[2022-06-17] Bitcoin mining becomes unprofitable as BTC price falls

[bbc.reporter]

but i hear the news that bitcoin hash rate keep to touching new ATH day by day you can see the news here
https://cointelegraph.com/news/not-a-minor-adjustment-bitcoin-mining-difficulty-soars-13-5-to-new-ath

it seems the miner from eth move to bitcoin

@dansus021. You have heard wrong or you are inventing stories. How can Ethereum miners move and mine Bitcoin? The mining algorithms are not the same!

In any case, if the hashrate is increasing, then it appears that miners think that the market will pump or there might be some large mining farms that found cheaper sources of electricity. It might also be what I have been speculating. Illegal mining hehehe.

[SFR10]

but i hear the news that bitcoin hash rate keep to touching new ATH day by day you can see the news here
https://cointelegraph.com/news/not-a-minor-adjustment-bitcoin-mining-difficulty-soars-13-5-to-new-ath

it seems the miner from eth move to bitcoin
https://s3.cointelegraph.com/uploads/2022-10/5be89178-ee48-42ce-9175-f29a64649007.png

In addition to @bbc.reporter's comment, there's an indirect link in the above article that points to a "tweet" that claims most of the new hash rates are coming from Bitmain's Antminer S19 XP, but I have a feeling that it could also be in connection to a select few companies that were supposed to receive the intel's second-gen mining chips in Q3 of 2022.

• How can Ethereum miners move and mine Bitcoin? The mining algorithms are not the same!
  

  Perhaps @dansus021 was referring to those GPU miners that recently sold their rigs or rather GPUs and replaced them with SHA-256 ASIC miners ^{[personally, I think they might be responsible for only a small percentage of what we're seeing at the moment]}.
  

[DaveF]

but i hear the news that bitcoin hash rate keep to touching new ATH day by day you can see the news here
https://cointelegraph.com/news/not-a-minor-adjustment-bitcoin-mining-difficulty-soars-13-5-to-new-ath

it seems the miner from eth move to bitcoin
https://s3.cointelegraph.com/uploads/2022-10/5be89178-ee48-42ce-9175-f29a64649007.png

In addition to @bbc.reporter's comment, there's an indirect link in the above article that points to a "tweet" that claims most of the new hash rates are coming from Bitmain's Antminer S19 XP, but I have a feeling that it could also be in connection to a select few companies that were supposed to receive the intel's second-gen mining chips in Q3 of 2022.

• How can Ethereum miners move and mine Bitcoin? The mining algorithms are not the same!
  

  Perhaps @dansus021 was referring to those GPU miners that recently sold their rigs or rather GPUs and replaced them with SHA-256 ASIC miners ^{[personally, I think they might be responsible for only a small percentage of what we're seeing at the moment]}.
  

Actually I think there is a good portion of the hashrate out there now from places that were power limited and now that GPU mining is more or less dead they are running SHA (and other) ASICs and remember there were also a lot of ETH ASICs out there too that are now shut down freeing even more power for SHA.

I don't think people realize how many places have plenty of space and cooling but not enough power to fill the building and run wall to wall miners. But, they filled the building with miners and then did some math to figure out what to mine when and what to keep powered off.

-Dave

[bbc.reporter]

@DaveF. However, will those miners of Ethereum shutdown easily and accept the loss? They can continue to mine other coins like Ethereum Classic and the Ethereum proof of work chain which is also presently being supported by exchanges. Binance has funded a new mining pool for ETHW to continue support for the miners.

@SFR10. I disagree, Ethereum miners might not take the risk of selling their hardware to buy Bitcoin miners and compete with Bitcoin miners. It would be less risky to mine other coins.

[SFR10]

and remember there were also a lot of ETH ASICs out there too that are now shut down freeing even more power for SHA.

You're right, but I intentionally didn't include them because I wasn't sure if there was an easy way for them to sell and recoup some of the initial costs to fund their next mining operations.

@SFR10. I disagree, Ethereum miners might not take the risk of selling their hardware to buy Bitcoin miners and compete with Bitcoin miners. It would be less risky to mine other coins.

You have a point that it's "less risky to mine other coins", but I read a few articles yesterday that mentioned it's no longer that profitable ^{[e.g. this and this]}.

[DaveF]

@DaveF. However, will those miners of Ethereum shutdown easily and accept the loss? They can continue to mine other coins like Ethereum Classic and the Ethereum proof of work chain which is also presently being supported by exchanges. Binance has funded a new mining pool for ETHW to continue support for the miners.

