Topic: Bitcoin is Dead - page 8. (Read 7742 times)

dead sexy

The potential for ASICs have always existed.  If no Bitcoin companies produced Bitcoin ASICs the threat would still exist.

Imagine if the network was protected by $100M worth of GPUs. No FPGA, no ASIC just "fair" GPU power.  Yay it is fair AND we are safe right?  It would be cost prohibitive not to mention the massive amount of space and energy for someone to attack the network using $100M worth of GPUs.  I mean we are talking about warehouses worth of GPU farms, and Megawatts of electrical load.

The problem is that an attacker wouldn't use GPUs.  They would spend $2M, build a custom line of ASICs and wipe put the network with a token amount of effort.  So really the power/security of the network (which is based not of hashpower but on the economic cost of that hashpower) is just an illusion.  It only appears strong because the defenders are foolishly using inefficient technology.  

Now if/when the network is protected by $100M in ASICs there is no "cheat card".  An attacker could still try to outspend the network but they can't do it for cheap.  It would take a $100M investment not a $2M one.  Hopefully someday it will be a billion dollars of deployed hardware protecting the network putting an attack out of reach for almost all entities.  We aren't going to get to that level of security until the ASIC transistion is complete though.

Pretending away the threat of ASICs is like going to war today using a massive army equipped with flintlock rifles.  It will become painfully obvious how bad of an idea that is when the enemy advances using body armor, automatic weapons, grenade launchers, and attack helicopters.  Oops our 1 million man flinklock army got routed by a tiny force using superior tech at a fraction of the cost.

I agree with some points of OP, but would like to make some clarifications.

Many people think that mining is about printing money (BTC). But actually, mining is about serving the network. And it is absolutely fair if p2p network is served by every peer in the network, not just by few monopolies. This is evidently not happening with bitcoin.

Did anybody think about altcoin, where transaction fees are paid with hashes cracked (or flops, or other pov), instead of coins? I mean, before being able to make a transaction a peer needs to provide some amount of computing power to serve the network. Initial distribution could be made by splitting X coins equally to each peer currently online, regardless of their hash rates, every minute or other time interval.

This way, early adopters would benefit by getting more coins, while there are few peers online. Guys with a lot of computing power would benefit by being able to make transactions faster. And nobody would be put out of business.

OP makes a good point.

But it will only lead to another e-currency, this is like the torrent protocol or mp3, the concept is not going away, perhaps this implementation.

My point is not that. Mining got peoples interests, and that will be lost. Not the coin itself, what will be lost is the P2P system.

First you lose miners, then you lose the P2P advantage.

What you say about factories, may be in a normal unlimited market. Bitcoins are not unlimited, and it could go under before that ever happens, or it would be to late to make profitable devices in your factory.

Losing the P2P advantage of being a distributed network is a huge drawback.

Also, you assume everyone will get an ASIC device like going to a store. This was not true last year, its not true this year and probably will not be true next year.

The only ones making a profit with ASIC devices will the ones having at least XX devices ready to be hooked as soon as they can.

Who controls the ASIC chips, will control the supply chain and bitcoin mining.

You assume things in the future, while I assume things that are happening as we speak.

As i said, BITCurrencies. Try to imagine what i am saying for a while and detach from the problem that appeared.
Really folks.

We need a *BIT*Curency system that de-values the centralized coins.
E.X; In blockchain everything is seen. If a coin is getting centralized (Meaning that 3 big guys take all the Coins) simply it MUST lose its value and other coins must be increased on the contrary.
With this, the money invested by those companies from time to time will be completely worthless and they might try to exchange their BitCoins for other coins.
Then, Bitcoin's value will start to grow up again until it reaches a hight that will be compatitible with the market and the other coins.

Everything is Economics. Demand / Sell e.t.c

We just dont have to only support BitCoin. We need other currencies too.

I'm sorry but I'm failing to understand the principle concept the OP is espousing. Let me see if this is approximately correct: because regular people can't mine bitcoins trust will be undermined and the whole network will die.

