Topic: Running some ASIC numbers... (Read 3564 times)

Not likely.  Even if every miner starts selling every coin he mines, thats still only 3600 BTC per day, which isnt that much. And even that is not likely to happen, most people who invested in ASICs believe in bitcoin and will want to hoard them. If anything I expect an opposite effect, I imagine many miners at least sell enough coins to pay for electricity, and that ratio is about to drop.


GPUs and FPGAs were very different. They were never going to drop massively or suddenly in price, because most of the demand isnt from bitcoin mining, its from other applications like gaming and relatively stable. ASICs on the other hand, can only be sold for mining, its market value is determined almost only by bitcoin difficulty. Once difficulty raises substantially, and sales start to dry up,  prices will drop and keep dropping through the floor, causing difficulty to explode.  best of luck with June deliveries.

SSSSHHHH,thats supposed to be a secret dude        .................Just like " No one will ever get thier ROI back ever,with ASIC's",too funny   

My GPU's have paid themselves off many months ago & paid for my first 30GH unit which will pay for my next 60GH unit & so on.I won't elaborate on my math,but even @ $8 per BTC,I should still make more than enough for several more 60 GH units by June at the latest 

Once ASICs hit though, won't the price plummet? I'm hesitant to buy any atm because I'm expecting several units to come online and watch as people desperately cash out on the BTC they mine in order to guarentee their ROI. Won't the price plummet for that? Followed by a rebound? So, wait for the market to bottom out then buy, wait a while to sell, and you could turn a decent profit from that.

what i hate the most about all of this is the lack of numbers from BFL. if as said... enough are pre-sold where the difficulty/hashrate rises enough.. unless bitcoin price increases by a drastic amount, its entirely possible that people will have great difficulty paying off their hardware from bitcoin sales. as mentioned... hardware prices will more then likely drop as well, but they would have to drop enough where people could buy back into the race with potential profits on the horizon. thats also assuming BFL doesnt drop the price before everything has finished shipping, causing even more people to rush in and buy more without ever knowing how many are currently sold.

one thought that keeps crossing my mind is "is bfl gaming the community?" by that i dont mean a scam. i mean are they keeping their sales numbers hidden, with the specific intention to sell as many as possible, regardless of the fact they know that everyone buying units after sales number ### will have virtually no chance to pay off that unit. if we had those figures we could calculate profits fairly accurately and  reasonably judge whether its OK to buy. the more i think about it the scarier this all feels.

on the other hand it could be the opposite. there sales are doing really bad and they dont want anyone to know. hoping people will order more so its not plainly visible by network hashrate that BFL didnt add much to it.

of course i should also mention... if they are a good company... and good people. and know that people in the latter orders wont be able to pay off their hardware... they could ... refund some money... or perhaps... upgrade people to increase their hashrate to allow them to make more money to offset that. either way, the risk is potentially huge unless you can afford to throw money away on a gamble.

With that said, and not knowing what BFL is doing in regards to all of this, this is all speculation on my part.

One thing is for certain, avalon has specific batches and we know months in advance what they will be. assuming they plan to ship more then 2 units(china dont count. lol j/k china)

if im totally way off the mark somewhere... forgive my late night... erm early morning post.

Hrmm.. my entire post reduced to one line...   

That's why the exchange price is rising

Fuck. I think I'd be better off just buying BTC.

On the BFL side it depends on their product mix.  A Jalapeno is 1 chip but not their "standard" 7.5 Gh/s per chip...

All the talk on the BFL forums is the initial release will be 6K chips -- WORST case that is 45 Th/s.  The 2nd release will also be ~6K chips so again another 45 Th/s WORST case.

I believe the next lot could be upwards of 75K chips and again WORST case that is 562.5 Th/s.

All said, the 420 Th/s number might not be too far off at the end though it could be nearer 500 I suppose.

Does anybody know if these estimates are fairly accurate?

I haven't been following as closely - but how does ASICminer fit into this?  How many TH/s from them by the May timeframe?

Your main point about the ASIC price steadily being forced downward is undeniable, especially when the known batches are considered.

Further, in the long-term electricity can be sourced almost for free, after the cost of solar panels are paid down. There has been a glut on the market in the last couple of years reducing the price per watt...

http://www.ecodirect.com/Suntech-STP250S-20-Wdb-250W-30V-PV-Panel-p/suntech-stp250s-20wdb.htm

An inverter would be needed too, and a feed-in tariff available by your powerco. So power is sold to the grid during the day offsetting the mining rig's overall power consumption.

