With the price of Bitcoin (BTC) moving at a very steady pace during the crypto winter, the return on investment (ROI) on a new mining device seems like a shot in the dark. But a mining expert explained that there may be hope for miners to make a comeback to make a profit.
Phil Harvey, the CEO of crypto consultancy Sabre56, told TUSEN that there are factors to consider when checking the potential profits of mining equipment. These are mining equipment specifications, cost, real ROI and the profitability of mining over time.
When analyzing the recently released Antminer S19 XP by mining company Bitmain, Harvey noted that it is the most efficient miner in terms of specifications right now. As for the cost, the crypto mining expert pointed out that the current cost of mining machines is significantly lower than in recent months, especially if purchased directly from the manufacturer, estimating that it could be around $5,600 per machine.
In terms of what Harvey describes as the true ROI, the consulting firm’s CEO explained that using their company’s database, which tracks miners’ earnings from the time the first ASIC miner came out, indicators show that large-scale miners their ROI in about 11 months.
On the other hand, given the electricity costs for retail miners, Harvey said it could take 15 months for them to achieve their ROI. He also explained that:
“These figures do not take into account potential leverage. In other words, miners who paid double have to endure a payback period that is twice as long.”
Commenting on the longevity of the new device, the CEO said that in a facility they operate, this type of miner can last a minimum of 36 months.
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When asked whether mining can be profitable in the long run, the expert also explained that mining revenue estimates don’t always work as theorized. He noted that mining revenue estimates in 2013 and 2014 averaged $4,711.28. However, the real turnover turned out to be only $1,047.33. He explained that:
“Basing the mining economy on a single measure, such as dollars per terahash, will not provide an accurate picture of the mining industry, investment opportunities, or the overall market.”
Harvey stressed that the data shows revenues per terahash will fall, predicting a possible mining collapse. But the mining expert argued that this is tangential to revenue per mining machine, which he claims has shown stability over time.