Topic: Difficulty post ASIC? - page 4. (Read 11607 times)

Well said

The sky is the limit...If BFL gets only 500 jalapeno orders look for a minimum hash rate increase of 1750Gh/s. Add in 10 rigs at 1000Gh/s and its not a pretty picture for mining difficulty.
CPU's made it an every mans game like tag, no equipment required. GPU's still lets every man with a few bucks to spend on a video card play, think snowboarding, without the gear and the lift ticket you can't play. ASIC's mean everyone who buys a special piece of hardware has a huge advantage over the average guy at home. So, You get your car and they get a helicopter to get to work.

If Joe the plumber cant make a few BTC he is not going to play and that is bad for BTC. Grandma is never going to buy into it then.
Environmentalists will see it as another way we waste natural resources on electricity.
For you conspiracy theory guys.. About $15 Million in BFL's for an "agency" buys over 500Th/s and messes with a $50million crypto-currency  economy.

Changing the entry requirements to serious players only alters this bitcoin experiment in bad way 

Difficulty will approach infinity and ROI will increase along with it. Eventually it won't be profitable to mine at all, but many people will leave their miners on anyway, just like Bitcoin pre-GPU. The price will increase drastically in a short period of time again eventually drawing the attention of government and institutional interest, but the resulting crash will probably eliminate any profitably of mining.

Eventually, after an extended period of non-profitability, enough miners will lobby their respective governments to force developers to put transaction fees into the clients and prevent other miners from implementing new ASIC development without government approval. The justification for these measures will be that such miners do the community/world a service that they get no pay for, so they should be compensated. Pools will be where many of these new mining operation rules are enforced. Pool operators will regularly be called upon by their respective Congressional and parliamentary leaders and testify on various activities. Some will even be asked to present regular updates to the UN.

Multiple TOR-specific (or otherwise) pools will eventually surpass 51% of the Bitcoin network and pools and developers will be forced by the government to ignore any TOR-related Bitcoin activity, thus forcing a fork of the blockchain. Again, the justification will be that since we can't be certain that a 51% attack isn't happening by the TOR pools, it simply must be happening. False evidence may even be fabricated that such a thing was attempted. The resulting crash in the "legal" blockchain will be stopped by further government intervention, including arrests of anyone providing exchange services of legal to illegal Bitcoin. Anyone who was known to own any significant amount of "legal" Bitcoin will be forced to hand over their wallets for the forked "illegal" blockchain. Many will, on principle, oppose such measures and they will be imprisoned or otherwise eliminated for doing so.

Obviously I'm talking about stuff that will be taking place years or perhaps decades from now, but such is the inevitable nature of man and his government.

Thanks.  Yes, pilling up orders without having visibility to volume could be very bad.

At least we have order numbers to use with estimation.

This is a nice analysis.  I think it's a plausible estimate.  Of course everything depends upon the ability of BFL to actually deliver, the appearance of competing solutions, and the rate they are able to sustain production after the initial shipments.  The 205 day breakeven you estimate for ASICs is around the level where rational investors will not purchase more hardware, so at that stage either prices drop or difficulty plateaus.  That market signal is badly muted if people continue paying 4-6 months in advance for hardware though.  There is a serious risk of a difficulty overshoot that kills everyone's ROI (except for BFL of course).

BFL Trade-In impact on Bitcoin Difficulty
Speculation based on my complete mastery (not)

Time frame of 5 months.  Assuming BFL delivery matches past performance.
Per SC chip output velocity will be greater with at least 10x chips per SC Single.

25 BTC block reward.  It's too close to call whether BFL can get SC delivered prior to reward halving.

BFL Singles sold (estimate)

500

BFL Mini Rigs sold (estimate)

20

Network capacity represented

Singles - ~ 400 GH
Mini Rigs - ~ 500 GH


BFL Trade-In network capacity impact
using a trade-in scenario of 4 Singles (FPGA) converted to 3 SC Singles, 2 Jalapenos (90% trade-in conversion to SC)
Mini Rig.  Straightforward conversion.  1:1 plus capital.

4 Singles trade-in credit - $2,400
Trade-in cash obligation  - $2,400
$4,800

3 SC Singles - $4,500
2 SC Jalapenos - $300
$4,800

1 Mini Rig trade-in credit - $15,000
Trade-in cash obligation - $15,000
$30,000

SC Mini Rig - $30,000


Single capacity loss (FPGA)

360 GH

Mini Rig capacity loss (FPGA)

500 GH


SC Single/Jalapeno capacity gained

14.3 Terahash

SC Mini Rig capacity gained

20 Terahash

Current network capacity (Mini Rigs/Singles not yet delivered and online added)

~ 12.5-14.5 Terahash

Minus Single (FPGA) capacity

~ 12.1-14.1 Terahash

Minus Mini Rig (FPGA) capacity

~ 11.6 - 13.6 Terahash

Minus GPU attrition (Let's say an initial conservative loss of 70% GPU capacity where GPU is assumed to represent 85% of current network capacity)

~ 3.6-5.6 Terahash

Minus non BFL FPGA attrition (Same attrition estimates as GPU)

~ 2.7-4.7 Terahash

(As you can see the advent of ASICs for bitcoin hashing decimates prior technology.  In and of itself is fine.)

