Bitcoin Forum

Why ASIC's Should Not Be The Future Of Crypto Currencies


ASIC's are not a natural technological generation leap like going from CPU to GPU was. ASIC's are simply specialized processing units made specifically for Bitcoin. Which i do not beleive is following the original intentions of Satoshi, for many reasons.

Moving from GPU to ASIC mining will not be the same as going from CPU to GPU mining. The reason here is because CPU's and GPU's have decentralized distribution. They are mass produced by huge companies  giving you the option to buy their products in any city, no matter where you live! This allows us to be in control of when and where we get our mining hardware, and to a certain degree, at what cost. (Which helps the decentralization process). http://en.wikipedia.org/wiki/Decentralization (http://en.wikipedia.org/wiki/Decentralization)

While on the other hand, ASIC's are/will not be mass produced, supply is controlled, price is controlled, they are in limited quantity, can only be bought from a few companies/sources, that in reality nobody even knows for sure they can trust. So what will happen is all the miners in the world will be forced to rely on those few small companies for ASIC's, as well as the small quantities that they produce. And we will be subject to their pricing. They will also control the supply of the mining rigs, which can have an effect on the bitcoin economy that is similar to the effect that the U.S Federal Reserve and banks have on the money supply. I'm not talking about the amount of money/BTC, but when it is available/mineable to the miners. This allows ASIC  manufacturers to be in control of when and where we get our mining hardware. (All this hurts the decentralization process)

People will have to rely on the small quantities that these companies produce, which causes people to have wait for their hardware, which in the end causes people to potentially lose money. This is exactly what is happening right now. Many people are waiting to see what happens with ASIC's, so that they can start buying mining  hardware again. So, basically if ASIC didn't exist people would continue to buy video cards as i type this, which would have meant more profit for those people now and in the future, which would have meant more money in those peoples pockets. This is where the 'Federal Reserve effect' comes in, because now mining hardware companies can control when people buy/receive their hardware, plus control when people get more or less profit through controlling the mining hardware supply. Also, buying ASIC's from a few small companies means whenever those companies come out with a new model, this process will start all over again. More lost money, more time lost waiting for release/shipping.

Another downfall of ASIC, is the fact that ASIC's will make everyone have to 'restart from scratch' buying mining hardware all over again, when most people already  have their mining hardware in the form of video cards, and it is already payed off. Now you will have to sell all your video cards, then have to buy $1000's of dollars of ASIC's just to be able to keep up with all the other players with the increasing difficulty. After that, you will have to wait all over again to get your return on  your investment! Which could take half a year or more, once difficulty adjusts, which should just take about a month or so.

Once ASIC comes out, the difficulty will adjust accordingly. Which will just cause everyone to make the same amount of money as they were before ASIC's. So the question is, is it necessary for us to go through all of what i mentioned above, to just end up making the same amount of money as you were before with GPU's, just a month or so later, with ASIC's?

Because of the above mentioned costs, plus the added cost of ASIC'S, this can hinder the widespread global adoption of Bitcoin just because of the sheer expense. This is especially true for people in other smaller, less wealthy countries. It is much easier to obtain a used video card for those people. People that could be helping to build security and decentralization for Bitcoin!

ASIC's threaten to ruin any anonymity that Bitcoin has left. This is by potentially making it easier to track who is buying the mining rigs through the few small companies that sell the ASIC's. Which could potentially be bad if Bitcoin ever became illegal!

There are also many more smaller disadvantages of moving towards ASIC that are of less importance.

So now it comes to the advantages of ASIC. That's where everything boils down to in the end. The problem is there are not enough advantages to using ASIC, for them to outweigh the disadvantages it brings to the table! In my opinion, network security and lowered power consumption cannot make up for the potential problems that it brings. This is an economy. This is not about power consumption! It will all come down to economics in the end. And that is what I'm talking about. And that is the infostructure that Satoshi built Bitcoin on!

The  Bitcoin developers, and the Crypto Community in general needs the recognize ASIC's as a threat, and we should all do something to stop this from happening. I do not think that Satoshi would think the way these ASIC's are to be distributed would be good for the Bitcoin economy in general.  There are a few things we can do to combat this, like changing the algorithm to prevent the usage of ASIC's. Or, we could all switch to another crypto currency that that uses a different algorithm that is resistant to ASIC's, like Litecoin, so that we can save Bitcoin and our crypto-independence!

By Switching To Another Bitcoin Algorithm, Or By Using Litecoin We Can Save Our Crypto-Independence!


The only options we have now is to change the Bitcoin algorithm, or for everyone to switch to another ASIC proof crypto currency. The ideal situation would be for the Bitcoin developers to change the algorithm, but that does not seem to be what they plan to do. So that's where Litecoin comes in. While Litecoin is not ASIC proof, it is ASIC resistant. It runs on an algorithm called scrypt that is highly memory intensive, which makes it much harder to produce an ASIC for Litecoin. Even if a company would find a way to produce an ASIC for it, it would take at least a year to design, produce and ship them. So it would be our 'safe heaven' from ASIC, saving us from the many disadvantages and negative effects that ASIC threatens to bring to Bitcoin and the cryptocurrency world. At the very least, it would be buying us more time to work on something to prevent mining hardware companies from taking over our crypto currencies. People will be able to continue to GPU mine, continue to profit, once again allowing us to be in control of when/where we buy our mining hardware, as well as, at what cost we buy it at. Allowing the control of the crypto world to stay in our hands, not the hands of greedy companies!

Jay1337

 8)

Litecoin will also get ASICs if it succeeds.

You can only fix this problem by switching to proof of stake. PPCoin is the right choice (though its design could be improved). Litecoin could make this switch too. Bitcoin won't.change.until it is forced.to by meaningful compeetition.

You see people, these few companies that you shouldn't even expect to keep their promises are different from all the other companies on this planet and don't seek a profit by building and selling as many copies of their product as possible. No, no, these companies are quite sinister, if one can even trust them, so sinister in fact that they don't want to make a profit!  :o

 ::)


No but seriously you fail, because this:


is contradicted by reality.

"can only be bought from a few companies"

Considering AMD is the ONLY company that makes decent GPU mining hardware.. a few almost sounds like a good thing......

actually i should have said

 "can only be bought from a few sources"

 ;D

ASIC's are just going to speed up the process of centralizing the money, and making the poor poorer and the rich richer to an even greater extent than things are already.

Litecoin doesn't help. It modified the normal scrypt behavior for inexplicable reasons to use only a very tiny amount of memory compared to the scrypt paper recommendations. It's quite easy to throw 128k of sram on a chip and scream out one cycle/hash.  You'd get an even bigger speedup over GPUs and CPUs than you get from Bitcoin.

As others have pointed out, in GPU land AMD was really the only game in town. The situation with bitcoin fpgas and asics appears to be more diverse. Moreover, without the public using asics an attacker could get a big speedup.

I've seen some POW ideas that I find intriguing for other reasons— like amiller's idea of using fast random access to the txout set as proof of ability to rapidly process Bitcoin transactions— but I've not seen anything that prevents people with custom hardware from getting a substantial advantage over the public— except by getting specialized hardware into the hands of the public.

If Bitcion itself is made illegal (which seems like far out scaremongering to me, but whatever) then no amount of technical mumbo-jumbo can help it. People like to compare the prospects of outlawing Bitcoin to the unsuccessful drug war or to preventing the illicit distribution of copyrighted goods... but the comparison is not fitting: An unlawful drug still gets you just as high— even if your upstanding friends won't touch it— an illicitly copied movie still makes you laugh. But a money like thing derives its value from other people's willingness to accept it and even underground arms dealers need to eat and pay the rent, so even outlaws have little use for an outlaw currency.  For Bitcoin there is a double whammy: Bitcoin isn't secure if used by only a small niche, resistance to overpowering requires widespread usage.

ASIC's are the future of every cryptocurrency. It's only a matter of time. Without ASIC's bitcoin network wastes ton of power for no real reason.

There are two other factors to consider:

(1) The first wave of sales of a new technology are often riddled with bugs, problems, and failures (think first 4g phone that was released as an example).

(2) The next wave of sales of a new technology are historically significantly cheaper in price compared to the first.

The future of crypto currencies is forever to be the bleeding edge of computing processor design. So ASICs right now. Then it will be Quantum CPUs. Then quantum GPUs. Then quantum FPGAs. Then quantum ASICs. Then stuff I havent imagined yet.

1. CPU also can be brought from only two sources. Can You trust AMD or Intel not to include anti-Bitcoin features in CPU?

