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Author Topic: What's your shutdown point?  (Read 10673 times)
fizzisist
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October 13, 2011, 05:19:30 AM
 #21

1001 kWh * $0.149/kWh = $149.
When you mine you are essentially buying a block for $149.  It doesn't matter if you buy it from the market or buy it from mining either way you are buying it.

$149/50 = $2.98.

If BTC are selling for MORE than $2.98 you should mine.
If BTC are selling for LESS than $2.98 you should buy.

+1 to this really great calculation and clear explanation. I especially like how you give an extra 33% margin depending on heating/cooling. Well done, sir.

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allten
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October 13, 2011, 07:21:56 PM
 #22

Current difficulty 7,255,634,282,020,860 hashes per block.
2MH/watt * 60 * 60 * 1000 = 7200000 MH / kWh

 7,255,634,282,020,860 /  ( 7200000 * 1000 * 1000 ) = 1007 kWh per block.  9 cents per kWh = $90.63 per block.  $90.63 / 50 = ~$1.80 per coin.

So if I'm pulling ~1550 from the wall for rigs and cooling and getting ~3120 Mh/s, I'm at ~2MH/watt right? Why does your difficulty number have more commas than the national debt?  At $0.149/kWh what price am I better off buying coins?

It isn't difficulty.  It is what difficulty represents.  Number of Hashes to make a block.

Difficulty * 2^32 = number of hashes per block.

Another way of looking at your numbers:

7,255,634,282,020,860 / (3120 * 1000 * 1000 * 60 * 60 ) = 646 hours.
It will take you 646 hours to find a block.

646 hours * 1.550kW =  1,001 kWh per block. (neto just about 1 MWh)  
Every block you find consumes 1,001 kWh of electricity.

10,01 kWh * $0.149/kWh = $149.
When you mine you are essentially buying a block for $149.  It doesn't matter if you buy it from the market or buy it from mining either way you are buying it.

$149/50 = $2.98.

If BTC are selling for MORE than $2.98 you should mine.
If BTC are selling for LESS than $2.98 you should buy.

In the winter you likely can reduce that by 1/3.  The energy consumed heats the house.  It likely isn't as cheap/efficient as using natural gas so we shouldn't consider it "free heat" but maybe "subsidized heat".  In the winter (if your rigs are in heated part of your house) maybe use $2.00 as the breakpoint.  In the summer if you need to AC to cool your house that adds about 30% additional electrical cost making your break even more like $4.00

So getting super complex.  The most efficient method to acquire coins.

In summer.  Price above $4 MINE.  Below $4 BUY.
In fall/spring.  Price above $3 MINE.  Below $3 BUY.  *if not needing to use AC or heat
In Winter.  Price above $2 MINE.  Below $2 BUY.

Of course when difficulty changes you will need to adjust but only the first number in the equation changes.  Number of hashes per block is simply difficulty * 2^32.


Nice Work! Thanks.

For me, I also like to add the capital investment into the calculation.
All the hardware should be paid off in 18 months in my opinion:
       That's the average time before hardware doubles in power and/or the price is cut in half.
        FPGAs will become commonplace and ASICs may be come common after that.

If you already had all the capital on hand before you joined the bitcoin venture, then it makes since not to think about it; however, in the future, in order to compete in mining capital investments will have to made by all specifically for mining.
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October 16, 2011, 10:07:43 PM
 #23

I couldn't imagine anyone would still be into this for the profit side of things, You would make more money in a single day washing car windows at the local traffic lights than you would mining for a whole month.

So with that in mind the question about a cut off point is stupid, People will believe in there minds what the want to believe even if they have convinced them self they are making money. But I would say atleast 90% of miners are in it for the community and fun(if you can call it that).

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October 16, 2011, 10:12:32 PM
 #24

I couldn't imagine anyone would still be into this for the profit side of things, You would make more money in a single day washing car windows at the local traffic lights than you would mining for a whole month.

So with that in mind the question about a cut off point is stupid, People will believe in there minds what the want to believe even if they have convinced them self they are making money. But I would say atleast 90% of miners are in it for the community and fun(if you can call it that).

How many hours of work does it take to run your miners each month?  I have 4 rigs running off usb drives which I haven't touched in weeks (except the whole DDOS fun and even that was maybe 1 hour of "work").   Now there is my 5th rig which is also my workstation that I tweak, modify, and change as a hobby of sorts but that is more a choice than a necessity.

Mining is more comparable to an investment than a job.  If I wash cars for 8 hours I get paid for 8 hours.  If it takes 8 hours per month to run and maintain the rigs I can get paid for 1000+ hours.

