Bitcoin Forum

I have been looking to buy new asic hardware to add to my mining farm and have come to find out that the in hand equipment is over priced.   People who are selling existing equipment want to sell it for more then it will ever ROI.  Manufacturers like Asicminer and Bitfury are also selling their equipment for more then you will be able to ROI.  Unless I'm using the available calculators wrong then its almost pointless to invest more BTC into asic equipment.  It has truly become where the people selling the shovels are ripping off the people that are using them to mine with. 

Asicminer usb cost .18 btc will only return .10 BTC in its usefull life.
Asicminer blade cost 4 btc will only return 3.3 BTC in its usefull life.
Bitfury 400gh/s Oct. costs 59.25 at $135 exchange rate will only return 43.31 BTC.  That is with a November 1st delivery.

These are figured at a 30% increase every diff change.  So why would I give away my bitcoins now in exchange for less bitcoins a year or more from now. 

Wow.  Really?  You must have missed the other thousand threads and posts that are saying the same thing...

+1  At least a thousand posts...

clearly sustainable

Holy crap, I've been wasting my time!

*Quits bitcoin mining*

Perhaps a more accurate subject would have been "Asics are overpriced?"

Entertainment value?  A lot of mine because we like it.
I have a few Asic Pre-orders outstanding, but I believe your assessment is currently correct.

Mining is fun but going to the casino is also fun until you go home with alot less then what you came with.  I guess what needs to happen is for people to stop paying for overpriced asics.  The problem is that people think that they can magically make their asic ROI.

You might as well go to vegas and camp out in front of the casinos and tell the folks they are wasting their money.  You are fighting the tide.

At a casino there is very little marginal benefit (I guess some local jobs).  At least in mining, the extra hashpower helps secure the network a tiny bit.

A fool and his money are soon parted. The 'stupid money' will eventually dry up, and then ASIC manufacturers will have no choice but lower their pricing to match what the intelligent market is willing to pay.

Of course, it's a fine balance. The question has always been, "Why would a hardware reseller sell equipment for less than he can mine with it?"

However, the 'stupid money' that seems to abound in the bitcoin community is only half the equation. People being willing to buy an item that will never ROI is what makes hardware sellers willing to sell in the first place. If hardware manufacturers can make more by simply running the equipment themselves, why bother with the hassles and logistics of sales, service, shipping, etc, etc?

Anybody who buys hardware at more than ROI is taking a MASSIVE gamble that difficulty is going to drop, or at least remain flat... Unfortunately for them, there seems to be no shortage of people willing to take that bet, and so difficulty continues to climb...  ;)

You do realize that the shovel sellers were the most successful businesses in the various gold rushes, and that several large businesses and fortunes were created by selling shovels instead of mining gold?

Same thing applies...

I like your analysis, especially this last part. The core question is, why do people continue to take that bet? What we are seeing here is an iterated form of the Prisoner's Dilemma which encourages players, who are trying to act rationally in their own self interest, not to cooperate with other players and thus we end up in a net destructive situation.

http://en.wikipedia.org/wiki/Prisoner%27s_dilemma

Specifically if we look at a prospective miner's choices, they boil down to:

Don't buy mining equipment - (Cooperate)
Do buy mining equipment - (Defect)

Obviously, if a single miner bought equipment (defected) and the rest of the mining world chose not to (cooperated), that sole miner would win hugely with massive ROI. But since ALL (or a majority of) miners choose to buy equipment (defect), the net result is that in each round of equipment purchases the majority of miners end up suffering a loss (negative ROI). It is then up to miners who lost in that round to choose whether they want to purchase again in the next round, again risking negative ROI.

This game will continue to iterate until the players with negative ROI drop out of the game due to lack of funds or lack of desire to play and only players with positive ROI remain (I'm ignoring hobby miners here).

Maybe it's just a mind trick but if you spend 50 btc at 100$ rate and you get only 43 at 200 i say you end up better, but here another question arise:why not just buy btc and wait?i think that's the only option till cheaper asics come on market and on more eternal delivery times.

there's another point - if no-one bought overpriced asic, would BTC price rise? There should be some connection (for example - if I buy expensive miner, I won't sell BTC for low price)

Ok, send me 50 btc (at $130 now), and when it his $260, I'll send you 43 btc.

