Some 'cigarette packet calculations' on ASIC and 7200 BTC per day....

[salty]

I want to put out some rough ballpark figures to help me understand the division of mining rewards post ASIC:

Total mining payout per day: 7200 BTC

Total network hashrate (current): 22.168 Thash/s

Daily payout per
 Thash/s: ~325BTC
 Ghash/s: ~0.325BTC
( Mhash/s:  ~0.0003BTC)

It's commonly quoted that the hashrate will double when the first production of ASICs are all online giving total hashrate: ~44 Thash/s
And of course the mining payout will halve to 3600BTC

Daily payout per
 Thash/s: ~83BTC
 Ghash/s: ~0.083BTC

 So assuming double hashrate the Jalapeno would earn ~0.35BTC per day, and the bASIC, SC, Avalon, etc. would be in the average region of 4.5BTC a day.


Is this about right?

[Jack1Rip1BurnIt]

Yes, you are on the right track. Now see what happens if you then multiply that 44 x 5 to give you 10 times today's difficulty. Realistically that's where we are headed within 3 to 6 months after the reward halve. After that the difficulty will just keep getting higher and higher.

[Jutarul]

It's commonly quoted that the hashrate will double when the first production of ASICs are all online giving total hashrate: ~44 Thash/s

you have to consider the rate of increase too. doing reliable ROI calculations or profit calculation right now is near to impossible. The only thing you can do is to get a feeling for it.
Unfortunately we don't have full information about the supply capacities of the different ASIC competitors. So we don't know how fast the difficulty will rise.

[salty]

Yes, you are on the right track. Now see what happens if you then multiply that 44 x 5 to give you 10 times today's difficulty. Realistically that's where we are headed within 3 months after the reward halve. After that the difficulty will just keep getting higher and higher.

Total network hashrate (10x): 220 Thash/s, 3600BTC daily reward rate

Daily payout per
 Thash/s: ~16.4BTC
 Ghash/s: ~0.017BTC
Jalapeno:  ~0.068BTC
SC, Avalon, et. al. :  0.85BTC

So once the dust settles the Jalapeno doesn't really seem worth buying to me, it doesn't add anything of consequence to the network and earns about as much as going on one of the 'free bitcoin' sites?

[Jack1Rip1BurnIt]

Yes the jalapeno is more of a novelty item and I will probably sell mine as soon as I get it if someone will offer me enough (I'm definitely in the first shipment). Yes the rewards will be low with such a high difficulty but you have to remember that the electricity consumption difference is what is going to make this new era of mining so freaking interesting. The fact is most people will not even notice any difference in their utility bills whether or not they are running asics 24/7. Now this is assuming all of these performance specs are legit.

[Monkey1]

Agreed.  At present I make a loss if I mine on a GPU (I never made the jump to FPGA).  With ASIC, I should be able to get back in the game.  We also have no idea what will happen to the price of BTC going forward.  If it increases, the rewward can decrease and you are no worse off (if you mine and sell).

At the end of the day, we are all competing for the same number of BTC, its just a question of who gets the biggest share.

[Paladin69]

Don't forget that the block reward is halving to 25 in two months.  This means 3600 per day, not 7200.  This will most likely happen before anyone gets their ASIC.

[crazyates]

Don't forget that the block reward is halving to 25 in two months.  This means 3600 per day, not 7200.  This will most likely happen before anyone gets their ASIC.

He takes that into account at almost every post. Did you even look at his math?

[salty]

Yes the jalapeno is more of a novelty item and I will probably sell mine as soon as I get it if someone will offer me enough (I'm definitely in the first shipment). Yes the rewards will be low with such a high difficulty but you have to remember that the electricity consumption difference is what is going to make this new era of mining so freaking interesting. The fact is most people will not even notice any difference in their utility bills whether or not they are running asics 24/7. Now this is assuming all of these performance specs are legit.

It's a shame they're not a bit cheaper, they'd make a brilliant present for a geeky kid - run your own open source pocket money machine Maybe they'll be the right sort of price by next christmas once the hardware people have recouped their wafer design costs.

[CoinHoarder]

Yes, you are on the right track. Now see what happens if you then multiply that 44 x 5 to give you 10 times today's difficulty. Realistically that's where we are headed within 3 months after the reward halve. After that the difficulty will just keep getting higher and higher.

Total network hashrate (10x): 220 Thash/s, 3600BTC daily reward rate

Daily payout per
 Thash/s: ~16.4BTC
 Ghash/s: ~0.017BTC
Jalapeno:  ~0.068BTC
SC, Avalon, et. al. :  0.85BTC

So once the dust settles the Jalapeno doesn't really seem worth buying to me, it doesn't add anything of consequence to the network and earns about as much as going on one of the 'free bitcoin' sites?

I don't get why you grouped together all SCs/Avalons/Etc, when they all mine at different numbers of gH/s. Wouldn't they all produce different amounts of BTC per day in correlation to their speed or am I missing something?

[salty]

I don't get why you grouped together all SCs/Avalons/Etc, when they all mine at different numbers of gH/s. Wouldn't they all produce different amounts of BTC per day in correlation to their speed or am I missing something?

I've tried to round off to do a rough 'get the ballpark figure' type calculation. I just put them all at 50gh/s for simplicity's sake. It's the sort of thing I do on the back of a cigarette packet to see if it's worth even quoting for a job in my trade.

[CoinHoarder]

I don't get why you grouped together all SCs/Avalons/Etc, when they all mine at different numbers of gH/s. Wouldn't they all produce different amounts of BTC per day in correlation to their speed or am I missing something?

I've tried to round off to do a rough 'get the ballpark figure' type calculation. I just put them all at 50gh/s for simplicity's sake. It's the sort of thing I do on the back of a cigarette packet to see if it's worth even quoting for a job in my trade.

