did ASIC ruin bitcoin ?

[WEB slicer]

i think so.

[1715135522]

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[WEB slicer]

when you spend up the ass for the equipment it takes months to deliver and when you have the equipment in hand the difficulty is so high you risk losing money cause you cant make ROI i think that makes bitcoin look like a joke and a huge gamble thus making bitcoin less attractive and could lead to panic selling and collapse.

[millsdmb]

i think so.

Do you believe they were not inevitable?

[SlyFoxy12]

I'd say little yes, it's not because ASIC is a problem it's the fact that previously we were all mining coin with readily available hardware so it felt equal opportunity but now it's difficult to get hold of good hardware and at the same time a lot of shifty people are trying to dupe people with fake offers to buy miners or even the people selling miners genuinely are quite shifty like BFL, unless it goes back to how it was I feel the system will lose a lot of hobbyists because it comes down to how do you compete against such people?

[millsdmb]

I'd say little yes, it's not because ASIC is a problem it's the fact that previously we were all mining coin with readily available hardware so it felt equal opportunity but now it's difficult to get hold of good hardware and at the same time a lot of shifty people are trying to dupe people with fake offers to buy miners or even the people selling miners genuinely are quite shifty like BFL, unless it goes back to how it was I feel the system will lose a lot of hobbyists because it comes down to how do you compete against such people?

a block erupter hashes at a respectable rate when you compare to GPU, and cost much less. Now we all know that they wont hit ROI -- did anyone here running a GPU cluster hit roi?

When has anybody actually made bank? Other than ATI, and now ASIC vendors and their resellers.  It sounds like people upset they cant play, like USB asics aren't on these very forums for BTC.38

[WEB slicer]

big money like BFL ASICminer and china mass producing equipment and mining with customers equipment prior to shipping doesnt help either.

[millsdmb]

big money like BFL ASICminer and china mass producing equipment and mining with customers equipment prior to shipping doesnt help either.

BFL has to be the company that has shipped the least yet people seem to associate most with the difficulty increase. Why is this? As for ASICMiner, they're listed in the hashrate distro chart and "Stock" (as in securities) in the company was available on these boards for purchase with dividends.

[WEB slicer]

they have that equipment and have been mining with it for months. they act stupid but they arent. they are con artists. they know what they are doing.

[Chalkbot]

I just tested my bitcoin, and they seem to be working as well as ever. I guess ASIC had no effect on them.

[millsdmb]

they have that equipment and have been mining with it for months.

Yes, ASICMiner also sold stock shares paying dividends on that hashing.

Or were you speaking of BFL...

[WEB slicer]

BFL is the devil.

[millsdmb]

BFL is the devil.

This is undisputed.

[JoelKatz]

when you spend up the ass for the equipment it takes months to deliver and when you have the equipment in hand the difficulty is so high you risk losing money cause you cant make ROI i think that makes bitcoin look like a joke and a huge gamble thus making bitcoin less attractive and could lead to panic selling and collapse.

Bitcoin != mining

[DeathAndTaxes]

when you spend up the ass for the equipment it takes months to deliver and when you have the equipment in hand the difficulty is so high you risk losing money cause you cant make ROI i think that makes bitcoin look like a joke and a huge gamble thus making bitcoin less attractive and could lead to panic selling and collapse.

Then don't mine.  Seems a pretty simple solution.  If you believe the risk of ordering, combined with potential delays, limited upside, and rising difficulty make it unattractive to invest in new mining hardware .... THEN DON'T.

"Bitcoin" (the network) needs someone to provide computing power.  It doesn't need everyone to do so, it doesn't need any particular individual to do so.  Eventually the mania will die down and Bitcoin mining will return to a high capital, low return operation just like ANY OTHER commodity production.

[millsdmb]

Sounds to me like OP's complaint is more like, "Bitcoin ASICs (and the companies who created them) ruined my (and other's) ability to earn money mining Bitcoins".

This: http://blockchain.info/charts/miners-operating-profit-margin

There is correlation between ASICS and the margin decline, however this does not imply causation.

[millsdmb]

when you spend up the ass for the equipment it takes months to deliver and when you have the equipment in hand the difficulty is so high you risk losing money cause you cant make ROI i think that makes bitcoin look like a joke and a huge gamble thus making bitcoin less attractive and could lead to panic selling and collapse.

Then don't mine.  Seems a pretty simple solution.  If you believe the risk of ordering, combined with potential delays, limited upside, and rising difficulty make it unattractive to invest in new mining hardware .... THEN DON'T.

"Bitcoin" (the network) needs someone to provide computing power.  It doesn't need everyone to do so, it doesn't need any particular individual to do so.  Eventually the mania will die down and Bitcoin mining will return to a high capital, low return operation just like ANY OTHER commodity production.

One thing I do think about is if ASICS will lead to the slow erosion of the decentralized nature of bitcoin. As rewards half, solo miners might step out. Leaving pools, which then could consolidate (or go bankrupt)

[WEB slicer]

Then don't mine.  

EXACTLY,  this leads to FAIL    

[DeathAndTaxes]

One thing I do think about is if ASICS will lead to the slow erosion of the decentralized nature of bitcoin. As rewards half, solo miners might step out. Leaving pools, which then could consolidate (or go bankrupt)

The reward halving has nothing to do with ASICs.  Prior to ASICs the overwhelming majority of GPU miners operated in a pool.  I don't see anything that makes ASIC miners more likely to use pools.  Most will but most always have.

[DeathAndTaxes]

Then don't mine. 

this leads to FAIL   

No it doesn't.  I didn't say nobody mine.  Someone will always be mining. It might not be you, and Bitcoin won't fail just because YOU are no longer mining. 

[WEB slicer]

why the fuck would anybody spend money on ASIC equipment pay electric and commit time if you cant make money?

if its not profitable to mine people wont mine and bitcoin will fail. at least people had a reason to spend money on GPU ASIC worthless if its not profitable.

[DeathAndTaxes]

why the fuck would anybody spend money on equipment pay electric and commit time if you cant make money?

if its not profitable to mine people wont mine and bitcoin will fail.

Difficulty adjusts.  If SOME people stop mining then difficulty will fall and those remaining will see their revenue rise and become profitable.  If difficulty falls too much then some people will turn rigs back on or buy new rigs and difficulty will rise again.  The network will adjust either way.

Also once hardware is purchased it is a sunk cost.  So long AFTER it becomes unprofitable to buy MORE NEW hardware, miners will continue to still operate their miners.  The only time it makes sense to a rig to be idle is when value of BTC < electricity used and that is at a difficulty much much higher (closer to 1 billion difficulty).  Even there it won't affect all miners equally.  The least efficient miners (lowerst MH/W and highest electrical cost) will idle first and help to lower difficulty.

So yes some miners may quit (and sell their rigs to other miners will cheaper power) and NEW hardware sales may flatline but miners will still keep mining as there is no economical reason not to.

[WEB slicer]

if there is money to be made i WILL be making it. but unless something drastic happens i dont think there is any money to be made for the core community. the power has shifted from the community to the companies. if there is money to be made big companies WILL spit out the machines corner the market and make it impossible for average users to earn cause by the time we get the new equipment they already made all the money and difficulty will be to high for us to earn. big money wins and the little guy gets fucked, as always. and its not your average fuck job cause they will make all the coins then turn around and make money off selling us the machines that are worthless cause they already made all the money. its a double money grab with a double fuck at the end.

