ASIC Hashrate vs. Scrypt Prices (LTC)

[fran2k]

Before this last months people used to move their GPU mining between coins based on their profitability using pages like coinchoose.com or other sources.

Now with BTC difficulty almost at 20M there are no more GPU miners in sha256 coins and since you cannot mine Scrypt with ASICs I think we cannot compare anymore the profitability of scrypt and sha256 coins based on the hashpower.

I think that the great loss of value of LTC this weeks was due to this. Dif. of BTC went up two weeks ago, then all Scrypt profitability went up, and as the volume of BTC is the bigger the adjustment was made in the LTC prices, that went down.

My feeling is that LTC and other Scrypt coins are going down until we figure out that 1ghps of ASICs (a few bucks) and 1mhps of GPUs (around 500 USD) isn't the same by far.

Thoughts on this?

[anderl]

if you bought an ASIC for $2000 the minute it ships you start mining.  You are $2000 in debt, so it is natural to sell some BTC to get that $2000 back.  When you sell off BTC so much that BTC/LTC starts to go up it is more profitable to exchange BTC for LTC and then sell LTC.  Also since there are a lot of GPU miners that woudl rather have BTC than LTC they will mine LTC and then exchange LTC for BTC.

These dynamics put selling pressure on both BTC and LTC and will last for as long as the network hash rate continues to climb on BTC.  Once ASIC profit margins tighten its going to be tight for GPU miners in the LTC mining market.

[GSnak]

Actually adjusted for stales BTC is the most profitable coin to mine right now, ASICs or GPUs. I'm not counting megacoin.

 
Megacoin   106.67%
Bitcoin   100.00%
Novacoin   99.14%   
PPCoin   95.65%
Feathercoin   93.25%
BitBar      90.27%

Right now a $2000 investment in BTC mining generates a whopping $180 per month with Block Erupters or $123 with GPUs. Expect this to fall drastically momentarily.

Bitcoin Difficulty

15,605,633
Next difficulty (estimate): 19,302,748

In short order mining will become an exercise of punching the gas on gravel, if it's not already.

[anderl]

3-5 year ROI is a sweet spot in business so it can go a little further.  but miners will soon have to accept the loss of their investment and mine BTC strictly for the profit margin.  they won't be able to add much new hardware to the network so at this point BTC may continue to fall or difficulty will continue to rise to shrink that margin.  $180/m on a $2000 investment is a very good deal.  You are talking a 9% monthly return?  Better than any bond, theoretically.

But as stated that is only going to last for a few more hours as the next difficulty spike with destroy that margin.  All undelivered ASICs will be a loss to the buyers, BFL, AVALON and other manufacturers that are out there are going to see orders dry up as too many ASICs came out too fast. 

This will result in a lot of ASIC owners dropping out in short order.  If I was one I would be putting that ASIC up on ebay very quickly or hope that BTC price appreciates soon.  But selling BTC to break even on an ASIC or maintain the power consumption is going to put pressure on BTC for a while.

This will have an indirect impact on alts as alts are pegged to BTC.  If Cryptsy or other exchanges open the doors for fiat exchange of alts, this will pave the way for decoupling alts from BTC and make for a more profitable future for them.