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Topic: Price of mining the cheapest bitcoin - page 2. (Read 3511 times)

newbie
Activity: 26
Merit: 0
September 08, 2014, 05:55:10 AM
#45
It is a really scary prospect. They day mining cost becomes unprofitable (soon), there will be a lot of dead mining companies thus an huge flash crash, thus killing even more miners. Also no one will lend money to this companies during theses times.
legendary
Activity: 1473
Merit: 1086
September 08, 2014, 05:49:08 AM
#44
But, then again: what is the "real" price of a miner? All of them get 50% cheaper just 2-3 months later. So, is the real retail price 4000$? Or 2000$? Or even 500$? We just don't know without insider informations.
hero member
Activity: 588
Merit: 500
September 08, 2014, 05:33:48 AM
#43
My experience in designing niche market consumer electronics (for racing applications) is that the production costs for small runs is about 20% of retail price. So for a $500 transmission controller for a rally car, my costs would be in the neighbourhood of $100-120 per unit. (Parts, pc boards, assembly labour...and mostly done in China.)

I believe it would be difficult for them to get much more of a discount, since my productions numbers were maybe half what theirs are, and my parts count was lower as well but generally I think we can assume somewhere between 10-20% of retail price is what one of the mining hardware manufacturers are paying for their hardware.

So, we can estimate that for a 5.5TH miner that retails for $4000....they are paying minimum of about $400 per unit cost.
Add 3kW of power supply and maybe you are at I dunno maybe $700(?)

(Edit: Whoops was I wrong on the power supply cost...they can be $300 used and $2000 new.)
Good luck finding 500-1000 used 3KW power supplies too!

Add rent and property taxes on the building...difficult to determine.

Add infrastructure....large scale power transformers, electricians, lan cabling, lan distribution, internet bandwidth

Add power costs...$0.05/kw(?) Not sure when you are buying in megawatts per month.

^Double that for air conditioning and fans to cool the place.

Add a salary 24/7 to maintain it when units go down...

Budget for maybe 5% spares of mining hardware and power supplies when units break down.


I can't see it making money unless some of these costs are eliminated.





legendary
Activity: 1470
Merit: 1007
September 08, 2014, 05:20:33 AM
#42
is this thread for idiots?

OP must have been extremely retarded. Why not use Unicorn OP? I have  one that hash at 5PH/s and only use 5kw. PM me dumbass.


1 PH/s per kW . Is it real ? sources ?

I just wanted to know, what was the mining cost of cheapest bitcoin, mined at industrial scale. According to oda its 459 USD/BTC.


Hm. Not too happy about the way my post was understood then. I probably should have phrased it more clearly...

Like I said in my calculation post, I don't want to claim this is the correct lowest production cost per coin.

What I intend it to be was a "model" calculation -  to show how, with a relatively conservative estimates on the discounts a large mining operator could get, mining could still be profitable assuming those rebates, even though mining for "amateurs" (who don't get those rebates) is probably not profitable at the moment.

As an example, say the large miners only can eek out a 10% discount for the hardware (vs. the 25% I assumed), and their overhead cost (facilities to run miners, cooling, etc) is higher than I think, in which case even the large miners don't mine profitable at the moment. That is the point CMMPro is making (correct me please if I'm wrong here, CMMPro).

My point is: I believe it is at the very least possible that large miners get substantial enough rebates on hardware, and are efficient enough in operating, that they can still turn a profit. Especially considering that large investments continue being made in mining farms.


To condense the point I tried to make even further...

Group 1: "Bitcoin mining is definitely NOT profitable at current prices!"

Group 2: "Bitcoin mining IS definitely profitable at current prices."

My position: "I can't say whether it's profitable for sure, because I don't know the discount factor of large farms, but large scale mining might be profitable, even at current prices, if those rebates are high enough."
legendary
Activity: 1020
Merit: 1000
September 08, 2014, 12:25:18 AM
#41
is this thread for idiots?

OP must have been extremely retarded. Why not use Unicorn OP? I have  one that hash at 5PH/s and only use 5kw. PM me dumbass.


1 PH/s per kW . Is it real ? sources ?

I just wanted to know, what was the mining cost of cheapest bitcoin, mined at industrial scale. According to oda its 459 USD/BTC.
hero member
Activity: 658
Merit: 500
September 07, 2014, 09:26:10 PM
#40
is this thread for idiots?

