ASIC Miners - The Next Great Bitcoin Vulnerability?

[donjoe]

So let's say the Mt.Gox problem is solved, that multiple exchanges pop up everywhere and that people spread out their assets so that no single Bitcoin exchange plays the role of the single point of failure anymore.

What about miners? Decentralized as it may seem, the whole network relies on the continued activity of miners for its ability to keep transactions published, stored and secured. But with the advent of more and more powerful mining equipment, I say we could expect a marked decrease in the total number of miners active on the network (because not every ordinary Bitcoin holder finds it worth the trouble to participate with their meager GPU or CPU anymore) and all the mining activity gradually concentrated in fewer and fewer hands: those who can afford the ever more powerful and expensive mining rigs. Won't this then be the new central point of vulnerability of the whole Bitcoin system? What if the government one day decides Bitcoins are too troublesome and moves to shut down the biggest mining farms? Sure, mining will then become profitable for the average GPU owner again, but depending on how late in Bitcoin's adoption history this happens it could still be a major hit and loss of liquidity for a lot of people before the community reacts and steps in to replace the lost processing power and if the specialized hardware that needs replacing is too powerful the ordinary participants may not even be able to match what will have been lost even if every single Bitcoin owner steps in.

Thoughts?

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[pheaonix]

the costs of asics are not going to be that much more than gpu or fpga miners. they are overly expensive now because of dev costs, monopolization, lack of availability and high demand. if you notice, all of those conditions are likely to decrease over time and the price will drop. it actually works out fairly well. the gpuers an switch to ltc or sell off their mining rigs as gaming computers, and the fpgaers can basicly keep mining because their power costs are so low, not to mention the chips can be reprogrammed and sold off. rather convenient for everyone in my opinion.

asic deployment will make it nigh impossible for an outside force to destroy btc via computing power, so imo it will make it safer. there will be mining farms, just like there are today, and there will also be a horde of nerdy entrepreneurs with a couple rigs, just like today.

[StringTheory]

As long as there is diversity and decentralized people mining, exactly what the post before me said, there should be no issue with network security.

[mmeijeri]

asic deployment will make it nigh impossible for an outside force to destroy btc via computing power, so imo it will make it safer. there will be mining farms, just like there are today, and there will also be a horde of nerdy entrepreneurs with a couple rigs, just like today.

But ASICs for mining could be outlawed and successfully suppressed by governments because there are only relatively small numbers of suitable production facilities. This could not be done for FPGAs as they have many legitimate other uses as well and can be programmed in the field. In addition governments could deploy large ASIC farms themselves thus potentially achieving >51% of hashing power.

[whitetoo]

Have BFL actually shipped yet?

[Anon136]

So let's say the Mt.Gox problem is solved, that multiple exchanges pop up everywhere and that people spread out their assets so that no single Bitcoin exchange plays the role of the single point of failure anymore.

What about miners? Decentralized as it may seem, the whole network relies on the continued activity of miners for its ability to keep transactions published, stored and secured. But with the advent of more and more powerful mining equipment, I say we could expect a marked decrease in the total number of miners active on the network (because not every ordinary Bitcoin holder finds it worth the trouble to participate with their meager GPU or CPU anymore) and all the mining activity gradually concentrated in fewer and fewer hands: those who can afford the ever more powerful and expensive mining rigs. Won't this then be the new central point of vulnerability of the whole Bitcoin system? What if the government one day decides Bitcoins are too troublesome and moves to shut down the biggest mining farms? Sure, mining will then become profitable for the average GPU owner again, but depending on how late in Bitcoin's adoption history this happens it could still be a major hit and loss of liquidity for a lot of people before the community reacts and steps in to replace the lost processing power and if the specialized hardware that needs replacing is too powerful the ordinary participants may not even be able to match what will have been lost even if every single Bitcoin owner steps in.

Thoughts?

there are actually some advantages for individuals who mine vs large institutions.

the individual can use the heat produced by his unit as an advantage, to supliment his heating costs during the winter. the large institution views all this heat as a liability not an asset, they must spend money to dispose of it.

The individual can "borrow" his parents electricity, the large institution must always pay for their electricity.

Furthermore economy of scale doesn't really benefit miners, not in the way it benefits steel mills or car manufacturing plants.