Bitcoin Forum

Hey guys, I'm back doing videos and as you know earlier this year I made a prediction that we would hit a Petahash by December 31, 2013 but with quickly rising hashrate I am changing my prediction and I also give an analysis about why the hashrate is increasing so rapidly and give educated predictions on what is to come.

Video:  http://youtu.be/a1DHEBrPYVE (http://youtu.be/a1DHEBrPYVE)

There is a good chance we will hit 1 PH by the end of September and 2 before November.

wow that would be crazy wouldn't it :)

This is exponential win.

Nothing like this has ever occurred in distributed computing in history, and before any complaining about mining ROI, think about what that means. Bitcoin's network is becoming a processing monster, and with dedicated ASIC core at it's heart is ready for a bigger world and a ton of transaction traffic. In the end, the network is quickly becoming larger, more distributed, and secure.

Really having a highly secure and robust network in place before Bitcoin takes its next giant leap forward is a really good thing. Not to equate GOX to mining directly, but we saw what it looks like when the infrastructure fails under the weight of a rapid push. Having a solid distributed net with multi-million dollar mining businesses involved should inspire further confidence in Bitcoin as a real currency.

What is more interesting however, is that despite soul-crushing ROI figures with the current crop of ASIC hardware, hashrate is still skyrocketing  :o Many mine operators aren't in it for the money, The Erupter USB's arn't selling because it will make anyone rich. I wonder if the simple need for economic change is driving it forward more than the profit incentive. Bitcoin mining would not be a multi-million dollar business right now (as a hardware maker or hardware user) without some level of belief in Bitcoin and what it means to the world.

So, being a miner at the moment sucks, but the end result is extremely good for Bitcoin.

You do realize that all this mining stuff has nothing to do with processing transactions, and that instead of running Bitcoin nodes that can process transactions practically all of these miners are just getting paid by pools to do outsourced sha256 calculations, and they never see transactions or even the blockchain at all, and as a result don't contribute much to improving Bitcoin's security— ... and that we're even in a worst state than we were a year ago,  now kidnapping or hacking _two_ people is enough to freely perform transaction reversals...

You realize this, right?

Make it _three_. BTCGuild, 50BTC, and Slush make up over 50% of the network. A year ago it took the top 5 pools to reach 50%.

And you don't need to kidnap them. Just use a $5 wrench.

http://imgs.xkcd.com/comics/security.png

Why don't you try again with a less dickish tone, and I'll reply



 

If KnC holds there schedule and starts delivery 25 sept or so we will see 1 PH about the second day, 26 sept and when there first batch is over around 21 days later, the 15 nov we will probably be at 4-5 PH at least.

knc stated "delivery at end of september" not september 25th.

that's why he said "or so"

Actually we're heading towards a exahash.

Reasoning: those upcoming  28nm chips produce ~500GH and my guess is ~$30 is roughly the price at which they can still be sold profitably (that includes basic PCB,  housing, minimal markup; variable cost of the chip alone is probably closer to $10 in large volume). So as long as there is demand at or above that price point, it makes sense for asic vendors to sell (or produce and mine themselves). If you do the math at what point most miners would no longer be interested in buying 500GH (250W) for ~$30, depending on electricity cost and BTC exchange rate, I get at a difficulty on the order of ~100 - 200,000,000,000. Which means a network speed of roughly a exahash. Thats where we are headed IMO, though Im not taking any bets how long it will take. Could be as little as 2 years from now  to get close to that.

Excellent reasoning. I think you are on target. It would be very interesting to get a leak on how much chips actually cost at manufacturing (28nm for example) to get a base seed value for your estimate.

Im basing my guestimate on the embedded SoC market. A typical highend phone SoC sells for about $15 in large volumes. That is when you buy them from nVidia (qualcomm, samsung etc)., so these companies already have a margin on that, fabbing cost will be lower. OTOH  28nm mining chips may be a fair bit larger than mobile phone SoCs, I dont have any size data (does anyone?), but they should also be a lot more simple to produce and validate, contain less layers, far less IO pins, etc.

My guesstimate may well be off by a factor 2 or 3, but not likely more than that, and so should still give you a ballpark idea.

How does that $15 phone compare to an $1100 i7 4930 processor?  It doesn't.  Neither does it compare to 28nm mining chips.  You're talking a drop in pricing by over a factor of 100 in less than a year.  AM's overpriced toys have only come down by a factor of 20, but he started out so overpriced PT Barnum is bowing in his grave.