OP must have been extremely retarded. Why not use Unicorn OP? I have  one that hash at 5PH/s and only use 5kw. PM me dumbass.
full member
Activity: 182
Merit: 100
September 07, 2014, 08:50:20 PM
#39
Most efficient bitcoin miner - Extolabs EX1/ Wolfblood-XE  - 1 GH/s for 0.19 watt

                                                                                             5263 GH/ for 1 kilowatt

Cheapest Electricity in USA/Europe/Russia/China (avg)     - 0.08 USD/kWh


Estimated time to generate 1 BTC                                    - 10.36 days (with the current difficulty)



Energy cost = 10.36 X 24 X 0.08 = 19.9 USD !!!
Hardware depreciation cost is a large factor on why so many amateurs miners lost a great deal of money on mining.

If they use the same amount of money to buy coin directly, risk is about same but they get more benefit from rising value of btc.
legendary
Activity: 1652
Merit: 1265
September 07, 2014, 06:29:02 PM
#38
Another point.

With all mining you need to be the first to have the miner to get good profits.
This means you need to preorder possible scam products and hope they produce it and deliver it on time for it to be worth while.

In essence there is also risk in mining upping the price aswell.
hero member
Activity: 588
Merit: 500
September 07, 2014, 04:24:56 PM
#37
Oda...I respect your calculation...but it is simplistic and lacking several important variables as you mentioned yourself.

There is a transition from amateur miner to commercial miner that occurs around 2400w of draw.
No one is pulling that much current from a single household circuit unless you have modified a dryer plug or something illegal.
If you burn your house down mining 0.1 btc per month...well good for you, great job.

Amateur miners may be able to eek out a few dollars of profit in 6 months of mining with the most efficient mining equipment on the market....I'm still not sure of that...most of these "mining rigs" require the amateur users to buy the power supply separately, and you have to pay duty and import taxes. This can double the hardware investment price before it ever reaches the wall socket. (For my KNC unit last year the power supply was $192, and the shipping, duty and taxes was almost $450.)

However, the biggest variable cost though occurs once you go beyond 2400w of power requirements....now the miner's have to move the mining units out of their mom's basement and go to a commercial installation.

Air conditioning alone almost doubles the electrical cost, not to mention...rent, electricians to install and sign off on wiring panels, networking demands that go beyond a few 8 port routers tied together, internet bandwidth charges that are more than your usual household data plans....the costs are exponentially higher than someone running up to 5TH in their basement.

The upside? If they can get the hardware or manufacture the hardware at cost (<20% of retail), they can reduce some of the depreciation costs.



I still put forth the thesis that there currently is NO mining hardware that is profitable being produced today, not at any scale.
If anything, the large commercial mines are running at bigger losses than the little guys like me.

Once we admit that, we can begin to think about what problems and possibly opportunities that brings.
The reason the difficulty keeps increasing is not because it is profitable, it is because of the lengthy feedback loop and the fact that we are engaged in a silent war of attrition.

I believe the feedback loop is 2-3 months...the time it takes to get new hardware off the drawing board and into the mines.






legendary
Activity: 1470
Merit: 1007
September 07, 2014, 01:02:47 PM
#36
A 453GH/s miner like antminer s3+ will produce 0.79983BTC over a year if difficulty adjusts by +15% every time. It costs 0.58BTC as per https://bitmaintech.com/productDetail.htm?pid=00020140813125800214NBU85kWt0672


It needs 355 watts of power which will cost $155.49 at $0.05 per kwh.
So, 0.79983BTC-0.58BTC leaves us with 0.21983BTC at $500 per BTC, it's $109.915, which is less than the electricity cost. Unprofitable!!

If we had a 25% discount from the hardware cost, we will make ~$28 by the end of the year.

All of this assumes no pool fees of any kind.

You're re-doing my calculation from above, but you let the hypothetical S3 run past its profitable range wrt energy.

My cutoff was ~200 days, in which case the total cost to produce 1 BTC with a 25% off S3 is $459 (this is the price per 1 BTC - so you will need more than 1 S3 running to get 1 full BTC after 199 days, to be clear).

Tell me again how this is unprofitable?

I'm saying that with 25% off the hardware cost, there is a tiny profit to be made. Pool fees excluded of course!!!!!

I agreed with that (the reduced margins) in my reply to cow-herder. Just as an aside, a sufficiently large farm won't need a pool, so not necessarily needs to pay a pool fee.

