Topic: New mining hardware (Read 1302 times)

I only can say how it was done with Asicminer when they were bringing out their first working ASIC. They became a big part of the networks hashrate and they did keep their bitcoin and only exchanged coins to fiat when they needed to pay something in fiat. For example development cost for the next asic generation, workers salary and so on.

Ok, it might be that the situation is a bit different now. The bitcoin price can drop anytime so it might be that miners exchange bigger amount, maybe half of the mined amounts in fiat just to secure some value. At least you should see miners as bitcoin fans for the most part since bitcoin is the future they build on. Even on a pure business perspective.

Yes it would be very interesting to know the various strategies that the big mining operations employ? I assume they first sell to cover costs, and probably take some immediate profit. After that it moves to pure speculation on what the BTC price will do, so I assume they apply a set of strategies to perhaps sell some on a regular basis and then hold or sell on various BTC price points?

If anyone has any first hand experience that would be very interesting?


Rich

The thing is these major operations are very profitable.  They only have to sell enough to cover operations, likely they can save a good amount of BTC if they want.  The thing is these operations are privately owned on almost all.  So we will never know on most.

With the continuous arms race of asics.... costs don't remain the samme over time.  You can count on new gear coming out.  So again I think this is being overlooked.

Originally I made no distinction about whether the miners were located in China or not. The point was that all major mining operations have to sell BTC for fiat at some point. Whether that's a day or a month after a block is mined doesn't really matter. Less BTC to sell means less downward pressure on the market. All other costs remain the same. The cost to produce ASICs isn't halving, nor is the cost to produce an actual miner. For a major mining operation that's the real cost anyways, not electricity or warehouse space. But even those smaller items are not negligible, and they're not being halved either.

I'm not saying the price is guaranteed to rise. There could be any number of things that cause it to fall that are totally unrelated to the halving. But when it does happen the amount of BTC being sold on the markets by miners will absolutely decrease. How much and what sort of long term impact will that have on the price? I have no idea. But its entirely reasonable to think the price will rise and allow less efficient miners to continue making a profit, even if its a small amount or for a short period of time.

I understand that the Chinese miners have bills to pay, just like the rest of us.
I am just querying the widespread assumption that as soon as they discover a block they immediately fiat it thru necessity. Bitcoin mining in China seems to be pretty much independent of the West, so why do we assume their costs are equivalent and price them in $?
Chips from Hong Kong, local labor prices for assembly, hydro power with very low real estate costs adjacent, no currency conversion, little shipping cost.
All adds up to very low overhead to pay.

Streng from Genesis Mining said that mining one Bitcoin in Iceland cost them $60 in electricity and $128 in other fixed costs.
Iceland, despite its cheap power, is one of the most expensive places in Europe. How about if the Chinese pay domestically half that for power and 20% of staffing and other costs?
If their total costs are $60 a coin and they can control the market price because of their size, why should they dump as they mine?
That's very short term thinking and not a particularly Chinese attitude or a very sensible one.
If, in the real world, you had an highly productive, very low cost gold mine would you sell everything you dug up straight away? I don't think so.
All this is pure speculation of course, it's just that basing any theory about price on an unproven assumption about the Chinese is dangerous and misleading.

When halving happens btc price goes to $1k.

Fine then CNY. The point is they pay bills in fiat not BTC.

As for what bills they pay that should be obvious. Companies producing Asics sink millions of fiat into development and production costs to pay whatever foundry produces the chips. Individual miners buy them in fiat most of the time as well. And of course there is always electricity. I've not heard of a single electric company taking payments in BTC yet. Not to mention rent payments wherever they're leasing warehouse space and of course internet costs. All of that paid in fiat not BTC.

I see this said a lot. Is there any basis for it?
What USD bills do large Chinese miners have to pay?

You should consider the possibility of an increase in BTC price. When the halving occurs its reasonable to assume the price may go up. Large miners sell their BTC because they have to pay the bills in USD. With less BTC to sell the price could rise. I say might because there is a lot of FUD and market manipulation that will take place so who knows what actually happens. But should the price rise it will improve profitability and allow many older miners to keep running.

Thanks for all your answers guys. In fact I had already thought about the issue and had pretty much the same idea that many of the old hardware will be put off and the A6 and S7 will still be profitable for a long time. However I sense that there is new hardware beeing produced, by Bitmain.

The hard thing is with B11 I think BW will fill up all internal upgrades before selling it to public.  So harder to get early in next gen race as I have a feeling they do a lot of updating of gear.  Also they needed to perfect it the early ones made did not hit final spec they released.

Bitfury..... I would love but stil not sure what home/hobby miners will be like getting.  On Innosilicon I think doing A3 and A4 at same time I think was a mistake, they should have focused on A3.   It's been quite a while on news from them.... which is sad as A1's were good machines and I hoped they got into the hardware sales game again.

With cheap enough electric, the S7 and Avalon 6 will still be profitable - barely.
The B-11 should also fit that description, if BW.Com ever starts selling the things.

 The big questions are Bitfury (supposedly having a miner available by end of March, but looks like they're going to miss that a bit), and Innosilicon (A3 due any day now, from what they posted a few months back), and BW.com B16 (due "in 4 months" or so).

 There is also the question of when Bitmain will have their next gen miner chip/miners available, as they announced they were working on the next gen as part of the initial S7 announcement....

i've seen around that there is already an efficiency that is double of that of the s7 (almost double, 700w for the same hash), so it easy to bet that they are working already on a better solution

but i doubt it can come here in 3 months, maybe they will use it without selling, then after the halving it will be possible to purchase those devices

There will still be some previous though in China.  I have been amazed at how long I think some got out of A1 gear due to cheap electricity.   When these big companies pay pennies per kwh.... they can keep a LOT of previous gen gear on.

Your are right for most "regular" people come having A6 and S7 are where they need to be.  I had to sell previous gen gear off a bit back due to selling and buying BTC far outweighed how much I was going to mine at my electricity rate.

avalon 6 and s-7 will stick around and a lot of other gear will power off

I doubt it. I think the solution that will happen is that alot of old miner tech will be switched off. If, let's say, 50% of the mining hardware is taken out over some weeks then that means the remaining miners would earn a similar amount they earned before the block halving. In fact more since the fees would not be halved.

The halving is coming soon now. when this happens the majority of the mining hardware will become nearly unprofitable.
Is there any new hardware already in production that will be profitable after the halving?