1 Exahash = 2 million 500GH chips.  That's only 2x what Avalon had 'on order'.  780BTC for 10,000 chips = .078BTC per chip... and these were 110nm chips.  I'm sorry, but I cannot see a more than 4x reduction in size for ~3x cost in that short a time. 

It does. Intels variable production cost for an i7 is in that ball bark too.

Now an i7 is about 2 or 3x the size of a mobile phone soc,  silicon cost scales accordingly, and  a bit more to account for lower yield, but dont be fooled thinking it actually costs intel $100, let alone $1000, because it doesnt. But there is a huge NRE to write off, developing an i7 is in no way comparable to a mining chip and may cost billions of dollars, not too mention the process tech, since intel does everything in house.

Its rather simple, a fully processed wafer on state of the art process tech from a foundry typically costs ~$5000  (and drops off to ~$2000 over time as the process matures).
IM not sure what 28nm wafer go for today, but last year they were $5000, today is probably quite a bit less. Lets take §4000 .

A 300mm wafer holds about 600 chip candidates if they are 10x10mm2
http://www.silicon-edge.co.uk/j/index.php?option=com_content&view=article&id=68

$4000/600=$6.6 silicon cost per chip candidate.

If the chip is huge, say 18mx18mm=324mm2 you get 177 candidatres

$4000/177=$22.5 per chip candidate

Add a few percent to accommodate imperfect yields and add a few dollar per chip for cutting, testing and packaging and and you are in the ballpark.


wafer processing costs for 110mm are not dramatically lower than for modern processes, the difference is probably only about a factor 2x or 3x at most. So 110nm chips are actually MUCH MUCH more expensive per transistor (/hashing engine/GH) than 28nm ones.  The big difference is that  the NRE (design and maskset) is dramatically cheaper for older processes (could easily be a factor 10 or more), and its much easier to book capacity without having to wait many months since its not like AMD and nVidia are putting in a lot of orders on 110nm anymore.

BTW, regarding avalon. I read elsewhere their chip is only 16.13 mm2. Lets assume its square, that gives 4.65x4.65mm.
Im also assuming this is a 200mm wafer, not many if any 300mm fabs use such an old process. That gives up to 1188 candidates.

A processed 200mm 110nm wafer should cost no more than $2000 in volume. There is a fixed tooling/upstart cost that will weigh in on small orders, but still:
$2000/1188=$1.6 per candidate.

Cutting, testing, packaging and handling likely cost more per chip than the fabbing in this case, but even so, and after applying a yield %  I seriously doubt it adds up to more than $4 per chip.
The rest is margin. Unless they used 150mm wafers in Fab2: http://en.wikipedia.org/wiki/TSMC

Then you get 630 candidates per wafer, and you may get in the ballbark of the numbers you quoted assuming a substantial fixed fee.


One last point of reference. AMD Llano. Granted, its on 32nm, but that shouldnt make all that much difference, especially since it uses SOI wafers which are substantially more expensive than bulk. It has a diesize of 228mm2, and it retails for as low as $39.99 on newegg (http://www.newegg.com/Product/Product.aspx?Item=N82E16819106013), so consumer price,  boxed with fan and cooler, warranty etc.  Do you really believe it costs AMD more than $20 to fab the chip?  I dont. I actually think its closer to $10, but lets use $20

srqt(228mm2)=15.1mm
That gives 256 candidates per 300mm wafer.
256x$20 (tops!) = $5120 per wafer.

Thats includes  yield, cutting, testing, packaging.

Still think Im far off?

Where did you get the $5k price on 28nm wafers?  Does that 5K include the design cost of the masks?  What about the bumping and binning processes?  The boards? Etc?

Sorry, I just don't see it.

I'm sorry. Did you not remember when Deepbit was 35% of the network back a year or two ago? Or when BTCGuild was like 50% of the network by themselves?

