Bitcoin Miners Face Leanest Month of 2024: August Earnings Hit Year’s Low

[larry_vw_1955]

Plus there's mining hardware depreciation and obsolescence. Turning off and limiting your miners to mere eight hours a day loses its opportunity to breakeven on the hardware cost which must be done as quickly as possible. In this industry, cheap electricity is the biggest requirement to succeed. No access to cheap electricity means losing against the other more efficient miners who do have access. It would absolutely be more profitable to buy the DIP, and HODL with the capital and relax by being a passive investor.

i'm not even sure that if someone was able to get free unlimited electricity that they would guaranteed to be profitable mining bitcoin. because the hardware costs is so high. the hardware might stop working before they break even.

[franky1]

Plus there's mining hardware depreciation and obsolescence. Turning off and limiting your miners to mere eight hours a day loses its opportunity to breakeven on the hardware cost which must be done as quickly as possible. In this industry, cheap electricity is the biggest requirement to succeed. No access to cheap electricity means losing against the other more efficient miners who do have access. It would absolutely be more profitable to buy the DIP, and HODL with the capital and relax by being a passive investor.

i'm not even sure that if someone was able to get free unlimited electricity that they would guaranteed to be profitable mining bitcoin. because the hardware costs is so high. the hardware might stop working before they break even.

this is where math always helps out

so lets do it
the average network is 650exa



which is $6318 for 234thash
(650,000,000 / 234 =2.777m)
(2.777m asics equivalent of running on average)

the hardware cost spread over 2 years of 24/7 operating is a hard ware cost per btc of:
6318 *2,777,777 = 17,550,000,000
17,550,000,000 / 105k blocks / 3.125 btc = 53,485

this is the current bottomline of the new batch hardware costs being released this q3 of 2024..
however many miners are using the hardware cost of 2022-3 when they got the s21 range which had a average hardware cost per asic of $4.2k and a price per btc cost over 2 years of $35k per btc

[Wind_FURY]

Plus there's mining hardware depreciation and obsolescence. Turning off and limiting your miners to mere eight hours a day loses its opportunity to breakeven on the hardware cost which must be done as quickly as possible. In this industry, cheap electricity is the biggest requirement to succeed. No access to cheap electricity means losing against the other more efficient miners who do have access. It would absolutely be more profitable to buy the DIP, and HODL with the capital and relax by being a passive investor.

i'm not even sure that if someone was able to get free unlimited electricity that they would guaranteed to be profitable mining bitcoin. because the hardware costs is so high. the hardware might stop working before they break even.

Free and unlimited electricity? I believe you could mine using older and second-hand hardware if you're lucky to have such an advantage over other mining farms. Because we're talking hypotheticals, you probably could build a partnership with Jihan Wu and tell him to provide the ASICs and you provide the electricity for a 50-50 split on all mined Bitcoins. You're like a quasi-central-bank printing money for free to be distributed.

[larry_vw_1955]

Free and unlimited electricity? I believe you could mine using older and second-hand hardware if you're lucky to have such an advantage over other mining farms. Because we're talking hypotheticals, you probably could build a partnership with Jihan Wu and tell him to provide the ASICs and you provide the electricity for a 50-50 split on all mined Bitcoins. You're like a quasi-central-bank printing money for free to be distributed.

you only get free electricity at your own house and you have to buy the equipment. no partnering with someone where they send you free equipment. the hardware costs alone might be hard to break even on before the hardware stopped working. that would be your biggest challenge. that and all the noise you generate. so you would have to spend money trying to stop the noise from bothering you and your neighbors. and keep a low profile so that authorities didn't try and stop you from running a commercial operation in a place zoned for residential. it won't be as easy as you think!

[dificanovi]

The supply of Bitcoin and some Altcoins to be mined is getting thinner. Several countries in the world have opened up large-scale bitcoin mining businesses since 2015 so that Bitcoin and Altcoins that are currently mined are getting harder, this is what causes miners' income to decrease from year to year.

