That's the one.

So, am I the only one who noticed the typo? Didn't this happen before? Is it a copy and paste?

Here's to hoping you are.  I will also be past my expected expire date.  So let's hope we get to argue about who was right over a smooth glass of rum.

This statement always boggles me.

LN may indeed begin to pay it's nodes more than a miner will make from the SUBSIDY.  But LN nodes along with every other form of L2+ will have to eventually settle on the chain.  And very large transactions will settle on chain.

Current Subsidy = 6.25BTC = $250,000
Number of transactions in a full block ~ 2500 (This may improve, but lets assume it does not)
Fee per base chain transaction to equal current block reward = 0.0025BTC = $100

Will fees be able to support the above?  Of course they will!  And the system will drive the technology of wasting the ABSOLUTE LEAST amount of base chain space possible,  Profitable businesses that use the base layer will consolidate as many meaningful transactions into a single BTC movement as they can.  And if not?  They will pay the going rate anyway.

Those numbers up there?  Pretty solid! But let do some math with the butt pencil.

Let's say the lightning network starts doing 1 million transactions a second worldwide at a SINGLE SAT per transaction (basically the worst case scenario for note operators).  Every second a million Sats would be charged for transactions on the network.  That means that in 100 seconds a WHOLE BITCOIN worth of fees would have been payed to the nodes.  And in the space of the average bitcoin block (600sec/100sec) we would see SIX bitcoins of fees be paid.

Then those nodes will have to compete for block space to settle on the base chain.  So a certain percentage of that earned income will go DIRECTLY TO THE MINERS.  And conveniently our butt pencil math has us at pretty much the current block reward!  6BTC/block.  And if we only pass half of that to the miners then they will make basically the amount of bitcoin they will earn after the next halving in fees!

Like I said these are not real numbers.  And the lightning network will not be the only source for competition for space on the base chain.  But i can most certainly imagine a world in which the miners would never want to go back to a paltry 6.25BTC Subsidy.

But cAPSLOCK now only the banks can transact on the base chain!!!

Nope.  That is wrong.  ANYONE can.  Anyone willing to pay the fees.  Or anyone with a miner willing to include their transaction in a block regardless of fees.  But in a free market the payment has to come from SOMEWHERE.  And it has to be fees eventually.  But did you ever think that miners might include their own transactions for nothing?  Think about that for a moment.  You own a huge mining farm, AND you have a lot of LN payment processors.  Next block you find?  The first 400 transactions are all yours.

And those fees will have to go up by two methods.  Value, or quantity.  Or both.  Either we increase the number of transaction a block can hold, or we increase the amount each transaction pays.  Or both.  And that balance will also be determined by the huge sea of nodes that validate transactions.  As tech gets stronger and the blockchain can remain decentralized but add blockspace?  We might just see increases to the block size.  But if not we will certainly see increases to the fees.

The lightning network will not kill mining.  And it might just end up being the biggest customer.

I think calculators are important to at least an estimate, just to have something to start for a beginner

I agree with you, buying price is important, and timing is also important

The calculators are very close to daily profit, 24h, but can't predict the week or montly hashrate, this part is up to you, it's hard to understand and people have to consider the fact that tomorrow people will put more cards to mine and the hashrate will increase, everyday, so you have to know that 1 dollar a day is not 31 dollars month, will be probably 28, 27 etc

I am not sure what Elon's actual position on Bitcoin is.

There is the Doge red flag.  And at the same time I cannot imagine he has been without some tutelage.  Someone must have helped him understand the reason putting everything on the base layer is not a real possibility without centralization.  you know... the thing that Hal Finney got in 2010.

So taking this down Binary paths:

He has not realized that basic fact for L1  - then he is either a moron (unlikely) or arrogantly unteachable (quite possible).

He HAS realized that but either does not care, or wants the centralization which makes him evil.

He HAS realized it but is being very careful about what he promotes after having wrecked a bunch of his acolytes.