Why? How is this a scam? Some people have resources to mine and some don't (as is the natural order of everything). The P2P nature of the payment system itself, the rate at which coin is produced, the security of the network and your coins are still fine. You just can't profitably mine them yourself. So most of the coins will be mined in China...and? How does that affect me as a saver/spender of bitcoin? It doesn't as far as I can see. I can't print USD or mine gold or anything similar now and it doesn't affect my use of currency at all. I still receive and spend as I like.

If the argument is that 2-3 players will control the market? really? why? what about competition? if I see my neighbor making a fortune with his ASIC factory, won't I build one too? And as the market floods with ASIC devices, so what? the rate of production will remain constant as is algorithmically determined.

If however the OP is right that only a couple of makers will stranglehold bleeding edge technology and hoard it, then truly all the eggs are in one scary basket.

Yes, anyone should be able to mine, even on an old computer.

One of the things that always hated about Bitcoins, including Litecoins is that CPU is not even taking into account. Its all about GPU.

What does this mean? That servers which costs 3,000$ or 8,000$ are a complete crap vs a 500$ gaming card.

So servers are useless for the Litecoin and Bitcoin network? Servers that power this same website, the whole Internet, cloud services, you name it. They are all useless.

CPU is CPU. And before someone says, you could hire amazon cloud to mine, you can, and it would cost you more than what you would mine, that will always still be true.

Still, I GPU are available on the market and all computers have a graphic card. My point is that in order to maintain distributed hashing it should be standard computing. Not some specialize device you have to order from a single factor in Chine could take years to arrive or never.

I don´t have a problem with CPU, GPU, RAM, etc. They would all process hashes in some way on another, and they would all help process the network. The problem is when the devices are special made things which are custom chips which nobody can get. And by the time they can get them, it will be to late. The mining will be monopolized.

On a computing model it makes sense. Mining just needs to get more efficiency. But on a logical point it does not. You can´t use this devices for anything else besides Bitcoin mining and you can´t get your hands on them either unless you have some local contact or a reported which got a free unit for review from BLF, and im excluding all those poor souls that preordered last year. Even if they still receive them the same week, we still have a problem with one single chip manufacturer.

Is someone using his ASIC device to post here? No. To browser online? No. To buy or sell bitcoins? No. This are devices that serve no daily computing tasks. You are creating a digital currency which works on "one computing" system with another "computing system" that is not compatible with the same system which is supposed to be generating its currency. It makes absolutely no sense at all. Bitcoins are for the Internet, digital coins, but you can´t use digital equipment to generate them. Ironic.

The biggest thing im afraid with this issue is the danger of putting all the hash power in just a few hands. You all understand what would happen if one this huge miners get a DDOS attack, if offline for some reason or is having troubles right? Not to mention intervention, government seizure, you name it. For the first time in years, it will be very easy to kill bitcoins.

You could even start by just controlling the avalon chips or just by the factory that is producing them.

Bitcoins are in its weakest spot ever in all its history. This is why price will keep dropping until something changes. As I see, Bitcoin has now a single point of failure. Control the ASIC production and you control the Bitcoin.

Litecoin looks good, but its following the same story Bitcoin did. It was said GPU did not made a huge awful difference between CPU mining, but this is not true, Litecoin is also now on the GPU stage, so eventually, even while its harder it will try to move to ASIC again. I hope they don´t do that mistake.

Also, since nobody knows from where Bitcoins comes, at least we know who created LiteCoin, from all I know this could be an elaborated scheme coming from China itself or even persons that knew upfront 3 years back how this would evolve, by producing this chips, or just by making themselves rich by controlling the mining. That is of course all bullshit and speculation, but can you guarantee its not true? Since Bitcoins are a mystery, nobody knows from where they came, but everyone knows where they are going, it would really not be hard to speculate who knew about this from the beginning.

