Three Men Mine $200,000 In Bitcoin Every Month

[franky1]

the perfect idealistic view these days is a person that wants to invest:
$1m and buy bitcoin over the next 6 months.
this is because he doesnt want to buy it in one go causing a massive price rise before he even spend $1mill in a single day meaning it costs him quadruple the price atleast on day 2. and also most exchanges/banks would flag him and freeze accounts by throwing that amount at an exchange in one go. thus these investors are talked into mining it instead
but... thats where their maths fails
(using maths of last post)
if he bought bitcoin at $500 each slowly over 6 months(11btc a day) = 2000btc(if bitcoin stayed at $500 for 6 months)

but...

by buying 2500 rigs ($737,000 cost) and paying $60k* in electric for 5 months. the best he will get is 1219* coin via mining for 5 months

so at chrismas this investor is going to hope that bitcoin is not $500, as that means the 1219btc* is only $610k. so he hopes that bitcoin is $820+ to break even.

*EDIT: original maths was based on $40k electric. now edited to use coindesks quoted $60k electric

[heybigboy1]

Now that living the life on my book, but what I imagine is terribly bad is the sound and electric bill. Not sure if they would even profit.

[Oldminer]

Just as well they covered the eyes of those guys otherwise they could be recognised! 

[wordman267645]

they should have tried to remain anonymous.

[CoinHoarder]

Firstly, this points out two of the biggest negatives of PoW.

#1 - The centralization of PoW mining will become more and more centralized over time, because big operations such as this will make the little guys unprofitable and therefore push them out of the market.
#2 - The huge amount of electricity that is wasted needlessly with PoW.

Secondly, it's nice to see where our "June 2013" Avalon deliveries went and the reason for the 2 month delay.. these guys have some balls allowing a news story about this.

Thirdly, again these guys have big balls... if I was operating such a large mining farm I would tell no one. Otherwise, I wouldn't be able to sleep at night thinking someone may break in at any moment or hold me hostage to get the location of the equipment. All they did was black out their eyes...

[Robert Paulson]

"They have 'a couple of bitcoin' each for their efforts

so basically these guys are wage slaves and there's one capitalist who owns everything, DOES NO ACTUAL WORK, and gets 99.5% of the profit?

Sounds about right.

they are not wage slaves, they can quit if they want to, the fact that they work at this job means its the best opportunity they have, without it they would be worse off.
the capitalist does no work, but he takes all the risk, the workers get paid no matter what, the capitalist could take heavy losses and lose everything.

[BADecker]

WOW, this is amazing! The huge electricity bill, the terrible noise and this:


Now I can understand why mining is not for everyone.

After looking at the calc in franky1's post at https://bitcointalk.org/index.php?topic=740717.msg8370294#msg8370294, I'd say these guys could make their big $BUCKS refurbishing these outdated computers, and selling them through Tiger Direct or something.

[BADecker]

Firstly, this points out two of the biggest negatives of PoW.

#1 - The centralization of PoW mining will become more and more centralized over time, because big operations such as this will make the little guys unprofitable and therefore push them out of the market.
#2 - The huge amount of electricity that is wasted needlessly with PoW.

Secondly, it's nice to see where our "June 2013" Avalon deliveries went and the reason for the 2 month delay.. these guys have some balls allowing a news story about this.

Thirdly, again these guys have big balls... if I was operating such a large mining farm I would tell no one. Otherwise, I wouldn't be able to sleep at night thinking someone may break in at any moment or hold me hostage to get the location of the equipment. All they did was black out their eyes...

But this is small compared with the one in Washington D.C. mentioned in the article. And there's a video of it too.

https://www.youtube.com/watch?v=5CjldZLXiAU

[keithers]

That looks like a super impressive operation.  60k per month electric bill...that is like a hotel..

[CoinHoarder]

#1 - The centralization of PoW mining will become more and more centralized over time, because big operations such as this will make the little guys unprofitable and therefore push them out of the market.
#2 - The huge amount of electricity that is wasted needlessly with PoW.

You've managed to fail twice in a row. Good job!

At least I'm not a fanboi that only cares about his special interests and can admit Bitcoin has flaws.  

[Jybrael]

Wow that is awesome..playing games while making tons of money....dream job

[dadaas]

Wow that is awesome..playing games while making tons of money....dream job

I would love it to be this way for myself. But I am quite sure there is lot of work with maintaining their farm. But still I am also sure they are enjoying every minute of it.

[leopard2]

Firstly, this points out two of the biggest negatives of PoW.

#1 - The centralization of PoW mining will become more and more centralized over time, because big operations such as this will make the little guys unprofitable and therefore push them out of the market.
#2 - The huge amount of electricity that is wasted needlessly with PoW.

