[Archive] BFL trolling museum

[the joint]

If it takes 2 weeks for the difficulty to adjust, could BFL mine all the remaining bitcoins before it adjusts?  Or perhaps a smaller number - like 1 million?

If it is possible, with a low marginal cost of production it might also be profitable.  (If it didn't kill confidence).

No, the difficulty adjusts every 2016 blocks, regardless of whether it took 6 months or 6 minutes.

I anticipate that the time it takes to reach the 12.5 BTC block reward will be a few months less than the time it has taken to approach the 25 BTC block reward.  It's going to be hilarious to see the difficulty and frequency of block generation increase when those 1 T/hash models start reaching consumers.  We might even have have a few periods where it takes as little as 3 days to see a difficulty change.

One thing is for sure...whoever the lucky few are to receive the 1 T/hash model before the rest of the pack are going to have one hell of a good month.

If the first ASIC provider decides to mine for himself for a while, there will be very little benefit for the end user.

Even if the provider decides to double the total network hashing power all by himself (e.g. 30 T/hashes total in the network), a single person with 1 T/hash is still going to have a field day.  Even with 200 T/Hash in the network, 1 T/hash is enough to earn steady profit (approximately 10 blocks mined solo in a given difficulty period).  It will take a while for 200 1 T/hash machines to reach consumers, so those that get them first will likely have no problem getting their money back.

On the other hand, I would expect the price of BTC to plummet temporarily when these things start reaching consumers.  If I was the first to have a 1 T/hash model, every single mined coin would be sold ASAP.

Edit:  BTW at current difficulty and taking into account the reward halving, you're still looking at $2000+/day with 1 T/hash.

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[Garr255]

If it takes 2 weeks for the difficulty to adjust, could BFL mine all the remaining bitcoins before it adjusts?  Or perhaps a smaller number - like 1 million?

If it is possible, with a low marginal cost of production it might also be profitable.  (If it didn't kill confidence).

No, the difficulty adjusts every 2016 blocks, regardless of whether it took 6 months or 6 minutes.

I anticipate that the time it takes to reach the 12.5 BTC block reward will be a few months less than the time it has taken to approach the 25 BTC block reward.  It's going to be hilarious to see the difficulty and frequency of block generation increase when those 1 T/hash models start reaching consumers.  We might even have have a few periods where it takes as little as 3 days to see a difficulty change.

One thing is for sure...whoever the lucky few are to receive the 1 T/hash model before the rest of the pack are going to have one hell of a good month.

If the first ASIC provider decides to mine for himself for a while, there will be very little benefit for the end user.

Even if the provider decides to double the total network hashing power all by himself (e.g. 30 T/hashes total in the network), a single person with 1 T/hash is still going to have a field day.  Even with 200 T/Hash in the network, 1 T/hash is enough to earn steady profit (approximately 10 blocks mined solo in a given difficulty period).  It will take a while for 200 1 T/hash machines to reach consumers, so those that get them first will likely have no problem getting their money back.

On the other hand, I would expect the price of BTC to plummet temporarily when these things start reaching consumers.  If I was the first to have a 1 T/hash model, every single mined coin would be sold ASAP.

Edit:  BTW at current difficulty and taking into account the reward halving, you're still looking at $2000+/day with 1 T/hash.

I don't really think in terms of the dollar with Bitcoin. I see Bitcoin being traded at possibly 100-1000 times more than today in the next few years (5-10), so I'm extremely hesitant to sell now.

[the joint]

If it takes 2 weeks for the difficulty to adjust, could BFL mine all the remaining bitcoins before it adjusts?  Or perhaps a smaller number - like 1 million?

If it is possible, with a low marginal cost of production it might also be profitable.  (If it didn't kill confidence).

No, the difficulty adjusts every 2016 blocks, regardless of whether it took 6 months or 6 minutes.

I anticipate that the time it takes to reach the 12.5 BTC block reward will be a few months less than the time it has taken to approach the 25 BTC block reward.  It's going to be hilarious to see the difficulty and frequency of block generation increase when those 1 T/hash models start reaching consumers.  We might even have have a few periods where it takes as little as 3 days to see a difficulty change.

One thing is for sure...whoever the lucky few are to receive the 1 T/hash model before the rest of the pack are going to have one hell of a good month.

If the first ASIC provider decides to mine for himself for a while, there will be very little benefit for the end user.

