Analysis of ASIC earnings, device agnostic

[Signus]

These projections show how hurt your profit margin can become. For example:

Let's say you bought in on a FPGA farm a few months back or just did. A rig I was looking at was a $45000 investment, at 47.5GH/s using ~2200W of power.

So given electricity of .15/kWh, using today's $118.31 USD/BTC rate, and calculating for profit by day, you can see how it will affect your average profit per day given that the exchange rate stays the same, which it won't. I know it's not ASIC but it still shows you that even a lot of power will lose the ability to profit.


http://imageshack.us/a/img402/8689/captureoor.png


So given that kind of investment now or at least two months ago, you'd be looking at a while for ROI. And say you got your ASIC in August (a BFL Jalapeno for instance), with the difficulty level that high it would still take ~50 days to pay off the $274 investment.

All I can say is..ouch.

[1715177079]

1715177079

[1715177079]

1715177079

[1715177079]

1715177079

[atcsecure]

These projections show how hurt your profit margin can become. For example:

Let's say you bought in on a FPGA farm a few months back or just did. A rig I was looking at was a $45000 investment, at 47.5GH/s using ~2200W of power.

So given electricity of .15/kWh, using today's $118.31 USD/BTC rate, and calculating for profit by day, you can see how it will affect your average profit per day given that the exchange rate stays the same, which it won't. I know it's not ASIC but it still shows you that even a lot of power will lose the ability to profit.





So given that kind of investment now or at least two months ago, you'd be looking at a while for ROI. And say you got your ASIC in August (a BFL Jalapeno for instance), with the difficulty level that high it would still take ~50 days to pay off the $274 investment.

All I can say is..ouch.

it looks like it could be even worse

[Viceroy]

Yep.

[Signus]

My point. That's a projection based off of a purchase from a month or two ago to today, that you're trying to pay off before the difficulty maximizes and the profit minimizes. I mean I like mining for fun but I do like to break even when it comes to electricity.

[organofcorti]

My point. That's a projection based off of a purchase from a month or two ago to today, that you're trying to pay off before the difficulty maximizes and the profit minimizes. I mean I like mining for fun but I do like to break even when it comes to electricity.

No, your projection is based on estimated data from now until August.

[Signus]

My point. That's a projection based off of a purchase from a month or two ago to today, that you're trying to pay off before the difficulty maximizes and the profit minimizes. I mean I like mining for fun but I do like to break even when it comes to electricity.

No, your projection is based on estimated data from now until August.

I said the purchase from a month ago or two today. The projection is from today until August.

[organofcorti]

My point. That's a projection based off of a purchase from a month or two ago to today, that you're trying to pay off before the difficulty maximizes and the profit minimizes. I mean I like mining for fun but I do like to break even when it comes to electricity.

No, your projection is based on estimated data from now until August.

I said the purchase from a month ago or two today. The projection is from today until August.

Ah, I misunderstood. But if the purchase was from a month or two ago, wouldn't it be better to do your analysis from then as well?

[Signus]

My point. That's a projection based off of a purchase from a month or two ago to today, that you're trying to pay off before the difficulty maximizes and the profit minimizes. I mean I like mining for fun but I do like to break even when it comes to electricity.

No, your projection is based on estimated data from now until August.

I said the purchase from a month ago or two today. The projection is from today until August.

Ah, I misunderstood. But if the purchase was from a month or two ago, wouldn't it be better to do your analysis from then as well?

Yeah, probably. See, I'm lazy and I didn't want to go looking down the old difficulty numbers, plus it works as a way of showing "if you bought today." And I meant "to today" and not "two today," damn touchscreens.

[organofcorti]

My point. That's a projection based off of a purchase from a month or two ago to today, that you're trying to pay off before the difficulty maximizes and the profit minimizes. I mean I like mining for fun but I do like to break even when it comes to electricity.

No, your projection is based on estimated data from now until August.

I said the purchase from a month ago or two today. The projection is from today until August.

Ah, I misunderstood. But if the purchase was from a month or two ago, wouldn't it be better to do your analysis from then as well?

Yeah, probably. See, I'm lazy and I didn't want to go looking down the old difficulty numbers, plus it works as a way of showing "if you bought today." And I meant "to today" and not "two today," damn touchscreens.

But I included all the old difficulty numbers in the initial post, you could use them. Anyway, you can cut short all your calculations by using the fifth column, which already provides the info you were calculating.

For example:

• If you bought on the 18th April the amount you'd earn until August is 2.897 btc / ghps -> 47.5* 2.897 btc = 137.6075 btc
• If you bought on the 1st February the amount you'd earn until August is 11.305 btc / ghps -> 47.5* 11.305 btc = 536.9875 btc

Hope that saves you some time, and I apologise for not making it more clear. Check out the blog post if you want more details.

[organofcorti]

New update in case you're interested: http://organofcorti.blogspot.com/2013/04/914-asic-earnings-23-april-2013.html

Adding an extra 100 Thps to the network by the end of July only adds an extra one third to the total, so the impact isn't as large as you'd think. If you look at last week's estimate, the earnings per day and cumulative earnings aren't reduced by a very large margin.

Any devices that arrive after 18th May are probably unable to obtain a complete return on their investment by the end of July.

