Difficulty post ASIC?

[arklan]

so, how high do we really think difficulty will go before reaching relative stability? for this discussion, lets assume the BFL products, prices and release time frame are accurate. do we see the price increasing quickly by a factor of ten as ASIC's come online? x100? more? you tell me.

personally i have no idea. too many variables for me to guess at. we don't know how many ASIC based units they can manfuacture and ship or in what time frame. we also don't have a reliable way t figure how many will actually sell, as far as i know.

[1715657016]

1715657016

[Dexter770221]

If everything is acurate then they will have chip with base potencial of 3.5GH/s @ ~2W. With little "overclocking" it will be 4GH/s @2.5W. 10 of these will be in Single= 40GH/s and 250 in MiniRig=1TH/s. I doubt they design 3 different chips. How many they can realese to wild in one week? 100 for sure. Lets assume 500 per month = 2TH/s. So difficulty will double in summer next year... With cheap electricity GPU miners don't have to worry for at least one year.
Thats of course speculation, that don't include others ASIC manufacturers.
My guess is that price of bitcoin will drop signifficantly becuse they will be "made" cheaply, very cheaply.

[DILLIGAF]

If everything is acurate then they will have chip with base potencial of 3.5GH/s @ ~2W. With little "overclocking" it will be 4GH/s @2.5W. 10 of these will be in Single= 40GH/s and 250 in MiniRig=1TH/s. I doubt they design 3 different chips. How many they can realese to wild in one week? 100 for sure. Lets assume 500 per month = 2TH/s. So difficulty will double in summer next year... With cheap electricity GPU miners don't have to worry for at least one year.
Thats of course speculation, that don't include others ASIC manufacturers.
My guess is that price of bitcoin will drop signifficantly becuse they will be "made" cheaply, very cheaply.

Here is some real numbers for you if they ship ~13 th/s boxes in a week then the network capacity has doubled right there and if they ship the same the next week the difficulty goes up another 50%. At that point in time gpu miners are just about dead in the water if everyone turns off their gpus and bfl ships another 13 th/s boxes then diff remains the same for that third week. Fourth week same shipment diff goes up by 33%, now actually the diff increase would be in the fifth week by now as the previous two were not enough to make it change in seven days but are enough to do it in the fifth for both combined. And that leaves out the other smaller boxes that will be shipping at the same time and the die hard gpu miners who will hold on.

[Unacceptable]

Difficulty dosen't change in 2 week intervals,it changes in 2016 block intervals.So time is irrelavent.It could change in as little as a day or less maybe.

If I'm correct,diff is 131,384 per th/s,so multiply this by your th/s guess............

So ,50 th/s x 131,384 =6569200 difficulty.

and 10 gh/s @ 6569200 diff @ $5 per coin =฿46.55=$232.73 (per month).Heck,this is close to what I make now with 2 gh/s,except the power used will be ALOT less  

Is my math correct

Still not as bad as all may think,don't forget,someone said " terahash is the new gigahash"  

[arklan]

i'm kinda expecting that my current ~350 mhash will need ot be replaced with a 3.5 ghash to remain at the same income level a year from now (in bitcoin number, not $, cause i can't begin to guess where THAT will be) so thats, what, a x5 difficulty increase combined with the halving of the reward, or thereabouts.

i just hope this transition, if BFL pulls the hardware off, doesn't destroy profitable mining... afterall, if it's not profitable, the number of people willing to do it out of charity will be incredibly small, which puts the enter bitcoin idea at risk.

then again, if difficulty got that high, people would stop mining, and difficulty would then lower, making mining profitable again... but then they'd turn their rigs back on and...

my head hurts.

[nedbert9]

BFL Trade-In impact on Bitcoin Difficulty
Speculation based on my complete mastery (not)

Time frame of 5 months.  Assuming BFL delivery matches past performance.
Per SC chip output velocity will be greater with at least 10x chips per SC Single.

25 BTC block reward.  It's too close to call whether BFL can get SC delivered prior to reward halving.

BFL Singles sold (estimate)

500

BFL Mini Rigs sold (estimate)

20

Network capacity represented

Singles - ~ 400 GH
Mini Rigs - ~ 500 GH


BFL Trade-In network capacity impact
using a trade-in scenario of 4 Singles (FPGA) converted to 3 SC Singles, 2 Jalapenos (90% trade-in conversion to SC)
Mini Rig.  Straightforward conversion.  1:1 plus capital.

