ASIC arms race = the end of bitcoin?

[SebastianJu]

The ASIC arms race is making it harder and harder from some rich entity to corner the market.

But not for governments, which can monopolise access to ASIC mining hardware if they want to. They can't realistically do that with general purpose CPUs, or with widely available GPUs or even FPGAs.

Similar to what i thought too. But lets pretend the NSA would buy the biggest ASIC-Companies or build their own asic and create so much asics that they rule bitcoin (while pretending its different companies, so that no one feard >50% attacks), why should they do it? I first thought they could do the same like they did with the internet infrastructure (sort of) but would it be rewarding for bitcoins? They already know where the bitcoins flow, they have the best tools to find out who owns what address too, so owning the network hashrate only would be of use when you want to crash bitcoin, if im right. And would they spend money on that?

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[Wipeout2097]

The NSA doesn't even care and would waste their time and resources targeting Bitcoin itself.

Bitcoin is good to help concealing one's small addictions (e.g. porn, gambling, pot - consuming is decriminalized where I live) from family, but only an idiot would use it for large scale criminal activity.

[timeofmind]

Every fabric of the universe is energy. Usable energy is just establishing the ability to route the fabric of the universe into patterns of motion that suite our will. As humanity grows in sophistication, our ability to control the patterns of energy around us will be completely established and quantity of energy, in the form of electricity and heat, will be just a matter of infrastructure. Eventually the economic cost of energy will be near zero. When ASICs reach their peak mining efficiency and manufacturing of ASICs also reaches peak efficiency, one's mining power equates to available energy one has access to + cost in energy to produce the required ASICs to mine that energy. At this point, costs of bitcoin mining will be so incredibly low, that transactions fees will be reduced to negligible amounts, but the mining will continue, in absence of reward, because there will be literally no cost to it. Bitcoin mining will become simply a way to use up the free excess usable energy left over from all other energy requirements of humanity. Maybe eventually, when usable energy storage technologies are perfected, we will simply scrap crypto coins and just use pure energy as a form of currency. That seems like the next step in the sequence: barter => physical coins => digital coins => pure energy? Nothing is simpler to exchange and more universal than usable energy, so why not? And nothing has more reassurance against counterfitting than energy, due to our confidence in the law of conservation of energy. Infrastructure to transmit large amounts of energy over long distances I'm sure would be trivial by this time; so currency could disappear and the world economy could operate on the basis of exchanging energy alone.

[MerchantMiner]

Just because the OP is bitter because he couldn't afford an ASIC doesn't mean the end of bitcoin.

ASICs are one of the best things to ever happen to bitcoin in terms of securing the network! The higher the difficulty, the better!

I'm tired of these whiny, FUD posts.

People please don't forget why we do what we do with mining,To help support a currency that isn't manipulated to enslave the people with crushing interest that leads to homelessness and family's breaking up . to the IMF ECB FED Bank of England , HSBC running drug money and all we hear is bitcoin can buy drugs from silk road, This is OUR evolution from our bedrooms our living rooms and our basements. to help stop whole countrys like Spain Greece Portugal going bankrupt foring people into food banks and poverty, OUR Zeitgeist MOVEMENT.

Yes it would be nice to make £100,000 doing this but at least my reasons for doing this are not just greed , if that's the case with you go work for JP Morgan or HSBC !!

Dont forget the goal of BITCOIN

IMHO   

[MerchantMiner]

Every fabric of the universe is energy. Usable energy is just establishing the ability to route the fabric of the universe into patterns of motion that suite our will. As humanity grows in sophistication, our ability to control the patterns of energy around us will be completely established and quantity of energy, in the form of electricity and heat, will be just a matter of infrastructure. Eventually the economic cost of energy will be near zero. When ASICs reach their peak mining efficiency and manufacturing of ASICs also reaches peak efficiency, one's mining power equates to available energy one has access to + cost in energy to produce the required ASICs to mine that energy. At this point, costs of bitcoin mining will be so incredibly low, that transactions fees will be reduced to negligible amounts, but the mining will continue, in absence of reward, because there will be literally no cost to it. Bitcoin mining will become simply a way to use up the free excess usable energy left over from all other energy requirements of humanity. Maybe eventually, when usable energy storage technologies are perfected, we will simply scrap crypto coins and just use pure energy as a form of currency. That seems like the next step in the sequence: barter => physical coins => digital coins => pure energy? Nothing is simpler to exchange and more universal than usable energy, so why not? And nothing has more reassurance against counterfitting than energy, due to our confidence in the law of conservation of energy. Infrastructure to transmit large amounts of energy over long distances I'm sure would be trivial by this time; so currency could disappear and the world economy could operate on the basis of exchanging energy alone.

