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Title: how can mining still be profitable even for the big farms Post by: btcmonster on October 11, 2014, 08:16:22 PM Hi,
Was wondering how mining still can be profitable even with free power?? For example the SP20 (1.7Th/s) goes for 1200$ and ships mid this month and will not earn the money back spent on the miner. the antminer s4 (2 Th/s) goes for 1250$ and will not earn the money back spent on the miner. how would this make a profit at all for larger mining companies and individuals? Do they do special deals with the producers of the miners? How do they still make money with overpriced hardware? thanks Title: Re: how can mining still be profitable even for the big farms Post by: xstr8guy on October 11, 2014, 09:34:08 PM Hi, Was wondering how mining still can be profitable even with free power?? For example the SP20 (1.7Th/s) goes for 1200$ and ships mid this month and will not earn the money back spent on the miner. the antminer s4 (2 Th/s) goes for 1250$ and will not earn the money back spent on the miner. how would this make a profit at all for larger mining companies and individuals? Do they do special deals with the producers of the miners? How do they still make money with overpriced hardware? thanks The big farms ARE the manufacturers of the machines... Bitmain, KNC, Bitfury, Cointerra, etc. That's how they do it. ;) However, I don't think Spondoolies have much of a mining operation at this moment. Title: Re: how can mining still be profitable even for the big farms Post by: mwizard on October 11, 2014, 10:36:22 PM No one knows what the costs of the hardware is to the big miners.
If you are a miner manufacturer selling to small consumers it is likely at least 30% of the sale price is to cover sales and marketing and the need to provide ongoing support. Selling to, and supporting, individual consumers is expensive. But the big miner manufacturers can make extra miners very cheaply through volume manufacturing and bulk buying of components. For example Bitfury, claim at least 20% of the entire bitcoin network is running from their data centres. They may be running more than 20,000 of their energy efficient BF3500 and BF4500 miners in their three data centres. The BF3500 and BF4500 are made to be cheap data centre miners. They are not sold to the general public. http://www.coindesk.com/bitfury-raises-20-million-asic-development-mining-output/ . Title: Re: how can mining still be profitable even for the big farms Post by: btcmonster on October 11, 2014, 10:43:53 PM but how do those that are not manufacturers make money?
a farm like this: That investment would never have been able to be able to pay back for the hardware and make a profit that is worth it. How do they do it?? buy hardware then mine for some time and sell them on ebay overpriced?? thats how i did it when i was mining. however this is inefficient as u always would need to change cooling power management to fit new hardware stuff like that which would cause long down time if needet to be done correctly with cable management Title: Re: how can mining still be profitable even for the big farms Post by: philipma1957 on October 11, 2014, 11:10:32 PM but how do those that are not manufacturers make money? a farm like this: That investment would never have been able to be able to pay back for the hardware and make a profit that is worth it. How do they do it?? buy hardware then mine for some time and sell them on ebay overpriced?? thats how i did it when i was mining. however this is inefficient as u always would need to change cooling power management to fit new hardware stuff like that which would cause long down time if needet to be done correctly with cable management maybe this is a hosting farm in the state of Washington. they pay 5 cents to a power company and charge 10 cents to host. Title: Re: how can mining still be profitable even for the big farms Post by: brian_23452 on October 12, 2014, 12:15:10 AM Hi, Was wondering how mining still can be profitable even with free power?? For example the SP20 (1.7Th/s) goes for 1200$ and ships mid this month and will not earn the money back spent on the miner. the antminer s4 (2 Th/s) goes for 1250$ and will not earn the money back spent on the miner. how would this make a profit at all for larger mining companies and individuals? Do they do special deals with the producers of the miners? How do they still make money with overpriced hardware? thanks Obviously they don't pay 1200 dollars for the unit. They, being the manufacturer, pay some small fraction of 1200 dollars for the unit. They typically accept payment in advance for units (so there is little up front cost or risk to them), take the units and mine with them for a while, then deliver them to you when they are no longer profitable. It's almost impossible for them to NOT make money. Title: Re: how can mining still be profitable even for the big farms Post by: btc-facebook on October 12, 2014, 12:15:50 AM but how do those that are not manufacturers make money? They don't pay "retail" prices for mining equipment. They can get a significant discount on the