Bitcoin Forum

Seems that ASICS is have a detrimental impact on BTC.

(1) A huge amount of hashing power is now in the hands of companies that can stamp out one set of chips after another.  Few seem to make it to retail (i.e. BFL)

(2) Most of the former GPU miners, once a large support base for the coin, have lost interest due to the BFL fiasco and the fact Avalon shipped only a tiny number of retail devices

(3) Concentration of network power in the hands of a few is a disaster.  Precisely the opposite of what BTC was supposed to be all about

(4) Raw gh/s figures are irrelevant given that only a tiny number of firms have ASICS designs.  THESE COMPANIES NOW EFFECTIVELY CONTROL THE NETWORK

LTC is looking very strong right now.  Holding its USD value as BTC falls.

The two may meet in the middle

No. Slowly it will decentralize again. IMHO, ASIC's are going to be one of Bitcoin's biggest strengths in the future!

What a load of nonsense. Seems to be an amazing number of LTC supporters showing up this week talking nonsense. Part of the FUD campaign against BTC in preparation for MtGox's launch of LTC trading I've no doubt. LTC has been pump-and-dump since inception. Please take note everyone.

This.  If LTC ever gets large enough it too will have ASICs and be stronger for it.  Without ASICs the miners = network defenders are fighting with one hand tied behind their back and the attackers will be using miniguns. 

Not having ASICs deployed doesn't mean an attacker is somehow prohibited from deploying them against you.

I don't see ASICs killing BTC.  There's a growth problem right now.  ASICs start expensive and get cheaper.  As a result, you see an early concentration.  This is why I'm very happy with ASICMINER's cheaper price point for the USB Erupters.

They are not a great investment.  There's still a reasonable chance that even at 1 BTC they will not make a full return on the investment.  But there is a chance.  Meanwhile, they're an extremely low barrier to entry mining device.  330 MH/s isn't a lot in the scheme of things...until you have tens of thousands of them distributed all over like we do today.  BTC Guild alone has sold over 2,000 in 5 days.

Once you have one, you never have a reason to turn it off.  It's extremely unlikely that they will hit a point where they cost more to run than they generate at 2.5w each.  They're a small step towards decentralization, and you can expect as ASICs mature there will continue to be more low level offerings.  They won't have the RoI of the bigger units, but they will help keep the hash rate from being fully concentrated in massive mining farms.

Many former bitcoin GPU miners indeed think the way the OP stated. Try reading BTC-e trollbox.
I think the problem here: those people earned some money with mining and they got accostumed to think about cryptocurrency as an easy way to earn money (they don't understand how bitcoin works, what they actually do, why it's valuable, they don't even want to know that). They frustate about the need to invest money in new hardware to remain profitable and want everything to remain the same. Btw many of them were denying ASICs existence until very recent days. Most likely their frustration is increased due to the fact they sold huge loads of BTC before the price went up.

AMD is the only manufacturer with a GPU design that has 3,200 ALUs, in addition to having BIT_ALIGN_INT.   Therefore, ONE COMPANY (AMD) EFFECTIVELY CONTROLS THE LITECOIN NETWORK

[see what I did there?]

I disagree.  Most of his points are accurate and reflect the people that I know.  The price lowering though is coming more from the larger ASIC players not only controlling the supply of BTC's but also selling more of them then a typical small miner would do.  A small miner is more likely to spend  BTC in the Bitcoin economy while a larger player is most likely selling most coins right into the market. 

The real failure is that many small miners DID invest in ASIC hardware and they DO NOT HAVE IT.  If they had that hardware now, the price would probably be more stable and higher. 

i dont think so.asic can prove a huge power of calculate.it can improve shield of this system.and also reduce confirm time.

Yeah they are.  The people that bought these asic's invested a lot of $ (or were early and didn't) and are trying to get the $ back/quick profit as fast as possible.  This will continue to happen for awhile.

The largest ASIC player is owned by thousands of shareholders each who receive a relatively small amount of Bitcoins.  If Joe Smith average AsicMiner shareholder gets 3 BTC in dividends and sells them how is that any different than Joe mining 3 BTC and selling them.

You did nothing with a point.   AMD is NOT mining and the products are distributed well and fairly.  Litecoin is now more decentralized then Bitcoin.  I still think BTC is the way to go, but the current security of BTC and LTC are probably near equal now thought he methods of attack would be quite different on each network.

It would be quite hard to raise enough scrypt mining power to take 51% of the LTC network.  Right now very small combinations (as few as two) of ASIC companies and pools are more then 51% of the bitcoin network.  

I think this is temporary as Avalon may ship out large volumes of chips that would at least break up some of the centralization.  I

But that ONE company sells to any and all who want it. No shortages. No taking orders months before availability. AMD is an actual supplier.

ASICMiner has kept the vast majority of its output for itself, then spread around a bunch of USB's to even out the rest of the network at a hugely inflated prices.

Avalon appears to be very slow in fulfilling promises (i.e. orders)

Butterfly Labs... well, I got my Sept 2012 order yesterday, which explains that.

And all the other rumored ASIC producers are targetting those who are already wealthy from mining bitcoins already, ramping up production on multi-thousand dollar machines.

Face it, the reason that Bitcoin took off the way it has so far was because everyone could participate, profitably, with a minimal investment. Seeing the recent shifts towards Litecoin from Bitcoin (LTC is now 60% more profitable to mine than Bitcoin, and this is after a probable influx of GPU units that have fled BTC do to lack of profitability, that should be the biggest wake up call.

Seems everyone with either ASICMiner shares, Avalon miners or the small contingent who have started getting orders from Jalapeños are content so they're quick to defend the status quo and say "of course nothings wrong!", while the populace that created and drove BTC's value is slipping away.

And I say that as a new ASIC owner. I'm more than happy to sell, BTW, but not at the prices that get thrown around on here, as running it will be a money losing operation after month two. Until it sells, I'll be using the BTC's generated to:

A) buy ASICMiner pass-through shares
B) accumulate Litecoin and PPCoin.

And the dividends from those shares will be devoted to buying LTC's as well.

Greed and ASICs are killing Bitcoin. Litecoin at least attempts to restore the peer-to-peer aspect... my hope being that if Scrypt is as vulnerable to ASIC's as some nay-sayers say, that the developers can stay a step ahead of ASIC hardware if at all possible...

Bitcoin generates blocks (and confirms) every 10 minutes. So many ASIC's have flooded the market that apparently blocks are getting generated a little faster than that, but as hashing power stabilizes, it'll be 10 minutes a block. Extra hashing power doesn't translate into faster confirms. Or at least that's my understanding, I'm happy to be corrected if I'm wrong, though.

First, that is false.  There are not thousands of INDIVIDUAL shareholders of ASICMINER and secondly they do not pay out enough of their profits to make this matter.  

Ummm .... no, sorry.  Profitability in mining is not "the reason that Bitcoin took off".

ASIC mining power will be decentralized. I stopped mining with GPU's because it was more work than it was worth but with ASIC devices it's more convenient. I have some running personally and our Bitcoin startup has some as well.

In fact our company is looking at investing a larger sum in ASIC's. Not just for direct profit, we actually want to support the network. We have a stake in Bitcoin overall so we want to do that. Not at a direct loss but we do want to support the network and make a small profit while doing that.

We'll also run everything ourselves. That's an important part of the decentralization. It can't be just one or two datacenters or we're absolutely screwed. It has to be at least hundreds all over the world.

ASICs will increase the security of the network long term and will be the power of bitcoin in the future! There are just some bumps along the way.

OP, you don't understand how Bitcoin works. Owning hashing power does not mean you control the network. Miners do not control the network, full nodes do. Meaning nodes which maintain the blockchain and relay new blocks and new transactions.

The only reason why 3 is bad is because it lowers the bar for one of these companies to start a 51% attack if they desired to destroy Bitcoin and their investment with it.

 Isn't the top quote stating profitability as one aspect the others being participation and minimal investment?............

Bitcoin needs to stand up and be counted against Litecoin, ripple etc. Maybe we all sing only from the song sheet born from our vested interest, however if it's now impossible to state anything negative towards btc without being branded an altcoin sympathiser then it's impossible to have a reasonable discussion.  

Early miner Enthusiastic nerd that nobody understood just doing it for the kicks? or lazy early adopter expecting something for nothing.

Modern miner Fat corporate cat in an ill fitting suit salivating with greed or valiant bitcoin soldier deffender of the blockchain?

Ugghhh ...  FFS.    This thread is in the BITCOIN DISCUSSION board. If this thread is not about Bitcoin but instead is about Bitcoin vs. alt coins, then the thread should be moved to the altcoin board.  Or off to wherever alt coin conversation should occur.