2. Next generation of GPU might be badly suited for Bitcoin GPU mining because of GPU architecture change.

3. ASIC manufacturing in few centralized places does not mean Bitcoin mining cannot be decentralized. Mining also is nothing to do as adopting it as a payment method. Not every Bitcoin end-user need to be a miner and most of them even will refuse to run full node.

OP just wasted bitcointalk.org SQL database space with pointless rambling.

Is it possible to use scrypt with memory requirement linked to difficulty? This could be GPU and ASIC-resistant forever.

Here's another perspective on ASICc coming to Bitcoin: the "nuclear weapons" perspective.

Let's say that we don't go the ASIC way and decide to stay with GPUs. However, the ASIC can be built and their hash power compared with GPUs is like nuclear weapons compared with AK-47s (and a few tanks, aka ATI 7970). It seems like a bunch of individuals can set an ASIC project up and deliver (Avalon, Reclaimer). Would you rather have that threat on the Bitcoin network of a possible ASIC disruption from a mal-intended person or would you rather give everybody the "nuclear weapons"?

Are you familiar with M.A.D Cold war concept (http://en.wikipedia.org/wiki/Mutual_assured_destruction)? If those "evil companies" decide to keep the "nukes" to themselves or do fishy business-es every other miner will get pissed of, Bitcoin level of trust and interest will fall, word will spread out and in the end it could mean the fall of Bitcoin as a whole. What would those companies do with the mined Bitcoin now worthless?

Yes, wow, i didn't think it would be so easy to make one  :-\

Also, i realize some of the things i say are highly theoretical, but i'm just looking at all possibilities.

My main concern is the centralized distribution of ASIC's. I mean, i can walk down my street and pick up a GPU. Can that be done with an ASIC?  ;)

I am currently designing a bitcoin equipped walking battle tank to circumvent that problem. I call it Bital Gear.

You will probably be able to do this N years from now if Bitcoin goes really mainstream. Larger market of potential miners = more business opportunities for ASIC makers. Bitcoin ASIC must not be so complex to develop like CPU. I already have crypto ASIC for IDE harddrives that cost me about 150$ and IDE have much more complex commands and besides that it must encrypt the data with AES in XTS mode. More than simple double SHA256 operation and compare.

What a fail thread. Fail is over 9000

^

Most definitely, YES! Difficulty isn't a means to make money. It is a means to provide security. When the difficulty skyrockets, the security of the blockchain also skyrockets. That isn't just a good thing. It is a crucial requirement for the health of the blockchain.

Absolutely true!

The OP might be concerning that the consolidation of ASICs in hands of wealthy might pose a risk, but remember that the distribution of people preordering ASIC scam from BLF are distributed worldwide and sometimes are not highly wealthy. Some might been buying with bitcoins they mined with GPU. 30 000$ for asic rig is not unreal for average westerner working high income high-tech job.

I read someone who push for litecoin, sorry, im all-in-BTC for now...  But, I must say, nice try, even good thinking behind !

The argument that ASIC are availlable from only few companies, I dont think it's a problem, as those companies exist for profit in $, then they are doing anything they can to sell a maximum of unit, for profit.  That's the only reason why those companies are building/selling ASIC : Profit.

As there exist few manufacturer, they can't control the price as they are competing each other, not that I think that competition is good, I'm more willing to accept the idea that cooperation is better in every way, but for now, competition it what drives the market !  (Except if they all collude togheter, price of unit is in competition, free market = the customer will buy what is best price/value for them.)

About investment : Each individual is free to invest or not, as they want/can.  Small power asic are availlable for those who dont have too much money/btc.  IMO, the game is still the same, low fund, small rig..  High fund, big mining rig.  There can be a small hurde, if the protocol needs a change that will disable actual asic design, total network power will go down drasticaly.  Could be a return to mass GPU mining for w hile.  But in case of a drastic protocol change that disable actual asic desing, I'm pretty sure that profit motivated companies will sell new asic version, in a matter of week/month, even before the update if possible.

Anyone with low or no power cost will be able to continue mining with GPU, I will, even with a medium-low power cost.

Something you seems to have forgot in you post, I may say a must for Bitcoin to go asic mining is SECURITY.  As it is possible to create ASIC to mine BTC, the community HAVE TO go asic, to protect against a malicious individual/entity that could build asic to 51% attack the network !  Bitcoin will be much more safe, and trustable for the long run with a much bigger hash powered network.

Also, if BTC became illegal, and those companies with logs of clients who bought asic, this change nothing, if becoming illegal, it will be the decision of any miner to conitnue to mine or turn rigs off..

My impression is that you are all-in for LTC and can't deal with the fact that BTC is in the way to become a grown-up, a real big and robust entity !

BTC are growing, soon will no more be in it's infancy.. maybe mass adoption within 5-8 years :D

was my 2 satoshi


sorry for bad english, even if it sounds good to me ;)

LOL, nice quote !

Added to ignore list.

No change, still showing 5-8 ignores. Your faggotry action was irrelevant!

to OP: people in thread confirmed that ASIC increase in difficulty will actually secure Bitcoin network even more against >50% attack.

If protocol is changed in a manner that renders both ASIC and current implementation incompatible, this will undermine peoples trust in Bitcoin as a whole. This is why I never will trust any scamcoins that change basic protocol rules even once.

OP is pissed because he bought a GPU farm few months ago. Sorry, it's part of the game.

Q:What green aliens with plasma guns and BFL ASIC's have in common?
A:They are not here and likely will not be in foreseeable future!It is easier to get second hand Core2Duo than high-end ATI video card. The same with GPU vs ASIC. Change algo? Shift of mined bitcoins income? Almost certainly yes, the shift occurs slowly all the time because of numerous factors. Shift in income does not mean a direct shift in balance of power. The ASIC owners still are a miners and early adopters who want Bitcoin to be a sucess. If we all unanimously decide not to use a ASIC then someone who really might Bitcoin to fail can pull off a >50% attack using the ASIC's. And he will need far less ASIC's to do that than if more ASIC's will be in hands of honest miners.High income is not without risk. Some people here purchased high-end CPU's complete with MoBo's and memories only for GPU mining to make CPU mining useless like voting parliament. They also told that GPU mining is ruining ideas of Bitcoin. Search this forum for about year and a half ago!

Better lose part of money in bad purchase than have your computer getting hacked. And having leaked naked pictures with the love of your life spreading legs for whole internet.

Why GPU's Should Not Be The Future Of Crypto Currencies


GPU's are not a natural technological generation leap like going from paper to CPU was. GPU's & mining software are simply specialized processing units made specifically for Bitcoin. Which i do not beleive is following the original intentions of Satoshi, for many reasons.

Moving from paper to CPU mining will not be the same as going from CPU to GPU mining. The reason here is because paper and CPU's have decentralized distribution. They are mass produced by huge companies  giving you the option to buy their products in any city, no matter where you live! This allows us to be in control of when and where we get our mining hardware, and to a certain degree, at what cost. (Which helps the decentralization process). http://en.wikipedia.org/wiki/Decentralization

While on the other hand, CPU's are mass produced, supply is controlled, price is controlled, they are in limited quantity, can only be bought from a few companies/sources, that in reality nobody even knows for sure they can trust. So what will happen is all the miners in the world will be forced to rely on those few companies for CPU's. And we will be subject to their pricing. They will also control the supply of the mining rigs, which can have an effect on the bitcoin economy that is similar to the effect that the U.S Federal Reserve and banks have on the money supply. I'm not talking about the amount of money/BTC, but when it is available/mineable to the miners. This allows CPU manufacturers to be in control of when and where we get our mining hardware. (All this hurts the decentralization process)

People will have to rely on the small quantities that these companies produce, which causes people to have wait for their hardware, which in the end causes people to potentially lose money. This is exactly what is happening right now. Many people are waiting to see what happens with GPU's, so that they can start buying mining  hardware again. So, basically if GPU didn't exist people would continue to buy CPUs as i type this, which would have meant more profit for those people now and in the future, which would have meant more money in those peoples pockets. This is where the 'Federal Reserve effect' comes in, because now mining hardware companies can control when people buy/receive their hardware, plus control when people get more or less profit through controlling the mining hardware supply. Also, buying GPU's from a few small companies means whenever those companies come out with a new model, this process will start all over again. More lost money, more time lost waiting for release/shipping.

Another downfall of GPU, is the fact that GPU's will make everyone have to 'restart from scratch' buying mining hardware all over again, when most people already  have their mining hardware in the form of CPUs, and it is already paid off. Now you will have to sell all your CPUs, then have to buy $1000's of dollars of GPU's just to be able to keep up with all the other players with the increasing difficulty. After that, you will have to wait all over again to get your return on  your investment! Which could take half a year or more, once difficulty adjusts, which should just take about a month or so.

