Question for GPU miners

[rovchris]

ASIC's will devalue bitcoin's

If you can produce something more efficiently it has less value.

Look at Gold - Gold increases in price due to mining costs.

If someone came along with a machine that could just suck the gold right out of the ground and did not need to mine - what would happen to the gold price?

The distribution of ASIC's has totally upset the balance.

If scrypt coins require more power and resources to mine - long term they would have more value.


Gold is rare and difficult to mine - hence its value.

If I developed a quantum computer and it mined all the remaining Bitcoins in 1 week then what? Do they still have the same value?

To further the analogy if gold could only be mined by hand tools its value would be substantially more than it is now.

Umm, it's not like ASICs can increase the amount of available coins on the market so no you are wrong.

the available amt of coins on the market is always increasing

and difficulty adjustments dont occur instantly, either

i've talked to a few people and my theory is the recent drop was the ppl with the avalon 2 units selling as fast as they can.  the continuing pressure for the last few months is probably just asicminer selling 25btc every block it gets

Yea but the rate of new coins remains steady no matter how many ASICs there are and how efficiently they are mining... So applying the "If you can produce something more efficiently it has less value." formula to the value of BTC is wrong.

If that is true please give me the exact time and date of the next difficulty adjustment and the difficulty.

Not sure what you mean. I thought the sole purpose of BTC mining difficulty adjustments was to keep the influx of new coins into the system steady... Please correct me if I am wrong.

It only adjusts every 2016 blocks - if it takes 1 year or 1 hour to mine them. If you doubled the network hash rate at the beginning of the difficulty change that limit will be reached in 1/2 the time.

The target is every 10 mins - approximately 2 weeks

[1715505730]

1715505730

[1715505730]

1715505730

[1715505730]

1715505730

[glon]

OK so it seems the devs may need to look into decreasing the required number of blocks before a difficulty re-calculation, in order to avoid this theoretically detrimental issue?

[rovchris]

Dude the problem is not the code - it has worked fine till this point.

What has messed it up are ASIC's and the way they have been distributed. Basically only a select few have managed to get their hands on this technology - I would guess around 10% of miners are using ASIC's yet they are probably 70 - 80% of the network hash rate.

It has caused a concentration of power into the hands of a few.

The increase in performance has blown Moores law completely out of the water - Satoshi never envisaged this problem - the idea was Bitcoins were available for anyone to mine - this is no longer the case.

If everyone could order ASIC's next day then maybe it would not have such an impact - like the change form CPU's to GPU's.

These guys developing the ASICs have gone so against everything Bitcoins stand for.

If they had stockpiled enough before making them publicly available (and not using them to mine themselves AVALON) it would not make a difference. But their greed was put before the mission of the Bitcoin project.

ASICminer are a perfect example - like I said in a previous post - One company should not be able to impact the entire network.

If they have a major outage - block times would be dramatically increased.

Look and see how they are expanding as well. ASICMiner are almost like a central bank now.

[glon]

Dude the problem is not the code - it has worked fine till this point.

What has messed it up are ASIC's and the way they have been distributed. Basically only a select few have managed to get their hands on this technology - I would guess around 10% of miners are using ASIC's yet they are probably 70 - 80% of the network hash rate.

It has caused a concentration of power into the hands of a few.

The increase in performance has blown Moores law completely out of the water - Satoshi never envisaged this problem - the idea was Bitcoins were available for anyone to mine - this is no longer the case.

If everyone could order ASIC's next day then maybe it would not have such an impact - like the change form CPU's to GPU's.

These guys developing the ASICs have gone so against everything Bitcoins stand for.

If they had stockpiled enough before making them publicly available (and not using them to mine themselves AVALON) it would not make a difference. But their greed was put before the mission of the Bitcoin project.

ASICminer are a perfect example - like I said in a previous post - One company should not be able to impact the entire network.

If they have a major outage - block times would be dramatically increased.

Look and see how they are expanding as well. ASICMiner are almost like a central bank now.

Dude chill down. All I'm saying is a change to the code may be a solution to this problem (i.e. influx of "easy" coins into the market in between difficulty adjustments)...

[rovchris]

Dude the problem is not the code - it has worked fine till this point.

What has messed it up are ASIC's and the way they have been distributed. Basically only a select few have managed to get their hands on this technology - I would guess around 10% of miners are using ASIC's yet they are probably 70 - 80% of the network hash rate.

It has caused a concentration of power into the hands of a few.

