AsicMiner's Immersion Cooling Mining Facility
bitcointalk.org
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They probably generate a guid and then append a number and increment
Whats the advantage of using a new random number each time?
(I don't know why this is useful, as I am not a mathematician.)
Primecoin's goal is to find chains of prime numbers, like the ones describe at https://en.wikipedia.org/wiki/Cunningham_chain
This is at least more useful than running a double sha on some input to produce some output that is hopefully less than a target t. But a altcoin that does something useful with its proof of work system is still not available.
This would provide a more direct incentive for researchers to make these algorithms faster, and would therefore provide a tangible benefit to society.
Other designs like the anonymous Bitfury's are hand routed and do a lot better, around 0.8w per gigahash, but although there's skills in doing so, it can't really be applied to anything except for Bitcoin mining.
They're pretty basic on the scheme of things, they're just very costly to get to a fabricator in the short timeframes the community wants.
I don't think that this technology is going to be readily adaptable to anything other than brute-forcing hashes. I don't know of any fundamentally useful engineering or research being generated that would have application elsewhere.
EDIT: Which isn't to say it isn't neat...I just don't think it'll bear fruit anywhere else.
It is a monkey-copy (of the ghetto variety).
This came up on the bitcoin Stack Exchange:
http://bitcoin.stackexchange.com/questions/10421/are-bitcoin...
We all live in the same capitalistic world, for better or worse.
Also, watch Food Inc. http://www.takepart.com/foodinc
The excuse that "Well, nobody forced them. It was their choice." is an elaborate illusion that needs to be done away with. There have been a couple of articles this year about how being poor causes bad decisions, not necessarily vice-versa. I'm glad those articles are being written because it shows at least a few people are starting to realize how the system traps people and others can be convinced it was they're own fault.
"Poor people, generally, make bad decisions—bad in the sense of their long-term physical, mental and financial welfare. But their bad decisions aren't the reason for their poverty. They're caused by it."
@http://killermartinis.kinja.com/why-i-make-terrible-decision...
Growing up poor is bad for your brain
@http://motherboard.vice.com/blog/growing-up-poor-is-bad-for-...
I have heard these arguments, and I don't disagree with them. I think that efforts would be better directed at educating poor people to make better decisions, than to act like a collective hovering mother and try to keep anything bad away from them. And we often end up being exactly wrong about what's good and bad anyway (see: the USDA food pyramid of the last two decades. It turns out we've had it basically upside-down).
This is drifting way off topic of this thread so I won't say more here.
For example, Whole Foods bought and closed a Wild Oats store in the same shopping complex as a Walmart. Less than a year after closure, that Walmart no longer carries organic produce. The closest store with an organic produce selection is 4 miles away.
Whether or not you think organic food is better or worse is irrelevant - Walmart offered a product to compete with another store, and once that competition was gone, they dropped that selection from their store.
My concern about bitcoin winding up more expensive is that it's a bit of a red queen's race. Unlike most applications of encryption, attackers and defenders are on even footing (except, like in most human spheres, in that defenders hopefully outnumber any coordinated group of attackers). This means that whatever latest best tech we have for efficiently turning power into hashes, we've still got to burn about the same amount of power to keep things secure (and continually update to the next newest tech). In other spheres, technological process makes doing the same work cheaper - but in bitcoin it stays the same; you've got to run as fast as you can just to stay in the same place.
It may well still be worthwhile, though.
The growth of Bitcoin is nothing but a symptom of the lack of faith most of the world have in the policies of the US Govt, the Fed, their politicians and other Central banks in general. They have proven that they simply can't be trusted.
First you have to have the VISA network in the first place, that's no mean feat. Then there are the banks themselves, hardly trivial. Only then do we get into central banks and financial regulators. All part of the package.
Really though, the fact that every single transaction is broadcast and that every single transaction must be verified by the entire network (in theory) is what kills Bitcoin's energy efficiency. Whenever a new mining rig is brought online, the energy efficiency of Bitcoin decreases -- and Bitcoin is designed to incentivize bringing more mining equipment online.
