The first ASICs would probably be GPUs modeled after the 5970 with the unneeded modules stripped out and extra SPs packed into the freed up area. Also, going down to a 20 nm process would allow for more transistors and less power. I could see a small US-based startup company with 2-3 million USD funding, 2 chip designers, 1 board designer and a couple of lab techs. coming up with this optimized GPU/ASIC in about 9 months. You basically need to figure out how to do all the brain work yourself and outsource the fab and packaging as efficiently/cheaply as you can.
An end product with 4 times the hashing rate of a 5970 and consuming 25% the power is very conceivable. That would just be the first cut.
The barrier to entry is not so high so you would probably see more than one company do this.
Topic: Newly minted idiot - page 2. (Read 8630 times)
A little math: 50BTC*6/h*24h/day*20$/BTC*30day/month = 4.320.000$/month (dimensions check). This is the total size of the monthly mining pie until 2013, at current BTC prices.
Even if you don't earn much the first few months, just by merely increasing the difficulty up to the point where GPU can't compete, you are quickly putting them out of business. Especially if you are so effective they don't get to recoup electricity, and so have no chance of recovering the sunken hardware cost. If they are rational they will go offline and wait for better times, if not it will take some time to convince themselves they are wasting money.
Once you get a big chunk of the revenue stream and reinvest it in hardware, there's little chance for anyone to catch up. The only reason why investors are not doing this is the high volatility of the BTC price, there's no way to know you can recover the high fixed costs of designing an ASIC and the custom boards. Once that happens, it's bye bye GPU, the market will be dominated by a few (one) ASIC miners.
Assuming one entity does control more than half of the hashing speed, it's anyone guess what might happen. Common sense suggest it will not use it's new double spend capabilities for it will drive people off Bitcoin and endanger it's substantial mining revenue. In any case, the security model of Bitcoin will no longer work.
Even if you don't earn much the first few months, just by merely increasing the difficulty up to the point where GPU can't compete, you are quickly putting them out of business. Especially if you are so effective they don't get to recoup electricity, and so have no chance of recovering the sunken hardware cost. If they are rational they will go offline and wait for better times, if not it will take some time to convince themselves they are wasting money.
Once you get a big chunk of the revenue stream and reinvest it in hardware, there's little chance for anyone to catch up. The only reason why investors are not doing this is the high volatility of the BTC price, there's no way to know you can recover the high fixed costs of designing an ASIC and the custom boards. Once that happens, it's bye bye GPU, the market will be dominated by a few (one) ASIC miners.
Assuming one entity does control more than half of the hashing speed, it's anyone guess what might happen. Common sense suggest it will not use it's new double spend capabilities for it will drive people off Bitcoin and endanger it's substantial mining revenue. In any case, the security model of Bitcoin will no longer work.
A superficial game theoretical analysis suggests it can't, the most efficient miner will drive everybody else off the market because hashing is perfectly fungible and there's no way to compete on product differentiation, just on scale and efficiency.
So, let's extrapolate that out - ASIC comes along and drinks the GPU milkshake... He's getting block after block a day, how soon before that person(s) can start naming the price? How long before that (as I understand it) million+ dollar investment gets paid back?
Am I missing something? "Bad" for GPU miners, but not all that apocalyptic to the Bitcoin economy as a whole.
I realize you're not saying it'll be bad for bitcoin - just thinking it through out loud.
http://www.reddit.com/r/Bitcoin/comments/i0r4o/ready_for_a_little_casual_mining/
..poor sap.....dipshit .... fuck-face
..poor sap.....dipshit .... fuck-face
wow, maybe you are jealous? or just a rude child? I can't tell which.
I really gotta stop coming here. This sounds like a community full of haters. Who gives a shit how much he spent on his investment? Why is he an idiot? Is it cause hes about to smoke half of your rigs? Really can't we just say "nice" and move along, instead of over analyzing his 10k investment (which is joke money to people who have it) and saying how stupid he is?
Y'know the $10k was an illustration that even if he got an INSANE deal on all that gear it's still a huge, huge gamble at this point.
He probably paid retail, there's a fucking newegg box there.
That means he probably actually paid closer to $25-30k, and that's just on the hardware.
He obviously rented office space, too.
Electricity.
Time.
I really gotta stop coming here. This sounds like a community full of haters. Who gives a shit how much he spent on his investment? Why is he an idiot? Is it cause hes about to smoke half of your rigs? Really can't we just say "nice" and move along, instead of over analyzing his 10k investment (which is joke money to people who have it) and saying how stupid he is?
