Topic: Newly minted idiot (Read 8630 times)

Good point, I had missed that.

Except he's not selling 5770's.  He's selling everything BUT 5770's.

I'm not saying it's impossible, just unlikely.  All I see in the flickr photo is 5770's, and all the other guy is selling is other cards.

https://i.imgur.com/sLpKc.jpg
=
http://www.flickr.com/photos/64331187@N04/5858492956/in/photostream#/
?

Bet it is. Timing's right.

Or he could be like me and just happen to already have a space for his other businesses before he found out about bitcoin...the 3phase industrial power became more important when I started buying rigs...especially in price/kwh.

That's a rather subjective comment.

It's an excellent way for them to outsource much of the risk (by reselling boards, to regain most if not all of their initial investment) and then use excess for themself.

It seems likely to me it's a pipe dream scam or troll to me as well, but...

For the sake of argument we'll assume it's legit. It's pretty easy to imagine a set of circumstances where an entrepreneur believed in the future of what was being mined, yet choses to focus on selling the picks and shovels instead. It's pretty easy to believe that designing, debugging and fabbing an ASIC could require capital in excess of what someone would have on hand. The likelyhood of getting a bank loan or angel financing for a venture where you'd do all that only to use it yourself to do "proprietary mining" is essentially zero. However, the likelyhood of being able to get some investment or perhaps a loan to do all of that and sell it to an existing committed list of customers is far greater. The profit involved in making 1,000 picks quickly and selling them to miners might easily outstrip the profit involved in making 10 picks slowly and then using them to mine yourself.

Still, I don't see anyone that's in a position to design, test and commercially fab an asic for this purpose deciding that posting a google docs signup form on reddit is the road to success.

Yeah, reddit is known for their circle jerking, and altruism to a point of stupidity...

So this LargeCoin business either:

A) Doesn't think BTC itself has any investment potential

or:

B) Is planning some gimped by product chip that they can hawk to miners that's better than a GPU but doesn't threaten their own REAL ASIC's mining share.

Because otherwise, this is a lie, or a company run by fucking idiots who know nothing about maximizing profit because if they did, and they believed in the viability of BTC, they would simple just employ EVERY unit they created to mining for themselves.

I call bullshit.

http://www.reddit.com/r/Bitcoin/comments/i2jby/my_company_is_building_a_bitcoin_mining_chip_asic/

Not attempting to hijack the term so much as explain why this situation looks like it fits to me. Apparently my (loose) interpretation of the metaphor did not seem to conform the commonly accepted one. To me, turning the commons into a private pasture effectively destroys them for all but one farmer. That's how my (tortured) logic works I will concede that I probably misused the term since most people don't think that way.

Also there is no reason to believe that multiple companies will not be simultaneously developing solutions, and 1st to produce may or may not be the winner. Given the apparent time it takes to develop and make something like this, I would not doubt that we will see a few different companies coming online with their solutions within a couple of months of each other. If Company A comes online in October, and Company B is only 1 or 2 months away from finishing their product, I doubt Company B is going to throw away all their work without trying.

If even 2 companies like that compete then imagine what will happen to the difficulty level. Now imagine a half dozen or so competing.

P2P networks work because everybody participating in the network gets benefits. They get copies of the music, movies, pr0n, whatever files they are moving. Bitcoin works because the miners get paid. Make the payment a pittance and not worth their trouble, and a majority of the miners quit. When the mining network gets consolidated down to a few (or one), the p2p aspect goes away. It also becomes very easy for a government to kill bitcoin at that point.

Also, companies that engage in this endeavor never really need expose themselves, well not until they hold a majority of the hashing power at least. Due to the nature of bitcoin, a private company can develop and implement ASIC mining in total secrecy, even cashing out on MtG without anyone knowing who they are. The rest of us will see the effects of their work, but we won't know who they are unless they choose to reveal themselves.

If a mining monopoly should develop (and the economics suggest that it will happen, ASICs or not) then that company can pretty much not only control the market price, but also dictate things such as transaction fees. They can simply refuse to process any transactions that don't include a .5, or .75,or whatever arbitrary fee they decide to impose.