Anyway, in reality, I'm sure the large operators' calculations are a lot more complex (since they presumably replace outdated hardware on the go, and need to take into account how much of their coins they can sell without depressing price too much)

But my point remains that, assuming you will be able to sell over the next 200 days for a price of around $500 per coin, investing $459 doesn't seem such a bad deal to me.  This would be a ~9% profit, that's hardly "tiny". (EDIT: at $500 per coin, that is. Profit would have been a lot higher at previous prices. Point is that, even now, there'd be 9% profit)
legendary
Activity: 854
Merit: 1000
September 07, 2014, 12:54:06 PM
#35
A 453GH/s miner like antminer s3+ will produce 0.79983BTC over a year if difficulty adjusts by +15% every time. It costs 0.58BTC as per https://bitmaintech.com/productDetail.htm?pid=00020140813125800214NBU85kWt0672


It needs 355 watts of power which will cost $155.49 at $0.05 per kwh.
So, 0.79983BTC-0.58BTC leaves us with 0.21983BTC at $500 per BTC, it's $109.915, which is less than the electricity cost. Unprofitable!!

If we had a 25% discount from the hardware cost, we will make ~$28 by the end of the year.

All of this assumes no pool fees of any kind.

You're re-doing my calculation from above, but you let the hypothetical S3 run past its profitable range wrt energy.

My cutoff was ~200 days, in which case the total cost to produce 1 BTC with a 25% off S3 is $459 (this is the price per 1 BTC - so you will need more than 1 S3 running to get 1 full BTC after 199 days, to be clear).

Tell me again how this is unprofitable?

I'm saying that with 25% off the hardware cost, there is a tiny profit to be made. Pool fees excluded of course!!!!!
legendary
Activity: 1470
Merit: 1007
September 07, 2014, 12:50:55 PM
#34
My goal in the above calculation is simply to point out, that, given the relatively conservative assumption that a large mining farm can acquire S3s for 75% of the consumer price, and make use of electricity for $0.05 per kWh, the production cost (taking into account hardware cost and energy only) is below current market, i.o.w. mining would be profitable for such an operation.
Nothing to argue there against.
It doesnt tell us anything about how much an Antminer actually costs to be built.
When announced the S3 used to cost 0.75BTC (and BTC was like $600 back then), so basicly the price has dropped from $450 in June/July to $280 now. In other words the price has already dropped nearly 40%.
Its fair to assume that the S3 definately costs less than $450 to build, otherwise one wouldnt consider building such a device. Is it still profitable to build at $280? Or is that already a clearance sale?
Probably still profitable, but unless some insider can tell us how much those companies pay for the wafers and how high the chip yield is we cant know for sure.

My guess would be the manufacturers operating their own pools are still turning a profit, but i doubt their margins are still healthy given risks involved.

Now we're talking. I don't think the margins are as good as they used to be for the big operators (that part is obvious, given lower price and higher difficulty), and are maybe even getting close to a net zero.

I have the suspicion (that I can't prove) that we are currently pretty close to the cost of a coin mined by a large farm. I don't think it is coincidence that the mid to high 400s are revisited so often and persistently. But it's nothing more than a suspicion, I admit. Maybe post hoc reasoning to explain why price keeps coming back to where we are now.
legendary
Activity: 1470
Merit: 1007
September 07, 2014, 12:45:41 PM
#33
A 453GH/s miner like antminer s3+ will produce 0.79983BTC over a year if difficulty adjusts by +15% every time. It costs 0.58BTC as per https://bitmaintech.com/productDetail.htm?pid=00020140813125800214NBU85kWt0672


It needs 355 watts of power which will cost $155.49 at $0.05 per kwh.
So, 0.79983BTC-0.58BTC leaves us with 0.21983BTC at $500 per BTC, it's $109.915, which is less than the electricity cost. Unprofitable!!

If we had a 25% discount from the hardware cost, we will make ~$28 by the end of the year.

All of this assumes no pool fees of any kind.

You're re-doing my calculation from above, but you let the hypothetical S3 run past its profitable range wrt energy.

My cutoff was ~200 days, in which case the total cost to produce 1 BTC with a 25% off S3 is $459 (this is the price per 1 BTC - so you will need more than 1 S3 running to get 1 full BTC after 199 days, to be clear).

