USB ASIC Miners will never ROI at 1 BTC/device

[notme]

...
buy 11th unit next month to compensate a 10% rise in difficulty. and pocket 1.5BTC

rinse and repeat for a constant never ending 1.5BTC income per month.

Network hash rate increased ~ 600% in 4 months (from 25TH/s to 150TH/s) since ASICs started shipping...and the ramping up of ASIC production is just getting started...by many companies that haven't even begun shipping yet.  Expect a market flood.

I laugh at your 10% increase every month.  Do the math, and a little forecasting both optimistic and pessimistic, either way, the increase in ASIC hashing power will crush your returns faster than a Black Wednesday on the DOW.

Denial is a river in Egypt my friend.

I've been mining for 2 years now.  Made most of my BTC in the beginning when hashing power was within grasp of the common man.  I'd like to get into ASIC but I just can't justify the prices, especially if you have to pay in BTC.  I rather pay good old USD.

Just recently stop GPU mining.  I've reached my break even point on my GPU mining.  At current USD/BTC, it's just not worth it.  I'm willing to bet that a USB miner will no longer be worth mining in less than 6 months (1 BTC/device) from now and you will not recoup your 1 BTC you spent to get it.  I'll re-visit this post in 6 months and post an update.

400 MH/s USB miners cost me $2 a year in electricity.  Are you sure they won't be worth mining on in 6 months?

depends whats your cost of electricity and the use? 2.5watts or 3? and relative to the value of BTC? since you cannot pay your electric with btc.

2.5 watts at $0.09/KWh

At the moment, electrical costs are roughly 1.5% of revenue.  So you are claiming (BTC Price)/(BTC Difficulty) will be 1/67th of it's current value within 6 months?  That's a pretty bold prediction

also did you pay 1 or 2 btc for them. i suspect 2.x

I did not buy them.  I am operating them for a fee for a friend.  Based on the timing, I would say 2 which is unfortunate for him.  I wouldn't have bought at that price and I told him that.  However, this shouldn't be a competition to prove I made bad decisions.  This should be a discussion of facts.

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[lazydna]

...
buy 11th unit next month to compensate a 10% rise in difficulty. and pocket 1.5BTC

rinse and repeat for a constant never ending 1.5BTC income per month.

Network hash rate increased ~ 600% in 4 months (from 25TH/s to 150TH/s) since ASICs started shipping...and the ramping up of ASIC production is just getting started...by many companies that haven't even begun shipping yet.  Expect a market flood.

I laugh at your 10% increase every month.  Do the math, and a little forecasting both optimistic and pessimistic, either way, the increase in ASIC hashing power will crush your returns faster than a Black Wednesday on the DOW.

Denial is a river in Egypt my friend.

I've been mining for 2 years now.  Made most of my BTC in the beginning when hashing power was within grasp of the common man.  I'd like to get into ASIC but I just can't justify the prices, especially if you have to pay in BTC.  I rather pay good old USD.

Just recently stop GPU mining.  I've reached my break even point on my GPU mining.  At current USD/BTC, it's just not worth it.  I'm willing to bet that a USB miner will no longer be worth mining in less than 6 months (1 BTC/device) from now and you will not recoup your 1 BTC you spent to get it.  I'll re-visit this post in 6 months and post an update.

400 MH/s USB miners cost me $2 a year in electricity.  Are you sure they won't be worth mining on in 6 months?

depends whats your cost of electricity and the use? 2.5watts or 3? and relative to the value of BTC? since you cannot pay your electric with btc.

2.5 watts at $0.09/KWh

At the moment, electrical costs are roughly 1.5% of revenue.  So you are claiming (BTC Price)/(BTC Difficulty) will be 1/67th of it's current value within 6 months?  That's a pretty bold prediction

also did you pay 1 or 2 btc for them. i suspect 2.x

I did not buy them.  I am operating them for a fee for a friend.  Based on the timing, I would say 2 which is unfortunate for him.  I wouldn't have bought at that price and I told him that.  However, this shouldn't be a competition to prove I made bad decisions.  This should be a discussion of facts.

it matters because 400m/hash @ 2.5watts @ 2.x BTC per means you can't realistically collect 2.x btc from that usb @ 10% every 11days you'll get back 1.23btc (nov 2014) + 0.0001 every 11days there after. with diminishing returns, you'll never hit 2.x BTC. not counting -2% fee. so you'll always run it at a perpetual loss because you can't recoup the initial investment cost, no matter how little electricity it consumes, you are always behind.

