bit_by_bit's mining-cost analysis is wrong - here's mine
bit_by_bit publishes a daily mining-cost-per-coin watch. Though his work is thorough and commendable, it is unfortunately incorrect, and his conclusions naive. I'm sure he has misled people on this board, so I'm here to set the record straight. Roughly using bit_by_bit's assumptions:
difficulty increase is (probably) impossible to predict
I'm 100% sure your miner would not arrive and be switched on today
Given those two huge, highly variable (and unpredictable) factors, trying to work out a cost-per-coin is ... more-or-less impossible. It's simply enough to assume that mining is extremely unprofitable at the moment and (probably) a very poor investment. Here are some examples of variability:
Cointerra TerraMiner IV
cost per coin
0% difficulty increase
20% difficulty increase
15% difficulty, but starting at 30bn difficulty
How are these numbers so different from bit_by_bits?
His calculations do not factor in an exponential difficulty increase. Instead, he says (in his maths) : "if the bitcoin network were composed of the miners here, and no extra miners are added/removed (i.e. difficulty remains the same) what would those miners (on average) achieve as a cost per coin over six months."
The problem with these numbers is
The percentage of miners he uses to compose the network is unknowable, and as you see above, miner performance varies greatly. I'm quite sure that huge operations custom manufacture their machines and never sell them. Their performance is unknown. (an unknowable unknown)
The makeup of the mining network in the future is unknowable, and difficulty will undoubtedly increase, but we can't know by how much. It has previously plateaued. Will it do the same? nobody knows.
They assume the very latest miners, shipped immediately. Historically, new miners are not shipped on time. It's been suggested that the manufacturers keep them and do highly profitable day-zero mining with them.
Also, to suggest that it is possible to predict market movements (and depth) is naive as it asserts that demand is constant, and that supply is the major, or key, factor. This is highly unlikely to be the case.
Let's talk about mining's effect on bitcoin price or, first should we talk about the effect of the price of bitcoin on the mining industry?
The two are intimately linked chicken-and-egg in a feedback loop. For a manufacturer to decide to make a rig, they need to design chips, get industry contacts, produce things (in china), make sure they work, then ship. They also need to get orders and decide if they are able to get the whole project in time for market. These projects are multi-month/year, and I've heard success is largely decided by who you know in china (china's pretty busy already). There is some kind of lag. Investors also pre-order, and must take a wild guess at future conditions with no guarantee whatsoever. At times like now, where mining is so unprofitable, which miners are actually selling coins (at a loss)? Large operations have large overheads, but to sell now, when the price might rise by 10x again would be idiotic. So, really this "supply" aspect of the supply-demand equation is very difficult to get a decent hold on, though I would love somebody to attempt it as a PHD. The blockchain should provide some answers. The other side of it (what miners will be produced) is also difficult to know. It could be that right now (with an unprofitable industry, and miners actually being quite close to desktop PC chip-size - i.e. as fast as humans can make them) no miners are in the pipe-line. This could (in crazy theory) lead to a zero difficulty increase for the lucky new owners of the above rigs. In that case, bit_by_bit's numbers would be spot on. Unfortunately, it's absolutely unknowable.
So... why do people buy miners now?
Quite simply, getting your head around an exponential anything is hard. The exponential difficulty increase is a motherfucker. But it's good for bitcoin (it protects our network from meddlers). Also, you could gamble that mining difficulty has to slow down... surely...
In my experience, looking at price charts is far more informative about future market movements. But, whilst I've got the microphone, I would remind newbies not to trade their coins.
$0.15 (varies quite a bit from country-to country, like 0.7 canada to 0.2 UK?)
price per BTC
I got these numbers off bit_by_bit. I don't care about the details. My argument is that it's not an answerable question. Result:
2252/600 = 3.75 BTC
7446/3.75 = $1985
Please, if I've made a mistake, let me know and I'll send bit_by_bit some flowers.