Once GPUs come out, the difficulty will adjust accordingly. Which will just cause everyone to make the same amount of money as they were before GPU's. So the question is, is it necessary for us to go through all of what i mentioned above, to just end up making the same amount of money as you were before with GPU's, just a month or so later, with GPU's?

Because of the above mentioned costs, plus the added cost of GPU'S, this can hinder the widespread global adoption of Bitcoin just because of the sheer expense. This is especially true for people in other smaller, less wealthy countries. It is much easier to obtain a used CPUs for those people. People that could be helping to build security and decentralization for Bitcoin!

GPU's threaten to ruin any anonymity that Bitcoin has left. This is by potentially making it easier to track who is buying the mining rigs through the few small companies that sell the GPU's. Which could potentially be bad if Bitcoin ever became illegal!

There are also many more smaller disadvantages of moving towards GPU that are of less importance.

So now it comes to the advantages of GPU. That's where everything boils down to in the end. The problem is there are not enough advantages to using GPU, for them to outweigh the disadvantages it brings to the table! In my opinion, network security and lowered power consumption cannot make up for the potential problems that it brings. This is an economy. This is not about power consumption! It will all come down to economics in the end. And that is what I'm talking about. And that is the infostructure that Satoshi built Bitcoin on!

The  Bitcoin developers, and the Crypto Community in general needs the recognize GPU's as a threat, and we should all do something to stop this from happening. I do not think that Satoshi would think the way these GPU's are to be distributed would be good for the Bitcoin economy in general.  There are a few things we can do to combat this, like changing the algorithm to prevent the usage of GPU's. Or, we could all switch to another crypto currency that that uses a different algorithm that is resistant to GPU's, like Litecoin, so that we can save Bitcoin and our crypto-independence!

By Switching To Another Bitcoin Algorithm, Or By Using Litecoin We Can Save Our Crypto-Independence!

The only options we have now is to change the Bitcoin algorithm, or for everyone to switch to another GPU proof crypto currency. The ideal situation would be for the Bitcoin developers to change the algorithm, but that does not seem to be what they plan to do. So that's where Litecoin comes in. While Litecoin is not GPU proof, it is GPU resistant. It runs on an algorithm called scrypt that is highly memory intensive, which makes it much harder to produce a GPU for Litecoin. Even if a company would find a way to produce a GPU for it, it would take at least a year to design, produce and ship them. So it would be our 'safe heaven' from GPU, saving us from the many disadvantages and negative effects that GPU threatens to bring to Bitcoin and the cryptocurrency world. At the very least, it would be buying us more time to work on something to prevent mining hardware companies from taking over our crypto currencies. People will be able to continue to GPU mine, continue to profit, once again allowing us to be in control of when/where we buy our mining hardware, as well as, at what cost we buy it at. Allowing the control of the crypto world to stay in our hands, not the hands of greedy companies!

Jay1337

Why FPGA's Should Not Be The Future Of Crypto Currencies

FPGA's are not a natural technological generation leap like going from CPU to GPU was. FPGA's are simply specialized processing units made specifically for Bitcoin. Which i do not beleive is following the original intentions of Satoshi, for many reasons.

Moving from GPU to FPGA mining will not be the same as going from CPU to GPU mining. The reason here is because CPU's and GPU's have decentralized distribution. They are mass produced by huge companies  giving you the option to buy their products in any city, no matter where you live! This allows us to be in control of when and where we get our mining hardware, and to a certain degree, at what cost. (Which helps the decentralization process). http://en.wikipedia.org/wiki/Decentralization

While on the other hand, FPGA's are mass produced, supply is controlled, price is controlled, they are in limited quantity, can only be bought from a few companies/sources, that in reality nobody even knows for sure they can trust. So what will happen is all the miners in the world will be forced to rely on those few companies for FPGA's. And we will be subject to their pricing. They will also control the supply of the mining rigs, which can have an effect on the bitcoin economy that is similar to the effect that the U.S Federal Reserve and banks have on the money supply. I'm not talking about the amount of money/BTC, but when it is available/mineable to the miners. This allows FPGA manufacturers to be in control of when and where we get our mining hardware. (All this hurts the decentralization process)

People will have to rely on the small quantities that these companies produce, which causes people to have wait for their hardware, which in the end causes people to potentially lose money. This is exactly what is happening right now. Many people are waiting to see what happens with FPGA's, so that they can start buying mining  hardware again. So, basically if FPGA didn't exist people would continue to buy GPUs as i type this, which would have meant more profit for those people now and in the future, which would have meant more money in those peoples pockets. This is where the 'Federal Reserve effect' comes in, because now mining hardware companies can control when people buy/receive their hardware, plus control when people get more or less profit through controlling the mining hardware supply. Also, buying FPGA's from a few small companies means whenever those companies come out with a new model, this process will start all over again. More lost money, more time lost waiting for release/shipping.

Another downfall of FPGA, is the fact that FPGA's will make everyone have to 'restart from scratch' buying mining hardware all over again, when most people already  have their mining hardware in the form of GPUs, and it is already paid off. Now you will have to sell all your GPUs, then have to buy $1000's of dollars of FPGA's just to be able to keep up with all the other players with the increasing difficulty. After that, you will have to wait all over again to get your return on  your investment! Which could take half a year or more, once difficulty adjusts, which should just take about a month or so.

Once FPGAs come out, the difficulty will adjust accordingly. Which will just cause everyone to make the same amount of money as they were before FPGA's. So the question is, is it necessary for us to go through all of what i mentioned above, to just end up making the same amount of money as you were before with GPU's, just a month or so later, with FPGA's?

Because of the above mentioned costs, plus the added cost of FPGA'S, this can hinder the widespread global adoption of Bitcoin just because of the sheer expense. This is especially true for people in other smaller, less wealthy countries. It is much easier to obtain a used GPU for those people. People that could be helping to build security and decentralization for Bitcoin!

FPGA's threaten to ruin any anonymity that Bitcoin has left. This is by potentially making it easier to track who is buying the mining rigs through the few small companies that sell the FPGA's. Which could potentially be bad if Bitcoin ever became illegal!

There are also many more smaller disadvantages of moving towards FPGA that are of less importance.

So now it comes to the advantages of FPGA. That's where everything boils down to in the end. The problem is there are not enough advantages to using FPGA, for them to outweigh the disadvantages it brings to the table! In my opinion, network security and lowered power consumption cannot make up for the potential problems that it brings. This is an economy. This is not about power consumption! It will all come down to economics in the end. And that is what I'm talking about. And that is the infostructure that Satoshi built Bitcoin on!

The  Bitcoin developers, and the Crypto Community in general needs the recognize FPGA's as a threat, and we should all do something to stop this from happening. I do not think that Satoshi would think the way these FPGA's are to be distributed would be good for the Bitcoin economy in general.  There are a few things we can do to combat this, like changing the algorithm to prevent the usage of FPGA's. Or, we could all switch to another crypto currency that that uses a different algorithm that is resistant to FPGA's, like Litecoin, so that we can save Bitcoin and our crypto-independence!

By Switching To Another Bitcoin Algorithm, Or By Using Litecoin We Can Save Our Crypto-Independence!

The only options we have now is to change the Bitcoin algorithm, or for everyone to switch to another FPGA proof crypto currency. The ideal situation would be for the Bitcoin developers to change the algorithm, but that does not seem to be what they plan to do. So that's where Litecoin comes in. While Litecoin is not FPGA proof, it is FPGA resistant. It runs on an algorithm called scrypt that is highly memory intensive, which makes it much harder to produce a FPGA for Litecoin. Even if a company would find a way to produce a FPGA for it, it would take at least a year to design, produce and ship them. So it would be our 'safe heaven' from FPGA, saving us from the many disadvantages and negative effects that FPGA threatens to bring to Bitcoin and the cryptocurrency world. At the very least, it would be buying us more time to work on something to prevent mining hardware companies from taking over our crypto currencies. People will be able to continue to FPGA mine, continue to profit, once again allowing us to be in control of when/where we buy our mining hardware, as well as, at what cost we buy it at. Allowing the control of the crypto world to stay in our hands, not the hands of greedy companies!

Jay1337

lol @ inaba.. nice

Why CPU's Should Not Be The Future Of Crypto Currencies


CPU's are not a natural technological generation leap like going from rocks-and-seashells to pencil-and-paper was. CPU's are simply specialized processing units made specifically for Bitcoin. Which i do not beleive is following the original intentions of Satoshi, for many reasons.