4 Singles trade-in credit - $2,400
Trade-in cash obligation  - $2,400
$4,800

3 SC Singles - $4,500
2 SC Jalapenos - $300
$4,800

1 Mini Rig trade-in credit - $15,000
Trade-in cash obligation - $15,000
$30,000

SC Mini Rig - $30,000


Single capacity loss (FPGA)

360 GH

Mini Rig capacity loss (FPGA)

500 GH


SC Single/Jalapeno capacity gained

14.3 Terahash

SC Mini Rig capacity gained

20 Terahash

Current network capacity (Mini Rigs/Singles not yet delivered and online added)

~ 12.5-14.5 Terahash

Minus Single (FPGA) capacity

~ 12.1-14.1 Terahash

Minus Mini Rig (FPGA) capacity

~ 11.6 - 13.6 Terahash

Minus GPU attrition (Let's say an initial conservative loss of 70% GPU capacity where GPU is assumed to represent 85% of current network capacity)

~ 3.6-5.6 Terahash

Minus non BFL FPGA attrition (Same attrition estimates as GPU)

~ 2.7-4.7 Terahash

(As you can see the advent of ASICs for bitcoin hashing decimates prior technology.  In and of itself is fine.)

Plus BFL Trade-in capacity

SC Singles

~ 17-19 Terahash

SC Mini Rigs

~ 37-39 Terahash


Resulting hashing difficulty increase

~ 181%

Average pre-existing BFL miner capacity increase (using trade-in figures above)

~ 39x increase in capacity

Current vs. BFL SC profitability per GH  (including block reward halving)

 -82%

BFL SC Profitability/ROI (Excluding prior investments.  Exchange rate remains constant.  Block reward - 25 btc.  Excluding all other factors that would lead to difficulty adjustments)

~ 62 days


What we can immediately take away from this (considering only the figures above)

1.  GPU currently represents a large portion of network capacity.  Immediate effects of BFL trade-in activity could be blunted by GPU attrition.  Depends how sensitive to electricity costs.
2.  Miner profitability will be, at a minimum, approximately 82% less profitable per GH.
3.  Once additional BFL SC sales beyond trade-in transactions occurs we are looking at a significant additional difficulty increase.
4.  If one hopes that GPU actors will not participate in BFL SC ROI calculation looks very good.


Now.  Let's see what happens when GPU actors participate in BFL ASIC.

Assumptions (attempting to be conservative with estimates)

1.  40% of former GPU actors (that's 40% of the actors representing 8 Terahash of current capacity - those that suffer attrition) leave mining.  60% remain to rebuild their operations using BFL SC.
2.  These 60% of GPU actors choosing to rebuild operations spend approx. 60% of their initial GPU capital outlays on BFL SC units.


Equating current GPU capacity to capital

60% (of those suffering attrition) of 8 TH.  4.8 TH at ~ $1,200 per GH. $5.7 million. 60% capital re-up - $3.4 million.

BFL SC approximate cost per GH.  $38

Additional network capacity from re-uping former GPU actors

~ 89 Terahash

Total network capacity

~ 127 Terahash

Resulting hashing difficulty increase (from current difficulty)

~ 840%

Current vs. BFL SC profitability per GH  (including block reward halving)

 -94%

BFL SC Profitability/ROI (overall.  Excluding prior investments.)

~ 205 days

[Entropy-uc]

Additional network capacity from re-uping former GPU actors

~ 89 Terahash

Total network capacity

~ 127 Terahash

Resulting hashing difficulty increase (from current difficulty)

~ 840%

BFL SC Profitability/ROI (overall.  Excluding prior investments.)

~ 205 days

This is a nice analysis.  I think it's a plausible estimate.  Of course everything depends upon the ability of BFL to actually deliver, the appearance of competing solutions, and the rate they are able to sustain production after the initial shipments.  The 205 day breakeven you estimate for ASICs is around the level where rational investors will not purchase more hardware, so at that stage either prices drop or difficulty plateaus.  That market signal is badly muted if people continue paying 4-6 months in advance for hardware though.  There is a serious risk of a difficulty overshoot that kills everyone's ROI (except for BFL of course).

[nedbert9]

This is a nice analysis.  I think it's a plausible estimate.  Of course everything depends upon the ability of BFL to actually deliver, the appearance of competing solutions, and the rate they are able to sustain production after the initial shipments.  The 205 day breakeven you estimate for ASICs is around the level where rational investors will not purchase more hardware, so at that stage either prices drop or difficulty plateaus.  That market signal is badly muted if people continue paying 4-6 months in advance for hardware though.  There is a serious risk of a difficulty overshoot that kills everyone's ROI (except for BFL of course).

Thanks.  Yes, pilling up orders without having visibility to volume could be very bad.

