Are ASICs the last major evolution in mining hardware?

[Puppet]

In 10 years,  blockreward will have decreased to 3% of what it is now.

You mean 25%?

My bad, I thought it halved every 2 years instead of 4

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[organofcorti]

In 10 years,  blockreward will have decreased to 3% of what it is now.

You mean 25%?

My bad, I thought it halved every 2 years instead of 4

It doesn't - it halves every 210,000 blocks. That could be more or less than 4 years depending on the hashrate.

[DeathAndTaxes]

Puppet here is the great thing (your easy to overlook 25% vs 3% mistake aside).  The price of BTC and thus the direct reward to miners is related to the exchange rate (since most miner's costs are in USD/EUR).  When the exchange rate rises global mining rewards rise and more people mine.  When it falls less people mine.  The exchange rate is at least loosely related (we could say positively correlated) to adoption.   If the amount of ASICs sold is relatively low (say $50M USD worth) that means the BTC exchange rate is low.  If the BTC exchange rate is low then adoption is low.   Who is going to spend $50M+ to attack something almost nobody is using? 

IF however adoption is extremely high (say a user base 100x larger) then we would expect the exchange rate to also rise by at least a magnitude.  This will mean more global reward for miners (in USD terms) and thus more mining equipment sold.  Potentially hundreds of millions of USD worth of units.

The economics of Bitcoin make it such that it is only "cheap" ($30M attack) to attack Bitcoin when almost nobody is using it.  The one weakness in that economic model was the ability for those with deep pockets to "cheat" (use ASICs to fight a GPU war) and drastically reduce their costs.  Once ASICs ship in bulk that shortcut will be closed.   Meaning attackers have two choices.  Spend $30M (or $xM) to destroy something nobody is using (and likely spawn a number of second gen cryptocurrencies hardened against 51% attacks) or wait and spend $300M or $3B or ($xxxxM) to destroy something a lot of people are using.

The window of opportunity is rapidly closing.  Within 10-20 years it will be cost prohibitive to make an attack especially if you see "ASIC heating" become mainstream. 

[lastbit]

lastbit, do you think that whatever you said would still be applicable when:
- half of the houses on the planet are heated by bitcoin ASIC powered "cost offset" heaters,
- half of space heaters on the palnet have "bitcoin cost offset module" with a bunch of latest bitcoin hashing chips inside?

That would be bad for manking. If in the future heating would be electric, I hope it will be the most efficient electric heating, with heat pumps which requires electric power only around 1/4 of the heat pumped in, i.e. a 1KW heat pump heats the same as a 4 KW clasic heater.   

- there are multiply racks full of bitcoin asic hashing gear in every datacenter that has decent energy pricing.
- etc...

It seems you are ignoring that logically after prototypes are done the next step for bitcoin ASIC manufacturers will be "mass production" of a huge quantity of chips and plugging them into everything even remotely viable as dedicated gear or as 'cost offset' device.

Now tell me if there a single entity on the planet that can build a set of DC's consuming say 10% of all electricity used on the planet for heating just to piss everyone off?

Mass-production advantage applies to an attacker also
Consuming 10% of electricity of the planet to maintain bitcoin network? This will not happen for sure

Look Vladimir, I have nothing with you. I only want to state a few things:
ASICs are not a panacea (like many around here seems to believe). They only "level" the field for now. After ASIC migration, cost of a network attack will be comparable with, but no greater then, the values of the miners. Now it's worse (it's much cheaper to attack).
Resilience of the network (value of the miners) is directly correlated with the value of bitcoin economy. So let's do our best to make it happen (the growth of the economy).
 

 

[johnyj]

The next major evolution is a nuclear power plant together with ASIC farms, and by that time most of the users will be closed from mining

After 4 years, 1800 BTC per day, if each of them worth $1000, then altogether they worth $1.8 million, suppose half of that is the electricity cost, so $1 million paid in electricity per day, almost 10 million kwh, that is 416Mw power, and most of the new nuclear plants are between 1000 and 1700 Mw electric

[Puppet]

Puppet here is the great thing (your easy to overlook 25% vs 3% mistake aside).  The price of BTC and thus the direct reward to miners is related to the exchange rate (since most miner's costs are in USD/EUR).  When the exchange rate rises global mining rewards rise and more people mine.  When it falls less people mine.  The exchange rate is at least loosely related (we could say positively correlated) to adoption...  

Thats pretty much the same as what i was saying. Vladimir's pipedream of a mining asic in every house, just wont happen unless bitcoins becomes.. well, lets do some silly math;
10 billion people, lets conservatively say 2 billion households? And lets use the previous  estimate of 40K mining devices today, and generously assume them to be perfectly distributed among households, and that they will be distributed perfectly in the future too. So we would need a 50000 fold increase in valuation, somewhere around 1 million of todays dollar per BTC. Oh, multiplied by 2 for every ~4 years that it takes. Im holding my breath .

If the amount of ASICs sold is relatively low (say $50M USD worth) that means the BTC exchange rate is low.  If the BTC exchange rate is low then adoption is low.   Who is going to spend $50M+ to attack something almost nobody is using? 

Someone with a big enough vested interest might because they see its potential before its realized.

