What type of reg would you build for 120k?

cdog

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Quote from: DeathAndTaxes on February 24, 2013, 03:34:43 PM

A 3G mobile hotspot, a Raspberry Pi running as host and a single BFL Jalapeno all operating from the cigarette lighter in an Italian made sportscar.
Now that I think about it the first three components are optional.

This thread really doesnt need any posts beyond this. Well played sir, well played. Although $ for $ a corvette has pretty nice performance, and save the rest of the $ for hookers and blow.

milly6

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Quote from: Zedster on March 04, 2013, 02:30:20 PM

OP edit your title.

Just sayin'

yeah the number wasnt accurate by any means

Zedster

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OP edit your title.

Just sayin'

mrb

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Quote from: ralree on March 04, 2013, 09:24:00 AM

Quote from: mrb on March 04, 2013, 05:04:14 AM

I speak as a miner who has been making decisions (mining/buying/holding/selling) since when the whole network was ~100 Ghash/s... and I have told you this before, but you grossly underestimate how fast the network is going to grow in the next few months and years. "2x per year", yeah right. For reference, the network's mining speed was growing by 100x every ~6 months when GPUs were introduced. Yes. Not 2x, but 100x.

(I also think you overestimate BFL's ability to ship in merely 4 months IMHO). Because of that I don't think that anybody can assert with good confidence that one of the options is definitively more profitable than the other.

CPU to GPU was also when bitcoin started to get noticed by the entire community, so it's not really a fair comparison. I think the estimates of a 10x to 40x increase in hashrate from the first BFL shipment are more likely, and maybe doubling per year after that. We're just going to double when Avalon actually arrives. ASICMiner is going to do something similar to that.
unknowns.

You are in for a big surprise... BFL's first 100k chips are only the tip of the iceberg. A low steady increase of 2x per year after BFL ships this amount would be plausible (1) if the BTC exchange rate stayed mostly constant; (2) if competition between ASIC vendors had stabilized; (3) if there was a point in the near future where we could imagine demand stop outstripping supply; and (4) if ASICs had reached the current 28-32nm process node with no more obvious room for improvement.

But none of these points are true. The exchange rate increased 5x-6x year over year from March 2011, to March 2012, to March 2013. There are only 3-4 ASIC designers in a vastly under-supplied market. The most advanced ASICs (BFL) are only 65nm.

Node

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Quote from: milly6 on March 04, 2013, 09:46:37 AM

Quote from: dree12 on February 24, 2013, 03:38:49 PM

Tough question. If I were contracted by a company with a 120 kUSD budget, I would either first look to acquire a company like Avalon or put the money in a bank account. Buying a rig now is pretty much a waste of money, as the ASICs will arrive far to late to be profitable.

Avalon took in $25million for preorders... good luck getting them to sell for 180k Cheesy

Your math is off

300*1300 + 600* 1500 = 1,290,000

or roughly $1.3million.

Unless you know of a secret batch # 3?

milly6

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Quote from: dree12 on February 24, 2013, 03:38:49 PM

Tough question. If I were contracted by a company with a 120 kUSD budget, I would either first look to acquire a company like Avalon or put the money in a bank account. Buying a rig now is pretty much a waste of money, as the ASICs will arrive far to late to be profitable.

Avalon took in $25million for preorders... good luck getting them to sell for 180k Cheesy

ralree

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Manateeeeeeees

Quote from: mrb on March 04, 2013, 05:04:14 AM

Quote from: crazyates on March 01, 2013, 11:48:50 PM

Quote from: DobZombie on March 01, 2013, 11:00:04 PM

Quote from: ishare on February 24, 2013, 03:31:22 PM

what type of rig would you guys build for 120k ?

I wouldn't put it into hardware. I just buy bitcoins. I could nearly guarantee that in 5 years time it'll be over $100 a pop.

Use it in short trading?