@ 1BTC cost, same formula, you'll make 1btc back @ dec 13'2013. and 0.2BTC to Nov' 2014.
so you profit 0.2BTC in a year. -2% pool fee and 2 dollars @ electricity. assuming BTC remains at 100usd. you made 18dollars in a 18months. this giving you the benefit of doubt by not calculating pool fee's and unforseen downtime.

assuming a conservative 10% every 11days.

[notme]

I did not buy them.  I am operating them for a fee for a friend.  Based on the timing, I would say 2 which is unfortunate for him.  I wouldn't have bought at that price and I told him that.  However, this shouldn't be a competition to prove I made bad decisions.  This should be a discussion of facts.

At 2BTC a piece I agree.

Also, I am the pool fee, so even on my own hardware I don't have to worry about that.

Dude, I've been mining since December 2010.  I know how to calculate expenses.  If you want to discuss potential difficulty, sure, that is guesswork.  But I know expenses.

[lazydna]

I did not buy them.  I am operating them for a fee for a friend.  Based on the timing, I would say 2 which is unfortunate for him.  I wouldn't have bought at that price and I told him that.  However, this shouldn't be a competition to prove I made bad decisions.  This should be a discussion of facts.

At 2BTC a piece I agree.

Also, I am the pool fee, so even on my own hardware I don't have to worry about that.

Dude, I've been mining since December 2010.  I know how to calculate expenses.  If you want to discuss potential difficulty, sure, that is guesswork.  But I know expenses.

K your 0.2btc return on 18 months plan is too little for my tastes. And a bit too risky considering
Thats based on 10% 11day schedule. How much is shipping on those?

[BitcoinBarrel]

Yeah because the price of BTC is going to stay the same forever.

[FiatKiller]

The real question is how the heck are you getting a hashspeed of 400 instead of 334? Do tell...

[lazydna]

Yeah because the price of BTC is going to stay the same forever.

I can't tell if that statement is for buying a USB miner or against.
But here's the facts for those that don't know.

The value of BTC is irrelevant to the ROI of hardware. If hardware does not return the BTC it costs to purchase. You are better off just buying BTC from the exchange and holding it.

[k9quaint]

Yeah because the price of BTC is going to stay the same forever.

I can't tell if that statement is for buying a USB miner or against.
But here's the facts for those that don't know.

The value of BTC is irrelevant to the ROI of hardware. If hardware does not return the BTC it costs to purchase. You are better off just buying BTC from the exchange and holding it.

^This
And I am continually amazed at how many people do not realize this.
If only I had a satoshi for every newly minted Bitcoin enthusiast who justified purchasing mining hardware by saying the price of Bitcoins was going to rise.

[tacotime]

Yeah because the price of BTC is going to stay the same forever.

I can't tell if that statement is for buying a USB miner or against.
But here's the facts for those that don't know.

The value of BTC is irrelevant to the ROI of hardware. If hardware does not return the BTC it costs to purchase. You are better off just buying BTC from the exchange and holding it.

^This
And I am continually amazed at how many people do not realize this.
If only I had a satoshi for every newly minted Bitcoin enthusiast who justified purchasing mining hardware by saying the price of Bitcoins was going to rise.

I hope the price tumbles to $30 per BTC and the margin of profit falls to almost nothing.  That way I can continue mining with my 5 ASIC sticks that only cost $1 a month to run and get more BTC, while the companies who invested a bajillion dollars into it make barely anything and have to shut their power hungry massive ASIC warehouses down.

In fact, I'd be surprised if it didn't, given the way things went after the first BTC bubble...

[lazydna]

Yeah because the price of BTC is going to stay the same forever.

I can't tell if that statement is for buying a USB miner or against.
But here's the facts for those that don't know.

The value of BTC is irrelevant to the ROI of hardware. If hardware does not return the BTC it costs to purchase. You are better off just buying BTC from the exchange and holding it.

^This
And I am continually amazed at how many people do not realize this.
If only I had a satoshi for every newly minted Bitcoin enthusiast who justified purchasing mining hardware by saying the price of Bitcoins was going to rise.

