Is the Antminer D3 No Longer Profitable?

In August 2017, there was lots of hype around the Antminer D3, a new ASIC miner for mining Dash, because at the time it was incredibly profitable compared to other available mining hardware.

Approaching 2018, as these new miners have been set up the difficulty of Dash has been going up rapidly. This guide explains what's been happening and why.

This Reddit post was the basis of this guide.

Why the difficulty has gone up

Back in September we posted a guide on how many Antminer D3s might be released, see that guide here. At the time, the August and September batches had 15GH/s of hashpower. The October batch seemed to then have 19GH/s of hashpower.

Many posts were made that in late September in the region of 4,000 of these devices were up and running, which would have produced 60,000 TH/s of additional hashpower to the Dash network. Between September and October the total hashrate of the Dash network rose by 128TH/s, an increase of 417%, so this led to two common assumptions online:

  1. The July and August batches had been shipped very fast and were up and running by September, causing this massive increase in hashpower.
  2. Bitmain (the creator of Antminers) has been mining these devices before shipping them to paying customers, as when they sell these they're normally pre-orders. This is difficult to prove, but given the timing of this extra hashrate on the network just before batches were supposed to be shipped, this is a possibility.

For context, the increase per month of Dash difficulty & total hashrate:

0.29M difficulty
9.68TH/s hashrate

0.56M difficulty (increase of 93%)
14.8TH/s hashrate (increase of 53%)

1.14M difficulty (increase of 104%)
30.69TH/s (increase of 107%)

5.74M difficulty (increase of 403%)
158.56TH/s (increase of 417%)

18.09M difficulty (increase of 215%)
460TH/s (increase of 190%)

Between September and October you can see a massive increase here in the total hashpower available in Dash, leading to an equally large difficulty increase to keep block times stable.

Risks of Mining

This has raised discussions about companies like Bitmain having too much control over cryptocurrency mining. Because these ASIC devices are so efficient compared to CPUs & GPUs, they're able to profit off them before consumers can get their hands on them. This is similar to industries like manufacturing, where profit margins become lower as more people compete for the same item - in this case Dash mining. As more ASIC devices become available, the profit margins will get smaller and unless there's a big increase in the value of Dash soon, these devices will no longer be profitable for many people.

This is why many people have become interested in coins like Vertcoin, which aim to deter ASIC mining.

Potential hope

From the point of view of a Dash enthusiast, this is in part a good thing. As a powerful Dash ASIC is now owned by many people, the chances of an individual having control of a large percentage of the total mining power is much lower, although the companies creating ASICs like Bitmain could still do this potentially.

For miners this isn't a great situation in general, made worse by the increase in the value of Bitcoin recently (as many people bought these miners with Bitcoin). If you own one of these D3s or have one scheduled to be shipped, there are a few things to consider:

  • In the Dash roadmap, lots of features (like Dashpay Evolution) are planned that may drive interest and drive up the coin's value.
  • If Bitmain have indeed been mining these devices before shipping, when they do eventually ship them there should be temporary drops in difficulty where there's an opportunity to earn some money (over the past weeks there are lots of drops like this).
  • The Antminer D3 can be used to mine several other coins. Typically these will stay on par with Dash difficulty, as many D3 owners are already aware of this; but if you keep an eye on these coins there are often opportunities to make better profits for short periods on other coins.

One thing to be aware of is that even with the recent difficulty increases in Dash, it's very possible that a competitor (or even Bitmain) could release another ASIC that's far better than the D3. For this reason we'd avoid buying one in any upcoming batches.

DISCLAIMER: This site cannot substitute for professional investment or financial advice, or independent factual verification. This guide is provided for general informational purposes only. Bitcoin Kit is UK-based and not regulated by the FCA (Financial Conduct Authority). The group of individuals writing these guides are cryptocurrency enthusiasts and investors, not financial advisors. The ideas presented are our analysis, learning & opinions on a range of cryptocurrency topics. Trading or mining any form of cryptocurrency is very high risk, so never invest money you can't afford to lose - you should be prepared to sustain a total loss of all invested money.

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October 17th, 2018

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