Projected Minimum Cost per BTC over the next year - page 6.

philipma1957

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Quote from: BurtW on July 01, 2014, 06:09:11 PM

Quote from: Mined on July 01, 2014, 05:17:52 PM

Thanks for putting this together. I'm confident that J/gh will decrease enough to mitigate this, but the possibility that all mining hardware producers fail at making a more efficient miner is highly improbable (especially because there are so many now) but not impossible!

I am curious about your statement. How much more room do you think there is in this number? At 28nm everyone is getting about 0.8 J/GH. Going from 55nm to 28nm only reduced the consumption from 0.9 J/GH to 0.8 J/GH. Lets say we can make 18nm chips. The best case I would see is 0.5 J/GH and it would probably be higher.

In other words I don't see any way to get another order of magnitude change in this number - only smaller incremental improvements at this point.

Running the numbers at 0.5 J/GH is not a whole lot different than 0.8 J/GH and 0.5 J/GH may be a total pipe dream.

so lets say in 6 months the network drops to .5 J/GH and the that is close to the brick wall. what would you predict price on JAN.1 2015 ?

BurtW

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Quote from: Mined on July 01, 2014, 05:17:52 PM

Thanks for putting this together. I'm confident that J/gh will decrease enough to mitigate this, but the possibility that all mining hardware producers fail at making a more efficient miner is highly improbable (especially because there are so many now) but not impossible!

I am curious about your statement. How much more room do you think there is in this number? At 28nm everyone is getting about 0.8 J/GH. Going from 55nm to 28nm only reduced the consumption from 0.9 J/GH to 0.8 J/GH. Lets say we can make 18nm chips. The best case I would see is 0.5 J/GH and it would probably be higher.

In other words I don't see any way to get another order of magnitude change in this number - only smaller incremental improvements at this point.

Running the numbers at 0.5 J/GH is not a whole lot different than 0.8 J/GH and 0.5 J/GH may be a total pipe dream.

Mined

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Thanks for putting this together. I'm confident that J/gh will decrease enough to mitigate this, but the possibility that all mining hardware producers fail at making a more efficient miner is highly improbable (especially because there are so many now) but not impossible!

BurtW

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I will redo this calculation in another 3 months.

BurtW

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When calculated in the OP over the time period from March 14, 2013 to March 13, 2014 the average increase in the difficulty and hash rate was 23.92% per adjustment period and the average length of each adjustment period was 11.38 days.

Recalculating over the period June 29, 2013 to June 29, 2014 it is 23.45% and 11.41 days.

Assuming the network growth rate over the next year is the same as it was this last year we get:

Code:

