Thoughts on Cost of Mining Farm now, with 40+ PH/s.

[tmfp]

So, there's a set up in Iceland with over 40 PH/s of hash, a mix of S7's and other similarly efficient equipment.
In a month it mines 150 blocks and total costs (power, site overhead, rolling equipment renewal, everything) are said to be around $390,000.
This equates to a total cost per coin around $105.
What's it worth?

[jpucela14]

So, there's a set up in Iceland with over 40 PH/s of hash, a mix of S7's and other similarly efficient equipment.
In a month it mines 150 blocks and total costs (power, site overhead, rolling equipment renewal, everything) are said to be around $390,000.
This equates to a total cost per coin around $105.
What's it worth?

I personally won't invest that amount of money... quite risky

[Legacy2005]

So, there's a set up in Iceland with over 40 PH/s of hash, a mix of S7's and other similarly efficient equipment.
In a month it mines 150 blocks and total costs (power, site overhead, rolling equipment renewal, everything) are said to be around $390,000.
This equates to a total cost per coin around $105.
What's it worth?

if you have 400k to throw around your best bang for the buck and best potential profit would be to use that 400k to buy bitcoins. Any farm you buy will be unprofitable by the time all the paperwork and red tape is done and you actually buy the mine.

[jpucela14]

You can buy more than 1000 BTC... if the price keep increasing you will get more profit that any kind of rig that you can buy

[NeuroticFish]

So, there's a set up in Iceland with over 40 PH/s of hash, a mix of S7's and other similarly efficient equipment.
In a month it mines 150 blocks and total costs (power, site overhead, rolling equipment renewal, everything) are said to be around $390,000.
This equates to a total cost per coin around $105.
What's it worth?

Since the halving is near, you should do the same math with 2 x $105 = $210 / coin.
It doesn't look that good anymore, isn't it?

If it would be me, I'd wait at least 6 months after the halving and do the math again. But the Bitcoin mining "market" is, imho, over-saturated and not very profitable unless you build the equipment yourself.

[tmfp]

Either my post wasn't clear or ppl aren't reading it properly.
The $400k refers to monthly costs of an operation that mines 150 x 25 BTC in that period i.e. ~$1.5m @ $420, or a net profit of >$1m per month.
Re: halving, yes I can divide by two too.

[Legacy2005]

Either my post wasn't clear or ppl aren't reading it properly.
The $400k refers to monthly costs of an operation that mines 150 x 25 BTC in that period i.e. ~$1.5m @ $420, or a net profit of >$1m per month.
Re: halving, yes I can divide by two too.

ok so 400k in operating costs. and they make 1M per month. meaning they wont sell for less than that most likely double. so you are looking at a 2M expense. Again the same logic applies buy 2M worth of bitcoin and sit on it. Depending on how active you want to be for 2M worth of coin you could buy it and flip it daily and make a nice size profit.

more then likely the mine wont sell/be bought because they themselves know how much they are making and that 1M a month they are making now they could wait till 1/2ing and sell and it make more money than what you were offering.

[HyperMega]

Either my post wasn't clear or ppl aren't reading it properly.
The $400k refers to monthly costs of an operation that mines 150 x 25 BTC in that period i.e. ~$1.5m @ $420, or a net profit of >$1m per month.
Re: halving, yes I can divide by two too.

Just to be sure that I got you right. You are talking about a S7 based 10MW setup with less than $40/kW per month hosting costs? About 8500 S7?

What is the S7 equivalent equipment you are talking about?

Could you please send me the contact to the Islandic datacentre, which offers $40/kW all inclusive?
If this is true, you got an extremely good deal!

Is this an existing operation or something you or somebody else is planning?

I guess it exists and you would either like to buy or sell it. Therefor you want to know what it is worth?

From my point of view this is one of the most competitive mines one can currently operate (forget about all this China free MW myths! ).
So you would be one of the last miners standing and should be able to mine with a profit for at least 12 months. Even after the halving and when the next gen 16nm miners hit the market.
So I would pay 50% of the conservative estimated mining profit of the next 12 months.

[Amph]

Either my post wasn't clear or ppl aren't reading it properly.
The $400k refers to monthly costs of an operation that mines 150 x 25 BTC in that period i.e. ~$1.5m @ $420, or a net profit of >$1m per month.
Re: halving, yes I can divide by two too.

so you really think that someone will sell to you a mining farm for a certain time frame, at a lower cost of what that farm will produce in this time frame? no way this is true

it's like someone do the renting at lower cost than the profit he would have made if mined directly his coins

[tertius993]

Either my post wasn't clear or ppl aren't reading it properly.
The $400k refers to monthly costs of an operation that mines 150 x 25 BTC in that period i.e. ~$1.5m @ $420, or a net profit of >$1m per month.
Re: halving, yes I can divide by two too.

so you really think that someone will sell to you a mining farm for a certain time frame, at a lower cost of what that farm will produce in this time frame? no way this is true

it's like someone do the renting at lower cost than the profit he would have made if mined directly his coins

Where did he say that? He said the monthly running costs are c. $400k and then he is asking what is it worth? Presumably to buy or sell (or invest in) the operation.

