Bitcoin Forum

Update Post as of 9-14-2013
https://bitcointalk.org/index.php?topic=273264.msg3156061#msg3156061

Update Post as of 9-3-2013
https://bitcointalk.org/index.php?topic=273264.msg3077414#msg3077414

Update Post as of 8-24-2013

https://bitcointalk.org/index.php?topic=273264.msg2999081#msg2999081
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I posted this updated chart on another thread however wanted to share it here in case you missed it.

Some of us were debating at this stage buying BTC short of mining at a loss can be a viable option rather then committing to the risky business involved with going all out with ASIC hardware.

The following chart shows the return on specific hardware from given manufacturers at present costs at a network difficulty increase of 35% every 10 days.

Buying BTC at $100 is a viable option with out the issues involved with mining.

Here is the updated numbers on network difficulty increase of 35% every 10 days from this point on.

Best case perhaps?

Overview
https://i.imgur.com/usy7WHr.png

KNC
https://i.imgur.com/u7V1P47.png

BFL
https://i.imgur.com/QxGQTCI.png

Bitfury 100TH solution.
https://i.imgur.com/dV5pTwH.png

Edit: View the form yourself and copy it using Google chrome to into your own drive for your own use.

https://docs.google.com/spreadsheet/ccc?key=0AmeuPljmUNHCdEpqX2RmMDFwemJyLURVUWFtZ3J3aGc&usp=sharing

Really more than 3 Billion difficulty by end of the year?  ::)
wtf u smoking man?  ;D
How about some realistic calculations?   ;)

This is just to show that come the end of December 2013 present prices are unsustainable at a 35% network difficulty increase.

Also for those that speculate the value of BTC is in the $1000's then getting BTC rather then hardware is a solid bet.

So this is a projected network difficulty if it would continue to go up 35% every 10 days.

The question still remains as to the total of "pre-order" hardware that has yet to hit the network.

Those that were here when we moved from CPU to GPU technology know that the faster the network difficulty goes up the longer it takes to normalize at the ideal 6 blocks and hour..

Due to popular demand :)

I have included the numbers at 20% 12 day network difficulty increase. At this time the yearly average for network difficulty increase is 18.6% and expected to go up by years end.

Again at what point does the rate of increase slow down is pure speculation. However as for the argument of BTC vs Hardware seems to win if you....

Consider the possibility that the value of BTC to USD goes up/down in value by say October?

For those that mine and dump then BTC is your option.

For those that mine and hold and do not mind operating at a cost/loss then hardware is your option.

Depending on what you chose you would end up with "less" and a "loss" of potential profit if you went exclusively BTC.

That is why its important to not "go big or go home" with one option or another.

https://docs.google.com/spreadsheet/ccc?key=0AmeuPljmUNHCdGpIcjhNaDdUQmlZSXVtRnNVSW9GM0E&usp=sharing

Avalon
https://i.imgur.com/qGgIiqS.png

BFL
https://i.imgur.com/eDYbMJ8.png

KNC
https://i.imgur.com/fXThfs5.png

Bitfury
https://i.imgur.com/J7q4zcs.png

Stopped reading there. Everything else is just bullshit.

One thing I will say is... you assume that all manufacturers will deliver. I expect, as happened in SHA-2 ASIC Round 1, that at least one of these mining hardware outfits will seriously under-deliver. You can almost count on it. "Almost" isn't good enough for someone looking to invest in this sort of landscape though, hence why even someone with Bitfury's credentials still hasn't sold out of... pre-orders (almost put "products" there,  :D)

yea well, we can always mine altcoins ...

You might be right about this.  As mining becomes unprofitable for an average ASIC miner, the only way to own coins will be to
buy them at an open market.  If demand will be there, the price will have to go up.

Mining is only one side of bitcoin.  Many people own coins without ever mining a single one.

very important info .mark.

Even if new hardware being added to the network was reduced the variance involved with mining does not immediately normalize at the next difficulty change. The network difficulty increase may slow down but we noticed that even at 6 blocks an hour that the network would still increase next difficulty target but at a noticeably lower %.