What loss? If they bought the ASICs / GPUs long enough ago they are paid for many times over. Even if you bought only a year before the merge if you had cheap enough power you were under 300 days for RoI on most ASICs and about the same for GPUs.
GPUs can and are still being sold off,  and as of now it looks to be more profitable running current or 1 gen out SHA ASICs then GPUs.

As for the other coins that can be mined with the ETH ASICs, it's a tough call. If you RoI already on them whatever you sell them off for is profit. Or, you can keep mining at a loss at the moment and hope those coins go up enough.

Businesses for the most part, if they know they can make money mining BTC but *may* make money mining something else but *will* make money selling the ASICs are going to sell the ASICs and mine BTC. That's just good business.

-Dave

[stompix]

What loss? If they bought the ASICs / GPUs long enough ago they are paid for many times over. Even if you bought only a year before the merge if you had cheap enough power you were under 300 days for RoI on most ASICs and about the same for GPUs.

If! And for a lot, it's not the case.
So, if we go to Reddit for example you will see that hundreds have bought gear at scalper prices during the spring and those guys will never ever achieve ROI, and there are hundreds and thousands of them, one year ago the hash rate was 700TH/s it peaked at 1Peta, with one 3090 doing around 120Mh/s you still have 2 and a half million that for sure haven't reached the break-even point.
Add to the price the risers, the power supplies, extra fans, a frame, that and that, downtime, cleaning, it adds and adds

As for the other coins that can be mined with the ETH ASICs, it's a tough call. If you RoI already on them whatever you sell them off for is profit. Or, you can keep mining at a loss at the moment and hope those coins go up enough.

A 3090 with free electricity will give you 50 cents worth of coins a day, if you want to go long on shitcoins you are far better just selling the damn thing and buying with the money those coins you feel are going up, with an older GPU like a 2080 you get 20 cents, in a year you will lose more on depreciation for the card that what it mines.

GPU miners are done for, and the ones that will rush into Bitcoin mining just because they are addicted to the game and want to make a steady income just by looking all day at fan spinning are in for a disappointment and some serious losses.

[DaveF]

What loss? If they bought the ASICs / GPUs long enough ago they are paid for many times over. Even if you bought only a year before the merge if you had cheap enough power you were under 300 days for RoI on most ASICs and about the same for GPUs.

If! And for a lot, it's not the case.
So, if we go to Reddit for example you will see that hundreds have bought gear at scalper prices during the spring and those guys will never ever achieve ROI, and there are hundreds and thousands of them, one year ago the hash rate was 700TH/s it peaked at 1Peta, with one 3090 doing around 120Mh/s you still have 2 and a half million that for sure haven't reached the break-even point.
Add to the price the risers, the power supplies, extra fans, a frame, that and that, downtime, cleaning, it adds and adds

If you bought when cards were at their highest with less then 6 months left on mining then you got what you deserved. Sorry, but you can't fix stupid.

Last spring (2021), I bought a couple of 2080Ti, mined with them for a YEAR and sold them this spring (2022) for close to 2x what I paid. There is no way the person who bought them could ever come close to making money.

I just about broke even mining in the year I had them and had I kept them would have been a few hundred dollars ahead when mining ended. So, it was definitely possible.

-Dave

[bbc.reporter]

@DaveF. However, will those miners of Ethereum shutdown easily and accept the loss? They can continue to mine other coins like Ethereum Classic and the Ethereum proof of work chain which is also presently being supported by exchanges. Binance has funded a new mining pool for ETHW to continue support for the miners.

What loss? If they bought the ASICs / GPUs long enough ago they are paid for many times over. Even if you bought only a year before the merge if you had cheap enough power you were under 300 days for RoI on most ASICs and about the same for GPUs.
GPUs can and are still being sold off,  and as of now it looks to be more profitable running current or 1 gen out SHA ASICs then GPUs.

As for the other coins that can be mined with the ETH ASICs, it's a tough call. If you RoI already on them whatever you sell them off for is profit. Or, you can keep mining at a loss at the moment and hope those coins go up enough.

Businesses for the most part, if they know they can make money mining BTC but *may* make money mining something else but *will* make money selling the ASICs are going to sell the ASICs and mine BTC. That's just good business.

