Yes, having a way for people to get bitcoins within very little time and not being gouged 30% or more has been helpful.

I'm topping out at 11.30/m with that flash and this difficulty. This is across 17 units. Almost all are above 11.22/m

By my calculations, if you have an FPGA in your hands right now and mine it, you will come close to break even before reward halving and the difficulty rise. Of course it's much better to have a BFL for the trade in, but you aren't completely out of luck.

I would not order a non-BFL FPGA at this point though.

They have said that they are going to be manufacturing a large batch and send those out at once to prevent one person from getting an advantage. Honestly, I hope the just produce as many as they can and start the first shipments on October 31st to make that first batch as big as possible.

That's my hope, but I still think the delivery will slip to December.

Yeah, what the hell. I was expecting them to be at least ISO 9002!

/s

Put an ad on craigslist for the current full price on newegg. Include a link to Amazon because that will cost more and they'll think it's a deal. Then, say that it includes installation. It takes no time at all to sell GPUs.

I think that ASIC is the bes tthing for bitcoin right now. For one thing, it defends again botnets.

But a more important advantage to me is that ASIC companies are now invested in BitCoin. We need more SIC companies, enough to make a voice. This voice is important because a major threat to bitcoin is the government passing legislation against it because of the blackmarket uses. The majority of volume in bitcoin is in USD, and if the american government passes a law against mining or trading in bitcoin, it could seriously cause issues for the network. Basically, it would need to be shifted to the darknet and exchanges would need to be drop cash in the mail. The inconvenience would cause the price to crumble. However, with devoted hardware companies, they can lobby to keep it legal. ATI will never go to bat for bitcoin, but BFL will because their business depends on it.

One other scenario to consider is viable quantum computing coming into being. If a 256qbit computer were made, then theoretically, it could churn out a solution every second regardless of the difficulty. In this case, most algorithms that run on GPUs and CPUs won't work.

I had good trades with bjornsni and Naelr, as they indicated in this thread. They bought some BFL singlles from me.

The problem isn't with ubuntu, but with other things you might have installed. A buffer overflow attack on apache or something else could get a remote user access to your wallet. There are many rootkits for linux. It's not a virus, but it's still a risk.

This is a little silly. At the present difficulty, these units pay for themselves in about 7 days. Even at 20x the difficulty, it's only 5-10 months (depending on when the reward halving happens). Current hardware has a payoff of 7 months. What you're asking for here is for a special advantage for the early receivers. Just release the hardware as it comes available (with the initial grouping that they indicated).


The current network hashrate (according to bitcoinwatch) is about 12 TH/s. 20x that is 240, so within 2 weeks the difficulty would be at that level. This plus the reward halving is what has killed profitability for video cards and FPGA (outside of BFL which takes trade ins for ASIC). This isn't will kill, if you are thinking about ordering anything other than BFL FPGA right now, don't bother because you won't get your money back. If you want a nice video card for gaming, then buy one and mine to get some of the money back, but expect that by December you won't get the cost of electricity.

I pre-ordered 6 the trade in option. I plan to order more this week when some more coins come in.  My order number is 1916

Still 2 left.

My idea on the orderiing is this: randomize the order book by the day. This means everyone who orders June 24th will get theirs before June 25th, but it makes it less of a quick click scramble to get your order in. This is fair because there is little difference in loss between someone who had their money tied up for 120 days versus someone who had it tied up for 120 days and 23 hours.

It is a lot more complicated. I simplified it along those two lines just to give an important illustration of where the actual value comes from. Another factor is savings rate, because if the miner or the seller is not selling their coins, it has short term effects. In addition, this is just how the market moves to resolve itself to a price that doesn't topple the system. So you might be able to estimate an average price over a few months, but it wouldn't help you to know what the price should be right now.

There's really a lot of things in play, but it can be easily demonstrated where the money is coming from, which I think is what concerns most people. The money comes from the people depositing at exchanges, and because miners are getting a part of the economy, it means that that amount is being split between the miners and whoever is intended to withdraw the money.

Got it. Sending as agreed.

I feel this question is a little leading because there is nothing "backing" bitcoin. But this isn't the right question to ask. The right question is "Why does bitcoin have value."

