Topic: Am i wrong thinking Butterflylabs is the end of Bitcoins ? (Read 5589 times)

It's truly sad how little some think of their fellow man.

The governments of the world are doing a great job of dividing and conquering humanity.

I also think ASICs are bad news for democracy in bitcoin-dom. ASICs will simply never be as widely distributed as CPUs. I would turn the whole bitcoin network back to CPU mining only, if only there was an algorithm which could not run on GPUs FPGAs or ASICs. Trouble is, anything you can softcode on a CPU, you can hardcode into an ASIC.

We *could* perhaps try a non-parallelizable algorithm, ohhhh, such as:

HASH_i = SHA256(BLOCKDATA + NONCE + HASH_(i-1))

and iterate at least N times where N is a measure of the difficulty. However, this would take as long to verify as it does to compute, so that's no good.  In fact, I'm not there there could possibly exist a long-running non-parallelizable algorithm which is difficult to compute but simple to verify. Any information-theorists out there that can shed light on this?

It makes me think of the phrase "the ultimate form of wealth is energy" (or something similar, origin unknown to me), except I'd modify it and say "the ultimate form of wealth is the efficient use of energy". Those with the energy and the means to use it efficiently, get the money. Only thing is, John Doe won't ever understand why *he* should buy a BFL Single or similar in order to protect the network. Right now the police and the banks protect our money from forgers and thieves, and we all understand that. Telling people that the only way to protect their bitcoins is to expend *energy* doing so, is so completely far out that majority of people will just glaze over and talk about the weather instead.  The curious minority will shrug their shoulders and wonder if there wasn't a simpler way but will trust that "someone else" will do it. The geeky ultra-minority will try to understand why, and some of those will actually go out and buy a mining rig.

I would, of course, disagree with that.  Mining consistently will average out over time.  If I were to leave my 35Mhs GPU mining for the long term it would eventually solve some blocks here and there.  A statistical analysis may say it would take years for solve a block but it could be the next share too, there is no way of knowing for sure.  So if for some reason all ASIC's left Bitcoin that GPU would still be there hashing and picking up the slack.

When/if my ASIC ever shows up I'm not going to keep mining that old GPU, you understand that I hope.


That's a more generous classification than most people, probably, group me in, so I'll take it.


Dependence?  How so?


Yep, sad but true.


This line of reasoning makes no sense to me.  So once the folks that won the gamble on the Avalons recoup their investment they are just going to turn them off?


FPGA's were just the stepping stone to ASIC's.  That is the normal technological progression in the high tech, or sometimes not so hi tech, electronics industries.

FPGA's were just a fart in a wirlwind compared to GPU's or even CPU's in the progression of Bitcoin mining.
Sam

I'm not sure if 'consistent' mining has any effect by itself, at least not anymore. I'd say that mining consistently is more of a classification of a person. If someone mines consistently then that person is good for bitcoin because of his dedication.
There are so many people hashing right now that they all can act inconsistently and the network would still be ok.

Also i think you underestimate bitcoins dependence on these people going for instant ROI.
The thing with the asics is that they have a pretty steep cutoff point when it comes to ROI so that tends to divide the short term from the long term people. This round is pretty much for the instant ROI people because the chips will be obsolete soon. Noone investing long time will be helped by these asics. FPGA's were the long term choice while they lasted.

Kind of like raising the minimum wage, eh


I don't necessarily disagree with your statement/analysis.  But it reveals your thinking in terms in making money in mining now, as many of the most vocal people in Bitcoin are.

There are many that are mining for the long term.  I'm not expecting to get a return on my investment before the next difficulty increase(s), after which I need to buy more hardware, because I didn't quite make it, in order to recoup my previous investments.  I'm investing in hardware that can mine for a long period of time at a stable hash rate.  Hopefully these devices can do that reliably.

I have no problem with people mining for an ROI immediately but that ultimately doesn't help bitcoin.  Mining consistently and reliably for decades does or at least more so.
Sam

OP: have you considered trading? You can do or make things to earn bitcoins, you can buy things with bitcoins. I don't see how "all coins will end up in few powerful banks", unless we all decide to give them away and never buy or earn them back.

Yeah, well, FORTUNATELY not all gold comes from the US... 

