Implications for Minirig SC owners?

[NLA]

I posed this question to #bitcoin, and they weren't very responsive, so here's a chatlog of my thoughts that I'd like to get some feedback on.

Code:

[16:35:02] <NLA> maybe I'm just not seeing it
[16:35:10] <NLA> but has anyone done some calculations
[16:35:20] <NLA> based on the BFL ASIC waiting thread
[16:35:30] <NLA> as to what the project difficulty will jump to
[16:35:39] <NLA> in October/November/December
[16:36:04] <NLA> and how that will affect how much that will affect the profitability of the different BFL ASIC
[16:36:49] <NLA> ie. at the current moment, the BFG of the bunch, the SC Minirig, estimated at 1500GH/s by BFL, would currently earn $180,000/month at current rates

[16:37:02] <NLA> obviously the difficulty is going to spike up when BFL starts delivering preorders
[16:37:21] <NLA> and likely small miners are going to be forced out due to the difficulty spike
[16:37:31] <NLA> but it seems like a lot of threads are ending there and focusing on the little guy

[16:38:06] <NLA> what I'm interested in is what happens to the big guys? does $180,000/month today become $30,000/month almost overnight? or $15,000? or $1,000?

[16:41:22] <NLA> Take for instance http://blockchain.info/charts/hash-rate and https://bitcointalk.org/index.php?topic=89685.0
[16:41:42] <NLA> if the current overall network hashing rate is estimated at 25TH/s
[16:41:57] <NLA> and based on the data from the wait list
[16:42:11] <NLA> which will likely not cover all the pre-orders made to BFL
[16:42:33] <NLA> of a total increase of 48.339TH/s when everyone receives their units and flips the switch on
[16:43:22] <NLA> thats almost a 3x increase in total hashing rate, and therefore a linear increase of 3x difficulty to accomodate the increased hashing rate

[16:43:50] <NLA> Consulting a simple profit calculator http://www.alloscomp.com/bitcoin/calculator
[16:44:31] <NLA> and multiplying the difficulty by 3x and plugging in 1500GH/s
[16:44:48] <NLA> results in an expected return of $59,924.51/month
[16:45:17] <NLA> which is significantly down from $180,000 but is still reasonable
[16:45:44] <NLA> but if everyone quits mining because the difficulty is so high
[16:45:56] <NLA> and lets pretend the exchange rate of bitcoin falls to $5/coin
[16:46:22] <NLA> that results in an expected return of $25,024.91/month

[16:47:40] <NLA> and I could what-if further along all day and make wild assumptions, but has anyone actually thought about the implications for the big guy, the guy that dropped $30K on a Minirig SC?

Thoughts, anyone? Am I overlooking some possibilities here? Is it possible for Minirig SC owners to net $180,000 for a month or two before, say, the block worth is cut in half, or the network collapses, or is it possible that almost upon arrival that Minirig SC owners will net $10,000 first month, $8,000 next, etc., and never earn back their initial investment?

[crazyates]

The BFL wait list thread has just under 50TH/s of orders. I think someone else around here claimed that Inaba (or BFL_Josh) said they were closing in on 90TH/s of preorders. The bASIC is closing in in 35TH/s of preorders. The Avalon preorders were around 18TH/s.

For my personal calculations, I'm assuming a 200TH/s network by the end of 2012, and then increasing by 20% per month after that. You can do the math to figure out the rest.

[NLA]

The BFL wait list thread has just under 50TH/s of orders. I think someone else around here claimed that Inaba (or BFL_Josh) said they were closing in on 90TH/s of preorders. The bASIC is closing in in 35TH/s of preorders. The Avalon preorders were around 18TH/s.

For my personal calculations, I'm assuming a 200TH/s network by the end of 2012, and then increasing by 20% per month after that. You can do the math to figure out the rest.

Well, if you're assuming a 200TH/s network by the end of 2012, what are you assuming the true overall networking hash rate is right now to correspond to current difficulty levels, so I can do some simple math and multiply the current difficulty to get expected profit by the end of 2012?

[crazyates]

The BFL wait list thread has just under 50TH/s of orders. I think someone else around here claimed that Inaba (or BFL_Josh) said they were closing in on 90TH/s of preorders. The bASIC is closing in in 35TH/s of preorders. The Avalon preorders were around 18TH/s.

For my personal calculations, I'm assuming a 200TH/s network by the end of 2012, and then increasing by 20% per month after that. You can do the math to figure out the rest.

Well, if you're assuming a 200TH/s network by the end of 2012, what are you assuming the true overall networking hash rate is right now to correspond to current difficulty levels, so I can do some simple math and multiply the current difficulty to get expected profit by the end of 2012?

What? You can't figure out an estimate for the current network hashrate? I'll give you a hint: http://bitcoin.sipa.be/

[Korbman]

The BFL wait list thread has just under 50TH/s of orders. I think someone else around here claimed that Inaba (or BFL_Josh) said they were closing in on 90TH/s of preorders. The bASIC is closing in in 35TH/s of preorders. The Avalon preorders were around 18TH/s.