                                 Hash Rate    Power      Energy            Cost         Cost
     Date          Difficulty         TH/s       MW         MWh        $/Period        $/BTC
---------  ------------------  -----------  -------  ----------  --------------   ----------
10-Jul-14      20,762,587,053      148,627      149      40,687      $4,068,655       $80.73
21-Jul-14      25,631,656,286      183,481      183      50,228      $5,022,802       $99.66
02-Aug-14      31,642,579,140      226,510      227      62,007      $6,200,707      $123.03
13-Aug-14      39,063,133,629      279,629      280      76,548      $7,654,846      $151.88
25-Aug-14      48,223,894,840      345,205      345      94,500      $9,449,997      $187.50
05-Sep-14      59,532,961,579      426,160      426     116,661     $11,666,131      $231.47
16-Sep-14      73,494,136,594      526,100      526     144,020     $14,401,975      $285.75
28-Sep-14      90,729,370,258      649,476      649     177,794     $17,779,407      $352.77
09-Oct-14     112,006,467,575      801,786      802     219,489     $21,948,885      $435.49
21-Oct-14     138,273,292,794      989,814      990     270,962     $27,096,155      $537.62
01-Nov-14     170,699,995,402    1,221,937    1,222     334,505     $33,450,520      $663.70
12-Nov-14     210,731,138,613    1,508,495    1,508     412,951     $41,295,058      $819.35
24-Nov-14     260,150,052,591    1,862,255    1,862     509,792     $50,979,231    $1,011.49
05-Dec-14     321,158,279,258    2,298,976    2,299     629,345     $62,934,457    $1,248.70
17-Dec-14     396,473,647,839    2,838,112    2,838     776,933     $77,693,322    $1,541.53
28-Dec-14     489,451,350,262    3,503,683    3,504     959,133     $95,913,314    $1,903.04
08-Jan-15     604,233,410,162    4,325,337    4,325   1,184,061    $118,406,107    $2,349.33
20-Jan-15     745,933,204,108    5,339,679    5,340   1,461,737    $146,173,722    $2,900.27
31-Jan-15     920,863,255,215    6,591,897    6,592   1,804,532    $180,453,167    $3,580.42
12-Feb-15   1,136,816,447,014    8,137,773    8,138   2,227,715    $222,771,543    $4,420.07
23-Feb-15   1,403,413,185,274   10,046,176   10,046   2,750,141    $275,014,073    $5,456.63
06-Mar-15   1,732,529,973,307   12,402,122   12,402   3,395,081    $339,508,086    $6,736.27
18-Mar-15   2,138,828,493,208   15,310,564   15,311   4,191,267    $419,126,699    $8,316.01
29-Mar-15   2,640,408,762,814   18,901,071   18,901   5,174,168    $517,416,806   $10,266.21
10-Apr-15   3,259,615,465,609   23,333,592   23,334   6,387,571    $638,757,092   $12,673.75
21-Apr-15   4,024,033,374,406   28,805,592   28,806   7,885,531    $788,553,093   $15,645.89
02-May-15   4,967,716,213,515   35,560,840   35,561   9,734,780    $973,478,006   $19,315.04
14-May-15   6,132,703,703,449   43,900,273   43,900  12,017,700  $1,201,769,972   $23,844.64
25-May-15   7,570,894,370,329   54,195,400   54,195  14,835,991  $1,483,599,070   $29,436.49
06-Jun-15   9,346,357,550,986   66,904,854   66,905  18,315,204  $1,831,520,385   $36,339.69
17-Jun-15  11,538,187,590,255   82,594,824   82,595  22,610,333  $2,261,033,313   $44,861.77
29-Jun-15  14,244,027,380,899  101,964,275  101,964  27,912,720  $2,791,272,041   $55,382.38

In other words something has got to give by the end of the year, or actually before November 1

BurtW

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UPDATE!!!

This thread is just a quick attempt to project the minimum cost per BTC over the next year assuming the growth in the hash rate next year matches the growth in the hash rate over the last year.

tl;dr: either the growth in the hash rate must slow down, the power consumption must go down, or the price of BTC must go up, a lot.

Using the following conversion factors, constants and assumptions:

Code:

GH/s per Diff   0.007158388055
Blocks/Period   2016          
BTC/Period      50400         
Watts per GH/s  1 (assumed constant for the next year - it may go down)             
USD/kWh         $0.10

In other words assuming everyone in the network pays $0.10 per kWh and everyone has miners that burn 1 W per GH/s (1 J/GH) then we can calculate the average production cost for each BTC over the last year as follows:

Code:

