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4601  Alternate cryptocurrencies / Mining (Altcoins) / Re: Swedish ASIC miner company kncminer.com on: September 03, 2013, 12:51:51 AM
Maybe the chips won't ever leave china? Cheaper and faster to send a guy there to test, then crack on with production there? I've not seen anything official mention them being assembled in Sweden, and I'd bet there's some factories over there about perfect for the job.

That slogan on their boards should have been, "Chips. Do you want to know more?"

The chips aren't being made in China.  There are no 28nm fabs in China.  TSMC's 28nm fabs are in Taiwan.  Also, KnC said the boxes would be assembled in Sweden.  I don't know where the chips are going to be mounted on the boards.  Could be Taiwan, could be Sweden.  It's not likely to be in China.

Also even IF KNC is using a production house in another country they will want the first batch of chips sent directlyto them so they can hand assemble a few boards for testing.   Nobody has thousands of boards assembled without testing.   It isn't economical to hand build a board but that doesn't mean you can't use a reflow oven and do a half dozen boards by hand to get some prototypes.
4602  Bitcoin / Mining speculation / Re: What's the lower bound on mining hardware over the next year? ($/GH) on: September 03, 2013, 12:48:51 AM
Competition could force them to reduce prices but buyers falling over themselves to buy at current pricing is going to limit how far they reduce prices.

I don't see anyone falling all over themselves anymore.  6 months ago, 3 months ago sure but a couple months is a long time in Bitcoin lands.

At the recent offerings
xcrypt - unlikely to have sucessful IPO
IceDrill - scaled back from 500 TH/s to 250 TH/s.
HashFast - still hasn't sold out of initial batch of 220 TH/s
KNC - never sold out of Oct batch.  Ended up cutting prices 30% for Nov delivery to stimulate sales.
Cointerra - announced 2 PH/s weeks ago and no indication they have sold out despite cutting prices 16% to $7 per GH/s.

Now this is all for delivery in 2013.   The math gets even worse in early 2014 when the network is >6 PH/s.  I don't really see >$10 GH/s flying off the shelf in early 2014.   Even if it does we are looking at 15 PH/s or so by mid year so late 2014 looks even worse.  Even if the exchange rate doubles, if hashing power quadruples then ROI% will look WORSE then then it does today and today sales are slowing despite falling prices.  As for exchange rate going to $1K per end of 2014 well that is just a pipe dream and anyone who thinks that should just buy BTC today as it is unlikely any miner at any price is going to return > 700% in a year.
4603  Other / Beginners & Help / Re: Is any hardware mining investment made today going to be profitable? on: September 03, 2013, 12:37:52 AM
A calculator is just a tool it isn't magical.  What matters is how fast difficulty goes up.  Nobody knows for sure.  However miners are very expensive and the profits decline rapidly.  If you are thinking about buying today you are essentially getting in at the end of the line.  Very likely you will lose money. 
4604  Bitcoin / Mining / Re: use your head before purchasing mining equipment.... on: September 03, 2013, 12:20:15 AM
Also consider dropping your electricity costs down to zero by setting up alternative energy. It could be solar or wind. That will increase your BTC profit margin. You only need few panels to power up ASIC Miners. Grin

Solar power is never free.

The panels have an upfront cost, the panels have installation cost, there is annual maintenance, the components have finite lifespan.

Solar power per kWh = (lifetime costs / lifetime power generated)
4605  Bitcoin / Mining speculation / Re: What's the lower bound on mining hardware over the next year? ($/GH) on: September 02, 2013, 11:45:29 PM
$10 GH/s by the end of 2014.

There are already units offered at less than that.  Cointerra is $6.99 per GH/s.


If you believe that Cointerra will be successful and if you believe that the price of BTC is going to stay under $150 then my $10 estimate wouldn't make any sense.

Well even KNC batch2 (Nov) is down to $11.50 per GH/s.  By the time every company has paid off their NRE and delivered their first batch of hardware difficulty is going to be much much higher, and there likely is little appetite for Petahashes more of high cost hardware.  Unless the price comes down nobody is going to buy gear which is negative ROI% from day one.  Anyone offering $10 per GH/s in early 2014 is likely not going to see a sale, by mid or late 2014 it is going to look downright silly.

The marginal cost of production is closer to $1.  Given finite economical capacity and multiple competitors it is kinda hard to believe that 1000%+ margins will be sustained.
4606  Bitcoin / Project Development / Re: Would you invest in a bitcoin startup who places ATM BTC machines in US cities? on: September 02, 2013, 10:50:32 PM
Only because the only action I'm aware at the federal level was the Mt Gox seizure and I assume the problem their is they are acting as an exchange.  I'm not a lawyer and I recognize the need for one. 

