The Bitcoin Arms race

[nexus99]

Take a look at this chart.

I have never mined before but I entered the market earlier this week at about 7 Gh/s.
Looks like many other people did as well.

I am assuming this means that folks with 10 or 20 video card rigs have effectively been pushed out of the bitcoin race all together.

http://blockchain.info/charts/hash-rate?showDataPoints=true&show_header=true&daysAverageString=7&timespan=all&scale=0&address=

How do you guys see this?

[mitty]

Welcome to Bitcoin mining :p
https://bitcointalk.org/index.php?board=14.0

(But to answer your question, ASICs, or "Application Specific Integrated Circuits", custom hardware designed specifically to mine bitcoins, has started entering the mining scene as of a few months ago, causing this huge difficulty spike.  People have differing opinions but this has been more or less predicted since bitcoin ASICs were announced about a year ago.)

[bytedisorder]

I guess it only makes fiscal sense to mine on an industrial scale. Who would be interested in colocating bitcoin miner arrays in a datacenter? 

[Stephen Gornick]

I guess it only makes fiscal sense to mine on an industrial scale. Who would be interested in colocating bitcoin miner arrays in a datacenter?  

No, that's not correct.

GPU mining is done for, permanently.  It doesn't matter how much you are scaling, it is now unprofitable (or rapidly nearing that point) to mine on GPUs.

But even the small ASIC device (e.g., Jalapeno) is competitive against larger operations ... meaning the cost per Ghash/s for hardware is not that much different whether you are buying a 5.5 Ghash/s Jalapeno or some 1 Thash/s monster, and they are not dramatically different on power consumption (when compared to the value of the bitcoins that are the result).

[empoweoqwj]

I guess it only makes fiscal sense to mine on an industrial scale. Who would be interested in colocating bitcoin miner arrays in a datacenter?  

No, that's not correct.

GPU mining is done for, permanently.  It doesn't matter how much you are scaling, it is now unprofitable (or rapidly nearing that point) to mine on GPUs.

But even the small ASIC device (e.g., Jalapeno) is competitive against larger operations ... meaning the cost per Ghash/s for hardware is not that much different whether you are buying a 5.5 Ghash/s Jalapeno or some 1 Thash/s monster, and they are not dramatically different on power consumption (when compared to the value of the bitcoins that are the result).

Correct. Let's face it graphic cards were designed for ..... displaying textured polygons. That they are flexible enough to mine bitcoins is a minor miracle in itself.

But their efficiency (hashrate, electricity) is terrible compared with ASICs. People only mine on them today because people are creatures of habit, and its hard to think that something nicely profitable six months ago is now simply not worth doing. Hence the move to alt-currencies mining, last resort stuff.

[PiaggioCaptain]

You'd think a step would be pooling resources to mine. Like people invest in super computer time and share rewards. Maybe the value of BTC is too low for that now? Don't universities and governments still have super computers?

[empoweoqwj]

You'd think a step would be pooling resources to mine. Like people invest in super computer time and share rewards. Maybe the value of BTC is too low for that now? Don't universities and governments still have super computers?

Err yes, but both Unis and governments have super computers for reasons, and that reason isn't mining bitcoins.

There is "cloud mining", which is close to what you are talking about.

In the end, it comes down to what is the most efficient way to mine bitcoins, and that is ASICs to date, something else in the future, but it always be something dedicated to the job from now on.

And sure, you can use "spare computing power" from any device, but that computer / electricity is always owned by someone or some entity, and you are probably breaking laws / terms of contracts if you spend their resources on bitcoin mining.

[Abdussamad]

It was around 83 th/s a week or so ago. The increase is phenomenal!

edit: This shows a better view:

http://blockchain.info/charts/hash-rate?timespan=30days&showDataPoints=true&daysAverageString=7&show_header=true&scale=0&address=