But if the argument is that ASICs are killing BTC, then why would Litecoin or Ripple or anything alt-related have any relevance here?

Miners don't control the network?  Only full nodes do?  What???

Sorry, but every miner out there is securing the blockchain.  No one "controls" the network.  Only a miner with 51% can manipulate the network.

You are right, I should have been more precise. Each full node is sovereign in control of Bitcoin for it's own use meaning every full node decides for itself what Bitcoin is and you are of course correct, no one controls Bitcoin. Not in the least the miners.

+1

ASICS are not Killing Bitcoin but securing the network more and more and this will increase the value

http://www.youtube.com/watch?v=uIivL1TYV1g

I GPU mined for two years and it was complete pain in the hole. Noise, heat, crashing while I was away for a few days, worrying about the cards catching fire, burned out PSUs etc. The daily problems were endless. In contrast plugging in a block erupter is simple and you don't even need a dedicated PC to do it. Being laptop friendly makes them accessible to a whole new range of people. The ROI isn't guaranteed but mining ROI has never been guaranteed so that shouldn't be a consideration.

Mining technology is always about first mover advantage and the handful of companies that have made the first ASICs deserve to be rewarded. This isn't going to kill Bitcoin. Saying that it will is just as absurd as saying GPU mining would kill Bitcoin when Artforz was the only person who knew how to do it.

1) Few seem to retail ?   I know 3 Asic manufacturer that delivered working chip as today... BFL, you can order rigs and chips.  Avalon, sold Rig, selling chips, AsicMiner you can order rigs.
All 3 are selling, with rigs with a price range from 1 to thousands BTC ! I call it Asic for the mass.

2) My GPUs are still runing, and I manage to economise enought BTC and $ to have product from the 3 manufacturer.

3) I agree that AsicMiner own too much power, and this could lead to a disaster, but im pretty sure this is a temporary situation, other big farming operation are bulding, many more Asic will be availlable for the mass, at cheaper and cheaper price.. just let this 6 month to a year, and power distribution of mining will be much more decentralized.

4) 3 control the network ?  as for now, thay are all selling mining power to whoever want to buy.. Just control your finance and order some.  I've taken a second job to pay for my asics, and keep this second job to pile more fore future gen asic.  I made the choice to be on board and doing what I need to !

+1  :D   very nice !

I cannot agree more.

the thing about owning enough hash power to mess up the network is that anyone who has that kind of money is obviously really into money so it wouldn't make any sense to attack the network when you could make more money not atttacking it.   Asic adoption kind or reminds of how bad it sucked to go to middle school from elementary school. it was huge and they made you take showers with strangers.  after a little while tho it turned out it wasn't so bad.    Transitions are always scary.     Bitcoin is way too big for some rich a hole with a house full of specialized circuitry to take over.  There's too many of us blue collar a holes with garages full of mining gear. 

You are forgetting the way the US Gov't is trying to shut down Bitcoin atm, right now would be the perfect time for them to attack and kill the coin.  Not saying they would go to such extreme measures, but the way things are atm, BTC is at it's most vulnerable point in almost it's entire history.  This will however settle once more ASIC miners are shipped to more and more people. 

Every time the price dips on the exchanges, a new batch of boogeyman-seeking posts escape the speculation board and end up here.

Not long ago, the preferred boogeyman was "the manipulator".  This week, looks like ASICs are taking the heat.  Next week, it'll be the Winkelvoss twins, or the NSA, or the flying spaghetti monster.

Einstein was wrong, compound interest isn't the most powerful force in the universe.  That crown belongs to the insatiable hunger of the human mind for finding false causes for chaos.

yawn PPC sidesteps 90% of this entire problem/argument/issue

So does PayPal but they both require centralized control.

Hey, I've been wondering, Litecoins are not immune to ASIC mining, they just need ASICs with a whole lot of memory to do it, meaning they would be way more complex and expensive. Once Litecoin goes up in value to the point where it would be worth it to invest in Litecoin ASICs, won't Litecoin become even more centralized, just because Litecoin ASICs will be very expensive to own and owned by a select few wealthy types, compared to Bitcoin, for which ASICs are dirt cheap (after initial design expense)? Right now it seems like Litecoins are more decentralized, but I fear eventually Bitcoin miners to Litecoin miners will be like Honda owners to Ferrari owners.

I do not agree.  Litecoins are in technicality ASIC mineable but in reality there is no point.   To build an ASIC that would mine scrypt well would be to get near or even exceed the cost of using a GPU to do the same thing.  So you could build a scrypt ASIC but it would not make sense.  In the end you would have an item that could not do anything else and it would have low resale value. 

Proof Of Work is not an effective way to achieve consensus in a p2p network.  http://www.links.org/files/decentralised-currencies.pdf

the only thing it achieved is an industry for SHA-256 hashing.

I see that..

-Nvidia could have and should have been there, if it were not for the lack of driver support
-AMD gpus are and have been readily available, WORLD WIDE ;D
-TMSC founderies is a monopoly

Asics and the greedy that pre ordered them, have likely damaged BTC beyond repair as I seriously doubt the masses will buy into this USB'd pipe dream for another round.

Some call it, 'the asic scam'. I say its Bitcoin's 2nd premine.

HT xD

That isn't true.  It isn't true even with full strength scrypt but the point is moot as the scrypt used in Litecoin was intentionally weakened significantly (2^10, 1, 1).  It is more than 100x less memory hard than the default for low security applications (2^14, 8, 1) and closer to 8000x less memory hard then what is recommended for high security applications (2^20, 8, 1).

They have ruined my personal experience of bitcoin..  but thats more to do with BFL than asics.  I wish i had spent my money on GPUs 15 months ago and not pre ordered with BFL.  I think by the time i do get my asic it will be a long wait t get ROI. 

Asics have defiantly changed the game, not sure if for the better or worse yet though.  Maybe we will see more specialised hardware for LTC soon, I just hope it's not from BFL.

How do people like this think their smart? Like is their an over 18 rule on this forum?

While bitcoin was cpu, or at least gpu bound it was in it's most decentralized form.

If people were so worried about the value of all over btc to fiat the the guys like friedcat should take fiat as payment. At some point they have to dump large amounts of btc to pay foundrys. Shippers. Workers etc. Those people I'm sure aren't going to accept btc. So why not just protect btc and sell your devices for a fair fiat price

There was still the threat of botnets.

This is a single parameter that can be changed with blockchain consensus and a new software release.  Considering most the users of scrypt coins are anti ASIC that would not be a tough sell to change it. 

Greed will kill ASICS by end of 2013... Bitcoin hijackers will be eating their chips.

http://bitcoinnews.io/dan-kaminsky-predicts-the-end-of-the-current-proof-of-work-function/

And universities using their idle supercomputer resources. Oh, and the that of someone who wanted to destroy Bitcoin making ASICs in private, instead of selling them to dedicated bitcoiners.


I think Mr Kaminsky really screwed up in this prediction. Miners have way too much invested to switch from the current function, it will be nearly impossible to build up an alternative mining infrastructure that can be as secure as the current one quickly enough to just switch to it, and besides, Gavin has absolutely no interest in switching the algorithm, either. He specifically said so when asked about that article.

I think the unguided may kill the BTC like the Liberty Reserve before.

It does not care about the packaging you used as ASIC is a method to pack your needed as there is no way to block something completely like combat. I have read news. For example,The PRISM may be abused by some people even the starting point is reasonable.


Remember, ASIC is not so powerful than expected. ASIC only concertrate on one purpose which are stable and reuseable. I currently am reading about the design, In 2-step SHA256 case, the sellers put the simple circult as L-U decoder based on software written. packaged in smaller size (28nm or even smaller), connect so many to speed up as the design is heavily connected with software and hardware like professional soundcards.

I have studied DSP before. I may have some clues about the usages that I have to find another way when the competitions...!

ASICS not killing BTC, the banker, or government can kill BTC.

YOU SAY ASIC is just a form of packaging, very good. I think the problem is not on packaging method used. It must be on some people...

You need to find better translation software. What's your native language?

Good point.
I wonder how hard is it to spot that your GPU is part of the botnet :)
Also how big are these botnets these days?

This. Those USB thingies are the real deal in terms of BTC decentralization. Plus, they are absolutely the best way to "spread the Bitcoin word".

Is it really true, did anybody make the calculations considering exponential growth of difficulty?

I wouldn't like to have one of my laptop's usb ports busy if it doesn't generate any significant amount of bitcoins (and consumes energy that costs something too).

+1

Bitcoin is falling because companies are cashing out large amounts of invested BTC to USD produce tangible products, i.e. ASIC.  LTC is holding value the same way my monopoly money is holding value, no one cares what it is worth unless you are in the game.

