Avalon ASIC Bitcoin Miner – Prices for Batch #2

by DiabloD3 • 13 years ago

28 61 13 years ago

polskibus• 13 years ago

Can someone describe what Avalon's hashrate: 66 Gh/s means in terms of bitcoin production (or better, in terms of money). How many days would Avalon need to work 24/7 to provide 100% ROI ? I don't know much about bitcoin, I would imagine such info should be the first thing a potential customer reads on Avalon's front page.

eof2• 13 years ago

right now, like ~8 days. It's really impossible to tell though when these things hit mainstream as they will affect the current difficulty so much.

michielvoo• 13 years ago

So it's basically a money making machine. Why would you ever sell such a machine for a one-time profit?

deutronium• 13 years ago

I don't think they could put how much money you'd be expected to make, as that fluctuates in relation to the dollar etc.

But I'd be interested to know what 66 Gh/s means in practical terms too!

Just found this site, that calculates your profit http://www.bitcoinx.com/profit/

Edit: This makes me wonder, why would you release this technology to the public.

DiabloD32• 13 years ago

My 7970, the fastest single GPU for mining, does 675mh/s overclocked to 1125mhz. Thats about 1/100th the speed of an Avalon.

SODaniel• 13 years ago

I would say it's a safe bet that the developers of the machine has been running it for quite a while themselves and have meticulously calculated exactly the breaking point at which these machines will drive up the difficulty enough that it's more profitable selling them than it is running them for BTC.

stch2• 13 years ago

Once they become prevalent, they'll make money at the same rate GPUs make now, or CPUs made before, or etc. etc.

sp332• 13 years ago

There are a lot more miners now, so each miner makes less money. Actually the reward was cut in half a couple of months ago, so even in aggregate, they'll make money at half the rate CPU's used to.

gigq2• 13 years ago

It's very difficult to predict how much money these will make as it's unknown by the time you get one how many other ASICs will ship. If you look at https://bitcointalk.org/index.php?topic=89685.0 these are preorders for BFL ASIC that people have reported.

So at the current difficulty you would make $220.35 / day with a 66 Gh/s Avalon. If you look at predictions people are throwing around though on what these BFL orders will do to the difficulty (https://bitcointalk.org/index.php?topic=89685.msg1218884#msg...) then your $/day would go down to $11.42.

The question is will BFL ship on time and how many units will they ship. They claim to be shipping their first batch on the week of Feb 10th. This second batch from Avalon is said to be shipping March 5th – April 5th, 2013. So if you believe BFL will ship before then, then the difficulty will look very different by the time you get your Avalon.

wmf3• 13 years ago

Ah, nothing like a good old duplicate Bitcoin mining 101 thread. http://news.ycombinator.com/item?id=5142021

eof2• 13 years ago

yeah but when will these things ship??

DiabloD32• 13 years ago

Sometime in March. They're already shipping their first batch as we speak.

gigq2• 13 years ago

The site claims March 5th – April 5th, 2013.

dustcoin3• 13 years ago

The launch was a disaster again, with most requests timing out, carts going to checkout only to ask for a few USD of payment instead of the full $1500, and a report a of a customer seeing other customer's name.

Avalon has insisted on using a different payment processor for each of their batches, I assume as way of supporting the community. This almost ensures there will be issues with their store every batch.

Great product, lousy store.

noonespecial• 13 years ago

What do you do to get rich during a gold rush? Sell shovels to miners.

dustcoin3• 13 years ago

Would you sell shovels to other people if the shovels mined gold on their own?

The real reason that the ASIC companies take preorders is to pay for the high upfront engineering costs. Additionally, a single entity controlling a majority of the bitcoin network would decrease confidence in Bitcoin, so it is in everyones best interest to spread out the mining devices.

angersock2• 13 years ago

It would seem to me that a winning strategy would be to make these units, sell them, and ship them.

In the delays for step 2 & 3, have them sitting around plugged in mining, paying for their use. The final sale defrays the cost of building the thing, and you effectively get free Bitcoins--right before the market for mining tanks due to your dispersal of mining ASICs.

Is this reasonable?

DanBC• 13 years ago

If they build many machines, and use them all to mine at the same time, aren't they suddenly crashing the value?

I guess if they get a good deal for energy (or need to heat the factory) "soak testing" is a good way to get a bit of money back.

angersock2• 13 years ago

Oh, they very much may be--but that's a problem for the purchaser. Presumably they've already been sold and spoken for, money having already changed hands. A slight delay of a few days in shipping--who's to say?

imatworkyo• 13 years ago

crashing the value of what?

Bitcoin price is not tied to computational effort spent on mining. The creation rate of new Bitcoins is already constrained and well defined. Producing more machines would just mean Avalon would get a larger portion of the new Bitcoins.

STRML3• 13 years ago

It seems strange to even sell these units at all right now. If they really can pay for their (retail!) value within a week, the real money is in running them, continuously, until the difficulty gets so high that they can only pay for themselves within, say, 6mo or more.

It may be that the competition has driven manufacturers to attempt to sell so they can offload their stock. But Avalon claims that they are made-to-order.

If it were me, I would've built 1000 of these, made them pay for themselves and then some, then started dumping as soon as it looked like a competitor was about to launch. And again, this sale is too early for that to make sense.

AndrewDucker• 13 years ago

They cannot afford to make 1000 of them and keep them for themselves. They need the money up-front, and to get that they need to sell them in advance.

spitfire• 13 years ago

You've just described how TV infomercials work. 1. Play the commercial on tv. 2. Sell the product and collect the money. 3. earn interest and find the cheapest manufacturer to do JIT manufacturing in the 6-8 weeks you have to ship the product. 4. Ship the actual product.

mistercow• 13 years ago

Wow, that's actually a lot like Kickstarter.