There's absolutely no need to mimic the GPU, which is after all an array of generic cores. All you need to implement high speed SHA2 circuits are basic elements: logic functions, adders and registers. A 1 cycle/hash fully unrolled SHA2 design is in the hundreds of Kgates, so a 1GHz, 10 million gates chip can pull at the very least 20GHash/sec, possibly even 50-100. A single chip could be equivalent to all of "newly minted idiot's" hardware and a rackfull would rival the whole current Bitcoin network.


Once one group has a working design and grabs most of the mining revenue, the entry barrier for a second ASIC miner is much higher, if the first aren't too greedy and reinvest most of the revenue. I don't know why the price would stay stable, it's a working scenario.


In my company a mask iteration costs about 1 million $, to fix some silly mistake. With design and all, we're talking about an investment of a few million. At current prices the monthly mining market is a few millions $, so there's no need for $100+ prices, just a few months of $10+ to get big players interested.

Just busting your (and others) balls a little.  The trolling was pretty funny to me, especially when it's off by such a wide margin.

Perhaps, and I don't doubt there may be some here who have done this.  Or perhaps this is a "rich" geek with too much time on his hands that finds the project interesting from a long-term perspective, and happened to know someone who was able to get him a deal on all the remaining 5770 video card stock if he agreed to buy it all in one order?  Just rampant speculation of course

I feel Bitcoin has a future, and hopefully this guy does too.   Mining gave me a way to both operate this as a business (aka get the creative juices flowing) and really learn how things function and what the community/market needs as a whole.  Now that my mining investment is relatively paid for and operates in a completely automated fashion, (assuming no $0 crashes within the next 4 weeks) I've been focusing on other things such as launching some services that accept bitcoin, or provide services to the bitcoin community.  

These take time to develop, much more time/expense than simply buying $10k (or $100k) of commodity readily available computing gear.  Paying good designers, developers, and taking the time to really lay out a solid business plan is *way* more effort and risk than this relatively tiny mining op you see here.  I have first hand knowledge of other mining ops that make this one look small in comparison, and I still wouldn't call them "large" to any degree when compared to scientific GPU clusters and other such short-term computational projects I've either been involved in, or heard about.

While I didn't buy this much gear (no cooling for it!), you can ask me I suppose, as I put my own money into dedicated mining gear about 2 months ago, and expanded it 3-4 weeks ago as well.  I will say the current (and last week's) market fluctuations do not worry me in the slightest.  I put one month's disposable income into my op, generate below 10Ghash/sec, and if I make exactly $0 on the BTC generation it will simply have been a sorely needed fun hobby/diversion from my real work.  Basically, in my opinion, it's already paid for itself simply in personal enjoyment.  It's been a long time since I've needed to pull out the dremel and soldering iron (to unlock the "unlockable" 6950's of course.).  Reconnecting with some really smart friends in various segments of the industry to hack on specific aspects (hardware, code, etc.) has also made this project more than worth it for me to boot!

If people spent more than they can afford to lay on black in Vegas, then I absolutely agree with you!  I think we likely have the same line of thought there, but you just don't really understand the scale of things quite yet

I will also point out that if all these "early adopters" had been putting their money directly back into their mining operations, they'd have operations that would absolutely dwarf this one - with almost no initial out of pocket USD (or other currency) investment.

Given the screwup that this picture was linked publicly without the shipping labels being obscured, I can say with almost absolute assurances than he is in no way scared whatsoever, and is likely reading this thread laughing a little bit  Heck, this thread probably already made the whole project worth it to him!

-Phil

Even at $14, he'll still be INSANELY profitable.  At current difficulty levels, I'm profitable above $2.66/coin, and he'll probably even slightly better than that, as I don't have the most efficient setups.  At $14/coin, he's making more than 5 times his cost of electricity (assuming he doesn't live in someplace with insane energy prices, like California).

He has no reason to be scared.  Mining is, by far, the safest way to invest in Bitcoins.  If I had $10k available to me, I would be doing exactly what he is doing.

Right again. It's all just assumption on my part.

And you bring up a point that's right on target too; I was really just trying to discourage this behavior for people thinking of entering in at that level of commitment this late in the game.

Hell, that pic could potentially have been from months ago, I really have no idea.

