ASICs coming on line is a whole different beast. Its entirely possible that one or two of the larger mining operations will be able to match today's entire network hash rate. The question is simply when this will happen. My guess is early to mid 2013.
BFL just announced availability in October this year. Im willing to take that with a table spoon of salt, but still, best of luck to all mining bond holders. |
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allright, Ill toss you an idea I intended to develop myself, but since you already have most of the work done, and my time is finite, you get it for for free. If it makes you rich, feel free to toss me some coins  Instead of only trading bitcoin options, add difficulty options, so that miners can hedge against future increases in difficulty. That would allow them to invest in mining hardware without taking on the full risk of their investment going south due to increases in difficulty, particularly now with ASICs on the horizon. |
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I think friedcat has made a very good explanation of why this is not as bad as you might think. I know there are some other options in which you can invest your money for a much higher interest rate. It depends on your risk profile, for example you might want to invest in pirate bonds for a highest reward at the expense of a higher risk. Funny, I actually think the risk of investing in pirate bonds is substantially lower, even though I suspect its a ponzi scheme. At least with pirate, if you pull out your investment before the collapse, you might actually make a pretty penny. These mining bonds I can only see go down, its a matter of how fast. One of the best things of mining bonds is that although their returns are not very high, 7% per month is actually pretty high, its just that Im rather certain it will be completely eclipsed by an exponential increase in difficulty. Just a continuation of current trends will make your investment a bad one, and thats pretty much a best case scenario. Mining difficulty will smoothly react to absorb bitcoin prices fluctuations, mining rewards halving in a few months or any technological advances that could hit the market. Wow. The first part is true, but irrelevant; the second part, highly dubious, the last one, absolutely not. Perhaps you should look what happened when we transitioned from cpus to gpus. Compared to what ASICs will do, that was actually a baby step. Its not the just the performance of these chips that are so radically better, its the pricing mechanism that will cause an explosion in difficulty beyond anything you've ever seen and your 1MH bond will be rendered utterly worthless. IMHO the key difference here is how much confidence you might have in the skills of the issuer as she/he will have to deal with these kind of changes making the right decisions. Actually, no. If you read some of my other posts, you may have noticed I dont believe asic mining can be profitable for a miner period. The only skill one can show is staying out of it. Well, unless he sells bonds to "suckers" who dont understand the feedback loop that will be triggered when difficulty rises, causing $/GH of asics to drop proportionally, causing more difficulty rise etc etc until ASICs are priced somewhere near variable cost, or perhaps some 100x lower than what BFL announced and difficulty would be 1000x what it is today. Good luck making money with fixed speed mining bonds under those circumstances. Id much rather buy some greek debt. |
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The difficulty curve of the past 6 months shows a slowing down of acceleration to me.
Wishful thinking IMO http://bitcoin.sipa.be/speed-lin.pngNext difficulty again +~10%. And in spite of the mass production of FPGAs, the difficulty hasn't recovered to the level of last August's. So it's a drop over the past 10 months. If you are going to look at difficulty of last summer, you cant ignore BTC price. But because you invest in BTC and get your return in BTC, any profits (or losses) coming from a BTC rise have to factored out. After all, if thats what you are betting on, you should just buy or sell BTCs. So you really have to look at BTC price / difficulty, and that has been going down fairly steadily: http://bitcoinx.com/charts/chart_large_log.pngNote the log axis. I see no reason why that trend would reverse, quite the opposite. Buying these mining bonds at current prices only makes sense to me if you assume three things: the declining BTC/difficulty trend willl somehow reverse AND the reward halving will cause a significant drop in difficulty mostly offsetting it AND those (s)-asics will not arrive for another ~12 months. That a lot of assumptions and I would be willing to bet against any of them individually; let alone the combination of them. Of course, it will even explode more once 20nm ASICs destroys 130, 65, and 45nm ASICs. The problem is when. Thats actually unlikely to happen, given the extremely low marginal costs of asics, the performance gains from shrinking asics to newer process nodes is unlikely to be big enough to warrant the investment any time soon, if ever; but thats for another discussion. Agreed that the 'when' is a big factor, but (s)asics are the sword