30 KiB
The coexistence model: can a specialised supplier earn a normal return while GPUs stay close enough to compete?
8 October 2026, 16:1x to 16:5x UK, branch class-v6-floor-sram, floor lane 3, on the research lane's word of 17:0x UK
(the founder's accepted third external review: the capex wall is replaced by a coexistence model as the economic
argument, with the profitability surface of docs/analysis/class-v6/floor/sram-and-floor.md section 4.4 as its base).
First run on today's measured rows. Every row is modelled: the arithmetic is scratchpad/coexist.py run on
build-3; the card rows are lane 4's class v5 table (docs/analysis/class-v6/floor/denominator.md, section 10.4 of
the design document: measured at the floor where it says so, modelled knees elsewhere), the chip rows the chip model's
(chip-model-v3 5.5 and 5.12, lane B, the k lane's 3.2 pJ per forced op), the prices street approximations. Nothing
here is served; nothing is a measurement of a chip. The founder is not named.
The statement under test. Success: a specialised supplier earns a normal return and GPUs stay close enough in total cost, obtainable and useful outside mining, that entrants still compete. Failure: a supplier operating privately at much lower cost exhausts competitors' margins. The result is the set of conditions under which the success statement holds, never a level the chain stays below. The development cost is SUNK in the mandatory case (the opponent covers manufacturing, deployment and operation only); the paid-development cases sit beside it.
0. The result in one page
- On today's rows the N2 SRAM die fails the success statement in every scenario where its owner can buy a fleet worth a few percent of the chain's yearly miner revenue. With development sunk, a 3-year life and power at USD 0.06 per kWh, the die's all-in cost per accepted MH/s-hour is 72 micro-USD against the best GPU owner's 156 to 204 at the same electricity (the 5070 Ti and 5080 at their knees, hardware sunk) and 415 to 588 for a new entrant: 2.2x to 2.8x on the existing owner, 5.8x to 8.2x on the entrant. At the GPU's more likely 0.12 per kWh it is 3.6x to 4.6x and 7.2x to 9.9x; at 0.25, 6.8x to 8.5x and 10x to 14x. A USD 10 M fleet of such dies takes 37 to 73 percent of the chain's hash the year it lands at IGN 0.10 to 0.20 and 100 percent the year after on a flat price; a USD 100 M fleet takes 100 percent on landing in every path and then runs at a loss because it is larger than the revenue (the self-limiting point: -1 to -300 percent margins).
- The GDDR7 board chip passes the success statement on its 1-year life and fails it on its 3-year life. At 1 year its cost per accepted unit (750 micro-USD at 0.06) is ABOVE every Blackwell owner's and above the Blackwell entrant's at 0.06 to 0.12 (0.8x to 1.0x the 5080 entrant, 0.6x to 0.7x the 5070 Ti), so it competes only against Ada and Ampere at dear electricity; at 3 years (307 micro-USD) it is 1.9x to 2.3x the Blackwell entrant and 0.9x to 1.1x the Blackwell owner: GPUs at their knee stay close enough. Its hardware is the term that holds it (USD 5.6 per MH/s with the core and the system against the die's 0.8), not its joules.
- The electricity axis is explicit and it is the GPU's. The break-even electricity price above which an EXISTING GPU owner with sunk hardware cannot match the die at 0.06 is 0 to 5 cents per kWh for every card (a 3-year die) and 1 to 5 cents (a 1-year die): no grid price in the world keeps a GPU owner level with a sunk SRAM die. Against the GDDR7 board at 3 years the owner's break-even is 9 to 15 cents on Blackwell, 4 to 6 on Ada and Ampere; at 1 year 27 to 40 cents on Blackwell. Read the other way, the die breaks even against a 5080 owner at 0.12 only when the die pays 47 to 60 cents per kWh; the board at 3 years when it pays 1 to 9 cents.
- Accessible supply is the structural fact. At the GPU entry equilibrium (revenue per MH/s-hour equal to a new 5070 Ti's cost at 0.12) the chain's hash is 2.6 TH/s at IGN 0.03, 8.8 at 0.10, 26 at 0.30, 88 at 1.00: that is 34,000 to 1.1 M 5070 Ti-class cards, which exist in the world's installed base, against 480 to 16,000 SRAM dies, 8 to 270 wafers of N2. One supplier holds the chain at every price in the window; the dependence on individual suppliers is total for the die and partial for the board (16,000 to 530,000 boards, a Bitmain-class run).
