Owners of A4 General Discussion and Help

[excelerator]

I agree with you that the future outlook for profitability is not positive. The only question I have is do you know if there's any reason why net profitability (i.e. after subtracting electricity costs) for an A4 would go negative? The only way I could see that occur if if there was some more efficient miner, and as far as I know, there is nothing better planned at the moment.

While I used the A4 as an example showing the inability to fully recapture the capital investment (~$780 before going negative) as A4s are new and at the beginning of their recapture cycle, it's not limited to A4s. Simplistically, I think about it as the total number of blocks available at any time versus the total hash rate pointed at those blocks at that same time in the scrypt ecosystem affects profitability.

Using the same difficulty adjustment, a used Titan purchased on ebay for $1800 (hashing at 280MH) would go negative even quicker and recover even less capital due to higher power costs. All scrypt hardware is going to experience rapid depreciation over the next X months for each month that A4s continue to ship in high volume. It's ironic that the A4s are cannibalizing their own profitability as their numbers grow because we're in a zero sum game right now.

The good news is that Prohashing is the dealer/house - you guys will be fine! Really, really glad you're here and squeezing out every bit of diminishing profitability per miner. From your perspective, the total miner earnings are not dropping as you reflect the market value of the coins being mined at any moment in the zero sum part of the game (mining). However, as more miners and more hashrate are pointed at those fixed number of blocks, the earnings per miner can only go down in the absence of more blocks or an increase of the value of the blocks in the scrypt ecosystem.

[fugju]

Its not a zero deal. Its ever negative deal with new hardware, if the coin dont raise up or you cant sell the hardware at the right point.
The A4 is an bad deal, the hashrate is too low for this price. Iam lucky with electric and can stay on the old hardware. But
in the near time i have upgrade to A4 too, because the currentlimit limit me to buy more old hardware.

[excelerator]

Its not a zero deal. Its ever negative deal with new hardware, if the coin dont raise up or you cant sell the hardware at the right point.
The A4 is an bad deal, the hashrate is too low for this price. Iam lucky with electric and can stay on the old hardware. But
in the near time i have upgrade to A4 too, because the currentlimit limit me to buy more old hardware.

I've seen it stated more succinctly - "mining is a great way to lose money slowly".

[Chris Sokolowski]

The good news is that Prohashing is the dealer/house - you guys will be fine! Really, really glad you're here and squeezing out every bit of diminishing profitability per miner. From your perspective, the total miner earnings are not dropping as you reflect the market value of the coins being mined at any moment in the zero sum part of the game (mining). However, as more miners and more hashrate are pointed at those fixed number of blocks, the earnings per miner can only go down in the absence of more blocks or an increase of the value of the blocks in the scrypt ecosystem.

Theoretically, that's right, but in practice, the pool owners' profits also tend to go down. We make 4.99% of the payout amount you see on the front page, and as you can see, it's going down day by day. If we have some percentage of scrypt hashrate, then our users would have to buy that same percentage of all new hardware if we as the pool owners were to make the same amount of money. However, it doesn't seem like existing miners ever buy their fraction of the new miners; instead, there seem to be completely new people (or existing miners not on Prohashing) buying a larger proportion of new scrypt miners compared to our users. So it's a constant fight to find the people who bought the new hardware and get them to switch to the pool just to maintain our earnings.

[excelerator]

The good news is that Prohashing is the dealer/house - you guys will be fine! Really, really glad you're here and squeezing out every bit of diminishing profitability per miner. From your perspective, the total miner earnings are not dropping as you reflect the market value of the coins being mined at any moment in the zero sum part of the game (mining). However, as more miners and more hashrate are pointed at those fixed number of blocks, the earnings per miner can only go down in the absence of more blocks or an increase of the value of the blocks in the scrypt ecosystem.

Theoretically, that's right, but in practice, the pool owners' profits also tend to go down. We make 4.99% of the payout amount you see on the front page, and as you can see, it's going down day by day. If we have some percentage of scrypt hashrate, then our users would have to buy that same percentage of all new hardware if we as the pool owners were to make the same amount of money. However, it doesn't seem like existing miners ever buy their fraction of the new miners; instead, there seem to be completely new people (or existing miners not on Prohashing) buying a larger proportion of new scrypt miners compared to our users. So it's a constant fight to find the people who bought the new hardware and get them to switch to the pool just to maintain our earnings.

The peak (then decline) of your earnings coincide almost exactly to the day with the huge run up in LTC hash rate starting last week of October.
https://bitcoinwisdom.com/assets/diffic ... 1481403907

This infers to me that you'll have to change your business model over time as well as scrypt moves more towards data hall mining and away from home mining. I'm making leaping assumptions, but all this new scrypt hashrate doesn't appear to be at the public pools as Nicehash doesn't seem to have grown significantly either.

Have you been in discussion with the different hardware hosting providers (Zoomhash, bitcoinasichosting, etc.)? They're in the middle tier like you between machines and customers and would be experiencing similar issues. Creating some co-marketing programs with these guys may yield results as they would be accepting those new machines into their facilities that you're trying to drive to your service.

From the unsolicited advice department, I do think you guys are trying to do too many things and be all things to all miners. You've spread a really wide and solid customer service net out there but you're getting buried by supporting so many of these features. I hope at some time you look hard at the labor expended/service and model how much each services is delivering you profitability. Don't be afraid to lose customers! You'll find that probably many of your customers are in the MSP or break fix business and they know they have to "fire" customers as they grow.

In summary, don't burn out! We need you and I would be happier if you did fewer things even better, increased your profitability and could hire a third person to continue to grow.

