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Author Topic: How do these large mining pools make money?  (Read 1478 times)
jasonjm
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January 17, 2016, 05:24:49 AM
 #1

What am I missing?

I have free access to data centers and free power as I already have lots of these paid for with real non bitcoin servers in them

But when I calculate breakeven on the best bitcoin mining equipment I can find my breakeven is more than a year even without the halvening factored in.

So how do these guys make money?




















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January 17, 2016, 06:12:28 AM
 #2

What am I missing?

I have free access to data centers and free power as I already have lots of these paid for with real non bitcoin servers in them

But when I calculate breakeven on the best bitcoin mining equipment I can find my breakeven is more than a year even without the halvening factored in.

So how do these guys make money?

pools or mining centers? Your post is asking 2 different things.

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January 17, 2016, 06:13:16 AM
 #3

What am I missing?

I have free access to data centers and free power as I already have lots of these paid for with real non bitcoin servers in them

But when I calculate breakeven on the best bitcoin mining equipment I can find my breakeven is more than a year even without the halvening factored in.

So how do these guys make money?

The top 2 customer pools I think by percentage are fish and antpool.  Fish is PPS at 96 if I remember right but gets some other mining with it.   Antpool you get no merged, or transaction fees but they do PPS at 2.5 percent.

So some such as those with PPS do make a killing since they are so big.   And having does not matter the pools will remain profitable just less profit as far as BTC, but value hopefully makes up for that in future.
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January 17, 2016, 06:16:05 AM
 #4

What am I missing?

I have free access to data centers and free power as I already have lots of these paid for with real non bitcoin servers in them

But when I calculate breakeven on the best bitcoin mining equipment I can find my breakeven is more than a year even without the halvening factored in.

So how do these guys make money?

pools or mining centers? Your post is asking 2 different things.

Good point I missed this.  Most regular data centers are actually set up for bitcoin miners they provide a lot more heat then your standard server.   So some true data centers do not want mining gear.  Normally its special data centers with specific cooling systems.

But you mention free?  Is it truly free if so how many watts do you have?   And have you checked if they allow miners?
jasonjm
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January 17, 2016, 07:01:21 PM
 #5

What am I missing?

I have free access to data centers and free power as I already have lots of these paid for with real non bitcoin servers in them

But when I calculate breakeven on the best bitcoin mining equipment I can find my breakeven is more than a year even without the halvening factored in.

So how do these guys make money?

pools or mining centers? Your post is asking 2 different things.

Good point I missed this.  Most regular data centers are actually set up for bitcoin miners they provide a lot more heat then your standard server.   So some true data centers do not want mining gear.  Normally its special data centers with specific cooling systems.

But you mention free?  Is it truly free if so how many watts do you have?   And have you checked if they allow miners?

Technically it's free because I already pay for multiple racks and they are not full

No idea if they ban miners

But all calculations show I will lose money unless bitcoin price increases. And even then buying bitcoin will outperform mining.

So how does anyone who buys mining gear make money these days?




















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January 18, 2016, 07:33:18 AM
 #6

What am I missing?

I have free access to data centers and free power as I already have lots of these paid for with real non bitcoin servers in them

But when I calculate breakeven on the best bitcoin mining equipment I can find my breakeven is more than a year even without the halvening factored in.

So how do these guys make money?

pools or mining centers? Your post is asking 2 different things.

Good point I missed this.  Most regular data centers are actually set up for bitcoin miners they provide a lot more heat then your standard server.   So some true data centers do not want mining gear.  Normally its special data centers with specific cooling systems.

But you mention free?  Is it truly free if so how many watts do you have?   And have you checked if they allow miners?

Technically it's free because I already pay for multiple racks and they are not full

No idea if they ban miners

But all calculations show I will lose money unless bitcoin price increases. And even then buying bitcoin will outperform mining.

So how does anyone who buys mining gear make money these days?

they have cheap electricity, and if you do not calculate roi, a s7 can make you money with 0.1 at present, so still plenty of room

yes roi is long, but you can not say that you're in negative each day, with a s7
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January 18, 2016, 07:40:33 AM
 #7


Unless you have good hardware that can generate lots of hash power enough to solve blocks else mining companies can still be the first to solve.   

