Are ASIC's worth the investment?

[wdmw]

I believe the last estimate was ~18000 BFL ASIC's ordered.  To put it into perspective, that's 0.00026% of the population.

[Kullar]

If you consider the sheer number of ASICs reportedly in queue the difficulty rise will be large enough to diminish returns to the point of never achieving return on investment.  Say you currently mine 25GH which is about 1/1000th of the total.  That probably costs about 20K in GPUs and boards.

Now to have 1/1000th of the hash after ASIC stabilizes you would probably need to spend well over $20k.

Unless you got in very early on the ASIC batches you're probably screwed as people will keep tossing money at it in hopes of getting rich.

I think the only ones who will see guaranteed profits from ASIC are the manufacturers (like a gun dealer arming both sides).

This is the sort of thing I'm worried about. But don't miners make a profit mining with their GPU rigs now? Why wouldn't ASIC rigs make money once all of this levels out? When the difficulty goes up, wont the value of BTC change to reflect that?

[Rarrikins]

One of the nice things about the ASICs is how little power they draw. I think the Jalapeno uses something like 4.5 watts. That means it takes about 9+1/4 days to use a kilowatt-hour, and a kilowatt-hour is pretty cheap. They're definitely going to help with the power costs.

[blockgenesis]

This is the sort of thing I'm worried about. But don't miners make a profit mining with their GPU rigs now? Why wouldn't ASIC rigs make money once all of this levels out? When the difficulty goes up, wont the value of BTC change to reflect that?

GPU are quite dead now. They cost more in electricity than the profits they can generate.. And with ASIC coming, it's really going to be the end for GPU soon.

Difficulty and value does not affect each other. In one line : The difficulty is the competition between miners, while the value is the competition between buyers.

A very high hash rate does not mean more people will want to buy and use Bitcoin.

[bitkame]

I didn't want to make a new thread just for this question but, does anyone know what kind of methods of payment Avalon accepts for their ASIC's?
Specifically for Batch #3, they are using bitpay.com. Do they only accept bitcoin for payment, or are there any payment alternatives to buy an ASIC from them?

Greatly appreciated if anyone has information on this, for some reason I couldn't find any at all. =[

[rpgman1]

Avalon only accepts BTC as payment. BFL accepts BTC, bank wire transfer, or PayPal as payment options.

[Oktoberfest]

What would be the wait time before a BFL Jalapeno ships? Anyone know?

[JusticeForYou]

They said: Go Solar and have the power companies pay you. That's what they said.

Ironically as it turns out, use more electricity to get free electricity plus some cash.  They said go solar, Pfft... LOL

[eBit]

I have done quite a bit of research on these ASIC's that Butterfly Labs is going to release here soon and my number one question is "Is it worth it?" Right now I am thinking yes. I believe that during the beginning phases of releasing these units will 1.) be beneficial to people who preorder and 2.) make the difficulty of mining sky rocket for those who do not own ASIC's. I am curious on what everyone else thoughts are on this.

If your concern is not losing money on your investment in mining equipment, which is a possibility, then it might be more useful to start out with the question, "What's an acceptable time frame to achieve a break even ROI?"

For me it took about 6 months with GPUs. Are you willing to wait 6 months? 9 months? 12 months? 18 months just to break even? If the break even is two years, are you sure you still want to purchase these? The further out into the future you go, the more uncertainty you'll encounter. If you're at more than 6 months break even, you're probably taking on more risk than previous miners took.

Once you determine that, that's where the number crunching comes in. No matter how much you may want to buy an ASIC device right now, if your own estimations and math show you can't meet your predetermined break-even ROI in months, you should listen to the math. Let the math decide for you, not your emotions. If the math says yes, then it's yes.

There's probably enough information on these message boards to make some estimation of what the network might look like through early summer, but that's about it. Just my thoughts... 

[Bitsaurus]

If you consider the sheer number of ASICs reportedly in queue the difficulty rise will be large enough to diminish returns to the point of never achieving return on investment.  Say you currently mine 25GH which is about 1/1000th of the total.  That probably costs about 20K in GPUs and boards.

Now to have 1/1000th of the hash after ASIC stabilizes you would probably need to spend well over $20k.

