All power grids have to deal with DEMAND > CAPACITY.
You either
a) use very expensive (in terms of cost per KW/h) "peaking plants" normally natural gas turbines because they can rapidly adjust load
b) you offer your largest customers a deal where they have to idle/scale back (they often do this because b is cheaper than a)
c) you have brownouts and destroy electronic equipment on a masive scale
d) you have rolling blackouts

A hydro-electric dam has a max capacity.  No power grid runs ONLY on hydro-electric dams and even if they did if the total instantaneous demand is greater than the total power grid capacity then something has to give.  Power companies have found that contracting to lower the load on large users is often the cheapest solution.   If 99% of the time your customers consume <10 GW of power and the other 1% of the time it can spike to 11 GW why build out an extra 1GW of capacity which is only used 1% of the time.  The use of hydro electric power doesn't change that dynamic.

To a certain extent there is a level of delusion but most of that comes from people
a) believing difficulty won't rise as fast as other people say (a miner may be a bad deal with 60% monthly difficulty growth and a great one with 30% monthly difficulty growth)
b) believing the often highly optimistic delivery timeframes

The feedback mechanism for new purchases is rising difficulty however pre-orders distort that.  What would the difficulty be today if all pre-orders had already been delivered. 1PH/s? 2PH/s?  Do you think sales would be as robust?

When difficulty is so high that even assuming NO difficulty growth your break even point is 3+ years out it takes a whole different level of delusion to buy more hardware.  This is why for example we didn't see 500 TH/s when everyone was using GPUs.  The feedback mechanism is currently "broken" but as pre-orders slowly get deployed reality will catch up and dispell a lot of the delusional thinking.

That is naive.  Say the company (any company) grows and eventually multiple people will have access to the password list.  If it is hashed that provides a level of security against internal theft/abuse.  If it isn't then an employee steals your login credentials, goes home, logs in as you with your unique secure password and withdraws all your coins. 

There is a reason hashed passwords is a security standard.   Password resuse is on vulnerability but it isn't the only one.

The idea
The purpose is to try to guestimate (and yes that means error) how much hashing power is in "the pipeline".  If there were no pre-orders every unit sold means a unit hashing and then difficulty rises a little and that makes new sales slightly less attractive so sales are slower.  This economic feedback model constrains hashing power to overall network efficiency, electrical cost, exchange rate, the risk premium miners are willing to accept and the time value of money.    There is a reason GPU mining never allowed the the network to reach petahash scale with miners, mining away at massive losses hoping to make it up with future exchange rates.  The problem with preorders is it breaks the feedback model and that is a great thing for hardware vendors; they can sell more hardware, earlier and at higher prices.  You can tell people difficulty will go up but there is a lot of uncertainty in how much and how fast.  That uncertainty favors the vendors.  Not until miners believe there is no profit and stop buying will prices fall.  Accurately projecting growth simply by looking at prior growth is probably an exercise in futility.

So lets look at it from another direction. If you know all pre-orders are X PH/s and you assume they (or most of them) will be delivered over some period of time (say between now and end of year) then you can come up with a more realistic curve for the next couple months.  You know hashrate now and you can project hashrate at the end of the year and then fill in some likely curves.  For that we need an idea of how much hashing power has been presold .  So throw me your cites, guesstimates, and official numbers.

The rules
1) To keep this thread from derailing please leave the "xyz is a scam" for another topic. On edit: I wish I had made this moderated.
2) A good starting point is the total pre-ordered amount.  This is likely unrealistic but we need a starting point.  Later that total can be discounted by the likelihood of fraud (the "coefficient of scamming").
3) If you have a reference or cite (even unofficial) to back up a guestimate please link to it.  If not a reasonable explanation is more useful then just posting a number
4) We can safely assume that all non-ASIC hashrate will go to zero so no need to break it out between delivered and ordered.  Eventually hashrate ~= total pre-orders.
5) No idea/number is bad.  Please be respectful.  Honestly nobody knows except the chip makers and most of them are keeping quiet.

The running total

Promised delivery by December 2013

Post 2013 rollouts






Relationship between difficulty and hashing power

Upper limits on difficulty based on hardware efficiency:
Miners are unlikely to mine when their electrical costs are higher than the value of BTC mined.  This limit can be called the electrical break even point and is based on:
a) the current exchange rate (USD per BTC)
b) the hardware efficiency (J/GH )
c) the miner's electrical rate (USD per kWh)

When hashrate/difficulty gets high enough it will cause the least efficiency miners to idle thus creating a sort of replacement cycle (i.e. x GH/s new efficiency hardware causes Y GH/s of older less efficient hardware to idle).  This should slow growth significantly because the returns on new hardware will be low, miners will be exposed to the bad news of less efficient miners being forced to idle and X GH/s doesn't mean the hashrate only rises by (X-Y)/GH.  It also illustrates the improbability of difficulty power growing exponentially over a long period of time like a year.  For example 65 million difficulty gaining 75% per month for a year results in 50 billion difficulty.  The electrical cost even at 1W/GH and $0.10 per kWh would >$250 per BTC.  

