Inaba's request

[Keefe]

So let's put some figures together...

Let's a say a professional miner has $100K to invest in mining hardware and is in a good area where power costs only $0.06/kwh.

In the GPU era, with 23 TH network hashrate and 50 BTC block reward, he can buy about 190 GH of GPUs which will use about 63kW of power and earn about $21.5K per month, minus about $2700 for power, for 18.8% monthly ROI.

In the ASIC era, with 280 TH network hashrate and 25 BTC block reward, he can buy about 4600 GH of BFL ASICs which will use about 4.6kW of power and earn about $21.4K per month, minus about $200 for power, for 21.2% monthly ROI.

$200/mo for powering BFL ASICs is quite an improvement over $2700/mo for GPUs.

Now let's imagine a 54 GH bASIC were to use 405W (which I don't believe will be the case):
He can buy about 5100 GH of bASICs which will use about 38kW of power and earn about $23.7K per month, minus about $1600 for power, for 22.1% monthly ROI. Hey, we're ahead of BFL still! But putting that point aside, we would only be twice as power efficient as GPUs

Now let's try a more realistic scenario, where a 54 GH bASIC might use 120W (this is my personal wild guess):
He can buy about 5100 GH of bASICs which will use about 11kW of power and earn about $23.7K per month, minus about $480 for power, for 23.2% monthly ROI. Even better ROI. And now we've cut our power bill to 1/6 of GPUs, very nice.

DISCLAIMER: We really don't know yet how much power the bASICs will use. The wattage figures for bASIC above are purely hypothetical and probably wildly wrong.

[Keefe]

I think Cablepair has a legitimate worry of his ASIC product being unfairly associated with a made up power number.

I apologize for not making it more clear that the wattage figure was purely hypothetical and came from a competitor.

[Coinoisseur]

I think Cablepair has a legitimate worry of his ASIC product being unfairly associated with a made up power number.

I apologize for not making it more clear that the wattage figure was purely hypothetical and came from a competitor.

I think your latest post in regards to power and ROI is much more clear about it to the point where it would take a real idiot or shill to misinterpret. I swear though, I feel like I need to record any conversation I use conditional statements in. Some people have a real hard time processing them.

I have no pre-orders for any ASICs from any company, I just have some sympathy for someone dealing with FUD-like issues.

[Tinua]

Let's a say a professional miner has $100K to invest in mining hardware and is in a good area where power costs only $0.06/kwh.

and now please with $0.25/kwh 

[Keefe]

The guy with $0.25/kwh power can quit mining and let the professional miner in the right location make up the slack.

[Keefe]

Alright, one more scenario, more extreme:

Let's assume $12/BTC, $0.25/kwh power cost, and 1000 TH network hashrate after reward halving.

Hypothetical device that does 60 GH, costs $1300, and uses 60W:
$100K buys about 4600 GH of hardware which will use about 4.6kW of power and earn about $5980 per month, minus about $830 for power, for 5.15% monthly ROI.

Hypothetical device that does 54 GH, costs $1070, and uses 405W:
$100K buys about 5100 GH of hardware which will use about 38kW of power and earn about $6630 per month, minus about $6885 for power, for -0.26% monthly ROI. Uh oh.

Hypothetical device that does 54 GH, costs $1070, and uses 120W:
$100K buys about 5100 GH of hardware which will use about 11kW of power and earn about $6630 per month, minus about $2040 for power, for 4.59% monthly ROI.

But someone with $100K to invest, ought to find a better place to setup than where power costs $0.25/kwh.

And if ~5% monthly ROI were attractive to professional miners, why has mining been historically much more profitable than that, except when the exchange rate fell toward $2? I think 10-20% monthly ROI will continue for the next year or so at least. Though a price war among mining devices could really screw ROI up.

[Tinua]

Thanks for your time, Keefe! 
Your explanations speak for themselves! Specifically for the European market! 

[abracadabra]

Alright, one more scenario, more extreme:

Let's assume $12/BTC, $0.25/kwh power cost, and 1000 TH network hashrate after reward halving.

Hypothetical device that does 60 GH, costs $1300, and uses 60W:
$100K buys about 4600 GH of hardware which will use about 4.6kW of power and earn about $5980 per month, minus about $830 for power, for 5.15% monthly ROI.

Hypothetical device that does 54 GH, costs $1070, and uses 405W:
$100K buys about 5100 GH of hardware which will use about 38kW of power and earn about $6630 per month, minus about $6885 for power, for -0.26% monthly ROI. Uh oh.

Hypothetical device that does 54 GH, costs $1070, and uses 120W:
$100K buys about 5100 GH of hardware which will use about 11kW of power and earn about $6630 per month, minus about $2040 for power, for 4.59% monthly ROI.