- The conditions under which the success statement holds, read off the tables: (a) the chip's all-in cost per accepted unit stays within about 1.5x of the best GPU owner's at the same electricity, which on today's rows is true of the GDDR7 board at a life of 1 to 2 years and false of the die at every life; (b) the chip's hardware per MH/s is not below about a quarter of the GPU's annualised hardware (the board's 0.7x to 1.9x the 5080 entrant passes, the die's 5x to 14x fails); (c) no single buyer can fund a fleet above about a third of the chain's hash for under a year's miner revenue (true for the board above IGN 0.3; false for the die at every price: a wafer is USD 30,000); (d) GPUs keep a resale market and a use outside mining (true for every card in the population; the chip has none, which is why its life is the axis that moves everything); (e) the per-joule gap at the honest knee stays under about 3x (the board at 2.2x to 2.6x against Blackwell passes; the die at 3.7x to 4.5x does not).
- What the chain controls, and what it does not. It controls the honest cost per accepted unit (the operating point: the lock is worth 34 to 41 percent of a Blackwell card's draw), the chip's life against a fixed lane (the 180-day rotation; nothing against a programmable one), and the visibility of a concentrated supplier (the share detector). It does not control the sunk development cost, electricity prices, the token price or a buyer's budget. On today's rows the SRAM die, once it exists, cannot be held to coexistence by anything in the hash; the board can. The condition that holds the die is that it does not get built, which is the surface of section 4.4 (a USD 150 M project at a third of the chain needs IGN 0.73 over three years), and that is a statement about who pays, not about the chain staying below a level.
1. The measure: cost per accepted unit of work
Cost per accepted MH/s-hour (micro-USD), both sides: annualised hardware plus power plus hosting, failures and fees, divided by accepted work. Accepted work is 97 percent of raw (rejects 0.5 percent, downtime 2.0, epoch preparation and propagation 0.5; approximate from the devnet's share rates), the pool fee 1 percent. The two GPU situations: the existing owner (hardware sunk; pays power, a wear allowance of 5 percent of the used price a year, fees; the alternative use is the card's rental yield, reported in section 2 and not deducted) and the new entrant (buys new or used, operates two years, resells at the table's fraction). Hosting: 0 at home, USD 0.02 per kWh-equivalent at a farm (the chip's case). Electricity axis: USD 0.06, 0.12, 0.25 per kWh.
| Input | Value | Label |
|---|---|---|
| Card joules per hash at the floor (the knee with the knobs) and at stock | lane 4's class v5 table: 5090 2.33 / 3.48, 5080 2.06 / 3.48, 5070 Ti 1.70 / 2.84, 5070 1.75 / 2.99, 5060 Ti 2.36 / 4.02, 5060 2.21 / 3.76, 4090 3.58 / 5.00, 4080 3.51 / 4.92, 4070 3.58 / 5.82, 4060 Ti 3.81 / 5.32, 3090 4.51 / 5.03, 3080 4.20 / 4.54, 3060 5.77 / 6.40, 9070 XT 7.90 / 10.7, H100 2.00 / 2.58, A100 2.89 / 2.99, M5 Max 1.40 microjoules | measured where lane 4 says so (5090, 5080, 4070, 9070 XT, M5 Max floors; most stock rows), modelled knees elsewhere |
| Card rates at the floor | 5090 134.8, 5080 71.2, 5070 Ti 77, 5070 41, 5060 Ti 19, 5060 17, 4090 58, 4080 45, 4070 31.1, 4060 Ti 17.6, 3090 37.8, 3080 40.8, 3060 23.8, 9070 XT 18.9, H100 90, A100 60, M5 Max 27.1 MH/s | measured where the bench table has the row; approximate elsewhere |
