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Author Topic: Will Avalon Batch 3's ever make ROI?  (Read 2335 times)
mik3
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July 13, 2013, 02:32:46 AM
Last edit: July 13, 2013, 03:29:07 AM by mik3
 #1

With KNC/Bitfury/Terrahash/ASICminer/etc + Avalon chips coming online very soon, and no way to recoup Batch 3 costs in 1 month as originally planned by Bitsyncom, do you think ROI is likely?

I tried some numbers and it looks like with the difficulty going up the way it is now it would take 4-5 months to make the coins back. But with all those other companies coming online, I am thinking ROI seems impossible. Someone convince me otherwise, I am contemplating getting a refund  Cry Cry
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July 13, 2013, 02:35:38 AM
 #2

You aren't going to make ROI in 2 months anymore. Those days are LOOOONG gone.

Looks like you're using even more conservative difficulty estimates than me.

My numbers come in at about 3-4 months using a 66 Gh/s avalon.

Not really too surprising. There is no such thing as a free lunch.
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July 13, 2013, 04:03:16 AM
 #3

I don't think it will unless you overclock it severely.  There was a good difficulty-adjusted calculator (http://www.coinish.com/calc/ - link doesn't work now) which showed that they wouldn't ROI in BTC if delivery was later than about 2-3 weeks from now.
I think there are still a lot of batch 2 units in transit as well, when they are all plugged in the difficulty should rise quite a bit.  Then there's at least another 40 THash/sec from all the batch 3 units (conservative -assumes all 3 module units).  That's nearly a 6m difficulty increase just from Batch 3.
BFL will probably finish shipping 'in two weeks' so there's more too...

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July 13, 2013, 04:14:16 AM
 #4

You aren't going to make ROI in 2 months anymore. Those days are LOOOONG gone.

Looks like you're using even more conservative difficulty estimates than me.

My numbers come in at about 3-4 months using a 66 Gh/s avalon.

Not really too surprising. There is no such thing as a free lunch.


I had the 88 BTC (price of batch 3 IIRC) earned back in between 16 to 20 weeks for 66 GH/s if the unit arrived today.
That is a decent return IMO.

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July 13, 2013, 12:27:19 PM
 #5

Yes no maybe?

My most optimistic estimate would be 3-4 months. That is if you start hashing right now, most Avalon Chip projects get delayed, KnC and Bitfury fail to deliver on time (or at all) and Asicminer doesn't need to move up their hashrate to maintain their share of the network.


Probably more realistic assumptions:
-) Asicminer partially manages to reach their goal and puts 200TH online by October
-) Those 200TH are required to maintain a share of 20% of the network, because KnC, Bitfury, etc. at least partially delivered.
-) Which would mean a total hashrate of 1000TH resulting in a difficulty of 140,000,000

If you manage to run the miner for 2-3 months before this happens you can still assume a total timeframe of maybe 6-9 months of operation until break even. Which in the real world isn't as bad as it sounds.


Worst case for Avalon Batch 3:
-) Everyone delivers on time. We all know the likeliness of this. Break even gets delayed for 2-3 years whichs means probably never.


The truth will be somewhere inbetween. It all boils down how much confidence you have in the other companies to actually deliver (and how well they manage to stick to their schedule)

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July 13, 2013, 05:17:24 PM
 #6

Not totally sure if I'm using http://www.bitcoinx.com/profit properly but it seems to me ROI should be expected after around 100 days (in my case).



Anyone see this nice Bitcoin difficulty predictor? Looks like October might bring a difficulty over 100 million!
https://docs.google.com/spreadsheet/ccc?key=0AmXn4BnLUgYsdEF0TUtWUWtUaUUzR1F2aUhEWW9lN2c#gid=0
I can't imagine pre-ordering for October at the same price and Gh as August. Again 25Gh orders further out should be cheaper as with the 400Gh model.


Here is a revised sheet with product lifetime profits at today's prices and an Aug difficulty of 64 Mill on the manufacturers top end hardware

I have updated the document to have multiple sheets along with Comparison between Multiple ASIC Hardware Vendors Vs Difficulty Sheets.

Combined Multiple Sheet Document https://docs.google.com/spreadsheet/ccc?key=0AmeuPljmUNHCdEpqX2RmMDFwemJyLURVUWFtZ3J3aGc&usp=sharing
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July 13, 2013, 05:44:49 PM
 #7

ROI should be calculated with BTC strictly, which is 74.46 BTC (3 module no PSU). If you want to go off of dollar amount for some reason. You would want to calculate what the price of BTC was during batch 3 sales. $75 was the price on the largest exchange so a batch 3 unit will need to make $5,584 back.
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July 13, 2013, 05:46:45 PM
 #8

ROI should be calculated with BTC strictly, which is 74.46 BTC (3 module no PSU). If you want to go off of dollar amount for some reason. You would want to calculate what the price of BTC was during batch 3 sales. $75 was the price on the largest exchange so a batch 3 unit will need to make $5,584 back.

That's not the correct way (IMO) to do it. You need to compare it to the 'sell' price today, which is a refund. So the equivalent value to break even is 75*today's price.

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July 13, 2013, 05:53:45 PM
 #9

ROI should be calculated with BTC strictly, which is 74.46 BTC (3 module no PSU). If you want to go off of dollar amount for some reason. You would want to calculate what the price of BTC was during batch 3 sales. $75 was the price on the largest exchange so a batch 3 unit will need to make $5,584 back.

That's not the correct way (IMO) to do it. You need to compare it to the 'sell' price today, which is a refund. So the equivalent value to break even is 75*today's price.

