Topic: Never make a ROI (Read 2949 times)

Many states force utilities to purchase excess solar power from consumers at retail prices.

Even if the electric did not "cost" anything they would still miss out on selling that electricity to the utility company

The answer to your question ultimately depends on two things:

One - how fast the difficulty increases. This will determine how much your machines will mine in the future as well as the future value of your miners.

Two - the price that you pay for the machines. This will help determine when/if you will ever reach ROI.

I assume that you would purchase 28nm machines. You generally "have" to assume that the price of bitcoin will remain flat when calculating ROI as if you think it will increase then you would be better off simply buying bitcoin.

IMO the best way to profit off of miners is to buy miners at the market price (or slightly below if possible) then resell it right away to someone else quickly, before the miner looses any value. You could then keep what it mines as profit.

Miners will lose value as the difficulty increases as they will produce less bitcoin

Possibly, obviously how much they cost and how much electricity they consume would be the main factors.  The thing is though, it's easy to make money on paper using cheap accounting tricks, without actually making any money.  Large part of the reason why costs are so high.  For instance someone mentions solar panels to cut down on the costs of electricity.  Okay, but solar panels don't come free, if you spend 20k USD on solar panels, are you including that cost in your operational costs or just ignoring it?  Even with solar panels, electricity that you are consuming is still worth money.  If you consume 1000 USD a month in electricity that you could have otherwise sold to the power company, is that missed revenue being accounted for as a cost as it should be, or just ignored?  And of course there are the people with "free" electricity.  Unless you are stealing it though, you are paying for it.  It may be included in the rent so you don't know how much your paying for it, but it's still there.  These are just a few examples of costs that are sometimes ignored but are nevertheless still there.

 So Lets say I had enough capital to buy 20 TH/s worth of machinery and could run it at $ 0.03 kw/h............could this not make money ?

This fella makes alotta sense.  I've been wanting to find somebody with a huge solar farm for sometime now.  Kudos to you sir (even though I hate you kind of...not really;)

mining has become over-staturated, thats why the profits are marginal/none.
Try to make a profit trading, instead of mining, if u have a steady hand and nerves

Most of miners usualy start selling equipement as soon as they recieve it, and that way they make better profit, so consider that also.

It's not imaginary.  I've made over 0.81 BTC with the single Antminer S1 I'm still running.  Put in February 12 to June 14 and 200 GH/s:

http://retrocalc.net/

Forget the fiat for a second, I've made 0.81 profit from my 1.45BTC invest.  So 0.81 is pure up coins.  So 0.81 x current exchange rate = $456 or so since BTC price dipped a little.

I always use coins to buy miners, so don't factor the exchange price then and now.  Coins in, coins out.

Hope that makes sense to you now.

Chuck

You didn't make $500. If you sold right now you'd make about half that due to the drop in price since February. You don't make a profit or a loss until you sell. Until then, it's imaginary.
 

Maybe if the money you were investing was obtained from illegal business activities.  Chalk up the not making ROI to the cost of the money laundering operation.

You will probably be better off simply buying bitcoin as the difficulty will likely rise much faster then the price of bitcoin.

With that being said you can potentially get ROI if you pay a cheap enough price, it is just that there are very few (or no) people selling at low enough prices for buying a miner to make sense.

Yea, I'm late to the game(started late 2013) but I can assure you I was making around 0.04-0.05 Bitcoins in mid-February since difficulty was at 2.6 Billion

https://bitcoinwisdom.com/bitcoin/difficulty

I wish I had mined in the GPU era, but oh well that boat has sailed.

You can be sure that the retrocalculator is pretty spot on as it pulls it's database from http://blockexplorer.com/q/nethash

Even with 1% variance due to pool luck or any outages, you can see I've made out with that single Ant.

Much much harder nowadays obviously with each difficulty increase, but not impossible as most would have you believe.  You have to pounce on the right hardware at the right price point.  If you aren't close to mining ROI, best to sell it right away for BTC to recoup losses and turn the sale into net profit.  Also, it doesn't hurt to have cheap or free electric!