Or.. I could have already ordered several rigs and am just trying to convince everyone else not to, maximizing my mining income.  

Umm..  seriously..  I think we are quickly approaching (or have already reached) the overshoot where buying ASICs _at the current price_ will no longer be profitable..  I'm basing this on the amount of Ghash I think has already been ordered and paid for.  This would be the medium term.  

In the long term, Once ASICs bottom out in price (2x ancilary component cost) I think mining will once again be very worthwhile.  This assumes that one's cost of electric is <25 cents.  As is now with GPUs, $/Mhash is going to reach an equilibrium with $/Kwh.  When that happens, I'll be jumping back in with both feet.  The longer I think about it, the happier I am that the Avalon batch #2 was such a cluster I was prevented from ordering.

So yes, I am in violent agreement with everything you said.  The only question is which side of the mine/invest decision is most profitable medium term.  

Sigg

Sigg - if you think ASIC mining is unprofitable medium/long term then consider the situation where everyone agrees with you.

The difficulty will stay lower and people will stick with existing graphics cards to make money. But then someone decides to get an ASIC going and makes a lot of money because no-one else is doing it.

Any market (as well as a mining market) is made of hundreds or thousands of people with graduations of opinion, the market finds a balance. Some will mine, some will invest.

Sooo...  this works if you have a FIAT income large enough to cover the loan payments.. but I don't see how it helps if you actually want to use your bitcoins to say.. _pay off_ a mortgage...  you'd just be substituting one loan for another.  Maybe you could get a better interest rate, but prolly not much.  And its not like you can just default on the BTC loan, as any unpaid balance becomes unearned income for tax purposes. 

The only way I can see this working, is if you have enough bitcoins that you can continually roll the Principle & Interest payments into new loans.  If you kept this up till you died, then repayment is no longer your problem     Unfortunately, there are very few with Ellison like reserves of collateral.

Seems to be a recuring theme of mine in this thread...  What am I missing here?

Sigg

It is simple, never sell your bitcoins . Then there is no tax to pay. Instead use them as a collateral for loans just like Oracle's Larry Ellison does with his Oracle shares. Unfortunately, one might have to wait until Bitcoin's "market cap" hits 10 billion USD for "stock loans" to become available.

What you are missing is that in june, august, october and the next years,  BFL and avalon will still want to sell boxes, as many as they can. The only way to do that, is lower prices. Lower prices will shorten the apparent break even time on new devices, while indirectly lengthening it on all existing boxes. Im pretty sure for most ASICs, the break even time will be stretched so often and so far it will approach infinity.

From GPU to ASIC
25 TH to 500TH
difficulty rise 25X
efficiency also increase by 25X (same investment for 50GH ASIC used to buy 2GH GPUs)
so basically for same investment it is still the same return, with less power consumption. BTC per user per day decreased due to reward halving, but price appreciatiion countered that effect

OK.. so currently, a GPU + supporting hardware for the slot will come in at ~$450, and consume ~150 watts. This is basically a 3:1 ratio ..  Assuming auxiliary components on BFL products are comparable to Avalon, that means that BFL should also settle in at around $300 per 100 watts, also a 3:1 ratio ...

Or in other words, if your electricity costs are such that you could make a decent amount mining now with purchasing GPU's, just wait a year or two and you'll be in the exact same position, only with ASICs.

I'd also like to thank you for the " 2x cost of its auxiliary components " figure.. I knew there had to be a floor, but I had no idea where it was.

Sigg

Sadly, Bitcoin isn't a magical anti-tax fairy. When you sell those coins for something else, you'll owe taxes on them and in all likelihood you won't even be able to enjoy preferable tax treatment (e.g. capital gains tax) for it.

Perhaps you're planning on breaking the law and not paying taxes on your income— well, okay, but Bitcoin isn't special there, you can do that just as easily if you're paid in cash— but this is insanely foolish at least in the US— tax collection is insanely powerful and the deck is not stacked in your favor.

ASIC's are quite different from ALL previous generations of mining hardware. The major new factor is that the manufacturers will be able to produce huge quantities of chips at very very low price per chip. I will tell you now that this basically guarantees that for a typical mining server it's price will asymptotically approach 2x cost of its auxiliary components (case, PSU, control boards etc).

I.e fully packed analog of the the avalon box will be sold for something around 300$. The price will be higher of course for new generations of more powerful mining chips.


BTW OP is quite reasonable.