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Topic: No ROI on future Mining, its a FACT! (Read 10215 times)

sr. member
Activity: 350
Merit: 250
June 23, 2014, 10:42:05 PM
#94
Thanks for explaining that to me I never considered the manufacturers mining case Smiley

How did you come to the $16 for a year using 2gh/s? I used one of the regular mining calculators, obviously not a very good one! Smiley

Cheers

You can't really predict that far in advance, that is why I said it makes more sense to calculate it per day, since we know the difficulty for sure right now.  But not one year from now.  But then you end up with really small numbers so I did it per Th/s instead of Gh/s.  Any calculator can accurately tell you what your earnings will be for one day at a time.

Well even that can be wrong.  Most pools are using PPLNS or similar variant.  If the pool has a bad luck streak for 3-5 days then you can take a big hit.  Only way to guarantee against this is go onto PPS.  This is why PPS still exists even with crazy fees - some miners want assurance of a given payback during a difficulty interval.

That's true of course, but a large mining farm can expect them to be pretty accurate over any reasonable time frame. 
sr. member
Activity: 448
Merit: 250
It's Money 2.0| It’s gold for nerds | It's Bitcoin
June 23, 2014, 10:27:32 PM
#93
Thanks for explaining that to me I never considered the manufacturers mining case Smiley

How did you come to the $16 for a year using 2gh/s? I used one of the regular mining calculators, obviously not a very good one! Smiley

Cheers

You can't really predict that far in advance, that is why I said it makes more sense to calculate it per day, since we know the difficulty for sure right now.  But not one year from now.  But then you end up with really small numbers so I did it per Th/s instead of Gh/s.  Any calculator can accurately tell you what your earnings will be for one day at a time.

Well even that can be wrong.  Most pools are using PPLNS or similar variant.  If the pool has a bad luck streak for 3-5 days then you can take a big hit.  Only way to guarantee against this is go onto PPS.  This is why PPS still exists even with crazy fees - some miners want assurance of a given payback during a difficulty interval.

Over a two week period these calculators are generally roughly accurate as long as the pool is large enough. The pool may have below average luck for a few days, however it could also have above average luck for a similar number of days resulting in the overall luck over the 14 day period to be ~100%
DrG
legendary
Activity: 2086
Merit: 1035
June 23, 2014, 10:08:05 PM
#92
Thanks for explaining that to me I never considered the manufacturers mining case Smiley

How did you come to the $16 for a year using 2gh/s? I used one of the regular mining calculators, obviously not a very good one! Smiley

Cheers

You can't really predict that far in advance, that is why I said it makes more sense to calculate it per day, since we know the difficulty for sure right now.  But not one year from now.  But then you end up with really small numbers so I did it per Th/s instead of Gh/s.  Any calculator can accurately tell you what your earnings will be for one day at a time.

Well even that can be wrong.  Most pools are using PPLNS or similar variant.  If the pool has a bad luck streak for 3-5 days then you can take a big hit.  Only way to guarantee against this is go onto PPS.  This is why PPS still exists even with crazy fees - some miners want assurance of a given payback during a difficulty interval.
sr. member
Activity: 350
Merit: 250
June 23, 2014, 12:14:57 PM
#91
Thanks for explaining that to me I never considered the manufacturers mining case Smiley

How did you come to the $16 for a year using 2gh/s? I used one of the regular mining calculators, obviously not a very good one! Smiley

Cheers

You can't really predict that far in advance, that is why I said it makes more sense to calculate it per day, since we know the difficulty for sure right now.  But not one year from now.  But then you end up with really small numbers so I did it per Th/s instead of Gh/s.  Any calculator can accurately tell you what your earnings will be for one day at a time.
hero member
Activity: 1316
Merit: 503
Someone is sitting in the shade today...
June 23, 2014, 11:30:08 AM
#90
you guys are all living in fantasy land, unless you can get free electricity there is miner currently on sale that is profitable.

