If Bitcoins Go Up Will USB Bitcoin Miners Be Profitable?

[cparsley]

So what price would a USB maybe be profitable? BTC.1, BTC.05, BTC.01?

[integrity42]

if you buy a USB miner at 30$ and in 3 years 1 BTC worth 1000$ => you have  a ROI ^^

You would not ROI in BTC terms, which is all that matters.  If you pay $100 for a miner when BTC=$100USD, then you paid 1BTC for it.

If the miner only gives you a maximum of 0.4BTC back, then you have lost 60% your investment.

If BTC goes $1000, you will have 0.4BTC which is $400. 

But if you didn't buy the miner and kept your 1BTC you'd have $1000. So where did the other $600 go? 

To the ASIC manufacturer who sold you -- the idiot -- the overpriced hardware.

The ASIC manufacturer is laughing at you -- the idiot -- all the way to the bank -- because you -- the idiot -- think that ROI in USD is what matters -- it doesn't.

ONLY ROI IN BTC matters.

Hopefully this post permanently clarifies things for idiots.

[timk225]

Preach on, brother integrity42!!!!!

I am continually dumbfounded by noobs who think that buying USB erupters in any amount will make them a profit, and they have to logically sort out how long they will have to mine to break even, and that is assuming that the price of BTC doesn't crash through the floor.

They make make "X" amount of BTC, but if a BTC is worth only 23 cents, then it is decidedly non-impressive.

I tend to focus on how many dollars I will end up with from my LiteCoin mining operation, but then again, LTC has lots of room to grow whereas BTC has maxed out already.

In the past I have explained how the ASIC manufacturers use their ASICS to mine FOR THEMSELVES for months before giving them to the people who prepaid for them.  The ASIC manufacturers would be fools to not do it!

[bcp19]

So what price would a USB maybe be profitable? BTC.1, BTC.05, BTC.01?

At the moment... BTC.01 or less.

[DeathAndTaxes]

So what price would a USB maybe be profitable? BTC.1, BTC.05, BTC.01?

At the moment... BTC.01 or less.

Seeing as a USB BE would generate more than that in the first week I think that is dubious.

At 0.1 BTC (or less) is is almost certainly profitable. 
At 0.15 BTC would likely take a long time (6+ months) and would require cheap power and difficulty growth slowing significantly in 2014.
At 0.2 BTC I don't see turning a profit under any conditions.

[bcp19]

So what price would a USB maybe be profitable? BTC.1, BTC.05, BTC.01?

At the moment... BTC.01 or less.

Seeing as a USB BE would generate more than that in the first week I think that is dubious.

At 0.1 BTC (or less) is is almost certainly profitable.  
At 0.15 BTC would likely take a long time (6+ months) and would require cheap power and difficulty growth slowing significantly in 2014.
At 0.2 BTC I don't see turning a profit under any conditions.

If I could get it in hand today, yes, I could make .1 BTC.  If it took 1 week to get it in hand, then it's looking shaky.  At 111M difficulty, it's estimated .05 after 1 month if difficulty doesn't go up.  I see .0015 per day for 10 days, .0012 for 10 days, .001 for 10 days, .0008 for 10 days, .0006 for 10 days, .0005 for 10 days.  .056 after 2 months, .066 after 3 months, .074 after 4 months .08 after 5 months and .085 after 6 months.  At 1Bil diff you're getting .000167 per day.  389 more days to .15 with no more increases, 90 more days to .1

[DeathAndTaxes]

So what price would a USB maybe be profitable? BTC.1, BTC.05, BTC.01?

At the moment... BTC.01 or less.

.085 after 6 months

Thanks for disproving your own claim.  Even assuming no slowing in difficulty growth, in the next six weeks and waiting a week for delivery, and subtracting 0.05 BTC for power cost the unit would produce 0.08 BTC net revenue.    Clearly 0.08 BTC is > "0.01 BTC or less".

[gingernuts]

Unless you pay for your electricity in BTC, the mining factor is the thing that determines when you have to shut down your miners as they are making less than the cost of running them. If you have free electricity, then you could just run them until they die - the difficulty would be irrelevant to you. Hell if BTC shoot up in value, or the heat they produce is valuable to you, you can always bring mothballed miners back into duty while the returns are +ve..

You make ROI the second your miner produces one satoshi more than the miner and the electricity have cost you up until that point...

That is not the same as saying that buying that miner is a good idea in the first place - there is an opportunity cost whenever you put your money somewhere, but having made any profit at all is ROI - not having made the best investment way back when...

