Some Bitcoin Calculations

[Trackr]

I stumbled upon an article on Bitcoin today, and did some calculations.

Apparently, each Bitcoin is worth 17.5$.

Mining for Bitcoins is done in Mhash/s, and every 46 are worth 1$,

Which means that 800 Mhash/s (for one day) are worth 1 Bitcoin (or 17.5$).

As an example, an HD 6990 manages just around 800 Mhash/s, with a 400w peak power consumption.

Now the price of electricity ranges from 6 cents for a Kw/h to 18 cents, so let's take a median-high - 15 cents.

That's 400w x 24 = 9,600w / 1,000 = 9.6Kw/h x 15 cents = 144 cents = 1.44$.

Which equates to a Profit of 17.5$ - 1.5$ = 16$ per day, or 112$ per week, or 450$ per month.

Now you can scale that essentially up to any number (I assume).

Say you own two rigs with 8 HD 6990s, considering that the rest of the components run at idle.

That's 8 x 900 (overclocked) = 7,200 Mhash/s, with a typical power consumption of 2,400w-3,200w (let's say 2,800w).

That's 2800w x 24 = 67,200w / 1,000 = 67.2Kw/h x 15 cents = 1008 cents = 10$.

Now for the profit. 7,200 Mhash/s / 800 = 9 Bitcoins = 157.5$ - 10$ = 147.5$, or 1,032$ per week, or 4,130$ per month, and 50,000$ per year.

So now I'm going to wait for someone to poke a hole in my plan to make 50,000$ a year without doing any more work than simple maintenance and upkeep, minus original funds for purchasing the components.

Again, this is just something I found interesting and as you all know, I love calculations

 

[osrk]

That's good, I just choose to sit out this money laundering, drug dealing and illegal activity scam. I have morals ya know.

 

[plugwash]

Assuming the cost of mining (as your calculations say it is right now) is less than the income from mining more people will start mining which will drive up the difficulty and reduce the number of bitcoins you will get from a given mining rig. This could be expected to continue until mining was barely profitable and possiblly even beyond that.

Recently the bitcoin community as a whole has been growing which has been pushing up the value of bitcoins and keeping mining profitable dispite the difficulty increases but that could stop happening at any time. Indeed the system could collapse completely or be legislated out of existance at any time.

Also you should consider the impact of your climate you live in on the effective cost of electricity. In a cold climate heat from electronics displaces heating therby reducing the effective cost of running them (potentially to zero if you live in a place with resistive electric heating). In a hot climate heat from electronics means more aircon costs increasing the effective costs of running them.

 

[Nightbird]

Give it a shot, start small with 1 6990 and let us know how it turns out. Power supply could be a problem though. 4 on one motherboard and you'll melt everything before a week.

Once you're rolling in $$$, join folding will ya

 

[danman]

That's good, I just choose to sit out this money laundering, drug dealing and illegal activity scam. I have morals ya know.

I'll take it seriously when I can pull a bitcoin from my pocket and buy a 6 pack at 7-11.

 

[Trackr]

Assuming the cost of mining (as your calculations say it is right now) is less than the income from mining more people will start mining which will drive up the difficulty and reduce the number of bitcoins you will get from a given mining rig. This could be expected to continue until mining was barely profitable and possiblly even beyond that.

Recently the bitcoin community as a whole has been growing which has been pushing up the value of bitcoins and keeping mining profitable dispite the difficulty increases but that could stop happening at any time. Indeed the system could collapse completely or be legislated out of existance at any time.

Also you should consider the impact of your climate you live in on the effective cost of electricity. In a cold climate heat from electronics displaces heating therby reducing the effective cost of running them (potentially to zero if you live in a place with resistive electric heating). In a hot climate heat from electronics means more aircon costs increasing the effective costs of running them.

It will still not get to 1/5 of the profit this year.

And who cares if the difficulty goes up or if Bitcoin just dies out of nowhere?

I could just sell the HD 6990s at any time for up to 110% of what I bought them for (if I get a good price), and HD 7990 will continue to rival the "difficulty", as should be.