[CurbsideProphet]

when you spend up the ass for the equipment it takes months to deliver and when you have the equipment in hand the difficulty is so high you risk losing money cause you cant make ROI i think that makes bitcoin look like a joke and a huge gamble thus making bitcoin less attractive and could lead to panic selling and collapse.

To me it makes the company look like a joke, not Bitcoin.  Like any consumer, speak with your wallet.  MtGox has shown time and time again to be incompetent, so I've taken my business elsewhere.  BFL is known to be run by people who have criminal pasts, so I choose to not conduct business with them.  This isn't about Bitcoin, it's about due diligence and personal responsibility.

[millsdmb]

why the fuck would anybody spend money on equipment pay electric and commit time if you cant make money?

if its not profitable to mine people wont mine and bitcoin will fail.

Difficulty adjusts.  If SOME people stop mining then difficulty will fall and those remaining will see their revenue rise and become profitable.  If difficulty falls too much then some people will turn rigs back on or buy new rigs and difficulty will rise again.  The network will adjust either way.

Also once hardware is purchased it is a sunk cost.  So long AFTER it becomes unprofitable to buy MORE NEW hardware, miners will continue to still operate their miners.  The only time it makes sense to a rig to be idle is when value of BTC < electricity used and that is at a difficulty much much higher (closer to 1 billion difficulty).  Even there it won't affect all miners equally.  The least efficient miners (lowerst MH/W and highest electrical cost) will idle first and help to lower difficulty.

So yes some miners may quit (and sell their rigs to other miners will cheaper power) and NEW hardware sales may flatline but miners will still keep mining as there is no economical reason not to.

Just to clarify, the general consensus is that ASICS will not lead to a more centralized mining group, correct? Be it in 10 years, 20, 30, whenever.

At some point, miners will be left only with TX fees, or contracts for fast confirmations.

I am not in agreement with OP generally, as I am presently mining with a couple ASICS and see no reason why he couldn't be as well. I am likely only to break even and am OK with that.

[JoelKatz]

why the fuck would anybody spend money on ASIC equipment pay electric and commit time if you cant make money?

if its not profitable to mine people wont mine and bitcoin will fail. at least people had a reason to spend money on GPU ASIC worthless if its not profitable.

If a restaurant is too crowded, nobody will eat there and it will go out of business.

[millsdmb]

why the fuck would anybody spend money on ASIC equipment pay electric and commit time if you cant make money?

if its not profitable to mine people wont mine and bitcoin will fail. at least people had a reason to spend money on GPU ASIC worthless if its not profitable.

If a restaurant is too crowded, nobody will eat there and it will go out of business.

if a restaurant is too crowded will cheesecake factory buy all of them and turn every one into cheesecake factories?

=D I want Buffalo Blasts

[WEB slicer]

I am likely only to break even and am OK with that.

fuck that, you may be OK with that but i will bet you my soul the majority of people will not be OK with that. people dont invest to break even. they expect or hope for a healthy return.

[Mike Christ]

If a restaurant is too crowded, nobody will eat there and it will go out of business.

/thread

[millsdmb]

I am likely only to break even and am OK with that.

fuck that, you may be OK with that but i will bet you my soul the majority of people will not be OK with that. people dont invest to break even. they expect or hope for a return.

Buy BTC.

[WEB slicer]

BTC will be worthless once big money has a choke hold on the BTC earned.

[Mike Christ]

BTC will be worthless once big money has a choke hold on the BTC earned.

Something about "worthless" and "big money" being in the same sentence is ringing as dissonance in my ears.

[astutiumRob]

if its not profitable to mine people wont mine and bitcoin will fail

Only if the reason they mined was for the block-reward  :p

As a business we accept BTC, it's in our commercial interest to see transactions confirmed quickly, maintain multiple copies of the blockchain, and so on - it's _nice_ to see some Satoshi's from the miner, but it's certainly not necessary.

[WEB slicer]

Something about "worthless" and "big money" being in the same sentence is ringing as dissonance in my ears.

they will make the money and bail just like mining for gold oil or diamonds in third world countries. they will be there when its profitable and fuck you when they cant make no more.

[millsdmb]

Something about "worthless" and "big money" being in the same sentence is ringing as dissonance in my ears.

they will make the money and bail just like mining for gold oil or diamonds in third world countries. they will be there when its profitable and fuck you when they cant make no more off you.

What about when there are 0 btc left to be mined? Imagine we are in 2141. Are you happy with mining for TX fees?

[WEB slicer]

nope, if i cant make a reasonable amount i will find something else to do.

[millsdmb]

if its not profitable to mine people wont mine and bitcoin will fail

...it's in our commercial interest to see transactions confirmed quickly, maintain multiple copies of the blockchain, and so on - it's _nice_ to see some Satoshi's from the miner, but it's certainly not necessary.

This will be the future, IMO...established companies with the proper equipment selling contracts to ensure the fastest confirms.

[millsdmb]

nope, if i cant make a reasonable amount that positively effects my life i will find something else to do.

But bitcoin won't die because of that.

[WEB slicer]

bitcoin might die because of ASIC and be replaced by bitcoin 2.0 or some new P2P digital currency. the first of anything never lasts it either dies and goes away for good or it evolves and gets replaced by something better. either way i think the future of bitcoin as it works today looks questionable. the good ol days of GPU mining are over. hopefully the next round they figure out a way to deal with people controlling the market and having the difficulty shit on ROI.

[David Rabahy]

I think *maybe*, unlike the current flurry of alternative "coins", Bitcoin 2.0 (whatever that is) would do well to provide a relatively short period of time during which Bitcoin 1.0 coins can be readily converted at a fixed rate (as opposed to exchanged at a varying amount indefinitely).  This is not to say post-conversion Bitcoin 1.0 coins would be worthless; on the contrary, the variable exchange would start then and be determined by classic market forces.  If it is well thought out, handled carefully and with some luck then a large amount of value could flow into Bitcoin 2.0 minimizing the disruption.

If one tries to stand up Bitcoin 2.0 without a conversion program then it is just like any other alternative coin and will likely suffer from a lack of investment.

I'm not sure going all the way to an automatic conversion program is better.  Trying to force Bitcoin 1.0 to shutdown altogether might be tough.

Incremental changes from 0.8.3-beta through to 1.0 and beyond and even to 2.0 or higher might not be able to achieve fundamental enhancements like becoming ASIC hostile.

[01BTC10]

Gold mining margin is too damn small so gold will fail.

[WEB slicer]

go look for gold with hand and pan while big money uses dynamite and excavators and tell me if its worth your time.

[knight22]

go look for gold with hand and pan while big money uses dynamite and excavators and tell me if its worth your time.

Same is true with ASIC

[viboracecata]

half right, ASIC IPO will ruin bitcoin

[WEB slicer]

bitcoin is good, ASIC and big greedy companies is bad.

[gadman2]

It does if you're one of the 97% of people at this forum who are in it for the potential UDS profits

[smscotten]

I love how profit becomes evil at exactly the moment that someone else is making it. As long as I am making profit, it's healthy and good.

[JoelKatz]

I love how profit becomes evil at exactly the moment that someone else is making it. As long as I am making profit, it's healthy and good.

"It's because of these evil, greedy people that I can't make a huge profit with minimal effort."

[barbarousrelic]

Bitcoin != mining

Indeed. ASICs made Bitcoin far better, but they made mining less profitable. But the general purpose of Bitcoin is not to make money mining. It's to have a secure independent quasi-anonymous trust free online currency system.