Between Jack, and Saylor it's hard to imagine they have not talked about it with him, and explained why scaling in layers is the optimal solution.  And also why Doge is probably doomed even worse than Bitcoin when it comes to bloat.  I also think there is a sincere chance he actually believes the "inflation is needed for velocity.  And he does not know that Bitcoin has solved this by reducing technical friction so much that we will see spending simply because of that.

So we will get to see which one of those categories he is in.  To be honest I would not place a bet for any of it yet.  And I pride myself in being a good people reader, and troubleshooter.  It is very hard to tell with him.  I do get the sense he isa bit of a narcissist.  And is also on the spectrum somewhat.  But he also seems to be an idealist.  It will be instructive to see what he does with twitter, and as we move forward with crypto.

I say "crypto" because I would be surprised if he did not do more things to support Doge, sadly.  Even if he has seen the light with BTC, I would expect a high possibility that he would try to make something good out of the giant mess he's made with Doge.  It would be better if he just stopped playing, but I think this is unlikely.

So the lower the number of graphic cards the better, what about RTX 3070s are they good options too? I can only find few RTX 3060 Ti here because many others are LHR which I don't want, I can find RTX 3070s non LHR, may be I should just mix them?.

It sure does, however, there is a downside to it which is the cost per hash,  an S9 will most likely last a lot longer running underclocked at 9.5th instead of the default 13 to 14.5th, but then assuming the miner costs $400 shipped, it becomes 28.5$ per th vs 42$ per th, you do save on power but the most often the lost hash rate surpasses all that.


Buying different batches might be a good idea, but not in the way you mentioned, batches come out in quantities of thousands, usually monthly, so buying from different people does not mean you will get a different batch, they could all have bought that one bad batch you were trying to avoid.

Usually, the first a few batches are the worst, when a few months have passed and the manufacturer starts getting a ton of warranty repair tickets,  they "might" fix what seems to be the issue, but then missing the first batch might also mean paying a lot more for the same miner, it's pretty hard to time this, luck is a major factor.


It's both, for an example antmine S9 are known to have a dead middle board due to a lack of airflow around the first a few chips facing the front side caused by the fan motor itself, so the longer it runs the likely to fail, so this gives you a linear curve more or less.

With something like 17 series where very often the issue is just one bad solder ball shorting the shit out of the board, it could be safer to buy a used miner which has been repaired, if your 17 series miner makes it through the first 6 months, it's more likely to survive another 6 months, but then again, different batches will have different results, the ones that later came from Malaysia were a lot better, it seems like the robots/people that did the soldering were doing it in a better way.

I also remember buying an early batch of S9k where I got miners without heatsinks attached, the heatsinks were sitting in the case doing nothing, it seems like they forgot to heat the thermal , on the other hand, I recall Phill got a different batch that arrived in good shape and worked for a while (not sure about the current status).

So ya, it's just a mess, very hard to predict and it's part of the risk you have to take when you are looking at a business than can get you a 1-2 year ROI, I highly doubt that even drug dealers have such a short projected ROI, , this is why when you invest in mining, you can win big just in the same way you can lose big, it's a very risky business, especially for those who are just starting, I always tell the majority of people NOT to invest in mining, at least not before knowing the full story, because things look pretty damn good on paper, you go to an online calculator and think to yourself that you will get your money back in 6 months, reinvest and double your hashrate in 3 months, get that many PH worths of hashrate and start making 10k a month while doing nothing, it's exactly how things look like in an excel sheet like the one you made, but that couldn't be further from the truth.

Do you mean 20% per year or 20% over the useful lifespan of the miner? If it's 20% per year, that really sucks in comparison to GPUs. I have had a farm with 200 video cards where only 2 of them failed in a 9-month period. I sent these cards to MSI warranty repair and they returned working ones within 1-2 weeks. This is why I have MSI brand loyalty.

Lesson learned for me, then. If I want to buy used MicroBT M20S's or Avalon 1146's, I should price in a 20% failure rate for the unrepairable problems + the money/downtime cost of fixing the fixable ones.

Do you know if failure rates can be lowered by downclocking or running at lower power usage?

I do have to admit I cherry-picked the ideal scenario. If one doesn't have unrealized capital gain equal to $1m, they should depreciate the miners over 2-3 years instead of in 1 year with Section 179.

