Insane Prediction for difficulty increases

[ewitte]

For now most ASIC companies only accept BTC.  Now its nearly required to have ASIC to continue mining.  For this alone I feel the price is about to skyrocket in BTC/$ ratio.  A lot of peoples mining dropped so much they are going to be forced to buy (demand driving up) if they want ASIC.

[NewLiberty]

For now most ASIC companies only accept BTC.  Now its nearly required to have ASIC to continue mining.  For this alone I feel the price is about to skyrocket in BTC/$ ratio.  A lot of peoples mining dropped so much they are going to be forced to buy (demand driving up) if they want ASIC.

There are some assumptions built into this analysis that may not hold up.

1) The assumption that the mining is done by ASIC
2) The assumption that there is not free power and free computers (or spare power / spare computers) doing mining.

It is entirely possible that some corporation that has a lot of computers connected and under utilized in facilities with already sunk costs for power, HVAC, real estate, connectivity may have just decided that they want to make use of their spare devices for a very small marginal cost start using them to mine bitcoin.

If this were true, this could have the effect of reducing the BTC/$ rather than raising it.  This is because the mining could be done at such a low marginal cost that the cost per mined coin goes down rather than up.  Further a corp might not need to show a quarterly profit and see that as more important than any long term hold opportunity and have the incentive to sell all mined coins as they are generated.
The secondary effect of this is that ASIC purchases would slow, because they are not as profitable as they once were.

That this may become a more common trend until the ASIC prices and demand falls to a more manageable level.
It would not be a bad thing for Bitcoin, and may even help to entrench it into the existing business environments if this practice continues.

If (for example) someone at IBM, ATT, or Google thought it might be a good idea to make use of their extra systems siting in data centers and rolled out mining installations  to their computing centers globally, you could see a difficulty increase such as this in advance of new ASIC shipments.
Or consider that data center consolidation is an ongoing project, there could be a data center disconnection planned that is delayed for some reason, and enterprising engineers make use of that extra time to get some mining done.
There are many possibilities that exist outside the narrow assumptions that we make thinking that everyone is doing things just in the same way and under the same conditions as we may be doing them.

Think outside the box.
Cognitare Extra Buxum

[ewitte]

I'm just talking about currently no ASIC companies accept $ you have to buy them with BTC.  If your smart your lining up access to ASIC if possible.  GPU is already dropping really really quickly.

[PaperClip]

BFL and KNCminer accept USD

[NewLiberty]

I'm just talking about currently no ASIC companies accept $ you have to buy them with BTC.  If your smart your lining up access to ASIC if possible.  GPU is already dropping really really quickly.

How are you able to determine that GPU use is dropping from these statistics?

[ewitte]

I'm just talking about currently no ASIC companies accept $ you have to buy them with BTC.  If your smart your lining up access to ASIC if possible.  GPU is already dropping really really quickly.

How are you able to determine that GPU use is dropping from these statistics?

It may not yet but I'm already getting 30% of what I was just a few weeks ago.  In another 2-3 months someone running even 10 cards will be barely making anything (like .02-0.04BTC a day).  I think its a safe assumption. There is a MASSIVE amount of Avalon chips coming online.

[Crindon]

Those who have large GPU farms that have already been paid off and who receive free electricity will still be mining.

The constant increase in difficulty from December onwards will make it harder for ASIC miners to turn a significant profit.

[Mota]

This discussion is so pointless... There will be no insane difficulty jump to 1.000.000.000 or whatever....
The amount of TH for that would be insanely high; around 9600TH.
If you look at a decent graph you will see that the difficulty rise per day was at most 2,5% since july 12. If you take that as the worst case, which it pretty much is, you will have approx. 791.000.000 at 31/12/2013.
If you take the median, which is around 1,4-1,5%, you will have a difficulty of around 193.000.000 at the same date. I don't think 2,5 percent ís in any way realistic, so here you go.

[NewLiberty]

I'm just talking about currently no ASIC companies accept $ you have to buy them with BTC.  If your smart your lining up access to ASIC if possible.  GPU is already dropping really really quickly.

How are you able to determine that GPU use is dropping from these statistics?

It may not yet but I'm already getting 30% of what I was just a few weeks ago.  In another 2-3 months someone running even 10 cards will be barely making anything (like .02-0.04BTC a day).  I think its a safe assumption. There is a MASSIVE amount of Avalon chips coming online.

