No ROI on future Mining, its a FACT! - page 2.

-ck

legendary

Activity: 4088

Merit: 1631

Ruu \o/

Here's the warning I wrote in November 2012. Pertinent then, still relevant today.

Quote from: -ck on November 30, 2012, 04:53:34 AM

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.

brian_23452

sr. member

Activity: 350

Merit: 250

Quote from: ShakyhandsBTCer on June 19, 2014, 09:18:26 PM

Quote from: brian_23452 on June 19, 2014, 08:11:21 PM

Quote from: zimmah on June 19, 2014, 03:13:32 AM

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.

ShakyhandsBTCer

sr. member

Activity: 448

Merit: 250

It's Money 2.0| It’s gold for nerds | It's Bitcoin

Quote from: brian_23452 on June 19, 2014, 08:11:21 PM

Quote from: zimmah on June 19, 2014, 03:13:32 AM

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.

brian_23452

sr. member

Activity: 350

Merit: 250

Quote from: zimmah on June 19, 2014, 03:13:32 AM

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.

zimmah

legendary

Activity: 1106

Merit: 1005

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.

This is the cycle of mining

1) Mining is profitable
2) people buy new miners
3) difficulty increases
4) mining becomes unprofitable
5) people stop being miners (or at a reduced rate)
6) mining becomes profitable again
7) repeat from step 1

also note that being profitable or not depends on how much electricity your miner uses (J/GH) and how much you pay for electricity. Europeans sadly pay the highest price for electricity (up to $0.40 per kWh, while americans, russians and canadians pay much less, about $0.10 per kWh)

ShakyhandsBTCer

sr. member

Activity: 448

Merit: 250

It's Money 2.0| It’s gold for nerds | It's Bitcoin

Quote from: pjviitas on June 13, 2014, 09:40:45 AM

Quote from: DrG on June 13, 2014, 09:33:11 AM

Quote from: SomeoneInNeed on June 12, 2014, 09:59:40 AM

There is ROI, you just need to invest big.

Sure we lose on each item we sell, but we make it up in volume Roll Eyes

Fastest way to the bottom of a pit.

Its not even about ROI anymore...its about running out of spare breakers in your house.

If you can have your machines hosted at a location that has cheap electricity then this is not an issue.

Most miners are being sold at prices that are above which would ever cause the machines to get ROI.

pjviitas

sr. member

Activity: 434

Merit: 250

Quote from: DrG on June 13, 2014, 09:33:11 AM

Quote from: SomeoneInNeed on June 12, 2014, 09:59:40 AM

There is ROI, you just need to invest big.

Sure we lose on each item we sell, but we make it up in volume Roll Eyes

Fastest way to the bottom of a pit.

Its not even about ROI anymore...its about running out of spare breakers in your house.

DrG

legendary

Activity: 2086

Merit: 1035

Quote from: SomeoneInNeed on June 12, 2014, 09:59:40 AM

There is ROI, you just need to invest big.

Sure we lose on each item we sell, but we make it up in volume Roll Eyes

Fastest way to the bottom of a pit.

TheDragonSlayer

sr. member

Activity: 273

Merit: 250

Quote from: SomeoneInNeed on June 12, 2014, 09:59:40 AM

There is ROI, you just need to invest big.

It doesn't matter if you invest big or small, as long as you cannot ROI on $/GHs its the same.

SomeoneInNeed

member

Activity: 94

Merit: 10

There is ROI, you just need to invest big.

zetaray

hero member

Activity: 658

Merit: 500

Mining will yield profits if mining gears are priced lower. There will always be a second hand market for asics. They will be hinged to profits.

povlhp

newbie

Activity: 35

Merit: 0

Lots of existing hardware using more than 2W/GHS will start to get unprofitable soo, and some of it wil be turned off, or resold to poor souls who plugs in in, realises it is bad, and tries to shift it on. The 2W/GHS will be profitable a little longer.

We have the 1W/GHS units coming up (Antminer S2, KnC and others). They will be profitable longer. But I see most of the units running today being turned off within the next year. If many gets out from the mining business, maybe we will have a difficulty decrease ? Or a slow increase in difficulty.