I won't be running my rigs for charity.  Maybe some miners will but not all of them will.  This is evident in the falling hashrate of the network.  So my break even point is very real $1.59 per BTC (modified by seasonal effect of heat).  When we hit that I will shut off my rigs.  If we go above it I will turn them back on.
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October 16, 2011, 10:19:16 PM
 #25

At $3.50/BTC, my earning rate would be $0.91/day after power at 1.2Ghash. So needless to say, my miners will stay off for the time being  Tongue

I think the thing that's going to come to light is that without speculators driving the price, in a healthy system, the ratio of difficulty/price will keep mining a zero profit game. If anything, the market is just adjusting back to levels it can support without people pumping money into it looking to make a quick buck.
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October 16, 2011, 11:26:21 PM
 #26

My shutdown point is $0, since I use my computer to heat my house.  Cheesy
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October 16, 2011, 11:29:41 PM
 #27

I hate to say it, but I didn't think bitcoin would fall this far given that there hasn't been a major theft recently. It looks like folks are just giving up. It's a shame because history shows us what happens when reason and progress fails. Bitcoin was a grand experiment in an egalitarian economy. Bitcoin, you either love it or hate it and while it's outlasted most marriages, every good thing will die. I wonder if anyone is developing a coin that works as a virus destroying computers? Now that is something our military-industrial complex would invest a great deal in resources to develop.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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October 17, 2011, 04:21:02 AM
 #28

$1.80.  That is the electrical cost for my hardware efficiency, current difficulty, and my electrical rate.  Obviously that number would adjust based on difficulty.

Another way to look at it is my cutoff point is (diff/USD BTC price): 854,626.1111  or roughly 850,000.  If difficulty / price is >= 850,000 I quit.

$1.80? Holy smokes! You must have super, super, super cheap power or something. My two mining rigs together pull about ~850w and at $0.091/khw + current difficulty, I'm only at $20/mo profit.

If price were to drop to $1.80, I'd be out $25/mo!

The price of a bitcoin is so low that now it's only for fun.

But that's the point I don't get. What's the fun? If you could just buy the bitcoins for less than it's costing you to mine them.

Keep in mind that trends often benefit bears in lean times, IE people who buy low often lose out in the short run and payoff in the long. I"m investing heavily now and I'll see great returns I believe.  If you are speculating, you're not an investor, you're a pig... Pigs get slaughtered.
wndrbr3d
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October 17, 2011, 02:19:22 PM
 #29

Gut check folks! Welcome to sub-$3!  Shocked
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October 17, 2011, 03:34:00 PM
 #30

jup lol i see btc drop like a rocket
d.james
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October 17, 2011, 03:53:10 PM
 #31

It's a hard question to answer, because the difficulty certainly will follow the price,
Say at 2 mil difficulty, my shutdown point would be at $5,
but when we actually reach $5, the difficulty went down to 1 mil,
so the new shutdown point is at $2.5, since you're getting double the amount of coins.

You can not roll a BitCoin, but you can rollback some. Cheesy
Roll me back: 1NxMkvbYn8o7kKCWPsnWR4FDvH7L9TJqGG
wndrbr3d
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October 17, 2011, 03:58:21 PM
 #32

It's a hard question to answer, because the difficulty certainly will follow the price,
Say at 2 mil difficulty, my shutdown point would be at $5,
but when we actually reach $5, the difficulty went down to 1 mil,
so the new shutdown point is at $2.5, since you're getting double the amount of coins.

right, but that only makes sense AFTER difficulty adjusts. so if you're losing money right now, you shouldn't be mining until difficulty adjusts lower where you'll be profitable again.
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October 17, 2011, 04:26:59 PM
 #33

That's correct, but most miners don't sell their coins every minute in real time, so it's really hard to determine the absolute profitable cutting point.

You can not roll a BitCoin, but you can rollback some. Cheesy
Roll me back: 1NxMkvbYn8o7kKCWPsnWR4FDvH7L9TJqGG
wndrbr3d
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October 17, 2011, 04:47:15 PM
 #34

That's correct, but most miners don't sell their coins every minute in real time, so it's really hard to determine the absolute profitable cutting point.

difficulty adjustments don't happen that fast, but if a miner isn't selling their coins in a timely manner after mining them, they're speculating.
worldinacoin
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October 17, 2011, 04:50:25 PM
 #35

Actually I find that during such times as a lot of miners stopped, there is a good range of second hand graphic cards and other equipment at cheap prices which may help the existing miners cut their cost per hash.  It can be a good time for some, it can be a bad time for others.
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October 17, 2011, 04:59:24 PM
 #36

Well my shutdown point... who am i kidding? I mine cause i have a decent gpu, i don't really have a shutdown point  Cheesy
sadpandatech
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October 17, 2011, 05:22:30 PM
 #37

I'm curious: What's your shutdown point?

