Topic: What'll happen to ASICs when they're no longer profitable to run? - page 2. (Read 3211 times)

I am making a 11 nm hashing chip. It does 800GH/s and I am selling them for 200 BTC each. Pre-order now. http://www.Minegoto11.com

The economic brick wall is 28nm.  20nm is beyond rediculously expensive for anyone who doesn't know their own fab (Intel, Samsung).  Nobody is predicting high availability or decent prices of 20nm wagers from any foundry in 2014 either. Nobody (not even Intel) is using 14nm yet, the technical challenges of 10nm haven't even been addresses.   Still even if 20/14/10nm is techincally available what matters in mining is the cost per hash and Bitcoin mining is almost perfectly parallel.  This means a 20nm chip is going to cost MORE than a 28nm one (everything else being the same) until the cost per transistor is lower on 20nm then 28nm.   Usually that takes 2-4 years from process start and it is taking longer and the end benefits are getting smaller (higher NRE, more delays, more complexity, more yield issues, and overall a shrinking gain on the prior process node).  So 20nm SHA-2 ASICs probably won't make sense even in 2015 or 2016 and 14nm isn't even on the map yet (2020?+).



That means for the convieable future 28nm is as good as it gets.  There may be more efficient 28nm designs but that would mean a brand new NRE cost and it would have to be a lot better to make sense (i.e. a company's new chip would need to be so much cheaper (MH/$ and MH/W) that even after a share of the NRE it added it is still a better deal that then existing design).  It remains to be seen if that will happen.  Regardless once everyone is on 28nm and shipping in volume, the market will become highly saturated and mining margins will be a small percentage over electrical cost of the most efficient miners.  Have a less efficient miner, have higher than normal electrical costs, paying for expensive datacenter space expect it to only be a question of how long before your net operating margin goes negative.  Really no different than GPU mining.  Those with excessive electrical costs or poorly though out rigs could only profit marginally when the price/difficulty was high and when it tanked they had to idle or mine at a loss.

With the recent selloff of ASICMiner shares, maybe they are already screaming?

The big farms like ASICminer need to make a profit or their shareholders will scream.

All we can now do is use the machines what they are made for, and i personally will run it as long as the electricity usage is being paid by the machine.
As soon as it becomes a loosing money issue i will probably send it to the recycle industry which will try to scrape out as much usefull materials as possible.
I do not say anything about what bitcoin is doing since i still not got a crystal ball
As soon as i can predict what is going to happen and never fail in that i would be the richest man on the planet.
Since i am one of the simple worker slaves, you can fill in how rich i am.... (NOT if you could not guess it allready, we eu slaves are only good for pay taxes)

Too many assumptions surround the mining outlook predictions.

- that difficulty will keep rising exponentially
- that all mining manufacturers will ship products (many all are SHA-2 ASIC only start-ups, I don't think Samsung are producing miners any time soon)
- that BTC price will stick long-term at $80-130 (what if it plunges tomorrow?)

People are getting caught up in their very fixed view of what should happen given current trends, without paying mind to possible severe trend reversals. Not being bearish, what if the price doesn't stop the current linear expansion? What if a high density 3d printed solar cell technology gets announced before December? What if an oil price shock hits the global market '70s style, causing price inflation madness? Mining depends on alot of variables, and assuming that so many will remain the same to support narrow predictions is pretty risky.

https://bitcointalksearch.org/topic/prediction-a-sha256-alt-coin-will-become-as-big-a-success-as-litecoin-1-2yrs-277864

Wont happen, If not big unprofitable, most will run in a hope of price rise

Depends on the ASIC.  ASIC miners relying on dozens of chips per board will probably hang out for a few years under your desks first, get cannibalized for their PSs and a few case parts, and then get trashed.  Some chippers might offer next-gen chippery in a similar package with identical pinout, power specs & footprint, offering to retrofit them to your boards (this will be more difficult than simple board assembly, more like reflow repair).  Maybe one of the ASIC manufacturers is already thinking in terms of socketed PGA chips (HasFast has a chip rendering on their site that looks exactly like Intel CPUs, down to the heat spreader), so users may replace ASICs like they replace CPUs.

