Do any of these ASIC's actually make a ROI?

[bcp19]

The "I paid BTC to mine BTC" will never get their BTC investment back on well over 75% of items ordered and not received at this point in time with the other 25% looking shakier by the day and never on the current in-stock USB ripoffs.  The people who understand BTC = USD and varies with time will understand that yes, with patience they will eventually have a positive RoI in USD spent vs USD received.

Then why bother mining? Just buy BTC and you'll make a better profit holding it than mining. Considering exchange rates is just a way to hide from the actual negative ROI.

Paying $1000 (10btc @ $100) to mine $1500 (7.5btc @ $200) is a bad deal. You have a false $500 profit.

Let's look at buying BTC instead: Buy 10btc @ $100, wait till the exchange rate goes to $200, you now have $2000. You have a true $1000 profit.

The only positive ROI for a miner is more BTC generated than it cost to purchase it. Apples to apples. BTC in vs BTC out.

I have just 1 simple question for you... can you show me proof that the BTC you had on Jun 23, 2012 and the subsequent BTC you earned from then until now was never spent on anything?  If so, I will accept your argument about buying BTC.

[crumbs]

...
* Fury-28 pretty catchy huh? If you like that name guys I wouldn't mind some chips as a gift.

I like '58 better

[Syke]

So it all depends on how fast the network hashrate will grow.  However I agree for 2013 power isn't really that big of an issue even under the worst case scenario, but 2014 is a whole different story. The nominal numbers don't really matter.  Power was important for GPUs and in time the ASIC powered network will use just as much power as the GPU powered one did (normalized for exchange rate).  There is one critical difference though the difference in efficiency between the best and worst GPU rigs (excluding NVidia) is maybe 3x.  Right now among ASIC devices in the field it is already 8x and if Cointerra meets their estimate it will be more like 12x once they ship.  Normalized for process size Bitfury is the most efficient design, so if a Fury-28* shows linear improvement to efficiency it would be closer to 20x.  That is huge and because of that I would say power efficiency is MORE important for ASICs.

Absolutely. When a Fury-28^tm comes along in 2014, we'll see the network reach a maturation point. These crazy performance charts we're watching grow now, will shift towards a Moore's law-like gradual improvement phase and mining will stabilize. Until then, it's the Wild Wild West of Bitcoin.

[crazy_rabbit]

So it all depends on how fast the network hashrate will grow.  However I agree for 2013 power isn't really that big of an issue even under the worst case scenario, but 2014 is a whole different story. The nominal numbers don't really matter.  Power was important for GPUs and in time the ASIC powered network will use just as much power as the GPU powered one did (normalized for exchange rate).  There is one critical difference though the difference in efficiency between the best and worst GPU rigs (excluding NVidia) is maybe 3x.  Right now among ASIC devices in the field it is already 8x and if Cointerra meets their estimate it will be more like 12x once they ship.  Normalized for process size Bitfury is the most efficient design, so if a Fury-28* shows linear improvement to efficiency it would be closer to 20x.  That is huge and because of that I would say power efficiency is MORE important for ASICs.

Absolutely. When a Fury-28^tm comes along in 2014, we'll see the network reach a maturation point. These crazy performance charts we're watching grow now, will shift towards a Moore's law-like gradual improvement phase and mining will stabilize. Until then, it's the Wild Wild West of Bitcoin.

I think that applies only if you assume that the number of miners stays the same and they only upgrade equipement. If bitcoin takes off and we get into a whole new level of success, we could see the rate move up even faster as consecutively more numerous and better funded miners come along. If bitcoin really "works" it's not crazy to think of lots of people building office park sized mining rigs. It's like the 'oil rush' where people start drilling everywhere and everyone seems to be getting rich. There are still a lot of people to be brought into the fold yet. Eventually it will slow down, but I think that is a very very long way off.

[JohnyBigs]

The only time profits will come again is when hardware companies charge resonable rates for their hardware. Until people stop buying their hardware at these ridiculous mark ups, its almost useless buying a miner unless bitcoin skyrockets.

Think about this KNC is going to cut their prices almost in half in October, that only shows they are charging insane mark ups on their products. It probably costs them $100max, say worst case $500 to produce a unit, they sell that unit for 10x-15x more. These guys have profit margins of 1000-1500%!!!

Its like Apple selling its iphones for $5, 000, in the real world this would never happen, in the bitcoin world with retards abound its common practice.