I hope the price tumbles to $30 per BTC and the margin of profit falls to almost nothing.  That way I can continue mining with my 5 ASIC sticks that only cost $1 a month to run and get more BTC, while the companies who invested a bajillion dollars into it make barely anything and have to shut their power hungry massive ASIC warehouses down.

In fact, I'd be surprised if it didn't, given the way things went after the first BTC bubble...

personal prediction.
I think bitcoin might hit anywhere between 30-50 by end of this year.
I do think we're experiencing another 2011, with a little twist.

[notme]

I did not buy them.  I am operating them for a fee for a friend.  Based on the timing, I would say 2 which is unfortunate for him.  I wouldn't have bought at that price and I told him that.  However, this shouldn't be a competition to prove I made bad decisions.  This should be a discussion of facts.

At 2BTC a piece I agree.

Also, I am the pool fee, so even on my own hardware I don't have to worry about that.

Dude, I've been mining since December 2010.  I know how to calculate expenses.  If you want to discuss potential difficulty, sure, that is guesswork.  But I know expenses.

K your 0.2btc return on 18 months plan is too little for my tastes. And a bit too risky considering
Thats based on 10% 11day schedule. How much is shipping on those?

Shipping is free.  I'm still not buying at 1BTC, but it is profitable and I will gladly continue to operate for a fee as many as my friend wants to buy.

Personally, I am waiting for a better proposal once AM gets some competition.  At the moment, they are the only ones shipping in reasonable times (2-4 days from China to US vs. a 3 month estimated queue at BFL and taking a risk on Avalon's "we will deliver when your rig starts to fill with dust"... oh or KNC's 28nm dream machines).  I'm waiting a few more months to see how it all plays out.

The real question is how the heck are you getting a hashspeed of 400 instead of 334? Do tell...

1. Plug it in
2. Start mining

They are likely advertising a hashrate that is based on average imperfection rate and a fair margin of error.  All ASIC production has areas where the chip doesn't work properly, so you might only get 90% of the cores in the chip that actually function properly.  Either they added too much buffer to their estimate or I got really lucky with all 10 of my miners.

[FiatKiller]

If you are getting 400, then you are just lucky because the vast majority of us are getting almost exactly 334.

On the just buy BTC theory, you may be correct, but we want to mine! Probably best to do a combination.

On the price drop theory, it seems like people are not remembering Cypress. More and more rumors of Cypress happening here. That will drive the price up. Also, serious rumors of fiat not being fiat anymore because the IMF is moving to a commodity backed system to readjust the values of all currencies. This will include precious metals and everything else like oil, etc. not just gold and silver. If that happens, then we may be in much better USD shape long-term and BTC rise will be much slower. Digital currencies still have the advantages of near instant payment without a bank and middlemen to take a cut.

[notme]

If you are getting 400, then you are just lucky because the vast majority of us are getting almost exactly 334.

On the just buy BTC theory, you may be correct, but we want to mine! Probably best to do a combination.

On the price drop theory, it seems like people are not remembering Cypress. More and more rumors of Cypress happening here. That will drive the price up. Also, serious rumors of fiat not being fiat anymore because the IMF is moving to a commodity backed system to readjust the values of all currencies. This will include precious metals and everything else like oil, etc. not just gold and silver. If that happens, then we may be in much better USD shape long-term and BTC rise will be much slower. Digital currencies still have the advantages of near instant payment without a bank and middlemen to take a cut.

I must be the luckiest person in the world... I just ordered 50 more and they are all pushing pretty close to 400 MH/s.

Edit: updating to cgminer 3.3 lowers my  hashrate to 334ish... strange

[rograz]

If only I had a satoshi for every newly minted Bitcoin enthusiast who justified purchasing mining hardware by saying the price of Bitcoins was going to rise.

They are still living with the GPU mindset when you could recoup some of your costs by selling your equipment if mining didn't pan out. No such easy way out for the math-illiterates this time around.

[notme]

If only I had a satoshi for every newly minted Bitcoin enthusiast who justified purchasing mining hardware by saying the price of Bitcoins was going to rise.

They are still living with the GPU mindset when you could recoup some of your costs by selling your equipment if mining didn't pan out. No such easy way out for the math-illiterates this time around.

