Bitcoin Forum

I've read a lot of "Welp bitcoin is no longer profitable" but I did some calculations and it seems pretty lucrative to me, but maybe there is something I don't quite see. I am pretty new to this scene and can be completely wrong about any of these details. I'm also not factoring in internet cost as I am paying for internet either way.

For example, I can buy an Antminer S5 for about $400 and expect to get about 1 Th/s out of it. This unit operates at 590W, so I did some numbers to crunch the electricity cost.

Electricity in my area is pretty high, with max tier usage coming in at about $0.32/kWh and baseline costing about $0.16/kWh. These can probably kept minimal with a commercial account, but let's pretend like I'm running it out of my bedroom. At max cost, I figured the electricity would cost $0.32/kWh * 0.59 kW/h * 24 h/day * 31 days/month = $140.47/month. That's a pretty high electricity bill, but let's compare that to how much it could make.

I'll be using Slush's pool as an example. Slush's pool usually has a collective hash rate of about 34 Ph/s. Your reward through this pool is calcuated by (Your Scoring Hash Rate/Pool Scoring Hash Rate)*0.98. So let's go through the calculations:
(1Th/s / 3400 Th/s) * 0.98 * 25BTC/block * 3 blocks/day * 31 days/month * ~$400/BTC= $265.06/month.

This means that per my calculations you would get a small, but definitely noticeable profit of at least $100/month. Obviously there is uncertainty in the whole bitcoin universe and difficulty will go up, but this to me seems like a much better investment to make money than gambling on penny stocks.

Please let me know if I'm mistaken!

I think you have got the conversion from PH to TH wrong? 34PH is 34000TH.

No way you can make money with an S5 & that electricity cost.


Rich

An S5 earns right now $71 assuming free electricity per month.

yea I think your math was off somewhere.  Here is a good tool to do the math for you...
https://bitcoinwisdom.com/bitcoin/calculator

I plugged in the numbers at your electricity price of 32 cents per kWh and it looks like you are unprofitable from the moment you plug it in.  It looks like anything over 17 cents is currently unprofitable for the S5.

At 17 cents you only chance is S7/Avalon 6.  You would mine and sell.  That is only way I see you possibly profiting.  And if you do go up to 32.... you stand no chance.

You can get hosting done much much cheaper somewhere then 32 cent's.  I would say 10 cents or less, I suggest looking at this as 32 cent's is just horrible.

no margin with the s5 anymore, the consumption is around $22 and the earning is only 3x that, which mean that by the halving it will be useless, if not before due to the diff increase

this assuming the classic 0.05 cent per hour, i'm not counting free electricity, because only few people own it, surely not big farm...

 The issue isn't that you can't make money NOW, the issue is being able to make ENOUGH money to pay back the cost of the hardware you buy before it becomes unprofitable.

 You messed up on your calc, 34 PH is 34000 TH not 3400 TH so based on your assumptions your income would be more like $26 / month (this is somewhat low, Slush normally finds more like 5-6 blocks a day not 3).

 Based on your assumptions and a CORRECTED calculation, you're LOSING over $100/month



 https://bitcoinwisdom.com/bitcoin/calculator is probably the best calculator out there, can account for difficulty increases (though you have to guess what they'll average long-term) and many other factors.

 I show you LOSING over $2/day right now at 32 cents/kWH electric on an S5 with ZERO pool cost, profit of about 8 cents per DAY right now at 16cent/kWH electric but that profit evaporates as soon as the difficulty kicks up 8-9% more than the price does (probably in a bit over a week at the next diff adjustment, pretty much definitely at the diff adjustment after that).

 At current difficulty, an S5 will earn a bit over 0.13 Bitcoin/MONTH.



 I'm pretty sure the S5 is going to become unprofitable before the halfing, unless you have FREE electric, but it might be close if your electric is in the 3 Cents/KWH range.
 Definitely still usefull as a space heater though. 8-)

It seems like you haven't got the math right! You can always use coinwarz to check your values and do your math:

http://www.coinwarz.com/calculators/bitcoin-mining-calculator

Don't listen the liars above, they're just trying to keep the profits to themselves!!!

Go ahead and start mining, live like a king! I got into mining in 2012 and now I've got a Ferrari, a Tesla, and I live in a mansion, all thanks to bitcoin mining! Anyone with a half brain should buy mining gear and start minting money right away. Do Not Wait!!

Coin warz is great for current difficulty but horrible for long term. Use https://bitcoinwisdom.com/bitcoin/calculator it allows difficulty change over time.

This adds up and really makes a difference if you use coinwarz and times it out your numbers ill be massively off.

he have 0.32 in electricity, it could be only profitable with a s7 not with a s5, which the consumption would be $150 against a $60 of earning per month

huge loss each month if he begin to mine with that ancient asic

Some year perhaps I'll be able to get into coinwarz more than about once a month, they have HORRIBLE issues just flat out timing out entirely when i've tried to access their site for any reason.

 I've NEVER seen that issue with bitcoinwisdom, my only issues there (currently) are 1) they haven't updated their Litecoin calculator for the block halfing 2) a lot of their market links don't work right.