The reality is difficulty increase is not slowing down anytime soon, with hardware getting pumped out nonstop. Next bump is 25%.

full member
Activity: 127
Merit: 100
June 23, 2014, 11:05:17 AM
#89
Thanks for explaining that to me I never considered the manufacturers mining case Smiley

How did you come to the $16 for a year using 2gh/s? I used one of the regular mining calculators, obviously not a very good one! Smiley

Cheers
sr. member
Activity: 350
Merit: 250
June 23, 2014, 10:24:02 AM
#88
2Gh/s using one watt generates $16 a year and costs around $0.44 at current rates (which of course are always changing).  You really need to do daily rates to get a more accurate picture, but can't do that with Gh/s because numbers are too low so 2Th/s at 1000 watts is about $44 a day generated, and consuming around $0.75 a day.  The margins are enormous.   Yes there are other costs associated with it as you mentioned but those costs all scale very well.  The fact that many of these data centers aren't put in strategic places should tell you something; the margins are so enormous they didn't even bother cutting costs in some cases.
They don't get a "discount" on the machines.  They are the manufacturers, so they get them literally at cost.  While I don't know for sure I would be very surprised if it is over $200 per Th/s.  But there is no cost associated with the machines themselves anyways, they get them not for free but better then free, they get paid for them.  See the cycle I posted above.  They get the machines at cost, mine with them for a few months, and then sell them at retail\wholesale prices which by their nature is more then cost. 

As I mentioned before, only way you would see these operations cease would be if bitcoin completely tanked for a prolonged period of time, which wouldn't do anyone any good.  Besides, they could always turn the machines back on if profitability turned around.
full member
Activity: 127
Merit: 100
June 23, 2014, 07:49:02 AM
#87
Im not sure I agree with you entirely with regard to companies continuing to mine if the price falls and stays down. There comes a time when a business has to make a decision about losing money. When the cost of gaining a bitcoin far outweighs its value and potentially future value.

For example, I have a 7 gig miner, it makes maybe $0.15 a day, but its costing that in electricity, now I get that for free so its worth running it but if it were costing me say $1 a day in power then I would turn it off.

But you aren't a mining operation.  You are using a very inefficient miner running it out of your house.  A large scale mining operation running equipment that gets 2Gh/s per watt running in Sweden or something where electricity is 5 cents a kilowatt or less is ALWAYS going to beat you in efficiency.  Bitcoin would have to drop to like $50 or so for it to start costing them money.  There is no guarantee they would turn off at that point anyway but let's say for the sake of argument they did.  So what?  You already turned your miner off long before then so what difference does it make?  A.  Bitcoin isn't going to drop and remain at such a low price and B.  If something happened where it did, ordinary miners would feel the pinch long before the datacenters.

For the record I might not be making a living out of mining, however electricity is free because its surplus in my racks I have a bit more than 7 gig of hashing power and what I have is making me money. I used the 7 gig miner (it was the first one I bought and sits in my office for old times sake) as an example. The point I was making is that even if they do get their mining power for 2 gh/s per watt if they aren't making a profit or there is doubt about how much they will make then it will stop, business is business.

I would like to see the figures for a big mining farm out of interest. Sure they must get discount on the equipment but by how much? By my reckoning 2gh/s that cost only $1 per gh/s (wild guess on my part Smiley)  running for a year and using 1 watt at $0.05 would make just under $4 in a year. So maybe $2 profit? But then you have the other costs such as cooling, rent, wages, insurance, accounting fees, tax etc. (prices worked out on current BTC value not $50).

I dont doubt they are making a profit somehow but the margins seem very tight to me.

Im not looking for an argument just a discussion. Wink
full member
Activity: 219
Merit: 100
Bitcoin Mining Hosting
June 22, 2014, 07:36:26 PM
#86
I hope that all the people reading believe this. less people taking the precious supply chain we need to buy from Smiley
legendary
Activity: 1610
Merit: 1000
Well hello there!
June 22, 2014, 07:33:32 PM
#85
Im not sure I agree with you entirely with regard to companies continuing to mine if the price falls and stays down. There comes a time when a business has to make a decision about losing money. When the cost of gaining a bitcoin far outweighs its value and potentially future value.

