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How can I compute mining profitability?

Do bitcoin miners like the one depicted in the video below with 24 server clusters actually profit from bitcoins at the current prices? Are the bit coin exchange rates high enough to cover their costs of electricity and hardware? And is there enough liquidity in the market to actually unload them?

Or are all these miners hoarding them in hopes the idea will take off in the future?

Bitcoin Mining Rig - 24 Machine Setup - 48Gh

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marked as duplicate by ripper234, Dori Sep 22 '11 at 5:40

This question has been asked before and already has an answer. If those answers do not fully address your question, please ask a new question.

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How can I compute mining profitability? might interest you –  nmat Sep 15 '11 at 2:04
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vote to close: other questions show exactly how to compute profitability under various scenarios. Other than that it is speculation. Some bitcoin miners are mining at a loss, some for profit, some making a lot of money, some a little, etc. –  lemonginger Sep 15 '11 at 3:02
    
@lemonginger I used to agree, but thinking about it a bit more, I think it's not really a bad question nor a duplicate. –  Lohoris Mar 25 '12 at 14:04

3 Answers 3

Miners have about 26% profit at the moment, that's includes only cost of electricity vs bitcoins sell price.

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Once you include the amortized cost of hardware that 26% goes away pretty quick. It's tough to estimate exactly how much that should eat up, though, since there aren't very good sources for MTBF of GPUs running at 100% 24/7. –  David Perry Sep 15 '11 at 3:19
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whose cost of electricity? that's totally variable.... –  lemonginger Sep 15 '11 at 23:26

Serith's answer has a good approximation for the operating costs. On that website, you can also see that miners have negative profits if you include hardware/bandwidth costs.
So it is profitable to mine, but it is not profitable to invest in mining hardware right now. Of course that these numbers often change according to several factors - BTC prices, mining difficulty, hardware updates, etc.

As for liquidity, MtGox alone moves around 1 million coins each month so that shouldn't be a problem (the total monthly bitcoin production is ~216000 until next year).

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At current valuations ($5.59 as I write this), the profitability of GPU mining is dominated by the cost of physically housing, cooling, and maintaining the GPU mining rigs in a commercial scale datacenter. Electricity and rig capital costs are both less. Electricity and GPU hardware depreciation costs are generally the only costs considered in today's mining profitability calculators.

Our analysis can be found here.

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