Mining costs are still low in some places methinks

[windjc]

After seeing this article on Reddit today:

http://www.thecoinsman.com/2014/08/bitcoin/inside-chinese-bitcoin-mine/

This mining company is making roughly $170000 a month while paying out $60000 a month for electricity + 3 employees + hardware costs.

3 Chinese employees probably cost less than $3k a month total.

And while everyone assumes that hardware is expensive, I'm willing to bet that the owner probably has a chip making factory somewhere or is getting them from a fellow chinese man for dirt cheap.

I would be surprised if this facility was clearing more than $80k month in profit after total costs.

There's a reason other than insanity that the hashrate still climbs exponentially.

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[dropt]

Put it this way: if you assume my HW is paid for and I'm operating in the black. My cost per BTC is ~$90.

This is fact.

[SMB-2525]

At 575 tera-hash, $2,000/day power, 16% difficulty increases every 12 days - this operation goes negative on power cost in 132 days. That will be in winter so maybe they will save on cooling and go a little longer. I show it making $353K in $600 BTC: almost 600 BTC.

I cannot determine the allocation of the exiting power cost between Watts/GHS and $/KWH, so the following is a guestimate:
This hardware is 2W/GHS and power is 0.072/KWH.

What happens then.

Using .8W/GHS and starting with the estimated difficulty on 12/6/14 when this operation is down to $30K/month gross revenue): 87036052189.
Toss all the old hardware and bring in 1.5 peta-hash of new hardware at .8W/GHS - roughly same power consumption.

This setup will cashflow for 84 days and generate maybe $113K in revenue.  They need the hardware to cost $0.075/GHS or $75/THS to break even.

Something is going to change in the next few months.

Please check my math.