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

[OurAsic]

Ah, the socialist solution to ASIC!

I'm in, if this isn't just a pipe dream.  But what's to stop unknown groups from buying huge chunks of this proposed new hashing power?  Wouldn't this just be another opportunity for the well-funded profiteers to make even more money?

What was stopping these "unknown groups" from buying a lot GPUs/FPGAs before ASICs? The goal of this project is to again make electricity a substantial cost for mining. Because electricity is something that is available at a relatively equal price for everyone.

[BenTuras]

Because electricity is something that is available at a relatively equal price for everyone.

Sorry to correct you, but electricity varies between 1 and 61 us$cents: http://en.wikipedia.org/wiki/Electricity_pricing#Price_comparison

I don't think this list is up-to-date, but relatively equal is incorrect.

[Puppet]

We are not creating just "another" ASIC. We are creating a low cost ASIC ($100 - $200 for a 400 to 600 GHash/sec capacity chip).

The other asic vendors will be there long before you. As difficulty shoots up, market value of these chips per TH drops proportionally. It doesnt really matter if thats achieved by these companies mining themselves or selling their gear. The result is the same, in order to maintain sales, market prices will drop and keep dropping until at some point they meet marginal profitability - which btw, IMO is considerably lower than your estimates. If you pay $10K for a processed wafer, you seriously  need to be looking elsewhere, volume prices are ~$4K for  28nm 300mm bulk.

[Phinnaeus Gage]

Interesting.
I will take part for 1 chip, once the 10 eminent members are known.

I suggest Rassah as one, if this proves viable and he's available depending on RL commitments and interest.

[aerobatic]

you sound quite naive.  while your intentions may be honourable, you're living in some dream world where commercial and financial reality doesnt exist.

the goal of an asic company is not just to sell enough chips to pay for its NRE.  thats just one of the big up front costs of going into manufacture.  What about the salaries of the engineers who worked for 6+ months to design the chip, will be working x months to ensure it works and continue optimising the design, and presumably will also be working 6+ months on the next generation chip?  or are they all expected to work for free?   What about the sales staff and the support staff ?  the people who answer the phone to help people with orders, or help people with problems getting it running etc?  And what about the return on investment for the investors who put up the money to start the company in the first place?

also, in the timeframes youre talking about, to design a 400-600 GH chip that you havnt even started yet, would take you 6+ months to design it, then 3+ months to manufacture it, so you're already 9 months behind the competition.   In that amount of time, their chips (which have been dropping in line with the rise in difficulty) will already be the price that youre aiming at, obviating the need for you to do this exercise.

by way of an example look at Cointerra (simply because theyre the lowest cost asic (per GH) i know of at present).  they're selling their december systems (not just chips, actual full systems in a box with power supply, controller host, plug and play...) at $7/GH, and their January systems for $3/GH.  By the time we get to may, june.. when your chips might be ready, just imagine what price theyd be selling them for!?   And what about every other asic company thats also competing for the same business.  theyre not in a vacuum.  theyre competing not only with each other, which keeps them honest, but theyre also selling gigahashes at a price that people decide has an roi or they wouldnt sell any, so they have to keep dropping their price in line with network hash increases.   And all of these guys would prefer to be selling chips on their own instead of systems, and im sure the only reason they build systems is because of time to market issues, and if they left it to others to design their boxes, theyd be out in the marketplace later.

part of the problem that youre missing is that its iots the NRE's that are causing the biggest problem.   its the high cost of starting a new asic that creates the issue (and lots of asics compound the problem).  not the actual production cost.  the bitcoin world actually needs LESS new asics, because its the raisning of the cash for the nre that puts such a strain on the bitcoin economy (all the pre-orders, many of which are paid for in bitcoins, which are converted into fiat and then paid directly to the fab, to pay for the nre).   if we didnt have such high nre's, asic companies wouldnt need pre-orders, and the price of bitcoins wouldnt have such price pressure because of high sales of btc into fiat.

youre compounding the problem.  Why not instead, do a deal with knc, hashfast or cointerra to buy the rights to their old 28nm chip when theyve obsoleted it (in the timeframe that your one would be ready anyway) and theyve moved on to 20, 16 or 14nm for their next chips ?

