Bitcoin Forum

http://www.businessinsider.com/warehouse-men-200000-bitcoin-monthly-2014-8

From the article: "They have 'a couple of bitcoin' each for their efforts (Smith says they’re “heroes that keep our precious bitcoin network safe”). They spend most of their time checking, wiring, installing and rearranging – or playing video games."

:)

fuck me! now thats how its done  :D :D

That's the dream  :D Puts my GPU rigs to shame.  :-X

Not only that, but, from the article: "There’s many more – and more sophisticated – giant operations around the world, including this one in Washington, USA, which generates about $US8 million a month."

:)

You still have a chance. From the article: "Currently, you can buy a rig that returns a single bitcoin every nine days for around $2500."

:)

yeah, but I'm not so into the ASIC game. I feel like the only people who can truly profit are the ones who have endless amounts of money to continuously dump into the newest and most efficient ASIC miners. I'll be sticking with my GPUs mining alts for the time being. The downside is having to do the research to find the right coins to mine.

WOW, this is amazing! The huge electricity bill, the terrible noise and this:
http://static3.businessinsider.com/image/53ece8186da8111c6ac340e9-840-519/bitcoin-3-1.jpg

Now I can understand why mining is not for everyone.

I agree. I passed it by as well

:)

Some of the scrap in that pile is way ahead of the best computer I ever had!

:)

I'm not sure if that thin black stripe will help protect their identities.

EDIT: original maths was based on $40k electric. now edited to use coindesks quoted $60k electric

$200k in BTC is only 400btc
which equates to 13btc a day
which equates to 0.55btc an hour
which equates to 0.09259259 a block

which is 0.4% of network hash or 640 terrahash units or 2500 avalon3 units

just a shame the equipment is obsolete quite quickly and having to endlessly keep buying more
the 0.59btc per avalon unit x2500 units=1500coin cost.

so lets work out if they will break even:
with hashrate at 100peta in june, then last month averaging 125peta this month 150peta
=roughly 25% increase per month(ill use this as bases of simple math calculations per month).

so this months 400 coin will be made, 300 next month. 225 in october.
168btc in november
126btc december (cut off point as 126btc is where the 120btc of electric ("in excess of $60k" at $500per btc=120btc+ in electric))
=about 1219 coin by christmas
minus off the 120btc electric costs per month (600coin electric cost from now till christmas)
=619btc by coin hoard by christmas if selling coin for electric. or 1219 if hoarding all coin.

either way the avalon3 miners are not profitable, which they will realise by the time it gets to christmas

Good math. Seems to me that they said something like 2500 units running at all times, didn't they?

:)

Good example of "Work Hard, Work Smart" :)

Wow you worked that out quick, well done mate!

so basically these guys are wage slaves and there's one capitalist who owns everything, DOES NO ACTUAL WORK, and gets 99.5% of the profit?

Sounds about right.

-At present mining difficulty (which will increase, cutting into your profits!)
-DOES NOT ACCOUNT FOR COST OF ELECTRICITY TO RUN IT

They mine $200k of bitcoins every month but what is the pure profit from this? Electricity costs and they invested in rigs a lot too?

I think to really profit you have to be one of the first to get any sort of new technology that comes out.  As you saw with BFL they screwed their customers and their customers didn't make squat even though they thought they would because they were getting an ASIC.  Now in a sense unfortunately it's become like an IPO, you have to know someone to get new tech and make good BTC.

It didn't.  They've already been identified and blacklisted.

What profit?

If they wanted to conceal their identity, they could have at least blurred their faces or better yet, not include that picture at all. Weird.

the perfect idealistic view these days is a person that wants to invest:
$1m and buy bitcoin over the next 6 months.
this is because he doesnt want to buy it in one go causing a massive price rise before he even spend $1mill in a single day meaning it costs him quadruple the price atleast on day 2. and also most exchanges/banks would flag him and freeze accounts by throwing that amount at an exchange in one go. thus these investors are talked into mining it instead
but... thats where their maths fails
(using maths of last post)
if he bought bitcoin at $500 each slowly over 6 months(11btc a day) = 2000btc(if bitcoin stayed at $500 for 6 months)

but...

by buying 2500 rigs ($737,000 cost) and paying $60k* in electric for 5 months. the best he will get is 1219* coin via mining for 5 months

so at chrismas this investor is going to hope that bitcoin is not $500, as that means the 1219btc* is only $610k. so he hopes that bitcoin is $820+ to break even.

