Topic: Miners that pay for electricity should seriously start reconsidering (Read 8090 times)

I hope so.

If the price stays this low difficulty will drastically lower making it profitable again for quite a few people who do pay electricity.

Yep, eventually the mining game will be limited to people with free or low flat electricity cost, like newminerr. Basically anyone paying more than 0.5c per KW is going to be looking at mining at a loss in the near future, you just can't compete with people like newminerr that pay $10 flat for unlimited electricity.

No, he have no way of finding how much KW i used.
So i get free electricity and pay a 10$ each month as a fine.

And no that won't change in the -near- future.

If you get "free" electricity. Isnt that in your contract/lease?

No sir, here is the thing.
There is no KW-Meters thingy.
The 10$ [50 Egyptian pounds] is a fine for not installing one <= which is totally legal.
And i am fine with that fine

So..  he will get free electricity for at least a month and possibly more until your landlord goes through proper eviction procedure?

So..  he will get free electricity for at least a month and possibly more until your landlord goes through proper evition procedure.

Start your farm, and see how long that lasts.

Just because they don't care if you run your stove 10 minutes or 20 minutes doesn't mean they don't care if you run a small server farm in the house.

You see, if you exclude things like server farms, electricity use CAN be guessed or estimated. Most people take a shower, make some breakfast, wash 1 weeks' worth of clothes each week, watch a few hours' TV, leave a PC on 24/7, etc.

But if you start a science lab in your basement, and run up a $500/month electric bill trying to re-create Frankenstein's monster, you can bet the landlord WILL notice.

I'm sure that the landlord's first $400 electric bill for your house will cause him to pay you a visit. He's not in the business of losing money.

I rented a new place.
I pay only 10$ [in local currency] for electricity no matter how much kw's i use 

I am thinking of creating a bitcoin farm 

That is true, apart from it is not at loss it is heating the house during winter. So in effect it is subsidised heating. But come next spring it will be time, for me anyhow, to stop mining and buy Bitcoins.

For me  equilibrium is about a month away. Do I plan to sell my cards, with that much raw computing power I can think of a few other projects to use them for in small bursts, not 24/7 like they have been. Maybe even play a few games, without worrying about the drop in hash rate.

Here is the guts of a post I was going to make when I noticed this thread and instead of posting a new thread with a very confusing title of "Sky rocket or go Magma diving ?" I decided to add to this thread ..... they are both ultimately about your own personal equilibrium day.




Sorry for the poor beginning, I always seem to start my posts at the middle and work my way towards the beginning and finally get to the end.

Cost of Electricity per Kilowatt hour unit for me $0.25 (fixed)
Power used by my rig per day (about 220W x 3 + misc) circa 750Watts (24*0.750*0.25) = $4.50 (fixed, unless I add more hardware)
Hashed by rig per day on average 1300MH/sec @ current difficulty of 1888786.70535 is 0.692 BTC.

Assuming that 1 BTC is currently worth about $10 this would be $6.92 mined per day. Great news for me, I am printing money, at a profit using the current exchange rate.


If I assume that the value will increase in the future, I could print at a loss today for a possible profit tomorrow.
Or I could assume that BTC is a bad techo/nerd/geek/investment fad and the value will suddenly drop through the floor, and that I am printing money for a loss today and will be hit by an even larger loss tomorrow.

But I am an optimist and am reminded of that old saying "Always buy land, there ain't any more of it coming along any day soon", that is of course unless you live in Hawaii
But if you bought land 100 years ago, there is one thing for sure and that is that it will have appreciated in value. And if I bought land today, in 100 years time it will also have appreciate in value. In between there are ups and downs but overall the value it is up. I think of BTC in the same way as minerals, there is a limited fixed supply. There are ways to get more minerals, by bring them back to earth from space, but the extra mass would slowly spiral our planet into the Sun.


So anyhow back to the task at hand lets work backwards. i.e. At what difficulty will the cost of electricity for me  match the BTC being printed per day (at given exchange rates) ?



I have one constant the cost of electricity and two variables: the BTC generated per day on average and the exchange rate of BTC to dollars.
So to balance both sides of an equation I need to reduce the BTC generated per day to match my electricity costs.

$4.50/$10.00 would be 0.45 BTC per day to be operating at no loss and no profit. Or one 50BTC block found on average once every (50BTC/0.45BTC) 111.111111 days (111 days, 2 hours and 40 minutes)

Now here comes the flaw in trying to work out the magic difficulty, this duration of 111.111 days is larger than 14 days, which is the target duration of each new difficulty level (probably closer to 12 or 13 days in reality).
There is also a flaw that the future exchange rate all the way during the total 111.111 days will be constant and at today's assumed exchange rate of $10.00

Even with these two major flaws in the calculation both of which are unpredictable (BTC exchange rate and future difficulty growth[reduction] rate). Is having a flawed number better than having no number ? I would like to see a bad approximation rather than nothing.

