Topic: [ANN] A public company will build a huge Bitcoin Mining Operation (ASIC). - page 10. (Read 27070 times)

I'm not much of a fan of this idea at all, however I have my doubts it'll ever get off the ground so I'm not going to worry about it just yet.

I feel you missed my point. Read that again.

Increasing mining investment is only directly profitable until 50%, after that it gets much more complex and can't be calculated by direct profitability. A sustained 50%+ presence is catastrophic for Bitcoin and anyone involved in it, because it would drive confidence down massively. Bitcoin is a new technology, an experimental technology that is not very trusted as it is, an entity with absolute power over the network would be unacceptable.

This is why I think that any speculation on the profitability of gaining over 50% is invalid if the conclusion is that it is profitable. I can guarantee that it is not. Unless you can somehow hide your hashing power so effectively that no one can now.

Good job missing his point entirely 
Read it again.

His point is absolute lunacy. It's true that from a linear point of view it is completely doable for a mining operation to attempt near 100% share but anything over 50% would be idiotic. Even if he can somehow hide it, there is a risk of people finding out somehow. That day Bitcoin price would crash to pennies (I'm not kidding about this, I would short with my entire bankroll and so would anyone with any sense). That risk would have to be fairly minimal for him to risk such a massive investment on the possibility of total failure.

How would you know?  Pretty trivial for a major entity to relay a portion of its hashing power to appear <50%.

Switching pools because you "care" is easy (not too mention profitable when moving from deepbit). Keeping x GH GPUs running just because you care, even though its costing you money, that is quite something else.

DnT has a good point about the 51% too. If 20% is doable, 100% is almost a given, more so because a sudden 20% increase in hashrate and therefore difficulty, will drive out a comparable number of existing miners, increasing your share automatically.

It just gives you a small glimpse into just how tough a market regulated and constrained by it's participants is. Hint: Much much tougher than any government regulations could ever be.

That's why it's also so laughable and at the same time so frustrating for me to see all this fear based on a logic that simply doesn't apply to this experiment.

This thread is slightly disturbing but I'm not too worried about it. First of all there is only a problem if one entity has over 50%. I would be comfortable if the majority of mining was done by major mining companies, but I would not use Bitcoin ever again if there was a sustained 51%+ presence in the network. It doesn't matter one iota if this entity is presumably "friendly" or not, it takes all credibility away from Bitcoin and what it's supposed to be.

So in conclusion, anyone who thinks they can get over 50% and that would actually benefit them, are entirely out of their minds. People would not be happy about it, not at all. Bitcoin would lose all core support instantly. Not only is mainstream bye bye, it's people like me bye bye. That is exactly the reason why I believe that no one is actually going for that and I'm fairly optimistic. I have no problem with someone starting a 2 thash operation but I would have an issue with someone starting a 15 thash operation (at this point in time).

It's no accident that Deepbit hashing power has never been over 50% sustainably, there are always enough people who care about this issue. A sustained 51%+ would be an absolute catastrophy for Bitcoin, mark my words. I honestly can't believe there would be anyone instead of a couple of complete lunatics or potheads using Bitcoin in that scenario.

Looking into it.

this whole "the sky is falling" scenario is completely nonsense, multiple asics companies and end user devices will flourish.
currently, 1M investment is only 2% of bitcoin market cap, I bet it will be 0.01% in the near future.
 

It's not that easy.

If there is only one ASIC mining person/company, they will push out the competition, confidence/price in BTC will drop, and it will not be profitable for a second ASIC company to join in even if they had the funds to develop one.

Also, no bank will lend $1M+ to a startup company investing in technology to do with something as risky/variable as BTC.  So yes, most of us here WOULD have trouble starting our own ASIC farm, for lack of funds.

+1

To anyone complaining, if what Vladimir is doing is so lucrative, you'll have no trouble starting your own ASIC farm and taking a share of the market. If it's not, then what have you got to worry about.

You assume that Vladimir will be the only guy who ever mines on a massive scale. This isn't the banking sector, where GOVERNMENT FORCE prevents competition.

Free market cartels are unsustainable, because there is a great incentive for any participant to break from the cartel and undercut their competitors.

Damn state apologists make me sick!

they (we) are paying small fees (by now), and higher fees for every transaction made, once the block rewards go lower.
the business plan is to participate and collect a portion of that fees.

Your not alone.

The Spaniards have some competition.

True.  It is also much more about the majority of users and businesses, not the majority of miners.  If the next version of bitcoin set a change date of Jan 1, 2013 (well not really a date, but a block #) past which all blocks would be mined with a different protocol, it would matter more which fork the users and businesses recognized.

After such a fork, people are going to be on the side where the exchanges, businesses and developers are, even if the hash rate was 1/3 of the other side. 

That brings up another ASIC problem.  Entrenchment.  If we find a weakness in SHA2 or in the bitcoin protocol itself and need to upgrade it, the ASIC miners may not be able to do the upgrade.  Even FPGA miners can switch up protocols pretty flexibly (unless it is specifically designed to keep them out), but ASIC miners can not switch as easily.  A bitcoin ASIC that was MOST flexible would probably be just an SHA2 engine.  At least flexible it would have even more of the protocol built into the ASIC and be harder to change.  So going to another hashing formula would be out of the question for most ASIC designs.

So a needed protocol change ur upgrade would be veto'd by the ASIC miners.  

For a fork 51% has no relevence.

You could fork the blockchain right this second with 0.00001% is you want.

Actually a 51% fork is a worst case scenario and likely means the death of Bitcoin.  Coins will exist and be spendable on both sides of the fork.  People will have wallets, and tx on both sides so merchants may accept BTC1 and some accept BTC2.  Some mining on BTC1, some mining on BTC2.

In a fork you want one side to have overwhelming support of the ecosystem (i.e. installed clients, developers, nodes, exchanges, merchants, etc).  If the original fork has 90%+ support then the new fork dies off.  If the new fork has 90%+ support the old fork will die off.  Having a roughly 50/50 split is going to create massive chaos.

Thinking out loud.
what happens if existing miners decide to "fork" and switch to a different algorithm, like scrypt, but building on the existing blockchain?
Most existing miners have everything to lose from competition like the OP, but switching to a different algorithm would likely render those ASICs useless.

All we need is 51%. Whos with me?

@Gusti - And what are they paying the company?  How does that help "pay the light bill"?

I get what you are saying but don't clearly see the longer-term business plan -- again seeing this will be a publicly traded company.

We corner the market on ASIC and have first mover advantage, mine lots of blocks, then what...