A related thread on the break even point is here:  Break even difficulty by hardware efficiency (power cost = value of BTC)



Alternate view
Here is an alternate visual representation by gkm22d.  I don't agree with all the capacities but I would consider it a worst case scenario (delusional miners may wish to close their eyes as this may be painful)




[1] https://docs.google.com/a/nacrypto.com/spreadsheet/ccc?key=0AiLYkKIHJaIsdHpIaGdUOWRYVUdncTNpNlVKbVhCbEE#gid=0  970,000 chips @ 282 MH nominal
[2] 550 orders @ 400 MH nominal
[3] Based on report that Dave (US distributor) sold out of their allocation of 300 full systems and 300 starter systems.  Oct is not sold out but conservatively it will if/when Aug deliveries are made.  I will assume that the EU distributor received an equal allocation (an assumption based on bitfury facing unknown demand and users in both markets).
[4] http://bitcoin.stackexchange.com/questions/8577/how-much-asic-power-has-been-or-is-being-shipped-in-2013  Crude assumption based on distribution of wait list (hashing power per order) and number of orders.  2PH/s is guestimated based on (avg GH/s per order of known orders)*(num order numbers)*(1/3 to account for unpaid/test orders).  Monarch is highly unlikely to ship in volume (if at all) in 2013 while upgrades cancel the existing 65nm order which would reduce the amount of 65nm pre-orders.
[5] Guestimate. https://bitcointalk.org/index.php?topic=278384.msg2994436#msg2994436
[6] https://bitfunder.com/asset/IceDrill.ASIC
[7] http://www.dpcapital.net/blockchain/?hours=336
[8] http://en.wikipedia.org/wiki/Occam's_razor
[9] Reduced to 30 full systems in Aug for both US and EU distributors https://bitcointalk.org/index.php?topic=278384.msg3010364#msg3010364
[10] http://www.coindesk.com/cointerra-cuts-price-of-terraminer-iv-bitcoin-mining-rig/ "In Dec" without a specific date can mean as late as 31 DEC.  Given that and the tight schedule and the fact that even a small delay would push it into 2014 I included it in the 2014 group.
[11] https://ghash.io/
[12]HashFast MPP will issue miners up to 4x their initial hashing power if 100% ROI is not acheived within 90 days.  Even if MPP is not needed, HashFast would need the chips in reserve and any chips not paid out in the MPP are likely to be deployed as quickly as possible.
[13] http://www.coindesk.com/bitmine-to-drop-4phs-of-asic-power-onto-bitcoin-network-before-april/
[14] http://thegenesisblock.com/cointerra-expects-to-deliver-2-phs-of-asics-in-december/ (Numerous references, Cointerra 2PH/s, KNC 0.5 to 2 PH/s, AsicMiner 1 PH/s, Bitfury 0.5 PH/s, Avalon 0.32 PH/s
[15] Upgraded BFL estimate from 2 PH/s to 3 PH/s https://bitcointalk.org/index.php?topic=278384.msg3029092 (see also the next two posts)

It is also telling that even if we assume BFL timeline is realistic AND they are able to keep it AND don't run into any engineering challenges that the main batch of chips won't be delivered until late January early February.  So even if BFL is able to meet their projections the Dec delivery date is completely false once they sell more units than are in the "rocket run".  At best it is would be January or February.  An honest company looking to maximize sales would have offered two different SKUs.  A smaller number of higher priced unit (the rocket run chips) with Dec delivery date and a large number of lower cost units with an "honest" (if BFL can meet their timeline) February delivery date. 

The ROI% for December delivery is questionable but the ROI% for February delivery is solidly negative under even optimistic scenarios.  Just keep in mind that February delivery doesn't include a possible delay due to problems it is the optimistic scenario.  A two month delay (not unreasonable given BFL track record) would mean April delivery.  A smart buyer should run ROI% for February 2014 and April 2014 delivery.

Very good advice.  Unless it has no business being called a "safe"* it is going to be easier for most thieves to remove and figure out how to open later in private.  Always bolt down your safe.

* IMHO anything less than a "B Rating" isn't a safe, it is just a metal box with a lock.

It weighs over 700 lbs and it is the smallest one in its line.  It costs ... a lot.  It probably is overkill for most people looking for a place to store a paper wallet so the OP was kinda tongue in cheek.  It technically is a "hardware wallet" though.

As for forgetting the combination.  It can't be cracked so that would mean drilling the door. Luckily the door is removable/replaceable so it wouldn't be a total loss but it would make me cry.

