Bitcoin Miner Pricing Puzzle

Bitcoin Miner Pricing Puzzle – Bitmain’s Antminer S9 Goes Down in Price as Canaan’s Avalon Miners Go Up.  What’s Going On?

The Bitcoin miner pricing puzzle is getting harder and harder to solve.  Two months ago The Antminer S9 had a “street price” of $5,000 (rated at 14 TH/s) compared to the Avalon 741 (7.1 TH/s) which could be purchased for $799.  Dollar for dollar, the Avalon miner was by far the better deal.  Fast forward to present day and Bitcoin miner pricing has gone sideways.

Canaan’s ASIC Bitcoin miners were always known to be of high quality with respectable performance at fair prices.  The fair prices thing has gone out the window with the Avalon 821 which cannot be purchased for less than $2899 despite a performance increase of roughly 35%  So why is the price more than three times higher when the performance increase itself is not hardly in step with the price increase? The Bitcoin miner pricing puzzle thickens.

By comparison, Bitmain’s flagship product can now be purchased after-retail for nearly half of what they were going for back in December.  Part of the reason for the radical change in pricing can be learned in this CNBC article on Bitmain operations.  It seems Canaan has taken a similar approach to pricing judging from what they said when the 821 and 841 were first announced; they would be pricing their new miners in step with the Bitcoin market.

That makes the Bitcoin miner pricing puzzle more complicated — since Bitcoin is well off it’s December high why are Avalon miners nearly the same price as Bitmain miners today? The Avalon 741 was seen as the next best option — balancing price and performance — compared to the Antminer S9.  I talked about this extensively in an earlier article.  With the Avalon 821 at about the same price as the Antminer S9 — with lower output — I predict Canaan will lower pricing to be in step with prevailing market conditions.

Bitcoin Mining for Beginners

Bitcoin Mining for Beginners

Avalon Miner
Bitcoin Mining History – I bought an Avalon Miner 721 for $900 INCLUDING a controller AND a 1200 watt power supply.  As I would later learn I scored a BARGAIN.

It all started in July when bitcoin got my attention.   Specifically bitcoin mining.  I spent WEEKS just reading articles on bitcoin itself absorbing every syllable on the subject.  From forks to exchanges to different cryptocurrencies to media coverage I spent the better part of a month just learning everything I could about bitcoin.

I dipped my toe in the bitcoin mining water by starting to mine bitcoin on a PC using a Windows store app….

bitcoin mining on a pc

Bitcoin mining on a PC is a money losing proposition.  That’s because I was getting paid roughly 30 cents per week for running a computer at full power 24×7.  BUT it was a very educational exercise that schooled me on the fundamentals of bitcoin mining.

During the course of my  research I realized that bitcoin mining at GH/s (such as with USB-based bitcoin miners) is  exponentially more effective than a PC that processes with KH/s ratings.  Running the numbers I concluded that at the end of a week you could earn enough money for a McDonald’s value meal.  Then I discovered ASIC miners that perform bitcoin mining at TH/s and then I got excited

KH/s GH/s TH/s WTF?

  • 1 KH/s is 1,000 hashes per second.
  • 1 GH/s is 1,000,000,000 hashes per second.
  • 1 TH/s is 1,000,000,000,000 hashes per second.

To make any kind of serious money in bitcoin mining you want as much firepower in terms of TH/s as possible.  And that’s what ASIC miners do.  They are stand-alone devices with a very dense array of chips designed with one single purpose; maximized mining at the most efficient rate possible to make more money.

This realization led me to start cruising eBay and Amazon and ASIC miner manufacturer websites looking for bitcoin miners to purchase.  I quickly realized that after-market rates were TOTALLY inflated to the point of absurdity.  Case in point, an Antminer S9 can be purchased for $1,415 directly from Bitmain – the manufacturer itself….

bitcoing mining antminer

The downside is you’re going to wait over TWO MONTHS for your bitcoin miner to arrive.  If you’re in a hurry and just can’t wait to start bitcoin mining you can buy an Antminer S9 with immediate shipment for “just” $3795 — “Only” 250%+ over the manufacturer’s own price…

bitcoing minng antminer s9 ebay

Here’s the thing – it makes absolutely no economic sense to buy an Antminer S9 or an Avalon Miner 741 on eBay or any other after-market platform and pay these inflated rates.  Even considering bitcoin prices are hovering right near record highs it would take you YEARS to recover your initial investment in ASIC mining hardware due to the unnecessary premium you’re paying to get a bitcoin miner sooner rather later.  Even if bitcoin prices soar to $27,000 in the next 12 months it’s going to take way, way longer than necessary to make money mining.

That’s why I’m particularly proud of my first bitcoin miner; the Avalon Miner 721  I scored used on Amazon for just $900 INCLUDING the Avalon Controller and a good power supply.  The seller was very patient and helpful which, as you will learn in future articles, was fundamental in getting me up to speed on cryptocurrency mining in no time at all.   I knew enough to get started but there was a lot more I learned along the way…

 

 

 

 

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