I have no problem dumping 120k into the Bitcoin economy, but if you're looking at a 5 year timeline, is that really the most profitable? Do you have any particular reasons why you think buying BTC is more profitable? Here are 2 scenarios:

Option A: You buy 120k worth of BTC, and sit for 5 years. That's ~3500BTC at today's price, and if you hold on to them for 5 years, they're worth $350K. $120K -> 350K isn't bad.

Option B: You buy 4 BFL ASICs. I don't care if it takes 4 months to deliver, you will have a 100% ROI within the next 8 months. A 100% ROI means you will have mined back what you spent, which would be the same 3500BTC. You then have the next 4 years to mine BTC before you cash out. Lets say the network doubles, and you earn half as much per year. So in the 5 years, you earn 3500, 1750, 875, 437, and finally 218 BTC. At the end of the 5 years, you end with almost 6800BTC. Assuming the same increase in price, you just went from $120k -> $680K.

You can't tell me the cost of power is going to make up the difference between $350K and $680K.

I speak as a miner who has been making decisions (mining/buying/holding/selling) since when the whole network was ~100 Ghash/s... and I have told you this before, but you grossly underestimate how fast the network is going to grow in the next few months and years. "2x per year", yeah right. For reference, the network's mining speed was growing by 100x every ~6 months when GPUs were introduced. Yes. Not 2x, but 100x.

(I also think you overestimate BFL's ability to ship in merely 4 months IMHO). Because of that I don't think that anybody can assert with good confidence that one of the options is definitively more profitable than the other.

CPU to GPU was also when bitcoin started to get noticed by the entire community, so it's not really a fair comparison. I think the estimates of a 10x to 40x increase in hashrate from the first BFL shipment are more likely, and maybe doubling per year after that. We're just going to double when Avalon actually arrives. ASICMiner is going to do something similar to that.

On the other hand, it's impossible to predict whether buying bitcoins is better than mining in the future. There are way too many unknowns.

mrb

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Quote from: crazyates on March 01, 2013, 11:48:50 PM

Quote from: DobZombie on March 01, 2013, 11:00:04 PM

Quote from: ishare on February 24, 2013, 03:31:22 PM

what type of rig would you guys build for 120k ?

I wouldn't put it into hardware. I just buy bitcoins. I could nearly guarantee that in 5 years time it'll be over $100 a pop.

Use it in short trading?

I have no problem dumping 120k into the Bitcoin economy, but if you're looking at a 5 year timeline, is that really the most profitable? Do you have any particular reasons why you think buying BTC is more profitable? Here are 2 scenarios:

Option A: You buy 120k worth of BTC, and sit for 5 years. That's ~3500BTC at today's price, and if you hold on to them for 5 years, they're worth $350K. $120K -> 350K isn't bad.

Option B: You buy 4 BFL ASICs. I don't care if it takes 4 months to deliver, you will have a 100% ROI within the next 8 months. A 100% ROI means you will have mined back what you spent, which would be the same 3500BTC. You then have the next 4 years to mine BTC before you cash out. Lets say the network doubles, and you earn half as much per year. So in the 5 years, you earn 3500, 1750, 875, 437, and finally 218 BTC. At the end of the 5 years, you end with almost 6800BTC. Assuming the same increase in price, you just went from $120k -> $680K.

You can't tell me the cost of power is going to make up the difference between $350K and $680K.

I speak as a miner who has been making decisions (mining/buying/holding/selling) since when the whole network was ~100 Ghash/s... and I have told you this before, but you grossly underestimate how fast the network is going to grow in the next few months and years. "2x per year", yeah right. For reference, the network's mining speed was growing by 100x every ~6 months when GPUs were introduced. Yes. Not 2x, but 100x.

(I also think you overestimate BFL's ability to ship in merely 4 months IMHO). Because of that I don't think that anybody can assert with good confidence that one of the options is definitively more profitable than the other.

crazyates

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Quote from: fulepp on March 02, 2013, 06:15:24 AM

And one more thing to consider. As far i know these rigs come with 6 month warranty. Let we assume they start to give trouble after 1,5 years... your 5 years plan is gone...