Moving from pencil-and-paper to CPU mining will not be the same as going from rocks-and-seashells to pencil-and-paper mining. The reason here is because rocks-and-seashells's and pencil-and-paper's have decentralized distribution. They are mass produced by huge companies  giving you the option to buy their products in any city, no matter where you live! This allows us to be in control of when and where we get our mining hardware, and to a certain degree, at what cost. (Which helps the decentralization process). http://en.wikipedia.org/wiki/Decentralization

While on the other hand, CPU's are/will not be mass produced, supply is controlled, price is controlled, they are in limited quantity, can only be bought from a few companies/sources, that in reality nobody even knows for sure they can trust. So what will happen is all the miners in the world will be forced to rely on those few small companies for CPU's, as well as the small quantities that they produce. And we will be subject to their pricing. They will also control the supply of the mining rigs, which can have an effect on the bitcoin economy that is similar to the effect that the U.S Federal Reserve and banks have on the money supply. I'm not talking about the amount of money/BTC, but when it is available/mineable to the miners. This allows CPU  manufacturers to be in control of when and where we get our mining hardware. (All this hurts the decentralization process)

People will have to rely on the small quantities that these companies produce, which causes people to have wait for their hardware, which in the end causes people to potentially lose money. This is exactly what is happening right now. Many people are waiting to see what happens with CPU's, so that they can start buying mining  hardware again. So, basically if CPU didn't exist people would continue to pencils and papers as i type this, which would have meant more profit for those people now and in the future, which would have meant more money in those peoples pockets. This is where the 'Federal Reserve effect' comes in, because now mining hardware companies can control when people buy/receive their hardware, plus control when people get more or less profit through controlling the mining hardware supply. Also, buying CPU's from a few small companies means whenever those companies come out with a new model, this process will start all over again. More lost money, more time lost waiting for release/shipping.

Another downfall of CPU, is the fact that CPU's will make everyone have to 'restart from scratch' buying mining hardware all over again, when most people already  have their mining hardware in the form of pencils and papers, and it is already payed off. Now you will have to sell all your pencils and papers, then have to buy $1000's of dollars of CPU's just to be able to keep up with all the other players with the increasing difficulty. After that, you will have to wait all over again to get your return on  your investment! Which could take half a year or more, once difficulty adjusts, which should just take about a month or so.

Once CPU comes out, the difficulty will adjust accordingly. Which will just cause everyone to make the same amount of money as they were before CPU's. So the question is, is it necessary for us to go through all of what i mentioned above, to just end up making the same amount of money as you were before with pencil-and-paper's, just a month or so later, with CPU's?

Because of the above mentioned costs, plus the added cost of CPU'S, this can hinder the widespread global adoption of Bitcoin just because of the sheer expense. This is especially true for people in other smaller, less wealthy countries. It is much easier to obtain a used video card for those people. People that could be helping to build security and decentralization for Bitcoin!

CPU's threaten to ruin any anonymity that Bitcoin has left. This is by potentially making it easier to track who is buying the mining rigs through the few small companies that sell the CPU's. Which could potentially be bad if Bitcoin ever became illegal!

There are also many more smaller disadvantages of moving towards CPU that are of less importance.

So now it comes to the advantages of CPU. That's where everything boils down to in the end. The problem is there are not enough advantages to using CPU, for them to outweigh the disadvantages it brings to the table! In my opinion, network security and lowered power consumption cannot make up for the potential problems that it brings. This is an economy. This is not about power consumption! It will all come down to economics in the end. And that is what I'm talking about. And that is the infostructure that Satoshi built Bitcoin on!

The  Bitcoin developers, and the Crypto Community in general needs the recognize CPU's as a threat, and we should all do something to stop this from happening. I do not think that Satoshi would think the way these CPU's are to be distributed would be good for the Bitcoin economy in general.  There are a few things we can do to combat this, like changing the algorithm to prevent the usage of CPU's. Or, we could all switch to another crypto currency that that uses a different algorithm that is resistant to CPU's, like Litecoin, so that we can save Bitcoin and our crypto-independence!

By Switching To Another Bitcoin Algorithm, Or By Using Litecoin We Can Save Our Crypto-Independence!


The only options we have now is to change the Bitcoin algorithm, or for everyone to switch to another CPU proof crypto currency. The ideal situation would be for the Bitcoin developers to change the algorithm, but that does not seem to be what they plan to do. So that's where Litecoin comes in. While Litecoin is not CPU proof, it is CPU resistant. It runs on an algorithm called scrypt that is highly memory intensive, which makes it much harder to produce an CPU for Litecoin. Even if a company would find a way to produce an CPU for it, it would take at least a year to design, produce and ship them. So it would be our 'safe heaven' from CPU, saving us from the many disadvantages and negative effects that CPU threatens to bring to Bitcoin and the cryptocurrency world. At the very least, it would be buying us more time to work on something to prevent mining hardware companies from taking over our crypto currencies. People will be able to continue to pencil-and-paper mine, continue to profit, once again allowing us to be in control of when/where we buy our mining hardware, as well as, at what cost we buy it at. Allowing the control of the crypto world to stay in our hands, not the hands of greedy companies!

Jay1337

Please act professional since you're representing BFL.  What a joke.

I wonder about the computational burden of my "ignore" list. Likely insignificant compared to the burden of having to read through useless, misguided ramblings in the future.

BFL itself is a joke. Scam to be more exact. And he is acting fully professional - rebutting criticism to ASIC technology to get every single ASIC preorder until they reveal that no ASIC miner is made.Take some smoke and read the texts where the CPU technology is criticized over older pencil and paper technology. The trolling shows the OP concerns as completely invalid. All that was done is automatic replacing words containing previous technology with technology generation before that.I spilled my beer on the floor when I started to read after finishing Find And Replace in Notepad++

I am?

Market tendencies will surely bring in more competition for them, right?

It wasn't always possible to pick up a GPU either. Over time things will change. Ces't la vie.

Imho ASICs will help us secure Bitcoin from being sabotaged by governments and thus help us take away the control over money printing from the rich. Which in fact will enable the poor to get richer.

Anyone who thinks litecoin is the answer to anything needs to spend like, 15 seconds thinking about the topic.  Anything that happens to BTC will happen to litecoin eventually. The only thing the rise of litecoin would bring is the downfall of cryptocurrency all together.

And if you say you have already thought about it...then think harder.

So uh, what is the OP's proposal?  ASIC's can't be prevented from being made.  Even Litecoin ASICs will come into being quite quickly if the Litecoin market cap and mining proceeds make it reasonable to create them.

Basically, whether you believe ASICs are good for any of these crypto-currencies or not doesn't matter.  They are coming either way, and there's no way to stop them.

There are a few things i would like to set straight. I am not writing this because i have a GPU farm, or because i hate ASIC's, or even because i'm a Litecoin supporter. On the contrary, i only have three GPU's, i think the idea and potential benefits ASIC could bring is wonderful, and even though i am a Litecoin supporter, i am only one because of my perceived threats from ASIC, which i mentioned in my original post. Nevertheless, i have mined much more Bitcoin than Litecoin in my past, and continue to do so today. Basically, when it comes down to it, i am a Bitcoin supporter first!
I simply believe there will be problems with the distribution, not ASIC in general.

Ok, so on the topic of distribution.

Intel and AMD's CPU's and GPU's can be bought from many more than two sources! When i say sources, i'm talking about distributors/local retail locations. Even if at one time it was harder to find a GPU, that was short lived, and bound to change because of the size of video card manufacturers. I do not believe that Bitcoin ASIC/FPGA manufacturers have the size and capacity to distribute at a high enough volume to meet the demand. Which leads to my main concerns about distribution.

This concern has already been put to the test i believe, and in my opinion has not worked out as people would have thought it would. My example is FPGA's. Yes, some of you (which have mocked my post above) have made example saying moving towards ASIC is the same as going from CPU to GPU, and GPU to FPGA. The only problem with that example is that when we moved to GPU, almost everyone started mining with a GPU. And when we moved to FPGA's, a much smaller percent of the community moved to FPGA's, and that is with the added fact that FPGA's use much less electricity, and are easier to use/setup than a GPU mining rig.

So if FPGA's are better than GPU's in every way (like ASIC's), why didn't everyone switch to FPGA's? Why can't you buy a Bitcoin FPGA at your local computer store? Your answer is in my original post. The answer is centralized distribution, as well as problems with supply/demand. Which is also the reason i own GPU's, and not FPGA's. As well as many others. Even though i wanted some! I feel we may have a repeat of this all over again with ASIC's.

