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Author Topic: Is rig building still profitable?  (Read 39988 times)
zimpixa
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May 20, 2011, 02:37:53 PM
 #21

to answer the initial question: yes, it is.

let's say you only get 2x5850 (not 5870s) for $800,
2 5850s get around 700MHash/s and the rig will need ~375W (probably less, but let's just be sure),
at (very expensive) $0.3 per kW/h you'll pay $2.7 per day
at current difficulty the expected average output is 2.88BTC per day,
at current market rates (of roughly $6.5) that's $18.72 per day.

$18.72 - $2.7 == $16.02 per day
16 / 800 == 2% ROI per day

show me an investment opportunity that pays you 2% per day and i'll join it.

Actually, I did calculations too and:
Today Im earning 23$ per day (after paying bills) then +35% difficulty
In 10 days - 16,1 $ then +30% difficulty
In 20 days - 11,5 $ then +25% difficulty
In 30 days - 8,3 $
After 40 days  ~600$
After 60 days ~713$ (few more difficulty rises)
I just assume that price wont change and Im good in predicting difficulty rise.

To get 23$ per day with current difficulty you need to have around 3.8 BTC per day, which gives 920Mhash/s (3x 5850)

If the price stays at 6.8$ most prolly u wont get back your cash, so your investment is risky.

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gat3way
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May 20, 2011, 02:51:06 PM
 #22

Nope. Stop building rigs!
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May 20, 2011, 03:02:48 PM
 #23

Rig building is still profitable and my guess is this will still be the case for some time. The problem is your returns will keep diminishing so you'll face an ever slowing ROI. It's hard to say how long it will take for you to recoup your investment, but with such a small sum I don't think it will be longer than 6 to 8 weeks. The last difficulty jump was huge but the next ones are bound to be a little smaller, if you take some history into consideration. There was an investment calculator spreadsheet floating around on the forum...

Keep in mind though that at any one time somebody can plug the giant cock of doom into the grid and screw us all with 3 THps jizz rates.


As a side note, if it's just gains that interest you, I think (and most people here seem to agree on this) that you'll be far better off by simply buying bitcoins for those money. With the grid hash speed being what it is now it's safe to say that BTC production will slow down eventually and judging by its growing popularity, prices will climb quite a bit more. It's your call though.

Ha, best description ever. All the replies post this were just people talking to hear themselves.
Though I disagree with the buying coins bit, excepting that it helps grow the bitcoin pool o' cash which will help keep it alive.
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May 20, 2011, 03:06:01 PM
 #24

I just assume that price wont change and Im good in predicting difficulty rise.
why do you predict the difficulty to continually rise, if the price doesnt change at all?
the price will change.

i won't and can't predict the future,
i just don't know, what the difficulty will be in 10, or 20, or 30 days
and i also don't know, what the price will be in 10, or 20, or 30 days, maybe it's more, maybe less than today.

it is profitable now and the last year has shown, that price and difficulty will catch up on eachother,
right now, the price leads the way, and difficulty follows, it might be the other way around in 2weeks.

it's always the same with every single difficulty jump,
everytime people start complaining that mining isnt profitable anymore,
fact is, it's more profitable today (at a higher difficulty), than it was a few weeks ago (at lower difficulty) due to the fact, that the price is so incredible high.

let it be a bit less profitable next week, or next month,
i won't care, less profit is still profit.

JJG
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May 20, 2011, 03:12:48 PM
 #25

to answer the initial question: yes, it is.

let's say you only get 2x5850 (not 5870s) for $800,
2 5850s get around 700MHash/s and the rig will need ~375W (probably less, but let's just be sure),
at (very expensive) $0.3 per kW/h you'll pay $2.7 per day
at current difficulty the expected average output is 2.88BTC per day,
at current market rates (of roughly $6.5) that's $18.72 per day.

$18.72 - $2.7 == $16.02 per day
16 / 800 == 2% ROI per day

show me an investment opportunity that pays you 2% per day and i'll join it.

Keywords: at current difficulty rates.

The OP admitted that the rig won't be up and running for another 1.5 weeks, at which point the bitcoin system will already be into the next difficulty. Therefore, none of your numbers apply to anything the OP will see.