Are you Nikola Tesla?

I agree in most part, .  we are still dumb humans that dont and cant manipulate the fundamentals of our universe , (Large Hadron Collider) when we do we wont need money, we need money because Petrol is expensive , food is expensive, energy is expensive and well everything's expensive , or in poor country's just dosnt exist there for them. we are being held hostage by the energy company's . in the uk anyway 

[SebastianJu]

The NSA doesn't even care and would waste their time and resources targeting Bitcoin itself.

Bitcoin is good to help concealing one's small addictions (e.g. porn, gambling, pot - consuming is decriminalized where I live) from family, but only an idiot would use it for large scale criminal activity.

Thats the point again where i have to think about silkroad. Bitcoins seems to be presented nearly as "the currency" for such things. While in fact its not really good for this the question comes up if it wouldnt be in the best interest of agencies when bitcoin has the nimbus of anonymous currency, while in fact they can observe easily. They most probably can find dealers and what more easier than with policemens searching for strange cash-transactions. I think bitcoin is in the best interest of such agencies and i believe that might be part of the reason why governments dont fight bitcoins and instead legalize it. They werent so friendly with money issued from someone different than states before. They forbid it simply. So bitcoin has to be different for them.

[JimboToronto]

Just because the OP is bitter because he couldn't afford an ASIC doesn't mean the end of bitcoin.

ASICs are one of the best things to ever happen to bitcoin in terms of securing the network! The higher the difficulty, the better!

I'm tired of these whiny, FUD posts.

+1

[Takeshi_Kovacs]

The ASIC arms race most certainly does not mean that the end of Bitcoin is inevitable and anyone who says that it does is a fool.

That said, it is also clear that the ASIC arms race does carry a number of serious threats to the future of Bitcoin and anyone who denies that is just as much a fool.

The Bitcoin community needs to identify those threats and work out responses.

The threats are all related to the way that the mining community will be changed by ASICs.

At the moment, the demand for ASICs greatly surpasses the ability and willingness of manufacturers to supply devices to the mining community. That means that manufacturing ASICs is a profitable and low risk activity and new entrants are seeking to join the sector and existing players are looking to expand and produce new models. That looks like a very healthy situation.

That situation will not last forever. The willingness of consumers to buy ASIC miners at prices higher than the value of the coins that the devices will mine is not going to continue forever. Once that happens, ASIC manufacturers will be faced with a simple choice. They will be producing machines for a certain cost. They can either sell those machines at a low enough price to allow their customers to make a profit or they can mine themselves and make more money.

ASIC companies that opt for the latter course will make more money than companies that opt for the former choice and it would be reasonable to expect that those companies will out perform, out compete and outlast their rivals.

As each generation of ASIC is rolled out, there will pressure on the companies whose products are the least competitive. Those companies risk being caught in a perpetuating trap. Their products will cost more to build and run and will mine fewer coins at higher cost. They will then have less and less money to fund future generations of devices and will eventually no longer be able to participate in the market.

ASIC mining seems to present a future in which mining activity is limited to a diminishing number of ASIC manufacturers who will be self mining with their own equipment.

That will affect Bitcoin in a number of ways, many of which are not immediately apparent.

The classic fear is that the last man standing in the ASIC war end-game will be able to exert superior hashing power to launch a 51% attack on the network. That seems to be a very unlikely outcome. If a dominant miner were to try that, confidence in the coin and thus its value would plunge and the perpetrator of such an attack would see the value of their mining activities drop accordingly.

A more likely effect will be on transaction fees as block rewards drop. A dominant end-game miner would be able to dictate transaction fees. Whatever the network or users might wish, a dominant miner could present the network with a simple choice. Pay higher fees or your transaction will not happen. Observers of dominant ecommerce platforms such as ebay will be familiar with such tactics.

Bitcoin supporters frequently express the opinion that an advantage of Bitcoin is that control of the currency lies with its community of mining users. Who would you trust to run your money: the Bitcoin community or a bunch of faceless suits running the Fed, ECB, BIS, IMF etc? That argument can be turned round if the Bitcoin network is being run by a cartel of ASIC manufacturers. The suits who run the world's financial institutions can be replaced by our governments and if we do not like our governments we can vote them out of office or rise up on the streets.