I'm not sure of the exact numbers, but i believe that more than 50% of the miners out there use GPU's, and it has been more than six months since FPGA's have been announced/released for pre-order. Back when GPU mining software came available for Bitcoin, within six months the GPU adoption level was much higher than 50%. Which in my opinion shows the adoption rate for Bitcoin mining is much lower when the mining hardware distribution is more centralized. Which leads to to my primary concerns about centralized distribution in my original post.

 It's simple economics!? :/

Jay1337

Huh... this is actually a pretty interesting statement and illustrates a completely separate, seemingly unrelated point very well.

Why didn't everyone switch to FPGAs?  First off, all the serious miners did, or if not "switched" they added FPGAs to their farm.  The small time/hobby miners continued to mine on GPUs, because that's what they had/what they were already invested in.  There is virtually no large scale miners that remained solely on GPUs, only the hobby miners remained in the GPU arena exclusively.  But this illustrates the point that so many people just want to ignore or deny, but you can see it in action right here.

Why do people still mine on GPUs?  Because they are still profitable.  That's the short, simply and really only answer.  They do it because they turn a profit.  When GPUs stop turning a profit, they will stop.  The same can be said for FPGAs, people will continue to mine on them while they still turn a profit, even in the face of gen2 ASICs.  What does this mean for the ASICs though?

It simply means power efficiency is the most important aspect of an ASIC.  I do wholeheartedly admit that the first two weeks of mining on ASICs is all going to be about hashing power and whoever gets the most hashing power first will be the winner, as it were.  After the first few weeks (two, three, four?) it will be about the power... and as you look down the road to 6 months, or a year, or even two years, as long as an ASIC is profitable, people will still mine on it.  Just like people are still mining on GPUs. 

So the transition from CPU -> GPU is just like the transition from GPU -> FPGA which is just like the transition from FGPA -> ASIC, with the exception of the fact that there's no transition any time soon from ASIC.  It's the end of the line and you'll see stepwise improvements from here on out, not 10x or 100x increase in efficiency and hashing power.  If your first gen ASIC is power efficient, you can be mining on it through at least 3 generations of ASICs, unlike CPU, GPU and FPGAs which always had the specter of new technology making old technology obsolete.

You seem to be equating the success of bitcoin with the number of human beings using mining equipment. I'd say there's an optimal number somewhere, maybe a few thousand people, that are needed to keep the diversity of mining healthy. Too few people and you risk one set of problems. Too many people and you have another set of problems. But the primary reason for mining is to secure the network. ASICs will bring much increased security to the blockchain, as long as there's enough of them. And by all accounts, there are plenty of people pre-ordering ASICs, so there's nothing to worry about. Not everyone that uses bitcoin needs to be a miner. In fact, we don't want everyone to be a miner. There is much overhead with being a miner. It's not appropriate for everyone.

This is an excellent point. 

@MysteryMiner, you call BFL a scam, where is the proof that BFL has scammed anyone? Can you name a single person that has bought a product from BFL that they didn't receive or didn't receive a requested refund that is not in accordance with published policies?

It appears to me that you don't understand the manufacturing process of an ASCI product so let me give you a short description of the process. First you have the prototyping stage. This is often done with an FPGA as an FPGA is easily reprogrammed to optimize a product. Once the program is finalized for the FPGA you then give that to the ASIC foundry. Weeks or months later you have your ASICs.

BFL is the only Bitcoin ASIC product producer that has shown pictures of their product offerings. MysteryMiner why aren't you calling other Bitcion ASIC producers scammers? Have you seen any pictures from them, aren't they also taking pre-orders? BFL has been shipping FPGA miners for months, get the hint?

MysteryMiner, I wonder if you will have the honor to retract your false statements about BFL and apologize once BFL's ASIC products begin shipping. It's one thing to say 'I think their scammers' or 'it sounds like a scam to me' but it's another thing entirely to call a company a scam. I wont mention that your statements appear to be libelous. If your in the US, BFL could take legal action against you. If your in the UK libelous laws are much tougher. I am not suggesting they would but I do expect from you a 'bring it on bitch' reply. But it does no good to sue someone that doesn't have the assets to recover in a victorious law suit.

MysteryMiner I know what your going to say an employee/founder/investor has a criminal history. If you think that someone is willing to risk 10-30 years in prison for a second conviction maybe that says more about how you would act, your thinking and how you value money. Let us not forget that it was you MysteryMiner that said "And I would be able to synchronize my computer when I come out of jail if something bad happens." That is a prophetic statement of how you live your life. And when you use terms like 'faggotry' intending it to be an insult it makes you look like your sexually insecure. MysteryMiner are you insecure with your sexuality?

People who are worried about ASIC distribution can simply become ASIC resellers, I'd assume. Buy lots more than you need then resell them.

Good discussion. However there is one very poor argument being pushed against the OP which I must expose.

Many of you are saying that as ASICs are a threat to the network security it is imperative that the public get easy access to this before a potentially malicious entity does. Well no shit captain obvious, but the error is you are saying this in itself will be a good thing.

His point is that such a weakness is a sort of unforseen 'design fault' in bitcoin, and so attempting to fix the fault by flooding the market is not going to cause a benefit. Total hashrate is irrelevant, only the relative difficulty of the hashing between honest miners and the malicious is important.

A 'weak' highly parallelisable algo will always be open to this attack vector.

So bitcoin will probably survive this event, but to say its a big advantage just because total hashrate will increase 100x is ridiculous imo.

I lol'd.

They aren't. FPGA are much more expensive than a GPU and hash less. But they consume much much less energy.

ASIC are better in everything and a LOT better

Agree cost-wise they hash less. But on all other fronts FPGA hash more than a GPU. Per measure of a) energy b) temperature c) size/volume

I agree with this. Technology speeds everything up, even the stages of greed and elitism. Bitcoin has very much gone from a moral ground of "any schmuck can earn!" to "You need a week's salary of an investment to earn." to "Only those with the ability to take a large financial risk can earn"

That said, morality goes out the window when there is money involved. It will be interesting to see if there is a morality shift to alternate currencies and equally interesting to try to determine if it's a morality shift or a financial shift. There is a lot of money invested in hardware which WILL work with those alternate currencies. For the past couple of days, PPCOIN is running around 175% more profitable to mine than BTC so perhaps it has already begun.

So $150 is a large financial risk?   ::)

I don't see the step towards ASICs as being morally questionable, myself.  It's still "any schmuck can earn" in my book when there's $150 ASICs available.

$150? Who has $150 ASICs? You must mean in some not-so-distant future.
I don't believe that a $150 ASIC device would be worth plugging in.

Assuming we're in that future and the difficulty has risen... and assuming you don't have free electricity....

If the current $600 FPGA devices are $150, would they be worth plugging in?
There is no $150 GPU device which is worth plugging in now, never mind the future.
There is no $150 CPU which is worth plugging in.

I guess you just want free money thrown at you then?

I really can't fathom how people could think that bitcoin could stay in the "everyone can print their own money!" phase for any extended period of time AND have any value what-so-ever.  The two ideas are in direct conflict with each other.  The moment that something becomes of high enough value the people with more starting resources will always, always, always, no matter what BS you tell yourself, be able to acquire more of it than those without starting resources. Morality has nothing to do with it. It's all about Economics 101.  

This goes for gold, USD, bitcoin, litecoin, poopcoin, piratecoin, durpcoin, whatever.  

This is why litecoin is promoted only by people who are emo-mad that they didn't get enough BTC mined before the big boom. They're just hoping they can convince enough people to raise LTC value enough that they can dump and just move over to whatever BS they come up with next.  Either it's that explanation, or they are just too stupid to grasp economic principals taught in American elementary schools.  I'll let them decide.

Don't be ridiculous.

No one said anything about free money.

The OP was trying to say that ASICs will further exclude "any schmuck" from being able to afford the initial investment to earn money. leading to centralization of financial power into the hands of fewer entities. This is certainly true and the progression is already well underway. Is it good? Is it bad? I don't know. I know my place in the pyramid though and it's no where near the top :) I'm not bitter. I got a free lunch from bitcoin for a very very long time. If/when that comes to an end, I'm well fed and happy to have been able to have been able to participate in it. Being a socialist, It will be sad to see the any schmuck aspect of bitcoin come to an end.

But I love a good drama, and the bitcoin drama level is especially high. I expect interesting drama to unfold in the final months of 2012 and into 2013. :)

My point is, $150 invested into ASIC is going to be just as "worthless" to plug in as $150 invested into FPGA's, or $150 invested into GPU's.  So I don't understand why ASIC's are going to make the average schmuck any less able to mine.

