Avalon ASIC pay back

[Dalkore]

The thing is that is very difficult to make long-term projections on hashrate, this is why an estimatetion of "3 months for ROI" doesn't sounds that good in bitcoin world nowadays, while in the "fiat" world a 3 months ROI is an increadible deal.

While you wait for batch #3, 2.5 months can pass. 3 months from that other players could be adding THs to the network, and difficulty could just skyrocket.

Paying 20BTC for a 65GHs machine you will receive in 2.5 months or less is almost a no-brainer. Paying 75BTC is risky if you are in only for the profits, it's very likely that you will profit much more HOLDING those bitcoins.

Don't forget everyone gets hurt when the difficulty goes up but if you have a long enough time horizon, the box should ROI.  12 months is fine if that is what it takes.

[johnyj]

Current total bitcoin network hash power

GPU+FPGA - 25T
ASICMINER - 12T
AVALON batch 1 - 20T
About 60T

This hash power will remain more or less unchanged until middle of April

Later part of April:

AVALON Batch 2 - 40T
ASICMINER 50T first deployment - 20T
About 60T

consider the shipping time, until mid-May, total hash power rise to 120T，double the current difficulty, so even the first batch 3 user will start with a maximum 2.4 coin daily return

May：
AVALON batch 3 - 33T (500 UNIT)
ASIC MINER another 30T
Add 63T

BFL should be able to ship around this time, suppose that shipping speed is 100 rig per day, average 40Gh, then in one month 3000 rigs delivered，that's 120T.

So for whole May the network hash power will reach 305T，5x current difficulty, avalon batch 3 user can get about 1 coin per day

June：
BFL will add another 120T，total 420T，about 7x current difficulty

July：
ASICMINER's 200T deployed, even AVALON won't make new delivery, BFL add 120T，740T total can be reached，12x current difficulty

After that the difficulty increase will slowdown due to large existing hash power base, and the ROI for mining equipment will become much worse: For an Avalon you can expect 0.4 BTC per day, and that return is shrinking slowly every 2 week

But there is some uncertainty about BFL's delivery, if they could not deliver at that speed before July, then Avalon will have enough good chance to ROI quickly

[Syke]

Current total bitcoin network hash power

GPU+FPGA - 25T
ASICMINER - 12T
AVALON batch 1 - 20T
About 60T

This hash power will remain more or less unchanged until middle of April

Later part of April:

AVALON Batch 2 - 40T
ASICMINER 50T first deployment - 20T
About 60T

consider the shipping time, until mid-May, total hash power rise to 120T，double the current difficulty, so even the first batch 3 user will start with a maximum 2.4 coin daily return

May：
AVALON batch 3 - 33T (500 UNIT)
ASIC MINER another 30T
Add 63T

BFL should be able to ship around this time, suppose that shipping speed is 100 rig per day, average 40Gh, then in one month 3000 rigs delivered，that's 120T.

Stop right there. No way is BFL shipping 100 units a day right off the bat. They've never pulled off that kind of throughput.

[SebastianJu]

Current total bitcoin network hash power

GPU+FPGA - 25T
ASICMINER - 12T
AVALON batch 1 - 20T
About 60T

This hash power will remain more or less unchanged until middle of April

Later part of April:

AVALON Batch 2 - 40T
ASICMINER 50T first deployment - 20T
About 60T

consider the shipping time, until mid-May, total hash power rise to 120T，double the current difficulty, so even the first batch 3 user will start with a maximum 2.4 coin daily return

May：
AVALON batch 3 - 33T (500 UNIT)
ASIC MINER another 30T
Add 63T

BFL should be able to ship around this time, suppose that shipping speed is 100 rig per day, average 40Gh, then in one month 3000 rigs delivered，that's 120T.

So for whole May the network hash power will reach 305T，5x current difficulty, avalon batch 3 user can get about 1 coin per day

June：
BFL will add another 120T，total 420T，about 7x current difficulty

July：
ASICMINER's 200T deployed, even AVALON won't make new delivery, BFL add 120T，740T total can be reached，12x current difficulty

After that the difficulty increase will slowdown due to large existing hash power base, and the ROI for mining equipment will become much worse: For an Avalon you can expect 0.4 BTC per day, and that return is shrinking slowly every 2 week

But there is some uncertainty about BFL's delivery, if they could not deliver at that speed before July, then Avalon will have enough good chance to ROI quickly

Asicminer currently has only 6.5TH online. Or where do you have your numbers from? Its uncertain how much will go online because unfortunately there are problems with power supply so that asicminer decided to sell some machines by auction.

And avalon users are mining at 20TH already? Really?

I really would like to know when bfl is shipping. But the lack of information about what they are doing at the moment and what the problems are, whos the problem or whatever keeps me from investing there. They broke too many dates and still dont communicate enough for that.