[markm]

There is no rational explanation for measuring a device which produces BTC in any unit other than BTC.  If a miner doesn't produce a net revenue (after electrical cost) in BTC which is greater than the purchase price in BTC then the mining was a loss.  Anyone can simply buy BTC instead.

Yeah but similarly there is presumably no rational explanation for measuring a device which produces i0coin, groupcoin, coiledcoin or geistgeld in any other unit other than one of those.

For a lot of people these devices are devices which produce dollars, thus to them there is no good reason for measuring them in any unit other than dollars.

They might not care at all whether they end up on any given day merged mining all the merged mined coins, or mining one of the standalone SHA256 coins, and will be willing even to change what they mine from day to day depending on which coin or merge of coins offers the most dollars that day.

If I pick just one SHA256 coin to buy, instead of buying a device that can mine any of them or even mine many of them all at once, I am less diversified.

If I buy some of each, even in proportion to what various statistics tell me I could mine of each right now, I still have to worry about whether today it happens to be better to mine, and thus, presumably, to buy, a standalone SHA256 coin that cannot be merged or some particular merge of many types of coins. Since I have to worry anyway about which coin or merge of coins happens to be best on a given day I already am having to track what would be best to mine, so even if I decide to buy instead of mining I already face all the work a miner needs to do of tracking exactly what specifically to mine from day to day or hour to hour.

Plus if I buy there is a paper trail showing which bitcoins I own in many cases or at least in some cases, so by buying I could end up weakening the pseudonymity that some regard as part of the appeal of bitcoin in the first place.

Further, lets say I do decide that I want to buy thousands of coiledcoins and geistgeld each day instead of merged-mining them, where do I buy them?

If I had bought instead of mining, where would I have bought my hoards of i0coins and groupcoins that, thanks to (merged) mining instead of buying, I accumulated in the period during which neither was on any exchanges?

-MarkM-

[k9quaint]

After finding this nifty site: http://mining.thegenesisblock.com/  and checking out lots of ASICS, it looks if you buy now, wait for delivery, nothing will make it's ROI.

Of course I subscribe to the idea that you are better off just buying the Bitcoins now versus investing into an ASIC. However, I already have Bitcoins (bought long, long, long ago) and I'm relatively Fiat Broke, so if I were to go an ASIC route, I would be spending Bitcoins anyway. I have held off till now because it seems like it's a smarter idea to wait for when ASICS can be purchased and delivered via 2 day shipping. Meaning, I can pretty much know what the difficulty will be when I receive my machine. At this point, even the conservative estimates make it look like top of the line miners won't arrive in time to pay for themselves.

What are others thinking?

Depends on which crowd you're hanging with.  The "I paid BTC to mine BTC" will never get their BTC investment back on well over 75% of items ordered and not received at this point in time with the other 25% looking shakier by the day and never on the current in-stock USB ripoffs.  The people who understand BTC = USD and varies with time will understand that yes, with patience they will eventually have a positive RoI in USD spent vs USD received.  Now, the people from the former group I just mentioned will argue that you should just BUY BTC and sit on it.  That's all well and good for the 10% or so of the populace with the wherewithal to atually do that, but I doubt the majority could handle it.

1) You presume that BTC will always rise with respect to USD. If BTC drops back to $5 each, then no you will not earn a positive ROI when only measured in USD.

2) BTC does not vary with respect to time to USD, it varies with respect to market sentiment. BTC can rise slowly or quickly, and it can fall slowly or quickly, and it can remain the same price for extended periods of time.

3)There is in fact no guarantee at all that BTC will ever attain a $250 exchange rate again. For instance, BTC 2.0 could come out with vastly improved features that causes everyone to migrate to the new currency. Or a fatal flaw in the math could result in the total debasement of BTC as a store of value.

[k9quaint]

There is no rational explanation for measuring a device which produces BTC in any unit other than BTC.  If a miner doesn't produce a net revenue (after electrical cost) in BTC which is greater than the purchase price in BTC then the mining was a loss.  Anyone can simply buy BTC instead.

Yeah but similarly there is presumably no rational explanation for measuring a device which produces i0coin, groupcoin, coiledcoin or geistgeld in any other unit other than one of those.

For a lot of people these devices are devices which produce dollars, thus to them there is no good reason for measuring them in any unit other than dollars.

There is one good reason. That reason is to determine if they overpaid for their BTC. If someone today paid $10,000 per BTC, you would laugh at him. He would patiently explain to you that BTC would always rise with respect to USD and therefore he was sure to make his money back. Sure enough, 2 years later the price of BTC cracks $10,000 and that same individual then gloats endlessly about his $10,000 BTC that have finally returned a positive ROI. You try to explain to him that he could have bought his BTC for $140 each, but your explanations fall on deaf ears because at that point he refuses to engage in "judgement by hindsight".