[larry_vw_1955]

The supply of Bitcoin and some Altcoins to be mined is getting thinner. Several countries in the world have opened up large-scale bitcoin mining businesses since 2015 so that Bitcoin and Altcoins that are currently mined are getting harder, this is what causes miners' income to decrease from year to year.

you would expect the pace of that type of activity to be slowing way down now. its like trying to get onto a dying horse.

[franky1]

The supply of Bitcoin and some Altcoins to be mined is getting thinner. Several countries in the world have opened up large-scale bitcoin mining businesses since 2015 so that Bitcoin and Altcoins that are currently mined are getting harder, this is what causes miners' income to decrease from year to year.

you would expect the pace of that type of activity to be slowing way down now. its like trying to get onto a dying horse.

the reward can still continue halving for another hundred years
yep ONE HUNDRED YEARS

the reward halves every 4 years, but the market price of those rewards moves forward more then 200% in that time
look at the range in the last cycle $15k-$70k thats 500%

meaning there is more money to be made

enjoy
..or stick with fiat that only offers 4-8% a year (17-34% in 4 years compounded)

[DaveF]

The supply of Bitcoin and some Altcoins to be mined is getting thinner. Several countries in the world have opened up large-scale bitcoin mining businesses since 2015 so that Bitcoin and Altcoins that are currently mined are getting harder, this is what causes miners' income to decrease from year to year.

you would expect the pace of that type of activity to be slowing way down now. its like trying to get onto a dying horse.

the reward can still continue halving for another hundred years
yep ONE HUNDRED YEARS

the reward halves every 4 years, but the market price of those rewards moves forward more then 200% in that time
look at the range in the last cycle $15k-$70k thats 500%

meaning there is more money to be made

enjoy
..or stick with fiat that only offers 4-8% a year (17-34% in 4 years compounded)

Could be worse you could be staking ETH that only gives you 3.5% before expenses and that will keep going down as more people stake.
That is the joy of PoS coins you have to keep putting money into it to get money out of it so there is effort and expenses involved.
It's not like some free magical internet money thing. That as we all know never lasts.

-Dave

[tbct_mt2]

Could be worse you could be staking ETH that only gives you 3.5% before expenses and that will keep going down as more people stake.
That is the joy of PoS coins you have to keep putting money into it to get money out of it so there is effort and expenses involved.
It's not like some free magical internet money thing. That as we all know never lasts

By locking your coins to staking pools, you take some risks.

Impermanent loss.
Lack of flexibility to sell your coins when price changes big.

Project teams are smart by creating staking feature because it gives people a sweet carrot of promising APR. This serves two purposes: attracting new investors who will bring new money to buy the coin, higher demand I mean; and reducing selling pressure from current coin owners who lock their coins in staking pools.

Stakers can lock their coins for staking without enough understanding of impermanent loss risk while project team members are always ready to dump their coins to get profit.

[larry_vw_1955]

the reward can still continue halving for another hundred years
yep ONE HUNDRED YEARS

the reward halves every 4 years, but the market price of those rewards moves forward more then 200% in that time

extrapolating that to the next 25 4-year cycles seems somewhat dubious though franky.  even you yourself would have to admit that there is no way that in 100 years from now bitcoin is going to be able to keep up that pace of 200% growth every 4 years. if it did it would be worth around $2,013,265,920,000 in 2124. That's right, 1 btc would be worth 2 trillion dollars.

enjoy
..or stick with fiat that only offers 4-8% a year (17-34% in 4 years compounded)

my bank doesn't even pay any interest at all!  

actually my computations was wrong. in 25 4-year cycles, 1 bitcoin would be worth $50837316566580000 thus invalidating that bitcoin can continue to grow.