Unless you got in very early on the ASIC batches you're probably screwed as people will keep tossing money at it in hopes of getting rich.

I think the only ones who will see guaranteed profits from ASIC are the manufacturers (like a gun dealer arming both sides).

This is the sort of thing I'm worried about. But don't miners make a profit mining with their GPU rigs now? Why wouldn't ASIC rigs make money once all of this levels out? When the difficulty goes up, wont the value of BTC change to reflect that?

Difficulty is related to price, but both are reactionary to each other.  If the difficulty goes up and the price doesn't, a lot of miners who instantly sell what they mine usually turn off their rigs.  Then the difficulty goes down and then they power them back on again.

With ASIC however, once somebody buys that dedicated hasher it's on the network permanently.  People are unlikely to retask the ASIC units for any other purpose, so difficulty will only go up from here on, never down.

GPUs also had the advantage of easy resale.  Most of the GPUminers have already paid off their cards.  There was minimal risk buying 20 7970s if you got a decent price.  Even if you lost $50 on each that's only 1k.  Good luck selling your ASICs if Bitcoin fails.

At this point if you don't have an early ASIC order I would say hold off and just buy BTC.  If you bought when this thread was made and sold today you would have made 15% in that short time!

[Beyondo]

So if I place an order with the BFL company today I would be unlucky? No hope of seeing a good return?

[Rarrikins]

With ASIC however, once somebody buys that dedicated hasher it's on the network permanently.  People are unlikely to retask the ASIC units for any other purpose, so difficulty will only go up from here on, never down.

I think some will be taken down due to power and maintenance eventually costing more than income, especially for the larger units.

[bitResearch]

If were lucky enough to get an initial ASIC from Avalon or order one from their second batch it is a good investment, but after that it is going to become an increasingly bad investment.

[bitcoinget]

If were lucky enough to get an initial ASIC from Avalon or order one from their second batch it is a good investment, but after that it is going to become an increasingly bad investment.

One of the first to get his hands on an Avalon tweeted that has it has already paid for itself (in 9 days i believe).

https://twitter.com/jgarzik/status/300138033590718464

[kworrom]

I am thinking about buying a BFL Jalapeno, but just for fun. In my eyes the lower ASIC models like the Jalapeno don't seem to be worth the investment, but the higher powered models seem like they will at least break even over time. I mean, if you have the disposable income, why not?

[rilesbriles]

Thanks for the awesome replies guys! I thought you would all find this interesting for those of you who are curious about shipping.

(UPDATE)
Butterfly Labs:
"Because of the potential for massive disruption that our ASIC units may cause to the mining ecosystem, we are instituting a 1/3 shipping method for our first shipment of products to individuals.  So that no single person or handful of people are able to gain a material advantage over any other, we will ship all our available units at the same time to as many customers as we can.  This means we will likely delay shipping on our first units until we have accumulated enough stock to satisfy a significant portion of our initial orders.  This ensures that as many people as possible who are early adopters are equally and fairly treated when receiving our product. To that end we will be shipping our first orders as such: 1/3 of each product line (Jalapeno, Single SC and Minirig SC) will be shipping to new orders, 1/3 to upgrade orders and the final 1/3 will be shipped to a random selection of orders from the first two categories (both upgrade and new customers)  received in the first month of orders (From 23 June 2012 to 22 July 2012)."

[Luno]

There is another way of looking at this:

We all benefit from others buying ASIC's, it's like another halving coming soon. Yes I do know that the coins mined/day are just the same, but ASIC miners also know that they for a time have some monopoly status in the Bitcoin production business!!

The rest of us are scared of departing from our last mined unsold coins!

[Gestas]

BFL is vaporware, you really think a common con man is going to deliver you a real product?

[dleonardi]

I am willing to trade 1OZ of 99.9999 gold for a BFL preorder dating at max to oct 2012 .
If interested contact me by PM!

[bigmint]

ASICs are worth the investment if you believe that the current fiat monetary system is doomed to collapse (or atleast instability that you can profit from).  Consider that bitcoin is only scratching the surface of its potential for use.  In 5 to 10 years, I believe the BTC will have a value in the hundreds if not thousands of USD.

This potential for growth is huge.  Get in now while you can - before the rest of the world catches up.

JM2C

bigmint