Bitcoin Forum

Check it out:

https://blockchain.info/address/1FGAftzSTztFSB8LMwsrdCKTyqGY6zr3sU (https://blockchain.info/address/1FGAftzSTztFSB8LMwsrdCKTyqGY6zr3sU)

China-based Forum Discussion:

http://bbs.btcman.com/forum.php?mod=viewthread&tid=2207 (http://bbs.btcman.com/forum.php?mod=viewthread&tid=2207)

Difficulty will be increasing like you don't know.  Hope you understand how this mining will play out.  


Thoughts?
-Dalkore

Cool beans...

anything below 1500TH at years end would be a disappointment, hopefully we can push 2-3 peta with some luck!

What kind of difficulty does that equate too?

Just on these chips it will go to 20 million when they get all online.

Pending on putting the chips onto some kind of pcb and mining with it. Id give that till 2014 before we see that.

One chip at time... one chip at a time. You will see some of this potential hash start coming in about 3 to 4 months. This is the WAVE... forget BFL, Avalon or ASICminer... it will be open source that will really expand Bitcoin and secure it's future. I can't wait to see the next chip something a lot smaller and lot more energy efficient. This is going to be some ride that the DIY community has been waiting for.

the link does not work to the chinese forum.  Could you post a better link or cut and paste the conversation?  Is it speculation or one of the Avalon team disclosing something?

that's not to bad

Fixed, sorry.  That was a mobile link.

It means I wont have to worry about Gold sellers in MMOs, because they will all be in the Bitcoin business! The value will be seriously deflated. It's time to cash out.

Translation time!

Original:

七彩神仙鱼：很有意思的一个现象，南瓜张芯片收款地址可以追踪，从目前的情况来看，目前已售出50W片芯片，折合算力140T，预计将在8月份增加150T+算力，元芳你怎么看？ https://blockchain.info/address/zh-cn/1FGAftzSTztFSB8LMwsrdCKTyqGY6zr3sU

RainbowAngelFish: A very interesting phenomenon, pumpkin (known alias of NGZhang) chip payment address can be tracked from the receiving address, currently the have sold 500k chips, equivalent to 140T, 150T+ hashrate is expected to increase in August. YuanFang how do you see the situation?

---

Note: RainbowAngelFish is the resident mining guru of the Chinese boards.

Difficulty will be approximately hashrate/2^32*600. So if by the end of August you're expecting 150 Thps on top of the already expected 500 Thps (including bitfountain's 200Thps) then difficulty will be: 650e12/2^32*600 = 90803951

So difficulty will be closer to 91 million at that point.

Lol, the current difficulty is what, 8.9million? So at 91mill your 66GHs Avalon is going to do a coin every 3 days. So much for the ROI. At least they will be dirt cheap if they keep to their pricing formula. They will probably not get enough return on that formula to keep making them.

If you solved a block every three days, that would be a 9 day ROI for most people since each block is worth 25btc.

At a difficulty of 91 million, 66Ghps will earn you about 0.044 btc in three days.

Here's the rest of the translation of replies.  As it is not the first post, sorry if I am being sloppy and editing off google translate!

沙发 zshsust 只看他
谁先收货和谁先造出矿机是关键 - Whoever first receives chips and first assembles mining machine is the key
板凳 whutrat308 只看他
当前应该是65T？不考虑蝴蝶，挖矿效率是现在的1/4，还能接受 - Should 65T? Not consider butterflies, mining efficiency is now 1/4, but also to accept
地板 cong1744 只看他
相信中国制造的速度 - I believe in the speed of made in China!
5# jack.song 只看他
有150T！- There are 150T!
6# jack.song 只看他
有150T！- There are 150T!
7# mylittlematong 只看他
很明显 2批不发货就是为了卖芯片 - Obviously batch 2 non-delivery is to sell the chip
8# asg99 只看他
希望二批三批不会赔钱 - Hope that the second installment of three batches will not lose money
9# asg99 只看他
希望二批三批不会赔钱 - Hope that the second installment of three batches will not lose money
10# Wayne_Chang 只看他
原来2批不发货是因为忙着卖芯片了啊！ - Original batch delivery is busy selling chips!
11# ruohongzhao 只看他
！！！150T！！！！ - ! ! ! 150T! ! ! !
12# 叶-Zell 只看他
说明订了蝴蝶和avalon的人都得去死了。。。
13# hiyung 只看他
第2批应该还能小赚,第3批基本就是回本了,买加价二手的我看困难了
14# speeditcert 只看他
买芯片能给技术支持吗？芯片的资料公布l吗？再说了，卖芯片赚钱还是卖设备赚钱啊？看来南瓜并不缺钱啊！还是说准备忽悠另外一批人的资金，告诉他们卖芯片了，但先付款后等货？
15# speeditcert 只看他
买芯片能给技术支持吗？芯片的资料公布l吗？再说了，卖芯片赚钱还是卖设备赚钱啊？看来南瓜并不缺钱啊！还是说准备忽悠另外一批人的资金，告诉他们卖芯片了，但先付款后等货？
16# 彬彬 只看他
大家不用怕。会有疯子为了利益，对工厂发动袭击的。。。。或者，如果某个地方聚集了极大量算力的时候，也可以直接或间接攻击那个地方，比如人为停电。。。先静静堆设备不运算，然后让大量大的对手停机一段时间，自己就爆发出来抢这段时间的币。
17# dudufish 只看他
人民币付款的还不知道有多少呢，有没有类似方法能查出来？

Sorry folks, times up, gotta catch a plane, don't have time to finish the rest of the translation...