[Wind_FURY]

Free and unlimited electricity? I believe you could mine using older and second-hand hardware if you're lucky to have such an advantage over other mining farms. Because we're talking hypotheticals, you probably could build a partnership with Jihan Wu and tell him to provide the ASICs and you provide the electricity for a 50-50 split on all mined Bitcoins. You're like a quasi-central-bank printing money for free to be distributed.

you only get free electricity at your own house and you have to buy the equipment. no partnering with someone where they send you free equipment. the hardware costs alone might be hard to break even on before the hardware stopped working. that would be your biggest challenge. that and all the noise you generate. so you would have to spend money trying to stop the noise from bothering you and your neighbors. and keep a low profile so that authorities didn't try and stop you from running a commercial operation in a place zoned for residential. it won't be as easy as you think!

Are you arguing against your own hypothetical example? You started the post by saying that,

i'm not even sure that if someone was able to get free unlimited electricity that they would guaranteed to be profitable mining bitcoin.

Which is a laughable claim because if someone truly had "free and unlimited" electricity, that would be a golden opportunity to mine Bitcoin with a very big advantage. Tell Jihan Wu you have a source to free electricity and definitely he'll be paying you a percentage of coins mined to give him access. It's guaranteed profit.

[franky1]

the reward can still continue halving for another hundred years
yep ONE HUNDRED YEARS

the reward halves every 4 years, but the market price of those rewards moves forward more then 200% in that time

extrapolating that to the next 25 4-year cycles seems somewhat dubious though franky.  even you yourself would have to admit that there is no way that in 100 years from now bitcoin is going to be able to keep up that pace of 200% growth every 4 years. if it did it would be worth around $2,013,265,920,000 in 2124. That's right, 1 btc would be worth 2 trillion dollars.

but it wont be producing 1btc a day, nor 1btc a week, nor 1btc a month so you thinking that it would be producing multiple trillions quickly is in error

in 2124 it would be producing only 9 sats per block as a reward, which over a year would be 9*52500=0.00472500btc a year
also within 12-100 years alot of other economics both on fiat side and btc side would kick in, but yet again i need to take things slowly and spoonfeed the baby steps details first

but can you atleast acknowledge that bitcoin is not going to stop mining this year or this decade and has many decades to go of mining.... if you can acknowledge that concept then we can dig deeper into the more economic details that will occur in the future

so far you think bitcoin in this year is a "dying horse" without realising that in human years its a tween and not even an adult. with far more years to go compared to years already passed

so do you accept the concept that bitcoin can continue mining for more then 120 years and only 15 years have passed so far, so not really a "dying horse"

[larry_vw_1955]

Which is a laughable claim because if someone truly had "free and unlimited" electricity, that would be a golden opportunity to mine Bitcoin with a very big advantage. Tell Jihan Wu you have a source to free electricity and definitely he'll be paying you a percentage of coins mined to give him access. It's guaranteed profit.

the rule is you can't use someone else's equipment you have to buy your own. can't partner up with anyone. only YOU get free unlimited electricity. not for you to share with someone else like whoever that person is you are talking about.

there are already with free electricity. some people who rent their landlord pays their electric bill. i don't see them mining bitcoin...

but it wont be producing 1btc a day, nor 1btc a week, nor 1btc a month so you thinking that it would be producing multiple trillions quickly is in error

in 2124 it would be producing only 9 sats per block as a reward, which over a year would be 9*52500=0.00472500btc a year
also within 12-100 years alot of other economics both on fiat side and btc side would kick in, but yet again i need to take things slowly and spoonfeed the baby steps details first

franky, you're the one that said the rewards go up in value by 200% every 4 years. in order for that to happen EVERYONE'S bitcoin has to go up by 200% every 4 years which leads to a contradiction as I already pointed out since bitcoin can not ever feasibly reach a valuatation of $50837316566580000 in the next 25 4-year cycles.

but can you atleast acknowledge that bitcoin is not going to stop mining this year or this decade and has many decades to go of mining.... if you can acknowledge that concept then we can dig deeper into the more economic details that will occur in the future

so far you think bitcoin in this year is a "dying horse" without realising that in human years its a tween and not even an adult. with far more years to go compared to years already passed

so do you accept the concept that bitcoin can continue mining for more then 120 years and only 15 years have passed so far, so not really a "dying horse"

it's definitely a dying horse franky. once those rewards dry up, you're going to see a mass exodus of miners over to some newer coin that actually pays rewards still. maybe a fork of bitcoin even. doesn't that make sense? 