Experience and industry contacts

edit, found a public source for you:
TSMC decided to increase prices for 28nm chips "by somewhere between 15% - 25%. Given that a wafer processed using latest process technologies can cost $4000 - $5000, ..
http://www.xbitlabs.com/news/other/display/20110912192619_TSMC_Reportedly_Hikes_Pricing_on_28nm_Wafers_Due_to_Increased_Demand.html

Please note the date on that, 2011, when 28nm was brand new, very low volume and very few fabs offered it. 28nm is now mainstream, offered in volume by all major fabs. So If anything,  $4000 today would be a high estimate, but Im okay using it since Cointerra is not an AMD or nViida and pretty low volume for a company like TSMC.


Absolutely not. Masksets, especially for 28nm, are orders of magnitude more expensive, but its a one time, sunk cost. Once you have a maskset, to determine production volume all that matters is the variable production cost vs market value. Sunk costs will determine whether or not you end up making a profit, but not whether or not you should produce more batches. Its like when buying a miner, once you bought it, purchase price (sunk cost) no longer matters to decide to run it or not, you will run it until it earns you less than it costs in electricity, but the purchase price will largely determine if you end up making a profit or not.


"Bumping and binning" is part of testing and packaging. Its not included in the $5K/wafer price, but it is included in a 'a few dollar per chip", since the cost is typically closer related to the number of die's than wafers.
If you want a public reference for that too, this is all I can find quickly:
http://electroiq.com/blog/articles/2001/03/technology-comparisons-and-the-economics-of-flip-chip-packaging/

(scroll down to the last charts as the others are unreadable, and you may want to note the numbers they picked for average die cost too: $5. Not $50 much less $500).
Please note that article is more than 10 years old. Gives you an idea what BGA packaging costed back then, when it was state of the art technology. The numbers have dropped since, but are still within the same ballpark of a few dollar per chip.

For PCBs, you can get an idea from the prices of infinitely more complicated PC motherboards (that contain dozens of other asics) and still sell for $20 or so in bulk, or from a raspberry Pi that retails for $40 including the  SoC, RAM, IO etc.  
PCB cost doesnt amount to much in the big picture.


You can lead a horse to water...

Speed (TH/s)   1003.00
http://mining.thegenesisblock.com/


One petahash is a fact now.
Im betting on 3 PH before the end of october, just 6 weeks from now.

Hmm, let's take a look at avalon with your numbers.  We know Avalon produced 3 batches of product and took orders for 1,000,000 chips.  I can't seem to get a solid number, but 400MH per chip seems likely.  So, we have 1500 units operating at ~65GH  which gives up ~164 chips per unit.  All in all that comes to 1,246,000 chips.  At 1188 chips per wafer, that cones to ~1050 wafers.  Those 1050 wafers would run ~$4.2M at $4k each or ~$5.2M with the masks.  $4.17 per chip or $684 per unit.   $1299/75btc/75btc = $389,700/45kbtc/45kbtc = $911,700/$3,476,250.  $4,777,650 income from the 3 batches.  78000 BTC = ~$10,920,000 for the 1,000,000 chips.  $15,697,650... I can see Avalon taking a 3x markup overall, even though it was mostly B3 that got screwed.

BFL went with 65NM and seems to have ~4GH per chip.  They must have a bigger chip size or did a better job with the traces, as halving the technology size should only give a 4x increase in traces.  Going to 28NM would roughly involve another 4x increase in traces.  6.4GHz off of a ~4.65x4.65mm chip (16.13mm²).  A single 500GH chip would require nearly 78x as many traces, or 35.5mmx35.5mm which wuld rival the size of an Intel processor which is 37.5x37.5, in which case using a 300MM wafer you'd get 48 chips.  At $4k per wafer, that's $83.33 per chip.

Arhm. Nope.
 35mmx35mm would dwarf any CPU intel has ever produced, including the highest end Itaniums.  You do realize that would be a 1250mm2 chip right? Thats 10x the typical cpu size. I think you are confusing die size with package size.

Anyway, hasfast is on record with their die size:
https://bitcointalk.org/index.php?topic=262052.msg2975190#msg2975190

18x18 = 324 mm^2 for 400GH.
Thats a big chip, perhaps bigger than I expected, but interestingly it matches exactly my high end estimate (hadnt seen that post when I made my calculations).
That still yields 177 candidates or $22 per chip candidate at $4K/wafer.

Whether thats actually good or bad compared to cointerra, BFL and the others remains to be seen, but its the first, and a useful datapoint that requires no guessing.

