Bitcoin Forum

Must I really squabble in the depths of this newbie forum?? Well so be it.

I recently got into bitCoin mining a month or two ago (way too late apparently). As I am efficient at data mining, I learned a lot very quickly about bitCoin and the process of mining. Likewise the low scale mining i was doing with my nVidia card was borderline useless, but it did allow me the opportunity to get my feet wet.

I do not have any direct questions that will yield direct or theoretical factual answers. I'm looking ahead to the future where the bitCoin potential value will be, and how much more difficult it will be to obtain them due to the mining community soon to be flooded with ASIC hardware.

Well i'm a product of my destruction. Last night I put an order in for a 50Gh/s model of Butterfly Labs equipment. I was told that it will ship in July and that current orders are expected to ship as early as next week. I'v seen a few demo video's of people testing the hardware. So July is the magic date for me. Where the difficult lies three months from now will strongly determine what i will be able to mine at that given time.

Two things. Where do we realistically expect difficulty to lie with the hardware coming out? Iv seen some analytical data by users on this very forum putting estimates together 6 months ago saying we would be in the 100M difficulty area right now. Those were not accurate... Obviously the ASIC hardware release has been delayed but at that same time, Avalons hardware is three batches into the market right now. From the information I received from Butterfly labs my order is batch three as well. This means there are already thousands of ASIC product out right now currently crunching numbers.

I think we are over-estimating the market of ASIC right now. Since almost none of the companies are releasing actual order data (i'm assuming to not scare miners away from buying there product), there is no real way to calculate the amount of hash power that will hit the market with these devices. Unless someone has raw data that can be proven? As far as I know Avalon shipped 300 in the first batch, 600 in the second batch, and I don't know about the third that is in progress.

The minirig everyone keeps raving about that's suppose to super inflate the mining community can't even be ordered anymore. I'm guessing because the availability of chips is dwindling? Or the unit doesn't yet work. From what i understand some of these units HAVE shipped. If you look at he difficulty graph over the last few months its almost tripled! I'm guessing its due to the Avalon release and not sheer volume of people who "all of the sudden" picked up mining considering its barely profitable as it is based on exchange rates without running a large scale operation.

What are your thoughts on difficulty?

What are your thoughts on where its headed?

Do we really think difficulty will still peak to 100M like some "experts" say in the next few months based on the fact that ASIC hardware is already on the market and hashing away?

Would it also be safe to say that GPU hashing will be extinct (as cpu was pushed out initially by gpu) as a result to ASIC, hopefully dropping the difficulty down somewhat?

Also bitCoin value has a lot to do with the demand for it. That been said, as difficulty increases would it be wrong to assume value of bitCoin also increase as the work to create them becomes more and more difficult. This is a trend that exists right now though they may not directly correlate. It is fair to say as the difficulty has gone up dramatically over the last 4 months... so has the value..

Let me have it people :)

Oh and i'm Tony btw. I hope to become a bigger part of this community over time!

Pretty intelligent post for a "newbie." I think the "barrier to entry" regarding BTC investment and mining is what will continue to result in a rise in BTC value. When it becomes as easy to invest in BTC as it is to invest in other currencies that is when BTC value will stabilize.

Well thank you sir. Like I mentioned as soon as I discovered bitcoin i'v been frantically crunching data and putting together risk-vs-reward plans. I stare at the market all day, and i plan to continue to do this over time as i await my 50Gh/s model to arrive. I agree with your statement. I also dont think that will happen until all bitcoins have been mined. As long as there are bitcoins to be mined, and the value continues to increase, people will constantly be looking for ways to maximize bitcoin mining potential. The prices of asic will indefinitely drop dramatically once the demand for them does due to the increased difficulty and the return. One thing is for certain, the future is uncertain.. any attempts at assuming what will happen (based on posts on this forum a year ago) have been terribly wrong thus far. ASIC is currently on the market and the difficulty is not 100-300M like people said it would be Q1 this year.

yep i believe in the same,  AsiC prices will drop significantly in a matter of months once BFL starts ships, the early adopters of the ASICs will make alot of money however those who get theirs late, difficulty will be up through the roof and their ASIC will be obsolete.

@OP

Mining speculation (https://bitcointalk.org/index.php?board=81.0) is a subforum you should check out.  Also I'm going to whitelist you so you can post outside newbie jail... hooray for intelligent posts!

There are a lot of smart, and some-what smart people in the world.  If there is a device that can produce easy money, they will buy it and run it.  That means the difficulty will rapidly get high enough that the machines are unprofitable. 

When that happens is built around two things.

1.  How quickly ASICs are distributed.  Avalon batch two is imminent.  And BFL is trickling out orders.  ASICminer is also trickling out some hardware.  Soon, when the Avalon chips are in hands, everyone and their Dad will have an ASIC miner of fifty.   At which point, it'll be those people with deep enough pockets to stay ahead of the curve.

2.  The price of bitcoin.  The difficulty can be very high, but if the price of bitcoin is also high, mining remains worthwhile.  The same if it goes the otherway.

It may make more sense to buy coins and sit on them.  If Paypal does start taking Bitcoin, it's going to cause the market to jump up significantly to say the least.  People who are hoarding coins for that kind of an announcement are smarter than spending that money on ASIC hardware that is far away from shipping.

