Topic: [ActiveMining] The Official Active Mining Discussion Thread [Self-Moderated] - page 77. (Read 771280 times)

Oh my god - are you guys freakin serious?

You're talking about millions of dollars of mining equipment...chips, boards and such somehow becoming a bottleneck in a 1/4 trillion dollar semiconductor industry?

Seriously?

Lets play out the figures shall we

Say the wholesale cost price of chips, boards controllers etc are $2/GH for the finished product. Forget splitting it down into chips and boards for simplicity's sake.

A global combined investment of 1 billion dollars in 2014 would yield around 500,000,000 GH of mining power. Thats 500 PH compared to the current network hash rate of 17.5 PH

1 billion dollars of investment in mining equipment could easily be swallowed by the global electronic industry - it wouldn't even blink.

EDIT: corrected GH to PH - thanks PurpleTentacle

Ok thanks! Where can I find them? I tried sifting through the threads but didn't find anything except mentions of cryptostocks.com

somestranger- don't know about that aspect, aren't they pushed on enmass by machine and soldered in solder baths? I thought it was all machine done?

Great link kleeck:

'The company [TSMC], which commands more than 90 percent of the global 28nm chip market, said earlier this year that 28nm chips would be the biggest contributor to revenue this year, since production capacity and revenue are set to triple on an annual basis.'

So the global production of 28nm will rise by around 330% maximum in 2014. That's a fact.

EDIT - while the TSMC press release makes the future roll out of 20nm look promising for around March 2014, there is yet no guarantee of the chips efficiencies (and certainly not massive efficiencies) over top-end 28nm.

Yes the foundries may be able to pump out chips, but will the board manufacturers be able to keep up? I don't mean producing the PCBs -- that should be easily scalable, but actually mounting the chips could be labor intensive especially since the 55nm ones are only ~1.2 cm^2.

http://www.taipeitimes.com/News/biz/archives/2013/12/13/2003578882

This also makes me want to invest in a foundry.

Edit: I like your post.

Two points:

KnC are not 'at 20nm'. KnC are working on a 20nm but that ASIC technology is still unproven. There is no guarantee that the reduced die size with limiting non-scalable components will allow for any significant increase in overall efficiencies over top-end 28nm. (Like the ACtM eASIC full custom 28nm). Infact, the increased cost of producing the KnC 20nm chip, plus the inevitable delays in actually designing and achieving a workable 20nm die (extremely difficult) could make KnC's Neptunes unable to ROI. That is a real possibility.

Second point - foundry capacity. Let's see some figures about the ability of the foundries producing bitcoin ASIC's being able to keep up with 100% production increase per month. No matter what their capacity now they are unable to meet that future demand - fact.

UMC currently has a huge capacity for 55nm but their total 28nm capacity seems to be only around 25% above that. So with a huge demand (100% increase per month) for 28nm, 28nm production limits will soon be met.
http://www.umc.com/English/class_300/c.asp

What that says is that very high demand for 28nm could reach a foundry back-log in the near future. That's why chip runs are indeed limited by the foundries - they do not have endless capacity when the world of electronics of all types runs off their production lines. 28nm is in high demand. 55nm is an established tech but with huge infrastructure supporting it and it does not have a 100% increase in market demand per month.

'Yau Kae Sheu, senior director of UMC's 12-inch Specialty Technology Development division, said, "UMC first taped-out customer 55nm SDDI products in late 2012. Achieving 15 million accumulated shipments and mature production yields in just one year is a significant milestone and highlights our engineering and manufacturing strength as a worldwide foundry specialty technology leader. With our 300mm Fab 12A in Tainan, Taiwan and Singapore's 300mm Fab 12i both providing ample capacity support and established economies of scale, we look forward to bringing additional 55nm products to volume production as many new products are scheduled for the design-in stage in early 2014'
http://www.prnewswire.com/news-releases/umc-surpasses-15-million-shipments-for-customer-55nm-sddi-chips-239014911.html

So the addition to our portfolio of a custom, top-end, 55nm that has a very high volume production capacity from UMC could be a very very fortunate - or smart - development for VMC. If our competitors (X-farm mining) can only source 100k chips per quarter while we can source 300k chips per quarter and our chips cost 60% of the cost to fab and run in their life-time than X-farms chips, then we can grow our farm above and beyond the capacity of X-farm to grow theirs.

Fuck this guy, his donkey and that raggedy dog humping his leg.
Do not believe everything rode clowns.. oops... conference clowns are telling you. This event was the first circle jerk of the year.
There will be others and even bigger numbers will come up. Do not forget, those are the guys who have BTC form the early days and/or have bought it way back then. Ver and those other clowns can go and fuck themselves while generating ideas like "bitcoin licence"  etc. Seriously... WTF!

So, back to Actm. Where are the fin. statements... Ken?

You thought correct.

So.... I never transferred my shares out of Bitfunder because I had (obviously stupidly) thought that ActiveMining would transfer them for us with the asset list.

I have ~5,500 shares and would be depressed to see them disappear - is it too late?

Bitfunder still has record of the shares, and I'm sure there's a paper trail (I have the BTC address linked to the Bitfunder account as well).

It seems stupid that my shares would simply be reabsorbed into ActiveMining.

Thanks

I'll reiterate what Zumzero already posted earlier since it is very relevant to this conversation:

Source: http://www.coindesk.com/miami-bitcoin-conference-crime-krugman-bitlicenses/

Day One of the conference was capped off by angel investor and bitcoin advocate Roger Ver and he did not disappoint. When asked about the future value of bitcoin, Ver was understandably bullish about price.

“It’s very, very clear that it is going to be higher than it is today,” he said.