| Prices new / used, resale after two years | 5090 2,600 / 2,200 / 55 percent; 5080 1,100 / 900 / 50; 5070 Ti 800 / 650 / 50; 5070 560 / 450 / 50; 5060 Ti 450 / 360 / 45; 5060 310 / 250 / 45; 4090 1,700 / 1,300 / 45; 4080 1,000 / 700 / 40; 4070 550 / 400 / 40; 4060 Ti 420 / 290 / 35; 3090 900 / 650 / 30; 3080 450 / 330 / 25; 3060 260 / 190 / 25; 9070 XT 650 / 520 / 45; H100 25,000 / 18,000 / 50; A100 10,000 / 6,000 / 35; M5 Max 4,000 / 3,200 / 55 | approximate street, October 2026 |
| Chip joules per hash (class v5, the shadow at 3.2 pJ per forced op, lane 4's chip columns) | GDDR7 board with an N5 core 0.79; HBM3 one stack 0.65; N2 SRAM die with the core 0.46 (W = 4); the die at the bare-lane floor 0.165 | modelled |
| Chip hardware, USD per MH/s, silicon and board plus 30 percent system (PSU, chassis, cooling) | GDDR7 board 5.6 (4.3 with the core die, chip-model 5.5 and research 16.1); HBM3 8.6; SRAM die 0.8 (0.6 with the board, lane B) | modelled, approximate |
| Chip failures, resale | 3 percent a year; no resale (single use) | approximate |
| Chip lives | 0.5, 1, 2, 3, 5 years (0.5 is the fixed-lane chip under the 180-day rotation; 3 the programmable chip's default) | the review's axis |
| Emission to miners | 0.77 / 0.80 / 0.40 / 0.40 / 0.20 B IGN in years 1 to 5 (the spec's constant, 80 percent to miners) | spec 05 |
| GPU equilibrium | while any GPU mines, revenue per MH/s-hour settles at the cheapest entrant's cost (a new 5070 Ti at 0.12: 521 micro-USD) during growth and falls to the owners' costs during shrinkage; a GPU generation at year 3 cuts the entrant's cost 25 percent (1.5x per joule at the same price) with the old card resold at the table's fraction | modelled rule |
2. The GPU reference population: cost per accepted MH/s-hour (micro-USD)
| Card | Owner at 0.06 / 0.12 / 0.25 | Entrant, new, 2 years, at 0.06 / 0.12 / 0.25 | Entrant, used | Hardware share of the entrant's cost at 0.12 | Wh per MH/s-hour | Alternative use (rental yield, approximate) | Label |
|---|---|---|---|---|---|---|---|
| RTX 5090 | 243 / 388 / 704 | 661 / 807 / 1,122 | 800 / 945 / 1,261 | 64 percent | 2.33 | USD 0.3 to 0.5 an hour on a rental market: 2,200 to 3,700 micro-USD per MH/s-hour, 3x to 5x its mining cost | measured floor |
| RTX 5080 | 204 / 332 / 611 | 588 / 716 / 995 | 650 / 779 / 1,058 | 64 | 2.06 | USD 0.15 to 0.25 an hour | measured floor |
| RTX 5070 Ti | 156 / 263 / 493 | 415 / 521 / 751 | 453 / 560 / 790 | 59 | 1.70 | USD 0.1 to 0.2 an hour | modelled knee |
| RTX 5070 | 175 / 284 / 521 | 515 / 624 / 861 | 558 / 668 / 905 | 65 | 1.75 | modelled knee | |
| RTX 5060 Ti 16 GB | 260 / 407 / 727 | 921 / 1,069 / 1,388 | 956 / 1,104 / 1,423 | 72 | 2.36 | modelled knee | |
| RTX 5060 | 225 / 364 / 663 | 734 / 872 / 1,171 | 768 / 906 / 1,205 | 68 | 2.21 | modelled knee | |
| RTX 4090 | 357 / 580 / 1,065 | 1,181 / 1,405 / 1,890 | 1,163 / 1,387 / 1,872 | 68 | 3.58 | USD 0.3 to 0.4 an hour | modelled knee, stock measured |
| RTX 4080 | 312 / 531 / 1,006 | 1,011 / 1,231 / 1,706 | 879 / 1,099 / 1,574 | 64 | 3.51 | modelled knee | |
| RTX 4070 | 300 / 524 / 1,008 | 854 / 1,078 / 1,562 | 778 / 1,001 / 1,486 | 58 | 3.58 | measured tune | |
| RTX 4060 Ti 16 GB | 336 / 574 / 1,090 | 1,159 / 1,397 / 1,913 | 969 / 1,207 / 1,723 | 66 | 3.81 | modelled knee | |
| RTX 3090 (used) | 384 / 666 / 1,276 | 1,272 / 1,554 / 2,164 | 1,091 / 1,373 / 1,983 | 64 | 4.51 | modelled cap | |
| RTX 3080 (used) | 310 / 573 / 1,141 | 754 / 1,016 / 1,585 | 661 / 923 / 1,492 | 48 | 4.20 | modelled cap | |