Also do not forget that existing hardware lifespan/operating costs will introduce psychological factors when miners evaluate their exposure in this market segment.


@dogie :)

This is an exercise in awareness.

It is true that this is a free market 24/7. So I expect a slowdown however it would be foolish to not consider the possibility on how the network difficulty will look in the next 2 months if things continue as they are.

I have posted the results at 20% 12 day target.

If you have a Gmail account you can copy the form using the chrome browser and enter the average increase rate for the year of 18.6% 13 day target and see the historical norm for the year.

You will see that so far the prices asked for ASIC hardware makes buying BTC at $100 USD a better option.

Remember that these ASIC's are not like GPU's in respects resale value.

It's not a viable option if you're just trying to increase the BTC you already have ;D

IMO labcoin stock is the best bet right now.

Update 8-24-2013

Here is the link with ROI for the new difficulty outlook if the next round increase at 30%

https://docs.google.com/spreadsheet/ccc?key=0AmeuPljmUNHCdEpqX2RmMDFwemJyLURVUWFtZ3J3aGc&usp=sharing

Also note that the estimated 64 million difficulty end of August came earlier by this recent increase by 2 weeks.

https://i.imgur.com/18sr89u.png

Here is the link with ROI for the new difficulty outlook for next round increase at 20%

https://docs.google.com/spreadsheet/ccc?key=0AmeuPljmUNHCdHpmSTIxQlhmOVdwdnUxMTJDV1N6cEE&usp=sharing

Difficulty increase is going to roll off at and increase at a gradual rate rather then the hockey stick we see now. Once the ASIC buy craze is over people are going to want to try to claw back some of their investment. There isn't endless cash to continue to explode the total hash rate. If you can reinvest to keep your hash rate percentage (compared to the total network hash rate) the same as what it was before the explosion you will come out earning approximately the same amount of BTC as before. You will just suffer the loss of BTC inflicted on us by the mining tool companies igniting an arms race.

coins mined during whole life span @20% increase per difficulty change = 5x (coins mined at first difficulty)
coins mined during whole life span @30% increase per difficulty change = 3.33x (coins mined at first difficulty)
coins mined at first (current) difficulty = 1 coin per 11GH under 12 days

So, a 11GH miner starting today will mine 5 coins at maximum under a 20% increase per difficulty change, 3.33 coins at maximum under a 30% increase per difficulty change

If that miner started after 24 days, it will mine 3.2 coins total @20% increase, 1.63 coins total @30% increase

The key to being able to determine ROI is guessing when the difficulty increase will level off and return to what it was before ASIC was released.

Keep in mind that all ASIC gear sold to date is going to be 'throw away' equipment. In a 12-18 months 1 TH/s miners will be selling for about 500 bucks. A prosumer miner will have 10 to 20 of them. Hard core/ professional will have 200 - 500 units. And everyone that trys to mine will have at least 1 TH/S.

So one that set of equipment delivers the community will have a minimum of 50,000 TH/S (or 50 PH/S). And total network will probably be double that at 100+ PH/S.
The person just wanting to try out mining will run at 1 TH/S. A good comparison is that today someone testing out Bitcoin will run at 350 mh/s. 1 TH/S will be the new 350 MH/S.

The world has changed :-)

I wish there was a way to bet on this.  Between August 2014 and February 2015 mining hardware will be selling for 1/20th of the current price?  Bear in mind that comparison is made against the cheapest hardware available today, the BFL Monarch.  Only problem is it's not available today, and will possibly ship by December 2013 and probably January or February 2014.  Within 7 to 13 months after that the price on the card will collapse to around $300?  Hmm.

Here is the posted update with the new difficulty of 86933018 or a 32.2% increase.

I have increased the BTC Value from $100 to $125.

Hardware Breakdown at 86M

https://i.imgur.com/ajeJdAr.png
source (https://docs.google.com/spreadsheet/ccc?key=0AmeuPljmUNHCdEpqX2RmMDFwemJyLURVUWFtZ3J3aGc#gid=2)

with projected October 31 Network Difficulty of 186M.
 This is at the yearly average increase of 20% every 12 days from now till then.

https://i.imgur.com/7XE0n7E.png
source (https://docs.google.com/spreadsheet/ccc?key=0AmeuPljmUNHCdEpqX2RmMDFwemJyLURVUWFtZ3J3aGc#gid=5)

Here are the estimated BTC returns on hardware operating on a network outlook of 20% and 30% difficulty increases.