Plus BFL Trade-in capacity

SC Singles

~ 17-19 Terahash

SC Mini Rigs

~ 37-39 Terahash


Resulting hashing difficulty increase

~ 181%

Average pre-existing BFL miner capacity increase (using trade-in figures above)

~ 39x increase in capacity

Current vs. BFL SC profitability per GH  (including block reward halving)

 -82%

BFL SC Profitability/ROI (Excluding prior investments.  Exchange rate remains constant.  Block reward - 25 btc.  Excluding all other factors that would lead to difficulty adjustments)

~ 62 days


What we can immediately take away from this (considering only the figures above)

1.  GPU currently represents a large portion of network capacity.  Immediate effects of BFL trade-in activity could be blunted by GPU attrition.  Depends how sensitive to electricity costs.
2.  Miner profitability will be, at a minimum, approximately 82% less profitable per GH.
3.  Once additional BFL SC sales beyond trade-in transactions occurs we are looking at a significant additional difficulty increase.
4.  If one hopes that GPU actors will not participate in BFL SC ROI calculation looks very good.


Now.  Let's see what happens when GPU actors participate in BFL ASIC.

Assumptions (attempting to be conservative with estimates)

1.  40% of former GPU actors (that's 40% of the actors representing 8 Terahash of current capacity - those that suffer attrition) leave mining.  60% remain to rebuild their operations using BFL SC.
2.  These 60% of GPU actors choosing to rebuild operations spend approx. 60% of their initial GPU capital outlays on BFL SC units.


Equating current GPU capacity to capital

60% (of those suffering attrition) of 8 TH.  4.8 TH at ~ $1,200 per GH. $5.7 million. 60% capital re-up - $3.4 million.

BFL SC approximate cost per GH.  $38

Additional network capacity from re-uping former GPU actors

~ 89 Terahash

Total network capacity

~ 127 Terahash

Resulting hashing difficulty increase (from current difficulty)

~ 840%

Current vs. BFL SC profitability per GH  (including block reward halving)

 -94%

BFL SC Profitability/ROI (overall.  Excluding prior investments.)

~ 205 days

i'm kinda expecting that my current ~350 mhash will need ot be replaced with a 3.5 ghash to remain at the same income level a year from now (in bitcoin number, not $, cause i can't begin to guess where THAT will be) so thats, what, a x5 difficulty increase combined with the halving of the reward, or thereabouts.

i just hope this transition, if BFL pulls the hardware off, doesn't destroy profitable mining... afterall, if it's not profitable, the number of people willing to do it out of charity will be incredibly small, which puts the enter bitcoin idea at risk.

then again, if difficulty got that high, people would stop mining, and difficulty would then lower, making mining profitable again... but then they'd turn their rigs back on and...

my head hurts.

Difficulty dosen't change in 2 week intervals,it changes in 2016 block intervals.So time is irrelavent.It could change in as little as a day or less maybe.

If I'm correct,diff is 131,384 per th/s,so multiply this by your th/s guess............

So ,50 th/s x 131,384 =6569200 difficulty.

and 10 gh/s @ 6569200 diff @ $5 per coin =฿46.55=$232.73 (per month).Heck,this is close to what I make now with 2 gh/s,except the power used will be ALOT less  

Is my math correct

Still not as bad as all may think,don't forget,someone said " terahash is the new gigahash"  

Here is some real numbers for you if they ship ~13 th/s boxes in a week then the network capacity has doubled right there and if they ship the same the next week the difficulty goes up another 50%. At that point in time gpu miners are just about dead in the water if everyone turns off their gpus and bfl ships another 13 th/s boxes then diff remains the same for that third week. Fourth week same shipment diff goes up by 33%, now actually the diff increase would be in the fifth week by now as the previous two were not enough to make it change in seven days but are enough to do it in the fifth for both combined. And that leaves out the other smaller boxes that will be shipping at the same time and the die hard gpu miners who will hold on.

If everything is acurate then they will have chip with base potencial of 3.5GH/s @ ~2W. With little "overclocking" it will be 4GH/s @2.5W. 10 of these will be in Single= 40GH/s and 250 in MiniRig=1TH/s. I doubt they design 3 different chips. How many they can realese to wild in one week? 100 for sure. Lets assume 500 per month = 2TH/s. So difficulty will double in summer next year... With cheap electricity GPU miners don't have to worry for at least one year.
Thats of course speculation, that don't include others ASIC manufacturers.
My guess is that price of bitcoin will drop signifficantly becuse they will be "made" cheaply, very cheaply.

so, how high do we really think difficulty will go before reaching relative stability? for this discussion, lets assume the BFL products, prices and release time frame are accurate. do we see the price increasing quickly by a factor of ten as ASIC's come online? x100? more? you tell me.

personally i have no idea. too many variables for me to guess at. we don't know how many ASIC based units they can manfuacture and ship or in what time frame. we also don't have a reliable way t figure how many will actually sell, as far as i know.