Why everyone here suggests not to mine? Explain it!

[HiSoC8Y]

Ok,

This applies to myself or anyone who has FREE electricity....I haven't calculated the cost of electricity in the below calc.

A simple calculation....

100 S3s @ each 350 USD, so total is $35,000.

50 PSUs to power them, lets say Corsair RM850 for every two...each PSU is around $160, so total cost is $8,000

Let's assume I need Misc. costs of power extensions, network cables, switches...etc. at around $5,000.

So what is my total cost? $48,000

Ok, based on my experience from Eligius, I've seen around 0.008 BTCs per day for every S3.

Now, let's run for a full year (365 days) with all 100 S3s, so the total expected BTCs is 292 BTCs for the first year.

at this moment's price of BTC, that's $140,000

minus cost ($48,000 earlier), so a net profit of $92,000.  Isn't that good income?  and this is only for the first year.  If you run it with another 2 years, you will even make more...

Ok, you will say the difficulty and all, let's make that total BTCs in the first year is not 292, let's cut it down to 260 BTCs for the sake of difficulty.

so, 260 BTCs is worth on today's price $124,800. Deduct the initial costs (the $48,000), that will be  $76,000 NET profit.

Now the BTC price is not constant as we all know, there is a change that it can be $600 or $1,000, and there is a chance that it could go down as well....

Am I missing something?

[1713424518]

1713424518

[1713424518]

1713424518

[1713424518]

1713424518

[jonnybravo0311]

Ok,

This applies to myself or anyone who has FREE electricity....I haven't calculated the cost of electricity in the below calc.

A simple calculation....

100 S3s @ each 350 USD, so total is $35,000.

50 PSUs to power them, lets say Corsair RM850 for every two...each PSU is around $160, so total cost is $8,000

Let's assume I need Misc. costs of power extensions, network cables, switches...etc. at around $5,000.

So what is my total cost? $48,000

Ok, based on my experience from Eligius, I've seen around 0.008 BTCs per day for every S3.

Now, let's run for a full year (365 days) with all 100 S3s, so the total expected BTCs is 292 BTCs for the first year.

at this moment's price of BTC, that's $140,000

minus cost ($48,000 earlier), so a net profit of $92,000.  Isn't that good income?  and this is only for the first year.  If you run it with another 2 years, you will even make more...

Ok, you will say the difficulty and all, let's make that total BTCs in the first year is not 292, let's cut it down to 260 BTCs for the sake of difficulty.

so, 260 BTCs is worth on today's price $124,800. Deduct the initial costs (the $48,000), that will be  $76,000 NET profit.

Now the BTC price is not constant as we all know, there is a change that it can be $600 or $1,000, and there is a chance that it could go down as well....

Am I missing something?

1) There is no such thing as free electricity.  Somebody is paying for it, or has paid quite a bit of money investing in generation capacity.
2) To run those 100 S3s you're going to need access to a constant supply of at least 50kW of electricity.
3) You need to remove the heat generated by those devices
4) Your calculations are off.  At 10% difficulty increases, at the end of a year you will have made approximately 4BTC profit.  At 15% difficulty increases, you're still 27BTC in the hole at the end of the year.  These assume 0 electricity costs, which I have already addressed in point 1.

[HiSoC8Y]

How is my calculation off? Only 4 BTCs by the end of the year?

[HiSoC8Y]

Before the last increase in the difficulty, how much was it possible to make per day with an S3? Right now, you can make 0.008 per day.

[jonnybravo0311]

How is my calculation off? Only 4 BTCs by the end of the year?

Yes, only 4BTC at the end of the year, and that's assuming 10% increases in difficulty.  Like I wrote, if you assume 15%, you're still trying to recoup your initial investment by year's end (you're at negative 27BTC).

It's simply math and any online calculator worth the name does the calculation for you:

Code:

25 / (Difficulty * 2^32 / hash rate / 86400) = expected earning per day

As that difficulty goes up, your earnings correspondingly go down.

Let's take a look at some real calculations for those 100 S3s (assuming 450GH/s each)...

