ASIC Difficulty Curves

[scrybe]

I'm thinking that the 100k chip order will last at least 4-6 months, maybe longer. We are only looking at 10-15k to cover the initial preorders that ship "though the end of the year" that cut off in September IIRC.

One of the latest tidbits that leaked from Josh was that Rev 1 (i.e. not this run, January or later) would potentially be packaged in ceramic, so there might be a 25-50% faster unit available from them within a few months. This is mixed news as early adopters will have to trade-up or resell their old unit to get the same speed, but it might or might not be worth it.

We will have Moore's law speed increases for a bit yet which is about 1.5x faster per year, as well as some catch-up that could get closer to modern processes. These are NOT the last ASICs to be produced or sold, unless bitcoin fails entirely, and soon.

I also did a rough model on log10, and it seems like the curve is too steep at the beginning, or the end depending on how many time periods you use. I'm assuming a period of large clearing batches (5k? 10k? chips/week) for backorders from mid-December (network impact date, not ship) to mid Feb. Then smaller batches once they catch up, in the hundreds of chips per week, maybe thousands if the +/- is still high.

This updates my current hypothesis:
I think BFL (and a lot of others) are making a solid bet on the long term value of bitcoin rising. We should be able to look forward to at least 50-100% price increase in 2013, maybe much, much more. Once the hockey-stick curve comes on BTC value BFL and others want to be all spun up and ready to sell into the consumer level ASIC wars that will result.

Right now we are modeling the supply side of the equations because our demand on ASIC has been starved for so long. We also have to remember to look at the demand side of the equation where more folks will rush to participate if the margins (or perceived margins by those bad at math) get too high.

So right now BFL (and others) are making some money, but when I can buy a terahash for under 200BTC, they get to say:


So, I think it's a bad idea to count out price changes, do your model at a few different price points for EoY with a linear model and see how it effects things.

[kjlimo]

...
This updates my current hypothesis:
I think BFL (and a lot of others) are making a solid bet on the long term value of bitcoin rising. We should be able to look forward to at least 50-100% price increase in 2013, maybe much, much more. Once the hockey-stick curve comes on BTC value BFL and others want to be all spun up and ready to sell into the consumer level ASIC wars that will result.

...

If you think the price is going up, I'm pretty sure you should buy bitcoins and not bitcoin hardware...  Haven't done the math in a while, but if you think there's going to be a 50-100% increase in BTC price, then buying bitcoins will make you a lot more money than buying hardware.

this was true 12 months ago, this was true 6 months ago, and I think it will remain true for the next 6-12 months.

That being said, I've put $5k USD into bitcoins and $5k USD into hardware b/c I believe these are slightly hedged against one another.

My hardware is an investment based upon the believe that price could stay the same level (or even lower); while my bitcoin investment is based upon my belief that the price could continue to grow as adoption increases.

Happy investing.

[scrybe]

...
This updates my current hypothesis:
I think BFL (and a lot of others) are making a solid bet on the long term value of bitcoin rising. We should be able to look forward to at least 50-100% price increase in 2013, maybe much, much more. Once the hockey-stick curve comes on BTC value BFL and others want to be all spun up and ready to sell into the consumer level ASIC wars that will result.

...

If you think the price is going up, I'm pretty sure you should buy bitcoins and not bitcoin hardware...  Haven't done the math in a while, but if you think there's going to be a 50-100% increase in BTC price, then buying bitcoins will make you a lot more money than buying hardware.

this was true 12 months ago, this was true 6 months ago, and I think it will remain true for the next 6-12 months.

That being said, I've put $5k USD into bitcoins and $5k USD into hardware b/c I believe these are slightly hedged against one another.

My hardware is an investment based upon the believe that price could stay the same level (or even lower); while my bitcoin investment is based upon my belief that the price could continue to grow as adoption increases.

Happy investing.

I generally agree, but I'm going 4:1 because I view it as buying discounted coins on an ongoing basis, if you don't cash out the profits right away. Mining for ASIC early adopters should be able to hit 100%+ ROI within 12 months, everything after that is like a free BitCoin. (and the profits are so heavily weighted toward the front that the risk decreases as you continue to mine.)

I like your last point the best, if I make 100%+ ROI at current prices (to plan) AND the price goes up 2, 3, 10, or 100 times, I'll be even more happy.

Or it could be that I'm a huge geek and I could not resist the lure of the "humming boxes that make Magic Nerd Money" and helping out on a cool project.

[MrTeal]

I'm of the opinion that when looking at mining hardware, just convert to Bitcoin and then stay there. Yes there is power costs and that expense will be tied to the exchange rate, but energy is minor enough that you can make an estimate without completely throwing out your calculations.

Right now the question is whether spending about BTC100 on a 72GH/s bASIC or 60GH/s Single SC will return BTC100 within a reasonable time frame and before energy costs start to become a major percentage of income.