Topic: ASIC Difficulty Curves (Read 8857 times)

I'm of the opinion that when looking at mining hardware, just convert to Bitcoin and then stay there. Yes there is power costs and that expense will be tied to the exchange rate, but energy is minor enough that you can make an estimate without completely throwing out your calculations.

Right now the question is whether spending about BTC100 on a 72GH/s bASIC or 60GH/s Single SC will return BTC100 within a reasonable time frame and before energy costs start to become a major percentage of income.

I generally agree, but I'm going 4:1 because I view it as buying discounted coins on an ongoing basis, if you don't cash out the profits right away. Mining for ASIC early adopters should be able to hit 100%+ ROI within 12 months, everything after that is like a free BitCoin. (and the profits are so heavily weighted toward the front that the risk decreases as you continue to mine.)

I like your last point the best, if I make 100%+ ROI at current prices (to plan) AND the price goes up 2, 3, 10, or 100 times, I'll be even more happy.

Or it could be that I'm a huge geek and I could not resist the lure of the "humming boxes that make Magic Nerd Money" and helping out on a cool project.

If you think the price is going up, I'm pretty sure you should buy bitcoins and not bitcoin hardware...  Haven't done the math in a while, but if you think there's going to be a 50-100% increase in BTC price, then buying bitcoins will make you a lot more money than buying hardware.

this was true 12 months ago, this was true 6 months ago, and I think it will remain true for the next 6-12 months.

That being said, I've put $5k USD into bitcoins and $5k USD into hardware b/c I believe these are slightly hedged against one another.

My hardware is an investment based upon the believe that price could stay the same level (or even lower); while my bitcoin investment is based upon my belief that the price could continue to grow as adoption increases.

Happy investing.

I'm thinking that the 100k chip order will last at least 4-6 months, maybe longer. We are only looking at 10-15k to cover the initial preorders that ship "though the end of the year" that cut off in September IIRC.

One of the latest tidbits that leaked from Josh was that Rev 1 (i.e. not this run, January or later) would potentially be packaged in ceramic, so there might be a 25-50% faster unit available from them within a few months. This is mixed news as early adopters will have to trade-up or resell their old unit to get the same speed, but it might or might not be worth it.

We will have Moore's law speed increases for a bit yet which is about 1.5x faster per year, as well as some catch-up that could get closer to modern processes. These are NOT the last ASICs to be produced or sold, unless bitcoin fails entirely, and soon.

I also did a rough model on log10, and it seems like the curve is too steep at the beginning, or the end depending on how many time periods you use. I'm assuming a period of large clearing batches (5k? 10k? chips/week) for backorders from mid-December (network impact date, not ship) to mid Feb. Then smaller batches once they catch up, in the hundreds of chips per week, maybe thousands if the +/- is still high.

This updates my current hypothesis:
I think BFL (and a lot of others) are making a solid bet on the long term value of bitcoin rising. We should be able to look forward to at least 50-100% price increase in 2013, maybe much, much more. Once the hockey-stick curve comes on BTC value BFL and others want to be all spun up and ready to sell into the consumer level ASIC wars that will result.

Right now we are modeling the supply side of the equations because our demand on ASIC has been starved for so long. We also have to remember to look at the demand side of the equation where more folks will rush to participate if the margins (or perceived margins by those bad at math) get too high.

So right now BFL (and others) are making some money, but when I can buy a terahash for under 200BTC, they get to say:


So, I think it's a bad idea to count out price changes, do your model at a few different price points for EoY with a linear model and see how it effects things.

Yes good point.
I guess it means that they can sell it as fast as they can make them.
If they can push out 20,000 chips in ~ two months then it seems possible to get the  other 80,000 in eight months.

But yes sales are also key.

If I was to take my assumptions further it would put pressure on miners to buy more hardware sooner while difficulty is projected to be lower.
But that would increase the Sales/difficulty even faster.

Thoughts?

12,500 Singles at current prices is over $16M worth of product. Do you think BFL is going to be able to sell that much in a few months?

100.000 chips are 12500 Single boards or 500 MiniRig or a total of 750.000GHash/s -> 750THash/s. If is true this make ASIC not profitables at all unless a big jump in bitcoin price: if only BFL sell ASIC with this numbers a Single will take 2 years to repay itself at $0,15/KWh and a MiniRig 500 days.

Well BFL just announced that they will be receiving 100,000 chips. Does this mean ASIC mining will become marginally profitable in mere months?

I ordered 5 and I have already retired. This is good no?

Maybe for you. I bought a few ASICs and now I'm going to retire.

What?  BTC per day is a limited resource?  How are things going to go down?  Oh knows... I'm so blissfully unaware....?!?!?!?

Due to nature of ASIC people that mine with them will not stop unless they lose lot of money in doing that (2 or 3BTC of power for every BTC mined IMHO): no way to resell them plus the fact that probably new generation of even faster or less power hungry ASIC can be presented in any future so in case of price drop keep the ASIC offline it's a direct loss of hundreds of $, it's less dangerous lost some money in mining and keep the bitcoin hoping that in future price will rise again.

But we don't reproduce. With our technology I mean. Well, I never did, anyway. Maybe others are not so squeamish

Ok I'll try those out as well. I guess my decision to use population growth is a bit political in nature. I think lots of miners are blissfully unaware of how things are going to go down. BTC per day is a limited resource and we are all competing for finite resources.

Try using the log-logistic or log-normal functions. I think they might be a better model and more what you're after.

That's a very good point, that I hadn't really considered previously, so thanks for bringing it up. It's actually an interesting distortion to the curve, a cost-bending to hardware to combat the almost inevitable hardware sale stagnation. One can only hope that it would be done in a timely fashion, as too immediate a drop would be tantamount to spitting in the early-adopters faces ("thanks for bankrolling development, now all the johnny come-lately folks get a free ride on your buck, and knock down your ROI").

If companies take the long view though, and BTC remains relatively stable/successful, I can see this leading to good things as the new tech becomes more accessible to all, and of course, as stronger hash rates shore up the security of bitcoin.

True, though there will be limits to that. BFL is obviously in the drivers seat there, if they can get their costs down. I'm unsure how low the price on something like ASICMINER could go, given their 4.2GH/J efficiency. BFL might be able to get 1TH/s down to $5000, but ASICMINER would have trouble with that when they have to deal with powering, housing and cooling 4.2kW.

That's all assuming price stays constant, as I said. If (and when) prices for hardware drop (or the price of BTC rises), you would expect another inrush of hashing power.

One thing to keep in mind is that ASICs introduce a new variable... hardware pricing.   While they have large upfront costs the per unit cost is far lower than current retail price.  So if/when new sales flatline (and difficulty stagnates) ASIC sellers can drop prices significantly.   Sell the same unit for 50% of current price and suddenly it looks very profitable and sales start to pour back in (and in time difficulty takes another leg up).  Months later the same stagnation occurs and one can cut prices again and again and again.  After selling the same units at 3 or 4 price points the profits can be rolled into an improved design at a smaller manufacturing process and the same process starts all over.

We didn't see that "much" with GPU.  Yeah as 5000 series hit end of life there were some "sales" and closeouts which resulted in lower hardware cost (MH/$) and then later buying used GPU lowered it further but the frequency of such price revisions and the magnitude was much less than you can expect from ASICs.

I would like to suggest using $10 as the price when calculating difficulty curves as it is close to the current price first off and secondly of the price changes those charts can be more easily adjusted percentage wise.

38million difficulty Have we already peaked? And so soon? This can't be good for hardware sales.

I will be very interesting when all that hw gets shipped..