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Author Topic: Expected increase in Bitcoin Difficulties, in 3 - 4 months as Butterfly, ships.  (Read 8008 times)
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April 15, 2013, 03:20:33 PM
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So, someone at butterflylabs said they were going to ship their asic devices in 3 -4 months ( maybe, ) and now after the "crash" ( god knows what caused that ?) we know that bitcoin is expected to raise in demand in the coming 3 -4 months.... how much is expected bitcoin difficulty to raise as the devices ship ??

But in a "plain english", how much you think would it take ( how long ) to generate say 1 coin ? How long would i take to create 1 coin, assuming a corresponding, increase in difficulty as we see now that bitcoin has gotten more coverage ?

Also they were saying something like the devices needing a certain motherboard or something, or their motherboard wasn't quite working but they had approved a new upgraded version.. any news on this ?


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April 15, 2013, 03:52:09 PM
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If, and that is a big if, BFL do indeed get their ASIC's to market within the next 3-4 months it would make the mining of Bitcoins a lot more difficult. How much more difficult would be hard to say as it would be based on the hash rate increase on the network, not as they ship in anticipation as you stated. We don't know how many units have been sold or in what configuration.

Even if they don't deliver as promised, it's a matter of time before some company or many companies start to mass produce ASIC's, rendering standard AMD (ATI) graphics card mining redundant.

When this happens it starts getting interesting as there will be more trade to acquire Bitcoins. The price will rise and those who have been hoarding will start selling. More business will start accepting and eventually the Bitcoin 'stock' that is traded on MtGox etc will become the currency it was designed to be.

Of course, this is based on speculation on my side that there will be green lights from all the banks and governments of the world. Highly unluckily but with a revolution or two we'll be just fine.
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April 15, 2013, 03:57:00 PM
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with all promised asics 250mil+

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April 15, 2013, 04:03:47 PM
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When this happens it starts getting interesting as there will be more trade to acquire Bitcoins. The price will rise and those who have been hoarding will start selling. More business will start accepting and eventually the Bitcoin 'stock' that is traded on MtGox etc will become the currency it was designed to be.

There is more to bitcoin than meets the eye , what are some insider sources or interesting posts on Bitcoin, because seems like there is a deeper system which, if understood one could  ride the "next wave" as you say.

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April 15, 2013, 04:15:06 PM
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If, and that is a big if,

What he said
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April 15, 2013, 05:12:16 PM
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If, and that is a big if,

What he said

Why so many people are saying "IF" butterfly ever ships ? What is this uncertainty based on ?

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April 15, 2013, 11:46:53 PM
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If, and that is a big if,

What he said

Why so many people are saying "IF" butterfly ever ships ? What is this uncertainty based on ?

BFL were supposed to ship their ASIC products out to customers a long time ago, I think October or November 2012 was the initial shipping date.  They've come up with countless excuses every month since then and the shipping date keeps getting pushed back another month or two.
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April 16, 2013, 02:39:31 AM
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Bitcoin mining is safe but i wouldn't remortgage the house to get into it as once Butterfly labs release their ASIC mining kit the difficulty will go way up and make GFX card mining redundant.

While there is money to make with bitcoins it's about to get very expensive to get in on the for profit side of mining.
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April 17, 2013, 04:45:49 AM
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If, and that is a big if, BFL do indeed get their ASIC's to market within the next 3-4 months it would make the mining of Bitcoins a lot more difficult. How much more difficult would be hard to say as it would be based on the hash rate increase on the network, not as they ship in anticipation as you stated. We don't know how many units have been sold or in what configuration.

Even if they don't deliver as promised, it's a matter of time before some company or many companies start to mass produce ASIC's, rendering standard AMD (ATI) graphics card mining redundant.

When this happens it starts getting interesting as there will be more trade to acquire Bitcoins. The price will rise and those who have been hoarding will start selling. More business will start accepting and eventually the Bitcoin 'stock' that is traded on MtGox etc will become the currency it was designed to be.

Of course, this is based on speculation on my side that there will be green lights from all the banks and governments of the world. Highly unluckily but with a revolution or two we'll be just fine.

I'm not sure how you're associating more BTC = higher price. In simple economic terms, that's called inflation. To control it, one method is to reduce economic growth, along with increasing interest rates. For BTC terms, this means difficulty increases and higher transaction costs. Overall this would decrease the price of BTC.
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April 17, 2013, 11:02:22 PM
 #10

First question, 3-4 months???

The most recent announcement from Butterfly 2 days ago says: "We are gearing up to start shipping out some dev boards and a few Jalapeno's most likely this week (at least a few dev boards) and then as more chips roll in we'll be shipping out the Jalapeno's. When the new boards land in KC, we'll start shipping Little Singles and Singles at that time. I don't currently have a time frame for those, but I should have something later this week in regards to that."

