What Do You Think $1,000,000 USD Worth of Hashing Power Would Do?

[computerparts]

So let's say some tycoon had nothing better to do with his time, bought a million dollars worth of hardware, rented/bought out an office building, and put it all online. Now let's say this tycoon had no intentions of doing it for the money as he has money to burn and is doing it only for competition and excitement. What do you think would happen to the network? What do you think the difficulty would be as a result? Would you stop mining if this happened?

Conversely in another scenario, lets say that tycoon instead of buying hardware, bought out everything available on Mt Gox and Trade Hill. So basically he would buy out all the bitcoins currently on the market. What do you think would happen to the bitcoin economy as a result? Do you think this would have an affect on the network as well?

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[hugolp]

1. I doubt anyone becomes a tycoon by throwing money away.

2. I highly doubt anyone could buy all the bitcoins even if he wanted to and accepted the incredibly high prices that it would have to suffer as supply disappears.

3. Ignoring that its not a realistic scenario, what is the point of this speculation?

[Lightspeed]

it's simply a matter of doing the maths

cost of office rental / month
+ cooling & electricity

that would reduce the amount available to spend on hardware, but if it's not the case then it's a matter of building the cheapest hash/watt rigs or hash/$ rigs depending on what your power bills are like where you are

but I CBF doing the maths haha

[AngelusWebDesign]

1. I doubt anyone becomes a tycoon by throwing money away.

2. I highly doubt anyone could buy all the bitcoins even if he wanted to and accepted the incredibly high prices that it would have to suffer as supply disappears.

3. Ignoring that its not a realistic scenario, what is the point of this speculation?

Good questions. Especially #1.

[computerparts]

You guys are taking this too seriously. Just answer the questions if you want to participate. This is only meant to make for an interesting discussion.

[Reckman]

he would have 1000 ghash about only 16 percent of the network.

[Chick]

he would have 1000 ghash about only 16 percent of the network.

16% of the network! Repeat! Soon, our hashing power will be less than 1%. 

[perfectchoice4u]

$1,000,000 USD Worth of Hashing Power would net him about $130-160k a week at $15 a bitcoin, because much of the equipment he could buy in bulk from manufacturers.

In fact, it would probably make him very very rich in bitcoins, but it would be next to impossible for him to lay it all off

However, with such a strong market presence, and the lack of coins going to others as they got stale hashes over and over, people would either respond buy giving up mining and buying bitcoins speculatively (bitcoin value increases), or buy quitting bitcoins altogether  (bitcoin value decreases).

It really could go either way, but id think the latter myself if i had to bet

[Fiyasko]

$1,000,000 USD Worth of Hashing Power would net him about $130-160k a week at $15 a bitcoin, because much of the equipment he could buy in bulk from manufacturers.

In fact, it would probably make him very very rich in bitcoins, but it would be next to impossible for him to lay it all off

However, with such a strong market presence, and the lack of coins going to others as they got stale hashes over and over, people would either respond buy giving up mining and buying bitcoins speculatively (bitcoin value increases), or buy quitting bitcoins altogether  (bitcoin value decreases).

It really could go either way, but id think the latter myself if i had to bet

FAWK OFF NO WAI 130-160k A week! holy fuck! Dude!, if that were seriously true then any millionaire could walk up to this and drop some money in ANY TIME, we could all be fucking screwed!

[Capitan]

Is there a point to these questions?

[Litt]

$1,000,000 USD Worth of Hashing Power would net him about $130-160k a week at $15 a bitcoin, because much of the equipment he could buy in bulk from manufacturers.

In fact, it would probably make him very very rich in bitcoins, but it would be next to impossible for him to lay it all off

However, with such a strong market presence, and the lack of coins going to others as they got stale hashes over and over, people would either respond buy giving up mining and buying bitcoins speculatively (bitcoin value increases), or buy quitting bitcoins altogether  (bitcoin value decreases).

It really could go either way, but id think the latter myself if i had to bet

FAWK OFF NO WAI 130-160k A week! holy fuck! Dude!, if that were seriously true then any millionaire could walk up to this and drop some money in ANY TIME, we could all be fucking screwed!

There are plenty of people that are working on this. They are already millionaires from bitcoin and have been mining longer than you and I as well.

