However, unless there are miners out there with tens of thousands of LX150-based boards already running,
I think you are greatly underestimating the number of FPGAs out there that are mining. The number of people involved in FPGA mining is small, but there are already several very
large FPGA farms. Also, I have pretty good info on Xilinx' pricing curve, which lets me put a lower bound on how many units the major vendors have sold. Lastly, I've been watching AVNet's inventory data, and they are moving pretty huge quantities of LX150's compared to LX75's -- and I don't know of any other non-scientific-computing product that uses them.
That's really useful information to know. I guess that the early-adopter miners who *aren't* constrained by capital (sadly unlike myself) wouldn't think twice about dropping a few tens of thousands, maybe a hundred k, on efficient mining kit that *doesn't* need the power and heat management resources of a professional datacentre outfit.
But this was always the risk in my business plan. Large amounts of capital could generate enough hashpower to make my return on investment worthless (I get your point about 'stripped out' FPGAs and their resale value, but this isn't necessarily the case for the proper development boards, and there are a few other cryptographic applications... but that's off-topic and probably a dangerous topic to follow).
However, until someone invests in proper ASICs (which few seem to think is likely in the probable lifetime of Bitcoin), the problem that the big money faces is simply physical integration. The major vendors (in the Bitcoin space) are offering single or dual units (I will not speculate on BFL because I don't know what's in the box). Anyone wanting to wade in and wipe out the small miners by building 10,000,000 unit FPGA clusters will have to *build* the cluster, and integrate 10,000,000 individual boards.
This is quite an extreme task and the technical barrier to entry is still fairly high. So I still consider my risk to be worth a shot - the main retail vendors (certainly outside the US) seem to be targeted at the small operations, such as mine. The other options appear to involve buying much more powerful FPGAs with many more LUTs and writing one's own code. It is clear that this is not a simple task and certainly not something a rich mining enthusiast could even *consider* unless he/she was also an FPGA development expert.
Following further out to the extremes, my understanding is that Bitcoin mining only works properly whilst it remains distributed. The entire economy is small enough to be wiped out by your average hedge fund, let alone a hostile government. AFAIK (please correct me on this if wrong), *real* money could be deployed to make every single current miner's hashpower contribution utterly irrelevant. The difficulty algorithm would compensate, but a government agency's resources, or even just an investment bank or unregulated fund, or even one of the well-known private individuals with much-speculated-upon motives, would be able to control the entire money supply. I'm not talking about the 51% attacks and other 'gaming the algorithm' approaches, but the ability of an abnormally large hashpower being able to receive 100% of the block rewards and hence control the money supply by being able to dictate how many, and at what price, BTC are available. This would reduce Bitcoin to a fiat currency with this 'agent' as the central bank. This is not necessarily the hostile 'BITCOIN MUST DIE' paranoia (as in receiving 100% of block rewards and hoarding them, killing the velocity of money and trust in the integrity of the network), but even a sufficiently greedy (and rich) miner in such a state could keep the economy running but hardly in its original intent (the probability of trust disintegrating, along with the currency, would be high, even if use was widespread).
Now please forgive me if I've completely misunderstood this, but this is how I see it, and have put these scenarios into my 'force majeure' category re: risk analysis, since I have no way of countering *truly* massive additions to the economy's hashpower by one agent.
However, with the hashpower still distributed, clearly a small miner like myself is facing an *imperative* to move to FPGA technology if I wish to continue mining. I'm limited by capital, and the very rich are limited by how quickly they can build out and maintain hundreds of thousands of units (or employ board designers to scale up the integration past 2-chip boards).
If I'm right about the control of money supply, then anyone wishing the Bitcoin economy to succeed must *also* attempt to ensure hashpower remains distributed, and not centrally controlled by one huge entity. This isn't going to be feasible with hobbyists and graphics cards, even to the extremes some of us have gone - not with FPGAs around.
Hence my value algorithm isn't quite as simple as your plain 50%-of-capital; I have several other known unknowns to analyse which focus on certain critical events and possible timescales. For example, there's no point paying you the 'rational' amount (i.e. cost of equivalent hashpower) if all capital is lost before payback time - this merely increases the lost capital. Given the 208 MH bitstream is free, your bitstream is comparable to financial leverage. Equally, paying equivalent-capital only for an open-source bitstream to *even marginally* close the gap performance-wise within the payback timeframe would be irrational - however I have absolutely no reason to doubt your claims about how difficult the task would be, so I will take them at face value until I have a serious chat with my old mate from university who was a VHDL consultant for over a decade before taking a chief engineer post at a large firm I won't disclose. It may be that you're the best, it may be that there are concurrent approaches like yours being taken, but silently because the experts concerned have a large capital investment in their own hardware, and aren't letting anyone know!
There are too many variables to approach this simplistically. I've been doing risk analytics for well over a decade professionally, but sometimes I find *instinct* more valuable than expected (and yeah, I've always done things 'differently'...) - and my gut feeling right now is that given the choice between 100 mining units with the free bitstream running at 208 MH, or 66 mining units plus paying you the equivalent-capital for your special 312 (say) MH bitstream (i.e. total capital expenditure the same, total hashpower the same)... I'd go with more hardware.
Simply because you've shown that the LX150 has plenty of headroom above 208 MH, but the probability of your bitstream becoming significantly faster is limited by one person's work and the fact that you've already taken the next step in optimisation. The probability of the free bitstream becoming significantly faster is multiplied by not only the multiple known efforts, but also the possibility of an 'eureka' moment being spread out amongst a greater population. Yeah, you can pick holes in this 'analysis' - the biggest hole is that you know the technology and I am not an expert, so your firm belief that nobody could replicate your work in useful time and that there are no other avenues of optimisation of superior performance could very probably be true. However I have a friend to ask, and a gut feeling....
BTW this is more a train of thought from your response. I am not doubting your work and respect your achievements (I see no reason for you to be lying about this, so whilst the discussion is 'academic' for now, I very much doubt you'll disappoint).What got me fired up was the comment about 'small numbers of people involved in FPGA mining' with 'very large FPGA farms' - which increases the factor in my analysis regarding the centralisation of mining control...
And I guess this is off-topic as a result. Let me know if you want it deleted. Just my thoughts on the matter, if things are as you say - it has quite a large consequence for the viability of small miners, regardless of how up-to-date their technology actually is...Does any of your inside data suggest that the high volumes of LX150s being sold are spread out in a distribution roughly approaching retail... or are they all going to one customer?
Apologies, impossible question to answer since anyone seriously considering controlling the money supply wouldn't be quite so unsubtle. It's late, I'm tired and I've just driven back to England from Switzerland so I'm a bit frazzled...
If a unit fails, and needs re-programming ... If the only way to prevent 'theft' of the bitstream would be to lock the FPGA so it can't be used for other purposes
I'm not enthusiastic about the bitstream encryption route, but I do want to point out that this is just flat-out false
. ADDING a decryption key to a Spartan in no way prevents it from being used for other purposes -- you don't have to use it (in fact, most bitstreams don't!). The encryption key is stored by writing to eFuses; Xilinx has multi-million dollar customers relying on those fuses. They are no more likely to fail than the rest of the device (in which case you're screwed anyways).
Many thanks for clarifying this for me. I'm not a hardware guy, I'm having to learn very fast indeed...