Should you Cancel your Jalapeno Order? - This might help to decide

[PuertoLibre]

Here is my estimate on revenue per week for a Jala 5Gh/s and 7Gh/s.  Assumptions: $111USD/BTC, 19% straightline increase in difficulty every two weeks.  I actually used 9.5% per week.  No allowance for electricity usage, just the gross $.
A 5Gh/s will make about $1000 between today and the end of the year.  Next year you only have a few weeks before it costs more to run than it makes.  So it's a brick by the end of February.  Although it may have a second life with altcoins.

Week   5 Gh/s   7 Gh/s
19-Jun    $101.27     $141.78
26-Jun    $92.48     $129.48
3-Jul            $84.46     $118.24
10-Jul    $77.13     $107.99
17-Jul    $70.44     $98.62
24-Jul    $64.33     $90.06
31-Jul    $58.75     $82.25
7-Aug    $53.65     $75.26
14-Aug    $47.10     $68.60
21-Aug    $43.01     $62.64
28-Aug    $39.28     $57.21
4-Sep    $37.32     $52.25
11-Sep    $34.08     $47.71
18-Sep    $31.13     $43.58
25-Sep    $28.43     $39.79
2-Oct    $25.96     $36.34
9-Oct    $23.71     $33.19
16-Oct    $21.65     $30.31
23-Oct    $19.77     $27.68
30-Oct    $18.06     $25.28
6-Nov    $16.49     $23.09
13-Nov    $15.06     $21.08
20-Nov    $13.75     $19.25
27-Nov    $12.56     $17.58
4-Dec    $11.47     $16.06
11-Dec    $10.48     $14.67
18-Dec    $9.57     $13.39
25-Dec    $8.74     $12.23

Try doing the numbers from the beginning of the year.

Find out what is the difference between what you make from now to the end of the year vs what you would have made if you had it in early january. I think you will (unpleasantly) surprised.

[k9quaint]

All the calculations I've seen about rate of return on Bitcoin mining tend to assume that $/BTC will remain stable. Is that a valid assumption?  I'd think that given the decrease in coins produced per person mining, that would effectively act as a reduced supply in economic terms, sending the dollar value of a Bitcoin upwards.

Any purchase in mining equipment is a bullish bet on the future exchange rate of BTC.
Litmus test:
One compares the amount of Bitcoin that could be bought instead at the time of the purchase to the amount of Bitcoin that the mining equipment could generate over the foreseeable future. That way, exchange rates are irrelevant. If the you can buy more BTC than the equipment will likely produce, you should not buy the equipment.

Most Jalapeno purchases fail this test (unless you got one for free).

[markm]

Isn't the BFL stuff some of the highest hash per watt?

If so, then presumably as people with higher electricity costs stop making profit some of them might stop mining.

So it seems like to at least some extent this should be self-correcting, and it will end up coming down to who has the lowest cost of electricity?

-MarkM-