It isn't rated against explosives but good safe companies do make those if you need that much security (google "TXTL-60" the X is for explosives). There is no reset button (and shouldn't be on any real safe) but I agree there is a lot of crap on the market, buyer beware.  Generally the best gauge of the security a safe provides is the insurance rating.  Insurance companies don't like paying out insurance premiums.  


Nice videos.  I hadn't seen those but I had seen similar ones.  It is one reason I began favoring electronic locks about ten years ago.  I always swore mechanical locks could never be replaced but the reality is that until we start nanoscale engineering mechanical locks provide feedback and feedback can be exploited.

There are lousy mechanical locks too.   In the lock/alarm/safe/security world you generally get what you pay for and that is more important than the choice of mechanical vs electronic.  Until about 10 years ago I strongly favored mechanical locks however good mechanical locks are very expensive.  Even Group 1 locks are vulnerable to xray investigation (avoiding that requires the asininely expensive group 1R locks).   A good electronic lock (one which meets UL Type 1 standard) can be designed much more cost effectively.  That being said there is a lot of crap on the market. 

A secure electronic lock can't be opened by shorting the communication cable. In theory with enough current you could destroy the solenoid circuit board but you aren't going to open the safe that way.   

I just don't get not accepting BTC.  That just seems insane.  They have to be the only ASIC/FPGA company yet that doesn't accept BTC.

That was worth a chuckle.  The funny thing is enough miners did that all the sellers would have no choice but to agree.

I am not saying you should buy this or it is a good deal.  For the record you probably shouldn't and I don't think this is a good deal.

Regardless it doesn't make your projection of difficulty breaking 700 million in January and 1.1 trillion by the end of 2014 any less dubious.  At some point growth will move from exponential to linear (i.e. + x GH/s per month ).

Well it can't pull any power from the motherboard.  BFL claims the product can be connected by EITHER PCIe or USB.  So when connected by USB that would mean it isn't connected to motherboard's powerlanes.   So either it is going to be three 8 pin PCIe connectors or they will need to run it overspec.  No I am not making this up.

350W if BFL power estimates are correct (which they haven't been for a single product back to the original FPGA miner).  The only cards that pull that much are the 6990 and 7990.  AMD had to delay the launch by over 6 months for both those products due to ... thermal and power issues.  

Pulling 350+ watts out of a confined space is an engineering challenge even for a company like AMD with decades of experience and a large talented team.  It is more than reasonable that BFL given their track record of perfect hardware launches and accurate power simulations will be able to do in 3 months what AMD couldn't do in almost a year.

Yes difficulty reaching >1 trillion is highly likely. 

I would point out that even with free hardware, $0.10 electricity and <1W per GH the exchange rate would need to be $42,860 per BTC.  In other words miners would be paying $42,860 in electricity (or more if they have less efficient rigs) to mine one BTC. 

Awesome analysis.

+1 glad to see it.

Jon,

Do anticipate a date for the tape out being completed and will it be made public on blog/news?  Providing meaningful updates at least once a week is a good way to differentiate yourself from your competitors.

None.  Higher price drives difficulty*.  At one time someone even provide some analysis showing the correlation of price driving difficulty.  There is no evidence that difficulty drives price though.  The minting rate remains (roughly) the same and today supply is only expanding by 0.3% per day due to newly minted coins.  As mining becomes unprofitable the most marginal miners quit and difficulty falls until price rises sufficiently to warrant increased hashing power.


* As the exchange rate rises the profitability of miners also rises.  This is because once hardware is bought the primary cost for continued mining is electricity which is priced in fiat. The increased profitability (ROI%) causes more hashing power to be brought online (miners chasing higher profits) and difficulty rises.  If price falls the profitability of miners go down and the least efficient miners (marginal miner) go underwater first.  Their cost to mine a coin is more than the coin is worth so some of them will idle their rigs and difficulty falls.

Well reading between the lines it is more like late September.


so
a) 24 days from tape out date to date bullet run should leave the fab.
b) bullet run is estimated to leave fab mid to late October.
b - a = tape out date

To put a number on it lets say "mid to late Oct" is 15 OCT at earliest and 31 OCT at the latest.  Backtracking 24 days from that it would mean tape out date of 21 SEPT at the earliest and 6 OCT at the latest.

"August tape out" = late September (or later) using non-BFL calender.  Sounds about right.

Wow thats even "better".  So only a small number of the orders even have a chance of December delivery (if their timeline holds).  
I am sure in full disclosure they will promptly update the pre-order website to Febuary once they sell more units than they have in the bullet run so as to not mislead customers.

Also as if a extremely high power density in a small package and PCIe interface wasn't challenging enough, the module can also connect by USB.

That is nothing for an additional $1000 $999.95 you can mine 50 BTC blocks and double your coins.