[Archive] BFL trolling museum

[bulanula]

Ftw......If this is legit, BFL is making no secret of their intent to screw their customers. 

How are they screwing their customers when you get $ for $ trade in

Maybe you meant competitors

[Tinua]

I think he meant the first time when they ship you the current devices. No way to avoid 20% government cut AFAIK.

Of course for the exchange later you can fool them saying it is broken products.

The first time of course! (But that is not what ice_chill with etc. means, I guess)

[cunicula]

Wrong. Prices of GPUs are relatively stable and predictable, since demand comes desktop users, gamers etc, same for FPGAs. Therefore bitcoin price/difficulty is currently fairly predictable.  Difficulty wont suddenly go up 10x unless BTC prices do.

ASIC is completely different. Its market value per GH is determined solely by bitcoin price/difficulty. And that difficulty will be determined almost entirely by ASIC price/$. See the feedback loop?  Then factor in the extremely low variable cost of an asic and perhaps you can see the problem.

There will not be an equilibrium until asic per GH market prices approach variable production cost, which is probably ~100x lower than these announced prices. How long that will take is what is completely unpredictable, unless you are BFL's CEO and no competitor will emerge. But if you think you can accurately predict price/difficulty 24 months from now, be my guest. I wouldnt dare bet if its 3x or 100x what it is now.

Nice. Their optimal pricing problem depends very heavily on how forward-looking consumers and how much consumers know about their marginal costs. I expect several rounds of price decreases to exploit myopic purchasers. It would be nice to know marginal cost, so we can have some guess about where difficulty would eventually settle. Is there a way of estimating their marginal costs based on those for comparable products in the ASIC industry?

[cyberlync]

...a coffee warmer...mining...hmmmmmmmmmmm

[||bit]

Who wants to create a fund to short AMD on the stock exchange ?

I know you are [likely] joking. But what percentage of profits do you think AMD makes from bitcoin miners?

[MrTeal]

Remember if you have 400Mhash GPU then you get 33 times increase over CPU, and we survived that no problem. The the ASIC is the final say, so future increases should be predictable.

Wrong. Prices of GPUs are relatively stable and predictable, since demand comes desktop users, gamers etc, same for FPGAs. Therefore bitcoin price/difficulty is currently fairly predictable.  Difficulty wont suddenly go up 10x unless BTC prices do.

ASIC is completely different. Its market value per GH is determined solely by bitcoin price/difficulty. And that difficulty will be determined almost entirely by ASIC price/$. See the feedback loop?  Then factor in the extremely low variable cost of an asic and perhaps you can see the problem.

There will not be an equilibrium until asic per GH market prices approach variable production cost, which is probably ~100x lower than these announced prices. How long that will take is what is completely unpredictable, unless you are BFL's CEO and no competitor will emerge. But if you think you can accurately predict price/difficulty 24 months from now, be my guest. I wouldnt dare bet if its 3x or 100x what it is now.

I would be surprised is BFL could get prices 100x lower than they are now, without a new mask set. They might be able to get a really good price on the wafers, but they've already made a decision on die size. If they want to add more power they have to place more dies on a board, and they'll have a price floor based on the production cost of PCBs, cases, etc. I don't think BFL will be able to sell a SC coffee warmer for $1.50 regardless of what BTC does.

[ThomasV]

not sure if this has already been mentioned:

http://news.yahoo.com/leading-sha256-hardware-manufacturer-acquires-venture-capital-funding-081026668.html

 

[Paladin69]

WOW.

Better start changing your name to terravps

[bulanula]

WOW.

Better start changing your name to terravps

LOL. And remove the silly "FPGA Mining Addict" for "ASIC Mining Addict"

[DutchBrat]

There will not be an equilibrium until asic per GH market prices approach variable production cost, which is probably ~100x lower than these announced prices. How long that will take is what is completely unpredictable, unless you are BFL's CEO and no competitor will emerge. But if you think you can accurately predict price/difficulty 24 months from now, be my guest. I wouldnt dare bet if its 3x or 100x what it is now.

But isn't this exactly what Bitcoin needs.... when the blockreward is gone, the speed of confirmations is totally dependant on transaction fees. For Bitcoin to be able to compete with PayPal or Credit Cards the transaction fees should remain low compared to the transaction size. The only way to achieve this is when 'miners' have access to ASICs at almost cost price that use little to NO energy, else the network will come to a screeching halt for only idealists will help process transactions that are costing them money

There's No way the network will survive on GPUs wthout a blockreward, transactions would simply be too costly to process

[P4man]

I would be surprised is BFL could get prices 100x lower than they are now, without a new mask set. They might be able to get a really good price on the wafers, but they've already made a decision on die size. If they want to add more power they have to place more dies on a board, and they'll have a price floor based on the production cost of PCBs, cases, etc.