                                          Hash Rate    Power      Energy        Cost    Cost
     Date      Difficulty   Delta Days         GH/s       kW         kWh    $/Period   $/BTC
---------  --------------  ------ ----  -----------  -------  ----------  ----------  ------
29-Jun-13      21,335,329                   152,727      153
11-Jul-13      26,162,876  22.63%   12      187,284      187      53,938      $5,394   $0.11
22-Jul-13      31,256,961  19.47%   11      223,749      224      59,070      $5,907   $0.12
03-Aug-13      37,392,766  19.63%   12      267,672      268      77,090      $7,709   $0.15
13-Aug-13      50,810,339  35.88%   10      363,720      364      87,293      $8,729   $0.17
24-Aug-13      65,750,060  29.40%   11      470,664      471     124,255     $12,426   $0.25
04-Sep-13      86,933,018  32.22%   11      622,300      622     164,287     $16,429   $0.33
14-Sep-13     112,628,549  29.56%   10      806,239      806     193,497     $19,350   $0.38
25-Sep-13     148,819,200  32.13%   11    1,065,306    1,065     281,241     $28,124   $0.56
06-Oct-13     189,281,249  27.19%   11    1,354,949    1,355     357,706     $35,771   $0.71
16-Oct-13     267,731,249  41.45%   10    1,916,524    1,917     459,966     $45,997   $0.91
26-Oct-13     390,928,788  46.02%   10    2,798,420    2,798     671,621     $67,162   $1.33
05-Nov-13     510,929,738  30.70%   10    3,657,433    3,657     877,784     $87,778   $1.74
17-Nov-13     609,482,680  19.29%   12    4,362,914    4,363   1,256,519    $125,652   $2.49
29-Nov-13     707,408,283  16.07%   12    5,063,903    5,064   1,458,404    $145,840   $2.89
10-Dec-13     908,350,862  28.41%   11    6,502,328    6,502   1,716,615    $171,661   $3.41
21-Dec-13   1,180,923,195  30.01%   11    8,453,506    8,454   2,231,726    $223,173   $4.43
02-Jan-14   1,418,481,395  20.12%   12   10,154,040   10,154   2,924,364    $292,436   $5.80
13-Jan-14   1,789,546,951  26.16%   11   12,810,272   12,810   3,381,912    $338,191   $6.71
24-Jan-14   2,193,847,870  22.59%   11   15,704,414   15,704   4,145,965    $414,597   $8.23
05-Feb-14   2,621,404,453  19.49%   12   18,765,030   18,765   5,404,329    $540,433  $10.72
17-Feb-14   3,129,573,175  19.39%   12   22,402,699   22,403   6,451,977    $645,198  $12.80
28-Feb-14   3,815,723,799  21.92%   11   27,314,432   27,314   7,211,010    $721,101  $14.31
13-Mar-14   4,250,217,920  11.39%   13   30,424,709   30,425   9,492,509    $949,251  $18.83
24-Mar-14   5,006,860,589  17.80%   11   35,841,051   35,841   9,462,037    $946,204  $18.77
05-Apr-14   6,119,726,089  22.23%   12   43,807,374   43,807  12,616,524  $1,261,652  $25.03
17-Apr-14   6,978,842,650  14.04%   12   49,957,264   49,957  14,387,692  $1,438,769  $28.55
29-Apr-14   8,000,872,136  14.64%   12   57,273,348   57,273  16,494,724  $1,649,472  $32.73
12-May-14   8,853,416,309  10.66%   13   63,376,190   63,376  19,773,371  $1,977,337  $39.23
24-May-14  10,455,720,138  18.10%   12   74,846,102   74,846  21,555,677  $2,155,568  $42.77
05-Jun-14  11,756,551,917  12.44%   12   84,157,961   84,158  24,237,493  $2,423,749  $48.09
18-Jun-14  13,462,580,115  14.51%   13   96,370,373   96,370  30,067,556  $3,006,756  $59.66
29-Jun-14  16,818,461,371  24.93%   11  120,393,073  120,393  31,783,771  $3,178,377  $63.06

Continued in next post...

Bicknellski

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Quote from: BurtW on April 10, 2014, 02:35:09 PM

There really is nothing new to report. The difficulty continues to climb at about the same rate and the price continues to go down. This wil not last. One of these things MUST give. Either the price needs to go up or the difficulty must stop going up. Eventually.

I will redo the calculations in a month or two.

Time yet for recalculation?

http://www.youtube.com/watch?v=u92O8LSkezY

I am wondering how Mining can be part and parcel of the Sustainocene.

Currently the world uses 16 TW in 2012 and will need an additional 16 TW by 2050. How can mining become sustainable when the direction of mining is to ever larger mining centers?

jamesc760

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The hashrate has been rising, just not as quickly as originally estimated. Currently, 57.6 PH/s and seems to be adding about 1 PH/s a day. In 10 days or so, when the next diff jump comes, we will have about 68 PH/s, about 15% increase not 20 %.

goose20

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Humans are not rational beings either.

