It'll be insanity not to buy bitcoin at sub $500

[nuff]

Actual production cost of one single bicoin is aroundt $530-$550. Any price below $500 is a steal. Buy now or regret years later. With difficulty ever increasing miners are getting screwed now cause anyone mining now is running at a loss.

[JerryCurlzzz]

Actual production cost of one single bicoin is aroundt $530-$550. Any price below $500 is a steal. Buy now or regret years later. With difficulty ever increasing miners are getting screwed now cause anyone mining now is running at a loss.

What if they just end up running at a loss for some time..... and price doesn't recover? Then hash rate drops.... despair sets in.... just saying.

[dropt]

When calculated in the OP over the time period from March 14, 2013 to March 13, 2014 the average increase in the difficulty and hash rate was 23.92% per adjustment period and the average length of each adjustment period was 11.38 days.

Recalculated over the period June 29, 2013 to June 29, 2014 it was 23.45% and 11.41 days.

Now, recalculating over the period August 24, 2013 to August 31, 2014 it is 21.12% and 11.63 days.

Assuming the network growth rate over the next year is the same as it was this last year we get:

Code:

                                Hash Rate   Power      Energy            Cost        Cost
     Date          Difficulty        TH/s      MW         MWh        $/Period       $/BTC
---------  ------------------  ----------  ------  ----------  --------------  ----------
11-Sep-14      33,220,936,877     237,808     238      66,349      $6,634,853     $131.64
23-Sep-14      40,236,446,759     288,028     288      80,360      $8,035,984     $159.44
04-Oct-14      48,733,473,526     348,853     349      97,330      $9,733,002     $193.12
16-Oct-14      59,024,880,009     422,523     423     117,884     $11,788,392     $233.90
28-Oct-14      71,489,598,585     511,750     512     142,778     $14,277,833     $283.29
08-Nov-14      86,586,583,575     619,820     620     172,930     $17,292,988     $343.11
20-Nov-14     104,871,710,060     750,712     751     209,449     $20,944,876     $415.57
02-Dec-14     127,018,241,359     909,246     909     253,680     $25,367,960     $503.33
13-Dec-14     153,841,618,762   1,101,258   1,101     307,251     $30,725,098     $609.62
25-Dec-14     186,329,486,300   1,333,819   1,334     372,135     $37,213,544     $738.36
05-Jan-15     225,678,056,071   1,615,491   1,615     450,722     $45,072,202     $894.29
17-Jan-15     273,336,153,086   1,956,646   1,957     545,904     $54,590,430   $1,083.14
29-Jan-15     331,058,561,407   2,369,846   2,370     661,187     $66,118,694   $1,311.88
09-Feb-15     400,970,635,767   2,870,303   2,870     800,815     $80,081,465   $1,588.92
21-Feb-15     485,646,557,708   3,476,447   3,476     969,929     $96,992,858   $1,924.46
05-Mar-15     588,204,117,648   4,210,593   4,211   1,174,756    $117,475,554   $2,330.86
16-Mar-15     712,419,512,763   5,099,775   5,100   1,422,837    $142,283,732   $2,823.09
28-Mar-15     862,866,387,600   6,176,732   6,177   1,723,308    $172,330,835   $3,419.26
08-Apr-15   1,045,084,236,901   7,481,119   7,481   2,087,232    $208,723,207   $4,141.33
20-Apr-15   1,265,782,371,309   9,060,961   9,061   2,528,008    $252,800,823   $5,015.89
02-May-15   1,533,086,956,002  10,974,431  10,974   3,061,866    $306,186,635   $6,075.13
13-May-15   1,856,840,218,301  13,291,983  13,292   3,708,463    $370,846,321   $7,358.06
25-May-15   2,248,962,841,151  16,098,949  16,099   4,491,607    $449,160,670   $8,911.92
06-Jun-15   2,723,892,885,897  19,498,682  19,499   5,440,132    $544,013,236  $10,793.91
17-Jun-15   3,299,117,405,623  23,616,363  23,616   6,588,965    $658,896,517  $13,073.34
29-Jun-15   3,995,816,323,188  28,603,604  28,604   7,980,405    $798,040,547  $15,834.14
10-Jul-15   4,839,642,281,734  34,644,038  34,644   9,665,686    $966,568,646  $19,177.95
22-Jul-15   5,861,665,181,962  41,960,074  41,960  11,706,861  $1,170,686,065  $23,227.90
03-Aug-15   7,099,516,184,307  50,821,092  50,821  14,179,085  $1,417,908,463  $28,133.10
14-Aug-15   8,598,773,298,472  61,553,356  61,553  17,173,386  $1,717,338,634  $34,074.18
26-Aug-15  10,414,639,578,109  74,552,032  74,552  20,800,017  $2,080,001,680  $41,269.87
07-Sep-15  12,613,975,712,232  90,295,733  90,296  25,192,510  $2,519,250,952  $49,985.14

In other words something has got to give by the end of the year, or actually before December 1

Ignoring the cost of HW: the current cost to mine a coin is ~$131.

