Topic: ASIC mining - confused?!? (Read 728 times)

Now that you mention it, I haven't seen a rocking horse since I was like four. Where the hell did they all go?!

Well, there is a specific market cap per day as to how much money is moving, so if they were to use their own asics and mine entirely themselves, they're limited by that market cap, while battling against the ever rising difficulty. Another thing is that by pre-ordering, the customer is paying for the hardware well before it is capable of mining. There is a severe demand for this hardware, and so they are taking advantage of that, instead of directly participating in the markets.

I would not purchase from BFL however. They might eventually ship your asic, but it will be much after any estimated date.

So, to clarify, some companies might be claiming to make/ship asics, but are actually just scams and are not doing that, where as otherwise there are companies that do make/ship asics.

I'm currently looking around for ASIC machines to mine coins. The problem I've found is the same that as been posted here. You have to wait too long to get the machines by which time the difficulty has increased to a point where it might be difficult to make any cash after paying for the cost of the machine itself.

Like the previous poster says, looking at avalon and auctions appears at the moment to be the best option although auctions are as rare as rocking horses! If anyone see's one i may have missed please post it here and then I can take a look

Butterfly labs are the best choice if you live in a world of rose tinted glasses otherwise I'd stick to Avalon  

I also hate throwing more and more power at it to acheive the same results. ASICs use considerably less power than GPUs. A 5 GH/s BFL is supposed to use about 40 watts, while my 550 MH/s GPU uses about 200.

Thanks for the responses. I'm still confused, but I've been that way my whole life. 

I've been thinking about this, and I'm still not sure what the reason for selling ASIC miners is. It seems like an arms-race. If I increase my own H/s rate, I mine more BTC, but if I sell the ASIC-based miners I created, I increase basically everyone's H/s so difficulty increases, and we end up mining BTC at the same rate as before. We are constantly throwing more and more resources at the problem, in the form of ever-increasing H/s, but it never gets us anywhere any faster. The only way a new technology is really meaningful in BTC mining is when only a few entities have access to it. Once it is mainstream, it no longer helps increase anybody's H/s.

Now that I re-read that, it seems like an environmentalist's nightmare. We are expending more and more energy to get the same overall return and there's no need for it. If efficiency was a goal, we'd all just run Raspberry Pis. The difficulty would go down, but the BTC mining rate would stay fairly constant. We'd reduce the power consumption by 100-fold, without reducing the resources produced per time.

I think everyone should ditch their ASICs and GPUs and only mine on slow ARM chips to save the environment. We want to be "green" as a community, don't we?
 

If the only thing the ASIC manufacturers are interested in is money, then you're right, they have no reason to sell them instead of using them all themselves. But they probably got into the business because they're interested in the idea of cryptocurrency. Selling mining equipment is an opportunity invest in the future of bitcoin and make a reasonable profit at the same time.

And I'm sure they're running as many ASICs as they can fit to bolster their profits.

Well when they say they are selling them, they mean that they will deliver it after they use it to mine for a few months, and then in 6-18 months they will deliver you the product after the difficulty increases 500-700% or more.

Try looking for an auction or sale of an ASIC that is IN-HAND... not PRE-ORDER.

Ok, this might be a dumb question, but they always say the only dumb questions are the ones you already know the answer to.

I've been looking at the various ASIC miners that are available, and I'm not sure I understand why they are being sold at all. For example, let's look at the Butterflylabs offerings: say the 25 GH/s model. They are selling them for $1249 on their web site. If I plug 25000 MH/s into a bitcoin mining calculator it comes up with just over $1000/mo. So, ignoring electricity, the thing should potentially pay for itself in about 5 weeks. How is this possible? Even if the value of BTC falls to half of what it currently is, or the difficulty doubles, you are still looking at less than 3 months to recover the initial $1249 investment.

So, if you were Butterflylabs, why would you sell these things? It seems like the prudent thing to do would be not to sell them at all, and just run all of them yourself until you had more BTC than anybody else. I'm kind of feeling like this is a similar deal to the "I'll tell you how to make $1,000,000 in the market with a $100 investment in only 6 months. Just send me $49.95." scams. If they really can make $1,000,000 in the market with $100, why would they be selling that info for $49.95, instead of just making a killing in the market?

So, what am I missing? How is selling the ASIC mining hardware a better business model for the hardware manufacturer than just running the miners themselves?

This isn't meant to pick on Butterflylabs; it's a generic question about all ASIC miners. I just had to pick somebody as an example.