[crazy_rabbit]

Something about "worthless" and "big money" being in the same sentence is ringing as dissonance in my ears.

they will make the money and bail just like mining for gold oil or diamonds in third world countries. they will be there when its profitable and fuck you when they cant make no more off you.

What about when there are 0 btc left to be mined? Imagine we are in 2141. Are you happy with mining for TX fees?

why not? When 2141 rolls around and BTC is the world currency and mining for TX is highly profitable.

[elor70]

It ruined gpu mining

[ninjarobot]

[yolo2222]

Whos that ASIC guy? I keep hearing his name 

[johnyj]

The only sure winner are those chip manufacturers like TSMC

[tonto]

I'm saying it sounds like OP's complaint is that he can't earn money mining Bitcoin.

This.

[WEB slicer]

i am making money with BTC. i have been making money with BTC. i will continue making money with BTC. even if not mining.

however, like many of us i have invested in ASIC. and when the difficulty shits on my return i am well within my right to cry bitch or moan.

[westkybitcoins]

i am making money with BTC. i have been making money with BTC. i will continue making money with BTC. even if not mining.

however, like many of us i have invested in ASIC. and when the difficulty shits on my return i am well within my right to cry bitch or moan.

Did you buy those ASICs with the expectation that the difficulty wouldn't skyrocket???

Sounds like the problem is with the company you chose to purchase from, not with the devices that offer greater hashing rates for less energy expenditure (since you chose to purchase one.)

[WEB slicer]

i knew it would go up but not like this. look at this chart. it makes mining very unattractive.

http://bitcoindifficulty.com/

[adworker]

ASIC making Bitcoin more secure. Bigger difficulty = more secure = better.
But im not biased because i dont mine

[smscotten]

Sure, the difficulty is high. As a fellow miner, I empathize. I'll hoist a glass of beverage and reminisce about the "good old days" or whatever. But you have to realize that that is not what you asked. The poll asks whether ASICs ruined Bitcoin, which if you'll forgive my bluntness is childish and petty.

ASICs have made it more possible for anyone to participate as miners, not less. They have also made it more difficult for miners to be professional miners. Most of us won't quit our day jobs, and a very small number of us will have huge self-sustaining farms. That is as it should be. Bitcoin was not invented to give us a free lunch, it was invented to give us a free economy.

[The 4ner]

when you spend up the ass for the equipment it takes months to deliver and when you have the equipment in hand the difficulty is so high you risk losing money cause you cant make ROI i think that makes bitcoin look like a joke and a huge gamble thus making bitcoin less attractive and could lead to panic selling and collapse.

Does it really matter though? The difficulty was bound to rise either way the more coins were produced. The only inconvenience ASICs caused was not being able to make the late comers rich.

[The 4ner]

It only ruined Bitcoin for those that were looking to make money off minting the currency. Everyone else just either gets paid in BTC or provides a service or good for sale in exchange for BTC.

[smscotten]

Does it really matter though? The difficulty was bound to rise either way the more coins were produced. The only inconvenience ASICs caused was not being able to make the late comers rich.

Well, the same number of coins would be produced either way. That's why the difficulty went up. But yeah.

And I think that's the frustration. Mining is a zero-sum game. You can't get in on it without diluting everyone else's share. I'm not saying there's anything wrong with that, but miners have to understand that (after the first few) we are not producing something that wouldn't exist without us; we are taking a slice of a set amount of wealth that is being created.

And again, the point of Bitcoin is not to make people rich, but to create the medium in which people can become rich through their non-Bitcoin-related efforts.

It's one thing to say, "woo! The more the merrier!" but the more people that are involved in mining, the smaller each of our shares will be. As Bitcoin grows, you have to put more and more hashing power in just to keep the same proportion. That is a given and a constant: the diff will (almost) always increase, especially when Bitcoin gains traction with wider numbers of people.

It's awesome that "anyone can do it" when not very many people are doing it. When more people do what "anyone can do" that's when it gets ruined by all those messy people that are doing it. But ultimately you cannot have it both ways. Either anyone can do it and your efforts are not special, or else only a few can and it will be profitable to each of those few.

[atomium]

a plus is that confirmations will be in seconds now with miners running on asics

[mrdavis]

Bitcoin was not invented to give us a free lunch, it was invented to give us a free economy.

Well said.

[westkybitcoins]

It's awesome that "anyone can do it" when not very many people are doing it. When more people do what "anyone can do" that's when it gets ruined by all those messy people that are doing it. But ultimately you cannot have it both ways. Either anyone can do it and your efforts are not special, or else only a few can and it will be profitable to each of those few.

Well said. More people need to understand this.

[westkybitcoins]

a plus is that confirmations will be in seconds now with miners running on asics

Well, that would have benefits. But it's not how it works; the whole point of the difficulty adjustments is to ensure that new blocks (confirmations) are generated at a rate of one every 10 minutes, no more, no less, regardless of total network hash rate.

[WastedLTC]

you can already start to see the changes.  If someone releases an ASIC on preorder, it no longer sells out immediately (or sells at all).   Things will level out.  Now we don't need to give all money to a single company (AMD graphic chips) but to many companies.  Don't forget when Avalon first made the chips, they could have taken over the entire network immediately.  That is no longer the case.  Soon buying a miner will become one of those things you can order and have the next day and maybe you will make your money back in 4 months, but that will be the choice when you order. 

All is well.

[600watt]

bitcoin might die because of ASIC and be replaced by bitcoin 2.0 or some new P2P digital currency. the first of anything never lasts it either dies and goes away for good or it evolves and gets replaced by something better. either way i think the future of bitcoin as it works today looks questionable. the good ol days of GPU mining are over. hopefully the next round they figure out a way to deal with people controlling the market and having the difficulty shit on ROI.

that´s not exactly true with technologies like the internet. the internet protocol for example which is still used today was developed in 1974. there have been several attempts by companies like microsoft, ibm, apple to start new protocols, but they did not succeed.

bitcoin is a protocol. if it lasts as long as the internet protocol there is nothing to worry about.

http://en.wikipedia.org/wiki/Internet_Protocol

[millsdmb]

a plus is that confirmations will be in seconds now with miners running on asics

the whole point of the difficulty adjustments is to ensure that new blocks (confirmations) are generated at a rate of one every 10 minutes, no more, no less, regardless of total network hash rate.

Was there not a point when the hashrate actually caused the block rewards to come quicker than was anticipated by the network? I had found an article a few days ago but cant relocate it. Must not have been signed into my google account at the time or they'd have archived my history.

[WastedLTC]

a plus is that confirmations will be in seconds now with miners running on asics

the whole point of the difficulty adjustments is to ensure that new blocks (confirmations) are generated at a rate of one every 10 minutes, no more, no less, regardless of total network hash rate.

Was there not a point when the hashrate actually caused the block rewards to come quicker than was anticipated by the network? I had found an article a few days ago but cant relocate it. Must not have been signed into my google account at the time or they'd have archived my history.

yup. two of them
http://thegenesisblock.com/bitcoin-block-time-halved-to-five-minutes-amid-exponential-network-growth/
http://thegenesisblock.com/at-this-rate-the-last-new-btc-will-be-issued-55-years-ahead-of-schedule/

[DeathAndTaxes]

a plus is that confirmations will be in seconds now with miners running on asics

the whole point of the difficulty adjustments is to ensure that new blocks (confirmations) are generated at a rate of one every 10 minutes, no more, no less, regardless of total network hash rate.

