ASICs & Difficulty

[BoozeHoundPoker]

I predict that in the next 8 weeks or so, you will see BTC's difficulty explode, and a lot of people will be crying over their $10,000 ASIC preorder.  "Difficulty" doesn't make sense to the buyers, all they see is money, so spending thousands on something that is unlikely to produce even a break-even return on investment makes sense to them.  Those who got in on the Avalon batch #1 ASICs and those who received their BFL orders recently are the winners.  The ones selling ASICs are the huge winners.  The rest will be left holding bags of ASICs.

Just my humble opinion 

[Coinmart]

I can respect that opinion. I think we may need more than 8 weeks though.

[JaaanStorm]

That's why people should invest in scrypt based coins, like LTC, PXC, XPM.

[polrpaul]

I predict that in the next 8 weeks or so, you will see BTC's difficulty explode, and a lot of people will be crying over their $10,000 ASIC preorder.  "Difficulty" doesn't make sense to the buyers, all they see is money, so spending thousands on something that is unlikely to produce even a break-even return on investment makes sense to them.  Those who got in on the Avalon batch #1 ASICs and those who received their BFL orders recently are the winners.  The ones selling ASICs are the huge winners.  The rest will be left holding bags of ASICs.

Just my humble opinion 

Respectfully, you are not a miner. Like many, you have dollar signs in your eyes, and immediately get turned off by the "bad" news. It doesn't work the way you've been thinking, unfortunately. Not that it's all on the positive side either as there are ups and downs. But one thing you are not accounting for is the price or value of Bitcoin as that difficulty increases. Think about supply and demand : what happens when something becomes rare and difficult to procure? Price goes up? I think so!

Stop thinking about break even and return on investment - either be a miner because it's fun and/or to help protect that network (be part of something). If you did it right, you might be surprised to see positive cash flow - just don't expect it.

[BoozeHoundPoker]

Why would you assume I am not a miner?

I am a miner, actually.  GPU mining, alt scrypt coins.  Plenty of return.

What I was implying is that very soon, a large number of new BTC ASIC miners will all show up with their brand new shiny $10,000 Jupiter just to learn that they can produce maybe 1 BTC per month.

I have nothing against somebody spending $10,000 on a hobby, just saying that there are way more profit-seekers than hobbyists at the moment.

For the price-to-difficulty analysis, compare the BTC price and difficulty on April 8th 2013 to the price and difficulty now and let me know if you still believe that 

[miffman]

can someone explain why asic and so on can't hurt scrypt-based coins? 

[bubblemarble]

Yes difficulty will increase as more asics hit the network, but that doesn't necessarily mean a huge drop in ROI. Those miners may be mining fewer coins but what if the coins are worth more in 8 weeks than they are today?  Bitcoin has been on a rather steady upward trend since asics really began impacting the network. Yes its up and down a lot but compare the price/market cap to just 6 months ago.

[bubblemarble]

can someone explain why asic and so on can't hurt scrypt-based coins? 

Its not impossible to scrypt mine with an ASIC just a lot more difficult and at this point nobody has spent the time/money to develop one. Basically scrypt mining is very memory intensive while sha-256 (bitcoin) is not. So any board with an asic chip would need a lot of high speed memory to scrypt mine (like vram on your graphics card)

[BoozeHoundPoker]

but what if ....

Yes, that is exactly it.  What if?

What if everybody buys an expensive ASIC miner and the price goes to $10?    

Supply doesn't create demand.  I'm not hoping for another price crash, but it sure looks possible because it wouldn't be the first time.   

But who knows 

[bubblemarble]

but what if ....

Supply doesn't create demand.  I'm not hoping for another price crash, but it sure looks possible because it wouldn't be the first time.   

Sorry but your logic is flawed. The supply can't meet the demand which is why people are over paying for asics in the first place, and why so many companies are trying to copy cat now. There is a very clear demand.

Yes the difficulty will increase and yes some smaller asic miners will be left out in the cold but most of them will have no problem getting a profit. It just won't happen overnight.

But in any case the people that make the argument that asic's aren't worth the effort are not thinking long term. Even if you struggle to make your initial investment back in bitcoins before the difficulty gets too high, you still have the hardware in your possession. It can easily be turned to any other sha-256 coin and continue making profits. I currently mine ppcoin and terracoin with usb erupters. I actually turn a higher profit in terracoin than if I set them to mine bitcoin.

[Drug5bitz]

Lot of flawed logic going around. Do this, order an asic 3 months ago like I did, patiently wait till it comes. I just don't give a fuck. Mine and store your coins. Just because you have coins doesn't mean they must be sold immediately to make a profit. My personal opinion, people who do just that ruin the actual value more than help it. Try this just once, think about something before hand, play out the different scenarios. That or go read a book on quantum mechanics, shoot yourself in the face and realize you're neither alive nor dead until a conscious being proves it. 

[tharude]

ASIC's will ruin the [place your favorite here]....
The only thing that ASIC's are bringing is more secure and fast network which will help Bitcoin to be much more trusted and it's faster entry into the mainstream!
Behave, think and act as investor!
For those missed the train.... well, there is a news for you: "Guys you've missed the early adopters train! Stop whining about the quick buck opportunity missed!"
For those with common sense - buy an ASIC, help to secure the network, help Bitcoin to be adopted in the mainstream and even if you've mined one coin for the next one year, remember, that after 5-10 years, this coin can worth more than a million!
So, which train exactly did you missed? Speculation train? Don't think so, unless you are qualified speculator.
For those looking for a quick buck - go to coinwarz, choose some of the top three, mine and trade or just go play the Dice.