Earnings per day right now: 25 / (27428630902 * 2^32 / 45000000000000 / 86400) = 0.8251BTC
Earnings per day at next difficulty (10% increase): 25 / (30171493992 * 2^32 / 45000000000000 / 86400) = 0.7501BTC
Earnings per day at next difficulty (10% increase): 25 / (33188643391 * 2^32 / 45000000000000 / 86400) = 0.6819BTC

...

Get it?  Your income goes down every time the difficultly goes up.  Your calculations assumed little to no increase in difficulty.  0.8251 * 365 = 301, you got 292.

EDIT: Let me give you a real world example of decreased earnings.  I received my very first Antminer S1 on 4/2/2014.  I overclocked it to 200GH/s the instant I turned it on.  On 4/2 of this year, that 200GH/s expected to earn me 0.02009BTC a day.  If I still had that S1 today, that very same 200GH/s would expect to earn me 0.003667BTC a day.

[HiSoC8Y]

Aha...

I get it now...so even with free electricity it's not possible to make any profit...

so why are all those huge farms mining still? how can they mine at loss?

[jonnybravo0311]

Aha...

I get it now...so even with free electricity it's not possible to make any profit...

so why are all those huge farms mining still? how can they mine at loss?

Huge farms get hardware at significantly lower rates than a regular consumer can.  KnC, Bitmain, Cointerra, etc all manufacture the hardware as well as run their own farms, as well as sell cloud mining contracts.  They make lots of profit.

[DrG]

Aha...

I get it now...so even with free electricity it's not possible to make any profit...

so why are all those huge farms mining still? how can they mine at loss?

As noted above they are not mining at a loss.  I don't think any company would mine at a loss unless their goal was to claim a loss for taxes by diverting income elsewhere.

If we as end user try to mine with their hardware we mine at a loss.

Bitmain can use it's own in house equipment, KNC can use its own in house equipment, Bitfury can use its own in house equipment.  You can't out-gun your gun dealer since he is the one selling you the weapons    If you look at where the large pools are right now you will find over 50% of the network is controlled by the ASIC manufacturers - that's not good.  Then again the people, including myself, who funded these companies are partially to blame.  The conflict of interest on the company's side is the other fault.

[thefunkybits]

Historically buying Bitcoins has always been more profitable than mining them (especially after the price has corrected from the top of a bubble)

You could spend 1K on a miner now and watch the difficulty eat away at your profits, or you could buy 2 coins and sit on them.

if you spent that $1K on a miner do you think you would be able to mine more than 2 Bitcoins? If not, then simply buying the coins is the better option

[philipma1957]

Historically buying Bitcoins has always been more profitable than mining them (especially after the price has corrected from the top of a bubble)

You could spend 1K on a miner now and watch the difficulty eat away at your profits, or you could buy 2 coins and sit on them.

if you spent that $1K on a miner do you think you would be able to mine more than 2 Bitcoins? If not, then simply buying the coins is the better option

 Historically buying btc occasionally wins over buying gear and mining.

  Take the batch 1 s-3's  sold at 2 for 1.5 btc and if you purchased them you got a coupon or a refund.  so the 1.5 btc was  really only 1.35 btc

So the day I purchased mine I paid  1.35 btc after the adjustment  you paid for 1.35 btc the same day.  THAT DAY WAS JUNE 30

HERE IS THE SALE 
https://blockchain.info/tx/fc58360c81e322871913b48ae1f4c897532129b5d0166c04fd9505733216a532 

coins were 618  I paid 834 for the 2 machines. 


 a coin holder paid the same 834.usd for the 1.35 in coins   well 1.35 coins are worth 648 usd  so a coin holder put up 834 and now has 648   a loss of 186



me a machine buyer I mined 1.10 coins as of today  1.1 x current price of 480 is  528 dollars  I have these in a very cheap power spot they have mined from July 23  up to now power for these is under 3 cents a kwatt  that is  around 50 cents a day or 25 bucks so far   so   take the 528 - 25 = 503 make it 500   .