Even if the provider decides to double the total network hashing power all by himself (e.g. 30 T/hashes total in the network), a single person with 1 T/hash is still going to have a field day.  Even with 200 T/Hash in the network, 1 T/hash is enough to earn steady profit (approximately 10 blocks mined solo in a given difficulty period).  It will take a while for 200 1 T/hash machines to reach consumers, so those that get them first will likely have no problem getting their money back.

On the other hand, I would expect the price of BTC to plummet temporarily when these things start reaching consumers.  If I was the first to have a 1 T/hash model, every single mined coin would be sold ASAP.

Edit:  BTW at current difficulty and taking into account the reward halving, you're still looking at $2000+/day with 1 T/hash.

I don't really think in terms of the dollar with Bitcoin. I see Bitcoin being traded at possibly 100-1000 times more than today in the next few years (5-10), so I'm extremely hesitant to sell now.

If everyone had that mentality, one of two scenarios would happen:  1)  There wouldn't be a 100-1000 fold increase in value, or 2) you would witness the largest bubble and largest subsequent collapse that any market has seen in the history of mankind.

[punningclan]

3)    BitForce SC Mini Rig: a case & rack mount server providing 1 TH/s, priced at $29,899

If BFL made just one of these, they could earn $40k per week as 1/15th of the current network, so why sell them?

Something's not right with these equations unless the profit margins are ridiculously large...

Just the price of startup would cancel out that idea, you can't make just one ASIC you have to make 100k+ to see a return. Bitcoin isn't big enough yet for huge corporations to really care about and BFL needs to make it's money back to pay its costs, they can't sit around mining for years since venture capital wants to see quick returns and not a trickle of Bitcoin. Their product prices are geared to the Bitcoin market today; A number of bigger players and many smaller ones, and I imagine the investors are banking on a marketable product rather than a mining operation that would kill Bitcoin outright.

There seems to be a natural law of diminishing returns built into the Bitcoin mining ecosystem that every player is subject to, it's a law that resists hegemony and is central to the Bitcoin idea. Bitcoin can be broken if it's not fast enough but if it is [broken] then no one profits. As it stands it's so big right now it would take a huge concerted effort but once ASICs become common not even combined governments will be able to take it down, if that's even possible already.

CPU to GPU was good, GPU/FPGA to ASIC will be much better IMHO. Here's hoping anyway. 

[Dargo]

Of course if the bfl Asic became too much of a problem one could modify bitcoin protocol just enough so that the ASIC doesn't work or is severely hampered. They are very specific. A fpga can be reprogrammed. An ASIC would be nothing more than a coffee warmer then, literally.

Why are some people seemingly under the impression that ASICs are 'evil' or 'a problem'? ASICs are not the boogeyman. They will be used for mining, just like FPGAs are this year, just like GPUs were last year, and just like CPUs were 2 years ago.

They are a natural evolution of an efficient solution for the proof-of-work problem that the bitcoin protocol presents. The fact that someone has the cajones to dump serious capital into development of something like this is evidence that bitcoin is thriving, in fact, growing. This is a good thing for all of us.

Yes, the large-scale deployment of ASICs will make GPU (and to a lesser extent, FPGA) mining obsolete. It will drive difficulty up to levels never seen before. That is, mining with GPUs and FPGAs will no longer be profitable. So what? Just like the arrival of GPU mining en-mass heralded the demise of CPU miners. So what? We either chose to embrace ASICs as miners, or we take our profits and GTFO of the mining scene.

What may happen is that when ASICs are deployed en-mass, the 'average miner' will have a farm that has 20x the hashrate of what they currently have. So instead of a 5Ghps miner being the 'average', it will be a 100Ghps miner. If that miner has $4k worth of GPU/FPGAs now, he can choose to 'upgrade' and buy $4k worth of ASICs. The difficulty will be 20x what it is now, so 30M instead of 1.5M. Bitcoins will still be $6 (they will still be generated at the same rate so supply remains the same).

And this all means that mining profits for the previously mentioned 'average miner' with $4k worth of 100Ghps ASICs will remain the same as they are now. If he is making 3BTC a day with his $4k 5Ghps rig now, he will continue to make 3BTC a day with his $4k 100Ghps ASIC rig. Nothing changes.

This is 'evil' or 'a problem' how? It is only a problem for those who are currently invested in GPUs and FPGAs and who don't want to change. Change or die. That's how it's always been. It was the case with the CPU-to-GPU transition, and we are seeing the beginnings of it now with the GPU-to-FPGA transistion, and we have already been warned that an FPGA-to-ASIC transition is looming. No one is forcing us to continue mining, but many of us will.