Many will keep mining at a loss with the hope btc will reach new heights.

BurtW

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Quote from: bcmine on April 13, 2014, 02:16:33 PM

Numbers are highly unrealistic. Fullstop

I am glad you understand my point.

samsonn25

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bcmine

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cloverme

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SpacePirate.io

Quote from: BurtW on April 10, 2014, 02:35:09 PM

There really is nothing new to report. The difficulty continues to climb at about the same rate and the price continues to go down. This wil not last. One of these things MUST give. Either the price needs to go up or the difficulty must stop going up. Eventually.

I will redo the calculations in a month or two.

The other issue is that all bitcoins are equal, btc mined at a lower energy cost are worth as much as those generated at a higher energy cost relative to difficulty. Eventually, like you correctly predict, the market will not be able to sustain the two factors going in the opposite direction. I think the balance will occur when the supply of BTC goes down as difficulty rises or BTC will crash in price and large hashing farms stop mining because it won't be profitable. As a result, the hashrate would drop and difficulty with it. I think we are going to see mining have some sort of a correction this summer unless price goes up by 40%.

BurtW

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All paid signature campaigns should be banned.

There really is nothing new to report. The difficulty continues to climb at about the same rate and the price continues to go down. This wil not last. One of these things MUST give. Either the price needs to go up or the difficulty must stop going up. Eventually.

I will redo the calculations in a month or two.

samsonn25

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What I do know is the difficulty is 1000x what it was last spring and the btc price is 5x higher.

Bicknellski

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Any planned updates to the thread BurtW?

BurtW

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I am glad you got a good laugh at me and gmaxwell since his thread does exactly the same thing from a different angle. Obviously I was not trying to calculate the actual production cost. You seem to have missed the entire point of the thread.

Since you missed it others might also so I have changed the title and OP.

BorisAlt

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Quote from: seriouscoin on March 17, 2014, 04:19:38 AM

Wow for a hero member, with activity over 1000 make a complete joke trial at projecting cost of BTC......unreal....

I cant stop laughing.... I will let someone explain to you a thing or two about production cost....

Hint: just taking assumed electrical cost of the mining network is NOT how you calculate the production cost of BTC.

How do you calculate? Why will you let someone else to explain if you know?

seriouscoin

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Wow for a hero member, with activity over 1000 make a complete joke trial at projecting cost of BTC......unreal....

I cant stop laughing.... I will let someone explain to you a thing or two about production cost....

Hint: just taking assumed electrical cost of the mining network is NOT how you calculate the production cost of BTC.

mwizard

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I find the initial assumption of this thread that there would be a continuing 23.92% difficulty increase completely unrealistic.

I have 2 reasons.

1) There are no obvious technical reasons to expect large hash rate improvements in the next year.

This time last year the first ASIC systems where shipping and it was obvious to everyone that difficulty would zoom up. People were still using GPUs with a hash rate of one megahash or so. The entire world hashing rate in March last year was just 35 terrahash.

The mining hardware world is now much more stable with no major technological advances expected. The only expected change are a movement to 20nm with some Joule/Gigahash improvements (as mentioned earlier in this thread).

2) The size of the hashing network is now so large it is difficulty to grow by such large amounts. Right now a 23.92% increase would require adding a petahash (1,000 terrahash) each day and even more in the future. It is just not happening. The sheer size of the current hashing network makes further growth more difficult.

It would be a much more realistic to assume an average 15% increase till mid 2014 giving a hashing network size of about 120 petahash by June 2014, 10% average till the end of the year giving 300 petahash, and 5% during 2015 giving 500 petahash at some time during 2015. This still means enormous network growth with 20+ petahash being added per fortnight during 2015.

Topic: Projected Minimum Cost per BTC over the next year - page 6. (Read 18793 times)