| RTX 3060 (used) | 408 / 768 / 1,550 | 847 / 1,208 / 1,989 | 754 / 1,114 / 1,895 | 40 | 5.77 | modelled cap | |
| RX 9070 XT | 657 / 1,151 / 2,220 | 1,617 / 2,111 / 3,180 | 1,668 / 2,162 / 3,231 | 53 | 7.90 | measured | |
| H100 (hosted) | 1,313 / 1,438 / 1,709 | 8,374 / 8,499 / 8,770 | 7,880 / 8,004 / 8,275 | 97 | 2.00 | USD 2 to 3 an hour: never mines | modelled lock |
| A100 (used) | 775 / 955 / 1,346 | 6,615 / 6,796 / 7,187 | 4,388 / 4,568 / 4,960 | 95 | 2.89 | USD 1 an hour: never mines | modelled |
| Apple M5 Max (reported, not headlined) | 789 / 876 / 1,066 | 4,033 / 4,120 / 4,310 | 4,690 / 4,778 / 4,967 | 96 | 1.40 | a workstation: mines only as an owner | measured |
Reading: the owner's cost is 60 to 70 percent electricity on every consumer card, so the electricity price is the GPU's whole variable; the entrant's cost is 60 to 70 percent hardware, so the card price and its resale are the entrant's whole variable. The best honest owner on today's rows is a 5070 Ti at its knee (156 micro-USD at 0.06); the best entrant the same card (415). Datacentre parts and the Mac never enter as entrants (hardware 95 percent) and mine only as owners with nothing better to do, which their rental yields say they always have.
3. The chip rows
3.1 Development sunk (the mandatory case): cost per accepted MH/s-hour, micro-USD, farm hosting
| Chip | Life 0.5 y at 0.06 / 0.12 / 0.25 | 1 y | 2 y | 3 y | 5 y | Hardware / power split at 0.06, 3 y | Label |
|---|---|---|---|---|---|---|---|
| GDDR7 board with an N5 core | 1,414 / 1,463 / 1,570 | 750 / 799 / 906 | 418 / 467 / 574 | 307 / 356 / 463 | 219 / 268 / 375 | 239 / 65 | modelled |
| HBM3 one stack with a core | 2,123 / 2,164 / 2,252 | 1,104 / 1,145 / 1,233 | 594 / 635 / 723 | 425 / 465 / 553 | 289 / 329 / 417 | 367 / 54 | modelled |
| N2 SRAM die with the core | 226 / 255 / 317 | 134 / 163 / 225 | 87 / 116 / 178 | 72 / 101 / 163 | 60 / 88 / 151 | 33 / 38 | modelled |
| N2 SRAM die at the bare-lane floor | 202 / 212 / 235 | 109 / 120 / 142 | 63 / 73 / 96 | 47 / 58 / 80 | 35 / 45 / 68 | 33 / 14 | modelled, the worst case |
3.2 Development paid: the same rows with C_dev spread over the fleet and the life
The fleet is sized to a share q of the network's hash at the GPU equilibrium (a new 5080 at 0.12 as the marginal
entrant). All-in cost per accepted MH/s-hour of the SRAM die (the GDDR7 board in brackets), at 0.06:
| IGN price | Miner revenue (year 3) | Network hash | C_dev 20 M, 1 y, q 0.3 / 1.0 |
20 M, 3 y, 0.3 / 1.0 | 150 M, 1 y, 0.3 / 1.0 | 150 M, 3 y, 0.3 / 1.0 |
|---|---|---|---|---|---|---|
| 0.03 | USD 12 M | 1.9 TH/s | 4,277 / 1,377 (4,893 / 1,993) | 1,453 / 486 (1,688 / 721) | 31,211 / 9,457 | 10,431 / 3,180 |
| 0.10 | 40 M | 6.4 TH/s | 1,377 / 507 (1,993 / 1,123) | 486 / 196 (721 / 431) | 9,457 / 2,931 | 3,180 / 1,004 |
| 0.30 | 120 M | 19 TH/s | 548 / 258 (1,164 / 874) | 210 / 113 (445 / 349) | 3,242 / 1,066 | 1,108 / 383 |
| 1.00 | 400 M | 64 TH/s | 258 / 171 (874 / 787) | 113 / 84 (349 / 320) | 1,066 / 414 | 383 / 165 |
Reading: a paid development cost puts every chip ABOVE the best GPU entrant (415 to 588) at IGN 0.10 and below, and
the SRAM die below it only from IGN 0.30 on a 3-year life or IGN 1.00 on a 1-year life; the GDDR7 board with paid
development is never below the Blackwell entrant inside the window. The sunk case is therefore the whole threat, and
it is the case the review makes mandatory. The derivative design (a revision at 0.3 x C_dev, section 4.4 of the
floor file) moves the paid rows a third of the way to the sunk rows.