Gold survived because it was tamed and institutionalized. Also, gold has been used as a defacto material of value since the stone age.
So there are pretty good historic and economic reasons for why gold survived.
Bitcoin on the other hand..

Absolute hashing power is irrelevant from a mining perspective. The GH/s you mention mean nothing except they make the network stronger.
The relative hashing power is what everyone is after. So this huge hashing power of 60GH/s will be the same as a GPU a few months back or a CPU a few years ago. If all the ordered ASICS are delivered you will be hashing $0.20 per day with yer 60GH/s rig before this year ends .
So in fact this ASIC round just made people pay up for an increase in difficulty.
The ONLY winners are the ASIC people and the people who got their ASICs soon enough. All other people will need to spend money to stay at the same level.

The low prices of the GH just mean that people with lots of budget can buy themselfs in esrly while leaving the rest out.
The other thing is that ASICS are specialized hardware. It means that everyone who mined with a GPU (because they happened to have one) will be irrelevant.
So ASICS are the first generation mining hardware that must be bought (and in fact it is already too late to buy/order because by the time it gets delivered your ROI is almost like a GPU 1 year ago) while at the same time killing off any general purpose solutions.

The Jalapeno will be worth almost nothing by the time BFL delivers and will be virtually worthless by summer this year.
Just do the math and see how much (little) a GH can mine you once all current batches are delivered.
There is no point in buying ASICS anymore unless someone makes them waaaay faster and that will only last untill everyone buys one of those.

Before the the gold rush in 1849 one could walk along creeks around San Francisco and pick up gold nuggets. Now you would need a million dollars of equipment to find one nugget. Yet gold survives.

If growth is going to kill bitcoin then bitcoin was dead as soon as the 2nd person started mining!

How is $1500 a barrier to entry into bitcoin mining?  How many people have actually spent less than that on their GPU rigs?  If a person can't spend $1200 to $1500 to get a 60+ Ghs ASIC they can enter for as little as a $150 for 4.5Ghs if they choose.

ASIC's are putting more hashing power into more peoples hands at lower prices and lower cost's of operation than previously was possible.  That is not going to kill bitcoin.
Sam

I do.

The more specialized the hardware becomes the more it is pushed into hands of people already owning money.
These hashing algorthms cannot be optimized indefinitely and so we are on a path of diminishing returns.
There will come a time that a small benefit in hashrate will cost a fortune and only a few people will be able to take the risk/gough up the dough.
These will be the people capable of mining the most.

Two problems.
1) By mining more they have more. They can excert more power over others and everything bitcoin stands for will be negated. Governments would just be exchanged for a handfull of individuals but the same power hunger remains.
2) By not spending a lot they can drive the price up for people not mining. This creates a barrier of entry to the system.

Effectively bitcoin has become a system where the person with the most money will win.
You can already see this in how BFL did their 1/3 thing to distribute the hashrate more evenly.
Otherwise they would propably have just been bought out by a few people.
So yeah, this growth cycle thing is going to kill bitcoin some day.
For one, people unable to invest $1500 into mining will be left out.
The democratic nature will be lost forever and a need for institutions will rise to protect us from the elite.
Maybe you're right and nothing has changed...
The problem is that bitcoin was supposed to make change.

People here are talking like we are going to loose a bunch of Bitcoin miners?  How many GPU based miners are going to pack up and leave Bitcoin altogether?  I don't know of any!

Most Bitcoin miners using GPU's are going to use those GPU's for other uses.  But all of the miners I've read replies from are getting an ASIC of some type as well and using their GPU's for other things or selling them and recouping even more of their original investment.

Once ASIC's come to full fruition the cost entry to mining will be at an all time low.  You can get a $150 mining device.  You can get a mid range system for $1200 to $1500.  These price ranges are less then what most GPU miners had spent.  And the ASIC's will have a low power consumption so you can just stick them in the corner somewhere and forget about them and they will hash whatever they will hash.