This implies we'll see singles by early May perhaps. Of course, the date always seems to slip, so I'm not holding my breath but I'd be surprised if they claimed 3-4 months at this point (for early orders at least). If you ordered now, I could see 3-4 months, but for those that ordered last summer/fall, I'd hope it would be much sooner.


Butterfly labs has about 50,000 orders presently (going by their order numbers). It's going to take them a long long time to ship that many units, so let's look at what happens if they ship just 25,000 of those:

Let's assume 70% of those are for Jalapenos (5 GH/s) and 30% are for Single SCs (50 GH/s). And let's assume 30 minirigs (1,500 GH/s) were sold.
The half-speed 25 GH/s miner didn't exist until recently.

Now, these numbers could be way off but they will give us a general idea.

Total hash power from butterfly labs would then be:
25000 (0.7) (5GHs) + 25000 (0.3) (50GHs) + 30 (1500GH/s) = 437 TH/s

The current hashrate is only about 65 TH/s currently so this will complete change mining.

That is, of course, not taking into account Avalon ASICs which will continue to arrive on the scene.

Using the bitcoin profitability calculator, with bitcoins at about $90, it will take you roughly 45 days to recoup your hardware costs, assuming that you bought a 50GH/s mining unit back when they were half the price. If you bought it more recently and spent $2500, well, first there will probably be more than 25000 units out there before they get to you, and you paid more so it will take you at least twice as long.

I think the only people who are going to do well are the people who ordered early, like within the first 10,000 orders, and that is assuming butterfly ships in the next month or two before Avalon has a change to take over.




 
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April 18, 2013, 12:40:43 AM
 #11

I think that it's more realistic to think that BFL, even if they do ship within the next few months could take up to a year to ship out all their existing orders. There is really no reason to assume they'll be any faster at shipping out units than Avalon is.

Of course, all this could just be idle conjecture because BFL could easily be lying about their pre-order quantities or they could never ship at all. On thing that is definite is if they ever do ramp up production GPU mining will no longer make sense and ASICs will drop in price quickly because there will be at least 2 providers to battle it out.

Of course, if Bitcoin prices fall too much no one is going to want to pay the prices ASICs cost. Frankly, I'm not sure anyone is going to make their money back on them after the first few purchasers. You can't turn around and resell ASICs as easily if the whole Bitcoin thing falls through so there is a big risk there.

It's a very complicated system and it doesn't look like anyone knows enough about it to predict anything to a reasonable level.
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April 18, 2013, 06:34:15 AM
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If, and that is a big if, BFL do indeed get their ASIC's to market within the next 3-4 months it would make the mining of Bitcoins a lot more difficult. How much more difficult would be hard to say as it would be based on the hash rate increase on the network, not as they ship in anticipation as you stated. We don't know how many units have been sold or in what configuration.

Even if they don't deliver as promised, it's a matter of time before some company or many companies start to mass produce ASIC's, rendering standard AMD (ATI) graphics card mining redundant.

When this happens it starts getting interesting as there will be more trade to acquire Bitcoins. The price will rise and those who have been hoarding will start selling. More business will start accepting and eventually the Bitcoin 'stock' that is traded on MtGox etc will become the currency it was designed to be.

Of course, this is based on speculation on my side that there will be green lights from all the banks and governments of the world. Highly unluckily but with a revolution or two we'll be just fine.

I'm not sure how you're associating more BTC = higher price. In simple economic terms, that's called inflation. To control it, one method is to reduce economic growth, along with increasing interest rates. For BTC terms, this means difficulty increases and higher transaction costs. Overall this would decrease the price of BTC.

I'm not saying more Bitcoins will increase price.
We know there is possibly a deflation of the currency as many people are hoarding.

What I'm saying is once Bitcoin moves to the next phase of evolution (once all have been minded) the only way to aquire BTC is either trading (bartering/service/product) or buying them for cash. Although there are many more Coins in the system they may still be scarce.
Imagine there are 100 million people mining BTC at the moment with a world population of 7 billion.
21 Million coins are actually very little and therefore supply and demand will drive prices up and those hoarding will start selling.

Of course I may be completely wrong Smiley
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April 18, 2013, 09:17:14 AM
 #13

First question, 3-4 months???

The most recent announcement from Butterfly 2 days ago says: "We are gearing up to start shipping out some dev boards and a few Jalapeno's most likely this week (at least a few dev boards) and then as more chips roll in we'll be shipping out the Jalapeno's. When the new boards land in KC, we'll start shipping Little Singles and Singles at that time. I don't currently have a time frame for those, but I should have something later this week in regards to that."