"Why are you just posting stuff directly against another user: that's not cool"
Well, it's whatever motivates you eh? I just go wound up by our discussions. But, I'm quite sure there are people on this board who don't know this stuff, so ... it's probably beneficial. Have fun EDIT: Ok, so I genuinely thought that I had made a fact-based post. Er, I added a few comments that I thought were funny, but I guess that wasn't a great idea. I removed one of my comments myself, but it's true that the moderators were in touch..... And - to bit_by_bit, I am sorry, because some of the things I said were above and beyond "spirited discussion". I absolutely agree that polite conduct is the way forward, and my initial "hang on a minute" reply to him was nice. But, I do have to admit that this subject has wound me up a fair amount. I genuinely believe that he's made a quite serious mistake - but I am happy to be proved wrong. Right now - I just want to get to the bottom of this. More Edit:
I am a miner
I didn't want to add this before, because I'm sure it (incorrectly) gives my argument more weight. But I need you to understand that bitcoin difficulty is a total motherfucker. I pre-ordered a BFL single for 11BTC in May 2013. The difficulty was about 4 million, and I worked out I'd make 30BTC/day at those conditions. It arrived at around 30 million difficulty, and I think now we're 18 billion. I've made about 0.7 BTC mining, and It's on the limit of believability that I'll make 1BTC before I throw it in the bin. I have a suspicion that it will be useful in the future for some altcoin/blockchain like thing. Also, I got free heating (which was the whole reason I discovered bitcoin in the first place!) Horrific loss. I think it makes about $1 more than it costs in electricity to run (at current price......) This whole post is not a "bitter miner" but somebody who has experienced bitcoin's exponential difficulty First Hand. Honestly, it is unbelievable. I genuinely think that the guy that does the profitability calculator deliberately does not explain what the 'profitability decline per year' is ... because he knows it will adversely harm bitcoin and the manufacture of miners. Even More EDIT:
Am I sure I've got the difficulty increase thing right?
So, I've made a spreadsheet thing to see if the 0.0022 difficulty thing is right. It is. All this table tells you is that in order to calculate 15% difficulty increase, you need to use a number LIKE 0.0022 in the 'profitability decline per year' box, and not 0.98 (which bit_by_bit calculated). I've sanity checked my numbers against the 'profitability calculator' and they don't quite line up, but they're close enough. The difficulty is not the same either, but it's in the same region. I don't know why. Also, the months aren't exact fortnights, so they don't line up. These are details. This proves my above workings to my satisfaction.
what is this horrible data?
It shows how much BTC your miner earns each 2 weeks (average difficulty change period). The last 2 rows (calc:) are from the profitability calculator website (and so are right). My attempt is on the left. Fortnight 13 is 6 months. Oh, this graph uses 14.07% difficulty.
BTC earned accumulated
calculator says BTC
2 bold numbers. 1 is approximately the 3.75 coins that gives you $1900 / coin whatever. 2 is the "profitability decline per year" as a tiny number. The pro tool comes up with 0.01095125 and I got 0.02257 but I don't care - it's close enough. My whole point is that these numbers are totally unworkably all over the place. You can't calculate them meaningfully.
I CANNOT BELIEVE the amount of effort that I have had to go to in order to show you that you made a minor mistake. (at time of writing you still deny it). There is no doubt in my mind now that I was right in the first place. Your calculations do not include a significant difficulty increase. I wish you well.
Hello everyone. So i was wondering what happens with my hash power, does it help someone?(hackers/goverments) What benefit does the bitcoin creator gets from my mining power? And another thing, i heard somewhere that you cant mine with 2 machines from the same ip, is that truth?
At what price will Bitcoin fail to function? My estimate: ~$100.