Can you state your source?  Which companies are cashing out?

Also, I imagine that those that aren't involved in some way with Bitcoin don't really care what it's worth either.

I like how you misspelled "they're/there" twice while complaining about someone else's intelligence.   :D

As ASICs are produced, whether they are shipped to purchasers or used by the companies that took pre-payment, or made/used by any other third party the overall hashrate of BTC climbs. This means the difficulty climbs, and the profitability per GH drops over time.

For any ASIC x that can mine y GH/s there is some point z in the future where it would no longer be profitable to buy it at price p . If I order an ASIC for price p now, I don't know when I get it will be before or after z. This is a problem and why I have not ordered one and instead got a GPU and mine LTC instead.

People already involved in BTC for years need to understand the attitude of new users, they have no huge loyalty to BTC over LTC or any other crypto. They are not in any GAME yet so they don't care about any coin, they learn about them, then decide which to get involved in. It's dangerous to think a newbie will take a risk on an ASIC pre-order over hardware that they can buy today, or already have to mine a scrypt coin immediately purely because of the momentum BTC already has.

Such situation over time may cause BTC community to shrink and the LTC or some other alt coin community to grow, and perhaps some day overtake it. I think it's arrogant and BTC-biased to think this is not possible.

man oh man, who saw this coming?

oh yeah, anyone with a fucking clue

when everyone is out to make a quick buck the money slows down eventually

OP makes valid points.

However I think (well at least hope) that more ASIC manufacturers will emerge and competition will increase.

The whole Asic & ltc thing is nothing more than that http://www.youtube.com/watch?v=768h3Tz4Qik

The difficulty will increase also if hash power increase. So, I don't think ASICS will be able to kill BTC.

Nope.  If ASICminer was not mining they would be, but for each USB stick you buy from them, they can add many times that in hashing power to their own farm.  At BEST you are just allowing them to place more hashing power online without taking 51%, at worst the majority of the network.

Everyone buy an ASIC - so it won't break Bitcoin - same way as GPU/FPGA-Hashing appeared...

Like i said before asics will be available at 1/10th the original retail price... that is the point at which asic ppl will give up and the long term visionaries who are not there to make a quick buck stick around and wreap the real profits as btc will become viable as a long term investment. At that point im not sure what the ground will be on btc could be $10 or $50.. but looking at the asic community for the fear index denoted in cost to buy an asic.

Kaminsky's prediction can come to pass by LTC simply superseding BTC as the dominant coin, and that is in fact the most likely scenario for that to happen due to resistance of BTC developers and BTC miners to consider any change in hash protocol.

Personally I believe the current dynamic we are seeing in the BTC price decline has nothing to do with government regulation, Gox or ASICs, its just the final stage of the deflation of the bubble and it will bottom out in the $10 to $30 range following a curve much like that after July 2011.  But unlike 2011 BTC now has a competitor that is showing independent and stable valuation, that presents a huge risk that BTC won't rebound in value as people have other coins to put their money in.

Now you might argue that their are all these SHA dedicated ASICs in existence now that can't move into LTC so they will just keep mining BTC and all those ASICS have sooooo many more hashes and are more 'secure' then LTC.  This is correct on the surface but irrelevant, coins derive their exchange value from the number of USD that people are offering for the coins divided by the number of coins offered for sale, past expenditure of 'Work' are irrelevant.  If the number of dollars that want LTC exceeds the dollars that want BTC then LTC will be worth more and will be the 'growth' coin.

Already total LTC mining revenue is 27% of BTCs, and if LTC maintains it's current price and BTC declines to the $20 point then the two coins would be at equal mining revenue.  If we see any kind of significant increase in LTC value following the highly anticipated (and hyped) inclusion of it on Gox then the cross over can occur with very little further decline in BTC valuation.  Their is also likely a zero-sum game here too, the customer base for BTC and LTC are nearly identical and it's likely that their is a limited pool of dollars and that a boom in one coin will always result in a slump in others.  A very large boom in LTC could cause such a drying up of dollars offered for BTC that it collapses down to levels that are effectively fatal as they will permanently remove the perception of BTC as a viable long term investment.

I really appreciate you being here :)

How do you figure? Bitcoin customers include those who use BitPay with all their businesses, and Gyft with all their businesses, among others. I don't know of many Litecoin customers aside from Thepiratebay and their donors.

Sorry I should have been more precise and said speculators rather then customers, I call people who spend coins users and BTC indeed still has a larger user base, but because prices in the BTC economy are in USD the user base has no net effect on valuation.  The pool of people who buy coins from exchanges for purposes of speculation (allong with miners) are the ones that set a coins valuation and they can very easily move to a different coin, just about anyone who speculates in BTC would be willing and able to buy LTC as they already have all the skills & knowledge necessary to do so, much like a customer for one car is potentially a customer for any other.  Because ALL coins value is almost entirely speculative right now the degree of penetration with merchants is not really relevant to valuation in my view.

Do you think, in that case, LTC could be percieved as a viable long term investment?

No we are all fine.

These asics are not interested in breaking bitcoin themselves, so if they mine, they will try to distribute their hashing speed on ifferent pools and etc. Otherwise they will LOSE IT ALL too.

Bitcoin will survive and have stable network doing those calculations. It's only that mining for simple basement dwellers becomes dead. And opportunistic fiat flowing into bitcoin slows down, lowering the price at that.

Only thing I would like to see - lesser reward for block in next 4 months, so those asics don't get to print too much money daily. They should be awarded with ~25% over their electricity and maintenance costs, not more.

The golden rule of Bitcoin is do not change the block reward structure Satoshi originally setup.   Changes in protocol,upgrades and tweeks are fine but not to deviate from the original Satoshi money supply. 

The companies which build the ASIC's are killing bitcoin. Look at BFL for example. They are using everyone's 'pre-order' money to build their own machines and then rape bitcoin themselves, only shipping when the difficulty goes too high.

but they do not rape bitcoin :) bitcoin still works

they're raping the original intentions behind it

They will.  Difficulty will keep rising until the ROI% over capital and electricity is low.  The block subsidy will not change until block 420,000 when it drops to 12.5 BTC.

So how do we take our Decentralized Revolution back ?

Want to slow these asics down ? SOLO MINE.

If just 25% of the sha-256 and scrypt hashpower was to suddenly switch to soloing BTC or one giant GPU only pool, what would that do to the asic hoarder's getwork/s rate ?

Like a swarm of locusts..

HT xD

Not much and that is the point of ASICs.  They so totally eclipse the power of GPU's that GPU's become irreverent.  This would be OK if ASICs were evenly distributed but they are not. 

We gain very little in security with a high hash rate if it is all controlled by one or two entities.  Security is a high enough hash rate that it is hard to mount a 51% attack AND that hash rate being distributed across many different unconnected people and groups.  I do not think litecoin is better then bitcoin, but right now litecoin would be harder to do a 51% attack on then BTC.  This is because one way to do a 51% attack is to compromise existing (concentrated) hashing power, not just adding new hashing power to compete. 

The second issue of course is that many small GPU and CPU miners were interested in bitcoins.  They are the ones that purchased stuff through me and others and spent BTC vs just cashing it out.  Large consolidated miners cash out, and do so in volume as they get coins.  We can all see what this does to the price. 

Asics will continue to devalue bitcoin, plain and simple..

People did not buy asics to secure network, they bought it to make money..

Asics owners are selling their coin to recoup the cost of the asic themselves..   

More and more asic owners will continue to put downward pressure on the market..
Not to mention BFL selling all the coins they have been mining with the asics they are selling as "NEW"



This is not hard to understand people.. 

It is just a bubble burst. That would have happened even if there were no ASICs at all. People are spending money on their vacations now. I expect speculative pumps and dumps during summer. Then people will come back with their money and start buying again thus stabilizing the price. I hope so :)

This is where you are trolling.  BFL is not the ASIC mining culprit.  If they are mining it is on a small scale to test.  Avalon has obviously done some mining but I also think it is not large scale.  ASICMINER is the one that is doing the large scale mining.  If you compare the other two to them, BFL and Avalon are not on the radar.

So, people who invested heavily in mining equipment with hopes of getting rich quick are causing a surplus of bitcoin supply, thus driving the price down and selling their newly minted bitcoin to people who want to hold on to/spend bitcoin at a reduced rate.

I don't see anyone losing here or anything being killed, except people who overvalued coins when they were hot, and weren't planning to hold them long-term are getting the shaft. That's the inherent risk in any market.