This implies we'll see singles by early May perhaps. Of course, the date always seems to slip, so I'm not holding my breath but I'd be surprised if they claimed 3-4 months at this point (for early orders at least). If you ordered now, I could see 3-4 months, but for those that ordered last summer/fall, I'd hope it would be much sooner.


Butterfly labs has about 50,000 orders presently (going by their order numbers). It's going to take them a long long time to ship that many units, so let's look at what happens if they ship just 25,000 of those:

Let's assume 70% of those are for Jalapenos (5 GH/s) and 30% are for Single SCs (50 GH/s). And let's assume 30 minirigs (1,500 GH/s) were sold.
The half-speed 25 GH/s miner didn't exist until recently.

Now, these numbers could be way off but they will give us a general idea.

Total hash power from butterfly labs would then be:
25000 (0.7) (5GHs) + 25000 (0.3) (50GHs) + 30 (1500GH/s) = 437 TH/s

The current hashrate is only about 65 TH/s currently so this will complete change mining.

That is, of course, not taking into account Avalon ASICs which will continue to arrive on the scene.

Using the bitcoin profitability calculator, with bitcoins at about $90, it will take you roughly 45 days to recoup your hardware costs, assuming that you bought a 50GH/s mining unit back when they were half the price. If you bought it more recently and spent $2500, well, first there will probably be more than 25000 units out there before they get to you, and you paid more so it will take you at least twice as long.

I think the only people who are going to do well are the people who ordered early, like within the first 10,000 orders, and that is assuming butterfly ships in the next month or two before Avalon has a change to take over.



 


Good Thoughts

This calculator here http://www.bitcoinx.com/profit/ , doesn't seem to take into account that the difficulty is raising constantly ... which is a key omission.

Considering your suggestion at 437 TH/s increase in the next 6 - 7 months or so, and this chart http://bitcoindifficulty.com/ here , then we are looking at 7x difficulty increase in that same time frame of 6 - 7 months. ( The time frame may vary depending on when butterfly ships ).

But then as devices continuing shipping, we are looking at 7x difficulty increase every, what 2 - 4 months ? ( because the difficulty increases after a set amount, irrespective of number of miners? )

Seems like a  50 GH device may get you 10 000 usd profit in the next year , if you are lucky, may be less than that. But then from the year after, the device is next to worthless. All this assuming bitcoin keeps growing in terms of devices and coverage, which I think it will, as the current bank system is going down fast.

With  lower butterfly GH devices, we are looking at even less profitable margins.

I get the "long-term" prospect, I just don't like all the money shelling that is going on.




 




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April 18, 2013, 04:53:28 PM
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I would be more "worried" about ASICMiner, if they start selling to customers in a large scale they could beat BFL and add a substantial increase on the network hashrate.

BFL is too many question marks for me, there is a real risk of economical failure if they don't get the shipping started ASAP. Even ASICMiner could cause heavy waves at BFL because people would just cancel their BFL orders if other companies would deliver in a few business days.

Those Avalon chips that you can buy in bulk might turn into a product quite fast, most of the development goes into the ASICs itself, and that being taken care of already leaves some engineering to design and prototype the unit and then it's selling time.
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April 18, 2013, 07:42:09 PM
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First question, 3-4 months???

The most recent announcement from Butterfly 2 days ago says: "We are gearing up to start shipping out some dev boards and a few Jalapeno's most likely this week (at least a few dev boards) and then as more chips roll in we'll be shipping out the Jalapeno's. When the new boards land in KC, we'll start shipping Little Singles and Singles at that time. I don't currently have a time frame for those, but I should have something later this week in regards to that."

This implies we'll see singles by early May perhaps. Of course, the date always seems to slip, so I'm not holding my breath but I'd be surprised if they claimed 3-4 months at this point (for early orders at least). If you ordered now, I could see 3-4 months, but for those that ordered last summer/fall, I'd hope it would be much sooner.


Butterfly labs has about 50,000 orders presently (going by their order numbers). It's going to take them a long long time to ship that many units, so let's look at what happens if they ship just 25,000 of those:

Let's assume 70% of those are for Jalapenos (5 GH/s) and 30% are for Single SCs (50 GH/s). And let's assume 30 minirigs (1,500 GH/s) were sold.
The half-speed 25 GH/s miner didn't exist until recently.

Now, these numbers could be way off but they will give us a general idea.

Total hash power from butterfly labs would then be:
25000 (0.7) (5GHs) + 25000 (0.3) (50GHs) + 30 (1500GH/s) = 437 TH/s

The current hashrate is only about 65 TH/s currently so this will complete change mining.

That is, of course, not taking into account Avalon ASICs which will continue to arrive on the scene.

