The Best Mining Rigs Are Now Barely Profitable -- Now What?

[davejh]

With 20c/kWh we hit a rate of 640 PH/s, 10c/kWh we hit 766 PH/s and 2c/kWh we hit 893 PH/s.

Which only shows your assumptions cant be right. Ultimately mining is converting electricity in to bitcoins, you would expect a near linear correlation, not a 40% increase for a 1000% decrease in elecricity rates. The only thing preventing that from being truly linear is hardware amortization. YOu must have quite unrealistic assumptions for those.

I don't believe so - the problem is that everyone thinks that the operating costs should dominate, but at the moment equipment/capital costs currently swamp everything else. Let's assume that the current ~ 60 PH/s requires ~ 90 MW of power. That's 2.16M kWh. At 2c per kWh that's only $43.2k per day, while at 20c per kWh that's $432k per day. If we assume the mining reward is $2M per day then the first cost leaves $1.95M to spend on other things while the second leaves $1.56M. Even with the extremely low 2c per kWh number we only get 1.25x as much to spend per day. It buys more capacity but this isn't a compound problem, it's additive. If $1.56M bought, say, 490 TH/s of capacity the $1.95 buys 609 TH/s. Assuming the costs stay the same then very simplistically after 30.5 days (a month, give or take) then we get 14.95 PH/s or 18.48 PH/s extra

For W/GH/s then I agree that voltage and frequency scaling can probably take things down to 0.325W/GH/s at a loss of probably something like 30% of the performance (assume a square law - it's over-optimistic but it's somewhere to start). That would give us an improvement of about 1.4x but means we need more ASICs to hit the same hashing rates.

? The fact you would need more chips to achieve better efficiency doesnt again reduce the efficiency. IT does increase cost, but not compared to todays market prices, only compared to todays marginal production costs.

If we clock slower in order to improve the W/GH/s ratio then we need more hardware. If we want to halve the W/GH/s ratio we drop the performance by about 30%. For the same amount of power we can achieve 1.4x the hashing capacity but now require 2 ASICs to do so. The hardware cost is what's totally dominating the current hash rate though.

The simulation allows that initial 1.4x to be factored in very easily. Let's assume that an ASIC vendor reduces the cost of their devices so that the cost/GH/s remains the same (they're effectively reducing prices 30%) so now 2 devices use the power that 1 previously did but we're now getting 1.4x the hashing capacity. Now the numbers work out as: 20c/kWh we hit 766 PH/s, 10c/kWh we hit 842 PH/s and 2c/kWh we hit 910 PH/s

Im not sure you understand how mining hardware pricing works. Only two factors really matter; miners (as in end customers) breakeven point or perceived breakeven and manufacturer breakeven (on marginal costs). Currently these two are several orders of magnitude apart. As a result, miners are being sold for prices that miners perceive as potentially profitable. BUt that price point is linearly correlated with difficulty, so those prices will keep going down, way, way faster than Moore's law, at a speed limited only by manufacturing capability, until prices approach marginal production costs of the most efficient vendors. Now you can debate what those are, but asicminer claims $0.2/GH wafercost and my guess is that larger MCM 28nm devices are at least 2-4x cheaper per GH.

So I definitely agree that hardware prices are high right now, but much of that has to be a factor of low production volumes. A 28 nm device of the same size will do more work but will also cost more than a larger geometry (this will change as 28 nm matures). MCMs are never particularly cheap and there's also a huge amount of variability based on the particular process being used too.

Now, could someone decide to operate at cost rather than making a profit? Yes, and that would change the numbers because more capacity could be bought. This will drive us to a point where electricity costs play a bigger factor.

I totally agree that the equipment cost is the biggest single factor.

Actually, I dont agree Electricity cost will become the biggest single factor IMO

For a ballpark guess, lets take $0.2/GH as marginal hardware production cost and 0.5W/GH efficiency. So each TH would cost $200 to produce and draw 500W. 500W @ 3 cents per KWH (including cooling, overhead) = ~$131/year.

$200>$131, however we are looking at the "endgame" here, and therefore hardware prices will stabilize and their value loss can be written off over several years. If you just amortize over 2 years or assume a resale value of 50% of the purchase price, electricity has become the biggest factor.

My point was just the equipment cost is currently the biggest single factor - electricity can become a much larger factor.

