Bitcoin Forum

Yesterday, Jack Dorsey announced the launch of a fund for the legal defense of Bitcoin developers. https://bitcointalk.org/index.php?topic=5378263.msg58967636#msg58967636 (https://bitcointalk.org/index.php?topic=5378263.msg58967636#msg58967636)

And now, he tweeted that they're officially building an open bitcoin mining system. https://twitter.com/jack/status/1481745463401500676 (https://twitter.com/jack/status/1481745463401500676)

Related news:

cnbc: Jack Dorsey: Block is ‘officially building an open bitcoin mining system’
https://www.cnbc.com/2022/01/13/jack-dorsey-block-officially-building-an-open-bitcoin-mining-system.html (https://www.cnbc.com/2022/01/13/jack-dorsey-block-officially-building-an-open-bitcoin-mining-system.html)

Reuters: Future of Money - Jack Dorsey's Block to build an open bitcoin mining system
https://www.reuters.com/technology/jack-dorseys-block-build-an-open-bitcoin-mining-system-2022-01-13/ (https://www.reuters.com/technology/jack-dorseys-block-build-an-open-bitcoin-mining-system-2022-01-13/)

Jack has a plan for Bitcoin  :)

when saying one of his idea's solves the issues of the delivery, setup, heat, dust, noise making it inconvenient for peoples homes.. im guessing he is going to offer a 'cloud mining' service... along with patent-less open source blueprints/designs/coding if people want to take his design of an asic and make their own asic.

years ago many ASIC manufacturers started very open. not just cloud hashing, but also selling asics, and also selling the chips stand alone so others can make their own asics. but lately due to headache and cost of building their own. most ended up just buying asics(farms) or cloud hashing(hobbyists)

I wonder how his words will encourage people to invest or something similar to it in regards with this cloud mining. And how it differs to typical scam cloud mining.

well jack so far is just at the preliminary investigation stage. he has yet to even build 1 prototype asic, let alone scale production, let alone have sufficient stock to offer using different sale models(parts, complete product, remote renting)
so too early to tell for sure which route he will concentrate on.

the easiest ways to know if a cloud mining is genuine:
1. the income you get is just 1 taint away from a blockreward
2. the asic 'worker'/hashpower and pool total hash power is accountable and allotted to renters
3. physical proof of asic ownership (warehouse/farm walkthrough video)

the easiest ways to know if a cloud mining is ponzi:
1. the income you get is just some coldstore coin from rent purchase transactions
2. there are more renters at xTHash each, than the pools hashrate combined
3. declines to physically prove asic ownership (never does a warehouse/farm walkthrough video)

It got me thinking what could be an "open bitcoin mining system"! Right now, it is extremely difficult for a newbie to start with bitcoin mining because we need specialized hardware that are extremely costly and also need a constant source of electricity. These kind of requirements actually creates a large barrier for a new person to enter into bitcoin mining. It seems Jack is trying to build a system where a person can start with bitcoin mining at a bare minimum cost.

This twitter thread will bring some clarity:
https://twitter.com/TempletonThomas/status/1481728131668987904

ASIC market definitely need some competition from a global brand name. Then only the prices will come down and logistics will be streamlined!

In my experience there is no such thing as non-scam cloud mining services. Even those honest ones that have actual hashrate will start scamming people at some point by turning into a Ponzi scheme simply because the revenue of such an operation can be pretty low and with some volatility they can easily lose a lot of money.

thats why you have to look closely at the payouts..
if cloudmining payouts stop being 1 taint from a block reward and instead have taint of the coldwallets you deposited your rental/hire payment.. then its gone ponzi. and thats the time you stop renting, cut your losses.

most of the cloud mining that do scam. are usually ones where the website and stratums are proxy protected. and the hosting is not revealing the physical office/location of business.(cant sue a scammer if you cant locate him)

im sure someone like a legit business owner thats in the public eye, someone that cant hide. will probably operated a business thats regulated and accountable.

but too early to tell as its not even at the prototype stage.

i think Jack Dorsey's decision is good as the announcement of open bitcoin mining systems will help developers of the original cryptocurrency facing legal headaches.