Just to set aside the "backing" concept, the electricity of the miners does not back the currency. It validates the blockchain but it does not back bitcoin in any way. Miner's electicity bills are a response to the price, not the other way around, and as the price crashed last year, miners turned off their rigs. Similarly, gold is not backed by the effort of gold miners. It is when the price of gold rises that miners can spend effort panning for a few ounces of flakes in 30 tons of dirt.

So where does the value come from? This is a little bit difficult to conceptualize, especially because it is the result of an equilibrium of a set of differential equations, but the simple answer is that the value of the coins comes from minor differences in the value from when a buyer buys coins, sends them to the seller, and the seller sells them (called the spread). On average, this transaction ends up with the seller making a slightly less amount than the buyer. This amount aggregated over all the transactions in a blockchain is then divided into the reward amount and this is the fundamental value of a bitcoin. However, this is done 1440 times a day and not all mined coins are spent, etc, etc, and also there is an individual preference in each transaction that determine the tolerated spread amount. So it becomes a lot more complex.

But let's just keep it simple.

Let's say the entire bitcoin world consisted of a buyer addicted to ice cream, a seller, and a miner. The seller sells ice cream for $50 that they make with $30 in inputs. Let's run a few transactions.
Every week, the buyer buys $50 in bitcoin and sends it to the seller. The seller puts all the bitcoin they get up for sale, and the next week the buyer buys $50 worth again. Every week there is one transaction which the miner mines for 50 btc. Now what is a fair value for bitcoin?

In this scenario, if bitcoin were $1/btc, then that would mean for each transaction the miner would be getting $50. They could take that 50 btc and buy some ice cream from the seller. The seller would now have 100 btc and would put it up for sale. But the buyer only wants $50 in ice cream, so the seller never makes back that money and they've spent $60 in inputs so they can't continue their business with just $50. The whole equation is out of whack.

I'll just skip forward to a possible answer. It might be that bitcoins are worth about .0196/btc. The buyer buys the $50 in btc and sends it to the seller. The seller then puts their 2500 up for sale. The miner has also mined the transaction and puts their 50 coins up for sale. The buyer buys all 2550 of the coins for $50, of which the seller gets $49.02 and the miner gets $.98. Now, because this is inflationary, in the next round the buys sends 2550, but 2600 end up in the market. However, the price is about stable.

So where does the spread from the buyer paying $50 and the seller getting $49.02 come from? Again, that is a personal preference based on the people who are making the transaction. You can say though, that most sellers would be tolerant of a 3% spread because this is as good as Visa processing, and there is no chance of chargebacks. In addition, buyers might be willing to pay for this if there is an item they feel they can only get through bitcoin (e.g. the ice cream is $49.02 in stores, but the buyer can't get to those stores).

This means that there are two main factors when it comes to bitcoin price: how much is being transacted per average block (the velocity of bitcoin), and how much of a spread is acceptable to an average transaction.

I think my price of $799 is pretty good. I'm selling units, but it's not so low that everyone is immediately buying them all (e.g. I have a few offers for $750 for all). It seems like a good balance.

Your unit is a little worn, but it seems to work and that's all that really matters. It really only has to last until next January-March.

The point is that this effectively kills all other FPGA right now. No one is going to want to buy another FPGA if it doesn't have a path to ASIC.

The thing is though, that these are still miners, earning money every minute they are on. By the time the ASICs are available, you'll have mined $400-$600 per single. So it breaks down like this

If you have one single, buy 4 jalapenoes with your BTC, trade in your single for 4 more. 28 GH/s
If you have two singles, buy 1 Bitforce SC single with your BTC plus maybe $300. Trade in your 2 singles plus $100 for 1 more. 80 GH/s

And so on. I don't personally understand the position of "I'll keep my money until the ASICs are available" when you could be making money.

There's no way I'm going down to 650. One unit makes $3.50/day (depending on price and difficulty). I can just hook up the rest and mine and still be guaranteed $599 from butterfly later on.

Yeah, I linked to that in my posting. This is great news for BFL Single owners. That release says that you will get 100% of your value (in this case $599) on a trade in for ASIC equipment with BFL,

The FAQ confirms this applies to second hand items:
http://www.butterflylabs.com/bitforce-sc-faq/

"Upon release of BitForce SC based Singles & Mini Rigs, all previous generation BitForce products will enjoy a full 100% trade in value when used towards the purchase of the newer generation replacements.  This means your current device is protected from depreciation through this evolution in technology.  This buy back offer is good for all previous generation BitForce units whether purchased directly from us or from a third party."