$100k of FPGAs, Mining Bitcoins at 110 Ghash/sec

by mrb • 14 years ago

73 70 14 years ago

drtse4• 14 years ago

Just to give you an idea of how does it compare to different solutions: https://en.bitcoin.it/wiki/Mining_Hardware_Comparison

mrb3• 14 years ago

Discussion thread on bitcointalk.org: https://bitcointalk.org/index.php?topic=82941.0

I don't know what the skeptics think, but to me, the fact that at least 2 wealthy individuals or entities have invested $100k in 360-FPGA farms should send a signal that at least some consider Bitcoin sufficiently reliable, trusted, and stable to warrant this kind of investment. They put their money where their mouth is.

I will soon write a blog post documenting the numerous other FPGA board vendors that started designing custom boards targetting the Bitcoin mining market.

Disclosure: I am myself a long-time miner.

taligent• 14 years ago

The more logical conclusion is that they simply see money to be made.

I don't believe they are sending ANY signal that Bitcoin is reliable, trusted or stable. In fact I personally see this as a clear sign that Bitcoin is fundamentally unfair and easily gamed.

celticninja3• 14 years ago

How is it easily gamed? Production of bitcoins is related to processing power, if you can purchase the processing power you can increase your capacity to mine.

etherael• 14 years ago

Wait, what? it's a sign that it's fundamentally unfair and easily gamed that the market is responding to the incentives implicit in the design? Miners don't just suck away all the value in the system, they are the value in the system; no mining, no blockchain, no blockchain, no transactions.

More mining, more secure blockchain, etc.

Andys2• 14 years ago

They are taking a huge risk with this investment. With the mining reward set to automatically halve in 2013, and the currency still in its infancy, its a bold move. And despite dropping 6 figures on the hardware it barely a percent of the total hash rate.

wamatt• 14 years ago

> I personally see this as a clear sign that Bitcoin is fundamentally unfair and easily gamed.

Curious that you used the word "unfair". It is quite likely that the fairness of bitcoin, is not related to it's future viability.

Disparity is alive and well in the real world, and seems to be doing just fine.

wr14724• 14 years ago

Who said the creation of wealth should be or is fair?

(not that I think it shouldn't be)

excuse-me• 14 years ago

Mining is the problem - these people at Newmont/BHP/Barrick are trying to destroy the economy by digging gold out of the ground.

bigiain2• 14 years ago

Isn't it a lot like historical "gold rushes"?

These guys are selling shovels to the miners.

"Step right up! Get your ~10k/month bitcoin mining gear right here! Only $90,000 and _guaranteed_ to make you rich!"

jerguismi5• 14 years ago

> "Step right up! Get your ~10k/month bitcoin mining gear right here! Only $90,000 and _guaranteed_ to make you rich!"

I don't see any false advertising here. I think the people who invest to these things know the risks. After all, bitcoin is pretty open project. You can easily calculate how much you will be making money with this with current difficulty/exchange rate. Of course both of them will probably fluctuate heavily in the coming years.

otterley• 14 years ago

I think it's telling that the manufacturer doesn't accept payment in BitCoins.

peteretep2• 14 years ago

I'm not sure what 110 Ghash/sec means. Can someone give me an idea of: at current Bitcoin <-> currency conversion rates, what return per hour should you expect from this?

mrb3• 14 years ago

Roughly this farm makes $10k per month.

110e9 (hash/sec) * 3600 (sec/hour) * 730 (hour/month) / (2^32 * 1733208 (current difficulty factor)) * 50 (coins/block) * 5.1 (current exchange rate: usd/coin) = $9903 per month

Minus about $730/month in electricity for the 10kW it consumes, assuming an average worldwide rate of $0.10/kWh.