[Keyser Soze]

If your primary mining goal is profit then the fiat price of bitcoins is irrelevant. When purchasing an asic miner you are essentially buying an unknown inflow of bitcoins in the future. To fairly value your profit/loss from mining (not currency speculation), you must denominate all income and expenses in bitcoin when they occur.

If you lose bitcoins from mining, but gain fiat due to bitcoins appreciating, then mining activities have generated a loss.

I previously posted a more detailed explanation that may help with this concept.

[bcp19]

So what price would a USB maybe be profitable? BTC.1, BTC.05, BTC.01?

At the moment... BTC.01 or less.

.085 after 6 months

Thanks for disproving your own claim.  Even assuming no slowing in difficulty growth, in the next six weeks and waiting a week for delivery, and subtracting 0.05 BTC for power cost the unit would produce 0.08 BTC net revenue.    Clearly 0.08 BTC is > "0.01 BTC or less".

True, but I still would not pay more than .01 for one of them.  AM has apportioned supply to regulate demand and milked every penny out of his victims err customers.  Obviously he is still making a fairly decent profit if he is able to sell them at the prices he is.  .1 BTC per chip still works out to $42 per GH as of today's prices.

[Tobias]

Currently you can get around $.25 a day mining 24/7 with a usb asicminer (underestimate) depending on your luck.Therefore at the current difficulty it would take around 140 days to remake the initial investment and even if the difficulty increased a few times bitcoin price would increase (in theory) to respond to increased difficulty, so you would mine less coins for more money. The beauty of usb miners is that the investment is so low that it allows newer miners to join the game without a huge risk, which helps to legitimize the bitcoin as a globally accepted currency making it a safer investment for everyone. And once you pay back your $35 everything else is profit. You can even save all the bitcoins you mine now and sell them in a year or two for a huge profit if the market doesn't crash because you can live without $35

[User705]

WOW at the above post.  A dozen posts before you explaining it and it is still over your head.  I like that BTC is a zero sum game so the more people like that the better for the rest who understand it.  Your loses are my gains and there's nobody to print more or steal more to bail you out of your dumb decisions.  Also the deflationary aspect of bitcoin makes it all seem correct so you'll keep on pouring more value into the system incorrectly.  I'm all for it.

[Tobias]

WOW at the above post.  A dozen posts before you explaining it and it is still over your head.  I like that BTC is a zero sum game so the more people like that the better for the rest who understand it.  Your loses are my gains and there's nobody to print more or steal more to bail you out of your dumb decisions.  Also the deflationary aspect of bitcoin makes it all seem correct so you'll keep on pouring more value into the system incorrectly.  I'm all for it.

Ok so what is your plan all knowing bitcoin fortune teller? There is no need to be hostile just because you don't know how to correctly debate a subject *waits for another unnecessarily rude post*

[Shak]

Tobias, you really don't get it, hm? You are talking about "how to debate a subject", but the point is "how to do simple math". And you failed.

Scenario A: (your way)
You bought a Block Erupter for 35$
You mined 0.1 Bitcoins with it before the power consumption costs more than your mining reward.
Bitcoin price rises from 140$ to 1000$ per Bitcoin.
You sell your 0.1 Bitcoins for 100$ and say "Hey, I made 65$, I was right, I told everybody that those Block Erupters make Money!"


Scenario B: (the one you need braincells for)
You bought Bitcoins for 35$.
You got 0.25 Bitcoins at the Price of 140$ each Bitcoin.
Bitcoin price rises from 140$ to 1000$ per Bitcoin
You sell your 0.25 Bitcoins for 250$ and say "Hey, I made 215$, I was right, I told everybody that those Block Erupters suck!"


The difference is: B gives you 150$, but only if you have braincells.


But clearly your point was: Hey, 35$, who needs such peanuts, just throw it away in a most delightful way.

[User705]

Also you are severely underpricing your time value.  Holding BTC for a year takes 0 time.  Running a miner takes what 5-10 min a week?  That's 4-8 hours a year?  What's your time worth to you?  In my opinion miners can be considered for purchase under the following conditions.  Difficulty is going to stop increasing because it is unprofitable to buy more miners and there is no new technology on the horizon.  Also miners sales price is very close to manufacturing costs and supply will be diminishing as manufacturers stop producing them because it is no longer profitable.  Currently we are nowhere near these conditions.  Numerous 28nm tech is coming and difficulty shows no sign of abating.  The chip production costs even for 28nm tech chips is likely a few dollars per chip.