Some times I can't tell if people forget about the rising difficulty, or just choose to ignore it because the numbers are so much better if you do. Thanks to the members here who keep pointing this out. Note that most of the projections here that take rising difficulty into account have the OP breaking even at some time in the future (2-3 months), at which point the difficulty will be so high that income will be a trickle. The only profit you're likely to see is from selling your hardware after the fact, but remember that plenty of other people will be eager to unload their ATI cards by then. That's a far cry from all of the claims that mining is 'very profitable' still.
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May 20, 2011, 03:32:18 PM
 #26


Keywords: at current difficulty rates.

The OP admitted that the rig won't be up and running for another 1.5 weeks, at which point the bitcoin system will already be into the next difficulty. Therefore, none of your numbers apply to anything the OP will see.

Some times I can't tell if people forget about the rising difficulty, or just choose to ignore it because the numbers are so much better if you do. Thanks to the members here who keep pointing this out. Note that most of the projections here that take rising difficulty into account have the OP breaking even at some time in the future (2-3 months), at which point the difficulty will be so high that income will be a trickle. The only profit you're likely to see is from selling your hardware after the fact, but remember that plenty of other people will be eager to unload their ATI cards by then. That's a far cry from all of the claims that mining is 'very profitable' still.
yeah, it has always been that way
and you always tell people, they shouldn't invest into new rigs,
yet those that do made profit and probably already paid off their new rigs.

very strange that mining for me has always been like "assuming difficulty rises, but price doesnt, it might become non-profitable in about 3months",
it was like that in october, when i bought my first ATI card, it was exactly the same when i bought the second card in december,
it was still the same when i bought 2 other cards in february and again 2 cards about 2-3weeks ago, everytime i had at least 3month in profit assuming the price doesnt rise at all.

and guess what?
today that same (pessimistic) calculation tells me, that mining might become non-profitable around september,
so the risk to take isn't any bigger than it was half a year ago.

but we all know why you tell everyone not to invest in rigs.  Wink

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May 20, 2011, 03:36:24 PM
 #27

The last difficulty jump was huge but the next ones are bound to be a little smaller, if you take some history into consideration.

That isn't a safe assumption at all.  The next difficulty level is going to be a doozy.  If the difficulty level were to increase today it would already be at 330,000.  And it just increased to 244,139, what, two days ago?  When the time for the next difficulty level increase comes you are going to be shocked by how much it has risen.  It's effectively already gone up 35% just in the past few days.
zimpixa
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May 20, 2011, 03:50:48 PM
 #28

Estimate difficulty is around 326,000 right now only because:

Average network hashrate on last difficulty level: 1.8 Thash/s
Average network hashrate on last difficulty level: 2.1 THash/s
But, hashrate at end of last 'jump' : 2.1 Thash/s
Means that difficulty is based on average performance on network, so even if performance is not changing, next jump can be huge.

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May 20, 2011, 04:04:17 PM
 #29

I just assume that price wont change and Im good in predicting difficulty rise.
why do you predict the difficulty to continually rise, if the price doesnt change at all?
the price will change.


Yes.  But everyone thinks that means it will go up, but in reality it has gone down. 

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May 20, 2011, 04:06:25 PM
 #30

How are you planning on achieving 1.5 Ghash/sec with an $800 budget?

5870's are $250 apiece at the moment and each only get around 350 Mh/s and are one of the most cost efficient GPUs at the moment. Even 3 of them would not get 1.5 Ghas / sec and that's not including the substantial cost of the rest of the equipment that goes with a computer.
you can get 5850 for less than $150, and they hash at 250-300 MH/s, even 400MH/s if it's overclocked (convery did it).

It is pitch black. You are likely to be eaten by a grue.

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May 20, 2011, 04:47:43 PM
 #31

to answer the initial question: yes, it is.

let's say you only get 2x5850 (not 5870s) for $800,
2 5850s get around 700MHash/s and the rig will need ~375W (probably less, but let's just be sure),
at (very expensive) $0.3 per kW/h you'll pay $2.7 per day
at current difficulty the expected average output is 2.88BTC per day,
at current market rates (of roughly $6.5) that's $18.72 per day.

$18.72 - $2.7 == $16.02 per day
16 / 800 == 2% ROI per day

show me an investment opportunity that pays you 2% per day and i'll join it.

you are missing the time you put into setting up and watching the rig. that is gonna be a couple of long days work depending on your experience. if you would work for money and buy bitcoins you would be much better off. so the question is: how much fun is it for you to play with the rig?