-Dave

You are correct, there are some Ethereum miners who made their ROI and also some profit, however, the argument is the same. The Ethereum miners cannot easily shutdown then take the risk of competing against the miners of Bitcoin. We are also assuming that the switch for Ethereum miners is as easy as selling the hardware they presently have then go to a store and buy miners for Bitcoin. There is a waiting list. Also, who will buy their Ethereum mining hardware?

There is also the next halving which implies that there will be more competition for fewer coins.

[bbc.reporter]

According to the Block cryptonews website, revenue for bitcoin miners fell down by 16.2% for the month September based on monthly revenue from August. It has also been falling for 5 months this year since November 2021 since Block Research began compiling mining revenue data.

However, there is also another news that reports that a cryptomining hardware maker has raised $13 million in seed funding to create liquid cooled bitcoin miners. Do the venture capitalists that invested in this company speculate that we might be on the bottom of this bear market? Why risk $13 million in an industry with declining revenues?



Bitcoin mining revenue fell 16.2% in September to about $550.5 million, marking its fifth decline in the last six months and the lowest total since November 2020, according to data compiled by The Block Research.

Source https://www.theblock.co/post/174445/bitcoin-mining-revenues-down-16-2-in-september



Crypto hardware technology startup Fabric Systems has raised $13 million in seed equity funding, with the capital to be used to build two products – a liquid-cooled bitcoin miner and a computer processor for advanced cryptographic algorithms such as zero-knowledge proofs.

“Most of the funding is going to be used on the Bitcoin side,” Fabric co-founder Michael Gao told CoinDesk. “Some of the funding will be used for pilot experiments in the zero-knowledge-proof side.”

Source https://www.coindesk.com/business/2022/10/13/crypto-startup-fabric-systems-raises-13m-seed-round-to-provide-blockchain-hardware/

[SFR10]

Why risk $13 million in an industry with declining revenues?

Even though that's the case with some of the miners, I don't think the same can be said with most manufacturers, and on top of that, if they can capitalize on the situation to come up with a really efficient chip at a reasonable or rather better price compared to their competition, then they can create a great gap between them and the rest ^{[even as a newcomer and that surely leads to significant profits]}.

[stompix]

According to the Block cryptonews website, revenue for bitcoin miners fell down by 16.2% for the month September based on monthly revenue from August. It has also been falling for 5 months this year since November 2021 since Block Research began compiling mining revenue data.

However, there is also another news that reports that a cryptomining hardware maker has raised $13 million in seed funding to create liquid cooled bitcoin miners. Do the venture capitalists that invested in this company speculate that we might be on the bottom of this bear market? Why risk $13 million in an industry with declining revenues?

Because 13 million is peanuts, the daily reward is $19 million each day, liquid cool bitcoin miners can increase their efficiency to really crazy levels,

https://youtu.be/8QZAGpssUe0
Stock s19 pro hydro being pushed from 27w/th at 23w/th, one machine gets 45th extra and even at these prices that means $1000 a year per machine, a full ant box will get you 210 000 extra a year, that's raw profit on top of your operation, you need just 13k of those to break even for such an investment.
Plus with that, you can make almost obsolete gear profitable again, and squees out competitors.

[philipma1957]

@DaveF. However, will those miners of Ethereum shutdown easily and accept the loss? They can continue to mine other coins like Ethereum Classic and the Ethereum proof of work chain which is also presently being supported by exchanges. Binance has funded a new mining pool for ETHW to continue support for the miners.

What loss? If they bought the ASICs / GPUs long enough ago they are paid for many times over. Even if you bought only a year before the merge if you had cheap enough power you were under 300 days for RoI on most ASICs and about the same for GPUs.
GPUs can and are still being sold off,  and as of now it looks to be more profitable running current or 1 gen out SHA ASICs then GPUs.

As for the other coins that can be mined with the ETH ASICs, it's a tough call. If you RoI already on them whatever you sell them off for is profit. Or, you can keep mining at a loss at the moment and hope those coins go up enough.

Businesses for the most part, if they know they can make money mining BTC but *may* make money mining something else but *will* make money selling the ASICs are going to sell the ASICs and mine BTC. That's just good business.

-Dave

As of sept 2022 i still had some of my 1080ti hybrid cards mining eth.

they paid for themselves maybe four fold.

IE. 4x700=2800 in dec 2017 made over 8000 with them.

I pulled the rig and turned on an old l3+

I have many old idle pieces of gear i hold them and fire them up when the bull runs.

But now with the looming mega crash not sure what i will do next.