I prefer the term skeptic, and I think it's quite reasonable to be skeptical of a $1300 device capable of generating $210/day with still no proof. I think the skeptics will be much calmer once he plugs it in and verifies that it does what it says it does.
and for a limited amount of time. Bitcoins are a finite resource, once they are all mined, this hardware will be pretty much useless, as far as I understand.
Miner reward = Transaction fees + block reward
Currently the the former accounts for only 1%. This will likely change in the future (a decade or so). See here https://en.bitcoin.it/wiki/Tragedy_of_the_Commons
I hope someone somewhere is documenting all the Bitcoin farming hardware.
The future people would probably like a nice list of things that people are trying. Bitcoin mining (and to a lesser extent Folding@home) are entry level clustering for hobbyists.
>I hope someone somewhere is documenting all the Bitcoin farming hardware.
>The future people would probably like a nice list of things that people are trying.
I can imagine future "coin" collectors gathering the ancient application-specific hardware that was used to mine bitcoins. "And here we have a 2013-era bitcoin ASIC...quite quaint really. I'd imagine she might be worth around...600 pounds?"
If you have a machine that generates $210 a day, why would you sell it for $1,300? Wondering why they wouldn't plug them all in and not start selling any until they've dropped the value of bitcoin below their profit margin...?
Mining is extremely risky right now. If someone else turns on ASICs before you do, the resulting difficulty spike would reduce your profits significantly. It's even possible (although unlikely) that some of these ASICs will lose money. But selling ASICs locks in the profit immediately.
If they had enough to build one, they could bootstrap themselves up from that. (It takes about 6 days for an ASIC to generate enough money to make a new one.)
Firstly, their true NRE costs are closer to $200-300k IMHO.
Secondly, $200-300k is not "nothing". I bet they tried to raise investor money, but didn't find any. $210/day/unit is a lot, but Bitcoin still remains relatively a risky investment.
The problem is that they can print money if they are released before their competition, but we don't know when the competition will ship. (In retrospect we can see that Avalon batch 1 shipped before BFL, but there was no way to know that ahead of time and batch 2 is still unknown.) So I can understand why outside investors would refuse to touch it and why the Avalon developers might have decided to reduce their risk.
That's no longer true for ASICs. This box consumes only $1-2/day of electricity, so it's likely that it will consume less than $1,300 of electricity over its entire lifetime.
The $210/day for $1,300 only holds for a single incremental device. Since the network produces a mostly fixed number of bitcoins per day regardless of the hashing power thrown at it, there are severe diminishing returns for running a lot of these devices. I think the current math is that if you ran 300 of these, each would only be producing $100/day. 600 and each would be producing $70/day, etc. (Pre)selling them scales much better and is far less risky since it insulates them from the fluctuating BTC/USD exchange rate and the possibility of competitors diminishing their share of the network down the line.
300 at 100 a day is $30k/day. If they're selling them for $1.3k, let's assume a 50% markup; it would only take about 6 days to make back their investment. 12 days if they're selling them at cost.
Presumably they want to sell much more than 300 devices (enough that running them themselves would be less efficient than selling them) and turning on these 300 for themselves would make customers much less willing to buy more from them in the future.
> Presumably they want to sell much more than 300 devices (enough that running them themselves would be less efficient than selling them)
That still doesn't make sense to me. If these machines work, they're money trees. You build them, run them, and use the ridiculous proceeds to build and run more of them, or to get out before the market becomes too crowded.
At scale you could fill racks with these things for a relatively small outlay.
> ... and turning on these 300 for themselves would make customers much less willing to buy more from them in the future.
but by this reasoning, you shouldn't be buying this machine anyway, so i dont know know what rational thought could lead anyone to purchase this machine, if the seller of the machine wouldn't use it themselves.
That doesn't make sense. If they chose to mine bitcoins they could just instantly cash out in dollars. Creating a business that sells Bitcoin miners doesn't seem like a smart route to take if you think Bitcoin is a fad.
Because of two things. Firstly they needed people to chip in money via pre-orders to even get the funding to produce these things. Secondly, it seems they don't want to ruin their reputation (and thus lose future orders) by mining with the devices themselves. These two factors result in them selling the hardware instead of mining with it themselves.
It's been an immense struggle to be the first company to ship a ASIC unit because the first company to ship a product will essentially decimate the Bitcoin mining industry, rendering other ASIC units worthless in a span of less than a year.
When the amount of bitcoins being mined oincreases the Bitcoin network increases the mining difficulty.
This means that when ASICS are in the hands of many people the difficulty will increase to the point where those mining with desktop rigs, even those with clusters of a dozen GPU's, will not be able to compete and the cost of electricity and hardware will eclipse the reward of mining.
