2022 Diff thread.

[Coinfarm ventures]

As for the growing hashrate, I'm wondering who is getting that gear

I would guess a large U.S. corporate miner, like Whitstone or White Rock is contributing most of the hashrate. These folks don't care if they make no profit or lose money for a few years. They have hundreds of millions in venture capital to throw at mining that their investors can't do anything else with.

[mikeywith]

As for the growing hashrate, I'm wondering who is getting that gear

I would guess a large U.S. corporate miner, like Whitstone or White Rock is contributing most of the hashrate. These folks don't care if they make no profit or lose money for a few years. They have hundreds of millions in venture capital to throw at mining that their investors can't do anything else with.

Yup, these rich corporates will redefine what mining is, a long time ago, there was 3-5 months ROI possibility on many gears (both in BTC and $), now the minimum is over a year, eventually, it will be like any other business where nobody including those big corporates can hit ROI in a few years.

Power doesn't seem to be limited over there, money isn't limited either, it seems like the only real bottleneck here would be the manufacturing speed, current hashrate estimation is 223EH, a 5% increase is 11.15EH, which translates to nearly 111,000 S19 pros,  to make and deploy that amount of gears is unsustainable IMO, we will have to slow down very soon, but we will never stop growing.

[alh]

For whatever reason, BTC price has now fallen to: $36,340. Maybe in sympathy with the US stock market?

[Coinfarm ventures]

Yup, these rich corporates will redefine what mining is, a long time ago, there was 3-5 months ROI possibility on many gears (both in BTC and $), now the minimum is over a year, eventually, it will be like any other business where nobody including those big corporates can hit ROI in a few years.

Power doesn't seem to be limited over there, money isn't limited either, it seems like the only real bottleneck here would be the manufacturing speed, current hashrate estimation is 223EH, a 5% increase is 11.15EH, which translates to nearly 111,000 S19 pros,  to make and deploy that amount of gears is unsustainable IMO, we will have to slow down very soon, but we will never stop growing.

The days where one could buy a Radeon HD 7970 and pay it back in 30 days on DOGE, or an Avalon that paid for itself in 4 months are long gone. ASIC mining will have the same return as any other business, which is 5-10% per year. GPU mining returns seem to be falling in the long term as well. The last of the glory days was summer 2017 where I could buy RX 480's for $300 which made $6/day of profit. Now I think the return on GPU mining post-PoS will be 20-40%, which is fine, but much lower than usual.

The U.S., especially Texas, has a large population that consumes a lot of energy per capita. In Texas everybody has big houses with a lot of A/C that use lots of energy, not to mention the 8-lane express highways built on top of each other that carry 20 foot long pickup trucks. The grid can handle gigawatts of power and the deregulated energy market is very efficient at sourcing more supply. 300MW is a drop in the bucket. In fact, the average American's electricity consumption peaked around 2000 and has declined. So the grids are running under capacity in most places.

So it does look like the U.S. will become as dominant for global hashrate as China used to be. The only brake is manufacturing capacity or BTC price. These billionaires will pile more capital into farms until ROI is zero, then only will they scale back. The unique tax situation here makes them not care about initial losses if they can get a 41% tax write-off. That's what venture capital does to every new business idea.

[stompix]

So we nearly touched $35k, revenue per TH went under 15 cents again, the difficulty still shows a trend of over 4.5%, at least it's weekend and sunny outside.

And one more piece of good news, cheap miners, you can get right now your favorite S19 95th from Bitmain for only $6,745 , shipping in 10 days, and only 450 to ROI with zero cost electricity. Or the brand new S19 XP Hydro with a 500 days ROI , but you'll have to wait till January 2023. I can't wait to see what they will plan to offer for delivery in 2024 just before the halving 

Power doesn't seem to be limited over there, money isn't limited either, it seems like the only real bottleneck here would be the manufacturing speed, current hashrate estimation is 223EH, a 5% increase is 11.15EH, which translates to nearly 111,000 S19 pros,  to make and deploy that amount of gears is unsustainable IMO, we will have to slow down very soon, but we will never stop growing.

Percentage-wise it might be unsustainable, in terms of added hashes probably it will keep bumping like that for a few months every time there is a batch of gear delivered to some big buyer. There are still close to 7 of those hops alone from contracts that have been made public for this year so it's going to be a fun ride.