The maths is trivial - see https://en.bitcoin.it/wiki/Difficulty#How_soon_might_I_expect_to_generate_a_block.3F I'm just flipping the formula to get a difficulty instead of an average time for a new block.

difficulty =  ( average duration for a block in seconds x hashrate in hashes per second) / 2^32  = ( 9,600,000 x 1,300,000,000 ) / 4,294,967,296 = 2,905,726.433

In my case a difficulty of 2905726.433 at a hash rate of 1.3Ghash/sec would yield one 50BTC block (ignoring block fees) found on average every 111 days, 2 hours and 40 minutes or 0.45BTC per day over 111.111 days (or a 54% increase from the current difficulty). This is as I mentioned assuming a constant exchange rate of $10 and a constant difficulty for 111.111 days of the 2905726.433 difficulty. 111.111 days divided by 14 days is 7.9, so the difficulty should have changed at least eight times during this period. But there is no way to know if the future difficulty will increase or decrease in the short term. In the long term it should increase, with increasingly more efferent future hardware.


Anyhow there is a decision that I will need to make, circa a month from now. Nothing is set in stone, the BTC exchange rate could sky rocket, or go magma diving. And the difficulty rate could increase (or decrease) more rapidly than expected. There should be enough information above to help you workout your own approximation to your own personal equilibrium day.

EDIT: Actually in about a months time it will be getting close to winter where I live, so maybe I will continue to mine for subsided heating. *evil grin* Maybe next spring/summer you will see a drop off in mining, but I think that every winter there will be an increase. Why generate heat without doing something useful to make the heat.

There is an interesting idea, electric BTC radiators. Increase the hash rate to increase the temperature, and throttle the sharerate to lower the temperature. Maybe pulse it 5 minutes generating then allow it 5 minutes of idle, and adjust the on/off ratio to adjust the average room temperature. It would definitely be an idea that would get media attention. Although I don't know if it would be in a good way, or a bad way.

Anyhow here is a simple table, everyone loves tables, well except those who love graphs, bloody hedonists.
The top row is cost in US cents per KWhour of electricity and the first column is the BTC to US dollar exchange rate.

You are either ON the table or OFF the table. This is because "average duration for a block in seconds x hashrate in hashes per second" is a constant for everyone mining. So if you are mining less than the required number of BTC's a day to break even you can not be on the table above. So in my case I am mining 0.69 BTC per day (1.3Ghash/sec) and my electricity cost is 0.45 BTC per day. If I was CPU mining at 10MHash/second generating 0.01 BTC a day with the same power cost of  0.45 BTC per day (or anything greater than 0.01), even though I could read values from the above table, I would be asleep probably in deep space and would definitely not be ON the above table. My current exchange rate ($10 per BTC) and current cost (18.75 cents per hour) of electricity would be there and point to a cell with the difficulty equilibrium answer if I was mining sensibly.

So My rig uses 750 watts per hour or 0.75 KW hours at 25 cents per KW hour unit. Thats 18.75 cents (0.75*25) , the 20 cent column is the closest to my true value and at a current exchange rate of $10 would give the approximate value of 2724118 for 20 cents but if I adjust this (20/18.75*2724118 = 2,905,725.867) I get the same value as above, or as close as makes no difference: 2,905,725.867 instead of 2,905,726.433

DELETED for privacy

Holy Snikies thats insane!!!! I need to rent a house in Slidell and load it up with miners.. thats just straight crazy energy pricing there !!!  Looks like your coop doesn't charge transmission rates.... Me = shocked right now :-).

I would call you a lucky bastard, but living Louisiana during this heat-wave probably isn't all that much fun... I'm not a fan of the 105's we keep seeing but at least the humidity is below 40%.. :-)

Josh

DROOL!

See for yourself. Removed for privacy

Yep this is why I created this post. Those who have to pay above 10c per KW for electricity, should start wind down their operation now. The only miners that can remain in the game for the long run, are those that pay zero or almost nothing for electricity. These people will laugh at difficulty rise, price drop, they don't care, they will still turn a profit. You just can't compete with these guys.

I'm sure if we ever have another spike where bitcoins surges to 30 dollars we will see a huge difficulty increase where people run to buy every ati card possible.

Oh, I know that.  By 'we don't need miners' I mean we don't need hoards generating bitcoins for little to no profit at current prices.  There will always be miners out there mining with very cheap or 'free' electricity, so transactions will always go through.

The hash rate has barely risen over the past few weeks so it seems we're well past the moment where GPU mining is attractive.  Next up is FPGA mining, assuming someone puts together an attractive package.