GPU and even CPU mining may be on the rise rather than on the decline.
Your assumption is that others also have to pay for power, environment, hardware, and etc in the same way that you do.
There exists a tremendous amount of unused computing power sitting idle in data centers with already sunk costs, and owned by corporations.
The amount of already paid for but unused computing power dwarfs the amount of ASICs.  
Corporate IT admins could be turning on mining.

[byronbb]

Asics the current models will be non profitable by the end of the year.

People with pre orders will get burnt bad with a product coming later in the year that won't make the greedy profit they thought when they first placed the order.

What's  even worst no resale value when the diff is too high.

They will make a good door stop for a Xmas present this year

I am trying the wrap my head around how this would affect the market place. So much money is being rammed down the mining pipeline it just screams screw-job. I mean if the price tanks there will be an absolute ton of people with 20k computers that can make $40 a day. I laugh but that's pretty brutal. However assuming they paid in BTC they can just  buy the cost of the rig back in btc and go from there. The whole relationship between miner and price discovery mechanism is hard to figure out for this tired old brain but I keep thinking of a snake eating its own tail.

[NewLiberty]

Asics the current models will be non profitable by the end of the year.

People with pre orders will get burnt bad with a product coming later in the year that won't make the greedy profit they thought when they first placed the order.

What's  even worst no resale value when the diff is too high.

They will make a good door stop for a Xmas present this year

I am trying the wrap my head around how this would affect the market place. So much money is being rammed down the mining pipeline it just screams screw-job. I mean if the price tanks there will be an absolute ton of people with 20k computers that can make $40 a day. I laugh but that's pretty brutal. However assuming they paid in BTC they can just  buy the cost of the rig back in btc and go from there. The whole relationship between miner and price discovery mechanism is hard to figure out for this tired old brain but I keep thinking of a snake eating its own tail.

Price may be more dependent on money flow rather than mining efficiency for the time being.

[Rampion]

I really do not understand why some of you are considering for your calculations only 500 Jupiters (+350 GHs by KnCminer).

Wake up guys, KnC may be lying or overpromising, but they have said they will just ship hundreds of units sequentially, and that everybody ordering now will receive his units in September. The "batch 1" myth (a myth KnC itself spread) was debunked by Sam, who said on the record that they will just manufacture as many units as possible and deliver them at a rate of hundreds per day.  In fact, I know for sure that they have some orders for +20 Jupiters and KnC committed to deliver all of them in September, regardless of the position in the preorder queue, etc.

They have currently more than 1,000 paid order, that figure is increasing, and you can bet that many of those orders are for multiple units, some of them for dozens of units. If KnC does what they say (shipping sequentially thousands of units in September), they will be pretty much killing any ROI possibility for all their customers.

[NewLiberty]

I really do not understand why some of you are considering for your calculations only 500 Jupiters (+350 GHs by KnCminer).

Wake up guys, KnC may be lying or overpromising, but they have said they will just ship hundreds of units sequentially, and that everybody ordering now will receive his units in September. The "batch 1" myth (a myth KnC itself spread) was debunked by Sam, who said on the record that they will just manufacture as many units as possible and deliver them at a rate of hundreds per day.  In fact, I know for sure that they have some orders for +20 Jupiters and KnC committed to deliver all of them in September, regardless of the position in the preorder queue, etc.

They have currently more than 1,000 paid order, that figure is increasing, and you can bet that many of those orders are for multiple units, some of them for dozens of units. If KnC does what they say (shipping sequentially thousands of units in September), they will be pretty much killing any ROI possibility for all their customers.

Link to Sam's on-the-record statement please?

All I found was:

The pre order number is the queue placement
After the 7 days are up we will match all the paid orders with the original preorders.
So yes the queue is already sorted.
The order numbers people have now are nothing to do with shipping queue placement

Which was just a quote of a quote, and out of context, but still seems different than your statement above.
It suggests they expect to follow the pre-order queue for shipping, and do not mention any expectation to throttle production capacity artificially.

[Rampion]

I really do not understand why some of you are considering for your calculations only 500 Jupiters (+350 GHs by KnCminer).

Wake up guys, KnC may be lying or overpromising, but they have said they will just ship hundreds of units sequentially, and that everybody ordering now will receive his units in September. The "batch 1" myth (a myth KnC itself spread) was debunked by Sam, who said on the record that they will just manufacture as many units as possible and deliver them at a rate of hundreds per day.  In fact, I know for sure that they have some orders for +20 Jupiters and KnC committed to deliver all of them in September, regardless of the position in the preorder queue, etc.