I'm not quitting Bitcoin mining.  Is anyone else?
Sam

bitcoin will only get stronger as mining hardware improves. If there are large hoarders of bitcoin yes they will become very rich but in the same the value of bitcoin will rise dramatically because of ever growing demand and user base. this will pave the way for the end of bitcoin trades for everone because we will be trading in satoshis (bitcoin fractions). People seem to be talking like this is the end of bitcoin, i strongly believe that we are still the pioneers in it. bitcoin has so much room for growth. The key for bitcoin to grow is the usability for the non tech savvy with new apps and ease of access around the world. this creates a new major profit opportunity to those who have good ideas and the knowledge on building these apps and services. I have mad a commitment to myself to not be one of the people who look back in years to come and say I wish I thought of that or I wish I did that.
Butterfly labs and avalon has changed the way bitcoin will grow because the teck savvy who like to build there own hardware will have to step up the game or start thinking of new ways they can help and profit from the bitcoin network. A new user base will come in as bitcoin expands to the non nerd type with the new apps and it will gain mainstream strength.
I may be wrong, I don't care if I am though I'm going to take the chance in bitcoin as every1 who is in it has already done.

theirs my rant. lol      

 Thanks for all the replies and like i said i am new Bitcoins and only found out about it because i was folding Proteins for free since i had the hardware i did i wanted to put it to use rather then sitting. When i heard about Bitcoins it really pulled me in. Lol no i never though i would get rich with the high power bills and the low hashrate of 2 7970's and 2 6970's on 2 separate machines. I guess it will be like you guys said a great currency for a small community. But there is no doubt this leaves a huge open door for another online currency to come take over. Regardless of how many coins are spent my opinion is the more people using the currency will make it last and become a stable currency i guess you could say.For instance how many people daily use Paypal over bitcoin? or there credit card. There has to be something to draw people in and mining brought allot of people in. I just get this feeling the more i read threads that Bitcoins are not aiming to be a real online currency at all.To have a real currency you need more then a couple Millionaire bitcoin holders spending it. For instance i buy a bag of peanuts and give tons to a few people in my area as a currency then sure we would be able to spend back and forth forever but thats as far as it would go. but the more we brought people into out peanut currency the greater our economy would become.

 Sorry but i truly believe that more people need to be brought into Bitcoins regardless if its mining or not. But i see no benefit of Miners selling there Bitcoins and forgetting all about Bitcoins. Most Miners are humans that enjoy Bitcoins because 1 its fun 2 we think its a great idea 3 we tell all our friends to get involved. Next we start investing out coins plus ones we buy back into the community because like you said small miners don't make much coin really so we buy it also.

 I dont know i really appreciate the reply's and never imagines there would be so many so thank you guys.

Bitcoin to me is fun and something i highly believe in and mining is fun as hell at the moment.


 I guess we just have to wait and see but still i am not convinced at all. I think this was predicted as part of the fall of bitcoin and now its finally begun. How many years for the fall or if it will be corrected who knows.I really think it will be replaced personally as its so easy at this point. All that needs to happen is a new currency to come on and lure in tons of people rather then the few and bitcoin will be there for the few but the mass of the population would use the new currency.

 I only come to this conclusion from what i read in replies and in other forums. I dont think losing small or any miners is good as thats more people gone from bitcoin.So technically what i get from reading is all you really need is 2 holders of bitcoins each owning 50% of all the coins and they juggle them back and forth and this would be considered a new online currency?

 Losing people is not good. Losing small medium or large miners are not good as they are also people who have more friends that are people. All these people are the community .

Like i always said though i love the original concept of Bitcoin and will mine and invest and spend and buy until the end or like the majority will change to a newer more appealing online currency with the same values comes along. Just after this much time i just think its strange that Bitcoin is not even considered a currency on most Online stores.I am aware some do but by the value of the coin and how long its been out it should at very least be accepted by computer hardware stores etc by now.

 Very cool idea and even though im a small part of it i am proud to be part of it. I dont know how many people i got into mining of buying and investing coins but its allot and i imagine each of you have probally done the same. Only point is losing people is not a good thing in my opinion.


 Like i said many times and will repeat this is only my opinion from reading in this forum and others like it and many of you know way more then i do.

Take Care Guys and again Thank you for the replies.

I have made an investment in bitcoin because it solves a number of issues related to payment taking in business transactions.  Weather or not my mining hardware will ride the mining wave and 'make me rich!' is inconsequential because if I have a more economical business success will follow.

