[ActiveMining] The Official Active Mining Discussion Thread [Self-Moderated]

[kleeck]

Adjustments have been more like every 10.5 days.

If the hashrate was flatlining the adjustment would be exactly 2 weeks.

If the hashrate is increasing the block time falls and the adjustments are more often than two weeks because 2016 blocks are solved in less than 10 minutes per block.

Correct me if I'm wrong

By my back of the envelope calculations ActM will be entering the mining scene after the total network hashrate has passed 100PH, potentially by a lot.

We are currently entering February around 18PH (http://thegenesisblock.com/mining/) with somewhere between 78% and 88% adjustments per month. We'll aim high and say 90% adjustments, per month. Actually, let's just say we'll see 100% adjustments from here on through Q2, it's not like that's unreasonable.

18*2 = 36PH  @ end of March
36*2 = 72PH  @ end of April - Start of Q2
72*2 = 144PH @ end of May
144*2= 288PH@ end of June - End of Q2

Where is all that hashrate coming from? For example, KNC is only bringing 10 PH or less in the next 6 months. The industry can't keep up the current trend, its getting too difficult.

Don't go spreading FUD. Everyone knows that The Genesis Block says there will be 1,500PH/s on the network by the end of September, and they wouldn't lie about that. It's only half a million Neptunes or a million Sierras. I'm sure the manufacturers will get it together.

I'm not spreading FUD. We have seen 100%/Mo. increases in the TNH not too long ago. This last month we saw an increase of 78%, which is actually low compared to past increases. We're seeing a lull right now. It will not last. See my last post for the influx of new miners coming on the scene.

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[Vigil]

Where is all that hashrate coming from? For example, KNC is only bringing 10 PH or less in the next 6 months. The industry can't keep up the current trend, its getting too difficult.

CoinTerra is aiming for shipping this quarter, HashFast is now shipping, BlackArrow is shipping Q2 and I know there are more already announced on top of new entrants. If you anticipate an increase in the value of Bitcoin, then you should anticipate an increase in companies wanting to enter the mining industry.

But those companies have no detailed plans after Q2. And it is unlikely that their next generation miners will be much more efficient than the ones they are getting ready to release. Yes, there is enough hashing power to double the hashrate through Q2, but to see it double every month through this year is very unlikely. We won't see 36 PH until Cointerra and KNC complete delivery of their latest batch.

[mainline]

Where is all that hashrate coming from? For example, KNC is only bringing 10 PH or less in the next 6 months. The industry can't keep up the current trend, its getting too difficult.

New players. Bigger foundry orders.  As i understand it, there's money in bitcoin ASICs.

There is money, but there are technological and productive limits. There is no way to sustain the current hashing growth rate.

We're nowhere close to production limits.  Bitcoin ASICs are currently an insignificant percentage of total silicon produced.
Sure, s-curve is real, but nothing suggests that we're anywhere close to the top.  The top will be reached when it's unprofitable for the best ASIC manufacturers to sell their ASICs.
That's self-evident, and is the only point i'm making here.

[Vigil]

Where is all that hashrate coming from? For example, KNC is only bringing 10 PH or less in the next 6 months. The industry can't keep up the current trend, its getting too difficult.

New players. Bigger foundry orders.  As i understand it, there's money in bitcoin ASICs.

There is money, but there are technological and productive limits. There is no way to sustain the current hashing growth rate.

We're nowhere close to production limits.  Bitcoin ASICs are currently an insignificant percentage of total silicon produced.

ASICs compete with other industries and the current round of miners are being delivered in fixed batches of only 5000 or so units. There are no plans at this time to produce more of these current generation miners. No one is claiming that bitcoin asics make up a significant part of the silicon production at this time.

Sure, s-curve is real, but nothing suggests that we're anywhere close to the top.  The top will be reached when it's unprofitable for the best ASIC manufacturers to sell their ASICs.

It is not just about profitability. It has to do with market saturation and limited gains in successive generation capabilities.

[mainline]

Where is all that hashrate coming from? For example, KNC is only bringing 10 PH or less in the next 6 months. The industry can't keep up the current trend, its getting too difficult.

New players. Bigger foundry orders.  As i understand it, there's money in bitcoin ASICs.

There is money, but there are technological and productive limits. There is no way to sustain the current hashing growth rate.

We're nowhere close to production limits.  Bitcoin ASICs are currently an insignificant percentage of total silicon produced.

ASICs compete with other industries and the current round of miners are being delivered in fixed batches of only 5000 or so units. There are no plans at this time to produce more of these current generation miners. No one is claiming that bitcoin asics make up a significant part of the silicon production at this time.