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May 20, 2011, 04:51:30 PM
 #32

to answer the initial question: yes, it is.

let's say you only get 2x5850 (not 5870s) for $800,
2 5850s get around 700MHash/s and the rig will need ~375W (probably less, but let's just be sure),
at (very expensive) $0.3 per kW/h you'll pay $2.7 per day
at current difficulty the expected average output is 2.88BTC per day,
at current market rates (of roughly $6.5) that's $18.72 per day.

$18.72 - $2.7 == $16.02 per day
16 / 800 == 2% ROI per day

show me an investment opportunity that pays you 2% per day and i'll join it.

you are missing the time you put into setting up and watching the rig. that is gonna be a couple of long days work depending on your experience. if you would work for money and buy bitcoins you would be much better off. so the question is: how much fun is it for you to play with the rig?
Two long days to set up a rig?  Good lord, I don't think it's ever taken me that long.  My first build took all of 3 hours to put together, and the most recent ones have been done in under an hour.  Install OS, install drivers, ready to go in under 2.

Anyone who takes two long days to put together a computer really shouldn't be putting them together to start with.
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May 20, 2011, 05:11:40 PM
 #33

to answer the initial question: yes, it is.

let's say you only get 2x5850 (not 5870s) for $800,
2 5850s get around 700MHash/s and the rig will need ~375W (probably less, but let's just be sure),
at (very expensive) $0.3 per kW/h you'll pay $2.7 per day
at current difficulty the expected average output is 2.88BTC per day,
at current market rates (of roughly $6.5) that's $18.72 per day.

$18.72 - $2.7 == $16.02 per day
16 / 800 == 2% ROI per day

show me an investment opportunity that pays you 2% per day and i'll join it.

you are missing the time you put into setting up and watching the rig. that is gonna be a couple of long days work depending on your experience. if you would work for money and buy bitcoins you would be much better off. so the question is: how much fun is it for you to play with the rig?
Two long days to set up a rig?  Good lord, I don't think it's ever taken me that long.  My first build took all of 3 hours to put together, and the most recent ones have been done in under an hour.  Install OS, install drivers, ready to go in under 2.

Anyone who takes two long days to put together a computer really shouldn't be putting them together to start with.

well yeah, SgtSpike - two hours is about right.

but everybody has to start somewhere.  took me a couple of days to build out my first 286.  getting that CGA card to work was a bitch - i wonder how many milli-hashes/sec it would have done...?
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May 20, 2011, 05:28:03 PM
 #34

yeah, it has always been that way
and you always tell people, they shouldn't invest into new rigs,
yet those that do made profit and probably already paid off their new rigs.

very strange that mining for me has always been like "assuming difficulty rises, but price doesnt, it might become non-profitable in about 3months",
it was like that in october, when i bought my first ATI card, it was exactly the same when i bought the second card in december,
it was still the same when i bought 2 other cards in february and again 2 cards about 2-3weeks ago, everytime i had at least 3month in profit assuming the price doesnt rise at all.

and guess what?
today that same (pessimistic) calculation tells me, that mining might become non-profitable around september,
so the risk to take isn't any bigger than it was half a year ago.

but we all know why you tell everyone not to invest in rigs.  Wink


Quite an absurd comparison. I never said buying a mining rig or hardware was unprofitable back in October, or in December, or in February. 2-3 weeks ago I said that the only way buying mining hardware would be profitable is if exchange rates went up, and sure enough they did. Of course, my point was still that you'd be better of buying bitcoins directly if you were convinced the exchange rate was only going up. And I was correct. If you had bought bitcoins a month ago, you'd be doing way better than mining. But I don't think bitcoin exchange rate increases are going to continue.

The point is: Going forward buying a computer just to mine isn't going to be 'very profitable' like so many members are convinced. Difficulty is skyrocketing, so any comparison to last October, December, etc. is entirely irrelevent.

And please drop the conspiracy theory ad-hominem already.  Roll Eyes
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May 20, 2011, 06:25:23 PM
 #35

How are you planning on achieving 1.5 Ghash/sec with an $800 budget?

5870's are $250 apiece at the moment and each only get around 350 Mh/s and are one of the most cost efficient GPUs at the moment. Even 3 of them would not get 1.5 Ghas / sec and that's not including the substantial cost of the rest of the equipment that goes with a computer.
you can get 5850 for less than $150, and they hash at 250-300 MH/s, even 400MH/s if it's overclocked (convery did it).