834 - 500 = a loss of 334 but I have 2 working s-3's

  I did better with the  2 s-3s as selling 2 s-3s today for 300 each would be a breeze.

even if I paid full price for these in power it would 125 not 25.

    so I would be losing 434 today  selling two of these for 300 each would still make profit.  So for batch one buy s-3s was better then holding coins if :

A) power was under  15 cents
B) you had psu's on hand.

even  if   you purchased a psu for 100-120 you still would have made money on the batch 1 s-3s

[DrG]

The batch 1 S3s got jipped a little with the decreased stats but they were rewarded with 2 consecutive minimal increases (as well as coupons or refunds).  I got a couple days out of my S3 and then saw a 21% bump followed by a 15% bump on my S3 B6.  Antminer didn't drop the price with B3-B6 to keep a linear cost compared to difficulty.

[cinnamon_carter]

simple and solid advice

Historically buying Bitcoins has always been more profitable than mining them (especially after the price has corrected from the top of a bubble)

You could spend 1K on a miner now and watch the difficulty eat away at your profits, or you could buy 2 coins and sit on them.

if you spent that $1K on a miner do you think you would be able to mine more than 2 Bitcoins? If not, then simply buying the coins is the better option

[SDRebel]

The greedy manufacturers are the reason mining is not peofitable for most. End of the sad story

[TheJuice]

Ok, you will say the difficulty and all, let's make that total BTCs in the first year is not 292, let's cut it down to 260 BTCs for the sake of difficulty.

Cute. I wish this were the case. That's about the change over 2 weeks. Over last year it would've been 292 ---> 2.92.

[TheJuice]

Historically buying Bitcoins has always been more profitable than mining them (especially after the price has corrected from the top of a bubble)

You could spend 1K on a miner now and watch the difficulty eat away at your profits, or you could buy 2 coins and sit on them.

if you spent that $1K on a miner do you think you would be able to mine more than 2 Bitcoins? If not, then simply buying the coins is the better option

 Historically buying btc occasionally wins over buying gear and mining.

  Take the batch 1 s-3's  sold at 2 for 1.5 btc and if you purchased them you got a coupon or a refund.  so the 1.5 btc was  really only 1.35 btc

So the day I purchased mine I paid  1.35 btc after the adjustment  you paid for 1.35 btc the same day.  THAT DAY WAS JUNE 30

HERE IS THE SALE 
https://blockchain.info/tx/fc58360c81e322871913b48ae1f4c897532129b5d0166c04fd9505733216a532 

coins were 618  I paid 834 for the 2 machines. 


 a coin holder paid the same 834.usd for the 1.35 in coins   well 1.35 coins are worth 648 usd  so a coin holder put up 834 and now has 648   a loss of 186



me a machine buyer I mined 1.10 coins as of today  1.1 x current price of 480 is  528 dollars  I have these in a very cheap power spot they have mined from July 23  up to now power for these is under 3 cents a kwatt  that is  around 50 cents a day or 25 bucks so far   so   take the 528 - 25 = 503 make it 500   .

834 - 500 = a loss of 334 but I have 2 working s-3's

  I did better with the  2 s-3s as selling 2 s-3s today for 300 each would be a breeze.

even if I paid full price for these in power it would 125 not 25.

    so I would be losing 434 today  selling two of these for 300 each would still make profit.  So for batch one buy s-3s was better then holding coins if :

A) power was under  15 cents
B) you had psu's on hand.

even  if   you purchased a psu for 100-120 you still would have made money on the batch 1 s-3s

I still don't understand why people always want to covert to USD.

You paid 1.35 and have earned 1.1. The price doesn't matter except for electricity, and in your post was $25 so about .05 BTCs. So we have 1.1-.05-.1.35 = loss of 0.3.

So so far you are in the hole 0.3 BTCs, but have 880 GHash of mining power. Which would have been the same regardless of BTC/USD price.

[philipma1957]

Historically buying Bitcoins has always been more profitable than mining them (especially after the price has corrected from the top of a bubble)

You could spend 1K on a miner now and watch the difficulty eat away at your profits, or you could buy 2 coins and sit on them.

if you spent that $1K on a miner do you think you would be able to mine more than 2 Bitcoins? If not, then simply buying the coins is the better option

 Historically buying btc occasionally wins over buying gear and mining.

