Break even difficulty by hardware efficiency (power cost = value of BTC)

[DeathAndTaxes]

Cointerra has the most power efficient 28nm process at the moment.

1666 MH/J

Do you have a link to this.  I thought Cointerra simply said significantly below 1GH/W.  Also I need full system power not the chip.  Even if it is an estimate the manufacturer I will use it if they are willing to put it into writing.

You can find it here:
http://thegenesisblock.com/cointerra-announces-2ths-asic-bitcoin-miner-for-15750/

Thanks.  I sent a PM to cointerra to confirm.  The fact that it is only on coindesk and not repeated anywhere on Cointerra website or in any of their posts makes me want confirmation.  I asked them also to confirm is the wattage estimate is at the chip level or at the wall. 

For BFL I likely will need to estimate an average system load to make it apples to apples.  That is ugly but with every other ASIC manufacturer building complete systems I don't see a better way.

[DeathAndTaxes]

Updated to include estimates for Cointerra & Monarch.  Given the high efficiency of most devices switched efficiency units to J/GH.

[qnosh]

mark！

[DeathAndTaxes]

Power Supply Recommendation.
With our shipment date approaching this update addresses the power demands of our mining devices.
We realise we are currently being compared to our competitors with respect to power consumption and would like to clarify our position.
Today we can reveal that our maximal power consumption will be below 1.6 W/GH/s.
We understand the need for some of our more remote customers to be able to secure a purchase of a power supply (PSU) within the given timeframe.
So today we can reveal the following recommendations;
We recommend an 850 Watt PSU with a minimum of 4x PCI-E adaptors for our Jupiter model.
We recommend a 600 Watt PSU with a minimum of 2x PCI-E adaptors for our Saturn model.
We recommend a 400 Watt PSU with a minimum of a PCI-E adaptor for our Mercury model.
This recommended power wattage figure is calculated upon our max. power consumption of total device including all of its components.
We aim to ensure you use a power supply unit capable of outputting in excess of the current recommended wattage to prevent any problems caused due to insufficient power.
Note: Powers supplies must contain a sufficient number of PCI-E adaptors for each respective unit.

https://www.kncminer.com/news/news-31




Raised (improved) estimate for KNC to 1.8 J/GH (from 2.5 J/GH) at the wall.  KNC reports efficiency is less than 1.6 J/GH however it is unclear what the reported efficiency includes.  I have asked KNC for a clarification but they haven't responded yet.  The break even difficulty is based on wattage "at the wall" (120V/230V measured/estimated at the plug).

If 1.6 J/GH refers to the ...
... system efficiency at the wall (AC load) then efficiency in table should be 1.6 J/GH.
... system total DC load then efficiency in the table should be 1.8 J/GH.
... ASIC boards (chips + DC PSU) but excludes the fans, controller, and ATX PSU then efficiency in the table should be 1.9 J/GH.
... ASIC chips and excludes the DC to DC supply, fans, controllers, and ATX PSU then efficiency in the table should be 2.0 J/GH.

I feel that based on the wording of the news and considering the PSU is not included, the second scenario is the most likely so the efficiency table will reflect 1.8 J/GH until more information is available.  I would have imagined that if KNC was reported "at the wall" efficiency they would have conditioned it with language like "with 80Plus Gold or better power supply, "as tested on power supply model #####", or "assuming 90% DC to AC efficiency". 

On edit: KNC supporters you can stop PM me.  I will change the table when either KNC confirms the "at the wall" efficiency or we have user provided benchmarks in the field.  If you want it updated, ask KNC to provide clarification.

[muyuu]

So it looks pretty safe to say that the network will be less than 250 PH/s using the 28nm technology at the current prices.

The replacement cost is calculated based on all hashing power coming from a single design so it shouldn't be taken as likely but more an upper bound.  I think there might be an error in the math as well.

The cost to reach the "break even point" is based on current cost so I don't find it too useful, because cost will decline significantly.  The network will approach a small margin below the break even point.  It is only a matter of time.  You can consider that the equilibrium point, we have seen it occur in the GPU era for a couple of years.  If more efficient hardware is produced then the hashrate will rise, if the exchange rate rises then the hashrate will rise, as mining moves to lower cost areas the hashrate will rise, if the exchange rate falls the hashrate will fall.  However the network will approach and stay close to a margin below the break even point.  How close?  It really depends on miners and what risk they are taking.