Was there not a point when the hashrate actually caused the block rewards to come quicker than was anticipated by the network? I had found an article a few days ago but cant relocate it. Must not have been signed into my google account at the time or they'd have archived my history.

If hashing power rises rapidly within one adjustment period (2016 blocks ~14 days) then the time between blocks can temporarily be shorter however it is that shorter interval which causes the difficulty to rise.  Yes for a short time the time between blocks can be <10 minutes (and in a falling hashpower environment it can be>10 minutes) however the network readjusts difficulty every 2016 blocks.   Hashpower can't keep growing at 20%+ per adjustment forever and when it slows the time between blocks will normalize at ~10 minutes regardless of if we have 1 MH/s or 1,000,0000 PH/s.

[MagicBit15]

i think so.

This and bitcoin was designed for anything that comes its way from now until 21 million coins. ASIC and other competition is what bitcoin is all about!!

[astutiumRob]

If hashing power rises rapidly within one adjustment period (2016 blocks ~14 days) then the time between blocks can temporarily be shorter however it is that shorter interval which causes the difficulty to rise.  Yes for a short time the time between blocks can be <10 minutes (and in a falling hashpower environment it can be>10 minutes) however the network readjusts difficulty every 2016 blocks

Between difficulty adjustment, overall, it's _never_ been an average of 10 minutes.

The current adjustment calculation is flawed in several ways.
One of which is not retargetting the difficulty based on the historical average time between blocks, to bring it back to an overall average of 10 mins.

This is why http://thegenesisblock.com/at-this-rate-the-last-new-btc-will-be-issued-55-years-ahead-of-schedule/

[alp]

If hashing power rises rapidly within one adjustment period (2016 blocks ~14 days) then the time between blocks can temporarily be shorter however it is that shorter interval which causes the difficulty to rise.  Yes for a short time the time between blocks can be <10 minutes (and in a falling hashpower environment it can be>10 minutes) however the network readjusts difficulty every 2016 blocks

Between difficulty adjustment, overall, it's _never_ been an average of 10 minutes.

The current adjustment calculation is flawed in several ways.
One of which is not retargetting the difficulty based on the historical average time between blocks, to bring it back to an overall average of 10 mins.

This is why http://thegenesisblock.com/at-this-rate-the-last-new-btc-will-be-issued-55-years-ahead-of-schedule/

This assumes having a block time of 10 minutes is really important.  And you may end up with a more flawed mechanism if try to set future difficulty based on expected growth, where you end up setting the difficulty far to high and end up with one really, really long period of a too high difficulty.

[millsdmb]

Will this affect deflation? I wonder if USD Fiat price and block reward are inversely correlated? (so long as demand exceeds supply)

[og kush420]

well i never mined bitcoins unfortunately, so yeah i wish i could have back then just for fun. too bad i got in late. i think its a little discouraging to n00bs when people who arent already in the game have few options. but not everyone can make money.

[Carlton Banks]

This is ASIC wave 1, and the hype is multi-faceted and pervasive. Those who feel they missed the boat: GPU miners felt the same way about CPU mining, as did the FPGA miners over GPU mining, as did ASIC miners about FPGA era. Hell, even Avalon batch 2 customers felt the same about Avalon batch 1.

[astutiumRob]

This assumes having a block time of 10 minutes is really important

Having a 'final' and known amount of BTC in circulation and a _relatively_ constant block creation rate is very very important - it's what makes BTC more-attractive traditional Fiat's

And you may end up with a more flawed mechanism if try to set future difficulty based on expected growth

Historical growth not future growth

where you end up setting the difficulty far to high and end up with one really, really long period of a too high difficulty.

You will get 1 or more periods of that when lots of hobby-miners (assuming they're the ones responsible for the electric bills) eventually realise they're losing large amounts of money running their miners ...

[David Rabahy]

A miner makes an investment in equipment and electricity, etc., and in return they get Bitcoins.  The amount of their investment is then compared to the value of the their production.  *But*, the potential future value of their production should be taken into account too.

[shields]

A miner makes an investment in equipment and electricity, etc., and in return they get Bitcoins.  The amount of their investment is then compared to the value of the their production.  *But*, the potential future value of their production should be taken into account to.

Why do people keep thinking this?
The miner could have bought  BTC directly with the capital investment (or maybe the initial investment was BTC anyway) so the future value of bitcoin doesn't matter. The investment is good if it makes more BTC than the capital would have bought, it's bad if it doesn't - the price of BTC does not factor into this.

[smscotten]

Why do people keep thinking this?
The miner could have bought  BTC directly with the capital investment (or maybe the initial investment was BTC anyway) so the future value of bitcoin doesn't matter. The investment is good if it makes more BTC than the capital would have bought, it's bad if it doesn't - the price of BTC does not factor into this.

I'm inclined to agree. I mine as an "investment" of sorts, but not the kind that pays short-term dividends on a balance sheet. The payoff is not a percentage-measurable profit but knowing that I've done something to support the operation of a currency I believe will make the world a better place for me to live in.

It's kind of cool that I get to spend the dividends too, and I wouldn't keep buying hardware if I were seeing nothing come back to me at all. And I know enough other people are doing it so I don't need to, but that's just sort of how I roll.

[JoelKatz]

Why do people keep thinking this?
The miner could have bought  BTC directly with the capital investment (or maybe the initial investment was BTC anyway) so the future value of bitcoin doesn't matter. The investment is good if it makes more BTC than the capital would have bought, it's bad if it doesn't - the price of BTC does not factor into this.

Huh? Say a mining machine costs $5,000 and is expected to average about one Bitcoin per day over the next 3 months. If Bitcoins are $1 each, that's a lousy deal. If Bitcoins are $100 each, that's a pretty good deal. The cost of mining hardware is based on dollars because mining companies have to pay employees and suppliers that way.

[Snail2]

A note about the original question. ASICs didn't ruin bitcoin. ASICs put bitcoin to an "industrial" level. What these boxes ruined is the "small town" feeling

[SeanArce]

You don't own bitcoin. Like the above user said, bitcoin was meant for use to have a free economy. asics didn't ruin anything. I would mine alt coin. Crypto gave a new meaning to competing currencies

[smscotten]

A note about the original question. ASICs didn't ruin bitcoin. ASICs put bitcoin to an "industrial" level. What these boxes ruined is the "small town" feeling

For some people, maybe. With my one FPGA and two block eruptors it still feels like a pretty small town around here.

But yeah, I think you're exactly right about what other people think it ruined.

[shields]

Why do people keep thinking this?
The miner could have bought  BTC directly with the capital investment (or maybe the initial investment was BTC anyway) so the future value of bitcoin doesn't matter. The investment is good if it makes more BTC than the capital would have bought, it's bad if it doesn't - the price of BTC does not factor into this.

Huh? Say a mining machine costs $5,000 and is expected to average about one Bitcoin per day over the next 3 months. If Bitcoins are $1 each, that's a lousy deal. If Bitcoins are $100 each, that's a pretty good deal. The cost of mining hardware is based on dollars because mining companies have to pay employees and suppliers that way.

If BTC are $100 each, the question is whether the miner will ever mine 50BTC? If it mines more than 50BTC it's profitable otherwise it isn't, as you could have bought 50BTC. The argument people make is "oh you pay $5,000 and make only 25BTC, but those BTC will be worth way more than $5,000 in future so it's a good investment". My point is no matter what the price of BTC rises to you'd be better off buying 50 up front instead of mining 25.