Can anyone else give me a reason not to go for it, besides F@H, which is essentially the same thing, except I lose money instead of making it. Really, I'd love to fold, but I'm not rich.

 

[Trackr]

I'll take it seriously when I can pull a bitcoin from my pocket and buy a 6 pack at 7-11.

Technically, you can, no?

I don't see how it's different from any other form of income.

Your bitcoins, or your paycheck, both need to be transferred to your bank.

Then, you can use your credit card to utilize the digital currency, or go to an ATM and get some physical money.

It's not like your employer pays you physical coins.

 

[jebo_4jc]

it's the difficulty increases. Somebody here has a link to a site that will estimate the bitcoin output of a card in its lifetime. It's lower than you think. Production would not be nearly linear.

 

[danman]

Technically, you can, no?

I don't see how it's different from any other form of income.

Your bitcoins, or your paycheck, both need to be transferred to your bank.

Then, you can use your credit card to utilize the digital currency, or go to an ATM and get some physical money.

It's not like your employer pays you physical coins.

err, what's the point of a bitcoin if I just use the US dollar for the purchase?

 

[Trackr]

it's the difficulty increases. Somebody here has a link to a site that will estimate the bitcoin output of a card in its lifetime. It's lower than you think. Production would not be nearly linear.

And a "lifetime" is from the moment of its release to the moment of its successor's release?

Even if you only make twice as much as your overhead, I think most companies would still consider that a success, on some scale.

 

[Trackr]

err, what's the point of a bitcoin if I just use the US dollar for the purchase?

I don't follow.

You're supposed to MAKE US Dollars, not spend them.

 

[jebo_4jc]

And a "lifetime" is from the moment of its release to the moment of its successor's release?

Even if you only make twice as much as your overhead, I think most companies would still consider that a success, on some scale.

I'm not sure TBH. I never opened the link. The impression I got was that it was actually calculated into infinity.

 

[Trackr]

I'm not sure TBH. I never opened the link. The impression I got was that it was actually calculated into infinity.

Well, isn't that kind of silly?

Obviously, a Geforce 256 today wouldn't get very high FPS.

The point is to buy a newer card.

 

[danman]

I don't follow.

You're supposed to MAKE US Dollars, not spend them.

I make USD and then spend them. I don't ask my employer to pay me in euro's. Why would I want to be paid in bitcoins if all I'm going to do is convert it to a currency that is accepted everywhere? Bitcoins are accepted nowhere. No one is taking their hard earned money and converting it to bitcoins. What would be the point?

 

[Trackr]

I make USD and then spend them. I don't ask my employer to pay me in euro's. Why would I want to be paid in bitcoins if all I'm going to do is convert it to a currency that is accepted everywhere? Bitcoins are accepted nowhere. No one is taking their hard earned money and converting it to bitcoins. What would be the point?

Think of it as an international job.

You perform a contract for a Japanese company.. they pay you in Yen.

 

[Parja]

There's a few significant problems with this assessment...

Apparently, each Bitcoin is worth 17.5$.

The price has been fairly stable the last few days, but it's proven to be pretty volatile.

Mining for Bitcoins is done in Mhash/s, and every 46 are worth 1$,

Which means that 800 Mhash/s (for one day) are worth 1 Bitcoin (or 17.5$).

Actually, with the recent difficulty increase, it now takes almost 1400 Mhash/s to make 1 BTC/day. So your $50k a year just shrunk to under $29k.

Difficulty adjusts automatically every 2016 blocks [edit: whoops, blocks, not days] (1 block every 10 minutes for two weeks, if hash rate is in equilibrium with difficulty). The next estimated difficulty is expected to be another 15% higher than it is now, shrinking your profits even more.

Putting together a mining operation right now is just not going to pay off unless difficulty comes down significantly or bitcoin price rises significantly.

 

[Schro]

The value of solving a block also decreases over time. Suppose difficulty plateaus... well.. the block reward is going to 25 after 210,000 blocks, which cuts your income in half.

At some point, transaction fees will make the world go around, but its not quite legitimate enough to rely on those yet.

 

[Parja]

The value of solving a block also decreases over time. Suppose difficulty plateaus... well.. the block reward is going to 25 after 210,000 blocks, which cuts your income in half.