It is also the fact that ensures it's distributed nature, and the purpose of its very existence in the first place (we have plenty of centralized digital currencies).
> Whenever a new mining rig is brought online, the energy efficiency of Bitcoin decreases -- and Bitcoin is designed to incentivize bringing more mining equipment online.
This is not necessarily true. The efficiency (number of SHA256 operations per joule expanded) will increase over time. It has already increased by a factor of 1000 compared to CPU mining. So it's definitely possible for both the security and the energy efficiency to increase simultaneously.
The long answer is: you cannot secure the network using another any other work. The work done has to be specifically tied to the previous block on the blockchain (made of up transaction data, which is of course unrelated to proteins or anything else "useful" in the view of the questioner). Otherwise, you cannot demonstrably prove the integrity of the blockchain.
The short answer is: they are doing useful work -- they're securing an increasingly large and distributed financial network.
- Peercoin (http://en.wikipedia.org/wiki/Peercoin), which introduced an alternative concept called proof-of-stake, which essentially dismisses mining in the long run
- Primecoin (http://en.wikipedia.org/wiki/Primecoin), for which the "work" is engineed to be scientifically useful (I'm not sure how useful it actually is)
I really wish the Bitcoin community had seeked more ingenious/efficient alternatives early on... a lot of energy is going to waste now.
Is it? How much does Bank of America spend in energy to keep up its servers? Backups? disaster-recovery setups? That's a significant energy cost, too.
Of course any big corporation or administration is going to have a lot of underused ressources and redundancy but it doesn't mean they burn power "for the sake of it" as bitcoin does.
Also, bitcoin is not a bank, it's supposed to be a currency. If big banks were to switch to bitcoin I don't think they would spend less energy doing all you said. So no matter what you think of bitcoin it's fair to say it's not very "green" so far.
Primecoin is not calculating anything particularly useful from a scientific or medical point of view (Cunningham chains).
* With cash we have to print and distribute cash, and move it around, and run hardware to validate it, and image scan it, and count it, and destroy it. Etc.
* Credit cards require servers, massive backups, authentication procedures, production of specialized hardware, and the same networked infrastructure as bitcoin, as well as server ops, bank managers, customer service. Etc.
* Bitcoin can use any machine, and the same internet as any other program. As chips get faster and more efficient the energy cost goes down.
This is incorrect. The value of the sum total of fees over a certain period, will be equal (or slightly greater) than the cost of the energy required to maintain Bitcoin.
The value of Bitcoin itself is not limited to the amount of energy required to operate it. Confirming a 1M BTC transaction requires the same amount of energy as confirming a 1 BTC transaction, so the cost of the amount of energy expanded is not a limit to the value of Bitcoin.
Not really. Peercoin's security comes from the developer of the system signing every block. It attempts to use a "Proof of Stake" system where ownership of coins controls mining, but the problem with PoS is, ironically, that there is nothing at stake.
In PoW when you attempt to mine you must expend energy and so you should only mine on a consensus which is likely to be the surviving one if you want your work to not be wasted. In PoS the same is not true, and an optimally rational PoS miner will attempt to concurrently mine all forks which he does not hate.
Originally the signed blocks in PPC were supposed to be a bootstrap mechanism until most of the mining was PoS based, but then some clever miner started mining many possible histories and finding ones where he magically got lucky and his coins were the selected stake for all the blocks.
Primecoin's work isn't scientifically useful— no one had bothered describing it as interesting before it got pulled out as a PoW, and it's far less clear that its not trapdoored (that someone knows how to mine it much faster) than the one way function based proof of work.
You can convert basically any stochastic search into a PoW, but not necessarily a good one (e.g. it might have trapdoors).
More deeply, if your mining work has independent value that that dilutes your incentive to mine on the one true best consensus, since you'll still gain that value even if you mine on a losing consensus.
