Assuming it's still available, I'll take the +3.51% to +3.75% slot.

This is sort of an interesting change, though I'm not sure I like it. It feels more constricting since I can't select the number I like because it's in a range taken by someone else, so a speedy reply is more of a factor now than it was before. Posting another guess as the closing date draws closer is also limited, since it's likely the range will already be taken.

Ah, sorry about that. I've got galdur on ignore. I'll change to: +5.30%

It's a bit early to tell at this point (with 1790 blocks to go), but I'll guess: +5.28%

0.062

0.05

Well, this is interesting...

Let's just jump right to it:

BTC0.04

Well, an industrial miner using widely available gear (0.5W per GH/s) and only paying $0.05 per kWh means they'll be profitable (at this difficulty) until the Bitcoin price drops to ~$53 ...or until difficulty increases to 167,638,063,430 (@ $200 per Bitcoin).

So, unfortunately for us home miners, there's room for movement.

I'm always happy to help where I can, and I'm glad you found my post informative. Mining on a larger scale tends to be vastly more complex than most people realize, and while I'm sure you know that, I still try to point out some "things to think about" for anyone else reading the forums.


Not sure if you've started doing this yet, but what I've always tried to do is to simplify *everything* down to what it costs per kWh (employee hourly rates, space rental, cooling...really any reoccurring expense) and add it to your electricity costs. The idea being to create an all encompassing expense, an example being $0.08 per kWh ($0.03 to cover monthly rent, monitoring, and maintenance + $0.05 for the raw electrical rate). I've found this usually helps when making difficulty and revenue predictions (among other things).

Other than that, my biggest question comes down to depreciation...and this is something I'm also asking the other experienced miners / veterans (both to help with my models and with CptTripps' setup). Is there a standard depreciation method you use for your hardware, or do you typically just run the equipment until it's no longer valued at anything (ending its useful life)?

EDIT: I noticed the equipment totals changed to 5 AntMiners and 3 SP20s. Though this changes the overall numbers, the concept is still the same.

This is actually kind of an interesting thread.

@OP - If you are legit, don't purchase any mining gear....yet.
With the 10 miners you've purchased for BTC19 (or the fiat equivalent), I imagine you're running at about 14.3 TH/s, generating BTC0.17394234 per day at the current difficulty (or $39.14 @ $225 per coin). Using roughly 9 kWh for the gear alone, you're daily electricity costs should be around $9.67 (since you hinted toward $0.045 per kWh), and that's fantastic! It means you're difficulty ceiling (the point where revenue is equal to expenses) is a bit over 167,042,141,322, or 4 times where we're at today.

Obviously you're in a good position given your datacenter setup (racks, cooling, power capabilities) and cheap electricity. The problem is the low price per Bitcoin. Recouping the initial test expense of BTC19 would take ~110 days...but only if the difficulty remains constant. There will be ~8-9 difficulty changes between now and your hypothetical breakeven point. So the fun, and challenging, part of researching a feasible setup is determining what the difficulty will look like after 8, 9, 10 adjustments and how that ultimately changes your breakeven analysis.

So! I noted "yet" above because it may be better to wait for the price per coin to increase (not guaranteed of course) or to wait for the next generation of more efficient hardware to come to market (which is, unfortunately, also an unknown). Waiting on the latter is usually my preference because most massive mining operations will have already implemented the gear by the time smaller operations can even begin purchasing it. That usually gives me an opportunity to see how the network reacts and how the difficulty rises, allowing me to readjust my predictions as necessary before making the purchase (if it's still feasible).

Yeaahh, that's not how mining works...though it's a fun thought experiment.

Problem #1) Who would mine the last block (#2016) to initiate the difficulty change? Even if "most agreed", the remaining miners (assuming there were very few of them) would take ages to solve the last block. No transactions would be processed on the Bitcoin network and the whole thing collapses.