Ill be fair, Hashfast is not likely able to sell those chips packaged and functional with PCB and everything at $30 with a profit, but even if you assume hashfast will be among the best in GH/mm2 and you adjust my numbers to $50 per chip or so, it hardly changes the big picture. And if you fast forward 12 months from here, $2500-$3000 is a more likely wafer price for large volumes.


edit: one more point. That post I linked to is actually utter nonsense when it comes to KNC's chip. You cant deduce die size by looking at a (rendering) of a heatspreader. Take any Core or Pentium chip, and remove the heatspreader to check the naked die size. You will find its anywhere from 50% to 15% the size. That a "VP of engineering" would spout such nonsense doesnt make me feel very good about hashfast. ALl you can say with confidence is that the die cant be bigger than the heatspreader (duh), but I would be very surprised if KNC were indeed making a 1000+mm2 behemoth.  Not even AMD and nVidia dare to go that big with their top end GPUs.

Ah, indeed, I was looking at packaging size. 

Does this mean Avalon's chips were very very inefficient?  Or is there a scaling I am missing?  28nm tech is basically 1/4th x 1/4 or 1/16th the area for the same traces.  I had been looking at the back of GTX480 I removed from a system a while back, and chip looked to be almost 1 1/2" square, so the 37.5 seemed feasible .  On the CPUs, is the package size so large to accomodate all of the contacts?

The process nodes are so far apart, its really an apples to oranges comparison. But lets see what we get.

Avalon 16 mm2 ~300MH @110nm
~19MH/mm2

Hashfast is 324 mm^2 for 400GH @28nm
~1234MH/mm2

From 110nm to 28nm youd expect a 15x increase in transistor density (110/28)^2.
Hashfast actually promises a 64x speedup per mm2 compared to avalon, or ~4x more than expected from shrinking alone.

Most, if not all  of that, can be explained by increased clock speed  (smaller node=faster switching frequency).
Also, hashfast has yet to prove its claimed performance, so lets wait and see.

But even so, it should come as no surprise that the first ever bitcoin asic to hit the market wouldnt also be the most efficient one possible.
I also doubt hashfast will be very close to that, but we will have wait for the others to compare.


Yes, its mostly to accommodate all the the IO and power pads.

As for your GTX480:
http://www.brightsideofnews.com/news/2010/8/9/nvidia-fermi-geforce-die-sizes-exposed.aspx

Thats a big sucker. The above quote is actually incorrect though, image sensors can be much larger than that, all the way to wafer scale sensors for stuff like mamography.
But for "asics" (cpu, gpus and the like) anything over 300mm2 is generally considered big and over 500mm2 huge.

Thank you.  You've pointed out a lot of information that I had previously been unable to find in my searches.  I have a clearer picture of what you are talking about now, but I do find one small flaw.  Look at what has happened to the market since the introduction of ASICs.  Sure, the first few would make money fast, but others would follow and to keep market share you'd have to continue spending more and more.  Soon you'd be up to 30-60 days RoI and climbing.  Why mine with something when you can get more by selling it?  The other thing to consider... what would happen to the price of BTC if 2-3 companies were mining the majority of it?  Businesses need capital to function.  They'd have to sell and sell and sell.  Who'd want to spend hundreds of thousands of dollars daily to keep BTC prices high while the big businesses profit?

Impossible. My reasoning and posts are widely known to be flawless :)

 

I dont understand your point, much less how it would contradict mine.


Potential 51% attack  issues aside, it doesnt matter if its one company or 10000 individuals mining. The amount of coins mined remains the same, and freshly minted coins are only a very small % of all the bitcoin trade volume anyway. Its pretty much irrelevant if miners hold or sell. The two largest dollar/BTC exchanges alone have a volume of nearly 1M BTC per month. Miners mine what, a bit over 100K BTC per month?  Not gonna make the difference.

While there may be 1M BTC traded each month, you're not looking at the bigger picture.  First, the majority of what is traded is kept on the market.  Mostly you have people either buying from Bots to get a few coins for whatever they want to use elsewhere or selling to other bots to get some cash out.  Unless the $ in equal $ out, you're going to have a price increase or decrease.  Let's say there's $10M in Mt Gox.  If Company XYZ is mining 1000BTC daily and selling them on MT Gox daily, at current prices that'd be around $138,000.  In 72 days that $10 mil is wiped out unless the price drops or people start sending $140k per day to Mt Gox to offset the withdrawls.  Which do you think is more likely, a price drop or people willing to add $140K a day to keep the BTC price stable?  It might happen 1 day or 2 days or even 3 days... but what about day 15?  day 30?  day 60?