Initial Value: $6500.
Ending Value: $11,180
Guaranteed Profit: $4680.

As many people as want can take advantage of this guaranteed ROI. Just send your 50 btc to 1vgzHWzzcsYejaqtP7RHGzsE549ySKQa2.

Guaranteed profit just happens to be the same as the BFL Monarch price.  I'll send you 50 BTC and then my Monarch is FREE!!

Right?

The situation is even worse than u think, guys. Just look at http://blockchain.info/charts/network-deficit.

EDIT: And this - http://blockchain.info/charts/miners-operating-profit-margin. Do u see the trend?

You got it! Act now and reserve your place in line. Payouts will happen in order of actual payments. All sales are final. No refunds!

if u mine with USB miners .. yes .. its dead ...

The the available capital from the smart money that goes into a buy-and-hold strategy continues the upward pressure on the BTC fiat price.

I bought a BFL single and I've mined many altcoins and other things so I don't have an exact amount of what I have mined in terms of BTC. I have certainly mined around 2 BTC already.

The miner cost $683 (with shipping) for 30 GH/s (it works at this level)

I think I can ROI really easily. From now on I'll just mine BTC until it does ROI.


I only have about .5 BTC in my wallet though!

I did use my mined BTC to buy games from the humble bundle, so since I paid fiat (for the miner) and saved money in fiat by paying less for all these games I can say that I'm good!

Free electricity?

L.O.L.  I like it.

Considering they are still operating on GPU power calculations, of course it LOOKS like a defecit.  Look at the bottom of the stats page:  "* Electricity consumption is estimated based on power consumption of 650 Watts per gigahash and electricity price of 15 cent per kilowatt hour. In reality some miners will be more or less efficient."

None of the ASIC are running at 650 watts of power per GH.

I just threw mine in the trash. So glad someone told me before I wasted more electricity!

/me stalks outside crazyates' house and intercepts his trash

Oh yeah? Well if you send me 49 BTC, I will send you 44 BTC when the exchange rate hits $350!!

Initial Value: $6,370
Ending Value: $15,400!!!
Guaranteed Profit: $9030!!  Almost twice the profit!!

PM me if you are interested in the deal of the century.

How about I send you 44 and you send me 49 when the rate hits $70?

If you want to open a service that does that, feel free. Until then, my offer of GUARANTEED PROFITS stands.
Send me 49 BTC, I will send you 44 BTC when the exchange rate hits $350!!

Initial Value: $6,370
Ending Value: $15,400!!!
Guaranteed Profit: $9030!!

Order now and I might include a 24K Gold-Plated Buffalo Nickel, plated with precious 24K gold.
http://www.littletoncoin.com/LCC/html/images/a3553-wc.jpg

That chart is based on blockchain.info's assumption of 650W/Gh/s electrical usage, which is at least 10x too high, and getting "too higher" by the day.

Several weeks ago organofcorti concluded the correct figure is 80W/Gh/s, and the hashrate has doubled or tripled since then, meaning lots of <80W/Gh/s mining equipment has since come on line.

Here is my offer:

You send me 30 BTC in June of 2012.  One year later (or so) I will send you a piece of equipment that cost me 2 BTC today to make.  I will keep the other 28 BTC, and call you a name.

What's the time limit on this guaranteed profit?  If the rate isn't up to $350 in a year, you going to payout $15,400 worth of BTC since you have offered a guaranteed $9030 profit?  If you want people to take a risk, you have to have risk yourself.

Just got my BFL Jally last week (ordered in Jan for $180 or so) and already I feel like a pro. Monday I got my dragon programmer, and I was up till 1am clocking it up from 5 to 7.5gh. Then difficulty changed, it's all my fault.

So of course today I just bought an erupter for $38.00, was $45 last week, but difficulty just hopped. :-)

Why?