20% Network  Increase (Avalon)

https://i.imgur.com/uqLVTu4.png
source (https://docs.google.com/spreadsheet/ccc?key=0AmeuPljmUNHCdEpqX2RmMDFwemJyLURVUWFtZ3J3aGc#gid=6)

30% Network Increase (KNC Jupiter)

https://i.imgur.com/912hytp.png
source (https://docs.google.com/spreadsheet/ccc?key=0AmeuPljmUNHCdEpqX2RmMDFwemJyLURVUWFtZ3J3aGc#gid=0)

30% Network Increase (Bitfury 400)

https://i.imgur.com/VMme7UU.png
source (https://docs.google.com/spreadsheet/ccc?key=0AmeuPljmUNHCdEpqX2RmMDFwemJyLURVUWFtZ3J3aGc#gid=3)

30% Network Increase (BFL Minirig SC 500)

https://i.imgur.com/i7BQCKW.png
source
 (https://docs.google.com/spreadsheet/ccc?key=0AmeuPljmUNHCdEpqX2RmMDFwemJyLURVUWFtZ3J3aGc#gid=4)

30% Network Increase (Metabank.ru Bitfury @ 220Gh/s 2 Units combined into 1)

https://i.imgur.com/e4FxNWG.png
source (https://docs.google.com/spreadsheet/ccc?key=0AmeuPljmUNHCdEpqX2RmMDFwemJyLURVUWFtZ3J3aGc#gid=8)

All these details located on the shared document found under the source link.

Great work. Thank you.

By saving a copy in my google apps folder I was able to make modifications to the file for KnC Miner

O4 start date to 24/9
P4 to 147 million
R4 to =14/(1+Q4)
O12 to $122

That is still optimistic for a KnC delivery date, but suggests lifetime Day1 Jupiter mining of approx 63btc.

At least its in the general public's hands rather than centralized. However I truly hope they will reward those that had supported them with first orders a discount voucher for return customers :)

All these charts and tables tell one thing: The price of mining equipment is mostly irrelevant, the delivery date is what actually counts. I've seen people complaining that one manufacturer's ASICs are 30% more expensive than the others and it's nonsense, you'll get that money back in two weeks if you have equipment on time. Many people are so used to looking at the price tag in everyday life that seem not to be able to adopt this concept.

Update September 14th 2013

I have taken the liberty to give an estimate as to the expected day 1 difficulty when shipped from manufacturer.

The difficulty dates selected are from the manufacturer's expected shipping date start. The numbers are based from a low Network Difficulty Increase of 20% every 12 Days.

https://i.imgur.com/INFtCVI.png

And as always here is the link to the updated estimate both 20% and 30% increases.

https://docs.google.com/spreadsheet/ccc?key=0AmeuPljmUNHCdEpqX2RmMDFwemJyLURVUWFtZ3J3aGc&usp=sharing


P.S.

Seems to be on target with expected Hardware growth. If hardware development and purchases continue at this rate. Expect to see a higher average then 30% come the end of October.

Estimates of so low (20%-30%) difficulty increases are pretty much useless. With all these hardware being delivered even 40%-50% difficulty increases may be unrealistically low.

These are 10.7 day increases, not monthly increases.

10.7 days is equivalent to 30% increase.

I am doing 12 days 20% for a minimum estimation of what to expect.

IT has been evident that 30% is the new norm. However 20% is the yearly average. Come October the minimum will probably be 30% or every 10 day network difficulty change.

Many new potential miners are being left in the dark to the simple fact that network difficulty reduces return in a substantial way.

I'm talking about 2016 block (14 days) increase, you can forget any figure below 30%, realistically put that to 40% and up. You will also not see that 2016 block reach 14 days span in foreseeable future, this explosion of mining power that awaits us in next few months probably happens once in BTC history and never again.