New setup- assume free power

[DrG]

Ok, got it, but even with the difficulty set at 20% on some calcs, i would be maybe breaking even if i were to get 5 s3 today up and running at around 2.5-3 month break. anything after that like you guys said, would be much slower etc. it just seems that the market itself would die very quickly if it were not possible at all to be making breakeven/profit. considering i do have unlimited free power, ive got no cost to at all to just set it up and let the machines run themselves 24/7 right?

and all this is if the coins stay at the same price, and the difficulty goes up at full 20%.

Perhaps you're not understanding what we mean by 20%.  We mean consecutively each increase goes up 20%.  So first 11 days difficulty is x, then 1.2x, then (1.2x1.2) or 1.44x, then (1.2x1.2x1.2) - geometric growth approaching logarithmic scale.  That's why the difficulty is 20X what it was 7 months ago - 20X is 2000%!

[jonnybravo0311]

sure, imagine my family owned a powerplant and within that powerplant i had an outlet and no one cared about power consumption. I still havent received a concise answer as  to why my plan  would/wouldnt work assuming free power. like i said before im a total newb at this and would like help.

To understand why your plan may or may not work requires you to understand the role of difficulty in your expected ROI.  Difficulty is a means by which the Bitcoin network adjusts itself to try and maintain a 10 minute block generation time.  As more and more hashing power is added to the network, blocks are solved faster and faster (typically).  Every 2016 blocks, the network looks at the average generation time and adjusts the difficulty to bring it back in line.

In a nutshell, as difficulty goes up, and your hashing power remains constant, you earn less BTC.  Here's a quick breakdown.  Your 5 S3s will hash at about 2.2TH/s.  Let's see how that would have manifested over the past few difficulties in expected earnings per day:

On 6/18, the difficulty was 13,462,580,115.  2.2TH/s expected to earn 0.08218BTC a day
On 6/29, the difficulty was 16,818,461,371.  2.2TH/s expected to earn 0.06579BTC a day
On 7/12, the difficulty was 17,336,316,979.  2.2TH/s expected to earn 0.06382BTC a day
On 7/25, the difficulty was 18,736,441,558.  2.2TH/s expected to earn 0.05905BTC a day

As you can plainly see, as the difficulty goes up, your expected earnings goes down, and how much the difficulty goes up directly corresponds to how much your expected earnings go down.  Just for fun, let's see what that same 2.2TH/s would have expected to earn in December of last year:

On 12/21/2013, the difficulty was 1,180,923,195.  2.2TH/s expected to earn 0.9369BTC a day.

So, in 7 months, that same hashing power went from earning you close to 1BTC a day to now making about 0.06BTC a day, because the difficulty went from 1.1 billion to the current 18.7 billion.  If you project that every single difficulty adjustment will be an increase of 20%, let's take a look at what that same 2.2TH/s would be earning you:

After 10 difficulty adjustments of 20% each, the difficulty would be about 116,000,000,000.  2.2TH/s expects to earn 0.009538BTC a day.  10 difficulty jumps should be right around the end of November this year.  So, at the end of a year's hashing, your gear would be earning just about 100 times less.  In fact, the decreased earnings EXACTLY corresponds to the increased difficulty.  Here's the actual formula for calculating expected earnings:

Code:

25 / (Difficulty * 2**32 / your hash rate / 86400) = expected earnings per day

So... now you need to speculate.  What do YOU believe the difficulty will do?

[jjc326]

OP I know it sounds nuts but I was mining and making what I thought was a decent like .01 BTC a day like a year ago and now it's to the point that it's not even worth my time to mine, even with free electricity!  The difficulty just goes up SO frickin fast sometimes it's just really depressing unless you want to keep investing in more and more expensive equipment.  So I'd just recommend starting small.