The increase in performance has blown Moores law completely out of the water - Satoshi never envisaged this problem - the idea was Bitcoins were available for anyone to mine - this is no longer the case.

If everyone could order ASIC's next day then maybe it would not have such an impact - like the change form CPU's to GPU's.

These guys developing the ASICs have gone so against everything Bitcoins stand for.

If they had stockpiled enough before making them publicly available (and not using them to mine themselves AVALON) it would not make a difference. But their greed was put before the mission of the Bitcoin project.

ASICminer are a perfect example - like I said in a previous post - One company should not be able to impact the entire network.

If they have a major outage - block times would be dramatically increased.

Look and see how they are expanding as well. ASICMiner are almost like a central bank now.

Dude chill down. All I'm saying is a change to the code may be a solution to this problem...

? errr - I am chilled - I thought you wanted an explanation!

The changing of the code does not stop the centralisation of power - the inability to get your hands on an ASIC is.

[glon]

Dude the problem is not the code - it has worked fine till this point.

What has messed it up are ASIC's and the way they have been distributed. Basically only a select few have managed to get their hands on this technology - I would guess around 10% of miners are using ASIC's yet they are probably 70 - 80% of the network hash rate.

It has caused a concentration of power into the hands of a few.

The increase in performance has blown Moores law completely out of the water - Satoshi never envisaged this problem - the idea was Bitcoins were available for anyone to mine - this is no longer the case.

If everyone could order ASIC's next day then maybe it would not have such an impact - like the change form CPU's to GPU's.

These guys developing the ASICs have gone so against everything Bitcoins stand for.

If they had stockpiled enough before making them publicly available (and not using them to mine themselves AVALON) it would not make a difference. But their greed was put before the mission of the Bitcoin project.

ASICminer are a perfect example - like I said in a previous post - One company should not be able to impact the entire network.

If they have a major outage - block times would be dramatically increased.

Look and see how they are expanding as well. ASICMiner are almost like a central bank now.

Dude chill down. All I'm saying is a change to the code may be a solution to this problem...

? errr - I am chilled - I thought you wanted an explanation!

The changing of the code does not stop the centralisation of power - the inability to get your hands on an ASIC is.

And an explanation has already been given so thanks for that!

But the problem (as you stated it) is not the centralization of power per se. You said the problem was that ASICs will devalue BTC because they will make it easy to produce new coins. So I asked how is this technically possible and you explained to me the theoretical possibility of inflation-spikes in between difficulty adjustments.

I then proposed a code change to alleviate this issue, to which you went on a tangential rant about the centralization of power again...

[rovchris]

You are right - I did go off topic.

Even changing the block interval will not solve the problem - it will have less of an impact but there is a limit to how quickly you can make the difficulty adjustments. Also this would mean the difficulty jumps would be way more often and much higher and these guys would just expand their operations even faster.

The thing is this - Never underestimate the power of human greed.

[firefop]

You are right - I did go off topic.

Even changing the block interval will not solve the problem - it will have less of an impact but there is a limit to how quickly you can make the difficulty adjustments. Also this would mean the difficulty jumps would be way more often and much higher and these guys would just expand their operations even faster.

The thing is this - Never underestimate the power of human greed.

A fair point - Personally, I expect the block creation rate to be increased by about 4x and the difficulty and block reward adjusted down accordingly (as soon as the network hash-rate grows past some randomly selected number). This needs to happen for the network so that we can actually get to a point to compete with large payment processors. It would also help with adjustments to global hash rate in that the difficulty would re-target much more often.

[Mazakguy]

But what about this.

Bitcoin is only worth something because people say it is.

What happens when all the GPU miners (70%+ of miners) move to scrypt and say Bitcoin is worth nothing?

Then what will the asic guys do?  Trade among themself? Polish there shiny useless hardware? Cry over it and short it out?

In the end they could be left holding the bag and I think that would be great

[Hippie Tech]

But what about this.

Bitcoin is only worth something because people say it is.

What happens when all the GPU miners (70%+ of miners) move to scrypt and say Bitcoin is worth nothing?

Then what will the asic guys do?  Trade among themself? Polish there shiny useless hardware? Cry over it and short it out?

In the end they could be left holding the bag and I think that would be great

This depends on the general public's perception on things as they are responsible for much of Bitcoin's jump in value. The Cyprus haircut was a big part of that.

Will they continue to invest in BTC when the true scope of the pre-order centralize Bitcoin scam becomes more public ?