The arms races is in full swing.   Hope you can stay in the kitchen.

So, don't trust Avalon's magic formula to estimate the difficulty anymore. 

490k? They've sold 3 batches, total 1.5k units.. Though I don't know how many actual chips each unit contains..

43,142 bitcoins and counting, we're over 160T now...

... continuing with where I left of:

12# 叶-Zell 只看他
说明订了蝴蝶和avalon的人都得去死了。。。 - This means those who ordered butterfly or avalon will be killed
13# hiyung 只看他
第2批应该还能小赚,第3批基本就是回本了,买加价二手的我看困难了 - 2nd batch should make a little money. 3rd batch is basically breakeven. Premiums paid for second hand should have trouble.
14# speeditcert 只看他
买芯片能给技术支持吗？芯片的资料公布l吗？再说了，卖芯片赚钱还是卖设备赚钱啊？看来南瓜并不缺钱啊！还是说准备忽悠另外一批人的资金，告诉他们卖芯片了，但先付款后等货？- Is there tech support for chip buyers? Will chip details be made public? Also, isn't selling machines more profitable than selling chips? It seems Avalon do not need money anymore! Or are they ignoring the needs of some customers, by telling them they are selling chips, but still ask for pre-order payment?  (sorry, this guy is hella confusing)
15# speeditcert 只看他
买芯片能给技术支持吗？芯片的资料公布l吗？再说了，卖芯片赚钱还是卖设备赚钱啊？看来南瓜并不缺钱啊！还是说准备忽悠另外一批人的资金，告诉他们卖芯片了，但先付款后等货？
16# 彬彬 只看他
大家不用怕。会有疯子为了利益，对工厂发动袭击的。。。。或者，如果某个地方聚集了极大量算力的时候，也可以直接或间接攻击那个地方，比如人为停电。。。先静静堆设备不运算，然后让大量大的对手停机一段时间，自己就爆发出来抢这段时间的币。 - No need to fear everybody.  There are some insane people who will attack the factory.  Or maybe wait for the big hashing sites to show up on the map... attack the mining sites... and then come out with their own hashing machines.
17# dudufish 只看他
人民币付款的还不知道有多少呢，有没有类似方法能查出来？- There is no indication of how many chips have been paid for in RMB. Is there a similar method of finding out?

So in August we will have many of those:
http://www.bilder-hochladen.net/files/k9l5-1y-14bf.jpg

+1 Sweet Cartoon Frizzy!

If you look at the blockchain link, BTC wallet "17Tfh..." transferred  enough BTC to buy 220,000 chips.

15,614 / 780 = 20.0179?

The 0.0179 must be shipping...

Oh, this gets interesting. I didn't expect this amount of sales in such a short timewindow.

Now it would be a golden time for BFL to start shipping if they don't want cancelled orders flooding in like crazy.

I knew this would come, now reality hits.  Hope people are paying attention.

Well avalon better seriously change their little equation for batch mini 4 then huh?

Btw the big transactions come from 17Tfh8SE71MbvQ5vZtXPQA8a4YM8NPv3bf and 1AyTpzuCCUdgZLTHi4iB5yawuRsHL37q3j

and https://blockchain.info/address/1AyTpzuCCUdgZLTHi4iB5yawuRsHL37q3j

https://blockchain.info/address/17Tfh8SE71MbvQ5vZtXPQA8a4YM8NPv3bf

 Exactly 15614 bt from each! This seems more like avalon moving money to themselves!

Comeon people.. freak out much? Unless you seriously think 2 different  people put over 1 million dollars each with the exact same number of coins into buying chips?!

Short answer - yes, it is possible.   I know a couple larger buyers.

wow! This is some serious fire power.
I have not followed the ASIC/Avalon/BFL circus too closely. Are those chips actually ready to ship or is this just another pre-order of chips from a parallel universe?

i dont buy that 2 large buyers each bought the same amount of chips. For me i'll choose to not freak out over transactions in a wallet when all it shows is BT moving around. Of course its all speculation.  so... specualte away!

My speculation is that this wallet is used to pay foundry and suppliers. BT is to pay avalon Batch 3 and chips.

Oh and the all important bribe the customs officials money.

Actually that makes no sense. As a seller of preorder you want to over promise. Competitors will have to second guess your actual hashrate contribution and buyers will side with you. As a chip seller, however,  you want the buyers to NOT know the future hashrate. So more manufacturers will buy your chips as the expected profit margin will still be high. Also note that not a single bitcoin has been moved from this address. Which means your point of paying for foundries is invalid. It is probably held on escrow until delivery.

I know both of these guys ,so I do not find it surprising! ;D

I said for for suppliers and foundry for chips and batch 3. They haven't even shipped batch 2 which would still work for my theory.

Either way my point is we are just trowing shit against the wall and seeing what sticks. You are all speculating on what BTCs in a wallet are for, and it doesn't make my theory any less  credible than yours. I actually did more work than jsut looking at the wallets total btc.

True. We'll see. I mean, they have to move that bitcoin at some point in time right? 42k bitcoins!

Yup its shipping cost - 490k = it's only 2 maximum orders = so two companies with secret asic project - and multiple smaller ones, like my 10k chip order.  But if you look at the timeline I calculated for assembling miners from chips: https://bitcointalk.org/index.php?topic=180093.0

August is about right for seeing these hashers coming online.