[franky1]

in 100 years people are not going to be moving whole bitcoins (thats the point your not getting)
so you emphasising $5trill/btc is like saying a 10k tonne gold bar is worth $460bill so lets kill gold usage

much like we are not in the era of 2012 where even i was normally moving 1000 bitcoin at a time, now i only move 1btc at a time and in the future will only be moving xxxsat amounts at a time

much like ancient egyptians moved tonnes/kg of gold at a time and now we move ounce, grams

you are again thinking that in 100 years the blockchain will be producing more then 1btc reward per block to be producing $5 trillion per block. which you now admit is not feasible in comparison to a countries GDP if you multiplied that across a demograph of holders..

what you need to realise is in dates like 2012 a "whale" was someone with 10k coins+ now a "whale" is someone with 100coins+ because the fiat value moved up, and in the future whales will be the ones with 1btc, then 0.001btc
just looking at the whale position shift of 15 years will show you the shift pattern of the next 100 years
individuals wont have whole bitcoins in the next century.. get it yet (individuals dont have whole tonne gold bars)

as for the other factors you have not understood. its not needed now, but in 20-100 years there will be a flip from reward being main income and fee being a bonus, to a situation where the reward is the bonus and the fee is the income
(there are other economics involved but you still not at the stage of basic economic understand to progress discussions onto deeper economics)

...
as for your horse analogy.. a average horse lifespan is 30 years. you are trying to say that a young 3 year old horse is a dying horse because its life is more than 25 years, so you want to shoot a healthy 3year old horse now because you fear its lifespan of over 25 years is not enough

to you a 10year old human child is a dying human because its lifespan is 80+... so you might aswell kill a 10yo kid now out of fear of it getting old in 80 years
..

i understand you are a ethereum fanboy and have no concept of bitcoins features, functions and economics(as proven in other topics) but it seems you have gone completely blind about real basics that can be found out in just 10 minutes of research.. or just sitting in a chair with a cup of coffee and actually just thinking rationally about real life stuff and the numbers

..

please understand this simple concept
although you think 3.125btc a block is a small number with not much divisions left
its actually 312500000, meaning alot of units per block and alot of divisions to go

[fruktik]

The supply of Bitcoin and some Altcoins to be mined is getting thinner. Several countries in the world have opened up large-scale bitcoin mining businesses since 2015 so that Bitcoin and Altcoins that are currently mined are getting harder, this is what causes miners' income to decrease from year to year.

Revenues will continue to decline as mining complexity increases incredibly quickly and equipment becomes obsolete at exactly the same rate. Can you imagine the cost of buying new equipment? It's simply astronomical money if mining is done on an industrial scale. Not every company is able to buy new equipment every year. It is highly likely that this will be their last step in this business. Alas, but such are the times. They require sacrifices.

[larry_vw_1955]

in 100 years people are not going to be moving whole bitcoins (thats the point your not getting)

franky i understand what you're saying about how people will use smaller and smaller units of bitcoin but that is only if bitcoin price relative to the us dollar keeps going up. it can't go up by 200% every 4 years for the next 25 years that is mathematically and economically impossible. the price of 1 bitcoin can never equal to $50,837,316,566,580,000. that's not 50 trillion us dollars franky. that's 50 QUADRILLION US DOLLARS.

no matter what the economics of bitcoin are in the future, no matter anything, it can never happen that the value of 1 bitcoin is that large. so anything else you have to say about that is just inconsequential. keep in mind there's also a possibility that bitcoin doesn't go anywhere that it just stays where it is right now or goes lower.

unlike gold, which for some reason you mention and i don't know why, bitcoin can have competitors. competitors that could come along and take marketshare away from it. so i'd say in 100 years, it's far more likely that gold retains its value than bitcoin does. but that's just my opinion. in 1000 years, gold for sure. 

