No its not unanswered, its business 101:
To expand a large miner must find more floor space, more power, expend more capital and increase their risk. This pushes out their ROI. With a large GPU farm its a race to profits, expansion puts you back into the red with a building full of 1+ year old GPU’s.
This IS exactly what many small miners do. They do not have any of the facilities costs that a large farm has. However, this is a long slow process for a small miner, and the ROI on a GPU can fluctuate significantly based on price and difficulty.
You have some misconceptions about mining economics. How does a large mining farm drive a small miner out of business? They both have access to the same GPU’s. The cost for power is more than offset by the cost for floor space, buildings, insurance etc etc. The business models are completely different and the profits margins are relatively the same, and can even better for the small miner.
Lets compare a large GPU mining operation with a modest small home based operation (say 10kW):
The large farm generally has lower power costs, but high cost for facilities. They tend to focus on the fastest way to get to ROI, so cheaper GPU’s, usually less efficient. If we look as the Nvidia P104, P106, and 1080ti, ~full out max mining, these numbers fluctuate a lot from day to day:
P106: daily mining $1.10, efficiency 2.39 Sol/Watt, ROI @ $0.03/kWh 194 days
P104: daily mining $1.66, efficiency 3.46 Sol/Watt ROI @ $0.03/kWh 237 days
1080ti: daily mining $2.75, efficiency 3.33 Sol/Watt ROI @ $0.03/kWh 249 days
Bitmain S9: daily mining $4.95, efficiency NA, ROI @ $0.03/kWh 384 days
So the primary risk for the big miner is getting to ROI as fast as possible. If the price crashes or the difficulty increases, the time to ROI skyrockets, so the faster to profits the lower the risk. I know of several large 2000+ GPU’s operations coming on-line and they are all using the P106. I don’t know any large farms that would even consider a more efficient long ROI GPU like the 1080ti.
By the numbers, a 352kW @ $0.03/kWh facility can support:
1,994 P106’s, startup cost of $637K, 1st year profit $82K PM 9.1%, 2nd year $537K PM 60.2%
1,994 P104’s, startup cost $995K, 1st year profit $126K, PM 9.7%, 2nd year $1.121M PM 86.6%
1,192 1080ti’s, startup cost $953K, 1st year profit $164K, PM 12.7%, 2nd year $1.117M PM 86.5%
213 Bitmain S9’s, startup cost $405K, 1st year profit $28K, PM 4.61%, 2nd year $607K PM 71.4%
So the 1080ti would make the best choice right? Not exactly, the 1080ti requires 47% more upfront capital investment, and the P106 reaches ROI a full 55 days before the 1080ti. For a 2000 GPU farm that is $124,300 in revenue before the 1080ti’s make a dime. That reduces your risk from increasing difficulty and fluctuating prices. This is also excluding discounts that large farms can get for volume GPU purchases on the P104 and P106 but not on a commercial GPU like the 1080ti. This will skew the numbers even more to the P106.
So now the small guy:
The small miner has higher power costs but no cost for floor space. So they tend to focus more on efficiency as they have a set amount of space and power available. A P104 is a mining GPU and has no resale value and limited warranty. The 1080ti on the other hand will still retain a considerable amount of resale value after reaching its ROI and still be under warranty.
a 10kW @ $0.09/kWh basement farm can support:
57 P106’s, startup cost of $18.1K, 1st year profit $955, PM 3.8%, 2nd year $18.1K PM 71.4%
57 P104’s, startup cost $28.3K, 1st year profit $2,213, PM 6%, 2nd year $30.5K PM 82.9%
34 1080ti’s, startup cost $27K, 1st year profit $3,301, PM 9%, 2nd year $30.4K PM 82.8%
6 Bitmain S9’s, startup cost $11.5K, 1st year profit -$569 PM -3.3%, 2nd year $11K PM 63.4%%
So the 1080ti has the best first year return and retains a significant resale value after reaching ROI. However, you need to understand that many small home miners don’t just go out an buy $27K in GPU’s, They may start with a $5K or $10K investment and then buy additional hardware with profits over time. So they typically have GPU’s well past their ROI and into pure profits as they buy new, this boosts their margins.
Then you need to consider the fact that small miners can push their mining efficiency way up if they choose. They can sell their GPU’s, and buy the latest more efficient models. Then you need to consider that 10kW is essentially free heat for a average size home in the winter months (I always move about 10kW of rigs in my home in the winter). All these things add up to keep the small miners profit margins even higher than I show here. So a large GPU farm cannot put a small miner out of business without first putting themselves out of business, even with triple the power costs. Small miners can weather high difficulty and low prices better than large farms as they have no fixed facility costs and can just turn up their mining efficiency.
ONLY ASIC’s can put small GPU miners out of business. I included the S9 so you could see how ASIC’s have impacted the economics of Bitcoin mining compared to GPU mining.
Its important to point out that there are NO large GPU farms mining ZEC. None of the 2000+ GPU farms coming on-line have any intention of mining ZEC. You cant compete with ETH, and for large GPU farms its not about supporting the community, or the network, its about profits. Even for the 1080ti Bitcoin Gold routinely beats ZEC in profitability. The time to ROI and profitability dominate large GPU farm mining decisions. The brief few times that ZEC was more profitable than ETH you had some large farms pointed at ZEC and only then.
I find it ironic you don’t understand this. ZEC is currently 100% supported by small miners as large miners will not touch ZEC unless it is more profitable than ETH. These are the very people you seem so focused on driving away from ZEC.
Your lack of business knowledge about the mining economics of your own coin is simply frightening.