ASIC Mining Soon to Be Unprofitable??!?!

[Sceptor_Sceptor]

Someone who understands this more...please comment.

If the current BitCoin network is 20.6 TH/S @ 2.86M difficulty, what happens with BFL ships their 10k orders of ASIC miners at 0.06TH/S each order on average.

This would effectively add 600 TH/s to the network?

According to straight multiplication calculation...this means difficulty of just under 100M. This would make the payback over 1 year instantly...not good.  

[nedbert9]

estimates

1 month post asic
100-150 TH

6 months post asic
450 TH

What is problematic to the health of bitcoin mining is any ASIC vendor that attempts to maintain the current, pre-order sales volume.


BFL is overcapitalized.  Meaning the company has too many employees and equipment to be supported by a limited market such as bitcoin.  The downside for bitcoin miners is that BFL may attempt to sustain their current size and by doing so massively deflate the value of mining equipment.  Those who purchase mining equipment first will suffer losses.

This opinion considers BTC/USD at no more than 15 for the foreseeable future.

[Vladimir]

For what it worth. There were a few very very good reasons I quit the mining game.

[Malophor]

You can't predict what will happen with the difficulty rating beyond "ASICS will make it go up." You can bet that as it goes up miners are going to stop mining. Thus, it will go down. This is a self correcting problem. If mining becomes too difficult and unprofitable people stop mining and it becomes profitable again.

[willphase]

For what it worth. There were a few very very good reasons I quit the mining game.

was it because I outbid you on the FPGA rig

Only joking... quite interested in your reasons behind this, but understand if you want to keep them to yourself.  Sorry we didn't get to chat more in London.

Will

[squid]

If you get in early enough there will be a decent time window to pay for your machine + hopefully make significant profits. The power/ghash rate though should guarantee that at least there is some continuous profit, how much? only time will tell.

[Vladimir]

For what it worth. There were a few very very good reasons I quit the mining game.

was it because I outbid you on the FPGA rig

LOL, Will, congrats on winning that auction. Should I have won it I would simply resell it next day most likely. Easy 100-200 BTC.

[cheebydi]

My Peronal 2 cents on that topic:

I don't think a lot of new miners are joining the game, and current miners are investing about as much as they already had invested in ASIC equipment.

Honestly, I think it's a zero-sum game.

For example, what I mean is:

a 2.4Gh/s rig which, for sake of the argument cost you $1100 , would get you about ฿ 25.284948/month at the current difficulty.
a 54Gh/s rig which costs about $1100, after difficulty adjustment, will get you about ฿ 12.642474/month (block reward changes to 25) for a certain time frame.


What I mean is, my personal opinion is that invested capital in mining equipment more or less stays the same, therefore reward will about decline by 50%.

Feel free to point out the flaws in my logic, as I said, that's just my personal opinion.

 

[grishnakh]

My Peronal 2 cents on that topic:

I don't think a lot of new miners are joining the game, and current miners are investing about as much as they already had invested in ASIC equipment.

Honestly, I think it's a zero-sum game.

For example, what I mean is:

a 2.4Gh/s rig which, for sake of the argument cost you $1100 , would get you about ฿ 25.284948/month at the current difficulty.
a 54Gh/s rig which costs about $1100, after difficulty adjustment, will get you about ฿ 12.642474/month (block reward changes to 25) for a certain time frame.


What I mean is, my personal opinion is that invested capital in mining equipment more or less stays the same, therefore reward will about decline by 50%.

Feel free to point out the flaws in my logic, as I said, that's just my personal opinion.

 

yeah, but the question is, how long till this happens? If it takes long enough, asic mining for the first ones can be very profitable

[chris200x9]

But with the block payout shrinking to 25 and increased difficulty won't bitcoin price skyrocket?

[davecoin]

But with the block payout shrinking to 25 and increased difficulty won't bitcoin price skyrocket?

One can hope..

[Autobahn]

i actually think it will be long enough profitable. thats means that i think that you surly can get back your money you bought the asic hardware with. and i think thats already enough. because every bc you mine afterwards is money you did not have before

[lsmith130]

It's very unlikely that the hashing power will end up in just a few hands. After the switch to ASICs there won't be any more foreseeable major jumps in hashing rate, and if anyone were to get anywhere near a 51% attack then everyone would bail out of bitcoin, making it worthless. There's no incentive to get that much hashing power. Also, because ASICs make hashing power so cheap and low power, there will be a low barrier to entry of the market for a very long time, allowing the power to distribute more evenly.

[CoinHoarder]

Someone who understands this more...please comment.

If the current BitCoin network is 20.6 TH/S @ 2.86M difficulty, what happens with BFL ships their 10k orders of ASIC miners at 0.06TH/S each order on average.

This would effectively add 600 TH/s to the network?

According to straight multiplication calculation...this means difficulty of just under 100M. This would make the payback over 1 year instantly...not good.  

BFL has stated that most of those 10k orders were not completed/paid for. Also, those order numbers include FPGA orders that have already been processed.

Inaba has stated off of a rough calculation that if all of BFL's pre-orders were shipped today, the difficulty would not go up 10x.

Therefore, your numbers are way off.

I don't expect 100m difficulty until the end of 2013.

[miner2013]

despite from unprofitable those devices are also undeliverable after almost a year....
i canceled my orders and asked my money back still nothing...
i found from another user here a company that delivers asic units and i placed my orders already the company is the www.labsnovo.com
hope this helps all of you...

[greyhawk]

Oh good, another scam AND a necromancy and in the same post too. great.

[CBuffer]

I read a book called "The madness of crowds" which described the South Sea bubble, and other disasters. One man set up an office and made a share offering "for a highly profitable venture but no one to know what it is". He was flooded with people willing to put 20% down. He took a pile of cash on the first day and, not wishing to push his luck, cleared off with the loot on the evening boat to France.

Scammers must be all over this ASIC mining rig business. I would go pick up a rig in person. But paying up front seems too dangerous.

[wilfried]

In my opinion the point in time to watch for is not Asics getting to work, but it is the point where the whole "bitcoin-experience" is either

a) "legalized" or "regulated" and/or taken over by multinationals - for example any bitcoin exchange that has money-accounts for their customers is a bank in manners of european regulations - imho no bitcoin exchange alive today meets those regulation requirements. and those are strict, for example, you need to have 350.000 EUR reserves to get a license..
b) shut down legally
until then everything about it is speculation and thats the fun part

why should a) happen?
-<put all the pros concerning bitcoins here> - banks will get into business and that will most likely be the end of the game for individuals without millions of capital. because every business that grows and has potential sooner or later is taken over by big-cash.

why sould b) happen?
-because bitcoin is dangerous to the system (banks, states etc) - bitcoin is like havala on the internet, no western government likes this..
-because too many bitcoins are lost in time..wallet beeing deleted, forgotten etc etc
-bitcoin is cryptoanalyzed and its discovered beeing flawed..
etc etc

so for my part i enjoy the time it is what it is and maybe asics will be a 5$ usb-stick in two years, so why bother..