Agree
------------------
Bitcoin is an idea worth more than its exchange value

No, or at least it will be massively reduced compared to the expectations that have been built around BTC.  If BTC ever ceases to be be a viable long term investment then it takes every other coin with it because it will be obvius the LTC would also have a successor some day.  But I wouldn't be surprised if it takes several such successions until people finally realize that the value in crypto-currency is the CODE not the COINS and we are going to see a succession of innovative coins that gradually supplant each other on technical merits, much as we treat every other piece of software ever made.

Exactly ! And thus why we must act before the network explodes.

Gpus are irrevelant only if 100% of the asics were in the hands of the hoarders. Imagine a 80 Thash, 20k node P2P pool chomping away at the blocks....

HT xD
I'm drooling at the thought of thousands of p2p nodes. ;)

 :o

It seems that ASIC is the evolution of mining, surely ASIC's will even become more powerful as time/difficulty increases. The important thing to remember is that Bitcoin promotes trade and there are a lot of great ways to make Bitcoin besides mining. There are lots of ways to get btc, if u dont like ASIC's then stop mining..

I give thanks for companies like ASICminer that actually delivered.. u snooze u looze..

Anyways bitcoin wont be monopolized like diamonds.. my opinion  ;D

Please elaborate a little as to where and how people can aquire BTC without having to deal with a centralized source.

The manner in which this technology was released, REAKS of collusion between the devs and companies involved. They sold Mr. Nakamoto's soul for a handful of 3M diff blocks.

Btw, the only thing Asicminer delivered, was black market pricing.

HT

and what exactly you gonna do.

You wouldn't be asking that, had you read (instead of erasing) everything I said after ".. network explodes." ;)

HT xD

ASICS are not killing Bitcoin, they are moving it into the future.

I cut it because I do not understand it. imagine what, thousands p2p nodes and what. 80ths of hashing power and what then. Please dont take it as personal offense, just trying to figure out, what can be done.

as I see situation with GPU mining, they are doing pretty well by mining LTC which in no way to be attacked by ASIC and mining LTC is much more profitable then BTC. 1.5 times more profitable most of the time.

I ran the numbers and they are depressing

https://bitcointalk.org/index.php?topic=251347.0

Asics are good for btc, they are easier to operate than GPU's so they provide a large mining base, and smooth transactions.

Asics could kill people's interest in BTC, though, since many people will be excluded from mining.

No one average is getting 3 BTC in dividends. That is an early adopter big shot not the average Joe Smith. You probably don't own a single share.

How do you complain about avarice when you have an ASIC, Asicminer shares, and a huge stash of LTC and PPC?

BTC
No offence taken lol.. I thought the deleted part was easy to understand.

Who knows what will happen. That depends on how many are willing to pile on, and how low the gpu : node ratio will affect Bitcoind.  1:1 is ideal and means that we are not required to divert all of our hashpower for this to have a significant effect. ;)

Go ahead.. keep mining as you were. All I'm asking for is, a minimum of, 1 piece of mining hardware and 1 Bitciond node per person.

HT xD

p.s. Scrypt is asic proof.. for now... :o

some people here need more sleep, apparently

why makes monopolization of mining power, BTC less peer-to-peer? Gold is perfectly peer-to-peer even though most people don't wash it themselves...

Who mines and with what is irrelevant, as long as no entity is over 51%.

The peer-to-peer part, in case you have forgotten, is not in the mining but in the usage.

And again it is very well possible that ASIC technology results in a larger number of households mining. Asics are much smaller, cooler and easier to run than GPU miners.

and over time ASIC hash rates will go up and the cost for them will go down. I'm sure if you look through the ancient posts you'll find the same complaints and statements from people who couldn't wrap their minds around big expensive GPUs.

Asic's shouldn't be compared to what the GPUs did to BTC because of it's pricing, availability and the massive jump in hashpower they bring.

I'm getting tired of this..  "everything is ok now... see everyone can buy them... " garbage !

@leopard2 Those large numbers of households will never see a return on their investment, in Bitcoins. Notice I did not mention f i a t. (pardon my swearing)

The story that this will bring stability to the network is BS, and will only help to fatten the hoarders. 1BTC .. F that !

HT xD

Simple. I ordered my ASIC out of greed nearly a year ago. Running the numbers and salivating just like everyone else. In the intervening period, seeing what's happened and extrapolating what will happen I think it's clear Asics are a net-negative to the currency. Sure, the network has many more hashes than it had a year ago. But that's not what's important. What it's starting to lack, and what will never come back, is the excitement that everyone had about bitcoin when it was something that everyone could participate in, to varying extents.

Put another way, bitcoin would be stronger, more valuable to everyone with 1/10 the network hashing power but 100x the miners, than this consolidation we have now. When the only investment required was a graphics card that many people already had, they participated and were excited about it. When the network devolves to exclude them, when its left with a few pillars of power (asicminer, a hand full of Avalon owners and a handful of mini rig owners), all of which require significant investment, the outside world will shrug their shoulders amd look on. As a consumer, for instance, I know that I have not been clamouring for an e-currency with irreversible transactions to send to vendors who may or may not be cooperative if there's an issue with their product. And I certainly don't wish for the means for my friends to send me money at no charge, only for myself to have to be hit with a wire fee if I need that money as cash. Especially not when they could just hand me cash or a check.

I very much doubt many other consumers wish for that either. But when they can at least participate, they then get excited about it and talk up those features. Don't believe me, that's fine. But that's my stance.  In the meantime, I'll continue on in my hashing, knowing or feeling like this is a dead end.

Rant all you want, but it was inevitable.  Any time people see an opportunity to make money by getting ahead of the pack, they will, even if those profits are short lived.

Let me go back a few years.  I had an nVidia card that could only mine about 66 MH/s, which wasn't a long but I could earn a few coins a month, enough to offset the costs when coins were only $2-5. People then started buying 5970 and other cards and built mining specific rigs.  People like me that didn't believe at the time that spending a several hundred dollars on a dedicated miner was worth it, dropped out and stopped mining.  The mining started going to the guys building the dedicated GPU rigs with multiple cards, often buying from craigslist or ebay to snatch up as many cheap cards as they could.

Along comes ASIC, now you have people spending money upgrading to ASICs while those with the GPU mining can't compete and are getting pushed out of the market.

It's the same game.  I have an Avalon, but I know that within 6-9 months, the difficultly will be so high that I probably won't make enough to offset the cost of electricity.  Once I reach that point, my options are to either spend my saved up coins on a better, more efficient rig, or drop out.

So even though ASICs are taking over, a year from now, there will be Gen 2 ASICs that are twice as fast using half the power and will be much more profitable.  Join the crowd or get out of the way.

Way to miss the point .... here so it won't offend your sensibilities ...  If Joe Smith average AsicMiner shareholder gets x BTC in dividends and sells them how is that any different than Joe mining x BTC and selling them.

As for me not personally owning any shares ... WTF does that have to do with the price of tea in China.

I agree that ASICS factories are bad to decentralization in short term, however the market is free and anyone can try do best anytime.

Crying is free too. In Portuguese we say "o choro é livre".

http://img2.mlstatic.com/plauto-cruz-regional-o-choro-e-livre-lp-autografado-78_MLB-O-228267999_914.jpg

I've come to agree with the OP's assessment, Dan Kaminsky agrees with us as well.  ASICs (and in fact every generation of mining improvement including GPUs) has a centralizing effect on mining and the effects are cumulative and each the generations have come too fast for any kind of re-democratization to occur.  And the current ASICs on the market now are not remotely the end of the line, theirs is a LOT more power that can be squeezed out of smaller feature chips.

Kaminsky thinks all this centralization weakens the network against regulatory pressure because the miners are so small in number but so individually BIG that they are worth targeting (theirs also collusion potential amongst miners).  I think that long before that happens the user base will vote with it's feet and move to what ever coin is more decentralized simply based on the threat that such a thing MIGHT happen.  Currently LTC is that obvious go to coin but it will probably get ASICs some day too (and soon too if it supplants BTC).

The long term solution is probably a chain that mixes a large number of hash algorithms together so as to make ASICs quite wasteful and expensive to develop as you would need a specially designed and fabricated chip for every algorithm.  Even then it might be necessary to defensively rotate in and out some algorithms if they are targeted for ASIC development.

because Joe Smith the miner actually CREATED something, whether it is digital or physical, it still exists. Joe Smith the shareholder simply threw money at someone in the hope that they knew what they were doing and walked away. He isn't going to spend his coins in the slightest, just let him know when its time to cash out.

Joe the miner is the reason developers create services for coins because they know he will spend them

Joe the shareholder is the exact type of person who Bitcoin was designed to combat, a get rich quick suit who couldn't even spell Bitcoin if you gave him all three vowels

so why don't you stop worrying about offending other people's sensibilities and realize that by putting the CREATION process in the hands of few, it completely kills the whole decentralization argument.