The impression I had at first when looking at mining during recessions was power & rent rates were important in order to be able to pay the bills while profit was low. But the more research I do, the more I feel like the residual value of the equipment is more important.

Mining farm A: pays 8 cent power, buys a M30S for $6000, then it's worth $5000 by the end of the year (including repairs). Profit = $2600

Mining farm B: pays 4 cent power, buys a M30S for $8000, then it's worth $5000 by the end of the year (including repairs). Profit = $1730

It looks like buying reliable equipment for a reasonable price is the #1 most important factor, as long as you can keep the doors open if BTC price were to fall by half.

Here's a new spreadsheet with more realistic assumptions. I assumed BTC price will slowly rise by 60% over the period, diff will rise by 25%, and the resale value of each working miner will stay the same at the end.



Unfortunately, HODLing still wins by a hair even when price growth is zero.



I tried many more price increases/declines, and in every single case, HODLing won by a small margin over mining.

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However, as a bright spot, the GPU spreadsheets are a hell of a lot better. Mining almost always beats HODLing Ethereum. So long as you can sell the cards before PoS, the very high reliability & profit margin at even 7 cent power trounces ASIC mining at free power.

The best part in my view is, since GPU mining is light on power, a normal U.S. house with a 200 amp panel can hold 200 RTX 3060 cards. No need to rent a separate warehouse if power is already 9 cents.

So you mean buying a cooling system, is not worth it for a big rig, because it is expensive and with standard fans, similar results are easily achievable.

According to murphy's laws and the usual way things go in this board invalidating a topic title in less than a week in most cases, there is a high chance to go bullish from now on.    Honestly, I don't think so either, probably we're going to be in a whole lot of annoying swings taking us closer to the 30k mark, but I don't think we will go below.

Long term everything could happen, there is a scenario for every direction and all look realistic to me:
- war is over, China goes back to normal, the fear of another economic crisis goes away everyone turns bullish again
- the situation goes on, purchasing power is eroding, less money to be spent on investment, companies become less anxious to throw money at everything, we have to counterbalance $30million of printed coins each day, we go down
- we keep going from positive to negative with both bullish and bearish news till something really big happens, and when I say big something beyond a part of a city on an island in Honduras accepting BTC

For the next 3 months, probably the best plan is not to care about the price that much, small talk is ok but leverage trading not so much.


Why is this so obvious? Would you risk all your coins shorting?

Ok that makes sense, but you can't have an infinite loop, you will have to stop at one point, or else, everyone in the U.S would be mining bitcoin and you all would have been rich.

Also, a few key points are missing here, the most important being the lifespan of the miners you invest in, and that could be the physical status of the miner (dead before ROI) or it gets to the point where the power bill is a lot greater than it's projected income.

Also if I understand correctly, selling your mining gears later on for whatever reason is a taxable event, no? as well as selling your bitcoin to pay the power bill or to buy a new transformer or anything like that, even your received reward from the pool are taxable as income.

Phill's example above is a good one but there are a few things I don't get


So just to be clear here, and let's assume your business model isn't 50/50, and that you had to pay $$ every month for the power bills, that means, you would have to sell some coins (a taxable event) no?

The second question, your example also assumes that for all these years you did not spend a single dime and re-invested all of it in buying more miners, true?

furthermore, you now (according to the example) own 386k worth of mining gears, what happens when you sell them? you will pay a lump sum of tax?

and lastly, if you decided to stop expanding (which you will get to at one point), all the profit you make will be taxable even if you don't sell your bitcoin, and then if you sell it later on for higher a price that will be a capital gains tax, true?

Not that I could use any of these U.S tax tips, but it's an interesting topic, I would love for someone to give me a perfectly detailed example of all the tax involved with numbers.


Let's say today, You buy S19 for $10,000, for the next 12 months, it makes you $500 worth of coins monthly, every month you sell 100$ to pay the power bill, and use $100 to improve your mining farm to be able to add more capacity and $300 reinvested in mining gears, how much tax do you pay in total for the total mining profit you made per month?