The coins and the hashpower have been hoarded. The Crypto movement has been damaged beyond repair.

[flipper]

Dude the problem is not the code - it has worked fine till this point.

What has messed it up are ASIC's and the way they have been distributed. Basically only a select few have managed to get their hands on this technology - I would guess around 10% of miners are using ASIC's yet they are probably 70 - 80% of the network hash rate.

It has caused a concentration of power into the hands of a few.

The increase in performance has blown Moores law completely out of the water - Satoshi never envisaged this problem - the idea was Bitcoins were available for anyone to mine - this is no longer the case.

If everyone could order ASIC's next day then maybe it would not have such an impact - like the change form CPU's to GPU's.

These guys developing the ASICs have gone so against everything Bitcoins stand for.

If they had stockpiled enough before making them publicly available (and not using them to mine themselves AVALON) it would not make a difference. But their greed was put before the mission of the Bitcoin project.

ASICminer are a perfect example - like I said in a previous post - One company should not be able to impact the entire network.

If they have a major outage - block times would be dramatically increased.

Look and see how they are expanding as well. ASICMiner are almost like a central bank now.

Well said. This precisely what I've suspected. ASIC is a curse for bitcoin.

[Hippie Tech]

You are right - I did go off topic.

Even changing the block interval will not solve the problem - it will have less of an impact but there is a limit to how quickly you can make the difficulty adjustments. Also this would mean the difficulty jumps would be way more often and much higher and these guys would just expand their operations even faster.

The thing is this - Never underestimate the power of human greed.

Nor should you ever underestimate the power of one... lowly gpu.

What would happen if everyone set one or more gpus per rig to solo mine ? How many getwork/s will be diverted from the asics if 10,000 nodes popped up all of a sudden ??

It might be like watching a swarm of locusts devour the harvest before the big bad tractors get to it.

[Xian01]

What happens when all the GPU miners (70%+ of miners) move to scrypt

 This will never happen.

[SirMintALot]

We are going to have a bitcoin oligopoly, with only a few getting the big amount of coins and being able to control the price of the bitcoin. We are now haveing a market that needs a constant flow of bitcoins to keep their bussiness (shops, gambling sites, etc.) running. If a big player like ASICMiner, with already 20% of the hashrate now, decides that they won't put their coins on the market for a while, then the value of bitcoin goes up. They also could decide to throw their stack of coins on the market causing a bitcoin crash. After that they could buy cheap bitcoins and controll the market even more. Just imagine Apple would do the same with their stock shares to get richer and richer... Luckily we have stock market rules that prevent this. I agree that Satoshi probably never thought about the possibilty that an oligopoly might rule the generation of coins and the market and it's now to late to add regulations to keep the market healthy and fair (like a transaction cap: nobody could do more than 5% of all market transactions, if you have to do more transactions then you have to wait. And a coin generation cap, nobody should be able to generate more then 10% of the coins. If one generates more than 10% of the total hashpower, then all generated extra coins are given away to all other miners). We need social market economy instead of turbo capitalism to keep trust into bitcoin  
Let's face it: Now we are in the same situation as mom and pops little general store when the big whole salers (like walmart & co) crushed the market. We can either believe into bitcoin and put all our money into things that generate more hashpower (GPUs, FPGAs and try to get ASICs) or sell our little general store and do another bussiness (Litecoin, PPCoin - not one of the bullshitcoins), which isn't controlled by a hand full of big players yet. But history will repeat when Litecoin mining will become profitable. Sooner or later we will see scrypt FPGAs and ASICs when the Litecoin market is big enough. PPCoin with it's Proof Of Stake is a good concept to prevent pump'n dump of the small miners (why should they invest lots of time for selling their coins when they get an interrest rate for holding them for a longer time) but the big boys will still do pump'n dump. Freicoin on the other hand isn't the real McCoy either: 4.89% demurrage is to much to get the small miner interrested, but the big boys with lots of hashing power will dump a lot and controll the coin. But I believe we are still in the time where lots of concepts are tried on the way to find the ultimate stable and trusted coin. I think we need a new hashing algorythm (like SHA3, but there is already a GPU miner for Copper Lark. Scrypt is no option either as there are people already working on FPGS and ASICs), Proof Of Stake to stabilise the market a bit and market rules (trade cap, coin generation cap) to prevent an oligopoly or even monopoly. Until then history will be repeating....