[NapoleonBonaparte]

When calculated in the OP over the time period from March 14, 2013 to March 13, 2014 the average increase in the difficulty and hash rate was 23.92% per adjustment period and the average length of each adjustment period was 11.38 days.

Recalculated over the period June 29, 2013 to June 29, 2014 it was 23.45% and 11.41 days.

Now, recalculating over the period August 24, 2013 to August 31, 2014 it is 21.12% and 11.63 days.

Assuming the network growth rate over the next year is the same as it was this last year we get:

Code:

                                Hash Rate   Power      Energy            Cost        Cost
     Date          Difficulty        TH/s      MW         MWh        $/Period       $/BTC
---------  ------------------  ----------  ------  ----------  --------------  ----------
11-Sep-14      33,220,936,877     237,808     238      66,349      $6,634,853     $131.64
23-Sep-14      40,236,446,759     288,028     288      80,360      $8,035,984     $159.44
04-Oct-14      48,733,473,526     348,853     349      97,330      $9,733,002     $193.12
16-Oct-14      59,024,880,009     422,523     423     117,884     $11,788,392     $233.90
28-Oct-14      71,489,598,585     511,750     512     142,778     $14,277,833     $283.29
08-Nov-14      86,586,583,575     619,820     620     172,930     $17,292,988     $343.11
20-Nov-14     104,871,710,060     750,712     751     209,449     $20,944,876     $415.57
02-Dec-14     127,018,241,359     909,246     909     253,680     $25,367,960     $503.33
13-Dec-14     153,841,618,762   1,101,258   1,101     307,251     $30,725,098     $609.62
25-Dec-14     186,329,486,300   1,333,819   1,334     372,135     $37,213,544     $738.36
05-Jan-15     225,678,056,071   1,615,491   1,615     450,722     $45,072,202     $894.29
17-Jan-15     273,336,153,086   1,956,646   1,957     545,904     $54,590,430   $1,083.14
29-Jan-15     331,058,561,407   2,369,846   2,370     661,187     $66,118,694   $1,311.88
09-Feb-15     400,970,635,767   2,870,303   2,870     800,815     $80,081,465   $1,588.92
21-Feb-15     485,646,557,708   3,476,447   3,476     969,929     $96,992,858   $1,924.46
05-Mar-15     588,204,117,648   4,210,593   4,211   1,174,756    $117,475,554   $2,330.86
16-Mar-15     712,419,512,763   5,099,775   5,100   1,422,837    $142,283,732   $2,823.09
28-Mar-15     862,866,387,600   6,176,732   6,177   1,723,308    $172,330,835   $3,419.26
08-Apr-15   1,045,084,236,901   7,481,119   7,481   2,087,232    $208,723,207   $4,141.33
20-Apr-15   1,265,782,371,309   9,060,961   9,061   2,528,008    $252,800,823   $5,015.89
02-May-15   1,533,086,956,002  10,974,431  10,974   3,061,866    $306,186,635   $6,075.13
13-May-15   1,856,840,218,301  13,291,983  13,292   3,708,463    $370,846,321   $7,358.06
25-May-15   2,248,962,841,151  16,098,949  16,099   4,491,607    $449,160,670   $8,911.92
06-Jun-15   2,723,892,885,897  19,498,682  19,499   5,440,132    $544,013,236  $10,793.91
17-Jun-15   3,299,117,405,623  23,616,363  23,616   6,588,965    $658,896,517  $13,073.34
29-Jun-15   3,995,816,323,188  28,603,604  28,604   7,980,405    $798,040,547  $15,834.14
10-Jul-15   4,839,642,281,734  34,644,038  34,644   9,665,686    $966,568,646  $19,177.95
22-Jul-15   5,861,665,181,962  41,960,074  41,960  11,706,861  $1,170,686,065  $23,227.90
03-Aug-15   7,099,516,184,307  50,821,092  50,821  14,179,085  $1,417,908,463  $28,133.10
14-Aug-15   8,598,773,298,472  61,553,356  61,553  17,173,386  $1,717,338,634  $34,074.18
26-Aug-15  10,414,639,578,109  74,552,032  74,552  20,800,017  $2,080,001,680  $41,269.87
07-Sep-15  12,613,975,712,232  90,295,733  90,296  25,192,510  $2,519,250,952  $49,985.14

In other words something has got to give by the end of the year, or actually before December 1

Ignoring the cost of HW: the current cost to mine a coin is ~$131.

You need to factor in the cost of HW as it will be useless after 4 months.

A more reasonable estimate on production cost per btc is 600.

[dropt]

You need to factor in the cost of HW as it will be useless after 4 months.

A more reasonable estimate on production cost per btc is 600.

Not necessarily.  Do you think that the large farms of Bitfury haven't already recovered their initial HW costs?  How about KnC?  Or maybe Bitmain?

Further, to derive that $600 figure do you know what the cost per GH is for these large corporate farms?  If you do, could you post the citation for said figures?

