Hashrates and Future Profitability

[sythe511]

As the Bitcoin network difficulty continues to skyrocket, I find it difficult to believe that mining will be effective. Even at this point, I wouldn't even attempt mining without at least a couple hundred GH/s. Even then, I might never see a ROI. It seems to me that by the end of the year (probably much earlier), any hashrate under 750 GH/s - 1 TH/s will probably fail to produce a viable source of bitcoins. This solution could be solved if hardware prices were eventually slashed by as much as 40-50%. Only a fool will purchase hardware that has no hope of producing a ROI. Either the hardware hashrates increase dramatically (keeping the same prices), or the prices must eventually be lowered by a large margin.

If a 1 TH/s miner is purchased for around $2400 (rough estimation), it would still take ~134 days to break even, assuming a power consumption of around 2000 watts. By the time this hypothetical miner actually pays for itself (assuming it doesn't suffer heat failure or another issue, requiring a warranty replacement and wasting valuable time), it will be comparable to the BFL Jalapeños of today.

Please correct me if I'm wrong, but it doesn't seem like mining will be a viable investment by the time 2015 rolls around.

[1715549927]

1715549927

[1715549927]

1715549927

[ujka]

You are shopping at the wrong places - $1700 can buy you 1TH with 1kw power use, and delivery from the stock.
https://www.asic-hardware.com/product/lketc-dragon-miner/

About skyrocketing difficulty - where do you see it? Difficulty is increasing, but at a steady decreasing rate  

[atc1]

The Difficulty can go down and it has in the past, but it will most likely only be for one or a couple of difficulty changes before it will start rising again.

One possibility would be if for example a very large Bitcoin mining farm would be down for a longer period of time for example if there having technical difficulty or need to relocate to another country or sells the hardware because of electricity cost is making there mining less profitable or unprofitable.

Another possibilty could be if bitcoin price would make a relatively rapid and big change down in price and it stayed there for several weeks/months sometime in the future when the "normal" hash-rate increase per difficulty-period is small(1-3%) that could lead to people in large numbers would stop mining or selling/relocating hardware to places/people/country's where electricity price would be lower or in some cases possibly even free.

A third possibility would be that large amount of obsolete mining equipment would end there life as seasonal dependent heating devices replacing/backing up existing electrical heaters witch could then lead to that difficulty could see some decrease.

Of course,what we see now is that the difficulty has been rising,but at much lower rates,due to low price as compared to earlier,but with that picking up as well,it may as well start up again. However,the most profitable thing to do is to trade altcoins as opposed to mining bitcoins directly,unless you have a mining farm or have a large hashrate with specialized equipment.

[xdigital]

Please correct me if I'm wrong, but it doesn't seem like mining will be a viable investment by the time 2015 rolls around.

You are correct. To keep the network decentralized as much as possible, mining should not be a high profit investment. if it's so, people with a lot of money will control network. That's why the reward is halved every 4 years.

[beatljuice]

There is a misconception I see on these forums quite often - that you will make a higher ROI with more GH/s. The ROI is equal at every level. If you have 10 GH/s you will make 0.01443 BTC per month at the current difficulty. At 100 GH/s you'll make 0.1443 BTC a month, which is exactly 10 times the 10 GH/s.

Of course there are considerations of equipment cost and efficiency per watt, but if you're just talking GH/s the ROI is the same. If you buy 2 Bitfurys you will get the same ROI (as a percentage) as you would if you bought 4.

[sythe511]

There is a misconception I see on these forums quite often - that you will make a higher ROI with more GH/s. The ROI is equal at every level. If you have 10 GH/s you will make 0.01443 BTC per month at the current difficulty. At 100 GH/s you'll make 0.1443 BTC a month, which is exactly 10 times the 10 GH/s.

Of course there are considerations of equipment cost and efficiency per watt, but if you're just talking GH/s the ROI is the same. If you buy 2 Bitfurys you will get the same ROI (as a percentage) as you would if you bought 4.

Yes of course the ratio is constant. However, it is only a matter of time before mining with any hardware simply becomes a waste of electricity.  I wonder if it would be possible to "force" the difficulty to decrease by coordinating a pause in mining, then quickly mining the reduced difficulty. Then the process would be repeated.