IS IT WORTH IT TO INCREASE THE SIZE OF YOUR FARM?

[Korbman]

That break even period was for someone who stopped at the number of rigs I mentioned in the beginning of this forum.

That's the beauty of these kinds of calculations; when brought down to just the hardware, power costs, and network difficulty, the math scales. If you buy a mining rig for $1 with a breakeven of 100 days, you can buy 100 rigs and expect the same breakeven time frame.

However, this isn't the reality of the situation, because as you scale up you'll have additional expenses (cooling, space, insurance, and everything else already noted here). In other words, 1 rig @ 100 days BE != 100 rigs @ 100 days BE. The only way equal scaling is possible is if the hardware discount received (when buying in bulk) is equal to the expenses generated by scaling up the operation.

I'm wanting much more that what was mentioned at the beginning of the forum. 

That may be true, but you're not seeing all of the major problems that come with buying more gear. You're plan is to start off running equipment in your 312.5ft² recreation room, which would be outfitted with enough power capacity to run a small neighborhood, and cooled only by several exhaust fans. Even if you moved everything to a 1000ft² attic, that's still an absolutely terrible idea.

I'm buying my rigs at a discount!  Meaning what I paid in my electric bill for kWH's to get the BTC needed for another unit is how much I actually paid for that new unit.

You do agree with that don't you?

Perhaps it's the phrasing of that sentence, but no, I do not agree.

[dmwardjr]

That break even period was for someone who stopped at the number of rigs I mentioned in the beginning of this forum.

That's the beauty of these kinds of calculations; when brought down to just the hardware, power costs, and network difficulty, the math scales. If you buy a mining rig for $1 with a breakeven of 100 days, you can buy 100 rigs and expect the same breakeven time frame.

However, this isn't the reality of the situation, because as you scale up you'll have additional expenses (cooling, space, insurance, and everything else already noted here). In other words, 1 rig @ 100 days BE != 100 rigs @ 100 days BE. The only way equal scaling is possible is if the hardware discount received (when buying in bulk) is equal to the expenses generated by scaling up the operation.

I'm wanting much more that what was mentioned at the beginning of the forum.

That may be true, but you're not seeing all of the major problems that come with buying more gear. You're plan is to start off running equipment in your 312.5ft² recreation room, which would be outfitted with enough power capacity to run a small neighborhood, and cooled only by several exhaust fans. Even if you moved everything to a 1000ft² attic, that's still an absolutely terrible idea.

I'm buying my rigs at a discount!  Meaning what I paid in my electric bill for kWH's to get the BTC needed for another unit is how much I actually paid for that new unit.

You do agree with that don't you?

Perhaps it's the phrasing of that sentence, but no, I do not agree.

Fair enough.  It's a free world on the internet.  For most anyways.

You are entitled to your opinion on this free internet forum.  Let others who read decide.

[dropt]

You are entitled to you opinion on this free internet forum.

Here's another of my opinions.  If you're seriously interested in owning 100+ TH of mining equipment, strongly consider colocation.

Ex: http://toom.im/

They'll be slightly more per kW per month than you'd be paying in straight power, but you won't have any of the headaches of a large farm in your house, which there are many.

[dmwardjr]

That break even period was for someone who stopped at the number of rigs I mentioned in the beginning of this forum.

That's the beauty of these kinds of calculations; when brought down to just the hardware, power costs, and network difficulty, the math scales. If you buy a mining rig for $1 with a breakeven of 100 days, you can buy 100 rigs and expect the same breakeven time frame.

However, this isn't the reality of the situation, because as you scale up you'll have additional expenses (cooling, space, insurance, and everything else already noted here). In other words, 1 rig @ 100 days BE != 100 rigs @ 100 days BE. The only way equal scaling is possible is if the hardware discount received (when buying in bulk) is equal to the expenses generated by scaling up the operation.

"Cooling" - That's the beauty of scaling up during the winter; as it is at present!

space - I've already shown you I have PLENTY of extra space [12.5' x 25' x 8' = 2,500 Cubic Feet (CF)] in a room downstairs that my family never uses.  Our family room is 18' x 22' x 8' = 3,168 Cubic Feet (CF).  That is where we spend the majority of our time as a family during the winter months.  We would rather be outside most of the time during the warmer months.

insurance Even if one needed to add their equipment on their home owners insurance, the costs are miniscule annually.  I have a business out of my home that has insurance on equipment in my office in the event of burglary, fire, etc.  The insurance is miniscule annually.  It's not a bad idea for anyone to have important documents, receipts, etc... in a fire safe in their home and/or safety deposit box to show support for the costs of equipment to insurance when filing a claim in the event of a catastrophe.  