And ultimately the energy is _not_ wasted: It provides security for the system which is shared by all it's users. In Bitcoin you don't mint coins (with enormous energy costs) or print notes, you don't need bank vaults, or armored cars. You don't need to incarcerate counterfitters, fly around agents, or suffer counterfeiting losses. All currencies have operating costs, if Bitcoin's costs are comparatively good is a complicated analysis which I don't think anyone's done.
It seems that the cost of preventing counterfeiting, and other comparable attacks against the conventional financial system, is much lower than than the cost of the proof-of-work calculations done in bitcoin. In fact, by design the cost of these calculations must be significant, otherwise it would be cheap to hijack the bitcoin system.
I'm aware of some alternatives to proof-of-work, but until we see more of this in practice, I will continue to bet on fiat money as the future of money.
Doing a simple google search shows that counterfeiting costs the USA alone $200bn a year which is 1.2% of annual GDP. Current market cap of bitcoin is $10bn. This means that $100m would be comparative. Maybe someone can give me the numbers on mining hardware and electricity prices.
To be completely accurate, we need to include cost of minting physical dollars etc...maybe someone can do a better analysis on all this but I'm highly skeptical that bitcoin costs more to run than conventional financial systems.
Also the correct figure to compare with the market cap of bitcoin is M1 (approx 2.5 Trillion) not US GDP (approx 16 Trillion)
What do you base this assertion on? I have no idea what the US spends annually on preventing counterfeiting. Do you?
David responds, "The work is not useless, it secures the transactions. The public hash chain ensures that Bitcoins can only be spent once... There is currently no known way to make the work more useful. " See http://bitcoin.stackexchange.com/a/334
[1] At least, that's what they tell me. I suppose it depends what you define as power.
My analogy might be a bit convoluted, but my point is that - as you mention - that we're comparing oranges to apples. We're comparing a general-purpose computer to doing a SHA256 hash.
Worse, the ASICs can't be used to fold proteins when they've finished being used for Bitcoin mining.
For instance, to stay with the protein folding example, maybe bitcoin could have used an algorithm that used similar logic as the one used by the folding@home project but with different input data and expected results. Once the hardware is no longer needed for mining it can be easily repurposed for research.
It makes you wonder if we'll ever hear of anyone turning their bitcoin cluster to this purpose. Perhaps someone unauthorized.
Edit: Downthread, nwh explained why this isn't possible:
> No, they can't crack passwords. They increment a nonce at the end of a supplied string and only return if the nonce results in a low hash. They're not a generic "fast SHA" device like you're thinking.
https://docs.google.com/file/d/0B3qaT-ZL6aeKOHNEQWdpZEtRYWc/... https://bitcointalk.org/index.php?topic=64421.5
I don't think it's unproductive at all.
Maybe instead of spending this energy on computers, we could be using it to build up the infrastructure of the developing world and help them become self-sufficient. I think that would create far more wealth for far more people than Bitcoin ever will.
Know how a good undergraduate CS degree involves writing hundreds of fully functioning programs? A great graduate EE degree might involve one single functioning piece of silicon.
Know how we bitch about compile time in the minutes or, god forbid, hours? Turnaround time on silicon is weeks at the minimum.
Doesn't the fact that money is being redistributed to technology companies good for technology, by definition?
http://www.bizjournals.com/sanjose/news/2013/11/18/silicon-v...
Also, you're asking how Bitcoin mining, the use of technology, and SV start-ups will directly impact the future. I can't do that.
Of course, I couldn't tell you in the late 90's how a search engine company would lead to better self-driving cars (among other things), or how a company that made paying online popular would lead to electric sports cars and rockets.
I bet convincing most people that Likes and building a better social graph in 2005 would lead to any sort of innovation would have been a stretch too.
As a side effect, it will effectively centralize control of the currency to a few major computational groups that have the resources to make such big investments. If they ever wanted to cooperate, just a few of these groups could be able to determine policy for bitcoin as a whole.
