Two Cointerra Terraminer Bitcoin Mining Machines Died
CoinTerra Levels Up With The TerraMiner IV and TerraMiner
At what price will Bitcoin fail to function? My estimate: ~$100.
I'll begin with my conclusions: If the Bitcoin network consisted solely of 'Titanium ASIC' miners, the most powerful and energy efficient mining machine I know of, then the price point at which electricity costs begins to exceed rewards is $71/BTC (based on yesterday's network figures; more on that later). More realistically though, most miners aren't running highly efficient Titanium ASICs, hence I estimate ~$100/BTC as the turning point. I say 'fail to function' in my title, because who will continue to mine at a pure loss? It would be irrational - the rational action would be turn off the machine until the value of the rewards increases. Note: This is not the same as sunk costs in buying hardware - because in that case even if you never get back how much you paid, you're still making something. Perhaps, you might counter, Bitcoin enthusiasts will continue to mine at a loss. Well consider this: To sustain just 1% of the current network hash rate, you would require 559 Titanium ASICs costing over one million dollars in yearly electricity cost (at $0.10/kWh) - and that's a best case scenario. Let's assume that's the case - you have Bitcoin Enthusiasts contributing the equivalent of 559 Titanium ASICs hashing power for free out of their pocket. That's a 99% drop in hash rate. The time to a difficulty retarget is 2016 blocks, or at 10minutes/block that's 2 weeks. But if the hash rate were to drop by 99% within that two week period, then the block time would balloon out to 16.66 hours - making the block retarget ETA up to 3.8 years! If transactions took 16.66 hours just to get a single confirmation (if they had first priority), then how would use of Bitcoin remain practically feasible? Would people still have confidence in the system and the developers for allowing this to happen? How difficult or costly would it be to launch a 51% attack? Now, on to the calculations, and a few less optimistic alternate scenarios: Network hash rate at time of calculation: 335,365,290.09 GH/s 335,365,290.09 GH/s / 6000GH/s = 55894.215 'Titanium ASIC' miners 55894.215 x $5.28 daily electricity cost (At $0.10/kWh) = $295121.4552/day in electricity costs = $1776.87709485/block (avg. time of 8.67 minutes) $1776.87709485 / 25BTC block reward = $71.04/BTC = break even point. The above does not account for pool fees or transaction fee revenue or more importantly variance in kWh rates ($0.10/kWh is nonetheless pretty low worldwide), and hardware cost is irrelevant to this calculation. Without doing all the math again, here's some other popular mining machines for comparison: $113.07 (SP35 Yukon) $193.84 (CoinTerra TerraMiner IV) $385.89 (Antminer S1) I've also just seen the 'Antminer S4' mentioned in /Bitcoin, so just for comparison a Titanium ASIC is almost twice as energy efficient as an Antiminer S4 (2200W vs. 4200W for 6TH/s) - it's less efficient than the SP35 Yukon. If I've made any miscalculations here or have left anything important out, feel free to correct me.
In Bitcoin mining you need reliability over a low price point. These low-cost miners will become high-cost as you are replacing them every few months or wasting your time on endless repairs. I boxed up my two Cointerra Terraminers today and shipped them to someone who wanted them for parts for their own problematic Cointerra Terraminers. CoinTerra Levels Up With The TerraMiner IV and TerraMiner II October 19, 2013 By Matt B. As an ASIC Mining company that designs and produces Bitcoin mining ASIC chips with top quality processors and systems, CoinTerra prides itself of state-of-the-art design approaches based up-to-date technology. Ideally, this enables the company to provide solutions to ASIC Bitcoin mining… With blazing performance approaching two terahashes per second, the TerraMiner IV is the first self-contained Bitcoin mining solution to smash the one terahash per second barrier and with its need advice on bitcoin mining with TerraMiner IV. A TerraMiner IV does about 1.6 Th/s. That will give you about 0.000277 BTC or $2 per day. One year later, this (still unspent) paycheck is worth double its original value because I sell my dollar-denominated labor for bitcoin instead of fiat. Don't sell yourself for State confetti. 741. PR Newswire AUSTIN, Texas, Jan. 28, 2014 AUSTIN, Texas , Jan. 28, 2014 /PRNewswire/ -- CoinTerra™ , the high performance and value leader in ASIC Bitcoin