BITMAIN: Antminer S-series Return on Investment (Bitcoin)

Chart shows the return on investment of Antminer S-series miners:
  • S1 (yellow): approx released July 2013, power consumption 2 kW /TH/s
  • S3 (purple): approx released June 2014, power consumption 0.71 kW /TH/s
  • S5 (orange): approx released December 2014, power consumption 0.51 kW /TH/s
  • S7 (green): approx released Aug 2015, power consumption 25 kW /TH/s
  • S9 (blue): approx released July 2016, power consumption 0.1 kW /TH/s

Red curve is network hash rate (proportional to difficulty).

Chart of mining efficiency (TH/s/ kW ): (blue is actual trend, red is projected continuation of pre-S9 trend)

Bitmain has not publicly released any significant efficiency upgrades since July 2016. Innovation at the mining sector's biggest player seems to have stalled. If the exponential trend had continued we should have reached >40 TH/s/ kW by Jan 2018, instead we are at 2016 levels. This is either because Bitmain cannot make more efficient ASICS or because they are keeping secret any innovations they have made.

Looking at the return on investment ( ROI ) chart. The white horizontal line is the breakeven line. Anything above is profit. The vertical lines are release dates of the various S-model miners. We see that a new miner is released to the public just when the previous model becomes obsolete. Normally there is a lead time before delivery of several months. Bitmain have not made any announcements regarding an S11.

Despite all of this the hash rate is increasing unabated. Have Bitmain been secretly mining with new hardware or have they simply been bringing more S9s online? If they have an S11 why aren't they releasing it?

Further reading
Bitmain now mines 42 % of the entire network
June 8 interview with the Bitmain CEO Jihan Wu
This is where I explain how to calculate the conversion factor

Comment: HORIZONTAL LINE: Breakeven should be at 1 on the right axis
Comment: Bitmain will hold an IPO to raise USD 12 billion. This will give them wildly more funding than any other ASIC producer. Bitmain's two mining pools already control over 42 % of the global hashrate. By the way, a 51 % share is not necessary to carry out a majority attack, it just ensures its success.
In the interview I posted above Jihan Wu says they plan to diversify into "Artificial Intelligence chip products". He also says that one of his major goals for the future is to work together with regulators, it's why they are so heavily invested in Circle (Goldman Sachs). This is what corporate crypto looks like: a company valued at 12 bn controls the network (>51%) and is in bed with investment banks who control the exchanges (guess who regulators will favour). BTC to the moon? Very probable, but currency of the people? Look elsewhere...

link provided courtesy of @elshanti
Comment: There is an interesting study ( that tries to estimate power consumption of BTC mining. They also estimate lifetime of miners, which they put at 1 to 2 yrs so it is important to take account of acquisition costs in my opinion. But their figure is slightly lower than mine, because they estimate acquisition costs for the manufacturer (USD 500) where as I just took the current retail retail price (800 unit + 100 PSU)

Anyway if I use their data and recalculate the conversion factor for a 1 yr amortization period I get 0.25 USD/TH/s instead of my retail 0.34 USD/TH/s.

I also chart Bitmain's ROI (area plot) for write off periods of 1, 1.5 and 2 yrs. We see that accordingly Bitmain should still be in the profit zone. Bear in mind this does not include coolin cost (which are substantial) and of ancillaries such as personnel etc.... however for "retail" miners (line) the situation is different with amortization plans of 1 year now in the red at current BTC prices