Sold my Jalapeno today. : ( Should I buy more?

[D_Thomas]

So here is my dilemma... I have a 25% off coupon for any purchase amount at Butterfly Labs this month. I was thinking about spending $1,000 to buy 5 more Jalapeños. Would that be a wise move? My 8570 now only breaks even with electricity cost. I'm guessing it may take 4-6 months for the new Jalapenos to arrive. In 6 more months could the Jalapenos already be almost obsolete? Right now they make about $400 a month (1 coin per week.) I don't know how often the payout is reduced and the difficulty increased to make an intelligent decision. Would I be better off to buy some other type of mining gear with the money?

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[optimator]

Ahhh. And here is where the real gambling begins. Clearly BFL is working through their back orders. Clearly, the can churn out 7-8 Gh/s miners. Lets assume October deliver represents break even. If you get a unit before then you are cash flow positive, after that... Maybe you don't get your money back.

The question is when do you think BFL will have cleared their backlog and deliver the newly purchased unit? Will it be the 5gh/s , the 50 Gh/s, or the mini rig?

I'm partial to betting on the min rig because they should easily churn through all orders and have available capacity for the new mini rig orders.

Sure go all in on the 5 Gh/s miners and have a backup plan of selling the orders if it looks like they'll deliever after whatever your cuttoff month is.

Cheers!

[D_Thomas]

I don't understand the lure of the BFL larger units. For example, the 50Gh/s unit is $2,490. That is the same price as 10 Jalapeños which would put out same hash rate. If the 50Gh/s unit craps out you have nothing to mine with until repaired. With 10 Jalapenos if one goes out you are only down 10%. So other than perhaps having to yell over the sound of 10 Jalapenos running in a room, I don't get the down side. I also think when it comes time to sell them it would be easier to get a better return on the used hardware selling the cheaper Jalapenos units.

But I really can't figure out how to factor in the difficulty issue. When is the next time the payout gets reduced in half?

[optimator]

I don't understand the lure of the BFL larger units.

If you do the math and assume a 5 Gh/s miner can be reflashed to 8 Gh/s then those miners are a better deal on a cost per gigahash basis. However, if you assume there are less mini rigs and the back orders for mini rigs will be cleared faster than the 5 Gh/s miners then the mini rig is a better deal.

It's all a crap shoot.

[D_Thomas]

Aha, that makes sense! Wonder if any way to find out what will ship sooner?

[Xian01]

Q: "Should I buy more ?"
A: "No."

[D_Thomas]

Q: "Should I buy more ?"
A: "No."

Reason?  Is mining dead unless you can be king of the hill in hardware? For $1,000 I could get 35-40 Gh/s. But may take 4-6 months to get...

[Syke]

So here is my dilemma... I have a 25% off coupon for any purchase amount at Butterfly Labs this month. I was thinking about spending $1,000 to buy 5 more Jalapeños. Would that be a wise move? My 8570 now only breaks even with electricity cost. I'm guessing it may take 4-6 months for the new Jalapenos to arrive. In 6 more months could the Jalapenos already be almost obsolete? Right now they make about $400 a month (1 coin per week.) I'm don't know how often the payout is reduced and the difficulty increased to make an intelligent decision. Would I be better off to buy some other type of mining gear with the money?

In 4 months you'll be lucky to mine .5 btc per month. You'll never break even on a new Jalapeno.

[D_Thomas]

Just from intuition I thought that may be the case. But can I get more specifics as to why? For example...

In 4 months you'll be lucky to mine 0.5 BTC per month because _________.  Fill in the blank.

Sorry to be a pest. I just like to know the reasoning behind what is speculated.

[k9quaint]

Just from intuition I thought that may be the case. But can I get more specifics as to why? For example...

In 4 months you'll be lucky to mine 0.5 BTC per month because _________.  Fill in the blank.

Sorry to be a pest. I just like to know the reasoning behind what is speculated.

There have been several "difficulty rise projection" spread sheets posted on these forums.
According to mine, if you got your Jalapeno today, it would earn it's money back in just under 6 weeks. But you won't get your Jalapeno today, I don't know when in calendar days but I do know you won't get it until BFL has cleared their back orders. That implies a minimum rise in difficulty. Also, Avalon has delivered on their chip orders. Bitfury & KNCMiner are looking like they might deliver on theirs. So you will be seeing double digit difficulty growth for the next 4-6 months as those 3 vendors bring new product to market and BFL & ASICMiner add as well.

Projecting over the next 12 months using my spreadsheet (projection ends July 20th 2014):
Assuming a lazy 6.5% growth average, if get your Jalapeno 3 months from now, it would take you until June 2014 to break even.