Using the bitcoin profitability calculator, with bitcoins at about $90, it will take you roughly 45 days to recoup your hardware costs, assuming that you bought a 50GH/s mining unit back when they were half the price. If you bought it more recently and spent $2500, well, first there will probably be more than 25000 units out there before they get to you, and you paid more so it will take you at least twice as long.

I think the only people who are going to do well are the people who ordered early, like within the first 10,000 orders, and that is assuming butterfly ships in the next month or two before Avalon has a change to take over.



 


Good Thoughts

This calculator here http://www.bitcoinx.com/profit/ , doesn't seem to take into account that the difficulty is raising constantly ... which is a key omission.

Considering your suggestion at 437 TH/s increase in the next 6 - 7 months or so, and this chart http://bitcoindifficulty.com/ here , then we are looking at 7x difficulty increase in that same time frame of 6 - 7 months. ( The time frame may vary depending on when butterfly ships ).

But then as devices continuing shipping, we are looking at 7x difficulty increase every, what 2 - 4 months ? ( because the difficulty increases after a set amount, irrespective of number of miners? )

Seems like a  50 GH device may get you 10 000 usd profit in the next year , if you are lucky, may be less than that. But then from the year after, the device is next to worthless. All this assuming bitcoin keeps growing in terms of devices and coverage, which I think it will, as the current bank system is going down fast.

With  lower butterfly GH devices, we are looking at even less profitable margins.

I get the "long-term" prospect, I just don't like all the money shelling that is going on.



It does take difficulty rising into account. Look at the "Profitability decline per year" parameter. That decline fudge factor in there is to estimate how much the difficulty is going to increase and thus your profit will decline.

I mostly agree with what you are saying though but not quite. It's not going to go up by 7x every few months because that is an exponential increase. The coming exponential increase is going to be due to the move to ASICs but the difficulty will increase linearly with each ASIC sold, not exponentially. So the difficulty might go up 7x in 6 months as 25,000 ASICs are shipped and then it will simply double again when 25,000 more are shipped. Butterfly labs is gong to take a long time to ship that many ASICs, and as they do, mining will become less profitably and the rate of increase will actually slow down when the cost of purchasing an ASIC will no longer cover your expected profits. There will be some losers, though, namely everyone who tries to get in the game when they see how great ASICs are only to find that by the time their hardware arrives, difficulty is so high that it is not worth it to mine anymore.

So yes, I agree, once the ASICs become popular, they will not be worth anything anymore. The windows of profitabilty is maybe only 6 months to a year depending on quickly they will be shipped.
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April 19, 2013, 12:59:04 AM
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I think that it's more realistic to think that BFL, even if they do ship within the next few months could take up to a year to ship out all their existing orders. There is really no reason to assume they'll be any faster at shipping out units than Avalon is.

Of course, all this could just be idle conjecture because BFL could easily be lying about their pre-order quantities or they could never ship at all. On thing that is definite is if they ever do ramp up production GPU mining will no longer make sense and ASICs will drop in price quickly because there will be at least 2 providers to battle it out.

Of course, if Bitcoin prices fall too much no one is going to want to pay the prices ASICs cost. Frankly, I'm not sure anyone is going to make their money back on them after the first few purchasers. You can't turn around and resell ASICs as easily if the whole Bitcoin thing falls through so there is a big risk there.

It's a very complicated system and it doesn't look like anyone knows enough about it to predict anything to a reasonable level.

At this point, I think it's more likely that BFL goes tits up as a company in general than delivers a working product anytime this year.

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April 19, 2013, 02:02:39 AM
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1 PH by year end

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April 19, 2013, 02:28:48 PM
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Regardless of what happens at ButtFuckingLabs is irrelevant since OTHER companies ARE shipping ASIC products RIGHT NOW. (anyone want to loan me 100k?)

So with that in mind, GPU should die out money wise by this time next year (assuming BFL does not ship a single unit)

If current ASIC providers ramp up production, who knows?

Difficulties will rise, blood will be spilled.

A more interesting question would be is what Alt Coin do people flock to when BTC mining is not profitable?

Personally if I ever get my ASIC from BFL (ordered is Sept w00t) I am going to rock BTC for as long as feasible and then start hoarding alt coins... but I am not really in this for the money, more the idea.

Looking to change the world and NOT just replicate Wall St...
Is that asking too much?
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April 19, 2013, 06:22:14 PM
 #19

User burnin made a DIY mining board proposal here, he's even going to sell ready made plug and play miners. Announced date of delivery: mid July.
We do know that the Avalon Chips are existing, so we might see quite a number of new ASICs soon.

So what do you think would be the maximum difficulty we could see in a 6 month timeframe?

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