[solex]

There is no rational explanation for measuring a device which produces BTC in any unit other than BTC.  If a miner doesn't produce a net revenue (after electrical cost) in BTC which is greater than the purchase price in BTC then the mining was a loss.  Anyone can simply buy BTC instead.

There is still the argument that the network needs to be protected by as many people as possible, mining, ideally not in pools but still ok if many pools exist. BTC sitting in cold storage is only worth $$$$$ if the BTC network is alive and healthy. So there is a feedback loop justifying mining without even hitting ROI as it helps protect the value of the same miner's BTC stash.
 

[markm]

Bitcoins are irrelevant though, if it is dollars, or geistgeld, or icecream cones or whatever that you are after.

Heck you could look at it all from the point of view of a person who has electricity to spend instead of a person who has fiat or bitcoins or geistgeld or whatever to spend.

I have a certain amount of electricity and I want to turn it into more electricity.

I could buy a device that can mine any SHA256 coin or even merge a bunch of SHA256 coins, and use it to burn electricity to produce stuff I can sell for more electricity than I put into it.

This fixation on bitcoins ignores the versatility of the device, heck I could launch a whole new SHA256 coin to mine with the device if I thought that would buy me more electricity than mining some already existing SHA256 coin...

-MarkM-

[DeathAndTaxes]

Bitcoins are irrelevant though, if it is dollars, or geistgeld, or icecream cones or whatever that you are after.

Heck you could look at it all from the point of view of a person who has electricity to spend instead of a person who has fiat or bitcoins or geistgeld or whatever to spend.

I have a certain amount of electricity and I want to turn it into more electricity.

I could buy a device that can mine any SHA256 coin or even merge a bunch of SHA256 coins, and use it to burn electricity to produce stuff I can sell for more electricity than I put into it.

This fixation on bitcoins ignores the versatility of the device, heck I could launch a whole new SHA256 coin to mine with the device if I thought that would buy me more electricity than mining some already existing SHA256 coin...

-MarkM-

The value of those coins are essentially zero.  I know you are the merged mining champion and merged mining is the solution to all problems but it doesn't change the economics.

Currencies are fungible so anytime someone says x BTC just think of it is as BTC equivalent.  If you mine 5 coins and their combined value is x BTC then it is no different than mining x BTC.  If you don't like to use BTC consider the five coins as x DVC equivalent or x XYZ equivalent.  It doesn't change anything.

If you spend 100 BTC on a rig that will produce <100 BTC equivalent (even including the rounding error merged mined coins) then you have a negative ROI.  
It doesn't matter if your intent is to makes lots of USD or buy lots of porches with the proceeds.  If you want lots of USD then 100 BTC is better than <100 BTC.
It doesn't matter if you spend USD, BTC, ounces of gold, or DVC.  The unit mines produces (mainly) BTC so however you pay it has an equivalent price in BTC.


Saying I will spend 100 BTC to mine 99 or less BTC (including the value of the near worthless merged mined coins) and it doesn't matter because I only care about USD makes no sense.  It doesn't matter what the future exchange rate is. 

Future exchange rate drops to $10 per BTC
Hold 100 BTC = 100 * $10 = $1,000 
Buy miner for 100 BTc and mine 99 BTC = 99 * $10 = $990
100 BTC is better than 99 BTC
$1,000 is better than $990

Future exchange rate drops to $1,000 per BTC
Hold 100 BTC = 100 * $1,000 = $100,000 
Buy miner for 100 BTc and mine 99 BTC = 99 * $1,000 = $99,000
100 BTC is better than 99 BTC
$100,000 is better than $99,000

[k9quaint]

Bitcoins are irrelevant though, if it is dollars, or geistgeld, or icecream cones or whatever that you are after.

Heck you could look at it all from the point of view of a person who has electricity to spend instead of a person who has fiat or bitcoins or geistgeld or whatever to spend.

I have a certain amount of electricity and I want to turn it into more electricity.

I could buy a device that can mine any SHA256 coin or even merge a bunch of SHA256 coins, and use it to burn electricity to produce stuff I can sell for more electricity than I put into it.

This fixation on bitcoins ignores the versatility of the device, heck I could launch a whole new SHA256 coin to mine with the device if I thought that would buy me more electricity than mining some already existing SHA256 coin...

