Curious I've heard the same argument from someone before... what if bitcoin price drops, what if someone sends you a fake bitcoin, what if SHA256 gets hacked. "ANYTHING can be cracked" he says. While I believe it's much easier to hack someone's computer than to crack SHA I started wondering if bitcoin is just too hard for the non-tech savvy to understand. Or they'll believe it when it's too late, as it is with ANYTHING when you're ignorant of something. Just another missed opportunity, I guess...
Most people don't understand how the internet works, how credit cards work, hell even how electricity works. It is simply a matter of faith. You click on the internet button and the internet just works. Nobody know how it just does, something to do with tubes and stuff. Bitcoin will be no different. Bitcoin is still raw and clunky kinda like the internet in 1980. Over time it will become smooth and shinny and masses will never have a clue how it works ... it just does. |
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- Bitcoin doesn't grow on trees.
Actually they do ... merkle trees |
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Ah man you didn't think that is what 30% revenue reinvestment means do you? You did read the contract before sending them money. You have 0% chance of making a positive ROI.
It means they take 30% of your REVENUE and buy hashing power with it. Your hashing power isn't going to grow 30% a month. Your $1000 bought you 20 GH/s of hashing power. They take 10% as a fee, reinvest 30% towards more hardware and payout 60%.
Not sure why you think that means you hashing rate will grow 30% a month. You got robbed and have no possible chance of a positive ROI% under any realistic scenario. I know I won't convince you but your account stats in October will. The good news is you won't have to wait 2 years to know you will lose money it will be obvious very good. You can't pay 300% markup on hashing power and then somehow magically come out ahead by reinvesting. They aren't giving you any hashing power for free they are using YOUR gross revenue to buy more. The only way 30% revenue reinvestment = 30% more hashing power would be if your revenue for the month was 100% of your contract price.
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Ok tell yourself that. I bought CloudHashing contracts instead because of the revenue reinvestment, which based on my own due dilligence will be much more profitable over a 12 month time frame than any miner purchase because of how they are buying and reinvesting at scale. Revenue reinvestment simply means putting aside some of gross revenue to pay for mining hardware. Any miner can do that with any rig. Also you almost certainly have no chance of positive return given CloudHashing price is >$50 per GH/s and hasn't started mining yet. We're derailing this thread, but you're wrong. The mining power on those contracts will grow very quickly, that $50 per GH number is extremely misleading because of how it will grow month after month; I have had private correspondence with them and am not quite sure how much of what they told me should be disclosed, but suffice it to say that they will be adding a substantial amount of power every month that will translate directly into increases in the hashing power of each individual contract. Any miner can put money aside with any rig, but you need to be a very large scale miner to buy new hardware every month with that money. And you need priority queuing and bulk rate prices to compete with the scaling of CloudHashing. Ok tell yourself that. Their projection is based on 2TH to 3TH in Sept 2014. We will likely see 5 TH/ by January. I mean just about any rig is massively profitable if difficulty scales linarly between now and Sept 2014 with a max of 2 TH/s. For example Cointerra rig: http://mining.thegenesisblock.com/a/92097362ab Wow 112% return. The host can't reinvest more revenue then it makes and with $50 per GH/s you are dead before you start. The only way they could make a compelling projection is with totally impossible scenario of only 2 TH/s in Sept 2014. If that happens well it is pretty much impossible not to make a fortune no matter what rig you pick. |
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These reasons are why I am skeptical of companies like basic-mining, cognitive, or peta-hash. It will be very hard to maintain any sort of network percentage and prohibitively expensive to keep up with difficulty increases. Real money is in making machines, not mining with them.
This. There is a limited market IF the entity has an advantage over the retail consumer. Access to industrial space at below market prices? Signed a power agreement for interruptable supply at unbeatable rate <0.04 kWh? Operating in a climate that reduces the need for HVAC? Have a deal w/ manufaturer to buy initial and upgrade hardware at substantially (30%) less than retail? Optimally it would be all of them combined. A person who has access to couple thousand feet of warehouse space in Canada in a district where with an interruptable contract can get power at $0.035 per kWh and is being offered rigs at $5 per GH/s for Dec delivery. |
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Buying IceDrill shares one does not have to pay electricity, keep the equipment running, if it brokes have to replace it, and so on...
