Thank you, hut I was referring to finding a way to know when/if public work is coming/available and at what price.

How can you tell when public work is coming in and at what price?

I just started using this a few weeks ago.

I'd like to see an opportunity for bitcoiners to invest in your project directly. Create a stock sale with legitimate stock restriction contracts and allow people to buy stock in the company and/or bonds. Maybe those who have interest in mining could participate in a hybrid pre-order/stock purchase.

For example:

Someone who wants to simply invest: They can purchase shares at a sort of IPO for people who support bitcoin. Don't initially allow people to buy more than X number of shares for a specific time period, say 30 days. Maybe you issue 10000 shares at $100.

So in the initial thirty day phase you only allow individuals or mining companies to purchase 10 shares. After the thirty day period you allow existing investors to have a first crack at whatever shares are left, then open it to anyone if there are any shares leftover. These shares of course pay dividends also.

This would allow you to raise capital of $1M to develop the ASIC. It would hopefully allow small time and big time bitcoiners to participate in the project. Ideally 1000 people buy ten shares in the initial thirty days, if not, well people had their chance.

Then create another stock purchase which includes one unit as part of the deal. So say these shares are preferred stock subject to dividends and you release 1000 shares at initial ASIC purchase price. These folks get to hedge against future units being sold at lower rates by knowing they will profit from these shares. If these units sell at $1000 you have raised an additional $1M.

I am a client of one of the top 50 law firms in the world and they have an office in Beijing. I would love to be involved in this project directly or as an advisor. I am a successful small business owner and I am currently two years into an MBA program.

PM me if you have interest in direct involvement or I will certainly try to contribute ideas through this thread.

My purpose would be to help spread ASIC technology in the bitcoin community in a way that does not consolidate mining power while also providing a reasonable profit for the ASIC producer.

Well I'm sure any donation is welcomed. I didn't want to give anyone the impression your donation will directly affect the pool or it's uptime. I was just responding to the post about whether a mandatory donation would improve the pool.

I am pretty certain from what I have observed that Inaba does whatever he can to make the pool the best it can be. He's clearly not doing it just for the money.

It seemed to me you were making the argument that singles have already paid themselves off, so why not ASIC type of thing.

Anyway, it really doesn't matter as most have suggested, the market will call the shots.

I just thought a major aspect of Bitcoin was the open source/community aspect, but I guess it is yielding to the market and maybe it always has.

I was drawn to bitcoin for the concept and possible role in improving personal freedom.

I think the free market is the most over-rated concept in economics. It only works if it has 100% rational players. It doesn't take into account Behavioral Economic Principles.

You're still being deceitful in saying they are almost paid off.

You bought them and took a risk and then sold them at a mark up. This profit lowered your cost on the ones you kept. Good for you.

If you think that type of free market will help bitcoin flourish, well then we just disagree.

That is a market driven by speculation and greed - tends to have too many losers to last.

In re-phrased some of it in other posts in the other thread.

I believe 4-5 different issues are being squashed together here.

Bitcoin needs ASIC, I don't deny that.

I don't believe a private company is the way to go, because either the company is going to have to take it in the pants, or the first buyers will take it in the pants.

I suppose most in the community don't give a shet either way.

I am not in the hole on my mining operation for the record and no I don't have a huge mining investment. I only got into this as a hobby instead of playing golf..lol

Mining is actually cheaper than golf.

I also could have clarified some points and stated that I do not believe ASIC technology is BAD for bitcoin. Allowing something like ASIC to be rolled out under traditional free market principles is going to be bad for bitcoin in my opinion.

High Initial cost+low production cost+low marginal cost is not going to be good for the people who buy the first units.

I guess many here don't give a shet about those people, but I happen to believe its unfair and could have backlash.

In the long run ASIC will be great for bitcoin and bitcoin has to get there eventually. Maybe the only path is a painful one.

Maybe an OpenASIC involving a bunch of motivated bitcoin investors could spread the cost amongst those who want to put up money and they can have access for a period of time and then let the floodgates roar open.

Inaba's pool really doesn't go down much. I've been mining on it for about 9 months and can only remember maybe 3 instances where it went down.

I'd just recommend people put their donation at 2-3% on their own.

Well I wish I knew how to create a GPU cloud and I would do it!

There are going to be a LOT of gpu miners who will be selling off unless something comes up that they can use their farms for. We could tap into a HUGE mass of GPU power by providing a way for them to make a reasonable profit above electricity and maintenance costs. The infrastructure and expertise are already in place.

I'm sure GPU miners would love a steadier income as opposed to the speculation involved in being a BTC miner, I know I would.

I like the concept of bitcoin and I love building rigs, but I really hate the constant speculation. If I knew I could slowly build up my GPU capacity over time and have a dependable revenue source I would keep on building.

I can't see how individual miners who deal with their own stuff couldn't be competitive with people like amazon who must have a pretty high overhead for their operations.