Regardless BTC74.46 is the ROI.
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July 13, 2013, 08:00:44 PM
 #10

The problem is that the Avalon's are first generation tech.  Which is great if you can sit on your lead for a while.
At this point, the newer competition is only a month or so away (and with 100TH mine maybe only weeks away).


It would be interesting to find out what was the problem which killed their ability to produce Batch2 and therefore hold back Batch3.

Component sourcing issues like not enough chips?
Administrative payment issues with wallet bit?
Was it the new production line?

Could these problem happen again with future products?

I still think that Batch3 will make a decent profit... but because of its power/GH ratio, it am not even sure the chip machines will makes sense to run very long (6 to 9 months if you are paying for your own power).

I think the biggest winners are the trade in folks... 17 BTC for a 80+ GHs machine is quite the steal (well other than the beginning batch 1-ers).
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July 13, 2013, 08:18:47 PM
Last edit: July 13, 2013, 08:29:56 PM by Bogart
 #11

With KNC/Bitfury/Terrahash/ASICminer/etc + Avalon chips coming online very soon, and no way to recoup Batch 3 costs in 1 month as originally planned by Bitsyncom, do you think ROI is likely?

...I am thinking ROI seems impossible.

Well of course you'll earn *some* Return On your Investment unless you never plug the Avalon in, or you do nothing but solo-mine and never mine a block.

Maybe you mean 100% ROI?

http://en.wikipedia.org/wiki/Return_on_investment

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July 13, 2013, 08:48:41 PM
 #12

If the network grows gradually up to 1200TH this year, 70GH Avalon can mine 80btc (august-december).
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July 13, 2013, 09:48:41 PM
 #13

If the network grows gradually up to 1200TH this year, 70GH Avalon can mine 80btc (august-december).

Here is a google spreadsheet I did while back.  I just updated the numbers with exponentials returned from Wolfram alpha.

https://docs.google.com/spreadsheet/ccc?key=0Auya3iRE6az1dDc0UVgwMU52YVpTazVjSHByOGNiWHc#gid=8

and a link to the OP:
https://bitcointalk.org/index.php?topic=236050.0

It basically says that an exponentially growing hash rate tracking since Feb. 5th will put an over clocked 4 module at break even around mid October.

Whether this models reality ... who knows... but it does but the eventual Avalon at 130% before it stops making sense to mine with it.

Feel free to make your own changes and see if you think it is worthwhile to do a refund.

Oh... I made the difficulty continuous rather than every 2016 blocks because I figured that you are competing with the global hashrate at the time... if the hashrate is always being added, then your effective difficulty is continuous.
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July 13, 2013, 10:35:32 PM
 #14

With KNC/Bitfury/Terrahash/ASICminer/etc + Avalon chips coming online very soon, and no way to recoup Batch 3 costs in 1 month as originally planned by Bitsyncom, do you think ROI is likely?

...I am thinking ROI seems impossible.

Well of course you'll earn *some* Return On your Investment unless you never plug the Avalon in, or you do nothing but solo-mine and never mine a block.

Maybe you mean 100% ROI?

http://en.wikipedia.org/wiki/Return_on_investment

From that article:
return on investment = (gain from investment - cost of investment) / cost of investment

If the cost of the investment  is larger than the gain from the investment, ROI is negative. 0% ROI is when you gain from the investment the same amount you spent on the investment.
In this case, the cost of the investment is 80 BTC (IIRC).
If the gain is only 70BTC, then the ROI will be (70 - 80)/80 which would be -12.5%.

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July 13, 2013, 11:04:57 PM
 #15

I estimate a batch-3 delivered today to take about 3 months to break even (roughly 80 btc). Since batch-3 hasn't started shipping yet, that's an optimistic view. Difficulty increases are just going to accelerate over the next few months. Batch-3 will likely break even by the end of 2013. Not bad, but not great either.

Buy & Hold
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July 14, 2013, 09:55:09 PM
 #16

Why would you ask on a forum? There are very strong incentives for for other miners to mislead you. Competing miners using different hardware will want you to waste money on Avalon, whereas Avalon miners will want you to refund (so they have less competition).

It is pitch black. You are likely to be eaten by a grue.

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July 14, 2013, 10:08:45 PM
 #17

Why would you ask on a forum? There are very strong incentives for for other miners to mislead you. Competing miners using different hardware will want you to waste money on Avalon, whereas Avalon miners will want you to refund (so they have less competition).

This is a question that can be answered with math for a range of difficulty growth rates. Of course, nobody can predict exactly what the growth rate will actually be. One can assign probability to the range and make a decent model of ROI for the various flavors of ASIC mining hardware.

But your comments about conflict of interest are correct.

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July 15, 2013, 08:52:05 AM
 #18

first units of batch #3 will be in customer hands in 3, 4 days, currently machine is making 1.3btc per day, so yes, in 3, 4 months, you're good with ROI...

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July 15, 2013, 10:22:56 AM
 #19

first units of batch #3 will be in customer hands in 3, 4 days, currently machine is making 1.3btc per day, so yes, in 3, 4 months, you're good with ROI...

thats what you think and hope for.

But based on the first and second batch delivery, it may take up to a month, till they deliever them.

And at that point, your ROI looks really bad.

Komuto Herovato is definitely the chief engineer of bfl)
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July 15, 2013, 10:47:49 AM
 #20

first units of batch #3 will be in customer hands in 3, 4 days, currently machine is making 1.3btc per day, so yes, in 3, 4 months, you're good with ROI...

3-4 days if you live in china I guess. Delivery from china to europe or usa? Many days more my friend Smiley

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