*EDIT: original maths was based on $40k electric. now edited to use coindesks quoted $60k electric

Now that living the life on my book, but what I imagine is terribly bad is the sound and electric bill. Not sure if they would even profit.

Just as well they covered the eyes of those guys otherwise they could be recognised!  ;D

they should have tried to remain anonymous. 8) 8)

Firstly, this points out two of the biggest negatives of PoW.

#1 - The centralization of PoW mining will become more and more centralized over time, because big operations such as this will make the little guys unprofitable and therefore push them out of the market.
#2 - The huge amount of electricity that is wasted needlessly with PoW.

Secondly, it's nice to see where our "June 2013" Avalon deliveries went and the reason for the 2 month delay.. these guys have some balls allowing a news story about this. ;)

Thirdly, again these guys have big balls... if I was operating such a large mining farm I would tell no one. Otherwise, I wouldn't be able to sleep at night thinking someone may break in at any moment or hold me hostage to get the location of the equipment. All they did was black out their eyes...

they are not wage slaves, they can quit if they want to, the fact that they work at this job means its the best opportunity they have, without it they would be worse off.
the capitalist does no work, but he takes all the risk, the workers get paid no matter what, the capitalist could take heavy losses and lose everything.

After looking at the calc in franky1's post at https://bitcointalk.org/index.php?topic=740717.msg8370294#msg8370294, I'd say these guys could make their big $BUCKS refurbishing these outdated computers, and selling them through Tiger Direct or something.

:)

But this is small compared with the one in Washington D.C. mentioned in the article. And there's a video of it too.

https://www.youtube.com/watch?v=5CjldZLXiAU

:)

That looks like a super impressive operation.  60k per month electric bill...that is like a hotel..

At least I'm not a fanboi that only cares about his special interests and can admit Bitcoin has flaws.  :P

Wow that is awesome..playing games while making tons of money....dream job

I would love it to be this way for myself. But I am quite sure there is lot of work with maintaining their farm. But still I am also sure they are enjoying every minute of it.

Exactly. This type of thing is the major threat to Bitcoin and I would not be surprised if long term, another coin takes over (NXT; ETH?). Centralization is dangerous and the waste of energy makes BTC vulnerable because it can be used to attack BTC ("too much CO2")

damn. I wanted to download that soundcloud of the mining drone. goes nicely with my Atrax Morgue and Brighter Death Now mp3s.

I am surprised that people think that any coin can overtake Bitcoin. Everyone should be aware that it is practicaly impossible. Most of those altcoins are just pump and dump thing an if Bitcoin ever fails only coin that could take its place is Litecoin. But that is just not gonna happen!

KnC has three mega data centers with 7,000+ miners each on the same property own by Europe Facebook at the Node Pole.

Hot damn wish I could do that as well have a few miners around and play games all day
That would be awesome stuff.

“It becomes louder and louder the closer you get to the building, and as you step through the doors it becomes a deafening and steady roar,” he says, then offers this soundbite:

A truly soothing sound ^_^

Then comes the wind from giant cooling fans, and despite their efforts, heat. Smith says the inside of the farm still manages to hold “steady at 40° Celsius (105° f) the entire time”.

(^_^ a true greenhouse) In the sense of this versus printing fiat still the profitability ROI may take a while with the difficulty always increasing neat though. Currently, you can buy a rig that returns a single bitcoin every nine days for around $2500.

#3 - The huge ammount of silicium and metals wasted with the hardware:


http://static3.businessinsider.com/image/53ece8186da8111c6ac340e9-840-519/bitcoin-3-1.jpg

That is, waste of limited resources that might be scarce in the future.

Also the mining operations will be centralized also among countries, since only first world countries can afford such race. Usually 3th world countries don't have access to up to date hardware stuff, and mining stuff is not an exception

Good analysis.

None of the ASIC bitcoin miners are profitable. Should btc price keep dropping, they will not only lose out on ROI but also taking hit on price dropped also.

