Estimate of ASIC pre-orders: 13 to 15 PH/s (diff 1.8B to 2.1B) by end of 2013

[DeathAndTaxes]

Moderated version. The original thread (now locked) is useful to see how the numbers evolved.

The idea
The purpose is to try to guesstimate (and yes that means error) the amount of hashpower in "the pipeline".  If there were no pre-orders, difficulty would rise based on sales and that makes future sales less attractive (lower ROI%) which reduces the amount of future sales.  This economic feedback model constrains hashing power based on efficiency, electrical cost, capital cost, exchange rate, the risk premium miners are willing to accept and the time value of money.    GPU didn't continue to grow to petahash scale because as new hardware was deployed it lowered the reward and increased the risk on future hardware and this slowed the growth until a rising exchange rate improved the reward.

Preorders break this feedback cycle as difficulty doesn't rise until delivery.  This can result in sold (but undelivered) capacity growing faster and larger than would happen if it was constrained by immediate feedback.  This is a great scenario for hardware vendors; they can sell more hardware, earlier and at higher prices.  On the other hand it means miners may face an avalanche of hardware purchased by their peers who don't quite understand how high difficulty can go. Accurately projecting growth for any period of time longer than a month is probably an exercise in futility.   We can however look at it from a different direction; if we can guesstimate the amount of preorders and can also estimate delivery timeframe then we can use that for the basis of a curve. So throw me your cites, guesstimates, and official numbers to try an pin down how much capacity has already been purchased.  

The rules
1) To keep this thread from derailing please leave the "xyz is a scam" or "abc sucks because ..." posts for another topic.
2 ) No idea/number is bad.  Please be respectful.  Honestly nobody knows for sure, except the chip makers and they aren't talking.
3 ) To stay on topic I will erase anything even remotely in violation of rule #1 and #2
4 ) A good starting point is the total amount preordered.  It may not be realistic but it provides a starting point.
5 ) Right now we aren't so much worried how likely a plan is just that there is a plan.  We can discount the hashpower by probability later (on edit: starting separating unfunded plans from presales and investor funded operations)
6 ) If you have a reference or cite (even unofficial) to back up a guestimate please link to it.  
7 ) If there is no reference a reasonable explanation is more useful then just posting a number. "Show your work".
8 ) We can safely assume that all non-ASIC hashrate will go to zero so no need to break it out between delivered and ordered.  Eventually hashrate ~= total pre-orders.
9 ) Mining companies buying retail product won't be listed seperately as they should already be included in the chip makers total.  Large operations should be noted so we can improve the estimate for the chip maker.

The running total

Promised delivery by December 2013

Code:

AsicMiner (internal):        1,000 Thash [7] [14]
AsicMiner (sales):             500 Thash
Avalon (rigs):                 123 Thash
Avalon (chips):                274 Thash [1]
Bitfury (internal):            500 Thash [11]
Bitfury (Aug US & EU):          50 Thash [3] [9]
Bitfury (Oct US & EU):         255 Thash [3]
Bitfury (metabank):             32 THash
Bitfury (100/200TH mine):      200 THash [16]
Bitfury chips:                 500 Thash  (guestimate putting total Bitfury chips all forms & batches at ~ 1.5 PH/s or <200 wafers @ 55nm)
BFL (SC series):             3,000 THash [4] [15]
HashFast ("Oct"):             500 Thash [2] [6] (will not ship till early Nov but this reflects total of Batch 1, IceDrill, & BabyJet Upgrades)
HashFast (Nov/Dec):        2,000 Thash ??
KNC (Sept/Oct):              2,000 Thash [5] [8] [20]
KNC (Nov):                   2,000 Thash

--------------------------------------------------------------
Running Total:               12,934 Thash 

Announced product but insufficient information to make an informed analysis (should be considered lower confidence and conservative estimators may wish to exclude completely)

Code:

ActiveMining:                   ?? Thash [19]
AsicMiner ("next gen"):         ?? Thash
Avalon ("next gen"):            ?? Thash
BTCGARDEN:                   1,750 Thash [17]
LabCoin:                        53 Thash [18]  DEAD?
xCrowd:                         ?? Thash DEAD?
--------------------------------------------------------------
Running Total:               1,803 Thash 

Post 2013 rollouts

Code:

Cointerra:                  2,500 Thash   (January 2014)  [10]
HashFast (MPP or reserve):    880 Thash   (January 2014)  [12]
BFL (monarch):                 ?? Thash   (February 2014)
BitMine:                    4,000 Thash   (March 2014)    [13]
--------------------------------------------------------------
Running Total:              7,380 Thash

Code:

Presales Total 2013:       12,934 Thash
Announced Total 2013:       1,803 Thash
Running Total 2014:         7,380 Thash
--------------------------------------------------------------
Combined Total:            22,117 Thash