Exactly what Siggy said...hahaha

Seriously though, would be great to help GPU people to stay in the game, we could lease to other services and secure the network in downtime. Everyone wins.

It's not going to help because it will be even easier for someone to outspend and buy thousands of those "cheap devices". People are acting like ASICS will become some impenetrable hashing force and its just bullshit.

Vladimir himself said the US government could develop a custom ASIC rapidly and take over the network in no time.

Look, I'm not one that believes some central authority will take notice anytime soon, but when they do, ASIC will make it EASIER than it has ever been before to take the network besides the CPU days.

You don't think some bitcoin ASIC vendor wouldn't love to sell 100,000 units to someone at $1,000 a piece? That's $100 million, which is nothing to a large financial entity. Hell, Bank of america could do that on their own and not blink, or VISA or even f'in paypal probably.

Or they could simply spend their own $1 mil to develop and probably produce 1 million units for $50 million.


The point is, how long do you think it would take to take over a network of millions of people with smaller devices that require constant monitoring and updating to work? This would take far more time than just throwing a shitload of money at plug and play hardware.

Now if ASIC were to roll out in a few years when there are hopefully millions of global users and hopefully a similar number of miners, it would be far more difficult to attack the network without serious backlash.

Why the hell do you think Satoshi wanted the network to stay at the CPU level as long as it did ? He knew this was a weakness in the protocol and rapid technological development in mining could cause serious problems.

They simply DO NOT, because mining then becomes about capital ONLY, not man power or technical knowledge. This will make it EASY for a 51% attack. Do the people involved in bitcoin think they have the capital to compete with banks or central governments or transnational corporations? Are you guys out of your minds? Hell I doubt the bitcoin network is willing to put up enough money to combat someone with 20 million to spend.

How easy would it be for someone to simply wait for bitcoin specific ASICS to come on line, watch the price drop precipitously after the early adopter phase, and then swoop in and pick up 1000 units for the same cost as the first ten which were sold ?

You want a free market? Watch how quickly ASIC pricing drops after competition enters the marketplace. It will drop far more dramatically than CPU, GPU or FPGA ever did or will and there is ZERO resale value which is why this will happen.

You guys are forgetting a simple principle to all decentralized movements. PEOPLE are what keep a movement sustained in the face of those who control vast resources and power. Elites cannot beat the masses with numbers, but they can outspend you easily and use force if necessary. The problem is they cannot outspend a network that is not based on money and they cannot destroy everything without destroying themselves.

Bitcoin's future depends on a VAST network of people who secure and utilize it. We must have BOTH sets of people for this to work long term or its doomed.

Think of things like TOR and why those things work. It's not money, it's not power, it's vast amounts of people all over the world co-operating, not COMPETING.

Because I'm concerned about the sustainable development of bitcoin since stability will lead to widespread adoption. Uncertainty will place many miners on the sideline and it could lead to a network hash rate that stalls instead of grows steadily.

Free markets are not the end all be all of economics. They require rational decision making to reach a pareto optimal state. The point is, bitcoin could be crushed in the process if confidence wanes.

I didn't get into mining to make big money. I like hardware and wanted to support what I believe could be an incredibly democratizing force for everyone.

I guess I'm just a naive idealist.

Because ASIC is a GIANT leap with almost NO marginal cost after initial purchase. CPU to GPU was a giant leap as well, but GPU's were still limited by availability and electrical costs/infrastructure. FPGA is really an incremental change from GPU because they are not cheap unless they are produced in HUGE quantity and their only advantage over GPU is power consumption.

ASIC is an exponential leap in hash rate, power consumption AND eventually cost.

How many people built GPU farms over 10 GH ? not many because it typically required new home wiring, heat dissipation and a high monthly electrical cost in the face of an uncertain and volatile bitcoin value. plopping down 10k to build a big GPU farm took alot of thought, knowledge and risk among other things so it was inherently self limiting.

ASICs are basically plug and play so there is no technological limit for the potential miner. They have almost no electrical cost so no new electrical infrastructure is needed. They have almost zero operational cost once deployed so again, no limiting factor there.

The ONLY barrier to entry is the initial capital investment, but we ALL know the price for these will drop dramatically after the initial development, once again, how the hell do the early adopters ever get their money back?

Unless as someone suggested that the developers pay $1million and then mine until they get their money back and then start selling the ASICs for 1k or something.

I don't disagree that ASIC will be good for securing the network, but how does it make rational economic sense as to how they are rolled out? This is the problem. Unless people here think folks will be willing to essentially "donate" their ASIC investment to the network without a hope of getting their money back.

This is absurd since I don't think anyone here can point to too many or anyone at all who has donated 25k to the bitcoin project to date.

The free market works fine if everyone in the market is rational, but miners are often not rational and the rush to become an "early adopter" seems to be an irresistible temptation.  As can be observed from the 6 month interest free loans that many gave to BFL for their singles.

Good responses, but can someone actually frame a sound economic argument as to how ASIC will profitable for both vendors and miners who buy them?