PSUs burn like bitches in a desert hotty summer.

Those three guys got it good. I wish I was an early adopter.

Yes, it is a flaw when compared to something like Bitshare's delegated proof of stake, which has fixed the "nothing at stake" issue with other PoS coins.. among other things. Seeing as though DPoS uses a fraction of the energy to protect the BitsharesX block chain just as securely, this is a vast improvement in and of itself. Furthermore, using dPoS you can increase block speeds to 10 to 30 seconds without seeing the problems that you would see using PoW (stales, forks, etcetra.) http://bitshares.org/delegated-proof-of-stake/

You actually can get discounts on electricity if you use a lot of it from certain companies, but there are other ways they can gain advantage.

Obviously someone setting up a large farm such as this has pretty deep pockets. Someone with deep pockets can order many more mining rigs than joe blow, which reduces his percentage of the network, which reduces joe blow's profits. This could be done (as we are seeing) to an extent that joe blow will never break even (in BTC... that's all we care about). Do you think joe blow will continue buying mining rigs if he can't break even? They can push him out of the market. The fact that most mining manufacturers offer bulk pricing only exemplifies this.

Another way they could gain an advantage is by investing money in manufacturing their own ASIC mining chips, PCBs, and assembly lines. In that scenario they would be paying a fraction of the price for a mining rig that runs at the same speed as joe blow (even more so than bulk discounts). Which allows them to purchase more mining rigs, further reducing the cost of the mining rigs, and therefore further reduce joe blow's portion of the network.

That is true, but if they can achieve a certain percentage of the network they will easily operate at a profit. Especially when they are getting the mining rigs much cheaper than average consumers via bulk discounts or manufacturing their own. If it wasn't wildly profitable, why would large manufacturers like KNC, Avalon, Bitfury be making these massive farms in the first place? I know how much of a headache a large farm is to setup and run.. I find it hard to believe they would do it if it wasn't highly profitable.

Because of the reasons I've stated above. Sure, the little guys have access to the most recent hardware, but they are paying much more for that same hardware than the large farms and manufacturers are paying. They are at a disadvantage from the get go. To make things worse, a lot of the little guys are closing up shop and moving on. I mean.. if you bought mining hardware and you lost a lot of Bitcoins doing so (IE. did not break even), would you keep buying mining hardware? It is still profitable for large farms and manufacturers, but not so much for the little guys. In my ASIC investments, NONE of them have broken even, and I know I'm not alone. I will never buy a Bitcoin ASIC again in my life.

Yes, I would consider both of those processes wasteful of natural resources, and potentially the downfall of humanity living on planet earth at some unknown point of time in the future. If gasoline engines weren't such a bad thing for the environment and wasteful of natural resources, then why is there so much effort being made to move beyond gasoline with the use of alternative fuels? Do you not understand how many natural resources are wasted during the process of generating electricity, how the environment is negatively impacted while doing so, and why using less electricity is beneficial to that problem?


There haven't really been any good solutions to PoW until very recently. There have been different variants of PoS that all suffer from various flaws. Only until recently have most of those flaws been fixed. A change like this (from Bitcoin to something else) will take time. The use of gasoline is actually a great analogy, I am glad you brought it up.

There are issues with the use of Gasoline just like there are issues with Bitcoin, both are not perfect for a few similar reasons (harmful to the environment and waste of natural resources.) Yet, Gasoline and Bitcoin will be around for a long time because of the infrastructure that has been built by both of them. In gasoline's case there are billions of vehicles, power tools, planes, etcetra that use it... to switch to an alternative we would need to rebuild these or design and build new ones. In Bitcoin's case the exchanges, ATMs, payment processors, etcetra are already setup to work with Bitcoin... to work with another crypto currency would require reprogramming just about every core service involved in the Bitcoin ecosystem. Costs are another thing holding gasoline and Bitcoin alternatives.. it is expensive to develop alternative technologies.