I don't know if those numbers are correct, it's saying 200ghash would make .05 bitcoins a day in mid-february.  doesn't seem correct to me.

but sure doesn't hold a candle to buying a radeon 5830 for $100 from newegg in 2011 and paying it off in like 2 1/2 days

For example I purchased my first Antminer S1 through Sushi's group buy in early February for 1.45BTC

I set it up and overclocked it to 200 GH/s and started mining on February 12th.

Using http://retrocalc.net/ I see I've roughly made 0.8 off that 1 Antminer S1(2.24 Total BTC mined).

I don't think making nearly $500 off of one miner(out of several I bought) is just barely making ROI, do you?  Another factor is I luckily have free electricity, so helps a great deal.

Now I've sold most of my Ants, but I've held onto Antminer #1, as that little guy is proof that you can ROI in this difficult environment.  He'll always have a place in my BTC heart....

No clue what an Antminer is, since checking information on ASICs hasn't been worth the time since Avalon batch 2, but even if it does show some greater # of bitcoins, when were these Antminers paid for?

Not before mid-November hopefully?

lol.

Also worth considering that just barely making ROI is still not worth bragging about, or something to equate to being a good investment, contrary to the misleading salespitch used by sellers of mining hardware or cloudmining contracts that have been making them a handsome profit.  You could have alternatively put the money in a GIC, and rename that GIC "the alternative to bitcoin mining GIC", where the maturity date would coincide roughly with when you would have reached ROI had you instead been mining bitcoins.

Not true, every January through early March Antminer S1 owner has ROI'ed:

http://retrocalc.net/

Antminer s1s, purchased 2 new when they had the fixed price that wasn't changing late feb and  2 mid march (coupons on these).  I know exactly what they have made, as they have only been on egluis pool, with brief periods on their backup pools (unlike gpus which have been at every coin imaginable.)  They were all overclocked at slightly over 200ghs.
I started with gpus, and believed all the nonsense spread by everyone about how bitcoin asics suck, you never see roi, and my gpus can be sold for 75 percent purchase price.......lmao, how did I believe that shit.

Yes this is what most people get confused with but keep in mind that's all we have to use now

You can buy a miner with Fiat or Bitcoin but when you're paying with Fiat and getting returns in Bitcoin that obviously muddies the waters as the price fluctuates

The calculations are not hard to do by yourself instead of relying on all these websites to do it for you and it comes to one very clear conclusion

There is very little on the market at this point that you will get a ROI whether its BTC or Fiat (keep in mind that you calculate how many BTC's you can buy right now for that amount) with a modest increase in difficulty 10-15% over a 6 month period

Lets not forget you may want to sell during a bubble that might be occurring during that period whereby it's much easier to liquidate the coins you already have

May I ask which machines you purchased.   The only ASICs known to easily do BTC ROI have been the Avalon Batch 1 & 2 units and the initial KNC deliveries.  All the other miners are struggling to make BTC ROI including Bitmain S1 buyers as far as I can tell from forum posts.  Did you buy your eq secondhand/used?

I have made over fiat return on antminers, and I am a week away from btc roi (technically the asics have made there btc roi price up, but I added in the cost of power and psus to be fair) in around 3 months.
-This assumes straight mining numbers (- power and psus), and if I held every btc mined, and sold them all this second.
A hell of allot of people used btc asics way before I ever did, and I do not see how they could not have gotten roi.   

You must be talking fiat ROI.  Fiat ROI just depends on timing - you buy the miner when BTC value is low, mine and hope BTC goes up to cover your cost.

BTC ROI is pretty much impossible with any ASIC.  I think the naysayers are talking about BTC ROI.

For those of us who have been mining during your same time frame, as close as we have been able to get to making ROI, we recognize that doing so has been very much dependent upon starting mining at that particular time (ie. in late 2013).  An opportunity that is vanishingly small, considering the considerable cost of home mining equipment.  Timing was everything.   The window for that opportunity has been rapidly closing over the past few months as the difficulty level has increased.  It is not worth bragging about getting ROI because it can encourage new miners to believe that can do the same.