-- Jez

[mrb]

A few questions:
1. So the ASIC companies are evil for selling a product with high market demand?
2. So the people buying ASIC's by the truckload are not the issue?
3. And this can be stopped by creating another ASIC?

1. In Bitcoin mining some laws of regular economy don't hold. For example, there would be NO demand for ASICs, if there were no ASICs anywhere. People were still mining happily with GPUs/FPGAs. ASICs just increased the difficulty rate.
2. They have no other choice, we are here to give one.
3. If you read my post properly, you would find the answer to this question. We are not creating just "another" ASIC. We are creating a low cost ASIC ($100 - $200 for a 400 to 600 GHash/sec capacity chip).

1. Completely untrue. At the very beginning (2009-2010), the market at the time was just not big enough to warrant investing even $150k to develop a 130nm ASIC. Plus Bitcoin's future success was very uncertain (legally and technologically speaking), so it would have been a very risky venture. ASICs were seen as inevitable, provided the Bitcoin market became big enough and the risks decreased. Once these 2 things happened, ASIC developments started.

2. Yes there is a choice: do not buy overpriced mining hardware. Wait for prices to decrease. Duh!

3. Prices will decrease by themselves. Just let capitalism do its work. There are so many ASIC companies competing between each other that prices are falling as we speak. Not too long ago the best you could get was 50 Mhash/s per dollar (Avalon ~75 Gh/s at $1500), and now the market is already moving toward 300+ Mhash/s per dollar (Cointerra TM IV 2 Thash/s at $6000 in 2014).

[gill83]

Did you even read his post? He never said that those companies should not make profit. He says they could make an equal amount of profit by selling at a lower price but higher quantity. That will not only make mining more fair for everyone but also also these companies who lie and deliberately delay delivery will have to compete by providing gear on time.

Also it does NOT take 6+ months to design an ASIC that does something as basic as SHA. Cointerra just started their design a week ago and are going to deliver in December.

you sound quite naive.  while your intentions may be honourable, you're living in some dream world where commercial and financial reality doesnt exist.

the goal of an asic company is not just to sell enough chips to pay for its NRE.  thats just one of the big up front costs of going into manufacture.  What about the salaries of the engineers who worked for 6+ months to design the chip, will be working x months to ensure it works and continue optimising the design, and presumably will also be working 6+ months on the next generation chip?  or are they all expected to work for free?   What about the sales staff and the support staff ?  the people who answer the phone to help people with orders, or help people with problems getting it running etc?  And what about the return on investment for the investors who put up the money to start the company in the first place?

also, in the timeframes youre talking about, to design a 400-600 GH chip that you havnt even started yet, would take you 6+ months to design it, then 3+ months to manufacture it, so you're already 9 months behind the competition.   In that amount of time, their chips (which have been dropping in line with the rise in difficulty) will already be the price that youre aiming at, obviating the need for you to do this exercise.

by way of an example look at Cointerra (simply because theyre the lowest cost asic (per GH) i know of at present).  they're selling their december systems (not just chips, actual full systems in a box with power supply, controller host, plug and play...) at $7/GH, and their January systems for $3/GH.  By the time we get to may, june.. when your chips might be ready, just imagine what price theyd be selling them for!?   And what about every other asic company thats also competing for the same business.  theyre not in a vacuum.  theyre competing not only with each other, which keeps them honest, but theyre also selling gigahashes at a price that people decide has an roi or they wouldnt sell any, so they have to keep dropping their price in line with network hash increases.   And all of these guys would prefer to be selling chips on their own instead of systems, and im sure the only reason they build systems is because of time to market issues, and if they left it to others to design their boxes, theyd be out in the marketplace later.

