Analysis of Realistic $ Earnings From Butterfly Labs Mining Hardware

[mobodick]

At each new technological step, the hash rate per dollar spent increased by an order of magnitude. FPGAs don't count as a technological leap, because they only incrementally improved the hash rate per dollar of TCO.

Once ASICs become common, I expect the difficulty growth to level off to a steady rate, until the next major technological leap which increases hash rate by 10x per dollar (or more). ASICs 2.0 will probably not be that leap.

I don't agree that you only call GPU and ASIC a technological step.
All new forms of mining are a technological step.

ASICs are the end station in IC design at the moment. Nothing faster than ASICs.
I think that now that we are on ASICS the growth will start alligning with the usual moore's curves of current tech.
Which means about 2x better every 2 years or so.
We will probably see some more spikes when the ASICs go to smaller processes but nothing shocking after that. Untill quantum computers destroy criytography, that is.

[KS]

+1

Everyone who's spending 2500+ USD on a mining rig will just hop onto the ASIC bandwagon and it will be business as usual for "serious" miners....I don't think it will take long either (ppl might take longer to switch if ASICs are delivered slowly but they will switch if they intent to stay profitable).

[Schrankwand]

I have compiled the following table showing the difficulty level extrapolated from present figures:

Date            Difficulty Level
---------------------------
17/04/2013    9,121,259.40
01/05/2013    10,842,874.22
14/05/2013    12,889,439.52
27/05/2013    15,322,288.88
09/06/2013    18,214,332.46
22/06/2013    21,652,242.00
05/07/2013    25,739,048.34
18/07/2013    30,597,229.13
31/07/2013    36,372,379.34
13/08/2013    43,237,574.67
26/08/2013    51,398,558.38
08/09/2013    61,099,907.29
21/09/2013    72,632,361.46
04/10/2013    86,341,537.41
17/10/2013    102,638,285.93
30/10/2013    122,011,004.83
12/11/2013    145,040,275.80
25/11/2013    172,416,263.88
08/12/2013    204,959,401.01
21/12/2013    243,644,973.60
03/01/2014    289,632,350.94
16/01/2014    344,299,730.35
29/01/2014    409,285,440.44
11/02/2014    486,537,040.22
24/02/2014    578,369,685.59
09/03/2014    687,535,512.33
22/03/2014    817,306,114.92
22/03/2014    971,570,593.08
22/03/2014    1,154,952,104.36
22/03/2014    1,372,946,415.71
22/03/2014    1,632,086,606.27
22/03/2014    1,940,138,857.49
22/03/2014    2,306,335,198.06
22/03/2014    2,741,650,178.95

You really think a difficulty of 2 Billion is realistic?  I don't see it going that high by then.  What what do i know.  The GPU thing made it spike for a while then it kinda leveld off and even went down for a second.  

Let me argue the case why these numbers are completely bonkers.

These numbers assume an 18% increase over the former month, steadily. This is an exponentially growing function.
Bitcoins are generated in a steady fashion, meaning that the network adjust the difficulty to keep the hashrate in line with the time Blocks are mined.

So, that means that if you are mining with 1% of the network and then later, 0.5% of the network, the difficulty will have to rise accordingly to reward you with the now fitting portion of the network rewards, not counting transaction fees.

That means that if you were mining 36BTC at 1% of the network, it would mean you are at 18BTC at 0.5% of the network, per day.

Now, this leads us to the coming table. The table that will consider that if we assume difficulty increases like that, it will correlate largely with the hashrate. The following table assumes an absolutey 100% linear correlation in hash rate and difficulty, which we will find, is the theoretical ideal, just never met because of variance of people starting and stopping their devices. I have used the number from above, because the talks of "Difficulty is 1 billion, get out of Bitcoin" people tended to annoy me.



If you think, people will invest a whopping 1.2 billion dollars in mining equipment and get that started by 2014, by my guest.
If you think all the ASIC companies together will manufacture to the order of 500.000 50gh miners and get them sold, be my guest.
If you think that this is absolutely bonkers, like me, lets assume something more reasonable.

You can take the amount of money invested and pick one of the numbers that feels "right" for you. See how much money is flowing in bitcoin land and in miners' land.

[cdog]

^ Good post, interesting. But what about newer ASICs which are faster, cheaper, and more efficient in terms of mh/joule?

[Schrankwand]

^ Good post, interesting. But what about newer ASICs which are faster, cheaper, and more efficient in terms of mh/joule?

Not factored in of course. However not designed yet and I doubt delivered before February.

[KS]

BFL won't ship 10.000 50GH/s ASICs and Avalon have shipped between 300 and 600 65GH/s ASICs.

Assuming BFL did ship 10K ASICs, that would still put us only in the 60-70 million range, according to the "Ripple table".

[Schrankwand]

BFL won't ship 10.000 50GH/s ASICs and Avalon have shipped between 300 and 600 65GH/s ASICs.

Assuming BFL did ship 10K ASICs, that would still put us only in the 60-70 million range, according to the "Ripple table".

Good. At 64 million according to that table, I make 0.008BTC a day per GH. A 50gh miner therefore makes 0,4BTC in 24 hours, making me 12 BTC a month, meaning it goes break even in... 2 months.

Come on guy, what the heck are you complaining about?

Of course, being first to market would be more awesome, making 70BTC right now, breaking even in 14 days. I get that. But come one... 2 months 100% ROI. I rest my case here... and I believe in 30-40 million actually, not necessarily 60.

[GodfatherBond]

Let me argue the case why these numbers are completely bonkers.

These numbers assume an 18% increase over the former month, steadily. This is an exponentially growing function.
Bitcoins are generated in a steady fashion, meaning that the network adjust the difficulty to keep the hashrate in line with the time Blocks are mined.

So, that means that if you are mining with 1% of the network and then later, 0.5% of the network, the difficulty will have to rise accordingly to reward you with the now fitting portion of the network rewards, not counting transaction fees.

That means that if you were mining 36BTC at 1% of the network, it would mean you are at 18BTC at 0.5% of the network, per day.

Now, this leads us to the coming table. The table that will consider that if we assume difficulty increases like that, it will correlate largely with the hashrate. The following table assumes an absolutey 100% linear correlation in hash rate and difficulty, which we will find, is the theoretical ideal, just never met because of variance of people starting and stopping their devices. I have used the number from above, because the talks of "Difficulty is 1 billion, get out of Bitcoin" people tended to annoy me.



If you think, people will invest a whopping 1.2 billion dollars in mining equipment and get that started by 2014, by my guest.
If you think all the ASIC companies together will manufacture to the order of 500.000 50gh miners and get them sold, be my guest.
If you think that this is absolutely bonkers, like me, lets assume something more reasonable.

You can take the amount of money invested and pick one of the numbers that feels "right" for you. See how much money is flowing in bitcoin land and in miners' land.

Great table, creates some useful perspective.

[dwyer17]

You really think a difficulty of 2 Billion is realistic?  I don't see it going that high by then.  What what do i know.  The GPU thing made it spike for a while then it kinda leveld off and even went down for a second. 

And now it is 40,300,030,328

omg.