Even with GPU now is hard to make a profit... My electric bill is far higher than my profit at the moment, but if prices go up might be worth in the long run - plus my home is really warn and no need to use tumble dryer LOL.

You can roi. I have and i'm no wizard.
I don't understand the miner price today though as they were cheaper, or the same price 2-3 weeks ago, and it is a later point in time. 
Companies just ripping people off from recent price increase right now.

Now anyone who is trying to mine alts with gpus these days, myself included, needs some wizard assistance cause were all fucked lol. 

The problem with that is that it's so geographically limiting.  Very few people would call Southern California technologically backwards and yet mining is essentially not happening here due to the insane power prices.  Even if we wanted to go off grid and put up our own solar there is so much red tape with the state gov because of environmental BS.

This is why everybody is colocating.  For me it's not worth the hassle of setting up solar for $50k.  I would rather buy a house in WA and then make a business of running other people's eq than mining myself 

ROI depends on how big you see your system. If it is limited to a crypto hardware and supporting CPU then your system input constraints (such as elec prices) will smash your ROI into the floor. On the other hand, expand your vision to include the energy source and derive a method to control it, such as adding a solar panel / wind turbine to power your hardware, then your system might take longer to break even but the ROI is ongoing.

Yes the ROI is diminishing however it does allow you to continue using older generation miners and updating them through profits.

This is the approach I have used and although I am not packing a 10THs facility, I do own my 1.5kW solar array plus the Jally plus the R-box plus the 3 * 6770s plus the 2 * AMD 6 cores that were ALL paid for out of an initail $500 investment.

Yes, this is less profit than having bought just BTC however I am more comfortable working with and understanding hardware/ software than I am with world economics...

P.S the 1.5kW array is more than enough to power sufficient ASICs to make it worth my while as each gen improves more hash for less watts. As the current 3rd gen stabilises, I will grab a few more to my collection. 

Overall, work out a business plan that works for you and stick to it!

Need another coin a serious edit to Bitcoin for that to work.

haha.   While that may very well be true, the OP proposed an idea and asked for input.  We're all giving our opinions - intelligent or asinine.  Feel free to buy up miners and mine away.  As long as you're not pushing GHash.IO I'm OK with that.

Sadly if people weren't so competitive (I refrained from calling them greedy since almost all will be losing) then people wouldn't be forced to colocate and everybody could have a simple miner at home to support the network.  Now everybody has to have their miners hosted  

Now-a-days most miners will not be able to ROI every. If they can time the market right they can possibly buy a miner, and put it up for sale right away and let it mine until it sells. Hopefully you can mine more then the value it looses.

I disagree with that assessment.

You sound just like a broker who says "Invest in these mutual funds from our company, they are better", and then gets paid commission for it.

Anybody that says to just buy BTC and hold it is just advising people to buy BTC so that more demand is created, so that they can sell the BTC they already have mined at a higher price.

No, actually I picked an example that has not fully played out. That was just the "6 months" checkup. Final tally for ROI is actually at 9 months.

I'm not really going to get into specifics, because frankly, I don't want to seem like any kind of boasting asshole. Suffice it to say that I owe a lot of stuff that I learned to people on these forums, who have tried to help other people, like myself and others. Those people are very nice and helpful, and have helped me a lot, so I try to pass on a little of what I have learned.

Cryptomining is like a box of chocolates, you never really know what you're going to get. Sure, everybody can have hindsight, and say "You should have bought BTC at price XXX, instead of buying mining hardware", but that's like saying "You should have bought Apple at $11/share back in 1995-6". That kind of advice is absolutely worthless. Kind of like the advice you get from a broker, who just wants to make his commission.

My advice, forget calculators (They have their uses to see mainly when you should unplug stuff). Physics is tough to argue with.

Buy with a 6-9 months window, and do your own thing. Try a few things out. I'm not going to get into specific amounts, because the IRS could be trolling these boards, but here is a few "projects" of mine that have turned quite well.