But someone with $100K to invest, ought to find a better place to setup than where power costs $0.25/kwh.

And if ~5% monthly ROI were attractive to professional miners, why has mining been historically much more profitable than that, except when the exchange rate fell toward $2? I think 10-20% monthly ROI will continue for the next year or so at least. Though a price war among mining devices could really screw ROI up.

Red bold emphasis is mine.  

Q: Where in the "real world" will you find MONTHLY returns like that?
A: No where.

This is why I feel investing in bitcoin is a great investment, beyond all the other benefits that bitcoin will provide.

[michaelmclees]

Q: Where in the "real world" will you find MONTHLY returns like that?
A: No where.

This is why I feel investing in bitcoin is a great investment, beyond all the other benefits that bitcoin will provide.

People in the Bitcoin community are very short sighted when it comes to returns.  1% per day sounds reasonable...     5% per month sounds low?   

If we could get 5% per month, we'd all be rich very, very soon.

[nick0016]

Indeed, I would be very happy with 5% a month. My bank gives me less than 5% a year!

[Bitinvestor]

Indeed, I would be very happy with 5% a month. My bank gives me less than 5% a year!

Don't forget that this is not 5% a month perpetually -- it will diminish as the difficulty increases. How fast is anybody's guess.

[PuertoLibre]

Anyone have a top 10 links for Inaba's antics on various threads?

Direct links are appreciated! (there are so many to choose from!)

--------------------------------

I got this from BFL:

Hello ******,

I have followed and reviewed the link you sent.  Could you please point out where you see defamation and libel, as we are having trouble finding it in the post you linked to, but maybe we are just missing it.  Could you also provide a link to post(s) where it was stated (and laughed at) that someone encourages refunds if they are upset at verbal abuse?

Thank you for your time.

------------------------------

[abeaulieu]

Nice job running the numbers Keefe. This demonstrates the original point of contention that was based on ROI with GPU/FPGA/ASIC 's. Power consumption and power prices will likely play a significant roll in ASIC mining, and even more so as the difficulty rises (not surprisingly).

[DoomDumas]

Very interesting numbers Keefe, Thanks alot !

As I read, it seems more and more clear that the future of mining, in the long run, will mainly be about power cost.  I'd like to know if someone has made some research about solar powered mining rig...  As the solar is'nt a constant source of power, what are the odds ?

Here the power cost is arround 0.085 CAD/Kwh..  So, if I'll enjoy mining for few years again, at least I hope to !

Thanks again Keefe, and as almost everyone reading this thread, curious to see what the 3 known asic producer will have on the table at delivery

[cablepair]

Bill Clinton is making a lot of sense lately.



If you listen to any of his speeches the main theme is arithmetic.



Just remember...

1+1 will always equal 2 and don't let anyone convince you otherwise no matter how loud they yell.

[abeaulieu]

Bill Clinton is making a lot of sense lately.



If you listen to any of his speeches the main theme is arithmetic.



Just remember...

1+1 will always equal 2 and don't let anyone convince you otherwise no matter how loud they yell.

0x01 + 0x01 = 0x10

[beekeeper]

Bill Clinton is making a lot of sense lately.



If you listen to any of his speeches the main theme is arithmetic.



Just remember...

1+1 will always equal 2 and don't let anyone convince you otherwise no matter how loud they yell.

0x01 + 0x01 = 0x10

you mean 0b01 + 0b01 = 0b10. in hex 0x01 + 0x01 = 0x02..

[abeaulieu]

Bill Clinton is making a lot of sense lately.



If you listen to any of his speeches the main theme is arithmetic.



Just remember...

1+1 will always equal 2 and don't let anyone convince you otherwise no matter how loud they yell.

0x01 + 0x01 = 0x10

you mean 0b01 + 0b01 = 0b10. in hex 0x01 + 0x01 = 0x02..

Complete fail. I almost feel ashamed enough to edit it 

[jjiimm_64]

Bill Clinton is making a lot of sense lately.



If you listen to any of his speeches the main theme is arithmetic.



Just remember...

1+1 will always equal 2 and don't let anyone convince you otherwise no matter how loud they yell.

But that depends "on what is is"

http://www.youtube.com/watch?v=j4XT-l-_3y0

[beekeeper]

Bill Clinton is making a lot of sense lately.



If you listen to any of his speeches the main theme is arithmetic.



Just remember...

1+1 will always equal 2 and don't let anyone convince you otherwise no matter how loud they yell.

0x01 + 0x01 = 0x10

you mean 0b01 + 0b01 = 0b10. in hex 0x01 + 0x01 = 0x02..

Complete fail. I almost feel ashamed enough to edit it  

No worries man, standard C wont recognize 0b either..