BFL comes with a lifetime warranty, meaning the lifetime of the product. If they still sell it, they will warranty it. This might be for a year, or more, or less.

fulepp

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And one more thing to consider. As far i know these rigs come with 6 month warranty. Let we assume they start to give trouble after 1,5 years... your 5 years plan is gone...

crazyates

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Quote from: DobZombie on March 01, 2013, 11:00:04 PM

Quote from: ishare on February 24, 2013, 03:31:22 PM

what type of rig would you guys build for 120k ?

I wouldn't put it into hardware. I just buy bitcoins. I could nearly guarantee that in 5 years time it'll be over $100 a pop.

Use it in short trading?

I have no problem dumping 120k into the Bitcoin economy, but if you're looking at a 5 year timeline, is that really the most profitable? Do you have any particular reasons why you think buying BTC is more profitable? Here are 2 scenarios:

Option A: You buy 120k worth of BTC, and sit for 5 years. That's ~3500BTC at today's price, and if you hold on to them for 5 years, they're worth $350K. $120K -> 350K isn't bad.

Option B: You buy 4 BFL ASICs. I don't care if it takes 4 months to deliver, you will have a 100% ROI within the next 8 months. A 100% ROI means you will have mined back what you spent, which would be the same 3500BTC. You then have the next 4 years to mine BTC before you cash out. Lets say the network doubles, and you earn half as much per year. So in the 5 years, you earn 3500, 1750, 875, 437, and finally 218 BTC. At the end of the 5 years, you end with almost 6800BTC. Assuming the same increase in price, you just went from $120k -> $680K.

You can't tell me the cost of power is going to make up the difference between $350K and $680K.

DobZombie

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Quote from: ishare on February 24, 2013, 03:31:22 PM

what type of rig would you guys build for 120k ?

I wouldn't put it into hardware. I just buy bitcoins. I could nearly guarantee that in 5 years time it'll be over $100 a pop.

Use it in short trading?

bam91

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Quote from: ishare on February 24, 2013, 03:31:22 PM

what type of rig would you guys build for 120k ?

4 minirigs plain and simple

Monster Tent

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Buy $1000 worth of bitcoin each day for the next 120 days.

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Quote from: molecular on February 24, 2013, 03:52:00 PM

Quote from: DeathAndTaxes on February 24, 2013, 03:34:43 PM

A 3G mobile hotspot, a Raspberry Pi running as host and a single BFL Jalapeno all operating from the cigarette lighter in an Italian made sportscar.
Now that I think about it the first three components are optional.

I'll put that stuff in a design radio case for you for only 5k. "Box with fan" miner instead of Jalapeno is 1k cheaper but will be delivered earler. I can also talk to BFL, maybe they have one of the old asics with the thermal conduction problems so you can light a cigar.

If its anything like BFL the sportscar wont have an engine.

mrb

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Quote from: Nemesis on February 25, 2013, 01:23:33 AM

Nonsense, whether btc succeeds or not, it does not depend on its exchange rate or your-rather-narrow-view "value"
Its funny when you talks about math,.... where you blatantly make assumption about relation of "btc succeed" + "economy grows"

Hey genius, if the economy grows at the same rate of btc supply, should the exchange rate increase?

Go back and take logical conjunction, genius

Cut your condescending tone.

The amount of BTC cannot grow by more than 2x (as I said, we have already mined half the coins).
If Bitcoin continues to succeed, the economy will obviously grow by a lot more than 2x (which is why I mention an economy growth of 10x, 100x -- it has already grown by more than 100x over the last 2 years).

Nemesis

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Quote from: mrb on February 25, 2013, 01:10:58 AM

Quote from: crazyates on February 24, 2013, 11:35:25 PM

Quote from: mrb on February 24, 2013, 10:27:14 PM

Actually, what is almost guaranteed to happen is either (1) Bitcoin fails completely and drops to $0, or (2) Bitcoin continues succeeds and naturally continues to appreciate in value to $100, $1000, and more. The chance that the exchange rate remains stagnant, say between $5-50, in the next decade (we are talking long term investment here) is almost zero. Mark my words, it will be either scenario (1) or (2).