In other words, 1 rig @ 100 days BE != 100 rigs @ 100 days BE. The only way equal scaling is possible is if the hardware discount received (when buying in bulk) is equal to the expenses generated by scaling up the operation.

Tell me something:

WHY can't rigs #1 - #16 with Air Conditioner, 14 inch exhaust fan, PDU's, Cords, supplies to build shelves, outlets, 10/2 wiring, etc. @ $5,200.00 be put off at a later date for pay off?

WHY can't I just pay power costs ($364.00) [Like I did the first time] to purchase an S4?  Then my number of days till payoff STARTS OVER at the date I purchased the S4 with the BTC I earned?  Also, my investment has increased from $5,200.00 to $5,564.00.  Actually, my pay off will be SOONER because:

#1 - I purchased the S4 at a discount.
#2 - I have more hashing power with the S4 and able to pay off in LESS TIME.  Only my pay off starts over from the date of purchase of the S4.

I'm about to order THREE (3) more S4's with cash and btc, all before the end of this month (November 30th) and my 118 days STARTS OVER (November 14)?  I have three (3) $400.00 OFF COUPONS OF S4 in my Bitmaintech.com account.  I have 1.4 BTC in my wallet earned since my purchase of that 1st S4.  I will end up mining at least another .6 BTC to 1.2 BTC before November 30 to put towards the purchase of those three S4's @ $850.00 each.  

The power costs used since ordering and receiving that S4 (Oct. 17) until Nov. 17 is 31 days x 24 hours = 744 hours:

Air Conditioner is off in the closet at 0 watts x 744 hours = $    0.00
16 S3's at 370 watts each [5,920 watts] + 232 watts for 14" exhaust fan [6,152 watts used from Oct. 17 to Nov. 14 = 28 days] =  $359.52 at .08 per kWH
S4 @ 1400 watts from Nov. 14 to Nov. 17 = $6.21 at .08 per kWH
Total power costs from Oct. 17 to Nov. 17 = $365.73 at .08 per kWH  [My billing cycle ends on the 17th of every month]
Power costs each day with 1 S4 and 16 S3's - $365.73 divided by 30.3 average days each month = $12.07 per day power costs at .08 kWH

Nov. 17 to Nov. 30 = 13 days x $12.07 per day = $156.91 + $365.73 from the previous 30 days = $522.64 that will have been spent on power costs up till I add 3 more S4's @ $850.00 + $140 shipping = $990.00each.

I will have approximately 2.0 BTC to put towards the purchase of 3 S4's totaling $2,970.00 + $5,564.00 = $8,534.00 yet to be paid off.

16 S3's @ 7.4 Th/s = 4 S4's @ 8 Th/s = 15.4 Th/s

ALSO:

16 S3's @ 5,290 watts + 4 S4's @ 5,600 watts = 10,290 watts + 230 watts for 14 inch exhaust fan = 10,510 watts @ .08 kWH = $614.20 power costs per 30.3 day period.

With BTC @ $391.65 presently and the difficulty at the next projected level of 40,658,945,677 the profit after power costs per 30.3 day period = $1,610.39





Yes, the difficulty will go up every couple of weeks.  However, what if the price of bitcoin goes up as well?  The projections of professional analysts at https://whaleclub.jit.su/posts see BTC getting as high as $650.00 US by May or June.  They are projecting BTC to be approximately $425 over the next couple of days if it maintains it's bullish mood.  I'm showing one profitability chart at $391.65 with 40,658,945,677 difficulty (above) and the second profitability chart at $425.00 with the same projected next difficulty.  The projected payoff period is approximately 156 days.  However, this is an estimate.  BTC could go up significantly or down significantly.  I'm betting on up significantly.  If down, then down a little.



If one doubts this profitability based on this chart, lets look at it another way:



Revenue on Eligius Pool with 15.43 Th/s is 0.19597313 BTC per day [Look in top right hand corner].  I've mined their off and on and my 7.4 Th/s got a little better than their projected 0.09 per day. because of luck.  So, these stats are legitimate.

IF I mined at Eligius Pool with 15.43 Th/s and brought in a projected revenue of .19597313 BTC per day, that would be 5.93798584 BTC  [$2,325.61 w/BTC @ $391.65] if multiplied by 30.3 days on average in a month at present difficulty.

$2,325.61 - $614.20 power costs = $1,711.41 at present difficulty.  That is $88.00 less than the Profitability calculator over a 30.3 day period.  