part of the problem that youre missing is that its iots the NRE's that are causing the biggest problem.   its the high cost of starting a new asic that creates the issue (and lots of asics compound the problem).  not the actual production cost.  the bitcoin world actually needs LESS new asics, because its the raisning of the cash for the nre that puts such a strain on the bitcoin economy (all the pre-orders, many of which are paid for in bitcoins, which are converted into fiat and then paid directly to the fab, to pay for the nre).   if we didnt have such high nre's, asic companies wouldnt need pre-orders, and the price of bitcoins wouldnt have such price pressure because of high sales of btc into fiat.

youre compounding the problem.  Why not instead, do a deal with knc, hashfast or cointerra to buy the rights to their old 28nm chip when theyve obsoleted it (in the timeframe that your one would be ready anyway) and theyve moved on to 20, 16 or 14nm for their next chips ?

-- Jez

[BTC-engineer]

Very interesting post. It coincides with a lot of my ideas about the future of bitcoin mining.
I would love to work in any kind of way on a fully open source ASIC project.   

[aerobatic]

if you think you can sell a chip that does 400-600 GH in 28nm, at $200, and somehow make a decent profit, youre wrong.  these chips, running at, say 0.6 watts/GH, are generating the top end of heat that any chip is allowed to generate (250-300 watts!) thus these chips and their packages, and their high performance cooling system would cost more than $200 each.

Then youve ignored the cost of the nre?  that needs to come out of the cost of each chip, ie: amortised over however many chips you plan to sell.

if youre going to sell 10,000 chips (which seems like a lot), then divide the $3m+ nre cost, over the 10,000 chips (ie: add $300 on top of the cost of each chip, before you can sell it at zero margin.  lets say it costs $250-300 each, for the die, the package, and the cooling system).  plus $300 contribution for the nre cost, and youre already at $600 minimum price that you could sell each chip - at zero profit margin !

-- Jez

[PuertoLibre]

A few questions:
So the ASIC companies are evil for selling a product with high market demand?
So the people buying ASIC's by the truckload are not the issue?
And this can be stopped by creating another ASIC?
What drugs are you guys on and can i have some?

1. In Bitcoin mining some laws of regular economy don't hold. For example, there would be NO demand for ASICs, if there were no ASICs anywhere. People were still mining happily with GPUs/FPGAs. ASICs just increased the difficulty rate.
2. They have no other choice, we are here to give one.
3. If you read my post properly, you would find the answer to this question. We are not creating just "another" ASIC. We are creating a low cost ASIC ($100 - $200 for a 400 to 600 GHash/sec capacity chip).
4. Irrelevant question.

May I ask how do you plan to effectively control the rate of difficulty climb?

Explain it to me, because I don't understand. Even if you are extra-ordinarily cheap by the time you release your ASIC, the prices from other vendors will probably already be matching yours.



For example, I created a CoinTerra chart a few days ago as to where their prices should be as difficulty climbs. If you look carefully by the time you ship, you will have to compete with them at their price point.

I don't quite understand how your company plans to lower ASIC prices (assuming this is the plan) to stop the crazy rise of difficulty?

http://s9.postimg.org/hcigp57fz/Terra_Miner_4_2_TH.png

[aerobatic]

Did you even read his post? He never said that those companies should not make profit. He says they could make an equal amount of profit by selling at a lower price but higher quantity. That will not only make mining more fair for everyone but also also these companies who lie and deliberately delay delivery will have to compete by providing gear on time.

Also it does NOT take 6+ months to design an ASIC that does something as basic as SHA. Cointerra just started their design a week ago and are going to deliver in December.

if it were so easy to design an asic, everyone would be doing it.  its not a week to design an asic.  im pretty sure cointerra and hashfast have taken (skilled, experienced asic designers) something like 6 months, certainly closer to 6 months than 1 week

since youve got vmc and others offering a 16 GH chip in 28nm, and knc offering a 100 GH chip in 28nm, and hashfast on 400 GH and cointerra on 500 GH.. then clearly, the design of the chip is the thing that differentiates the performance, and i think the performance these guys are hitting is represenative directly of the skill of their asic designers (and the time they've taken to optimise the power consumption).  thus its not just any old sha design thrown together and it seems like the skill of the engineers does actually make a difference to the design and enables the consequent performance.  and to achieve your desired goal in the 400-600 GH range, that is a very high end, state of the art chip, and will not be achieved just by throwing together some public domain sha engines without any effort or skill required, - if it were true anyone and everyone would be doing it.  in order to reach that level of performance you will need to do serious engineering to lower the power consumption and improve efficiency or you will butt up to the thermal limit of the chip without hitting the performance goal