Yes, I agree.  Which plays nicely into my claim that "The top will be reached when it's unprofitable for the best ASIC manufacturers to sell their ASICs."

It has nothing to do with unprofitability. It has to do with market saturation and limited gains in successive generation capabilities.

Market saturation is an integral part of the profitability calculation.  When the market is saturated, making ASICs becomes unprofitable.

[kleeck]

Where is all that hashrate coming from? For example, KNC is only bringing 10 PH or less in the next 6 months. The industry can't keep up the current trend, its getting too difficult.

CoinTerra is aiming for shipping this quarter, HashFast is now shipping, BlackArrow is shipping Q2 and I know there are more already announced on top of new entrants. If you anticipate an increase in the value of Bitcoin, then you should anticipate an increase in companies wanting to enter the mining industry.

But those companies have no detailed plans after Q2. And it is unlikely that their next generation miners will be much more efficient than the ones they are getting ready to release. Yes, there is enough hashing power to double the hashrate through Q2, but to see it double every month through this year is very unlikely. We won't see 36 PH until Cointerra and KNC complete delivery of their latest batch.

How do you know what they have planned for Q2? You mean they haven't announced that they're going to continue operations ergo they're going to pack up shop and go away? It may not be a 100% increase each month, but I wouldn't expect much less. Even @ ~60% increase/mo we'll see over 100PH by the end of Q2. I'm not trying to rain on any parades here, guys, but this is happening.

[Vigil]

Yes, I agree.  Which plays nicely into my claim that "The top will be reached when it's unprofitable for the best ASIC manufacturers to sell their ASICs."

I never said there was going to be a top, just that the growth rate will decline to look more like the situation prior to the introduction of ASICs.

[wasubii]

You're all thinking only in terms of home miners - thats who CT, HF, etc are aiming at (currently).

You are forgetting the massive investments from venture capitalists and private mining outfits.

Look at 21e6

Look at the brother of one of the KnC guys and his plans to use KnC equipment for a private farm

Look at that growing 'Unknown' part of the pie chart. The dark horses.

You all sit here and think 'We are in such a great position - once the ActM chip mask is done we can just continue to crank out chips as fast as we want for low cost and we will take over the world hash rate and nothing will stop us'

And you think the other guys with chips won't? Why? They don't like money? WTF is with that logic?

They already have chips. They are already making money to reinvest in more chips, more rack space, more efficient chips!

And us? we are no further now than we were at the beginning. Silly me, i forgot - we have already shipped 'products'!

Sometimes i wonder what you guys have been smoking...

[mainline]

Yes, I agree.  Which plays nicely into my claim that "The top will be reached when it's unprofitable for the best ASIC manufacturers to sell their ASICs."

I never said there was going to be a top, just that the growth rate will decline to look more like the situation prior to the introduction of ASICs.

Then we agree.  But I'm not sure how knowing this helps  with profitability of aging chips.
Edit: +1 to wasubii

[MrTeal]

Adjustments have been more like every 10.5 days.

If the hashrate was flatlining the adjustment would be exactly 2 weeks.

If the hashrate is increasing the block time falls and the adjustments are more often than two weeks because 2016 blocks are solved in less than 10 minutes per block.

Correct me if I'm wrong

By my back of the envelope calculations ActM will be entering the mining scene after the total network hashrate has passed 100PH, potentially by a lot.

We are currently entering February around 18PH (http://thegenesisblock.com/mining/) with somewhere between 78% and 88% adjustments per month. We'll aim high and say 90% adjustments, per month. Actually, let's just say we'll see 100% adjustments from here on through Q2, it's not like that's unreasonable.

18*2 = 36PH  @ end of March
36*2 = 72PH  @ end of April - Start of Q2
72*2 = 144PH @ end of May
144*2= 288PH@ end of June - End of Q2

Where is all that hashrate coming from? For example, KNC is only bringing 10 PH or less in the next 6 months. The industry can't keep up the current trend, its getting too difficult.

Don't go spreading FUD. Everyone knows that The Genesis Block says there will be 1,500PH/s on the network by the end of September, and they wouldn't lie about that. It's only half a million Neptunes or a million Sierras. I'm sure the manufacturers will get it together.

I'm not spreading FUD. We have seen 100%/Mo. increases in the TNH not too long ago. This last month we saw an increase of 78%, which is actually low compared to past increases. We're seeing a lull right now. It will not last. See my last post for the influx of new miners coming on the scene.