If hardware prices dropped dramatically then this shifts the balance, but even then there are still choices. In your example it would probably make more sense to voltage/frequency scale the ASICs. In 2 years your cost would represent $462, but if we throttle back by 70% and get a 50% reduction in power consumption then each TH would cost $282 but the operating cost for 2 years would be $131 - that's $413 and so is the more cost effective approach; it's also driven the balance back towards the capital cost though.

I'm not sure that anyone currently producing mining ASICs can get to $32 per device though

If by device you mean the asic itself, then obviously that can be done easily. If you mean a complete rackmountable miner, then obviously not, but in 6 or 9 months, no one is going to be selling miners in fancy enclosures with touch screen LCDs. Look at KnC's datacenter, or bigmegapower; naked PCB's on "ikea" shelves. Thats how it will look.

I think if someone really wanted to do this seriously they'd go warehouse scale and fab ASICs to meet their design. That would let them increase their volumes and reduce costs but there's a major cooling problem to be solved and that would have to be amortized in too.

[jimmothy]

You do realize bitmain s1 could achieve 1.2w/gh at the wall right? That's a tad bit more than half as efficient than an s2(1.1w/gh)..

You moron, S1 and S2 use the same chip. So of course S1 is capable of achieving similar efficiencies if you underclock and undervolt them just like in the S2. Thats the whole point. The difference is that S1 by default uses a clock and voltage setting that results in ~2W/GH at the wall while for S2 they picked a point that roughly cuts that by half.  

S1 has ALWAYS advertised up to 0.68w/gh at chip level and 1.2w/gh at the wall. OVERCLOCKING resulted in 200GH and 2w/gh at the wall.

Again do you have a single example that suggests any asic is capable of higher efficiency than advertised?

[Puppet]

I don't believe so - the problem is that everyone thinks that the operating costs should dominate, but at the moment equipment/capital costs currently swamp everything else.

Thats only true for end users who are paying OEM's enormous gross margins. Those margins serve partly to pay for the substantial NRE, partly because they can get away with it because difficulty is still so "low". BUt dont let that confuse you. If it helps, look at KnC's datacenter. How much are they paying for their equipment? Its not going to be anywhere near $2/GH, I guarantee you that.

If we clock slower in order to improve the W/GH/s ratio then we need more hardware. If we want to halve the W/GH/s ratio we drop the performance by about 30%. For the same amount of power we can achieve 1.4x the hashing capacity but now require 2 ASICs to do so. The hardware cost is what's totally dominating the current hash rate though.

No, its not the cost. Its the producers gross margins. A year ago we paid $50/GH for preorders, today we are below $2 for immediate shipment and that is despite bitcoin appreciating ~5x. What changed ? Difficulty, and little else, considering I happen to be comparing 65nm (BFL) and 55nm (Bitmain) products here. If you calculate GH cost in function of BTC price / difficulty, you will see that barely budged at all.

We are not anywhere near the bottom yet. Prices will keep dropping as difficulty skyrockets as long as gross margins are still phenomenal and manufacturers have therefore no incentive to scale down production. You cant predict whats going to happen without acknowledging this reality.  

So I definitely agree that hardware prices are high right now, but much of that has to be a factor of low production volumes.

Nope.
Its clear that cointerra or HF wont get the same pricing as AMD, but even if you double AMD's wafer price, you will find their margins are stunning. Lets do some math. Hashfast golden nonce has 4 81mm² dies in an MCM. That works out to (4x) 185 candidates from a 300mm wafer. How much does HF pay for a wafer? Industry standard volume pricing for 28nm today is in the ballpark of $2500 per wafer. Keep in mind that AMD/nVidia/etc chips regularly need 15 or more metal layers, whereas Im guessing a bitcoin miner would need no more than 3. That alone should pretty much close the price gap with AMD, but lets say despite that, HF pays $6000 per wafer. Thats $32 per GN candidate. Add a few dollar for packaging and yields (which should be very high given the redundant nature), and there is no way they should pay over $40 per chip. The PCB will cost too, lets say thats also $40. And lets add $20 in operating margin and to get a nice round high end ballpark of $100.

Whats the market price for their EVO board? $1888. If you buy 5. And are gullible enough to beleve HF will ship that in June.  Note that I didnt forget cooling, it comes without cooling, much less a PSU.

Low production volume isnt a factor in current pricing. It will become a factor once prices drop another order of magnitude, at which point, bitcoin asic volume will have become non trivial even for fabs anyway.