I did the same as you not too long ago. although by the look of things i might make out slightly better... i opted for a bunch of jalapenos instead of one big machine. my thought was if i have one and it goes out for any time it would really piss me off :P now it looks like jalapenos will be first and maybe give me enough time to get some coins before the difficulty gets too out of whack.

Has anyone seen an Avalon miner in action? I was thinking about going in on one of the ASIC chip group buys and making my own!

Are you an electrical engineer, or do you know some?  It's not going to be easy to make your own miner.  I know there's someone doing the PCB part of it with chips people buy, but I don't know too much.

Thank YOU tysat!!!!



This was my next thought! As long as people are sitting on some bitCoin, sayyy 100+, it may make sense to cash in hardware for more coin and start playing the exchange market. Banks make millions of currency exchange in todays markets. I knew a vice president of USbank who specialized in foreign exchange investment banking. I don't know 2 things about it but what i do know is with the USD value of bitCoin jumping around the way it does... it is a hell of a lot more profitable to play the market than mine coins at a certain point. What point i cant say i know. But if you look at todays little blip.

When i woke up, checked the market (nice little ticker on my phone ;)), and it was 140~. Up from the number i saw last night around 125-130.

Later today it spiked up to slightly over 160! Then trickled back down to around 150 where it is now.

My point is if you played that simple jump in value even having bought 100 coins yesterday at 125, and sold today at the 160 mark.. that's 3,500$ in profit in one day... now take your 16K$ and buy more bitCoin when it hit a low of 138 today and now you have 116 bitCoin :)  A 16% increase in possible levy value.. i mean its a stock brokers DREAM to see rapid and large fluctuations like this.

My conclusion is that making predictions about mining is very hard. I hope, like many others that i'll be able to mine enough BTC with my 50Gh/s before the difficulty skyrockets. But i think that in the long run the investment in a miner is smart. Even if all the coins are mined, there are still the fees.

Also even if the difficulty rises, so does the price. So i'm hoping for a "steady" pay-out.

My greatest choice to make is which mining pool to join :)

EDIT: Taking advantage of the huge fluctuations is smart, but not always easy to do.
Also i don't have "deep" pockets, so sitting on a big amount of coins is not possible for me.

Oh well, bitcoins are very interesting :)

I hear you. I was reading something about 50BTC having close to 50% or more of mining power? I'm going to make a special note NOT to choose them.

same here ;)
the amount of shares we'll get will be too low.

BTCGuild is much closer, check out http://blockchain.info/pools

Ahh there you go. I had the name wrong. Correct me if i'm wrong but we wouldn't want to join a mining pool with too low a hash-rate correct? Then coin discovery becomes less likely? Or more of mere luck over time?

Over a long enough period of time it doesn't matter, but it's nice to be part of a decent sized pool so you get consistent payouts.

Is it something like this:
Big pool[BTC Guild] - steady but low payout
smaller pool[Slush] - less steady but higher payout [more relative shares]

Yup, I am one actually! I'm planning on making one simple board to start that just holds a single asic and support circuitry (like power supply and high-frequency clock) with the data pins broken out to 0.1" headers so it can be plugged into a breadboard. People can then use this to prototype larger designs.

I can write highly optimized code (more so that what is currently out there to run these asics). Let me know when you are closer to a prototype and I will get you going if you like.


MOD EDIT:
Removed a bunch of duplicate quotes

You honestly think BFL will deliver? Hahaha.

No, see, he's great at data mining, so that's why he sunk thousands of dollars into a venture he obviously didn't investigate and.... I have no idea, where I'm going with this, it is just too comical.

i buyed one some moths ago. i think that it will never come lol

My thoughts on mining and difficulty are that the difficulty will always settle at a point that is relative to the amount of money people are willing to spend on the widest available production method.

If the most efficient (and widely available) hardware you can buy is 5Mh/s/dollar, then the majority of miners will use that hardware and the network hashrate will rise accordingly. This means, that unless you are on the leading edge with a new piece of hardware, you can never really gain much advantage.

For example, if Bob the statistically average miner maintains $1000 worth of mining hardware, and upgrades at a rate that is also average, he will never really progress in terms of his share of the entire network hashrate, which means he will always (again, on average) generate bit coins at a constant rate, assuming he is keeping up with the available technology.

Then again, I am a newb, so what do I know.

If you've tried to buy a decent ATI/AMD video card on Kijiji or craigslist lately, you'll find that many people are still full steam ahead on GPU mining...

And your good at talking..(from what iv gathered on all of your other posts on this forum) and not actually backing up what you say.

I'v personally spoken to the team at BFL.

There own blog stated yesterday that they shipped units. Regardless i'm not concerned with your opinion.

Go read something.

I tried to quantify the increase in difficulty/hashrate for a given number of BFL ASIC miners:

https://docs.google.com/spreadsheet/ccc?key=0Akhvf6-Gen09dDFMbGQ1NlRaTW9OMzVjSmJ4dGpPZkE&usp=sharing

Its still a work in process, but it might help you get an idea of where the difficulty will be.

Yea Theres a newbie board!