  Take the batch 1 s-3's  sold at 2 for 1.5 btc and if you purchased them you got a coupon or a refund.  so the 1.5 btc was  really only 1.35 btc

So the day I purchased mine I paid  1.35 btc after the adjustment  you paid for 1.35 btc the same day.  THAT DAY WAS JUNE 30

HERE IS THE SALE  
https://blockchain.info/tx/fc58360c81e322871913b48ae1f4c897532129b5d0166c04fd9505733216a532  

coins were 618  I paid 834 for the 2 machines.  


 a coin holder paid the same 834.usd for the 1.35 in coins   well 1.35 coins are worth 648 usd  so a coin holder put up 834 and now has 648   a loss of 186



me a machine buyer I mined 1.10 coins as of today  1.1 x current price of 480 is  528 dollars  I have these in a very cheap power spot they have mined from July 23  up to now power for these is under 3 cents a kwatt  that is  around 50 cents a day or 25 bucks so far   so   take the 528 - 25 = 503 make it 500   .

834 - 500 = a loss of 334 but I have 2 working s-3's

  I did better with the  2 s-3s as selling 2 s-3s today for 300 each would be a breeze.

even if I paid full price for these in power it would 125 not 25.

    so I would be losing 434 today  selling two of these for 300 each would still make profit.  So for batch one buy s-3s was better then holding coins if :

A) power was under  15 cents
B) you had psu's on hand.

even  if   you purchased a psu for 100-120 you still would have made money on the batch 1 s-3s

I still don't understand why people always want to covert to USD.

You paid 1.35 and have earned 1.1. The price doesn't matter except for electricity, and in your post was $25 so about .05 BTCs. So we have 1.1-.05-.1.35 = loss of 0.3.

So so far you are in the hole 0.3 BTCs, but have 880 GHash of mining power. Which would have been the same regardless of BTC/USD price.

 I used usd because I was showing buy and hold on the day of June 30th 2014  is losing out to buying 2 s-3s on that day.

If I go your route and stay in coins the coin buyer holder is at 1.35 coins .  I am at 1.05 coins after power  so I have .3 less coins then the buy and hold guy.  I also have 2 s-3's which I can sell today for 1 coin easy   so I am at plus .7 btc    and the buy and hold guy is at 0 btc up or down.

So in the case of the batch 1 the ants were a good deal much better then buy and hold.  I would say 2 btc vs 1.35 btc    staying completely in btc.  and accounting for power spent.

My pair had very low power cost if it were normal NJ rates I would be at 1.8btc after power costs and sale of the 2 s-3s . While the buy and hold person is at 1.35 btc.

[Mabsark]

I did better with the  2 s-3s as selling 2 s-3s today for 300 each would be a breeze.

I seriously doubt it unless you find a complete moron. A brand new S3 and a brand new PSU would only cost you $320. I think you'd be lucky to get $200 for the S3s.

[philipma1957]

I did better with the  2 s-3s as selling 2 s-3s today for 300 each would be a breeze.

I seriously doubt it unless you find a complete moron. A brand new S3 and a brand new PSU would only cost you $320. I think you'd be lucky to get $200 for the S3s.

http://www.ebay.com/sch/i.html?_from=R40&_sacat=0&_mPrRngCbx=1&_udlo=275&_udhi=325&_nkw=antminer+s-3&rt=nc&LH_BIN=1


the lowest 4 on ebay range from 325 to 344

batch 9 on bitmaintech is not open and has no price

https://www.bitmaintech.com/productDetail.htm?pid=000201409100729132701XzQIXcc06AB

So you are pretty off with your numbers

zoom hash 349 plus shipping
http://zoomhash.com/products/antminer-s3

show me a seller that sells an s-3 for 280 with no psu

[Mabsark]

I did better with the  2 s-3s as selling 2 s-3s today for 300 each would be a breeze.

I seriously doubt it unless you find a complete moron. A brand new S3 and a brand new PSU would only cost you $320. I think you'd be lucky to get $200 for the S3s.

http://www.ebay.com/sch/i.html?_from=R40&_sacat=0&_mPrRngCbx=1&_udlo=275&_udhi=325&_nkw=antminer+s-3&rt=nc&LH_BIN=1


the lowest 4 on ebay range from 325 to 344

Like I said, you'd have to find a complete moron. They're only $270 USD directly from Bitmain's official site. The top ebay link costs $325 + $121.65 shipping, for 10th of October delivery. 