A 28 nm device of the same size will do more work but will also cost more than a larger geometry (this will change as 28 nm matures). MCMs are never particularly cheap and there's also a huge amount of variability based on the particular process being used too.

28nm has been mature for quite some time. MCMs do cost a few dollars, but think why they are using them. If it were cheaper to use 4 smaller dies, wouldnt they? MCM packaging apparently is cheaper than what it costs to mount the chips and coolers. That says it cant be much.

Now, could someone decide to operate at cost rather than making a profit?

Thats not someone's decision that will drive that. ITs the market that will drive that. Who's going to pay $2/GH if difficulty is 10x what it is today? No one. And likewise, what bitcoin asic manufacturer is  going to prefer not selling anything at all over selling a $100 PCB for $200?

I think if someone really wanted to do this seriously they'd go warehouse scale and fab ASICs to meet their design.

That would let them increase their volumes and reduce costs but there's a major cooling problem to be solved and that would have to be amortized in too.

Cooling just increases your electricity costs.

[samsonn25]

I stand by my estimate now that it costs manufacturers $500-600 per to produce.

In 6 months these machines will not mine much anymore but can be good space heaters or broken down for parts disassembly.

[guysmiley]

And then the question is, who's going to want to mine when it's not even a little bit profitable to do so then (unless you're a manufacturer)?

[samsonn25]

And then the question is, who's going to want to mine when it's not even a little bit profitable to do so then (unless you're a manufacturer)?

Alot of makers will stop making and mining the asics.

[davejh]

No, its not the cost. Its the producers gross margins. A year ago we paid $50/GH for preorders, today we are below $2 for immediate shipment and that is despite bitcoin appreciating ~5x. What changed ? Difficulty, and little else, considering I happen to be comparing 65nm (BFL) and 55nm (Bitmain) products here. If you calculate GH cost in function of BTC price / difficulty, you will see that barely budged at all.

We are not anywhere near the bottom yet. Prices will keep dropping as difficulty skyrockets as long as gross margins are still phenomenal and manufacturers have therefore no incentive to scale down production. You cant predict whats going to happen without acknowledging this reality.  

That's a very interesting insight! I'm curious to see what the implications are:

Here's a thought experiment (simplified)...

If we want to buy 0.01% of the total hashing capacity today we have to buy approximately 6 TH/s, say, 8 * 750 GH/s ASICs at $2 per GH/s and it will, say, require about 3 kW. I just reran my original growth estimate assuming a 3c/kWh, a final BTC price of $900, the same 2x improvements in power and hashing rates and get a hashing rate of 1359 PH/s in 2 years time. That's 23.8x larger than today. The projected difficulty increase today is about 18% and about 3.1% in 2 years time. In 2 years time the model assumed that we'd get 12 TH/s for the same money and that the power consumption would be 1.5 kW, but 12 TH/s would only be 0.00088% of the total hashing capacity. Clearly that is able to ROI over a longer period because the difficulty changes are much smaller but we'll need a lot more than 12 TH/s to get the same return on our $12k investment.

Let's guess that instead of 2x we need a 6x improvement in price per GH/s changes in the course of the 2 years: Now the growth is larger and we get a hashing rate of 2590 PH/s in 2 years time. The difficulty is higher at 18.2% and 4.3% respectively but we now have 0.001339% (36 TH/s) of the hashing rate. We're still not seeing the same USD returns even though the BTC price has doubled.

Going back to my original assumption of 2x hashing and 2x power improvement over 2 years but starting with new capacity being added at $0.2 per GH/s (10x cheaper) then the ASIC vendors really don't make any money, nor do any existing miners - the next difficulty jumps would be around 65% and within a few months every existing miner would be out of business and have made a loss (which doesn't really help anyone).

The implication is that the ASIC vendors planning to be in business in 2 years time have to work out what their costs are in the future and backtrack to set a price where the difficulty level is held under far more control than the technology alone would define. There's also a positive incentive for none of them to get too aggressive in pricing because the total market size is fixed; doing the least possible work wins both for them and existing miners.

I'll build a new version of the model that tracks difficulty to compute the hardware prices (essentially drop the hardware price on every difficulty change to keep new entrants able to ROI) - should be interesting! :-)

[Entropy-uc]

I'll build a new version of the model that tracks difficulty to compute the hardware prices (essentially drop the hardware price on every difficulty change to keep new entrants able to ROI) - should be interesting! :-)

You are assuming that buyers of ASICs are rational and won't buy unprofitable hardware.   The last year has proven that completely false.  More retail hardware was sold at loss making prices that profitable ones.