Relationship between difficulty and hashing power

Code:

1 TH/s = 0.14 mil difficulty
1 PH/s = 140 mil difficulty
1 million difficulty = 7 TH/s
1 billion difficulty = 7 PH/s
1 trillion difficulty = 7 EH/s

Upper limits on difficulty based on hardware efficiency:
Miners are unlikely to mine when their electrical costs are higher than the value of BTC mined.  This limit can be called the electrical break even point and is based on:
a) the current exchange rate (USD per BTC)
b) the hardware efficiency (J/GH )
c) the miner's electrical rate (USD per kWh)

When hashrate/difficulty gets high enough it will cause the least efficiency miners to idle thus creating a sort of replacement cycle (i.e. x GH/s new efficiency hardware causes Y GH/s of older less efficient hardware to idle).  This should slow growth significantly because the returns on new hardware will be low, miners will be exposed to the bad news of less efficient miners being forced to idle and X GH/s doesn't mean the hashrate only rises by (X-Y)/GH.  It also illustrates the improbability of difficulty power growing exponentially over a long period of time like a year.  For example 65 million difficulty gaining 75% per month for a year results in 50 billion difficulty.  The electrical cost even at 1W/GH and $0.10 per kWh would >$250 per BTC.  

A related thread on the break even point is here:  Break even difficulty by hardware efficiency (power cost = value of BTC)






[1] https://docs.google.com/a/nacrypto.com/spreadsheet/ccc?key=0AiLYkKIHJaIsdHpIaGdUOWRYVUdncTNpNlVKbVhCbEE#gid=0  970,000 chips @ 282 MH nominal
[2] 550 orders @ 400 MH nominal
[3] Based on report that Dave (US distributor) sold out of their allocation of 300 full systems and 300 starter systems.  Oct is not sold out but conservatively it will if/when Aug deliveries are made.  I will assume that the EU distributor received an equal allocation (an assumption based on bitfury facing unknown demand and users in both markets).
[4] http://bitcoin.stackexchange.com/questions/8577/how-much-asic-power-has-been-or-is-being-shipped-in-2013  Crude assumption based on distribution of wait list (hashing power per order) and number of orders.  2PH/s is guestimated based on (avg GH/s per order of known orders)*(num order numbers)*(1/3 to account for unpaid/test orders).  Monarch is highly unlikely to ship in volume (if at all) in 2013 while upgrades cancel the existing 65nm order which would reduce the amount of 65nm pre-orders.
[5] Guestimate. https://bitcointalk.org/index.php?topic=278384.msg2994436#msg2994436
[6] https://bitfunder.com/asset/IceDrill.ASIC
[7] http://www.dpcapital.net/blockchain/?hours=336
[8] http://en.wikipedia.org/wiki/Occam's_razor
[9] Reduced to 30 full systems in Aug for both US and EU distributors https://bitcointalk.org/index.php?topic=278384.msg3010364#msg3010364
[10] http://www.coindesk.com/cointerra-cuts-price-of-terraminer-iv-bitcoin-mining-rig/ "In Dec" without a specific date can mean as late as 31 DEC.  Given that and the tight schedule and the fact that even a small delay would push it into 2014 I included it in the 2014 group.  Cointerra promises 20% additional hashrate if more than 30 days late so bump the amount from 2 PH/s to 2.5 PH/s.
[11] https://ghash.io/
[12] HashFast MPP will issue miners up to 4x their initial hashing power if 100% ROI is not acheived within 90 days.  Even if MPP is not needed, HashFast would need the chips in reserve and any chips not paid out in the MPP are likely to be deployed as quickly as possible.
[13] http://www.coindesk.com/bitmine-to-drop-4phs-of-asic-power-onto-bitcoin-network-before-april/
[14] http://thegenesisblock.com/cointerra-expects-to-deliver-2-phs-of-asics-in-december/ (Numerous references, Cointerra 2PH/s, KNC 0.5 to 2 PH/s, AsicMiner 1 PH/s, Bitfury 0.5 PH/s, Avalon 0.32 PH/s
[15] Upgraded BFL estimate from 2 PH/s to 3 PH/s https://bitcointalk.org/index.php?topic=278384.msg3029092 (see also the next two posts)
[16] https://picostocks.com/docs/index/19
[17] https://bitcointalk.org/index.php?topic=264696.msg3033042#msg3033042
[18] https://bitcointalk.org/index.php?topic=283820.msg3046590#msg3046590
[19] http://thegenesisblock.com/easic-announces-24-ths-hash-fast-miner-activemining-shares-move-70/
[20] https://bitcointalk.org/index.php?topic=283820.msg3125451#msg3125451

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[DeathAndTaxes]

Reserved for highlights from original thread.