One aspect of the pre-ASIC Bitcoin network was that almost anyone in the world could participate. Restrictive governments can clamp down on foreign exchange but they found it much harder to restrict access to commodity computer components such as CPUs and video cards. Media reports suggest that some governments have already moved to restrict access to Bitcoin ASICs, if the general availability of ASICs is further limited, then the opportunity for people in countries without free currency exchange facilities to participate in Bitcoin will be further limited.

If the trend to centralized mining works out as described above then these three effects - transaction fee control, unaccountable network control and the loss of Bitcoin democracy - will come into play. How severe they may be is yet to be seen but the Bitcoin community should be thinking about these things.

[JoelKatz]

The ASIC arms race most certainly does not mean that the end of Bitcoin is inevitable and anyone who says that it does is a fool.

That said, it is also clear that the ASIC arms race does carry a number of serious threats to the future of Bitcoin and anyone who denies that is just as much a fool.

Exactly. If you're in a car and there's a curve ahead, you don't scream "We're all gonna die!", you turn the wheel just before the curve.

One of the things that annoys me is when people complain that things are unsustainable. Almost everything we do is unsustainable, that's why we don't do the exact same thing for decades. Driving in a car in a straight line is unsustainable, but you do it until you get to the curve. Then you drive in another direction that is also unsustainable. The goal is not to find a path that's sustainable but to find the next change in direction to maintain progress.

Most of the disaster scenarios that I've thought about for Bitcoin seem possible but unlikely. But I'm absolutely confident that if we approached any of those disaster scenarios, the community would respond with a solution, just as it did when we had the chain split. Miners all want the system to succeed. Software maintainers all want the system to succeed. And if there's a few jerks who don't, it won't take long for everyone else to stop listening to them. If at any time the majority of stakeholders actually want Bitcoin to fail, then it probably should.

[Hyena]

OP here. For a record, I do have an ASIC, so just because I'm sceptical doesn't mean I'm bitter. It's disturbing to see how many of you make assumptions without really knowing the context. How can your "wild guess about the bitcoin's future" be believable if you can't even make correct assumption about whether the OP has ASIC or not

I made this topic to see any objective opinions on my question. Unfortunately I got a bunch of emotion-driven-subjective stuff

So let's try again:
1. once developed, ASICs are sick ass cheap to mass produce
2. Nikola Tesla is no joke, it is possible to get free energy from Earth's magnetic field
3. there are people/families wealthier than your governments, they own you
4.
5. profit

Some dude said something about NSA. This was actually going to the direction I was hoping this thread will go.
I personally will prepare myself for Bitcoin's demise. I won't sell my bitcoins but I'm already looking forward to alternative crypto currencies that could be possible replacement for bitcoin. This is not FUD, this is an attempt to stay alert and objective. People tend to be blinded by their desires and slowly lose contact with reality, bringing totally laughable arguments like "OP is just bitter because he can't afford an ASIC" - come one, don't fall that low.

So, we're in a car and there's a curve ahead. This curve is "51% attack by entities who run this place". How can you turn the wheel on that?

From JoelKatz's reply I extracted that Bitcoin community would somehow act as a whole and maybe change the protocol rendering all ASICs useless? That is actually a nice argument and it might work. But nevertheless 51% attack can still be profitable. Knowing all that, I think it's reasonable for people like OP to think about such scenarios and even discuss it in mining speculation.

I think I got my answer from JoelKatz. Thank you for that. The answer is to not put all your eggs in the same basket, even if that basket is Bitcoin kind of obvious but for some reason I needed a topic for that. I guess I'm fool then.

[Zeek_W]

I think the market will level out and existing ASIC chips will continue to be manufactured in quantity and seeing all the development costs are already covered, will be cheaper and everyone can eventually afford.

[timeofmind]

I think the market will level out and existing ASIC chips will continue to be manufactured in quantity and seeing all the development costs are already covered, will be cheaper and everyone can eventually afford.

Maybe all house holds can be heated with solo mining ASICs and we can have our decentralized network again. :-) But I doubt it since heat pumps are more efficient.

[Takeshi_Kovacs]

The ASIC arms race most certainly does not mean that the end of Bitcoin is inevitable and anyone who says that it does is a fool.

That said, it is also clear that the ASIC arms race does carry a number of serious threats to the future of Bitcoin and anyone who denies that is just as much a fool.

