$12366, first data point.

[ralree]

Yes, but the price for 1 Bitcoin might be +$10,000 by Christmas at this rate!

I'd take that as my gift this year! 

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[CounterStrike]

October 24, 2013: 553Gh/s gets 1 BTC/day @ a cost of $12366 (9.25 BFL singles from ebay) ($22.36/Gh/s)
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16900 (13 BFL singles from ebay) ($21.72/Gh/s)
November 05 2013: 1016Gh/s gets 1 BTC/day @ a cost of $22013 (17 BFL singles from ebay) ($21.66/Gh/s)

November 17, 2013: 1212Gh/s gets 1 BTC/day @ a cost of $42,420 (20.2 BFL singles from ebay) ($35/Gh/s)

The prices of ASIC units for immediate delivery has increased dramatically over the last few weeks with bidding wars erupting over available units. There is a massive shortage of ASIC miners in relation to the demand due to slow production, and increased demand due to the rapidly increasing value of BTC.

I was hoping to substitute the ASICMiner cube this week for the 60Gh/s BFL units, but they immediately sold out and are not available even on the secondary markets such as Ebay in any quantity. I must say it was unexpected that the price per gh/s increased. It appears that this trend will continue until some company can provide higher hashing units at a lower cost. Many are promising to do so, but none have any available for immediate delivery at this time.

The cost to mine 1btc/day has quadrupled in less than one month. If this trend continues it will be over $100,000 before Christmas.

Well, since the price has increased so much its more profitable to sell then use it to mine right?

[Rival]

Welcome to December, 2013!

October 24, 2013: 553Gh/s gets 1 BTC/day @ a cost of $12366 (9.25 BFL singles from ebay) ($22.36/Gh/s)
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16900 (13 BFL singles from ebay) ($21.72/Gh/s)
November 05 2013: 1016Gh/s gets 1 BTC/day @ a cost of $22013 (17 BFL singles from ebay) ($21.66/Gh/s)
November 17, 2013: 1212Gh/s gets 1 BTC/day @ a cost of $42,420 (20.2 BFL singles from ebay) ($35/Gh/s)

And now, today:

November 30, 2013: 1420Gh/s gets 1 BTC/day @ a cost of $82,833 (24 BFL singles from ebay)  ($58/Gh/s)

Now, I grant you that the prices of ASIC units has gone loopy. Everything everywhere is priced through the ceiling because hardly anyone has units in stock and with btc breaking ATH day after day, more folks want to get involved... way more folks than there are ASIC's for. I guess we should have seen this coming. Instead of the glut of ASIC's predicted by most, it appears the reverse came to fruition first. You are lucky to lock in a BFL 60Gh/s unit on ebay for under $3500. And they said there would never be ROI on these....LOL!

[Puppet]

You are lucky to lock in a BFL 60Gh/s unit on ebay for under $3500. And they said there would never be ROI on these....LOL!

So they are charging about 3 BTC for them. You realize most people paid  25 - 100 BTC for one, right?

[Rival]

You are lucky to lock in a BFL 60Gh/s unit on ebay for under $3500. And they said there would never be ROI on these....LOL!

So they are charging about 3 BTC for them. You realize most people paid  25 - 100 BTC for one, right?

Apples and Oranges. They could have paid either with dollars or BTC, it did not really matter because at that point in time they had a specific conversion rate. That is like a Silk Road guy bitching because he ended up paying $50,000 for a nickle bag last year if you figure in today's rate. Or buying 5000 acres of Florida property for 10 cents per acre a century ago.

Currencies have a value peg when you spend them. You can't cry that you sold your 69 GTO 25 years ago for $1000. At the time, it was the going rate. You cannot ignore the temporal nature of the universe to prove a point. If you bought a BFL unit you can today practically double the stack of your dollars by reselling it. That is by no means a bad deal. Perhaps you would have been happier buying shares of Facebook, Pizza, Hookers and Blow, or just letting it sit in BTC. But that really is not the point.

