Inside the Race to Build the World’s Fastest Bitcoin Miner
wired.com
wired.com
You could make a fortune at the factory just doing the burn-in test for 24 hours.
In fact I am curious why they would even ship them from China, you'd lose money the weeks on the boat, just plug them in at the factory...
> This is an obvious question, but why aren’t you mining your own chips?
> Like I said, the current reality is vastly different from what we originally had planned. We always figured we would be late to the party. Butterfly Labs and bASIC (another ASIC developer that ultimately failed to launch) were supposed to launch in succession. But due to various complications and delays, it didn’t work out that way. > . If they had delivered on their promises, they would have shipped months before our first batch. We wanted to start selling chips so people could make their own units, providing a hedge from a single entity becoming too powerful, and then move onto a new project. That was our main goal. We wanted to prevent this potential monopoly. As it turned out, we became the monopoly we tried to prevent.
> You aren’t doing any mining at all?
> Nope. Fun fact: none of the Avalon team have their own mining units (outside of test units)... We’ve had plenty of opportunities, such as keeping the technology to ourselves and simply mining, but that was never our intention. So how much is that trust worth? We think it’s worth $5000 by itself. Beyond that, the calculation is based on the current difficulty rate so that break-even point occurs in a month. Which, by the way, as an investment vehicle is a fairly unique proposition. It should be mentioned also that the cost of the batch two was also 75 bitcoins. That the exchange rate has moved is out of our control. And in the end, this was never what we wanted. If we wanted to maximize our profit, we could charge much more. For us, this has always been an ideal-oriented problem, not a business-oriented one. This is one of the primary reasons we aren’t clearly in the black. We’re lucky that we held onto the second batch of bitcoins because if it weren’t for the appreciation, we would be very, very deep in the red, which ultimately still isn’t that big of a deal.
(And presumably, they're airmailing the components. Why risk a boat?)
Also, since they are the only game in town (plus BFL & private players probably), they could take advantage of their position in the short term, before the difficulty increases by another order of magnitude.
It does seem like it would be awfully tempting to delay those preorder deliveries a little bit and use the machines first.
Other suppliers which haven't established this idea can be accused of receiving orders and just running them locally for a while before sending them out.
https://bitcointalk.org/index.php?topic=181982.0
http://store.avalon-asics.com/?product=avalon-asic-chips-100...
The BTC network may be utterly dominated by ASIC players within a few weeks.
Are they any more energy efficient than racks of GPUs?
Vastly. GPU's are space heaters compared to ASICs and FPGA's.
However this 140 Thash/s of Avalon chips is just a fraction of what is about to hit the network. All ASIC vendors combined, plus future Avalon deliveries will push the difficulty far more than 3x higher in the next 4-6 months.
Current ASICs do 150-200 Mhash/Joule (at 12V). Much better than GPUs topping out at 3-4 Mhash/Joule (at 12V).
The key questions to predict ASIC mining profitability is:
- how much will be invested in ASIC hardware
- future prices of bitcoin
- how long will it take for the ASIC hardware to roll out
The only "easy-money" I see here is if you have access to ASIC mining hardware _right now_.
Other than that, adding capability doesn't benefit the network, it burns a lot of power as people effectively just burn electricity to try to increase their share of a fixed payout.
Sure, if you want to efficiently allocate resources, all bitcoin miners could get together as a cartel and limit the overall hash rate to 1Mhash/hr, and collectively the bitcoin transactions network would consume a lot less power.
However, the temptation would always be there to add a little extra hash power to the network and network to claim more of the mined blocks and transaction fees. And pretty soon you'll be back where we are today, with each person acting in their own selfish interest, addiing as much hashing power as they can afford to run to get as big a share of a fixed pie as they possibly can.
Relevant to the article that this thread is linked to, it wouldn't be at all impossible if you are the single high-rate producer of by far the most efficient mechanism for mining bitcoins, and you really wanted to disrupt bitcoin.
(It might be economically irrational for anything that seems to a sane person to be a plausible assignment of utilities, but then, lots of socially destructive acts that actually occur in the real world meet that description.)
Impossible?! The claims about why this polynomial-time attack on Bitcoin is not really a problem seem to get more outrageous with each passing day.
I find it interesting that you simply assume that there is no other attack on Bitcoin. There is no proof of this. There is not even a good enough definition of the security goal of Bitcoin to allow for such a proof.
EDIT: I vaguely remember the Linode hacker mention that a more reasonable attack possibility would be if you slipped an backdoor into the popular bitcoin client libraries, and then it could be used to steal.
edit2: spelling.
Really though, trying to figure out your attacker's intentions or goals, or their willingness to commit resources to an attack, is a fool's errand. This is even more so when your system has known and exploitable weaknesses. The Germans learned this lesson the hard way with Enigma:
I think I agree with the major implications of what you are saying: bitcoin hasn't demonstrably withstood nation-state levels of attack effort, so calling anything impossible is premature.
If the bitcoin network survives for long enough [which can't be taken for granted] this will eventually happen, but it hasn't demonstrably happened yet.
Imagine the same about newspapers: This is really perverse, some of our best writing talent got pulled into writing news articles in order to get people to read the ads.
Advertising is a means, not an end and as such it is a pity that so much talent gets devoted to getting people to click on it but that will burn itself out somehow and then we're left with the byproducts.
This isn't an apt analogy. Ads may bring in the revenue but people are doing something useful. Same could be said for Google---ads bring in the revenue but the product (i.e., search) is still highly useful.
The computational power used to mine bitcoins are doing absolutely nothing of useful value to society. I believe there was an HN discussion earlier about tying this in with Folding@Home or SETI@Home and make the mining process a bit more productive.
If the amount of profit from using these machines was greater than the profit from selling the machines.. then the company selling the machines wouldn't sell them to you..
Unless they couldn't make the machine without you paying for it first. Or they don't want to break the system by reaching >51% of the network (after which the value of btc plummets down immediately, thus making the machines worthless).
They take pre-orders for one batch of machines. They build that batch of machines. They soak-test those machines, and then start sending them out.
Now, with the money from the pre-orders and from the soak-test bitcoins, they can build a second batch which they keep.
Certain profit today, vs. less certain profit of greater magnitude tomorrow. Seems familiar.
I wouldn't be surprised if these companies were using each rig for a couple months in their prime before shipping them out.
Looking at the global hash rate it's clear that this is not happening. (Before anyone asks, you cannot hide mining.) http://bitcoin.sipa.be/
It is my understanding (but I could be mistaken, there is a lot of FUD around BTC) that someone could in theory mine 500 hashes in a ten minute window then 'retire' having boosted the mining rate. This would not only net them a lot of bitcoins immediately but also restrict others supply of bitcoins.
Supply is roughly constant given a slowly increasing mining pool, supply isn't shock resistant.
http://techland.time.com/2011/05/23/report-police-confuse-bi...
I would think they are sophisticated enough that they could have a parameter for their client specifying a target hash rate and slowly ramp it up (over weeks/months), looking more or less just like other sorts of hardware coming online. It would take some work to hide in a pool or whatever, but I don't think it would be a big problem.