For example, I have a 7 gig miner, it makes maybe $0.15 a day, but its costing that in electricity, now I get that for free so its worth running it but if it were costing me say $1 a day in power then I would turn it off.

But you aren't a mining operation.  You are using a very inefficient miner running it out of your house.  A large scale mining operation running equipment that gets 2Gh/s per watt running in Sweden or something where electricity is 5 cents a kilowatt or less is ALWAYS going to beat you in efficiency.  Bitcoin would have to drop to like $50 or so for it to start costing them money.  There is no guarantee they would turn off at that point anyway but let's say for the sake of argument they did.  So what?  You already turned your miner off long before then so what difference does it make?  A.  Bitcoin isn't going to drop and remain at such a low price and B.  If something happened where it did, ordinary miners would feel the pinch long before the datacenters.
Truer words where never typed.  Rubber meets the road here!
sr. member
Activity: 350
Merit: 250
June 22, 2014, 04:39:12 PM
#84
Im not sure I agree with you entirely with regard to companies continuing to mine if the price falls and stays down. There comes a time when a business has to make a decision about losing money. When the cost of gaining a bitcoin far outweighs its value and potentially future value.

For example, I have a 7 gig miner, it makes maybe $0.15 a day, but its costing that in electricity, now I get that for free so its worth running it but if it were costing me say $1 a day in power then I would turn it off.

But you aren't a mining operation.  You are using a very inefficient miner running it out of your house.  A large scale mining operation running equipment that gets 2Gh/s per watt running in Sweden or something where electricity is 5 cents a kilowatt or less is ALWAYS going to beat you in efficiency.  Bitcoin would have to drop to like $50 or so for it to start costing them money.  There is no guarantee they would turn off at that point anyway but let's say for the sake of argument they did.  So what?  You already turned your miner off long before then so what difference does it make?  A.  Bitcoin isn't going to drop and remain at such a low price and B.  If something happened where it did, ordinary miners would feel the pinch long before the datacenters.
full member
Activity: 127
Merit: 100
June 22, 2014, 02:38:21 PM
#83
Im not sure I agree with you entirely with regard to companies continuing to mine if the price falls and stays down. There comes a time when a business has to make a decision about losing money. When the cost of gaining a bitcoin far outweighs its value and potentially future value.

For example, I have a 7 gig miner, it makes maybe $0.15 a day, but its costing that in electricity, now I get that for free so its worth running it but if it were costing me say $1 a day in power then I would turn it off.
sr. member
Activity: 350
Merit: 250
June 21, 2014, 05:27:26 AM
#82
Ive been giving this some thought, I said some, not lots Smiley

People buying Bitcoin right now want the price to stay low, people mining want (need) the price to rise. As people realise the price isnt rising like they thought it might they will get out of mining. Also when the last block is mined, what then? Transaction costs are going to have to be much bigger with the current turn over of coins. As the big mining farms go bust will those of us with their home miners be able to make money again?

What Im saying is, even if we dont use them now should we hang on to our old miners?

First, the last block will be mined many many years from now, no need to worry about that just yet. 
Second, the price of bitcoin has a lot less to do with it than you would think.  The big mining operations aren't going to just shut down.  The mining rigs are a sunk cost, they won't turn them off just because they are making less money.  Sure they may look to sell some machines, but only people who would buy them would be people who were going to mine with them anyway so that doesn't reduce difficulty.  Besides, bitcoin would have to drop to like, 50 bucks for it to cost more to run the machines then they make and even then they may still mine, hoping for a price increase later.  At most, you would see them cease or reduce development of new machines so the difficulty stays the same, but it wouldn't go down.  In any case though most of their R&D costs are born by "customers" who preorder their miners so that isn't much of an issue. 