of Damocles hanging above your bonds; its not a matter of if it will drop, but when and Id be very surprised if it didnt hit in the next 6-9 monts. Anticipation and resulting value loss of these bonds will begin a lot earlier, probably as soon as a time table is made public. Besides the reasons I listed above, I have to add another: Imagine the Bitcoin price drops to 1/10 of the current level. If you have 100BTC (600+$) and don't invest in anything now you only 60+$. But if you buy PIMP bonds at 0.25BTC/each, we can safely predict that the difficulty will decrease to at least 1/4 of the current level (hard to pay electricity bills, lots of mining operations closing). Then you have a 28% per month return, which translates to 1934BTC after a year if you reinvest, that is, more than 1160$. Isn't it a good investment if you could turn 60$ to 1160$ in a year? If you want to speculate on a huge price drop or rise, buy or short bitcoins and you will make a whole lot more if your prediction pans out. A said earlier, those bonds are denominated in BTC and earn you BTC, so thats what you have to look at. Difficulty dropping to 1/4 just aint gonna happen, but if you are willing to make a bet in that direction, Im certainly up for it. |
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Using words as "ASIC fabs" scares me a bit TBH. Anyway, Im guessing they are looking at structured asics / gate array chips, there is no other way to have a reasonable chance of beating BFL to market. Whether a s-asic will turn out to be price/performance/power competitive with BFLs offering will be interesting to see, but I would guess absolutely not; but given the difference between marginal cost and market value, if they are fast enough to market that may not be a deal breaker. Performance after all is just a matter of using more chips, and power consumption will be lots better than FPGAs anyway. It will simply be a matter of shipping high enough volume fast enough, triggering the price war and difficulty explosion we are all so looking forward to . |
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Hi guys, I think that PIMP bonds are very undervalued so I will put here some reasons behind my rationale: - Investors could get all the best features of mining bonds, that is getting dividends without the hassle of maintenance and electricity costs.
- Given the way he calculates difficulty variations, his dividends will be always better or at least equal to similar mining bonds.
- Because of his statement of providing free upgrades to BFL ASICs when available.
If/When the BFL ASICs arrive, this could really boost the MH/s he will be providing for the same price, but even if they do not arrive any time soon, his current price of 0.25 per share is also a good deal. As a result of what I think has been a thoughtful evaluation I have heavily invested in Pimp bonds. I am truly optimistic in the evolution of this asset for long term investors, so if you are one of them I urge you to make your own analysis and share your own opinions. Help me understand. These bonds are sold at 0.25 BTC, they currently yield 0.0044315 BTC per week, correct? Thats what, ~7% per month? So you are looking at ~40% ROI on your investment as dividends by December, at which time, mining revenue will half. So you'd be lucky if dividend payments compensate the expected loss in value of your bonds and thats when completely ignoring the rather obvious trend over the past 6 months where difficulty has increased steadily by almost 10% per month on average; a trend I suspect will accelerate when BFL will start shipping its minirigs in volume (the ones I know about alone represent almost 1TH), and a trend that will explode once they or anyone else starts shipping ASICs. I dont understand how anyone can believe this is a sound investment. Mind you, that goes for all mining bonds on GLBSE, not just Philj's.. I really really wish I could short sell them. Perhaps I should instead set up a virtual mining bond thats not backed by any mining equipment but will just pay out dividends based on difficulty. |
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5.5 Gbps is at a core frequency of 735 Mhz, and the 3.1mW power number has this note by it: "The power consumption is estimated for the frequency of 100 MHz". Furthermore, all the numbers are synthesized. They say they plan to tape out all the different implementations for comparison, but I don't think that's actually been done yet. Sure, they are estimates based on pre-layout synthesis, and afaik the 90nm chip hasnt been built, but at this point the same probably goes for the BFL chip, so its not an unfair comparison  . The 130nm chip was build. In fact, you can request a free sample if you want. ITs also worth pointing out these chips are not optimized for bitcoin, but general purpose sha2 hashers. The 130nm chip isnt even optimized for SHA2 the whole paper describes all the trade offs they made to get those 5 or whatever competing SHA3 algorithms implemented. Whatever you want to read in to the results, they are not the highest possible, most definitely not for bitcoin. |
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If BTC value goes up, obviously you do lose. You lose the opportunity to sell your coins at that price.