Once the price drops, adding new hardware to the network results in less gain.  Sooner or later power will catch up and then where are you?

If you still don't see it, then imagine Bill Gates deciding to sell 1000 shares a day.  Once wall street finds out Bill is selling, who the heck is going to want to buy?

I dont see what this has to do with anything or at least with my point that bitcoin mining hardware production cost is almost two orders of magnitude below current market prices, and that the inevitable conclusion of this is that difficulty will rise by a comparable amount in the time it takes these vendors to produce those amounts.

 I suggest you discuss the effects of miners selling off in the bitcoin speculation threads, but I dont see why concentrated mining power would behave differently from distributed mining when it comes to selling bitcoins, nor do I see how anything I said would lead to more concentrated mining.

You said the companies would either sell or produce and mine themselves.  I can see the former, but I dispute the latter for the reason stated above.  The majority of people buying mining equipment are not into the get-rich-quick scene.  If they were, you'd be seeing a lot more refunds from all companies as their chance at RoI vanishes.

People kept buying GPUs way back when while the RoIers were screaming it wasn't worthwhile.  Poeple are buying ASICs today while the RoIers scream.  Bitcoin is not made up solely of the RoIers, it's made up of a lot of individuals looking at it long term.  Businesses cannot afford the long term outlook, they need working capital on a regular basis.  That is why half of your conclusion fails, the buinesses cannot afford to mine for themselves or they will destroy the market.

Maybe you need another viewpoint to understand.  Take Magic the Gathering trading cards.  If I buy 100 boxes of the newest edition and sort them out, I can then sell the rare cards and make a profit.  But, if WOTC decided to just print everything out and sell the individual cards people would never pay as much.  They would be stuck with thousands upon thousands of cards that no one would want to buy and the ones that people did want would never command the same prices as they would if individuals were opening the packs.  The ASIC companies are selling the equilavent of trading card packs.  When we mine the coins, they have meaning, just like if we found that one particular rare card in a pack.  If the ASIC companies mined all the coins and then offered to sell them to us, they'd not mean as much and the value would drop.

We'll never hit 1 ezahash without something changing.  The current price of BTC would never sustain it.  Using your $50 for 500GH, it'd cost $99.9 million to get from where we are today to 1 exahash.  We're minting ~600k a day at current levels and that's not including power costs.  1 exahash running at .7 watts per GH would consume 700 megawatts an hour, 16.8 gigawatts per day.  At a mere $.05 per kilowatt you're looking at $840,000 in power costs per day.  -$240k per day... not going to happen.

At $.05, no, but in Russia electricity can be had for half that price. In Kuwait its only once cent :)

Anyway, one exahash may not happen if Hashfast is among the most efficient design, but that remains far from certain.  Most miner gear is being tuned for performance right now, not power efficiency. But you can make your own simulations, I put up a spreadsheet

https://bitcointalk.org/index.php?topic=295270.msg3165594#msg3165594

Here is chart from it:

http://snag.gy/15E5o.jpg

I can't see all the bitcoiners moving to Russia or Kuwait ;)

In Russia mining would remain profitable at network speeds where its unprofitable elsewhere; can you not see that russians would keep buying profitable mining rigs? Can you not see that europeans or US miners would shut down theirs rigs or sell them to a russian? The people wont move, but the mining rigs will end up where its most profitable.

Absolutely. In the long run, miners will locate where low cost electricity is (as long as a good Internet connection is also available).

Turns out its not such a large die after all; its an MCM, multichip module that constist of 4x 81mm² dies, which is much closer to the size I had expected.
https://bitcointalk.org/index.php?topic=262052.msg3190992#msg3190992

Interestingly, calculating the number of chip candidates with this size yields a smaller TH/wafer potential. I would have expected the opposite, smaller squares can better fill a circle,  but the default values for spacing between dies more than offset that gain.
Its only a few %, not worth redoing my math for, probably a bigger factor is the MCM packaging which will cost more than traditional asics.

Well we are now at 3 PetaHashes  ;D

not so sure about PETAHASH, only thin is wait and see

4 Petahashes, gosh Bitcoin's hashrate is exploding :)