For the little guy, space, power, and cooling are effectively free. He makes use of space that was already available and unused (eg. his desk), cooling is easy (a few watts can be passively cooled), and power is so small (2.5W per port) that he effectively writes it off as insignificant.
But a large scale miner like friedcat has to build or rent a data center facility, has to pay for air conditioning units, has a electricity bill he cannot ignore as insignificant, has to pay people to deploy and maintain the dozen of racks, etc.
Source: I have been mining since 2010, at some point I was mining with 20 killowatt of GPUs (ten racks or so).
Obviously, someone with 10,000 watts of USB thumbdrive-sized miners would run into the same costs eating his profitability: 10,000 watt of electricity bill, 10,000 watt that need to be cooled, etc.
At least with larger setups, you get to pool your costs, and your power usage would be more efficient.
Now, the counter to this are the micro-mining setups where you are using very little electricity, such as using a flashed router or Raspberry Pi to host your USB miners. In this case, you could even probably run it off of solar in most places to make running costs actually zero. You'd have maybe $100 more in initial costs (for solar), but you'd have no ongoing costs, only profit.
BTW, your username is funny to me - those are my initials. It's like I'm having an argument with myself. It's been known to happen.
I meant a Raspberry Pi running as the host for a bunch of USB ASICs. This way you are effectively reducing the power requirements of the host to the minimum amount. You could do the same thing with any low-power embedded system that could run bfgminer or cgminer and keep up with the network.
This would be opposed to running a Linux or Windows desktop system as a host.
Do you want to be the punter or the house?
People actually went as far as to sneak into Butterfly Labs' facilities and found no evidence of it.
Edit: I get that I would need a USB miner. I could pick up a 12 port USB HUB from Amazon and 12 USB Miners for a few hundred dollars of an investment.
You'd need ~ $500 in upfront costs (12*~$40 + $20 USB hub, plus cooling - unless someone knows where to get USB ASICs cheaper - if so, I want to know!), and you're probably not going to make that back in any reasonable amount of time.
There are online calculators to tell you what the time to get a return on your investment is, but ballpark, you'd be looking at 30-50 weeks minimum to get back your money. And that's factoring in running the system for 24 hours, which would put extra wear and tear on your MBP. And by that time, your effective rewards would be less for mining... etc...
But then you still have the issue of buying the mining gear. And you'll probably never mine enough Bitcoins to ever pay back the initial purchase price. You'd be better served to just buy some coins from an exchange.
I have a 330Mhash/sec USB ASIC miner running right now on an old netbook, but I'm just doing it for fun. It's been running now for the past 2 weeks, and I've made less than $2. I spent only $20 for my ASIC though, so it's not too bad. A similar miner today would cost $35-$40 on ebay.
You forget to take into account that cost per GH plotted against volume is non-linear. At $50,000 investment one won't see much difference and the graph will look linear. At $500,000, though, one can design and manufacturer their own ASIC and purchase everything in high volume. Then the cost plummets like a rock. And I would argue $500k is where large scale mining starts these days, not $50k.
When this happens, all a large scale miner can hope to accomplish by manufacturing his own ASICs is to save that 5-10% which is going to be insignificant compared to the free power/cooling from small scale miners.
I am interested to see how the dynamics play out, but find it hard to believe that they will be much different than anything else.
Take home gardening, for example. It's easy to say that it's cheaper, and pretend the food is free, but it isn't. The biggest cost there is time. People are willing to discount the time spent gardening, because they get pleasure out of it. But it's a real cost, and that time could have been more profitably spent doing contract work (for example).
If you sum up everything one gains from having a home garden, will the consumer see a net gain? Probably not. But people do it anyway, because they don't see it as work. They'd rather do that, than fill their time with another job. That's where mining will end up in the long run, in my opinion. And I have my doubts that that sector will be large enough to prevent centralization.
P.S. I appreciate the discussion. Speaking honestly, I'm still close to the fence on this one. I hope my remarks don't come off as rude; I enjoy seeing the arguments made for one side or the other.