[vinylwasp]

Also FWIW, with the enormous influx of A4s into the market, even with profit switching pools, these machines will never ROI at current pricing with just mining. I've linked to an LTC calculator and adjusted coin price to reflect today's "coin price" for switching. Scrypt coins are loosly linked to LTC price overall as LTC is loosely coupled to BTC (halo effect). The purchase price excludes shipping or a PSU and assumes $0.1KwH.
This calculator assumes the difficulty will keep growing (in line with A4 sales) and thus insures the inability to fully recapture the investment. Your best bet to is mine until you have captured your "profit", then sell the machine to secure your return on investment.

People forget that without a growth in the price of scrypt coins, this is a zero sum game.
http://www.vnbitcoin.org/detailcalculat ... evel=68988

I'm not advising reckless investment, but I disagree with your assessment that A4 miners will not even pay back their electricity costs after November 2017. As far as I'm aware, there aren't any more efficient scrypt miners coming out, and without any more efficient hardware, the profitability of an A4 will not go negative. That doesn't mean it will ever pay back its initial price, but on the other hand, over the past three years scrypt profitability never even came close to the point where the most efficient hardware with moderate electricity costs would lose money day-to-day.

I can't agree more Chris. Those calculators are nonsense. Most have existed since 2014 and are based on overly simple linear and flawed assumptions. If you look at LTC diff from July 2015 to July 2016 for instance, it was actually nett negative. The other factor is electricity cost. Mine is about $0.064 per Kwh so my ROI potential is better than most, but there's people who pay even less than that. Mining at home may be marginal, but mining at scale is another thing altogether.

The other thing is this: what is ROI? These devices have a residual value, perhaps 40% after 2 years so 100% ROI is nonsense, no-one buys equipment in business and expects 100% pay back, they write some of it off, and expect a residual value. Only after that they work out the repayment schedule over the expected operating life of the equipment.

Show me one calculator that has any concept of residual value and amortization?

Factor in multi-coin pools and and the future price of BTC, ETH, DASH, ZCASH or whatever you're being paid out in and there's a much shorter ROI than these calculators suggest.

[fugju]

vinylwasp, you sell hardware ?


And you cant calc with rising prices of some coins...

[excelerator]

....Mine is about $0.064 per Kwh so my ROI potential is better than most, but there's people who pay even less than that. Mining at home may be marginal, but mining at scale is another thing altogether.

That $0.064 per Kwh seems really low for NZ! That's a great rate even in Eastern Washington where we have cheap hydroelectric.

[Steve Sokolowski]

The good news is that Prohashing is the dealer/house - you guys will be fine! Really, really glad you're here and squeezing out every bit of diminishing profitability per miner. From your perspective, the total miner earnings are not dropping as you reflect the market value of the coins being mined at any moment in the zero sum part of the game (mining). However, as more miners and more hashrate are pointed at those fixed number of blocks, the earnings per miner can only go down in the absence of more blocks or an increase of the value of the blocks in the scrypt ecosystem.

Theoretically, that's right, but in practice, the pool owners' profits also tend to go down. We make 4.99% of the payout amount you see on the front page, and as you can see, it's going down day by day. If we have some percentage of scrypt hashrate, then our users would have to buy that same percentage of all new hardware if we as the pool owners were to make the same amount of money. However, it doesn't seem like existing miners ever buy their fraction of the new miners; instead, there seem to be completely new people (or existing miners not on Prohashing) buying a larger proportion of new scrypt miners compared to our users. So it's a constant fight to find the people who bought the new hardware and get them to switch to the pool just to maintain our earnings.

The peak (then decline) of your earnings coincide almost exactly to the day with the huge run up in LTC hash rate starting last week of October.
https://bitcoinwisdom.com/assets/diffic ... 1481403907

This infers to me that you'll have to change your business model over time as well as scrypt moves more towards data hall mining and away from home mining. I'm making leaping assumptions, but all this new scrypt hashrate doesn't appear to be at the public pools as Nicehash doesn't seem to have grown significantly either.

Have you been in discussion with the different hardware hosting providers (Zoomhash, bitcoinasichosting, etc.)? They're in the middle tier like you between machines and customers and would be experiencing similar issues. Creating some co-marketing programs with these guys may yield results as they would be accepting those new machines into their facilities that you're trying to drive to your service.

From the unsolicited advice department, I do think you guys are trying to do too many things and be all things to all miners. You've spread a really wide and solid customer service net out there but you're getting buried by supporting so many of these features. I hope at some time you look hard at the labor expended/service and model how much each services is delivering you profitability. Don't be afraid to lose customers! You'll find that probably many of your customers are in the MSP or break fix business and they know they have to "fire" customers as they grow.

In summary, don't burn out! We need you and I would be happier if you did fewer things even better, increased your profitability and could hire a third person to continue to grow.

While I would love to say that some of the most recent issues, like the "multiple connections" issue, were caused by new features we added, Chris has yet to identify the cause of that and some of these other recent issues, like that corruption that required reindexing a week ago.

We already took your advice and purposely decided to make no changes to the system between October 13 and the release of multiple algorithms, in order to reduce the probability of issues occurring. That's part of the reason why I think that Chris has had so many problems in identifying the cause of the issues. Nothing at all had been changed for an entire week before the "multiple connections" issue started to occur. One would think that the best way to avoid problems is to avoid making changes to a working system, but for an unknown reason these issues have been appearing.

On the positive side, tradewiz reported that new A4s do not exhibit the same problems that old A4s do with work restarts. There was a time when pool hashrate (as reported by the graph, not the incorrect multiple connections hashrate from the live stats) declined in proportion to network hashrate, but now that trend seems to have reversed, possibly because the new A4s are more stable.

[CritterDog]

Is there any info on someone getting a jig to fix batch one and batch two for owners in the USA? I read on the forum the fix is pretty straight forward and will turn all batch one and 2 into a batch 3. This is very good news but we need someone in the states to get a jig