Mining bitcoin with 1st gen hw doesnt seem to make sense at all by next year

[frankenmint]

In terms of BTC difficulty makes no sense to mine late next year even as next gen hardware will simply "keep up" into this spiraling hardware race.  A KNC Jupiter for example, It loses profitability once you touch november so for that matter once you touch week 2-3 of october (the calculator doesnt go as far as weeks into difficulty).  This calculator brings a very realistic and different picture from the known bitcoinx.com/profit calculator showing a miner.  I'm starting to believe that this is truly a "shovels" industry that mining companies are doing and that you can't win unless you buy in early enough.  This is just like the "block eruptor" argument...even if you had 4000 block eruptors, they still cost you 3-4k bitcoins...will you make ROI?   NEVER - the efficiency curve is just too high due to too many current asic first entrants. 

Does it make sense to take that same money to various exchanges and buy up a pleathora of Alt coins - Probably not, but maybe if one or two skyrocket and you chose them then you have still gained from those bubbles.  Just make sure to cash in on those bubbles. Others have noted that the same money can be used to hold bitcoins instead and to sell them at appreciated gains and of course acquire them at low values.  Soon if not yet so, Mt Gox is supposed to also carry litecoin so hopefully that helps bring crypto to mainstream. 

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[HellDiverUK]

So how is this thread different from all the other "BTC mining is dead" threads?  

Oh, that's right, it isn't.  

[Ytterbium]

If no one runs Jupiters, then there will be no reason for anyone to run Jupiters or any other hardware, in which case the difficulty will go back down and it'll be profitable to run them again.

In the end, it'll be like GPU miners, cost of electricity will be the limiting factor.

[mgio]

In terms of BTC difficulty makes no sense to mine late next year even as next gen hardware will simply "keep up" into this spiraling hardware race.  A KNC Jupiter for example, It loses profitability once you touch november so for that matter once you touch week 2-3 of october (the calculator doesnt go as far as weeks into difficulty).  This calculator brings a very realistic and different picture from the known bitcoinx.com/profit calculator showing a miner.  I'm starting to believe that this is truly a "shovels" industry that mining companies are doing and that you can't win unless you buy in early enough.  This is just like the "block eruptor" argument...even if you had 4000 block eruptors, they still cost you 3-4k bitcoins...will you make ROI?   NEVER - the efficiency curve is just too high due to too many current asic first entrants. 

Does it make sense to take that same money to various exchanges and buy up a pleathora of Alt coins - Probably not, but maybe if one or two skyrocket and you chose them then you have still gained from those bubbles.  Just make sure to cash in on those bubbles. Others have noted that the same money can be used to hold bitcoins instead and to sell them at appreciated gains and of course acquire them at low values.  Soon if not yet so, Mt Gox is supposed to also carry litecoin so hopefully that helps bring crypto to mainstream. 

What kind of difficulty are you expecting we will hit by November.

I'm guessing you are waaaay off if you don't think a KNC Jupiter will be profitable then!

Alt coins are the WORST investment. None of them will ever be worth anything. They are an extremely risky way to invest your money.

And Mt Gox will NEVER trade litecoin. Yes, I know what they've said, but believe me, it will never happen.

[aoshea]

Anyone who claims to "know" what bitcoin difficulty will be in 2, 4, 6, 12 months from now is either very confused or purposively trying to be deceptive. I would wager it will be higher than today at any of those timepoints, but how much higher? How many orders of magnitude? Who will actually ship and in what quantities/speed? If only I had a crystal ball 

[glendall]

Well the good thing about a free fed-free market is that the price will balance with demand. If it is not profitable to mine, price will fall and people will stop mining. Or, more likely, the opposite will happen. It's sort of like a magical self-regulating system somewhat.

But as said, it is really hard to guess the price. So many new ASIC companies coming out, but who will keep the schedule? Sort of like horse racing these days.....but tHe Avalon clones alone will really bring the ASICs to the masses.

[frankenmint]

So how is this thread different from all the other "BTC mining is dead" threads?  

Oh, that's right, it isn't.  

Nice signature - how much did you pay for all your hardware again?  How much have you earned this past month as a result?


I'm just pointing out that the difficulty rate has been pretty fairly modeled after a non-linear difficulty expectation based on past shipping commitments presented by other mining companies.  Right now, if you are going off of mining.thegenesisblock.com  there is nothing, Including a Jupiter, that will pay for itself if delivered in November of this year or later.  Doesn't matter if you were to buy 10 jupiters, 100 or 1000, Your Jupiters will only clear $95 by June 2014  - NOT a rosy picture. 

[gdpone]

Yep I didnt want to admit to it either.  The difficulty rate, even if it only jumps to 80mil by the end of the year, will make the usb miners worthless.  You will NEVER even see a break even point.  Oh well ive got two nifty turds I will let run till they no longer produce anything.

[Ytterbium]

Here's the problem though. If difficulty goes insane before October, no one will buy any more miners at any price,  In fact people will probably be dumping them for cheap  prices.  Look at these guys trying to sell avalon clones they made for $19k.  Lol. If wee see 100 difficulty by Dec no one is going to be buying any new miners.

If no one buys any new miners, ASIC companies are going to stop making new chips and the market will stagnate. Which means difficulty will stop going up.  Which means miners will actually have a chance to make a profit, just over a longer timeline then they would have liked. 

Difficulty can't keep going up forever if it's not profitable.