1) May 2013, bought a 7850 and a 7750 Radeon. Everybody was saying GPU mining was dead, blah blah blah. Kept mining with GPU's until August, Now those GPU's are mining Scrypt. ROI made beyond my wildest dreams, let's just leave it at that.

2) July and August, added 5 block erupters. ROI made, because I kept the BTC and waited for the top.

3) Bunch of K16's that I ordered finally came in early November 2013, mined with them for a month and a half,  sold them in December  on E-bay for basically what I paid for them. Net profit enough to pay my wife's student loans and mortgage one month. Wife stays off my back now on cryptomining and computers (priceless).

4) Some jally preorders came in about the same time as I got a 30Gh/s little single off E-bay (October 2013). That thing has made the money back on it in spades, and then some. Butterfly labs stuff is still going, although I will have to pull the plug soon, according to my calculations.

5) Made enough to get the Antminers, which are still going.

6) Just got an SP10 Dawson in, we'll see how that works out. The next power bill might be interesting however. That thing sucks power.

So, my point is, stop stressing about ROI for the next 6 months, and don't listen to the naysayers who say you should buy BTC and hold it. Yes, you have to hold BTC, but hold the BTC you mine yourself, until there is the right time to either re-invest in mining equipment, or sell them.

Hope this helps somebody.

It seems that some people didn't agree with those calculations and they bought all SP10 miners available Now only the SP30 is available for order (see affiliate sig)

Maybe it is dotcom type thinking.  We are losing money on every order but we are going to make it up with volume.

IMO its very hard to make ROI now better buy bitcoin directly.

And how exactly does that change if you have more than 10TH/s?
More kicks, more heat and more flashing lights.
If mining is unprofitable, having more miners means losing more money.

Yeah, I think few people deny that if you bought the right miner at the right point of
time from the right company, it was possible to make a profit.

So, may I ask: Was this your first and only mining project?
Or did you just pick the example with the best outcome?

Forget USD. It's a dying currency, and soon it will be completely worthless, only good enough for kindling and toilet paper.

I used to think like you, honestly. I always converted stuff to USD, and calculated profit/loss that way.

However, once I've used BTC for about a year, I've started thinking in BTC. There is no need to think of stuff in other terms.

If I paid in BTC, I calculate my profit in BTC.

I could care less about fiat, worthless currencies. Yes, my power bill is in $$, but that's chump change in my book. $300 over 6 months is going to the movie theater twice a month with another person and buying popcorn and a drink. I don't even think about it.

Yes, the price of BTC was high in December/January 2013/14, but that's irrelevant also.

The price of USD to Yen, Euros and Pesos goes up and down too, but you don't see people calculating and saying "OMG, I had more Euros in December than I did in May, if I converted my USD to Euros!"...

What's the point of conversions to other currencies, if you don't really care about the other currencies?

I use BTC as much as I can, other currencies be damned.

Yes, your analysis makes sens XScrypt, as long as you pick and choose which data points for USD/BTC conversion you use. But, I respectfully disagree with your conclusion, since it is based on hindsight.

I don't really care if  BTC goes up or down in terms of fiat currencies, because I'm minimizing their use. Hell, you can buy just about anything you want nowadays in BTC, even cars and groceries.

Plus, if all small time miners gave up and bought BTC, then BTC would be controlled by HUGE centralized mining farms, which is just like the Federal Reserve/Central Bank system. The whole point of BTC is to have a decentralized currency creation system, that cannot be brought down if one or more nodes go down.

The whole theory of "You should have bought BTC instead of mining because of ...blah blah blah" goes completely AGAINST what a decentralized cryptocurrency with no central control stands for.

You're not profitable. At least not if your using USD.

BTC Cost: 5.35BTC*$900 = $4800 (Average of December and January BTC prices)
Power Cost: $300
Current Value: 6.6*$650 = $4290
Profit/Loss: -$810

That's better than if you had bought BTC and held it.

