Actually, if you already own the FPGA, Im giving you fair odds of breaking even. Odds on breaking even on those ASICs however, are close to zero IMO.

Care to revise your opinion?
http://news.yahoo.com/butterfly-labs-announces-next-generation-asic-lineup-054626776.html

Mind you, those are initial prices. Expect them to tumble over time.

Its not that odd; in fact it makes perfect sense for two reasons:
1) If they intend to accept preorders long before shipping the hardware, these prices will pretty much guarantee a huge backlog before the first asic miner even starts pushing up difficulty in to the stratosphere and people start realizing that $30K per TH may not be such a good move after all. The price is just low enough for people to realize that gpu and fpga mining is dead and enticing those gpu/fpga miners to place an order. Remember, per GH silicon cost is very close to zero.

2) it scares potential competitors. My guess is BFL has at most taped out, but not made the maskset yet. Thats why they got VC money and Im assuming thats recent. So you are looking at ~3-6 months before they have silicon, and probably another 3-6 months before they are ready to ship your first coffee warmer. This is a good time to deter potential competitors.

Agreed with those statements.


But this wont happen until ASICs are priced near marginal costs.  We will almost certainly start several orders of magnitude above that. Its the inbetween, that is the problem, at least for miners. And that inbetween could last pretty much forever, because its highly likely most asic miners will never make a positive ROI as prices drop and difficulty goes up in a race to the bottom; there is no point in turning off those asics either as long as they produce more than the electricity cost. IOW, I expect the market will get saturated even before prices have reached marginal costs. As a result, every asic customer will lose money, not operationally, but when you factor in their investment. So unless BTC exchange rates make some large and unforeseen jumps, profitable mining will be a thing of the past.

Baking it may well destroy the heatpipes. I once put a blowtorch on the heatpipes of a gpu cooler to heat up the copper to more easily bend it in to shape, suffice to say after that it performed miserably. I think you are better off getting an aftermarket cooler.

My android phone died recently and while waiting for a new one to arrive, I got around with a borrowed one.
As it turns out; Im kind of impressed by it.
How would you like a 7 day battery life. Stunning sunlight readable e-ink display. Extremely rugged (ive seen it survive drops from third floor on concrete, a car driving over it and being taken in to a shower all without any damage). Thin and light like no other phone Ive ever had in my pocket. Best reception and voice call quality of any cell phone Ive ever tried so far.

Granted, its functionality is "somewhat" limited. As in, making and receiving calls and text messages and, well,  thats about it. You can buy it for $15 on ebay. Its the amazing motofone f3.
http://www.gsmarena.com/motorola_motofone_f3-1794.php

Im seriously considering keeping it (or getting something similar as I do miss bluetooth when Im in my car). Of course I regularly miss all the other goodies and functionality as well, but Im no longer sure I want all that functionality in my phone, which is always too small when you need the smarts, and too big, fragile and battery hungry when you dont. So Im left wondering if it wouldnt make more sense to get a ~5-7" tablet for all the other "smart" stuff.

Has anyone else gone back from a smartphone to a dumb phone?

its not cost that will determine price initially, its demand. At current difficulty, demand will enable BFL insanely high gross margins (which are needed to pay back the NRE), easily 10000% or more of marginal cost;  but as difficulty increases, prices will come down accordingly, or miners will no longer buy them; eventually its the marginal cost that will determine prices.

lower prices -> increasing difficulty -> causing lower prices; its a feedback loop you do not have with cpus, gpus or fgpgas because their price is not determined by bitcoin difficulty. Thats the key issue, the difference between initial prices and eventual prices per GH will likely be several orders of magnitude, since no one is going to buy asics that cant generate a profit in their lifetimes, and there is no reason BFL wouldnt want to sell products as long as they still have a huge gross margin.


See the many other threads on this issue; its based on some academic research and an actual SHA256 asic implementation.

Mask set is an NRE, no one ever said NRE was low, quite the opposite (and a few 100K is if anything, too low an estimate). We are talking variable production costs being negligible.  A fully processed 200mm wafer costs around $1000 for an older 130nm process. One such wafer should yield somewhere between 1 and 10 terrahash. $0.1-$1 per GH is negligible compared to current prices and asic development costs.

Makes no difference, at those per GH prices they will sell boatloads and difficulty will just go up even faster and you will still have close to no chance to recover your investment. 

Not that I see why would BFL charge just $100 for 1GH if people are willing to pay > $600 today.

As for the internet connection dave mentioned; thats of course a complete non issue. Having a 100GH mining rig will consume the exact same amount of bandwidth as 1 GH today,  once difficulty goes x100. Difficulty has gone x100000 in the past 24 months, but that hasnt affected bandwidth required for mining.

They might, but then again, its no different as selling the same chip for $1000 initially and dropping prices to $100, $50 etc over time.  The net effect is the same; per GH price will likely start close to FPGA prices and eventually drop by somewhere between one and two orders of magnitude.

Crippling does have the potential benefit of being able to sell "upgrades". Flash the bios or something and double, quadruple or ten fold your hashing power.  

Either try to buy shares in the company developing the asic or find a way to short mining bonds or companies.