True, but we are still in the midst of a paradigm shift in mining as people are still switching to ASICs. It's only been a year, and the transition has been hampered by extremely limited supply for the first half of the year since only Avalon and ASICMINER were shipping before June. Huge increases over the last 3 months are to be expected, but they won't continue. We'll probably only have 20% jump or so on the next retarget, and while the one after that might be a little bigger if Bitmine and Cointerra both start shipping in volume the days of consistent 30+% jumps are over*. In the current market conditions it just doesn't make sense to expand production capacity exponentially, when you expect that you won't be able to sell more units in a few months.

*of course, Bitcoin jumping 100x in the next year like it did in 2013 would change everything. Not that I'd care at that point, I'd be retiring to drink Mia Tais on a beech somewhere and crying about all the coin I sold at $13.

[Vigil]

Where is all that hashrate coming from? For example, KNC is only bringing 10 PH or less in the next 6 months. The industry can't keep up the current trend, its getting too difficult.

CoinTerra is aiming for shipping this quarter, HashFast is now shipping, BlackArrow is shipping Q2 and I know there are more already announced on top of new entrants. If you anticipate an increase in the value of Bitcoin, then you should anticipate an increase in companies wanting to enter the mining industry.

But those companies have no detailed plans after Q2. And it is unlikely that their next generation miners will be much more efficient than the ones they are getting ready to release. Yes, there is enough hashing power to double the hashrate through Q2, but to see it double every month through this year is very unlikely. We won't see 36 PH until Cointerra and KNC complete delivery of their latest batch.

How do you know what they have planned for Q2? You mean they haven't announced that they're going to continue operations ergo they're going to pack up shop and go away? It may not be a 100% increase each month, but I wouldn't expect much less. Even @ ~60% increase/mo we'll see over 100PH by the end of Q2. I'm not trying to rain on any parades here, guys, but this is happening.

They cannot release miners with the same hashing rate increase that they previously did. KNC is already at 20nm. Therefore they are going to release batches that don't have the same percentage of increase from the previous generation at similar batch numbers. IOW, their next batches after Q2 are going to add comparable hash rate as the batches they deliver in Q2.

[mainline]

...They cannot release miners with the same hashing rate increase that they previously did. KNC is already at 20nm. Therefore they are going to release batches that don't have the same percentage of increase from the previous generation at similar batch numbers. IOW, their next batches after Q2 are going to add comparable hash rate as the batches they deliver in Q2.

You're ignoring the fact that Bitcoin ASICs are at this point a cottage industry.  The thing about making chips is it scales real nice.  People here focus on ActM's ability to rinse & repeat, but they forget that all of the other ASIC makers have the same ability in spades.

[Vigil]

...They cannot release miners with the same hashing rate increase that they previously did. KNC is already at 20nm. Therefore they are going to release batches that don't have the same percentage of increase from the previous generation at similar batch numbers. IOW, their next batches after Q2 are going to add comparable hash rate as the batches they deliver in Q2.

You're ignoring the fact that Bitcoin ASICs are at this point a cottage industry.  The thing about making chips is it scales real nice.  People here focus on ActM's ability to rinse & repeat, but they forget that all of the other ASIC makers have the same ability in spades.

I'm not ignoring anything. That is exactly what I am talking about. You are not going to see hash rate doubling every month. You will see that begin to happen this year.

[wasubii]

Markets tend towards equilibrium.

Equilibrium in bitcoin mining is (arguably) when mining income is equal to mining costs.

I would actually disagree with that slightly and posit that people will continue mining ASICs even when costs are higher than income. This is because most people will choose to believe that the value will rise, eating up any losses. Also, ASICs can't do anything except mine coins, so why turn them off?

If anything, due to the lead time of chips and the bullish attitude of mining companies (Moar chips! Moar miners!) then the hash rate will overshoot the equilibrium point significantly. And then BTC/USD will increase, and mining will continue, chips will continue to be made etc etc.

Hash rate levelling out will not happen in 2014. You can quote me on that.

[breadcrumbs]

At this point, despite the promises and dreams of the CEO of Active Mining, we do not need to be first to market.
We do not have to have the fastest chips.
We do not have to have the most energy efficient chips.

What Active Mining DOES need to do is produce chips, complete production of mining hardware, and begin mining on a massive enough scale to make some profit.


We do not have to be #1. We can still make tons of money for everyone being #3 or even #4

It does not have to be incredible amounts of profit, just enough to pay out dividends.

If mining on a level of 10s or 100s of Terrabytes is happening AND dividends are being paid out AND there is a working exchange, share price will go up.