The advancement in technology is still being improved upon, but better technological alternatives certainly already exist for both gasoline and Bitcoin. It will take time, how long is anyone's guess, but I am certain that both will be uprooted as the king of fuel (gasoline) and the king of crypto currencies (Bitcoin) at some point in the future. Gasoline is definitely not the only example, all technologies come and go as better technologies replace the less adequate technologies. The transitions from VHS to DVD to Blu-ray took a lot of time. Along with the transition from Records to Tapes to CDs to MP3s to FLACs took a lot of time. I could go on and on with these examples..

Notice the more technological advancements happen at a quicker pace.. I don't see why this couldn't be applicable to Bitcoin as well. It is after all much cheaper to reprogram something than to rebuild all the vehicles, power tools, etcetra in the world. Furthermore, gasoline has many other factors why it is probably the best option for the foreseeable future, but Bitcoin has less so.


I just assumed by your reply that you could think through the above reasoning yourself and understand it, yet still chose to call me out for being wrong because you own a lot of Bitcoins and want to protect your nest egg. Many people (individuals, companies, and corporations) are heavily invested in the current system (gasoline and Bitcoin), and profit from it. They are hesitant to allow change and will spend any amount of time, effort, and money that it takes to thwart the opposition because it is how they sustain their lifestyles and provide for their families. I apologize if my assumption was incorrect. If my reasoning is wrong, then please explain how I am wrong. Sometimes I do a horrible job of conveying exactly what I am trying to say, even though it makes perfect sense in my head. :)

Just like other industry, when they are not profitable anymore, the operation will be disclosed to public. When they can still make good return, all is secret

While private miners could pay for those electricity bill and hold the coins, the rent and electricity cost for mining farms must be covered by selling some of the coins, these farms will all add to the sell pressure on the market

ASIC mining has not being profitable for the last 8 months.

How much does it cost for them to mine $200,000 worth of bitcoin every month?

Man, That's pretty insane. I felt pretty rich just mining with my 1.6/THs Cointerra. These guys are crazy to even attempt this, with the difficulty rising day by day.

They started early, had money to do so and how they are enjoying and picking the fruits of their labor. It's just a business opportunity for them, that's why they don't have much bitcoin with them. Too bad about that, hope that changes. It's not all in mining.

Big farms can not compete with small miners, as small miners can afford to mine at a loss just to support the network. At the end of the year or early next year it will be pretty hard to be profitable even for the big farms if the difficulty keeps increasing. But many small miners can just keep running their one unit

Doubt the big farms care about supporting the network... Plus they will sell off their hardware to smaller players.. thus supporting the network.

Curious how many individuals run their units at a loss purely to support the network anyways ?

So am I right when I say eventually only a few people/companys will be mining btc thus making it more or less centralised?

New solar panel material 19% efficient.

http://www.businessinsider.com/key-to-making-solar-panels-cheap-2014-8

:)

Obviously, if mining is not profitable, which seems plausible, then WHY? Even if they are taking the gamble that the rate will rise beyond break-even in the future (someone mentioned $717 before) , it would be easily more profitable to just buy BTC for the same investment at the current rate (not to mention the effort).

The only reasonable explanation is that there is something we don't know.

I think it is this:
They made a secret deal with an ASIC manufacturer: They buy non-profitable ASICs, and share the profit. They can pocket that money themselves and maintain the unprofitable mining farm. ASIC manufacturer is happy to have a customer for nonprofitable equipment, and therefore willing to sacrifice some profit. Mining operation doesn't care it is buying ASICs at a high price, because they will get a fraction of that margin. They show off on social media to attract more investments, with which they buy more unprofitable ASICs -> more money for themselves via the secret deal.

Eventually, the whole operation will collapse as investors realise their investment doesn't yield sufficient returns, but the miners don't care a they already made a profit for themselves.

very noisy...but for a chinese a good work  :-X

I don't know if that is the case. Still if they make 200,000$ a month and pay an electricity bill of about 60,000$ I see a lot of profit there even when you include renting the space. Still would need more info to be sure if there are some hidden costs.

Pics are amazing.
I'd love to see their electricity bill.

Most likely in a year, they'll be losing profit due to the difficulty rising up so fast. Small miners will have an advantage here, we can just keep on running ours even with our loss. But these guys are most likely
going to lose profit even more. Correct me if I'm wrong though.