Exactly. This type of thing is the major threat to Bitcoin and I would not be surprised if long term, another coin takes over (NXT; ETH?). Centralization is dangerous and the waste of energy makes BTC vulnerable because it can be used to attack BTC ("too much CO2")

[gogxmagog]

damn. I wanted to download that soundcloud of the mining drone. goes nicely with my Atrax Morgue and Brighter Death Now mp3s.

[dadaas]

Firstly, this points out two of the biggest negatives of PoW.

#1 - The centralization of PoW mining will become more and more centralized over time, because big operations such as this will make the little guys unprofitable and therefore push them out of the market.
#2 - The huge amount of electricity that is wasted needlessly with PoW.

Exactly. This type of thing is the major threat to Bitcoin and I would not be surprised if long term, another coin takes over (NXT; ETH?). Centralization is dangerous and the waste of energy makes BTC vulnerable because it can be used to attack BTC ("too much CO2")

I am surprised that people think that any coin can overtake Bitcoin. Everyone should be aware that it is practicaly impossible. Most of those altcoins are just pump and dump thing an if Bitcoin ever fails only coin that could take its place is Litecoin. But that is just not gonna happen!

[Gleb Gamow]

fuck me! now thats how its done 

Not only that, but, from the article: "There’s many more – and more sophisticated – giant operations around the world, including this one in Washington, USA, which generates about $US8 million a month."

KnC has three mega data centers with 7,000+ miners each on the same property own by Europe Facebook at the Node Pole.

[freedomno1]

Hot damn wish I could do that as well have a few miners around and play games all day
That would be awesome stuff.

“It becomes louder and louder the closer you get to the building, and as you step through the doors it becomes a deafening and steady roar,” he says, then offers this soundbite:

A truly soothing sound ^_^

Then comes the wind from giant cooling fans, and despite their efforts, heat. Smith says the inside of the farm still manages to hold “steady at 40° Celsius (105° f) the entire time”.

(^_^ a true greenhouse) In the sense of this versus printing fiat still the profitability ROI may take a while with the difficulty always increasing neat though. Currently, you can buy a rig that returns a single bitcoin every nine days for around $2500.

[Brewins]

Firstly, this points out two of the biggest negatives of PoW.

#1 - The centralization of PoW mining will become more and more centralized over time, because big operations such as this will make the little guys unprofitable and therefore push them out of the market.
#2 - The huge amount of electricity that is wasted needlessly with PoW.

Secondly, it's nice to see where our "June 2013" Avalon deliveries went and the reason for the 2 month delay.. these guys have some balls allowing a news story about this.

Thirdly, again these guys have big balls... if I was operating such a large mining farm I would tell no one. Otherwise, I wouldn't be able to sleep at night thinking someone may break in at any moment or hold me hostage to get the location of the equipment. All they did was black out their eyes...

#3 - The huge ammount of silicium and metals wasted with the hardware:




That is, waste of limited resources that might be scarce in the future.

Also the mining operations will be centralized also among countries, since only first world countries can afford such race. Usually 3th world countries don't have access to up to date hardware stuff, and mining stuff is not an exception

[SunBin]

fuck me! now thats how its done  

$200k in BTC is only 400btc
which equates to 13btc a day
which equates to 0.55btc an hour
which equates to 0.09259259 a block

which is 0.4% of network hash or 640 terrahash units or 2500 avalon3 units

just a shame the equipment is obsolete quite quickly and having to endlessly keep buying more
the 0.59btc per avalon unit x2500 units=1500coin cost.

so lets work out if they will break even:
with hashrate at 100peta in june, then last month averaging 125peta this month 150peta
=roughly 25% increase per month(ill use this as bases of simple math calculations per month).

so this months 400 coin will be made, 300 next month. 225 in october.
168btc in november
126btc december
95btc in january
72btc in february (cut off point as 72btc is less then 80btc of electric ($40k at $500/btc=80btc electric))
=about 1393 coin by february
minus off the 80btc electric costs per month (560coin electric cost from now till february)
=833btc by coin hoard by february if selling coin for electric. or 1393 if hoarding all coin.

either way the avalon3 miners are not profitable, which they will realise by the time it gets to february

Good analysis.

None of the ASIC bitcoin miners are profitable. Should btc price keep dropping, they will not only lose out on ROI but also taking hit on price dropped also.

[fran2k]

WOW, this is amazing! The huge electricity bill, the terrible noise and this:


Now I can understand why mining is not for everyone.

PSUs burn like bitches in a desert hotty summer.