In fact, ASIC is the only thing that can prevent 51% attack. Why? Today there are banks, financial
institutions, intelligence organizations that have super-computers, consisting of thousand and thousands
of CPUs or GPUs. These grids are used to run financial analysis, mostly Monte-Carlo.
Imagine "Societe General" in France for example. They have a GPU array of 15,000. If for financial
interests or certain other reasons, they decided to switch to BitCoin for a week. This grid alone can
give them over 15TH in processing power... this will not be 51% attack, it will be 120% attack.
This is just one bank, activating only one of its grids.
As long as the algorithm used in BitCoin can be effectively implemented in CPU or GPUs, network will always
be under threat. Scrypt won't be good either, since many institutions have grids of several thousand CPUs.
The only thing that can stop it is the ASIC. Imagine tomorrow the processing power of the BitCoin network
is 2,000TH. This is something super-computers cannot attack, simply because their combined processing
power cannot reach even 10% of it, let alone 51% attack....
BF Labs Inc.
Well partially this is true - ASIC would be able to counterfeit 51% attack, but it depends on:
1) what kind of ASIC - i.e. 150 nm ASIC can be something like NEC does @ 266-300 Mhz or something like Intel does @ 2 Ghz - and that requires different amounts of investments;
2) depends on ASIC developer's wishes - say successful ASIC deployers would make a) centralize system around them controlling majority of network hashing power; b) implement way for decentralization.
Why - because in chips market MAIN price is to recover initial R&D and chips basically costs low. And this depends on your plans - you can make webmoney-like system for yourself, by controlling majority and thus development of bitcoin completely or you can spread it... Greedy way would be to control it completely and I doubt that you would choose way first getting to the top, and then giving out your powers.
To everyone - I would like that you understand - MINING POWER IN BITCOIN POWER IS LIKE VOTING POWER TO ELECT GOVERNMENT, ETC
with mining power you can decide which blocks would be correct one in the future, etc. Thus with 51% you can change protocol like it was with BIP-16 for example. Can change emission rules - so say there will be not 21'000'000 BTC only, but unlimited emission... Then - when ONE ENTITY would take decision, it could have pros - that if BFL would get money, and lead overall bitcoin community - it can become better organized movement, and has cons - that if their decisions would get to failure - system would fail. You can compare this as democracy vs autocracy (dictatorship) - it maybe beneficial for some period of time to concentrate power, but long-term it fails....
So your choice whether you with BFL or not with them depends on whether you are willing to give such power to them or not. Behavior of many miners however remind me other story - that people would easily sell their votes with peanuts, and then they cry that their governors make laws to rob them, because they're kind "returning initial efforts and investments" :-)
With buy-back offer they mainly stated following: "all of those who will not use our equipment exists only temporary on this market, so you can either join us, or we'll it obsolete and you loose investments"... They haven't offered buy-back of ANY MINING EQUIPMENT, EVEN FROM DIFFERENT VENDORS
. This is to make it clear.... I don't know however what they'll do with that equipment though.
Anyway, this grade has increased my awareness, and I like how it works... Do you see improvements ? BFL improved hash rates for singles... Probably their next mini-rig will be with proper hashing power etc. ! That's are mine congratulations to you!
So probably my next move would be to develop ASIC as well and deliver much better offer for obsolete equipment exchange to everyone, and not just those who use equipment based on spartans. However I have still to look for competition not against BFL, but against those who ALREADY
develop high-performing silicon for many years AND HAVE TRULY DEEP POCKETS
. And it is unlikely that with modified SHA256 there can be kind of "zero point" where say intel wouldn't develop better chip that would blow off mine or BFL "homebrew" chip. I call it so - as this chip would be technologically more like some simple microcontroller than like intel cpu. Unlikely however that I will buy into this ASIC buzz, as it not solves problem in its roots, as still community vs corp edge would not be so high.
Another way would be to improve algorithm and make it more latency-dependent... So when implemented in hardware there would be physical difficulties to reduce latencies and to implement parallelism as can be done even with Scrypt.
As you see for example that LATENCIES to access DRAM in computer do not follow Moore's law... There's speed of light limits that you can't counterfeit. And if your algorithm requires some beforehand-known minimal latencies and better without much variance between specific implementation - i.e. CPU, GPU, FPGA, ASIC - it would be much more fair to use.
And yet another point - is risks that ECC would be not secure in the future. As I mentioned already with quantum computers. Because that imposes risks of making bitcoin cryptosystem obsolete. This issue as well should have eye kept on.
2 BFL guys: I really love that you are improving. I have no personal hate to you, but only attacked your biz behavior, and as act towards you I disclose you another attack vector against bitcoin and you with ASIC: if you do autocracy-way, then if attacker would just kidnap you and crack your balls hard (hmm... you're in USA... well... say FBI ambush your office and you now stand before court against 10-20 articles each adding up you +2 - 5 years prison term for money laundering, fraud, etc like was for example with Vadim Vassilenko - 5 years in prison still no trial... - and his westernexpress exchange system) you are very likely would give power to attacker like e-gold did etc. Don't tell ME that you're doing only ASICs etc, as gov. systems does not work that way... They'll charge everything they can... And they're pretty powerful... And you will be responsible then for everything - for illegal usage that could happen in bitcoin and for people who loose bitcoin's values. I suppose by what I saw from your actions that you probably haven't met yet with the bad sides of live, how it can be... Please, remember that Satoshi had purpose to be anonymous
... That is really important, because well - I can abandon all of this stuff myself - no problem for me, but with your passion, you could take risks that you wouldn't pass and take many people with you as well. And this is truly challenging... how to do it right way... so challenging, that I can't simply answer how to do it right, however your answer is premature... I think that till June you should think really harder on these issues - on what you do and what consequences will be...