It still seems a good deal to me... Of those only not having to keep the equipment running is correct. Any electricity costs come out of the gross revenue. It is no different then mining your own coins and putting aside enough to pay the power bill. Any damaged equipment has to be replaced from gross revenue and reducing the revenue until replaced, once again the same as hardware you own. I think IceDrill is a good project but come on, if those facts came as a shock to you, maybe you shouldn't be an investor, generally speaking. |
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Don't forget to double your electricity costs to allow for the air conditioning. If you have to hire even a single staff member to run the show, their wages would buy a lot of electricity. Data center space is not cheap either. Good point on the AC. |
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I bought CloudHashing contracts instead because of the revenue reinvestment, which based on my own due dilligence will be much more profitable over a 12 month time frame than any miner purchase because of how they are buying and reinvesting at scale. Revenue reinvestment simply means putting aside some of gross revenue to pay for mining hardware. Any miner can do that with any rig. Also you almost certainly have no chance of positive return given CloudHashing price is >$50 per GH/s and hasn't started mining yet. |
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I think that your point about CPU and FPGA actually folds on itself to some degree, because when CPUs and GPUs and FPGAs come offline, it's like a tree falling in the woods that no one hears. By the time they're so unprofitable that they stop getting used, they are already too small a portion of the network to be missed. I think that Avalon is relatively near succumbing to this fate based on what I know about preorders of 28nm chips. Avalon and ASICMiner will go first but I think the network will grow slower that some project. Here is a discussion based on probable preorders and timelines with a couple different viewpoints. https://bitcointalk.org/index.php?topic=278384.0I wouldn't say those techs aren't missed. GPU was ~50 TH/s. They are effectively obsolete now @ 500 TH/s it was a 10% drag on the network growth rate. Avalon & AsicMiner won't go "obsolete" (@ current exchange rate & $0.10 per kWh) until 17.9 PH/s. Even with no new orders that would mean >1.5 PH/s of capacity (plus ASICMiner retails sales which are hard to pin down). That is around the same share of the network. |
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It's quite laughable, 4PH/s of obsolete 110nm Avalon chips with no chance of ROI, probably wont even cover power costs.
Don't be ridiculous. It's going to be quite some time before Avalon chips can't cover power costs. 17.9 PH @ $100 exchange rate & $0.10 per kWh. It could happen mid next year. If you believe some of the "exponential growth forever" kids it will happen in 10 weeks or some nonsense. https://bitcointalk.org/index.php?topic=281279 |
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Still it looks like you just assumed everything is operating at 0.7 J/GH.
Meanwhile full sized miner is falling quite a bit short (10-20%) on hashrate, but the powerconsumption is.... 250W AT THE WALL.
That would be between 320 and 360 GH/s at 250W = between .7 and .8 J/GH on a 55 nm product. I seriously hope the 28nm products can beat Bitfury's 55nm by a significant margin. Bitfury's developer is an amazing ASIC developer. He also had efficiency unmatched by anyone else on FPGA and really only lacked a commercial success because of the false promises of BFL (both on FPGA side and early announcement of ASICs in a few months). I would also point out that the rigs are essentially unavoidable underclocking. They don't want to underclock but the chips are running slower than spec and that is going to improve the efficiency. I am sure if you underclock or undervolt 28nm devices you will get improved efficiency (at the expense of less hashpower per $). Still at stock clocks I don't think anyone is going to massively (<0.4 J/GH) outperform. All the 28nm builders are taking pre-orders. It is a competition for pre-orders and funding. If they felt they could with high confidence say they can deliver <0.5 J/GH at the wall they say so because it would boost sales. Process node is only part of the equation. KNC (28nm) is only guaranteeing 2.5 J/GH which is 4x worse than Bitfury despite being on a smaller process and BFL (65nm) is on a process very close to Bitfury but needs 5 J/GH which is 8x worse. We can only go by what they unreleased specs and they are likely hedging their numbers to avoid an embarrassing miss but if KNC simulations were showing them 0.5 J/GH they wouldn't be building boards capable of 320W max for a 100 GH chip and only advertising better than 2.5 J/GH. Still if Bitfury design can be shrunk to 28nm with similar efficiency it could be the most efficient chip yet. |
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That assumes everything is operated at 0.7J/W. It isn't there is a lot of less efficient gear out there. Long before you get to 200 PH/s for example every 55nm or higher chip will be operating with negative ROI. They will go idle. Plus when hashrate is already say 30 PH/s and even with NO difficulty increased the margin over electrical cost is next to nothing and the break even point stretched out into years into the future hardware sales are going to slow down. When you start subtracting inefficient hardware going offline well it isn't likely at all.