So how does anyone who buys mining gear make money these days?

Maybe mining altcoins and trade them to bitcoin. Mining those newer altcoins can be much easy, some are even just using graphic cards for it.


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January 18, 2016, 08:06:44 AM
 #8

Technically it's free because I already pay for multiple racks and they are not full

No idea if they ban miners

But all calculations show I will lose money unless bitcoin price increases. And even then buying bitcoin will outperform mining.

So how does anyone who buys mining gear make money these days?
It is the most expensive and difficult way to turn cash into bitcoin but people are obsessed with the idea they are buying a money making machine - however the reality is the machine never makes you as much money as it costs you to buy it and mine with it so you need another strategy.

Buy hardware. Mine for 3 months. Sell hardware. HODL bitcoin on the gamble its value will rise.

Far more effective way to make money if you think the value of bitcoin will rise: Convert lots of cash into bitcoin. HODL.

Developer/maintainer for cgminer and ckpool/ckproxy.
ZERO FEE Pooled mining at ckpool.org, 1% Fee Solo mining at solo.ckpool.org
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January 18, 2016, 09:41:03 AM
 #9

ok so here are my calculations: assuming cost of electricity, real estate and labor all cost ZERO - and bitcoin price remains constant

both methods show big losses - so unless the chinese are getting these devices at 1/3 the price we have to buy them for, it makes no sense.

Average 2 week increase of bitcoin difficulty in last 48 adjustments of 2 week periods, is 6.1841667%

antminer s7 batch 9 is probably around $1200 at best possible price

so after 90 days:

Output Over 90 Days

Difficulty after 90 days: 171571712432.0.
BTC   USD
Revenue   1.54586823   589.04
Hardware Cost   3.14927567   1200.00
Power Cost   0.00005669   0.02
Profit   -1.60346412   -610.98


now assuming a block halving and mining for 365 days

Output Over 180 Days

Difficulty after 180 days: 244758616301.0.
BTC   USD
Revenue   2.60425378   992.32
Hardware Cost   3.14927567   1200.00
Power Cost   0.00011337   0.04
Profit   -0.54513526   -207.72

and then over the next 180 after block halves : Revenue   0.60896981   232.04


so after 1 year of mining with the halvening, i can count on $25 profit - by risking $1200?























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January 18, 2016, 09:48:01 AM
 #10

in fact the cost is more, I forgot the power supply at about $250 minimum





















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January 18, 2016, 09:32:24 PM
 #11

What am I missing?

I have free access to data centers and free power as I already have lots of these paid for with real non bitcoin servers in them

But when I calculate breakeven on the best bitcoin mining equipment I can find my breakeven is more than a year even without the halvening factored in.

So how do these guys make money?

They got a better deal by purchasing in bulk.
Having a lot of miners, will get you a better deal in kW pricing.

This is how they are making money.


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January 18, 2016, 09:53:54 PM
 #12

ok so here are my calculations: assuming cost of electricity, real estate and labor all cost ZERO - and bitcoin price remains constant

both methods show big losses - so unless the chinese are getting these devices at 1/3 the price we have to buy them for, it makes no sense.

Average 2 week increase of bitcoin difficulty in last 48 adjustments of 2 week periods, is 6.1841667%

antminer s7 batch 9 is probably around $1200 at best possible price

so after 90 days:

Output Over 90 Days

Difficulty after 90 days: 171571712432.0.
BTC   USD
Revenue   1.54586823   589.04
Hardware Cost   3.14927567   1200.00
Power Cost   0.00005669   0.02
Profit   -1.60346412   -610.98


now assuming a block halving and mining for 365 days

Output Over 180 Days

Difficulty after 180 days: 244758616301.0.
BTC   USD
Revenue   2.60425378   992.32
Hardware Cost   3.14927567   1200.00
Power Cost   0.00011337   0.04
Profit   -0.54513526   -207.72

and then over the next 180 after block halves : Revenue   0.60896981   232.04


so after 1 year of mining with the halvening, i can count on $25 profit - by risking $1200?





your error is using 48 weeks for your diff average .  it gives you 6%

you could go from Sept of 2014 until now  the average is different

you could go from Jan 2015 until now the average is different.

