With the price of Bitcoin (BTC) moving at a very steady pace during the crypto winter, the return on investment (ROI) on a new miner looks like a shot in the dark. But one mining expert explained that there may be hope for miners to return to profit.
Phil Harvey, CEO of digital consultancy Saber56, told Cointelegraph that there are factors to consider when investigating the potential profitability of mining hardware. These are miner specs, costs, true ROI, and the economics of mining over time.
Analyzing the recently released Antminer S19 XP by mining hardware provider Bitmain, Harvey noted that it is, in terms of specs, the most efficient miner at the moment. In terms of costs, a crypto-mining expert noted that the current costs of miners are much lower than they were in the past few months, especially if they were purchased directly from the manufacturer, and estimated that they could be close to $5,600 per machine.
On what Harvey describes as the true return on investment, the consulting firm’s CEO explained that by using their company’s database, which tracks miners’ revenue from the first ASIC miners to the present, indications are that large-scale miners can earn what they have. ROI in about 11 months.
On the other hand, given the electricity costs of retail miners, Harvey said it could take up to 15 months for them to get a return on the investment. He also explained that:
These numbers do not take into account the potential leverage. In other words, miners who paid twice must exceed the payback period twice as long.”
Commenting on the longevity of the new device, the CEO said that at the facility they run, this type of miner could last for at least 36 months.
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When asked if mining can be profitable in the long run, the expert also explained that mining revenue estimates do not always play out the way it is perceived. He noted that in 2013 and 2014, estimates of mining revenue increased by an average of $4,711.28. However, the real revenue turned out to be only $1047.33. He explained that:
“Basing the economics of mining on a single dollar-to-dollar scale will not provide an accurate picture of the digital asset mining industry, investment opportunities, or the market as a whole.”
Harvey emphasized that the data shows that revenue from each trash will decline, and he predicted a possible collapse in mining. But the mining expert argued that this was tangential to revenue per miner which he said showed stability over time.