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Author Topic: Determine your break even Value/Difficulty (V/D) ratio  (Read 957 times)
DBordello
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August 06, 2011, 08:25:43 PM
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I have seen some recent discussion about miner's break even price.  However, your break even point is not solely a function of the BTC value.  

Miners should calculate their break even Value/Difficulty (V/D) ratio.  That can be calculated using the following equation (derivation below):

C - Cost in USD/KWh
E - Efficiency in MH/J [or (MH/s)/(Watt)]

V/D = 2.3861*10^-5 * C/E

Currently the V/D is about (8USD/BTC)/(1888786.705) = 4.23*10^-6.  Since this number is so small, it is a little cumbersome for discussion.  Therefore I purpose we divide it by 10^-7 for discussion.  Therefore, the equation reduces to

V/D = 238.6 C/E [with * 10^-7 implied]  

The current V/D is about 42.3 [with * 10^-7 implied]  

For a point of comparison, I am mining at about 1070 MH/s using 500 W.  My electricity cost is 8.6c per KWh.  Therefore my V/D 2.3861*10^-5*(0.086)/(1070/500) = 9.6. Therefore things have to get much worse for it to be unprofitable [9.6*10^-7 * 1888786.705 = 1.81 USD/BTC].

I think that using the V/D for comparison will be more useful than the current discussion about everybody's BTC/USD break even point.  The V/D provides a consistent value for comparison, since it does not change with the difficulty every two weeks. 

What is everybody else's V/D?  It would be interesting to see how it varies by region and GPU setup. 

I have a 9.6 in Illinois with 3x5850. 

Thoughts?

Derivation
Variables:
Symbol - Description [units]
V - Value [USD/BTC]
D - Difficulty [Shares/Block]
C - Electricity Cost [USD/KWh]
H - Hash Rate [Hash/s]
U - Energy Use [Watts]
E - Efficiency [MH/J]
X - Expense [USD/s]
I - Income [USD/s]

Expenses:
X = U [Watts] * (1 KW / 1000 W) * C [USD/KWh] * (1 Hour / 3600 s)

X = UC/3.6e6 [USD/s]

Income:
I = H [Hash/s] / (D [Shares/Block] * 2^32 Hash/share) * 50 BTC/Block * V [USD/BTC]

I = 50HV/(2^32D) [USD/s]

Break Even:
X = I
UC/3.6e6 = 50HV/(2^32D)

=> V/D = 2^32 UC / (3.6e6*50*H)

E = 1e6 H / U

=> V/D = 2^32 C / (3.6e6*50*E*1e6)

V/D = 2.3861*10^-5 C/E


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The network tries to produce one block per 10 minutes. It does this by automatically adjusting how difficult it is to produce blocks.
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August 06, 2011, 08:57:15 PM
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simpler idea: use Kilowatts instead of watts for energy usage. No need to say 1000.
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