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Author Topic: Trying to calculate profitability - weird outcome  (Read 5419 times)
StopLossLOL
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June 05, 2011, 05:17:24 PM
 #1

Hey guys.

I'm currently thinking about whether or not i should get into the mining game.

Read this forum for several hours and put every information i got into an excel sheet.

outcome: with difficulty increasing 37% every 2 weeks (source: http://forum.bitcoin.org/?topic=5826.0), i would make 300 dollars profit (hardware-costs included) after 10 weeks.

is there something wrong with my calculations?

http://localhostr.com/files/AxHBTJL/capture.png

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StopLossLOL
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June 05, 2011, 05:24:05 PM
 #2

The only thing you don't factor in is the BTC price itself.

what do you mean? I calculated with 17.4 usd/btc.
nobody can tell if the rate goes up or down - so the expected rate has to be the current, or am i wrong?

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June 05, 2011, 05:28:03 PM
 #3

IMO 37% increases are a pretty modest estimation but that's just me.
In my similar calculations I like to pessimistically evaluate difficulty raising at 70% or more every time as time passes. Hoping to be wrong of course, though.

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June 05, 2011, 05:30:27 PM
 #4

what will be your hash rate?
what gpu are you buying?

Mine only when pc is IDLE totally indivisible...
http://forum.bitcoin.org/index.php?topic=9851.0
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wareen
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June 05, 2011, 05:30:58 PM
 #5

with difficulty increasing 37% every 2 weeks
Did you consider that if hashrate grows at 37% every time, the difficulty adjustments happen every ~10 days instead of 2 weeks?
Most often people overlook that difficulty is adjusted every 2016 blocks not every 2 weeks. The 2 weeks would only hold if the hashrate stayed the same.
xenon481
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June 05, 2011, 05:31:21 PM
 #6

2 weeks is too long for a 37% difficulty rise. At 37% increase, the time between difficulty changes should be ~10 days, not 14.

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MiningBuddy
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June 05, 2011, 05:32:20 PM
 #7

Your numbers look good, I just wish others would do the same as you have done.
Everyone is running around with blinkers on thinking they will become millionaires.

OP, I have respect for you  Cool

StopLossLOL
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June 05, 2011, 05:36:22 PM
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what will be your hash rate?
what gpu are you buying?

since its impossible to get 6990s here in germany (all out of stock), i calculated with 3 5850s, which have 330.000 kHash/s, according to https://en.bitcoin.it/wiki/Mining_hardware_comparison.

combined hashrate would be 1.000.000 kHash/s. (as you can also see in the top-left of the excel sheet)


PS: using 2x6990 instead of 3x5850 wouldn't change the outcome too much.

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KJaneway
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June 05, 2011, 05:37:36 PM
 #9

One small error is included in your Sheet: The difficulty will not wait for another 2 weeks, but will increase tomorrow.

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jme621
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June 05, 2011, 05:39:15 PM
 #10

Your chart is wrong, in the aspect you dont have your equipment yet. Difficulty will go up tomorrow according to bitcoincharts estimation, so your first two entrys at current difficulty will skew all your data.

EDIT: seems me and kj think alike lol

Findeton
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June 05, 2011, 05:39:32 PM
 #11

Your numbers look good, I just wish every other retarded person would pull their head out of their ass and do the same as you have done.
Everyone is running around with blinkers on thinking they will become millionaires.

OP, I have respect for you  Cool

You should correlate price and difficulty. If difficulty rises, it's because price rised before that. Otherwise people will stop mining and difficulty will go down.

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StopLossLOL
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June 05, 2011, 05:46:44 PM
 #12

ok, i updated my spreadsheet based on your suggestions.

i will need a few days to order my hardware and difficulty will increase tomorow. i also changed the 14day intervals to 10 days.

looks worse and worse...

http://localhostr.com/files/SBkqRo6/capture.png

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jme621
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June 05, 2011, 05:52:17 PM
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well this weeks will be better than your forecast, as of right now, they only predicting a 26% difficulty increase, dont see that going up to 37.5 in a day, so you will make a little more this week than what your sheet is saying

StopLossLOL
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June 05, 2011, 05:56:30 PM
 #14

well this weeks will be better than your forecast, as of right now, they only predicting a 26% difficulty increase, dont see that going up to 37.5 in a day, so you will make a little more this week than what your sheet is saying

maybe possible. but i am not even close to any profit (after buying hardware) in this spreadsheet. and i didnt even include my working time.

