How to more accurately estimate the payback period of S19

popular sciencepopular scienceminingmining, is a craft of turning electricity into "gold". And this sounding attractive technology has caused many friends who had hoped to invest in mining to lose all their money and leave the market dismally.

So, where is the problem? If mining is a blatant lie, why do so many people actually benefit from it, and even continue to invest?

From the initial barbaric growth, mining has gradually formed a 100 billion-level market with rich business formats and clear division of labor. However, in the implementation process, there are actually various "traps" that lead to less than expected benefits. If there are no reasonable risk avoidance measures, it is indeed easy to lead to losses.

The author still takes Bitcoin mining as an example, aiming at a commonMarketing trap - "mining machine payback cycle"secondary title

"Toxic" marketing slogans

In the process of publicity and buying and selling of mining machines, there is a critical and tasteless parameter called "payback cycle". If it is a more responsible merchant or channel provider, it will be indicated that this is"Static payback cycle"。

This data is calculated with reference to the theoretical computing power and power consumption of the mining machine, the mining difficulty at the time of data release, block rewards, real-time currency prices, and a specific electricity price. According to the above data, first calculate the net income of mining on the day. Then divide the net income by the cost price of the mining machine to get the static payback period.

This value is generally not large, and the static payback period of most mining machines is300 dayswithin, and some performances are far superior to the current similar mining machines (for example, the performance of the mining machine is increased by 2-4 times, or the first appearance of a certain currencyororASIC mining machine), the static payback period can even reach150 dayswithin.

but

butThe actual situation will always be greatly different from the expectation. With the large-scale shipment of mining machines, the income of each mining machine will be rapidly diluted.Just imagine。

Just imagine, a few months after you bought the mining machine, because the manufacturer shipped a large number of mining machines, resulting inComputing power skyrocketed by 30%electricity priceelectricity priceBy the mineincreased by 10%, the market turmoil causedThe price of the currency plummeted, the house leak happens to be raining all night, so it happens at this timeBlock Reward Halved, you will suddenly find that the mining machine at this timeThe static payback cycle is infinitely longsecondary title

Factors Affecting Mining Profit

The static payback period is a picture that cannot be used to satisfy hunger, but when we make investment decisions, we must consider the return on investment, so how to evaluate the payback period of the mining machine to make it as close as possible to What about the actual situation?

To solve this problem, we must first understand the factors that affect mining revenue, and why the static payback cycle is not worth referring to.

Taking Bitcoin as an example, most mining pools currently usePPS revenue model(such as PPS+, FPPS, etc.). And according to "Calculation method of mining incomeimage description

The part in brackets is the theoretical income per day of computing power, which can also be obtained directly from third-party websites when calculating

We found that the factors that actually affect the income of Bitcoin mining are as follows:

• Mining power: Under normal market conditions, miners will not choose to over-clock the mining machine too early, which can be regarded as a fixed parameter;

• mining difficulty: From the perspective of the development of Bitcoin, Bitcoin mining continues to grow in terms of difficulty. The current mining difficulty is twice that of the same period in 2019 and three times that of the same period in 2018.image description；

  

  block reward

• block reward: Bitcoin’s current block reward is 6.25BTC, and this value will remain for nearly 4 years (the next halving will be in May 2024), which can be regarded as a fixed parameter;

• Transaction Fee Rewardsimage description

  

  Figure 2 Changes in the proportion of Bitcoin transaction fee rewards in mining revenue

• currency priceelectricity price

• also,electricity priceIn summary,

In summary,mining difficultyThe drastic fluctuation is the main reason for the huge difference between the payback period of static mining and the actual payback period of miningsecondary title

Estimation method of mining machine payback period

After sorting out the ideas, we can try to estimate the investment payback period of a mining operation. With the latest generation of Bitcoin mining machinesS19For example:

If you buy S19 at the official price, you will start to use the annual electric mine (Electricity price: 0.35 yuan/kwh) mining, in the current difficulty cycle,daily mining incomefor:

When the author wrote this article, the computing power of the mining machine = 95TH/s, the daily theoretical income per unit computing power = 0.00000929 BTC per TH/s (data from F2Pool), and the current currency price = 68549.55 yuan (data from CMC).Daily mining income = 60.5 yuan。

The daily mining expenditure (i.e. electricity fee) is:

