The beginning of the end?

[poby]

There is no doubt that GPU mining profitability will plummet to below zero for those with electric greater than 10 cents a kw.  The only question is when this will happen.  I've always been conservative in predicting by the end of this year but in fact it is likely to happen well before then.  The long term profitability for those lucky enough to have cheap electric will be around $1 per day per GPU, and probably even less than that. I expect we will reach this level by December and probably earlier.

Coin prices have plummeted lately.  They may bounce up again, they may stay the same or they may continue to decline further.  But mining difficulty will continue to rise.  This creates a "perfect storm" of rapidly declining mining revenue.  It is extremely doubtful that anyone building a rig today with electric higher than 10 cents a kw will ever get a ROI.

I'm building a rig but I am under no illusions that I will make money out of it.  Would be nice but I no longer expect to.  My electric is around 15 cent a kw so I am very much in the hobbyist camp.  I can only envy those who live in countries with cheap electric for whom it can make long term profits.

Coins are plummeting, difficulty is rising.  This looks a lot like the beginning of the end.

[adaseb]

Right now the ROI times are so short... that its a very low risk at the moment buying rigs.

But I agree with you. Problem is nobody knows when the ETH bubble will burst from all those scam ICOs.

[poby]

Right now the ROI times are so short... that its a very low risk at the moment buying rigs.

But I agree with you. Problem is nobody knows when the ETH bubble will burst from all those scam ICOs.

I don't agree with "very low risk"  A ROI from here is certainly possible but I think the risk is now very high.  Prices of tradeable assets usually decline much faster than they rise and a sawtooth pattern is often evident.  The massive increase in coin prices in the past couple of months might evaporate in a couple of weeks.  It's entirely possible prices will be 50% lower than now in a few weeks time.  But there will be no corresponding decrease in difficulty.  What was very profitable 2 months ago, will be much less profitable at the same price now.

ROI based on current figures is around 2 to 4 months.  The problem is that current figures are pretty meaningless on that time scale.  Coin value needs to rise continuously to get your money back in that timeframe because difficulty definitely will continue to increase.  In a falling market or even a static one, ROI will be much more than a few months and may never be hit.

Prices may go up and down but difficulty will rise inexorably.  The long term (measured in months) profitability will likely become an annual yield of around 12% of asset value after paying 10 cents a kw.  Those with higher electric will lose money.

The coming bloodbath will be interesting.

[Vann]

There is no doubt that GPU mining profitability will plummet to below zero for those with electric greater than 10 cents a kw.  The only question is when this will happen.  I've always been conservative in predicting by the end of this year but in fact it is likely to happen well before then.  The long term profitability for those lucky enough to have cheap electric will be around $1 per day per GPU, and probably even less than that. I expect we will reach this level by December and probably earlier.

Coin prices have plummeted lately.  They may bounce up again, they may stay the same or they may continue to decline further.  But mining difficulty will continue to rise.  This creates a "perfect storm" of rapidly declining mining revenue.  It is extremely doubtful that anyone building a rig today with electric higher than 10 cents a kw will ever get a ROI.

I'm building a rig but I am under no illusions that I will make money out of it.  Would be nice but I no longer expect to.  My electric is around 15 cent a kw so I am very much in the hobbyist camp.  I can only envy those who live in countries with cheap electric for whom it can make long term profits.

Coins are plummeting, difficulty is rising.  This looks a lot like the beginning of the end.

Actually that would be good compared to what it was towards the end of 2014 after ASICS and Megapools took over. I pay 10 cents a kW and remember when EVERY coin was unprofitable once electric was factored in. Mining isn't always about ROI, sometimes you have to look at it in as an investment into a coin you believe in and take a long term approach. Those that mine on Nicehash to get paid in BTC are the ones that care about daily coin prices. The bottom line chicken little is you have no idea when and if mining will become unprofitable. And those that kept mining are the ones benefiting from having done so.

[sundownz]

IMHO... I'm not sweating it. I've picked up 30k in mining hardware since March. People have been saying it's the end since then.

I build around BTC around half the price it is now.

Plus... the alt-coin ecosystem keeps expanding. I think at least *something* will turn a profit for quite some time.

[Elder III]

IMHO... I'm not sweating it. I've picked up 30k in mining hardware since March. People have been saying it's the end since then.

I build around BTC around half the price it is now.

Plus... the alt-coin ecosystem keeps expanding. I think at least *something* will turn a profit for quite some time.

I completely agree, especially with the last part. There are so many coins to mine that I could care less if some of them disappeared. Anyways, don't believe either the eternal optimists nor the chicken littles and we'll be fine.

[Metroid]

It's game over trolls, you will never get your return of investment hehe

[adaseb]

If you are worried about price crashing, just short ETH. And then your enemy is only the difficulty.

And the hardware is resellable. Like I said before, highly unlikely you will end up losing money.

The people who will be burnt the most are the investors of these ICOs.

[Tmdz]

Don't panic about ether/btc, the market is just having another shakeup and profit taking.

It's not the first one or will it be the last.

I think we will still have good margins by December, even though the mining scene is an all out arms race to the bottom.

To push the profit to dollar a day per gpu we will probably need ~8 million gpus and have around 2 million currently so that is a crap load of growth.  It will happen eventually but lots of people getting into crypto every day so more growth is bound to happen in the markets by then.

[Marvell1]

Don't panic about ether/btc, the market is just having another shakeup and profit taking.

It's not the first one or will it be the last.

I think we will still have good margins by December, even though the mining scene is an all out arms race to the bottom.

To push the profit to dollar a day per gpu we will probably need ~8 million gpus and have around 2 million currently so that is a crap load of growth.  It will happen eventually but lots of people getting into crypto every day so more growth is bound to happen in the markets by then.

prices always go back up

[VyprBTC]

FUCK! It's the beginning of the end everyone, really sorry to say it.

You all should sell everything you have, hardware, BTC, ALTc, everything.

Your dog and your mothers, sister too. I'm into MILF's - I'll buy cheap and RESELL ... after proper use of course.

[dbc23]

Biggest drop since the start of this >3 month bull run.  Time for a big scary correction, get ready to see your blockfolios halve themselves.

[adaseb]

Biggest drop since the start of this >3 month bull run.  Time for a big scary correction, get ready to see your blockfolios halve themselves.

No, the drop last week was larger.

[dbc23]

Biggest drop since the start of this >3 month bull run.  Time for a big scary correction, get ready to see your blockfolios halve themselves.

No, the drop last week was larger.

Really?  Must've rallied before i checked my holding values 

[sundownz]

And the hardware is resellable. Like I said before, highly unlikely you will end up losing money.

THIS... I sold pretty much all my Radeon 7950s the last time things took a dive. Kept all the "base" computers. Ended up using almost all of those around the house / office.

In March I filled those back up with RX480s and starting building new systems again. Now... worst case I have even more "base" computers and can sell off all these GPUs.

I've been buying mostly premium cards since the first batch of 4 GB RX480s I got... almost entirely 8 GB RX580s, 8 GB Geforce 1070, and 6 GB Geforce 1060 cards. Figured the higher models will re-sell better.