Which is the only thing keeping Bitcoin from going belly up, it being too decentralized for world governments to try and attack.

But god damn, some of these fucking people are trying really hard to make that not true anymore

I don't know, for roughly 1 BTC you too can be an ASIC Miner. I don't see a centralizing factor unless the little guys decide it just isn't worth it.

I would hope that big miners who, unlike regular users, actually have a huge incentive to keep mining, would also be aware of this issue, and would base themselves in multiple countries, just to make sure they don't get taken down all at the same time. Plus I would hope that all the users will go to where all the hardware and software development is taking place, and all the hardware and software developers will go to where all the users are, and not just where all the mining takes place. (hardware as in ATMs, hardware wallets, etc) I.e. if this ASIC thing and centralization is really an issue, then people won't leave bitcoin for anything else until there is a catastrophic failure from this issue, which may turn people off from crypto-currencies completely for a long while.

I think SHA-256 is probably okay for proof of work.  Bitcoin, however, should include something other than just proof of work.  I am curious about the possibility of tying proof of work to proof of identity via private keys.  A block would have to have both a hash of a certain difficulty and be signed with a valid private key.  The hard-code of client could prohibit reject any block not signed by a valid private key, and to discourage centralization, only 4 out of the last 100 blocks could be signed by the same private key.  I just made up 4 out of 100... obviously these could be picked carefully after some statistical analysis.  We would first need to decide just how dispersed we wanted the hashing to be.

Then the real questions becomes 'what determines if a private key is valid?'.  Maybe those keys could be mined themselves, via scrypt.  Maybe it could be based on a web of trust model that somehow limited each person to just on current private key.  The private keys could wear out... they could be good for only 100 blocks total.

Of course we would have to be extremely cautions in picking a method to make sure it couldn't be easily gamed and lead to greater centralization.  There would be a market for valid private keys, and that is okay and expected.  I would hope there is someway the web of trust idea could be implemented.  Bitcoin, after all, is a service in the name of us people.  This project is not about trusting no one, but more so trusting everyone.  We trust ourselves - as a community - right now.  The web of trust could start with the core devs and valid keys would be propagated throughout the bitcoin community.  One person, one valid key.  The details of how that could be enforced I don't know yet.  But I hope some of you will be able to build on this.

Let's say I'm a notorious hacking group or even a government that has backdoors into hundreds of thousands of person computers across the globe.

What's to stop me from using CPU mining to pull off a 51% attack?

ASICs - that's what.

With CPU/GPU mining obsolete, that huge network of compromised machines is worthless for a 51% attack.

This is exactly what I feared when the BFL disaster began.

A fool gets conned by a group of smooth talking hucksters and pays for a golden goose laying ASIC device.  There is plenty of evidence that the hucksters have no idea how to build such a device, but greed parts the fool and his money.  Enough fools throw money at the hucksters that some real players take note and start developing their own devices.  The hucksters promise '2 weeks' every few days, and that keeps the fool dreaming of sugar plums rather than investing in alternatives.

When the real players deliver and the hucksters still can get their shoes tied, the fool's dreams of sugar plums fade slowly.  Eventually difficulty rises so much that the fool realizes gifting his money to hucksters was a huge error, and he starts counting all he he lost by trusting the hucksters.

Who does the fool blame?  Not himself, not the hucksters, he blames Bitcoin!

What are you talking about? You're putting words in my mouth, or not at all understanding what I said....

 I'm doing fine. my jalapeno cost $149 - in 7 days, I've generated just about 1 coin. I'm FAIRLY positive that it'll generate another coin at some point. So, I'm not blaming ASIC's at all on my "loss" (which hasn't occured). I'm blaming ASIC's for driving many people away from Bitcoin. I'd hardly call myself "conned". Sure, it took a lot longer than expected, but I'm certainly glad I declined my friends offer to split the cost of several GPU's back in May to run while I waited for this.... That would have been a disaster. But no, I'm not part of the problem, driving away ordinary peoples interest in Bitcoin, I fully acknowledge that.

But still, hear me out... Bitcoin without people to drive interest in it isn't going to amount to anything. If you think that network hash rate is more important than network participants, well, I would be shocked.

tell that to Rassah, dude is reminding me of Denzell in Training Day when Ethan Hawke walks away from him

http://www.youtube.com/watch?v=6KrNpxODiDA (http://www.youtube.com/watch?v=6KrNpxODiDA)

people are walking away Rassah, DEAL WITH IT OR ADAPT

This. ASICS make mining harder for new people joining Bitcoin, but they also provide much more support for blockchain.

Memory is a lot cheaper than people seem to realize.  Slap some DDR3 sockets on your ASIC board and you have 16gb for like $60.  I understand that memory is more expensive than computation power, but not forever, and not nearly to the degree everyone here seems to think.  The reason ASICs don't exist for Litecoin right now is because no one sees the same profit margins because adoption is so much lower.  Litecoin is based almost PURELY on speculation, as opposed to bitcoin that actually has a small viable market.  In addition, Litecoin is mainly mined by people who like mining but can't mine bitcoin at a profit any longer.

The number of coins created remains constant; that's what difficulty is for.  So there is indeed no surplus of bitcoin supply.

They barely provide any protection. Well, they protect it from script kiddies, but even with tons of GPU's, there wasn't too much of a worry there... after all, 99% of them are looking to make money, so all theyed do is change someones payout address, which they can do whether a machine is CPU mining, GPU mining or ASIC mining.

For an attacker intent on taking down bitcoin, they provide next to no protection... First, that attacker isn't looking for profit. Second, by contemplating attacking bitcoin, they're well aware that it's going to cost 7 or 8 figures. And a 7 or 8 figure expense is a rounding error in the budget of most governments or banks, any of whom could contract the developement of their own ASIC and still take it down with relative ease.

Nope.  Litecoin now has more protection then bitcoin.   Compromise two large hosts now (asic mining operation and large pool) and you have 51%+.  ASICs are good for bitcoin if they are widely distributed.  In the hands of a few they are a problem. 

I am sorry if I repeat something already been said on the thread, or if I say something stupid because I am new to Bitcoin business, but I see no danger of ASICs killing Bitcoin, and I’d be happy if you please show me where exactly I am mistaken.

If I understand correctly, there are hobbyist miners and professional miners. Hobbyist miners (like myself) engage in mining out of sheer curiosity and their ultimate desire is to get some extra bitcoins to spend on a pizza. A hobbyist miner does not invest considerable money into mining nor awaits a quick ROI and considerable profit. Professional miners are those organising mining rigs and investing serious money into the process of mining. Professional miners crave for serious mining power in order to get profit.

Professional miners did not appear with ASICs. I guess they started to emerge when GPU mining replaced CPU mining. I doubt that someone would buy a couple of computers solely for mining purposes, but GPUs are much cheaper and you can stuff a whole lot of them together with the cooling making a powerful mining rig. Most of the mining power of the network since the appearance of rigs and later FPGAs began to concentrate in the hands of professionals. Did it kill bitcoin? Obviously, no. Do you really think that 1000 hobbyist miners who mine on their only GPU brought any considerable power into the network? Just 10 professional miners with a rig of 100 GPUs each can overpower those. Make 80% of the hobbyists go but the network will stay. And the number of hobbyists won’t dwindle because ASICs will only become cheaper. On the contrary — one cannot stick 10 GPUs into a cheap netbook, but can easily do the same with a pile of USB Erupters, and something like Erupter Blade does not require a computer at all!

Now there come ASICs. Does it considerably change anything about the division between hobbyist miners and professional miners? No. The former instead of wasting electricity and killing their GPU can buy themselves some USB Erupters, or several months later even a Jalapeño or analog. Environment is safer, everyone is happier. The latter exchange their GPU rigs for ASIC rigs. The early adopters have more competing power, just as you do in business. Weaker ones get out. Stronger ones find their niche with an amount of Gh/s they can afford to invest in. Nothing really changes much. Again, the environment is safer.

But mining is only one faucet of the Bitcoin network and it’s not the most import one! If everything revolved around mining, Bitcoin would never get any value. The real value goes from adopting Bitcoin in businesses. And I believe, with ASICs the network becomes more protected against attackers because it is really hard to accumulate 51% of current TH/s and PH/s that are coming. With more protection and possibly new improvements to the protocol we have more adopters, and the value of Bitcoin rises!

The only real problem are governvents prohibiting Bitcoin collectively. And no government will do that through ASICs or other hackery. It is much simpler. Declare Bitcoin illegal. Close all exchanges into local fiat — and you will constrict Bitcoin to underground barter economy only. Can this happen? Theoretically yes, but very unlikely. Even if the US or the EU expels Bitcoin into underground, we have a growing adoption in China and Latin America. And for some states Bitcoin is not a danger to their economy, but just the opposite — a way to get less dependent on the first world banking system.