Cost is about $2 million for chips - figure double that for facilities and supplies, including all the PCB, FPGA, PSU, cables.. the list goes on and on, plus more for labor.  Two companies made that investment without informing the community or allowing them any opportunity to participate in it because the ROI is so obvious.

How many chips per avalon device from batch 1-3? Here, I'll help: 3 modules each, each module has 10 pcb with 8 chips each = 240 chips per avalon.
batch 1 300, batch 2 600, batch 3 600 = 1500 devices = 360k chips

How many purchasers do you think are speculators just hoping to resell their in-hand chips at a markup?

org, please update thread in mining speculation with 400k chips mining in tweve weeks.


https://bitcointalk.org/index.php?topic=178051.0

none.  theses are ALL makers.

Considering the max order is 200,000 chips, I feel at the moment it doesn't seem likely they will "sell-out" and turn into a mark-up situation.

there is no discount when buying volume, the only to resell is to mount the chip and resell the package.

If you believe that 200k is the max chip order then these transactions don't make any sense and should be discounted.

the max single order is 200k chips... just need more than one order.  the number of chips they are offering is infinite.

I'm saying that the value of the mark-up will come from having them in-hand for immediate shipment vs ordering from the Avalon store and waiting on production.

What are your thoughts on Batch II not even moving yet and complete silence from avalon?

So for the average (non-ASIC owner) miner, what does this mean?

All this is based on what? more speculation?

According to BFL, they don't have a refund issue.  ;D I know, I laughed too when I heard him say that.

I'm debating whether this kills bitcoin or not.

it's based upon what they are selling in their store... I am not speculating.

It means GPU miners will be pushed out of BitCoin mining....Unless the extreme difficulty leads to each BitCoin being worth alot more (1,000 USD per BitCoin by summer).

If that happens, then expect the "new normal" to be people buying BitCoins in fractions up 8 decimal places. Personally I think people should focus on storing and increasing their current BitCoin Stockpiles.

If you do, it may very well keep you padded with enough cash to transition to the next generation of ASIC's. Maybe...

Where on the store did it say they were offering infinite chips? funny that you guys throw around these figures as facts.

edit: ok i concede that chip supply is  technically infinite since you can still order it.

That is until end of 2013

"2. these chips will be available until at least end of the year, 2013."

source:
http://store.avalon-asics.com/?product=avalon-asic-chips-10000

I still say wallet total does not mean jack shit for the amount of chips bought. All speculation, could be any number of reasons for the BT to be in there. Only avalon knows.

I'll be doing this, yes. But unfortunately not much. And the current price of ASICs is waaay overblown considering how much the difficulty will rise in one or two retargets. I can tell you right now, working 10 years every day of my life I still won't have even 50k.

What's happening right now, is that only the elite will mine Bitcoin.

Luckily there are a ton of other less mature currencies which will allow newcomers to enter the markets. I doubt mining will end. It will just shift from one Coin to another. (IMO)

My [imaginary] crystal ball tells me that the biggest challenge to the Future of Coin Mining will be from governments. BitCoin needs to detach itself from the banking system. MtGox, BTC-e, BitFloor etc, will need to find alternatives to converting currency while side stepping the current fiat infrastructure.

Someone will eventually have to create a feedback system that is reliable and tied to a persons real or virtual permanent identity. A system that can keep tabs on decentralized transactions and multi-currency conversions without the direct aide of banks.

I think there are some steps in that direction, but they seem spotty at the moment. I don't think ASICs will be the end of anything anymore. It will simply push Virtual Currencies to be alot more distributed and flexible.

These chips really aren't much more power efficient than FPGA. I'm afraid they will be obsolete by the time they get mounted on PCBs.

Aka Litecoin? ASICs will not be happening for Litecoin for a LONG time. It already takes up 1.5 - 2 GB of memory for just around 500-600 khash.

They are very power efficient given that the amount of hashes/joule is very good. No idea what you're thinking.

agreed.  (see my sig)

I don't think LiteCoin will be that important in the long term. If anything it [LiteCoin] will be a cheap way of converting and moving funds from one place to another.

Check my original post as I elucidated a bit more on what I think will happen next. I think the future will be what BitInstant is now. Except it will be on an individual level and minus the high fee rates for exchanging or converting transactions. I think the long term future (or should I say hope) will be someone writing an easy to use interface which will look at regional registrations.

Some individuals within those registrations will have ties to the "old fashioned" bank accounts. Others will have ties to different currencies, yet others to different forms of sending money (Western union, A specific Credit Union, Interkassa etc), yet others will have the capability to convert it into physical cash at some distant location etc.

I hope the future takes the control of money from regulated institutions and places it unto individuals with connections and a variety of methods of honoring that transaction. If you want your BitCoins (if it exists by then) denominated in 3 different currencies and in addition 2 types of money orders and 1 physical cash transaction to someone in another country, it can be done via this yet to be built interface.

I hope this is where it is going. The current system is incredibly vulnerable and subject to being seized.

The TeraHash issue is going to be pretty insignificant compared to a sudden future closure of MtGox by one or more governments.

Relevant interview with BFL buyers:
http://youtu.be/_ERE4uiufqE (http://youtu.be/_ERE4uiufqE)

Agreed that the centralized exchanges (MTGox in particular) are a huge weak point in the current economy.

