DEVTOME.COM HOSTING COSTS HAVE BEGUN TO EXCEED 115$ MONTHLY. THE ADMINISTRATION IS NO LONGER ABLE TO HANDLE THE COST WITHOUT ASSISTANCE DUE TO THE RISING COST. THIS HAS BEEN OCCURRING FOR ALMOST A YEAR, BUT WE HAVE BEEN HANDLING IT FROM OUR OWN POCKETS. HOWEVER, WITH LITERALLY NO DONATIONS FOR THE PAST 2+ YEARS IT HAS DEPLETED THE BUDGET IN SHORT ORDER WITH THE INCREASE IN ACTIVITY ON THE SITE IN THE PAST 6 MONTHS. OUR CPU USAGE HAS BECOME TOO HIGH TO REMAIN ON A REASONABLE COSTING PLAN THAT WE COULD MAINTAIN. IF YOU WOULD LIKE TO SUPPORT THE DEVTOME PROJECT AND KEEP THE SITE UP/ALIVE PLEASE DONATE (EVEN IF ITS A SATOSHI) TO OUR DEVCOIN 1M4PCuMXvpWX6LHPkBEf3LJ2z1boZv4EQa OR OUR BTC WALLET 16eqEcqfw4zHUh2znvMcmRzGVwCn7CJLxR TO ALLOW US TO AFFORD THE HOSTING.

THE DEVCOIN AND DEVTOME PROJECTS ARE BOTH VERY IMPORTANT TO THE COMMUNITY. PLEASE CONTRIBUTE TO ITS FURTHER SUCCESS FOR ANOTHER 5 OR MORE YEARS!

KnC Miner and Scrypt Titan – is it Worth it?

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We keep hearing that Scrypt ASICs are coming soon, and many companies have been accepting preorders for a while now. Only one has successfully shipped at this point, which is the Gridseed, but KnC Miner states that they are getting close to releasing their Titan. This is a Scrypt ASIC that is supposed to be reaching 300 MH/s, use 800W of power, and only cost $9,995. Well, I say “only” because that is significantly cheaper than the options that we have today, but is this really a good deal? I think a lot of people are missing how the mining system works, so that is what I would like to go over in this article. Please keep in mind that while I am going to be analyzing the mining system and its profitability, it is ultimately up to you, as the reader, to make your own conclusions as well. As a result, please do not take my statements and feelings as being the decision you need to make as well. You may just feel differently than I about it. With that said, let us get started.

Waiting for Shipping

As you probably already know (or at least should, if you are getting in to the mining game), more and more hash power is being thrown on Scrypt coins every day. Whether it is a single person that wants to run one video card or a massive company that has entire farms dedicated to the mining process, there is a consistently growing amount of hash power. As this hash power goes up, profitability (based on earnings) goes down. In other words, the longer you have to sit around waiting for a company to ship, the less the hardware is going to earn, and therefore the less it is worth.

The problem here is that while many companies like to throw out estimated dates of shipping, none of them are able to follow through. This is one of the reasons why they are “estimates,” rather than solid ship dates, but at the same time they will often give more solid dates that they are not able to follow through on. This is important to understand because it means that at the end of the day, you have no idea when the hardware is really going to ship. Even if it is claimed to be going out in a couple of weeks, there is no guarantee of this.

Adding Hash Power

This is a concept that is lost on a lot of people when it comes to mining. As stated, the more hash power there is on coins, the less profitable the same has power becomes. Well, the same goes when you add hash power as well; even if 1 MH/s is worth $1 per day right now, as soon as you add that on you have already watered that down to under $1. The concept is actually pretty simple to follow when using a scenario, so let us do that now.

  • You have a coin that has 100 coins per block, 10 minute block times and there is 1 MH/s mining on it right now. This means that 1 MH/s earns around 100 coins per 10 minutes (this is going to be an average, though, so sometimes it will be more and sometimes it will be less, but will always come out to be the same over time)
  • You now decide you want some profit as well. You want 100 coins per 10 minutes, so you throw up 1 MH/s of your own hashing power. And then you realize you are not getting the full reward. Instead, you are getting half of it, or 50 coins per 10 minutes

The reason this happens is because 1MH/1MH equals 1, or 100% of the block rewards. When another MH is added, this now makes your hash rate 1MH/2MH, which is 0.5 or only 50% of the block rewards. In other words, by adding on your own hash power, you have already decreased the profitability of that power. This is a big reason why people need to stop looking at earnings per x hash power, and instead realize that the earnings, just by the nature of adding on more power, are already going to be lower than that as soon as the new rigs are up.

Why This is Important

You are probably wondering why this information is important. Well, when these rigs are sold, they are based on their profitability at the current time and at the current hash rate. Considering you are not instantly getting the rigs, you are already losing profitability (which means you are going to be earning less, being that others are constantly adding more to the network). At the same time, as soon as you do get your rig, you are already earning less because you have just watered down the profits of yourself and everyone else.

The moral to the story is that if you are going to be buying ASICs, you need to account for a lot of losses. Both from the time it is going to take to actually get the hardware and from your additional power to the network. Failing to account for one of these, or even both, is a recipe for losing a lot of money. The hard part is that neither of these can be accurately guessed. There is no telling what is going to happen with the networks in a day from now, much less a week or a month. As such, all you are able to do is speculate on how you personally feel things are going to go. Just keep in mind that if you do this, you need to make much more informed decisions; do not just throw your money out there because some online calculator claims that the systems are going to be earning more than they cost. In the vast majority of cases, this ends up not being true and the money would have been much better to simply invest in coins themselves for the ride up in value.

Source

Mining


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