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Author Topic: Now we know my posts about ASICs were correct  (Read 2399 times)
jjshabadoo
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June 19, 2012, 08:35:06 PM
 #1

We finally have a real world scenario and multiple threads saying the same thing I was saying. ASIC is different than any other mining technology because it is a much larger leap and there is NO secondary market or primary market beyond BTC mining.

All other mining technologies used thus far had these qualities and therefore created a reasonable market where risk could be reasonably quantified outside of BTC price.

There is NO business model that works for both miners and the hardware vendor when it comes to ASICS if you use only free market principles. EITHER THE MINERS GET BURNED OR THE VENDOR GETS BURNED.

In this case we have maybe the most inconsistent vendor in the BTC community leading the charge...what a fucking disaster. Since no one will be able to truly quantify when they can expect to get their hardware, many people will willfully hand over interest free loans to these clowns in exchange for, hopefully, being one of the first to get a device.

After the first 10 1TH units hit the market, everyone else is screwed unless BFL lowers their price ten fold. Now the early buyers are screwed.

An ASIC development co-operative was/is the only way to avoid this, but if the BFL scheme hits the market in October then there is no hope for that possibility.

Enjoy your $150 coffee warmers because using them for mining will be useless.
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June 19, 2012, 08:36:22 PM
 #2

Enjoy your $150 coffee warmers because using them for mining will be useless.
Why?

Mining Rig Extraordinaire - the Trenton BPX6806 18-slot PCIe backplane [PICS] Dead project is dead, all hail the coming of the mighty ASIC!
jjshabadoo
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June 19, 2012, 08:45:20 PM
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Okay I was wrong. If they release the coffee cup warmers first, then those buyers will be fine. Unfortunately, their 1 TH people will be pissed if they sell enough coffee warmers.
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June 19, 2012, 08:47:33 PM
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Okay I was wrong. If they release the coffee cup warmers first, then those buyers will be fine. Unfortunately, their 1 TH people will be pissed if they sell enough coffee warmers.
Seeing how the Single came first followed by the Mini-rig, I would assume the small devices come first this time round as well.

Mining Rig Extraordinaire - the Trenton BPX6806 18-slot PCIe backplane [PICS] Dead project is dead, all hail the coming of the mighty ASIC!
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June 19, 2012, 08:50:45 PM
 #5

So, wait, the argument is that because ASICs are a single-use device they can't be profitable? This argument kind of falls apart when you realize that for 99% of the people buying them, FPGAs are also single-use devices. Sure, you could do other things with them, but the majority of miners don't have the knowledge, skill or any kind of application to throw their FPGAs at anything but mining.

jjshabadoo
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June 19, 2012, 08:50:52 PM
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Let's just hope the open ASIC thing gains momentum and everyone can be happy, or at least almost everyone.
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June 19, 2012, 09:00:25 PM
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Dude...how many threads do you need to start. We get it, you don't like asics. Regardless, ASICs are the future. If they weren't developed now, they would be developed eventually. Even if you managed to get a change away from SHA2, a different ASIC design would fill the same role. Embrace the change.
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June 19, 2012, 09:10:28 PM
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So, wait, the argument is that because ASICs are a single-use device they can't be profitable? This argument kind of falls apart when you realize that for 99% of the people buying them, FPGAs are also single-use devices. Sure, you could do other things with them, but the majority of miners don't have the knowledge, skill or any kind of application to throw their FPGAs at anything but mining.

No, the problem is that price is determined by the market.

What's the market of mining? The ratio price of Bitcoin / difficulty of mining.

What's the market of ASIC? The miners, who follow the price/difficulty of Bitcoin.

So, knowing that, what prevents the ASIC makers (like BFL) to price their product accordingly to the mining market? They'll know exactly at which point they can sell, and at which point they don't. If the ASIC price is too high, miners can't make an interesting ROI, and the difficulty stay stable or maybe goes down. If the price is low, miners makes an interesting ROI, they buy, the difficulty goes up and they lose their ROI. Same thing if the Bitcoin price varies.

FPGA prices are not determined by Bitcoin difficulty. ASIC prices for Bitcoin will vary, depending on the Bitcoin price and Bitcoin difficulty. In a market like that, either the provider make profit, either the miners make profit. The profit is the same for the two groups, so what one gain, the other lose.
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June 19, 2012, 10:06:42 PM
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So, wait, the argument is that because ASICs are a single-use device they can't be profitable? This argument kind of falls apart when you realize that for 99% of the people buying them, FPGAs are also single-use devices. Sure, you could do other things with them, but the majority of miners don't have the knowledge, skill or any kind of application to throw their FPGAs at anything but mining.