-MarkM-

Of course, you could convert your BTC to USD and then to lottery tickets if you thought the lottery would return more than just holding BTC. That is still more than just 1 bet. First you have to bet that the USD/BTC exchange rate will not fall. Second, you have to bet that your lottery odds will pay off. The second bet has nothing to do with mining and should not be considered as part of the mining payoff.

Launching a whole new cryptocurrency based on SHA256 is also a risky proposition and involves many unknowns. It is true that you could profit from doing so, but that is not the same as saying you should count on such a thing happening as part of your value proposition.

Similarly, playing the market in electricity caries risks as well. Some enterprising soul at MIT might discover a cheap to manufacture highly efficient solar cell that provides cheap and limitless power for the entire human race. This would disrupt all previous methods to produce electricity and would make stockpiling electricity pointless.
 

[markm]

Well its silly to argue anyway I guess since I do want to mine and do still want my Klondike 16 boards built and so on and so on.

I should just jump on the bandwagon telling everyone hell yeah mining won't pay, mining is for idiots, forget mining, if you think crypto coins are good buy them but don't waste your time screwing around with this whole mining thing.

I am partly influenced personally by the fact I made far more CPU mining BBQcoins, a purportedly worthless coin, than I did on any other coin. So to me the ability to mine coins nobody is selling has proven itself to be the most profitable approach, historically.

Really it was all the actual time and thought I put in that paid, no turnkey buy it and plug it in magic box made me my profits, I profited by having the skills, time and equipment to work the outer edges the masses would not or could not.

-MarkM-

[k9quaint]

Well its silly to argue anyway I guess since I do want to mine and do still want my Klondike 16 boards built and so on and so on.

I should just jump on the bandwagon telling everyone hell yeah mining won't pay, mining is for idiots, forget mining, if you think crypto coins are good buy them but don't waste your time screwing around with this whole mining thing.

I should point out that the topic is "Do any of these ASIC's actually make a ROI?" and not "Should I mine at all?"

[01BTC10]

Bitcoins are irrelevant though, if it is dollars, or geistgeld, or icecream cones or whatever that you are after.

Heck you could look at it all from the point of view of a person who has electricity to spend instead of a person who has fiat or bitcoins or geistgeld or whatever to spend.

I have a certain amount of electricity and I want to turn it into more electricity.

I could buy a device that can mine any SHA256 coin or even merge a bunch of SHA256 coins, and use it to burn electricity to produce stuff I can sell for more electricity than I put into it.

This fixation on bitcoins ignores the versatility of the device, heck I could launch a whole new SHA256 coin to mine with the device if I thought that would buy me more electricity than mining some already existing SHA256 coin...

-MarkM-

The value of those coins are essentially zero.  I know you are the merged mining champion and merged mining is the solution to all problems but it doesn't change the economics.

Currencies are fungible so anytime someone says x BTC just think of it is as BTC equivalent.  If you mine 5 coins and their combined value is x BTC then it is no different than mining x BTC.  If you don't like to use BTC consider the five coins as x DVC equivalent or x XYZ equivalent.  It doesn't change anything.

If you spend 100 BTC on a rig that will produce <100 BTC equivalent (even including the rounding error merged mined coins) then you have a negative ROI.  
It doesn't matter if your intent is to makes lots of USD or buy lots of porches with the proceeds.  If you want lots of USD then 100 BTC is better than <100 BTC.
It doesn't matter if you spend USD, BTC, ounces of gold, or DVC.  The unit mines produces (mainly) BTC so however you pay it has an equivalent price in BTC.


Saying I will spend 100 BTC to mine 99 or less BTC (including the value of the near worthless merged mined coins) and it doesn't matter because I only care about USD makes no sense.  It doesn't matter what the future exchange rate is.  

Future exchange rate drops to $10 per BTC
Hold 100 BTC = 100 * $10 = $1,000  
Buy miner for 100 BTc and mine 99 BTC = 99 * $10 = $990
100 BTC is better than 99 BTC
$1,000 is better than $990

Future exchange rate drops to $1,000 per BTC
Hold 100 BTC = 100 * $1,000 = $100,000  
Buy miner for 100 BTc and mine 99 BTC = 99 * $1,000 = $99,000
100 BTC is better than 99 BTC
$100,000 is better than $99,000

I'm still trying to figure how Josh and al. justify buying a mining device that will mine less BTC than it's price in BTC but I can't.