[DeathAndTaxes]

Thats pretty much the same as what i was saying. Vladimir's pipedream of a mining asic in every house, just wont happen unless bitcoins becomes.. well, lets do some silly math;
10 billion people, lets conservatively say 2 billion households? And lets use the previous  estimate of 40K mining devices today, and generously assume them to be perfectly distributed among households, and that they will be distributed perfectly in the future too. So we would need a 50000 fold increase in valuation, somewhere around 1 million of todays dollar per BTC. Oh, multiplied by 2 for every ~4 years that it takes. Im holding my breath .

Yeah not sure what insane math you are doing?  $1M USD per BTC * 25 BTC per block * 6 * 24 * 365 = $1.3 T global mining rewards.  If miners were willing to accept "only" a 50% ROIC that would require an attacker to spend $2.6T to attack Bitcoin.  Bitcoin would be quite safe even under much smaller scenarios.

If the amount of ASICs sold is relatively low (say $50M USD worth) that means the BTC exchange rate is low.  If the BTC exchange rate is low then adoption is low.   Who is going to spend $50M+ to attack something almost nobody is using?  

Someone with a big enough vested interest might because they see its potential before its realized.

And if Bitcoin never lives up to its potential then just $50M wasted?  Most "big scary" entities either have a need to explain expenditures (imagine the shareholder revolve if BofA misses earning estimated because the CEO decided he needed to spend $50M to kill this thing almost nobody has heard about) or are massively reactionary (like governments).  

I don't worry too much about it.  Still if a massive and well planned 51% attack comes from an entity both with the funds and willingness to lose them it still won't matter in the long run.  Much like killing Napster didn't end p2p file sharing, it only mutated and evolved into much harder to kill systems.  Cryptocurrency is a concept, it can't be killed. If Bitcoin is killed by a 51% attack the next version will be even harder to kill.   This next version doesn't have to start at 0 (like all pump and dump altcoins do for obvious reasons).  The next version could use the values just prior to the 51% attack as its genesis block.  The system could be made 51% resistant possibly through a combination of proof of work and proof of stake to increase the cost to attackers.  $50M to kill something nobody uses is too "easy" try $500M or $5B.  

[Gabi]

Let's speak about ASICs used as heating system. Combined with floor heating (so you have water at a not too high temperature and the ASICs are happy) 

[Puppet]

Yeah not sure what insane math you are doing?  $1M USD per BTC * 25 BTC per block * 6 * 24 * 365 = $1.3 T global mining rewards.  If miners were willing to accept "only" a 50% ROIC that would require an attacker to spend $2.6T to attack Bitcoin.  Bitcoin would be quite safe even under much smaller scenarios.

I was replying to Vladimir's post who fantasized about an ASIC in every household as if that would happen almost no matter what.

And if Bitcoin never lives up to its potential then just $50M wasted?  Most "big scary" entities either have a need to explain expenditures (imagine the shareholder revolve if BofA misses earning estimated because the CEO decided he needed to spend $50M to kill this thing almost nobody has heard about) or are massively reactionary (like governments).  

I dont believe for a second it would cost anything like $50M now. I bet you could pull it off with closer to $1M today or even next year. Per chip, asics costs almost nothing, its not because avalon or bfl are selling them as if they are made from pure gold, that your scary entity cant order wafers at $2000 each.

I don't worry too much about it.

 

Nor do I, and agreed with your other points.

[DeathAndTaxes]

Well I don't think Vlad was meaning today but more the "end state" but I could see how it could be taken that way.  Also I agree today we are vulnerable because we don't have ASICs in large numbers.  Of course we were ALWAYS vulnerable however seeing retail products suddenly makes that threat more tangible.

Today your $1M number is probably right.  Even though Avalon/BFL are sold at a huge premium that premium will come down overtime and hashrate will be much higher.  To achieve real security requires both replacing horribly inefficient (in terms of MH/$) GPU with ASICs AND raising the true security value of the network (which comes through higher exchange rates and fees).  Both are needed to provide a real deterrent against attacking the network.   Still without ASICs the second half become moot.  We simply could never get enough hashing power with GPUs to build any credible defense against ASIC based attackers so moving to ASICs is a mandatory first step.   I will feel better when the hashrate is in the tens of PH/s.

[Mageant]

Hard-wired SAT solvers?

[rupy]

So  yes, in practice if QC becomes viable, pretty much all current methods of encryption become pointless and we will need something else. Thats being researched, if you are interested:
http://en.wikipedia.org/wiki/Post-quantum_cryptography

Which doesn't apply to bitcoin mining.  Post QC algorithms are theories to improve the security of asymmetric encryption (public private key) algorithms.  They aren't applicable for cryptgraphic hashes.  

But what's the point of "quantum" hashing, if your wallet belongs to everyone?

[zvs]

Coherent Logix's HyperX!

[Fuzzy]

Coherent Logix's HyperX!

According to them, ASICs are already more efficient...

[Jutarul]

No. Next evolution is: Molecular computing, once the time for computing a block (preparing DNA samples and doing a read out) drops below the 10 minute mark, and the associated cost is lower than the electricity cost consumed by the state-of-the-art asics at that time.

But won't be happening within the next 10 years.

[zvs]

Coherent Logix's HyperX!

According to them, ASICs are already more efficient...

well, the hyperx could be at the top of the bubble and the asic at the bottom...



plus, given the stated development time, they could probably ship them out before  BFL

[Fuzzy]

well, the hyperx could be at the top of the bubble and the asic at the bottom...

Yeah, but that's nothing really major to write home about.

plus, given the stated development time, they could probably ship them out before  BFL

Jesus will be back to solve all of our worldly woes before then.