We've seen trouble manifest time and again when a major exchange has a major problem, yet the situation hasn't changed much (yet).

so help define the next  mt gox  (https://bitcointalk.org/index.php?topic=179147.0)

difficulty will go up about 10X by August... So if you have a second batch Avalon, there will have potentially a short time to make good money and then it may be a couple dollars a day. Depending on the BTC price.. So do you buy, sell or hold? Have an Avalon batch #2 and #3. Any feedback would be great (please don't pm me about selling them)!

So let's analyze your statement "difficulty will go up about 10X by August":

Let's make it by September because let's face it none of the players have met their self-made deadlines strictly so far.

Current Global Hashrate: 65 TH/s
Current Difficulty: 9.0 m

By August September:
Avalon batch 2 + 3: 1200 X 65 GH/s = 78 TH/s
Avalon raw chip increase: 500k X 282 MH/s = 141 TH/s
Big Time Coin hashrate increase: 500 X 96 GH/s = 48 TH/s
BFL hashrate increase (wild guess) = 50 - 100 TH/s
ASICMINER hashrate increase = 50 - 200 TH/s

Total hashrate increase: 367 - 567 TH/s

Difficulty after adjustment in September:

(9/65) X (367) = 50.8 m
to
(9/65) X (567) = 78.5 m

Or an increase of 5.6 X current to 8.7 X current difficulty.

Also, people will switch off their GPU miners and FPGA miners around this time or soon thereafter, mitigating the difficulty increase for September - December.  And there are no new technologies on the horizon that will exponentially increase difficulty thereafter, it will grow linearly. So while Avalon's difficulty calculation of doubling every month seems accurate for the next 3 months, it will not double any more after that and revert to more linear, less exponential growth.

So your Batch #3 avalon, assuming a cost of 100 Bitcoin and a hashrate of 96 GH/s, recieved in June or July, could potentially break even in 2 or 3 months.  Definitely buy and hold, you will find no better ROI anywhere.

I was wondering when/if someone would analyze the blockchain for payments ;)



1. Almost all payments (with the exception of less than 800 BTC total) are exact multiples of the cost of one batch of chips (780.7 or 782.1 BTC: different shipping costs for different parts of the world).

2. I know the people behind some of these orders.

So yes, prepare for at least 530k chips or 150 Thash/s to hit the network soon. What else did you expect? This Avalon OEM chip sale is by far the largest and cheapest ASIC investment option available in the immediate future.

Dude you have to stop with the video.  I literally am going to choke from laughing.   :D

I hope you have subtitles on :)

Ah good catch there. Someone who does math, unlike me.

thank you for taking the time to give your detailed analysis. Does everyone agree with these numbers? Are they too low or high..
Regards,
Brian

Hi Brian

I second the thanks for an great analysis. Here is another thread with a link to a detailed analysis, and a prediction table. The author thinks difficulty will be slightly lower in August, but they do not say anything about September.

https://bitcointalk.org/index.php?topic=178051.0 (https://bitcointalk.org/index.php?topic=178051.0)

^^Where the author concludes the difficulty is going to approach 1 billion, unfortunately he cannot determine how quickly (bottom of thread shows 700 million).

What do you think will happen with btc price in august? On one hand avalon and other asic miners will want to sell whatever they mine to pay off investment, on the other asic manufactiorers will need to sell most of the 42k btc accounts to pay for costs. On top of that the shrinking population of miners may make merchants and investors more wary of the crypto currency whose transaction confirmation is concentrated in the hands of few. Hash power concentration makes btc weaker not stronger. The conclusion sems straightforward dosen't it?

This question is unanswerable and belongs in economic speculation.  There is no correlation between mining difficulty and the price of the coin, price is determined by human demand which is in-calculate-able.

Yes, there is. Difficulty absolutely correlates with previous prices.

Agreed. But point is not in the price per se. It is the fact that loss of trust as number of miners winds down would create a reinforcing downward spiral of trust and yes price that threatnes to destroy this experiment. I would not say i am a doo.sday prophet but this is really worring.

lol.  damnit.  Now predict the future seer!   :)

Unlike with gpu asic  has not other useful purpose. If diff is too high, people will get rid of them and never come back. Consolidation of hash power is ineviteable.

Unless you use a different algorithm...  See here (https://bitcointalk.org/index.php?topic=179033.0).  I agree this hashing power may spell the end of bitcoin as we know it.  Disagree?  Come talk to me about it.

Thank you for the detailed analysis as well.

I see a time when I start to lose my sense of humour, VR ;)

sure. i read the suggested thread and you are correct in your analysis. from the merchant standpoint i don't care what crypto currency i use. if ltc has faster confirmation then great. nice but not spectacular.

but... if btc with diff of 500M is only worthwhile to mine by 100 entities, i might consider it to be unsafe. as if only one entity ended up mining it would certainly be unsafe.

simply put: safety of btc is in number of people mining it and using it. asic goes against that and has therefore likely killed off btc.

ltc? well if miners move there, so will exchanges. then merchants and users will surely follow.

personaly i predict btc ltc price parity within a year (1 btc = 1 ltc)

cheers...

I'm not following you. I say that mining difficulty correlates strongly with past BTCUSD prices. Are you saying this is or is not the case?

here is what i think:
gpu has other purposes besides btc mining. if marginaly profitable i'll mine. if not i'll stop. at worst sell off a card or two. but i can always be back if need be. so yes, current diff is based on past price.

asic is different. i'll buy it to mine period. if unprofitable i'll sell it. but it's likely that to be profitable i need to run it like a business. large scale because of upfront cost. if in this scenario i loose interest in mining then i'll sell hw and whole company to a competitor. and will not be back.

with asic it's a one way street. and will result in small number of dominant players.