At some point when you are scaling, your costs are lower than your expected income. You have to be doing this at scale in order to break even, let alone make money. And, if you have a sufficiently large setup, you aren't talking about mining in pools, you have your own pool, where you keep the rewards for each mined block.
Little guys mining get minuscule rewards for negligible costs. You aren't going to make any significant money with it.
Source: I've been running a 330Mhash/sec USB ASIC miner for the past two weeks :) I'm a total newbie, but the economics of it aren't good.
If the cost of the mining unit will buy more BTC than it will generate, just buy the bitcoin. So a 2.2ghash miner (e.g. Blue/Red Fury from BPM) will generate 0.1BTC over 6 months. That miner would cost you approx $280. That would buy you 0.35BTC at a price of $800 per BTC.
There is obviously a point at which these would be economical to buy but that price point is less than $80, which is just over a quarter of their current price and that is probably close to what the manufacturer is paying for the production of them (including chip costs etc).
Source - I resell a lot of mining equipment on ebay, I charge approx 2 - 3 times what I pay for the units in bitcoin and i sell out of stock usually within 48-96 hours.
Now it may be that obtaining bitcoins is more difficult that obtaining mining equipment, or the fact that you can buy them on ebay (a site people are familiar with) as opposed to a site like localbitcoins (where people are not familiar with it and it requries sending money direct from your bank account) means people prefer to buy miners instead of BTC. The argument that coins will be worth more does not factor in as you can buy more coins now whoch will also be worth more.
Final point I would make on this is that mining has not been a profitable endeavour for most of bitcoins history. Anyone who mined from 2009 to late 2010/early 2011 will probably have done so at a loss, based ont he understanding that coins would be worth more later on down the road. The big difference however is that obtaining coins now is much easier than it was in 2009/10 if you are looking to obtain them without mining.
Up until then, you are correct -- the rate of new BTC generated will be dominated by the few.
I'm not saying this will happen, but it's possible.
The Chinese computer engineers can go out and assemble this thing from spare parts in their city.
Americans would have to order through five different middlemen and face language interop issues along the way.
China looks like a fantastic country to live if you're a talented engineer.
(Obviously, you might not make as much money, but what could you pioneer with the agility you'd have?)
But something in the same form factor as the mining ASIC might make this a pretty powerful engine for computing 'X' for some useful definition of X, post BitCoin exhaustion.
Password cracking-as-a-service for China's government/companies?
Bcrypt? There be dragons!
My reasoning is that replacing just the boards should be less expensive than creating the entire system from scratch. It may not be much less if the infrastructure is cheap compared to the boards but less.
It's not being evaporated into the atmosphere, it is undoubtedly being recondensed to liquid state and recirculated.
The coolant is pouring off the copper pipes, which it presumably has condensed on.
Something like 3M Novec maybe?
What are they going to do with all this hardware worldwide when the entire chain is finished in a couple years?
The question is are people going to bother to use $10k gigahash machines with dollars/day in power to make 0.0000001 BTC
Beside that, transaction fees should make mining profitable for ever, in theory. Transaction fees, or transaction volume, only needs to grow by 10x in the next 10 years (from ~0.3 to 3 BTC per block), in order to make them generate more profits to miners than coin issuance.
Once they announce whatever comes after SHA-256, would it not be possible to immediately start building ASIC's for whatever that is, and put them to work as soon as the new proof-of-work is used?
The second source is transaction fees. When you make a transaction (for instance when you buy a flight on Virgin Galactic) you have no guarantee that the rest of the world agrees that you made that transaction until someone finds a block which includes your transaction. You increase the likelihood of your transaction being approved by offering a transaction fee. This incentivizes miners to look for blocks which include your transaction.
Eventually, the awards will be very very small but there will be more transactions and thus more transaction fees available to miners. Thus miners must continue for as long as bitcoin transaction are being made.
Plus, adding liquid cooling does not appreciably increase the energy costs, and could even decrease them if it allowed savings on, say, air conditioning.