I'm not so sure of the conclusion that a price fall will be closely followed by a hashrate fall. ASICs have mostly no alternative use and there is no outside market for them.

Provided they are in profit, they will remain on. Even at a loss many people won't bother turning them off.

[DeathAndTaxes]

@ muyuu,

I think you misread (or I wasn't clear).  The scenario is the network is in equilibrium (hashrate growth changes with exchange rate because the difficulty is near the collective break even point for the network).  To illustrate lets say the exchange rate is $200 per BTC and there is a miner with an older 130nm rig which requires $180 in electricity to produce 1 BTC (based on difficulty, efficiency, and power cost).  Now the exchange rate falls and remains below $150 for thirty days.  At some point that miner is going to stop producing one BTC worth <$150 using >$180 in electricity and just buy BTC because it is cheaper.  People may make bad long term plans but generally make better short term ones.  When you are spending >1 BTC to produce 1 BTC it is pretty easy to see you should stop.  On the other hand he is unlikely to throw his rig away.  If the price (or more importantly price/difficulty) rebounds then we will turn his rig on.  The bad news for this marginal miner is that the higher price/difficult will bring in new investment likely by miners with lower power cost and more efficient gear so difficulty will likely overshoot his break even point and he will have to idle again. 

We aren't concerned with hardware costs for the break even point as you indicate they are a sunk cost even if a miner has a lifetime loss it still makes sense to mine to reduce that loss UNTIL difficulty exceeds the break even point.  At that point any additional mining is just increasing the loss for the miner.  

We saw this in dynamic in the GPU era where difficulty would track price.  Today it doesn't simply because we are no where near the break even point for the network.  For even the least efficient gear and the highest power cost user it would be >6PH/s.

[BBazaar]

Thanks for this OP.  I've had this conversation so many times but needed the numbers to back it up!

[wpgdeez]

.0718 kwh here in Manitoba and lots of cold air in the winter

[DeathAndTaxes]

Lowered efficiency of Avalon from 8.5 J/GH to 8.8 J/GH.  The Avalon miner is shipped in multiple configurations with 2, 3, or 4 modules in three different batches, using different power supplies.  The goal of the table is to provide an average break even point.  Reported efficiency "at the wall" ranges from 8.5 J/GH to 9.3 J/GH. 

[Dyaheon]

Good list.

Bitfury is somewhat better than that though, I measured +116W for adding a 150GH/s Bitfury unit to my rig. Gold-rated 1300W PSU at 440W@230V total now so I'd assume about 90% efficiency. Anyway, <0.8J/GH at the wall for Bitfury. Another guy had similar results.

[DeathAndTaxes]

Good list.

Bitfury is somewhat better than that though, I measured +116W for adding a 150GH/s Bitfury unit to my rig. Gold-rated 1300W PSU at 440W@230V total now so I'd assume about 90% efficiency. Anyway, <0.8J/GH at the wall for Bitfury. Another guy had similar results.

Was this on the reduced speed boards?  The reason I ask is if the boards intended for 25 GH/s are getting 21 GH/s then they are essentially underclocked (even if unwillingly) and that will improve efficiency. 
Was the 116W increase at the wall? 

[pyra-proxy]

Cointerra has the most power efficient 28nm process at the moment.

1666 MH/J

Do you have a link to this.  I thought Cointerra simply said significantly below 1GH/W.  Also I need full system power not the chip.  Even if it is an estimate the manufacturer I will use it if they are willing to put it into writing.

You can find it here:
http://thegenesisblock.com/cointerra-announces-2ths-asic-bitcoin-miner-for-15750/

Thanks.  I sent a PM to cointerra to confirm.  The fact that it is only on coindesk and not repeated anywhere on Cointerra website or in any of their posts makes me want confirmation.  I asked them also to confirm is the wattage estimate is at the chip level or at the wall.  

For BFL I likely will need to estimate an average system load to make it apples to apples.  That is ugly but with every other ASIC manufacturer building complete systems I don't see a better way.

Another thing to consider is that BFL claims you will also have the option to use USB interface instead of pci-e as a standalone device as well.  I'll try and dig you up a link....

Edit: Here's info (Monarch btw)
https://products.butterflylabs.com/homepage-new-products/600-gh-bitcoin-mining-card.html

Connectivity

USB 2.0   -  Monarch cards can be used as an external computer peripherial and chained via USB hub.  In this mode it can be controlled via an Android host or standard Linux or Windows computer.
PCI-Express  -  Monarch cards consume two PCI slots when installed in a standard ATX montherboard.  The PCIe format used is x1 for maximum compatibility.