BTC Cost: 5.35*$900 = $4800
Current Value: 5.35*$650 = $3477
Profit/Loss: -$1323

But what if instead you had split that $4800 over 6 months and just bought straight BTC(dollar cost averaging)?
(Buying .892 BTC at the beginning of every month for 6 months beginning in December)

Cost: $1000*.892 + $800*.892 + $800*.892 + $550*.892 + $450*.892 + $450*.892 = $3612
Current Value: $3487
Profit/Loss: -$125

That's better than the $800 loss from mining. But an ever better situation is if you bought at a low point like April.

Cost: $4800 = 13.71BTC @ $350
Current Value: $8914
Profit: $4114

With mining, you're accepting a loss out of the gate and hoping that at some point in the future you can not only make back what you paid for the hardware but also make a profit. In other words, your hoping that:

1. BTC prices don't drop.
2. Difficulty doesn't increase to the point that renders your hardware unprofitable to run before you reach break-even.

With buying BTC, you just hope the price goes up. In addition, you can employ various investing strategies (such as dollar cost averaging) to reduce losses and improve profits. And unlike mining, if the market starts plummeting you can just cash out.

Better for small timers to just buy BTC or set up a regular investment strategy than to mine.

You are right, I did miscalculate my power costs.

700 W for 2 antminers (measured using KillOwatt meter),  24 hours a day, that's 16800 W or 16.8 KW.

At $ 0.10 / KW, that's $1.68/day * 180 days = $302.8 for half a year.

Subtract that from the profit, and that knocks it down to roughly 11% profit.

Still, profit is profit. You're not getting 11% by investing in treasury bills, and AntMiners are way safer than the stock market (Nothing exciting happens in my basement, heh).

Those Antminers are still running, and will be profitable until roughly October/2014.

Thank you for pointing that out.

I think you may be understating your power price if you pay for it.  By your math you have .01/kwh power (.35 / 24 hrs = .01458).  Can you please pull out your power bill again or if you want to disclose your state and county, I can look it up. 


-D

I love these threads, because they are usually total nonsense, with just some random new website calculator to put in some assumptions into, leading to some set in stone conclusion which never changes.

You won't make ROI, ever, blah blah blah blah.

Please. Your assumptions are totally invalid.

Here, I will give you a real world example. I'm a small-time home miner, mostly do this for a little fun and a little profit.

I bought an S1 AntMiner in December 2013, and one in January of 2014. Total cost for the 2 S1 AntMiners was 5.35 BTC.

Here were are in June of 2014, and I'm looking at a wallet balance of about 6.6 BTC.

Net profit = 1.25 BTC, or (1.25/5.35 invested)*100 = 23.36-ish %.

Electricity cost per day is about 35 cents, to that's about 65 bucks worth of electricity for 180ish days.

This is not a boast, or a calculator, or a set of assumptions.

The price of BTC in $$, or rubles, or yuan doesn't matter, since I paid with BTC.

If you want something done right, do it yourself, and don't worry about the price spikes or price dips. Averaged out over 6 to 9 months, you will almost always make a small profit (assuming you don't have an excessive electricity costs).

forget mining at this time
better to buy BTC instead mining
not good for mining hardware company

http://shop.rockminer.com/goods.php?id=35

You're so better off buying Bitcoin. It's really better for everyone, even for non-miners.

Miners generally make lousy bitcoin day traders. Soon as the fiat value of BTC goes up enough, were buying miners again with the bought BTC. If you are into mining and not punching out 10+ TH/s then you are an amateur in it for kicks, overpriced winter heating bills and you just like things that flash blue and red in the dark.

If everybody will buy coins instead of mining gear, the purchaged coins will not be converted to fiat money. Win-win situation for everybody, price rises.

Recently mining at home became more and more difficult, the maximum expectation of a miner is to breakeven the investment,
I think it's better to buy btc from exchanges instead of triyng to mine them to pay the hardware.

I have come across this site:

http://mining-profit.com

and its basically saying with the miners you buy you will never make a ROI

Spondoolies-Tech SP10 Dawson 1.4TH Bitcoin Miner *Backordered till 6/6/14*
$3,099.00 USD


How many bitcoins will I earn with   Calculate
 Gh/s miner?
You will mine 3.7452 bit coins.


3.7452 = $2,452

So you pay $3,099.00 to make $2,452

hm...