[eoakland]

because it's a love hate relationship.  you get a miner, and a week later you are paying more in electrical than it actually makes mining (perhaps i am fibbing with the 1 week part, but it feels like it).  if you are not prepared to be active in modding, upgrading, tweaking your HW--home mining is not for you.  that's part of the love/hate relationship with mining. 

[philipma1957]

I did better with the  2 s-3s as selling 2 s-3s today for 300 each would be a breeze.

I seriously doubt it unless you find a complete moron. A brand new S3 and a brand new PSU would only cost you $320. I think you'd be lucky to get $200 for the S3s.

http://www.ebay.com/sch/i.html?_from=R40&_sacat=0&_mPrRngCbx=1&_udlo=275&_udhi=325&_nkw=antminer+s-3&rt=nc&LH_BIN=1


the lowest 4 on ebay range from 325 to 344

Like I said, you'd have to find a complete moron. They're only $270 USD directly from Bitmain's official site. The top ebay link costs $325 + $121.65 shipping, for 10th of October delivery. 

bitmain'S official site does not have them up for sale  .

SO ONCE AGAIN SHOW ME A LINK FOR A NEW MINER AT 280.

[Mabsark]

bitmain'S official site does not have them up for sale  .

SO ONCE AGAIN SHOW ME A LINK FOR A NEW MINER AT 280.

ANTMINER S3+ -B8
Speed:    453 GH/s
Price:      0.58 BTC

https://www.bitmaintech.com/productDetail.htm?pid=00020140813125800214NBU85kWt0672

0.58 BTC * 478 USD/BTC = 277.24 USD

That's how much batch 8 S3s officially cost and batch 9 S3s will likely cost less and start shipping in October.

[jonnybravo0311]

bitmain'S official site does not have them up for sale  .

SO ONCE AGAIN SHOW ME A LINK FOR A NEW MINER AT 280.

ANTMINER S3+ -B8
Speed:    453 GH/s
Price:      0.58 BTC

https://www.bitmaintech.com/productDetail.htm?pid=00020140813125800214NBU85kWt0672

0.58 BTC * 478 USD/BTC = 277.24 USD

That's how much batch 8 S3s officially cost and batch 9 S3s will likely cost less and start shipping in October.

I think the point is that you cannot order either the batch 8 or batch 9 units at this time.  Yes, the officially listed price is 0.58BTC for the batch 8 units, and it's very likely the batch 9 units will be priced lower; however, since you can't actually order one, the price is kind of irrelevant.  If you want an S3 right now, you're going to have to find a reseller, or a private sale - and those prices are going to be higher than what Bitmain lists.

[bomb177]

I have tried with cloud mining but couldn't earn anything with it.

[Mabsark]

I think the point is that you cannot order either the batch 8 or batch 9 units at this time.  Yes, the officially listed price is 0.58BTC for the batch 8 units, and it's very likely the batch 9 units will be priced lower; however, since you can't actually order one, the price is kind of irrelevant.  If you want an S3 right now, you're going to have to find a reseller, or a private sale - and those prices are going to be higher than what Bitmain lists.

The units linked to aren't shipping now either though and there's the chance you might not even receive anything from a "reseller". Buying overpriced miners from ebay and similar sites is just a bad idea.

[jonnybravo0311]

I think the point is that you cannot order either the batch 8 or batch 9 units at this time.  Yes, the officially listed price is 0.58BTC for the batch 8 units, and it's very likely the batch 9 units will be priced lower; however, since you can't actually order one, the price is kind of irrelevant.  If you want an S3 right now, you're going to have to find a reseller, or a private sale - and those prices are going to be higher than what Bitmain lists.

The units linked to aren't shipping now either though and there's the chance you might not even receive anything from a "reseller". Buying overpriced miners from ebay and similar sites is just a bad idea.

I completely agree.  I was just pointing out that if you wanted to purchase an S3 right now your only option is to go with a private sale, either through ebay or some other channel.  Both cases would lead you to pay a higher price than what Bitmain lists the units.  Supply and demand and all that. 

[BTCish]

So when would S4 miners will be announced  ?