[alh]

Ive heard that during the Gold Rush days, the guys that made out the best were those that sold shovels,
rather than those that actually "mined" the gold. Don't know how true that is, but it sure seems applicable
here.

[Mike Scofield]

yep, it is getting harder and harder to mine bitcoins now, unfortunately. Don't forget we got competition!!

[identityunknown]

It will always be worthwhile for somebody (of course, otherwise difficulty would plummet).

If it doesn't work out for you, you just need a better shovel. Anyways, as others have pointed out, moving to scrypt coins, you can profit from GPUs for longer.

[bronan]

Some of the people see indeed only dollar signs
But i really hope we can someday use a credit card and go shopping with bitcoin there is enough people trying to make the best out of it.
I agree fully on the comment that mining is not for a quick buck earning, you do that to get in the long run a small or larger profit for now its clear asic is going to be a big part of the mining power in the network

Those who mine keep some coins apart for future investments and use some to cover the costs for mining and on a larger scale the costs to host their machines.
Ofcourse i do know that investment in mining equipment can be a risc, but if we do not move forward the costs of energy will kill the bitcoin mining industry anyway.
 
But overall i see the miners as the people who do help economy on a small scale because most normal people at the moment do not spend much money,  miners do spend a considerable amounts of money in new tech and devices

Nevertheless at certain point btc will become so hard to get by mining that it will no longer be worthwhile for smaller miners to do so.

Then i am sure the value of the coin is considerable since it became a very rare product to get, the only way it would loose value is that all of us loose faith in the coin and if it will not being used.

Thats why it is important to see bitcoin payement to spread and become more common, as soon as sellers see it is a trusted and worthwhile system they will use it when we do accept that the early adopters will cost a bit more.

You just must keep in mind they take a risc that the coin with its value may increase or decrease in short time, if this gets adopted more by bigger firms then i think the value might be more like current valued products.
do not forget gold, silver and any coin its value is dictated by the demand and offers like any other item of value.

Btc is a product with a limit and will be a hard to get object.
So do not come with a story its only digital/virtual because each and every day you buy and sell all your items digital
{ most buying gold/silver do not really buy gold but buy virtual gold in an bank account, they have no clue if this gold really exist or not }

I do know patience with spending the coins can be very profitable also, so if you do not really need the value the coins represent i would not spend them easily. And i can promise you some of the coins will go into a digital freezer for a long time by me  
  
We need to get solid companies who deliver what they promise and get those scam artists out of this system, i sure as hell hope that we get more and really honest sellers of items on the bitcoin community.
And really would like to see a list of companies who are to be trusted and can be verified that they deliver what they promise, so we can weed out the untrusted ones.

[AstroBoy]

Ive heard that during the Gold Rush days, the guys that made out the best were those that sold shovels,
rather than those that actually "mined" the gold. Don't know how true that is, but it sure seems applicable
here.

Very true.  I am one of the literal thousands of people waiting on a BFL unit which I will be lucky to break even with when it does arrive.  The answer isn't mining with your own hardware (like panning for gold) or buying and holding bitcoins waiting for the currency to appreciate (similar to holding physical gold but a lot more risky).  I believe that bitcoin as a currency has for the short-medium term stabilized.

What has me very interested right now, is the emerging uses for the bitcoins most of us are holding onto.  My current obsession is the emergent bitcoin venture capital IPO stock market (which includes futures trading, options, bonds, etc)  Since the market is so new and relatively small, the price finding mechanism isn't as efficient as in the fiat stock market, meaning that: 1: there are some real bargains out there, 2: stuff gets over priced often 3: 4: Profit!

A great example of this IMHO is if you look at ASICminer: https://bitcointalk.org/index.php?topic=99497.0 They have been in business for awhile, and are worth over 4 BTC a share, the IPO was 0.1 BTC per share.  That's a 400% rise in just 12 months!  And they pay dividends!

Now ActiveMining comes along and is just 0.0025 per share right now (although the management of their IPO is very poor, which is keeping the price down) but they just reached their NRE funding and are already paying dividends with the revenue from Avalon units they purchased, with more on the way, AND they are going to build their own line of ASIC miners and pay dividends (a 10% royalty) on the sale of each, but their mining pool gets first dibbs. AND it's a scalable solution that capps out at 96 cards for a total of ~24TH/s?!?!  I mean wow!  This could be the next big thing!  (Disclaimer, I've already bought some shares myself and researching this company has been my obsession for the past 24 hours.  Bitcoin has been my obsession since the rally started in Feb of this year.)

[No_10]

I've just been reading this article: http://www.coindesk.com/feathercoin-founder-peter-bushnell-talks-about-cryptocurrency-challenges/ and it turns out Butterfly Labs are now shipping their ASIC rigs.
Does anyone know of anyone who has revived any of the rigs they ordered? If so what was their place in the queue? My friend has had one on pre-order for 9 months now and wondering when he's likely to get it and if its worth joining the queue too

[Drug5bitz]

If he ordered when you said and paid then it has just shipped..... Fucking Google something. The forum has daily updates. If you paid before the end of October for a jalapeno it has shipped.

[theokep]

That's why people should invest in scrypt based coins, like LTC, PXC, XPM.

I 100% agree. I myself like XPM because of its CPU mineability and LTC because of its stability. If I had to pick a third, I would go with DGC. Just my 0.02