I wonder what's the average price at which those companies actually lose money on operations alone.
For the average S19 running at 5 cents per kWh electricity is 25% of the revenue right now, I wonder how much are the other costs, maintenance, security, electricity cost for cooling, and so on assuming a 1k or 5k miner operation.

[philipma1957]

So we nearly touched $35k, revenue per TH went under 15 cents again, the difficulty still shows a trend of over 4.5%, at least it's weekend and sunny outside.

And one more piece of good news, cheap miners, you can get right now your favorite S19 95th from Bitmain for only $6,745 , shipping in 10 days, and only 450 to ROI with zero cost electricity. Or the brand new S19 XP Hydro with a 500 days ROI , but you'll have to wait till January 2023. I can't wait to see what they will plan to offer for delivery in 2024 just before the halving 

Power doesn't seem to be limited over there, money isn't limited either, it seems like the only real bottleneck here would be the manufacturing speed, current hashrate estimation is 223EH, a 5% increase is 11.15EH, which translates to nearly 111,000 S19 pros,  to make and deploy that amount of gears is unsustainable IMO, we will have to slow down very soon, but we will never stop growing.

Percentage-wise it might be unsustainable, in terms of added hashes probably it will keep bumping like that for a few months every time there is a batch of gear delivered to some big buyer. There are still close to 7 of those hops alone from contracts that have been made public for this year so it's going to be a fun ride.

I wonder what's the average price at which those companies actually lose money on operations alone.
For the average S19 running at 5 cents per kWh electricity is 25% of the revenue right now, I wonder how much are the other costs, maintenance, security, electricity cost for cooling, and so on assuming a 1k or 5k miner operation.

the real question is how much flare gas is available in
North Dakota
South Dakota
Texas

and the pipeline shut down in PA

these are four areas that could drop in 1 container for mining and 1 container for generators.

Since the first three states were burning the gas that comes from drilling oil and getting fined that are not paying four that fuel that was burned off.

I e 1000 cubic feet flare burn = say a 1 dollar fine
1000 cubic feet burned for mining = 10 cent tax.

so they get paid for the fuel used or the expense of the fuel used it reduced 90%

plus they collect for the coins they earn.

as for PA pipeline shut down by biden I am not sure how it would work if they hook into it at the source and burn that gas without shipping it.

Basically a huge theft by the government and home ever owns that pipeline (note this is speculation in the pipe case)

[wndsnb]

Looing like >4% increase in difficulty along with a ~9% drop in price. People keep saying this trend can't possibly continue, but then it just keeps going in the same direction...

Profitability is still relatively high though, it's just the gear prices that are out of control. Might just need some actual low profitability time to clean house... maybe a doubling of difficulty at current price or halving in price at current difficulty would get us there.

I wonder what's the average price at which those companies actually lose money on operations alone.
For the average S19 running at 5 cents per kWh electricity is 25% of the revenue right now, I wonder how much are the other costs, maintenance, security, electricity cost for cooling, and so on assuming a 1k or 5k miner operation.

I don't think costs other than power make up a significant percentage of the total for even relatively small farms...

For a 5MW farm paying $0.05/kwh, that's $182,500 per month for a power bill. That's ~1600 3kw miners that would fit in 5 or 6 shipping containers. They could have several full-time employees and not even hit 5% of the power bill.

[philipma1957]

Looing like >4% increase in difficulty along with a ~9% drop in price. People keep saying this trend can't possibly continue, but then it just keeps going in the same direction...

Profitability is still relatively high though, it's just the gear prices that are out of control. Might just need some actual low profitability time to clean house... maybe a doubling of difficulty at current price or halving in price at current difficulty would get us there.

I wonder what's the average price at which those companies actually lose money on operations alone.
For the average S19 running at 5 cents per kWh electricity is 25% of the revenue right now, I wonder how much are the other costs, maintenance, security, electricity cost for cooling, and so on assuming a 1k or 5k miner operation.

I don't think costs other than power make up a significant percentage of the total for even relatively small farms...