Problem #2) As far as I've understood it, a change in difficulty doesn't happen based on what's happening on the last block, but rather the culmination of all 2016 blocks after the last change. To cause a drop in the difficulty, the average timestamps on the blocks would need to be greater than 10 minutes apart. Stopping at the last block wouldn't do anything to change the average of the previous 2015.

Well, 7,000 GH/s at 3,550W is a decent ~0.51 J/Gh ...and judging by your numbers, it's essentially 6 AntMiner S5's.
With that in mind, at $0.13 per kWh, you're looking at $11.08 in electricity costs per day. So long as 7 TH/s generates more than that in the same period, you'll be good.

Here's what to think about instead: At what point will your setup no longer generate a profit (expenses equal revenue)? This largely depends on two factors; price per Bitcoin, and the network difficulty. There are other factors for larger setups, but we'll keep it simple for this one.

If a Bitcoin is valued at $230 (current price off of Coinbase as I write this), and at the current difficulty of 41,272,873,895, your revenue should come in around BTC0.08529572, or $19.62, per day (ignoring variance).

This means you'll be able to maintain profitability until the price per Bitcoin drops to about $129.90, with difficulty staying constant (though unlikely given many more miners would drop out of the game at that price).

Alternatively, if the price stayed constant instead, you could maintain profitability until the difficulty rises to roughly 73,076,881,507...you can be the judge on how long it takes to get there (1, 3, 6, 12 months, etc).

Obviously neither of these variables are constant, so I'd advise you do to your own calculations. As the price per Bitcoin rises, your difficulty ceiling rises by a similar proportion as well.

Ah, got it, that makes more sense. Ha, even I didn't pay attention to the dates

I think you misread the opening...or at least I read it as spending BTC74 for the miner and only making BTC3-4 with it.

And that, ladies and gentlemen, is an example of why you don't calculate hashrate / difficulty on a block-by-block basis (or however Alloscomp does it). It's terribly inaccurate.

Can't tell if that was a jab at me (for whatever reason), if you were trying to be helpful, or if you misread my post...



What I was getting at was that you never stated the period of time used in the calculations (though 1 day, 86400 seconds, was assumed based on the first example), and your yield was a bit off.

Going back to the math part:
First example
1 TH/s, using 1 kWh, will (on average) generate BTC0.01143723 per day at a difficulty of 43,971,662,056, or roughly $2.65 @ $232/BTC. However, it will cost $2.40 (@ $0.10 per kWh) to mine those coins. Net income at this point is $0.25 per TH/s per day.

A few things could happen that would generate a loss in this situation. Either,
1) Difficulty would need to be greater than 48,615,027,051.
2) The price per Bitcoin would need to be less than $209.84.
3) Energy costs would need to be greater than $0.11 per kWh.

Second example
1 TH/s, using 0.7 kWh, will still generate BTC0.01143723 per day at a difficulty of 43,971,662,056, or roughly $2.65 @ $232/BTC. However, since this miner is more efficient, it will only cost $1.68 (@ $0.10 per kWh) to mine those coins. Net income at this point is now $0.97 per TH/s per day.

A few things could happen that would generate a loss in this situation. Either,
1) Difficulty would need to be greater than 69,450,048,235.
2) The price per Bitcoin would need to be less than $146.89.
3) Energy costs would need to be greater than $0.158 per kWh.


Overall, you're right; profitability is getting squeeze pretty hard, and the constant jumps in difficulty, while expected, don't help. It would only take ~5 jumps at 10% to kill off the profitability of 0.7W/Gh miner, and the less efficient 1W/Gh miner is more or less dead for the average user at this point anyway. Thankfully we've already seen a rise in 0.5W/Gh miners, with more efficient ones under development.

Calculating at the current difficulty, you may want to check your math here...

Be careful when going down this rabbit hole.