The only real danger to Bitcoin is if most of the adopters will be speculators and high volatility drives real producers out of Bitcoin. But the ASIC hype actually targeted speculators and those looking for get rich quickly schemes. Now when a considerable part of them leaves due to the stall with new ASICs and drop of Bitcoin value this will only improve the new more secure Bitcoin network.

Well no.  There is no bank where 8 figures is a "rounding error" and most nations could not afford that type of expenditure.  Still Bitcoin is hardly worth spending 8 figures to kill it today however someday Bitcoins might have 100x the economic activity and then spending 10 figures is beyond a rounding error for just about everyone on the planet.

The cost in killing Bitcoin is that the second you do someone will release a newer coin that is immune (or at least very resistant) to the method you used to kill it.  Think POW/POS hybrid or something we haven't even thought of yet.  Necessity is the mother of all invention.  Much like killing Napster didn't kill file sharing.  So what is next spend another 8-12 figures killing the half dozen next gen hybrids spawned from the carcass of Bitcoin?  Then what spend another 8-12 figures killing their hybrids.  It is merely forced evolution.   

ASICs does three things:
a) prevents attackers from "cheating".  Pretend ASICs don't exist and the attacker uses a technology over a magnitude more efficient.  Bitcoin GPU miners march into battle with flintlock rifles and get nuked from orbit by a star destroyer. 

b) finally eliminates the risk of botnets.  Some people think GPU have done that but the on core GPU (APU) have significantly improved and now Intel and AMD both include OpenCL drivers in their default installs.  It is only a matter of time before botnets start adapting to use GPU power.  Now the on-core GPU may seem but they are capable of 50 to 100 MH/s.  A botnet with  ten thousand such nodes would have significant power against an "all GPU" network.

c) has the potential of creating widespread hashing power on a scale never see before.  Think $5 chip in home router (Bitcoin edition) adding 1 GH/s to the network.  Now imagine someone like dlink is making the router and sells 50 million units.

 

For those confused on why asics are hurting us more than helping us here is a short explanation of when asics would help:

The % of ppl using asics vs the rest buying bitcoins for spec/holding/trading/buying goods is too high. When that % is low OR when the price of asics falls to a rate at which it stops those hoarding or is a very small amount of bitcoins to recover intial investment is where you will see asics actually help the community. Until then it is destorying it. You can't get any more simple than that.

I can only imagine asic producers becoming more widespread, aswell as difficulty rising thus leveling off the demand from buyers purely from trying to profit quickly rather than to hold over a long period of time allowing for more stable growth in our eyes. Thus I would assume to see some very cheap asics hiting the market sometime in a year or so, coupled with high difficulty and low btc rates should provide breeding grounds for the next base in the chart.

All this dramatic, existential angst over temporary growing pains...

If you can modify a simple desktop computer you can make it a more energy efficient bitcoin miner. Start with removing your mouse. ASICS are just for showing off.

Sarcasm or stupid?  I just don't know.

(most serious miners have run rigs headless for a long time sempron processor, linux on usb stick, no mouse, no keyboard, no monitor, a power cable and ethernet).

/holds up Radeon

From my cold, dead hands...

Just another scammer inflating their post count to circumvent the PM sending limits.

A lot of people on here just don't seem to get it.

There is no difference between using Altcoins to purchase goods and using Bitcoins, except the amount and variety of goods that can be purchased at the moment and that (according to bitheads) minor caveat of confirmation time.

One of those differences is going to change with time, the other will always be set in stone.

We live in the age of convenience, and waiting 60+ minutes just to buy one thing online is anything but convenient

When on a single die, with no complex logic, memory is pretty darned cheap.

Try to combine it on a single die with more complex logic (e.g. hashing engines), and you've shot up one or two orders of magnitude in cost.

Semi processes that lend themselves to endless repetitions of tiny circuits (DRAM) do not lend themselves to orders of magnitude of vastly more complex circuits (logic).

Please don't take this as an endorsement of Litecoin. I hope it dies a speedy death. I think the prime reason people desire CCs is the so-called inflation-proof aspect. If a second coin such as Litecoin catches on too quick, it opens the floodgates to endless inflation - not per-coin, but of so many copyscamcoins. Thereby leaving the masses saying (correctly) 'why would I put my money in something that is trivially inflated into nothingness?'

Re-read your last sentence

now apply that to Bitcoin

now let's pause for a moment for station identification

"This message brought to you by: Reality , she's quite a bitch sometimes but at the end of the day you can either live with her or die trying to kick her out"

Hi Hate. I did re-read the last sentence. And I tried to apply it to a world where there was only Bitcoin, and no (meaningful) copycoins.

I could not see any conflict.

Please enlighten me.

Bitcoin is was trivially inflated into nothingness

why would the masses put money into it?

You want to apply it to a world where there is only Bitcoin? So you're referring to a fantasy world?

They aren't copycoins because that would imply they did not make improvements.

ASICs themselves aren't killing bitcoin: unwelcome, unabashed, and undeserved greed is. ASICs are merely the axe being swung by the executioner

Yeah, that's reality. If bitcoin dies, litecoin will inevitably die as well. Because it is not unique, there are tons of scamcoins like litecoin (in fact they are all, including litecoin, copypaste of bitcoin).

::sigh:: perhaps. Although, Litecoin - as the king of the copycoins - is still merely a pimple on Bitcoin's ass. If it can be lanced before attaining any meaningful ratio, then the promise of CryptoCurrencies still has a chance. If not, I believe we're stuck with central banks for another century or three.


I say toe-may-toe, you say tuh-mah-tuh. You say improvements, I say gratuitous and ultimately insignificant changes.


I don't believe anything is yet killing bitcoin. If there are any threats about which to worry, the arrival of ASICs ain't among them.

yeah besides the whole SHA256 vs Scrypt thing, I agree with what you are saying

and you are correct in that Bitcoin itself isn't being killed, just everything it stands and was created for is

Nothing is original anyway, it doesn't have to be completely unique, just be different enough to provide incentives for its use

Yes wonderful script kiddies claiming to know how great ASIC's are.

What do you mean? Scrypt centralizes control in hands of few GPU miners? I agree, with things like block erupter: https://bitcointalk.org/index.php?topic=195004.0 bitcoin mining going to be very decentralized.

I just watched a pump and dump on Mt Gox today.  
If you think there aren't bigtime players pumpin' and dumpin' bitcoin, then you don't watch the API feeds.

Are you seriously trying to tell me there is an easier path to centralization via GPUs than ASICS?


qft

it's only a scamcoin if it's not MY p&d apparently

Hey, Hateface, Are you advocating that people abandon Bitcoin and switch to Litecoin, or are you just saying that Bitcoin, and cryptocurrencies in general, are a bad idea? I seriously can't tell any more.

I am saying that they have a time and place to be useful but it is not in everyday society. Anyone who wants Bitcoin to go mainstream is solely under the impression that they still haven't missed the boat by a long amount of time, and clearly doesn't understand why they are not viable to the common citizen.

I support Litecoin but not because I am trying to make money off of it, I just think it is more functionally sound to use for spending on goods than Btc. I don't hoard coins because I actually use them on the economy, which the majority of bitcoin holders stopped doing once more 0s got thrown around.

Why not? How are they worse than debit cards? If they are at least as good, or even just a bit worse, there are still a ton of benefits they provide that can help drive adoption.



How so? Just the having to wait for only 2.5 minutes instead of 10 for a transaction? And why do you believe almost all hardware point-of-sale terminals and web shopping cart plugins are being developed for bitcoin instead of litecoin?

There is no economy to back them, besides the one it is trying to compete with. The bottom line is goods will always be priced in bitcoins to be equal to their price in USD, so you aren't really revolutionizing anything except the name of how you are paying for the item. The goods and production of goods themselves will still be done with USD. You are simply convincing yourselves otherwise.


Bitcoin does not take 10 minutes for a transaction, no idea where you got that from. And I think all of those things you listed are being developed for Bitcoin because it came out first, and it takes some time for most people to figure out the bullshit that is really going on.

You cannot be both a cryptocurrency and a mainstream currency, it is an oxymoron. How does that not sink in to you people?

besides which, how hard would it be to adapt a shopping cart plugin from taking bitcoin to any other?

not very, i dont think. so all the advantages bitcoin claims can easily be applied to any other.

there's that phrase, about standing on the shoulders of giants, and I think it applies very well here.