Other than filing as an MSB what do you think we'd need to do?  (And what do we need to do as an MSB?)

Comply with the Bank Secrecy Act.  At a minimum know your customers, collect identitifcation, record transactions, report suspicious transactions to FinCEN and develop an AML program.
4607  Alternate cryptocurrencies / Altcoin Discussion / Re: ASIC Testing on Scrypt? on: September 02, 2013, 10:49:27 PM
He also appears to be clueless about the BIOS and AMD driver limits which make 16 GPU per system an impossibility.  In theory using PCIe bridge is possible but nobody with any capital dumped it into custom GPU boards when you could dump it into custom ASICs and make a fortune (in the early days). 
4608  Bitcoin / Project Development / Re: Would you invest in a bitcoin startup who places ATM BTC machines in US cities? on: September 02, 2013, 10:42:19 PM
Your selling Bitcoins.  MSB regulations apply.  Depending on the exact business model and the wording of state laws money transmitter requirements in one or more states apply.  It is a very complicated issue and likely will require legal counsel.

Not sure why you conditioned your explanation with "like an exchange".  By FinCEN's guidance if you are exchanging BTC for USD or USD for BTC then you are a money service business.

[quote[As only a seller of "numeric codes" I'm not sure what regulations specifically apply.[/quote]

Most US dollar are simply numeric codes.  That isn't much of a legal defense for anything.
4609  Bitcoin / Mining speculation / Re: What's the lower bound on mining hardware over the next year? ($/GH) on: September 02, 2013, 10:36:10 PM
It depends on if you mean raw chips or entire system?

The raw silicon (excluding NRE) is on the order of $0.20 per GH/s.   I think people forget that high quality DC to DC PSU aren't cheap and neither are high current ATX power supplies.  Between the two you are looking at at least $0.30 to $0.50 per GH/s.  Then add all the boring stuff life labor, PCB, minor components, assembly, testing, cooling, cases, etc and I don't see cost being below $1 per GH/s and retail is going to be more than that.  Maybe $1.50 on the low end but $2 is probably more realistic.
4610  Bitcoin / Mining speculation / Re: What's the lower bound on mining hardware over the next year? ($/GH) on: September 02, 2013, 10:32:03 PM
$10 GH/s by the end of 2014.

There are already units offered at less than that.  Cointerra is $6.99 per GH/s.
4611  Bitcoin / Hardware / Re: HashFast launches sales of the Baby Jet on: September 02, 2013, 10:13:45 PM
Looking forward to seeing how quickly the GN chips go through spins.  To give everyone else here a sense of time, Intel's 45 nm Penryn 5500s did their first tape-out and wafer generation in the beginning of January 2007.  The initial chips were able to boot Windows (almost unheard of luck for a first tapeout), but the Q9550 chips had many spins and revisions and were not released until November 2007.  However, TSMC has been making solid progress on 28 nm yield for the past while, and I'd expect it'd be through spins in less than a year since it's no longer a bleeding edge process.

This is like comparing a rowboat to a super tanker in terms of complexity.  Bitcoin ASICs are little more than parallel SHA-2 calculators.  There is essentially no logic in the chips, all the smarts are in the general purpose microprocessor running the mining software.
4612  Bitcoin / Hardware / Re: HashFast launches sales of the Baby Jet on: September 02, 2013, 10:11:21 PM
At 324 mm^2, HashFast will have a huge problem if they don't meet thermal specs at 250 W as they'll be next to impossible to cool or will not meet specified hash rates.  This was the same problem AMD hit early on with their Bulldozer processors, and the Bulldozer series of processors were slightly smaller than this.  I would say that anyone who is claiming a 324 mm^2 chip with a target TDP of 250 W can be easily overclocked 25% should be considered suspicious.

Not really.  It is all relative.  Say for the sake of the argument they can't exceed 250W (not sure what is true with water cooling and large die size).  Lets also say 400 GH/s is over 250W.  There is some clock speed and voltage combination which produces X GH/s stable at 250W TDP.  Now lets take that a step further.  What makes you think 250W is the target?  Maybe they are targeting 450 GH/s @ 200W and the rest is just to hedge their bets in the final silicon comes in hotter or slower than expected. 

Worse case scenario they end up needing to use multiple chips and/or offer customers a partial refund (which may be cheaper than providing multiple units if they miss by less than a certain percentage).  With the markup on BOM being >500% that simply means less profit, not a loss of profit.


