Purchasing a Bitforce unit = betting on stagnation? - page 2.

Mousepotato

hero member

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Seal Cub Clubbing Club

To put things in real world perspective let's pit a BFL Bitforce FPGA against an AMD 5970.

Price:
5970: $300-400
BFL: $700

MH/s:
5970: 840MH/s
BFL: 1000MH/s

Power Consumption:
5970: 350W
BFL: 20W

Cost of operation @ $.10/KWh:
5970: $26.04/mo
BFL: $1.55/mo

Money saved by staying home during the week playing WoW/BF3/MW3 instead of going out:
5970: $500-800/mo
BFL: N/A

So yeah, the BFL Bitforce FPGA might save a little power in the long run, but because you can't game on it, is it really worth it? Tongue

nmat

hero member

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12 months payout is great if it actually happens. Depending on your electricity price you may never break even. Even if prices remain the same, difficulty will probably rise until the average production cost on an FPGA matches market price.

rph

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Merit: 100

Quote from: DeepBit on December 08, 2011, 07:48:45 AM

12 months is a very good return time in real world.

Exactly. Those complaining about 1-2 year payoff periods must live in some alternative universe where
it's easy to earn 50-100% a year, with a small amount of startup capital, from anywhere in the world.

A miner that produces its own cost in BTC over 1 year is still worth at least 50% of its initial cost after that year.
So: it's earning a 50%+ return on investment.

For people with a certain skill set willing to tolerate a certain level of risk -
that looks very attractive compared to 5% corporate bonds, 0.9% FDIC savings accounts, etc.

-rph

caston

hero member

Activity: 756

Merit: 500

A lot of transactions fees are lost to exchanges in the form of "trade commissions". So although Magical Tux is making a nice profit a lot of miners are struggling. At the same time traders are being gouged more in fees using conventional services such as bank transfers, credit card fees, paypal fees and so on then they otherwise would in their lifetime. Ironic that the very same bitcoin that is supposed to be saving people fees is actually increasing them. If you want to develop bitcoin further look at applications to return more transaction fees to miners and give less to banks and middle men.

finway

hero member

Activity: 714

Merit: 500

Yeah, u r right. Only a big rise will make FPGA sense.

ElectricMucus

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Marketing manager - GO MP

Mining is going to remain unprofitable until transaction fees kick in. Oh I nearly forgot: Isn't there a design flaw?
Something which makes it unprofitable to share transactions with high reward?

DeepBit

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Activity: 532

Merit: 501

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Quote from: chickenado on December 08, 2011, 07:03:43 AM

This doesn't seem like a very good bet to me. 12 months is like a century in the bitcoin universe. My prediction is that in the next 12 months, bitcoin will either a) experience another huge growth spurt, perhaps by 1-2 orders of magnitude, or b) continue to shrink until only a handful of diehard enthusiasts use it. I don't see very much room for stagnation.

1. 12 months is a very good return time in real world. Yes, breaking even in 1-2 months is very cool, but usually much more suspicious.

2. "continue to shrink" - oh, really ? As I see, the number of different BTC businesses and merchants now is much greater than before and continues to grow. Also the price is more stable.

Quote from: chickenado on December 08, 2011, 07:03:43 AM

Even if stagnation materializes, it's a risky investment because the unit could be made obsolete by superior ASICs much sooner than Jan 2013 when it finally starts to return profits.

Working on this.

chickenado

hero member

Activity: 1036

Merit: 502

At current difficulty, a Butterfly Labs Bitforce unit takes about 8 months to earn back the 230 BTC that it cost to buy. Even if the number of miners remains equal, I would expect difficulty to go up as a result of miners switching to Bitforce units. So a more realistic amortization time is about 12 months.

This doesn't seem like a very good bet to me. 12 months is like a century in the bitcoin universe. My prediction is that in the next 12 months, bitcoin will either a) experience another huge growth spurt, perhaps by 1-2 orders of magnitude, or b) continue to shrink until only a handful of diehard enthusiasts use it. I don't see very much room for stagnation.

If case a) materializes, the Bitforce unit is a bad investment because it will never earn back the 230 BTC.

If case b) materializes, it's also a bad investment because then you can make more money by selling those 230 BTC now and buying them back when the price is hits 0.1 USD.

Even if stagnation materializes, it's a risky investment because the unit could be made obsolete by superior ASICs much sooner than Jan 2013 when it finally starts to return profits.

If you are one of the buyers, I am curious: What are your motivations?

Topic: Purchasing a Bitforce unit = betting on stagnation? - page 2. (Read 4826 times)