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June 05, 2011, 05:57:39 PM
 #15

let's get serious about your problems.

First, you pay way too much electricity.

Second, you project too much into the future. I think the gear wil pay off very well - prices HAVE to rise, but not necesarily in your timeframe. Who cares - pay for electricity, let it run.

Third, if you want torun this as a business, then calculate as a business. You get full investment back - according to your calculation - AND a 60% return on investment within 10 weeks.

Seriously, this is a REALLY HIGH return for investment, only topped by some really great traders. Things move now from fun area to business area.

For example, I am right now duming some money into mining. Will likely get online with 20 servers the next 3 months - each with 2.3 gigahash around.

I would love a full return (investment, 100% profit) after 12 months, then I am happy. I plan for a lot more. I am fully prepared to run this for some time and have no problem running the whole set for a year or two - the power costs are NOT my concern - I know I am cheaper than most people (not the large centers, but cheaper than for example... some miner somewhere in germany at home, who for example pays about 20% sales tax that I get back) and I am very happy if the mined coins then.... appreciate in value. I am prepared to say I will sell them around 100 USD upward. Yes, CAN take 2-3 years. Guess what - the funds I use here are from one of my strategic investment pools, the mid risk area and I think the profit potential on a 3-4 year timeframe is significant Wink Comebined mining + speciulation, and I am happily moving the bitcoins I mine over from my strategic ivestment to my trading pools once the mining is profitable Wink

Seriously, if I get back 100% of the investment on top of the costs within 12-18 months that is a seriously nice investment. I think this is conservative.
wareen
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June 05, 2011, 05:59:16 PM
 #16

I took the liberty and entered your values in my own spreadsheet - the result was that if you start tomorrow you are probably going to make close to 50 BTC before mining will be unprofitable due to electricity costs.
Including the cost for electricity you have probably just earned enough to pay for your hardware by then. Again: that is if you can start mining tomorrow!

So your only option to really make money out of this would be to hope for rising BTC value in which case you would probably be better off just buying BTC instead (as would have everybody else who invested in mining equipment during the last 2 months).

Do you by any chance have some spare computer around which you could use by just adding a decent graphics card? In this case you could buy just the GPU and put the rest of the money you were prepared to spend into BTC directly. This would obviously be most profitable option for you.

Anyway, I welcome you to the community and wish you all the best!
StopLossLOL
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June 05, 2011, 06:01:40 PM
 #17

Third, if you want torun this as a business, then calculate as a business. You get full investment back - according to your calculation - AND a 60% return on investment within 10 weeks.
no, i'll never get to any profit based on the updated spreadsheet. the profit on the right is the profit without hardware-costs. after 10 weeks i'm at -400 dollars (-40%). not a great investment at all. (at least for me with high energy costs in germany)

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Sukrim
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June 05, 2011, 06:05:28 PM
 #18

If you buy BTC:
56,21 BTC at current rates (give or take a bit)

Just sum up your generated coins... It will be less. The question is: Are the fewer coins worth more or less than your hardware is worth after a certain point of time or not?


Also currently 100 MH/s are worth a whopping ~4USD/day! Please expect this value to go down a LOT over time... You are calculating with extremely mining friendly staring numbers here.

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broker11
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June 05, 2011, 06:10:45 PM
 #19

You also have to factor in the hours spent researching, purchasing, setting up and then monitoring the mining rig.

Sukrim
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June 05, 2011, 06:14:02 PM
 #20

Ah yes, and downtime/stale shares.

If you mine, you are dependent on: 100% internet uptime, no electricity problems, no problems with the mining pool(s) you are using, 0 hardware/software/OS errors, no problems with cooling and the "woman factor" ("That computer in the living room is too loud, honey!")

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