MegaBigPower Opens Buyback for Unprofitable Bitcoin Miners

[Bicknellski]

http://www.coindesk.com/megabigpower-buyback-program-bitcoin-miners/

I haven't tried their service yet so I don't know what they are offering for SP and Bitmain hardware... but this may be better than selling on amazon or ebay

Interesting move... dry up the resale market and lower the hash rate?

Make cloud mining the only option?

Compete with the Chinese?

They already compete. They more than compete. They just had no need to supplement or offset production / mining costs at least until now maybe. Those companies engaged in cloud mining and miner production are likely trying very hard to make back the loss of BTC value.

Possibly they are looking more at cloud mining as Spondoolies has as well mentioned it. Who knows the real motives behind this but suffice to say they want to clean up the playground toys and put them away in box. Why? Look at what Singapore does with old cars? THERE ARE NONE. Unless you want to Pay & Pay to keep an antique. Taxes are extremely high on new cars. You can't buy a cheap used car and you must have a Certificate of Entitlement (COE) because of the Vehicle Quota System. As there are fewer and fewer ASIC suppliers the competition will increase. I submit that Bitfury is likely buying up used equipment like Spondoolies gave rebates if you had previously purchased and could prove you bought from another vendor. Why? Good publicity and good will. Many a miner will just jump at the chance to offload old crap. Cash for Clunkers. They could also spin it as A GOING GREEN move see how many electricity guzzling inefficient BFL Monarch we got offline.

[Blazed]

It seems like they will buy only certain miners though so...why would they scrap S3's? I am guessing they just want a bunch of gear for under market prices to cash in. I noticed they do not want all the crap gear (BFL, AM, FailFast, etc...). I think it is a pretty smart move, but also a little strange if Bitfury is so close to having that new chip ready?

[dogie]

I bet the buy for $ per pound and get the scrap. They won't be plugging in anything. Seriously when / if BTC goes 1000$ again where are you going to get miners?

Making sure there is nothing left on the market is a good way to make sure there is less competition. Given that there will be few miners out there then they could also sell off their own older generation miners to consumers as they phase in new generation Bitfury.

So you will be left with few if any cheap options. You have to get either cloud-mining  or used equipment from their farms potentially. 

At $1000 - everywhere. It becomes extremely profitable to produce again and you'll see all sorts of companies pop up producing OEM style machines.

[Gleb Gamow]

I bet the buy for $ per pound and get the scrap. They won't be plugging in anything. Seriously when / if BTC goes 1000$ again where are you going to get miners?

Making sure there is nothing left on the market is a good way to make sure there is less competition. Given that there will be few miners out there then they could also sell off their own older generation miners to consumers as they phase in new generation Bitfury.

So you will be left with few if any cheap options. You have to get either cloud-mining  or used equipment from their farms potentially. 

This is what I was alluding to.

[soy]

.23 cents per kwh?  really?? as in less than a quarter of a penny per kwh?  can that even be true?

it's not. It's $0.023 per kWh. Closer to 3 cents with taxes & other charges.

Could they be near an old nuclear reactor power station?  I think rates are low near Three Mile Island and others.  I recall on LI the Shoreham reactor saw very low rates in the immediate area but any meltdown threatened a very wide area - so the low rates were to influence locals not to compensate for threat - sorry, I get carried away....

[anamichii]

hmm i have an unused gridseed miner 

[pmorici]

Can anyone explain how this could be profitable to them?

Cheap power costs and under clocking.  They may also be looking to stock pile capacity in case the price goes back up.  Buying hashing power is kind of like buying a BTC futures contract w/o buying BTC directly which would push the price up in the process.

[philipma1957]

s-3's are about 40-50ph. Worldwide.

  At 3 cents you make good money with them.

they can go down to .65watts a gh.

[MrTeal]

This would also serve to push down global hashrate in the short term. If MBP picks up 15PH/s for a song from people who are operating at breakeven right now, not only do they get a unit (say an S3) that they can run profitably, but during the move they're keeping difficulty increases in check.


It is interesting that they would bother with this though. I would have thought they would be extremely busy getting ready to integrate new Bitfury product into their mines as it is released.

[wpgdeez]

That would be sweet if they took S1's I would love to clean out my garage.

[Mikestang]

It is interesting that they would bother with this though. I would have thought they would be extremely busy getting ready to integrate new Bitfury product into their mines as it is released.

And that new hardware is pretty darn impressive! http://www.coindesk.com/bitfury-launches-new-28nm-bitcoin-mining-asic/

[CanaryInTheMine]

This would also serve to push down global hashrate in the short term. If MBP picks up 15PH/s for a song from people who are operating at breakeven right now, not only do they get a unit (say an S3) that they can run profitably, but during the move they're keeping difficulty increases in check.


It is interesting that they would bother with this though. I would have thought they would be extremely busy getting ready to integrate new Bitfury product into their mines as it is released.

There's just no decent hardware available in the marketplace.  Manufacturers slowed down due to depressed btc price.  Bitfury announcement doesn't mean a mining product is about to be ready to ship to an end user next week.  In fact I think it will be a while before any products ship with latest BF chip.  They will mine the shit out of it with first batches of their own chips...

[MrTeal]

This would also serve to push down global hashrate in the short term. If MBP picks up 15PH/s for a song from people who are operating at breakeven right now, not only do they get a unit (say an S3) that they can run profitably, but during the move they're keeping difficulty increases in check.


It is interesting that they would bother with this though. I would have thought they would be extremely busy getting ready to integrate new Bitfury product into their mines as it is released.