While I think that that there will be a form of peer-to-peer crypto currency in the future, I think that Bitcoin is the version 0.1 of it. Many of the copy/paste coins are there as well. A few implementations might be 0.1.5 or even 0.2, but we're a far way off from a final product. And all of its proponents, rather than looking objectively at things, are blindly swinging around trying to prevent anything from climbing onto Bitcoin's shoulders.

And Hate's got a point... one of the biggest failings of Bitcoin, I think and agree, is that too many people are holding them  in the expectation that their value should skyrocket one day. Acting as if an intangible is a commodity. I think it's best roll would be as a medium of exchange, not something to hold onto for long periods... with no other currency do people simply hold onto that currency and hope that by that action alone, they should become rich. No, the currency is just the means to the end of actually acquiring things or investing in things to create actual wealth.

I hope you guys understand I am not Anti-bitcoin, I am anti-social really at heart

I don't want to see anyone lose money, but I don't want to see anyone get rich quick due to insider trading either, which is exactly what I think goes on with Bitcoin.

That sword cuts both ways: If it's so easy to switch back and forth, why not just stick to what everyone else is already using, anyway?

Why doesn't everyone use Windows?

Why doesnt' everyone drive Fords?

Why isn't everyone vegetarian?

Why doesn't everyone think that Britney Spears is the biggest superstar ever?



Like i said, I think Bitcoin's got failings that some of the others are trying to remedy...  But I think a lot of people think that Bitcoin is perfect as is. If they're not willing to see that not everyone thinks that Bitcoin is the most perfect thing ever delivered to humanity, then why shouldn't I/we support other peoples works that attempts to improve on that design? Again, if someone thinks there's nothing at all wrong with Bitcoin, then even that would be hard for them to grasp... But believe that a lot of us think that there is a lot of room for improvement, it's not just about trying to strike it rich like bitcoins earliest adopters did.

Litecoin is IPX/SPX to Bitcoin's TCP/IP.

It's not competing with an economy, it's competing with a currency and a financial system. Currencies are being inflated, in some cases are very unstable, and have tons of restrictions on them. Financial systems are slow and clunky, with lots of bureacracy and paperwork, with huge fees and likewise tons of restrictions on them. Bitcoin's main flaw right now is low adoption, but the way to fix that is just to increase adoption, which shouldn't be too hard, since it doesn't have those other currency and financial system flaws.


How Americacentric of you. Goods are not just priced in USD. They are also priced in EUR, JPY, GBP, and other currencies. And when they are priced, they are typically priced in the currency that the buyer uses, so if I'm in US, and I'm selling to someone who uses Euros, I give them a price in Euros, not in USD. If they accept BTC, I'll price things in BTC. As more and more people use BTC, there will be less and less of a need to do a conversion to get a sense of what you are paying for.
Also, what do you mean by "anything except the name of how you are paying for the item?" Are you claiming that there is no difference between bitcoins and dollars besides the name???


Exactly right. In business, that's called "First Mover Advantage," which was quickly followed by "Network Effects," which is where everyone uses something because everyone else uses it. First Mover Advantage benefited bitcoin because it allowed it to set up the biggest customer and developer base first. Now Network Effects are sustaining it because everyone else uses bitcoin. The only business term left to decide whether bitcoin will succeed or not is called "Switching Costs," or the cost of switching from using Bitcon to something else. While true, they may seem very low, such as adding a Litecoin module to your shopping card plugin, you also have to take into account things like support and development, learning about new systems, opening up new accounts, etc. All of these concepts are perfectly exemplified by MS Windows, which had a First Mover advantage with DOS and GUI being built on top of it, Network Effect with everyone using and developing for Windows because everyone else is using it, and Switching Costs, where it would cost a lot in time and lost productivity for people and businesses to switch from it, despite Linux offering much of the same things, including a full office suite, for free. Microsoft tripped up, and may get beaten by Linux eventually, especially since they missed the boat on smartphones and tablets somehow (despite having them first). I don't think the same thing can happen with bitcoin, since it's an open source project from the start, and no one is restricted from developing or improving it.



Unless your definition of insider trading is different from mine, ASIC mining has nothing to do with insider trading :P

Almost everyone does. Especially in business and government.


Because cars wear out, and you are forced to switch to either a new Ford, or something else. Bitcoin doesn't wear out.


I have no idea why this is relevant  ???


Sounds like a strawman argument, as I don't know anyone who does. Certainly not the developers who are continuing to fix problems and add issues. Certainly not businesses, who are still sitting on the sidelines, waiting for increased adoption and easier to use tools. And certainly not the users who find some things a hassle, and are hoarding coins with the expectation that eventually they will be easier to use, and thus will be worth more. If people thought it was perfect, everyone would be using it for transactions, and almost no one would hoard it, since there would be no future developments and adoption to "invest" in.

This is probably the most stupid pseudo-technical drivel that I have read since Mike Hearn warned against "running out of disk seeks". I decided to preserve it for posterity.

All this will do is make is so that the only people mining Bitcoin either have alot of money to buy the ASICS or are influence in the Bitcoin world.

This is good in a way, due to the fact that you would hope that the older generation mining Bitcoins will be better education and have the knowledge to reinvest wisely and not dump as the first sign of a small drop.

You will find the older more mature generation mining Bitcoin and the much younger generation mining the vast array of Altcoin with their GPU's.

For me the difficulty is an increased number of currencies I have to deal with and convert around to pay people.
And increased testing every time I make changes to how things are done.

Shh..., don't accelerate the downward trajectory. Just ride on the optimism/faith and make some money.

LOL.  Good bye.

The point is that its a free market (god, I hate that word, sounds so libertarian!),  and there's no reason why bitcoin should be the only choice. Just as we speak different languages, have different phone carriers, use different forms of paper money (sons people in fact freak out about the idea of a merged currency among the America's). People choose between debit and credit, paper or plastic, visa Amex Mastercard, choose among different banks and gas stations (whose final product is indistinguishable from that of their competitors). Contrary to your statement, there is in fact a contingent of people who use macs. There's also many people who use iOS and many more who opt for android, while others opt for blackberry. RHEL, Centos or Ubuntu? Postgres, MySQL, mariadb, oracle, SQL server or FileMaker?

So the point is, nowhere do you see a "this is good enough for everyone" approach, yet a lot of people think that bitcoin, with its 3 year history, ought to be it for peer to peer currencies. I digress - where some people see advantages, others will see flaws. The time to first confirmation is a huge one I think. The artificial cap on number of coins to be issued is another (I see zero advantage to this over a perpetually expanding monetary base). Those are big ones. Proof of work is resulting on a minor drain on resources, which is temporarily being fixed by ASICs, but once the arms race moves forward, I'm willing to bet that ASIC's will ultimately be the same power hogs as GPUs were....

More simply, and I say this as a complete hypocrite, having mined coins, sold them and bought from BFL while seeing dollar signs in my eyes, I think that the incentives in Bitcoin are completely upside down; people concentrate on mining as their road to riches rather than concieving businesses, and people hold coins close to their chest on hoping to simply profit from the fact that they hold those coins.... While I think mining (ie, issuing more currency and validatign transactions) needs to be a profitable activity for a peer to peer currency to take hold, think the reward structure needs to be rethought so that people are more focused on building an economy around a currency than to simply produce it and hope for demand to kick in.

So as you see, some of my complaints are based (I think) on what I think are shortcomings, other complaints are based more around the economy that's sprung up around Bitcoin in light of those shortcomings (ie the arms race to mine them since they're a limited resource and the hoarding effect that that has brought on).

Bitcoin is a pioneer, I'll give it that. The blockchain as the solution to the question of how a currency can be issued to tracked without a central authority is genius. So, there's no need to re-think that concept – other currencies can use Bitcoin as their “giant” whose shoulders they can stand on top of... Members of the community that think that Bitcoin is the be-all end-all solution can stick with Bitcoin, but remember, Satoshi released Bitcoin under an open-source license, fully understanding that not only would that mean that people could review his code and add to it under the “Bitcoin” umbrella and brand, but that other people might choose to take his work and go in a different direction with it.

I don't see why there are uproars when that happens, quite honestly. Worse are calls to actually attack the the competitors, and worse still are those who actually do attack currencies, simply because those currencies aren't Bitcoin.

I'm not a networking wiz, and only know IPX as the old Novel Netware that DOS based computers used to run before they switched to Windows and TCP/IP. Could you explain why that comparison was "stupid pseudo-technical drivel" please?

In that case, perhaps Bitcoin is the TCP/IP...

There will of course be alternative cryptocurrencies. There are no laws or rules against them, and obviously everyone is free to use them. My main point is that Bitcoin is not dying, nor is it anywhere at risk of being replaced by something like Litecoin. Not unless something so radically different comes along that Bitcoin ca't implement it even with a hard fork. And sure, people use all those other OS's, but that still does't change the fact that Windows is the dominant OS out there.