The important thing about ASIC hardware is that fewer miners are required to maintain the block chains.  ASIC to me is an improvement over GPUs because they will provide me stability against difficulty/price fluctuations.  Why are there so many haters/chicken little's on these forums?  Sit back, relax, enjoy the ant pile.

Viva bitcoin!

 I dont know why people think Miners mine as a get rich quick scheme at least small miners. The only reason i even know Bitcoins exist is because i am a system builder /Modder. I never planned on getting anything back as the builds i am using are nt simple mining machines they are Mods that have been in magazines and won many awards. What i am trying to say is just 1 of my builds was insured for $10,000.00 when it was traveling with a sponsor. So like i said i never intended on getting rich with a total hash rate  1320mhps on one machine and 900mhps on the other when each machines costs me way more then the costs of ASIC's.

 My whole reason for getting into Bitcoin was i had the hardware siting here and i really liked the whole concept of Bitcoins and i think whoever said mining doesn't bring people to get interested in Bitcoins is totally wrong. Yes of course i planned on Mining at first. This is a Currency that on one webpage you can read how big of a scam it is and how its a great failure from the start yet on another you can read how incredible it is. I happen to believe it can be incredible. My individual plan was to first Mine on these machines and Invest the coins ,Gamble the coins etc to see how it goes. Yes i could simply sell some equipment as i have like 6 top end builds here and buy ASIC's but personally i think i will wait and watch what happens before making a crazy decision like that.

 What all that, was basically trying to say is i def think mining gets many interested in bitcoins as well as silly bunny runs etc. Not because they get rich but because it intrigues them to get involved.

 And also as was even just said by someone else already 50% of all Bitcoins have been Mined. This scares me because i think eventually this will be no different then the Governed money you are trying to get away from. The system will have the Federal Reserve (Person running huge hash rates and holding the coins) In any currency online or not money is power and control. And all the other few people running huge hash rates with become the banks. Mining on PC's will be gone so there goes a huge number of new people getting into bitcoins i believe this strongly as many get pulled in by mining. Hell i know people trying to mine on laptops. Are they making money now . But they are now interested in bitcoin and will buy them to get involved further.

 Honestly i dont even see how buying ASIC's. would help even for mining as i just see bitcoin becoming a battle between a few people that own the coins at a certain point and by no means a currency.

 Please ember this is all just my outlook on things from what i read as i came into bitcoin new so i seen both sides. The people and articles saying its doomed from the start to the people that say its great.The funny part is the reasons they say it would be doomed was before ASIC's even existed . They though just GPU's were going to end it to fast.


 Thanks all for all the replies they are very interesting to read ,all the opinions.

 Will i buy a few ASIC's ? I really cant say as my Equipment now is worth allot of cash as they are real PC's that have multiple uses vs a Box that could be obsolete if a newer technology is released 1 month later.
Also since i am only doing it for fun and to many eventually donate some coins to some charity's i will just keep plugging away on my 2 useless little machines that at least have a worth of $5000.00 + each as you can see i will never pull in a profit Lol . But just being part of Bitcoin is the exciting part. And please dont get me wrong i want bitcoin to be Huge as i also believe in a few other online things id rather not speak of do to being judged but anything that is for us and free from political bullshit interests me.

 Sorry for the novel sized Post. Lol

Take Care
MybadOmen

The only realistic problem I can see with fewer miners is that they may collude to increase TX fees.  If a large proportion (> 50%) decided they would no longer include transactions in blocks with less than say 1% tx fee paid then the rest of us would be pretty screwed, but then if they did that they would be disinceting the use of BTC which would cause the price to fall and them to make less money mining.  Doesn't make much sense.

You do realize that over 50% of all coins have already been mined, right? We already have a good number of coins to work with to create an economic ecosystem. From here on out, mining is NOT to make ginormous profits. Mining is to keep the network going, approve transactions, and make it as resilient as possible to an outside attack. Yes, the BTC rewards and later the TX fees will keep rewarding miners for their efforts.

So no, BFL is not the end of Bitcoins. In fact, all ASIC companies are helping to get the ball rolling towards a more secure network. Remember, Bitcoins is still relatively new, and is going through some growing pains. I do think it will level out in the end.