hardware because it cost much less to produce miners then they are sold to retail customers. The mining manufacturers simply let the retail customers pay for the R&D via higher prices and preorders and let the corporate mining farms buy the miners at a discount as there are less logistical costs involved in selling to them (less salesmen, less shipping to various places, ect)a farm like this: That investment would never have been able to be able to pay back for the hardware and make a profit that is worth it. How do they do it?? buy hardware then mine for some time and sell them on ebay overpriced?? thats how i did it when i was mining. however this is inefficient as u always would need to change cooling power management to fit new hardware stuff like that which would cause long down time if needet to be done correctly with cable management Title: Re: how can mining still be profitable even for the big farms Post by: btcmonster on October 12, 2014, 12:22:18 AM but how do those that are not manufacturers make money? They don't pay "retail" prices for mining equipment. They can get a significant discount on the hardware because it cost much less to produce miners then they are sold to retail customers. The mining manufacturers simply let the retail customers pay for the R&D via higher prices and preorders and let the corporate mining farms buy the miners at a discount as there are less logistical costs involved in selling to them (less salesmen, less shipping to various places, ect)a farm like this: That investment would never have been able to be able to pay back for the hardware and make a profit that is worth it. How do they do it?? buy hardware then mine for some time and sell them on ebay overpriced?? thats how i did it when i was mining. however this is inefficient as u always would need to change cooling power management to fit new hardware stuff like that which would cause long down time if needet to be done correctly with cable management so the person who owns this farm would have gotten larger discount for the units? It still needs to be significant to cover all the hosting, maintenance and power to make a profit that is worth the investment and risk. so do u just email the manufacturer and ask for a discount for only 25 units ?? Title: Re: how can mining still be profitable even for the big farms Post by: xstr8guy on October 12, 2014, 12:30:49 AM but how do those that are not manufacturers make money? a farm like this: How about a panoramic? PIC OMITTED That investment would never have been able to be able to pay back for the hardware and make a profit that is worth it. How do they do it?? buy hardware then mine for some time and sell them on ebay overpriced?? thats how i did it when i was mining. however this is inefficient as u always would need to change cooling power management to fit new hardware stuff like that which would cause long down time if needet to be done correctly with cable management Farms just like this are being shutdown as we speak because they no longer make money. In fact, the guy who's farm that's shown in the pic... Here's what it looks like today. https://bitcointalk.org/index.php?topic=813649.0 https://i.imgur.com/XBX3DVj.jpg https://i.imgur.com/8drZ50F.jpg https://i.imgur.com/uxKwz9j.jpg Title: Re: how can mining still be profitable even for the big farms Post by: btcmonster on October 12, 2014, 12:46:22 AM but how do those that are not manufacturers make money? a farm like this: How about a panoramic? PIC OMITTED That investment would never have been able to be able to pay back for the hardware and make a profit that is worth it. How do they do it?? buy hardware then mine for some time and sell them on ebay overpriced?? thats how i did it when i was mining. however this is inefficient as u always would need to change cooling power management to fit new hardware stuff like that which would cause long down time if needet to be done correctly with cable management Farms just like this are being shutdown as we speak because they no longer make money. In fact, the guy who's farm that's shown in the pic... Here's what it looks like today. https://bitcointalk.org/index.php?topic=813649.0 https://i.imgur.com/XBX3DVj.jpg https://i.imgur.com/8drZ50F.jpg https://i.imgur.com/uxKwz9j.jpg he stated that he made some profit Yeah, Price + Difficulty = S1 and Jupiter retirement. All said and done about 50TH offline now. Dunno what I'm going to do with them. Sucks, but yeah... Keeping all that running would be expensive. You could try to sell to some location with (extremely) cheap electricity for some petty cash. Out of curiosity, did you make any profit with your setup? Definitely When he bought those machines he must have gotten a large amount off the retail price to be able to make a profit thats worth it? do u need connections to get that or do u just email the producer (in this case bitmaintech ) and ask for a discount for large number of miners 25+? Title: Re: how can mining still be profitable even for the big farms Post by: jonnybravo0311 on October 12, 2014, 01:07:18 AM 25? Try 250. You need to think way bigger than you are. 25 is hobby mining.