Assuming a moderate 8% growth average, if get your Jalapeno 3 months from now, you would not break even in a year (and doubtfully at all). You would have to get your Jalapeno by Sept 1st to break even in a year.

Assuming a torrid 10% growth average, if get your Jalapeno 3 months from now, you wouldn't get half your money back in a year. You would have to get your Jalapeno by mid August to break even. Your upside would be 2 bitcoins. At the end of the projection period, the Japaleno is earning 0.0032 BTC per day.

Does that fill in the blank?

[Xian01]

Q: "Should I buy more ?"
A: "No."

Reason?  Is mining dead unless you can be king of the hill in hardware? For $1,000 I could get 35-40 Gh/s. But may take 4-6 months to get...

1) It could be argued America's Favorite Bitcoin ASIC Company does not deserve the support of this community.
2) Do you believe they are going to get through the last twelve months of order backlog in the next 60 days according to their announced intentions ?
3) Does their pattern of behavior over the last thirteen months inspire confidence in their enterprise ?
4) Has their shipping/production schedule since April 1st, 2013 inspired confidence in their enterprise ?
5) Evidence suggests 4-6 months from now, the mining landscape will have second gen ASIC's available for purchase, while America's Favorite Bitcoin ASIC Company will presumably be still struggling to ship out their first gen orders.
6) Mining is quickly becoming a game of diminishing returns.

[chuhuue]

If you profited 3k off bitcoin already (nice!), I would vote for buying a GPU rig and mining alts. I think it is too risky to go into BFL again

[D_Thomas]

Just from intuition I thought that may be the case. But can I get more specifics as to why? For example...

In 4 months you'll be lucky to mine 0.5 BTC per month because _________.  Fill in the blank.

Sorry to be a pest. I just like to know the reasoning behind what is speculated.

There have been several "difficulty rise projection" spread sheets posted on these forums.
According to mine, if you got your Jalapeno today, it would earn it's money back in just under 6 weeks. But you won't get your Jalapeno today, I don't know when in calendar days but I do know you won't get it until BFL has cleared their back orders. That implies a minimum rise in difficulty. Also, Avalon has delivered on their chip orders. Bitfury & KNCMiner are looking like they might deliver on theirs. So you will be seeing double digit difficulty growth for the next 4-6 months as those 3 vendors bring new product to market and BFL & ASICMiner add as well.

Projecting over the next 12 months using my spreadsheet (projection ends July 20th 2014):
Assuming a lazy 6.5% growth average, if get your Jalapeno 3 months from now, it would take you until June 2014 to break even.

Assuming a moderate 8% growth average, if get your Jalapeno 3 months from now, you would not break even in a year (and doubtfully at all). You would have to get your Jalapeno by Sept 1st to break even in a year.

Assuming a torrid 10% growth average, if get your Jalapeno 3 months from now, you wouldn't get half your money back in a year. You would have to get your Jalapeno by mid August to break even. Your upside would be 2 bitcoins. At the end of the projection period, the Japaleno is earning 0.0032 BTC per day.

Does that fill in the blank?

Thanks, yes! Between you and Xian01 it paints a grim picture to buy anything now that does not have a firm delivery date. Maybe there isn't any smart plan to follow now for new mining gear. It seems that very soon the only winners will be mining hardware manufacturers creating a quasi pyramid scheme. They manufacture more powerful miners that makes the existing crop obsolete. Then anyone who wants to mine has to keep upgrading and the cycle repeats faster and faster. But unless you are buying some serious hardware, I guess you won't make beans. And if you buy some serious hardware, you probably have to be at the front of the line to use it for a shorter and shorter opportunity window. I would also guess that when production reaches a level where demand can be satisfied in a short time period, basic supply and demand principles will have kicked in and dictate that the hardware would be priced in a manner that one could not make a very high rate of return compared to traditional investments. Dang, this stinks. Oh well, my GPU still works well for playing video games. :p

[Lohoris]

How come is there still people who thinks they aren't scammers? O_o

[D_Thomas]

That who are scammers, BFL? To be honest I was going to order a few miners from BFL last year, but after some research on management, I cut back my order. (Which I kind of regret now cutting back as I got my order early enough for it to have value.) I came out ahead as it was finally delivered, but going into the order I gave it only about a 40% change I would ever see a package arrive. LOL. But now that they are shipping I have confidence they can manufacture the product, but I'm still shaky on delivery expectations.

[D_Thomas]

Just saw this graph. Only thing similar is our national debt. Think this photo says it all when interpolated for the rate hardware will start becoming obsolete.