It's basic math. If Bitcoin succeeds, and if its economy grows by 10x, 100x, etc, then its exchange rate should increase by 10x, 100x, etc, because there is a predetermined finite number of coins. (Except that we have mined only half the coins up to this day, but you get my point). The question is how quickly will Bitcoin succeeds? Will it significantly rise in value over 0.5 years, 1 year, 3 years, or more?

You mean to tell me that in the next 10 years, either Bitcoin will fail, or it won't? Your level of perception is amazing! Everyone involved in Bitcoin knows that.

What we don't know is what the value will be one year from now. Two years ago, the price was less than $1. Then it rose to $30+, and fell back to $2. One year ago, the price was less than $5, and it's been a slow steady increase over months to what it is today. The question is, what's the price going to be in one year? We don't know.

My answer was assuming a long-term investment (5-10 years). Whereas you seem to focus on the short term. In which case I agree that mining is safer strategy to maximize short-term profits, except I am saying right now is the worse time to invest in ASICs (see below).

Nonsense, whether btc succeeds or not, it does not depend on its exchange rate or your-rather-narrow-view "value"
Its funny when you talks about math,.... where you blatantly make assumption about relation of "btc succeed" + "economy grows"

Hey genius, if the economy grows at the same rate of btc supply, should the exchange rate increase?

Go back and take logical conjunction, genius

mrb

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Quote from: crazyates on February 24, 2013, 11:35:25 PM

Quote from: mrb on February 24, 2013, 10:27:14 PM

Actually, what is almost guaranteed to happen is either (1) Bitcoin fails completely and drops to $0, or (2) Bitcoin continues succeeds and naturally continues to appreciate in value to $100, $1000, and more. The chance that the exchange rate remains stagnant, say between $5-50, in the next decade (we are talking long term investment here) is almost zero. Mark my words, it will be either scenario (1) or (2).

It's basic math. If Bitcoin succeeds, and if its economy grows by 10x, 100x, etc, then its exchange rate should increase by 10x, 100x, etc, because there is a predetermined finite number of coins. (Except that we have mined only half the coins up to this day, but you get my point). The question is how quickly will Bitcoin succeeds? Will it significantly rise in value over 0.5 years, 1 year, 3 years, or more?

You mean to tell me that in the next 10 years, either Bitcoin will fail, or it won't? Your level of perception is amazing! Everyone involved in Bitcoin knows that.

What we don't know is what the value will be one year from now. Two years ago, the price was less than $1. Then it rose to $30+, and fell back to $2. One year ago, the price was less than $5, and it's been a slow steady increase over months to what it is today. The question is, what's the price going to be in one year? We don't know.

My answer was assuming a long-term investment (5-10 years). Whereas you seem to focus on the short term. In which case I agree that mining is safer strategy to maximize short-term profits, except I am saying right now is the worse time to invest in ASICs (see below).

Quote from: crazyates on February 24, 2013, 11:35:25 PM

Quote

It is already too late to order the current generation of devices. Customers in front of you in the line will spike the difficulty up. One of the flaws in your math assuming a difficulty of 100M is that you assume it will stay constant at 100M for a straight 6 months while you are recouping your MiniRig investment. It will instead continue to rise during these 6 months because vendors will slash prices, offer better hardware, etc.

You seem to be under the impression that the only way to make a profit with a BFL order is to be within the first month of pre-orders?

Pretty much, yes. More precisely, the profits difference is so huge between being first or last in line of the ASIC preorders, that I think it would be utterly stupid to place an order today Feb 24. If you can wait, say 6 months, until a vendor slashes prices or announces a more power efficient chip, then wait, and order the day this announcement will be made. Being the first in line of the next technological advancement is always going to be the optimal time to invest in mining equipment (whether you are the first to mine on GPUs, or first on 110nm ASICs, or first on 65nm ASICs, etc).