All I know is this. Some groups and people are destroying the bitcoins. Even while I do agree that in the future there will be almost no solo miners, a systems like this NEEDs this users to maintain its security and stability. We need users processing the network in China, Australia, New York, London, you name it. We need users all over the world, in every city, and every country. A huge networks or peers connected and processing transactions.

It was once said that to shut down bitcoins you would have to shut down the Internet. And this was only true for the reasons I stated above. This is coming to an end. It will be very easily to disrupt the Bitcoin network in the future. Its staring with miners, and then its going to move into other areas like price dropping. Finally government regulation will give it the final blow, because the network will not be big or hard enough to sustain the killing of a few big players, just like its happening with MtGox, in the future it will be a huge ASIC miner going offline.

Also, there are people collecting huge amounts of Bitcoins and not putting them back on the market. The only, and only possible way to avoid is, is if Bitcoins mining is very distributed, at least for its first years. If only a few individuals can mine most of the bitcoins, there is no incentive for them to put them back on market, they are going to hold on them like gold, in particular when prices go up.

Why is the price dropping now? Because there are allot of people with to many bitcoins and nobody is buying them. Probably a result of huge ASIC miners getting to many and trying to get rid off them.

Once you lost trust, there is no turning back. The consumer, which is the one that is supposed to be using bitcoins does not have them and if he does not trust Bitcoin itself, as a project, as a network, as an idea, he will not use it ever, and price will keep dropping and dropping.

Bitcoin is the biggest way to show how greedy we humans are. A few of them, that joined in organizations, to mine it, to produce devices that mine, or that invest in holding huge amounts, what ever you name it, the TOP number Bitcoin believers are the ones that are and will destroy it because of their own greed. When they realize it, they will start to get rid of bitcoins or trying to put them back on the market, and the prices will even plump more.

Users are speculation for over a year now about ASIC devices, and we are seeing the first batches of them entering the bitcoin network. We have now results. And they are not good. And since other users see that this devices are coming online and they cannot get them, they enter into desperation and feel left out, since they cannot get them or have any other possible way to compete, even if you have the money, you cannot just get this devices. So they turn away from bitcoin into something more stable like Litecoin and have fate that such system will not suffer the same fate.

Now, don´t get me wrong guys. I have nothing against ASIC devices, it its 2 millions devices distributed amongst 1 million users. The problem is that this is not the case. The first ones that purchased and received their ASIC devices, are funding more ASIC devices from the first batch of bitcoins they generated with this devices. This is creating a huge Ponzi Scheme and it will blow up eventually.

Some companies will go down, ASIC manufacturers, or payment processor, I don´t know, but someone will eventually try to cash their bitcoins for money and it will blow up. In particular if the first users are mining bitcoins with their ASIC devices, using this bitcoins to buy even more ASIC devices, and then again, and again and again. The systems creates a huge egocentric systems, and Bitcoins are not rolled out to users or distributed.

We are watching this on the prices. How long until one payment processor or one exchange blows up? If this does not stop, dark times will come to the bitcoin world.

Bitcoins are still worth around $90 last I checked. Plus there will always be interest in bitcoins as long as they can stay anonymous by using them.

To Avoid Problems, we need some cryptocurrencies that could stand up against BitCOIN and have up-down the same value.
Each of them designed in a different way but ofcourse with the same difficulties as the Bitcoin.

Example;

US Dollar, Euro, Pound.

Each of those have its price, but those are different currencies.

Each one of those fights each other for its own benefit.

This is what exactly we need. NO altCoins but NEW BitCurrencies!

Vote for BitCurrencies!

That's pretty much my point, but see if this works any better for you:
Premise: Asicminer thinks its rigs, sold to marks at a markup, will still be profitable for the marks.
Conclusion:  Asicminer are fools to sell, they will get more bitcoins by mining with their chips themselves, and if the dollar value of each bitcoin remains the same as it is today, they will get a greater profit.
Corollary:  Either Asicminer are a bunch of noobs, the other miners will not recoup their investment (in bitcoins), or the last option: the value of bitcoin is expected to decrease, so even if the miners get back their investment in bitcoins, those bitcoins will be worth less.  Fail.