[Puppet]

Did you even read his post? He never said that those companies should not make profit. He says they could make an equal amount of profit by selling at a lower price but higher quantity. That will not only make mining more fair for everyone but also also these companies who lie and deliberately delay delivery will have to compete by providing gear on time.

Cant you see what nonsense that is? Mining companies will sell every asic they can produce, the only variable is price and shipping date. Its impossible for them to sell at a lower price and still get the same revenue, thats laughable. Lowering prices will not help a thing for anyone, since these companies are already selling out and lower prices would increase demand which they cant fullfill.

Also it does NOT take 6+ months to design an ASIC that does something as basic as SHA. Cointerra just started their design a week ago and are going to deliver in December.

Cointerra started lasted week?  More nonsense.  The company was founded in April and doesnt expect products until the end of the year.
If anything, 6 months for a 28nm design cycle is a very aggressive schedule.

[tarmi]

fuck them all.

just dont buy them.

if asic manufactures are asking for so much money for their ASICS, leave it to them to secure the network, and just buy and hold bitcoins.

[shep80]

Very interesting and I am interested to support the effort if the details all line up.

My biggest general concern is "are we too late" when it comes to keeping up with folks who are basically at 28nm now, and moving to smaller soon...

[VolanicEruptor]

fuck them all.

just dont buy them.

if asic manufactures are asking for so much money for their ASICS, leave it to them to secure the network, and just buy and hold bitcoins.

This seems to be the popular opinion right now.. but if Bitcoin starts tanking, you're all going to blindly jump into mining again right?   

[erk]

Very interesting and I am interested to support the effort if the details all line up.

My biggest general concern is "are we too late" when it comes to keeping up with folks who are basically at 28nm now, and moving to smaller soon...

Lol, not much smaller than 28nm atm. The ROI on anything smaller will be terrible, way to bleeding edge.

[af_newbie]

How flooding the market with $100 ASICs suppose to save the mining community?

It will accomplish the opposite.  You'll need $25K minimum to invest in h/w to make BTC1+/day.  Same as today.

People with deep pockets will just hoard the chips and small guys will be left out there with few 500GH/s chips that
will make BTC1/year.  All will change is the arithmetic.  The proportions of ROI/profit/diff will stay more less the same.

I think the rest of this mining ASIC cycle will not be done by mining community at large, but a small group companies who
already got enough money from their gen1 products to go completely solo with their next gen chips.  Think Avalon/ASICMiner and Bitfury.

They might still "offer" border line ROI products, just like bitfury and ASICMiner is doing today.

Let the free market work its magic.   Interfering with it is wrong.  

Sure it is painful to watch ghash.io reap 1000s of coins a day, but it does not really matter who mines those coins.
If you don't like the current ASIC offerings, just vote them out with your wallet.  KNC, HF, CT will be mining with your pre-order money, just like BFL and Avalon did.

Your effort will only speed up the process.  
Bitcoin is an example of ruthless (or real) capitalism (not the gov sponsored capitalism we have today).  Let it be, it does not need fixing.

[erk]

How flooding the market with $100 ASICs suppose to save the mining community?

Because it Lets the free market work its magic. If they can't match the price they fold.

[VolanicEruptor]

^ agreed.  And "save the bitcoin network!" is a hippie mentality.. I am picturing them chaining themselves up to trees, but in this case it's the blockchain.   I doubt these actions would stop the bulldozers.   Mining isn't for the little guy, plain and simple.  

[tarmi]

"save the bitcoin network" isnt a valid argument anymore.

thats early btc adopters + asic manufactures propaganda.