However you seem to have your mind made up so 200 PH/s +
Don't get me wrong - I somewhat believe 200 or 300 PH/s is science fiction, unless a very large percent of miners are not paying for electricity, which I doubt. But don't forget 2 very important factors: 1 - BTC price can skyrocket. $1000 BTC price changes the landscape dramatically: with 1USD per GH/s efficiency it equals 1388.88 PH/s network speed for electricity only break even.2 - People are greedy in nature and a lot of them will keep mining long after it is unprofitable, hoping for an increase in BTC price. Yeah. People that buy mining equipment that'll never ROI may continue to mine on the hope that BTC value will skyrocket. It may be worth the extra few hundred dollars of electricity a year for them. Big operations may shut down but I can see average joes continuing to mine, which would help decentralize hashing power anyway. To a certain extent but everyone has a pain point. Are you still CPU mining Bitcoin? Why not? You already own a CPU. It will only cost you $2,000 or so in electricity to mine 1 BTC. If BTC exchange rate goes up to $3,000 you will profit. So why aren't you mining on a CPU right now? (You already know the answer) 236 PH/s would mean an Avalon or Block eruptor would require $660 in just electricity to mine one BTC. Sure at close to the break even point many miners will hang on but mining at a guaranteed 50%, 70%, 90%, 99% negative margin for week after week, month after month. Nobody is going to do that. Just like nobody (or at least not enough to be more than a rounding error) is CPU mining Bitcoin today. |
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If more people use bitcoin, maybe we need millions of years to download it.
Yup millions of years. Your right, can't believe nobody noticed this before. I recommend uninstalling the client and clicking [logout] in the upper left of the forum. |
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It isn't just the ATX PSU. If a chip operates at 0.55 J/GH how are you going to power it? Plug 12V connector from power supply to it and blow it up? Most ASICs run at 1V. ATX doesn't supply 1V. So you need a DC to DC PSU to convert 12V to 1V. Good ones are roughly 90% efficient. So the wattage for the ASIC boards are going to be >0.55 J/GH even if the chip is 0.55 J/GH. Now how are you going to cool up to 1400W of heat? Fans consume wattage, as does the system controller. So the overall DC system wattage is higher than the board wattage which is higher than the chip wattage. Now to convert AC to DC you are talking another ~10% inefficiency so the AC wattage is even higher.
Still it looks like you just assumed everything is operating at 0.7 J/GH. That ignores the petahashes of existing hardware which is much less efficiency. Long before you get to 200 PH/s for example every 55nm or higher chip will be operating with negative gross margin. Why would they continue to mine to turn $100 in electricity into $50 in Bitcoins? Simple they won't and when they go idle it will slow the growth of the network.
200 PH/s isn't any more realistic. It assumes that all existing hardware goes into the trashcan and despite hashrate already being so high that the break even point (even assumming no more hashrate growth) is years in the future people keep buying more and more rigs month after month until they are negative ROI% from day 1.
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0.55W/GH? What using magical unicorn miners?  Here are "at the wall" efficiencies of various devices and proposed devices. https://bitcointalk.org/index.php?topic=281279Nobody, not even cointerra is predicting half a watt per GH/s at the wall. |
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It is not largish it is just beyond silly. It think you are misunderstanding. 236 PH/s is so large even if the hardware was free you would mine at a loss because even with @ 2J/GH and $0.10 per kWh it would cost ~$300 per Bitcoin just in electricity. So if someone gave you a free miner you would lose money by using it. When you consider that even @ Cointerra prices (lowest price per GH) we are talking nearly a $1B in pre-orders (or 8 years of gross mining revenue excluding electricity) it just gets even more silly.
Difficulty is going up but saying 236 PH/s is plausible well you might as well say difficulty of eleventy quadrillion septillion is also possible.
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Yes, it seems reasonable considering this: http://bitcoin.sipa.beThere are so many companies and securities releasing hash power in Q4 this year. I would not be surprised if the network continues its current growth rate through the end of the year. Also, I think a large percentage of manufacturers will setup large mining farms using their own equipment at cost. Notice how none of the newer companies have stated they will not mine on the Bitcoin network. This will push difficulty up much higher & much faster than anyone anticipated. This is not me hating on just Cointerra by the way. I think almost all current consumer mining hardware equipment is overpriced. They are not the only ones by far... I just would like to see them succeed because they are from my home state of Texas, so I am giving them constructive criticism. No it isn't realistic in any fashion. 236 PH/s would mean that every single miner in the world would be operating at a loss. So even when miners have a 100% negative ROI from day one people will keep deploying tens of thousands of more units. Why? They have to much money and want to turn $1000 in electricity into $50 in BTC? |
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