[Hippie Tech]

What happens when all the GPU miners (70%+ of miners) move to scrypt

 This will never happen.

We are likely already there. 25 terrahashes is my conservative estimate..  http://www.coinchoose.com/

The gpu miners have been conned into the alt-coins, very much the same way that the Asic Dream did. Just hearing them all trumpeting the promises of whatever crypto-currencey god(s) they believe in, makes me want to throw up. More now because I've learn that 1-2 of those alts are starting up a ... (pardon my foul mouth) BANK.

@SirMintALot

Is there any evidence of collusion between the big three ?

What is to stop them from merging ?

[SirMintALot]

@SirMintALot

Is there any evidence of collusion between the big three ?

What is to stop them from merging ?

You mean ASICMiner, Avalon and BFL? I think they try each on their own to make their profit. As the bitcoin is quite stable in the last time I think there isn't anyone manipulating the market yet. But I see the 20% of the networkhashrate of ASICMiner as a big problem. There are pools that have a higher hashrate now, but in a few months when most of the GPU miners will have stopped bitcoin mining and ASICMiner bought even more ASICS, then they might be up to 40%. And from 40% it isn't a long way to 51%...

If they realy would want to merge I think nobody could stop them. But I hope that they are smart enough and know that they would kill the bitcoin with that.

[zvs]

You said the problem was that ASICs will devalue BTC because they will make it easy to produce new coins.

more like asicminer selling bitcoins as soon as they get them.  wouldn't doubt a majority of the people that are wasting money on these crap devices that asicminer has made available (good lord, i wonder why?) trying to recover money in a futile effort

[tony_357]

Dude the problem is not the code - it has worked fine till this point.

What has messed it up are ASIC's and the way they have been distributed. Basically only a select few have managed to get their hands on this technology - I would guess around 10% of miners are using ASIC's yet they are probably 70 - 80% of the network hash rate.

It has caused a concentration of power into the hands of a few.

The increase in performance has blown Moores law completely out of the water - Satoshi never envisaged this problem - the idea was Bitcoins were available for anyone to mine - this is no longer the case.

If everyone could order ASIC's next day then maybe it would not have such an impact - like the change form CPU's to GPU's.

These guys developing the ASICs have gone so against everything Bitcoins stand for.

If they had stockpiled enough before making them publicly available (and not using them to mine themselves AVALON) it would not make a difference. But their greed was put before the mission of the Bitcoin project.

ASICminer are a perfect example - like I said in a previous post - One company should not be able to impact the entire network.

If they have a major outage - block times would be dramatically increased.

Look and see how they are expanding as well. ASICMiner are almost like a central bank now.

Dude chill down. All I'm saying is a change to the code may be a solution to this problem...

? errr - I am chilled - I thought you wanted an explanation!

The changing of the code does not stop the centralisation of power - the inability to get your hands on an ASIC is.

... so the ASIC miners are going into the hands of a few people (or they could be used by the ASIC mining manufacturers themselves (mining BTC to offset/lower their production costs) before being released to their customers), and that means that ASIC units are going for $3800 for a 5000 MHash/sec unit on Ebay http://www.ebay.com/itm/Butterfly-Labs-ASIC-5-6-GH-s-Jalapeno-Bitcoin-Miner-IN-HAND-NOT-PRE-ORDER-/330944064052?pt=LH_DefaultDomain_0&hash=item4d0dcdaa34  (as opposed to anywhere near their $274 list prices).

One possible solution is to use the most advanced FPGA technology - 28 nm FPGA - which can get you 2000 MHash/sec for $1000.  http://www.raspberrycoins.com  (The ASIC miners are using 65 nm technology node - they are limited by how much time and technology a Fab will provide them - (and the Fabs give their best customer services to companies like Qualcomm, Nvidia, Altera, and Xilinx - who order hundreds of millions of chips) ).  The FPGA prices will continue to drop over time (Altera recently announced a 14nm and 20nm nodes, and they're a little overdue to announce a Cyclone 6).

There were many times that FPGA's were considered too overpriced, but these companies just keep pushing Moore's law consistently ... (and companies like Altera and Xilinx can afford the 7 figure ASIC NRE's for the newest process nodes), and they make standard products which gets sold to a myriad of applications (and those volumes again - lowers cost) ...

... so between the greed and/or incompetence of certain ASIC mining manufacturers who are over a year late to market, and the steady execution of professional FPGA chip vendors, I wouldn't quite count out the FPGA technology just yet ...