[furuknap]

There was an interesting article on Wired posted on Reddit today, regarding the arms race of ASIC mining equipment.

http://www.wired.com/wiredenterprise/2013/04/bitcoin-mining-rigs/

.b

[railadner]

With increasing difficulty and reducing miners, which the price of 1 BTC in August? $ 500 +?

[chipd]

Not sure if already discussed (too lazy to read through the whole thread right now, sorry).
How about GPU miners that might move away when profit is close to 0 for them?

edit:
Nice work, an interesting read!

[Epoch]

With increasing difficulty and reducing miners, which the price of 1 BTC in August? $ 500 +?

Bitcoins are created at a relatively constant rate (25 BTC every 10 minutes on average) that self-adjusts every 2016 blocks based on network hashrate. Rising difficulty and 'reducing miners' have no direct effect on supply/demand and, hence, price.

[Signus]

But I included all the old difficulty numbers in the initial post, you could use them. Anyway, you can cut short all your calculations by using the fifth column, which already provides the info you were calculating.

For example:

• If you bought on the 18th April the amount you'd earn until August is 2.897 btc / ghps -> 47.5* 2.897 btc = 137.6075 btc
• If you bought on the 1st February the amount you'd earn until August is 11.305 btc / ghps -> 47.5* 11.305 btc = 536.9875 btc

Hope that saves you some time, and I apologise for not making it more clear. Check out the blog post if you want more details.

Well that shows you how much I'm paying attention. That extra month or two could have seriously helped if someone were going to invest that much to get ROI. Especially if they were on a loan.

With increasing difficulty and reducing miners, which the price of 1 BTC in August? $ 500 +?

The change in the price depends on the interest and the trading whereas the ability to mine profitably depends on the difficulty, market, electricity, etc.

[organofcorti]

Not sure if already discussed (too lazy to read through the whole thread right now, sorry).
How about GPU miners that might move away when profit is close to 0 for them?

edit:
Nice work, an interesting read!

Good question. I'm not including GPU miners leaving, since of the ~ 24Thps that were present prior to ASICs I don't know how much was attributable to GPUs and how much to FPGAs. So I don't know how much the hashrate would drop once GPUs are unprofitable. Another thing is that I've very carefully avoided guessing what the exchange rate will be, which is needed to determine GPU profitability.

All I can say is that some point we'll lose GPUs and at another we'll lose FPGAs. Many GPUs will probably leave early to mine LTC, FPGAs will mine on until the bitter end. I'm assuming that by the time this happens, 24Thps will be a very small fraction of the network, and probably won't have much of an impact on the forecast accuracy given all the other sources of error (shipping times being the largest source of error).

[organofcorti]

With increasing difficulty and reducing miners, which the price of 1 BTC in August? $ 500 +?

The change in the price depends on the interest and the trading whereas the ability to mine profitably depends on the difficulty, market, electricity, etc.

Just so.

Signus' statement implies that difficulty is affected by the USDBTC price and not visa versa. I have a number of posts on this subject, and a weekly forecast of the network hashrate and difficulty that does not rely on ASIC shipping predictions, just previous hashrates and exchange rates. It is surprisingly (to me) accurate.

[Signus]

With increasing difficulty and reducing miners, which the price of 1 BTC in August? $ 500 +?

The change in the price depends on the interest and the trading whereas the ability to mine profitably depends on the difficulty, market, electricity, etc.

Just so.

Signus' statement implies that difficulty is affected by the USDBTC price and not visa versa. I have a number of posts on this subject, and a weekly forecast of the network hashrate and difficulty that does not rely on ASIC shipping predictions, just previous hashrates and exchange rates. It is surprisingly (to me) accurate.

I said the ability to mine depends on the difficulty and many other factors.

I'm not saying the difficulty is necessarily affected unless the market implodes the market like it has done with ASICs. Essentially the price spike got people interested in bitcoin, and then because of that people are buying large amounts of mining power that escalates the difficulty rise. It's a cycle.

[organofcorti]

With increasing difficulty and reducing miners, which the price of 1 BTC in August? $ 500 +?

The change in the price depends on the interest and the trading whereas the ability to mine profitably depends on the difficulty, market, electricity, etc.

Just so.

Signus' statement implies that difficulty is affected by the USDBTC price and not visa versa. I have a number of posts on this subject, and a weekly forecast of the network hashrate and difficulty that does not rely on ASIC shipping predictions, just previous hashrates and exchange rates. It is surprisingly (to me) accurate.

I said the ability to mine depends on the difficulty and many other factors.

I'm not saying the difficulty is necessarily affected unless the market implodes the market like it has done with ASICs. Essentially the price spike got people interested in bitcoin, and then because of that people are buying large amounts of mining power that escalates the difficulty rise. It's a cycle.

OK, well I'm going to have to disagree with you then. Even before the price spike there's been quite a nice relationship between the exchange rate and network hashrate. Check the posts I linked to.

Difficulty / network hashrate is predominantly affected by the exchange rate. If the things that the money buys are reduced or increased in cost, then then these external influences change the relationship away from expected.

[Signus]

I will do that, thanks.

At least an ASIC will pay itself off at a relatively decent rate given that most people will receive their ASIC devices once the difficulty is 45-55mil.