On a different note I see someone above has questioned the numbers, I haven't done the sums but it certainly seems like a very low cost to run.

[notlist3d]

Either my post wasn't clear or ppl aren't reading it properly.
The $400k refers to monthly costs of an operation that mines 150 x 25 BTC in that period i.e. ~$1.5m @ $420, or a net profit of >$1m per month.
Re: halving, yes I can divide by two too.

so you really think that someone will sell to you a mining farm for a certain time frame, at a lower cost of what that farm will produce in this time frame? no way this is true

it's like someone do the renting at lower cost than the profit he would have made if mined directly his coins

Where did he say that? He said the monthly running costs are c. $400k and then he is asking what is it worth? Presumably to buy or sell (or invest in) the operation.

On a different note I see someone above has questioned the numbers, I haven't done the sums but it certainly seems like a very low cost to run.

If he truly has it to "This equates to a total cost per coin around $105." then it's a no brainer.  I would even think of investing if a number like that is true.  I would want to see long term though with different difficulty changes.   As we really don't know how long it would take to pay off a pretty big investment of 390k, as the 105 number should only be good for one difficulty period.

So it is still hard to speculate on many things.

[Amph]

Either my post wasn't clear or ppl aren't reading it properly.
The $400k refers to monthly costs of an operation that mines 150 x 25 BTC in that period i.e. ~$1.5m @ $420, or a net profit of >$1m per month.
Re: halving, yes I can divide by two too.

so you really think that someone will sell to you a mining farm for a certain time frame, at a lower cost of what that farm will produce in this time frame? no way this is true

it's like someone do the renting at lower cost than the profit he would have made if mined directly his coins

Where did he say that? He said the monthly running costs are c. $400k and then he is asking what is it worth? Presumably to buy or sell (or invest in) the operation.

On a different note I see someone above has questioned the numbers, I haven't done the sums but it certainly seems like a very low cost to run.

yeah it's what i was implying, selling you for a certain time frame means renting, nothing more, at a lower cost than the earning of that farm, simply unfeasible by a long shoot

[tertius993]

Either my post wasn't clear or ppl aren't reading it properly.
The $400k refers to monthly costs of an operation that mines 150 x 25 BTC in that period i.e. ~$1.5m @ $420, or a net profit of >$1m per month.
Re: halving, yes I can divide by two too.

so you really think that someone will sell to you a mining farm for a certain time frame, at a lower cost of what that farm will produce in this time frame? no way this is true

it's like someone do the renting at lower cost than the profit he would have made if mined directly his coins

Where did he say that? He said the monthly running costs are c. $400k and then he is asking what is it worth? Presumably to buy or sell (or invest in) the operation.

On a different note I see someone above has questioned the numbers, I haven't done the sums but it certainly seems like a very low cost to run.

yeah it's what i was implying, selling you for a certain time frame means renting, nothing more, at a lower cost than the earning of that farm, simply unfeasible by a long shoot

That is not what he is saying.  It is slightly vague but according to the OP the 390k is what the farm costs to operate per month, i.e. its outgoing expenses in terms of electricity, maintenance, etc..

Each month it generates a certain number of bitcoins - revenue - 150 blocks (at the moment) = 150x25=3,750 BTC per month
Each month it spends a certain amount of dollars to keep the farm running - expenditure - $390k (at the moment)

Therefore each coin generated is costing 390,000/3,750 = $104

At a coin price of $420, that suggests gross profit of over a million dollars per month.

He is asking how much is such an operation worth.  He hasn't given any numbers on this point.

Though he hasn't said why - he may be the owner selling, or a potential buyer or investor.

[mwizard]

If the OP was really after an estimation of what the mining farm was worth he/she would be giving details of current hardware and the contracted long term electricity prices.  

The Op estimated current total cost figure of $390,000 per month looks way too low.  For example let us assume  8,500 S7s with an average installed cost of $700. The capital cost would have been $6 million dollars, and even more if earlier S7 batches.  If you assume a life of 12 months you have depreciation of $500,000 per month, 24 months gives $250,000 per month.

That number of S7s would also draw 12 megawatts of power. Even at $0.03 per kWh you are looking at an electricity bill of $250,000 per month.

Plus there is hosting/housing, staffing and other costs.

If the Op really wants a price estimation of a farm he should give details of long term electrical pricing and of existing hardware. The value of any business depends on the expected future earnings.

[Dalkore]

I am going to ponder these numbers and update if I can find something to add to really see if this was a good investment.  I run a DC so I can pipe in on hosting costs at that level. 

[tmfp]

I am going to ponder these numbers and update if I can find something to add to really see if this was a good investment.  I run a DC so I can pipe in on hosting costs at that level. 

Thanks.
Yeah, the details are a bit vague but all I have. It's a serious question and I was hoping for a little more quality input, seeing as the core question -how much does it cost to mine a BTC- is a pretty important one.