Profitability in mining lies with the success of getting peple to not buy more equipment, and turn their old stuff off. Difficulty increase needs to slow down. Lst one was 12% instead of the 20% before that. High difficulty increase can only be caused by new hardware. And since there is so much hardware out there, I don't see it increasign that much any more. I see it slowing down.

klondike_bar

legendary

Activity: 2128

Merit: 1005

ASIC Wannabe

Quote from: KensingtonLabs on March 20, 2014, 04:10:51 PM

We are really curious about this too....what would the optimum price per GH/s be for a used mining rig these days? $10 a GH/s seems to be the the lowest I've seen for some of the higher capacity rigs.....would that really turn any kind of substantial profit or would it be completely obsolete after 2-3 months?

thats terrible. You should be able to find an antminer used OR new for about $4-6/GH ($700-1200)

KensingtonLabs

newbie

Activity: 8

Merit: 0

We are really curious about this too....what would the optimum price per GH/s be for a used mining rig these days? $10 a GH/s seems to be the the lowest I've seen for some of the higher capacity rigs.....would that really turn any kind of substantial profit or would it be completely obsolete after 2-3 months?

klondike_bar

legendary

Activity: 2128

Merit: 1005

ASIC Wannabe

I bought new equipment last week because i know it will be profitable. I expect to see a 20% gain over electricity costs by the end of the year

mechew

newbie

Activity: 23

Merit: 0

Isn't the real problem here the fact that these are prices and difficulty as of today and these miners won't arrive for an unquestionable amount of MONTHS?

zerk89

newbie

Activity: 38

Merit: 0

Quote from: mwizard on March 19, 2014, 12:11:04 AM

Its interesting that in January the initial thread author expected that by now (March) the difficulty would be approaching 9 billion. It seems the author used more than 30% as the ongoing difficulty increase. No wonder he saw no ROI.

In fact just 10 weeks later difficulty has only risen about half what the author expected with a current difficulty about 4.5 billion rather than 9 billion.

Difficulty increases between 10-15% seem much more realistic in the current environment when calculating ROI.

No substantial miners have come online yet, wait for the peroid of April-July, you will eat a shoe.

mwizard

full member

Activity: 203

Merit: 100

Its interesting that in January the initial thread author expected that by now (March) the difficulty would be approaching 9 billion. It seems the author used more than 30% as the ongoing difficulty increase. No wonder he saw no ROI.

In fact just 10 weeks later difficulty has only risen about half what the author expected with a current difficulty about 4.5 billion rather than 9 billion.

Difficulty increases between 10-15% seem much more realistic in the current environment when calculating ROI.

Sonny

hero member

Activity: 868

Merit: 1000

Quote from: ?? on ??

Quote from: pjviitas on January 28, 2014, 12:21:43 AM

Quote from: ?? on ??

Quote from: pjviitas on January 27, 2014, 11:37:11 PM

Regardless of whether mining is profitable or not is irrelevant...without it there would be no Bitcoin.

There is a world of difference between operating existing gear, and buying new hardware.

For the existing gear, your capital is already spent. All you need to do is cover power, network and labor. Any earnings above this level recover some portion of the capital you investing into the hardware, so you run it until your power costs exceed income. Even if all you manage is to reduce the amount of your initial investment that is lost, a rational actor runs the gear.

For a rational person to buy new equipment there needs to be an expectation that all of the required funds will be recovered, and a profit commensurate with the risk will be earned.

With the current difficulty growth rate, and hardware costs, rational people are standing back.

Well I guess its the end of Bitcoin then

Are you unable to read?

Existing miners will continue to operate their hardware and verify transactions regardless of difficulty. There is no 'end of bitcoin'. Just an end of the gold rush.

Some are mining for profit.
Some are mining for fun.
Some are mining to support bitcoin solely. (core dev? someone enthusiastic in bitcoin? big whales?)

SomeoneInNeed

member

Activity: 94

Merit: 10

I agree that an ROI on the mining rigs is possible with the current difficulty.
What I see with the future is, big "mining corporations" coming up, which will mine most of the coins.
We need an improvement in the protocol if we want to prevent this from happening.

Topic: No ROI on future Mining, its a FACT! - page 2. (Read 10215 times)