Block Erupter USB - ROI still possible

[mberg2007]

Hello all,

Many people will say that buying a block erupter is a bad idea because at the rate the network difficulty is rising, they will never produce enough bitcoints to break even.

I had an opportunity to discuss this with a friend today, and the fact is that you can actually still make money with a low yield device like a block erupter, so long as you pay for it in some form of fiat currency. This is true because of the rise in value of bitcoin against these currencies - a trend which is likely to continue.

For example, take a place like this (randomly picked, no affiliation). Buy a block erupter here for $15 and put it to work today.

According to the profit calculator at bitcoinx, the unit will produce 0.00033 btc/day at the current difficulty level. At $326/btc that's 0.10758 per day, which gives a ROI of 139 days. But, some say, difficulty increases will make the unit unable to ever break even.

Let's say the unit produces the promised 0.00033 btc/day for just one month. The total sum produced would then be 0,0099, or roughly 0.01 BTC. You paid $15 for it, so if the BTC/USD rate just swings up to $1500 you have in fact broken even. These are super conservative numbers, it is realistic to assume the unit will produce 0,03 if you let it run for a year I think. It is also likely that you will be able to buy them for $10 rather than $15. With these numbers the BTC/USD rate in one year will only have to be 334, which is pretty much where it already is (my guess is that in one year, BTC/USD will be close to $1000).

So, as long as you buy units with fiat currency, it should still be possible to not just break even but make a healthy profit with lowly block erupters.

What do you think?

-Michael

[TKeenan]

Let's say the unit produces the promised 0.00033 btc/day

I love block erupter - I'll go to the post office tomorrow to get 8 of them.  However, I don't do my calculation that way you do.  I am going for the lottery style of mining.  That is, I am not going to join a pool.  But my erupter can get the lucky lottery ticket and win 25BTC in one second - maybe.  So I'll run it in the winter (I have electric heating so this makes it free to run) and when it hits I'll buy caviar!!  Whoo Hooo!

[Keyser Soze]

Hello all,

Many people will say that buying a block erupter is a bad idea because at the rate the network difficulty is rising, they will never produce enough bitcoints to break even.

I had an opportunity to discuss this with a friend today, and the fact is that you can actually still make money with a low yield device like a block erupter, so long as you pay for it in some form of fiat currency. This is true because of the rise in value of bitcoin against these currencies - a trend which is likely to continue.

For example, take a place like this (randomly picked, no affiliation). Buy a block erupter here for $15 and put it to work today.

According to the profit calculator at bitcoinx, the unit will produce 0.00033 btc/day at the current difficulty level. At $326/btc that's 0.10758 per day, which gives a ROI of 139 days. But, some say, difficulty increases will make the unit unable to ever break even.

Let's say the unit produces the promised 0.00033 btc/day for just one month. The total sum produced would then be 0,0099, or roughly 0.01 BTC. You paid $15 for it, so if the BTC/USD rate just swings up to $1500 you have in fact broken even. These are super conservative numbers, it is realistic to assume the unit will produce 0,03 if you let it run for a year I think. It is also likely that you will be able to buy them for $10 rather than $15. With these numbers the BTC/USD rate in one year will only have to be 334, which is pretty much where it already is (my guess is that in one year, BTC/USD will be close to $1000).

So, as long as you buy units with fiat currency, it should still be possible to not just break even but make a healthy profit with lowly block erupters.

What do you think?

-Michael

You should not include an exchange rate increase in your profit calculations. If you pay 0.04BTC (or the equivalent in another currency) for a device that will only produce 0.01BTC (after operating costs) in its lifetime, then it is not profitable. If you want to bet on bitcoins increasing in value over other currencies, then just buy bitcoins. This assumes your only motivation is profit.

[gadman2]

Let's say the unit produces the promised 0.00033 btc/day

I love block erupter - I'll go to the post office tomorrow to get 8 of them.  However, I don't do my calculation that way you do.  I am going for the lottery style of mining.  That is, I am not going to join a pool.  But my erupter can get the lucky lottery ticket and win 25BTC in one second - maybe.  So I'll run it in the winter (I have electric heating so this makes it free to run) and when it hits I'll buy caviar!!  Whoo Hooo!

