Topic: Why You Haven't Seen Miners Leave in Hordes..... - page 4. (Read 7728 times)

This isn't entirely correct. In long term I agree it will make mining less attractive but any coins mined and saved before this will make profits even greater. I'll give an example and before I do I want to point out that I don't think this is realistic any time in the near future its just an example.

Say you started mining in june and by october you have saved up 300 bitcoins. The price of bitcoins is hovering around 8 dollars making that worth $2,400. Then out of know where newegg and amazon decide they want to start accepting bitcoins. The price skyrockets to $30 because of all the news bitcoins is getting now. That 2,400 in bitcoins is now worth 9,000.

So the early investors (us) get a pretty damn big payday. I don't plan to get rich off bitcoins but anything like that would make me extremely happy and I'm sure I'm not the only one in this boat. That's why people want wide spread adoption.

Also the previous ROI% were simply unsustainable.

Mining has no barrier to entry and there is minimal advantage when it comes to economies of scale.
Somewhat unusual the highest ROI is for people doing it "part time" reusing existing hardware.  For example a gamer who already owns and uses a high end gaming rig that discovers bitcoin and mines for some beer money (or the hope/chance to get rich).  His hardware has an effective cost of $0 because it is a sunk cost.  He already bought it and would buy it again even if bitcoin didn't exist.

High ROI situations only exist when there is some competitive advantage or barrier to entry.  Also anyone using open-source mining software and off the shelf hardware has no competitive advantage (that can be exploited for higher ROI%) over other miners.   There is no market in the world that has no barrier to entry where one can earn 5000% annual ROI.  Free markets don't work that way.  High ROI attacts competition unless the ROI is crushed.

Eventually the "mining market" will stabilize on a low but sustainable ROI.  Something in the 5% to 20% annually range based on how risky mining is perceived to be.  Ironically the thing that people want the most will result in even LOWER profits for miners.  If bitcoin takes off and becomes very mainstream and daily volatility falls then the risk in mining decreases and economic theory tells us the margin (profit) will decline also.

Now granted if your write a customer miner (and keep it a secret) that gets 10% higher hashes than public miners then you have a competitive advantage.  If you discover a FPGA breakthrough and build a massive FPGA cluster lowering your operating expense then you also have a competitive advantage.  However so far everything about bitcoin is rather open.  People share miners, kernels, fixes, enhancements.  There is an open source FPGA project, etc. 

The reason miners haven't left in hordes is because even at $5.00/BTC mining is STILL profitable.  I am not saying it's great profit but it's profit nonetheless and I guess if you have an unstable rig which you have to constantly coddle then it's not worth the hassle.  I will give examples of my rigs, which are very common rigs (nothing special), and my electrical rate is middle of the road ($.12/KWh) for United States:

Rig # 1 (Antec Lanboy Air w/ 2 x Radeon 6950s & 7 high-speed 120mm fans for cooling)

   - 730 MH/sec. with current difficulty 1,755,425 = .40 BTC/day => $6.10 current price = $2.44/day
   - 455 Watts = .455 KWh @ $.12/KWh = $1.31/day
   - Net Profit = $1.13/day for 28 days = $31.64/month

Rig # 2 (Open rig w/ Radeon 5970, 2 x Radeon 5830s, 2 high-speed 120mm fans & one Honeywell Table Fan for cooling)

   - 1350 MH/sec. with current difficulty 1,755,425 = .72 BTC/day => $6.10 current price = $4.39/day
   - 736 Watts = .736 @ $.12/KWh = $2.12/day
   - Net Profit = $2.27/day for 28 days = $63.56/month

So as you can see nearly $100/month for just keeping an eye on two rigs is easy money (if you plan on selling BTC at this low of a price).  This is imo the lowest point Bitcoin will go, so any rise in value will make your profitability go up significantly.  For everyone complaining about electricity rates just go get a Kill-A-Watt EZ and measure your energy consumption.  736 watts for 3 power-hungry cards is pretty damn good, granted the PSU is a Cougar 1050W GX which has 80 Plus Gold energy efficiency but any long-term miner should invest in some solid PSUs.  Enermax, Cougar, and Lepa make some very affordable 80-plus Gold PSUs not to mention others if you can catch rebates/sales on Newegg.  For fun here are some other appliances around the house I measured:

Hairdryer on High
   - 1,520 Watts 
Toaster
   - 850 Watts
Fridge
   - 11 Watts closed, 47 Watts with fridge open - 660 Watts Starting
Lasko Blower Fan
   - Speed 1 = 77 Watts, .64 Amps => $0.22/day
   - Speed 2 = 86 Watts, .71 Amps => $0.24/day
   - Speed 3 = 102 Watts, .88 Amps => $0.29/day
Honeywell Table Fan
   - Speed 1 = 26 Watts, .17 Amps => $0.07/day
   - Speed 2 = 29 Watts, .22 Amps => $0.08/day
   - Speed 3 = 34 Watts, .3 Amps => $0.10/day
TV, Cable Box, Wii Idle
   88 Watts => $0.25/day