Since it's open source even if it's there it would be easy to see and remove.
The biggest obstacle I see is that fact that there are a lot of people with a lot of time and money and effort already out there and they may not like new competition coming in.
Would bitmain & others drop their price to the point of dumping just to keep new people out?

-Dave

i wouldnt see bitmain dumping their price below their cost to monopolise. there is already other asics on the market and bitmain still sell at a premium due to reputation.

they may lower the price if people find a good asic competitor with fair pricing, thus reducing demand for bitmain, where bitmain might then bring it inline with competitors to stay desirable. . but again i dont see them wanting to dump below cost just to monopolise.

When it comes to Bitcoin, there is no question that Jack Dorsey is the man just like Elon Musk is with Dogecoin! And what I love with jack is that he is more than talks...he has ideas, he got plans and he seems to be able to set-up the infrastructure needed for his vision of an open Bitcoin mining system. I would not want to go into technical details on this because i am qualified to do or other words there are things I could not fully grasp with it. I just can't contain my excitement and admiration for someone who is taking the works needed to push Bitcoin further to the mainstream population.

If that's what he is going to endorse then there's going to be a problem, cloud mining will never be legitimate because it has been proven time and time again that it's a scam and that it doesn't do any work to make you money. I think that the only way that people will still believe in it is if Jack finds a lot of influencers to lie to their teeth about this project.

i dont think cloud mining is a good business model, so i doubt thats jacks actual plan, he hasnt even made a prototype yet so his 'idea's are still speculative/theories
i only mentioned it as an option as his wording of solving the 'home cost, dust'noise' stuff, made it appear to be one of his idea's.. many other people in other discussions had the same thoughts

the reason why its not a sound business plan is because if he warehouses the asics. pays the electric and maintenance.. and is then calculating a average cost per asic of this service. and charges users that fee..

if the customer can 'profit'.. then a sound business would just avoid a customer. and instead the company would mine itself and profit itself.

EG if i had an apple that cost me 20cent to grow. why would i sell it for 25cent. knowing the <middleman> can make 50cent. . instead id avoid offering to the <middleman> for 25cent.  and instead I sell it for 50cent. thus i make 30cent instead of 5cent

They are just planning to make an open-source ASIC, how is it going to help with electricity or expensive hardware? Their ASIC is not going to be significantly cheap, especially at the current age of silicon shortages.

The fund for legal protection of Bitcoin devs is much more interesting, it can positively affect Bitcoin ecosystem by allowing people to work on Bitcoin without the costly harrasment done by Craig Wright and similar legal trolls.

It won't be cloud mining. Real hardware at your home.


https://twitter.com/TempletonThomas/status/1481728145644351488 (https://twitter.com/TempletonThomas/status/1481728145644351488)

In October we announced that we’re considering building a bitcoin mining system, out in the open & alongside the community, and we’ve decided…we’re doing it! We thought we’d share some more details on how our initial discussions are going and where we’re headed next.

We want to make mining more distributed and efficient in every way, from buying, to set up, to maintenance, to mining. We’re interested because mining goes far beyond creating new bitcoin. We see it as a long-term need for a future that is fully decentralized and permissionless.

We started by digging into two big questions. 1) What are customer pain points today? 2) What are the specific technical challenges? We spoke with members of the mining community to learn more about their experiences. Here’s what we’ve found so far:

1/ Availability. For most people, mining rigs are hard to find. Once you’ve managed to track them down, they’re expensive and delivery can be unpredictable. How can we make it so that anyone, anywhere, can easily purchase a mining rig?

2/ Reliability. Common issues we’ve heard with current systems are around heat dissipation and dust. They also become non-functional almost every day, which requires a time-consuming reboot. We want to build something that just works. What can we simplify to make this a reality?

3/ Performance. Some mining rigs generate unwanted harmonics in the power grid. They’re also very noisy, which makes them too loud for home use. Unsurprisingly, all miners want lower power consumption and higher hashrates. What’s the right balance of performance vs other factors?

