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Author Topic: Expected return of bitcoin invested in mining  (Read 4324 times)
Peter Lambert
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June 26, 2011, 12:06:29 PM
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I was wondering if anybody had all the numbers and calculations to calculate the expected return of bitcoins invested in mining, expressed in bitcoins? Essentially, what I mean is for each 1 bitcoin I spend mining, how many bitcoins would I get back?

I guess we would have to know the typical cost of mining hardware, the typical cost of electricity and data connection to run the hardware, and the expected mining return of a typical hardware setup.

For keeping the math consistent, we can set an exchange rate to use, say 15 USD/BTC. I guess if we could generate an expression with a variable for the exchange rate that would be good too. Heck, we can express the other data as variables and get a useful expression.

If this has been done before in the forum, please post a link.

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Hawkix
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June 26, 2011, 12:43:23 PM
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You cannot get precise numbers because you do not know future BTC value and future difficulty.

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June 26, 2011, 01:18:25 PM
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Ok, for the sake of theoretical argument, lets hold BTC/USD at 15. Say the difficulty stays where it is right now. Once we get a number, we can adjust it for these variables.

We can't because difficulty changes every 14 days at 6 blocks/hour, or about every 5-9 days at 7-12 blocks per hour as it has recently.

Difficulty wont stay at 1,3 million just as it didn't stay at 877k.
It will rise to about 3-5 million by the end of next month which means any calculations made at current difficulty are completely useless.

You can't calculate future earnings based on 1,3M difficulty when it's only going to last about a week before going up again (and likely double within 20-30 days).

If BTC price really does stay at $15/btc then a miner buying a full rig today will likely never pay it off. He's missed the train by a long shot.
His only hope is holding onto what little he can get out of his rig & wait for price appreciation.

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June 26, 2011, 01:24:51 PM
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I've already seen my production cut in half in one month, add the cost of eletric and its cutting it close. My bill is about $600 more a month with added AC 15 rigs.
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June 26, 2011, 10:41:46 PM
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reinvesting the coins your mined back into mining is a fool's game.
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June 26, 2011, 11:35:17 PM
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funny thing is, it seems mining will be more profitable in the winter.  Right now people have to run AC to not heat up their house/room with their mining rigs.  In the winter you could keep the mining rig in the basement and use it to slightly subsidize your heating costs, in addition to not having to run AC.

so we should see difficulty go up during cooler seasons, theoretically.
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June 26, 2011, 11:47:13 PM
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funny thing is, it seems mining will be more profitable in the winter.  Right now people have to run AC to not heat up their house/room with their mining rigs.  In the winter you could keep the mining rig in the basement and use it to slightly subsidize your heating costs, in addition to not having to run AC.

so we should see difficulty go up during cooler seasons, theoretically.

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June 26, 2011, 11:49:25 PM
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funny thing is, it seems mining will be more profitable in the winter.  Right now people have to run AC to not heat up their house/room with their mining rigs.  In the winter you could keep the mining rig in the basement and use it to slightly subsidize your heating costs, in addition to not having to run AC.

so we should see difficulty go up during cooler seasons, theoretically.
That's assuming that most of the miners are in the Northern Hermisphere. It's winter time for some right now Tongue

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June 27, 2011, 03:00:43 PM
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Ha my miners keep my room nice and warm at night (South Africa)

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June 27, 2011, 04:45:35 PM
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funny thing is, it seems mining will be more profitable in the winter.  Right now people have to run AC to not heat up their house/room with their mining rigs.  In the winter you could keep the mining rig in the basement and use it to slightly subsidize your heating costs, in addition to not having to run AC.

so we should see difficulty go up during cooler seasons, theoretically.
That's assuming that most of the miners are in the Northern Hermisphere. It's winter time for some right now Tongue

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I still stand by all my statements because I do assume most miners are in the northern hemisphere - there isn't a separate market for north/south hemispheres so I predict a trend of increased difficulty when it is cold in the northern hemisphere  Tongue
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June 27, 2011, 05:12:39 PM
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Quote
Earth's northern hemisphere contains most of its land area and most of its human population (about 90%).
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June 28, 2011, 07:08:22 AM
 #12

OK, this thread has been a bit derailed.

I guess the information I am actually looking for is:
- How much does a typical mining rig cost?
- How many hash/sec would such typical rig generate?
- For how long would it run?
- How much electricity would it consume?
- How much does electricity cost? (something like $0.1 per kWh?)
- What is the formula for calculating expected bitcoin mining from hash rate?

Check out these sites, they will help in calculation. I am currently asking these same questions because I am considering buying a rig. Doesn't look too favorable.

http://bitcoinX.com/profit/


http://www.alloscomp.com/bitcoin/calculator.php
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June 28, 2011, 07:13:05 AM
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Also, this thread has a spread sheet you can download: http://forum.bitcoin.org/?topic=7531.0
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