Hmm.. not sure where you got the 130nm figures from. I only see 180 and 90nm if you click the asic button.
On 90nm, one core is 50,800um2 or 0.0508 mm2
One core is 7.75Mbps / MHz. On 90nm they project 500 Mhz, so thats 3.8 Gbps or ~7.5 bitcoin MH.
a 100mm2 chip would therefore yield 15 GH. A single 200mm wafer over 4 TH.

But as DnT pointed out, thats unlikely to be anywhere near optimal for bitcoin.

edit: revised math

Sure. If difficulty/price goes up by a factor 3 or so, its safe  to assume its due to ASICs. FPGAs arent going to plummet like that in price per MH.

edit: you should factor in reward halving too though.

I already did. Granted, its a research chip, but the numbers are there.

Care to share your math? I suspect you forgot a bitcoin hash consists of two SHA256 hashes.


I did the math. Using the above PDFs you can get an idea of density compared to FPGAs. To make that math work, you need to know the die size of those FPGAs, which I couldnt find, but I assumed they were between half and full reticle size (1/24th of a wafer). In reality they are almost certainly smaller. Still, even using that assumption, I ended up with well over 1 terrahash per wafer.  A processed 200mm 130nm wafer costs about $1000. Those are ballpark figures, but they give you an idea.

As for FPGAs, they may not cost nearly as much as what we pay, but there is no reason to assume FPGAs are going to drop dramatically in price, and their price certainly wont change with bitcoin difficulty. By contrast an ASIC vendor will eventually have to sell near marginal cost, or not sell anything at all. There will be a race to the bottom because no one is going to buy ASICs that can not generate more bitcoins than it costs.

Without competition, BFL would simply be handing out a part of their future profits. That only makes sense if you think miners arent going to buy otherwise, but judging by the posts on this forum, I highly doubt that. Moreover, Im not convinced your scheme would change a lot of minds. If they set that percentage really low, as they probably should, it wont factor in most people's buying decision. ; but BFL cant set it very high either if you assume sold hashrate is going to increase by several orders of magnitude over the next years. It would only help for those people who truly understand the problem, and those arent the customers who are going to bid the highest prices.

When you factor in competition, I cant see it work at all. The protection would be moot for miners, because they wouldnt be protected from difficulty increase created by the competitor; nor can BFL provide safeguards against that, you can hardly expect them to pay old customers for sales their competitors achieve. It would be like giving a difficulty insurance; if you do that, I dont see the point of selling hardware, if you assume the major risk and give away the potential benefits,  you are better off mining yourself.

Thats actually a good idea, but I dont see why BFL would do it. Moreover, it falls apart if you factor in a competitor.

http://rijndael.ece.vt.edu/sha3/publications/DSD11SHA3.pdf
Last page. They achieved 3.7mW for 1.5Gbps SHA256 (single pass) on a 130nm process.  Thats ~2.5mW per bitcoin MH. Or ~2.5W per GH.

Other comparison between 65nm FPGA and 130nm asic on SHA256:
http://filebox.vt.edu/users/xuguo/homepage/publications/CESCA_Seminar_SHA3.pdf
Page 23.  The asic is about 35x as power efficient as the Virtex5 on sha256 hashing.

Its anyone's guess what process node BFL has chosen, but I assume it be 130nm or perhaps even better.

Still want to take that bet?

For those miners, thats potentially even worse, unless they are fully aware of how many of those units are ordered and will be sold in the next 6 or 12 months. Including those of a competitor, if any. What BFL should do if they want to maximize their profits is more what you suggested; accept preoders for a few months without shipping a thing and not saying how many orders they have; then unleash all their terrahashes and make its customers cry. Lower prices, rinse, repeat.

No matter how you slice it though. an ASIC provider playing its cards right can almost certainly earn more by selling its hardware than by mining itself. And that tells you that whoever is buying, isnt likely to make a profit.

Agreed that for bitcoin this is not a problem. I just hope someone sets something up that allows me to short mining companies investing in these asics.

I think you are vastly underestimating the potential of asics; a 130nm asic is ~40x as energy efficient as current 65nm fpgas for sha256 hashing according to papers ive seen and linked. A 40nm asic would therefore be closer to 100x more efficient than an FPGA.

But thats not the main point here. The main point is the variable cost per GH where the difference is even bigger. For FPGAs you are looking at ~$1 per MH. For an asic you would be looking at less than $1 per GH.


A spartan 6 price is not affected by bitcoin difficulty. Just like with cpus and gpus, demand for such chips comes from non bitcoin applications, if bitcoin difficulty goes x100 tomorrow, spartan 6 prices will remain unaffected, as will gpu and cpu prices. Its market prices of these chips that largely determine bitcoin difficulty, not the other way around. If xilinx would start seling spartan 6s for $10 you would see a huge increase in bitcoin difficulty, but a huge increase in difficulty will have close to zero impact on xilinx prices.

But for a bitcoin asic, its market value is 100% determined by (future) bitcoin difficulty. If difficulty goes up x100, its market value will drop by ~100x, causing even higher difficulty. There is no such feedback effect for cpus, gpus, or fpgas.