binance), I don't expect any major moves in difficulty for weeks to come as long as we remain within this price range.

At mikey we stay semi flat until price moves over 15k  or price drops to 7k

A lot of 50watt gear is out there some 80watt gear.

some 30 watt .  pretty much a bell curve.

It will take a year for the oldest gear to truly pass on some will live as solo pool space heaters

I would think we will be 50 watt to 30 watt gear by Jan 1 2021   making network near the 40-45watt a th rate.

Once network has pushed out the s9's and any 60watt or higher gear.  we will get more growth in diff.

for now 11400 price is not good enough to grow your farms. so sideways for a while.

Nice for miners with a paid for farm.

We are pretty close to ATH of 17.3T, nothing much has left the network, it's simply old gears got swapped by the new once, despite the 2-3k to the upside prices aren't good enough for most power rates, we are talking 12 months to Roi 17 series and well over a year and a half to ROI the more efficient gears.

Since the halving we had a 50% drop in BTC block rewards, we didn't have a 50% increase in price and yet we now have a 6% increase in difficulty from before the halving.

Loss    = 50% + 6%
Gain    = 27% in price

Total = -29%, in other words, mining now is 29% less profitable but the latest generation of mining gears aren't 29% cheaper and they aren't even 29% more efficient, add to that the fact that you mentioned above about Bitmain not being able to deliver new gears and their rivals don't have/can't make enough mining gears.

All these factors combined will help suppress difficulty until either price makes another jump so that older gears become profitable again, or the world gets over the pandemic real quick and Bitmain goes back to normal production levels, and I doubt the latter is going to happen anytime soon, but the former is likely now that the charts look bullish above the critical level of $10,400.

I suspect it is intentional diff manipulation. Simply because the industry would collapse if they keep shipping gear out.

Edit

When ASICs came out in late 2017 and early 2018 they crushed gpus and sent mining into a long downward spiral .  If they sold s19's and s19 pros in bulk the etc part of mining would suffer.

So we get a hash shortage and a price boost in coins to 11500. EXACTLY what miners need to carry on.

Wow, the estimation went up by 1%. Looks like my prediction (facepalm!) is not off any more by more than 70%!


I was looking at the price diff charts for the last 3 months, image here and I still think something is fishy, we had a serious growth in difficulty the last time the price went up from the 7k area to the 9k, and a serious drop went it was the other way around. My hunch right now for not seeing a jump in difficulty is that bitmain is unable to deliver and maybe the competitors are out of stock, but I seriously can't understand why the hash that was generated at 9k and stopped at higher prices is not coming back online. Again, I could blame something like the floods but that is almost over and nothing major was reported either.
Fortunately for the miners around here seems like my scenario is getting farther away day by day, but, it's not over till the fat lady sings, or till Zhan and Wu make peace.

price is near 11800

diff is good.    + 0.67%

Binance's FPPS was 112.10% yesterday, which is pretty close to viabtc, you are 100% right phill, everyone should be mining to pools that pay the block fees, recently fees have been pretty high, on average over 10% of the block reward, so in other words if your pool isn't paying the fees you are simply losing $100 in every $1000 you make, that's a ton of money in the long run.


Timing is everything, I got my hands on some more S9s, the total cost for each was about $65 plugged and running (including every little expense) with the current difficulty and price I should ROI in just about 50 days, what I would do next is sell them and move to a slightly more efficient gears.

If in 2 months, we hit a high price of say 15-16k I should be able to sell these people for over a $100, if I get a $100 each that will be 153.85% profit in 2 months, which I would gladly accept.

If price turns south, I would simply let the gears mine on without having to worry, with that being said and despite the current prices and a potential bull-run, it isn't worth paying over $3000 for an S19pro like many people still do.

Still early for diff but we are  better then -1%


BTC price got all the way past 12000

12,134 at 12:01 Am Aug 2

then dropped to 11,182 at 1 am Aug 2.   Note I got those numbers from Coinbase price charts

it has been hanging in there at about 11200 since then.

11,200 and a diff dropping to 16.6 would be nice.

I will be adding some more info when I post here.

tx fees of last six blocks lifted from this site.

https://www.blockchain.com/explorer

642025. = 1.34
642024. = 1.76
642023. = 0.77
642022  = 1.54
642021. = 1.42
642020. = 1.77

huge fees are like coins being worth more then 11,200 for a miner using a pool that shares those fees.

I have most of my 1.7ph with viabtc

if you look here

https://www.viabtc.com/pool/state

they are paying

111.79 %. that means 6.25 x 1.1179 = 6.9868 coins a block

or for a guy mining at viabtc. the 11200 coin price is boosted to 12520

this is not an advertisement for viabtc it is simply showing that. for miners on the right pools. we are getting 2 boosts

1) the rise in coin price.  and

2) the share of the larger tx fees.

I also want to make note that in spring of 2017 fees got stupid high and were a leading indicator for the fall bull run.

I am basing a lot of this bull run to come on FUD of the Nov 2020 election in the USA

The left and the right are so fearful of each other that anyone with money is thinking just in case I need to leave the USA I want some wealth to have.

ie crypto coins better then anything if you are leaving an unstable country.

So if the election fear turn out to be a dud BTC and other coins will drop ending this bull run.
But it the election turns into a huge mess, first pray for me and my wife as we are not leaving, second coins will move higher.

Lastly I came up with this idea the following way.
35 days ago I told my wife we should go to Canada around Oct 25 of this year to watch the election result from a safer place.
She said fuck that shit we are staying.
I said okay.
Canada closed it borders to USA citizens about 25 days ago.
I then read Tom Hanks and his Wife became greek citizens which means they can travel to Greece and be let in.
After looking at all of the above I purchased 2 s15's on ebay at 730 with shipping tax and ebucks for the 2 with 24 months to pay zero interest. I realized the bull run would start soon.

July 21 we were at 9100

I purchased my units on July 21

Timing was perfect.

https://www.ebay.com/itm/Bitmain-Antminer-S15-28TH-s-ASIC-Bitcoin-Miner-BTC-with-PSU-Not-S9-S17-M2-M20/224075044130?

Much like oct 2018 when I said the diff would drop right before the large drops happened.

I have no idea is my call will be as good as the 2018 diff drop call was, but why not    and we get an ATH for btc.