Developing products is never a solo journey, and evaluating existing tech is always part of our practice. For this project, we started with evaluating various IP blocks (since we’re open to making a new ASIC), open-source miner firmware, and other system software offerings.

We are interested in performance *and* open-source *and* our own elegant system integration ideas. Which tech and which partners should be on our list to consider? We’ve learned so much just from these preliminary conversations and we want to keep this going.

Team. We’re incubating this investigation within Block’s hardware team and are starting to build out a core engineering team of system, asic, and software designers led by @afshinrezayee. A few of the open roles are Electrical Engineers, Analog Designers, and Layout Engineers.

Thanks for engaging with our work. If you have questions, want to share more feedback about the pain points or missing features of the existing mining solutions, or know someone we should be talking to about our open roles, you can reach us at miningsystem (at) block (dot) xyz

its these 'idea's' and queries they are thinking of addressing is what got discussions started on the theory of cloud mining as one of the options they may go down.

probably people picked up on his tweet of him trying cloud mining to earn BTC last year
https://twitter.com/jack/status/1427664937862717441

I wonder if they are going to try to build something for the 120V US market for small home / hobby miners.
It really is a wide open market at this point. With everything going high power 220V 20A miners I can really see having a lower power unit that even if it's not price competitive.
I think you could sell a bunch for people who want to have newer stuff at home as opposed to having to make 1 & 2 board S9 and similar to run quiet and at home.

-Dave

This is the reason why he stepped down as the CEO of twitter. I still don't know how it's going to work and there's still a need for me to comprehend and understand the vision that he's going to do with the open system.
But if this is going to benefit the average joe people like me then that would be an interesting goal that he's trying to build up and focus with its development.

there is only so much twitter does. so being a CEO gets boring when there is not much 'new features' to add/change/maintain.
turning up each day and just say, for example "great work employee's keep doing what you're doing, see you tomorrow" is not really exciting. he wanted a challenge. bitcoin is still new and has lots of potential, something to be excited about

We don't know the perspective of a CEO and probably that's like that and there's more. It's true about the challenge and if this is going to be beneficial not only to the bigger investors and someone who's an average can mine soon at their homes then that's really the challenging part that he has brought to himself. Well, some CEOs are going to find it a vacation day after stepping down but after that, what's next? They're going to long for the time that they've been working hard with their past position and so Jack probably is.

those that find their role stressful, step back and take a break
those that find their role boring, step back to find a challenge

he found his role as CEO and founder "severely limiting"

In order to produce an ASIC, the manufacturer needs to first invest (a lot of) money in R&D so they know how to create the miner. They also need to use specialized chips that are not trivial to procure.

It is unclear what exactly they are going to make "open-source". If they are going to make the firmware and software that runs the miners open-source, this will do effectively nothing for anyone, as without the R&D investment in designing the hardware, the firmware and software is worthless.

if they are open-sourcing their hardware design, they would be effectively giving away their R&D investment.

No, probably not. It is not trivial to mass-produce ASICs. If Jack were to produce some ASICs that he sells for less than the market rate, they will quickly sell, and will be resold for the going market rate.

like sports stadium ticket 'touting'..
its a profitable business model competitors can try. by buying up all the asics to resell for more.
this can be dealt with by an ASIC manufacturer limiting asic units per physical home delivery address

usually this also is done the opposite way when businesses can handle large orders., where they discount large orders.
however if some of the idea's of distribution, supply and access to normal people is the aim then i can see him limiting it to 1-10 units per home and not accept orders of 1000-10,000

theoretically even on low order numbers, 'touters' can still gain.
if they know the manufacturer direct sale rate was 0.01btc($430) and the 'tout' wants to sell for $1k
the touter can offer lots of individual customers that paid $430. an incentive to sell the asic for $516(0.012) meaning customer instantly gets ROI + 20% extra bitcoin without even hashing at all. and the touter gets lots of asics at $516 which if demand is there can sell for upto $1k

so as it was said they would have to find the fine economic line between cheap asics and hash profit