I'll begin with my conclusions: If the Bitcoin network consisted solely of 'Titanium ASIC' miners, the most powerful and energy efficient mining machine I know of, then the price point at which electricity costs begins to exceed rewards is $71/BTC (based on yesterday's network figures; more on that later). More realistically though, most miners aren't running highly efficient Titanium ASICs, hence I estimate ~$100/BTC as the turning point. I say 'fail to function' in my title, because who will continue to mine at a pure loss? It would be irrational - the rational action would be turn off the machine until the value of the rewards increases. Note: This is not the same as sunk costs in buying hardware - because in that case even if you never get back how much you paid, you're still making something. Perhaps, you might counter, Bitcoin enthusiasts will continue to mine at a loss. Well consider this: To sustain just 1% of the current network hash rate, you would require 559 Titanium ASICs costing over one million dollars in yearly electricity cost (at $0.10/kWh) - and that's a best case scenario. Let's assume that's the case - you have Bitcoin Enthusiasts contributing the equivalent of 559 Titanium ASICs hashing power for free out of their pocket. That's a 99% drop in hash rate. The time to a difficulty retarget is 2016 blocks, or at 10minutes/block that's 2 weeks. But if the hash rate were to drop by 99% within that two week period, then the block time would balloon out to 16.66 hours - making the block retarget ETA up to 3.8 years! If transactions took 16.66 hours just to get a single confirmation (if they had first priority), then how would use of Bitcoin remain practically feasible? Would people still have confidence in the system and the developers for allowing this to happen? How difficult or costly would it be to launch a 51% attack? Now, on to the calculations, and a few less optimistic alternate scenarios: Network hash rate at time of calculation: 335,365,290.09 GH/s 335,365,290.09 GH/s / 6000GH/s = 55894.215 'Titanium ASIC' miners 55894.215 x $5.28 daily electricity cost (At $0.10/kWh) = $295121.4552/day in electricity costs = $1776.87709485/block (avg. time of 8.67 minutes) $1776.87709485 / 25BTC block reward = $71.04/BTC = break even point. The above does not account for pool fees or transaction fee revenue or more importantly variance in kWh rates ($0.10/kWh is nonetheless pretty low worldwide), and hardware cost is irrelevant to this calculation. Without doing all the math again, here's some other popular mining machines for comparison: $113.07 (SP35 Yukon) $193.84 (CoinTerra TerraMiner IV) $385.89 (Antminer S1) I've also just seen the 'Antminer S4' mentioned in /Bitcoin, so just for comparison a Titanium ASIC is almost twice as energy efficient as an Antiminer S4 (2200W vs. 4200W for 6TH/s) - it's less efficient than the SP35 Yukon. If I've made any miscalculations here or have left anything important out, feel free to correct me.
The machine is secure in a server room. Home is not a good place to run this IMO.
I am mining on Eligius but I will monitor that in case their share gets too big.
I do not know anyone from Cointerra personally. I was chosen to be customer 1 because I live in Austin and I am active in the local bitcoin community (is what they told me).
I have certainly met a lot of Cointerra people since a week ago and I really like everyone I met.
I am the guy doing the Numisalis coin. I am wearing that shirt in the picture. I still really believe in it and encourage contributions to the Indiegogo campaign.
Fire away! edit: Stats! The miners typically run at ~1.7TH/s. I have seen it jump to 2TH/s and have seen it drop to 1.55TH/s but those speeds are not sustained. There are 2 power supplies. Each pulls 1kW pretty much on the nose. Fans run at full speed all the time right now. I have been told a not-yet-scheduled firmware upgrade will address that as well as other power and speed improvements. I can only go on what I see right now though.
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What happens when mining is completely non-profitable?
Difficulty keeps going up, price keeps going down. A quick look at the bitcoin calculator on bitcoinwisdom.com shows that at this rate, even the $6,000 TerraMiner IV would take about 214 to break even, and any other miners would never ROI. It looks like the only way to get into mining right now and profit would be to stake an initial investment of $6,000, and the amount of people willing to do that is extremely small. Yet the hashrate continues to rise somehow. I know that there are plenty of miners who have already earned back their hardware costs and continue to mine as long as their profits outweigh their electric costs. But what happens when the price drops so low and the difficulty gets so high that the electricity used actually costs more than the bitcoin earned? Would the network hashrate completely plummit and drastically extend transaction times?