There is pretty much no scenario that could happen that would both cause the major companies (the ones driving the difficulty) to want to shut down while at the same time, ordinary people would want to still mine.
full member
Activity: 127
Merit: 100
June 21, 2014, 05:08:26 AM
#81
Ive been giving this some thought, I said some, not lots Smiley

People buying Bitcoin right now want the price to stay low, people mining want (need) the price to rise. As people realise the price isnt rising like they thought it might they will get out of mining. Also when the last block is mined, what then? Transaction costs are going to have to be much bigger with the current turn over of coins. As the big mining farms go bust will those of us with their home miners be able to make money again?

What Im saying is, even if we dont use them now should we hang on to our old miners?
hero member
Activity: 784
Merit: 1004
Glow Stick Dance!
June 20, 2014, 06:20:33 PM
#80
Everyone should stop mining. And buy bitcoins instead.  Smiley

I'd really wish people would just stop mining for a while,that way the difficulty will drop significantly,buy BTC and then when the difficulty is much lower,mine again and you profit in both ways,more mined BTC and returns from the BTC you bought as well.

But I'm also sure that until the big mining operations stop (like companies,data centres,large scale mining farms) there's not much point in normal people stopping their mining operations either.

And as soon as people start mining again, the difficulty, at the next adjustment, returns to exactly where it was when they quit. What would be the point? You've just delayed the inevitable.

Be honest now. What you really meant was that you wish everyone would stop mining... except you.  Roll Eyes
legendary
Activity: 1022
Merit: 1000
Freelance videographer
June 20, 2014, 06:11:54 AM
#79
Everyone should stop mining. And buy bitcoins instead.  Smiley

I'd really wish people would just stop mining for a while,that way the difficulty will drop significantly,buy BTC and then when the difficulty is much lower,mine again and you profit in both ways,more mined BTC and returns from the BTC you bought as well.

But I'm also sure that until the big mining operations stop (like companies,data centres,large scale mining farms) there's not much point in normal people stopping their mining operations either.
hero member
Activity: 784
Merit: 1004
Glow Stick Dance!
June 20, 2014, 05:44:39 AM
#78
there is no such thing as no ROI in mining, some people will make ROI or else no one will buy a miner.

If no one buys a new miner for long enough, difficulty will not increase (because only old miners are mining), while the technology improves to create more efficient miners. This will lead to mining being profitable again. Than people will again buy miners, until it becomes (close to) improbable again.


You're wrong.  This is the cycle of mining:

1.  Asic company develops new miner.
2.  Asic company mines with new miner.
3.  Having used up the best part of it's profitability, Asic company sells miner to end user for more BTC than it will ever generate.
4.  End user mines with it indefinitely because the cost they payed is a sunk cost so why not.

So you see, it is very possible following this model for mining to never be profitable for "ordinary" people, while at the same time new asics continue to come out and drive up the difficulty.  Since really, only steps 1 and 2 are needed for difficulty to go up.  This is how it works now.


Don't forget the "X Factor"... the infamous "preorder". People invest in miners that won't be delivered for many months. The investment looks great on paper. That is until the miners are many months late and when they are finally delivered, profitability has gone POOF!

No one can make a sound investment without a crystal ball. Some have been very lucky with their timing and have been successful. I have been VERY lucky myself. But the forum is filled with sad sacks who have been absolutely raped by ASIC vendors. And I'm not talking about outright scams. I'm talking about (semi) legitimate companies that have had horrendous delays or have been lured by the bitcoin siren to hash with customer machines for months before delivering.
sr. member
Activity: 350
Merit: 250
June 20, 2014, 04:43:47 AM
#77
there is no such thing as no ROI in mining, some people will make ROI or else no one will buy a miner.

If no one buys a new miner for long enough, difficulty will not increase (because only old miners are mining), while the technology improves to create more efficient miners. This will lead to mining being profitable again. Than people will again buy miners, until it becomes (close to) improbable again.