At some point, transaction fees will make the world go around, but its not quite legitimate enough to rely on those yet.

Ahh yes, forgot about that. At the rate we're going, block 210,000 is probably a little over a year away.

 

[thax]

i have 3 unlocked 6950s and 2 5770 and i been mining whit them for about 2 months now and i have have about 60 coins worth about $1000 right now. i already had the 2 5770 and 2 of the 6950s so even if i had to bought all the cards just fro mining i woudl have paid them off by now and could always sell the cards if i wanted to. but my plan is to save up enough to build a nice new rig for gaming/folding so i could ether get a sb rig now or wait till bd and the new intell chips come out or i could pick up about another 1 ghs or so and hope mining keeps making money, or i could go take that $1000 buy coins and just sit on them and hope the price goes up. idk waht to do part of me says buy more gpus part of me says buy more coins and part of me says just sit on what i got idk what to do. how many other are in the same place as me and cant make up there dam mind?

 

[Zerosum]

I stumbled upon an article on Bitcoin today, and did some calculations.

Apparently, each Bitcoin is worth 17.5$.

Mining for Bitcoins is done in Mhash/s, and every 46 are worth 1$,

Which means that 800 Mhash/s (for one day) are worth 1 Bitcoin (or 17.5$).
...
Which equates to a Profit of 17.5$ - 1.5$ = 16$ per day, or 112$ per week, or 450$ per month.

Everything else would be off if the first part is off. Right now 800MHash/sec would get ya 1/2 a BTC per 24 hours.

With your numbers at $17/Coin, you're gonna be pull in $8.50/day. You're forgeting pool and exchange fees. 8.50 - 1.5 and you're down to $7/day. $49 week if difficulty doesn't change in the next month/year. Of course the price of each coin can also go up which will help your numbers. But that's speculation and if that's what you're after why not just buy the coins directly?

That's making alot of assumptions. And it's these assumptions (especially from these web pages that provide the calculations out for you) that's causing people to still buy hardware. If you believe the numbers work for you, then go ahead but people spending money on hardware now to break even would be RISKY at best. It's still possible, if you get a good deal or hardware that will be used for something else or needed elsewhere. People starting new rigs/hardware now are more likely people who are funneling profits from existing rigs back in. Which imo, is fine. They already paid their dues and more then likely broken even or in the black now which wouldn't be the case for someone just starting off.

I wouldn't worry about the 25 coin drop anytime soon. It's still over a year away at today's rate. Even if the rate doubles, that's still over 9 months out. I doubt I would still be mining when that comes around even with my free utilities and cooling.

 

[Lorien]

Why do we need a spin off? Keep the discussion in the main thread. Notice how the very first reply was from a troll. All you will accomplish here is attract more of them or argue with a bunch of people who don't understand nor have to desire to understand.
Also your calculations are only true for the current difficulty period, however long that lasts. At current network hash rate this period will end in ~8 days. You cannot make monthly projections because by then the difficulty will have changed at least 2 or 3 times (up or down always depending on network hash rate).
Here's a calculator that outputs adjusted values based on difficulty http://98.200.247.249:81/btc_calc.php and here is a more crude one that gives monthly estimates adjusted by difficulty: http://striketeam.ath.cx/btccalc/btccalc.php

 

[osrk]

Why do we need a spin off? Keep the discussion in the main thread. Notice how the very first reply was from a troll. All you will accomplish here is attract more of them or argue with a bunch of people who don't understand nor have to desire to understand.
Also your calculations are only true for the current difficulty period, however long that lasts. At current network hash rate this period will end in ~8 days. You cannot make monthly projections because by then the difficulty will have changed at least 2 or 3 times (up or down always depending on network hash rate).
Here's a calculator that outputs adjusted values based on difficulty http://98.200.247.249:81/btc_calc.php and here is a more crude one that gives monthly estimates adjusted by difficulty: http://striketeam.ath.cx/btccalc/btccalc.php

I don't like being called a troll . I still haven't found a valid reason for using bitcoins other than to do illegal activities. The calculations should also include how much it takes to buy out your morals knowing that this activity could be causing massive harm to another individual.