By selling now, asic companies have zero interest in longterm stability of the network, zilch.

TL;DR: If it's not profitable for Asicminer to mine with all of their chips, it's certainly unprofitable for anyone else to pay a markup & mine with those same chips.

I dont think I would argue that case on here, you can literally go back and forth with dozens of pages filling up on reasons from both parties why some countries are better than others. Home is where the heart is, everyone has their own preference.

 There is no "best country in the world" because the best country in the world is the country that individual is happiest in. 

I don't live in the US, I'm not a citizen of the US but I've lived in countries which restrict my freedoms, especially freedom of speech much more than the US - and I mean restrict in constitutionally by law not in a vague / taboo way.

If you're going to make such statements you should provide some context and proof. When there are countries where you can be killed on the street for joking about a certain prophet or thrown in jail indefinitely for doing your job as a journalist or not being able to drive because you're a woman the US hardly seems like one of the least free countries in the world.

More specifically please list which freedoms the US restricts that MOST other countries do not? I don't mean restrict in a big brother / conspiracy sort of way, I mean restrict by law.

OP does bring up many valid concerns.

The current market arrangement for ASIC devices is clearly as described by the OP. However I'm not sure how would have things turn out differently.

The reason why chip production is centered in china is because only a handful of countries have the technology do develop/manufacture chips. Despite bitcoin's relative success, I really don't think intel, motorola, TI, national, etc. are too worried about wining the bitcoin mining race. It's still peanuts for them, they have serious businesses to run and serious amounts of money to profit.

The idea of "anybody should be able to mine with their computer" is flawed. That could not, and did not, last for long obviously. It's called 'mining' for a reason, it's not 'growing'. Abundance would eventually erode and mining had to become a novelty.

Gold was once relatively easy to find, if it is valuable today is exactly because you cannot just dig a hole on your backyard and collect a handful of gold bits.

What you need to realize is that, the bitcoin protocol is known, so any entity can, whenever they want, develop and manufacture their own mining hardware. If you are extremely rich, or if you are the president of the country, nothing is stopping your from doing so.

That said, I think mass production of cheap mining devices is something the bitcoin foundation (and/or other interested parties) should have as a goal. Not for proffit, that won't be possible, for obvious reasons, more as a safety, a means to achieve a better hashing power distribution.
Block eruptors (or whatever those thingies are called) are a start, but they have to become much easier to get. I do see a market for devices that won't yield the ROI for most of the people, but could be a way of squeezing some extra bucks at night for those owning power sources for example.

EDIT:
after reading OP's last post.
So you think the solution is something that anyone could mine with an old computer? So anyone could buy as many money printing machines as one would like? Well... they kind of do that in africa already in many countries. "Wait, we need money? Let's print it!". The result is they money is now longer a currency, cell-phone credit is a more reliable currency in some places. A chewing gum in some contries costs 10 million whateverian-dollar.

Look at emunie, currently in beta, after beta blockchain will be reset.
What makes it different?, its not based on raw power, it only uses cpu, and extra power doesnt get you extra coins, its a whole new system, check it out here
http://forum.emunie.com

This is what is going to happen with Bitcoins for new users in a few months:

You see this type of new posts? They are typical of new comers:

https://bitcointalksearch.org/topic/can-you-mining-with-gpu-248517

Now lets see how this would play in the future:

Newbie: So how do I get BC and mine then?

Bitcoiner: Mining

Newbie: So, I have my PC, how do I mine?

BitcoineOr f: Forget it, you can´t really mine anymore with your PC

Newbie: He? Why, I read Bitcoins are mined with computers.

Bitcoiner: That was years ago, when Bitcoins was new. Today you would mine 0,0000000000000000001 bitcoins in a one year. Today Bitcoin is mined with specialized ASIC chips in specific hardware.

Newbie: Ahh, well, I don´t want to buy anything new. I have 3 computers, so I can´t mine?

Bitcoiner: Nop.

