Topic: Why everyone here suggests not to mine? Explain it! - page 2. (Read 2301 times)

Huge farms get hardware at significantly lower rates than a regular consumer can.  KnC, Bitmain, Cointerra, etc all manufacture the hardware as well as run their own farms, as well as sell cloud mining contracts.  They make lots of profit.

Aha...

I get it now...so even with free electricity it's not possible to make any profit...

so why are all those huge farms mining still? how can they mine at loss?

Yes, only 4BTC at the end of the year, and that's assuming 10% increases in difficulty.  Like I wrote, if you assume 15%, you're still trying to recoup your initial investment by year's end (you're at negative 27BTC).

It's simply math and any online calculator worth the name does the calculation for you:
As that difficulty goes up, your earnings correspondingly go down.

Let's take a look at some real calculations for those 100 S3s (assuming 450GH/s each)...

Earnings per day right now: 25 / (27428630902 * 2^32 / 45000000000000 / 86400) = 0.8251BTC
Earnings per day at next difficulty (10% increase): 25 / (30171493992 * 2^32 / 45000000000000 / 86400) = 0.7501BTC
Earnings per day at next difficulty (10% increase): 25 / (33188643391 * 2^32 / 45000000000000 / 86400) = 0.6819BTC

...

Get it?  Your income goes down every time the difficultly goes up.  Your calculations assumed little to no increase in difficulty.  0.8251 * 365 = 301, you got 292.

EDIT: Let me give you a real world example of decreased earnings.  I received my very first Antminer S1 on 4/2/2014.  I overclocked it to 200GH/s the instant I turned it on.  On 4/2 of this year, that 200GH/s expected to earn me 0.02009BTC a day.  If I still had that S1 today, that very same 200GH/s would expect to earn me 0.003667BTC a day.

Before the last increase in the difficulty, how much was it possible to make per day with an S3? Right now, you can make 0.008 per day.

How is my calculation off? Only 4 BTCs by the end of the year?

1) There is no such thing as free electricity.  Somebody is paying for it, or has paid quite a bit of money investing in generation capacity.
2) To run those 100 S3s you're going to need access to a constant supply of at least 50kW of electricity.
3) You need to remove the heat generated by those devices
4) Your calculations are off.  At 10% difficulty increases, at the end of a year you will have made approximately 4BTC profit.  At 15% difficulty increases, you're still 27BTC in the hole at the end of the year.  These assume 0 electricity costs, which I have already addressed in point 1.

Ok,

This applies to myself or anyone who has FREE electricity....I haven't calculated the cost of electricity in the below calc.

A simple calculation....

100 S3s @ each 350 USD, so total is $35,000.

50 PSUs to power them, lets say Corsair RM850 for every two...each PSU is around $160, so total cost is $8,000

Let's assume I need Misc. costs of power extensions, network cables, switches...etc. at around $5,000.

So what is my total cost? $48,000

Ok, based on my experience from Eligius, I've seen around 0.008 BTCs per day for every S3.

Now, let's run for a full year (365 days) with all 100 S3s, so the total expected BTCs is 292 BTCs for the first year.

at this moment's price of BTC, that's $140,000

minus cost ($48,000 earlier), so a net profit of $92,000.  Isn't that good income?  and this is only for the first year.  If you run it with another 2 years, you will even make more...

Ok, you will say the difficulty and all, let's make that total BTCs in the first year is not 292, let's cut it down to 260 BTCs for the sake of difficulty.

so, 260 BTCs is worth on today's price $124,800. Deduct the initial costs (the $48,000), that will be  $76,000 NET profit.

Now the BTC price is not constant as we all know, there is a change that it can be $600 or $1,000, and there is a chance that it could go down as well....

Am I missing something?