Miners are about to get squeezed big time unless the price of BTC jumps soon - page 2.

Korbman

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Quote from: bozo333 on August 18, 2014, 02:46:26 PM

Same stuff I have posted elsewhere. According to my calculations, even with a sub 10 cent/kwh electric rate you are not making money at these difficulties if BTC is below 650, 650 being about break even after 3-4 months. And thats assuming (big assumption) that you did not overpay for the hardware (another set of calculations).

And what calculations did you do to come up with that?

Even with inefficient hardware (2W per GH/s) and an energy cost of $0.15 per kWh, each GH/s would cost $0.0072 per day. At the current difficulty (19.7B), each GH/s would generate somewhere around BTC0.000025, or $0.01175 at the current exchange rate of ~$470. A gross profit of $0.00455 per GH/s.

At what point will revenue and expenses cancel each other out? Around $288 per Bitcoin, or a difficulty of ~32-33B.

Either way, I agree with what's been said...small time mining is mostly dying, and instead being left up to the big manufacturers / wholesalers with deep pockets, vast swathes of chips, and industrial grade (cheap) energy. When thinking long term, there's no way we can compete.

Syke

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Quote from: DrG on August 18, 2014, 08:39:07 PM

Without a doubt Bitmain's S3s are nice hardware that are relatively problem free (compared to competition) and have pretty much the best pricing for end users. The problem is if Bitmain wants to mine on their own it doesn't cost them 0.66BTC but probanly something less than 0.25BTC to make one so they can keep making them and mining as can many other ASIC manufacturers.

Yup. Small-time/home miners are finished. The big guys have their startup costs paid for, and now they just crank out the chips at far cheaper cost than they will sell them for. There's no way to compete with that.

DrG

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Quote from: Syke on August 18, 2014, 05:48:55 PM

Quote from: iglasses on August 18, 2014, 02:45:05 PM

Even Bitmain who had one of the best reps out there have really left a bad taste in people's mouths with the S3, now they want you to wait until September 20th for the next round to ship and pay .66BTC for it TODAY.

.58BTC is only $266, or $.6/ghps. That is by far the best price in the market.

Without a doubt Bitmain's S3s are nice hardware that are relatively problem free (compared to competition) and have pretty much the best pricing for end users. The problem is if Bitmain wants to mine on their own it doesn't cost them 0.66BTC but probanly something less than 0.25BTC to make one so they can keep making them and mining as can many other ASIC manufacturers.

Syke

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Quote from: iglasses on August 18, 2014, 02:45:05 PM

Even Bitmain who had one of the best reps out there have really left a bad taste in people's mouths with the S3, now they want you to wait until September 20th for the next round to ship and pay .66BTC for it TODAY.

.58BTC is only $266, or $.6/ghps. That is by far the best price in the market.

jonnybravo0311

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Quote from: iglasses on August 18, 2014, 02:45:05 PM

It's crazy to see that people just blindly continue to add power to the network regardless of what the price/difficulty are doing. I think part of this is yet another negative of the pre-order disease BTC suffers from. If you ordered from Company XYZ three+ months ago and the box shows up on your doorstep today what are you going to do, not plug it in? But would you order that same piece of hardware for the same price today even if it would be delivered tomorrow? Too often I think the answer to that question is a big fat NO.
Until people truly keep their hands in their pockets and stop financing the development for h/w Co's. two, three quarters away I don't think it will change.

Even Bitmain who had one of the best reps out there have really left a bad taste in people's mouths with the S3, now they want you to wait until September 20th for the next round to ship and pay .66BTC for it TODAY.

It's 0.58BTC... but I'm just nitpicking there. I agree with your post. Try to tell somebody they can purchase a 600GH/s miner for $4000 and they'll tell you to go pound sand.

Quote from: bozo333 on August 18, 2014, 02:46:26 PM

Same stuff I have posted elsewhere. According to my calculations, even with a sub 10 cent/kwh electric rate you are not making money at these difficulties if BTC is below 650, 650 being about break even after 3-4 months. And thats assuming (big assumption) that you did not overpay for the hardware (another set of calculations).

PS Forget most online 'profit calculators'. Pie in the sky, not real world earnings by any means. But better than nothing.

You need to stop thinking in terms of fiat here. You need to consider whether or not the miner you purchase will ever make back the BTC it cost to purchase it. If you are going to invest fiat in the hardware, instead of BTC, you need to look at how much BTC that fiat can buy you at the same time you are going to purchase the hardware. For example, if BTC is $100 a coin and your miner costs $3000, you can either buy 30BTC or the hardware. If you choose the hardware, you need to determine whether or not that hardware will ever get you back the 30BTC during its useful lifespan. Same applies if the cost of a coin is $10,000. You can buy 0.3BTC or that miner. If the miner will earn you back more than 0.3BTC, then pick up the miner.

Nagle

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Quote from: iglasses on August 18, 2014, 02:45:05 PM

It's crazy to see that people just blindly continue to add power to the network regardless of what the price/difficulty are doing. I think part of this is yet another negative of the pre-order disease BTC suffers from. If you ordered from Company XYZ three+ months ago and the box shows up on your doorstep today what are you going to do, not plug it in? But would you order that same piece of hardware for the same price today even if it would be delivered tomorrow? Too often I think the answer to that question is a big fat NO.

Right. Because of all those pre-orders and extended delivery times, a lot of mining gear is coming online that's will have a negative lifetime ROI. That creates an overshoot situation - lots of miners losing money, but losing less than if they never powered up the preordered equipment. It's quite possible for this to persist until all miners are losing money.

bozo333

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Same stuff I have posted elsewhere. According to my calculations, even with a sub 10 cent/kwh electric rate you are not making money at these difficulties if BTC is below 650, 650 being about break even after 3-4 months. And thats assuming (big assumption) that you did not overpay for the hardware (another set of calculations).

PS Forget most online 'profit calculators'. Pie in the sky, not real world earnings by any means. But better than nothing.

iglasses

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It's crazy to see that people just blindly continue to add power to the network regardless of what the price/difficulty are doing. I think part of this is yet another negative of the pre-order disease BTC suffers from. If you ordered from Company XYZ three+ months ago and the box shows up on your doorstep today what are you going to do, not plug it in? But would you order that same piece of hardware for the same price today even if it would be delivered tomorrow? Too often I think the answer to that question is a big fat NO.
Until people truly keep their hands in their pockets and stop financing the development for h/w Co's. two, three quarters away I don't think it will change.

Even Bitmain who had one of the best reps out there have really left a bad taste in people's mouths with the S3, now they want you to wait until September 20th for the next round to ship and pay .66BTC for it TODAY.

kendog77

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Miners are going to get hit with a ~17% difficulty increase in around 1 day on August 19th, and the price of BTC has fallen from ~$580 to ~$470 over the past two weeks.

These two factors combined are going to put a lot of pressure on miners. I expect to see us reach mining equilibrium (the point at which the difficulty stays roughly the same or even goes down) before the end of the year unless the price of BTC spikes soon.

The rest of 2014 will be very interesting as inefficient hardware and miners with high electricity costs get pushed off the network.

It will also be interesting to see how mining hardware manufacturers deal with this issue and if they can continue to sell new hardware at a profit.

Topic: Miners are about to get squeezed big time unless the price of BTC jumps soon - page 2. (Read 2393 times)