4. The cost advantage, separated
The chip at 0.06 per kWh and farm hosting; the GPU at 0.06, 0.12 and 0.25. "Operating" is power only (joules times electricity); "hardware" the annualised hardware of the GPU entrant over the chip's.
| Chip, life | Against | Total: owner / entrant, at 0.06 | At 0.12 | At 0.25 | Operating advantage at 0.06 / 0.12 / 0.25 (joules x electricity) | Hardware advantage |
|---|---|---|---|---|---|---|
| GDDR7 board, 1 y | RTX 5080 | 0.3x / 0.8x | 0.4x / 1.0x | 0.8x / 1.3x | 2.6x / 5.2x / 10.9x (2.6 x 1, 2, 4.2) | 0.7x |
| RTX 5070 Ti | 0.2x / 0.6x | 0.4x / 0.7x | 0.7x / 1.0x | 2.2x / 4.3x / 9.0x | 0.5x | |
| RTX 4090 | 0.5x / 1.6x | 0.8x / 1.9x | 1.4x / 2.5x | 4.5x / 9.1x / 18.9x | 1.4x | |
| RTX 3080 (used) | 0.4x / 1.0x | 0.8x / 1.4x | 1.5x / 2.1x | 5.3x / 10.6x / 22.2x | 0.7x | |
| GDDR7 board, 3 y | RTX 5080 | 0.7x / 1.9x | 1.1x / 2.3x | 2.0x / 3.2x | the same | 1.9x |
| RTX 5070 Ti | 0.5x / 1.4x | 0.9x / 1.7x | 1.6x / 2.4x | 1.3x | ||
| RTX 4090 | 1.2x / 3.8x | 1.9x / 4.6x | 3.5x / 6.2x | 4.0x | ||
| RTX 3080 (used) | 1.0x / 2.5x | 1.9x / 3.3x | 3.7x / 5.2x | 2.1x | ||
| N2 SRAM die, 1 y | RTX 5080 | 1.5x / 4.4x | 2.5x / 5.4x | 4.6x / 7.4x | 4.5x / 9.0x / 18.7x | 4.9x |
| RTX 5070 Ti | 1.2x / 3.1x | 2.0x / 3.9x | 3.7x / 5.6x | 3.7x / 7.4x / 15.4x | 3.3x | |
| RTX 4090 | 2.7x / 8.8x | 4.3x / 10.5x | 8.0x / 14.1x | 7.8x / 15.6x / 32.4x | 10.1x | |
| N2 SRAM die, 3 y | RTX 5080 | 2.8x / 8.2x | 4.6x / 9.9x | 8.5x / 13.8x | the same | 13.8x |
| RTX 5070 Ti | 2.2x / 5.8x | 3.6x / 7.2x | 6.8x / 10.4x | 9.3x | ||
| RTX 4090 | 5.0x / 16.4x | 8.1x / 19.5x | 14.8x / 26.2x | 28.7x | ||
| RTX 3080 (used) | 4.3x / 10.5x | 8.0x / 14.1x | 15.9x / 22.0x | 14.7x | ||
| Apple M5 Max (reported) | 11.0x / 56x | 12.2x / 57x | 14.8x / 60x | 3.0x / 6.1x / 12.7x | 118x |
Reading: the electricity axis multiplies the operating advantage one for one (a 2.6x chip at 0.06 against a GPU at 0.25 is 10.9x on power alone, the review's point), but on the consumer cards power is 60 to 70 percent of the owner's cost and 30 to 40 percent of the entrant's, so the total advantage is a third to a half of the operating one. The GDDR7 board's total advantage over a Blackwell card at its knee is under 1x (owner) to 2.3x (entrant) across the whole electricity axis at a 3-year life, which is the coexistence band; the die's is 2.2x to 14x, which is not.