4613  Bitcoin / Project Development / Re: Would you invest in a bitcoin startup who places ATM BTC machines in US cities? on: September 02, 2013, 10:04:34 PM
How do you plan on dealing with the regulatory issues?  How do you plan on identifying and verifying customer identities.  The tech is trivial, the laws/regulations not so much.  If you intend to just operate above the law, well consider how incredibly easy it is to seized an expensive public fixed asset like an ATM.
4614  Bitcoin / Hardware / Re: HashFast announces specs for new ASIC: 400GH/s on: September 02, 2013, 08:45:08 PM
The information you are looking for has not been said in public, and is most likely under NDA, but I think AsicSchill is probably right.  IceDrill is the primary investor in HF.  They have double the amount of raw chip hashpower than HF's own Babyjet line.  For that level of commitment, I would imagine that the IceDrill folks are footing a large part of HF's NRE chip costs, and want to make sure their investment is a good value.

IceDrill is 250 TH/s.  550 BabyJets @ 400 GH/s nominal is 220 TH/s.  If MPP is maxed out the BabyJet Customers would receive 1,100 TH/s.
4615  Bitcoin / Hardware / Re: HashFast announces specs for new ASIC: 400GH/s on: September 02, 2013, 07:38:22 PM
Quote
I would say add a "populated" board.

Agreed that was my meaning, I updated the post for clarity.

If HF provides boards I can't see them saying "build it yourself".  Generally the more boards assembled the lower cost per unit so no single user could achieve the costs (and yes time is money) of HF doing a run of a couple thousand boards.  I would expect if the MPP is exercised most users would opt to pay the difference and receive completed boards over raw chips. 
4616  Alternate cryptocurrencies / Speculation (Altcoins) / Re: Litecoin Price to hit $25? on: September 02, 2013, 07:28:35 PM
So, how a network gets larger?

Well that is a good question.  Merchants accepting LTC along side BTC is good but has a small network effect.  Merchants that only accept LTC provides more a network effect.  Even more useful would be developing the supporting infrastructure?  Where is the LTC equivalent of bitpay to provide turnkey solutions for merchants?  Where is a US/EU based exchange which provides LTC/USD pairs?  If LTC is less liquid and harder to adopt then outside the dreams of those holding large coins it is improbable to think merchants will adopt it.  I mean lets look at Bitcoin.  Bitpay makes it very easy and risk free to accept.  Companies can price in USD, get paid in USD, receive a guaranteed amount of USD, and have funds in their bank account as fast as credit cards.  Combine that with no fraud and low fees.  Even with that Bitcoin adoption has been slow.  Now compare the current LTC situation?  Honestly think its network is going to grow faster? 

The problem is that as valuable as a well run "LTC Bitpay" would be it would only be "as good" as Bitcoin.  LTC wasn't ambitious enough and ended up a shallow copy of Bitcoin.  That makes it very hard to outgrow its big brother.  It may simply be impossible.  A crypto-currency which is designed from the ground up to be superior to Bitcoin in areas where Bitcoin is inefficient likely has more of a chance of carve out a niche.  Bitcoin is ill-suited for small transactions.  A radically different crypto-currency designed to use a floating ledger would provide less security but would provide a superior platform for quicker, lower cost small transactions.  Is it enough to compete with off-chain txs? I don't know but at least it would have a competitive advantage.  Still nobody would likely be storing huge sums in this complimentary currency due to potentially lower security but it could be successful alongside Bitcoin.

Honestly (and no doubt some will disagree) I see only two highly successful alt-coins in the future
a) one which tries to compliment Bitcoin (and please no "silver for Bitcoin's gold nonsense)
b) one which is so vastly superior to Bitcoin that it displaces it as the dominant currency

No alt-coin to date has been ambitious enough to attempt either.
4617  Bitcoin / Hardware / Re: HashFast announces specs for new ASIC: 400GH/s on: September 02, 2013, 07:21:22 PM
Yeah... the MPP is pretty awesome... but it is near useless if they don't provide "usable" hashpower for a nominal fee.  

Raw chips without a PCB is pretty tough pill to swallow. And if they decide to charge 10BTC per populated PCB in March, there is nothing in their terms to stop that.  They promised that there would be an independent DIY community at the time, but no technical specifications of the chip has been released which would be a pre-requisite.

Hopefully there will be some clarity provided around this soon for customers (I am one btw)... not that is matters as they are sold out.  But yes... the MPP is the most attractive/innovative part of HF's offer.

Clarity would be a good thing but there are a couple of positives:
1) HF publicly showed the # of units sold and honestly it is a relatively low number (~0.25 PH/s direct sales, ~0.5 PH/s including IceDrill)
2) If nobody else IceDrill will have the knowledge and experience making boards as they are buying only chips.

So while HF "could" screw over their customers charging a high premium for boards and assembly most of their potential profit comes from future sales and burning the early customers is a good way to ensure there are none.  Also given at least one outside entity has the specs and ability to produce boards it is kinda hard to close the door now.  That being said it would be an encouraging sign if HF provides some specs for the boards as well as a guestimate on what they would charge to convert chips to complete boards or rigs.   Boards might be more useful as cases, power supplies, waterblocks, and other gear can be obtained off the shelf.  I also assume the controller used in the babyjet can be connected to more than one hashing board.  So the critical number is what is the cost for an assembled & tested board.