Good luck, 300mh/s has the chance of getting a block in about 231 years and 346 days. Divide that by 8 and that's 1 year and 142 days.

[fizzmine]

Good luck, 300mh/s has the chance of getting a block in about 231 years and 346 days. Divide that by 8 and that's 1 year and 142 days.

That's why he views it as a lottery... could happen.

I hit a block finding share on my GPU a few months ago before I got into running asics, it can certainly happen   Course I was on a pool, but I just consider it paying back for all those pool earnings in years past before I ever found a block myself.

[mberg2007]

You should not include an exchange rate increase in your profit calculations. If you pay 0.04BTC (or the equivalent in another currency) for a device that will only produce 0.01BTC (after operating costs) in its lifetime, then it is not profitable. If you want to bet on bitcoins increasing in value over other currencies, then just buy bitcoins. This assumes your only motivation is profit.

I was going to write a bunch of clever calculations but you are right. It is actually more sensible to just exchange the $15 to 0.03 btc.

But if you really wanted to make a profit with a mining device of some kind, how would you be able to gauge the performance? Like "price per ghash per watt < x"? Did anyone make an online calculator for that?

-Michael

[ajw7989]

I just resold my 3 usb erupters for $20 each with local pickup from craigslist. Mined with them for about 3 months so even though I did not ROI I did not take a huge loss.

[balanghai]

If you could get one for BTC0.005 you will get ROI.

[odolvlobo]

Many people will say that buying a block erupter is a bad idea because at the rate the network difficulty is rising, they will never produce enough bitcoints to break even.
I had an opportunity to discuss this with a friend today, and the fact is that you can actually still make money with a low yield device like a block erupter, so long as you pay for it in some form of fiat currency. This is true because of the rise in value of bitcoin against these currencies - a trend which is likely to continue.
...
-Michael

The issue is not about making a profit in dollars. That mostly depends on the exchange rate. The issue is whether it is better to buy a miner to mine bitcoins or to just buy the bitcoins directly.

Despite what people say, you can get a positive return on investment with a USB block erupter. The block erupter will mine about 0.015 BTC total, so if you buy one for less than 0.015 BTC (about $5), you will make a profit. It is as simple as that, and it applies to all mining equipment.

[TheDragonSlayer]

Many people will say that buying a block erupter is a bad idea because at the rate the network difficulty is rising, they will never produce enough bitcoints to break even.
I had an opportunity to discuss this with a friend today, and the fact is that you can actually still make money with a low yield device like a block erupter, so long as you pay for it in some form of fiat currency. This is true because of the rise in value of bitcoin against these currencies - a trend which is likely to continue.
...
-Michael

The issue is not about making a profit in dollars. That mostly depends on the exchange rate. The issue is whether it is better to buy a miner to mine bitcoins or to just buy the bitcoins directly.

Despite what people say, you can get a positive return on investment with a USB block erupter. The block erupter will mine about 0.015 BTC total, so if you buy one for less than 0.015 BTC (about $5), you will make a profit. It is as simple as that, and it applies to all mining equipment.

You forget electricity charges.....

[odolvlobo]

The issue is not about making a profit in dollars. That mostly depends on the exchange rate. The issue is whether it is better to buy a miner to mine bitcoins or to just buy the bitcoins directly.
Despite what people say, you can get a positive return on investment with a USB block erupter. The block erupter will mine about 0.015 BTC total, so if you buy one for less than 0.015 BTC (about $5), you will make a profit. It is as simple as that, and it applies to all mining equipment.

You forget electricity charges.....

Electricity costs are low enough to ignore, at least for the next several months. A USB block erupter currently mines about $.11 per day and the power cost is about $0.01 per day. Newer mining equipment is even more efficient. When the difficulty goes up by another factor of 10, then the first gen ASIC miners will no longer be profitable (assuming that the exchange rate does not also go up).