Additionally you are assuming that ASIC manufacturers don't mine for themselves.  This is false as every ASIC supplier is running their own mining op.  That internal mining activity, and competition between the internal miners breaks your assumption of incentives to manage the rate of difficulty growth.

Internal mining operations incentivize the manufacturers to only sell at prices higher than the operational earnings of the equipment (or cheat you into that position through late delivery).  Basically, retail mining has become a suckers game.  It will likely remain so for the foreseeable future.

[Puppet]

The implication is that the ASIC vendors planning to be in business in 2 years time have to work out what their costs are in the future and backtrack to set a price where the difficulty level is held under far more control than the technology alone would define. There's also a positive incentive for none of them to get too aggressive in pricing because the total market size is fixed; doing the least possible work wins both for them and existing miners.

The latter is kinda obvious, since this mining is a zero sum game.

As for the former, they figured that out looong ago. As did I. Before the first asic was even announced I predicted the dynamics of virtually free to produce GH (especially compared to FPGA's and GPU's of that time) could only result in plummeting prices and skyrocketing difficulty for years to come, and it would have to happen at a speed that would result in a BTC denominated bloodbath for nearly all miners, and it gave perverse incentives for overpromised preorders. I was ridiculed by miners drooling over the prospects of dozens of GH for only a few thousand dollar or a few hundred BTC. I kept clear, shut down my GPU farm never ordered as much as a Jalapeno and watched the onslaught.

Several years later, perhaps confused by the BTC price spike, most people still dont seem to get it.

I'll build a new version of the model that tracks difficulty to compute the hardware prices (essentially drop the hardware price on every difficulty change to keep new entrants able to ROI) - should be interesting! :-)

Yep, except if you want to make it realistic, new entrants will not be able to achieve a positive ROI. Almost no asic miner ever has (BTC denominated), and very few paying list prices ever will.

[Polemos]

Mining is the heart of the Bitcoin. If transactions are not processed then there is no coin! I wonder what the bitcoin developers think about that and most importantly what are they doing to correct the problem. I read a comment that said that Devs are working on this problem and they are working on a solution to make mining more efficient. Has anyone heard anything similar?

[davejh]

The implication is that the ASIC vendors planning to be in business in 2 years time have to work out what their costs are in the future and backtrack to set a price where the difficulty level is held under far more control than the technology alone would define. There's also a positive incentive for none of them to get too aggressive in pricing because the total market size is fixed; doing the least possible work wins both for them and existing miners.

The latter is kinda obvious, since this mining is a zero sum game.

As for the former, they figured that out looong ago. As did I. Before the first asic was even announced I predicted the dynamics of virtually free to produce GH (especially compared to FPGA's and GPU's of that time) could only result in plummeting prices and skyrocketing difficulty for years to come, and it would have to happen at a speed that would result in a BTC denominated bloodbath for nearly all miners, and it gave perverse incentives for overpromised preorders. I was ridiculed by miners drooling over the prospects of dozens of GH for only a few thousand dollar or a few hundred BTC. I kept clear, shut down my GPU farm never ordered as much as a Jalapeno and watched the onslaught.

Several years later, perhaps confused by the BTC price spike, most people still dont seem to get it.

I'll build a new version of the model that tracks difficulty to compute the hardware prices (essentially drop the hardware price on every difficulty change to keep new entrants able to ROI) - should be interesting! :-)

Yep, except if you want to make it realistic, new entrants will not be able to achieve a positive ROI. Almost no asic miner ever has (BTC denominated), and very few paying list prices ever will.

I will try to get the results of the new simulation published over the next couple of days. There are some interesting conclusions though. The main one is that the gross margin that the ASIC vendors currently have gets eaten away completely by the need to maintain any semblance of a potential ROI. BTC price surges can hide this for a short while, as can relocating mining to cheaper locations but (as expected) any such shifts will trigger difficulty increases that in turn result in the operating costs consuming any amount of mining reward.

I know the long-term hope was that transaction fees would provide the means to escape the zero-sum nature of the game but they're not showing much sign of doing so either and the size of the game halves again in 2016.

At this point I'm somewhat struggling to see what will actually allow anyone but electricity suppliers to see any sort of profitable returns in a few years time.

[Puppet]

At this point I'm somewhat struggling to see what will actually allow anyone but electricity suppliers to see any sort of profitable returns in a few years time.