Title: Re: how can mining still be profitable even for the big farms Post by: philipma1957 on October 12, 2014, 01:28:28 AM 25? Try 250. You need to think way bigger than you are. 25 is hobby mining. even 250 s-3's is only 125th at best. and 125th earns about 2 blocks a month. back in the day i earned a coin a day oh i spent 5kwatts an hour in gpu's, but i got a coin a day for 5 kwatts. 5kwatts now gets me 6.6th or about 2.8 coins a month vs 13gh in gpus and 33 coins a month Title: Re: how can mining still be profitable even for the big farms Post by: btcmonster on October 12, 2014, 01:32:46 AM 25? Try 250. You need to think way bigger than you are. 25 is hobby mining. in the pictures those where not 250 miners max 120 s1 and 25 s2, how can u run and setup those miners and be profitable?? Title: Re: how can mining still be profitable even for the big farms Post by: xstr8guy on October 12, 2014, 03:13:17 AM 25? Try 250. You need to think way bigger than you are. 25 is hobby mining. in the pictures those where not 250 miners max 120 s1 and 25 s2, how can u run and setup those miners and be profitable?? Why don't you ask the guy himself? I don't think he took everything offline. I believe he's still running his most efficient gear. And yes, he probably made a profit on the old machines which he most likely got a bulk discount on. But the point I'm making is... you can't go out and buy a bunch of machines and duplicate his success. No one can. It's just not possible now. The ASIC manufacturers are the only people who can do this in the current mining landscape. Title: Re: how can mining still be profitable even for the big farms Post by: iglasses on October 12, 2014, 04:17:12 AM iirc he said he took 50Ths offline. Even sitting in his garage collecting dust he is unsure what he is going to do with the hardware. I PMd a bit with him and let's just say he isn't exactly looking to give it away so even unplugged and unprofitable, he feels it has value (and he's right).
Title: Re: how can mining still be profitable even for the big farms Post by: scarsbergholden on October 16, 2014, 12:40:43 AM but how do those that are not manufacturers make money? They don't pay "retail" prices for mining equipment. They can get a significant discount on the hardware because it cost much less to produce miners then they are sold to retail customers. The mining manufacturers simply let the retail customers pay for the R&D via higher prices and preorders and let the corporate mining farms buy the miners at a discount as there are less logistical costs involved in selling to them (less salesmen, less shipping to various places, ect)a farm like this: That investment would never have been able to be able to pay back for the hardware and make a profit that is worth it. How do they do it?? buy hardware then mine for some time and sell them on ebay overpriced?? thats how i did it when i was mining. however this is inefficient as u always would need to change cooling power management to fit new hardware stuff like that which would cause long down time if needet to be done correctly with cable management Title: Re: how can mining still be profitable even for the big farms Post by: lowbander80 on October 16, 2014, 01:54:44 PM Since now technology is not advancing as fast as expected and currently we face the first lower difficulty change the machines get more greedy for electricity the difficulty may slow down for a while untill new asics come.So until then only free power saves all big farms
Title: Re: how can mining still be profitable even for the big farms Post by: BitcoinHeroes on October 16, 2014, 02:15:52 PM Since now technology is not advancing as fast as expected and currently we face the first lower difficulty change the machines get more greedy for electricity the difficulty may slow down for a while untill new asics come.So until then only free power saves all big farms 16 nm is coming, another big hike in difficulty... Title: Re: how can mining still be profitable even for the big farms Post by: ChuckBuck on October 16, 2014, 03:34:23 PM Only if these farms have extremely cheap electricity, own the facilities, have natural cooling like say in Iceland or a cooler temperature country, or have solar panels setup already is there possibility of profit for a mega farm.
