[ExI] Bitcoins Again

[Kelly Anderson]

I've been trying to do an estimate of what I might expect to make if I
bought a bitcoin miner from Butterfly Labs, and I thought I'd share my
calculations in case any of you found it interesting (and to double check
my math... LOL)

Ok, So according to http://www.bitcoinwatch.com/
The network's current power is 82.77 TeraHashes/Second (I'm making the
assumption that there are zero butterfly labs machines out there at this
point, which may not be entirely correct)

The network is automatically adjusted to target the creation of 7200
bitcoins per day (though it varies both up and down, this is the average
that the math attempts to maintain).

So, you currently need to do 41.385 TeraHashes to create a bitcoin, on
average. This makes sense since 7200 is about twice the number of seconds
in a day... So far, I think my math is about right.

So the vapor hardware 50 GH/s Bitcoin Miner at $2,499 (that's right, not
yet available) would create a bitcoin, on average every 827 seconds, or
every 13.7 minutes. (Of course, they are really created 50 at a time...)

So now the interesting question is what happens when there are thousands of
these machines actually out there... What happens is the difficulty goes
up. Some of the serial numbers on ebay suggest that they have presold as
many as 53,000 of the 50 GH/s Miners, though that is a guess based merely
on serial numbers beginning with 1 and going up by 1, which is probably a
reasonable guess. So that gives 50 GH/s * 53000, which ups the network
capacity by 2650 THashes/second, meaning that the entire network will be
1587 TH/Sec, making the difficulty roughly 31 times more difficult (and
making all the old bitmining hardware pretty worthless). And that is just
the big boxes, doesn't count all their smaller units, and those of their
competitors... Is my math messed up here?

So if the guy on Ebay is right that one of the 60GH/s machines will make
$336/day (I didn't check his math). Then once these are out there, you
could expect to make about $10 a day off an investment of $2500, which is a
return of $3650 on an investment of $2500 if nothing better comes out
during the year... for a profit of $1150 minus the cost of electricity.
That seems like a lot of risk.

I found another article where the guy said he thought the difficulty was
rising about 5% per week. If a bunch of these new machines ship quickly,
that will be a fond memory of the past, for a little while anyway.

Another interesting article on how the bitcoin network compares to
supercomputers.
http://www.kurzweilai.net/bitcoin-network-speed-8-times-faster-than-top-500-supercomputers-combined

So, I can only assume that it is going to get worse, as this chart seems to
show.
http://bitcoindifficulty.com/

Bottom line... If you can get an ASICS machine in the VERY short term, it's
probably not too horrible... but if you get one in six months, it will take
a long time to earn a return, if you ever do. But damn, that's some number
crunching for the ages folks!

-Kelly
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