[cdog]

You are lucky to lock in a BFL 60Gh/s unit on ebay for under $3500. And they said there would never be ROI on these....LOL!

So they are charging about 3 BTC for them. You realize most people paid  25 - 100 BTC for one, right?

Apples and Oranges. They could have paid either with dollars or BTC, it did not really matter because at that point in time they had a specific conversion rate. That is like a Silk Road guy bitching because he ended up paying $50,000 for a nickle bag last year if you figure in today's rate. Or buying 5000 acres of Florida property for 10 cents per acre a century ago.

Currencies have a value peg when you spend them. You can't cry that you sold your 69 GTO 25 years ago for $1000. At the time, it was the going rate. You cannot ignore the temporal nature of the universe to prove a point. If you bought a BFL unit you can today practically double the stack of your dollars by reselling it. That is by no means a bad deal. Perhaps you would have been happier buying shares of Facebook, Pizza, Hookers and Blow, or just letting it sit in BTC. But that really is not the point.

Im not really sure what your point is? The cost of a miner MUST be denominated in BTC (cost = X).

This miner will mine Y amount of BTC in its life. If Y isnt higher than X, the machine will never ROI. Its pretty simple.

I sold my BFL 60 gh/s miners for $1600 each on ebay back in Oct and bought BTC with the money. At roughly $200/BTC, I got 8 BTC per unit.

It wasnt possible for them to mine 8 BTC over their lifespan, so this was an easy decision (sell to people who dont understand 3rd grade math).

 

[Puppet]

Currencies have a value peg when you spend them. You can't cry that you sold your 69 GTO 25 years ago for $1000. At the time, it was the going rate. You cannot ignore the temporal nature of the universe to prove a point. If you bought a BFL unit you can today practically double the stack of your dollars by reselling it. That is by no means a bad deal. Perhaps you would have been happier buying shares of Facebook, Pizza, Hookers and Blow, or just letting it sit in BTC. But that really is not the point.

You really dont get it. A miner produces BTC, not dollar. So of course you have to calculate the profit in BTC. If you calculate it in dollar, the outcome is 100% dependent on future BTC exchange rate, exactly like when buying BTC. Buying mining gear is exactly like buying BTC spread over time.

Of course Im not surprised you dont get this. You dont seem to understand the basic concepts behind mining otherwise you wouldnt be calculating silly things like mining cost per BTC and thinking it somehow impacts btc exchange rate.

[Rival]

I am obviously doing a poor job of communicating a simple concept.

Imagine gold mining. You buy shovels with dollars. You lease land with dollars. You pay wages in dollars. You have costs that are all calculated in dollars.

Gold is a commodity. No company on earth asks how many ounces of gold it needs to spend to extract ounces of gold. They are converting dollars to gold, and then back again into dollars.

A gold mining company must understand the dollar cost to produce an ounce of gold. If they are either unable or unwilling to do so they will likely fail. This is basic. One must know the cost to produce a bitcoin before even considering investing in mining one. That information is being provided here.

A miner is not in the business of mining gold and hoarding it. They are in the business of extracting a commodity and selling it at a profit.

[Puppet]

Whats the gold analogy for difficulty? There is none. And thats why the analogy breaks down completely. If you send an army of slaves to scour your land and in to your mines, they will mine more gold per day. And if you mine a lot more gold, price will drop.  But you can invest $10B in mining hardware and your equipment will still only mine ~150 BTC per hour, if it werent for the reward halving, exactly the same as what Satoshi was mining alone on his $1000 laptop.

The result is that bitcoin price is not dependent on mining cost, since production is fixed through difficulty. The opposite is true, mining cost and mining equipment, especially since there is a huge shortage, is currently priced solely in relation to expected revenue, which is function of (expected) difficulty and bitcoin's price. There is no opposite mechanism.