+1

The transition to ASICs will be a problem for some miners, though, because the difficulty increase from ASICs will make some investments in new GPU/FPGA rigs unprofitable. Since we don't really know exactly when this difficulty increase is coming, or exactly how fast it will rise (i.e. how large the initial supply of ASICs will be), it makes investing in new GPU/FPGA rigs a more dicey proposition at the moment. If we don't see large numbers of ASIC units in the wild for another 12-18 months, then it may still be worthwhile to invest in the old technology. But if it's more like 6 months, then not so much. To adapt to the coming change, miners will need to be able to raise capital for the new technology, so plan accordingly as best you can given the uncertainties.   

[arklan]

my concern is less with it being a transition and more with the potential, as described by some in this thread, for it to basically ruin profitable mining. tha'ts bad forall involved, really. no profit for miners, and no miners verifying transactions...

of course, i find it hard to imagine a climate in which BFL (or anyone) could be so stupid as to intentionally and knowling destroy their only market.

butthen, i'm generally rather optimistic about peoples intelligence...

[phr33]

I think it's great that the ASIC transition is finally on its way.
I'm just a bit miffed 'caue I probably won't get my hands on one util you guys already have sent the difficulty to the sky!  

Any news on the "tax-free strategy for Europe shipments"?

[kaurdump]

when do you all think they'll be accepting pre orders?

[BR0KK]

Sending under Nda or evaluation unit should do the trick (I think that this could work but I'm not Shure)

[rav3n_pl]

when do you all think they'll be accepting pre orders?

There is still NOTHING on BF website. IMO it is all FAKE.

[||bit]

If everyone had that mentality, one of two scenarios would happen:  1)  There wouldn't be a 100-1000 fold increase in value, or 2) you would witness the largest bubble and largest subsequent collapse that any market has seen in the history of mankind.

Bitcoin has already went up 300 times over the past two years or so. So, what's the difference now?

[kano]

when do you all think they'll be accepting pre orders?

There is still NOTHING on BF website. IMO it is all FAKE.

Most likely then this is just Version 2.0 of last September ...

Have some marketing ploy that's full of crap to negatively impact their competitors ... since people like giving them money for stuff LONG before they ever get it
They may well produce it- but given how long it took the 10 years of experience BFL hardware techs to make shippable 'Single's I'd not expect any true ASIC from them for quite a while.

----

Anyway back on the sha256 ASIC issue:
Um, there is a quite reasonably serious reason why we could dump sha256 and change to something else.
Exactly the same reason for NIST's directive that U.S. government agencies had to stop uses of SHA-1 after 2010.

Once problems are found with sha256, then we'll move on to the next choice (sha512 I'd guess - or sha-3 if sha512 is considered problematic at the same time as sha256)

So anyone looking to invest 100's of thousands (or millions) of dollars into making ASIC miners is taking a much larger risk than making FPGA hardware

[BR0KK]

when do you all think they'll be accepting pre orders?

Just send them your hard earned BTC, they'll accept them for shure

[sadpandatech]

when do you all think they'll be accepting pre orders?

Just send them your hard earned BTC, they'll accept them for shure

That is not true.  I'm begging them to take my BTC now and they won't do it.

WHYYYYYYYYYYYYYYYYYYYY? :/

[Dargo]

when do you all think they'll be accepting pre orders?

Just send them your hard earned BTC, they'll accept them for shure

That is not true.  I'm begging them to take my BTC now and they won't do it.

WHYYYYYYYYYYYYYYYYYYYY? :/

Probably because they won't be ready to manufacture these units for a *really* long time.

[nave]

Anyway back on the sha256 ASIC issue:
Um, there is a quite reasonably serious reason why we could dump sha256 and change to something else.
Exactly the same reason for NIST's directive that U.S. government agencies had to stop uses of SHA-1 after 2010.

Once problems are found with sha256, then we'll move on to the next choice (sha512 I'd guess - or sha-3 if sha512 is considered problematic at the same time as sha256)

So anyone looking to invest 100's of thousands (or millions) of dollars into making ASIC miners is taking a much larger risk than making FPGA hardware

I completely agree with this. While I think that changing the algorithm just because there is an ASIC in the wild won't happen and would be a silly thing to do, it's completely possible that we need to change from SHA256 for another reason in the future.