[marra]

Hey I do not understand one thing

how long does it take for a AA to make back the 75 BTC

I really don't get why AA would not be used by the manufacture to mine, if they were worth more than 75 BTC.


Can some one enlighten me?

They have non stop  1 THASH on and testing. Why would they need more units? To destroy the market? $50k per week they make with machines that are currently testing by my rough estimation. Perhaps someone has more detailed info.

[johnyj]

Stop right there. No way is BFL shipping 100 units a day right off the bat. They've never pulled off that kind of throughput.

This is a conservative estimation, I've seen some numbers as high as 400 units per day

[S M I L Y]

I believe anyone who currently has an ASIC on the way will be making plenty of profit!

Its the people who will be ordering in about 6 months that will be fighting for the small profits.  Just like GPUs were about a year ago.

[jubalix]

Hey I do not understand one thing

how long does it take for a AA to make back the 75 BTC

I really don't get why AA would not be used by the manufacture to mine, if they were worth more than 75 BTC.


Can some one enlighten me?

They have non stop  1 THASH on and testing. Why would they need more units? To destroy the market? $50k per week they make with machines that are currently testing by my rough estimation. Perhaps someone has more detailed info.

you make a good point, by mining now at a low rate, they ensure market exists for thier sales

buuut it still does not stack up why they would bother selling

[mrb]

you make a good point, by mining now at a low rate, they ensure market exists for thier sales
buuut it still does not stack up why they would bother selling

You don't understand the whole context of the Avalon project. It is very simple:

Avalon was started by 2 young engineers who had almost no money (*), and no or little experience designing ASICs. They had no choice but to sell pre-orders at a low price (due to the overall risk and uncertainty of the project) to acquire the initial capital required to develop a 110nm chip and the machines ($200-300k or so). Once they successfully manufactured the first batch of Avalons, they honored the pre-orders because they are ethical persons. If they had say at this point "f*ck you, customers, we will mine with your hardware and not ship it to you", this would have enraged the community, destroyed their reputation (so no batch #2 and no batch #3 sales revenues for them), and it would have possibly disrupted confidence in Bitcoin due to 2 guys controlling the majority of the hashing power, possibly destroying the exchange rate and their potential mining profits.

That's why. If you knew the 2 guys, you would see they care deeply about the future of Bitcoin and about ethics.

(*) ngzhang did not make that much profits from previous FPGA sales, and yifu did not bring capital AFAICS.

[Rampion]

you make a good point, by mining now at a low rate, they ensure market exists for thier sales
buuut it still does not stack up why they would bother selling

You don't understand the whole context of the Avalon project. It is very simple:

Avalon was started by 2 young engineers who had almost no money (*), and no or little experience designing ASICs. They had no choice but to sell pre-orders at a low price (due to the overall risk and uncertainty of the project) to acquire the initial capital required to develop a 110nm chip and the machines ($200-300k or so). Once they successfully manufactured the first batch of Avalons, they honored the pre-orders because they are ethical persons. If they had say at this point "f*ck you, customers, we will mine with your hardware and not ship it to you", this would have enraged the community, destroyed their reputation (so no batch #2 and no batch #3 sales revenues for them), and it would have possibly disrupted confidence in Bitcoin due to 2 guys controlling the majority of the hashing power, possibly destroying the exchange rate and their potential mining profits.

That's why. If you knew the 2 guys, you would see they care deeply about the future of Bitcoin and about ethics.

(*) ngzhang did not make that much profits from previous FPGA sales, and yifu did not bring capital AFAICS.

this post should be stickied so everybody asking "why Avalon is selling a money printing machine"? Can easily find an answer

[sgravina]

I have a batch 1 Avalon.  It will not ever return my initial investment.  I estimate it will make about 80 BTC over the next 6 months.  But I paid 108 BTC for it.

Yet it is worse than that.  I bought from all three manufacturers.  Because I was hoping to get whichever one delivered first.  I paid about 680 BTC for that.  One company went broke and paid me back a small fraction of what I spent in BTC (because of the exchange rate inflation).  Avalon just delivered one of my units and of course Butterfly labs has yet to deliver.

In dollars if I had saved my BTC they would be worth $70,000.  This would have been a much better move.

So those of you who didn't buy Avalons are doing much better than those of us who did.

[needbmw]

I have a batch 1 Avalon.  It will not ever return my initial investment.  I estimate it will make about 80 BTC over the next 6 months. 

Hmm, check your math, one Avalon now makes more than 5BTC/24h, and will make say 4BTC/day for 10-14 days after next difficulty change.

[Rampion]

I have a batch 1 Avalon.  It will not ever return my initial investment.  I estimate it will make about 80 BTC over the next 6 months.  But I paid 108 BTC for it.

