[ANN] A public company will build a huge Bitcoin Mining Operation (ASIC).

[film2240]

I'm curious about how to acquire these ASICS and how much power they use,the MHash/s (or GHash/s) they produce,how easy they are to setup and how much are they?

I think that I may have to acquire an ASIC to make mining profitable.I was interested in the BitForce type miners though as they look reasonably priced to me (as a man from the UK as USD=less cost in GBP and I'm looking at the 80W power model for 0.8GHash/s)

Since my GPU only gives me 400MHash/s (stable OC for 24/7 operation),that'll put me out of the mining game unless I can get access to ASICs (cheaper than FPGA maybe)

Whats the difference between an FPGA and an ASIC in general as well as mining ability?

Thanks.

[terrytibbs]

I'm curious about how to acquire these ASICS and how much power they use,the MHash/s (or GHash/s) they produce,how easy they are to setup and how much are they?

I think that I may have to acquire an ASIC to make mining profitable.I was interested in the BitForce type miners though as they look reasonably priced to me (as a man from the UK as USD=less cost in GBP and I'm looking at the 80W power model for 0.8GHash/s)

Since my GPU only gives me 400MHash/s (stable OC for 24/7 operation),that'll put me out of the mining game unless I can get access to ASICs (cheaper than FPGA maybe)

Whats the difference between an FPGA and an ASIC in general as well as mining ability?

Thanks.

Are you bulanula?

[cunicula]

Cornering 100% of the market is highly improbable because to do so you would have to drive everyone else out.  Even cornering 70% of the market is very difficult.

The only way a monopoly can survive and make monopolistic (above-average) profits is to have barriers to entry in the market.  In this case the barrier to entry is the development cost for an ASIC.  

51%-ing the network to capture 100% of profit is a barrier to entry that would produce monopolistic profits. You don't need ASICs, 5970s will do. Txn fees would also be increased under the 51% monopoly. The monopolist is a price-maker and has the luxury of choosing appropriate fees for the user base.

And the customer gets to choose the currency in a free market. With fiat currency that isn't always as straightforward, but with a community based open currency the user can choose to evade the tyranny of the monopolist by exercising their right to choose a competitive currency. Right now there's no viable alternative to bitcoin, but if there's an opportunity and demand for it (like if the terms of the monopolist become unacceptable) there will be another crypo-currency. The new currency would be able to build on existing bitcoin infrastructure; if a merchant already accepts bitcoin, it's easy to add yet another crypto-currency and capture a greater market share.

So I'd think one has to be careful to assess these risks when building a monopoly.

If the other currency also uses proof-of-work, like bitcoin. It would be a dead letter. Monopolist could control both simultaneously with negligible additional cost.

[bulanula]

I'm curious about how to acquire these ASICS and how much power they use,the MHash/s (or GHash/s) they produce,how easy they are to setup and how much are they?

I think that I may have to acquire an ASIC to make mining profitable.I was interested in the BitForce type miners though as they look reasonably priced to me (as a man from the UK as USD=less cost in GBP and I'm looking at the 80W power model for 0.8GHash/s)

Since my GPU only gives me 400MHash/s (stable OC for 24/7 operation),that'll put me out of the mining game unless I can get access to ASICs (cheaper than FPGA maybe)

Whats the difference between an FPGA and an ASIC in general as well as mining ability?

Thanks.

Are you bulanula?

Sure he is.

Did you not know that everybody on this forum is me

In fact, it is just you ( terrytibbs ) and my 10 000 sockpuppet accounts on here ! It is the Matrix !

Not everybody that puts spaces in their lines is me ...

[Grinder]

Cornering 100% of the market is highly improbable because to do so you would have to drive everyone else out.  Even cornering 70% of the market is very difficult.

100% is very unlikely if he doesn't use the >50% to invalidate everybody else's blocks. 70% is probably fairly easy, though. If he adds the same as the current amount of hashing power the difficulty will double, and that will make a lot of mining operations unprofitable. Lots of miners will stop mining, and then his market share will increase to 60 or 70% without him needing to add more hardware.

This will probably also lead to fear about the future of Bitcoin. The price will fall, and then it will become unprofitable for even more miners, and his market share will be even larger. On short, I think anything more than 15-20% will put the future of Bitcoin in great danger.

[payb.tc]

the difficulty will double, and ... Lots of miners will stop mining, and then ...

and then difficulty will drop again, and lots of miners will start mining, and then...

[Grinder]

and then difficulty will drop again, and lots of miners will start mining, and then...

No, they wouldn't. We've already seen such a drop, and the difficulty is still well below what it was about 7 months ago. It will fall sharply and then level out before it starts going up again very slowly (unless it kills bitcoin completely).

[jamesg]

(unless it kills bitcoin completely).

Watch out, the sky is falling!

[cunicula]

Cornering 100% of the market is highly improbable because to do so you would have to drive everyone else out.  Even cornering 70% of the market is very difficult.

100% is very unlikely if he doesn't use the >50% to invalidate everybody else's blocks. 70% is probably fairly easy, though. If he adds the same as the current amount of hashing power the difficulty will double, and that will make a lot of mining operations unprofitable. Lots of miners will stop mining, and then his market share will increase to 60 or 70% without him needing to add more hardware.

This will probably also lead to fear about the future of Bitcoin. The price will fall, and then it will become unprofitable for even more miners, and his market share will be even larger. On short, I think anything more than 15-20% will put the future of Bitcoin in great danger.

Wow, some economic reasoning. I likey!

[Vbs]

I expect the emerging of a large ASIC industry (if it happens) will lower the value of bitcoin by reducing the number of miners and thus the number of participants and the size of the bitcoin economy. 