[DeathAndTaxes]

Reserved.

[Jaymax]

I think this needs to be looked at as much from the expenditure side as the forecast fabrication side.

In essence, a years worth of investment is coming onto the network now and over the next few months.  A lot of new miners (like me) have spent their available cash on pre-orders.  I'm not sure that the market will be there to pay for the production of the ~ 6 PH/s that's been announced by the new ASIC foundries over the past couple of weeks.

Of course, I could be very wrong, and new corporate-scale mining companies with new external capital might appear, but the existing contract 'cloud' hashing services don't seem to me to be capturing that much interest.

So another way to look at the question would be to try and calculate retrospective month-by-month dollar spends, and projecting that curve and factoring in some approximate hashrate-per-dollar forecasts. 

[geofflosophy]

I think this needs to be looked at as much from the expenditure side as the forecast fabrication side.

In essence, a years worth of investment is coming onto the network now and over the next few months.  A lot of new miners (like me) have spent their available cash on pre-orders.  I'm not sure that the market will be there to pay for the production of the ~ 6 PH/s that's been announced by the new ASIC foundries over the past couple of weeks.

Of course, I could be very wrong, and new corporate-scale mining companies with new external capital might appear, but the existing contract 'cloud' hashing services don't seem to me to be capturing that much interest.

So another way to look at the question would be to try and calculate retrospective month-by-month dollar spends, and projecting that curve and factoring in some approximate hashrate-per-dollar forecasts. 

It's an interesting way to think about it, but how would you get the spend numbers? It's not like these chip companies are publicizing revenue.

[DeathAndTaxes]

I think this needs to be looked at as much from the expenditure side as the forecast fabrication side.

In essence, a years worth of investment is coming onto the network now and over the next few months.  A lot of new miners (like me) have spent their available cash on pre-orders.  I'm not sure that the market will be there to pay for the production of the ~ 6 PH/s that's been announced by the new ASIC foundries over the past couple of weeks.

That is why we are looking at pre-orders.  A large portion of the initial 6 PH/s in 2013 has ALREADY been paid.  Now maybe miners overpaid and will never see a return but that hashing power will come online regardless because it is a sunk cost.   Take Avalon chips as an example.  There is a very good chance those that bought them will never see a positive return because they aren't online yet however once manufactured they are a sunk cost.  Not mining just means a -100% ROI.  Mining means something better.  They may still lose but a -20% ROI is better than -100% so they will be used ... by somebody.

Now I agree with some of the numbers it is tough to estimate how many sales have occured.  Cointerra indicated they are selling 2 PH/s.  How much of that 2 PH/s have they sold.  The good news is most of the "may not be able to sell" are further out.  I would consider the 2013 numbers to be of a higher confidence.  I would also point out that the amount of capital depends on the selling price.  The cost per GH (excluding NRE) of 28nm silicon is probably less than $0.25.  An entire system is probably about $1 (people forget how much power supplies including DC to DC PSU cost).

So if we assume 6 PH/s has already been paid the question becomes how much more capacity could be sold at prices declining to $2 per GH/s.  

Simple version:
Price reflects supply and demand not cost.  If people are buying $20 per GH/s and you are selling out why would you lower the price.  You lower the price when it is higher than your marginal cost of production AND you are no longer able to sustain sales at the current price.  I think we can get to 100 PH/s eventually just by cutting prices however that is harder to project.

[bcp19]

One question you may also want to consider, with the manufacturers that have a promise to increase the hashing power in certains circumstances, how much will that then ultimately add to the 6PH estimate you have? 

[Gomeler]

Don't forget Bitfury's private pool(at least I believe it is his pool) -> https://ghash.io/. I haven't been keeping up with it but I know it has grown to 100 TH/s very quickly. This has nothing to do with the 100TH(now 200TH) mine. Wouldn't be surprised to see Bitfury just maintain 20% of the network for months to come given how efficient his chips are.

edit: Just realized this post may not be useful for the purpose of your thread. Just something that should be considered though given the opportunity that Bitfury has to replace ASICMINER as the 800 pound gorilla on the network. If ASICMINER's 2nd generation chips can compete with Bitfury you could end up with a large chunk of the network held by those two.

[DeathAndTaxes]

One question you may also want to consider, with the manufacturers that have a promise to increase the hashing power in certains circumstances, how much will that then ultimately add to the 6PH estimate you have? 

I had already included HF and I added 0.5 PH/s to Cointerra to reflect 20% "bonus" for late delivery.  I am not aware of any other company offering additional hashrate capacity.

[Jaymax]

I think we can get to 100 PH/s eventually just by cutting prices

Assuming:
1) 0.25 kW per TH/s
2) 0.12 USD per kWh
3) 6 blocks per hour
4) no income from fees

then 100000 TH/s requires 500 USD per BTC just to cover the power costs - which is actually more viable than I thought it was going to be. 