There's just no decent hardware available in the marketplace.  Manufacturers slowed down due to depressed btc price.  Bitfury announcement doesn't mean a mining product is about to be ready to ship to an end user next week.  In fact I think it will be a while before any products ship with latest BF chip.  They will mine the shit out of it with first batches of their own chips...

My understanding (quite possibly mistaken) is that MBP is a pretty premier partner of the Bitfury group, and I would have expected them to get pretty early access to new hardware. A lot might have changed since 2013 though, that might not be the case anymore. That's the interesting part.

This project won't be without delays too, I would assume. If they are looking at getting offers now I'd expect it could be a month or more before any significant volume is decommissioned, shipped, installed and running.

[CanaryInTheMine]

This would also serve to push down global hashrate in the short term. If MBP picks up 15PH/s for a song from people who are operating at breakeven right now, not only do they get a unit (say an S3) that they can run profitably, but during the move they're keeping difficulty increases in check.


It is interesting that they would bother with this though. I would have thought they would be extremely busy getting ready to integrate new Bitfury product into their mines as it is released.

There's just no decent hardware available in the marketplace.  Manufacturers slowed down due to depressed btc price.  Bitfury announcement doesn't mean a mining product is about to be ready to ship to an end user next week.  In fact I think it will be a while before any products ship with latest BF chip.  They will mine the shit out of it with first batches of their own chips...

My understanding (quite possibly mistaken) is that MBP is a pretty premier partner of the Bitfury group, and I would have expected them to get pretty early access to new hardware. A lot might have changed since 2013 though, that might not be the case anymore. That's the interesting part.

This project won't be without delays too, I would assume. If they are looking at getting offers now I'd expect it could be a month or more before any significant volume is decommissioned, shipped, installed and running.

As far as I know that relationship existed when a group helped organize mass production of first BF chip.  Since then, the new BF entity is different with none of the past relationships in place.  The name BF is same, but it's a different beast today compared to the original group.  So MBP does not have any tie ins anymore as far as I know.

[dogie]

This would also serve to push down global hashrate in the short term. If MBP picks up 15PH/s for a song from people who are operating at breakeven right now, not only do they get a unit (say an S3) that they can run profitably, but during the move they're keeping difficulty increases in check.


It is interesting that they would bother with this though. I would have thought they would be extremely busy getting ready to integrate new Bitfury product into their mines as it is released.

There's just no decent hardware available in the marketplace.  Manufacturers slowed down due to depressed btc price.  Bitfury announcement doesn't mean a mining product is about to be ready to ship to an end user next week.  In fact I think it will be a while before any products ship with latest BF chip.  They will mine the shit out of it with first batches of their own chips...

My understanding (quite possibly mistaken) is that MBP is a pretty premier partner of the Bitfury group, and I would have expected them to get pretty early access to new hardware. A lot might have changed since 2013 though, that might not be the case anymore. That's the interesting part.

This project won't be without delays too, I would assume. If they are looking at getting offers now I'd expect it could be a month or more before any significant volume is decommissioned, shipped, installed and running.

As far as I know that relationship existed when a group helped organize mass production of first BF chip.  Since then, the new BF entity is different with none of the past relationships in place.  The name BF is same, but it's a different beast today compared to the original group.  So MBP does not have any tie ins anymore as far as I know.

That matches up with what I've heard. MBP were important in the early days of 'super farms' and make some money investing big in Bitfury hardware, but past that there is nothing special there.

[bitcoin4eva]

I guess theyll be getting really cheap electricity. I have the same thing going on right now, at 0.03$/kwh its profitable for me to mine with almost any miners : )

[adaseb]

I don't know why anybody is surprised here.

They are buying relatively new hardware such as the S3 and if they only pay 0.02kwh then it worthwhile for them. I got ROI in 40 days with my S3+ that I paid $75 with 0.00kwh electricity. So for them probably paying similar amounts they will ROI within 2 months or so.

After a few months they can always liquidate the hardware on eBay.


The problem is how much are they willing to pay. Most likely not much. I am guessing $50 per S3.

[johnyj]

Actually mining rigs investment will be the same as bitcoin, buy low and sell high, now it is a good time to buy.  A large scale of hash rate increase will not happen due to highly concentrated production and low profit of mining farms. If chip makers make  alliance like OPEC to limit the chip production, then mining cost will rise quickly for retail customer

[freedomno1]

Actually mining rigs investment will be the same as bitcoin, buy low and sell high, now it is a good time to buy.  A large scale of hash rate increase will not happen due to highly concentrated production and low profit of mining farms. If chip makers make  alliance like OPEC to limit the chip production, then mining cost will rise quickly for retail customer

A mining OPEC would have said that was highly unlikely only a year ago but with many firms going bust and the chips getting more advanced and needed to book fabrication time to scale these units, a chip monopoly could become a real thing at a certain point in time.
The centralization of mining farms and factors such as price are leading towards that conclusion at least until the price makes it economic enough to decentralize and have new entrants join not part of that OPEC mining cartel.

[klondike_bar]

.23 cents per kwh?  really?? as in less than a quarter of a penny per kwh?  can that even be true?

it's not. It's $0.023 per kWh. Closer to 3 cents with taxes & other charges.

Could they be near an old nuclear reactor power station?  I think rates are low near Three Mile Island and others.  I recall on LI the Shoreham reactor saw very low rates in the immediate area but any meltdown threatened a very wide area - so the low rates were to influence locals not to compensate for threat - sorry, I get carried away....

unlikely. most of it is in washington, powered by hydro dams.

nuclear power is generally built close to the cities it will power. hydro dams are often located a distance from any major populations due to the steep terrain and large rivers/streams they need to create power. Its reasonably common for the cheapest electrical rates (and thus datacenters) to be found near these facilities in otherwise largely-undeveloped areas