It just doesn't work no matter how you slice it.

It is estimated that it takes approximately $1 million to develop ASIC technology for mining correct ? Yet the cost to produce the units after the development phase are extraordinarily cheap.

So let's say a company spends $1 million and develops 50 GH/s units. In order to be competitive with let's say, the mini rig at $15,000 for 25 Gh/s, they sell their ASIC units for $25,000.

Of course they want to recover their $1 million investment and some profit so they take pre-orders for 50 units. They receive $1.25 million in revenue and let's assume they deliver the 50 units within a 30 day period, once the units are ready to be shipped, to be fair to these customers. Now 2.5 TH has been added to the network within 30 days. Currently the network is approximately 12 TH so we have a 20% difficulty increase right away.

At the current difficulty you get about 900 coins per month with 50 GH at current prices this about $4,000 USD per month minus power costs which by all accounts are extremely small so they are practically irrelevant. This looks good for early adopters as they are thinking 6 months and its all gravy.

Well not so fast because within 30 days, 900 coins became 720 coins with 20% difficulty increase and profit becomes $3200 per month at current pricing. Never mind that hoarding becomes less desirable as people want to get their 25k back(very few people will hoard/save after they plop down 25K) so there is certainly some downward pressure on pricing.

Also ASIC's are unlikely to be deployed before the block reward halves, so 360 coins per month is more like it. For arguments sake lets assume it doesn't matter because coins are now $10 each. Then the ASIC developer sells another 50 units at $20,000 because demand is lower and well hell, they can produce these things for dirt cheap relative to their initial investment. So they pocket $1 million more and are smiling ear to ear.

Unfortunately, network hashrate is now 17 TH for a 30% difficulty increase from 12 TH and people are now getting 630 coins or 315 after the halving. So now at $10 a coin they are getting $3150 per month. Original buyers are approximately $19,000 in the hole and second gen buyers are $16,850 in the hole.

Okay so you say, " Well GPU people are exiting the game en masse " fair enough, but at 50 GH per unit it only takes 240 units to displace the original 12 TH assuming those were all GPU miners.

Bottom line is, demand will slow for the ASIC increasing downward pressure on pricing per unit as people become hesitant to put up 20K, yet the manufacturer has now made a substantial profit so why the hell wouldn't they start selling them for maybe 10k or 5k ?

It wouldn't be out of the question to think that 300 units could be sold in 6 months easily creating a 15 TH network assuming all GPU and FPGA miners leave. Which won't happen because FPGA people also have inconsequential power costs so they stick around hoping to get some return and some GPU people will stick around because they have super cheap electric or don't pay at all.

Once can see that the 25K people will never get their money back as the network would easily swell to 25 TH in 6-9 months.

If competition enters the market this accelerates the process.

Now you can argue that the ASIC people are benevolent bitcoin benefactors and they choose to roll out these rigs in a controlled manner at lets say only 5 per month... AND PIGS START FLYING.

It is unbelievable that a community of relatively intelligent people cannot see how ASIC will ruin mining profitability for everyone and only make the manufacturers rich.

There is no financial model that can make these work due to their incredibly low marginal operation cost and ridiculously high hashrate.

The ASIC manufacturers would have to control the rate at which these are sold to stand any chance of miners getting a return on their investment and no business is going to do this after spending such a huge initial investment. Especially since after they sell the first several units at high prices, making more is so cheap they can just start unloading them at rock bottom prices.

The early ASIC buyers will never turn them off due to their low operation cost even though they stand ZERO chance of recouping their investment.

This is just standard economics and common sense.

I hope the bitcoin DEVS change the protocol to make ASICS obsolete. It will save the irrational potential buyers from themselves and the rest of us along with it.

Profitable doesn't mean shit. Sure, difficulty would have to be very high to make fpgas "unprofitable", but what if profitable means $5 a month ? What if it takes two years to pay off a $1000 unit ? This is a VERY real threat once ASICS penetrate the market and of course they have ZERO resale value so they are a ridiculous gamble.

Unfortunately people don't care and get caught up in the hype and will buy anyway, not realizing that once they become widely available, no one will ever get their money back. The real problem is not that these people won't get their money back, but they'll screw everyone else because they will also have no reason to turn them off since the power is so cheap and they have already spent their money with no hope of selling them.

People letting BFL hold onto their money for months was stupid enough. ASICS from BFL are just the ultimate EPIC fail for everyone.

Hard to say anything should be "outlawed" as part of a decentralized project like bitcoin, but ASIC is going to destroy the profitability in mining.

I hope people come to their senses after the initial euphoria surrounding the efficiency of ASIC and realize it is a mining killer.

Hopefully the bitcoin DEVS realize this already and just change the protocol before they even come to market.

Decentralization of mining is also over once ASIC hits because it will be too easy to have a few people with money to burn band together and control the network hashrate. It is likely they will almost HAVE to initiate some type of 51% attack just to get their money back.

Any results on power consumption at this point?