That's the one concern I have with this as well.  A lot of the people currently interested in Bitcoins are interested because they are mining them "for free".  Take away that "free" income, and those people are just going to disappear.

... and that will be the day a new alternative cryptocurrency will be born, so they can participate again.

If you have a warehouse full of toys, but no one to play with them, do you have any toys at all?

[payb.tc]

and then difficulty will drop again, and lots of miners will start mining, and then...

No, they wouldn't. We've already seen such a drop, and the difficulty is still well below what it was about 7 months ago. It will fall sharply and then level out before it starts going up again very slowly (unless it kills bitcoin completely).

point is, you said 'difficulty will double' causing lots of miners to drop out, but failed to mention this would cause difficulty to drop again.

[stryker]

The beauty of bitcoin is that if such an operation causes panic amongst the majority of hashing participants then acceptance of change namely in the hashing algorithm will be wide spread thus a new version of bitcoin would become mainstream... as most everyone has no access to asic tech then I'd suspect thats exactly what would happen.... interest as asic cannot really be re-tasked to another job that makes for a massive risk to investors.... I'd not want to bet a lot of money that massively relies on guessing the outcome of human nature :-)

[triplehelix]

don't forget that to gain x% of the network hashing power, you can't look at the current hashrate, and do a straight percentage.

for example, to gain 50% of the network hash power, someone would have to have a hashrate equal to the current entire network.

[cunicula]

and then difficulty will drop again, and lots of miners will start mining, and then...

No, they wouldn't. We've already seen such a drop, and the difficulty is still well below what it was about 7 months ago. It will fall sharply and then level out before it starts going up again very slowly (unless it kills bitcoin completely).

point is, you said 'difficulty will double' causing lots of miners to drop out, but failed to mention this would cause difficulty to drop again.

He is describing an equilibrium effect which significantly decreases the amount of hashing power needed to carry out an attack. For example,  if there are 10 TH currently, you won't need to add another 10 TH to carry out a 51% attack. 7 TH could be enough if increasing difficulty to 14 TH level causes 3 TH of miners (30% of the starting amount) to drop out. That is what he is saying.

The actual numbers are hard to estimate, however it is certain that you won't need to create a full new 10 TH to 51% an existing 10 TH network. True attack costs are less than people naively assume.

[cunicula]

don't forget that to gain x% of the network hashing power, you can't look at the current hashrate, and do a straight percentage.

for example, to gain 50% of the network hash power, someone would have to have a hashrate equal to the current entire network.

This isn't right either. The answer is somewhere in between. Take an extreme case...

If 50% of the network is on the borderline of dropping out (at the threshold of profitability), then you can look at the current hashing power and do a straight percentage. i.e. if there are 10 TH of miners to start out with and at least 5 TH of miners cannot tolerate any difficulty increase without dropping out, then you will only need 5 TH to 51% the network.

In reality, it is not reasonable to assume that 50% of the network is just at the threshold of quitting. It is also not reasonable to assume that difficulty can double without leading to any exit from incumbent miners. To 51% a 10 TH network, you need to add an amount of hashing power somewhere between 5 and 10 TH.

[Grinder]

point is, you said 'difficulty will double' causing lots of miners to drop out, but failed to mention this would cause difficulty to drop again.

It's the kind of thing I expect people to realize without mentioning it explicitly, and it doesn't change my point.

[Syke]

However, all investment in ASICs would be lost if the core function had to change.

This is what makes a private ASIC farm extremely risky. Building ASICs to sell to the public on the other hand is far more profitable and much less risky.

[triplehelix]

point is, you said 'difficulty will double' causing lots of miners to drop out, but failed to mention this would cause difficulty to drop again.

It's the kind of thing I expect people to realize without mentioning it explicitly, and it doesn't change my point.

i'm speaking on the straight math, no assumptions, no predictions.  nobody knows the full impact if this company ever launches.  nobody knows what gpu miners might do (like selling their gpu's and buying fpg's) or if a retail asic option would become available, so safest not to make any assumptions.

as to people generally realizing that you have to double current hashrate to gain 50% of the hashing power, numerous and repeated postings on these forums speak otherwise.  you most often find it in a statement like, "well if he got 1.2TH hashing, he'd have 10% of the network.".

[Vladimir]

I would like to thank everyone who responded in this thread and elsewhere, be it compliments, suggestions, criticism (constructive or otherwise).

At the moment I am having a series of meetings with investors, accountants, lawyers and other "professionals" trying to figure out subtle details of "the plan". As soon as there is some better clarity on our exact plans it will be announced. Until then I will be mostly quiet.

Thank You all, again. Your feedback both positive and negative is very much appreciated.

[payb.tc]

and then difficulty will drop again, and lots of miners will start mining, and then...

No, they wouldn't. We've already seen such a drop, and the difficulty is still well below what it was about 7 months ago. It will fall sharply and then level out before it starts going up again very slowly (unless it kills bitcoin completely).

point is, you said 'difficulty will double' causing lots of miners to drop out, but failed to mention this would cause difficulty to drop again.

He is describing an equilibrium effect which significantly decreases the amount of hashing power needed to carry out an attack. For example,  if there are 10 TH currently, you won't need to add another 10 TH to carry out a 51% attack. 7 TH could be enough if increasing difficulty to 14 TH level causes 3 TH of miners (30% of the starting amount) to drop out. That is what he is saying.

The actual numbers are hard to estimate, however it is certain that you won't need to create a full new 10 TH to 51% an existing 10 TH network. True attack costs are less than people naively assume.

yeah i get that but guess what happens as soon as they drop out? you failed to mention it too.