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Comment by possibilistic | Hacker News Reader

I'm only casually familiar with ASIC mining, but I do recall hearing that the best position to be in is selling tools to the miners. Still, I'm curious; how much would you have to invest into modern mining hardware in order to see a return on investment? I'm going to assume you either need a lot of these or have to join a pool.

Is this a game only playable by those with tens or hundreds of thousands of dollars?

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The biggest problem with ASIC miners that I see is that they do not ship until "a few months". With the mining difficulty growing exponentially [1], the hardware you buy now will be relatively obsolete in a few months. For example by buying the latest 600GH/s from Butterfly labs[2] at 4500$, you'd break even in about a month according to the acula mining calculator[3].

The problem is that your card will arrive in January. In 2 months, if the bitcoin difficulty keeps growning at a steady pace (which is improbably, it probably keep growing exponentially), the break-even will be closer to 2 months. While you will probably keep making a few hundred of dollars after the break-even point, your chances to "double up" your initial 4500$ investments are close to zero. I have no idea about the profit marging ButterflyLabs make on those cards, but I'd bet it's larger than "a few hundred of dollars". That's why the mining gear business is probably more profitable than the mining business itself.

Of course this doesn't stop Butterfly Labs from having large farms of those cards...

[1] http://bitcoindifficulty.com/

[2] http://www.butterflylabs.com/monarch/

[3] http://www.alcula.com/calculators/finance/bitcoin-mining/

Butterflylabs is notorious for delivering many months late.

All the ASIC miners are notorious for delivering many months late.

KNC is already shipping a 28nm 550GH/sec miner for $5k

There are people already using them and more next month.

Butterflylabs will be out early next year.

If a thousand ASICs are profitable then one ASIC should also be profitable. The problem today is not scale but finding any profitable ASIC.

Assuming your payoff for that 4k is 3 months ignoring energy costs...

600 * 1000 * 60 * 60 * 24 * 30 * 3 / 4000 = 1166400000 thousand hashes per dollar. If the average person spent 60 at 20,000 Hashes seconds on your site you would need 972,000 people to connect to make a dollar... ouch.

And more hashing power is coming online all the time. Here's a link to long-term plots of the difficulty and reward for Bitcoin mining: http://www.blockchained.com/chart_large_log.png

If you don't already have hardware in your hands it is unlikely to be profitable.

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