Exactly. If you're in a car and there's a curve ahead, you don't scream "We're all gonna die!", you turn the wheel just before the curve.

One of the things that annoys me is when people complain that things are unsustainable. Almost everything we do is unsustainable, that's why we don't do the exact same thing for decades. Driving in a car in a straight line is unsustainable, but you do it until you get to the curve. Then you drive in another direction that is also unsustainable. The goal is not to find a path that's sustainable but to find the next change in direction to maintain progress.

Most of the disaster scenarios that I've thought about for Bitcoin seem possible but unlikely. But I'm absolutely confident that if we approached any of those disaster scenarios, the community would respond with a solution, just as it did when we had the chain split. Miners all want the system to succeed. Software maintainers all want the system to succeed. And if there's a few jerks who don't, it won't take long for everyone else to stop listening to them. If at any time the majority of stakeholders actually want Bitcoin to fail, then it probably should.

That is a very poor analogy. Cars are designed to be able to go around corners and drivers are trained to do so. Drivers have been going round corners for as long as there have been cars. Bitcoin faces a set of problems that were not anticipated when Bitcoin was conceived and we have yet to see answers or even signs that the community is seriously thinking about the issues - I do not count miners running around saying that the sky is falling as serious thinking.

[awesomeami]

But not for governments, which can monopolise access to ASIC mining hardware if they want to. They can't realistically do that with general purpose CPUs, or with widely available GPUs or even FPGAs.

That!

How could GOV fight with CPU againt bilions of CPUs?
How could GOV fight with GPU againt bilions of GPUs?
They could - but it would be hard and costly.

Now they (FED, NSA, GOV) can just (anti terrorism, blah blah) make a law forbidding ASICs or sell it to plebs.
Or just buy 1000pcs of 2THs from Terra - each for $10K - or $3K, or just size their Ltd. a and force them somehow to sell it only to them.
And 100 or 1000 or 10K of 2THs boxes will take 90% now or "only" 60% attack in December.
Gov has electricity and no costs as they have power.

So ASICs make it easier for enemy

Worst is
A) in 4 months 60% of today's miner won't be effective - none CPU, GPU, FPGA and first 2 waves of ASICs and anything less than 10GHs
http://mining.thegenesisblock.com/a/b6bda97409
10GHs with only 20% diff rise, no costs, no pool fees, no electricity, no buy costs - can't handle.
So I am wondering why is any1 buying miners - I don't want them even 4free.
B) in 12 months 95% of today's miner won't be effective - even if free electricity, no other costs, no pickup/SH costs and 1BTC for 100GHs. Output will be like 1mbtc / day.
http://mining.thegenesisblock.com/a/100498799f

[JoelKatz]

Bitcoin faces a set of problems that were not anticipated when Bitcoin was conceived and we have yet to see answers or even signs that the community is seriously thinking about the issues - I do not count miners running around saying that the sky is falling as serious thinking.

What problems is Bitcoin facing?

[j68r]

What problems is Bitcoin facing?

1) Utility beyond itself and the mining scene?
2) Mainstream adoption?
3) Money cartel and captured Government attack if 1) & 2) are ever achieved or even likely?
4) Network security and incorruptibility after mining stops?

[JoelKatz]

What problems is Bitcoin facing?

1) Utility beyond itself and the mining scene?
2) Mainstream adoption?
3) Money cartel and captured Government attack if 1) & 2) are ever achieved or even likely?
4) Network security and incorruptibility after mining stops?

Well, 1 and 2 are major problems Bitcoin actually faces today. I certainly wouldn't say that they aren't getting enough attention or are being ignored by the community. That's what people are talking about.

3 and 4 are potential problems. Right now, they're more of academic interest, since no such threat is imminent, Trying to work out specific solutions that could actually be implemented is probably not particularly useful since we don't know what versions of these threats Bitcoin will actually face.

[j68r]

Can't dispute any of that, and I certainly don't profess to have any answers or solutions. I'm just mindful of perspective and the thing perhaps lost on the bitcoin scene is how utterly insignificant bitcoin really is at present. Obviously people in here, mining and involved with btc elsewhere live and breath bitcoin but globally it's still an insignificance, novelty at best, and far from secure in terms of a future beyond itself and a mere existence. A fragile thing for all it's mathematical and conceptual brilliance.

I want to see btc succeed but cannot conceive of it being allowed to, by the crooks in charge, if and hopefully when it gets to the point where it starts to loosen the debt money strangle hold the money printing masters of the universe have on peoples lives.