For my personal calculations, I'm assuming a 200TH/s network by the end of 2012, and then increasing by 20% per month after that. You can do the math to figure out the rest.

Won't happen unless ASIC devices become extremely cheap, much faster, and the BTC/USD rate increases.

Otherwise, your assumption sets you at 1.7PH/s by  the end of 2013. Meaning that sexy Mini Rig a user just purchased for $30,000 would net an epic $870 per month after electricity costs.

[crazyates]

The BFL wait list thread has just under 50TH/s of orders. I think someone else around here claimed that Inaba (or BFL_Josh) said they were closing in on 90TH/s of preorders. The bASIC is closing in in 35TH/s of preorders. The Avalon preorders were around 18TH/s.

For my personal calculations, I'm assuming a 200TH/s network by the end of 2012, and then increasing by 20% per month after that. You can do the math to figure out the rest.

Won't happen unless ASIC devices become extremely cheap, much faster, and the BTC/USD rate increases.

Otherwise, your assumption sets you at 1.7PH/s by  the end of 2013. Meaning that sexy Mini Rig a user just purchased for $30,000 would net an epic $870 per month after electricity costs.

Sorry, I should clarify. I'm only estimating a 20% increase for the next 3-6 months. Past that, it's darn near impossible to even estimate what it will be like. My numbers will be off, but I'm trying to go high, so I don't oversell myself, and set myself up for disappointment.

[Korbman]

Sorry, I should clarify. I'm only estimating a 20% increase for the next 3-6 months. Past that, it's darn near impossible to even estimate what it will be like. My numbers will be off, but I'm trying to go high, so I don't oversell myself, and set myself up for disappointment.

Ah, that makes more sense. That said, I couldn't agree more...it's better to figure out how you'll do when the difficulty is really high. As long as the difficulty remains under your prediction, you'll be good to go.

[Shadow383]

I like how people assume that BFL will be first... bASIC is predicting last week of November... At the rate BFL's going they could be the second player to market.

[Gatorhex]

My first year calculations are...

Difficulty will become 10x (just add a zero to the end of the current difficulty)
Coin reward in December 2012 will half to 25 coins (effectively doubling difficulty)
So projected profits (after power costs @ 0.15c KW/h and 1 BTC=$12.53 and ignoring equipment cost) are...

Jalapeno (4,500MH/s@4.5W) = $0.91pd, $27.30pm, $332.15pa

Little Single (30,000MH/s@30W) = $6.08pd, $182.40pm, $2,219.20pa

Single SC (60,000MH/s@60W) = $12.16pd, $364.80pm, $4,438.40pa

Mini Rig SC (1,500,000MH/s@1500W) = $304.04pd, $9,121.20pm, $110,974.60pa

You can calculate it yourself here: http://bitcoinx.com/profit/index.php

[crazyates]

My first year calculations are...

Difficulty will become 10x (just add a zero to the end of the current difficulty)
Coin reward in December 2012 will half to 25 coins (effectively doubling difficulty)
So projected profits (after power costs @ 0.15c KW/h and 1 BTC=$12.53 and ignoring equipment cost) are...

Jalapeno (4,500MH/s@4.5W) = $0.91pd, $27.30pm, $332.15pa

Little Single (30,000MH/s@30W) = $6.08pd, $182.40pm, $2,219.20pa

Single SC (60,000MH/s@60W) = $12.16pd, $364.80pm, $4,438.40pa

Mini Rig SC (1,500,000MH/s@1500W) = $304.04pd, $9,121.20pm, $110,974.60pa

You can calculate it yourself here: http://bitcoinx.com/profit/index.php

You're calculating the difficulty when the ASICs hit and the reward drops. Noone's arguing that they won't be crazy profitable then. But what about if/when the network continues to grow?

[senseless]

I was thinking like 100TH/s total hash rate by DEC-JAN. But, the pre-orders just seem to keep rolling in for BFL. I myself placed a few more orders just to secure the return per month I'm looking for.

All you can really do with any sort of accuracy is speculate on total hash rate after the asics hit based on published order information. I think by Jan 2014 the network hash rate should be relatively stable with a relatively small amount of growth each difficulty increase. People may still continue buying asics after that point, but I think largely the hash rate at that point will be the hash rate until 2017.

If the difficulty goes to high I could see some smaller miners switching over to alt coin chains.

[crazyates]

I was thinking like 100TH/s total hash rate by DEC-JAN. But, the pre-orders just seem to keep rolling in for BFL. I myself placed a few more orders just to secure the return per month I'm looking for.

All you can really do with any sort of accuracy is speculate on total hash rate after the asics hit based on published order information. I think by Jan 2014 the network hash rate should be relatively stable with a relatively small amount of growth each difficulty increase. People may still continue buying asics after that point, but I think largely the hash rate at that point will be the hash rate until 2017.

