Bitcoin Forum
October 17, 2017, 03:20:56 PM *
News: Latest stable version of Bitcoin Core: 0.15.0.1  [Torrent]. (New!)
 
   Home   Help Search Donate Login Register  
Pages: [1] 2 »  All
  Print  
Author Topic: When bitcoins half with asics near december?  (Read 1506 times)
kgonepostl
Full Member
***
Offline Offline

Activity: 124



View Profile
October 22, 2012, 02:01:32 AM
 #1

I hear all this about a gold rush until they half in the estimated time of december. Now listen. I got an asic on pre-order that's going to do 40 gh/s. Even after the halfing I still see me going from 38 dollars a day to 19.5 dollars a day profitable. I mean wtf. So what. Profits are cut in half. It's still profit. What am I missing?!
1508253656
Hero Member
*
Offline Offline

Posts: 1508253656

View Profile Personal Message (Offline)

Ignore
1508253656
Reply with quote  #2

1508253656
Report to moderator
1508253656
Hero Member
*
Offline Offline

Posts: 1508253656

View Profile Personal Message (Offline)

Ignore
1508253656
Reply with quote  #2

1508253656
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1508253656
Hero Member
*
Offline Offline

Posts: 1508253656

View Profile Personal Message (Offline)

Ignore
1508253656
Reply with quote  #2

1508253656
Report to moderator
1508253656
Hero Member
*
Offline Offline

Posts: 1508253656

View Profile Personal Message (Offline)

Ignore
1508253656
Reply with quote  #2

1508253656
Report to moderator
DeathAndTaxes
Donator
Legendary
*
Offline Offline

Activity: 1218


Gerald Davis


View Profile
October 22, 2012, 02:05:26 AM
 #2

When everyone gets their ASICS you 40GH/s will be more like 2 GH/s now. 
kgonepostl
Full Member
***
Offline Offline

Activity: 124



View Profile
October 22, 2012, 03:51:47 AM
 #3

still, that's pretty good considering that my gpu rig was making decent bitcoins and that was only 2.7 gh/s Smiley
Still not scared. Please! Somebody scare me!
Stephen Gornick
Legendary
*
Offline Offline

Activity: 2282



View Profile
October 22, 2012, 05:29:02 AM
 #4

Profits are cut in half. It's still profit. What am I missing?!

What you are missing is the difference between the concept referred to as "revenue" and the concept referred to as "profit".

Revenues are cut in half.  You might be making "good profit" at a BTC/USD $12 when there are 50 BTC per block, but you might be losing your ass at $12 when there are then only 25 BTC per block.

With GPUs, it nearly entirely depends on what your cost of electricity is.  If it is low, like $0.07 per kWh or lower, you will likely still be able to mine profitably with GPU even after the block reward drop, but the wildcard is when the ASICs start shipping.

So most of the "be afraid, be very afraid" talk (which I espouse myself) is directed to those mining with GPUs who are continuing to add GPU hashing capacity at this late stage in the game.

The problem with the ASICs is nobody knows how many of the things have been ordered, how man will ship initially and from which manufacturers.

I got an asic on pre-order that's going to do 40 gh/s.

By the way, you got a free upgrade, 60 gh/s now.
 - http://www.butterflylabs.com/order-form-bitforce-sc-single/


Also, what you are missing is the concept of opportunity cost.

If you were one of the first to order a BFL SC Single back in June you then plunked down 162 BTC for a BFL SC Single  (at BTC/USD of around $8) then you don't technically break even on the investment until it has mined 162 BTC plus the cost of electricity (though this is minimal for BFL SC ASICs), plus the cost of capital (if you put that $1,299 in a bank you would have received interest on it so this investment has at least that expense), plus your time, etc.

Now let's say ASICMINER happens to go live first, and difficulty skyrockets by the time you get your BFL SC.  You'll probably wish that you still had that 162 BTC because getting to breakeven, could end up being more than a year or more away!  That's opportunity cost.  You lost the opportunity to hold 162 BTC yet today, and instead you have a claim check for a piece of hardware which is promised to yield 60 Ghash/s.