[smscotten]

Theoretically given infinite time, the mining hardware is always the better purchase because it makes new Bitcoin. Though that might intuitively make sense, it's wrong if either of the following conditions are true (basically the same condition, but whatever):

1) difficulty increases and/or block rewards decrease faster than you can mine new coin.
2) difficulty goes high enough that the amount mined won't add up to your initial investment in your lifetime.

The difference between the two conditions is only whether it's "never" or "not in your lifetime." So basically the same condition even if the math shakes out a little differently.

That's why the block eruptors make such great gifts and less-great investments. If you give one away, the recipient gets a free fountain of money for the rest of their life. What fun! Even if it will be fractions of a Satoshi per year in not too long, it is free! Yay! But when you buy them with your own money it's sort of a different dynamic.

[razorfishsl]

Stupidity is like Nuclear waste....
Better to stay FAR way, even better to not get any on you.

[shields]

2) difficulty goes high enough that the amount mined won't add up to your initial investment in your lifetime.

Or difficulty rises to a level that your electricity costs of running the miner exceed the BTC you make from it.

[JoelKatz]

If BTC are $100 each, the question is whether the miner will ever mine 50BTC? If it mines more than 50BTC it's profitable otherwise it isn't, as you could have bought 50BTC.

It's actually slightly worse than that ecause if you buy 50 BTC, you can sell them any time you want. If you mine 50 BTC, you can't sell them until you mine them.

The argument people make is "oh you pay $5,000 and make only 25BTC, but those BTC will be worth way more than $5,000 in future so it's a good investment". My point is no matter what the price of BTC rises to you'd be better off buying 50 up front instead of mining 25.

True, but the arguments rarely work out quite that way. You generally don't really know how many BTC you're going to get because future difficulty is hard to predict. But I absolutely agree that if you're trying to decide whether to mine, you should first compare buying mining hardware to buying BTC.

[RChevalier]

Depends on who you ask.  For GPU miners, yes.  For the receivers of the first Avalon batch, no.  For those waiting for their deliveries, depends on your queue.  Then there are long term investors and day traders.  Day traders may like the ever increasing volume to play with.  Long term investors may hate the volitility. Merchants dealing in bitcoin may also like the increase in volume and ultimately the publicity it brings.  In the overall sense I don't think ASICs ruined Bitcoin itself, just certain aspects relating to it, for certain people.  Bitcoin will continue to chug along, and ASICs will eventually be archived as just another part of bitcoin's history when something better comes along.

[smscotten]

Day traders may like the ever increasing volume to play with.

I'm with you on the rest of it, but this confused me. How do ASICs contribute to increased trading volume?

[User705]

You can't ruin Bitcoin with hardware.  Bitcoin can be ruined if it's utility is threatened but that's not with hardware.  Even if someone had a magic box with 60% of hashing power right now they still wouldn't find it profitable in real life to double spend and crash the rate vs simply to mine and sell the coins at a much higher rate.  That's exactly what happened with Avalon.  They probably at one point had more hashpower than the entire network combined if not a few times that, but who could they double spend to make it even remotely worthwhile?  Nobody.  Will that remain true as we approach both a much larger acceptance therefore a much easier double spend profitability and a lower block reward combined with lots of old cheap asics with lots of hashpower but simply electrically inefficient.  Only time will tell.

[faiza1990]

yes I believe its ruin

[01BTC10]

What would have ruined Bitcoin is that an attacker used existing technology (ASIC) to 51% the network. ASIC actually made the network more secure. When the price was lower it was easier to mine bitcoins but interest was lower. Now the price is higher and so is the difficulty since everyone is sharing the same pie and interest increased.

[Darktongue]

The space race is fucking over.  Hype has fallen and yes BTC more then likely needs a fix.  2  years of speculation lead to a ton of improvements on GPU and FPGA Mineing.  For some it was an education.  Myself included.  Now that we really don't have much to tweak on we are bored and restless LOL.

It's an arms race now. No real fun in that.  No real education aside from perhaps understanding ASIC Tech. I pray daily somebody will find a homebrew method to allowing one to expand on this hardware they have.  But thay isn't going to happen.  I for one am going to continue keeping one or two gpu rigs around.  So much can be done aside from ET Search and PW Cracking.

For me it's not about money.  This hosted mineing shit with 4737474GigaNanoUberBits of hash powet per person.  Thats more money then brains

[frankenmint]

Sigh...no it proliferated bitcoin. Now there are other alts around and they exist for complainers to mine about.  I think there are more inventive ways that those with fiat could use the bitcoin and also the proliferation of alts - http://vimeo.com/71559751

Once more people ...both rich and poor....have these alts it will be a good incentive to push merchants into accepting them.  I think that bitcoin being around this long and having this much network hashing power available allows it to be resistant to being attacked.  Unlike a computer,  an asic machine doesnt use an OS and is not subject (yet) to the risk of botnets or malware designed to wreak havok.  I don't know why the blackhats haven't yet created FUDwallets or spinoffs of coins that are designed to destroy cpus or hardware as they would then put off potential entrants to the community and would also sabatoge those whom wish to encroach on their precious pie of network hashrate. 

 

Crazy right...I hope that doesn't happen but I imagine it would...UNLESS we decide to work together to build upon a platform of cryptocurrency economies.  Like for instance why couldn't a bunch of comicbook shops ban together and be willing to accept bitcoin litecoin and galaxycoin exclusively?  Wouldn't that just shoot the price of galaxycoin UP?  Why couldn't fastfood shops accept fastcoin?  I think that currencies could be here to stay if there were more adoptions for them and/or useful purposes. 

[ProfMac]

I am likely only to break even and am OK with that.

fuck that, you may be OK with that but i will bet you my soul the majority of people will not be OK with that. people dont invest to break even. they expect or hope for a healthy return.

The first bitcoin miners did not expect return.

[User705]

I am likely only to break even and am OK with that.

fuck that, you may be OK with that but i will bet you my soul the majority of people will not be OK with that. people dont invest to break even. they expect or hope for a healthy return.

The first bitcoin miners did not expect return.

that may be the problem with this wave is that a lot of people will get disillusioned that they got taken for a ride by the earlier adopters and quit or start calling cops and lawyers.

[SlyFoxy12]

I'd say little yes, it's not because ASIC is a problem it's the fact that previously we were all mining coin with readily available hardware so it felt equal opportunity but now it's difficult to get hold of good hardware and at the same time a lot of shifty people are trying to dupe people with fake offers to buy miners or even the people selling miners genuinely are quite shifty like BFL, unless it goes back to how it was I feel the system will lose a lot of hobbyists because it comes down to how do you compete against such people?

a block erupter hashes at a respectable rate when you compare to GPU, and cost much less. Now we all know that they wont hit ROI -- did anyone here running a GPU cluster hit roi?

When has anybody actually made bank? Other than ATI, and now ASIC vendors and their resellers.  It sounds like people upset they cant play, like USB asics aren't on these very forums for BTC.38

Yeah I did, but I ran a small operation, bought 2 GPUs and stuck then in an already high powered machine, ran it for a few months and made double my money but that does involve knowing when to sell out your coins and not being too greedy.