Xcelerate• 13 years ago

I like the idea of Bitcoin, but it bothers me that the computational power gets spent on such a useless project (hash function calculation). Isn't there anyway that the system of Bitcoin could remain the same while the computational power goes into something like... I don't know... protein folding or weather prediction?

gwern• 13 years ago

No one seems to have proposed such a system, either for Bitcoin or for earlier proof-of-work systems (designed for fighting spam, that sort of thing). How do you come up with a decentralized secure system with verifiable problems which can come from anyone which they couldn't've computed the answer to in advance or have chosen it to be especially weak but which answer will still be actually useful?

I keep some notes on the topic http://www.gwern.net/Notes#a-bitcoinbittorrent-driven-econom... but so far I haven't seen any proposals which might work.

sltkr2• 13 years ago

It's not useless; BitCoin security depends on the majority of hashing power being in the hands of benevolent users. People who invest in ASICs and other mining hardware have an implicit incentive to be benevolent (because a collapse of the system means they won't see a return on their investment). So developments like this strengthen the security of BitCoin.

tptacek2• 13 years ago

You're missing his point. It's not that people who buy ASIC rigs are evil; it's that the whole system is burning energy on a toy problem, instead of addressing a real scientific problem that needs compute.

dustcoin3• 13 years ago

Bitcoin's proof-of-work system requires a problem that is difficult to solve, has a predictable and adjustable difficulty, and allows solutions to be verified easily. Many hash functions, in Bitcoin's case, SHA-256, meet these requirements. Protein folding and weather prediction do not.

dasil0032• 13 years ago

If Bitcoin holds up over time and fulfills it's full promise of a democratized currency immune to the influence of corrupt governmental power (which is a big if) then I'd argue that spending a lot of dedicated processing power is a small price to pay.

npongratz• 13 years ago

Some might argue that decoupling currency from central banks and government is not a useless project (or a toy problem). With Bitcoin, participants invest their own resources. It's none of my business how private individuals or enterprises peacefully allocate their resources, so I choose to not be bothered by how they do so.

DennisP6• 13 years ago

The hash function is not arbitrary. Its purpose is to put the global list of transactions in an unambiguous sequence that everyone agrees on, to solve the double-spending problem. The inputs to the hash function are transactions.

When a block of transactions is successfully hashed, the miner is awarded new bitcoins, as an incentive to do that necessary work of putting those transactions in order.

I was worried about energy consumption, until I worked out how much the numbers. Starting with an extreme assumption that the bitcoin money supply reaches parity with the dollar by 2021 or so, total power consumption used directly for mining is only a couple gigawatts, about a tenth of a percent of the world's total. I worked that out like this:

First assume the cost of mining equals the value returned. If mining is very profitable, more people will mine and difficulty goes up. If mining loses money, people drop out and difficulty goes down. Overall mining will always tend to be in the neighborhood of breakeven, with just barely enough profit to keep people from dropping out (though that's the equilibrium, and in periods of rapid growth we could be far from equilibrium at times).

Pick a date, figure out how many reward halvings we'll have between now and then, and you get how many coins we award every ten minutes. Multiply by coin price to get value awarded each time. If you assume electricity is half the mining cost, divide that value in half. Then divide by the cost per kWh to get kWh per ten minutes. Multiple by six to get kWh per hour, which is the same as just kilowatts.

And now you know how much power production you need to support the bitcoin economy given your assumptions.

Dylan168073• 13 years ago

The hash function is completely arbitrary. An infinitesimal amount of the work that goes into a block is actually processing the transactions. After that it's all proof of work, and you can slot in any proof of work.

The problem is that 'useful' calculations aren't suited for extremely fast verification.

fnordfnordfnord6• 13 years ago

Many power companies in my area offer free electricity at night to help them shed excess load.

kirian• 13 years ago

See this StackExchange answer for an answer to this question: http://bitcoin.stackexchange.com/questions/5617/why-are-bitc...

Some issues with "useful" computational work is that it needs to be computationally easy to verify the result (a hash function is but other work may not be), also it may not be crptographically strong so someone could come up with some method to solve the problems much more efficiently than others and make the network insecure.

m0nastic• 13 years ago

In general, specialized hardware tends to be expensive (niche uses result in poor economies of scale), which makes it difficult to see more widespread adoption, and consequently makes them less usable by researchers.

If these types of hardware end up finding use in a new problem space (like bitcoin mining), then in theory that could make them more popular, and thereby cheaper (as well as increasing the acceleration of the technology, leading to better, faster, hardware for everyone who uses them).

So in theory, even if Bitcoin mining doesn't have any "direct good" that comes from it, it could still be indirectly helpful to the larger scientific computing community.

stcredzero• 13 years ago

At this point, I think Bitcoin just has to survive. If it survives long enough, enough people will have heard of them and start to believe that they're money, it will be a defacto currency. So long as there aren't any disasters that kill its credibility, this will happen in a matter of a few to several years.

gesman• 13 years ago

Best business is instead of digging for gold - to sell showels to gold diggers.

calinet6• 13 years ago

Someone explain this to me: if I have extra computing power just lying around being unused (and say I have a lot), should I be mining or what?

wmf3• 13 years ago

No. You need specialized ASICs to mine Bitcoin profitably.

Avalon ASIC Bitcoin Miner – Prices for Batch #2

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