Retric2• 14 years ago

So, 9k per month.

peteretep2• 14 years ago

I think I'm right to say this will drop off as the potential number of Bitcoin dwindles (although I don't know the mechanics)... I wonder how long until this thing pays for itself, assuming Bitcoin value stays roughly constant

Andys2• 14 years ago

Using the excess heat for household hot water and space heating is a great idea.

hexagonal• 14 years ago

Not really "excess". You put 10kw of electricity in, you get 10kw of heat out.

dantiberian• 14 years ago

Excess heat in the sense that it is unwanted heat.

driverdan• 14 years ago

Perhaps you should read up on the laws of thermodynamics. You do not get "10kw" of heat out.

Jabbles3• 14 years ago

I think the incentives of the bitcoin system to hoard money and the massive bias towards early adopters will be the downfall of bitcoin. All the advantages of anonymity and irreversibility are voided if there is every reason to keep hold of your money and let it increase in value. Several people on HN claim to have hundreds of thousands of bitcoins, making them worth more than 0.1% of the entire economy. Whilst the real world has its (possibly unfair) share of billionaires, the majority of these have come through substantial business innovation. Bitcoin "billionaires" come through luck and early adoption, and in my view it makes it more unfair than our current system.

I think that bitcoin will continue to have some success in areas that wish for privacy, but will not reach the heights that some people predict.

alexchamberlain2• 14 years ago

I don't disagree with you, but there are a significant number of hereditary billionaires (in the real world), which inherit money through luck and early adoption (of business or banking)

joelthelion• 14 years ago

That was my opinion in the beginning, but I'm not convinced anymore. First of all, the bitcoin billionaires have a strong incentive to spend, because if they don't, the currency will crash and they will lose their money.

Second, if you were to create "inflatacoin", with a small but real inflation rate, who would adopt it? It would probably be better economically speaking, but people prefer putting their money in things that stay stable or grow over time.

Jabbles3• 14 years ago

If people are spending their money in fear of a crash then hoarding is not bitcoin's main problem.

I don't know the solution to bitcoin's deflation, but IMO it's still a problem.

jerguismi5• 14 years ago

> Bitcoin "billionaires" come through luck and early adoption, and in my view it makes it more unfair than our current system.

I don't see how the hoarding/early adopter thing would destroy bitcoin. Bitcoin isn't fair, but lack of fairness doesn't necessarily make the project unsuccessful.

codexon3• 14 years ago

If people don't think bitcoin is fair they won't adopt it, and may even fight against it.

DanBC3• 14 years ago

Early adopters used powerful computers; then GPUs; then GPU farms; now people are using FPGA clusters. They've seen considerable investment in hardware depreciate, and now they're stuck with a massively powerful setup that isn't much use to them. (Perhaps well-funded scientific groups should start buying all these hobbyist GPU farms while they're being sold cheap and put them to use folding proteins or modelling whatever?)

Will anyone go to the expense of an ASIC?

Would a well funded group with access to FPGA technology early on in the chain, when others were using GPUs, have been enough to crash the currency?

And does anyone believe that a government would not be able to destroy bitcoin, trivially, by spending a few days mining?

fleitz• 14 years ago

The most the government could do is generate all the new coins, this would drive up the price of coins until it became economical compete.

Given the almost limitless divisibility of bitcoins I don't think it's much of a threat. I'd be far more worried about laws being passed that made bitcoins punishable by jailtime.

JonnieCache• 14 years ago

>Perhaps well-funded scientific groups should start buying all these hobbyist GPU farms while they're being sold cheap and put them to use folding proteins or modelling whatever?

This seems likely. I don't imagine that FPGA clusters depreciate much over periods of a few years. I bet you could make most of the investment back by selling them off to some research firm once the return from the mining dropped. There must be plenty of hi-tech research based startups that need to do serious number crunching on a budget.

mrb3• 14 years ago

No. The "hoarding" argument has been beaten to death. Evidence shows people are not hoarding the coins: every day, 40 thousand coins change hands on the single largest exchange: http://bitcoincharts.com/markets/mtgoxUSD.html This is six times the number of coins created daily (7 thousands).

In other words, people are not hoarding them, but are trading them very, very frequently.