I just think it's hilarious that FLHippy and Benator are going on and on about how ASICs are ruining the world and de-equalizing the mining playing field when that simply isn't true at all.  Anyone could invest in ASICs, just the same as anyone could invest in FPGA's or GPU's.  And just like FPGA's and GPU's, the higher the investment, the higher the revenue (duh!).  Anyone who expects the world to work any differently than that under any circumstances is deluding themselves.

And where/how does "greed" and "elitism" come into play?  Just because people are trying to generate extra income doesn't mean they are greedy or elitist.

Oh, and the kicker:  FLHippy mentions PPCoin, which just so happens to have the focus and hope of turning towards proof of stake in the future.  If there's any system that works to make the rich richer, proof of stake is IT!  And somehow, FLHippy is SUPPORTING it!   :D

I'm pretty sure you can't do that. True, you can throw 128k of SRAM on a chip and compute 1 step of the innnermost Salsa20/8 hash per cycle, but that's not terribly far off what a normal CPU can manage. The problem you'll run into is this key design goal of scrypt (quoting from the scrypt paper):


What that means is that roughly speaking, no matter what clever scheme you come up with involving pipelining or only storing every Nth value or whatever else you care to try, you shouldn't be able to get a hardware implementation significantly better than if you just threw on a bunch of naive hashing cores with 128k of SRAM each that compute a single Salsa20/8 hash per clock cycle. If you think you could, your scheme almost certainly has a flaw that you haven't spotted yet.

Is there some reasoning behind this? Are you operating on pure confusion, pure ignorance, or some mixture of the two?

You may think that proof-of-stake will offer a higher return on investment to rich people than it does to poor people. You are confused.
This is not the case in PPCoin or any of the alternate proposals I am familiar with (e.g. any of my own, or Colbee's "proof of activity" )

Alternatively, you may think that the return on investment will be equal for rich people and poor people under proof-of-stake just like under proof-of-work. Since rich people have more capital and can invest more, they will get richer. However, the wealth distribution is not affected simply because the rich save more in absolute terms than the poor. Instead, the wealth distribution changes when the rich save a larger proportion of their income than the poor. The wealth distribution depends on the savings rate for each group, not the absolute amount saved.

If the savings rate is the same for both rich and poor, then there will be no change in the wealth distribution over time.
If the savings rate is higher for the rich than the poor, than the wealth distribution will become more and more unequal.
If the savings rate is lower for the rich than the poor, than the wealth distribution will become more and more equal.

I don't see why proof-of-stake would affect savings rates. Could you explain why you think this is the case?

Why are you spreading FUD? or does this term FUD only apply to illogical statements made about bitcoin? are illogical statements made about PPCoin also FUD?
are logical, but pessimistic statements made about bitcoin also FUD?

It is often difficult to get what people are trying to convey in a typed message.

To be clear, I'm not anti-asic. I'm not anti-greed. I'm not anti-elitism. I aim to be a socialist but living in a capitalist world requires me to make money to survive. Money, greed and elitism are a fact of life in a capitalist society. Sometimes pointing out the obvious makes it appear as if you're complaining.

The OP stated a bunch of stuff. Some of it I was agreeing with. I'm simply interested in talking about how things have changed in bitcoins short lifetime. Changes that mirror the financial systems bitcoin claims to replace.

The OP and many others  claim that bitcoin takes the power away from the elite. There was a time when this was true but it is becoming less true. The introduction of ASIC eliminates quite a lot of people from the mining scene creating an elite class of miners. The BitCoin Foundation is another example of elitism. The few people (Atlas) attempting to have a discussion about this and other issues (or non issues) are marginalized and ridiculed. Again, I'm not anti-bitcoin foundation either.

The only thing I am certainly going on-and-on about is the shut-the-fuck-up-DIAF, attitudes of people who have a dissenting opinion. Bitcoin is most often advertised in a way that suggests elitism is reduced by the ability for any schmuck to be able to be a player. It shouldn't shock anyone that it has attracted people who would be offended by marginalizing or outright elimination of those schmucks.

As for supporting PPCoin... I converted all my PPCoins to bitcoins. They're pretty much useless for anything else. IMHO All these alt currencies are bitcoin's bitch. I'll support bitcoin for as long as I can find an angle to produce the somewhat free lunch I've gotten used to. With PPcoin generating 1.85 bit coins yesterday... Fuck yes I was generating some PPCoins. I'll eat steak today I think.

In the end, bitcoin seems doomed to be something more like fiat when viewing it from an end user perspective. Some elite group of people controlling it, manipulating it, and deciding who gets to be a player with the only real advantage being that you can buy drugs online and gamble online with it. That, of course, is a completely different discussion. Would bitcoin survive elimination of these spending avenues?

If your goal is to just troll every discussion, thats cool too. We all need a hobby. (I'm also not anti-troll)

Can you explain what this means? I've tried to figure it out but every possible interpretation I can think of is either incoherent or malicious.

I agree it is incoherent and malicious.

It's disheartening to want to be something you can never be and to have to do things that are against your ideals.

I've got this addiction to life and it makes me do terrible things.

That puts you in rare company here.  Most of us regard "greed" as a good thing, the force that drives progress.


ASICs were inevitable.  You might as well complain that the sun sets in the evening.


Atlas is a special case.  He really does need to STFU/DIAF.  Or at least have his psychiatrist adjust his meds.

As to other dissenting opinions, I haven't seen any real hostility.  Sadly, most of the dissenting opinions start with premises that are not widely considered to be true here, and the arguments raised by the dissenters rarely rise above the level of repeating their assumptions.

For example, your opening paragraph makes it pretty clear that you feel that "money, greed and elitism" are bad things.  Most of us disagree, and no matter how self-evident their badness may be to you, if you just assert your position over and over again, we'll get annoyed.  (See Atlas...)


Money is not wealth.  I bolded it because it is a superbly important concept, and one that most people fail to understand.  Money is a means to facilitate trades of wealth across time and space.  If you were hoping that bitcoin was going to steal the wealth of those that produced it and give it to those that did not, then yeah, bitcoin will be a "failure" in those terms, just as fiat has been.

#1 Same here bro, I hear ya!

#2 It's not the ASIC to be blamed, is the greed part of the human nature, which some may argue is good and some may argue is bad. In the Bitcoin case, the greed does have a "good part" no matter on which side you're arguinmg, the part that brings more efficiency and better technology to the table. However greed's inherent "bad part" is always damaging to the society as a whole if you have liberal views.

Good post kjj.

I find all these threads about ASIC bringing about the downfall of bitcoin and/or crushing profit potential hilarious. Back when you could only mine with CPU everyone would freak out if someone had a gazillion cpus hashing away. Then along comes the ability to hash with gpu and everyone would cry OMG all the time and effort i spent setting up my awesome cpu mining farm have been for nothing. Now here comes the asic and everyone is doing the same thing that has been done everytime a new tech become available. If you want to mine with an asic go buy one. They really arent that expensive when you consider how much it costs to start a rig from scratch using gpus. Will the rich kids have an advantage? Of course dont they always? Does that mean you cannot even the field a bit? Of course you can. Im willing to bet that when tech changes again there will be a ton of threads once again complaining about everyones asics not being up to snuff because i can use this new and improved widget to hash at 4000Th/s or something. It is all a race to get to the end of the block reward. Enjoy the journey

And yet so many bitcoiners try to discourage newbies from applying their CPUs and GPUs to altcoins that such hardware can still manage to mine some of so they can get involved in the cryptocurrencies scene from that small-change angle to get a taste for mining and see if they think they might want to move up to the big leagues by buying an ASIC (only $150 fergoshsakes), setting up p2pool and merged-mining all the coin types they can...

-MarkM-

I'm trying to figure out what your ideals are because what you originally said reads like "I want other people to give me stuff for free but unfortunately they won't unless I trade them something of equal value".

Satoshi was an intelligent man. He was well aware of the possibility of a hardware mining development arms race. Also one can make the following observation:

There was only 1 GPU chip manufacturer who dominated mining farms: AMD.
Today there are 2 FPGA chip manufacturers who are at the basis of all FPGA farms: Altera (in the BFL Single), and Xilinx (Spartan6-LX150 in all others).
And soon there will be 3 vendors of ASIC mining chips: BFL, Tom's, and nghzang's companies.
So we are actually becoming more decentralized over time.

IMHO the number of owners of the IP (intellectual property) of the technologies at the core of Bitcoin mining is a better indicator of how resilient (which is what you mean by decentralized I think) Bitcoin mining can be, assuming hypothetical scenarios where hostile parties would try to take control of, or negatively affect, this technology. It is not the number of resellers or distributors that matters (like you point out there are many AMD graphics cards resellers).