Just a (somewhat tenuous, surely) platform to launch an argument from...

Pretty sure you're reading waay too much into what you know. AFAIK that pic came off twitter and was reposted and titled on reddit by someone unrelated to the venture.

I don't know if what this guy is doing or not doing makes much sense. I do know that mining represents a form of the prisoner's dilemma and that game theory suggests that other miners should discourage this behavior. So I don't put too much stock in what people say about the practice on the Internet. Those that suggest it's a good idea either probably don't know enough about the economics or don't understand enough about their own position to know they should discourage it. And those that suggest it's a bad idea likely understand that they should say that whether or not it's true.

You're absolutely right about the fail math.

I really have no idea about the actual value.  I glanced at the pic and took a wildly inaccurate assumption at the lowest possible price for the pile of shit I saw.

Still doesn't invalidate the point I was trying to make. With the timing of this cutesy little "Just some casual mining" post, it's pretty safe to assume this was an impulse buy based on the astronomical $30 high.

I'd really like to be able to ask this guy how he feels about his purchase with Mt Gox going practically flaccid.  And it's not a bunch of insane trading driving the price down right now...it's people pulling out massive amounts of USD value from the market over the past 72 hours.

It looks like people are scared, and rightfully so.

The guy who bought this gear is probably pretty scared too.

I don't understand what the big deal is...he has about 70 5770's that I can see and/or estimate, and even at pretty high overclocks he will be pushing around 16.8G/hash. You guys act like he is going to disrupt the whole network with his rigs coming online. Maybe I'm not seeing something here, but it doesn't look like those numbers are that crazy. And yes I know I can't see everything in the picture, but neither can any of you.

Lol, yep.

Have to be trading steadily at $100+ prices for anyone to justify building and producing an ASIC.

And like someone else mentioned, IF an ASIC is ever created, you sure as fuck aren't going to get one, because it will ALWAYS be more profitable for the ASIC producer to simply mine with every ASIC they produce for EXACTLY as long as it would be profitable for you to buy one for mining.

Anyone thinking they're going to get an ASIC without directly investing in their development and production is fooling themselves. And 90% of us will never have enough $$$ to invest in ASIC in any meaningful amount that someone more serious would be willing to put up.

The amount of fail at math here is pretty awesome.  You guys can't even come up with a number resembling anything remotely close to what this gear actually cost, and you think you can predict future profitability for this guy?

Hint: newegg gives distributor pricing to large accounts.  Hell, 10 seconds of google and you'd figure this out.  You are not likely to get much better pricing unless you are buying in lot-sized quantities directly from AMD (which you can't, because you're a hater posting on the bitcoin forums  Having made buys similar to this from both Newegg, their competitors, and directly from distributors like MALabs, Ingram, etc. I can say the discount off of most high-volume items is negligible at best.

This also is pocket change for many folks who run tech/R&D consulting groups - an interesting investment from the geek side, hire a couple high-schoolers to put it together for you, spend a night or two scripting your installs/pool/whatever and then let it run for a few months without ever having to touch it.  Pay said high-schoolers to come by once a day and swap out any dead gear.  

Free money, or not - but very little effort or work required to start a relatively risk-free investment.  It fails and you lose every single dollar you put into it (not likely)?  Guess what, you just reduced your tax base for 2011 with a nice sized write off.

Many folks also have blank lab space - just like this - to do projects a lot like these (I have one, but not quite this size).  Given some personal knowledge of this specific situation, I'd say this is some guy with disposable income who finds this sort of thing fun, and happened to have most of the infrastructure handy and unused so it was convenient.

Basically I'm saying more is spent on a fun weekend in Vegas quite regularly, and this has hell of a lot better chance of payback than that does!  Plus, it's a lot more fun to some people

Edit: spelling

Why would the price stay stable?  If it does - why wouldn't more than one group be pursuing this at the same time?

I don't see that it follows that the security model would be broken.  A big stack of confirmations is still a big stack of confirmations...  Unless you're talking about this ASIC entity keeping a whole other blockchain in the wings to swap in at some point...

Perhaps I have an inordinate amount of free market in my eyes.

If such a point does come along that it is actually profitable and reasonable for a company to do this, we'll all be so rich it wouldn't matter for us.