I say the calculator is not a bad tool to determine projected profits and how long to pay off equipment.  If I was to stop right here and not add any more equipment, it would take 156 days to pay off POSSIBLY.  It could be less it could be more.  WHY?  Depends on how much difficulty goes up or down AND it depends on how much the price of BTC goes up or down.  

If difficulty increased 2% the next change and the price of bitcoin increased 6% from the previous difficulty change to the present difficulty change, we could take off 4% in days from our pay off length.  Of course this would be done each time the difficulty changes.  Of course, we would take add to the number of days till pay off if the percentage of the price of BTC was less than the percentage of the difficulty increase or decrease.  It's possible they could both decrease.  Yet, more days are tacked on to pay off period because the price of BTC [percentage wise] decreased more than the difficulty [percentage wise].

You can agree or disagree with my calculations.  That is fine.  Let the readers decide.

By the way,  I had completely different costs with 19.2 Th/s and lower difficulty factored in at the beginning of this forum.  Also, the price of BTC at the beginning of this forum was more than what it is now.  I'm using the calculations of what the price is NOW and what the NEXT projected difficulty will be according to Bitcoinwisdom.com.  So, the reason the pay off period is more than what was seen previously at the beginning of this forum is because the complete investment costs were not inputted and the price of BTC was more then than what it is now [2 days later].

[dmwardjr]

ALSO #1:

If one wants to SHORTEN THEIR PAY OFF PERIOD, simply don't buy more equipment for how ever many days you want to eat off of the pay off period.  Save your money, trade on the exchange with your earnings or whatever you want to do with it.

Once your BTC is converted into fiat and fiat is hand, do whatever you want to do with it.  You earned it.  It's up to us what we want to do with it.

ALSO #2:

At present I have 9.4 Th/s.  You see my total costs of hardware at this point in time entered in the proper place.  You see the hash rate and price of BTC at $425.00.  You also see the difficulty set to the projected next difficulty.  The difficulty is the same in both calculation charts you will see below.  The BTC price is the same.  The hash rate and cost of equipment is what is different.

YOU WILL NOTICE THE HARDWARE BREAK EVEN PERIOD IS LESS [180 days vs. 156 days] WITH MORE EQUIPMENT RATHER THAN LESS EQUIPMENT.

This would be another reason to argue it is worth getting more equipment IF you can get it at a good price and it's power consumption is low.

[dmwardjr]

You are entitled to you opinion on this free internet forum.

Here's another of my opinions.  If you're seriously interested in owning 100+ TH of mining equipment, strongly consider colocation.

Ex: http://toom.im/

They'll be slightly more per kW per month than you'd be paying in straight power, but you won't have any of the headaches of a large farm in your house, which there are many.

I see $80 per kW for 12 months and $99 for 1 month.  First off, this leads me to believe $80 per month for 12 months OR $99 for just 1 month per kW.  Is that right?

I'm lead to believe people will send there equipment to you to let you use it to mine for them?

[dropt]

I see $80 per kW for 12 months and $99 for 1 month.  First off, this leads me to believe $80 per month for 12 months OR $99 for just 1 month per kW.  Is that right?

$80 per kW if you sign a one-year term if I understand correctly. $99 if you just want to have a month-to-month deal.

I'm lead to believe people will send there equipment to you to let you use it to mine for them?

It's not my operation, but you can message one of the owners here under "jtoomim".  I assume you have the HW shipped to them, they install it in their racks, plug it in and set it up on their network.  Then, you either provide them with the pool and worker credentials and they'll configure your HW to mine for you, or they'll allow you to access the equipment yourself to manage it remotely via IP.  All they're doing is leasing you space and power in their data centre.

[dmwardjr]

Okay,

Thanks for the info.

It's an option to consider if I want to go beyond the limits the power company limits me to. 

Please forgive me for using foul language towards you earlier.  My apologies!  I would rather have one be a little more tactful at trying to convince me though.  Doesn't mean I'm trying to justify my language towards you by no means.  No one deserves to be cursed out even if I think that someone might be disrespectful or condescending in their word or phrase choices.  I still need to work on my temper a bit...

I'm pretty sure the power company will give me 600 AMPS at my meter.  They will wonder if it is a business ran out of the home because of the amount of power I'm requesting.  I'm sure I will need to convince them it's not a business and it's for personal use with bitcoin mining.  They charge a business almost twice as much for power than they do a residence.  They will wonder if I'm running a business out of my home.  I do have a business I run out of my home.  However, this bitcoin mining is for myself and I'm not writing off anything I've spent for business expenses.

Again, thank you for the info and it's something to consider.

Regards,

David

[dmwardjr]

You did help me double check myself to determine the safest way to wire up everything depending on what the power company will give me.