When you're a small miner it's also easier to upgrade/sell your old hardware. No giant piles of junk to worry about.

Shit, I feel hopeless after see those rigs. :'(
Who's got a bigger capital is the person who will benefit more from bitcoin

Just like everything in life, but its funny how price lowers with an increasing hashrate.
I recently watched a documentary explaining how price of diamonds is pumped by mining operation owners, and
i believe same thing is going to happen with bitcoin; first they will gain a considerable amount of hashrate controlling the inflow of new coins, and then pump the value.

60 000 USD per month (read coindesk source).

Amazing...
I doubt that they made that kind of investment without carefully calculating the profit and the security of their investment.

For things like this, and this kind of moves, i seriously doubt bitcoin is going to fade away anytime soon.
Since small man is forced out from mining, i believe right now buying bitcoins directly off exchanges is the way to go.

This massive operation is netting $6500 a week..


I wonder what the 8 million dollar warehouse would look like. Fire hazard or what  :o

The only ones who actually profit with big margins are the makers. Build the next generation ASIC, mine with it at lower difficulty, and then sell off the obsolete to suckers.

Mining is more or less useless now, sadly.

For most small miners this is more of less true. However if you are able to invest a much larger amount into your mining operation then you may be able to get the manufacturers to ship you your miners much earlier then others as if they wouldn't they would lose out on a very big sale.

Good for them for seeing an opportunity to do something big and make some profit.  Thanks for sure takes alot of planning and dedication.  Can't wait to see what their project will be.


This is why I think that mining is still worthwhile but I get mixed messages when hear so many people complaining about the difficulty.  I'd think their would be more miners that would see the benefit of holding on.  I would just look at it as paying for your coins if your not making a profit, especially if the price raises significantly.  That is how I look at it anyway but it may be to bullish for some

Interesting article. So it seems that the people who actually run the rigs don't actually own the operation. That makes me wonder... How was the person behind the whole thing able to buy so many miners in the first place? And pay for so much electricity? Was he a fiat whale or something?

Interesting, I think there are still plenty of Bitcoins being mined by the miners this year, resulting in the inflation problem.

indeed there are hidden costs.
when doing the maths to demonstrate costs on page one i used the current price of mining units (which were actually higher a couple months ago) so the units could have cost $1mill instead of $700k.

and i used the current electrical costs of the miners ($40k) but even i didnt think about the air fans etc costs that those guys had, which added an extra $20k+ to the bill, hence coindesks $60k+ electric quote.

so adding on building rental and the 1-2btc a month for the guys to sit there maintaining it, my numbers in my maths of page one were inaccurate.(i have edited now but still its only a guesstimate)

i have rectified the electric useage which now puts the total bitcoin hoard at 1219, and an electric costing of 600btc (meaning 609btc once you take out the electric and also the 2btc/month for 5 month labour) so with rent, cabling costs aswell you are probably near to only 600btc hoard after costs.

yep even i was too quick with my maths to not include everything.

on average 3600 coins are made a day (25 per block per 10 minutes= (25x144blocks a day) yet there are more than 3600 coins swapping hands per day.

but most people only think about the high school level of economics. so i wont waffle into the deeper levels of trading that go beyond the whole supply and demand structure.. but in short bitcoin is DEFLATIONARY

I agree. Seems to me that this deflationary condition will make the value of Bitcoin only grow over the long term (with relation to fiat), provided the blockchain encryption is not cracked somehow.

:)

They can only estimate and predict the difficulty, they can't know ahead of time what price the coin can be sold at. And the ASIC miners only has a life span of 4-6 months before they become obsolete.

I doubt it'll be that way after difficult spikes up again. At first I thought this article was on Coindesk. Was not expecting Insider. Maybe they got it from Coindesk? Because Coindesk articles are usually like this. And later than they should be...

yes actually very noisy at all, let alone 3 I wore mining tools,
but fortunately for me I have a special room so the sound does not come out the room buzzing

Quote: “I was struck with a feeling of awe that THIS is what keeps bitcoin alive. That even if someone wanted to bring down bitcoin, they’d have to outdo these guys and the dozens of other operations like this around the world.
This really drove home that bitcoin can’t be killed by decree. Make it illegal in one country and people like this will keep hashing away in others.”  :)

I wish I would mine 1/100 of those bitcoins, I wonder how many btc farms are there and we won't never know about them.