Or you can create a collector's market.  Think NEXT Cube

Asic's have a problem if they are no longer usefull on the task they are made for.

These chips are designed to do one task pretty well, so indeed the question is what can be done with them is limited to calculate sha256 security hashes
In fact they where allready used for this task.

The problem is that these chips can not be changed and reprogrammed like fpga.

So what will your expenssive toy be worth after new and faster designs enter the scene

Also i am kinda sure the companies using asic for other tasks do not want our asics, simply because they pay very little for their asics because the ones they use are made in massive numbers.

We pay enormous prices compared to the normal industry designed ones.

I will be expecting kinda 0.0 value after they no longer can be used on the bitcoin scene
Unless you can find an alternative sha256 coin which can be done on the same machines.

 

People will switch them off to save electricity until such time are they are profitable to run again.

Someone will set up a black market distributed computing network for cracking passwords.  I'm sure there's some demand for a few PHash at rock bottom prices.

Someone will create a clone coin which can be mined with current ASICs

will mine unless the loss from electricity costs are more than a couple hundred dollars a month.

They'll be sold on eBay to those who don't do their research properly.

Hobbiests will run their ASIS forever... even when they are producing .0001 BTC/day. PROs will sell off old equipment when they think they can make more return by putting the effort to run the equipment into a new box.

Yes, I have admitted in the past I view this as a hobby.

Either you are irrelevant hobby miner or brand new.

Well - yeah, I can see that to an extent, but at some point, a solar farm will never pay for itself if all its daily intake is being spent on an ASIC farm mining the equivalent of $10/month. As for people with "free" electricity, no landlord's going to stand for them sucking down $1k in electricity per month on a $600/mo lease - so there's a scalability problem there, too.

I think while there may not be "revolutionary" performance improvements in ASICs over previous generations, there will at least be "revolutionary" improvements in the cost for consumers (as we've been seeing since the first ASICs were announced for pre-order) as ASIC manufacturers suddenly face a massive decline in demand and price equipment x% above cost to manufacture instead of x% below what the other guys are charging. That doesn't even factor in manufacturers becoming established/experienced and implementing real manufacturing techniques (instead of half a "line" being a row of plastic tables), and with dedicated purchasing departments.

Profitability is a matter of perspective. Just like how an orebody can be ore one day, and dirt the next (ore is defined as being profitable to mine, once the costs outweigh the profits the rock is no longer considered to be ore), what is unprofitable to some people will be profitable to others.

Consider the requirements for operating mining equipment. You have inputs of power and an output of hashes. Those generally need to be put to a pool and onto the main network, so lets also call bandwidth an input here.

The cost of bandwidth for mining is almost negligible, and in most cases people pay a set amount for their bandwidth whether they use it or not. Power is a much bigger concern, however the cost of this varies from place to place - some pay a fortune for it while others may be able to get it for free.

Take my setup for example, my rigs are solar powered. I have costs of bandwidth but zero on power. If you want to get technical you could potentially factor in the cost of batteries and their associated degradation, but equally you could build a system without batteries, or using any other source of renewable "free" energy. These operations will in essence always be profitable, while those with high power costs will end up unprofitable much sooner.

What is likely to happen is those with highest power cost will end up selling their older equipment, which will be purchased for bargain basement prices by those with no concern for power costs. This will be in part replaced with newer more efficient gear, however the network hashrate won't increase anywhere near the rate it has with the transition from GPU and FPGA to ASICs, as there really isn't a huge improvement to be had.

The second hand market will be decidedly different to that of FPGAs and GPUs. These can both be used for other things, while ASICs can't (unless someone else figures out a use for SHA256(SHA256(x)) hashes)