Yeah, but then you increase the overhead costs as a % of total rig cost. Since for every 2 graphics cards, you need to spend about $300-$400 more to buy the case, power supply, CPU, motherboard, optical drive, operating system(this one is optional albeit).
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May 20, 2011, 06:45:43 PM
 #36

No, building a new rig from scratch probably will not become profitable for you unless the value of bitcoin increases dramatically in the short term.
If it's a matter of just slapping in another video card to your system, it probably will be profitable or at least break even.

For the BTC value to increase, more commerce needs to occur with it.  Simple as that.  Anything else (like trying to tie BTC value to hash rig value...) is a bubble market situation.

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May 20, 2011, 06:46:03 PM
 #37

$18.72 - $2.7 == $16.02 per day
16 / 800 == 2% ROI per day

show me an investment opportunity that pays you 2% per day and i'll join it.
This was my initial thinking, but then I started accounting for predicted difficulty increases and it looked less hopeful; clearly I'm new here, so feel free to point out any foolish mistakes, but here's how I was looking at it:
The $16/day figure applies at current difficulty, which should last for another 10 days or so (probably less, looking at the figures on blockexplorer.com), so that nets you $160 total. A guesstimate based on the previous data would optimistically suggest a difficulty jump of 40% (again, quite possibly more), reducing the daily income to (18.72/1.4)-2.7=$10.67. Say the difficulty levels off somewhat, you might make a further $130 or so at that price, followed by another 20% jump, giving a subsequent daily income of (18.72/(1.4*1.2))-2.7=$8.44. Your daily revenue has halved in less than a month, and break-even might take three months total. Investing in more hardware can't help with break-even time, since Mhash/$ remains largely the same, although it will make the absolute potential profits higher once you do pay off the investment (at the price of a higher risk if the investment is not paid off for any reason).

Of course, the key point left out here is the changing value of the bitcoins themselves - the overall trend seems to be that value very approximately tracks difficulty, so if you're confident that the increases will continue to more or less offset the difficulty increases then my 'diminishing returns' theory is totally irrelevant. It also doesn't account for the resale value of the rig, which diminishes, but may be enough to generate an overall profit once mining itself becomes unprofitable.

Basically, I'm not saying that mining is a bad idea, just that it's a moderately high-risk investment which is inextricably linked to the assumption that the bitcoins themselves will continue to increase in value faster than the increase in mining difficulty.

And this is why you might as well just buy bitcoins, the only way you are going to recoup your money on a dedicated rig, time to buy build and manage it, and make some money, is if bitcoins value increases, if that is the case, then why not just save yourself a whole lot of time and energy and simply buy bitcoins with your money.  Well there are a few I can think of: building a rig is fun for most people doing it, you can't play a game at 150fps on your bitcoins, the resale value of the rig makes it a less risky proposition than simply buying bitcoins.
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May 20, 2011, 06:49:42 PM
 #38

It's awful tempting for me to keep adding more mining power to keep my bitcoin production from falling as difficulty rises, but I'm quickly going to exceed what my infrastructure can currently handle.  Mining is addicting, however I have to keep reminding myself that if I'd had just put the money I have spent on rigs into purchasing bitcoins, I would have had 5x the number of bitcoins that I have right now and a much (much!) larger profit.  It's not that mining isn't profitable, it's just that if you believe in the future of bitcoins, you might be better off putting cash into bitcoins directly.  I'm glad I have the mining capacity that I have...it's nice to have been able to keep generating bitcoins rather than chase the market higher...but now that the price seems to be dropping, I'm scaling into bitcoins directly rather than buying more hardware for mining.

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May 20, 2011, 08:03:25 PM
 #39

I don't think building a new computer a week from now just for mining will be profitable. I think the value of bitcoins are going down in the near future anyways. If you want to build a gaming computer or upgrade your current nvidia 9600 and mine when you aren't gaming you might not get back your money but you will recoupe some of your investment.  Remember mining will burn out your hardware faster than normal use.
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May 20, 2011, 08:20:19 PM
 #40

I don't think building a new computer a week from now just for mining will be profitable. I think the value of bitcoins are going down in the near future anyways. If you want to build a gaming computer or upgrade your current nvidia 9600 and mine when you aren't gaming you might not get back your money but you will recoupe some of your investment.  Remember mining will burn out your hardware faster than normal use.
No it won't.
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