No, the problem is that price is determined by the market.

What's the market of mining? The ratio price of Bitcoin / difficulty of mining.

What's the market of ASIC? The miners, who follow the price/difficulty of Bitcoin.

So, knowing that, what prevents the ASIC makers (like BFL) to price their product accordingly to the mining market? They'll know exactly at which point they can sell, and at which point they don't. If the ASIC price is too high, miners can't make an interesting ROI, and the difficulty stay stable or maybe goes down. If the price is low, miners makes an interesting ROI, they buy, the difficulty goes up and they lose their ROI. Same thing if the Bitcoin price varies.

FPGA prices are not determined by Bitcoin difficulty. ASIC prices for Bitcoin will vary, depending on the Bitcoin price and Bitcoin difficulty. In a market like that, either the provider make profit, either the miners make profit. The profit is the same for the two groups, so what one gain, the other lose.


+1

ASICs are great!  Seriously.  Examining ASIC alone is just a technology shift.  Considering technological efficiencies brought by ASIC we will benefit.

It's the ASIC market that, where if ASIC pricing is guided by BTC mining difficulty alone, a vicious cycle could (probably will) form where early adopters overpay and late comers get dismal ROI at best.

ASICs bring about the possibility for many more miners and larger capacity of existing miners due to lowering entry requirements.  This can result in emphasizing large, e.g. 60,000 USD+ with BFL pricing, capital requirements to be a serious mining operation with interesting ROI.  All this further pushes difficulty while the ASIC provider has the ability, and compulsion to do so based on difficulty, to lower unit pricing by orders of magnitude.  If the ASIC provider does indeed lower unit cost severely then all of that big miner operation capital was wasted.

I agree.  ASICs are only good for mining profitability if done for the community by the community at minor profit.

 
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June 19, 2012, 10:46:43 PM
 #10

If anyone has killed the mining market, then it's the people that started building mining rigs specifically for mining.
If everyone used their own PC only, and mined on the CPU+Single GPU then such discussions would never take place.

When people started mining for profit only, it set a chain reaction = how to mine more while consuming less ?

This led to FPGA slowly killing off GPU and now ASIC slowly killing off everything else.
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June 19, 2012, 10:55:15 PM
 #11

If anyone has killed the mining market, then it's the people that started building mining rigs specifically for mining.
If everyone used their own PC only, and mined on the CPU+Single GPU then such discussions would never take place.

When people started mining for profit only, it set a chain reaction = how to mine more while consuming less ?

This led to FPGA slowly killing off GPU and now ASIC slowly killing off everything else.

Denying the evidence while hoping people follow angelic virtues is not going to change human nature.

It's only a new problem, where we need to find new solutions, that's all.
bitlane
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June 19, 2012, 10:55:58 PM
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This led to FPGA slowly killing off GPU and now ASIC slowly killing off everything else.

I would venture a 'guess' and say that GPUs still make up atleast 70+% of the current 11.x TH Network, so nothing has been 'killed off' as of yet.

FPGA market penetration has not been that great, considering the delivery times for most.

Also, ASIC will not SLOWLY kill off everything else - it will kill it off decisively and quickly....LOL

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June 19, 2012, 11:27:09 PM
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So, wait, the argument is that because ASICs are a single-use device they can't be profitable? This argument kind of falls apart when you realize that for 99% of the people buying them, FPGAs are also single-use devices. Sure, you could do other things with them, but the majority of miners don't have the knowledge, skill or any kind of application to throw their FPGAs at anything but mining.

+1 been saying this all along; FPGA for mining is only good if you can later sell it for a reasonable price after having paid it off.
NOBODY will buy FPGA from you for other purposes most likely because it does not have RAM or good I/O pins.
With introduction of ASIC all FPGA really become useless because nobody wants it ( for mining or otherwise ).
At least GPU you can sell on eBay for gaming or something. 

OP is just butthurt ( I have to say this : like TONS of other GPU miners with cheap electricity on the forumz ) that his GPU farm is worthless.

Either surrender to BFL or get out of the game !

Nobody can stop change / ASIC ...
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June 20, 2012, 12:34:49 AM
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This led to FPGA slowly killing off GPU and now ASIC slowly killing off everything else.

I would venture a 'guess' and say that GPUs still make up atleast 70+% of the current 11.x TH Network, so nothing has been 'killed off' as of yet.

FPGA market penetration has not been that great, considering the delivery times for most.