Quite true. There's a lot of overhead to running a mining operation. Uptime, installing new releases, always on Internet connection, etc. Mining isn't for everyone. You don't see everyone who owns gold also running a gold mining operation. Bitcoin users don't need to mine.


It will strength the security of the network. Professional miners will be more diligent in keeping their systems up-to-date and running optimally. That is what keeps the network healthy. Not amateur miners.

I'm not sure how you read that into anything I typed.

And, without being dismissive, I think that this thread isn't really the place to discuss the perfect world according to FLHippy. If you are truly interested in reading about a fantasy society I'll post it in off-topic.

Nicely put mrb.

Also, what do you guys think it helps becoming more and more decentralized?

A. Buy a small $150 device that you can just "plug and play" via its one and only USB cable

B. Buy video cards that you need to put inside your computer, check if you have free slots, upgrade MB if not, create racks as wooden scaffolds, have a lot of noise and heat, etc.

Of course newbies use what they have. Doesn't everyone? I mean it isnt really possible to use that which you do not possess. New people will always start hashing. Last year when the best gpu for hashing was a 6990 people didnt stop mining because they got all sold out. They continued with whatever they had or whatever they could get their hands on. Many new people try it with what they have and whenever they purchase something with their bitcoins or convert them to fiat they either decide to continue with what they have or they upgrade. That is another thing that will always remain true.

 Im pretty sure you completely missed my  point so i will restate it. Everytime the technology changes people complain and squeal doom and gloom. Yet the reality is people still mine with cpu's even though gpu's are so much better. People still mine with gpus even though fpga's are better or at least more efficient. Asics will come along whenever they finally start shipping and people will still mine with cpu's gpu's and fpga's. The difficulty will go up the network hash rate will go up but it wont matter people will still mine. Almost anyone can afford an ASIC of one type or another as they are not expensive and they are actually much much cheaper than building a gpu rig especially if you want to build one with comparable hash rates.

As for your statement mining will be a specialty business. It already is. Otherwise everyone would be doing it already. There will always be hobby miners and there will always be more profit minded miners. This will be true no matter what the difficulty rises to or how many times the block reward halves.   

Thank you everyone for adding your opinion!

*bump*  ;D

http://www.reddit.com/r/IAmA/comments/sq7cy/iama_a_malware_coder_and_botnet_operator_ama/
Without ASIC's, this botnet operator earns $67.58/day.
With ASIC's, this botnet operator would earn around $5.00/day.

http://www.reddit.com/r/Bitcoin/comments/zk24s/i_earn_over_500_bitcoinmonth_by_mining_on_a/
Without ASIC's, this botnet operator earns $129.50/day
With ASIC's, this botnet operator would earn around $10/day.

Etc, etc, etc.

Enough said.

Don't see why botnet operators have anything to do with this??

Even with ASIC, botnets will still exist.  ;)

If they want to make the same amount of money as they were before ASIC's, they will just have to add more nodes to their botnet.  ::)

So that doesn't change anything for anyone really..

It changes quite a lot.

Botnets cost a certain amount, and are valued at a certain amount.

If a $500/monthly botnet rental brings in $2,027.40/month of bitcoins, then it is a worthwhile investment.
If the same botnet (after ASICs are released) bring in $150/month of bitcoins, then it's a waste of the botnet renter's time.

Likewise, if a botnet owner can mine $2,027.40/month of bitcoins, but only rent it out at $500/month, then it makes sense to mine on that botnet instead of renting it out.  But if ASICs are released, and the same botnet would only bring in $150/month worth of Bitcoins, then it makes sense to rent it out instead of mine bitcoins with it.

Most botnets are already at their max size.  In other words, they can't just "add more nodes" to their botnet - the nodes are being added at precisely the rate that people's computers are infected.  An operator couldn't just increase the infection rate - if they could, they would have already done so.  For some reason, you seem to think it is as easy as the click of a button and doesn't cost anything.

What gives you the impression ASIC will not be mass produced?

In addition, Avalon will be the only company so far to have an option to purchase ASIC chips directly from us if you wish to design your own PCB and controller. the details will be revealed in a later time.

---

(disclaimer: The following message express the opinion of Yifu G. and Yifu alone. It does not reflect Avalon ASIC in any way or form.)

---

I personally got into the ASIC game in the first place for network contingency. Business and profits aside, I realized the community was practically beat in the head and robbed blind by the existing competition after I gotten our ASIC simulation results.

before Avalon announced our unit, the market looked like this,  ~$1000 for 27Gh/s and ~$1300 for 40Gh/s
Avalon announcs their unit $1300 for 60Gh/s.
after Avalon announced their unit, the market looked like this within a week, ~$1000 for 54Gh/s(+200%) and ~$1300 for 60Gh/s(+150%)

It really makes me wonder what our competitors' profit margin was before, and what would have happened if Avalon decided against the ASIC project.

Although I support you guys (most of the time, lol), I believe that Tom cablepair did say that he was considering licensing his company's ASIC chip out to a 3rd party manufacturer, although there has been no confirmation of who the 3rd party could be, or any additional information. But the intention was announced, and it hasn't been retracted.

Competition is a wonderful thing. Thank you for bringing it.

Revise history!  GO!

You offered a "pre-order" of $1300 with a "regular" price of $1900!  There was no magnanimity there; if you could have stuck to your original $1900 price point, I have absolutely no doubt you would have.  It was Cablepair and BFL that forced you to stick to your "preorder" price just to compete.

To be perfectly honest, the Avalon pricing played basically no part in our pricing structure and I'm pretty confident that it played very little if any part in Tom's either.  We responded to Tom's offering, as Avalon is frankly not really competitive due to power consumption issues.

"competition"? To me it looks like avalon and bfl use exactly the same asic  ::) similar prices, similar performance and similar release date  ::)

Hah.  That's a joke, right?  You need to get your eyes examined, then.

Avalon is on an ancient 110nm technology while the BFL chip is the most advanced bitcoin mining ASIC in on the planet by several orders of magnitude, performance is 7x better than Avalon and the release date is 2 months prior to Avalon... yeah, exactly the same!

I second that. We'd need more ideas of how to implement a fair POW system which cannot be easily corrupted. Satoshi ruled against Proof-of-IP, because it's even easier to attack.

A fundamentally fair system rewards the miner by their contribution to the network (in terms of transaction processing and related services). The difficulty increase does not add any beneficial factors to the bitcoin network, except resilience against a 51% attack. Thus the focus should lie on how to implement resilience against 51% attacks without the consumption of a lot of energy.

Well we have the PPCoin experiment running, so we can see if proof of stake is a way forward, but they still use PoW for minting.

The other thing that PoW does that some folks forget, is it gives us an unhackable time source that does not rely on external time servers or anything else that could potentially be spoofed. You know locally when each block happened, so you have a reliable timestamp, and don't have to trust anyone. Moving to a pure PoS system would remove that timing mechanism, which is why PPC is a hybrid and was initially launched with check-pointing servers until the PoW activity became high enough.

You have to have a constraint that can reliably be applied to all members of the network. There are a lot of choices, but relatively few that are immune to manipulation. Bitcoin is based on pure CPU PoW, LiteCoin uses CPU and cache/memory IO, and PPC uses pure CPU as it's constraint for block generation to give us this timestamp. Other theoretical constraints include network latency or bandwidth (potentially manipulable by building well connected private clouds, but there could be some benefits to this like the Swiss are doing,) persistent storage, or even real-world physical token passing (and 2 guys pass a bag of tokens back and forth as fast as possible to do a 51% attack.)

When I start thinking about a potential future where we want to control power usage, I'm noticing that really what you are talking about is "increasing the cost of mining equipment so that power cost/performance parity is reached earlier" So instead of an ASIC that costs $1300 and uses 1W/GH, you have a computer that costs $2500 and uses 5W/(GH equiv) of power. Assuming that folks like bitcoin and keep mining, it would end up being a completely power neutral move that would have no advantage in security, minting, or timekeeping. (my opinion, but I think the conclusion is pretty obvious)

The good news is that you are stressing out over a short term issue that does not need to be solved because Satoshi designed the solution into it. Block halving will make this look like the 1849 gold rush (http://en.wikipedia.org/wiki/California_Gold_Rush) once the reward drops to a level that is not economic for all but the most efficient operations. These larger and more efficient operations will be motivated by profits, but will likely be more interested in maintaining the network security to ensure bitcoin profits in other endeavors rather than directly from mining itself. I would not be surprised at all if the BitCoin world of 2030 is almost 100% institutional (finanacial houses/banks) mining, with partnering agreements on planned hash levels to help reduce costs, and a big warehouse full of standby gear that can be powered on if a rouge does appear on the network.