+1

No, it doesn't.
If some still want to become miners there's nothing stopping them, it shouldn't  and doesn't matter to them if they need to invest in GPUs, or in ASICs.

But Bitcoin is not about mining, it's about freedom, the hardware used by miners doesn't change that.

If price drops it is unlikely that they will be hoarding. If price crash I will by more. If price increase, that it not a problem either if business is not pegging their products to btc.

i don't understand this logic, even though it's repeated quite often

yes, to a certain degree it means a more secure network, due to the proliferation of botnets.  

on the other hand, it turns bitcoin generation into an oligarchy, much moreso than it is at the moment


marginal propensity to save

the same logic you use here is the same logic that is used to bring taxes down to 0% for 'job creators'


so what?  does it change the fact that it does?

People using coins != Miners
What's so hard to understand about that?
Mining is a highly competitive business and has nothing todo with the general use of Bitcoin as a currency.

The small miners don't actually have enough coins to spend to influence the market in any way, besides that even big miners need to pay bills, so they will probably spend or sell mined coins too.


Why should different mining hardware drop the price, or change the market?
It's not that there'll be any more coins produced, it'll be about 3200BTC per day, no matter if miners run pen&paper, CPUs, GPUs, FPGAs, or ASICS.

Mining isn't the point to get more people using Bitcoin!

Come back from where?
Those people holding a few of those machines that operate at insane Hashrates are the very same people that operate large GPU-farms today, they get a lot more BTC already today than you do, as stated before, ASICs don't really change that.

I sold yesterday... Still keeping BTC10. Maybe the price goes even higher.

Please SELL!!! Last chance to sell at $27!!!

 Thank you for a better understanding and yes the new machines are way cheaper then the hardware i have now. Allot more practical. I still just dont see a good outcome of it all really. Speaking in terms of the long run and more people actually using the coins. The way i see it is the small miners are most likely the ones that will just spend the coins and they will recirculate.I find it hard to see the world or majority investing there cash when they see the huge drop in price and how fast it is going to happen.I am only thinking for myself but if the market drops as rapidly as i think it will when tons of these machines get rolling the Bitcoin that mind you i think its absolutely amazing to work out how well it did and become a currency which was very close to valid.

 I know Die Hard Bitcoiners will always be here till the end but isn't the point to get more people using them as a currency?

 Right now i love it its a blast to do and i am on 2 small machines really that i already owned so reading about Bitcoins and Mining and investing ,Gambling all the great stuff about it i got sucked in and love it. As i am sure many other Newbies did. But then when i started reading the Million posts and videos on how bad these new machines are for Bit coining as a whole my draw kinda dropped and i came here to just ask straight up what the deal was.

 I cant possibly understand how the value with ever come back up when you know there will be a few holders of toms of these machines operating and insane Hash rates.


 I thank you guys for the replies you left they were very helpful. I love Bitcoin's I love Mining (Not for huge profit but just for fun) And i would be devastated if everything fell apart as many predict it will.My personal reason for Mining is i was folding before Mining as i have a handicapped child. Well it seemed more practical to make some Bitcoins while having the same fun and Donate to some of the different Children Charity's like Autism and Cerebral Palsy and of course pay my electric ,Gamble a little,Invest a little. But these new machines kinda kill the whole online world of it all. Can i write and Post this message while Mining on one of those new machines? Can i be on the new Mining machines being part of the community?

 Just a bunch of stupid little concerns but you guys have been very helpful. Although sadly if it was a gamble i would be against Bitcoins making it do to this new technology Unfortunately .

But please guys come back in a couple years to this thread and say I told you so. Because there is nothing i want more then to be wrong. I really dont understand why you guys want to take the new people getting into Bitcoins out of the Picture. I think that 1 thing right there is a Killer. In the pool i am in 1 person owns like half the hashrate and the rest are all little guys. I know some with buy but can you imagine the amount that wont.

Sorry for the long blab and Long Live Bitcoin's

It isn't the end of Bitcoin but the end of Bitcoin mining and that means that Bitcoin will be used as a currency as opposed to a silly get rich scheme, Bitcoin was never intended to be purely about mining and it's actually been incredibly well designed for a real economy that isn't run by central banks, so the short version of it all is yes, you're very wrong

FTFY.