Perhaps the most intriguing though that Ver conveyed was his opinion on mining. “It’s a market that has huge potential,” he said. Ver pegged bitcoin mining as a $1 billion industry given the roughly one million coins that will be rewarded over the next year.

“I don’t think anyone understands how big this industry will be,” he said.

The number of SHA Asic "manufacturers" (The people who design/order/distribute, not the fabs) seems to have multiplied by 3 in 6 months, the hashrate density has gone up by a factor of up to 10ish and we could imagine that existing manufacturers could double output without bending any laws of physics... so top end potential of something like 1000x the mid 2013 production rate in 2014. Though that would have been around 200Th a month not the couple of petahash of late 2013.

Anyway, with that "crazy" level of expansion 200 PH a month might be possible from mid 2014 ... and if that is balls out production, expansion will drop below 20% a month after we blow through 1000 PH ... hopefully by that time we've caught up with "Moores law" and expansion in hashrate will be more predictable...

Unfortunately, since bitcoin interest seems to be going in cycles, the next one seems about "due" in June-ish which is where we may see rapid climb to $5000, which will of course encourage overproduction of mining equipment. The ramp up there will look good in fiat, not sure BTC reinvestment will work out so good.

So yah, can't expand forever, but unfortunately, lot of expansion potential left for hardware production.

At this point, despite the promises and dreams of the CEO of Active Mining, we do not need to be first to market.
We do not have to have the fastest chips.
We do not have to have the most energy efficient chips.

What Active Mining DOES need to do is produce chips, complete production of mining hardware, and begin mining on a massive enough scale to make some profit.


We do not have to be #1. We can still make tons of money for everyone being #3 or even #4

It does not have to be incredible amounts of profit, just enough to pay out dividends.

If mining on a level of 10s or 100s of Terrabytes is happening AND dividends are being paid out AND there is a working exchange, share price will go up.

At that point, the CEO of Active Mining, as well as all the long suffering shareholders will be able to sell their shares.
Profit will come from a combination of share price and dividends. Of course, supply and demand holds true, so if more old shareholders selling, price will tend to drop, but if dividends are flowing and if Ken Slaughter keeps adding hashing power, and marketing is done properly (which is unlikely, given the current track record), there will be continued demand. Ken Slaughter can make profit, at that point by selling his shares, by taking a salary, or asking payment for speaking gigs at conventions and motivational seminars.

What will be announced with this week's Wednesday announcement?

Surely it will be that shares have been transferred to a working exchange.

We all wait and hope for that eventuality.  The alternative is not very pretty.

 
 

Markets tend towards equilibrium.

Equilibrium in bitcoin mining is (arguably) when mining income is equal to mining costs.

I would actually disagree with that slightly and posit that people will continue mining ASICs even when costs are higher than income. This is because most people will choose to believe that the value will rise, eating up any losses. Also, ASICs can't do anything except mine coins, so why turn them off?

If anything, due to the lead time of chips and the bullish attitude of mining companies (Moar chips! Moar miners!) then the hash rate will overshoot the equilibrium point significantly. And then BTC/USD will increase, and mining will continue, chips will continue to be made etc etc.

Hash rate levelling out will not happen in 2014. You can quote me on that.

I'm not ignoring anything. That is exactly what I am talking about. You are not going to see hash rate doubling every month. You will see that begin to happen this year.

You're ignoring the fact that Bitcoin ASICs are at this point a cottage industry.  The thing about making chips is it scales real nice.  People here focus on ActM's ability to rinse & repeat, but they forget that all of the other ASIC makers have the same ability in spades.

They cannot release miners with the same hashing rate increase that they previously did. KNC is already at 20nm. Therefore they are going to release batches that don't have the same percentage of increase from the previous generation at similar batch numbers. IOW, their next batches after Q2 are going to add comparable hash rate as the batches they deliver in Q2.

True, but we are still in the midst of a paradigm shift in mining as people are still switching to ASICs. It's only been a year, and the transition has been hampered by extremely limited supply for the first half of the year since only Avalon and ASICMINER were shipping before June. Huge increases over the last 3 months are to be expected, but they won't continue. We'll probably only have 20% jump or so on the next retarget, and while the one after that might be a little bigger if Bitmine and Cointerra both start shipping in volume the days of consistent 30+% jumps are over*. In the current market conditions it just doesn't make sense to expand production capacity exponentially, when you expect that you won't be able to sell more units in a few months.

*of course, Bitcoin jumping 100x in the next year like it did in 2013 would change everything. Not that I'd care at that point, I'd be retiring to drink Mia Tais on a beech somewhere and crying about all the coin I sold at $13.

Then we agree.  But I'm not sure how knowing this helps  with profitability of aging chips.
Edit: +1 to wasubii

You're all thinking only in terms of home miners - thats who CT, HF, etc are aiming at (currently).

You are forgetting the massive investments from venture capitalists and private mining outfits.

Look at 21e6

Look at the brother of one of the KnC guys and his plans to use KnC equipment for a private farm

Look at that growing 'Unknown' part of the pie chart. The dark horses.

You all sit here and think 'We are in such a great position - once the ActM chip mask is done we can just continue to crank out chips as fast as we want for low cost and we will take over the world hash rate and nothing will stop us'

And you think the other guys with chips won't? Why? They don't like money? WTF is with that logic?

They already have chips. They are already making money to reinvest in more chips, more rack space, more efficient chips!

And us? we are no further now than we were at the beginning. Silly me, i forgot - we have already shipped 'products'!

Sometimes i wonder what you guys have been smoking...

I never said there was going to be a top, just that the growth rate will decline to look more like the situation prior to the introduction of ASICs.