Big Time Coin, was the member who provided the detailed analysis. So give credit where credit is due :)

regards,
Brian

And so you do or you don't think difficulty will correlate with the exchange rate?

I don't think difficulty is related to the exchange rate.
The algorithm dictates a steady flow of 50400 BTC every two weeks regardless of the amount of processing power.  Processing power just decides how those 50,000 coins are distributed.

Public exposure I believe to the be dominant component with exchange rate.

Security is defined by any one person with the ability to takeover the network. When there are three suppliers (two and a half? ) pumping out machines that can compete against all the super computers worldwide then we will have achieved network stability on two counts. Firstly government will never catch up with the specialized hardware to compete. Secondly, machine distribution is scattered worldwide. Although this has been discounted by BFL's non delivery, but chip sales has just more than compensated. There are at least 10 different threads in five different languages calling for pooled effort of turning chips into hashing machines. As such, the supply base has already become 10 fold, to the extent that ASICminers 250T is no longer a big threat.

Conversely, LTC miners can mine LTC today, XYZTC tomorrow. Which means there's no substance in it's hashing base. Furthermore, the difficulty is still within grasps of super computers. So, LTC has yet to see the light.

"Eppur si muove"

There is a good case for this.   Short-term, there might be light correlation but overall, growth of the network and demand will be the ultimate driving factor.   

The original quote was :



This is an answer about the past, not the future. Up until now there has been an extreme clear correlation between Difficulty and previous prices.

One such linear model (for hashrate rather than difficulty, but the same principle applies):

Liner model compared to network hashrate:

http://1.bp.blogspot.com/-oYbeCTBuf7I/UKTuR6Wx5iI/AAAAAAAADdM/OfULleYplU4/s1600/npw10.2.chart2.2012-11-16.png (http://organofcorti.blogspot.com/2012/11/102-forecasting-network-hashrate.html)

Organofcorti: that is an amazing chart. How can correlation be so close? But surely that is only the case for red sea competition. More fish in the sea, more fishing boats. But asic is blue ocean. Is there a modelling method that you can apply to predict the next 18 months?  Say when gpu's or fpga's first hit the scene?

Hey Organofcorti,

The "Price drives Difficulty" thread, and your blog spot article, are interesting.  Numbers don't lie and your model with R^2=0.9991 is hard to dispute.

Philosophically though I think it is a shame.  It sort of implies that casual mining is a fools errand, and resources are better spent just acquiring BTC rather than mining.  Personally I find that boring... but I guess now I have been warned.

In the meantime I will stop saying the sun revolves around the earth  ;D

Thanks for the complement. If you want more information, click on the chart and the link will take you to the post that describes how it's done. You might want to start at the previous "10.1" post for some background.


The modelling method survived the start of GPUs and FPGAs quite well. I don't know how it's going to go over the next few years, but I'm keeping track. If you search my blog for "Weekly network forecast" you can see the most recent updates. At the moment with a volatile USD BTC rate and ASICs arriving in spurts the predictive value isn't as good as it was a few weeks ago.

I think you're looking at it the wrong way and that's probably my fault. The exchange rate drives the network hashrate through the cost of electricity, returns on equipment and so on. It  illustrates how the exchange rate affects miners directly.

There are other drivers that can't be accounted for by the model and we'll be seeing plenty of these soon.

Up until now though the main drivers of the network hashrate has been previous exchange rates and previous network hashrates.

I think Avalon started something very interesting in terms of your chart. And that is they removed USD from the equation by pricing in BTC. As such, until they stop doing that, or competition forces them to price in fiat, there may be a duration where the exchange rate does not dictate the proliferation of miners. This is double the case since asicminer by default is denominated in BTC. Arguably tripled as well as it seems BFL will price in reaction to Avalon. The only price unlinkable to fiat is electricity, but currently that is not the main concern of asic miners.

I think you're partly right - for the moment the exchange rate will have little effect on the profitability (edit: vs unprofitability) of ASIC miners. However, the nature of the difficulty changes means that we will quickly advance to the point that electricity costs will be a problem for ASIC miners too

At this point the relationship between exchange rate and difficulty wil be much more obvious and at that point we hit a hashrate plateau until the next big change in either exchange rate or mining device design.

So what your saying is because Avalon & ASICMiner are priced only in BTC, they are retaining a certain portion of BTC from miners forced upgrade to ASIC (assume they are keeping a BTC reserve in a form of profits)?  That would make sense because the nature of ASIC mining, it is a continual race toward efficiency until (as organofcorti said) we hit the hash-rate plateau.

Actually no that wasn't my point. But your point is much more valid. Since asics can only produce BTC, even asic producers are forced to think in BTC and not fiat. Both asicminer and Avalon hold more BTC than fiat. So their decision to take short term profit or invest in new technology is also based on BTC. Furthermore, upgrades  to asic technology will only produce BTC. As their payback period is even longer than miners, it is arguable that this BTC based decision making is here to stay.

I think what that earlier fellow meant was that pricing and difficulty will be relatively in sync when actors behave rationally. It seems that this asic phase is akin to the 2011 gpu phase when bitcoin price exploded, in that people acted foolishly. Just as people were taking out $20k loans to retrofit their house and buy GPUs and rigs (that they later regretted), we now see people pricing themselves in at $50,000 for a batch 1 avalon, $9000 for an ASICMiner blade, $80,000 for a batch of avalon chips, rather willy nilly. If this thread is correct, and 150TH of chips has been ordered *already* and people have shown little sign of slowing down on that unlimited train, there might be another glut of "oops, I spent way way way more than I should have" rolling down the track.

