It's an interesting analysis, but it misses the key point: the payout will on average always be a little more than the running costs on a completely optimised setup, and therefore a bit less than your running costs if you don't have the most power efficient machine and the cheapest electricity, and certainly not enough to pay for your time on a single machine with a handful of GPUs. If you want to mine cryptocurrencies because you have an interest in them, fine, but if you want to make money you'll be just as well (or as badly) off by buying them with dollars.
> It's an interesting analysis, but it misses the key point: the payout will on average always be a little more than the running costs on a completely optimised setup, [...]
Is that necessarily true?
I can see why it would be true for a blockchain system when it is at a stage of development where the primary reason people run nodes is to mine for that chain's cryptocurrency, but there is other functionality provided by many blockchain systems besides just a simple currency.
If those other functions become important enough to enough people, then could we end up in a situation where people who rely on those functions run nodes to help keep those functions working even if what they can make from the coins and transaction fees of their nodes will not cover the costs of running the node?
It's possible if there isn't an easy mechanism to exchange the benefits of the mining. If there is, in a large enough market, the people who benefit from the nodes being run could pay others a premium to run the nodes, and that premium can be thought of as part of the "payout".
if you're in on ETH, you better be in it for the long haul because everything else is just gambling and posturing. Being in ETH for the long hodl means you believe in the underlying infrastructure, and if you believe in that, then you know the price today is irrelevant.
There are two businesses here - mining, and speculation. You have to calculate the ROI on both of them separately. Mining and holding is a form of speculation, which can be done without mining. If mining and selling immediately doesn't have a useful ROI, don't do it.
The way the difficulty is rising, mining isn't going to be profitable for much longer unless you're getting GPU boards in bulk, operating in a cold climate, and have really cheap power. Difficulty will self-adjust until only the most efficient miners are profitable.
These sort of analyses really need to baseline against the opportunity cost of simply buying and holding.
> "If the price goes around $400, we should be at break-even in the next 75 days..."
Yeah, but if the price goes to $400 you could have just spent your original startup costs on the coin and not spent $77-150 on electricity.
If you require the value of the currency to steadily increase for mining to be profitable, then you're just bullish on the value of the currency. If you're bullish on the value of the currency, just buy some.
If you're relying on rising value to break even, probably just buying the eth low and selling high would be a better approach.
The reality is that any big miner will get economies of scale for buying memory in bulk. Though eth is asic resistant, nothing will ever be bulk pricing resistant.
For the most part I assume that all of the cryptoasset mining opportunities quickly reach an equilibrium where the difficulty has scaled in direct response to the ratio of the exchange rate and the cost-per-PoW-unit. The cost of electricity in your region is one small wildcard that could be exploited when you scale up.
The complexity of operating and maintaining the mining equipment is low enough that anyone who's mildly interested can order it and flip the switch.
It's interesting and fun but rarely a money making opportunity. For the PoWs that are yet-to-move-to-ASICs, it's more interesting. When the exchange rate changes rapidly, it becomes a bit more interesting.
I have a moderately powerful gaming GPU in my bedroom and my apartment has electric heat (in Boston! Its downright criminal), so I've been considering mining some kind of *coin just to get back a bit of the money that I'm spending on heat anyway.