[Wexlike]

Actual production cost of one single bicoin is aroundt $530-$550. Any price below $500 is a steal. Buy now or regret years later. With difficulty ever increasing miners are getting screwed now cause anyone mining now is running at a loss.

How do you come up with these numbers ? If i assume that an industrial mining operator with access to really cheap electricity(0.05c/kw) has a current miner running, it is still profitable even with a bitcoin price of 55$.

You can check my math: Antminer s3 440gh equals 0.008068 btc per day. The price of the units electricity for a whole day is 0.44 cent. (0.366 kw per hour)

0.008068 * 55$ - electricity = 0.443 - 0.439

Of course this is an extreme example, there are more expanses. For example the price of the miner. But if you already have a miner, that means that you paid for it in advance. You would let it run until btc goes below 55$. (insane thought lol)

[An amorous cow-herder]

Actual production cost of one single bicoin is aroundt $530-$550. Any price below $500 is a steal. Buy now or regret years later. With difficulty ever increasing miners are getting screwed now cause anyone mining now is running at a loss.

I think your logic is the wrong way round.
If something costs more to produce than its worth doesnt mean its a good idea to buy the product, just thats it a bad idea to produce it.

[JerryCurlzzz]

Actual production cost of one single bicoin is aroundt $530-$550. Any price below $500 is a steal. Buy now or regret years later. With difficulty ever increasing miners are getting screwed now cause anyone mining now is running at a loss.

I think your logic is the wrong way round.
If something costs more to produce than its worth doesnt mean its a good idea to buy the product, just thats it a bad idea to produce it.

Bingo. All the perma bulls saying that mining cost will drive exchange rate upwards aren't really using sound logic. Surely, miners could simply be making a horrible investment (if currently mining at a loss).

[razorramon]

actually if you buy hardware (or most things business related)

you pay now and the price is paid off through the time you use it

lets say:
item: 1000$
use of item: 10 months

-> costs per month 100$

of course how your "expenses" are calculated depends on what kind of expense it is...the calculation above also says that after 10 months the item is worthless...but if you can resell it for 200$ then it would be:

1000$ - 200$ = 800$

Costs per month 80$

[danynx]

yeah.. any amount below 500 are mere cheap coins 

[jbrnt]

$500 is cheap if it reaches $700 by the end of the year, $500 is expensive if it drops below $400. It just depends on your own view on bitcoin prices. I personally think $500 is cheap, but it is because I bought some at $600. 

[danynx]

$500 is cheap if it reaches $700 by the end of the year, $500 is expensive if it drops below $400. It just depends on your own view on bitcoin prices. I personally think $500 is cheap, but it is because I bought some at $600. 

400 have been seen to be a very strong resistant point, so i doubt it will fall below that.

[JerryCurlzzz]

$500 is cheap if it reaches $700 by the end of the year, $500 is expensive if it drops below $400. It just depends on your own view on bitcoin prices. I personally think $500 is cheap, but it is because I bought some at $600. 

400 have been seen to be a very strong resistant point, so i doubt it will fall below that.

Well, we did see the $340 level on the last major spike down. So I would not say that sub-$400 is off the table. Seems some respected analysts here are calling for a revisit to the mid-300s.

[JimboToronto]

Seems some respected analysts here are calling for a revisit to the mid-300s.

Respected by whom? 

[JerryCurlzzz]

Seems some respected analysts here are calling for a revisit to the mid-300s.

Respected by whom? 

You may disagree, but I'd say that masterluc and RyNinDaCleM both command some respect on this forum. Most analysts here are pretty half-assed, but not them.

[bonipper]

Actual production cost of one single bicoin is aroundt $530-$550.

In 2011 bitcoins cost more to produce than you could sell them for.

http://www.theguardian.com/technology/2011/oct/18/bitcoin-value-crash-cryptocurrency

[truehold3r]

I've already bought as many sub $500 coins as I can so I'm ready for the next jump.

[razorramon]

Actual production cost of one single bicoin is aroundt $530-$550.

In 2011 bitcoins cost more to produce than you could sell them for.

http://www.theguardian.com/technology/2011/oct/18/bitcoin-value-crash-cryptocurrency

but back then no one was mining bitcoins with special hardware...you had the mining program "running on the side"...that's also the reason why there are so many lost bitcoins....a lot of people tried it out and deleted it because it was not worth it  (me included in 2010 or so)

[hodap]

I've already bought as many sub $500 coins as I can so I'm ready for the next jump.

Strong conviction, but also dangerous position you are taking.

[minerpumpkin]

Actual production cost of one single bicoin is aroundt $530-$550. Any price below $500 is a steal. Buy now or regret years later. With difficulty ever increasing miners are getting screwed now cause anyone mining now is running at a loss.

It could very well be. If you're not invested now and just getting into Bitcoin, it may be a great price to get your first couple of coins. If you are heavily invested, you should think about hedging a bit - never go full crypto. Investing when we've crossed the $700 mark will be a lot safer, since we'd be in a definite bull-market then!