Would not surprise me if we once again surpass any reasonable plateau, and find ourselves in deep waters. A shame too, because it makes it very difficult to participate when I can't count on the other actors to not slit my throat along with their own.

as i said:
- with gpu: price drives diff (price up is followed by hash up, price down hash down)
- with asic: price up hash up, price down hash remains and miners consolidate i.e. there are fewer but larger miners

Ah, thanks. Sometimes I need my information pre-chewed ;)

I agree to a point, but I think that electricity prices will have a significant effect as well.

Edit: What you're suggesting already happened after the last exchange rate bubble, so it's not specific to ASICs, although the effect may be greater.

You can look at an estimate for loss of profit based off of the expected rise in difficulty from now until about the 1st of August.

I did the analysis for a 47.3GH/s FPGA rig as an example. An ASIC rig would just have a lower initial cost but the profit degradation would be the same.

Look for my post here: https://bitcointalk.org/index.php?topic=178051.msg1910302#msg1910302 (https://bitcointalk.org/index.php?topic=178051.msg1910302#msg1910302)

Well put.   Yes, I believe we are in "deep waters" so you will need to be really patient to ROI.   One interesting side-effect is that now the network will be more secure for a longer period of time because miners want to recoup their investments.  This creates an interesting situation.   With the ROI being pushed out this far, I will be looking to expand my management service into a very very cheap power district much sooner than I thought to allow people to send their machines to me so their ROI time-frame improves.  Road-trip time.

What indicate 490k chips ?  The five 3000Btc orders aren't factors of 782btc.

I thought the same but if you follow the transaction infro from addresses they are orders of ~15k BT which is 2 orders of chips. Someone pointed this out and I now agree that is all chip orders in that address.

The sending address(es) sent 15614 BTC which is exactly 20x the cost of one batch + domestic shipping (780.7 BTC).

40,000+ BTC at this funding address.  That equals 50 order of 10,000 chips (approx.).    You can see where the 490,000 chip estimate comes from.

Damn. That's a whole lot of ASIC going on.

And it actually looks like BFL might be shipping stuff in quantity in another month or two.

The difficulty is going to explode.

Sigh...my batch 3 Avalon order could not arrive soon enough.

I wonder if there will be an unheralded excess of used video cards going up for sale come summertime, or if many will stick around for the razor-thin margins.

Or GPU miners will switch to Litecoin or other Cryptocurrencies.

It's possible but I'm not convinced there will be this giant exodus from BTC to LTC . There will be a big one, but I don't think most GPU BTC miners will go to LTC after ASICS roll out en masse.

I mine LTC (albeit only have 5 gpus so I'm just a hobbyist miner guy) currently. The ROI is already not much over BTC returns due to difficulty. Thing is, while BTC will be raising, and float LTC's boat some much, I don't see as much USD/fiat gains rising for LTC to conceive that it will be worthwhile when the difficult goes up by 5000%* in a couple of months time. I don't think the valuation of LTC will increase at the rate needed to match the incredible skyrocket of difficulty that would result if most BTC miners switched over.  

* made this number up obv, but it'll be insanely ridiculously large when the asic wave crests

Guess this is more a speculation-type post so maybe I'll just leave my thoughts on this as that, to not derail the thread...

watch yifu inadvertantly end up destroying bitcoin when all he was trying to do was protect it. :P

Avalon doesnt seriously have to do anything but..  

All this difficulty speculation makes you wonder!?  

So does avalons formula hold true for the batch 4 that was announced? If so for how long? Is there a chance that youre batch 4 @ 45Gh/s develops an unfavorable ROI before it ships or no ROI at all.. Tho, no date for purchase was announced, I think it was a late may or early june delivery time quoted..

Whats the life span of such a device in terms of profitability on its own at the speculated difficultys..






 (    (.)(.)  This thread went from difficulty rising to were all dead pretty quick! )

Everything about ASICS has been late so far.  BFL super late, but even AVALON has yet to get ONE batch 2 in the "wild" and it was supposed to ship a month ago.  From when Jeff got his batch 1 it pretty much still took over a month for anyone else to report having one - really took two months to have them out "in force".

While a half million chips may have been ordered, lets hope Avalon is as late with them as they have been with the rest of their stuff!

August?  You really think whoever is buying these chips has enough capacity to get raw chips online and all that quickly?

may the force be with you

Yes, there might be delays but overall, the capacity will be coming online this year.

The network speed is certainly going to explode this year.

Throw all profitability calculator numbers out the window.. there is so much Th being deployed from so many different places that calculating ROI within reasonable doubt is quite challenging.

Challenging is a good thing! If it was easy, where is the fun?

 2P by 2013 year end. 500T BFL. 250T Avalon. 500T Avalon chips. 250T asicminer.

The only unknown is whether litigation will stop BFL (a minus) and whether Avalon comes up with higher spec asics for the fourth quarter (a plus). P x EV for both is of similar magnitude, so I'd say 2P give or take 10 percent?

Kind of OT but related, did Avalon confirm that they had shipped Batch 2? I believe the date for shipping was set to 4/15/13, but they might be staying mum to avoid bribing officials again.