For a 5MW farm paying $0.05/kwh, that's $182,500 per month for a power bill. That's ~1600 3kw miners that would fit in 5 or 6 shipping containers. They could have several full-time employees and not even hit 5% of the power bill.

very much matching 2018
diff rose jan to oct
price dropped jan to oct

it turned into an over adjustment in that too much diff.

so diif went lower or flatter from oct 2018 for close to a year.

it remains to be seen if this repeats perfectly.

https://www.bitrawr.com/difficulty-estimator

Latest Block:   735506  (4 minutes ago)

Current Pace:   104.6577%  (1683 / 1608.10 expected, 74.9 ahead)

Previous Difficulty:   28225928151211.1                            
Current Difficulty:   29794407589312.08                            
Next Difficulty:   between 31173113578048 and 31213627331660
Next Difficulty Change:   between +4.6274% and +4.7634%
Previous Retarget:   April 27, 2022 at 11:04 AM  (+5.5569%)
Next Retarget (earliest):   Tuesday at 8:07 PM  (in 2d 5h 1m 48s)
Next Retarget (latest):   Tuesday at 8:31 PM  (in 2d 5h 26m 16s)
Projected Epoch Length:   between 13d 9h 2m 47s and 13d 9h 27m 16s

more ugg. still near 4.7%

and price is down to 34K

[alh]

An update to the above: BTC price is now $30K, not $34K.

[alh]

We are now into the final "sprint" of the current epoch. BTC price has crawled back to $31,646.

Latest Block:   735730  (3 minutes ago)
Current Pace:   105.0313%  (1907 / 1815.65 expected, 91.35 ahead)
Previous Difficulty:   28225928151211.1                             
Current Difficulty:   29794407589312.08                           
Next Difficulty:   between 31316746918655 and 31321438959535
Next Difficulty Change:   between +5.1095% and +5.1252%
Previous Retarget:   April 27, 2022 at 10:04 AM  (+5.5569%)
Next Retarget (earliest):   Today at 5:58 PM  (in 0d 17h 17m 47s)
Next Retarget (latest):   Today at 6:01 PM  (in 0d 17h 20m 36s)
Projected Epoch Length:   between 13d 7h 54m 16s and 13d 7h 57m 5s

[robertpaulsen]

Are there any electricity price changes at your countries? It seems to me energy prices are only scheduled to go up (way up). Adding ridiculously increasing hashrate into the equation, things aren't looking good for miners, even S19-tier. This, apart from having tremendous impact on mining, obviously has even greater impact on the world economy, and can quite possibly trigger a recession, much like the one in 2008 in magnitude, which basically is the reason bitcoin exists.

I gotta say, it would be interesting observing recession, this time with bitcoin around. Also seeing whether my at home mining equipment turn to junk or a goose with the golden eggs.

[Coinfarm ventures]

Are there any electricity price changes at your countries? It seems to me energy prices are only scheduled to go up (way up).

U.S. wholesale energy price is going up by a cent because natural gas is very expensive now. But it depends on the region. PJM & ERCOT are seeing big increases while I would guess Washington/New York aren't as affected because they use hydropower.

$31k coin, 1 cent more for power... we're approaching the production cost of many U.S. farms which currently pay 6-7 cents for their power and 1 cent for rent. They won't make profit anymore.

[stompix]

Are there any electricity price changes at your countries? It seems to me energy prices are only scheduled to go up (way up). Adding ridiculously increasing hashrate into the equation, things aren't looking good for miners, even S19-tier.

I would be losing money mining on the grid with anything below s19 pro, even the standard s19 would make me lose money if I would be paying consumer rates. But, this is the EU, mining here stopped really competing with the world the moment the first ASIC went live.

This, apart from having tremendous impact on mining,

The big guys are tied by long-term contracts, they get electricity below 5 cents, sometimes even ridiculously low as 2.5-3.5, it will not affect the hashrate that much, we're indeed broke 12 cents per TH/s, the lowest in years but gear still keeps being delivered.

Latest Block:   735788  (2 minutes ago)
Current Pace:   104.5262%  (1965 / 1879.91 expected, 85.09 ahead)
Next Difficulty Change:   between +4.6133% and +4.6164%

8 hours to go, another 4.5, if we go below 30k again a lot of home miners if not all will realize they should have bought BTC rather than a 10k heater. Cheap gear anyone?

Oh, forgot this:

very much matching 2018
diff rose jan to oct
price dropped jan to oct

it turned into an over adjustment in that too much diff.
so diif went lower or flatter from oct 2018 for close to a year.
it remains to be seen if this repeats perfectly.