I don't know what other people think. The reason I personally think that bitcoin is it, is simply because it's a protocol, not a piece of software that gets upgraded or not. If something like Litecoin's 2.5 minute block confirmation time turns out to be a significant advantage, Bitcoin can easily switch to such a confirmation with a fork. If, or rather when, SHA-265 hashing algorithm becomes inadequate, Bitcoin will switch to something better, like Scrypt, or something that is resistant to quantum computers. Bitcoin can even run two different mining algorithms at the same time if need be, giving time for miners to switch from old to new mining hardware. There is just nothing that I can think of, short of debt-based Ripple system, that Bitcoin can't implement if users see a need for it.



I actually think confirmation times may be too short in the long run. There are discussions elsewhere on this forum about the speed-of-light problem for using Bitcoin between Earth and Mars. As for buying things like coffee, there are lots of ways to use bicoin where you don't need to worry about confirmations. One of those methods will be released either in 0.9, or the version after.



This has been discussed at length, and the basic problem is, how do you control the increase? If you give that control to a party of people, you've basically defeated one of the biggest reasons for Bitcoin. If you base it on some algorithm, there will always be ways to game them. If you just set it to a constant 3% a year increase, not only will you have trouble convincing people to move their money into something that gives them a negative return (see Freicoin), but the world's economy doesn't grow at a constant 3%, so you'll still have boom and bust cycles with periods of inflation/deflation.


I'll name some of the richest Bitcoin people who are running bitcoin businesses:

Eric Voorhees (Satoshidice, Coinapult), Charlie Shrem (Bitinstant), Roger Ver (Bitcoinstore.com, and many others), Tony Gallippi (BitPay), Jered Kenna (Tradehill), Mark Karpeles (MtGox).

Now can you name some of the richest people who are bitcoin miners?

Sure, people started out thinking of Bitcoin as a get-rich-quick scheme, where you just run your GPU and print money. I was one of them. But bitcoin mostly makes people rich when they actually do some business with it. And Satoshi's brilliant idea was also that those who mined and hoarded at the start, found themselves wealthy once Bitcoin was more widely accepted, and are now pumping that wealth into developing more bitcoin tools. If you had been at the Bitcoin 2013 conference, you would've seen that of al the energy and enthusiasm there, barely any of it was about mining (BFL had a table, and Yifu made a presentation about Avalon), but 95% of the rest of it was all about bitcoin businesses, hardware, development, financial services, etc. The tens of thousands of dollars that were being thrown around at the conference weren't from miners.




Part of the reason there are uproars is because newbies get suckered into investing in scamcoins, or investing their money into altcoins thinking they can be "early adopters" or wealthy miners, when whatever it is they are adopting has no support behind it. Personally, I don't see Litecoin's "economy" growing beyond just the miners who feel butthurt about not being able to mine bitcoins anymore, and thus expect that it will eventually stagnate. There really aren't any benefits that can't be overcome on bitcoin's side. Look at this list:

https://en.bitcoin.it/wiki/List_of_alternative_cryptocurrencies

and think about how many fools were parted with their money.

IPX/SPX and TCP/IP were developed completely independently with different goals, different target markets, different development models that have very little in common besides the basic concepts.

For a "not a networking wiz" I think it should be sufficient to read the Wikipedia articles portions about their respective history:

http://en.wikipedia.org/wiki/Internet_protocol_suite#History

http://en.wikipedia.org/wiki/IPX/SPX

Edit: It took me a while to locate the appropriate document:

TCP AND IP BAKE OFF
http://tools.ietf.org/html/rfc1025

This is probably the shortest description how the architects of TCP/IP encouraged interoperability of independent implementations and the general spirit of the cooperation within their base of users and vendors. Probably the quickest way to describe Bitcoin supporters is how they are an almost exact opposite of IETF: discouraging interoperability, confusing documentation, denigrating of both competitive and compatible implementations.

The point is that IPX/SPX is the one that nobody uses any more.

Metcalfe's law means there is little demand for competing networking standards, just like there is little demand for competing cryptocurrencies.

I will admit I was initially attracted to BTC by the idea of mining and making some extra money.

With more and more ASIC miners coming on board, the barrier of entry will likely increase for a short period of time when big miners still cost a lot, but there are enough of them out there to greatly increase the difficulty levels.

However, as ASIC rigs continue to drop in price, they will also be devaluing their predecessors to some degree. At some point we'll be back to a lot of people having access to similarly powered setups just like what I've read about the pre-ASIC mining days.

If all of those suppositions are correct, I wouldn't expect ASICs to kill BTC, I would expect them to usher in the transition away from video card mining to ASIC mining which will be a period of great flux during which some large entities may be able to make significant sums of money.

ASICs were anticipated as part of the 'Bitcoin Whitepaper' - Bitcoin itself is a mechanism designed to facilitate efficiency on numerous levels, computing efficiency being one of them.

Given ASICs supremacy in both Total Processing Power & Processing Power per Watt, ASICs in a sense are a metaphorical representation of Bitcoin fulfilling its computational efficiency potential.

Any statements otherwise must then be fallacious.

-Johnny
www.americandatafarms.com

This is the first argument that makes sense to me in favor of LTC. Thanks for sharing :)

Very original thinking. Must sit and think.

Hardware 'volume' is essentially the proxy for the value of a particular Cryptocurrency [inherent given the proof-of-work designation that pays out the currency].

Although you are certainly correct that the technical merit of Cryptocurrencies will increase over time [as both a byproduct of further mathematical precision and the need to protect the network against more sophisticated hardware - Graphene microprocessors & Spintronics systems], the initial investments into the hardware must be made to made a singular cryptocurrency network valuable to the supposed users of said network.

a classic chicken & the egg problem emerges from this relatively straightforward logic.


Needless to say... I certainly feel that the number of viable & valuable cryptocurrencies will grow over time. But in the mean time - Bitcoin's first mover advantage and Litecoin's relatively-more-sophisticated mathematical approach [along with both's relatively large hardware base over other newcomer coins] have successfully entrenched them for the longer-term.

-Johnny
www.americandatafarms.com

ASIC spoil the whole idea of crypto currencies and the father / mother of all crypto  - Bitcoin

Decentralization is the idea .... and everyone at home can support the network against it to take a few dollars or buy something beautiful as a new phone, car, etc. with the crypto  coin


LTC already died for the ordinary miners with GPU

I bet on Vertcoin, this will be the next hit in crypto World, especially with Stealth Address for all business and people

Take a look at LTC trade volume, and then say it is dead.

You bet on sh*tcoin , then flame old and prooven coins, you must be realy incentive.

How is this thesis working out so far?

Bahaha I must do the opposite as you. Can I short vertcoin somehow? Someone make a ltc/vtc exhange its a winning ticket!

X11 is the new Scrypt.

u are true when u say that.  but who is gonna buy "dark" coin over "lite"

light always wins.  us hould know that

Yeah, damn those Greedy Miners and their Evil ASICs. The Decentralized Commoner should be able to mine coins with their GPU and get their share of the wealth ::).

Guess the solution to this would be to design a custom algorithm for some shit coin that nobody wants and no one would bother to design an ASIC for it.

DarkCoin? I'm mining ConspiracyCoin on my GPUs, even made a profit today 33.001 coins in 5 hours.  :P

EDIT:

66.001 in 23.9 hours, the ASIC conspiracy has failed to keep me from turning a profit!

Go on make an X11 ASIC... assholes

This needs up voting...badly. People need to understand that the path they are on, Bitcoin has already walked.

mining is the concept of creating new bitcoins as a reward for auditing transactions.. like bringing new gold into circulation is mining but counting and verifying gold hoards and movements is auditing holdings....

the mix up is that people call the auditing, mining. because their brains care more about getting the new coin then the auditing part, and because these 2 processes are combined, they lazily just call it mining.

but in 2140 no new coins will come into circulation.. although the protocol for making blocks wont change (auditing).. an analogy would be more closer to only auditing after 2140,, not mining.. because after 2140 il repeat.. no new coins will be added to circulation.

so the term would be auditing the blockchain, or administering* the blockchain.. or something along those lines.. but who cares about 2140 we will all be dead and buried by then..

*hmmm administering.. admining.. could catch on :D

as for the topic question

video killed the radio star (its a song)
dvd killed the video star
blueray killed the dvd star

GPU killed the CPU miner
FPGA killed the GPU miner
ASIC killed the FPGA miner..

every couple years we will hear someone complain that new tech killed old tech...

my only reply is .. tech evolves, move on, deal with it. dont get stuck in the past

Which ironically is how this whole thread started.