Otherwise, the only farms that are really profitable are the ones making the pickaxes: Bitmain, Spondoolies, AsicMiner, Bitfury, KNC etc Title: Re: how can mining still be profitable even for the big farms Post by: taipo on October 16, 2014, 07:46:50 PM Noone sinks that many millions into huge facilities like that without a long term plan so people should not assume the big farms are turning a profit 'at the moment'.
My guess is its a waiting game, as Ive said in the past, first to blink. 5 or more large players owning a huge chunk of the hashrate, holding the difficulty up to break point and waiting firstly for the small players to drop out then medium players rigs to become unprofitable enough to drop out eventually only leaving those players too big to quit. If they can hold the hashrate to dollar value high enough that noone in their right mind would every want to contest them, then they have won the arms race. The end game then is a bitcoin version of OPEC ( perhaps Organization of the Bitcoin Exporting Companies - possibly a reincarnation of the Bitcoin Foundation ) which will be an economic cartel with the task to coordinate the policies of the bitcoin mining conglomerates. The goal would be to secure a steady income to the large mining conglomerates and to steady the price of bitcoin while guaranteeing constant supply to the markets. Basically a complete bastardisation of everything Satoshi tried to create. Title: Re: how can mining still be profitable even for the big farms Post by: brian_23452 on October 16, 2014, 08:07:29 PM Noone sinks that many millions into huge facilities like that without a long term plan so people should not assume the big farms are turning a profit 'at the moment'. My guess is its a waiting game, as Ive said in the past, first to blink. 5 or more large players owning a huge chunk of the hashrate, holding the difficulty up to break point and waiting firstly for the small players to drop out then medium players rigs to become unprofitable enough to drop out eventually only leaving those players too big to quit. If they can hold the hashrate to dollar value high enough that noone in their right mind would every want to contest them, then they have won the arms race. The end game then is a bitcoin version of OPEC ( perhaps Organization of the Bitcoin Exporting Companies - possibly a reincarnation of the Bitcoin Foundation ) which will be an economic cartel with the task to coordinate the policies of the bitcoin mining conglomerates. The goal would be to secure a steady income to the large mining conglomerates and to steady the price of bitcoin while guaranteeing constant supply to the markets. Basically a complete bastardisation of everything Satoshi tried to create. 1. Bitcoin is not a consumable commodity like oil, nor does it have a relatively inelastic demand. There is NO comparison whatsoever between Bitcoin and OPEC or oil. None. 2. What Satoshi tried to create? I've read his white paper many times as I'm sure you have as well, and there is NOTHING in it abut trying to create anything other than a trust-less, irrevocable electronic payment system, which isn't bastardized or even effected by who is profiting from the mining. Title: Re: how can mining still be profitable even for the big farms Post by: tjwebb on October 17, 2014, 06:30:45 AM Mining is a long-term bet on the transaction volume of the bitcoin economy. The large players are poised to benefit over time as the transaction fees paid to miners rises with transaction volume. Short term, you're just happy to break even on electricity. But If you have the capital to burn while you wait for the tipping point of transaction volume, it'll be worth the wait.
Title: Re: how can mining still be profitable even for the big farms Post by: petersiddle98 on October 17, 2014, 09:35:51 AM Big farms usually get better deal on electricity rates, thats how they are more profitable..
Title: Re: how can mining still be profitable even for the big farms Post by: ranochigo on October 17, 2014, 09:39:52 AM The real people who get the most profit is the ASIC manufacturer. They "test" their customer's orders and profit themselves. Most of the big farms are hosted in datacenter with low electrical cost and good cooling. They can easily buy some used raspberry pi as a controller, or some of the ASIC even come with a controller.
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