Block Erupters aren't very economical pieces of kits, you'd need a good number to keep up with the difficulty rate

[smscotten]

that may be the problem with this wave is that a lot of people will get disillusioned that they got taken for a ride by the earlier adopters and quit or start calling cops and lawyers.

Cops and lawyers? Taken for a ride? Huh?!?

[SlyFoxy12]

A miner makes an investment in equipment and electricity, etc., and in return they get Bitcoins.  The amount of their investment is then compared to the value of the their production.  *But*, the potential future value of their production should be taken into account to.

Why do people keep thinking this?
The miner could have bought  BTC directly with the capital investment (or maybe the initial investment was BTC anyway) so the future value of bitcoin doesn't matter. The investment is good if it makes more BTC than the capital would have bought, it's bad if it doesn't - the price of BTC does not factor into this.

The price of bitcoin factors in heavily to buying equipment. You have to hope that the coins you mine are going to get an increase in value. Mining is just a more secure form of investing as you at least have the hardware if you can sell it on if the value of the coins mined don't flourish as you hope. Obviously if you don't have the facilities to run the hardware then yeah, buying coins directly is a better option.

[NWO]

Did CPUs ruin bitcoin?

Now take your answer and apply it to ASIC.

[smscotten]

The price of bitcoin factors in heavily to buying equipment. You have to hope that the coins you mine are going to get an increase in value. Mining is just a more secure form of investing as you at least have the hardware if you can sell it on if the value of the coins mined don't flourish as you hope. Obviously if you don't have the facilities to run the hardware then yeah, buying coins directly is a better option.

Admittedly the resale value of the hardware can be a hedge against losses, but I don't think that makes mining hardware a good investment compared to just buying Bitcoin. See, the price of Bitcoin factors heavily into buying Bitcoin as well.

Say you have $137 to invest right now. You can buy 1.14 Bitcoin today. Or you can buy three block eruptors. Never mind the setup and buying USB hubs and whatnot, lets assume you can plug them in and start them going.  At the current rate of difficulty, those three eruptors will have mined 0.140 Bitcoin for you in two weeks. Sounds great, right? Because that's a little more than eight weeks to ROI.

Except that that's about when the difficulty goes up again. Over the next two weeks you'll get another 0.110 BTC. The difficulty will increase again, and in the following two weeks you'll get 0.090. At the end of eight weeks you will have mined a total of 0.410 BTC. At the end of twelve weeks your total revenue will be 0.509. At the end of six months you will have gotten 0.65 BTC total. Even if at that point the difficulty never increases again, ROI would still be another year out.

Saying that you hope the coins will increase in value is all well and good. Lets say that in six months the USD-to-Bitcoin exchange rate goes up by a factor of ten. OK, then at the end of the six months you'll have 0.65 BTC which will be worth almost $780. That makes a pretty good return on your original $137, I know. Except that if you bought Bitcoin instead of mining hardware, you'd have had 1.14 BTC instead of 0.65 BTC, and $1370 is a lot more than $780.

It doesn't matter whether the price goes up, down, or stays the same. If difficulty keeps increasing, you'll get a lot more Bitcoin by buying it with USD than by buying mining hardware with USD.

And here's the important part: at the end of that six months, the three block eruptors will be bringing in less than one-tenth the bitcoin per day that they did when they started. Do you think anyone will be willing to pay more than about one-tenth what you paid for them at that point? Even selling the hardware after six months of mining would only bring you up to about 0.75 BTC on your 1.14 BTC investment.

[NewLiberty]

You can't ruin Bitcoin with hardware.  Bitcoin can be ruined if it's utility is threatened but that's not with hardware.  Even if someone had a magic box with 60% of hashing power right now they still wouldn't find it profitable in real life to double spend and crash the rate vs simply to mine and sell the coins at a much higher rate.  That's exactly what happened with Avalon.  They probably at one point had more hashpower than the entire network combined if not a few times that, but who could they double spend to make it even remotely worthwhile?  Nobody.  Will that remain true as we approach both a much larger acceptance therefore a much easier double spend profitability and a lower block reward combined with lots of old cheap asics with lots of hashpower but simply electrically inefficient.  Only time will tell.

Hardware may be one of the only things that CAN ruin bitcoin.  A 51% attack launched by a hostile force could do that.
ASICs help protect against that.  Running them in defense against such an attack is noble in the face of unprofitability.
(Thank you, miners)

[Carlton Banks]

Excuse me if I don't read all 6 pages of this thread, but did anyone handle the "in a decade or two, BTC price increases so much + advanced mining hardware becomes so expensive that it basically gets taken over by corporations" scenario? I can think of  a few objections, just thought I'd put it out there if it's not already been handled.

[FreedomCoin]

You can't ruin Bitcoin with hardware.  Bitcoin can be ruined if it's utility is threatened but that's not with hardware.  Even if someone had a magic box with 60% of hashing power right now they still wouldn't find it profitable in real life to double spend and crash the rate vs simply to mine and sell the coins at a much higher rate.  That's exactly what happened with Avalon.  They probably at one point had more hashpower than the entire network combined if not a few times that, but who could they double spend to make it even remotely worthwhile?  Nobody.  Will that remain true as we approach both a much larger acceptance therefore a much easier double spend profitability and a lower block reward combined with lots of old cheap asics with lots of hashpower but simply electrically inefficient.  Only time will tell.

Hardware may be one of the only things that CAN ruin bitcoin.  A 51% attack launched by a hostile force could do that.
ASICs help protect against that.  Running them in defense against such an attack is noble in the face of unprofitability.
(Thank you, miners)

Your welcome, glad we could help and heat our houses in the winter with the wasted heat.

I think i only used my heater 3 or so times over last winter.

[DeathAndTaxes]

Excuse me if I don't read all 6 pages of this thread, but did anyone handle the "in a decade or two, BTC price increases so much + advanced mining hardware becomes so expensive that it basically gets taken over by corporations" scenario?

Bitcoin mining is essentially a problem which is almost perfectly parallelized, there are no significant global restrictions, and the barrier to entry is non-existent.  What you are seeing today is the gold rush phase but it will fade.  Hardware will become more available, and as NRE get paid off and inventories build the price per GH/s will only fall.   This means that there is no realistic scenario where a small miner can't compete on with big miners (especially when you consider those with reduced or so called "free" power).

For example say a 1 PH/s miner someday costs $1000x well a 1 TH/s miner would probably be ~$x. Yes larger units are marginally cheaper per GH/s but not to a point that it would make smaller units unviable.  Sure if you have 1/1000th the hashing power of a big entity, then your reward is only 1/1000th but your capital and electrical costs are ~1/1000th as well.  People look at the USB Block Eruptors says it is a "bad" deal and assume that means small units will cost too much.  The reality is the price of miners right now has little to do with cost and more to due with demand.  Friedcat sells out of every batch of BE.  As a merchant the best possible price is the highest price where you still continually sell out.  Any higher and you are stuck with inventory, any lower and you still run out you just makes less.  As demand falls so will the price (it already has to some extent from 2 BTC to 0.3 BTC).  Eventually the margins on these small miners will be very low and they will be produced in hundred thousand lot units.  I could see entities like ASICMiner getting out of the retail business all together instead they mass produce chips and sell them to OEM who build the end product (the AMD/NVidia model).  USB Miners will lose their "premium" relative to larger units as they become more available and there is more competitions.