Or the bet might pay off and you are among the first to get the SC delivered and it ends up being the most profitable investment you've ever made.

The thing is, it is pure speculation at this point either way.  Nobody knows how it is going to play out.  What is known is that it is now near the end of October (the original shipping estimate provided by BFL) and ASICs don't yet exist for Bitcoin mining (from any manufacturer) as far as anyone can tell.

jackdavis1983
Newbie
*
Offline Offline

Activity: 14


View Profile
October 22, 2012, 06:12:35 AM
 #5

reward halving and also difficulty increasing will make 40gh/s feel like 2gh/s but on the flip side BTC may reach $20 each
HotSwap
Hero Member
*****
Offline Offline

Activity: 812


COINMIXER.NET


View Profile
October 22, 2012, 10:02:30 AM
 #6

At this moment I have a ore-order with basic and bfl so let's hope they deliver at the same time!

High Volume, Secure Bitcoin Mixer: https://CoinMixer.net
b!z
Legendary
*
Offline Offline

Activity: 1568



View Profile
October 22, 2012, 10:06:54 AM
 #7

At this moment I have a ore-order with basic and bfl so let's hope they deliver at the same time!

I hope so too. Good luck mining.
kgonepostl
Full Member
***
Offline Offline

Activity: 124



View Profile
October 22, 2012, 03:51:06 PM
 #8

I pre-ordered only a couple months ago. I'm praying that I'm the 33% that gets the random shipment. I tried to bribe the office lady 50 bucks but she had ethics. Bleh!! :-P
kgonepostl
Full Member
***
Offline Offline

Activity: 124



View Profile
October 23, 2012, 01:15:22 AM
 #9

Price increase sounds like a good thing  Wink
HotSwap
Hero Member
*****
Offline Offline

Activity: 812


COINMIXER.NET


View Profile
November 05, 2012, 04:21:26 AM
 #10

Price increase sounds like a good thing  Wink

Agreed! come on $30 BTC

High Volume, Secure Bitcoin Mixer: https://CoinMixer.net
Fjordbit
Hero Member
*****
Offline Offline

Activity: 588

firstbits.com/1kznfw


View Profile WWW
November 06, 2012, 03:45:47 PM
 #11

still, that's pretty good considering that my gpu rig was making decent bitcoins and that was only 2.7 gh/s Smiley
Still not scared. Please! Somebody scare me!

Here's the scary thing: ASICMINER is a company with ASIC IP that is planning to use it for mining. They can crank out as many ASICs as they want for dollars per chip. They can use this to increase difficulty to tens of billions and probably still make a profit. They will also likely own more than 51% of the network.

Edit: The only thing that seems to be holding this back is Nefario's closing of GLBSE and him holding onto the funds raised.
xx78213
Jr. Member
*
Offline Offline

Activity: 41


View Profile
November 06, 2012, 03:48:40 PM
 #12

I will at least wait until the price of the asics go down. I can't see how it's possible that they cost anywhere near that to produce.
MrTeal
Legendary
*
Offline Offline

Activity: 1274


View Profile
November 06, 2012, 04:08:37 PM
 #13

still, that's pretty good considering that my gpu rig was making decent bitcoins and that was only 2.7 gh/s Smiley
Still not scared. Please! Somebody scare me!

Here's the scary thing: ASICMINER is a company with ASIC IP that is planning to use it for mining. They can crank out as many ASICs as they want for dollars per chip. They can use this to increase difficulty to tens of billions and probably still make a profit. They will also likely own more than 51% of the network.
No they can't, for several reasons. First, even if the chips themselves are free there are other costs. They need to pay for the PCB and it's components, power supplies, enclosures, etc. The cost for those components is not insignificant. They are on a 130nm node, and will not be power competitive with BFL (or bASIC). With $0.1/kWh electricity and current BTC prices ($10.67), they would be running at a loss at a difficulty of 600M. That's probably a best case though, since their installation would probably have to be in a large data center and they would have hosting and cooling costs as well.