Also, ASIC will not SLOWLY kill off everything else - it will kill it off decisively and quickly....LOL

Long term GPU will be killed off . In australia power is now at 0.20  kw/h and will rise

bitcoin have to be above $4.80 just to break even with power  -- I have sold all my GPU's
however I agree about 70% of the network power is from GPU's
FPGA's only shipping in small numbers because they are expensive and only a handfull of small suppliers
I think if BitForce SC Mini Rig comes out is will complely change bitcoin mining
Ie GPU and FPGA will no longer generate enought bitcoins to make any money for miners
jjshabadoo
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June 20, 2012, 03:41:26 PM
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Brunic nailed it, this is the first time that the price of the mining equipment is tied to bitcoin price/difficulty.

THIS is the problem. ASIC is great for bitcoin if done right, otherwise we play this dangerous game stated above and let's not kid ourselves, the companies selling will win and the miners will lose. This will reduce overall interest and stall the network hashrate which is bad for everyone.

My farm is gone, so I don't give a shet about myself unlike the rest of you. My concern is bitcoin because I believe in its potential to create freedom from the banking cartels.

I make plenty of money running my company, I didn't get into mining thinking I would make a killing, I just like screwing around with hardware so I built a farm.

I made some money which is a bonus.

My point in all of this was simply to get people to stop and think, this is not the same old cpu-gpu-fpga argument.

I'd prefer to see a thread without trolling made up of those in the community who actually have an expert knowledge of all of these technologies, plus some solid economic thinkers. A sort of bitcoin mining think tank that the rest of us could follow and make appropriate decisions from SOLID info.
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June 20, 2012, 03:48:35 PM
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Brunic nailed it, this is the first time that the price of the mining equipment is tied to bitcoin price/difficulty.

THIS is the problem. ASIC is great for bitcoin if done right, otherwise we play this dangerous game stated above and let's not kid ourselves, the companies selling will win and the miners will lose. This will reduce overall interest and stall the network hashrate which is bad for everyone.

My farm is gone, so I don't give a shet about myself unlike the rest of you. My concern is bitcoin because I believe in its potential to create freedom from the banking cartels.

I make plenty of money running my company, I didn't get into mining thinking I would make a killing, I just like screwing around with hardware so I built a farm.

I made some money which is a bonus.

My point in all of this was simply to get people to stop and think, this is not the same old cpu-gpu-fpga argument.

I'd prefer to see a thread without trolling made up of those in the community who actually have an expert knowledge of all of these technologies, plus some solid economic thinkers. A sort of bitcoin mining think tank that the rest of us could follow and make appropriate decisions from SOLID info.

Love to see people finally questioning the right people and asking the right questions


Old cablepair does'nt seem so crazy anymore does he Tongue
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June 20, 2012, 03:54:46 PM
 #17

As discussed before, there IS a solution: Give early adopters a royalty slice of later sales, justifying the comparatively high initial cost. This allows a midpoint to be reached between the miners and BFL. BFL maximizes profits by releasing exponential hash increases slowly rather than all at once, and also maximizes miner's profits. The key thing is to give realistic public plans about how chips will be released and then stick to them so that people know what they're getting into.

-bgc

I'm selling great Minion Games like The Manhattan Project, Kingdom of Solomon and Venture Forth at 4% off retail starting June 2012. PM me or go to my thread in the Marketplace if you're interested.

For Settlers/Dominion/Carcassone etc., I do email gift cards on Amazon for a 5% fee. PM if you're interested.
bitlane
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June 20, 2012, 03:57:46 PM
 #18

As discussed before, there IS a solution: Give early adopters a royalty slice of later sales, justifying the comparatively high initial cost. This allows a midpoint to be reached between the miners and BFL. BFL maximizes profits by releasing exponential hash increases slowly rather than all at once, and also maximizes miner's profits. The key thing is to give realistic public plans about how chips will be released and then stick to them so that people know what they're getting into.

-bgc

Their plan is already SET and was done so a long time ago. It was essentially to get as much of your money as possible, hold it for as long as possible, then FORCE you to send them even MORE money in the end, regardless of how pissed off you are at them.

They are geniuses...

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June 20, 2012, 06:38:25 PM
 #19

Brunic nailed it, this is the first time that the price of the mining equipment is tied to bitcoin price/difficulty.


Yeah, but it doesn't come from me. We have some quality people around here, and one of them explained well the situation.

I'm simply playing the parrot here.  Wink
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June 21, 2012, 12:21:39 AM
 #20

BFL are the APPLE of bitcoin mining.

I dont know who the steve jobs is yet.

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