The history of cryptography is full of back-and-forth of new techniques and those techniques becoming outdated and insecure for a variety of reasons. One thing that remains constant is the people who bet on their encryption technique being completely secure forever have run into big problems sooner or later.

[nrd525]

I tentatively think for BFL to maximize its profits without causing its miners/customers to lose money, it needs to sell enough devices to drive almost everyone out of the market (ex. all the gpus, and at least stop new production of fpgas).  This might mean increasing the hash rate by around 5 times - so they would stop people with very cheap electricity (like in Quebec) from profitably mining with GPUs.

Then it needs to restrict supply of the ASIC devices and price them so that miners get their money back within, say, 6 months.  The payback time frame needs to be very short because another company (or group of people) might produce an ASIC and then the hash rate will go through the roof (factor x100 increase), and there is no other known use for the devices (If password cracking turns out to be lucrative - then this changes everything).  If BFL can make a profit doing this than that is good. Otherwise BFL and/or the miners are in for losses.

The ASIC devices also all need to be delivered on the same date.  Or whoever gets them first will benefit a LOT.

So they need to be sold once, and then not sold again until there is competition in the ASIC market or the miners have had time to earn back their investment.

Or BFL could takeover the network and mine 90% of the bitcoins for itself until a competitor arrives.

[Dalkore]

I tentatively think for BFL to maximize its profits without causing its miners/customers to lose money, it needs to sell enough devices to drive almost everyone out of the market (ex. all the gpus, and at least stop new production of fpgas).  This might mean increasing the hash rate by around 5 times - so they would stop people with very cheap electricity (like in Quebec) from profitably mining with GPUs.

Then it needs to restrict supply of the ASIC devices and price them so that miners get their money back within, say, 6 months.  The payback time frame needs to be very short because another company (or group of people) might produce an ASIC and then the hash rate will go through the roof (factor x100 increase), and there is no other known use for the devices (If password cracking turns out to be lucrative - then this changes everything).  If BFL can make a profit doing this than that is good. Otherwise BFL and/or the miners are in for losses.

The ASIC devices also all need to be delivered on the same date.  Or whoever gets them first will benefit a LOT.

So they need to be sold once, and then not sold again until there is competition in the ASIC market or the miners have had time to earn back their investment.

Or BFL could takeover the network and mine 90% of the bitcoins for itself until a competitor arrives.

This is what I have been thinking since this announcement.   As a community, we need to think about this issue hard and long and see if its the best interest of Bitcoin.   I am leaning towards this being a hack job and someone really trying to be clever.   Because if not, BFL would be basically giving is the "bird" in a sense because they gave no guidance to the many people who are trying to grow the network and create value,  if I released a product like this, I would be very aware of how this is going to affect so many people, that I would give guidance so people can make plans and investments.  If they didn't think it was their responsibility or didn't care then that would tell us a lot about the heart and soul of BFL.   If you think that is all about the dollars and sense and nothing about the community as a whole and how your actions affect us all, then YOUR IN THE WRONG PLACE. 

We already have enough people that want to see us fail, the last thing we need is some company with smart people coming in swing their "you know what" around without any thought of the long term goals.  If we allow the network to fall into a few hands then we are lost and we might as well come up with Bitcoin 2.0 now, because when you have a few points of attack, then that makes your a target.   Yes, I have ordered their products and have contacted them about this but I said the same thing in it as well to be consistent.  I have no problem with the product, but it is such a game-changer, you OWE it to Bitcoin miners everywhere to let them know when it is coming and how you are handling orders and who is first.   That is sound business and will go a long ways to make many people happy and less stressed.


Sincerely,
Dalkore

[sadpandatech]

when do you all think they'll be accepting pre orders?

Just send them your hard earned BTC, they'll accept them for shure

That is not true.  I'm begging them to take my BTC now and they won't do it.

WHYYYYYYYYYYYYYYYYYYYY? :/

Probably because they won't be ready to manufacture these units for a *really* long time.

I meant, 'Why would you offer them your BTC at this point any way?' ...

[Garr255]

when do you all think they'll be accepting pre orders?

Just send them your hard earned BTC, they'll accept them for shure

That is not true.  I'm begging them to take my BTC now and they won't do it.

WHYYYYYYYYYYYYYYYYYYYY? :/

Probably because they won't be ready to manufacture these units for a *really* long time.

I meant, 'Why would you offer them your BTC at this point any way?' ...

To be first to receive their ASIC.