 

[Trackr]

There's a few significant problems with this assessment...



The price has been fairly stable the last few days, but it's proven to be pretty volatile.



Actually, with the recent difficulty increase, it now takes almost 1400 Mhash/s to make 1 BTC/day. So your $50k a year just shrunk to under $29k.

Difficulty adjusts automatically every 2016 blocks [edit: whoops, blocks, not days] (1 block every 10 minutes for two weeks, if hash rate is in equilibrium with difficulty). The next estimated difficulty is expected to be another 15% higher than it is now, shrinking your profits even more.

Putting together a mining operation right now is just not going to pay off unless difficulty comes down significantly or bitcoin price rises significantly.

The value of solving a block also decreases over time. Suppose difficulty plateaus... well.. the block reward is going to 25 after 210,000 blocks, which cuts your income in half.

At some point, transaction fees will make the world go around, but its not quite legitimate enough to rely on those yet.

Everything else would be off if the first part is off. Right now 800MHash/sec would get ya 1/2 a BTC per 24 hours.

With your numbers at $17/Coin, you're gonna be pull in $8.50/day. You're forgeting pool and exchange fees. 8.50 - 1.5 and you're down to $7/day. $49 week if difficulty doesn't change in the next month/year. Of course the price of each coin can also go up which will help your numbers. But that's speculation and if that's what you're after why not just buy the coins directly?

That's making alot of assumptions. And it's these assumptions (especially from these web pages that provide the calculations out for you) that's causing people to still buy hardware. If you believe the numbers work for you, then go ahead but people spending money on hardware now to break even would be RISKY at best. It's still possible, if you get a good deal or hardware that will be used for something else or needed elsewhere. People starting new rigs/hardware now are more likely people who are funneling profits from existing rigs back in. Which imo, is fine. They already paid their dues and more then likely broken even or in the black now which wouldn't be the case for someone just starting off.

I wouldn't worry about the 25 coin drop anytime soon. It's still over a year away at today's rate. Even if the rate doubles, that's still over 9 months out. I doubt I would still be mining when that comes around even with my free utilities and cooling.

Okay, so the amount of money I make will go down. That's perfectly understandable.

I mean, if it's because, as newer hardware comes out, older hardware is worth less, then it's impossible to stop this.

But like I've been saying, since you can raise the stakes exponentially, essentially, that $50k turning into $29K could be $290K or $2.9M, with an investment of less than $1M.

I mean, if it eventually gets to a point where you're spending $1M on hardware and not getting more than $100K (minus power cost).. then it just won't be worth it to anyone..

Not just me.

The question is - should I forgo my GTX 590 and get an HD 6990 instead?

I mean, even with the difficulty going up, I could still make up its worth in a month.

 

[Parja]

I mean, even with the difficulty going up, I could still make up its worth in a month.

No...no, you can't.

Even at current difficulty, one 6990 is going to net you about 17 coins in a month, so about $300 at current rates.

We're almost half way through this difficulty, so let's assume that by the time you get that 6990 up and running we're on the next difficulty.

With estimates at a 15% increase, you're now down to about $250/month for about the first two weeks and likely less than that after that as the difficulty increases again.

The problem is, with a rise in difficulty, you get diminishing returns. If difficulty keeps increasing anywhere near the rate it has been, you may never recoup the initial cost of the card.

And unless you have free power, the situation is even worse.

Right now, I would definitely advise against investing in mining hardware. If you already have it or have a reason to be buying new hardware otherwise, fine, but don't expect to build new hardware specifically for mining and expect to make any money off it.

 

[Trackr]

No...no, you can't.

Even at current difficulty, one 6990 is going to net you about 17 coins in a month, so about $300 at current rates.

We're almost half way through this difficulty, so let's assume that by the time you get that 6990 up and running we're on the next difficulty.

With estimates at a 15% increase, you're now down to about $250/month for about the first two weeks and likely less than that after that as the difficulty increases again.

The problem is, with a rise in difficulty, you get diminishing returns. If difficulty keeps increasing anywhere near the rate it has been, you may never recoup the initial cost of the card.