If the difficulty goes to high I could see some smaller miners switching over to alt coin chains.

IIRC, BFL has ~100TH/s of confirmed pre-orders. Cablepair has ~30TH/s, and Avalon has another ~18TH/s.

[senseless]

I was thinking like 100TH/s total hash rate by DEC-JAN. But, the pre-orders just seem to keep rolling in for BFL. I myself placed a few more orders just to secure the return per month I'm looking for.

All you can really do with any sort of accuracy is speculate on total hash rate after the asics hit based on published order information. I think by Jan 2014 the network hash rate should be relatively stable with a relatively small amount of growth each difficulty increase. People may still continue buying asics after that point, but I think largely the hash rate at that point will be the hash rate until 2017.

If the difficulty goes to high I could see some smaller miners switching over to alt coin chains.

IIRC, BFL has ~100TH/s of confirmed pre-orders. Cablepair has ~30TH/s, and Avalon has another ~18TH/s.

Hence the But

It's looking now like 200TH/s easily. With BFL so back logged it wouldn't surprise me to see the other ASIC pick up more pre-orders.

[Gatorhex]

You're calculating the difficulty when the ASICs hit and the reward drops. Noone's arguing that they won't be crazy profitable then. But what about if/when the network continues to grow?

I took into account 10x difficulty and 0.5 reward (effectivly 20x increase in Hashing power)

It makes not much difference, the flow of new bitcoins is constant because the difficulty changes with network power, the only thing more hashing power buys you is a bigger share of the coins at the expense of someone with less hashing power. The Mini Rig SC will always be near the top of the pile in terms of reward.

[Shadow383]

I was thinking like 100TH/s total hash rate by DEC-JAN. But, the pre-orders just seem to keep rolling in for BFL. I myself placed a few more orders just to secure the return per month I'm looking for.

All you can really do with any sort of accuracy is speculate on total hash rate after the asics hit based on published order information. I think by Jan 2014 the network hash rate should be relatively stable with a relatively small amount of growth each difficulty increase. People may still continue buying asics after that point, but I think largely the hash rate at that point will be the hash rate until 2017.

If the difficulty goes to high I could see some smaller miners switching over to alt coin chains.

IIRC, BFL has ~100TH/s of confirmed pre-orders. Cablepair has ~30TH/s, and Avalon has another ~18TH/s.

Cablepair's gone up a bit - I heard 650 of the 54Gh/s units, which would put BTCFPGA on >35Th/s

[Sitarow]

I was thinking like 100TH/s total hash rate by DEC-JAN. But, the pre-orders just seem to keep rolling in for BFL. I myself placed a few more orders just to secure the return per month I'm looking for.

All you can really do with any sort of accuracy is speculate on total hash rate after the asics hit based on published order information. I think by Jan 2014 the network hash rate should be relatively stable with a relatively small amount of growth each difficulty increase. People may still continue buying asics after that point, but I think largely the hash rate at that point will be the hash rate until 2017.

If the difficulty goes to high I could see some smaller miners switching over to alt coin chains.

IIRC, BFL has ~100TH/s of confirmed pre-orders. Cablepair has ~30TH/s, and Avalon has another ~18TH/s.

Cablepair's gone up a bit - I heard 650 of the 54Gh/s units, which would put BTCFPGA on >35Th/s

I suspect hes over 700 of the 54Gh/s Units, atm.

[scrybe]

I was thinking like 100TH/s total hash rate by DEC-JAN. But, the pre-orders just seem to keep rolling in for BFL. I myself placed a few more orders just to secure the return per month I'm looking for.

All you can really do with any sort of accuracy is speculate on total hash rate after the asics hit based on published order information. I think by Jan 2014 the network hash rate should be relatively stable with a relatively small amount of growth each difficulty increase. People may still continue buying asics after that point, but I think largely the hash rate at that point will be the hash rate until 2017.

If the difficulty goes to high I could see some smaller miners switching over to alt coin chains.

IIRC, BFL has ~100TH/s of confirmed pre-orders. Cablepair has ~30TH/s, and Avalon has another ~18TH/s.

Cablepair's gone up a bit - I heard 650 of the 54Gh/s units, which would put BTCFPGA on >35Th/s

I suspect hes over 700 of the 54Gh/s Units, atm.

Tom has stated he has enough parts for 1000 units, but is closing pre-orders at 900 or tomorrow at Midnight. Right now he's in the 800 range. Of those <100 are 27Gh/s units.

It has also been revealed on his website (new one is going up tomorrow) that each 54Gh/s unit is running 2x6 90nm ASIC clusters, meaning each chip is 4.5Gh/s.

Sounds like a 12,000 part run, so 54TH/s from Tom would be a good worst case bet.

He's also not taking new orders until January, so you don't have to worry about him adding any more hash power until later in January at the earliest, more likely a new run that will take 30-45 days to complete. (Including the backlog from the Chinese New Year shutdown it could be longer)