5. The replacement economics
For an existing GPU owner, switching pays when the chip's all-in cost per accepted unit is below the owner's OPERATING cost (the hardware is sunk, the resale value is the only thing the switch recovers). For a new entrant, when the chip's all-in is below the GPU entrant's all-in. The chip must be purchasable for either (hardware sales; the manufacturer keeps about half the operator's profit through the price, floor file 4.4 table B, which roughly doubles the chip's hardware term for the buyer).
| Who | Against the GDDR7 board (bought, hardware term x2) | Against the SRAM die (bought, x2) | What it means |
|---|---|---|---|
| A Blackwell owner at 0.06 to 0.12 | never switches: the bought board at 3 years is 550 to 600 micro-USD against the owner's 156 to 332 | switches at 0.12 (the bought die 105 to 134 against 263 to 332) and is near indifferent at 0.06 (105 against 156 to 204) | the die replaces Blackwell owners at normal grid prices; the board never does |
| An Ada or Ampere owner at 0.12 | near indifferent at 3 years (550 to 600 against 524 to 768); switches at 0.25 | switches at every electricity price | the board retires the oldest cards only at dear electricity, which the generation upgrade does anyway |
| A new entrant choosing between a new 5070 Ti and a bought chip at 0.12 | the board at 3 years (about 600) is 1.15x the card's 521: the card wins; at 1 year the card wins 2x | the bought die (134) is 0.26x the card: the die wins 4x | an entrant market with a bought SRAM die has no GPU entrants; one with a bought board keeps them |
| The GPU generation upgrade (year 3: 1.5x per joule at the same price, the old card resold) | cuts the entrant's cost about 25 percent and the owner's power 33 percent: the board at 3 years then reads 1.5x to 1.7x the new entrant, still in band | the die's advantage falls 25 to 33 percent, from 7x to 5x on the entrant: still out of band | the GPU side's own curve narrows the board's gap to nothing by the second generation and never closes the die's |
6. Break-even electricity prices
(a) The GPU electricity price above which an EXISTING owner (hardware sunk) cannot match the chip's all-in cost at 0.06 per kWh:
| Chip, life | 5090 | 5080 | 5070 Ti | 5070 | 5060 Ti | 4090 | 4080 | 4070 | 3090 | 3080 | 3060 | 9070 XT | M5 Max |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| GDDR7 board, 1 y | 27 c | 32 c | 40 c | 38 c | 26 c | 17 c | 18 c | 18 c | 14 c | 16 c | 12 c | 7 c | 3 c |
| GDDR7 board, 3 y | 9 c | 11 c | 15 c | 13 c | 8 c | 5 c | 6 c | 6 c | 4 c | 6 c | 4 c | 2 c | under 0 |
| SRAM die, 1 y | 1.5 c | 2.7 c | 4.7 c | 3.8 c | 0.9 c | 0 c | 1.1 c | 1.5 c | 0.7 c | 2.0 c | 1.4 c | under 0 | under 0 |
| SRAM die, 3 y | under 0 | under 0 | 1.2 c | 0.4 c | under 0 | under 0 | under 0 | under 0 | under 0 | 0.5 c | 0.4 c | under 0 | under 0 |
(b) The chip electricity price at which its all-in cost equals a GPU owner's at 0.12 (how much dearer the chip's hosting can be and still match): the GDDR7 board at 3 years 1 to 9 cents against Blackwell (it must be hosted cheaper than the GPU to match an owner) and 75 cents against the Mac; at 1 year it cannot match a Blackwell owner at any price. The SRAM die matches a 5070 Ti owner while paying up to 46 cents (3 years) or 33 cents (1 year), a 5080 owner up to 60 or 47, the Mac up to 174.
Reading: the board lives or dies on the GPU's grid price, which is the review's electricity axis doing what it should; the die does not see the axis at all.
