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Author Topic: Current and future price of BTC based on mining  (Read 1863 times)
Joe200
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July 10, 2012, 08:02:53 PM
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Any calculators out there?

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AmazonStuff
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July 10, 2012, 08:10:40 PM
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Any calculators out there?

https://en.bitcoin.it/wiki/Myths#The_value_of_bitcoins_are_based_on_how_much_electricity_and_computing_power_it_takes_to_mine_them
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July 10, 2012, 08:44:47 PM
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That's fine. I still want to see the value based on mining.

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Firstbits: Compromised. Thanks, Android!


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July 10, 2012, 08:49:18 PM
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The only impact mining might have on price is that because more Ghashes are coming, Bitcoin might appear more secure and attack-proof, thus encouraging more interest and investment, leading to a higher price. There's no direct correlation.

Bitcoin is the ultimate freedom test. It tells you who is giving lip service and who genuinely believes in it.
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In the future, books that summarize the history of money will have a line that says, “and then came bitcoin.” It is the economic singularity. And we are living in it now. - Ryan Dickherber
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The idea that deflation causes hoarding (to any problematic degree) is a lie used to justify theft of value from your savings.
Joe200
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July 10, 2012, 09:00:44 PM
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Let me clarify my question.

I'm looking for a calculator that will tell me the amount of fiat currency it takes to mine 1 BTC, both based on current conditions and on projected conditions within the bitcoin network (difficulty, etc). Given that the fiat currency prices for electricity / rigs vary, the calculator should give the low-end of the ratio.


Stephen Gornick
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July 10, 2012, 09:03:54 PM
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The only impact mining might have on price is that because more Ghashes are coming, Bitcoin might appear more secure and attack-proof, thus encouraging more interest and investment, leading to a higher price. There's no direct correlation.

With just one of BFL's $30K USD SC mini-rigs equal to 8% of all the hashing occurring today, the addition of those Ghashes actually has de-stabling potential, at least until enough of the technology is distributed and in the hands of regular, profit minded mining operators.

As far as a chart, BitcoinX has a great chart showing difficulty and price relationship.  (and yes, moves in mining capacity simply lag moves in price and to relatively proportional degrees.)

About the closest functioning chart is the "miner's profitability", which shows margins for mining based, presuming typical electric rates and mining performed with GPUs.  (right now mining is generating pretty decent returns even with a rising difficulty, thanks to the rising BTC/USD.)
 - http://blockchain.info/charts/miners-operating-profit-margin

Stephen Gornick
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July 10, 2012, 09:29:59 PM
 #7

I'm looking for a calculator that will tell me the amount of fiat currency it takes to mine 1 BTC, both based on current conditions and on projected conditions within the bitcoin network (difficulty, etc). Given that the fiat currency prices for electricity / rigs vary, the calculator should give the low-end of the ratio.

Well, here's one approach:
 - http://tpbitcalc.appspot.com/

Say you want to amortize the cost of a rig with say 3 ATI 5970s.  That rig might run $1,250 (buying used), and consume about 1050W.

Each 5970 might produce 700 Mhash/s so the rig hashes at 2.1 Ghash/s.  There is 12,700 GHash of current capacity on the Bitcoin network, all competing for 7,200 BTC per day.  So that 2.1 Ghash/s will yield 1.19 BTC per day  (7,200 * 2.1 / 12,700) -- and that amount produced daily is currently worth about $8.33.

If your cost of electricity is $0.15 per kWh, power that rig will cost $3.78 per day  ($.15 * 1050 * 24 / 1000).

Amortize that rig over one full year, and the expense is $3.42 per day for the equipment ($1,250 / 365)

So using the one-year amortization your your rig costs $7.20 per-day ($3.78 + $3.42)  and brings in $8.33 worth of bitcoins.

Thus it currently takes $0.864 to mine $1.00 worth of bitcoins assuming you have worthless equipment after one year, and that the "mining profitability" (the ratio of BTC/USD versus difficulty) doesn't change over the next year.  Also, that is assuming there is no (zero, nada, zippo) labor costs.

Since nobody knows what levels these factors will be in the future, there's no projections that can be made reliably.

What is likely to happen is that the mining profitability for GPU miners will change dramatically, as the cost of electricity currently gives gross margins of 55% for a GPU miner with typical U.S. electric rate but for an FPGA miner those gross margins run from 90% to 95%.  For ASIC, those gross margins might run from 98% to 99%.  (at current difficulty and exchange rate levels).  Obviously, as more FPGA s ship and once ASICs start to be produced, those gross margins will be falling dramatically.

The best deal around today is the GPU miner whose electricity is included in the lease.    For that person, the hardware is cheaper than ever, and gross margins then are 100%.   Many of these people are likely still acquiring more equipment, up until the point that heat removal and per-circuit capacity limits block further expansion.

But for the typical mining operator, the calculator above will let you do your own projections, if you might want to take a stab at a few different scenarios.

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July 11, 2012, 05:38:18 AM
 #8

Thread should be moved to mining speculation.

You might find good info in this thread. https://bitcointalk.org/index.php?topic=89947.0

Mining will soon have little to do with electricity cost.
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July 12, 2012, 06:22:13 AM
 #9

Let me clarify my question.

I'm looking for a calculator that will tell me the amount of fiat currency it takes to mine 1 BTC, both based on current conditions and on projected conditions within the bitcoin network (difficulty, etc). Given that the fiat currency prices for electricity / rigs vary, the calculator should give the low-end of the ratio.




you didn't read the wikipidea artical at all did you?

well since you obviously didn't and merly want what you want.... you still can't have it.

""The value of bitcoins are based on how much electricity and computing power it takes to mine them

This statement is an attempt to apply to Bitcoin the labor theory of value, which is generally accepted as false. Just because something takes X resources to create does not mean that the resulting product will be worth X. It can be worth more, or less, depending on the utility thereof to its users.
In fact the causality is the reverse of that (this applies to the labor theory of value in general). The cost to mine Bitcoins is based on how much they are worth. If Bitcoins go up in value, more people will mine (because mining is profitable), thus difficulty will go up, thus the cost of mining will go up. The inverse happens if bitcoins go down in value. These effects balance out to cause mining to always cost the amount of bitcoins it produces.""  -wiki



AND IF YOU STILL DIDN'T READ IT THE ANSWER IS THERE ISN'T ONE BECAUSE THAT'S NOT HOW IT WORKS!
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