And this is just measuring MtGox's volume. Other trades (merchant sales, other exchanges, etc) are likely surpassing MtGox's volume in aggregate...

aw3c2• 14 years ago

Are there any statistics what those might be used for? Is there a list of sites/services that use Bitcoin with published numbers?

Duff• 14 years ago

How many coins were created daily 3 years ago?

Jabbles3• 14 years ago

I apologise for re-hashing old arguments, I haven't been following them, and I'd be interested to read rebuttals if you know where they are.

I'm not sure that evidence of trading is evidence of non-hoarding. It's only 0.5% of the total number of bitcoins out there that are traded daily. Is that a lot? I'm not sure, but I don't think we can compare it to the number of coins created daily and draw conclusions from that.

Some people are hoarding them. A lot of them. Or at least they claim to be.

codexon3• 14 years ago

How much of this volume are traders trying to flip bitcoins? I am willing to bet it could be as high as 95%.

As someone who has mined, bought bitcoins, and tried using them at bitcoin stores, there is really nothing special I can buy with them, and can and have dropped 20-50% in a matter of hours.

anamax• 14 years ago

> Evidence shows people are not hoarding the coins: every day, ... This is six times the number of coins created daily (7 thousands).

That's not very convincing. A better comparison evidence would compare the daily exchange to the total inventory.

However, the real question is more granular. If we look at #exchanges/age for each bitcoin, what do we find?

I'd expect to find that some bitcoins have higher turn-over than others even if there's no hoarding, but what fraction have never been traded, or have been traded less than 3 times?

PabloOsinaga• 14 years ago

There is a huge psychological bias for this argument. I believe it is 'sunk cost bias' or something like that.

It goes like this. Say you are a miner. You mine. At the moment you get your bitcoins, you've realized value in the sum of ( $Bgenerated - $Bcost (your hardware, etc)).

From that point on 'hoarding' is no different than going to an exchange and buying $Bgenerated in bitcoins with dollars.

So your argument for 'hoarders' having a tremendous unfair advantage is seriously flawed. They have no greater advantage than any speculator going and making a bet in bitcoin long term value.

The real value generated is the one they capture at mine time, and there is a super efficient market for that with very slim profits.

http://tpbitcalc.appspot.com/

ZenPsycho• 14 years ago

" the majority of these have come through substantial business innovation." [citation needed]

sschueller• 14 years ago

I wonder how long until we see worms/botnets that use the infected PCs to mine bitcoins.

kalmi10• 14 years ago

They already do: "I operate a ~10k botnet using a ZeuS software I modified myself, including IRC, DDoS and bitcoin mining (13GH/s - 20GH/s atm)." - reddit IAmA http://www.reddit.com/r/IAmA/comments/sq7cy/iama_a_malware_c... http://news.ycombinator.com/item?id=3960034

Bootvis• 14 years ago

They already do:

http://www.reddit.com/r/IAmA/comments/sq7cy/iama_a_malware_c...

ibotty• 14 years ago

already happening. not for a short time.

fratido• 14 years ago

A great way to sell showels in a gold rush.

DanBC3• 14 years ago

Anyone know enough about Amazon and Bitcoin to know how many bitcoins you'd get for a $10,000 spend on Amazon EC2 GPU clusters?

alexchamberlain2• 14 years ago

It's not worth it. See: https://bitcointalk.org/index.php?topic=8405.0

cperciva3• 14 years ago

... unless you're paying for them using stolen credit cards.

astrodust• 14 years ago

The margin on EC2 hardware is very high compared to a do-it-yourself solution. The GPU machines are also NVidia based which is nowhere near as efficient as the ATI ones for this particular application.

twog• 14 years ago

I started a small bitcoin consultancy as well. I thought bitcoin was going to be the next gold rush and replace currency all together, so I started building a super efficient OS. I have since moved on, but I still believe in bitcoin.

If anyone is interested in the project, you can check it out here: http://projects.tonigemayel.com/bitcoin-os/

$100k of FPGAs, Mining Bitcoins at 110 Ghash/sec

Related Stories