Why the Bitcoin community HAS to save the network from HashFast, CoinTerra, BFL.

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All the ASIC manufacturers are marred with greed, and will continue to suck blood out of the community until the community gets back in control.

ASIC Manufacturer Greed
The reason why the ASIC manufacturers are selling their products for a HIGH margin is, they want to mine themselves. And if they sell for cheap, they will get a lot of competition in mining. A 28nm chip costs at most $100 to manufacture (after the Non Recurring Engineering costs, which are about 1 to 1.5 million dollars). HashFast has already recouped their NRE costs from the sale of their first batch, but they are still selling their chips at 3500% of cost price for the second batch! They can easily make as much profit by selling a lot of chips for a lower price (around ~$200). But they are not doing this. Why? Because, by flooding the market with cheap ASICs, they will not be able to mine on their own. Right now electricity is a negligible cost associated with mining. But if there are a lot of people mining with the latest ASICs, the cost of electricity will once again become significant. Then, these companies will not be able to make much profit from mining.

Delaying a delivery is LEGAL!
In addition to that, they can always delay the delivery of the chips. Deliberately delaying the delivery of a product is NOT a crime, unless specifically ruled as fraud by a court in this special case of Bitcoin mining. Why would a company sell you a money printing machine and deliver it on time when they can delay the delivery and print money in the meantime without breaking any laws?

Getting back in control
Getting back in control is easy. We just have to flood the market wth a lot of cheap ASICs. This is possible (there is a proposal at the end of this post), economically feasible and attainable. How will this help? By flooding the market with cheap ASICs, we can:
1. Foil the evil plan of all the greedy ASIC manufacturers, since mining will no longer be SO MUCH profitable to them. They will have to start making profit from sales only, which will lead to competition and a much fair pricing.
2. Make mining affordable (and attainable) for everyone.
3. Secure the network, by properly decentralizing mining once again.

This will be kind of similar to the "Gentleman's Agreement" proposed by Satoshi in the earlier days of mining.

ďWe should have a gentlemanís agreement to postpone the GPU arms race as long as we can for the good of the network.  Itís much easier to get new users up to speed if they donít have to worry about GPU drivers and compatibility.  Itís nice how anyone with just a CPU can compete fairly equally right now.Ē Ė Satoshi

Right now there is nothing "fair" about mining. The ASIC manufacturers, with millions of investment from the community, are light years ahead of everyone else. For them making the hardware is VERY cheap (~$200 for a complete 500 GHash/s miner using the 28nm technology), the cost of electricity is negligible. For every other Tom, Dick and Harry, the same machine will cost about $5000, and they probably won't get it until March/April next year, when it won't be worth anything.

The big hurdle
Making an ASIC chip is not something that anybody can do at home (unlike using GPUs or FPGAs for mining). There are a lot of upfront costs, known as NRE costs, to the tune of 1 to 2 million dollars. Majority of this investment goes into the ASIC design, and making the "die". The die is used to burn wafers. Once the die is made it can burn an unlimited amount of wafers. A single wafer burn (costing about $10,000) can produce about 150 chips. That comes to about $66 per chip. Packaging/testing of the chip is extra, which is not more than $50 per chip. So, once the NRE costs are collected, each new chip can be produced for about $100.

In order to save the network, Bitcoin community has to get back in control. Here is our proposal. Our company will first develop an ASIC chip based on the 28nm technology. And later probably a 14nm one. We will do this 100% transparently by keeping the community in control! How this can be achieved:

The community will elect 10 eminent members from the Bitcoin community (reputed Escrows, Group buyers) and we will appoint them as "treasurers" of the company. They do not have to US citizens. These treasurers will be in control of all the pre-order funds and will approve every expense.
When the pre-order money for Non Recurring Engineering costs is raised, each treasurer will be in control of 1/10th of the company funds. Whenever there is a bill/invoice to pay, the office bearers of our company will send it to the treasurers for approval. Upon which, each treasurer will transfer 1/10th of the bill amount to the company's account. After making the payment, the company will send back the proof of payment/receipt to each treasurer.
During the whole process the company will have to sign many NDAs, and would not be able to disclose all the invoices/receipts to public. However, since these treasurers will be a part of the company legally, we would be allowed to show the receipts to them.
All the expenses would be disclosed publicly.
Since the biggest cost (and barrier to entry) is the die. We will instruct the fab to release the die to "public domain". That means, any company can place an order from the fab without having to invest in any NREs. This will lead to a healthier competition.
We will not take any salaries, compensations etc., but we will earn a fixed pre-determined small mark-up from the sales as profit.
We are a group of Bitcoin veterans who have invested (and like most others lost a lot) in the ASIC manufacturing companies. OurAsic Inc. is a Delaware corporation. We are located all over the USA, but plan the headquarter the company in Silicon Valley (SF Bay Area, CA). We plan to make a 28nm chip with a capacity of 400 to 600 Ghash/sec (we will get better estimates of the actual value when we start the process, but we are 99% confident that it will be in this range). We will sell the first batch of 10,000 chips at $200/chip to collect 2 million dollars. As proposed above, the money will remain in control of the treasurers. Once the NRE money is collected, it will take us about 4 to 5 months to ship the chips to the customers. (2 months for designing the chip, simulations, etc. and 2-3 months for the tape-out, burning, testing, packaging, etc.) If we start today, we can have the chips in our hands by late January. During this time, we will release the chip specs, sample circuit schematics, Gerbers, BOMs etc. so that OEMs can start designing/manufacturing their units. The subsequent batches will be even cheaper at about ~$100/chip (fabs give huge discounts for large quantities).

Lets please keep the discussion on this topic limited to whether this is feasible and to gauge the interest of the community in such a project. We will start another thread to discuss our ability/legitimacy, and to introduce our team.

is OurAsic Inc. your actual registered name?  Is it a registered business?

Quote from: VolanicEruptor on September 16, 2013, 05:50:16 AM

is OurAsic Inc. your actual registered name?  Is it a registered business?

Yes, its a Delaware corporation. We also own OurAsic.com (there is nothing there yet).

starting with funding for a 28nm design is a little late now, the 28nm rush is happening right away.. I would suggest jumping right into 14nm.   :D

Activity 1 ?
Am sure this not your first visit to the forums ?

Perhaps you should disclose your previous forum name for credibility.

That aside its a nice idea..


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