4618  Alternate cryptocurrencies / Speculation (Altcoins) / Re: Litecoin Price to hit $25? on: September 02, 2013, 07:15:14 PM
litecoin just needs to be spendable in a manner.

i dont see anybody try to accept litecoin seriously.

and even more,
for the end-user people, they have bitcoin option, why should they change their money to litecoin for spending it on sites that accepts both bitcoin & litcoin???

That is the power of the network effect.  

Why would a merchant accept LTC if most people who have LTC also have BTC?  
Why would a user (not a miner but just a user) acquire LTC to spend if more merchants accept BTC and almost all that accept LTC also accept BTC?
Why would a merchant only looking to convrert to fiat  (using cryptocurrency as a proxy for dollars & a payment platform) accept LTC given the lower liquidity, the need for double conversion in many cases, and the lack of turnkey solutions (bitpay, coinbase, etc)?

The network effect creates a self reinforcing cycle that only becomes stronger as the network gets larger.
4619  Alternate cryptocurrencies / Altcoin Discussion / Re: Why not stıck to bıtcoın? on: September 02, 2013, 05:57:17 PM
The coin cap of bitcoin could eventually kill it. People won't spend millions a year on mining hardware and power if mining isn't giving a decent return. Transactions fees could work but they could also drive people away if the fees got too high.

I doubt bitcoin will last in the long term, 10+ years. Most alt coins will tank long before btc though, every litecoin clone as well as litecoin are doomed imo.

The Bitcoin network costs ~$150M a year to run.  Either way you pay for it.  Users (collectively) pay for the cost of securing the network by inflation or by transaction fees.  The cost is real.  One could hard fork Bitcoin so that it has continual block subsidy at 12.5 BTC after the next subsidy cut, and eliminate all fees (possibly using a tx POW to prevent denial of service).  This wouldn't make Bitcoin free.  The network has a real operating cost and users would pay for it in the form of inflation.

It is also a fallacy to say fees have to be "too high" in order to support the network.  Not necessarily, it all depends on tx volume.  At $150M a year that works out to $2853 per block.  To keep the current level of network strength miners need to be compensated ~$2853 per block. You could have $2853 in subsidy (inflation), $2853 in fees or more likely some combination of both.  Miners don't care.  Either way the miners are supported by the same amount of annual revenue.

The larger the network the lower fees can be.  Assuming no block subsidy the fee per tx would be
@ 1 tps = $4.76 per tx
@ 7 tps = $0.68 per tx
@ 50 tps = $0.10 per tx
@ 5,000 tps = $0.01 per tx

If you want to look at it terms of Bitcoins.  Today miners are compensated an average of 0.12 BTC (120 mBTC) per transaction by a combination of subsidy and fees.  That is relatively high but the marginal cost per tx is very low (maybe 0.01 mBTC) so the network can support significantly higher volume without significantly higher cost.  How high?  Well that is a matter of some debate but at a minimum 10x to 100x is pretty conservative.  At 10x current volume that would put the cost per tx @ 12 mBTC and would be lower than many other payment systems.  At 100x it is more like 1 mBTC and Bitcoin would be the lowest cost transaction system in the world.


Of course due to the relatively high subsidy the network is likely stronger than it needs to be (based on the value of economic tx it protects).  So there is plenty of time before fees have to become even a majority of miner's revenue.  It does show the genius of Satoshi system.  The network has real cost and if users directly pay that real cost solely in tx fees the project would be nonviable from day one.  Instead miners are subsidized to support the network while it grows.  Your claim is only true in the network remains relatively small even after a couple decades.  Then again if the network remains relatively small after a couple decades then Bitcoin likely is a failure. A high subsidies wouldn't change that fact.

 


4620  Alternate cryptocurrencies / Altcoin Discussion / Re: Why not stıck to bıtcoın? on: September 02, 2013, 12:22:23 AM
Say someone invents a new super ASIC that's thousands of times faster then the best ones currently on offer. They set up a farm, grab 99% of the net hash rate, attack the block chain a bit,  let the difficulty rise to a hundred times higher than it was, then switch the farm off. Bitcoin is stuck at a crazy high diff and effectively ruined, transactions grind to a halt, game over.

So someone has the ability to make hundreds of millions of dollars by obsoleting all other ASIC technology overnight.  They could make the hundreds of millions of dollars by mining coins themselves or they could make it by selling next gen tech to miners.  Instead they spend millions of dollars to develop the tech, build out a massive farm and then lose all the money by ruining the technology and coin.

Yeah that seems likely.
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