So what? Bitcoin isnt dependent on miners or its manufacturers being profitable. All bitcoin needs is that those miners actually run, and that is guaranteed.

That said, i would expect the most power/cost efficient mining operations to be able to extract a small operational profit on average, but anyone who thinks this is a long term goldmine (excuse the pun) doesnt understand mining or is betting on BTC appreciation - which we all know can be profited from much more easily by just buying BTC.

[davejh]

At this point I'm somewhat struggling to see what will actually allow anyone but electricity suppliers to see any sort of profitable returns in a few years time.

So what? Bitcoin isnt dependent on miners or its manufacturers being profitable. All bitcoin needs is that those miners actually run, and that is guaranteed.

That said, i would expect the most power/cost efficient mining operations to be able to extract a small operational profit on average, but anyone who thinks this is a long term goldmine (excuse the pun) doesnt understand mining or is betting on BTC appreciation - which we all know can be profited from much more easily by just buying BTC.

Certainly in the near term then there's still profitability to be had for some miners (but not many of them), but this will naturally drive anyone who wants to mine over to the same sorts of low-energy-cost locations and the advantage is quickly wiped out by the difficulty change that will ensue.

What I'm unclear on is who is going to pay to run mining hardware that takes insane amounts of power and can never ROI? It will always be someone else's problem, whereas if the difficulty were to be allowed to drop significantly in order to offset the costs then the system is too easily exposed to 51% attacks (it's almost impossible to safely de-escalate an arms race).

At the moment a large fraction of the entire BTC economy is mining-related so if there's no money in mining then something needs to fill that void quickly. I'm not saying that it can't happen, but it looks like it needs to happen in the next 2 to 3 years and I'm not seeing anything driving a 100x increase in transaction rates (not to mention that that poses additional problems).

[davejh]

I'll build a new version of the model that tracks difficulty to compute the hardware prices (essentially drop the hardware price on every difficulty change to keep new entrants able to ROI) - should be interesting! :-)

You are assuming that buyers of ASICs are rational and won't buy unprofitable hardware.   The last year has proven that completely false.  More retail hardware was sold at loss making prices that profitable ones.

Additionally you are assuming that ASIC manufacturers don't mine for themselves.  This is false as every ASIC supplier is running their own mining op.  That internal mining activity, and competition between the internal miners breaks your assumption of incentives to manage the rate of difficulty growth.

Internal mining operations incentivize the manufacturers to only sell at prices higher than the operational earnings of the equipment (or cheat you into that position through late delivery).  Basically, retail mining has become a suckers game.  It will likely remain so for the foreseeable future.

I think last year we saw a level of mania based on 2 large BTC price spikes - the size of them just isn't sustainable, even if you expect them to occur every 7 months :-)

I agree that retail mining is pretty-much done. Firstly I can't see any way for the difficulty levels to allow anyone to do anything useful without very large power feeds. Secondly if any ASIC vendor dropped the price sufficiently to make retail mining viable they simply drive the difficulty up faster.

Even commercial mining ops look very weak in a couple of years time. Any way I try to calculate this we get to a point where electricity costs end up dominating any mining operation (it's just a matter of when) because the difficulty changes act to swallow up any reduction in energy costs, improvements in technology or increase in the BTC price.

[Puppet]

First of all, congrats davejh, you seem to be getting it now .

What I'm unclear on is who is going to pay to run mining hardware that takes insane amounts of power and can never ROI?

Whoever happens to still have a miner or mining operation. Keep in mind that as long as its operationally profitable, it doesnt make sense to turn off those machines, even though they may never ROI. And you will most likely see tons of those, in fact you already see them now, miners who will never make a BTC denominated profit, but keep mining to minimize the loss.

It will always be someone else's problem, whereas if the difficulty were to be allowed to drop significantly in order to offset the costs then the system is too easily exposed to 51% attacks (it's almost impossible to safely de-escalate an arms race).

As above, difficulty is not likely to ever drop (assuming constant BTC value), as that requires miners to actually be turned off. Thats never going to happen on a large scale. Once we approach the point of marginal profitability, ie, mining revenue is barely above electricity cost, sales/deployment will pretty much grind to a halt, but there is still an incentive to keep the existing infrastructure running.

Before you mention reward halving, that will already be factored it when making the purchase/deployment decisions.

[davejh]

First of all, congrats davejh, you seem to be getting it now .