Yet it is worse than that.  I bought from all three manufacturers.  Because I was hoping to get whichever one delivered first.  I paid about 680 BTC for that.  One company went broke and paid me back a small fraction of what I spent in BTC (because of the exchange rate inflation).  Avalon just delivered one of my units and of course Butterfly labs has yet to deliver.

In dollars if I had saved my BTC they would be worth $70,000.  This would have been a much better move.

So those of you who didn't buy Avalons are doing much better than those of us who did.

What are the maths backing up your statements? What is the yearly decline in profitability you are considering?

[dogie]

I have a batch 1 Avalon.  It will not ever return my initial investment.  I estimate it will make about 80 BTC over the next 6 months.  But I paid 108 BTC for it.

Yet it is worse than that.  I bought from all three manufacturers.  Because I was hoping to get whichever one delivered first.  I paid about 680 BTC for that.  One company went broke and paid me back a small fraction of what I spent in BTC (because of the exchange rate inflation).  Avalon just delivered one of my units and of course Butterfly labs has yet to deliver.

In dollars if I had saved my BTC they would be worth $70,000.  This would have been a much better move.

So those of you who didn't buy Avalons are doing much better than those of us who did.

You must be the most negative person in the history of the universe to seriously believe that. Its like not wearing a hardhat because you're convinced a piano is going to fall on you, which you're resigned to, and have no will to move out of the way.

[sgravina]

I assumed the network would grow 10% each difficulty.  That each difficulty would take 14 days.  These are not well justified forecasts but they are easy.  Some day I will try harder.

                network          me     btc earned
4/7/13   254000           72.3     14.34614173
4/21/13   454000           72.3   8.026255507
5/5/13   499400           72.3     7.296595915
5/19/13   549340           72.3     6.633269014
6/2/13   604274           72.3     6.030244558
6/16/13   664701.4           72.3     5.482040507
6/30/13   731171.54     72.3     4.983673188
7/14/13   804288.694   72.3     4.530611989
7/28/13   884717.5634   72.3     4.118738172
8/11/13   973189.3197   72.3     3.744307429
8/25/13   1070508.252   72.3     3.403915845
9/8/13   1177559.077   72.3     3.09446895
9/22/13   1295314.985   72.3     2.813153591
10/6/13   1424846.483   72.3     2.557412355
10/20/13   1567331.131   72.3     2.324920323

total                                            79.38 BTC in six months

[needbmw]

My Avalon may be broken, but it paid for itself (in BTC terms) in 18 days... 

[sgravina]

My Avalon may be broken, but it paid for itself (in BTC terms) in 18 days... 

You did what I was trying to do.  You got one of the first ones.  That was the lottery ticket I was buying.  I, unfortunately got one of the last batch 1 shipped.

Nobody will ever have that happen to them again.  You were lucky to earn what you did, unlucky to have it break while it is still profitable.

[johnyj]

Nr.1 - Invest fiat, get BTC
Nr.2 - Invest fiat, get fiat
Nr.3 - Invest BTC, get BTC
Nr.4 - Invest BTC, get fiat

Of these 4 moves, Nr.1 is the most preferred, Nr.3 is exchange rate independant, Nr.4 is the worst option

I heard about 75000 chips from BFL, so that is 600Th, if all that power can reach market in 6 months and push the total network hash rate to 1000TH, an Avalon still can make 66/1,000,000*3600=0.24 bitcoin per day

And so far ASIC miner only deployed 6TH

[pikeadz]

I have a batch 1 Avalon.  It will not ever return my initial investment.  I estimate it will make about 80 BTC over the next 6 months.  But I paid 108 BTC for it.

Yet it is worse than that.  I bought from all three manufacturers.  Because I was hoping to get whichever one delivered first.  I paid about 680 BTC for that.  One company went broke and paid me back a small fraction of what I spent in BTC (because of the exchange rate inflation).  Avalon just delivered one of my units and of course Butterfly labs has yet to deliver.

In dollars if I had saved my BTC they would be worth $70,000.  This would have been a much better move.

So those of you who didn't buy Avalons are doing much better than those of us who did.

I assume you are talking about never seeing return on your ENTIRE investment (from all 3 manufacturers), because your Avalon is going to pay for itself in a few months. 

[sgravina]

The protocol tries to generate 50,400 bitcoins for every difficulty change.  For the next difficulty the network will be about 60,000 GHashes/sec.  My avalon will be about 65 Ghashes/sec.  Thus I will get 65/60,000 * 50,400 bitcoins = 54.6 bitcoins.   Thus, my spreadsheet above is wrong.  If the network grows 20% durring the next difficulty I will only get 80% * 54.6 = 44 bbitcoins.  Still alot more than I said this morning.

44 bitcoins is a lot.  But I need to make 108 to recover what I spent on the thing.

I will try to figure this out again when I get home tonight.

Sam