They have currently more than 1,000 paid order, that figure is increasing, and you can bet that many of those orders are for multiple units, some of them for dozens of units. If KnC does what they say (shipping sequentially thousands of units in September), they will be pretty much killing any ROI possibility for all their customers.

Link to Sam's on-the-record statement please?

All I found was:

The pre order number is the queue placement
After the 7 days are up we will match all the paid orders with the original preorders.
So yes the queue is already sorted.
The order numbers people have now are nothing to do with shipping queue placement

Which was just a quote of a quote, and out of context, but still seems different than your statement above.
It suggests they expect to follow the pre-order queue for shipping, and do not mention any expectation to throttle production capacity artificially.

It's buried in one of those hundred pages threads about KnC. He pretty much said that the fact they were producing in batches is a myth, they will produce as many units as orders they have, they will obviously respect the queue, but nevertheless they plan to manufacture and ship hundreds of units per day, which means that a) an order placed now is shipped in September, b) being in the first 500 will give you a couple of days advantage, that's all.

The 500 thing made sense as they needed that amount of preorders to make the project happen, but in no way means they will produce in batches.

All the above are promises and wishful thinking, but based on what KnC claims if we decide to count with them for our calculations we shouldn't expect hundreds of units but thousands of them. Which seems kinda worrying for their own customers.

[Mota]

Bullshit. They have 890 orders paid, which we know of. Every order after that will be shipped in a first come first serve manner. Of course there are people with multiple orders. Zephyr has ordered 27 of them. So what? Not every order has multiple Jupiters in it, and not every oder is a Jupiter.  
Again with the math: (why can't you people do that yourself?...)  Let's say every order contains 2 Jupiter units (which it certainly does not.) and there are 1000 paid orders right now. 350x2x1000/1000=700th.
Atm there are 150th=19,3mil diff.    Lets say until shipment there will be 400th.
400th+700th=1100th equals approx 141,5mil diff.    That's ROI alone in around 60 days, depending on your power costs and with the btc for a 100 dollars.

So PLEASE tell me again how ROI is impossible.


And, before I have to read any more idle speculation:
One of these babies will still mine 156,6 Bitcoins in a year if the difficulty reaches 400million. That's 3108th or 8451 Jupiter units for you.

[Rampion]

Bullshit. They have 890 orders paid, which we know of. Every order after that will be shipped in a first come first serve manner. Of course there are people with multiple orders. Zephyr has ordered 27 of them. So what? Not every order has multiple Jupiters in it, and not every oder is a Jupiter. 
Again with the math: (why can't you people do that yourself?...)  Let's say every order contains 2 Jupiter units (which it certainly does not.) and there are 1000 paid orders right now. 350x2x1000/1000=700th.
Atm there are 150th=19,3mil diff.    Lets say until shipment there will be 400th.
400th+700th=1100th equals approx 141,5mil diff.    That's ROI alone in around 60 days, depending on your power costs and with the btc for a 100 dollars.

So PLEASE tell me again how ROI is impossible.

They will have 1,890 orders very soon and they claim to be able to ship sequentially hundreds units per day. And you can bet there are many multiple units orders (and with multiple i mean +10) that have not been advertised on the forum. Looking at BFL you will see how quickly orders can pile up but also how easily promises are broken.

The point is KnC plan seems to be to deploy much more than 700TH in September. Seems to be, because everything is pretty messy and unclear. What you can be sure about is that the time of easy and quick ROI is gone for good - quote me on that. This is going to get hyper competitive.

[erk]

Bitcoin was not designed to be easy for miners, it was designed to facilitate commercial transaction. Miners tend to forget this as they get wrapped up in their own little world. So do traders, as currency exchanges were never part of the Bitcoin design. Bitcoin is designed to be a pain for miners not a money tree.

[elasticband]

OP 's predication for today was off well off.....

[Rampion]

Bitcoin was not designed to be easy for miners, it was designed to facilitate commercial transaction. Miners tend to forget this as they get wrapped up in their own little world. So do traders, as currency exchanges were never part of the Bitcoin design. Bitcoin is designed to be a pain for miners not a money tree.

True, in fact it seems to me people is overly optimistic when discussing difficulty and ROI for September, they might be blinded by the amazing returns had by Avalon batch 1 customers and ASIC miner shareholders,but the harsh truth is that we are returning very fast to the point in which ROI is hard to achieve and saving every penny on electricity/storage is crucial.

Just check the difficulty chart on bitcoin.sipa.be

[Rampion]

OP 's predication for today was off well off.....

Well, he said 1.3 billion difficulty by September, that's crazy and its unlikely.