Well, first I have an open USB port here. But more to the point, winter is coming on, and I need to keep the top floor warm. Normally I would use gas heat with a 1.5kw heater as a supplemental. However my Jally is now dissipating 30w of heat (up from 20), and each erupter can generate 5 watts or so? That will reduce the need to use the heater, and "make" money.

So think of it this way: You have an electric water heater in your basement? Pull the filament and heat it with erupters. No wait, make a heating element *out of* erupters that you can put in the tank in place of the heater that's there now. 4500 watt element would be 900 erupters. That's a 300gh unit that you can use forever to heat your water and it will make bitcoins! Why use a heating element? :-)

Bitcoin is less like a prisoner dillema and more like a dollar auction. I mine because it's entertaining.

C

Payout in two or more months.

So you figure that a year from now there will be more ASIC chips manufactured in the world, than all other microchips combined?

this is an interesting idea.  I wonder if an ASIC can work as a tankless water heater.

Did you calculate that or is it a guess?

If you calculated, did you take into account that the number of hashes per chip is going up all the time?

Calculated.

To get to a difficulty of 2.5 trillion in a year (which is what 33% period-over-period implies), you need 20'000 peta hashes of computing power. With 5 ghash chips, you need 4 billion chips a year. Intel currently ships 1 billion chips per year.

Ok, but let's go for those big 500ghash cointerra chips that come out in 3 months, and say they can quad it to 2 TH within 1 year. (Keep in mind that Cointerra 28n/s technology is only marginally below state of the art manufacturing that is being used by Intel).

So that means someone still needs to manufacture, ship and sell 10 million x 2 TH chips within 1 year. And they will need to package that into a device and sell the whole thing for less than $13.5 each, otherwise nobody will buy it. (The whole bitcoin network just generates $750k per day - regardless of network size. So multiply by 6 months and divide by 10 million).

Those 500 ghash cointerra chips sell for $2870 each. It's not going to double twice in power and drop to less than $1 each within 1 year. That didn't even happen with GPU to ASIC, and that was a huge step-change in technology.


[EDIT]: Of course that won't stop BFL from starting to take pre-orders for it today...

Quite possibly: put the ASICs inside a copper waterproof tube that goes into the water heater, then use either direct-connects to the tube walls or heat pipes to conduct the heat to the walls.

The only issue then becomes how hot can you run the chips, and how hot do you like your water? If the chip temp limit is 140 that's the max temp your water can be at. The other issue of course is the thermodynamics behind heat transfer at dissimilar temps, the closer the two plates are to same temp the less heat that can be transferred. Hm.

Maybe what this needs to be billed as is a "pre-heater tank". That's it: You build a say 5 gallon copper tank, then line the *outside* of it with ASICs, then insulation. It takes the cold water from the utility, heats it up as much as it can, then when you turn on the faucet it goes into the bottom of the main tank where your electric heater can finish boosting the temp to household. Stratification is limited by water coming in and out.

If you want to run this contraption 24*7, you put a small heat exchanger in the tank, connected to a radiator outside the insulation zone. Kick on that pump if water temp >120 or something. But in this thought experiment the main goal is to heat your house water for less by subsidizing your heat with bitcoins.

I may actually try this with an erupter, heat sink it to the copper inlet pipe on my water system, right across from the expansion tank (to increase the water sinking mass). My wife is going to love me.....

C

Your correct psjw4450, ASIC miners bought today will not make there money back at the prices there sold for today.

There are a huge group of miners who own powerful devices and have been taking more action each day..

http://i41.tinypic.com/aw9ab.jpg

If you mean the large "unknown", that's just because blockchain.info's estimate is unreliable.

Try either http://blockorigin.pfoe.be/chart.php (constantly updated), or mine (updated only weekly):

http://3.bp.blogspot.com/-I6FZ16MKQuY/Uiv6IETriJI/AAAAAAAAJuo/6gJhy93AIHk/s1600/1.pie.08-09-2013.png (http://organofcorti.blogspot.com.au/2013/09/september-8th-2013-weekly-pool-and.html)

 

Sended.