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You realize they are different documents right? If you had read my posts or read beyond page 1 of the paper you keep quoting, you might have noticed at the end it has actual performance and power numbers for the asic implementation. You can compare that to whatever uber optimized fpga you want, so who the fuck cares about that quote of yours about what they did during prototyping. Their ASIC numbers are NOT relative to the FPGA prototype, those arent even published.
The other document, the powerpoint, is a head on comparison between FPGA and ASIC implementations.
But who cares, clearly you are not interested in reading or finding out what you dont want to know.
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In all cases you come out ahead, because you were going to sell and not hold anyway.
Well; getting $6.5 when the exchange rate is $7.5 is not exactly what I would call "coming out ahead". You also miss the scenario where no one buys your contracts. That said, interesting service, subbed. |
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Still stuck on page 1 I see. Here I was thinking you were smart.  Let me try big fonts. BECAUSE THEIR GOAL IS BUILDING AN ASICWTF do you want them to optimize for an FPGA? Go read the ASIC results. |
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Maybe if you render the entire paper in that same big red font you can actually read it and understand that the FPGA was used for prototyping and therefore FPGA specific optimizations where not used. Now read about the ASIC, will you?
Oh well, I guess you are just trolling. You can lead a horse a water...
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To be fair, the paper from Virginia Tech is also using 0.13 standard cell. If BFL isn't lying about the ASIC being full custom, there could be optimizations on the ASIC side as well.
Highly unlikely they used anything other than standard cell. But their published performance is completely believable for a 130nm standard cell implementation (particularly if its optimized for bitcoin only) and no one has said its 130nm, it could even be a smaller node. Some skepticism regarding BFLs claims and in particular, the timetable is warranted, but its ridiculous to pretend these numbers are somehow completely impossible. |
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Right there on the front page almost in <blink> tags:
Great, so you (mis)read the first paragraph, now scroll down to the last page and see the power and performance results for the reference 130nm asic implementation. |
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If you had read the papers I linked, you would have seen how that kind of power efficiency is more than plausible with a 130nm asic, nevermind a 90 or 65nm one.
I honestly wouldnt have thought someone with your background would even need to see such papers to believe that though, so Im gonna assume you are just pretending.
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I wanted to have BitMinter as my backup pool but I haven't yet done so because of the payments system that punishes not mining constatly by paying more to the most recent shares instead of valuing them equally.
If I understand this correctly, this makes any pools with this kind of payout inadequate as a backup pool, correct?
No, incorrect. Every share you submit will have a chance of not being paid out or being paid out multiple times. But on average it will be paid out exactly once, just like any other honest payout scheme. |
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P4man. IMO, it's pretty clear that, NRE aside, cost to produce a SC Single is at least $1000 below what's stated in their announcement. It's also clear that BFL will easily recover the NRE.
What situation are we left with? For example, how much of that $1000 would an early adopter have to eat while BFL is lowering price due to difficulty spikes over, let's say, a 6 month period.
I guess what is the potential depreciation 6 months after launch of SC models. Will BFL still be under pressure to recover NRE at that point and resist price drops. I suppose time will only tell.
NRE becomes a sunk cost. It doesnt factor in your pricing strategy after you spent it. BFL will not adjust its pricing in either direction depending on whether or nor they have already recovered it, they will price their hardware purely to make as much as possible. They are not a non profit organization. Will they recover it? If they are the first asic provider on the market and maintain an asic monopoly for 12 months or more, I think easily and many times over. If several ASIC providers would emerge in a short time frame triggering a price war, well, potentially none of them will recover their NRE. |
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Being able to spell doesnt even guarantee it. Sure does help.  |
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