[Rival]

There is a fixed amount of gold as well. The easy stuff gets mined first, with just a pan. Now you have to grind up thousands of tons of low-grade ore with millions and millions invested in gear. I would say the difficulty level for getting gold has increased substantially. Guys with pans are like CPU mining. A waste of time, energy, and effort. Every ounce of gold extracted means the next one will be harder to mine, and be more expensive and/or more dangerous to obtain.

Like I said, miners are not in the business of hoarding. They are in the business of obtaining a commodity and bringing it to market at a profit. That is their only measure of success.

Additionally, you could effectively mine every future coin tomorrow with a sufficiently large asic farm. Solve 10,000 blocks per second and see if you can't mine the last coin before the diff increases. Unrealistic, of course. But mathematically possible.

[Puppet]

There is a fixed amount of gold as well. The easy stuff gets mined first, with just a pan.

Sigh. You are clearly trapped in your flawed analogy. There are some parallels, but the mechanisms are fundamentally different. The revenue of my mining pan (in gold ounces per day) doesnt get affected in any way when someone opens a new gigantic mine in South Africa or starts mining asteroids. The dollar revenue of my pan might change, perhaps even quite dramatically if they ever manage to mine millions of tons of gold floating in space or near the earth core,  but not the amount of gold I can mine.

This is completely different with bitcoin where my btc revenue is 100% dependent on what the rest of the network does, and bitcoin value is almost completely independent of that.

[Rival]

It matters when a bunch of Chinese claim jumpers mine every ounce from your field. Your coins got mined by someone else. If you mine them before some else does, you get them. The similarities are striking. The only difference is that there is not a legal structure in bitcoins to determine who has the right to mine a particular block.

[zimmah]

There is a fixed amount of gold as well. The easy stuff gets mined first, with just a pan.

Sigh. You are clearly trapped in your flawed analogy. There are some parallels, but the mechanisms are fundamentally different. The revenue of my mining pan (in gold ounces per day) doesnt get affected in any way when someone opens a new gigantic mine in South Africa or starts mining asteroids. The dollar revenue of my pan might change, perhaps even quite dramatically if they ever manage to mine millions of tons of gold floating in space or near the earth core,  but not the amount of gold I can mine.

This is completely different with bitcoin where my btc revenue is 100% dependent on what the rest of the network does, and bitcoin value is almost completely independent of that.

but if we would keep the rate of BTC/day constant with hashrate than in no time at all we would get quaddrillions of bitcoin.

[sh1k1g4m1]

BTC has a cap of 21 billion coins iirc, half have already been mined.

IMO, BTC is worthless until you can convert it to whatever the standard currency is. Same with gold, it's useless until you convert it to a currency you can use, other wise it's just a shiny rock.

[BitcoinDenvini]

Its getting more and more expensive for those who want to mine 1 BTC everyday for 10 days.

[Rival]

October 24, 2013: 553Gh/s gets 1 BTC/day @ a cost of $12,366 (9.25 BFL singles from ebay) ($22.36/Gh/s)
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16,900 (13 BFL singles from ebay) ($21.72/Gh/s)
November 05 2013: 1016Gh/s gets 1 BTC/day @ a cost of $22,013 (17 BFL singles from ebay) ($21.66/Gh/s)
November 17, 2013: 1212Gh/s gets 1 BTC/day @ a cost of $42,420 (20.2 BFL singles from ebay) ($35/Gh/s)
November 30, 2013: 1420Gh/s gets 1 BTC/day @ a cost of $82,833 (24 BFL singles from ebay)  ($58/Gh/s)

And now, today:

December 11,2013: 1800Gh/s gets 1 BTC/Day @ a cost of $75,000 (30 BFL singles from ebay) ($41/Gh/s)

Even with the difficulty jump, the cost to mine a coin per day has dropped nicely. This should be correctly analysed as an example where the value of a bitcoin directly impacted the value of ASIC units. High prices of btc drove up the price of available units, and the "crash" in btc value drove it back down. This can stand as an example where the price of BTC directly affected the cost to mine them, both upward and downward.