Tell me again how this is unprofitable?
sr. member
Activity: 322
Merit: 250
September 07, 2014, 12:38:03 PM
#32
My goal in the above calculation is simply to point out, that, given the relatively conservative assumption that a large mining farm can acquire S3s for 75% of the consumer price, and make use of electricity for $0.05 per kWh, the production cost (taking into account hardware cost and energy only) is below current market, i.o.w. mining would be profitable for such an operation.
Nothing to argue there against.
It doesnt tell us anything about how much an Antminer actually costs to be built.
When announced the S3 used to cost 0.75BTC (and BTC was like $600 back then), so basicly the price has dropped from $450 in June/July to $280 now. In other words the price has already dropped nearly 40%.
Its fair to assume that the S3 definately costs less than $450 to build, otherwise one wouldnt consider building such a device. Is it still profitable to build at $280? Or is that already a clearance sale?
Probably still profitable, but unless some insider can tell us how much those companies pay for the wafers and how high the chip yield is we cant know for sure.

My guess would be the manufacturers operating their own pools are still turning a profit, but i doubt their margins are still healthy given risks involved.
hero member
Activity: 686
Merit: 500
A pumpkin mines 27 hours a night
September 07, 2014, 11:57:48 AM
#31
Are the Extolabs actually legit? They first came up in May if I remember correctly. The prices back then are just too high at the current levels of difficulty, though. You need to buy the miner first!
legendary
Activity: 854
Merit: 1000
September 07, 2014, 11:50:31 AM
#30
A 453GH/s miner like antminer s3+ will produce 0.79983BTC over a year if difficulty adjusts by +15% every time. It costs 0.58BTC as per https://bitmaintech.com/productDetail.htm?pid=00020140813125800214NBU85kWt0672


It needs 355 watts of power which will cost $155.49 at $0.05 per kwh.
So, 0.79983BTC-0.58BTC leaves us with 0.21983BTC at $500 per BTC, it's $109.915, which is less than the electricity cost. Unprofitable!!

If we had a 25% discount from the hardware cost, we will make ~$28 by the end of the year.

All of this assumes no pool fees of any kind.
hero member
Activity: 518
Merit: 500
Trust me!
September 07, 2014, 11:39:48 AM
#29
0.2W/GH/s seems to be quite low, that's a given. What needs to be considered as well is the initial price of the miner itself. Those miners don't grow on trees. But it shows how manufacturers can make quite a decent return if they're able to churn those miners out at a low price!
legendary
Activity: 1473
Merit: 1086
September 07, 2014, 11:34:01 AM
#28
Here is a chart with the addition of the miner costs:

Code:
100$ miner 200$ miner 300$ miner 400$ miner 500$ miner
-0,02 -0,23 -0,43 -0,64 -0,85

0,16 -0,05 -0,25 -0,46 -0,67

0,32 0,12 -0,09 -0,3 -0,5

0,48 0,27 0,07 -0,14 -0,34

0,61 0,4 0,2 -0,01 -0,21

0,72 0,52 0,31 0,1 -0,1

0,83 0,62 0,41 0,21 0

0,92 0,71 0,51 0,3 0,1

1 0,8 0,59 0,39 0,18

1,08 0,87 0,67 0,46 0,26

1,15 0,94 0,74 0,53 0,33

1,21 1,01 0,8 0,59 0,39

1,27 1,06 0,86 0,65 0,45

1,32 1,12 0,91 0,7 0,5

1,37 1,16 0,96 0,75 0,55

1,41 1,21 1 0,79 0,59

1,45 1,25 1,04 0,83 0,63

1,49 1,28 1,08 0,87 0,66

1,52 1,31 1,11 0,9 0,7

1,55 1,34 1,14 0,93 0,73

1,58 1,37 1,16 0,96 0,75

1,6 1,4 1,19 0,98 0,78

1,62 1,42 1,21 1 0,8

1,64 1,44 1,23 1,02 0,82

1,66 1,46 1,25 1,04 0,84

1,68 1,47 1,27 1,06 0,85

1,69 1,49 1,28 1,08 0,87

1,71 1,5 1,29 1,09 0,88


In the chart you see the bitcoins that the miner creates over its profitable lifetime, if you would start from the beginning of the launch. The cost of the miner is calculated by $cost/485(<-current bitcoin price).
legendary
Activity: 854
Merit: 1000
September 07, 2014, 11:25:41 AM
#27
Nice job but it only reflects the cost in electricity. Why don't you redo it adding the cost of the miner! We would have the whole picture then!
legendary
Activity: 1473
Merit: 1086
September 07, 2014, 11:17:13 AM
#26
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