7. Five years: growing, flat and shrinking networks, with the GPU side reacting
The sunk chip enters at the start of year 2 with a fleet bought for a budget B (USD 1 M, 10 M, 100 M at USD 0.8
per MH/s for the die: 1.3, 13 and 128 TH/s); revenue per MH/s-hour r settles at the cheapest GPU entrant's cost
(a new 5070 Ti at 0.12, 521 micro-USD; 391 after the year-3 generation) while entry continues, and when the chip's
fleet alone exceeds the hash that revenue supports, GPU owners exit in cost order until the survivors' costs are
covered or none are. Three price paths: growing (x2 a year from 0.10), flat (0.10), shrinking (x0.5 a year from
0.30). Emission halves in year 3 and year 5.
| Path, budget | Year 2 | Year 3 | Year 5 | Reading |
|---|---|---|---|---|
| Growing, USD 1 M | chip 3.7 percent of 35 TH/s; r 521; margin 86 percent |
2.7 percent; owners all above water | 1.4 percent of 93 TH/s | coexistence: the supplier earns 82 to 86 percent margins on a tiny share, GPUs set the price |
| Growing, USD 10 M | 37 percent of 35 TH/s | 27 percent | 14 percent | coexistence by dilution only: the share falls as the chain grows and the fleet is fixed; the supplier's margin stays 82 to 86 percent, far above normal |
| Growing, USD 100 M | 100 percent; 0 of 17 owner classes above water; r falls to 142; margin 49 percent |
the same | 100 percent; 2 of 17 owner classes above water at r 285 |
failure: one buyer holds the chain for five years, GPUs exit in year 2 and only the two best classes could return in year 4 |
| Flat, USD 1 M | 7 percent of 17.5 TH/s | 11 percent | 22 percent of 5.8 TH/s | coexistence, the share rising with each halving |
| Flat, USD 10 M | 73 percent | 100 percent; 3 of 17 owner classes above water | 100 percent; 0 of 17 | failure by year 3: the halving does the rest |
| Flat, USD 100 M | 100 percent; margin -1 percent | margin -102 percent | -305 percent | failure for both: the fleet is larger than the revenue; the buyer loses money and the GPUs are gone (the self-limiting point) |
| Shrinking, USD 1 M | 5 percent | 15 percent | 100 percent; 3 of 17 above water | failure in year 5 at USD 4 M of revenue: even a USD 1 M fleet is the chain when the chain is small |
| Shrinking, USD 10 M | 49 percent | 100 percent; 1 of 17 | 100 percent; margin -116 percent | failure from year 3 |
| The GDDR7 board (sunk), flat, USD 10 M | 10 percent of 17.5 TH/s; margin 41 percent | 15 percent; margin 21 percent | 31 percent; margin 21 percent | coexistence: a normal return (21 to 41 percent gross) on a minority share with GPU entrants still setting the price |
Reading: the row that passes the success statement as the review states it is the GDDR7 board at a sunk USD 10 M (a 21 to 41 percent gross margin, a 10 to 31 percent share, GPUs setting the price, entrants competing). The SRAM die passes only at a fleet under about 1 percent of the chain's yearly miner revenue in a growing network, and fails in every flat or shrinking path by year 3 to 5; above a tenth of a year's revenue it takes the chain in every path. The failure is not a margin the die extracts (its margins collapse once it is the chain); it is the exit of every GPU class, which is the review's definition.
8. Accessible supply and the dependence on individual suppliers
| IGN price | Network hash at the GPU entry equilibrium | In 5070 Ti-class cards | In 5090s | In N2 SRAM dies (5.5 GH/s) | In N2 wafers (about 60 good dies) | In GDDR7 boards (166 MH/s) |
|---|---|---|---|---|---|---|
| 0.03 | 2.6 TH/s | 34,000 | 19,500 | 480 | 8 | 15,800 |
| 0.10 | 8.8 | 114,000 | 65,000 | 1,600 | 27 | 52,800 |
| 0.30 | 26 | 341,000 | 195,000 | 4,800 | 80 | 158,000 |
| 1.00 | 88 | 1.1 M | 650,000 | 16,000 | 270 | 528,000 |
| 3.00 | 263 | 3.4 M | 1.9 M | 48,000 | 800 | 1.6 M |
The GPU side's accessible supply is the installed base of consumer cards (tens of millions of Ampere, Ada and Blackwell cards in the world, approximate) and the used market, with a use outside mining and a resale price that the population table carries; at every price in the window the hash the chain needs is under 4 percent of one generation's shipments. The die's supply is one supplier's wafer allocation (8 to 800 wafers of a node booked to 2028, claimed); the board's is a Bitmain-class production run (16,000 to 1.6 M units) with a commodity memory bill. The dependence on individual suppliers is total for the die at every price (one order holds the chain), partial for the board (a run of that size is visible and takes months), and nil for the GPU side.