(across the network, over 26 million USD per year in power costs alone)

[Dexter770221]

And where is 200TH mine? Bitfury chips. ghash.io is private bitfury pool, different story than 200TH mine.

[DeathAndTaxes]

And where is 200TH mine? Bitfury chips. ghash.io is private bitfury pool, different story than 200TH mine.

link?

[Dexter770221]

And where is 200TH mine? Bitfury chips. ghash.io is private bitfury pool, different story than 200TH mine.

link?

https://bitcointalk.org/index.php?topic=140366.0
https://picostocks.com/stocks/view/19
https://picostocks.com/docs/index/19

[dhenson]

It looks like BTCGarden is ~ 1750TH in 2013 https://bitcointalk.org/index.php?topic=264696.msg3033042#msg3033042

[DeathAndTaxes]

Updated BTCGarden & 100/200TH project (based on Bitfury).

I think it may be important to start considering the inability for all companies to meet sales quotas.  Take BTCGarden for example their main run 1.5 PH/s is 130nm arriving in Nov with a selling price of $14 per GH/s.  I just don't see that being popular giving the rising hashrate, and the fact that power will be more important in 2014.  I think ~6 PH/s by end of 2013 is probable and would be willing to wager at least that much has already been pre-ordered.  Sales beyond that I think are more questionable.  I see Cointerra ($8 per GH & 0.7 J/W) being more likely to fill their orderbook than BTCGarden ($11 per GH & >7 J/GH). If I get a chance I may break out "pre-sold" (as in already paid) from "planned capacity" (which may not be able to attract sales).   

Another thing to consider is the combined total is ~15 PH/s.  This is getting close to the electrical break even point for the less efficient miners.  These two topics go hand in hand.  The hardware rollout gives us an idea of how quickly we will approach the break even point for various devices.  Beyond the BE point we will begin to see the least efficient hardware "retire" and that is going to slow hashpower growth.  Anyone interested should probably read both topics even if you disagree with my assumptions you can come up with your own.

[Syke]

Assuming:
2) 0.12 USD per kWh

Long-term miners are going to shift to much cheaper electricity. .12 USD is not sustainable.

[ecliptic]

So for all the competition and talk, the future if bitcoin is STILL controlled by BFL.

Wow

3 fucking petahash

Assuming:
2) 0.12 USD per kWh

Long-term miners are going to shift to much cheaper electricity. .12 USD is not sustainable.

Not viable for 99.99% of people.

Only groups like ASICminer or others with millions of $ invested can make this move.

[ecliptic]

Don't forget Bitfury's private pool(at least I believe it is his pool) -> https://ghash.io/. I haven't been keeping up with it but I know it has grown to 100 TH/s very quickly. This has nothing to do with the 100TH(now 200TH) mine. Wouldn't be surprised to see Bitfury just maintain 20% of the network for months to come given how efficient his chips are.

edit: Just realized this post may not be useful for the purpose of your thread. Just something that should be considered though given the opportunity that Bitfury has to replace ASICMINER as the 800 pound gorilla on the network. If ASICMINER's 2nd generation chips can compete with Bitfury you could end up with a large chunk of the network held by those two.

This is a single person with this hasing power?

[ecliptic]

You know what would be very, very interesting to see?

$ sent to these companies over time.

IIRC, BFL got something like 50,000,000$ in pre-orders.

Avalon's chips total about 8,000,000$

KNC?  Terrahash? Less than 8,000,000$

The hashing power is a sigmoid curve (low, exponential growth for a period, then levels off because the hashing power and absurd costs means that we go from the old days of making 100% ROI in ~3 days - 3 months, to a sane, stable 100% ROI in 1-2 years even with no hashrate change

The money spent to each company is an inverted sigmoid curve

People talk about moore's law but don't understand it.  That's part of a trillion dollar computing industry.  Bitcoin doesn't work that way.  And frankly, any increases past cointerra will be marginal at best.

[DeathAndTaxes]

Don't forget Bitfury's private pool(at least I believe it is his pool) -> https://ghash.io/. I haven't been keeping up with it but I know it has grown to 100 TH/s very quickly. This has nothing to do with the 100TH(now 200TH) mine. Wouldn't be surprised to see Bitfury just maintain 20% of the network for months to come given how efficient his chips are.

edit: Just realized this post may not be useful for the purpose of your thread. Just something that should be considered though given the opportunity that Bitfury has to replace ASICMINER as the 800 pound gorilla on the network. If ASICMINER's 2nd generation chips can compete with Bitfury you could end up with a large chunk of the network held by those two.

This is a single person with this hasing power?

Single person is probably not accurate.  It is a single entity I imagine it takes more than one person to build, manage, and maintain it.