[shields]

I won't insult you, but I will debate and argue the points in your post.

Currently you can get around $.25 a day mining 24/7 with a usb asicminer (underestimate) depending on your luck.Therefore at the current difficulty it would take around 140 days to remake the initial investment

The difficulty definitely will not be the same for 140 days, it won't be the same for 15, it won't even be close at 140.
Considering 'mining at the currently difficulty' for any duration beyond the next difficulty change ruins any profitability calculations. You can't even know what the difficulty will be in a month, so you can't calculate how much btc your miner will make then so you can't calculate your profitability in advance. The only thing that seems certain is that diff will be higher than now.

and even if the difficulty increased a few times bitcoin price would increase (in theory) to respond to increased difficulty, so you would mine less coins for more money.

I bought coins instead of a miner, what you're saying is that even if your miner makes less coins than it cost you'll profit due to price rise, but you'll never have as much as if you just held/bought coins instead of buying the miner.

The beauty of usb miners is that the investment is so low that it allows newer miners to join the game without a huge risk, which helps to legitimize the bitcoin as a globally accepted currency making it a safer investment for everyone.

It's true you can buy a cheap USB miner, have some fun, make a loss, but not be financially ruined because of it. However, it may turn people off the coin if they feel they've been scammed when their first 'money making machine' purchase fails to be profitable if they expected otherwise.  If you dont' care about profit and enjoy the hobby aspect or want to support the network then great!

And once you pay back your $35 everything else is profit.

But you never will.

[Armchair Miner]

The way I read it, most "know it alls" here in the thread are completely dismissing the possibility that USB miners will have future value, even when BTC mining is unprofitable.

I'd like to see some calculations when future value is included. Naturally, you can not prove that the future value is nil.

[jaywaka2713]

The way I read it, most "know it alls" here in the thread are completely dismissing the possibility that USB miners will have future value, even when BTC mining is unprofitable.

I'd like to see some calculations when future value is included. Naturally, you can not prove that the future value is nil.

They aren't saying that they won't have any value at all. What the "know it alls" are saying is that, instead of buying 0.3 BTC of hardware hoping to make back 0.1 BTC is ridiculous. The 0.3 will always have more value than the USB ASIC miner in ANY and ALL situations proposed except for one in which Bitcoin becomes so invaluable that the pieces of hardware in the ASIC are worth more than what it can generate in a year. In such a situation, nobody would be willing to pay for such hardware, as it will have likely been used incessantly, as all ASIC devices are not given breaks. Why argue over something when you probably won't even buy it because of what we are saying is true.

And with the value of the ASIC miner argument. Say in 6 months the difficulty is 700million. At that moment, you will be making 0.01 BTC a month. Judging off the fact that nobody can predict future Bitcoin values, lets estimate a value of about double (e.g. $250). You will be making $1.64 worth of Bitcoin every month. Another factor people refuse to acknowledge is that the USB ASIC isn't the only thing pulling power while mining. Not only is the ASIC using power, but the device it is connected to is pulling power as well. Whether it be RPi, MK802, a USB hub hooked up to anything with miner software, or a computer, it's still pulling power. In most situations I've seen, people are using full desktop computers. Factor in the power draw of running a computer with all USB ports at maximum power draw and tell me that it won't draw more than $1.64 a month and I'll back down. Have fun celebrating with your stack of pennies.

[shields]

The way I read it, most "know it alls" here in the thread are completely dismissing the possibility that USB miners will have future value, even when BTC mining is unprofitable.

I'd like to see some calculations when future value is included. Naturally, you can not prove that the future value is nil.

You're right, i usually assume that. If you're assuming that the only thing that makes your miner profitable is selling it at an unprofitable price to another person then so be it. This is a ponzi scheme. It may actually work, but it sure sounds risky to assume there's one more idiot waiting to buy one. And even I'd feel like a dick doing it, but that's just me.

[Bitweasil]

The way I read it, most "know it alls" here in the thread are completely dismissing the possibility that USB miners will have future value, even when BTC mining is unprofitable.

I'd like to see some calculations when future value is included. Naturally, you can not prove that the future value is nil.

GPUs have a use outside bitcoin so have a good residual value.

FPGAs have a use outside bitcoin so have a good residual value.

Bitcoin mining asics have no use outside bitcoin. Why would you expect them to have a residual value higher than their mining returns?