[SgtSpike]

In terms of BTC difficulty makes no sense to mine late next year even as next gen hardware will simply "keep up" into this spiraling hardware race.  A KNC Jupiter for example, It loses profitability once you touch november so for that matter once you touch week 2-3 of october (the calculator doesnt go as far as weeks into difficulty).  This calculator brings a very realistic and different picture from the known bitcoinx.com/profit calculator showing a miner.  I'm starting to believe that this is truly a "shovels" industry that mining companies are doing and that you can't win unless you buy in early enough.  This is just like the "block eruptor" argument...even if you had 4000 block eruptors, they still cost you 3-4k bitcoins...will you make ROI?   NEVER - the efficiency curve is just too high due to too many current asic first entrants. 

Does it make sense to take that same money to various exchanges and buy up a pleathora of Alt coins - Probably not, but maybe if one or two skyrocket and you chose them then you have still gained from those bubbles.  Just make sure to cash in on those bubbles. Others have noted that the same money can be used to hold bitcoins instead and to sell them at appreciated gains and of course acquire them at low values.  Soon if not yet so, Mt Gox is supposed to also carry litecoin so hopefully that helps bring crypto to mainstream. 

As someone with miners, I think it's great if you choose to stay away.  Scare them all away, that's what I say!   

[MrHempstock]

Only idiots are getting into mining at this point to Get Rich Quick.

And as Ron White said, "You can't fix stupid."

[JoelKatz]

Here's the problem though. If difficulty goes insane before October, no one will buy any more miners at any price,  In fact people will probably be dumping them for cheap  prices.  Look at these guys trying to sell avalon clones they made for $19k.  Lol. If wee see 100 difficulty by Dec no one is going to be buying any new miners.

Nobody will be buying 400GH/s miners at $5,000, but they might be buying 2TH/s miners at $5,000.

If no one buys any new miners, ASIC companies are going to stop making new chips and the market will stagnate. Which means difficulty will stop going up.  Which means miners will actually have a chance to make a profit, just over a longer timeline then they would have liked.

No, not at all. ASIC companies will respond by making more powerful miners using better processes and better designs. The difficulty will keep going up.

Difficulty can't keep going up forever if it's not profitable.

Nonsense. The balancing factors will be that it is barely profitable or barely not profitable with the current generation of miners but highly profitable with the next generation of miners, incentivizing ASIC companies to build the next generation. The governing factor that keeps the spiral from going up forever is the total value of all mining, which will go down as the block reward drops but also vary based on the price of a Bitcoin.

[Xian01]

Not sure about the topic, but it seems that AM hardware purchases have an ROI after ~1 year, including difficulty increases. Avalon batch 1 adopters have definitely ROI'd and I imagine early batch 2 owners are breaking even about now.

How is this any different, really, than the debate from "CPU's are dead" to "GPU's are dead" and now "First gen ASIC's are dead" ?

Many GPU's have already paid for themselves several times over and are still turning a profit even after factoring electrical costs.

I don't know about you, but with the relatively negligible electrical costs with running my AM gear, I fully expect to still be running gen 1 hardware in 2014, in addition to whatever gen 2 hardware I've added to my farm.

[bassclef]

Anyone who claims to "know" what bitcoin difficulty will be in 2, 4, 6, 12 months from now is either very confused or purposively trying to be deceptive. I would wager it will be higher than today at any of those timepoints, but how much higher? How many orders of magnitude? Who will actually ship and in what quantities/speed? If only I had a crystal ball 

If I remember correctly there were many who predicted difficulty would be approaching 80-100 million this month and next. Silly people.

[Ytterbium]

Here's the problem though. If difficulty goes insane before October, no one will buy any more miners at any price,  In fact people will probably be dumping them for cheap  prices.  Look at these guys trying to sell avalon clones they made for $19k.  Lol. If wee see 100 difficulty by Dec no one is going to be buying any new miners.

Nobody will be buying 400GH/s miners at $5,000, but they might be buying 2TH/s miners at $5,000.

Possibly.  But people won't buy if they think the difficulty is going to continue to skyrocket. Not at those prices.  We might see people buy block-erupter type devices for fun without really caring about ROI though.

If no one buys any new miners, ASIC companies are going to stop making new chips and the market will stagnate. Which means difficulty will stop going up.  Which means miners will actually have a chance to make a profit, just over a longer timeline then they would have liked.

No, not at all. ASIC companies will respond by making more powerful miners using better processes and better designs. The difficulty will keep going up.[/quote]

There are limits to how powerful and cheap they can make the chips at present.  KnC is already a 28nm design. There's only going to be so much more performance you can get out chips made with contemporary lithography.  Economies of scale can play a role in making the per-chip cost cheaper but there are limits there as well.

More's "law" will have an impact year by year, but explosive growth month by month is not going to be possible.

Difficulty can't keep going up forever if it's not profitable.

Nonsense. The balancing factors will be that it is barely profitable or barely not profitable with the current generation of miners but highly profitable with the next generation of miners, incentivizing ASIC companies to build the next generation. The governing factor that keeps the spiral from going up forever is the total value of all mining, which will go down as the block reward drops but also vary based on the price of a Bitcoin.[/quote]

I think you're being way overly optimistic about just how much performance can be achived.  We've gone from 300Mhashes/chip with Avalon to 2.5-4 Ghashes with BFL and bitfury, 100Ghashes with KnC and now a claimed 400Ghashes with HashFast. All in the space of maybe half a year (depending on when HashFast ultimately ships)

However.  That simply can't continue forever.  There are hardware limits as to what can be produced today, and at what cost - those costs will change according to More's "law" but at a far slower pace then what we've seen so far.

[Dalkore]

If no one runs Jupiters, then there will be no reason for anyone to run Jupiters or any other hardware, in which case the difficulty will go back down and it'll be profitable to run them again.

In the end, it'll be like GPU miners, cost of electricity will be the limiting factor.

Yep, I realized this a while ago.  In the end, power, cooling and rent will be the limiting factor.  That is why I setup a hosting location.  Once more people realize this, we will likely fill out all our racks in short order.