I was thinking out loud, more or less, in my aspirations to mine bitcoin.  The Th/s I wanted at first would have required 700 AMPS minimum.  After going to my power company's website, i know they are going to limit me to 600 AMPS at a residence.  Only under unusual circumstances will they put more than 600 AMPS at a residence.  Saying the residence is 20,000 square feet, which would require a transformer service installed next to the home.

Thanks again for getting me to do some research on my power company's rules and regulations regarding a residence and getting me to double check how many S4's I would have on each circuit to achieve maximum hashing power in the safest way possible.

[philipma1957]

don't come close to 600 amps.

I worked for the IRS 6 or 7 years.  My mom worked for them 29 years my wife worked for them 33 years.

I mine and claim as a small business since I make a profit. i run about 5k watts as i type about  7th

If you ramp up to 600 amps and use 400 amps  mining it will be considered a sole proprietor  schedule c   business.

Stay under 400 to 600 a month in power.

all the money you would buy gear with don't so this instead.  if you buy an s-4 for 3 coins buy 4 coins from your coin dealer.  I use coinbase.

you will be more diverse and  less likely to attract attention from your power company.

[dmwardjr]

don't come close to 600 amps.

I worked for the IRS 6 or 7 years.  My mom worked for them 29 years my wife worked for them 33 years.

I mine and claim as a small business since I make a profit. i run about 5k watts as i type about  7th

If you ramp up to 600 amps and use 400 amps  mining it will be considered a sole proprietor  schedule c   business.

Stay under 400 to 600 a month in power.

all the money you would buy gear with don't so this instead.  if you buy an s-4 for 3 coins buy 4 coins from your coin dealer.  I use coinbase.

you will be more diverse and  less likely to attract attention from your power company.

Thumbs up!

Thank you

Have a business!  It's incorporated!  I'm a contractor out of my home training telephone technicians.  I also do various other things for profit with my business out of my home.  My company bought the rigs.  The rigs are written off as an expense [with depreciation over time of course].  The power consumed by the rigs is written off as an expense.  No need to go any further about what I'm doing regarding taxes for my company's mining rigs.  By the way, my wife is an accountant.

Just wanting to stay in my house with my company's rigs.  Power costs are double for a business in a commercial building.  That's the main reason I want to remain in my house.  I might go as far as to have a 2nd structure built on my property to house rigs and have a service transformer installed by the power company in the back yard next to the 2nd structure.

.08 for residential versus .15 for business

.097 for residential versus .158 for business from October to May; after you tack on taxes and fees.

.12 for residential versus .18 for business from June to September; after you tack on taxes and fees.
 

[Argwai96]

YOU WILL NOTICE THE HARDWARE BREAK EVEN PERIOD IS LESS [180 days vs. 156 days] WITH MORE EQUIPMENT RATHER THAN LESS EQUIPMENT.

Both of these calculations make certain assumptions about both price and difficulty (and electric cost). If any of them are wrong to your disadvantage then your profitability will be less and potentially negative; as a result you will need to take on additional risk in order to shorten your ROI timeframe

[dmwardjr]

YOU WILL NOTICE THE HARDWARE BREAK EVEN PERIOD IS LESS [180 days vs. 156 days] WITH MORE EQUIPMENT RATHER THAN LESS EQUIPMENT.

Both of these calculations make certain assumptions about both price and difficulty (and electric cost). If any of them are wrong to your disadvantage then your profitability will be less and potentially negative; as a result you will need to take on additional risk in order to shorten your ROI timeframe

Agreed.

This is based off my electric costs.  Yes, it assumes btc price in relation to diff will make mining REMAIN profitable.  That's why I also pointed out keeping up with the percentage difficulty goes up or down in relation to price of btc goes up or down.  This should be done every time the diff changes to determine profitability and time remaining on ROI.  


One should have already done calculations to determine if it is profitable for THEM to mine before getting into it for a profit.  Once one determines if it is profitable for them; based off electric costs, speculation of price of btc, difficulty and hashing power; they should then keep tabs with each time the diff changes in relation to btc price changes.  This, in turn, can also determine how many days they can take off or add to their ROI.

How much time one adds to or takes off from their "break even" date not only concerns the percentage Difficulty and Price of BTC goes up and/or down; it also involves what was the price of BTC when and/or if they convert to fiat.  Several things come into play when coming up with those percentages to determine how much time one adds to or takes off from their "break even" date.

Also, I understand why one who is involved with advertising CLOUD MINING would want to try to shoot down those who would advocate investing into their own equipment; versus your equipment through the cloud.