[fruktik]

no matter what the economics of bitcoin are in the future, no matter anything, it can never happen that the value of 1 bitcoin is that large. so anything else you have to say about that is just inconsequential. keep in mind there's also a possibility that bitcoin doesn't go anywhere that it just stays where it is right now or goes lower.

unlike gold, which for some reason you mention and i don't know why, bitcoin can have competitors. competitors that could come along and take marketshare away from it. so i'd say in 100 years, it's far more likely that gold retains its value than bitcoin does. but that's just my opinion. in 1000 years, gold for sure. 

And who, in general, says that Bitcoin will exist in a few years? Where does such a probable scenario come from? Just want it and that's it? Well, that really won't be enough. I am considering the option in which something different and unique will come to replace the blockchain technology, meeting the requirements of that time. Why do I think like that? All because the technological process does not stand still and is developing by leaps and bounds. The computer direction is also improving, which is capable of changing the course of history. Yes, it sounds loud, but we should all look at the modern world and understand this.

[larry_vw_1955]

And who, in general, says that Bitcoin will exist in a few years? Where does such a probable scenario come from? Just want it and that's it? Well, that really won't be enough. I am considering the option in which something different and unique will come to replace the blockchain technology, meeting the requirements of that time. Why do I think like that? All because the technological process does not stand still and is developing by leaps and bounds. The computer direction is also improving, which is capable of changing the course of history. Yes, it sounds loud, but we should all look at the modern world and understand this.

i think people who put all their trust in bitcoin are kind of shortsighted to the extent that what you just mentioned. it would be really arrogant and conceited to think that something better is not going to come along and bitcoin will die a slow death. it's just the way things are. no wonder some of those old satoshi era wallets woke up recently and starting hitting the sell button they know what's up. 

use it for what it is good for but don't expect it to make you a millionaire or billionaire without you doing any work. it might not even be a good store of value. in the long term. but i know people don't want to hear that...

[nelson4lov]

i think people who put all their trust in bitcoin are kind of shortsighted to the extent that what you just mentioned. it would be really arrogant and conceited to think that something better is not going to come along and bitcoin will die a slow death. it's just the way things are. no wonder some of those old satoshi era wallets woke up recently and starting hitting the sell button they know what's up. 

use it for what it is good for but don't expect it to make you a millionaire or billionaire without you doing any work. it might not even be a good store of value. in the long term. but i know people don't want to hear that...

We have been down this road before; multiple times in fact and one thing that has been clear is that Bitcoin won't be going anywhere. If people need ultra cheap transactions, they can port elsewhere. For me, my biggest concern is how many of these miners that aren't profitable right now will still be here when there are no more block rewards and only rewards are from tx fees?

If they take losses even with block rewards enabled, I'm imagining what it would look like when the block rewards tap stop following. Either fees are raised exponentially and small users leave or keep fees low and miners leave. If this is resolved, I think Bitcoin will be here for a long time. I mean, we already solved block rewards.

[franky1]

use it for what it is good for but don't expect it to make you a millionaire or billionaire without you doing any work. it might not even be a good store of value. in the long term. but i know people don't want to hear that...

1. bitcoin has PROOF OF WORK as its block creation mechanism, which means you can make money via proof of work.... unlike legiteums sad preference of a stake coin which he thinks makes him money doing nothing... its good to see him eat his own words and realise his preferred PoS coin is not going to make him a millionaire/billionaire

2. the whole point of proof of work is that the work has a cost and so there is an underlying cost that protects value.. unlike legiteums preferred PoS coin thats just speculation and inflation increased production.. its good to see him eat his own words and realise his preferred PoS coin is not going to make him a millionaire/billionaire

3. i wonder id legiteum hears his own words and realises it when said in comparison to his preferred PoS coin

i do laugh when i see people being swayed by idiots to abandon bitcoin for an inferior coin/token/network that has no proof of work and no underlying cost mechanism to support the value.. but they dont wanna hear that