And unless you have free power, the situation is even worse.

Right now, I would definitely advise against investing in mining hardware. If you already have it or have a reason to be buying new hardware otherwise, fine, but don't expect to build new hardware specifically for mining and expect to make any money off it.

The diminishing returns rate is pretty bad, if what you claim is true, and I agree.

But, if I do make 550$ from this card, in two months, and then I sell the card and buy Kepler.. I would have at least 1200$, from a 700$ investment.

Now, for fun, you can imagine this on a larger scale (I just enjoy that - wonder what job that makes me good for..)

With 100 HD 6990s, I could make 120,000$ from a 70,000$ investment, or 50,000$ in profit in two months.

It just.. it SEEMS like a bad idea, but it feel like if I were to take it on and do it seriously, it WILL work.

 

[Vaulter98c]

If its between a 590 or a 6990 then obviously go with the ATI. Who cares how bad the market gets, youll always make more back than the 590 lol

 

[Trackr]

If its between a 590 or a 6990 then obviously go with the ATI. Who cares how bad the market gets, youll always make more back than the 590 lol

That seems true. The HD 6990 sells for 700$ stateside, but for some reason ~1000$ on eBay.

Screw Bitcoin Mining.. I will Mine the Miners

 

[Vaulter98c]

There is going to be more hardware on the market soon, people seem to be selling off a ton of hardware, which if you can get it for sellout prices then run very long term, it'll pay off (assuming the value of the coin goes over 20$ or so)

Still, it comes down to two top line cards, and one will mine better than the other, so it's the smarter choice. Just gotta find one lol

 

[Parja]

There is going to be more hardware on the market soon, people seem to be selling off a ton of hardware, which if you can get it for sellout prices then run very long term, it'll pay off (assuming the value of the coin goes over 20$ or so)

No kiddin'. Quite a few pretty big farms up for sale on the bitcoin forums. Just gotta wait for the market to get oversaturated with hardware so prices come down. I'd love to pick up a cheap 6990 for my Eyefinity gaming rig.

 

[Roman79]

Calculators are all well and good, but they don't take into account the downtime (for various reasons), inconsistent hash rates, etc. The real world output is definitely lower; just keep that in mind when using profit calculators.

I bought 2x 6970s, a new AM3+ motherboard, huge PSU, and.....had to buy a new case when I realized that the 6970s wouldn't fit in my current case. So my point is, I'm in for a large chunk of change (probably ~$1500). Hmm speaking of which, I should update my signature.

It will take me a long time to pay this off with mining, let alone make a profit. That doesn't really bother me since I was prepared for that. The way I figure it, I just got a subsidized upgrade since I would have made that purchase in the future anyway. I'm just glad I didn't go all in, building dedicated mining boxes.

 

[Parja]

had to buy a new case

Meh, cases are overrated.

 

[Trackr]

No kiddin'. Quite a few pretty big farms up for sale on the bitcoin forums. Just gotta wait for the market to get oversaturated with hardware so prices come down. I'd love to pick up a cheap 6990 for my Eyefinity gaming rig.

But the question is - why are they for sell? That is, if they're really that useful and profitable.

It feels like buying those "How to get rich" books.. if the author knew, he wouldn't be selling a book.

 

[jebo_4jc]

But the question is - why are they for sell? That is, if they're really that useful and profitable.

It feels like buying those "How to get rich" books.. if the author knew, he wouldn't be selling a book.

people are realising bitcoin wing be profitable forever so they're selling now .

Problem is they still think the hardware is worth as much or more than they paid.

 

[Parja]

But the question is - why are they for sell? That is, if they're really that useful and profitable.

Because they're not profitable. Not any more, at least.

I bought my 3x 5830 setup about 4 weeks ago and paid it off pretty quickly back when difficulty was around 500k and the price of bitcoins shot up over $30 each.

I wouldn't buy hardware to mine now unless it was really cheap.

 

[Parja]

Problem is they still think the hardware is worth as much or more than they paid.

Yeah, some of these people are f'n delusional. Most 6990s on ebay right now have Buy It Nows set well over $1000.