Dead in the sense that it never was profitable to begin with?  I will agree with that because of the high markups initially.  But with competition comes lower prices so I think it may be "revived" one day, if you will. 

Thanks for the graphs organoifcorti.

The asic mining is almost dead to the general public but not for them who are making the chips, when they are salling 5 ghs devices is because they already have a 50 ghs asic miner prototype. also if the price of bitcoin goes up exponentially another time, everyone will be making money very fast.

Do you have the guaranteed pre-dated BTC delivery in-hand or is it a pre-order ?

If its a pre-order is is it near the front of the queue ?  8)

And the difficulty just went up and my rig went from .05btc/day to .03btc/day.

With this crazy increase in difficulty current low end mining rigs are becoming worthless and probably by the end of the year not be worth their electric costs for most people who pay electric

Actually I recomputed: With the pair of erupters+a hot jally I'm holding at 8gh which should be .04btc per day.

Still, I will probably barely break even since I bought it for $169 back in Jan.

C

my question is ...if most of the "draw" and such in popularity of alt coins and bitcoin are due to people who "mine" such coins for fun and/or profit....STOP doing so because it makes no sense do do so anymore...could/would bitcoin survive or when the people buying miners left the game ..would there be no cheerleaders for bitcoin/altcoins anymore ..bexuse people said "duck it"

ie could the bitcoin market survive if all the miner types said it is a "rigged' game or customers of equip taking all the resk...and book it to other computer releated pastures?

Is there anything better then ASIC for mining?

Quantum computing. If it exists.

C

You can say it is dead all you want. My BTC wallet and daily payouts say otherwise.

Oddly enough I agree. As of this morning I have made 1.7892 bitcoin with my Jally, which more than covers the $169 purchase and probably $40 worth of electricity used so far. *HOWEVER* THIS IS ONLY BECAUSE:

1) I ordered it on Jan 13, 2013, before the rust.
2) I immediately spent another $50 for a Dragon to boost it to 7.3gh speeds
3) I have been mining non-stop.

So yes I did make a "profit" but it's not that much and it's because I got a faster device than ordered relatively early in the cycle at a lower price than they had to charge later people. I consider that to be a lot of "luck", and not skill.

C

The only reason you think you made a profit is because BTC price increased. IN january you spent the equivalent of  (169+50)/16= 13.7 BTC on your jally plus some on electricity. And you mined 1.8 BTC? LOL. What a fantastic deal you got there. Next time you want to invest BTC in something that returns you 10% of your investment, let me know, I may be able to help.

That is correct. And my situation is one of the best of the bunch. However technically the dragon should not be included in the 169 amount in Jan as I bought that in Sept.

Funny the way the world works.

C

Irrelevant what the equivalent was then in BTC. He paid in cash, he mined BTC, BTC worth $200. All that really matters. He made an investment that BTC will do well and it paid off.

You are just jealous you can't convert $170 into 1.8 BTC :p

I love this, this is why I'm not worried about Bitcoin security dropping due to lack of miners. People can't make the small mental jump to separate mining profits from speculation profits and will continue to buy and mine unprofitably.

Why are you telling them then.  Every time someone says that you should encourage them to buy another ASIC since they made a profit on the 1st one.

Exactly.

For those that dont understand, a mining device generates bitcoins, not dollars. So to calculate ROI you either look at bitcoins in vs bitcoin out, and then its a gigantic loss.
Or, if you insist at looking at dollar in, bitcoin out, then you have to compare it with the more common way of turning dollars in to bitcoin, that is buying them, and compared to that, mining is an equally gigantic loss.

But hey, keep buying those asics, maybe bitcoin will go x10 again in the next year and you can manage to turn that zero effort 1000% gain in to a 10% 'profit'

Ah, but given that bitcoin prices are crazy, the concept of "ROI" is in a state of flux. And given that I could not buy this device with bitcoins (remember even if you paid in BTC BFL priced it in dollars, not bitcoins) dollars to dollars is all I can compare with on this sale.

I'm mining mostly for the fun of it, and to work on hooking this thing to a solar array. Bitcoins are and will continue to be a joke until things calm down a bit.

C