From Business Insider: "Smith is the editor of cryptocurrency blog The Coinsman (http://www.thecoinsman.com/). He’s based in Beijing and dedicates his site to 'the ones who believe that Bitcoin is a revolutionary technology 40 years in the making that’s going to disrupt finance and government as we know it'."

:)

I don't care who mines them as long there are enough funds to buy them up.

Wow, dat amount of cabling.

http://static2.businessinsider.com/image/53ece81869bedd72622af1d9-840-593/bitcoin-5-1.jpg

Wouldn't it be easier to set up big fat trunks and distribution boxes?

I bet they don't bother to troubleshoot it, and just lay a new cable if there's a problem.

What they neglect to mention is it cost them more than 200k each month to mine 200k worth of coin.

Beside, if the price of bitcoin go down, they will have lose more than just the production cost.

Maybe work hard, but definitely not all that smart with the changes in difficulty etc - as franky calculated.

Yes but it's a pretty big risk with the changes in difficulty lately. The day you know asics aren't going to get faster/better but more of them only, that's the day you buy your first rig and enjoy your endless income til 90% of the coins are minted, then it probably won't make much of a difference anymore if you are still mining or not. :)

ah shit :D how he do that wkwk  ;D
I want work hard like them  :)

We cant compare us to them. LOL for the price that they are getting the miner from, and their cost etc. They have far more advantage than us.

My BTC0.00000002

Would be awesome to get this kind of money each month :O

i guess this why bitcoins are done, too much money to sustain

Damn, that's shitload of money. I will invest in miners now, they are making me jealous :)

Shit it's admirable! But I won't invest in mining, I'm so worried by the difficulty rise and I think now you can make money just if you have tons of dollar invested

That is pretty amazing but can you imagine their electricity bill? Saying that though with that amount coming in a month I can't imagine that is a problem for them. Great to see someone making so much from mining, just goes to show it can be done!

If you have enough wealth that you can set up a system like this that almost breaks even, you stand to win in the long run.

It might take a couple of decades, yet, for the fiat currency banking system to crash itself. But things are in a position right now that the system could crash any time. All it might take is a few more countries getting off the USDollar as the world currency, like Russia and China are doing.

When this happens, the value of bitcoins just might soar in nations that still use the USD as their basic form of money. So, while Bitcoin mining might not be worth it today, it almost certainly will be worth it sometime in the near future... and maybe worth it in a very big way.

:)

wow, pictures of piggy back mining finally ! ::)

I don't see how something that does not even break even could potentially create wealth in the long run. As it stands now, it is a much better idea to invest your money in buying additional BTC instead of buying mining equipment. With the difficulty rising ~20% every two weeks and the price of bitcoin not rising this quickly you will always be better off by simply buying bitcoin on an exchange or via a trade.

Botnets make way more, you know, and there's no upkeep our cost.

Illegality is the root of all money.

No, don't come banging down my door. I don't run a botnet.

wow, look at all the cables and asics.
This is cool.

Holy shh......now that is hardcore mining for ya

haha me too  ;D
I cant mining  :( my computer not strong for this  ;D

Kudos to those men, keeping BTC strong. I wonder how many miners they own  ::)

$200,000 is lot of cash..!!

Wow, i wish i were in their shoes  8) 8) 8)

A wise way to keep getting richer if you ask me,Kudos to them.

The way these guys will make money for the future lies in the number of bitcoins they store up for the future. They don't sell all the bitcoins they mine. They hold some of them for the future. Not the little guys, of course. But the  big boss who has put this system together.

Who knows the future? If the fiats all collapse, it just might bring down telecommunications worldwide. This might destroy Bitcoin at the same time - too many forks of the blockchain. However, if only a few fiats collapse, or if the Dollar loses its position as the major currency of the world, there just might be a big transfer of wealth into Bitcoin in the areas of collapse.

It's a gamble. But people gamble in the markets all the time.

:)

I am curious to know how much power they are using...probably kilowatts...enough to house a colony.