[Dyaheon]

Good list.

Bitfury is somewhat better than that though, I measured +116W for adding a 150GH/s Bitfury unit to my rig. Gold-rated 1300W PSU at 440W@230V total now so I'd assume about 90% efficiency. Anyway, <0.8J/GH at the wall for Bitfury. Another guy had similar results.

Was this on the reduced speed boards?  The reason I ask is if the boards intended for 25 GH/s are getting 21 GH/s then they are essentially underclocked (even if unwillingly) and that will improve efficiency. 
Was the 116W increase at the wall? 

Yes on both counts. And right, I suppose they might be somewhat less efficient at full speeds.

[muyuu]

@ muyuu,

I think you misread (or I wasn't clear).  The scenario is the network is in equilibrium (hashrate growth changes with exchange rate because the difficulty is near the collective break even point for the network).  To illustrate lets say the exchange rate is $200 per BTC and there is a miner with an older 130nm rig which requires $180 in electricity to produce 1 BTC (based on difficulty, efficiency, and power cost).  Now the exchange rate falls and remains below $150 for thirty days.  At some point that miner is going to stop producing one BTC worth <$150 using >$180 in electricity and just buy BTC because it is cheaper.  People may make bad long term plans but generally make better short term ones.  When you are spending >1 BTC to produce 1 BTC it is pretty easy to see you should stop.  On the other hand he is unlikely to throw his rig away.  If the price (or more importantly price/difficulty) rebounds then we will turn his rig on.  The bad news for this marginal miner is that the higher price/difficult will bring in new investment likely by miners with lower power cost and more efficient gear so difficulty will likely overshoot his break even point and he will have to idle again. 

We aren't concerned with hardware costs for the break even point as you indicate they are a sunk cost even if a miner has a lifetime loss it still makes sense to mine to reduce that loss UNTIL difficulty exceeds the break even point.  At that point any additional mining is just increasing the loss for the miner.  

We saw this in dynamic in the GPU era where difficulty would track price.  Today it doesn't simply because we are no where near the break even point for the network.  For even the least efficient gear and the highest power cost user it would be >6PH/s.

I doubt even that will happen with ASICs. With GPUs, people had other uses for them. With ASICs, lots of people are not even aware of their consumption and they don't have any other usage for them. I don't think they will track the price so tightly if at all... but I guess we will eventually find out when we get closer to break-even.

[SolarSilver]

I doubt even that will happen with ASICs. With GPUs, people had other uses for them. With ASICs, lots of people are not even aware of their consumption and they don't have any other usage for them. I don't think they will track the price so tightly if at all... but I guess we will eventually find out when we get closer to break-even.

I think it's highly unlikely that people will order custom hardware like ASICs to mine BTC and NOT track the power consumption and do the math (unless they are the kind of customers BFL got where Josh was laughing at them buying items where they had no clue what it did)

[Roy Badami]

The cost to reach the "break even point" is based on current cost so I don't find it too useful, because cost will decline significantly.  The network will approach a small margin below the break even point.

I've always assumed that, in the short-to-medium term, the equilibrium point will be on the wrong side of breakeven, due to optimism bias in the purchase decisions.  It's true it wouldn't make much financial sense to continue to mine under those circumstances, but there are other reasons to hash than profit, and even the people who were in it purely for the money will find other ways to justify their purchases to themselves.

roy

[Ente]

The cost to reach the "break even point" is based on current cost so I don't find it too useful, because cost will decline significantly.  The network will approach a small margin below the break even point.

I've always assumed that, in the short-to-medium term, the equilibrium point will be on the wrong side of breakeven, due to optimism bias in the purchase decisions.  It's true it wouldn't make much financial sense to continue to mine under those circumstances, but there are other reasons to hash than profit, and even the people who were in it purely for the money will find other ways to justify their purchases to themselves.

roy

I agree.
They may have put a lot of money into the hardware, maybe even more than they should have afforded. With no money left, they simply can't shut down mining and buy bitcoins directly. So it could be "exchanging electricity-money to bitcoins".
Expecting the price to rise is easy when you are a bull anyway and invested in hardware. So this dip is just temporary.
And finally, noone likes to accept to have made a mistake.