You could have bought a unit on November 5th, mined on it for a month, and then sold it for twice what you paid for it. You can probably buy it back for the original cost in another week.

I expect that once the availability of ASIC miners becomes more ubiquitous, we will eventually see the tail wagging the dog. Time will tell.

[Rival]

October 24, 2013: 553Gh/s gets 1 BTC/day @ a cost of $12,366 (9.25 BFL singles from ebay) ($22.36/Gh/s)
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16,900 (13 BFL singles from ebay) ($21.72/Gh/s)
November 05 2013: 1016Gh/s gets 1 BTC/day @ a cost of $22,013 (17 BFL singles from ebay) ($21.66/Gh/s)
November 17, 2013: 1212Gh/s gets 1 BTC/day @ a cost of $42,420 (20.2 BFL singles from ebay) ($35/Gh/s)
November 30, 2013: 1420Gh/s gets 1 BTC/day @ a cost of $82,833 (24 BFL singles from ebay)  ($58/Gh/s)
December 11,2013: 1800Gh/s gets 1 BTC/Day @ a cost of $75,000 (30 BFL singles from ebay) ($41/Gh/s)

Merry Christmas! Today:

December 21, 2013: 2350Gh/s gets 1 BTC/Day @ a cost of $86166 (39 BFL singles from ebay) ($36/Gh/s)

Difficulty going up, prices for ASIC units going down. Eventually someone will have to get something to the secondary market for immediate delivery so we can stop using BFL singles as the benchmark. There are not even 39 BFL units combined available for sale on ebay. In another month or so there may not be enough hashing power for immediate delivery on ebay to even do one coin per day at any price.

[Frozenace]

If you had put the 12000 into bitcoin in October, you'd probably be much better off than putting it into mining hardware, no?

[Rival]

With bitcoin sub $650 today, no. You would have been better off buying the miners, mining for a month, selling the miners on ebay, and then buying coins. All timed perfectly with their respective markets, of course.

[Rival]

October 24, 2013: 553Gh/s gets 1 BTC/day @ a cost of $12,366 (9.25 BFL singles from ebay) ($22.36/Gh/s)
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16,900 (13 BFL singles from ebay) ($21.72/Gh/s)
November 05 2013: 1016Gh/s gets 1 BTC/day @ a cost of $22,013 (17 BFL singles from ebay) ($21.66/Gh/s)
November 17, 2013: 1212Gh/s gets 1 BTC/day @ a cost of $42,420 (20.2 BFL singles from ebay) ($35/Gh/s)
November 30, 2013: 1420Gh/s gets 1 BTC/day @ a cost of $82,833 (24 BFL singles from ebay)  ($58/Gh/s)
December 11,2013: 1800Gh/s gets 1 BTC/Day @ a cost of $75,000 (30 BFL singles from ebay) ($41/Gh/s)
December 21, 2013: 2350Gh/s gets 1 BTC/Day @ a cost of $86166 (39 BFL singles from ebay) ($36/Gh/s)

Today:

January 08, 2014: 2821Gh/s gets 1 BTC/Day@ a cost of $58500 (78 AsicMiner Cubes from ebay) ($21/Gh/s)

The tumble in asic miner unit prices over the last few weeks has made it much cheaper to get bitcoins. Since the are now several dozen cubes available I have moved over to them for the calculations, and they are fairly cheap compared to BFL units offered. Unfortunately, to run these miners you need some power supplies. In this case, add an additional 39 power supplies (corsair TX850) at a cost of $4875 and that gets you up to right at $63,000 to arm up for one BTC per day with the ASICminer cubes. That's pretty close to what you would need to spend on little singles from BFL, so it's really a wash. If the antminers become more widely available I may consider using them for pricing the next round as they are slightly cheaper currently per Gh/s. It BTC can climb back over $1000 and sustain it for a while, we could see the unit prices increase as they did before, so keep your seatbelt on, it's one big wild ride!