At that point, the CEO of Active Mining, as well as all the long suffering shareholders will be able to sell their shares.
Profit will come from a combination of share price and dividends. Of course, supply and demand holds true, so if more old shareholders selling, price will tend to drop, but if dividends are flowing and if Ken Slaughter keeps adding hashing power, and marketing is done properly (which is unlikely, given the current track record), there will be continued demand. Ken Slaughter can make profit, at that point by selling his shares, by taking a salary, or asking payment for speaking gigs at conventions and motivational seminars.

What will be announced with this week's Wednesday announcement?

Surely it will be that shares have been transferred to a working exchange.

We all wait and hope for that eventuality.  The alternative is not very pretty.

 
 

[Flashman]

The number of SHA Asic "manufacturers" (The people who design/order/distribute, not the fabs) seems to have multiplied by 3 in 6 months, the hashrate density has gone up by a factor of up to 10ish and we could imagine that existing manufacturers could double output without bending any laws of physics... so top end potential of something like 1000x the mid 2013 production rate in 2014. Though that would have been around 200Th a month not the couple of petahash of late 2013.

Anyway, with that "crazy" level of expansion 200 PH a month might be possible from mid 2014 ... and if that is balls out production, expansion will drop below 20% a month after we blow through 1000 PH ... hopefully by that time we've caught up with "Moores law" and expansion in hashrate will be more predictable...

Unfortunately, since bitcoin interest seems to be going in cycles, the next one seems about "due" in June-ish which is where we may see rapid climb to $5000, which will of course encourage overproduction of mining equipment. The ramp up there will look good in fiat, not sure BTC reinvestment will work out so good.

So yah, can't expand forever, but unfortunately, lot of expansion potential left for hardware production.

[kleeck]

I'll reiterate what Zumzero already posted earlier since it is very relevant to this conversation:

Source: http://www.coindesk.com/miami-bitcoin-conference-crime-krugman-bitlicenses/

Day One of the conference was capped off by angel investor and bitcoin advocate Roger Ver and he did not disappoint. When asked about the future value of bitcoin, Ver was understandably bullish about price.

“It’s very, very clear that it is going to be higher than it is today,” he said.

Perhaps the most intriguing though that Ver conveyed was his opinion on mining. “It’s a market that has huge potential,” he said. Ver pegged bitcoin mining as a $1 billion industry given the roughly one million coins that will be rewarded over the next year.

“I don’t think anyone understands how big this industry will be,” he said.

[wolfbiter]

So.... I never transferred my shares out of Bitfunder because I had (obviously stupidly) thought that ActiveMining would transfer them for us with the asset list.

I have ~5,500 shares and would be depressed to see them disappear - is it too late?

Bitfunder still has record of the shares, and I'm sure there's a paper trail (I have the BTC address linked to the Bitfunder account as well).

It seems stupid that my shares would simply be reabsorbed into ActiveMining.

Thanks

[JoTheKhan]

So.... I never transferred my shares out of Bitfunder because I had (obviously stupidly) thought that ActiveMining would transfer them for us with the asset list.

I have ~5,500 shares and would be depressed to see them disappear - is it too late?

Bitfunder still has record of the shares, and I'm sure there's a paper trail (I have the BTC address linked to the Bitfunder account as well).

It seems stupid that my shares would simply be reabsorbed into ActiveMining.

Thanks

You thought correct.

[EskimoBob]

I'll reiterate what Zumzero already posted earlier since it is very relevant to this conversation:

Source: http://www.coindesk.com/miami-bitcoin-conference-crime-krugman-bitlicenses/

Day One of the conference was capped off by angel investor and bitcoin advocate Roger Ver and he did not disappoint. When asked about the future value of bitcoin, Ver was understandably bullish about price.

“It’s very, very clear that it is going to be higher than it is today,” he said.

Perhaps the most intriguing though that Ver conveyed was his opinion on mining. “It’s a market that has huge potential,” he said. Ver pegged bitcoin mining as a $1 billion industry given the roughly one million coins that will be rewarded over the next year.

“I don’t think anyone understands how big this industry will be,” he said.

Fuck this guy, his donkey and that raggedy dog humping his leg.
Do not believe everything rode clowns.. oops... conference clowns are telling you. This event was the first circle jerk of the year.
There will be others and even bigger numbers will come up. Do not forget, those are the guys who have BTC form the early days and/or have bought it way back then. Ver and those other clowns can go and fuck themselves while generating ideas like "bitcoin licence"  etc. Seriously... WTF!

So, back to Actm. Where are the fin. statements... Ken?