Newbie: So how do I get this ASIC device?

Bitcoiner: You can´t. Its on a special pre-order list, they are produced very rarely and you can be months on hold.

Newbie: Ah, no problem, I can wait, I assume I would make bitcoins eventually.

Bitcoiner: Not really, once you get your ASIC device, the mining hash increased so exponentially that you would need 10 devices to even break costs at the point, and since you will be on hold again, good luck....

Newbie: So who is mining bitcoins?

Bitcoiner: Well, there is this XX corporation that has 50 clusters in a datacenter full of ASIC servers and that other foundation that also has a huge cluster that they where growing over the year. They hold most of the bitcoins this days.

Newbie: So only this 2 are mining bitcoins?

Bitcoiner: Yes. Miners are history. They don´t exist anymore.

Newbie: Ok, thanks, this surely looks like a scam


You see the problem? Trust. If bitcoins started like this, today they would not even exist.

This post resumes more or less my point of view as well:
https://bitcointalksearch.org/topic/defending-ahead-the-p2p-nature-of-bitcoin-blending-hashcash-scrypt-180020

Im not the only one that thinks this is going to destroy the essence of P2P on which Bitcoins is being build. Its supposed to be our network.

Personally I have to admit that more I research Litecoin it not only seems 100 times more secure than Bitcoin but its also designed to prevent this flaw, and reward a P2P system. Its basically improves on Bitcoin itself.

And I have also read several articles about math calculations which show LiteCoin is not even allot more secure but will there be ASIC devices for it? In the future, probably, but they will not be amazingly more powerful than standard computing, to the point it would not deserve investment.

The biggest flaw LiteCoin is attacked now is that their network is small and so more insecure, but this is changing amazingly fast. In particular when all those Bitcoin miners move off to mine LiteCoin.

Also, it seems that LiteCoin was created in particular for being used with standard computing which is what a digital currency should be faithful too.

Also, if this things with ASIC goes bad or good with Bitcoin, regardless of what happens, LiteCoin will be second, so it can learn on the errors of Bitcoin. I see a future where Bitcoin will be used as gold, people are going to hold it, its going to cost allot and its going to be like an investment, and LiteCoin could be actually be the real currency that people use to buy and sell on the Internet.

The second is what I want. Or it could turn really ugly to Bitcoin to the point most people start to lose interest all together, and prices start to plumb more and more.

We don´t know, its all speculation. What is not speculation is that miners which are the foundation of Bitcoin are now building LiteCoins. This is amazingly bad for Bitcoin. Their first users that promoted them are betraying the system, as they see they are kicked out by ASIC devices. Some will buy ASIC devices, some will not bother, some will lose allot in them.

On the end, only the future can tell, but all I know is this. A digital currency which is supposed to be created by users, by a P2P network should be maintained by its users in the long run. Not everyone, I understand that it can´t for ever, but Bitcoin is very new, its not even mature and theirs users are already being alienated. And those buying ASIC devices are really shooting themselves in the foot, if they think they are going to pull out anything off with a few devices.

You need to spend allot on this devices, and even so, you have your days counted. The difficulty at which ASIC devices increases the network is just absolutely ridiculous. Maybe a 50%/50% in the future would could work like suggested in that other post, but right now its moving to full and complete monopoly and by those that where supposed to protect the bitcoins. The same people are destroying it in their needs of unlimited greed.

In the big cities and some suburbs, sure. The rural sections of the US are another story entirely.

I think you misunderstood - they create uncertainty in the future of Bitcoin - i.e. will it survive the concentration of mining power that ASICs are being used for?

The real winners of ASICs are the companies that produce and sell them. Anybody mining with ASICs especially those high end ones mentioned will always see a declining return even if Bitcoin remains the same price. It's a losing battle, the more power they add to the network the more difficult if becomes and the less bitcoins they make. This is the reason that ASIC companies simply couldn't produce all their machines and turn them all on to make $$$ - after a couple of days the difficulty would shoot so high that it wouldn't make sense.

scrypt ftw