Math is only as good as the assumptions it is based on.

ASICMiner USBs will continue to outproduce their electrical costs until the network hits about 95 petahashes.  Even if all the rumored hardware is true, we'll be lucky to see 20 petahashes within a year.  Who is going to pay for 5-10X more hardware than is already planned?  Are there that many "math-illiterates"?  That said, the window is indeed narrowing.

[k9quaint]

If only I had a satoshi for every newly minted Bitcoin enthusiast who justified purchasing mining hardware by saying the price of Bitcoins was going to rise.

They are still living with the GPU mindset when you could recoup some of your costs by selling your equipment if mining didn't pan out. No such easy way out for the math-illiterates this time around.

Math is only as good as the assumptions it is based on.

ASICMiner USBs will continue to outproduce their electrical costs until the network hits about 95 petahashes.  Even if all the rumored hardware is true, we'll be lucky to see 20 petahashes within a year.  Who is going to pay for 5-10X more hardware than is already planned?  Are there that many "math-illiterates"?  That said, the window is indeed narrowing.

I predict your first year of mining will bring you 0.45 BTC for each stick you have.
Lets necro this thread in a year and run a regression against the actual difficulty rises. 

[notme]

If only I had a satoshi for every newly minted Bitcoin enthusiast who justified purchasing mining hardware by saying the price of Bitcoins was going to rise.

They are still living with the GPU mindset when you could recoup some of your costs by selling your equipment if mining didn't pan out. No such easy way out for the math-illiterates this time around.

Math is only as good as the assumptions it is based on.

ASICMiner USBs will continue to outproduce their electrical costs until the network hits about 95 petahashes.  Even if all the rumored hardware is true, we'll be lucky to see 20 petahashes within a year.  Who is going to pay for 5-10X more hardware than is already planned?  Are there that many "math-illiterates"?  That said, the window is indeed narrowing.

I predict your first year of mining will bring you 0.45 BTC for each stick you have.
Lets necro this thread in a year and run a regression against the actual difficulty rises.  

Sure.  Put it on your calendar if you want.  For my customer (I'm just operating for a fee) to lose that much, we would need to see the network at roughly 128 Petahashes/second within one year of the date these started mining (July 3rd).  That's a lot of hashpower, considering the entire bitcoin network, plus all the planned (preorder plus not yet sold) ASICs comes to around 3-5 petahashes at the moment.  How many more suckers do you think there are if the devices are already unprofitable?

[k9quaint]

If only I had a satoshi for every newly minted Bitcoin enthusiast who justified purchasing mining hardware by saying the price of Bitcoins was going to rise.

They are still living with the GPU mindset when you could recoup some of your costs by selling your equipment if mining didn't pan out. No such easy way out for the math-illiterates this time around.

Math is only as good as the assumptions it is based on.

ASICMiner USBs will continue to outproduce their electrical costs until the network hits about 95 petahashes.  Even if all the rumored hardware is true, we'll be lucky to see 20 petahashes within a year.  Who is going to pay for 5-10X more hardware than is already planned?  Are there that many "math-illiterates"?  That said, the window is indeed narrowing.

I predict your first year of mining will bring you 0.45 BTC for each stick you have.
Lets necro this thread in a year and run a regression against the actual difficulty rises.  

Sure.  Put it on your calendar if you want.  For my customer (I'm just operating for a fee) to lose that much, we would need to see the network at roughly 128 Petahashes/second within one year of the date these started mining (July 3rd).  That's a lot of hashpower, considering the entire bitcoin network, plus all the planned (preorder plus not yet sold) ASICs comes to around 3-5 petahashes at the moment.  How many more suckers do you think there are if the devices are already unprofitable?

By my calculations ~200 TH/s got us to 26M difficulty. My projections put the difficulty at between 500M - 700M in 52 weeks time. That would require between 3900TH/s and 5400TH/s to achieve that difficulty. That is within your "planned ASICs" window.

The current margins on mining devices cannot be supported over the longer term. Second generation ASICs which are far cheaper and more efficient are coming online soon. Right now, there is no company that can fulfill demand. Everyone is back-ordered and margins are fat because of this. The next generation of mining equipment companies should be able to build and ship product far better than BFL or Avalon could.