9. The conditions under which the success statement holds (the result)
Success (a specialised supplier earns a normal return and GPUs stay close enough in total cost, obtainable and useful outside mining, that entrants still compete) holds on today's rows when ALL of the following do:
| Condition | The number on today's rows | GDDR7 board | SRAM die |
|---|---|---|---|
| (a) the chip's all-in cost per accepted unit at its own electricity is within about 1.5x of the best GPU owner's at the GPU's electricity | the owner at 0.12: 263 to 332 micro-USD (5070 Ti, 5080) | 307 at 3 years, 750 at 1 year: PASSES | 72 to 134: FAILS at every life |
| (b) the chip's annualised hardware per MH/s is not below about a quarter of the GPU entrant's | the 5080 entrant's hardware 460 micro-USD | 239 to 677: PASSES | 33 to 95: FAILS |
| (c) a fleet above a third of the chain's hash costs more than a year's miner revenue | at IGN 0.10 the chain is 8.8 TH/s; a third is 2.9 TH/s | USD 16 M of boards against USD 40 to 80 M of revenue: PASSES above IGN 0.05 | USD 2.3 M of dies: FAILS at every price under about 3 |
| (d) GPUs keep a resale market and a use outside mining | every card in the population resells at 25 to 55 percent after two years and rents at 3x to 5x its mining cost | PASSES (the GPU side's property) | PASSES (the same) |
| (e) the per-joule gap at the honest knee stays under about 3x | Blackwell at the knee 1.70 to 2.06 microjoules | 2.2x to 2.6x: PASSES | 3.7x to 4.5x: FAILS (the bare-lane floor 10x to 12x) |
| (f) the supplier's gross margin on the share it holds is a normal return (under about 50 percent) and does not rise with each halving | 21 to 41 percent in the five-year run: PASSES | 82 to 86 percent, or a loss once it is the chain: FAILS |
So: the success statement holds for the stored-dataset DRAM-board chip at a 1 to 3 year life on today's rows, in every price path, at every electricity price on the axis, with the GPU side's own generation curve narrowing the gap further; it does not hold for the N2 SRAM die once that die exists with its development sunk, at any life, price path or electricity price, and the only condition that holds the die is that nobody pays to build it (the surface of the floor file's section 4.4: a USD 150 M project at a third of the chain needs IGN 0.73 over three years, a maker who takes the chain 0.22, a revision 0.12 to 0.16). That last is a statement about an investor's decision, not about the chain staying below a level, and the review is right that it is the only honest form.
What the chain can do about the die, from the model: raise the honest side's efficiency (every cent of GPU electricity and every point of the knee moves condition (a) and (e); the lock already moves a Blackwell card 34 to 41 percent), keep the share detector as the instrument that makes condition (c) visible the week it fails, and keep the dataset floor as the ticket (section 3.2 of the floor file: USD 1,500 to 3,000 per die at the schedule, which moves condition (c) by 2x to 4x and nothing else). Nothing in the hash moves conditions (a), (b) or (e) for the die by the factor they need.
10. Unverified and owed
- Every chip-side figure is modelled; no chip has been measured. The chip's hardware per MH/s (USD 0.8 for the die with the system, 5.6 for the board) is the term conditions (b) and (c) rest on and is approximate within 2x.
- The card prices are street approximations of October 2026; the 5090's street price has been 2x MSRP this year, which moves the entrant rows for that card by up to 2x and no other row.
- The Ada and Ampere knees are modelled (no rented host allows the lock); the Blackwell floors are measured on the 5090, 5080 and 4070, modelled on the 5070 Ti, 5070 and 5060 class.
- The accepted-work factor (97 percent), the wear allowance (5 percent a year), the hosting (USD 0.02 per kWh) and the rental yields are approximate.
- The five-year run's GPU reaction is a single-rule model (entry at the cheapest entrant's cost, exit in cost order); a second cut adds a per-class supply curve, the installed base as a cap on entry, re-entry on a price rise, and the halving's effect on the entrant cost through used-card prices.
- The derivative-design rows (a revision at 0.3 x
C_dev) are carried from the floor file's surface and not re-run here; the sunk case bounds them. - The emission beyond year 5 and the proving pool's 20 percent are outside the run.
- Nothing was run on the Mac; the script ran on build-3.