This also means that the first fifty to a hundred people who have these units in their hands stand to make somewhere around $150/day after you figure in the cost of the mining units (which run around $1,200 USD) for the first few months, and it's essentially free money. All you have to do is plug the thing in, set it up and let it run. If you can hook it up at the office where you work or at someone's house where they have very cheap electricity, it becomes almost literally free money.
This is why everyone is so excited about ASIC units.
However, one company (BTCFPGA) has already fallen apart and is issuing refunds to everyone who pre-ordered. Another, Butterfly Labs, is on track to ship around the middle of next month.
I have ordered one unit from BTCFPGA, which I was refunded for. I also have an order with Butterfly Labs, which I am holding right now. Though my participation is purely academic: I'm interested in seeing what happens if/when I get this unit and plug it in. I am also interested to see what's going to happen to the Bitcoin network once a serious shipment of ASIC units goes out.
I would not be surprised if he plugged that thing in and it did nothing, or did something other than expected. This would give Avalon the right to say "we shipped it but it must have been damaged in shipping," or "there are bugs in the hardware/software" thus buying them time and cementing them as the first to ship an ASIC unit.
47 comments
[ 2.7 ms ] story [ 95.6 ms ] threadI hope this will put a stop to most of the non-believers constantly trolling on bitcointalk.org
EDIT: Now confirmed on Jeff's blog: http://garzikrants.blogspot.com/2013/01/avalon-its-alive.htm...
and for a limited amount of time. Bitcoins are a finite resource, once they are all mined, this hardware will be pretty much useless, as far as I understand.
Miner reward = Transaction fees + block reward Currently the the former accounts for only 1%. This will likely change in the future (a decade or so). See here https://en.bitcoin.it/wiki/Tragedy_of_the_Commons
http://www.thebitcointrader.com/2013/01/the-first-bitcoin-as...
The future people would probably like a nice list of things that people are trying. Bitcoin mining (and to a lesser extent Folding@home) are entry level clustering for hobbyists.
>The future people would probably like a nice list of things that people are trying.
I can imagine future "coin" collectors gathering the ancient application-specific hardware that was used to mine bitcoins. "And here we have a 2013-era bitcoin ASIC...quite quaint really. I'd imagine she might be worth around...600 pounds?"
Is this what you are looking for?
Right now, 66 GHash/sec generates about $210/day (11 bitcoins/day).
Avalon is literally the work of 2 chinese guys (ngzhang and yifu). They are not a big company with lots of money.
Secondly, $200-300k is not "nothing". I bet they tried to raise investor money, but didn't find any. $210/day/unit is a lot, but Bitcoin still remains relatively a risky investment.
If they can't, then they're not worth $1.k/ea.
No need to sell any of these machines before somebody else hits the market.
I know people who have unplugged their entire setup and flown it half way across the US to get power 10% cheaper.
I don't really follow the maths here.
That still doesn't make sense to me. If these machines work, they're money trees. You build them, run them, and use the ridiculous proceeds to build and run more of them, or to get out before the market becomes too crowded.
At scale you could fill racks with these things for a relatively small outlay.
> ... and turning on these 300 for themselves would make customers much less willing to buy more from them in the future.
The truth outs. In a gold rush, sell shovels.
Deepbit, one of the more popular pools (teams that split profits) is currently doing 1.9 TH/s and accounts for roughly 17% of all mining operations.
So you are buying a single device capable of approximately .5% of the output of everyone else combined.
http://www.thebitcointrader.com/2013/01/the-first-bitcoin-as...
When the amount of bitcoins being mined oincreases the Bitcoin network increases the mining difficulty.
This means that when ASICS are in the hands of many people the difficulty will increase to the point where those mining with desktop rigs, even those with clusters of a dozen GPU's, will not be able to compete and the cost of electricity and hardware will eclipse the reward of mining.
This also means that the first fifty to a hundred people who have these units in their hands stand to make somewhere around $150/day after you figure in the cost of the mining units (which run around $1,200 USD) for the first few months, and it's essentially free money. All you have to do is plug the thing in, set it up and let it run. If you can hook it up at the office where you work or at someone's house where they have very cheap electricity, it becomes almost literally free money.
This is why everyone is so excited about ASIC units.
However, one company (BTCFPGA) has already fallen apart and is issuing refunds to everyone who pre-ordered. Another, Butterfly Labs, is on track to ship around the middle of next month.
I have ordered one unit from BTCFPGA, which I was refunded for. I also have an order with Butterfly Labs, which I am holding right now. Though my participation is purely academic: I'm interested in seeing what happens if/when I get this unit and plug it in. I am also interested to see what's going to happen to the Bitcoin network once a serious shipment of ASIC units goes out.
I would not be surprised if he plugged that thing in and it did nothing, or did something other than expected. This would give Avalon the right to say "we shipped it but it must have been damaged in shipping," or "there are bugs in the hardware/software" thus buying them time and cementing them as the first to ship an ASIC unit.