What I'm unclear on is who is going to pay to run mining hardware that takes insane amounts of power and can never ROI?

Whoever happens to still have a miner or mining operation. Keep in mind that as long as its operationally profitable, it doesnt make sense to turn off those machines, even though they may never ROI. And you will most likely see tons of those, in fact you already see them now, miners who will never make a BTC denominated profit, but keep mining to minimize the loss.

I buy that in the short term but that hardware will eventually die but there's no clear means to replace it if the ASIC vendors exit the market because no-one's buying what they're selling anymore.

Thus far the ASIC vendors haven't really had to think very hard about MTBF because the difficulty has obsoleted their products long before thermal stress does. Reducing frequency and voltage levels to reduce heat dissipation problems certainly helps that longer-term stability but only works if everyone does it. The problem is that if the difficulty is even inching upwards then there's no time like the present to push a mining ASIC as hard as possible.

Frankly if I didn't know better I'd think this was some insane game theory experiment :-) (A quick Google search revealed one or two interesting comments to the same effect)

As above, difficulty is not likely to ever drop (assuming constant BTC value), as that requires miners to actually be turned off. Thats never going to happen on a large scale. Once we approach the point of marginal profitability, ie, mining revenue is barely above electricity cost, sales/deployment will pretty much grind to a halt, but there is still an incentive to keep the existing infrastructure running.

I get back to the question of who's going to be left supplying infrastructure? Certainly at a point where things are saturated it would be very difficult to start a new company to do this (how would you fund it?).

[Puppet]

I get back to the question of who's going to be left supplying infrastructure? Certainly at a point where things are saturated it would be very difficult to start a new company to do this (how would you fund it?).

Im sure some of these companies will continue existing as they branch out to different markets or products and most of them will probably end up mining themselves, either for their own account, like KnC, or reselling the hashrate, like BFL.

But even those that will close their doors, will probably sell their IP before doing so (assuming its a reasonably competitive design), so anyone holding it can place an order with TSMC to produce another batch of wafers should demand increase again.

[davejh]

I get back to the question of who's going to be left supplying infrastructure? Certainly at a point where things are saturated it would be very difficult to start a new company to do this (how would you fund it?).

Im sure some of these companies will continue existing as they branch out to different markets or products and most of them will probably end up mining themselves, either for their own account, like KnC, or reselling the hashrate, like BFL.

But even those that will close their doors, will probably sell their IP before doing so (assuming its a reasonably competitive design), so anyone holding it can place an order with TSMC to produce another batch of wafers should demand increase again.

If the difficulty has been pushed to the point where no-one's making money from mining then reselling hashrate is going to require someone with the ability to sell sand in the middle of the Sahara :-)

There are a few companies around who specialize in buying up old chip designs to keep things going so perhaps one of those will pick up the slack, but they generally don't build boards, just sell silicon.

I guess if the geometry shrinks continue though then there's a 3x to 4x improvement to be had every 4 years so maybe we'll see someone enter the fray with a low margin operation to take that one generation, make what they can and then exit again, or to stockpile enough cash to survive through to subsequent generations. It feels like this probably wouldn't have many players though as it would be very hard to get VC funding for something that doesn't have huge growth opportunity.

[TheMinex]

If the difficulty has been pushed to the point where no-one's making money from mining then reselling hashrate is going to require someone with the ability to sell sand in the middle of the Sahara :-)

In this case we'll see market power, where bid & ask will drive hardware's price low until someone buy it.  I guess that if BTC price will dramatically fall and difficulty skyrockets, price of miners will never go to 0. Someone will use them (first of all probably as speculation mining party) as funny heater in winter, or keep them like hardware museum of one of the most interesting experiments of the modern history.

[Brunic]

Great discussion going on here, interesting to read.

Bitcoin mining is in a huge bubble right now. It's hard to get data to analyze that market, but how many $$$ have been injected in that market since 2012? Consider all the R&D, investments in mining business, and investments in ASIC manufacturers. I'm pretty sure the money injected in mining overshoot what the Bitcoin economy is able to support today.

Bitcoin mining can't go over what the Bitcoin economy is able to support. The better the Bitcoin economy is, the better it's network is going to be. Like any bubble, it usually ends with a crash. I think mining was temporarily saved by the Bitcoin bubble last November, but it can't grow like that eternally, not at that rate.

I'm pretty sure it's going to crash hard in the following months. The market has to correct itself, the sooner the better.