[Keyser Soze]

I was going to write a bunch of clever calculations but you are right. It is actually more sensible to just exchange the $15 to 0.03 btc.

But if you really wanted to make a profit with a mining device of some kind, how would you be able to gauge the performance? Like "price per ghash per watt < x"? Did anyone make an online calculator for that?

-Michael

http://mining.thegenesisblock.com/ is pretty good. It suggests an average (exponential) increase per month, but you can input your own estimates. If you are serious about trying to profit, you should probably analyze a few different scenarios to see if it makes sense to purchase a particular miner.

I have made a more detailed post in the past, which may interest you.

Of course this all assumes your primary goal is profit.

Generally (at this time) you will have a hard time finding a miner at a cost low enough to be profitable.

[Littleshop]

Hello all,

.........................

Let's say the unit produces the promised 0.00033 btc/day for just one month. The total sum produced would then be 0,0099, or roughly 0.01 BTC. You paid $15 for it, so if the BTC/USD rate just swings up to $1500 you have in fact broken even. These are super conservative numbers, it is realistic to assume the unit will produce 0,03 if you let it run for a year I think. It is also likely that you will be able to buy them for $10 rather than $15. With these numbers the BTC/USD rate in one year will only have to be 334, which is pretty much where it already is (my guess is that in one year, BTC/USD will be close to $1000).

So, as long as you buy units with fiat currency, it should still be possible to not just break even but make a healthy profit with lowly block erupters.

What do you think?

-Michael

You should not include an exchange rate increase in your profit calculations. If you pay 0.04BTC (or the equivalent in another currency) for a device that will only produce 0.01BTC (after operating costs) in its lifetime, then it is not profitable. If you want to bet on bitcoins increasing in value over other currencies, then just buy bitcoins. This assumes your only motivation is profit.

+100   Just buy bitcoins if you think prices are going to go that high.  If you buy the Bitcoins straight up vs the erupters you are going to make a lot more money.  Also remember that buying the Bitcoins ADDS to the Bitcoin ecosystem directly, buying block erupters adds to ASICMINERS bottom line instead. 

[Enira]

Hello all,

Many people will say that buying a block erupter is a bad idea because at the rate the network difficulty is rising, they will never produce enough bitcoints to break even.

I had an opportunity to discuss this with a friend today, and the fact is that you can actually still make money with a low yield device like a block erupter, so long as you pay for it in some form of fiat currency. This is true because of the rise in value of bitcoin against these currencies - a trend which is likely to continue.

For example, take a place like this (randomly picked, no affiliation). Buy a block erupter here for $15 and put it to work today.

According to the profit calculator at bitcoinx, the unit will produce 0.00033 btc/day at the current difficulty level. At $326/btc that's 0.10758 per day, which gives a ROI of 139 days. But, some say, difficulty increases will make the unit unable to ever break even.

Let's say the unit produces the promised 0.00033 btc/day for just one month. The total sum produced would then be 0,0099, or roughly 0.01 BTC. You paid $15 for it, so if the BTC/USD rate just swings up to $1500 you have in fact broken even. These are super conservative numbers, it is realistic to assume the unit will produce 0,03 if you let it run for a year I think. It is also likely that you will be able to buy them for $10 rather than $15. With these numbers the BTC/USD rate in one year will only have to be 334, which is pretty much where it already is (my guess is that in one year, BTC/USD will be close to $1000).

So, as long as you buy units with fiat currency, it should still be possible to not just break even but make a healthy profit with lowly block erupters.

What do you think?

-Michael

You should not include an exchange rate increase in your profit calculations. If you pay 0.04BTC (or the equivalent in another currency) for a device that will only produce 0.01BTC (after operating costs) in its lifetime, then it is not profitable. If you want to bet on bitcoins increasing in value over other currencies, then just buy bitcoins. This assumes your only motivation is profit.