Amazing work nevertheless :)

Yep its a legit gamble, but someone has to do the job, without miners, theres no Bitcoin, if Bitcoin wins, big miners will get the biggest reward.

On the contrary, big miners can not cover recoup their investment if they pay market rate for those ASIC miners.

$8 million a month in Washington state - that was a year ago.  What do you think that they are making now?  Probably a lot less and maybe getting ready to shut their doors.  Everyday more hashing power comes onboard and difficulty increases - my electric bill has finally overtaken the bitcoins that I generate.  I'm running 10 Antminer S-1's and I thought about getting the upgrade kit to get each one up to 453 GH, but that will only buy me a few months until the electric bill once again surpasses my generated bitcoins.  I think that I'll shut everything down and hope that my 15 bitcoins might be worth something someday like $100k each?  I can always dream!

True without miners and more people mining Bitcoin would become worthless as it would not be able to confirm etc so people need to respect people who do mine and gamble some of them do it not to profit but to help Bitcoin. they are bitcoin heroes.

Thats like 67,000$ per month for 1 person. Within 1.5 years they will be millionaires, or they are already ones.! Holy shit. Nice work they are doing and supporting the btc.

They will get it back when Bitcoin goes to $10,000... if they stay strong, and hodl a few of the bitcoins they mine.

:)

And every 2 weeks it goes down by 20 to 30% or maybe advantage of 10 to 15% drop in earnings and soon their equipment will be worthless due to power consumption. Only way they can continue their adventure is by adding 30% more speed and equipment every 2 weeks to be ahead of the game.

If they though the price of bitcoin was going to rise in the future then they would be better off using the money they spend on the miners and use that money to buy bitcoin on an exchange. It is very difficult today to ROI in terms of bitcoin because of how fast difficulty is rising.

Good point. Here's the start of an answer, the start of what might be practical solar:

http://www.popsci.com/article/science/can-mineral-power-planet?dom=PSC&loc=recent&lnk=3&con=can-this-mineral-power-the-planet

:)

I don't think solar power is the answer to paying for miner's electricity. You will need to pay the initial costs upfront to buy/setup the solar panels. You also have the issue that many states require that utilities buy excess solar energy from consumers at market rates, so miners could sell their electricity back to the grid instead of using it to power their miners, essentially causing the miners to have the same electric cost as if they were buying from the electric company in the first place.

This is not true. If a miner earns block rewards and the value of the block rewards later increases because the value of bitcoin increased then the miner would have been better off simply buying bitcoin from an exchange and/or on LBC.

Ok, nice, but how much do they spend? In the article it just talks about $60000 in electricity.

it's my dream, how I get to be like that :)
may someday be a success like that :)

Wow.... I wonder if they are looking for a 4th guy to help out.

Why did the Bitcoin miner cross the road?

To steal his neighbors electricity.



What does mining hardware have in common with a turd?

When it first comes out you feel good but the longer you have it around the more it starts to stink.



Why were the police called on the neighborhood Bitcoin miner?

The pot farm down the street complained he was using all the neighborhood electricity.

It's incredible, really. Those farms are just crazy. But it is not only them that keep Bitcoin safe, it is effectively the number of those mining operations around the globe and done by different people. You could power the whole network with 10 ASICMiner USB Block Erupters. It's just a question of distributing the consensus widely enough!

Their electricity bill must be through the roof.

If they spend that much then they will likely end up having to turn off the miners within a few months. That comes out to 30% of the mining revenue (to be paid for electricity) and with 20% difficulty increases the cost of electricity will exceed the bitcoin mined in 7 difficulty increases.

And that's just one of the costs. Then you have to take into account the investment in hardware, the rent they pay, the opportunity costs of not working in another place, taxes, etc.

THey will be very very very rich in a decade, people has no perspective.

Maybe there are many more farms around the world, and maybe bigger than this one but they are secretly hiding from the media...

Kudos to the guys. They are helping to maintain bitcoin value so much

I wish I had miners like that!

Rent in data centers is usually a small expense when compared to electricity, there is no reason for this to be a major expense. The hardware is a "capital expense" and is generally measured differentially then current expenses (such as the expenses required to keep the machines running). 