Same for  October 2020. We're heading for those numbers at full speed but I'm doubtful we'll have a bull run next few months.

[mikeywith]

Latest Block:   735844  (a few seconds ago)
Current Difficulty:   31251101365711.12                           
Previous Retarget:   Today at 1:40 AM  (+4.8892%)

3.1 difficulty, it's amazing how we managed to hit 50% increase in exactly one year, I wonder what were we speculating to happen back then, it's going to take some digging into the 2021 diff thread to see if anyone has predicated anything close to this.

the funny part is that if we use July instead of May, we are up more than 100%, who would have thought? and now looking at how things could play out a year from now, one should expect anything and everything.

[alh]

I don't know how this fits into past experience, but BTC price is now $28,661!

[stompix]

I don't know how this fits into past experience, but BTC price is now $28,661!

Touched 27900
Keep calm, difficulty just went up, revenue is at the lowest per th since 2020, we've just learned that a stable coin is traded at 20 cents per 100 cents, some people get wrecked in longs, a few  NFTs dropped 99% losing millions, somebody just spammed the mempool with 100 MB of tx, and the difficulty keeps rising, but! tomorrow is Friday! (at least in my timezone), and everyone is happy on Fridays! 

Meanwhile, resellers still ask for $8,500 used no warranty s19 (110th version).
And somewhere somebody probably buys!

[NapHappy]

Are there any electricity price changes at your countries? It seems to me energy prices are only scheduled to go up (way up).

U.S. wholesale energy price is going up by a cent because natural gas is very expensive now. But it depends on the region. PJM & ERCOT are seeing big increases while I would guess Washington/New York aren't as affected because they use hydropower.

$31k coin, 1 cent more for power... we're approaching the production cost of many U.S. farms which currently pay 6-7 cents for their power and 1 cent for rent. They won't make profit anymore.

At 8 cents for power and rent wouldn't it continue to net a measly amount of BTC even if price dropped to about 16000?

Edit - assuming 100TH/s, 3010 watts.

Edit again - assuming current difficulty 

[philipma1957]

Assume 3.3 not 3.01 so 80kwatts a day say 8 cents  rent ,breakage,power ,labor

that is $6.40 cost a day. 100th is making. 12.23 - 6.40 = 5.83 profit.

which works for a big farm.  this is with 30k price.

at 20k that 100th will do 8.15- 6.40  = 1.75 which is piss poor for a big farm. as they may have paid 7k a unit or more.

If they took a loan and are servicing  debt 💸 it is very likely they go bankrupt.

But you need an extended time at 20k to really crash big farms.

look at current diff it is +3%  which means big farms are grinding away.

https://www.bitrawr.com/difficulty-estimator

Latest Block:   735998  (28 minutes ago)

Current Pace:   103.8034%  (159 / 153.17 expected, 5.83 ahead)

Previous Difficulty:   29794407589312.08                           
Current Difficulty:   31251101365711.12                           
Next Difficulty:   between 31426821229651 and 32448536370230
Next Difficulty Change:   between +0.5623% and +3.8317%
Previous Retarget:   Yesterday at 7:40 PM  (+4.8892%)
Next Retarget (earliest):   May 24, 2022 at 7:22 AM  (in 12d 10h 9m 35s)
Next Retarget (latest):   May 24, 2022 at 5:48 PM  (in 12d 20h 36m 20s)
Projected Epoch Length:   between 13d 11h 41m 19s and 13d 22h 8m 4s

[NapHappy]

Yeah, servicing debt would be a killer.

I don't know how long farms would manage 20k BTC if the difficulty keeps rising at this incredible pace. I imagine it may drop a bit, but then the 140TH machines start entering the market.

I wonder how much illegal mining is happening in China. The hash rate recovery was mind boggling. People said it would take at least a year to recover!

[Coinfarm ventures]

At 8 cents for power and rent wouldn't it continue to net a measly amount of BTC even if price dropped to about 16000?

Edit - assuming 100TH/s, 3010 watts.

I included capital cost in that calculation with straight-line depreciation, assuming the average Whatsminer M30S or Antminer S19 will last for 4 years. That is why production cost per coin is higher than power cost. Unless the farm is earning enough daily profit to pay off their equipment in 4 years, they're losing $$.