This whole post is just to negate the buyers remorse. I've bought 27 of em for a few months ago for something like 6 BTC. I am currently at 1.11 BTC, if they pump out 2 BTC, given the current Bitcoin price, then I will have hit my ROI.
Off course there is a gap of 4 BTC and so the ROI in bitcoins hasn't been met, but in fiat money it can eventually break even.

+100   Just buy bitcoins if you think prices are going to go that high.  If you buy the Bitcoins straight up vs the erupters you are going to make a lot more money.  Also remember that buying the Bitcoins ADDS to the Bitcoin ecosystem directly, buying block erupters adds to ASICMINERS bottom line instead.  

That's the consensus now, now we've seen the ASIC rush. Now it makes more sense to buy em instead. But remember the first ASIC equipment? They made a lot.

[wtfvanity]

You should not include an exchange rate increase in your profit calculations. If you pay 0.04BTC (or the equivalent in another currency) for a device that will only produce 0.01BTC (after operating costs) in its lifetime, then it is not profitable. If you want to bet on bitcoins increasing in value over other currencies, then just buy bitcoins. This assumes your only motivation is profit.

I was going to write a bunch of clever calculations but you are right. It is actually more sensible to just exchange the $15 to 0.03 btc.

But if you really wanted to make a profit with a mining device of some kind, how would you be able to gauge the performance? Like "price per ghash per watt < x"? Did anyone make an online calculator for that?

-Michael

Everyone ignore everything else, and that's the answer right there. You could invest $15 to get 0.01 btc, or you could just buy 0.03 btc with that same money, and have those bitcoins.

Here is a fact that every miner needs to contemplate. THE DIFFICULTY IS NOT GOING TO GET EASIER

The end.

[Keyser Soze]

This whole post is just to negate the buyers remorse. I've bought 27 of em for a few months ago for something like 6 BTC. I am currently at 1.11 BTC, if they pump out 2 BTC, given the current Bitcoin price, then I will have hit my ROI.
Off course there is a gap of 4 BTC and so the ROI in bitcoins hasn't been met, but in fiat money it can eventually break even.

Yes, bitcoins appreciated in value compared to traditional currencies. It does not change the fact that the mining activity generated a net loss.

+100   Just buy bitcoins if you think prices are going to go that high.  If you buy the Bitcoins straight up vs the erupters you are going to make a lot more money.  Also remember that buying the Bitcoins ADDS to the Bitcoin ecosystem directly, buying block erupters adds to ASICMINERS bottom line instead.  

That's the consensus now, now we've seen the ASIC rush. Now it makes more sense to buy em instead. But remember the first ASIC equipment? They made a lot.

A small number of (lucky) people who took risks with the correct companies profited greatly (ex: Avalon batch 1), but many miners will take a loss in btc.

Individual miners will have a rough future as profits will be squeezed out by ASIC manufacturers.

[mberg2007]

If "private mining" becomes unfeasible/unprofitable, it kind of defeats the original intent of having bitcoins distributed fairly evenly, and not under the control of one or more "power hubs".

Once all coins have been mined the entire mining economy will come from transaction fees. Kind of difficult though to see how private miners will see this as an attractive way to spend their kWh, unless there is a profitable upside. I wonder if the transaction fees will skyrocket in the future to provide incentive for private miners. Having a diverse and distributed mining community is vital for bitcoin I think.

-Michael

[wtfvanity]

If "private mining" becomes unfeasible/unprofitable, it kind of defeats the original intent of having bitcoins distributed fairly evenly, and not under the control of one or more "power hubs".

Once all coins have been mined the entire mining economy will come from transaction fees. Kind of difficult though to see how private miners will see this as an attractive way to spend their kWh, unless there is a profitable upside. I wonder if the transaction fees will skyrocket in the future to provide incentive for private miners. Having a diverse and distributed mining community is vital for bitcoin I think.

-Michael

You forget that those that hold large amounts of BTC will also have an interest in protecting the network, regardless of fees.

[Ruzka]

My block erupter will only make ROI if I re sell them.

[chaosknight]

Anybody that say ROI is possible must have either free electricity or forget about them...