Short of a hardware paradigm change like cheap asics or fpgas, miners cannot get much more efficient. Adding a lot of mining rigs to your setup does not mean you earn a greater percentage of bitcoins vs costs, only that you earn more bitcoins in total.
GPU miners can buy in bulk at discount prices. GPU miners can optimize their hardware for minimal price/Gh; think single industrial 12V power supply for all motherboards, no case/peripherals, centralized cooling etc. GPU miners can setup shop in jurisdictions with cheap electricity. GPU miners can learn OpenCL and optimize their client; if you have a 5770 shop you might learn 5770 internal hardware details and assembly for that critical extra 5% speedup. As in every business with low entry barrier, the margin is thin and only the most efficient survive.
Quote
The decentralized, peer to peer currency will be refined down to a handful of specialized data centers controlled by the largest mining organizations.
And that, imho, is the tragedy.
And that, imho, is the tragedy.
As long as you don't hijack the well established term "tragedy of the commons", it might be a tragedy in some sense. The "tragedy" of the economy of scale where only large corporations can survive. It happens most everywhere these days, think Walmart, but it's also associated with progress and brings the prices down by mass production and standardization, improving access to industrial goods for the average man.
It remains to be seen if Bitcoin security model can survive a single corporate miner with cost optimized 45nm ASICs. A superficial game theoretical analysis suggests it can't, the most efficient miner will drive everybody else off the market because hashing is perfectly fungible and there's no way to compete on product differentiation, just on scale and efficiency.
I forsee a lot of Distributed Denial of Service attacks in the future.
Consolidating pools is a pretty bad idea, but I suppose they will have to learn their lesson the hard way.
Consolidating pools is a pretty bad idea, but I suppose they will have to learn their lesson the hard way.
I agree that is the dynamics of Bitcoin mining, but I fail to see how it is a Tragedy of the Common. That miners become more efficient is a desirable outcome.
Short of a hardware paradigm change like cheap asics or fpgas, miners cannot get much more efficient. Adding a lot of mining rigs to your setup does not mean you earn a greater percentage of bitcoins vs costs, only that you earn more bitcoins in total. In the next few months someone with a pair of 5870s will earn only ~1 bitcoin per week. Only those with larger operations will be able to pull in any appreciable amount of bitcoins for their efforts. Large scale corporations will jump in (or be formed) with the sole purpose of mining, making the difficulty go ever higher, and causing a significant barrier to entry for anybody without sufficiently deep pockets.
The network's hashing power is already consolidating into a few pools. As more and more smaller miners give up due to the skyrocketing difficulty level and are replaced by the larger conglomerates the pools will be replaced (or completely populated) by those who can afford very large operations (governments, corporations, some wealthy individuals). The decentralized, peer to peer currency will be refined down to a handful of specialized data centers controlled by the largest mining organizations.
And that, imho, is the tragedy. For anyone that not in the top few mining operations, the commons will effectively be destroyed. Every new worker we bring online accelerates us toward this end. It is the way this game is rigged. Myself, I'll play for as long as I can, but within 6 months I doubt I'll have enough Ghash/s to be competitive.
What a perfect illustration of the Tragedy of the Commons.
How?
A new farmer to the commons not adding a couple of cows, but an entire herd of them. In two weeks the commons will be that much harder to utilize for everyone. It is advantageous for each miner to add as many video cards as possible, but in so doing they make the difficulty increase, thus causing diminishing returns on everybody's cards and requiring more cards to keep the same level of income, causing a higher difficulty, etc etc. Unless price moves substantially, in a couple of months the difficulty will be so high that many will be mining at a loss. But that is how the game goes.
With the current difficulty progression, at best I am going to make *maybe* 200 more bitcoins in the next 3 months...and I am pushing 6 GHash/s.
I agree that is the dynamics of Bitcoin mining, but I fail to see how it is a Tragedy of the Common. That miners become more efficient is a desirable outcome.
Synaptic, I've been following your posts and threads over the past few days and I've observed that (1) you've got some reasonable things to say, and (2) that you say them with astonishing douchebaggery. Chill out.
Not going to argue that observation.
Most of my posts are made quite far past the point of 20-24 hours sleep deprived, so it's not as though I can admit to wholly being about my full wits.
And, that I don't care about that fact, either.
Or a betting man. Maybe he thinks the price of BTC is going up to $100 (or $1000 for that matter).
Risk is all in the eyes of the beholder...