To produce, chips are cheap as... well, chips. Assuming their 3.5 GH coffee warmer contains a single asic, and assuming its made on 130nm, and assuming my previous projections were roughly correct (1-10TH per wafer, which costs < $1000), variable silicon production cost of that chip would be in the $0.5 range.  Okay, thats a lot of assumptions, but you get the idea.

Obviously there is no point in trying to build a $1.5 dollar miner around that, put putting dozens of those chips on a PCB and putting dozens of PCBs in a case isnt rocket science and isnt going to cost 10x more than the asic itself.

I also wouldnt rule out the possibility these chips are not running anywhere near their full potential in the first products, but are instead capped, particularly in the coffee warmer.  Its what I would do if I were BFL.

[sadpandatech]

There will not be an equilibrium until asic per GH market prices approach variable production cost, which is probably ~100x lower than these announced prices. How long that will take is what is completely unpredictable, unless you are BFL's CEO and no competitor will emerge. But if you think you can accurately predict price/difficulty 24 months from now, be my guest. I wouldnt dare bet if its 3x or 100x what it is now.

But isn't this exactly what Bitcoin needs.... when the blockreward is gone, the speed of confirmations is totally dependant on transaction fees. For Bitcoin to be able to compete with PayPal or Credit Cards the transaction fees should remain low compared to the transaction size. The only way to achieve this is when 'miners' have access to ASICs at almost cost price that use little to NO energy, else the network will come to a screeching halt for only idealists will help process transactions that are costing them money

There's No way the network will survive on GPUs wthout a blockreward, transactions would simply be too costly to process

I think the real, underlying issue here is timing. We have years to go yet before block reward is an issue on its own. But throw asic into the mix too fast and we start having an incentive to mine issue, or could protentially have one much sooner.  I personally think it will all be fine, but can see where the concern is because it is there in the math on face value..

cheers

[P4man]

But isn't this exactly what Bitcoin needs.... when the blockreward is gone, the speed of confirmations is totally dependant on transaction fees. For Bitcoin to be able to compete with PayPal or Credit Cards the transaction fees should remain low compared to the transaction size. The only way to achieve this is when 'miners' have access to ASICs at almost cost price that use little to NO energy, else the network will come to a screeching halt for only idealists will help process transactions that are costing them money

There's No way the network will survive on GPUs wthout a blockreward, transactions would simply be too costly to process

It doesnt matter one yota if transactions are processed by a a handful of  slow 100W CPUs or a gazillion 0.001mW ASICs. All that changes is difficulty, and arguably, security of the network, though that argument can go both ways.

[bulanula]

Anybody using http://www.easic.com/

[||bit]

Also, just buying bitcoins might be a better move. Imagine when the difficulty starts to double, quadruple, 10x, 20x.... Miner will have fewer bitcoins to sell. Supply starts to shrink. Demand stays relatively the same [or increases after anything like QE3]. Econ 101.

I hope you either flunked or have never taken Econ 101. If not, your instructor deserves a caning.

I see the fault in my idea, but what I see has nothing to do with Econ 101.

Bulanula commented that the difficulty would still be the same for everyone, which reminds me that  bitcoin dispensing will occur at the programmed rate over the community regardless of difficulty changes.

So, maybe buying hardware is better. Unless his dream of bitcoins popping to $10 are likely.

[cunicula]

There will not be an equilibrium until asic per GH market prices approach variable production cost, which is probably ~100x lower than these announced prices. How long that will take is what is completely unpredictable, unless you are BFL's CEO and no competitor will emerge. But if you think you can accurately predict price/difficulty 24 months from now, be my guest. I wouldnt dare bet if its 3x or 100x what it is now.

But isn't this exactly what Bitcoin needs.... when the blockreward is gone, the speed of confirmations is totally dependant on transaction fees. For Bitcoin to be able to compete with PayPal or Credit Cards the transaction fees should remain low compared to the transaction size. The only way to achieve this is when 'miners' have access to ASICs at almost cost price that use little to NO energy, else the network will come to a screeching halt for only idealists will help process transactions that are costing them money

There's No way the network will survive on GPUs wthout a blockreward, transactions would simply be too costly to process

Exactly what bitcoin needs is proof of stake, of course.

[DutchBrat]

But isn't this exactly what Bitcoin needs.... when the blockreward is gone, the speed of confirmations is totally dependant on transaction fees. For Bitcoin to be able to compete with PayPal or Credit Cards the transaction fees should remain low compared to the transaction size. The only way to achieve this is when 'miners' have access to ASICs at almost cost price that use little to NO energy, else the network will come to a screeching halt for only idealists will help process transactions that are costing them money

There's No way the network will survive on GPUs wthout a blockreward, transactions would simply be too costly to process

It doesnt matter one yota if transactions are processed by a a handful of  slow 100W CPUs or a gazillion 0.001mW ASICs. All that changes is difficulty, and arguably, security of the network, though that argument can go both ways.