That first image looks like BFL's back room where they test the miners (for a year) before shipment. lol

That is freakingly amazing....
If i could just mine 1k in bitcoin a month, i'd probably already have set a foundation around my place. I've seen good investments go 2x 3x even 9x already....

More like 5 or less years from now

haha everyone dreaming this  ;D
yes I have the same expectations like you  :)

Well for now they are getting all the benefit but think about it as stronger and stronger ASIC's come out and the difficulty increases..they will begin to lose a lot of the money that they are making unless they upgrade.

no electricity bell ?  :o

Ahhh now I understand why i dont overclock my machines HAHAHA

Overclocking a miner can easily be reversed if it is decided that the efficiency is not an appropriate level for the miner. Granted it may damage the machine somewhat but miners have such short profitable lives that this will likely not matter.

I have done a little bit of research on using Farms but I don't know whether or not they are worth investing in to get bitcoins or not..because as the difficulty increases so does the profit margin decrease, right? Can someone explain this to me a bit..

How much you wanna bet those were the BFL orders that people have been waiting for all this time lol.  Imagine that?  Those 3 guys are lucky though, wish I had that many miners

They're making a lot less than $200,000 per month now.

If any profit at all. I guess, they just need to stock some profit in good days for rainy days.

They could be making 100,000 or they could have bought have made more farms and sold the old miners to keep the profits going.

I believe another contributing factor that determines profitability is that spare parts in china are still relatively cheap.

I was wondering if they pay electricity more then $200000 now..

Their electric bill was around  $60K/month.

Nah, they're stealing electric from their neighbor. The neighbor just thinks his wife is leaving the lights on when she goes out for the day. lol

But what if the neighbor is an old lady?

The one in Washington state is sick. Now this is what a profitable mine looks like.

More like $100,000 a month now.

All depends of the investment.


All that asics are broken? @.@ such a waste.

Give it to me and i will try to make they work =D.

Probably not for very long. What is essentially an arms race in the mining world is causing the difficulty to increase at double digit percentages every month because of increasing efficiencies for miners. As a result, even the most efficient "corporate level" miners will have a useful lifespan of only a few months

Love it... I can see dump scavengers looking for salvageable asics  ;D

Wish I had the same thing... my power is out for 1week. I want to become an apprentice of these three marketers...

Why are they hiding their faces again? An electricity load like this would have the police / electric company/ hired goons there after the first bill right?

There's a huge gambler called AKcoinminer losing tons of bitcoins almost everyday on dicesites. Is he one of them?

Not if they don't have any criminal records and are paying their bills in time.

These guys are going to get busted once China TRULY bans bitcoin.  when china bans something, they ban everything related to it. 

Even if China bans bitcoin there are plenty of people all over the world that have started to deal with Bitcoins. Chinese government banning bitcoin is only going to cripple them in the long run not the rest of the world.

When they make something "like" bitcoin, then they can ban bitcoin. Chinese always think about how to make cash.

Effectively, they're performing calculations. I wonder how far they may abstract the actual process of mining Bitcoins to just hosting a large server-farm-like institution. It could be difficult to ban such a thing, even in China!

The miners depreciate much faster than $100k a month.

I wish I could start my own miner company..it would be fun to just play all day and mine bitcoins or alt-coins all day long sadly I am not too tech savvy.

I wonder who belongs to this? (From http://pro.wsdinsider.com/TAOREWARDSWCX/ETAOQA25/)


(Prompted by https://bitcointalk.org/index.php?topic=828208.msg9254538#msg9254538)

:)

Hope china do that, it is going to reduce the bitcoin difficulty a lot... like 1/3 at least..

if only i could invent a time machine and steal this idea back in 2009

Yes, but if you did, you would be so rich that you would have forgotten all about your time machine by today. So, you would never invent it, and you would be right where you are now.

 ;D

I remember seeing this picture a long time ago so whoever the farm belongs to likely no longer has it as it would most likely be unprofitable to run based on how much difficulty has risen.

I am sure that the person who owed that farm would be very rich if they had held onto the bitcoin that he mined with that

Wishing that too while reading the article. pffft.. I wonder how much these guys invested on their equip

Lets hope btc will go to $100 so they will stop wasting electricity :)