The power consumption of the S19 mining machine = 3250W, the mining machine runs around the clock, and the running time = 24 hours. Therefore, the daily power consumption of the mining machine = the power consumption of the mining machine × the running time of the mining machine = 3250 × 24 = 78000 W hours = 78 Spend. Electricity price = 0.35 yuan/kWh.Daily mining expenditure = 27.3 yuan。

It can be seen that the net mining income of S19 at this time = daily mining income - daily mining expenditure = 33.2 yuan, calculated according to the current mining difficulty and currency priceMining machine static payback cycle=S19 mining machine price/S19 mining net income=but。

butAs mentioned above, the actual mining situation is greatly affected by the change of mining difficulty, which will have a large discrepancy with the static payback period of the mining machine. In order to more accurately estimate the mining payback period,Mining difficulty fluctuations need to be considered。

Looking back at the changes in the difficulty of Bitcoin mining in the past two years, the difficulty of Bitcoin mining has been adjusted within two years54 times, the average mining difficulty increases each time2.38%(Mining revenue is inversely proportional to mining difficulty, that is, each mining revenue decreases2.32%image description

Among them, 0.0232 is the decline in mining revenue after each mining difficulty adjustment, n is the number of mining difficulty adjustments In the total mining expenditure, the daily power consumption of the mining machine × electricity price = daily mining expenditure = 27.3 yuan

Substituting the computing power of the mining machine, the current unit computing power daily theoretical income, the currency price, the daily power consumption of the mining machine and the electricity price data, the curve of the net mining income over time can be obtained:

It can be found that when the difficulty is adjusted for the 35th time (about October 2021), the mining revenue of the mining machine will not be able to offset the electricity bill. At this time, the net mining income reaches a maximum value of 7076.9 yuan, which is less than half of the cost of the mining machine.The investment did not return the capital,,,(As a blogger of inspirational popular science mining, I feel so embarrassed)

fine, the actual situation is not necessarily like this: if the depreciation price of the S19 mining machine can reach half of the sales price at this time, if you choose to sell the mining machine at this time, you can get back the cost. (As the latest generation of machine king, S19 still has this value preservation property)

of the above resultsConditionsyes:

• Electricity price 0.35 yuan/kwh

• Mining machine update iteration maintains a speed of nearly two years

• The currency price is stable between 63,000 yuan and 70,000 yuan, or the currency price is locked in this range through hedging in advance

But the actual situation is changeable, the above conditions are not necessarily valid in the investment mining process. For example, some miners can get the mining machine at a lower price, some people have more advantageous power resources, and more skilled people can transform the mining machine Improve mining performance, etc. Therefore, in the process of calculating return on investmentwantCombined with its own situationFor consideration, here are a few other possible situations for your reference:

• If there isMore advantageous power resources, the data will be different, for example, if the electricity price reaches0.21 yuan/degree, then the mining machine will reachThe maximum net income from mining is 13,900 yuan；

• In view of the fact that the chip manufacturing process used by the latest generation of mining machines has reached a very high level, optimistic estimates,In the next 2-3 years, the update and iteration speed of mining machines will be greatly reduced.The changes in the computing power of the entire network will continue to revolve around the replacement of all previous old mining machines by the new generation of mining machines represented by S19.The computing power of the whole network grows slowly. Therefore, in the next three years, the average miningDifficulty increasecan be setlower. In this case, the result will be very different;

• currency priceHas a drastic impact on mining revenue. When investing in mining, hedging can be used to sell the future mining income at a certain currency price in advance to lock in the currency price (the author is optimistic about the market in the next two years, investors canenough cash flow，Waiting for hedging at a higher currency price), reduce the possible impact of currency price fluctuations on mining revenue, and obtain stable income.

On the whole, as the audience of encrypted assets increases and the mining industry gradually complies with regulations, mining profits will inevitably return from huge profits to small profits, and the risk of mining investment will also increase. In the future, it is necessary to integrate high-quality resources and use Necessary financial means to avoid risks and lock in profits.

All the above estimation results are calculated according to the mining difficulty and currency price when the author wrote the article. Readers should combine the actual situation when estimating. This article only provides a relatively reasonable estimation idea of ​​the mining payback cycle. It is believed that some masters will make an estimation model that includes more variables, which can more accurately estimate the return on investment of mining.