I ponded whether or not to mine bitcoin, then the ASICs were announced. Luckily, I didn't preorder Butterfly Labs, but that whole scenario made me a skeptic. I pondered whether or not to buy a Bitcoin ASIC (the first month the terraminer was on Preorder), and I let that slip by. I pondered whether or not to mine Litecoin, and that slip by. I'm still very skeptical about Litecoin ASIC shipping times so in the meantime, I decided I will buy one when they are available to ship, not for preorder. Till then, I decided to force myself into purchasing high performing cards and mining. I think about things WAY too much and often end up convincing myself not to do them. There's no going back, I'm tired of looking into the water and trying to see if it's warm or not— debating whether I should dip my feet in. I've jumped in 8 graphics cards deep. I've been looking at building guides for months, but after mark-ups and outdated builds, I'm reaching out to see what builds would be good for mining with these 8 cards. Any links or advice would be very much appreciated. SIDE NOTE: I have two GTX 690s I purchased for my incredibly powerful, yet amazingly irritating hackintosh, which I am now incredible frustrated and eventually will be turning in for a Mac Pro. I've been getting about 1150 KH/s with the two cards running CudaMiner on OS X or 530~560KHs Vert— Do you think it's worth it to keep the cards in my new build? Or sell them on eBay? http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=291126412466 TL;DR part 1: Bought 2 XFX/6 Sapphire 290Xs for $2400, $300 each, and I would like to know what is the most efficient, cheapest mining rig to build around it. I have looked at many guides (not the software quite yet), I am open to using Linux as I hear that is the best and would preferably like to be able to control the units remotely. part 2: I also have access to two GTX 690s hashing at 1150kh/s scrypt, 530~560KHs scrypt-N— is it worth running these if I have access to free electricity? Or should I sell them on ebay?
Hello, I want to start mining and was thinking about ordering the Terraminer since it seems to have a good payout (according to online calculators which say I would be a billionaire in 100 days o_O) I was wondering if it would be worth it, if i can mine doge with it and How much i would earn approximately ? Thanks http://cointerra.com/product/terraminer-iv-1-6-ths-bitcoin-mine
Hi, I'm fairly new to the subreddit but have been keeping a close eye on bitcoin for a while now. I was wondering if anyone had any opinions on CoinTerra and whether they are trust worthy etc.. I stuck it out with butterfly labs for a 60gh miner but that took 9months to arrive. I'm not too worried about the time but more so about actually receiving the product and also making sure it's the right purchase for that amount of money. I'm thinking of making an investment in the new terra miner. http://cointerra.com/product/terraminer-iv-2ths-networked-miner-january-batch/ Any alternatives or opinions are much appreciated. Thanks
http://i.imgur.com/vzTj05k.jpg These numbers assume I am getting free electricity at the office, where I currently mine with a 30 GH little single, ordered in October of 2012 and delivered some time in August, 2013. Unless my numbers are way off (and who knows, really..), the best-case scenario isn't very attractive. I'd sooner drop $3,499 on buying Bitcoin itself -- it would seem like this was more of a sure thing given how time-sensitive delivery time can be. In the best-case scenario, if delivery were to slip by just one month to mid-February, I might not break even by the end of 2014. This is my best shot at analyzing this sort of purchase -- am I close?
CoinTerra has recently fired back at the competition with the announcement of the TerraMiner II. This ASIC Bitcoin miner comes in at 1TH/s or (1000 GH/s) and will be one of the highest mining speeds on the market. Looks like they have raised the bar for the retail consumer (average Joe) on this one. The unit will weigh in at about 27lbs and come self-configured, and plug and play ready with ... We are proud to lead the retail bitcoin mining market with our new GoldStrike™ I ASIC and our 2TH/s TerraMiner™ IV Bitcoin miner rigs – both representing the highest performance Bitcoin miner hardware that are currently announced. Chapter 7 Bankruptcy. On Jan 24, 2015, CoinTerra filed a petition for chapter 7 bankruptcy protection in the United States Bankruptcy Court for the Western ... CoinTerra cuts price of TerraMiner IV bitcoin mining rig CoinTerra has just announced its official launch and, with this, is cutting the price of its TerraMiner IV product from $15,750 to $13,999. Accessing the TerraMiner via the serial port and modifying the software will invalidate the product warranty. Edit after comment: I do not own this machine myself, so I can't say this out of experience. But from what I can read, the miner has a Beaglebone board inside of it, as the miner controller. A beagle bone has a micro USB connection, so ... Terraminer is currently launching an initial coin offering, or ICO. Terraminer offers tokens called TRM tokens, which represent the processing power of mining equipment. The Terraminer farm is powered by NVIDIA 1080TI GPU’s that run on electricity generated from a hydroelectric power station in Shaoguan, China.
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