You're wrong.  This is the cycle of mining:

1.  Asic company develops new miner.
2.  Asic company mines with new miner.
3.  Having used up the best part of it's profitability, Asic company sells miner to end user for more BTC than it will ever generate.
4.  End user mines with it indefinitely because the cost they payed is a sunk cost so why not.

So you see, it is very possible following this model for mining to never be profitable for "ordinary" people, while at the same time new asics continue to come out and drive up the difficulty.  Since really, only steps 1 and 2 are needed for difficulty to go up.  This is how it works now.


ASIC companies are testing the ethical limits by mining with the preorder miners. The preorder funds should be used for product development only, once the products are developed and determined to work per their standards the machines should ship.

What do you expect?  When you preorder from one of these companies they typically make it very clear in their terms (the contract) that there is no guaranteed delivery date, and no penalty to be paid if they fail to deliver by a certain date.  Why anyone would agree to such terms is beyond me but people do, and then act surprised when the companies honor the contracts as it is written as opposed to what they feel should be "ethical", whatever that means in this context. 


It's probably because there is no other option, all miners are either obsolete or preorders. It impossable to buy profitable miners directly. Especially if you live in Europe where electricity prices are astronomical compared to the restof the world. (About 4 times more than in Canada and the USA)

Some people would say that not buying it at all would be another option.
legendary
Activity: 1106
Merit: 1005
June 20, 2014, 04:30:49 AM
#76
there is no such thing as no ROI in mining, some people will make ROI or else no one will buy a miner.

If no one buys a new miner for long enough, difficulty will not increase (because only old miners are mining), while the technology improves to create more efficient miners. This will lead to mining being profitable again. Than people will again buy miners, until it becomes (close to) improbable again.


You're wrong.  This is the cycle of mining:

1.  Asic company develops new miner.
2.  Asic company mines with new miner.
3.  Having used up the best part of it's profitability, Asic company sells miner to end user for more BTC than it will ever generate.
4.  End user mines with it indefinitely because the cost they payed is a sunk cost so why not.

So you see, it is very possible following this model for mining to never be profitable for "ordinary" people, while at the same time new asics continue to come out and drive up the difficulty.  Since really, only steps 1 and 2 are needed for difficulty to go up.  This is how it works now.


ASIC companies are testing the ethical limits by mining with the preorder miners. The preorder funds should be used for product development only, once the products are developed and determined to work per their standards the machines should ship.

What do you expect?  When you preorder from one of these companies they typically make it very clear in their terms (the contract) that there is no guaranteed delivery date, and no penalty to be paid if they fail to deliver by a certain date.  Why anyone would agree to such terms is beyond me but people do, and then act surprised when the companies honor the contracts as it is written as opposed to what they feel should be "ethical", whatever that means in this context. 


It's probably because there is no other option, all miners are either obsolete or preorders. It impossable to buy profitable miners directly. Especially if you live in Europe where electricity prices are astronomical compared to the restof the world. (About 4 times more than in Canada and the USA)
DrG
legendary
Activity: 2086
Merit: 1035
June 20, 2014, 04:07:58 AM
#75
Here's the warning I wrote in November 2012. Pertinent then, still relevant today.

What I really worry about, is that new hardware will continue to come out frequently enough that people end up on a cycle of investing in hardware that basically never pays itself off as slightly newer hardware and higher diffs keep coming out. Sure at some stage the limits of technology will be reached, but given the best tech at the moment is going to be 65nm ASICs when CPUs are 28nm devices, I can see the cycle going on for some time, and then even if btc mining ASICs end up in line with CPU manufacturers, they still continue to evolve over time. Dramatic profits from ASICs will likely only last a couple of weeks at most for a lucky few. The rest of you who paid for devices that don't even exist yet will not be making any magical profit no matter how big the hashrate appears. Your proportion of the total bitcoin hashrate will remain pitiful.

Sigh...
The period of the "couple of weeks for a lucky few" has long since passed.

Oh it's still there, but the few have names now: BFL, Avalon, Hashfast, etc etc....

I'm still shocked people were able to +ROI in BTC with S1s.
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