The delays on everything ASIC is what kept me from ordering into the Chip batches, which I may or may not regret ~3months from now. Scares me that someone had 16k BTC to drop on chips, plus whatever they will pay to have them made into whatever they will become (unless burnin finds himself with an order for 1600 modules from one source ;))

People still waiting on batch 1. check the batch 1 thread.

KH-->MH-->GH-->PH/s.  We're going to run out of letters!  ;D

SI Prefixes
Multiple   Prefix   Symbol   Example
1,000,000,000,000,000,000 (1018)   exa-   E   Eg (exagram)
1,000,000,000,000,000 (1015)   peta-   P   PJ (petajoule)
1,000,000,000,000 (1012)   tera-   T   TV (teravolt)
1,000,000,000 (109)   giga-   G   GW (gigawatt)
1,000,000 (106)   mega-   M   MHz (megahertz)
1,000 (103)   kilo-   k   kg (kilogram)
100 (102)   hecto-   h   hm (hectometer)
10 (101)   deka-   da   daN (dekanewton)
1/10 (10–1)   deci-   d   dC (decicoulomb)
1/100 (10–2)   centi-   c   cm (centimeter)
1/1,000 (10–3)   milli-   m   mm (millimeter)
1/1,000,000 (10–6)   micro-   (   (F (microfarad)
1/1,000,000,000 (10–9)   nano-   n   nm (nanometer)
1/1,000,000,000,000 (10–12)   pico-   p   ps (picosecond)
1/1,000,000,000,000,000 (10–15)   femto-   f   frad (femtoradian)
1/1,000,000,000,000,000,000 (10–18)   atto-   a   aT (attotesla)



When will we reach 1 Exa Hash per second?  EH/s <---- Eh? Canadian named it.

http://organofcorti.blogspot.ca/2013/04/913-asic-choices-asic-earnings-17-april.html

Fell out of chair with my laptop in hand and continued reading from the floor.

According to that guys assumptions we wont see batch #3 Avalons till july... with difficulty on roids.

Batch #4 was hinted at a late may / early june ship but ..
https://bitcointalk.org/index.php?topic=177386.msg1876668#msg1876668

considering there are no batch #2 in the wild let alone batch #3's...  I now understand why im still on the floor as write this.



I requested a turbo boost button on the avalon batch #4 thread in case of emergency difficulty rising! I was joking when i said it but man ..
https://bitcointalk.org/index.php?topic=177386.msg1900115#msg1900115



 

If you want to sink even lower, check out this post from the same guy: http://organofcorti.blogspot.com/2013/04/914-asic-earnings-23-april-2013.html
 

Yep, we are really arriving to the "point of no ROI" ;)

I think Avalon gave a good price for their chips. I hope they will be also kind enough to price their batch #4 at around 25BTC for 45GHs and 50BTC for 90GHs. I think they would still have a decent profit, while allowing for decent ROI also to batch #4 customers. Higher than that (0.55BTC per GHs), unfortunately I believe there won't be any ROI for batch #4, as I would expect that no batch #4 will be hashing in the wild before July.

ROI is quickly going out the window, but the question becomes will people still run the ASIC's even if they are loosing money on power costs. 

Well, those who pay electricity $0.3 will shut their rigs off way before than those paying $0.15, and those who do not pay electricity at all... Well, they will shut their rigs of much later. And I can guarantee you that there are quite a few big-size mining set ups that pay 0 for electricity.

Keep in mind that even at $0.3, an Avalon unit will be profitable up until about 950Million difficulty (100x current difficulty, or about 6500TH). It won't be making much, but it will be making something. Though if price drops out it will be much lower of course.

I think you are providing a very smart and needed service. $0.02 Kw/h is a killer!

Yep, I am heading out there very soon to nail down a commercial space and get it under lease.   More details to come, PM me if you want to be on pre-list for space.   This will be phase two for ASIC once diff goes to 50,000,000 plus.

Check the address link now...

560,000 chips ordered now... we may have already surpassed PONROI... poor folks still ordering are probably the ones who haven't noticed the 170T spike in August.

^^^^

Those 560K chips might be delivered in August, but they won't come online immediately (probably get a 2 month reprieve for peeps to figure out how to use them --- so October?).

Figure out how to do them is easy. Figure out how to do them en masse quickly and cheaply is a different matter.

Much truth in that statement. Scaling up efficiently is always a difficult task.  Small bad decisions early can cost you big down the road.

^^ i was looking at big time coins thread... i think he under positioned himself ..  staffing .. timing and price so alot can go wrong even after chip purchase..


EDIT// Thats alot of assuming by me..

I agree, we will see how much improvement we get.  I have heard a Russian ASIC is actually about to come online as well.   Bitfury?   

^^ Yeah i first saw that last night.. its 90k for a custom rig.. looks crazy.. What are they feeding it.. blasts of nos!? lol
https://i.imgur.com/JfjDvma.png

This has nothing to do with BitFury's ASIC. This picture is their previous generation rig (FPGA Spartan6, not ASIC).

^^ My mistake, youre are right i didnt even read the whole page at all. My eyes forwarded to the speed and cost and dropped everything else but the pics, i remembered being curious about how they were cooling it besides the fans when i saw the pic.. and i moved along..  

That rig doesn't pencil.  Just do the math with the power requirements of 7,000/Kw.   

I don't think there will be a spike that large in August because of all the mining difficulties and such. However, I think the price will go up some for BTC. Worst case you can switch to ltc.

the demise of GPU mining... same thing happened to CPU mining just recently... nice!!

