Minimum sustainable mining efficiency.

[mustyoshi]

I've done some math, and come up with a formula to determine the absolute minimum sustainable (break even) network efficiency (in terms of Hashes per joule).


This basically gives the minimum efficiency that would be required to run the network if it was a single person mining and they got all the coins. So for mining to be profitable you'll need to be a tad higher than the given efficiency(to account for pool fees and luck), but it does shed light on the future of mining.

For price = .15$, difficulty as 10076292.88, reward at 3600 coins per day, and exchange rate at 110.
655714 Hashes per joule.
Which is a little less than half of what blockchain.info estimates the efficiency to be at (1.5MH/J).

Now if we fast forward  to the end of the year, I personally believe we will see 50M difficulty (350TH/s+), I also believe we will see a stable 200$ per coin, so at .15$ per kwh results in about 1.79MH/J, which cuts out some GPU miners already.
.10$ per kwh: 1.19MH/J
.05$ per kwh: 596KH/J
Obviously, cheaper electricity lowers the efficiency needed.

But what this formula really lets us know is the long term viability of the network itself. Right now, to currently survive off transaction fees alone (144*(500*.0005)) my estimate is that on average you get 500 paying transactions per block, and at the default fee, it amounts to 36 btc per day. At the current rates...
65.5MH/J are required to break even.

This makes it apparent that cheap electricity will be required to
Just some food for thought.
Now does anybody have any thoughts on this?

EDIT: I really hope my math is right, or I'll sound really stupid.

[Malawi]

You forgot ASIC

[mustyoshi]

You forgot ASIC

Yeah, hidden deep within my text is the subtle idea that GPU mining is dead, due to it being less efficient.

[Malawi]

You forgot ASIC

Yeah, hidden deep within my text is the subtle idea that GPU mining is dead, due to it being less efficient.

I calculated that a 5GH ASIC at 30W would still be running with a difficulty of 300mil and a BTC price of $2, and even make a tiny profit.

[mustyoshi]

You forgot ASIC

Yeah, hidden deep within my text is the subtle idea that GPU mining is dead, due to it being less efficient.

I calculated that a 5GH ASIC at 30W would still be running with a difficulty of 300mil and a BTC price of $2, and even make a tiny profit.

Are you sure? By my calculation you'd need just over GH/J at that difficulty and price assuming .15$ per kwh. 5GH at 30W is 166MH/J

[Malawi]

Depends on the accuracy of this calculator http://www.bitcoinx.com/profit/

Diff - 300,076,293
Mhash - 5000
Conversion rate - 2
power - 30

Says it will give a profit of $0.02/day

[mustyoshi]

Depends on the accuracy of this calculator http://www.bitcoinx.com/profit/

Diff - 300,076,293
Mhash - 5000
Conversion rate - 2
power - 30

Says it will give a profit of $0.02/day

It says you'll get a revenue of .02$ per day, you have to factor in your power costs.

Coins per 24h at these conditions   0.0084 BTC
Power cost per 24h   0.11 USD
Revenue per day   0.02 USD
Less power costs   -0.09 USD
System efficiency   166.67 MH/s/W
Mining Factor 100 at the end of the time frame   0.00 USD/24h@100MHash/s
Average Mining Factor 100   0.00 USD/24h@100MHash/s
Power cost per time frame   9.86 USD
Revenue per time frame   1.44 USD
Less power costs   -8.42 USD

You'll lose money overall.

[Malawi]

Hmf. You are absolutely correct

I was confusing the different numbers, and looked at power cost as revenue and revenue as surplus

Oh the humanity

[mustyoshi]

Hmf. You are absolutely correct

I was confusing the different numbers, and looked at power cost as revenue and revenue as surplus

Oh the humanity

If only it worked that way, we'd all be rich

[BTCAviator]

I have made a calculator for another thread that is asking a similar question. You may or may not be interested in the results. I certainly was.

Given a specified mining rig and electrical utility rate, I can show you at what difficulty your rig will not be profitable, compared to the current exchange rate of BTC. This should be applicable to solo or pooled mining.

Here is an example:
BFL 5Gh/s ASIC Miner in BLUE
Power consumption: 35 watts
Price of electricity: $0.10 USD/KWHr
Block Rewards: approx 25.5 BTC (25 for block, .5 for tx fees)

Avalon Batch 3 63Gh/s ASIC Miner in RED
Power consumption: 600 watts
Price of electricity: $0.10 USD/KWHr
Block Rewards: approx 25.5 BTC (same as above)

Result:


PM me for a personalized calculation. I will work for what ever tip size you feel I deserve.

16a2WVi1u3VFDcqvuWHTahk15UM9CxAnUh

[KS]

What that graph shows is perfect correlation between difficulty and exchange rate.

Where do you plug in the cost of KW/h?

[BTCAviator]

What that graph shows is perfect correlation between difficulty and exchange rate.

Where do you plug in the cost of KW/h?

The inputs are listed above the chart. This chart is only representative of one specific mining situation. If you are interested how your rig will do, I can plug in your setup variables into the spreadsheet and show the results.

There are four setup variables: Hashrate, Power consumption, Block Reward Size, and Energy Cost. And just one dynamic variable that you read along the chart: Difficulty.

The resulting graphs answer one question: "With my setup, what does the price of Bitcoin need to be in order to make mining at a given difficulty profitable?" So, with my Jalapeno, if the difficulty is 30 million, the price of a Bitcoin needs to be at least $25 for me to be breaking even.

Hope that answers your question.

[KS]

What that graph shows is perfect correlation between difficulty and exchange rate.

Where do you plug in the cost of KW/h?

The inputs are listed above the chart. This chart is only representative of one specific mining situation. If you are interested how your rig will do, I can plug in your setup variables into the spreadsheet and show the results.

There are four setup variables: Hashrate, Power consumption, Block Reward Size, and Energy Cost. And just one dynamic variable that you read along the chart: Difficulty.

The resulting graphs answer one question: "With my setup, what does the price of Bitcoin need to be in order to make mining at a given difficulty profitable?" So, with my Jalapeno, if the difficulty is 30 million, the price of a Bitcoin needs to be at least $25 for me to be breaking even.

Hope that answers your question.

Yes, thank you. The axis labels made me think it was only a representation of BTC/USD value with respect to difficulty while it's really "what BTC value in USD do I need to break even with a setup consuming 35W at 0.10 USD/KW/h". That's what you get when reading late at night

Not easy to fit 4 variables in a 2D chart, do you think you could plot 3x 3D charts? At 35W, 600W and 1500W with the z-axis being the cost per KW/h? That'd be cool

[BTCAviator]

Not easy to fit 4 variables in a 2D chart, do you think you could plot 3x 3D charts? At 35W, 600W and 1500W with the z-axis being the cost per KW/h? That'd be cool

Yeah, I could give that a go today. 3D graphs are notoriously fickle though. You just got to capture then at the correct angle.

[KS]

Not easy to fit 4 variables in a 2D chart, do you think you could plot 3x 3D charts? At 35W, 600W and 1500W with the z-axis being the cost per KW/h? That'd be cool

Yeah, I could give that a go today. 3D graphs are notoriously fickle though. You just got to capture then at the correct angle.

nice