@OP,
Why don't you go for a single s7 which gives you higher TH/s with greater efficiency and lesser consumption???
The math you are showing is based on older machines which means that there is no guarantee that you can profit with the amount of miners you are going to use, as the electricity is higher at your place, and most importantly, it is associated with your ROI period...

I have a feeling we can let this thread die. I don't think OP is coming back he signed up asked question and has not been back:

Date Registered:    January 03, 2016, 09:47:09 PM
Last Active:    January 03, 2016, 10:18:12 PM

I would guess he did the math and decided not to do it.  But that is speculation.

It is hobby mining for him. He can only afford S5. S7 costs more than $1000, that is too expensive.

As I mentioned OP appears to be gone I think we can let this thread die.  But you must have missed his top electricity at "$0.32/kWh" which is very very high.  Were talking so high it makes it hard to mine at all.

If he runs anything he will want most current he can get.  Do the math on S5 running at that electricity you will see it is not good at all. 

than if it is only an hobby why he don't go with s3, much cheaper

also s7 is sold for $1250 right now, i'm sure you can find someone that sell an used unit for $1k

What would a good example be for difficulty change over 12 months? 20% per month seems High.

If I had to pick single figures I would go for 8% for each 14 Day difficulty period up to the halving in July. Then after that 5%. I would hope that these numbers are a bit high, but who knows what Spondoolies & Bitfury etc are going to be deploying?

Rich

That said right now, even at 0.03 used per kW. Avalon 6 and ant miner s7 are never profitable...

Is my above post accurate?

The next batch of Antminer S7 at 3 cents/kwh is VERY VERY iffy on if it will ever achieve a positive ROI.

 10% diff increase seems to be a conservative LOW SIDE estimate for diff increases up to the halfing, then I expect to see a short-term dip as some folks shut down their no-longer-even-CLOSE-to-profitable old gear, then it will probably start rising again.
 How much it will climb depends a lot on how soon the 14/16NM generation hits full production at the manufacturers, and how fast they can make those units.

LOL  But I look back on my bitcoin interests and when I started I managed to _buy_ a bitcoin by going to Walmart and getting a money transfer or something, back when even with the fees the bitcoin cost me like $27 and it wasn't long before I sold a single bitcoin and bought a 3 foot Samsung Smart TV.  Loving it I bought a ztex that was way over priced, then thumb asics, and then a Mercury - I was riding  high and added another card to the Merc.  I had been completely duped by MtGox as safe and lost maybe half my bitcoins.  Then S3's, S3+'s, C1's and an S5.  But I never really knew my true electric costs and was busily caught up in keeping them running.  Then I did the math and discovered my electric utility had different rates for winter and summer and found I was running at a loss.  I had always kept my winter heating bills low, turning off the heat when I'd be out and dropping it way down at night, never mind the long underware throughout winter months.  A thing that is when heating with bitcoin miners, one really doesn't want to shut them down and light them up every time one goes shopping so some are running at a loss when it isn't smart.  And the 113 difficulty - and Eligius having a round time of 59 hours right now and the last was 2 days at least, things are tough.  But I love the TV.

Oh, forgot I prepaid for a jalapeno then waited and waited and waited and when it arrived its hashrate was just a little inside the low hashrate return product acceptance - like they begrudged sending out products to those who prepaid and sent the better to friends and new buyers at a huge markup - and at that point when the Jalapeno arrived it was just about at break even.

I have made the math simpler for you. Click here (http://www.coinwarz.com/cryptocurrency/?sha256hr=1000&sha256p=590&sha256pc=0.32&sha256c=true&scrypthr=75000.00&scryptp=1500.00&scryptpc=0.1000&scryptc=false&scryptnhr=300.00&scryptnp=420.00&scryptnpc=0.1000&scryptnc=false&x11hr=13500.00&x11p=600.00&x11pc=0.1000&x11c=false&x13hr=9750.00&x13p=600.00&x13pc=0.1000&x13c=false&keccakhr=1260.00&keccakp=825.00&keccakpc=0.1000&keccakc=false&quarkhr=6300.00&quarkp=825.00&quarkpc=0.1000&quarkc=false&groestlhr=45.00&groestlp=825.00&groestlpc=0.1000&groestlc=false&blake256hr=6.40&blake256p=450.00&blake256pc=0.1000&blake256c=false&neoscrypthr=400.00&neoscryptp=400.00&neoscryptpc=0.1000&neoscryptc=false&lyra2rev2hr=13500.00&lyra2rev2p=825.00&lyra2rev2pc=0.1000&lyra2rev2c=false&cryptonighthr=1950.00&cryptonightp=750.00&cryptonightpc=0.1000&cryptonightc=false&e=igot). This will lead to a website called Coinwarz, where you can find profitability chart based on SHA-256 and other mining.

Upon checking that site you can clearly see that you will face a straight loss of $2.60 from your revenue of $1.93 everyday if you mine Bitcoin. If you consider mining Digitalcoin (DGC) for now, you will face a lesser loss of $0.74 from your revenue of $3.79.

