Topic: Impact of ASIC on price (Read 2070 times)

I haven't been mining for a year, but isn't p2pool established? I guess if the DDOS on the pools really is successfull (this should be pretty expensive to pull off for starters), miners would hop to p2pool within a day or two (or even solomine should that fail). So the impact wouldn't be as big as hoped by the "attacker".

As it is at the start of another bull, the impact of the potential selling pressure from ASIC miners will be absorbed easily.

Just to play "devil's advocate" -- let's just imagine a world wherein a group of hackers (let's just call them anonymous) were to launch a DDOS on a number of larger pools (and also smaller ones, doing as much damage as they can) AT THE SAME TIME that some "anonymous" individual or group of individuals begins to mine with ASIC's 'en masse'

let's also assume that they were to do this as close as possible to the next difficulty change... how long could they keep this up? how long before the difficulty would react? how much profit potential would such a scenario present?

**edit** sorry, forgot to answer the question "How do you DOS the network using ASICS?" :: answer, you don't. you DoS the system using conventional means. The ASIC's would be used solely for mining the most coins possible during the disruption. (*I don't believe anyone interested in profiting would attempt a 51% attack btw*)

How do you DOS the network using ASICS? By mining blocks with 0 or 1 transaction in them? If so... how does that harm your "competition"? Competition in what? You make no sense to me, neither mathematically nor otherwise.

What a load of mathematical bollox.

You forget to take into account something called difficulty........ the network compensates for hashing power.... as it scales up so does difficulty.

Now.... What might work.. is that you buy a load of ASICS then you dos the network taking out your competitors.

I will come back at you if and when a scam is established consensus like pirate is now. This is far from certain since the avalon guys seem to at least act semi-professional.
If this is happening though I would expect the effect to be quite dramatic, single digits for sure.

Scams: bad publicity = publicity = good

Refunds: hardcore bitcoin fans with money in their hands....   buy all them coinzees


If all the ASIC drama will have any short term impact on price it might as well be positive.

This is not true. In a case where the hashing power is constantly rising, the number of coins generated will be higher than 7200 BTC/day.
When hashrate is falling consistently, production will be lower. This is because difficulty doesn't adjust in "realtime", but only every 2 weeks.

number of coin generated by week will still be the same, on average.  Whatever diff, the overall effect of asic will be to bring down power cost.

My conclusion : no noticable effect on the ratio between BTC and other currency.

Remeber, bitcoin are'nt only a currency, it's also the best known (by us) paiement processing system ever.  Nothing compares to Bitcoin in the world of paiement processing...

BTC are well under priced imo.

Only the future will tell !

I think the thinking is that while hashing power is in a crazy rise, many more coins than usual will be mined before difficulty adjusts. Rinse, repeat while ASIC manufacturers scale up. Add to that the assumption that these miners are dumpers and you have a dropping exchange rate.

I agree this effect might happen, however I don't think it will be of great magnitude.

1. I am not attacking, I'm making an observation about the fact.
2. Hardcore Bitcoiner attracts coin and then releases it into the wild. If you think that hoarding is the way to go you are an idiot. Now, that's a personal attack.

I won't be offended by your failure to see that an accusation of ignorance is a personal attack and will risk being branded myself by joining jl2012 in disagreeing with you - or at least questioning what you wrote.

I'll start by going miles off topic!  I could loosely be called a Georgist in that I believe hoarding land is harmful to the economy and that measures to disincentivise the purchase of land for investment are a good thing (for instance implementing a policy based on the principle that any raise in the value of land arising out of the actions of any parties other than the owner is not by right the owner's).

Hoarding Bitcoin on the other is not harmful, providing the amount remaining continues to be divisible enough to be practical.  Available land being 1/10th of what it would be other were it not for hoarders has a big impact whereas available Bitcoin being 1/10th of what it would be were it not for hoarders makes no difference as far as I can see.  Does it matter if it's 3 million Bitcoin or 30million Satoshis that are being traded daily if the value (based on labour/loaf of bread etc.) is equivalent?

I also see an implication in what your wrote of a false dichotomy.  Even if 'most hardcore believers' hoarded virtually all their mined Bitcoin it does not mean they are not 'moving coin'.  If we're looking at the small minority, let's say the 'hardest core believers' the likelihood is they're already pretty active a Bitcoin venture or more and if they can afford to and believe that strongly, would be more likely leave whatever they can afford to in Bitcoin to further gain from the raise in Bitcoin value arising partially out of their Bitcoin business activities.

Just some thoughts

I suppose I could write my ha'penneth worth on the potential impact of ASIC on price too...

My guess is what is likely to have the biggest impact is not amounts of Bitcoin being sold or not to pay for hardware but how the fact of ASICs appearing (or not) affects people's confidence in Bitcoin as a project.  There are some who believe ASICs would be a bad thing for Bitcoin whilst others see it as a sign of Bitcoin 'growing up'.  I would guess the biggest impact is likely to be dependent on the consequent actions of those who trade on their respective beliefs.  And seeing as I have no idea how many believe each of those viewpoints let alone how, how much or when they are likely to trade then I can happily say I haven't a clue whether there will be an impact on price

I have the same question.

^ this

If the mining subsidy is such a small percentage of trading volume why is this issue a concern?

Like it or not, storage of wealth is an important function of BTC. People working hard in real life and invest part of their salary on BTC give it value.

I am not going to make a personal attack on you though your ignorance offends me. I'll just say this. The most hardcore bitcoin believers realize that they do not benefit if the coin is not moving.

I hope so!

I'll be there to buy it up at $2 per bitcoin.  Then 6-12 months later after recovering, it'll slowly increase to $27 (probably December 2014, give or take 6 months)

I actually assume those ASIC companies will deliver.

If all of them are scams, it's nothing worse than the BTCST scam. Some people may panic sell but soon they will find that's irrational.

I have to agree with OP. I don't think an ASIC company failing will have considerable effect on the exchange rate.

As a (potential) miner: if you've spent that fiat back in late summer 2012 then it's already out of your hands. You had USD, now you don't. Your plan was to use the hardware to acquire bitcoins. Now you wont get that hardware. Why the hell would you sell bitcoins now when your plan was to acquire bitcoins.

If you had bitcoins in summer 2012, it's more likely you already sold back then to get fiat for the preorder. And now you're here in 2013 and you lost a bunch of fiat and you still don't have bitcoins. What do you do?

Yes I did not count the BFL first batch. What is their total revenue?

When all first batch ASIC are running, the difficulty will skyrocket and the price of subsequent batches have to reduce. $39M is obviously overestimated. With $14/BTC and BTC3600/day, the ROI would be 773 days. However, 773 days is just an average: early ASIC adoptors may have ROI of 30 days, which means latecomers may have >2000 days. And electricity cost has not been considered so the actual ROI for latecomers could be >5000 days. No one will buy an ASIC like this.

I think $3.9M is a more realistic total revenue of all first generation ASICs (including first and all sequent batches). The average ROI would be 77 days. This may extend the BTC3600/day dump to about 100 days assuming the price of BTC is not too low.

However, please don't forget the R&D of first-batch ASIC is supported by free loans from pre-orders. The developers should keep a significant proportion of hashing power because the marginal cost is very low for producing extra units. They are less likely to join the panic selling because they are literally printing BTC for free. If the devs are keeping 50% of the hashing power, their customers will only be able to mint BTC1800/day, which is only 10% of average MtGox volume.

Last but not the least, mine-and-dump activities always exist even before the arrival of ASIC, which means my "worst case assumption" is actually worse than the real worst case.