Mining isn't really that attractive for corporations, most wouldn't want to touch Bitcoin mining with a 10 foot pole.  Bitcoin mining is a somewhat unique industry where your profitability matters less on what you do but on what other people (you can't control) do.  For example a lot (maybe the majority) of early ASIC miners (orders in 2012 and 2013) will have negative net profits.   This is because you can do everything "right" (order when difficulty is low, pick the right supplier, have low electrical costs, buy the most efficient gear, etc) and still lose due to tens of thousands of clueless noobs who combined deploy so much hashing power that the revenue for everyone falls.  You can't stop them from doing that which means a big entity can't protect their margins.  Sure they can optimize cost but price spikes, a bunch of noobs think they will become millionaires in a month buy a 100 PH/s and then price falls.  Everyone is stuck in the same low/no profitability boat.  That scenario is a nightmare for any CEO.  Period.  It isn't something anyone with a lot of capital will be dreaming about.

Maybe I am an optimistic but I don't see it being an issue.  Mining will eventually be a very boring, low profit business.  Many hobyist will mine hoping to break even as an alternative way to acquire coins (essentially buying them from the power company). I would be far more worried about centralization in the financial services space to a tiny handful of massive global players.  By financial services I mean bitcoin dealers, brokers, exchanges, merchant processors, etc.  This is more of a risk because government will put up barriers to entry and those that can afford those costs will have a vested interest to see those costs become larger to kill off any future competitors.  This has already started to happen in the sense of nonsensical high cost regulation and one should only expect it to accelerate as Bitcoin becomes a bigger deal.  Luckily that isn't a core aspect of Bitcoin itself but it is something to closely watch.

[smscotten]

Excuse me if I don't read all 6 pages of this thread, but did anyone handle the "in a decade or two, BTC price increases so much + advanced mining hardware becomes so expensive that it basically gets taken over by corporations" scenario? I can think of  a few objections, just thought I'd put it out there if it's not already been handled.

If everything goes right, corporations will have a huge stake in Bitcoin. I suspect that in a decade or two, the only real money to be made from mining will be the transaction fees. In 10 years we will be getting ready for the block reward to drop to 3.125 BTC and in 20 years we will have just passed the reward halving to 0.78125. It's likely by then that the large bulk of the network will be large companies handling and securing transactions and collecting transaction fees. The block rewards will still be a nice bonus but I would guess that an industry will grow (is already growing) around Bitcoin and mining won't necessarily be something everyone does.

But whether corporations can "take over" Bitcoin is the real question and i think we've gone beyond that point. The people and/or organizations that are willing to put the most time, energy, ingenuity, and money into it will have the biggest stake. But collecting transaction fees, while it could be a very large industry, is necessarily going to be much smaller than the set of industries sending and receiving that money.

So yeah, it won't be something that hobbyists will get rich off, but it's hard to imagine that it would ever be something that hobbyists could no longer participate in. I'm personally looking forward to the day when I might get a chance to help a kid build a mining rig for an elementary school science fair.

If in 20 years most of the network is still running on the mining efforts of amateurs, then it will be fair to say that Bitcoin had failed.

[Carlton Banks]

Some well thought out replies. I would add that the rest of technological progress will likely be pretty dynamic in the coming few decades: if we're only just at the stage where open source firearms are being developed, what happens when electronic devices start becoming homemade? The potential for someone to print their own mining rig suddenly throws up limits around the physical resources needed and the availability of the design knowledge or availability of designs. I realise we're nowhere close to printing chips right now, but I think anyone who follows the semiconductor manufacturing industry will know: they're running out of road, and on the timescales I'm talking about, too. Who will innovate the next processor fabrication technology: Intel, TSMC, or some Kazakh carbon-substrate 3D printing enthusiast, living far away from prying eyes? You can't put that particular brand of toothpaste back in the tube...

[David Rabahy]

Comparing investments against one another is always wise; I recommend diversity.  I, for one, haven't put a penny into mining yet but am utterly delighted to have other folks doing so; best o' luck; break a leg.

If the only currency is Bitcoin then taking the future value of Bitcoins into account is not relevant to determining the wisdom of mining as an investment.  Since there are other currencies then taking the exchange rate into account is relevant.  Then again I'm sure I will be told if the exchange rate does move in favor of Bitcoin then the original investment should have skipped mining and gone directly into speculating on Bitcoin.

Mining as a charitable donation; hmm, can I deduct them from my income on my tax return?

[DeathAndTaxes]

Comparing investments against one another is always wise; I recommend diversity.  I, for one, haven't put a penny into mining yet but am utterly delighted to have other folks doing so; best o' luck; break a leg.

If the only currency is Bitcoin then taking the future value of Bitcoins into account is not relevant to determining the wisdom of mining as an investment.  Since there are other currencies then taking the exchange rate into account is relevant.  Then again I'm sure I will be told if the exchange rate does move in favor of Bitcoin then the original investment should have skipped mining and gone directly into speculating on Bitcoin.

Mining as a charitable donation; hmm, can I deduct them from my income on my tax return?

You could structure it as a single owner business and then deduct the resulting net business loss on your tax return.  Businesses which continually lose money are still businesses, the IRS just looks for a profit potential. 

[Darktongue]

Some well thought out replies. I would add that the rest of technological progress will likely be pretty dynamic in the coming few decades: if we're only just at the stage where open source firearms are being developed, what happens when electronic devices start becoming homemade? The potential for someone to print their own mining rig suddenly throws up limits around the physical resources needed and the availability of the design knowledge or availability of designs. I realise we're nowhere close to printing chips right now, but I think anyone who follows the semiconductor manufacturing industry will know: they're running out of road, and on the timescales I'm talking about, too. Who will innovate the next processor fabrication technology: Intel, TSMC, or some Kazakh carbon-substrate 3D printing enthusiast, living far away from prying eyes? You can't put that particular brand of toothpaste back in the tube...

Well put,  that's exactly why I stick around.  I believe this ecosystem is actually top dog in the open source multiverse (had to use it ). Hell I would even say we have preppers beat. 

[teknohog]

The space race is fucking over.  Hype has fallen and yes BTC more then likely needs a fix.  2  years of speculation lead to a ton of improvements on GPU and FPGA Mineing.  For some it was an education.  Myself included.  Now that we really don't have much to tweak on we are bored and restless LOL.

It's an arms race now. No real fun in that.  No real education aside from perhaps understanding ASIC Tech. I pray daily somebody will find a homebrew method to allowing one to expand on this hardware they have.  But thay isn't going to happen.  I for one am going to continue keeping one or two gpu rigs around.  So much can be done aside from ET Search and PW Cracking.

For me it's not about money.  This hosted mineing shit with 4737474GigaNanoUberBits of hash powet per person.  Thats more money then brains

Agreed. Looking back, the best financial investment would have been to buy lots of BTC, but there were a lot more fun ways to participate. I've had tons of fun learning to code FPGAs, and some might even consider it a skill worth money. I've generally only bought hardware that the user could program themselves, so that rules out ASICs - as you said, there are plenty of other uses for GPUs, and the same goes for FPGAs.

Of course, there have to be people who develop stuff, instead of investing, so this kind of fun aspect is actually quite important even from the financial POV.

Some of the altcoins have rekindled the fun to some extent, notably Primecoin from the most recent ones. It's a little sad that a lot of the talk around Primecoin is about hosted mining and profitability, while the math itself is so exciting.