Also, yes, I do think the "profitability decline per year" of 0.61 used by that mining calculator grossly underestimates the tidal wave of ASIC developments that is about to hit the Bitcoin mining industry.

crazyates

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Quote from: mrb on February 24, 2013, 10:27:14 PM

Actually, what is almost guaranteed to happen is either (1) Bitcoin fails completely and drops to $0, or (2) Bitcoin continues succeeds and naturally continues to appreciate in value to $100, $1000, and more. The chance that the exchange rate remains stagnant, say between $5-50, in the next decade (we are talking long term investment here) is almost zero. Mark my words, it will be either scenario (1) or (2).

It's basic math. If Bitcoin succeeds, and if its economy grows by 10x, 100x, etc, then its exchange rate should increase by 10x, 100x, etc, because there is a predetermined finite number of coins. (Except that we have mined only half the coins up to this day, but you get my point). The question is how quickly will Bitcoin succeeds? Will it significantly rise in value over 0.5 years, 1 year, 3 years, or more?

You mean to tell me that in the next 10 years, either Bitcoin will fail, or it won't? Your level of perception is amazing! Everyone involved in Bitcoin knows that.

What we don't know is what the value will be one year from now. Two years ago, the price was less than $1. Then it rose to $30+, and fell back to $2. One year ago, the price was less than $5, and it's been a slow steady increase over months to what it is today. The question is, what's the price going to be in one year? We don't know.

Quote from: Dalkore on February 24, 2013, 11:18:17 PM

I think we will be above 100 million by next summer. Your numbers under these assumptions are solid and I like the website for calculations as well. I think we will be around 50,000,000 by July and that is the earliest that someone could get there rigs from BFL.

Right, so someone places an order today, they get them in July with a difficulty of 50M. Lets say by the end of the year, the network is up to 150M difficulty. You're still talking at a 100% ROI of less than 6 months.

The end result would be: What option makes the most amount of money in a 1 year period of time.

1) If you buy BTC, you're looking at throwing 4,000 BTC in a wallet, and letting it sit there.
2) You buy from BFL, sit for 6 months, and earn 4,000BTC over the next 6 months after that (when you start mining).

Both options end up with the same result: your ultimate profitability is bound by the exhange rate. However, one option gives you hardware you can now resell, or keep mining for another year, and make even more BTC.

Dalkore

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Quote from: crazyates on February 24, 2013, 06:58:47 PM

Quote from: Dalkore on February 24, 2013, 04:48:44 PM

Quote from: crazyates on February 24, 2013, 04:46:37 PM

Quote from: crashoveride54902 on February 24, 2013, 03:56:01 PM

just buy 120k in btc...wait til the end of the year when it's at 100usd and sell = profit Cheesy

You can't guarantee that that will happen. In fact, you run a giant risk that the price will fall, and you would lose money. What would you do if the price dropped down to $20 or even $10 again?

My suggestion: buy 4 BFL MiniRigs. It's what I would do if I had that kind of cash.

That will give you ~6TH/s, and pull about 6kW of power. For comparison, 120k would buy ~80 Avalon units, which would give you ~5.3TH/s, and pull almost 50kW of power.

He seems to forget the lead time on these BFL units. By the time you get them, it would worry about the profitability.

It all depends on how quickly you expect the network to grow. I'm personally looking at a difficulty of 100,000,000 sometime next summer, after BFL ships all their preorders, and all orders between now and then (aka they're all caught up). You could expect more than that, or you could expect less. It's all speculation.

I went to http://www.bitcoinx.com/profit/ and entered in these variables:
Difficulty of 100,000,000
Speed of 6TH/s
Power usage of 6000W
Time frame of 6 months
Hardware cost of 120k
Estimated break even point: 152 days.
Net profit after 6 months: 21309.79 USD

Difficulty of 50,000,000
Hardware break even: 71 days

Difficulty of 150,000,000
Hardware break even: 245 days

You can worry about the profitability all you want. Please show me numbers where it doesn't make sense.

I think we will be above 100 million by next summer. Your numbers under these assumptions are solid and I like the website for calculations as well. I think we will be around 50,000,000 by July and that is the earliest that someone could get there rigs from BFL.

D

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