Even if they could produce 1TH/s for $5000, with $0.10/kWh electricity/cooling cost and 4000W power draw the difficulty for a 1 year break even would be a constant difficulty of 230M.
xx78213
Jr. Member
*
Offline Offline

Activity: 41


View Profile
November 06, 2012, 06:39:36 PM
 #14

I think anyone buying a $30k ASIC will be disappointed. Difficulty is gonna go crazy high.
Fjordbit
Hero Member
*****
Offline Offline

Activity: 588

firstbits.com/1kznfw


View Profile WWW
November 07, 2012, 04:23:07 AM
 #15

Even if they could produce 1TH/s for $5000, with $0.10/kWh electricity/cooling cost and 4000W power draw the difficulty for a 1 year break even would be a constant difficulty of 230M.

I just plugged those figures with a $10.70 price into my profitability spreadsheet and it gives a 4.42 ROI. At the same difficulty, etc, the BFL Single SC is at 16.32 months, assuming 80W at the wall.

They would be at a 12 month ROI at 462M difficulty. BFL is at 35 month there.
MrTeal
Legendary
*
Offline Offline

Activity: 1274


View Profile
November 07, 2012, 04:44:51 AM
 #16

Even if they could produce 1TH/s for $5000, with $0.10/kWh electricity/cooling cost and 4000W power draw the difficulty for a 1 year break even would be a constant difficulty of 230M.

I just plugged those figures with a $10.70 price into my profitability spreadsheet and it gives a 4.42 ROI. At the same difficulty, etc, the BFL Single SC is at 16.32 months, assuming 80W at the wall.

They would be at a 12 month ROI at 462M difficulty. BFL is at 35 month there.
Are you sure you're not using 50BTC/block?
Fjordbit
Hero Member
*****
Offline Offline

Activity: 588

firstbits.com/1kznfw


View Profile WWW
November 07, 2012, 05:55:16 AM
 #17

Are you sure you're not using 50BTC/block?

Oops, you're right. I changed that in the wrong spot. That gives an ROI of 11.91 months. BFL is at 35.22 months there.

This just shows that it's still a problem. They have every motivation to push the network to 230M (1.6 THps).

cabin
Sr. Member
****
Offline Offline

Activity: 311


View Profile
November 07, 2012, 03:24:31 PM
 #18

The capital cost is huge, but the marginal cost shouldn't be too bad. I agree they will probably come down in price, but by then their advantage might be all eaten up since lots of people will have them. It will be an interesting 6 months!

I will at least wait until the price of the asics go down. I can't see how it's possible that they cost anywhere near that to produce.
MrTeal
Legendary
*
Offline Offline

Activity: 1274


View Profile
November 07, 2012, 05:14:14 PM
 #19

Are you sure you're not using 50BTC/block?

Oops, you're right. I changed that in the wrong spot. That gives an ROI of 11.91 months. BFL is at 35.22 months there.

This just shows that it's still a problem. They have every motivation to push the network to 230M (1.6 THps).



That's only true in my very optimistic scenario. Friedcat has said their cost of electricity is US$0.10/kWh, but that is not the only expense. There would be other hosting costs, including not insignificant cooling costs. They've quoted 4.2GH/J, so 1TH/s would be expected to pull 4200W. If they were to add 1PH/s to the network (adding 140M diff) they would be drawing 4.2MW of power. That is not something you can run in some standard office space. Hell, that would be half the power used by the new Titan Supercomputer at full load. Total cost to run is probably closer to twice what I estimated. Second, $5000/TH/s is probably pretty optimistic when you're talking about building out that kind of infrastructure.
greyhawk
Hero Member
*****
Offline Offline

Activity: 924


View Profile
November 07, 2012, 05:21:36 PM
 #20

Well maybe they have a side business selling fried cats, because goddamn that room is going to get warm.
Pages: [1] 2 »  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!