The changes you see in the network hashrate on a website aren't indicative of miners being added or removed from the network. Hashrate is calculated based on the time it takes to solve a block over a certain period of time. If I were to start up a 1GH/s miner and somehow manage to solve 6 blocks in 5 minutes, sites calculating hashrate on a block-by-block basis would think I controlled half the network (300PH/s out of the then assumed 600PH/s). This is why you see hashrate averages such as 504, 1008, and 2016 blocks on BitcoinWisdom, for example. The only real average that matters comes after calculating 2016 blocks, since that governs the difficulty.

It's certainly interesting to revisit this a year later, especially to see how completely wrong the majority of us were. It seems I was off by a factor of ~9.


Close. 

With an average difficulty this month of around 42.5 billion (averaging past, current, and predicted difficulties), and with January having 2,678,400 seconds, the hashrate necessary to generate BTC1.0 is 2.726047 TH/s (ignoring pool variance).

Alright, let's see if we can break these down a bit...


This is called 'solo mining', and it's possible to do at any time, with any amount of hashing power. Can't say I've had to set that up in years, so you may want to search the forums a bit if that's what you're interested in.

As for mining a block while going solo, think of it like an elaborate lottery that takes place an average of every 10 minutes. If you have a device that generates 1,000,000,000,000 hashes per second (1 TH/s in this case), you'll be competing to solve a block with the rest of the network, which is operating at somewhere in the ballpark of 300,000,000,000,000,000 (300,000 TH/s).

Solo mining with 1 TH/s means the probability of finding a block before the rest of the network is about 0.000333% (1 TH/s / 300,000 TH/s). In other words, not that great...that's why many people join pools...but that's not to say it isn't possible (just very unlikely).



Speaking strictly about Bitcoin, no, there are no CPU/GPU miners that are profitable today. That era of mining quickly died out after the rise of ASIC-based mining.

As for the most cost effective miners, BitMain Tech and Spondoolies-Tech are at the top of the list (decent quality hardware, price, and power efficiency). There may be others, but I'll leave that up to other members to mention them.



With pools, size (hashing speed) and fees are typically the things I look for. The larger the pool (in regards to their share of the total hashing power), the more stable / consistent the payouts can be. Smaller pools have much more variance (such as not finding a block for days, limiting how often you're paid), but that's necessarily a bad thing. A small pool on a recent lucky streak (finding blocks more often than their theoretical average) can be more lucrative for the miners since there's so few of them to share the BTC25 reward.



Not quite sure what you mean by "9m by 2017", but the price isn't higher because of...so many possible/plausible/known/unknown factors.

In other words, I have no idea. Part of it could be because of BitStamp, or the US Marshals upcoming massive auction, or fear resulting in (or from) investor capitulation, or lack of volume, or uncertainty of the future, or a combination of everything. Only one way to reverse it though; start buying up some cheap coins. 



That's a hard question to answer, mainly because it's usually based on opinion. Personally speaking (just to emphasize that this is my opinion), Bitcoin was the first and the most revolutionary of the cryptocurrencies because it brought about the blockchain. Will there be anything better than Bitcoin? Maybe. Has it come along yet? No.



Well, for starters, saying "safely exchange bitcoins into USD" and "Paypal" in the same sentence is essentially an oxymoron, given the ability to reverse payments on the platform.
I use Coinbase for all of my BTC/USD and USD/BTC transactions, and I haven't had a single problem (depositing and withdrawing directly to/from my bank account). My next 'go to' was BitStamp, though I'm obviously hesitant to recommend them after their recent hack.

You're correct.

1 TH/s generates roughly BTC0.01144 per day at the current difficulty, and with a maintenance fee of $1.551 an equilibrium is reached at ~$135.61.



...what does that even mean?

If you're mining at a loss, you're essentially "buying" Bitcoin at a higher price than you otherwise could on the market. If, for example, mining a single Bitcoin has a prime cost of $200 (energy, space, cooling, etc) and the current price per one Bitcoin is $180 on the open market, it makes more financial sense to power off the mining gear and purchase Bitcoin directly. If you choose to sell that Bitcoin you just mined, you'd end up with a loss of $20.