What is the range of estimates for BFL?

assuming

1. Order limited (i.e. fill all 10,000-20,000+ orders)
2. Wafter limited (i.e. run out of ASIC chips)

I have heard that the upper theoretical limit is something like 1,000 - 2,000 THash/sec ordered from BFL.

also - difficulty follows price.  not the other way around.  we may well see a decrease in bitcoin price

indeed it has stabilized heavily and ceased it's gradual increase on average / massively chaotic pricing.  difficulty can skyrocket and price can do as it pleases.

exa isn't the max

there is zetta
1x10^21
and yotta(above all)
1x10^24

I know it goes BIGGER... what is the point?

Also... boards are getting designed for these chips as we speak so likely the only pinch point for most of the DIY chip crowd will be getting boards to chips. Will be a very very very interesting few months.

was just to complete the sentence
anyway...
http://cdn.memegenerator.net/instances/400x/37697098.jpg

It's already interesting right now. The scams, the speculation! :)

Ya definitely KS,

You got chips on order?

What board you think has the legs?

Alas, I missed the ASIC-chips train :(

RIGHT NOW and for the next 6 months, FPGAs still have legs (assuming we reach 50 million difficulty in August, and assuming the BTC/USD will hover around 110 - given it does currently rise 1:1 with difficulty ATM, it might go higher, but the market might decide otherwise...), longer if ASICs are delivered more slowly. GPUs are still good, but it depends a lot on your utility bill.

I like KnCMiner's project, but I'm worried they won't be able to pull if off for lack of resources.

ASICMiner is shipping but their USB miners are way too expensive.

BKKcoins is doing a hell of a job on the Avalon boards, and he will open source the layout. Just for that, I'd put my money on him, but he's also depending on Avalon actually shipping the ASICs in a reasonable timeframe.

If 4 ppl in their garage can produce an ASIC, I'm thinking "hey, GROUP DESIGN". Why not? There are a number of companies selling SHA256 ASIC designs...

I understand why people are predicting consolidation of miners. The very fact that chips are priced in BTC is aggravating that monopoly (rich get richer scenario)

I don't disagree that many will quit mining, but I do disagree that hobby and general "normal" people mining will die. It won't

Why wouldn't a person have a few units stacked up in his shed, wired up to a solar panel, churning out a few blocks? it's the bitcoin equivalent of a savings account, it won't make the person rich and they understand that, but it's extra coin they wouldn't have otherwise. Not every miner is an enterpriser.

Man: those chips/machines generate BTC, so it's fair and normal that they are priced in BTC. Just get your money to an exchange and buy BTC with your fiat, like we all do.

Why people never factor in Altcoins surprises me. There will be many who see the value in smaller sized rigs or options and go after easier game.

It looks to me that you assume solar panels are cheap/free. They're really not. Best to invest in cheap electricity, say in Seattle or in Canada.

Or Denver...   https://bitcointalk.org/index.php?topic=186457.0

Sorry, I thought about adding Dallas or Houston, then I thought "yeah right, these cowboys...". Denver NEVER EVER entered my mind though. What can I say, I go to Amsterdam. Cultural bias? pfiuuu :)

Solar panels aren't free, that's true. But many people already have them. In many states, net metering laws allow the power company to keep any surplus energy after a year. So it's use it or lose it. Some people are already producing a surplus that is just going to the power company's pockets. This is just one example of how somebody could use bitcoin to harvest capital that is otherwise lost to them.

There aren't very many options that can directly turn electricity into money, so if you have a surplus of electricity, a bitcoin mining system is a change machine.  ;)

Sure. Or they should have invested less in the solar panels and put the difference in BTC. Dollars to your cents ;)

Investing in solar panels but not using them? Thats kinda like buying carbon offset credits. And hey, if you have a farm hooked up to that "free" energy, its hundreds of dollars to your dollars.

BFL already seems to be mining with all the units they have except for the very few they decide to send off to keep up the illusion that they are actually delivering. I'd imagine they will start shipping larger amounts at some point (when they have another large amount finished that they can use for mining), but I doubt that BFL's units are going to affect difficulty seriously any time soon.

As for price, the issue is that while we only had GPU and FGPA miners, minimal price (assuming at least some demand) was set by the power costs, and the massive efficiency of the ASICs makes mining profitable (not factoring in the purchase price, only power cost) even at really extreme values, say you bought Avalon chips and put them on a board, you'd still have some small profit if the price was some $15/btc and difficulty at 100m, so the ASICs really don't provide any reason for a price increase. Not to mention KnCMiner units, which are supposedly going to be even more power efficient, assuming they deliver some time this year.
Ultimately, price is dictated by supply/demand, and for the time being the supply will not increase; demand is dictated by whether or not Gox is having issues and the latest related announcement the US makes.

7 posts and you are already an expert on BFL with inside knowledge of their mining operation, please tell us more, I haven't had a good laugh for a while.

Do shed light on the workings of the mysterious BFL then, oh mighty Hero Member with 627 hard-earned posts!

Before people get mad, it's horribly moronic to assume that post count directly equals knowledge, which he did assume.
In any case, that's enough offtopic.

check out

https://blockchain.info/address/16ygEoTjg7P5GJwLKTQd1UgqAGuF8bKVRc

10k BTC just came out of avalons account to this address, check out its history

Do you see anything strange in it?

the btc keeps being transfered then split ~20/80 and resent, continually.

From XKCD, "Karl Mark Gave The Proliteriat eleven Zeppelins, Yo!" (http://www.explainxkcd.com/wiki/index.php?title=992:_Mnemonics)