I really tried hard to understand their logic but that doesn't make any sense to me.

[DeathAndTaxes]

Well its silly to argue anyway I guess since I do want to mine and do still want my Klondike 16 boards built and so on and so on.

I should just jump on the bandwagon telling everyone hell yeah mining won't pay, mining is for idiots, forget mining, if you think crypto coins are good buy them but don't waste your time screwing around with this whole mining thing.

I am partly influenced personally by the fact I made far more CPU mining BBQcoins, a purportedly worthless coin, than I did on any other coin. So to me the ability to mine coins nobody is selling has proven itself to be the most profitable approach, historically.

Really it was all the actual time and thought I put in that paid, no turnkey buy it and plug it in magic box made me my profits, I profited by having the skills, time and equipment to work the outer edges the masses would not or could not.

-MarkM-

Which has absolutely nothing to do with the topic "Do any of these ASIC's actually make a ROI?"

There are lots of non-ecnonomic reasons to mine.  There is a difference between saying "if you don't make a profit you are stupid" and saying "the claim you are profitable even if you lose BTC (100 BTC to buy a miner which nets 99 BTC) because the exchange rate might go up is stupid".

[markm]

The biggest problem in guessing whether there will be ROI is all the bullshit and all the delays.

A long long time ago it was clear that GPUs would not make ROI because BFL was going to ship ASICs in "two weeks".

Somehow nonetheless people still keep managing to make money with GPUs.

So mostly I guess it depends on whether you actually believe that any or all of the vapourware that has been announced is going to ship.

For a long long time people who ignored all the speculation about supposedly to be shipped in the future hardware have done rather well going ahead and buying stuff that would not have made ROI had all the vapourware actually been shipped "on time".

Any of these ASICS can probably make ROI if none of the others end up actually shipping, or if they get delayed long enough.

Even USB block eruptors started looking a lot better once Avalon turned out not to be shipping chips than they had looked back when people imagined Avalon was going to ship "on time".

-MarkM-

[01BTC10]

The biggest problem in guessing whether there will be ROI is all the bullshit and all the delays.

A long long time ago it was clear that GPUs would not make ROI because BFL was going to ship ASICs in "two weeks".

Somehow nonetheless people still keep managing to make money with GPUs.

So mostly I guess it depends on whether you actually believe that any or all of the vapourware that has been announced is going to ship.

For a long long time people who ignored all the speculation about supposedly to be shipped in the future hardware have done rather well going ahead and buying stuff that would not have made ROI had all the vapourware actually been shipped "on time".

Any of these ASICS can probably make ROI if none of the others end up actually shipping, or if they get delayed long enough.

Even block eruptors started looking a lot better once Avalon turned out not to be shipping chips than they had looked back when people imagined Avalon was going to ship "on time".

-MarkM-

I think the problem is that ASIC are way overpriced compared to GPU. This combined with the April hype make most (if not all) ASIC a bad investment. When, I first started mining in early 2012 it was possible to get more BTC then invested solely buying GPU if your electricity cost was low and you knew how to optimise your rig.

[ssi]

The biggest problem in guessing whether there will be ROI is all the bullshit and all the delays.

A long long time ago it was clear that GPUs would not make ROI because BFL was going to ship ASICs in "two weeks".

Somehow nonetheless people still keep managing to make money with GPUs.

So mostly I guess it depends on whether you actually believe that any or all of the vapourware that has been announced is going to ship.

For a long long time people who ignored all the speculation about supposedly to be shipped in the future hardware have done rather well going ahead and buying stuff that would not have made ROI had all the vapourware actually been shipped "on time".

Any of these ASICS can probably make ROI if none of the others end up actually shipping, or if they get delayed long enough.

Even block eruptors started looking a lot better once Avalon turned out not to be shipping chips than they had looked back when people imagined Avalon was going to ship "on time".

-MarkM-

I think the problem is that ASIC are way overpriced compared to GPU. This combined with the April hype make most (if not all) ASIC a bad investment.

Really?  a 700MH 7950 at $300 is $430/GH.   A bitfury asic today at the expensive rate of $108 is $40/GH.  In october, when they're closer to $25, they'll be under $10/GH.

[Syke]

I'm still trying to figure how Josh and al. justify buying a mining device that will mine less BTC than it's price in BTC but I can't.

I really tried hard to understand their logic but that doesn't make any sense to me.

It's how they soothe the pain of loss. It hurts when you make an investment and lose. Deep down they know they lost. But if they can pretend like they made a profit, they won't feel as bad.