So even if PoW is not ideal, it still seems to be the best solution, and I don't see any real advantage to changing it from a simple solution to a more complex one if it does not bring a substantial additional value.

I don't feel stressed at all. Thank you. Let POW be with us for as long as we see fit.

I don't understand how the convergence towards efficient operations solves anything. It may be efficient in terms of profit margin, but can still be wasteful. After all, bitcoin users will pay for each consumed kWh in terms of transaction fees.

Sorry, stressed might be too strong a term, I like using overstatement. ;)

I doubt very much that we will see aggregate fees increase to anywhere close to the level that mining revenue is at now, which means that overall the level of available money to miners will decrease over time.

Combine this with power costs and it should lead to a smaller network (some miners leave, others reduce investment) and more efficient hardware that consumes less electricity on aggregate. This is because after the minting operation is complete, 33% of the value of the mining community (to the bitcoin network) is gone, and now it's focus should be on making it's core functions more secure instead of subsidising a larger set of miners than needed. As part of this we will have to redefine a "small transaction" at some point and lower the fees on them proportionately, because having to pay a $5 transaction fee when buying a coffee because BTC makes it up to $1000 is not going to work.

I think large institutions will get into the game at some point and we will start seeing peering agreements that happen outside of the typical transaction fee mechanism. Once that happens all bets are off on fee structure as they are likely to try to eliminate them rather than increase them. That's because large institutions will be able to take a loss on their bitcoin farm (and standby equipment, and ASIC on-demand manufacturer contract) because they can make so much more from the services they offer WITH bitcoin, but they are going to want to minimize that loss.

Buying a coffee with bitcoin might not make sense at all once bitcoin is a high value per coin, and transaction fees might be aiming more to have such trivially tiny purchases move to retail-purchase merged-mined blockchains instead of cluttering up the international balance of payments settlement network that is the original bitcoin chain.

Merged chains could also become significant sources of revenue for miners, as every Tom Dick Harry Airmile and Walmart starts looking into establishing its own brand of Canadian Tire Money.

-MarkM-

Why the heck do we need 8 decimal places if the transaction fee is always .005? I thought a core tenant of bitcoin was it's ability to adjust to increased value by reducing fees, we have moved from .01 to .0005 already, why would that not continue? The real question is how big a network (in terms of power usage) we want to grow to, and adjust the transaction fees to match the typical costs so that those that are wasteful are losing money and those that are efficient are making a profit...

As for merged chains, they have their own rewards in their own currency, that revenue is of consideration for the pool and miner, but not for BitCoin itself. It's just piggybacking on the work available. If miners are making enough on these alt-chains then maybe bitcoin does not need to pay fees except for anti-spam reasons, it adds value to the miners by enabling the other protocol to profit in place of a direct reward.

(Of course, I have to ask WHY Walmart would be willing to let anyone mine their chain instead of just running a closed system.)

You sparked a new thought for me there, is/will there be an implementation that allows automated p2p exchanges using the mechanisms mentioned here: https://en.bitcoin.it/wiki/Contracts#Example_5:_Trading_across_chains? If so it could enable the future you mention where the transaction fee stays high, but we are going to have to have a completely automated conversion system in place to make it work as easily as just lowering fees. IIRC, the mandatory fees are anti-spam as much as anything else, if the blocks start filling up then a market for fees will start to be established as folks bid on space in the block for their transactions.

You had me up till the concept of miners hevily invested in hardware continuing to mine so that bitcoin continues.... I don't see that happening at all. Just like poeple will sell their GPUs when it's not profitable to mine, those who bought into ASIC expecting profits will shut down when there are none also.

I'm shutting down and selling my GPUs tuesday, maybe wednesday.

ONLY in the case where there is another revenue stream that is directly supported by their continued unprofitable participation in bitcoin mining.

For example, thinking like a multinational bank, it might make millions or billions of dollars a year on fees related to bitcoin utilization, so they can factor that into the overall P%L sheet with both departments included. So while the mining department is like IT (sucking in money and turning it into heat (disclaimer, I work in IT)) at a loss of $4m a year, and you get $44m a year in fees, then you are $40M in the black, and you know that you have enough capacity (5% for a really big bank?) to prevent a double-spend attempt from any of your evil competitors, or ensure that your transactions are confirmed within a certain timeframe without excessive fees. Who cares if the mining is a losing proposition when you are making 10 times as much overall!

I'm not thinking that this makes sense for anyone who does not have something like "maintain X significant percentage of hashrate" as a key component to some other business plan. So independent miners are likely to have to run extremely lean, and it might not even ROI out if you have free power if the big boys start throwing their weight around. It's also not likely to stay that way permanently, the appetite for the loss leader status will run out and they will figure out a way to reduce hashing closer to parity, but it could impact us for several quarters if it happens.

I do think it will overall hit an equilibrium with a modest (5-15%) profit as time goes on, but in the start up phase we are going to see a lot of weird shit as we hit more diverse and larger markets. I'm hoping for at least a couple years before mining gets strange in some way, guessing maybe 5 at the outside.

took you off ignore because this was a good comment.

You point out "now" as the timeframe, I'm talking about 2-5 years out when we have much bigger fish swimming in the bitcoin pond.

You always have to take the whole business model into account. Google should be broke based on this logic, but they are not because the monetize the hell out of advertising and other advantages they can make out of their data and search capabilities. Amazon Kindle is another great example. All it will take is one large company that "needs to have x% no matter the cost" as part of a plan and we will see them going towards mining at a loss.

Of course now that I think about it, the loss might just be for Enterprises if they don't build efficient farms, so the solar powered mining rig might be a gift that just keeps on giving and giving.

I suggest you read up on the definition of Orders of magnitude (http://en.wikipedia.org/wiki/Order_of_magnitude)

Or...  I suggest you look up the term vernacular (http://en.wikipedia.org/wiki/Vernacular) before you try to educate me with grade school trolling.  I'll give you a freebie, too:  My use of "ancient" isn't technically accurate either.  You might also want to look up hyperbole (http://dictionary.reference.com/browse/hyperbole) since you are unfamiliar with both it and "vernacular".  They are useful words that you should have learned in grade school.

Both of these lessons are free of charge, the next one will cost you though.

PS - You should have a period after "magnitude" above. (Something else you should have learned in grade school.)

Ah, gotcha. You're just making things up, like that 7x performance increase and the 2 months prior shipping date. I guess the reality is Avalon is faster and will ship sooner. Thanks for clearing that up.

Lol, this is even possible.

No, AVALON is 400w at 60 GH/s.  Ours is 60w... now, what is 400/60?  Tell everyone, please.

BFL is scheduled to ship end of November, Avalon, sometime in January.  How many days are between December 1st and January 31st?  Tell everyone please?

Now, with your answer, how many days are in a month?  Divide that by the answer you got above.  Tell everyone, please?

Are you really so stupid that you need me to hand hold you through basic math?  I had given you more credit, but I see that credit was misplaced. 

No, Avalon is worst case 400 Watts but once they have the real boards and not a prototype board, they will announce the real life power consumption. Stop twisting your competitors announcements (just like you did with the bASIC).

Are you still as sure about that 60 Watts / 60 GH/s just like the performance and power consumption of BFLs first product turned out? How well did that calculated guess work out?

Until you have a working product, you can only make guesses. Will you give people a refund if your product underperforms?

How is that twisting the announcement?  That is the number they released, am I suppose to just pull numbers out of my ass?  Fine, the Avalon will use 900w and hash at 800 MH/s, hows that?  What did I twist for bASIC?  Tom still hasn't released numbers and he's suppose to ship in a couple weeks.

Where can I bet that he will ship at most 1 week later than you or better?

Can you STOP?

inaba, pls stop feeding the troll, or ill have to go make popcorn lol :)

This statement is not false, 66Gh/s > 60Gh/s


This statement is false, 66Gh/s != 60Gh/s, In addition Avalon is scheduled to ship all their units out before Jan 31st.

That statement is false.  The statement is "Avalon is faster and will ship sooner."  Avalon will not ship sooner, therefore the statement is false.


I am sorry, you are correct.  Avalon is scheduled for 66 GH/s at 400w, my mistake.

That is correct, both vendors have not released their final power specs yet as both don't have their final boards in their hands and it's their good right to wait until they have some real measurements and not marketing inspired guesses or a Mentor Graphics Power Aware Verification.

If you had a working final board, you would have long showed us a little video made by a neutral third party that shows a working board hooked up to a test pool and a kill-a-watt.

BFL is shipping in how many weeks to this date?

I have absolutely no idea what you are even trying to say.

everyone around to hear it had a chance to pre-order

LOL.

This sure is fun to read.