Its actually 50+ original Pentium cores (think after 486), just shrunk down to 22nm and built with their 3D Trigate design, Not Sandy Bridge at all. I'm sure they've added some extra instructions but still, it's not much more than that.

Timekoin is the first non-experimental application of an open encrypted electronic  currency system on a public network.

The first concepts of digital currency date back to the late 1980s before the Internet was know as The Internet. Computer enthusiast would communicate with each other via modem dial-up bulletin boards and exchange files and messages. During those times, phone bills were high so online time was limited each day by system operators. Users would trade around "time" as currency in exchange for files or services.

This "time" could be added to another users account so that they may use more "online" time on the bulletin board computer. Because this started to become it's own culture of digital currency of trading time, many bulletin board operators began limiting users ability to trade "time" and eventually lead to business models of giving limited free time and charging users to use more time pass the free time point. Because of the limited nature and expense of running a bulletin board system, the electronic currency concept at the time was given an early death.

30 Years later, things have changed greatly. The Internet now allows anyone in the world with a computer to communicate. This vast open public network gives back the ability to resurrect the concepts of digital currency run by the public. Without any central authority to try to monetize the system and the vast amounts of computer power available to any person, the doors of the public digital currency once again swing open.

From what I read and could collect by looking for information, you need to pay several hundred (thousand?) dollars to get the Xilinx tools and the bitcoin miner bitstreams seems to need 10s of gigabytes or RAM to build. I don't know about others but my hobbies usually start smaller than that...

Bitcoins could be stored on a smartcard having a flexible e-paper display, flexible built-in keypad, and flexible LiPo battery [1]. Withdrawing coins from the card could require a user typing in an amount and a pin code, and then using a smartphone to scan a QR code shown on the e-paper display (or sliding the card in the merchant's payment terminal, which would scan the QR code). The QR code would represent a signed Bitcoin transaction to a pre-programmed address whose private key sits on some online server, which is only used as an intermediary step before forwarding the coins to the final merchant. The smartcard would effectively never connect to an online device during its entire life, making it un-hackable without having physical access to it. Smartcards could also be manufactured in pairs, or triplets, etc, to have clones of them in order to have redundant backups of the Bitcoins in case of a loss of one of the cards.

One might ask how the smartcard can sign transactions without access to the current blockchain. Well it is mathematically possible, because a transaction just consists of ECC-signing a few bytes representing the destination addresses.

[1] The technology for this already exists. I own one of those Paypal cards: http://gallery.drfaulken.com/d/8752-1/IMG_1466.JPG

At that port it forks, and everyone who hasn't updated will be on one fork while everyone who has updated will be on the other fork.

What actually happens next ... well that depends on the % of who decides what.

I guess those with asics and the security problem may stay on their risk fork and everyone else will be on the new fork.
Though if asics are most of the network by then and they want to keep the security risk, I guess BTC stays a security risk - bye bye BTC

Basing on the square mm and a clock speed of 1 Ghz the raw manufacturing cost would be closer to $0.10 per GH/s.  Now granted you have the NRE, the capital cost, the profit magins, yield losses, salaries, etc but even with 1000% markup <$1 per GH/s would be possible.

One way to look at it is the SHA-256 hasher only took 20kGE.    Lets say scaling it to 1 Ghz required twice as many GE and you want to make it perform a double hash; so 80 kGE. Obviously you wouldn't make a chip that small.  But hashing is perfectly parallel.  Instead of 1 single hashing engine running 1Ghz you could lay down 20 parallel engines.  So that on each clock 20 nonces are calculated simultaneously (20 GH/s @ 1Ghz).  Even that would only be ~ 1.6M GE.  Tiny small by modern chip standards (which have transistor counts in the billions).   The $20 CPU in your smartphone likely has a higher transistor count.

Are you nullifying his bid for cheating, or does 30/50 stay as the high bid?

30

Its rather the opposite. The fact they intend to launch at 10x better MH/$, while they could easily charge 5 or even 10x more considering the power efficiency gains, shows what kind of tectonic shift this really represents.

 I expected something much close to FPGA prices initially. But these prices will only last until price/difficulty catches up, therefore asic sales would dry up, so BFL will slash them over and over until they are >100x lower than today and finally approach somewhere closer to marginal costs which is damn close to zero $ per GH.
That is the 'exponential' leap. Want to take bets that in 24 months, bitcoin difficulty wont be 100x higher than today?