When I started Chia farming the price per coin was just over $1500 USD. That was one of the key things that made me decide to start farming and definitely helped put Chia on my radar in the first place. That’s probably true of a lot of people in our ecosystem. And those that are still Chia farming are almost certainly waiting for a time where the price rebounds back to where we started. But for a lot of folks, especially large or institutional farmers, there are plenty of costs that need to get paid out regularly. Leases and salaries need to come from somewhere so they need to sell coins and cannot just hold them all speculatively hoping for a price explosion.
So when does Chia farming stop being profitable? Right now according to ChiaProfitability (still up, as of now at least) a PB of storage (10300 plots) will generate about $1,100 USD a month, on average. That’s about 100 disks (hopefully not more or its an inefficient setup for the size), or about 1000w plus another 500w for network and compute so you’re looking about 1.5 kw/h of uptime per PB. At my power rates that’s about $115 bucks a month for power. This is an incredibly rough “calculation”, and everyone’s situation will be different as it relates to both power requirements for their setup and cost of power. Lets say between $100 and $400 USD per month per PB, with some efficiency at scale for the densest setups – which will have correspondingly higher startup costs.
But the rewards scale linearly. There is the initial startup costs, which for a PB will be significant. Likely north of $10 000 USD. There is the plotting costs. But accounting for those fixed capital expenses its hard to see that Chia becomes unprofitable even if it drops to $100. Recouping initial costs? That time goes up as the price falls, but in terms of keeping the lights on it makes a lot of sense to just keep farming.
Where these calculations start to drop is for users with big, inefficient setups. If you have a similar setup, with 500w of network and compute for 100TB of storage half as dense, so around 700wh total consumption for 10% of the netspace, then you quickly get pretty close to the line. In this scenario, of someone with a couple different older servers stuffed with smaller disks, then you are looking at about $110 USD a month income to a power cost of $50 to $200 USD depending on region. I assume this person’s startup costs are lower, so that helps, but it really does show how important an optimized setup is. My personal setup is not optimized in the slightest, and its making me consider a re-architecture. I suspect the big operations are focusing on efficiency right now as well, if they are not considering liquidating. Those folks have payroll and need to eke out every bit of fiat they can.
And this does not take into account other issues like downtime for maintenance or network-wide issues, like the current Dust Storm, that can seriously affect profitability. I think its clear that without very cheap power and labour, right now the main benefit to farming Chia is the speculative nature of trusting in the team will produce good long term value. If you are hoping to get rich soon it seems highly unlikely at this point. But to answer the question in the title, we have a long time to go before farming is inherently unprofitable and if you are selling coin off as soon as you make it to pay bills you should still be coming out ahead right now. But not by a lot.