That is not completely true, difficulty only changes to keep the time constant in which a block is mined, it has got nothing to do with the amount of energy that is spent on it

With ASICs being more energy efficient than a CPU (not to mention a GPU) by a magnitude of XXX (no idea what the numbers are) it is less likely for a transaction fee to be lower than the actual energy cost spent on processing the underlying transaction. As mining is now NOT profitable in some parts of the world on a GPU when a 50 BTC reward is attached to a block, imagine what it will be like if there's only transaction fees incorporated in a block. By that time there need to be solutions that cost next to nothing to purchase and use as little energy as possible....

[cunicula]

But isn't this exactly what Bitcoin needs.... when the blockreward is gone, the speed of confirmations is totally dependant on transaction fees. For Bitcoin to be able to compete with PayPal or Credit Cards the transaction fees should remain low compared to the transaction size. The only way to achieve this is when 'miners' have access to ASICs at almost cost price that use little to NO energy, else the network will come to a screeching halt for only idealists will help process transactions that are costing them money

There's No way the network will survive on GPUs wthout a blockreward, transactions would simply be too costly to process

It doesnt matter one yota if transactions are processed by a a handful of  slow 100W CPUs or a gazillion 0.001mW ASICs. All that changes is difficulty, and arguably, security of the network, though that argument can go both ways.

That is not completely true, difficulty only changes to keep the time constant in which a block is mined, it has got nothing to do with the amount of energy that is spent on it

With ASICs being more energy efficient than a CPU (not to mention a GPU) by a magnitude of XXX (no idea what the numbers are) it is less likely for a transaction fee to be lower than the actual energy cost spent on processing the underlying transaction. As mining is now NOT profitable in some parts of the world on a GPU when a 50 BTC reward is attached to a block, imagine what it will be like if there's only transaction fees incorporated in a block. By that time there need to be solutions that cost next to nothing to purchase and use as little energy as possible....

No, P4Man is correct.

[MrTeal]

I would be surprised is BFL could get prices 100x lower than they are now, without a new mask set. They might be able to get a really good price on the wafers, but they've already made a decision on die size. If they want to add more power they have to place more dies on a board, and they'll have a price floor based on the production cost of PCBs, cases, etc.

To produce, chips are cheap as... well, chips. Assuming their 3.5 GH coffee warmer contains a single asic, and assuming its made on 130nm, and assuming my previous projections were roughly correct (1-10TH per wafer, which costs < $1000), variable silicon production cost of that chip would be in the $0.5 range.  Okay, thats a lot of assumptions, but you get the idea.

Obviously there is no point in trying to build a $1.5 dollar miner around that, put putting dozens of those chips on a PCB and putting dozens of PCBs in a case isnt rocket science and isnt going to cost 10x more than the asic itself.

I also wouldnt rule out the possibility these chips are not running anywhere near their full potential in the first products, but are instead capped, particularly in the coffee warmer.  Its what I would do if I were BFL.

I would assume the same, that the single ASIC is 3.5GH/s. Still, that doesn't change the fact that they are going to have fixed costs. Even if the chips are free, they need to place 286 of them in a minirig. That's going to have no insignificant expenses for PCBs, power supplies, and cases. Do you think they would be able to ship a Minirig even with free ASICs for $300?

[Paladin69]

okay so 1 SC Single @ @$1299 is equal to 11.42 SC Jalapenos.  Round it down to 11 Jalapeno's and that would cost $1639.  If you can swing for an SC Single, it is like getting two extra Jalapeno's for free to process the same amount of hashes.

As for the SC mini-rig, you would need to buy 25 SC Singles to reach 1TH/s for a total of $32,475.  You save the cost of two SC Singles for a total of $2,576 if you just go with the rig.

$30K is a bit steep though.  I'd rather just buy 12 SC Singles for a little more than the cost of a single previous generation $15K mini-rig which would still let me process 480 GH/s.  It makes absolutely no economical sense anymore to get the current mini-rig for $15K but process 25GH/s.

The only way it makes sense is if the SC's take another year to get here.

But man, 480 GH/s would produce 274.46 BTC per day at the current difficulty.  That would be 8,233.8 BTC per month x $6.53 mt gox current exchange = $53,766.71 per month.  WTF that can't be right?

Yeah...talk about disruptive technology...lol  Most of the 21 million bitcoins would be mined in no time compared to the original estimates...