Depending on your electricity cost, you could spend $5 to mine a bitcoin that would only have cost you $4 to just buy.

  The other variable is whether or not a person is mining solely for the purpose of bitcoin acquisition.  Some of us, believe it or not do so solely for supporting the network and view any coins we receive as a 'bonus' for doing so. I have personally sold 0 coins out of several hundred mined and have found ways to use/spend the ones I have gotten rid of.


  On the point of cheaper to mine or cheaper to buy. For anyone that had that mindset for the sole purpose of acquiring bitcoins. I would pray that they atleast know basic 6th grade algebra, as it is not exactly rocket science to formulate what it cost to buy equip, elec cost, etc verse what one could buy bitcoin for.

If you're not excited by the idea of being an early adopter 'now', then you should come back in three or four years and either tell us "Told you it'd never work!" or join what should, by then, be a much more stable and easier-to-use system. - GA
It is being worked on by smart people. -DamienBlack
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October 17, 2011, 06:31:24 PM
 #38

Actually people with free electricity is what's keeping bitcoin alive. Otherwise, bitcoin network would be too expensive to keep running. Each block cost a ton of money in electricity to produce if someone had to pay for the electricity.

I really have no shutdown point.

Im probably one of the lucky ones, as Im able to keep all my miners at work.  And my miners really didn't cost me anything either as Im able to put them on the books at my business.  Getting close to 2ghash/s now with the addition of my 4th miner.

I think as long as I can buy stuff with btc I will continue mining...

Hope you are found out and fired. This is the reason why the price is so low. If all people competed evenly, then the price would be higher than currently but when some idiots like you get "free electricity" they cause the price to fall as they can afford to sell lower than the ones paying for electricity. Result : most of the miners paying get out due to such a low price and we are all screwed as the ponzi collapses.

If my post has been helpful, send me some love -> BTC: 1kokojUapmWqCqPw3Ch2rjcVh57tJEzka | PPC: PDyXAgA8eH47gokVW6zVZPSuu15aao5nZF | Bitshares: kokojie
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October 17, 2011, 11:34:12 PM
 #39

Actually people with free electricity is what's keeping bitcoin alive. Otherwise, bitcoin network would be too expensive to keep running. Each block cost a ton of money in electricity to produce if someone had to pay for the electricity.

No it doesn't I posted a long post outlining my exact electrical costs.  My electrical costs at current difficulty are $1.59 per BTC.  Today BTC is selling higher than that for any miner w/ electrical costs equal to me or less it is profitable to mine.

Another way to look at it is

Current difficulty: 1,486,600
MH/Watt: 2.00 (efficiency)

MHashes per Block =  (2^32)(1,586,00)/1000/1000
MHashes per Block = 6382321402

MH per kWh = 2.0 * 60 * 60 * 1000
MH per kWh = 7200000

kWh per block = (MH/block) / (MH/kWh)
kWh per block = 6382321402 / 7200000
kWh per block = 886.43

Break even electrical cost = (block reward) * (market price) / (kWh per block)
Break even electrical cost  = 50 * $2.40 / 886.43
Break even electrical cost  = $0.139

If your energy cost is $0.139 you are mining break even (@ 2 MH/W efficiency).
If your energy cost is > $0.139 you are losing money mining (@ MH/W efficiency) and likely should simply buy coins from more efficient providers.
If your energy costs is < $0.139 you are making money mining (@ MH/W efficiency) and likely should continue to mine and sell coins to less efficient users.

Obviously this doesn't include hardware costs.  Also miners with less efficient have lower break even electrical cost and those with high efficiency (FPGA) have higher break even electrical costs.


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October 18, 2011, 01:36:21 AM
 #40

If your energy cost is $0.139 you are mining break even (@ 2 MH/W efficiency).
If your energy cost is > $0.139 you are losing money mining (@ MH/W efficiency) and likely should simply buy coins from more efficient providers.
If your energy costs is < $0.139 you are making money mining (@ MH/W efficiency) and likely should continue to mine and sell coins to less efficient users.

Your results are not typical though as your setup is... unique. I think you're going to have some delusional people here who will find reasons to keep mining a positive venture in their mind (yet not their wallet), but I agree with your pragmatic approach.

I'm at ~1.5MH/W efficiency (2x 5830's, 2x 6870's) and my money losing point is $2.46/BTC with my current electricity rate of $0.091/kwh. Luckily, my only money 'invested' was my first video card months ago, since that point, I've only used cashed out BTC/USD to finance my hardware, so at least it's all paid for.

Everything being equal, I think it's very safe to say that if someone hasn't made their money back on their initial investment in hardware, now might be the time to sell your equipment and break even/positive if you can. Depending on your efficiency/power cost, there's a good chance people are only making pennies per day.
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