[astutiumRob]

Block Erupters aren't very economical pieces of kits, you'd need a good number to keep up with the difficulty rate

If one is not profitable, it's unlikely more-than-one will magically transform into being profitable - simple maths ...
They make great gifts, good GPU replacements for hobby-miners and have blinking lights - what's not to like

[LukasP33]

nothing "ruined" bitcoin in my opinion it is still at its very beginning

[NewLiberty]

Did CPUs ruin bitcoin?

Now take your answer and apply it to ASIC.

+1

[NewLiberty]

... there were a lot more fun ways to participate. I've had tons of fun learning to code FPGAs, and some might even consider it a skill worth money. I've generally only bought hardware that the user could program themselves, so that rules out ASICs - as you said, there are plenty of other uses for GPUs, and the same goes for FPGAs.

Of course, there have to be people who develop stuff, instead of investing, so this kind of fun aspect is actually quite important even from the financial POV.

Some of the altcoins have rekindled the fun to some extent, notably Primecoin from the most recent ones. It's a little sad that a lot of the talk around Primecoin is about hosted mining and profitability, while the math itself is so exciting.

Here's a hidden gem for those who have read this far into the thread and can parse the lingo:

When we get EEPROM ASICs that can switch coins and crypto algos, deep into the micron chip limit, then we will have saved our project from those that would see it fail.
Whosoever can get there first, gets a hero medal from yours truly.

[User705]

that may be the problem with this wave is that a lot of people will get disillusioned that they got taken for a ride by the earlier adopters and quit or start calling cops and lawyers.

Cops and lawyers? Taken for a ride? Huh?!?

be nice.  Actually I did do a preorder but realized that I was extremely unlikely to receive it even if the companies had it produced so I sold it on.  You can review some of my previous posts.  The issue is I'm a reasonable person and willing to admit mistakes.  A large % of the population however can not.  So they see the new shiny ASIC ad for 600gh and picture all these riches that shall flow from it but it's a statistical improbability for them to make any serious money from it so the reaction after you pictured yourself a millionaire but instead the device barely covers electricity can certainly be bad.  Still surprises me no one drove a truck through BFL building.  To get back on topic BTC is a protocol so hardware running it can't ruin it but yes some of these new adopters will get discouraged but will learn a great lesson in the process.

[smscotten]

that may be the problem with this wave is that a lot of people will get disillusioned that they got taken for a ride by the earlier adopters and quit or start calling cops and lawyers.

Cops and lawyers? Taken for a ride? Huh?!?

be nice.  Actually I did do a preorder but realized that I was extremely unlikely to receive it even if the companies had it produced so I sold it on.  You can review some of my previous posts.  The issue is I'm a reasonable person and willing to admit mistakes.  A large % of the population however can not.  So they see the new shiny ASIC ad for 600gh and picture all these riches that shall flow from it but it's a statistical improbability for them to make any serious money from it so the reaction after you pictured yourself a millionaire but instead the device barely covers electricity can certainly be bad.  Still surprises me no one drove a truck through BFL building.  To get back on topic BTC is a protocol so hardware running it can't ruin it but yes some of these new adopters will get discouraged but will learn a great lesson in the process.

It wasn't clear to me that you were talking about BFL rather than BTC in general. I get what you were saying now. Thank you for clarifying.

[zekesonxx]

ASIC has made Bitcoin much more secure. This means that to perform a double-spend attack on the network would require more mining power than the majority of other miners combined, which would be very hard and insanely expensive.

[teknohog]

When we get EEPROM ASICs that can switch coins and crypto algos, deep into the micron chip limit, then we will have saved our project from those that would see it fail.
Whosoever can get there first, gets a hero medal from yours truly.

You mean programmable logic, like FPGAs? I think the idea actually grew out of memory chips - you can implement basic logic by having memory addresses as the input, and memory contents as the output.

It's a nice technology to have, as long as someone can actually program the requisite logic - we still don't have a Scrypt miner on an FPGA. Also, good luck developing a Scrypt ASIC without first prototyping it on an FPGA.

OTOH, if you had the ASIC tech for several different hashes, you could in theory have all of them on one chip, but why would you switch between them, instead of running them all at once?

[Goldmember]

If you are commodity trading you could not care less, ASIC did not change anything to first order. However I think ASICs are bad for the currency functions.

With CPU and GPU mining anybody with an hour to read up on the topic could participate, and by word of mouth pull other users in. Let's face it, nobody is going to make the required investment in a new miner without a reasonable ROI prospect, so new miners are those that already have the hardware.

In a sense it is similar to real gold; to make a profit you need to be a large company, but this makes gold not easily accessible to consumers and thus impractical as a currency, while it is still fully functional as a commodity. Due to the lack of industrial applications of BTC (as opposed to gold) in the long run it must succeed as a currency. With small scale hobby miners quitting there is less talk about BTC, leading to less PR, which could drive BTC price down, and thereby also affect traders. To save the situation we would need much improved capabilities to pay using BTC in our everyday lives.

[Mooshire]

They were only profitable when they first came out

[NewLiberty]

When we get EEPROM ASICs that can switch coins and crypto algos, deep into the micron chip limit, then we will have saved our project from those that would see it fail.
Whosoever can get there first, gets a hero medal from yours truly.

You mean programmable logic, like FPGAs? I think the idea actually grew out of memory chips - you can implement basic logic by having memory addresses as the input, and memory contents as the output.

It's a nice technology to have, as long as someone can actually program the requisite logic - we still don't have a Scrypt miner on an FPGA. Also, good luck developing a Scrypt ASIC without first prototyping it on an FPGA.

OTOH, if you had the ASIC tech for several different hashes, you could in theory have all of them on one chip, but why would you switch between them, instead of running them all at once?

Yes, FPGA are the EEPROMs for this.  Add the coin switching to follow the most profitable mining of the moment, optimize, and away we go!  Doing this on ASIC doesn't provide the flexibility for dynamic changing so you don't also get the monetary optimization which requires external market input. What you gain in speed and heat efficiency, you may lose in flexibility.
Though with FPGAs advanced to a sufficient optimization for better ASIC development, that may not be so important. 

[Carlton Banks]

Some well thought out replies. I would add that the rest of technological progress will likely be pretty dynamic in the coming few decades: if we're only just at the stage where open source firearms are being developed, what happens when electronic devices start becoming homemade? The potential for someone to print their own mining rig suddenly throws up limits around the physical resources needed and the availability of the design knowledge or availability of designs. I realise we're nowhere close to printing chips right now, but I think anyone who follows the semiconductor manufacturing industry will know: they're running out of road, and on the timescales I'm talking about, too. Who will innovate the next processor fabrication technology: Intel, TSMC, or some Kazakh carbon-substrate 3D printing enthusiast, living far away from prying eyes? You can't put that particular brand of toothpaste back in the tube...

Well put,  that's exactly why I stick around.  I believe this ecosystem is actually top dog in the open source multiverse (had to use it ). Hell I would even say we have preppers beat. 

Locking down all raw commodities is where the control system logically moves next, I'm pretty sure of this. Electricity, glue, wood, water, metals, seeds, plastics (well, they got the crude oil pretty well wrapped up already, in fairness). How much good is digital hard money and 3D printers when price controls on materials force us into 21st century Dickensian pauper-dom? I might be overstating the extent to which all commodities could be controlled, but there are signs they've already started (ETF's for copper and no doubt other surprising ETF's, Blythe Masters on her "World Tour" since 2008...)

[TitanBTC]

Technology accelerates change.  It seems like, of all communities, the bitcoin community should OK with that.