The Bitcoin Experience, and What It Might Tell Us About The Future For ScryptI'd like to suggest that we take a look at what has taken place in Bitcoin, and by doing so, perhaps lay the foundation for creating a thoroughly documented case study, and, ultimately, get as good of an idea as we can as to where scrypt mining might be headed using the logic of extrapolation.
Last December, ZeroHedge posted a very nice article documenting the current state of affairs regarding BTC mining at that time.
The article starts out with some background information to put things into context and then quickly moves to the 'numbers' at the heart of Bitcoin 'mining' and valuations.
As the following chart from the article shows, in addition to the surge in the price of Bitcoin, another explosion was witnessed in the processing power of the Bitcoin network
which was directly correlated with price:
"from non-existent a couple of years ago, the 'mining' power dedicated to hashing, or the calculations used to extract new Bitcoins, has risen to nearly 10 quadrillion per second!"
The article then gives us an introduction to “what these supercomputer-populated mines" behind the huge increase in hashrate "look like” (along with some pictures like the one below that give us a intuitive visual perspective).
The details regarding the prototype behind these mines, their design, and the technology being employed, are scintillating to say the least, with the following excerpt from the New York Times describing the entrance of one such mine located in Iceland perhaps sufficient to pique your interest further:
- To get there, you pass through a fortified gate and enter a featureless yellow building. After checking in with a guard behind bulletproof glass, you face four more security checkpoints, including a so-called man trap that allows passage only after the door behind you has shut. This brings you to the center of the operation, a fluorescent-lit room with more than 100 whirring silver computers, each in a locked cabinet and each cooled by blasts of Arctic air shot up from vents in the floor.
In my opinion, this article is a wonderful primer on how ASIC mining is a complete game changer, and a 'wake up call' for anyone who thinks they can compete, even with ASIC, on an individual level (without moving to Iceland with a huge stash of cash in their pockets to set up shop with). I highly recommend it, and don't miss the embedded video either!
http://www.zerohedge.com/news/2013-12-25/trip-through-bitcoin-mines--------------------------------------------------o--------------------------------------------------
The main question, as I see it, that we have before us now has to do with what percentage of current mining is being done by these “supercomputer-populated mines” and what percentage belongs to the most probably extinct members of the now very theoretical widely distributed user base. Given that we're dealing with a basically “anonymous” system, hard data to that effect is hard to come by, if not practically impossible to gather, and we are left with educated guesses. However, based on what I've read from individual accounts and articles like the one above, my educated guess would be that a substantial percentage of current Bitcoin mining corresponds to the supercomputer-populated mines, to not say a vast majority. When looking at where network hashrate has gone in comparison to the inverse trend in price (demonstrating a clear break of the positive correlation between hashrate and price that existed leading up to the advent of mass use of ASIC BTC mining), I'd have to say that these two hard data points corroborate that 'guesstimate'. (
https://blockchain.info/charts/hash-rate https://blockchain.info/charts/market-price )
If the above is accurate, then what we are seeing, in real time, is the logical consequences of ASIC mining of what what originally designed to be a widely distributed, peer-to-peer, cryptocurrency which increased in value as mining difficulty rose and immediate new relative supply fell. This preliminary conclusion would suggest that our 'real life' case study of BTC clearly demonstrates that ASIC mining not only destroys the widely distributed user base by 'locking out' the little guy from mining, but that it also subverts normal pricing behavior by suppressing price with an oversupply of 'artificially cheap' coins being brought to market. (The ultimate consequence would be the outright destruction of the coin once price goes so low as to fall below 'Iceland ROI', when there would be nobody left to even man the nodes, but that's for another topic and another day.)My hope is that this is simply the beginning of a collaborative effort to document the 'Bitcoin experience' with an eye on learning from their mistakes (and successes where they are) so as to avoid the same pitfalls that could very well be leading to BTC's eventual demise. Of course, that's my opinion based on how I interpret the information I have at my disposal, and it should by no means imply that this “collaborative effort” should be one way, or unidimensional – if there's one thing I deplore, it's “group think”. All data points and perspectives are not only welcomed, but actively encouraged.
In order to keep this thread as clean [and mean] as possible, help to eliminate clutter by NOT quoting this entire post when responding. If you link to it by quoting only the title, or the particular comment you wish to respond to, that should suffice, and you'll also be helping the rest of us to more quickly see and read your own contributions and comments on the subject at the same time!
...The team is being very transparent and honest, that's all that I ask for at this point in time 