..not even talking about parents paying for electricity, or the landlord splitting the bill among several flats..

Ente

[DeathAndTaxes]

The cost to reach the "break even point" is based on current cost so I don't find it too useful, because cost will decline significantly.  The network will approach a small margin below the break even point.

I've always assumed that, in the short-to-medium term, the equilibrium point will be on the wrong side of breakeven, due to optimism bias in the purchase decisions.  It's true it wouldn't make much financial sense to continue to mine under those circumstances, but there are other reasons to hash than profit, and even the people who were in it purely for the money will find other ways to justify their purchases to themselves.

roy

That is a good point.  Another way to look at it is difficulty may overshoot before correcting.  We say this multiple times over the years with GPUs.  The trend is something like, exchange rate rises rapidly and then difficulty follows over a much slower timeframe as miners deploy new hardware prices, eventually prices peak and decline and thus pushes the most inefficient miners into a negative operating margin.  Maybe they hang on for a while hoping difficulty goes lower or prices rise but eventually they give up and difficulty declines back towards equilibrium.

If the electrical cost to mine a Bitcoin is slightly higher than purchase cost miners may continue to mine for some time.  One reason is that it is an easy anonymous way to "buy" Bitcoins from your power company.  However it is important to keep in mind that unlike the GPU world the efficiency between the least efficient rigs and the most efficient ones is on the order of 12x (possibly more if/when Bitfury produces a 28nm device).   So while electricity is still a small % of gross revenue for a cointerra miner it will be >150% of gross revenue for an Avalon one.  So difficulty can continue to rise far beyond the break even point of an Avalon miner to a level where even the most "stubborn" miner will admit defeat (Paying $5 in electricity for $1 in BTC).

[ScaryHash]

So, assuming that one is trying to accumulate as many BTC as possible gambling that it will go higher...hell, why not right?

You could subsidize an equal amount Gh/s of GPUs with say an equal amount of Gh/s of AsicMiner USBs or blades, and average it out until you hit 1.2-ish billion difficulty.

The ASICs would be subsidizing the power consumption of your GPUs (assuming they have long been paid for), and the rise in BTC price would cancel out some of your power use.

That might even be a net win over the long term?

Opinions?

[Roy Badami]

That is a good point.  Another way to look at it is difficulty may overshoot before correcting.  We say this multiple times over the years with GPUs.  The trend is something like, exchange rate rises rapidly and then difficulty follows over a much slower timeframe as miners deploy new hardware prices, eventually prices peak and decline and thus pushes the most inefficient miners into a negative operating margin.  Maybe they hang on for a while hoping difficulty goes lower or prices rise but eventually they give up and difficulty declines back towards equilibrium.

If the electrical cost to mine a Bitcoin is slightly higher than purchase cost miners may continue to mine for some time.  One reason is that it is an easy anonymous way to "buy" Bitcoins from your power company.  However it is important to keep in mind that unlike the GPU world the efficiency between the least efficient rigs and the most efficient ones is on the order of 12x (possibly more if/when Bitfury produces a 28nm device).   So while electricity is still a small % of gross revenue for a cointerra miner it will be >150% of gross revenue for an Avalon one.  So difficulty can continue to rise far beyond the break even point of an Avalon miner to a level where even the most "stubborn" miner will admit defeat (Paying $5 in electricity for $1 in BTC).

Yes, I agree with you on that.

But to continue, my feeling is that almost no one buying recently or now or in the near future will get ROI, both due to overoptimism and also due to a significant number of unprofitable miners hanging on until they finally hit their pain point - whereever that is.

I think we're looking at a period of time - maybe a year - where virtually no one will get ROI.  And following that, ROI will only return when the prevailing wisdom on mining changes from bullish to bearish - i.e. when the majority of posts here are saying that mining is a mugs' game and that the only way you can make money is if you either have free electricity or are like ASICMINER designing your own chips.

What I haven't decided is whether that change in sentiment is going to happen gradually or suddenly.  But I'm pretty sure sentiment will overshoot, and when we switch from the current prevailing wisdom that there is money to be made in mining, to one that there isn't - then, of course, the 'pessimism bias' will make it much easier for the miners who keep the faith to attain ROI.

I'm leaning towards 'fairly sudden', I think, but not sure... ETA: 'Sudden' is good of course, because it means more overshoot in sentiment...

roy