Ultimately you are ending up losing your money at electricity costs. Now if you want to mine just for fun you can do so or you can start mining solo on -ck's pool in hopes of finding a block. ;)

I wonder if the money spent monthly on electric solo mining might be more profitably spent on Fantasy Five every time the pot goes over $200k. 

I would like to see numbers but I don't think most broke even with Jalepeno's.  But that is the nature of some companies luckily seems less are doing releases like that at this point, sad part of that is there are less gear being released compared to then.   

Most that bought Jalepeno's if they would have held coins had a huge difference between what they made off Jalepeno and what they would have had just holding.  I never invest on just prototypes anymore.  Terrahash was the company that about got me.

Yes. I misspoke.  I meant break even in the power cost versus bitcoin mined value.

The electricity cost is the key here. Mining is not viable for people living in UK, Germany or Califonia. The price is too high there.

 I'd guess that 8% figure is more likely, on average, 'till the halfing - and might be LOW.
 I've been using 10% on my figuring for a while.

 Yes, the S7 and Avalon 6 sales will probably slow down - but then comes the B-Eleven (even if BW doesn't SELL any, they go into the farm) - and sometime soon, proabably BEFORE the halfing, 14/16nm gear will hit full production from at least one and more likely 2 to 4 manufacturers (KnC claimed Solar was in production a little while back though their block figures don't support them having made very many if any Solar-based miners yet, BitFury is demoing early production chips, Bitmain might have their next gen gear taped out by now, Innosilicon should have the A3 in production shortly).



 The ONLY reason I can see for the average to stay under 10% is if (1) production on the 14/16nm gear hits yeild issues limiting how many can be built for a while, or (2) the diff goes up enough folks start turning off a LOT of 2-gen old (like the S5, SP20, and whatever the comparable BitFury gen gear was) and older gear because it becomes unprofitable before the halfiing.

Besides the items mentioned above, I'll add that a sustained decline in the price of Bitcoin will slow difficulty growth big time. If BTC were to drop below $200 and stay there for 3 months, the impact on difficulty would be obvious.  The appetite for new hardware would wane, along with a great deal of gear becoming unprofitable to run.

While some people compute ROI using BTC only, 90% of the rest of the world has to pay an electric bill in fiat, along with rent, salaries, and so forth. When the profit margins become very small, or disappear, they will discontinue mining and then difficulty will stop increasing.

cloud mining born for a reason, why you can not simply try to rent hash on hashnest for example, it's already well known that they are legit, and you will have your cheap electricity with them

but even with that cheap electricity, roi is an hard work in any case

Worth remembering that even 8% Month on Month soon ads up. Have not done the exact maths but I suspect that it would close to double the Difficulty by the halving....


Rich

Difficulty adjustments are normally about twice a month. At 8% per diff adjustment, the difficulty will MUCH MORE than double by halfing.

You are right. I have just done the maths and if we see 8% increases every 14 Days, the we would see the Doubling on May 12th.

Shows how deceptive an apparently low number like 8% is, when compounded only needs 4 Months for a doubling. So let's hope, as I hoped, that on average it is less than 8%...


Rich

It's the law of compound interest in a different application.
5% interest for 14 years appx doubles your money, if compounded at least annually.

Compound interest is one of the amazing things in finance.  It can work for or against you depending on situation.  But it is amazing over time what it can do.

What I wish I could speculate better is the value of BTC around having.  We are slowly making it back up since the last bump.  But I just hope Mike Hearn can handle not being in the top news on BTC and stops doing statements 2 so far neither helped BTC value.   Short term it's not been the greatest with that and cryptsy.

The rise of difficulty will be much higher when the 16 nm chip based miner come out from BitFury and BitMain.

it depend on the value, there is a limit of the diff increase if the value do not increase in the future, and for the time being seems stagnant, so the diff will not increase indefinitely

i'm expecting a slow down soon, if the value stays the same

I'm not sure on slow down.  We have a LOT of big players with cheap electricity, they can run at a profit where most regular people cannot.   For example this week looks horrible on jump up, and price is going down.

So right now.... not to bright future on mining.   Will this change before having? After? No one really knows or can give a good speculation as it's a long time away in crypto world.

ah well i'm not counting free electricity, does can mine forever, but big farms are not sitting on free electricity, they still have plenty of margin though, they are currently at 5/1 in the ratio between consumption and earning, you can check for yourself

1 antminer earn $7.5 a day = 225 a month vs $45 a month in consumption

I suspect these farms will just sell off the outdated miners to end users at a cheap price as they update to new miners.  If they built the infrastructure to mine might as well keep on going.

The hard part is the big players I suspect have very low cost electricity.   When you have that low of electricity it is going to have a hard time to find someone with cheaper electricity.

They might be able to do it  though just going to be trough to find buyers.   It is possible here is one that bought a bunch of old bitfury blades - https://bitcointalk.org/index.php?topic=1231822.msg13587711#msg13587711 .  It is a interesting read.

Yeah well when the shipping exceeds any income you might generate regardless of free electricity or not I think that pretty much destroys any utility of a older miner. Looking at USPSFedEx/UPS pricing it's not going down (despite fuel being at a 10 year low).