Quote from: DrG on August 24, 2014, 03:46:31 AM

Quote from: learning on August 24, 2014, 12:25:50 AM

Quote from: alh on August 23, 2014, 04:15:28 PM

Quote from: learning on August 22, 2014, 11:36:41 PM

That's exactly my question, I'm new to bitcoins but I saw the video on MBP datacenter in Washington. Are they still making $USD8million a month profit? Is there a formula that shows how and when (at what investment level) that a profit can start to be made? Feel free to answer here or PM me, I'm looking to learn about this. So far it seems to me that only the manufacturers win because they mine for 6-12 months on their new equipment while "testing" it in pools of at least 100 servers, then when those servers get too slow for the formula they finally ship them to end customers. Do I have it right so far in my conclusions? So to make any profit at this you have to be the manufacturer of your own ASIC cards and get each server for about $500-$900 total cost.

It's quite unlikely that the Washington mining facility is making $8 Million per month today. Unless they have continued to upgrade/replace their hardware, at some serious cost, they will see a declining number of Bitcoins each and every month. The largest facilities are as exposed to difficulty increases, and the volatility of the Bitcoin price as even a puny 100 GH/s miner like myself.

Just think of yourself as the "CEO" of such a mining facility walking around and realizing that every 12-14 days, difficulty will adjust, and you will make fewer Bitcoins next month than you did this month. And you you still have to sell some of your Bitcoins to pay for the electric bill (in US $$$, not Bitcoins) at the end of the month. You just hope that Bitcoins didn't also go down by 5% in value during the month. And sometime, you will likely have to report back to your investors that you didn't make $8 million this month.

While the numbers are jaw dropping, the finances are every bit as precarious as they come.

You can take each month's profit and re-invest into new (and faster) servers. $USD3million buys 1000 5TH machines. So each month you can replace nearly your whole datacenter with faster servers. If you replaced every 4 months you are still making 4x profit over replacement costs. I just wonder what the facts are, not speculation, on what they invest and what they make. Even more I wonder what the lowest entry point is to make a worthwhile income. Companies like Mega Big Power and Cointerra and others who have big datacenters wouldn't do it if it wasn't making them money. So what are they doing right and what is their formula?

The trick is that they can sell to themselves without cheating themselves. If Cointerra sold a 2TH unit last year for $5000 and it cost them $1500 to develop the unit, then they can buy more units for themselves. They don't need to pay for any additional research, they don't need to pay for shipping, they're not penalized with a 2 week downtime with shipping. So if the miner costs 1/3 of their total end user selling price then they essentially have only 1/3rd the investment cost that an end user would have. Not to mention the benefit of mining earlier.

Now if they continue to sell the units for $5k and it costs them $1.5k, they can buy 3 units for every 1 unit they sell you.

This is why she is a hero member Cheesy