At least we have order numbers to use with estimation.

[Raize]

Difficulty will approach infinity and ROI will increase along with it. Eventually it won't be profitable to mine at all, but many people will leave their miners on anyway, just like Bitcoin pre-GPU. The price will increase drastically in a short period of time again eventually drawing the attention of government and institutional interest, but the resulting crash will probably eliminate any profitably of mining.

Eventually, after an extended period of non-profitability, enough miners will lobby their respective governments to force developers to put transaction fees into the clients and prevent other miners from implementing new ASIC development without government approval. The justification for these measures will be that such miners do the community/world a service that they get no pay for, so they should be compensated. Pools will be where many of these new mining operation rules are enforced. Pool operators will regularly be called upon by their respective Congressional and parliamentary leaders and testify on various activities. Some will even be asked to present regular updates to the UN.

Multiple TOR-specific (or otherwise) pools will eventually surpass 51% of the Bitcoin network and pools and developers will be forced by the government to ignore any TOR-related Bitcoin activity, thus forcing a fork of the blockchain. Again, the justification will be that since we can't be certain that a 51% attack isn't happening by the TOR pools, it simply must be happening. False evidence may even be fabricated that such a thing was attempted. The resulting crash in the "legal" blockchain will be stopped by further government intervention, including arrests of anyone providing exchange services of legal to illegal Bitcoin. Anyone who was known to own any significant amount of "legal" Bitcoin will be forced to hand over their wallets for the forked "illegal" blockchain. Many will, on principle, oppose such measures and they will be imprisoned or otherwise eliminated for doing so.

Obviously I'm talking about stuff that will be taking place years or perhaps decades from now, but such is the inevitable nature of man and his government.

[interfect]

Difficulty will approach infinity and ROI will increase along with it. Eventually it won't be profitable to mine at all, but many people will leave their miners on anyway, just like Bitcoin pre-GPU. The price will increase drastically in a short period of time again eventually drawing the attention of government and institutional interest, but the resulting crash will probably eliminate any profitably of mining.

Eventually, after an extended period of non-profitability, enough miners will lobby their respective governments to force developers to put transaction fees into the clients and prevent other miners from implementing new ASIC development without government approval. The justification for these measures will be that such miners do the community/world a service that they get no pay for, so they should be compensated. Pools will be where many of these new mining operation rules are enforced. Pool operators will regularly be called upon by their respective Congressional and parliamentary leaders and testify on various activities. Some will even be asked to present regular updates to the UN.

Multiple TOR-specific (or otherwise) pools will eventually surpass 51% of the Bitcoin network and pools and developers will be forced by the government to ignore any TOR-related Bitcoin activity, thus forcing a fork of the blockchain. Again, the justification will be that since we can't be certain that a 51% attack isn't happening by the TOR pools, it simply must be happening. False evidence may even be fabricated that such a thing was attempted. The resulting crash in the "legal" blockchain will be stopped by further government intervention, including arrests of anyone providing exchange services of legal to illegal Bitcoin. Anyone who was known to own any significant amount of "legal" Bitcoin will be forced to hand over their wallets for the forked "illegal" blockchain. Many will, on principle, oppose such measures and they will be imprisoned or otherwise eliminated for doing so.

Obviously I'm talking about stuff that will be taking place years or perhaps decades from now, but such is the inevitable nature of man and his government.

I agree. This is what will probably happen. 

I see the difficulty going way up, and the mining power being centralized. It won't go to real banks, but it will go to that set of people who have both a lot of capital and a desire to spend it on strange cryptocurrency-related ventures. The kind of people who currently assemble vaguely professional GPU racks will switch to purpose-built hardware, and the kind of people who don't will no longer mine profitably.

The rate of Bitcoin generation will remain exactly the same. So changes in price will reflect how the Bitcoin market feels about this centralization of hashing power. I am predicting a downward move, because very few Bitcoin enthusiasts are also centralization fans.

[GernMiester]

The sky is the limit...If BFL gets only 500 jalapeno orders look for a minimum hash rate increase of 1750Gh/s. Add in 10 rigs at 1000Gh/s and its not a pretty picture for mining difficulty.
CPU's made it an every mans game like tag, no equipment required. GPU's still lets every man with a few bucks to spend on a video card play, think snowboarding, without the gear and the lift ticket you can't play. ASIC's mean everyone who buys a special piece of hardware has a huge advantage over the average guy at home. So, You get your car and they get a helicopter to get to work.

If Joe the plumber cant make a few BTC he is not going to play and that is bad for BTC. Grandma is never going to buy into it then.
Environmentalists will see it as another way we waste natural resources on electricity.
For you conspiracy theory guys.. About $15 Million in BFL's for an "agency" buys over 500Th/s and messes with a $50million crypto-currency  economy.