The only people who will really profit from ASIC are the few people that have the units now. Everything later is basically a joke.

This is the progression of any monetary system. The means of production are concentrated into fewer hands while the many have to compete against each other to get the crumbs of the pie. This is why we see the many problems we face as a global society, and it is one that money will never fix. While bitcoin is technically a better money, it remains money, and it can only lead to the further destruction of the human species until we learn to live without money.

^^This!


I don't see what bitcoins being used by the majority of people as an online currency has todo with the fact who generates them, or on what hardware they do it.

There's no need to be a miner at all to use Bitcoin as an online currency, a user doesn't really care who creates it.

If you wanted to become a decent miner before, you needed to invest in a lot of decent GPUs, or FPGAs,
if you want to become a decent miner now, you need to invest in (at least) a couple of ASICs.

ASICs don't change anything! (except for botnets, hopefully)

I think people said the same thing when you couldn't mine from the CPU's anymore.  I used to mine with GPU's what a headache.  lol

ASICs are just the natural order defending itself from outside threats, as any organism would.

You don't make hardly anything that you use yourself and most of it works great. And $1200 or whatever is hardly out of reach for home production anyway.

we HAVE to move ahead and hash harder

the ASICs will be widely dispersed, you mentioned the jale, even the SC single is $1300, cheaper than a GPU rig

if BFL and others had not moved ahead with bare metal ASIC then governments or banks would have, with the aim of destroying bitcoin

indeed, ASIC is bitcoin's salvation

It means a more secure network.  It does mean GPU mining is over, but there's a new technology until the next new technology.

 My point exactly. I kinda was under the assumption the Bitcoins were a huge innovation that would eventually be used by the majority of people as an online currency. I think that idea is out the window. I know see it becoming more like a bunch of banks that owe all the coins. And on the other side i see people like us totally losing interest all together as the system will become no different then what we have now. Really sad to be part of and watch a wonderful idea go out the window so fast. I guess it was only a matter of time as it has been predicted to happen. Bad part is its happening way sooner. I will still mine hoping that it survives as i am mainly doing it for fun and because i believe in the concept. I also believe or hope rather that something will change to prevent this from happening the way it is.

 Like i said i don't see any other conclusion besides the end of what we call Bitcoins today.But then again it will be a great opportunity for another online currency to take over. Sure i can run out right now and order a few 60Ghz machines right now and set them up but honestly i want no part of the destruction that i personally foresee.

 But again im hoping someone can put some ease to my worries.

 Another thing if Bitcoins died today i would lose nothing so my worries are not about me but the whole system i really admire.

Take Care
 

Mining coins getting 20 times harder means:

1. price goes up?

2. price goes down?

The value of Bitcoin comes not from being easy to make at home!

Bitcoins are getting out of stock, because the average guy, like you and me, can't make them ourselves any more.

 Hiya guys I know I am new to Bitcoins/mining and there is allot I don't understand.But there is allot I do understand also. I knew about Butterflylabs when i recently decided to get into mining Bitcoin's and Investing etc.But don't get me wrong i think are amazing at what they created and i highly respect their intelligence.

 But the last few days i cant get it out of my head how this isn't going to really do a number on the whole Bitcoin system. Miners like me who thought they had half decent mining setups now will become totally pointless seeing you can buy the BitForce Jalapeno 4.5 GH/s for $150.00 Thats 1/3 the cost of just 1 7970. My first thought of course was wow im dumping my cards and grabbing a few of those.The i woke up and came back to reallity and realized just about every Miner out there is doing the same.

 So ok im going to lose by staying with my GPU's but i dont see how everyone is not going to lose as wont the coins all be held by few people extremely soon? We are talking machines faster then complete pools at the moment. I cant see any future every way i look at it for Bitcoins once a few thousand of these are running.

 Problems i see is 1) the majority of the coins will be held and not in circulation. 2) Mining will become kinda pointless or let me re phrase that it will become less attractive. 3) I think the value of the coin will be like pennies really fast.

 That is just a few of my concerns. Can someone please prove me wrong and tell me there is a future and why?

 As i said i am rather new so take it easy on me as i think i have some valid points even if they are a little off.

Take Care
MybadOmen