10,000 Bitcoin Mining ASIC Chips Arrive in Switzerland – 3 TH/s

http://thegenesisblock.com/10000-bitcoin-asic-chips-arrive-in-switzerland-3-ths/

by cgi_man • 13 years ago

37 53 13 years ago

thegenesisblock.com

chris_mahan• 13 years ago

so, just like in the gold rush of 1849, those getting rich are those selling equipment to the miners.

cryowaffle2• 13 years ago

It's more like "there ARE people getting rich selling equipment". There are plenty of miners getting rich.

betterunix• 13 years ago

Plenty of people found gold during the gold rush. That does not mean it is even remotely representative of the norm.

astrodust2• 13 years ago

This isn't manufacturing money out of nothing. This isn't generating physical materials with tangible value.

The only money being generated here is simply being vacuumed out of the pockets of investors losing money on trades or exchanges.

In that sense it's not unlike online poker.

dragontamer4• 13 years ago

This basically will signal an end to the typical BTC pools. At .1 BTC (~$10) per chip, it is now possible to beat a $400 AMD 7970 with just $20 worth of chips.

cryowaffle2• 13 years ago

This doesn't change the pools at all (pools don't change if everyone uses ASIC). This does probably signal the end of GPU mining though.

tomjen32• 13 years ago

Fuck bitcoin, if custom chips are that much cheaper the GPU power in cracking hashes then most key streching algorithms are worthless.

fatjokes2• 13 years ago

Such a waste of electronic computing power.

EDIT: what I meant by a waste of electronic computing power is that it does nothing for the world beyond pumping out more bitcoins. I guess it's more of my opinion on bitcoins in general than this particular artile. All the computational energy is not used to search for a cure for cancer, or aliens, or crack a code, or used to compute a deep neural net. I guess I would compare it to high-frequency trading---it makes people (a lot) of money, but doesn't deliver any net gain for society.

gbl08ma• 13 years ago

That could be said in the time of CPU, GPU or FPGA mining, but since these ASICs do nothing but Bitcoin mining, I think computing power is only wasted when they aren't running. In other words, I don't think they qualify as "computing power" for anything but Bitcoin mining.

DanBC• 13 years ago

But even when they're running all they're doing is pointless "mining bitcoin". And these ASICs are worse because they can't be re-purposed to do anything else.

All that computing could have gone to Folding@home and done some actual science. Instead it's just burning power and creating heat.

nadaviv2• 13 years ago

What about the electronic power and human work that goes to operating banks? By that logic, the alternatives to Bitcoin are much more wasteful.

Edit: What I was trying to say, that maybe wasn't quite clear, is that Bitcoin mining isn't wasteful because it helps protect the integrity of the Bitcoin network. Other methods for holding and transferring money requires trusted third parties, who also "waste" (probably much more) energy, time and resources to operate.

justincormack• 13 years ago

Thats a fair point but why should I believe in bitcoin not another crypto ledger? The idea is fine, and the idea of a validatable record is great, but why should I support this one?

cLeEOGPw2• 13 years ago

All the work effectively makes bitcoin more and more secure, so it isn't waste at all. Potential 51% attacker has less chances to succeed the more miners there are.

rmc• 13 years ago

Conversely, if these fancy chips become the standard mining kit, they will push regular hardware out even more. This means if you want to do a 51% attack there are much fewer individual people you need to compromise.

A 51% attack isn't based on the number of people, but based on computing power. If 30 people control 60%,then they control everything.

criley22• 13 years ago

It's not a zero sum game.

It's not a "waste" of computing power at all, in my opinion.

- If BTC did not exist, this computing power would not exist. The demand for this power is in addition to other forms of demand. This isn't taking away power from any other field, it's simply new power being added for a new cause. - The technology derived from this "arms race" can benefit far more than this field.

Why wasn't the moonlanding a "waste" of money, talent and science? Because of the training it provided people and the tools and technologies they developed, etc.

fatjokes2• 13 years ago

The technology derived from this "arms race" can benefit far more than this field.

Sure, I guess...

Why wasn't the moonlanding a "waste" of money, talent and science?

The moonlanding was a major advance for mankind, independent of all the long-term benefits that have since arisen. You're comparing that to bitcoins?

hoka• 13 years ago

Absolutely. I had a CS professor who lamented how much more time students spent playing games than studying, but acknowledged the fact that the video games industry is a gigantic stimulus to the computer hardware industry. Because games are always pushing the envelope of graphics and resource consumption, there is a reason for companies like Intel, Nvidia, ATI, AMD, etc. to produce better hardware. This hardware has led to benefits in the scientific computing realm, and may not have been developed without the bankrolling from gamers.

DannoHung• 13 years ago

Can you briefly explain how the development of the custom ASIC's for BitCoin mining are of utility outside of their purpose built role? I don't understand that line of reasoning.

nullc4• 13 years ago

what I meant by a waste of electronic computing power is that it does nothing for the world beyond pumping out more bitcoins.

This is a deep, though common, misunderstanding of what mining is for. The purpose of mining is to achieve consensus and protect transactions against reversal. The dissemination of new coins is a wisely-aligned side effect.

