5 ms·

This operation currently mines about $262k per month: 230e9 (each machine does 230 Ghash/s) * 2500 (# of machines) * 3600 (second/hour) * 730 (hour/month) / (2

by mrb 12y ago

This operation currently mines about $262k per month: 230e9 (each machine does 230 Ghash/s) * 2500 (# of machines) * 3600 (second/hour) * 730 (hour/month) / (2^32 (average number of hashes to solve a block at diff=1) * 19.8e9 (current Bitcoin difficulty)) * 25 (BTC/block) * 590 (USD/BTC) = $262000/month The article says their electricity bill is $60k per month. Subtract the 3 employees salaries, say $5k per month (this is China). So you are looking at a pure profit of $197k per month. Of course these profits are declining quickly over time; look how fast the difficulty has been rising: http://bitcoin.sipa.be/speed.png http://bitcoin.sipa.be/speed.png (logarithmic scale!) And this mine only represents 0.3% of the total network speed (about 170,000,000 Ghash/s). Edit: bellerocky: most exchange fees are < 1% to turn BTC to fiat. Edit: FigBug: roughly yes, but because the network is growing, there are more than 3600 coins mined per day (blocks are solved a bit more often than every 10min).

bellerocky 12y ago
> So you are looking at a pure profit of $197k per month. Not including liquidity issues and fees for turning that stuff into actual money, at least until you can start paying all your bills with bitcoin.
- Sambdala 12y ago
  $200k/month is not going to run you into liquidity issues.
  - pyre 12y ago
    It's $200k/month worth of Bitcoin. The 'liquidity' we're talking about here is converting Bitcoin into local currency that you can purchase things with.
    - jafaku 12y ago
      Again, not a problem.
      - vectorpush 12y ago
        Possible, perhaps, "not a problem", seems pretty untrue. How exactly would someone go about cashing out $200k worth of bitcoin?
        anon4this1 12y ago
        I sold $800k US of bitcoin on bitstamp market earlier this year - i did it over 30 minutes and it dropped the spot price about $6
        venaoy 12y ago
        Sell on an exchange. The big ones have a monthly trade volume of 100k+ BTC ($50+ million): http://bitcoinity.org/markets/list?currency=ALL&span=30d http://bitcoinity.org/markets/list?currency=ALL&span=30d Clearly $200k is a drop in the bucket for them.
yutah 12y ago
that doesn't include the cost of hardware but I guess it is negligible... and I thought mining was not profitable at current prices.
- vidarh 12y ago
  It's not profitable for people with expensive electricity. Location matters greatly.
- wmf 12y ago
  Mining tends to not be profitable if you pay retail prices for ASICs, but if you make your own ASICs it's still pretty profitable.
miles 12y ago
The article says their electricity bill is $60k per month. Subtract the 3 employees salaries, say $5k per month (this is China). So you are looking at a pure profit of $197k per month. Three other significant expenses worth considering: rent/physical plant, hardware, and taxes.
- contingencies 12y ago
  In most cases in mainland China, no tax is paid and cash is king. Only if you are a large, visible company doing business with other large, visible companies do you need to get formalistic. Even then, double or triple sets of accounts are normal.
  - seanmcdirmid 12y ago
    I pay plenty of taxes. Heck, I pay the tax on my rent for a fapiao that gives me a tax benefit at work. The PRC is getting better about tax collection, though a lot of activity still goes on underground, especially those that are related to money laundering.
FigBug 12y ago
If they have 0.3% speed, wouldn't it be expected that they get 0.3% of the coins per month? 3600 coins per day * 30 days * 588.41 BTC/UDS * 0.003 = $189831.60 USD gross per month?
erikb 12y ago
I think for this kind of work $5k is already too much for three Chinese workers. Each worker about $500 and maybe some fees for the living room and food. If you pay $2k it might be fine. If you pay $5k for such kind of 24/7 job in China you'll make a middle man very happy.
jedc 12y ago
How much would they have paid for 2500 machines that can do 230 Ghash/s each?
epynonymous 12y ago
you forgot to include capital expenditures, asics are expensive.

by mrb 12y ago

bellerocky 12y ago

> So you are looking at a pure profit of $197k per month. Not including liquidity issues and fees for turning that stuff into actual money, at least until you can start paying all your bills with bitcoin.

Sambdala 12y ago
$200k/month is not going to run you into liquidity issues.
- pyre 12y ago
  It's $200k/month worth of Bitcoin. The 'liquidity' we're talking about here is converting Bitcoin into local currency that you can purchase things with.
  - jafaku 12y ago
    Again, not a problem.
    - vectorpush 12y ago
      Possible, perhaps, "not a problem", seems pretty untrue. How exactly would someone go about cashing out $200k worth of bitcoin?
      - anon4this1 12y ago
        I sold $800k US of bitcoin on bitstamp market earlier this year - i did it over 30 minutes and it dropped the spot price about $6
      - venaoy 12y ago
        Sell on an exchange. The big ones have a monthly trade volume of 100k+ BTC ($50+ million): http://bitcoinity.org/markets/list?currency=ALL&span=30d http://bitcoinity.org/markets/list?currency=ALL&span=30d Clearly $200k is a drop in the bucket for them.

yutah 12y ago

that doesn't include the cost of hardware but I guess it is negligible... and I thought mining was not profitable at current prices.

vidarh 12y ago
It's not profitable for people with expensive electricity. Location matters greatly.
wmf 12y ago
Mining tends to not be profitable if you pay retail prices for ASICs, but if you make your own ASICs it's still pretty profitable.

miles 12y ago

The article says their electricity bill is $60k per month. Subtract the 3 employees salaries, say $5k per month (this is China). So you are looking at a pure profit of $197k per month. Three other significant expenses worth considering: rent/physical plant, hardware, and taxes.

contingencies 12y ago
In most cases in mainland China, no tax is paid and cash is king. Only if you are a large, visible company doing business with other large, visible companies do you need to get formalistic. Even then, double or triple sets of accounts are normal.
- seanmcdirmid 12y ago
  I pay plenty of taxes. Heck, I pay the tax on my rent for a fapiao that gives me a tax benefit at work. The PRC is getting better about tax collection, though a lot of activity still goes on underground, especially those that are related to money laundering.

FigBug 12y ago

If they have 0.3% speed, wouldn't it be expected that they get 0.3% of the coins per month? 3600 coins per day * 30 days * 588.41 BTC/UDS * 0.003 = $189831.60 USD gross per month?

erikb 12y ago

I think for this kind of work $5k is already too much for three Chinese workers. Each worker about $500 and maybe some fees for the living room and food. If you pay $2k it might be fine. If you pay $5k for such kind of 24/7 job in China you'll make a middle man very happy.

jedc 12y ago

How much would they have paid for 2500 machines that can do 230 Ghash/s each?

epynonymous 12y ago

you forgot to include capital expenditures, asics are expensive.