[mrb]

Spending $1M on a mining cluster would have almost no effect on the Bitcoin network and economy. Assuming the money is spent on AMD GPUs, where $1 buys 1Mhash/s, it would only increase the global network hashrate by about 1 Thash/s. However it would take at the very least 2+ months for this hypothetical tycoon to go online. The network is currently at 8 Thash/s, and is more than doubling in size every month. So 2 months from now the network will be at 30-40 Thash/s. This tycoon would end up owning ~3% of the global hashrate. A drop in the bucket. This would have no significant impact on the difficulty factor. This should not entice anybody to stop mining. Nonetheless this would be a fun learning exercise for whoever sets up such a farm. In terms of DP FLOPS performance, this theoretical AMD GPU mining cluster would be at roughly position #10 on the TOP500 list.

On the other hand, if this hypothetical tycoon buys coins it would be different. I don't have access to the complete depth of market data from MtGox, but we know that $430k would raise the price up to $21.13 at this moment (http://bitcoincharts.com/markets/mtgoxUSD_depth.html). So buying $1M worth of coins would probably push the exchange rate up to $25-30, enticing more users to scale up their mining efforts, and probably contributing to another +50% future difficulty increase.

[yoake]

mrb, 3% of an economy is not a drop in the bucket. If it were the global economy the only nations who would have more money would be the United States, the PRC, Japan, Germany, France, the UK, Brazil and Italy. With the UK, Brazil and Italy having each having less than 4%. France at around 4%, Germany <6%, the PRC and Japan <9%, and of course the US with around 23%.

[Yeti]

Uhm, yeah. But Bitcoin economy is roughly 100 mio. USD whereas world economy is 74 trillion USD!
So 3% is either 3 mio. USD (a drop in the bucket for s/o who has 1 mio to burn) or 2.22 trillion USD!

[bcpokey]

If I had a million dollars
(If I had a million dollars)
I'd buy you a house
(I would buy you a house)
If I had a million dollars
(If I had a million dollars)
I'd buy you furniture for your house
(Maybe a nice chesterfield or an ottoman)
And if I had a million dollars
(If I had a million dollars)
Well, I'd buy you a K-Car
(A nice Reliant automobile)
If I had a million dollars I'd buy your love

If I had a million dollars
I'd build a tree fort in our yard
If I had million dollars
You could help, it wouldn't be that hard
If I had million dollars
Maybe we could put like a little tiny fridge in there somewhere
You know, we could just go up there and hang out
Like open the fridge and stuff
There would already be laid out foods for us
Like little pre-wrapped sausages and things

They have pre-wrapped sausages but they don't have pre-wrapped bacon
Well, can you blame 'em
Uh, yeah

If I had a million dollars
(If I had a million dollars)
Well, I'd buy you a fur coat
(But not a real fur coat that's cruel)
And if I had a million dollars
(If I had a million dollars)
Well, I'd buy you an exotic pet
(Yep, like a llama or an emu)
And if I had a million dollars
(If I had a a million dollars)
Well, I'd buy you John Merrick's remains
(Ooh, all them crazy elephant bones)
And If I had a million dollars I'd buy your love

If I had a million dollars
We wouldn't have to walk to the store
If I had a million dollars
Now, we'd take a limousine 'cause it costs more
If I had a million dollars
We wouldn't have to eat Kraft Dinner
But we would eat Kraft Dinner
Of course we would, we’d just eat more
And buy really expensive ketchups with it
That’s right, all the fanciest ke... dijon ketchups!
Mmmmmm, Mmmm-Hmmm

If I had a million dollars
(If I had a million dollars)
Well, I'd buy you a green dress
(But not a real green dress, that's cruel)
And if I had a million dollars
(If I had a million dollars)
Well, I'd buy you some art
(A Picasso or a Garfunkel)
If I had a million dollars
(If I had a million dollars)
Well, I'd buy you a monkey
(Haven't you always wanted a monkey)

If I had a million dollars
I’d buy your love

If I had a million dollars, If I had a million dollars
If I had a million dollars, If I had a million dollars
If I had a million dollars
I'd be rich

[perfectchoice4u]

I cant post the lyrics to "Eminem's 'if i had..(a million dollars)" here
But i think i like that version and song better

[Xer0]

If someone invests such power, he changes the market, and wont evet got out his investment, as there just arent so much $ on mtgox etc from the people currently investing/mining bitcoin

[frutza]

Difficulty would go up tremendously, and he will get tons of bitcoins. If he decides to sell them all at once, the price would crash and he will lose lots of money. BTW, I think a million dollars has already been spent on mining equipment. What a boon for AMD!

[tehcodez]

$1M is nothing for AMD.

Do they even care about mining? I'm sure its a "trend" on their analysis, and that's about it.

I though they made GPGPUs and CPUs, not SHA-2 chips....

[Mousepotato]

$1M worth of hashing power?  Hmm, might actually be able to run Crysis.