The computation here is computation spend making the history of Bitcoin secure and permanent. It's not a waste.

atte• 13 years ago

I'm fairly new to the Bitcoin world, but it seems to me that ultimately (in 10 years or so) one of two things will happen:

1) Bitcoin will gain large-scale adoption. As a result, the value of Bitcoins will greatly increase from what it is today.

2) Bitcoin will fail due to government regulations, better alternatives, or other unforeseen reasons. As a result, Bitcoins will become effectively worthless.

Am I oversimplifying so far? If I'm not, then it seems like investing substantially in Bitcoins (purchasing coins) now will either make me very rich in 10 years, or I'll lose my initial investment.

By the same logic, if I earn coins by mining now and hold them, I will either be rich in 10 years, or I'll lose my mining investments.

I'm not interested in diving into mining to earn a quick 10-20k while the market fluctuates, so as a long term strategy it sounds like investing is the more sensible and less time consuming option. Thoughts?

nullc4• 13 years ago

A lot of people agree with this thinking.

It's not the only possibility— e.g. Bitcoin could putter around for a long time basically where it is now, maybe acting as a very mild threat the keep the alternatives on their toes enough that Bitcoin never gets widespread adoption.

Right now it's possible to make a decent amount _today_ with mining as a small / hobby business, supplying coins to people who don't want to get into the mining stuff, without engaging in major speculation yourself.

ISL• 13 years ago

Puttering would still be inflation-corrected.

ams6110• 13 years ago

I see this "puttering" as the most likely possibility, since if they do hit some level of adoption that starts to threaten sovereign currencies, the GP's option (2) will come into effect.

tlrobinson• 13 years ago

That sounds pretty much correct. I compare investing in Bitcoin to investing in an early stage startup.

Regarding mining, each time Bitcoin mining technology improves there's a mini gold rush. If you can get your hands on the technology before everyone else you can make quite a bit of money for a few months. But there's also the chance your preordered miner won't be profitable by the time you get it. This may be why hardware manufacturers prefer to sell hardware (i.e. pickaxes) rather than mine themselves.

Long term, once Bitcoin ASICs catch up to the state of the art Bitcoin mining will be very a very low margin business. Only the most efficient hardware located in places with cheap electricity will be profitable.

vehementi• 13 years ago

Am I missing jargon or are they saying terahertz per second?

jgross206• 13 years ago

i think its tera-hashes per second

chmodd2• 13 years ago

It's terahash where hash means double sha256 that is used in the bitcoin proof-of-work protocol

oh_sigh• 13 years ago

What happens when all 21 million bitcoins are mined? How will transactions be archived if no one is putting in the effort to mine bitcoins?

nadaviv2• 13 years ago

Transaction fees are expected to replace the block reward by the time that happens.

chmodd2• 13 years ago

Which is year 2140 or so

richcollins• 13 years ago

transaction fees

nullc4• 13 years ago

The supply of "subsidy"— newly created coins— declines exponentially over time. So a long time before all 21m is mined, sometime around the year 2140 the amount of new coins created this way will be insignificant.

Bitcoin transactions can optionally provide transaction fees which are paid to the first miner to include their transaction. Blocks have a limited size in order to prevent the biggest nodes from centralizing the system by producing more load than smaller ones can handle, so there will be competition for access to that limited space. Miners can then be funded collecting these fees.

laserbrain• 13 years ago

http://i.imgur.com/zAMkNCV.gif

nerdo• 13 years ago

What is this in current $/hr?

jnbiche2• 13 years ago

If my off-the-cuff calculations are right, then a little under $10/hr for the whole batch of 10,000 chips that just arrived(i.e., each chip will generate about $0.01/hr), which seems pretty low until you realize that each chip costs only about $10. Break even point is about 40 days, right? Not bad at all. Unfortunately, difficulty will probably spike, so these rates are not sustainable. And who knows what the price will do.

Unless you're a very shrewd businessman and want to do this full-time, you're far better off just buying Bitcoins if you're interested in speculating on them. Just remember that Bitcoin prices will inevitably plummet, go sky high a few months, and then re-plummet. It's just what Bitcoins do.

pontifier2• 13 years ago

So... I agree that Bitcoin has some advantages, but it's disadvantages are quite high as well.

It seems to me that all the money going into Bitcoin mining equipment, and all the power being used to run it is essentially an indirect tax on Bitcoin usage... I wonder what the total value of Bitcoin transactions in USD compared to the cost of electricity to keep the block chain up is.

The true value that Bitcoin mining provides must be some low percentage of the total Bitcoin transaction volume... or am I missing something?

dragontamer4• 13 years ago

It is impossible for Bitcoin transactions to take place without miners. BTC miners provide cryptographic integrity, proving that transactions took place at a certain time between certain people.

Bitcoin is purely held up by the community of miners. The integrity of BTC becomes greater and greater the more trusted miners enter the system.

pontifier2• 13 years ago

Couldn't this be achieved in some sort of other way? One that does not require hundreds of thousands of dollars worth of equipment and electricity? Couldn't a regular PKI message digest on the transaction list work?

I suppose there's something I'm not getting about this.

10,000 Bitcoin Mining ASIC Chips Arrive in Switzerland – 3 TH/s

Related Stories