Risk is all in the eyes of the beholder...
A new farmer to the commons not adding a couple of cows, but an entire herd of them. In two weeks the commons will be that much harder to utilize for everyone. It is advantageous for each miner to add as many video cards as possible, but in so doing they make the difficulty increase, thus causing diminishing returns on everybody's cards and requiring more cards to keep the same level of income, causing a higher difficulty, etc etc. Unless price moves substantially, in a couple of months the difficulty will be so high that many will be mining at a loss. But that is how the game goes.
That's not a tragedy of the commons, it's called competition. The total bounty of (50 coins + fees)/block does not decrease, it's only spread thinner, so that the less competitive miners die out. If anything, more miners means a more stable network, more users, therefore more fees.
A real tragedy of the commons is this: every guy brings more cows up to the point were there's overgrazing, no time for grass to recover and grow, and the total utility of the grazing land goes down temporarily or permanently, even to zero in the event of desertification. So maximizing the individual utility has diminished or destroyed the global utility of the shared resource.
Thanks for giving the textbook definition there.
Synaptic, I've been following your posts and threads over the past few days and I've observed that (1) you've got some reasonable things to say, and (2) that you say them with astonishing douchebaggery. Chill out.
+1
I still have to go write up a response to his "logical" discussion of bitcoin.
What a perfect illustration of the Tragedy of the Commons.
How?
A new farmer to the commons not adding a couple of cows, but an entire herd of them. In two weeks the commons will be that much harder to utilize for everyone. It is advantageous for each miner to add as many video cards as possible, but in so doing they make the difficulty increase, thus causing diminishing returns on everybody's cards and requiring more cards to keep the same level of income, causing a higher difficulty, etc etc. Unless price moves substantially, in a couple of months the difficulty will be so high that many will be mining at a loss. But that is how the game goes.
With the current difficulty progression, at best I am going to make *maybe* 200 more bitcoins in the next 3 months...and I am pushing 6 GHash/s.
The reason it's not a tragedy of the commons is because it's good for Bitcoin. The more network hashing power Bitcoin has, the more secure the network is, and thus the more viable and safe Bitcoin is. It's only a "tragedy" if you look at it from the miners' perspective. If you actually care about all of the other aspects to Bitcoin besides making a quick buck off mining, then the network growing in size is a great thing.
A new farmer to the commons not adding a couple of cows, but an entire herd of them. In two weeks the commons will be that much harder to utilize for everyone. It is advantageous for each miner to add as many video cards as possible, but in so doing they make the difficulty increase, thus causing diminishing returns on everybody's cards and requiring more cards to keep the same level of income, causing a higher difficulty, etc etc. Unless price moves substantially, in a couple of months the difficulty will be so high that many will be mining at a loss. But that is how the game goes.
That's not a tragedy of the commons, it's called competition. The total bounty of (50 coins + fees)/block does not decrease, it's only spread thinner, so that the less competitive miners die out. If anything, more miners means a more stable network, more users, therefore more fees.
A real tragedy of the commons is this: every guy brings more cows up to the point were there's overgrazing, no time for grass to recover and grow, and the total utility of the grazing land goes down temporarily or permanently, even to zero in the event of desertification. So maximizing the individual utility has diminished or destroyed the global utility of the shared resource.
And you care that someone might be wasting their money.... why?
Besides, he could likely resell all of that hardware for 75% of what he bought it for in the coming months. As long as he can regain the 25% lost on depreciation in bitcoins (which should only take a matter of days), he won't be out any money if it all comes crashing down.
Besides, he could likely resell all of that hardware for 75% of what he bought it for in the coming months. As long as he can regain the 25% lost on depreciation in bitcoins (which should only take a matter of days), he won't be out any money if it all comes crashing down.
Synaptic, I've been following your posts and threads over the past few days and I've observed that (1) you've got some reasonable things to say, and (2) that you say them with astonishing douchebaggery. Chill out.
I think the key for mining is making back your investment as fast as possible while the BTC is still trading at a fair price and the difficultly isn't too high. Once you make your hardware cost back, everything past that (assuming you aren't paying a ton for power) is just profit. And even if the market did crash and bitcoin had an epic fail, you'd still be sitting on a ton of used gear which you'd be able to sell for even more profit.
What a perfect illustration of the Tragedy of the Commons.
How?
Hint: narrowly define "Commons".
This is economics, not a Tragedy. The miners chase the Red Queen -- it's not like they don't know the game's rules beforehand.
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