do 6%
do 5%
do 4%
do 3%
do 2%
do 1%      keep price at 400

any of the above could be true from now until  July1 and any of them could be wrong

BTW we had about 3.4% diff  for the year of 2015

I mine alt coins with https://simplemining.net...
I see BTC as the super highway and alt coins as taxis and trucks needed to move transactions.
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January 19, 2016, 12:29:51 AM
 #13

ok. I can go with that, 2015 difficulty increase as the guide, I will re-rerun





















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January 19, 2016, 12:36:58 AM
 #14

ok my calcs show difficulty increase of 3.6533% for 2015

Output Over 180 Days

Difficulty after 180 days: 174288878668.0.
BTC   USD
Revenue   3.11874045   1191.64
Hardware Cost   3.66405821   1400.00
Power Cost   0.00000000   0.00
Profit   -0.54531776   -208.36


BTC   USD
Revenue   2.02877427   775.17
Hardware Cost   3.66405821   1400.00
Power Cost   0.00000000   0.00

1191.64
775.17

so $2k for 1 year with halving


i guess ill call the datacenters and check if they mind mining equipment




















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January 19, 2016, 02:52:31 AM
 #15

ok so here are my calculations: assuming cost of electricity, real estate and labor all cost ZERO - and bitcoin price remains constant

both methods show big losses - so unless the chinese are getting these devices at 1/3 the price we have to buy them for, it makes no sense.

Average 2 week increase of bitcoin difficulty in last 48 adjustments of 2 week periods, is 6.1841667%

antminer s7 batch 9 is probably around $1200 at best possible price

so after 90 days:

Output Over 90 Days

Difficulty after 90 days: 171571712432.0.
BTC   USD
Revenue   1.54586823   589.04
Hardware Cost   3.14927567   1200.00
Power Cost   0.00005669   0.02
Profit   -1.60346412   -610.98


now assuming a block halving and mining for 365 days

Output Over 180 Days

Difficulty after 180 days: 244758616301.0.
BTC   USD
Revenue   2.60425378   992.32
Hardware Cost   3.14927567   1200.00
Power Cost   0.00011337   0.04
Profit   -0.54513526   -207.72

and then over the next 180 after block halves : Revenue   0.60896981   232.04


so after 1 year of mining with the halvening, i can count on $25 profit - by risking $1200?





your error is using 48 weeks for your diff average .  it gives you 6%

you could go from Sept of 2014 until now  the average is different

you could go from Jan 2015 until now the average is different.

do 6%
do 5%
do 4%
do 3%
do 2%
do 1%      keep price at 400

any of the above could be true from now until  July1 and any of them could be wrong

BTW we had about 3.4% diff  for the year of 2015

 Batch 9 is currenty: 918.07 USD .   Also a psu if Bitmain 140 and there shipping.   The PSU should still be good and you can use it with another miner or sell it if you actually are just mining 1 miner.

If truly free electricity you should ROI, when is the question.  The 3 month ROI just does not happen anymore that was long ago.  Only way now is if you mined for 3 months and then sell gear and got a profit from sale.

I would really check with data center though.  After they see the heat from miner most server farms would not want them in there I don't think.
QuintLeo
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January 19, 2016, 05:38:08 AM
 #16

1) The big mines aren't buying S7s right now, if they ever did.
2) Location, location, location where electric is VERY VERY cheap.
3) Discount cost on large purchaces of what they DO buy.



 Difficulty since the S7 was introduced has averaged pretty high - 8% or so I think but I've not actually calculated it. DEFINITELY more than 6% on average though.

 Also, the price will probably bump up quite a bit a month or two before the halfing, but it likely won't be bumping up from a $400 base.
 I DO believe the bump will exceeed $500 handily at it's peak though, then drift back down some after the halfing.


 Bitmain actually chose a fairly bad time to introduce the S7 (and Avalon an even worse time for the 6). They'd have done a lot better if they could have been introduced even 3 and preferably 6 months sooner, giving more time to achieve RoI before the halfing.

 I suspect the 28nm Full Custom generation is going to be short-lived and most will never achieve RoI due to a combination of factors.

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