Ahhh I see. Thanks for the response, I agree with your numbers if the network speed increases 10x. Those numbers are indeed pretty dim. However, I do not think that it will be as bad as the numbers make it seem.

Based on what I've read, I assume like you there will be around a 10x increase in network speed by January. But, I am of the opinion that the BTC per USD exchange rate will increase in between now and then, making it a little more profitable than that.

I read something that someone (can't remember where) was saying here on the forums that with the looming block reward halving soon in December, the BTC/$ has to go up at least a little to make up for this. This makes a lot of sense to me and I hope it turns out to be true. Hopefully it will increase enough to make our ASIC investments more profitable than ~$10/day.

[salty]

I read something that someone (can't remember where) was saying here on the forums that with the looming block reward halving soon in December, the BTC/$ has to go up at least a little to make up for this. This makes a lot of sense to me and I hope it turns out to be true. Hopefully it will increase enough to make our ASIC investments more profitable than ~$10/day.

I think that's hopeful to be honest, if you look at it another way, all the people who have got big multi-GPU rigs and FPGA hardware are the people that are going to buy ASICs some time over the next 6 months. I only have ~850mh/s myself and get ~0.3BTC a day. The hardware to do this cost ~$650, so for my $650 I get ~$3 per day right this moment.

I suspect that if I buy an ASIC for ~$1200 in 6 months I will be rewarded with ~$6 per day. You may get an average of $10 per day in the first 3-4 months but I think it will drop to $6 a day once everyone who wants one has one. I think there is an equilibrium.

Of course this goldrush for the early adopter big money is going to attract new miners when people see crazy hashrates and pool payouts posted here in the first month or 2, so the price of BTC will have to go up if everyone gets their $6 a day. Another good thing is that ASIC will be the only way to mine realistically, and there will be a lot of people who have bought expensive single-purpose mining gear financially committed to keeping bitcoin afloat, and the only way they can do it is by not selling BTC on the exchanges below their personal profit threshold.

Interesting times indeedy

[CoinHoarder]

Yep. So many possible outcomes that my head is about to explode!

Reality is that nobody really knows and no one will know what will happen until these events unfold. So I suppose I'll stop worrying about it and just let it happen.

I've always been a gambling man. I love not knowing whether I'm going to make bank or break the bank. I'll just take it day by day and try to enjoy the ride along the way!

[dungdn19]

scams, you carefully

[VeeMiner]

It's commonly quoted that the hashrate will double when the first production of ASICs are all online giving total hashrate: ~44 Thash/s
And of course the mining payout will halve to 3600BTC

Nope... It will be more like 15-20x the current hashrate

[DeathAndTaxes]

Ahhh I see. Thanks for the response, I agree with your numbers if the network speed increases 10x. Those numbers are indeed pretty dim. However, I do not think that it will be as bad as the numbers make it seem.

Based on what I've read, I assume like you there will be around a 10x increase in network speed by January. But, I am of the opinion that the BTC per USD exchange rate will increase in between now and then, making it a little more profitable than that.

Counting on future price increases is kinda silly.  There is another way to profit from future price increases.  Simply own bitcoins. 

Still the point is that if network capacity can increased 10x at current prices future prices are unlikely to provide you much long term support.  Once NRE is paid for ASICs have massive per unit profits.  Those margins will eventually come in and that means much lower prices.  So say USD:BTC doubles! Sweet back into the big money.  Except BFL et all can simply cut their prices 50% in 2013 and sell another 400TH/s of mining gear (bringing hashing power to ~600TH/s) that causes difficulty to triple again to ~90 million.

Mining is a fixed sum game. Now in "GPU land" there was possibility for miners to "protect their margins.  Electricity was a larger portion of lifecycle cost and thus if you mined in a low electrical environment you could gain an advantage.  Efficiency (MH/J) also varied significantly depending on components and skill.  Anything from sub 1 MH/J all the way to up 5MH/J.   If you combine a highly efficient set of rigs with a low electrical cost environment you could really improve your relative standing.  Lastly running a major farm takes skill and dedication.  It isn't plug it in and throw a switch.  I only got up to 15GH/s and trust me it is a "hand on" operation.   Everything gets more complicated as you get bigger.  Electrical supply, cooling, replacement parts, networking, etc.  ASICs are essentially plug and play.  TL/DR summary:  there is less difference in relative efficiency of ASIC miners thus the race to the bottom in terms of yield is going to be accelerated.

Note I am not saying don't buy an ASIC, just think about all the ramifications.  Mining isn't a get rich operation and the days of 3000%+ APR aren't ever coming back.   In time I think most well run large mining ops will earn about 7% to 15% ROIC (thats annually ) which is inline with other commodity producers.

[salty]

It's commonly quoted that the hashrate will double when the first production of ASICs are all online giving total hashrate: ~44 Thash/s
And of course the mining payout will halve to 3600BTC

Nope... It will be more like 15-20x the current hashrate

We don't know for sure what it will be yet I think it's useful to see in black and white what the rewards are under these different hashrates.

Total network hashrate (20x current): 4400 Thash/s, 3600BTC daily reward rate

Daily payout per
 Thash/s: ~8BTC
 Ghash/s: ~0.009BTC
 Jalapeno:  ~0.034BTC
 SC, Avalon, et. al. :  0.42BTC

If we look at the scenario of profitability settling in the 5-10% ROI region in line with most other businesses, I still think that there will be a lot of 'casual' miners who decide to keep their 1st gen. ASIC, because hey, it's paid for and still generating coin. I think the 'casual' miners will drop off at the next hardware iteration and the business minded players will be largely the only ones buying future improved hardware.