Changing the entry requirements to serious players only alters this bitcoin experiment in bad way 

[Graet]

The sky is the limit...If BFL gets only 500 jalapeno orders look for a minimum hash rate increase of 1750Gh/s. Add in 10 rigs at 1000Gh/s and its not a pretty picture for mining difficulty.
CPU's made it an every mans game like tag, no equipment required. GPU's still lets every man with a few bucks to spend on a video card play, think snowboarding, without the gear and the lift ticket you can't play. ASIC's mean everyone who buys a special piece of hardware has a huge advantage over the average guy at home. So, You get your car and they get a helicopter to get to work.

If Joe the plumber cant make a few BTC he is not going to play and that is bad for BTC. Grandma is never going to buy into it then.
Environmentalists will see it as another way we waste natural resources on electricity.
For you conspiracy theory guys.. About $15 Million in BFL's for an "agency" buys over 500Th/s and messes with a $50million crypto-currency  economy.

Changing the entry requirements to serious players only alters this bitcoin experiment in bad way 

Well said

[Unacceptable]

ASIC's are available to EVERYONE,just like a video card you need a few bucks,BUT,you don't need to know how to "build" anything(like a PC).Just buy it,setup the mining software & GO!!!!!!!!!!!!!!!

This IS for the layman & general public.It WILL secure the network like never before.

The sky is falling,wtf is everyone on drugs

[Dargo]

ASIC's are available to EVERYONE,just like a video card you need a few bucks,BUT,you don't need to know how to "build" anything(like a PC).Just buy it,setup the mining software & GO!!!!!!!!!!!!!!!

This IS for the layman & general public.It WILL secure the network like never before.

The sky is falling,wtf is everyone on drugs

+1 What are people worried about? Suppose SC MR ROI is 200 days. An SC Single is only 9% more in terms of $/Mh, so it would be profitable in 218 days. This requires and investment of $1300, an amount that very many small players in GPU mining found within their reach. The Jalapeno is 42.5% more than the SC MR in terms of $/Mh, so it would be profitable in 285 days. And this is only $150 - well within the reach of very small players who before might have just bought one $150 GPU. Plus it doubles as a cup warmer - woot! GPU can't do that! A lot of people will probably buy Jalapenos just for fun and not care about the ROI. Add to this the fact that these are plug and play mining appliances, so you don't have to spend days reading forum posts to figure out how to get the thing running, and it's obvious that ASIC will make mining *more* accessible to small players. It will take longer for them to get a ROI, but that was true before with GPUs (i.e. efficiency gains for a rig with 5 or 6 GPUs). MR owners owners will have more of an advantage than I've let on here b/c they will do better in short rounds in pools for example, but the same was true before with big players and their huge GPU farms. I've also assumed a constant difficulty, so Singles/Jalapenos might take longer to reach profitability with difficulty increases, but again the same was true before for large vs small players in GPU. It's true that ASICs will make mining so accessible that this might accelerate the decrease in profitability that we've already been seeing for a long time, but it's unclear how much, and this is probably a long way off. At some point we should see an equilibrium where ROI takes a long time, but is nonetheless possible. And for Jalapenos the ROI may take so long that it doesn't look very attractive, but realistically that was true a while ago for someone with one $150 GPU. ASIC increases the hashing power of the network, but so far I haven't seen a solid argument that it will make it less secure or less profitable - if anything it makes it more secure and no more or less profitable than it was before. It's just a change, and a good one IMO.   

[Raize]

And for Jalapenos the ROI may take so long that it doesn't look very attractive, but realistically that was true a while ago for someone with one $150 GPU. ASIC increases the hashing power of the network, but so far I haven't seen a solid argument that it will make it less secure or less profitable - if anything it makes it more secure and no more or less profitable than it was before. It's just a change, and a good one IMO.   

I agree, it's good for Bitcoin, but bad for all these miners and people expecting to "get rich quick" by buying. They are going to be looking at VERY long ROI, enough that it is unprofitable for them, now the question is, what are they doing to do because of this? The block reward halving is a threat to them, enough miners making not enough money means they are going to pursue some very ingenuitive things, and an attempted fork of the blockchain into an alt-currency that doesn't have the reward halving isn't entirely out of the realm of possibility here.

We really should be talking about what is going to happen when thousands of miners and GLBSE businesses are faced with the prospect of no profits, because I really do think it's going to result in increased pressure on developers to change the way Bitcoin is done. The real winners here will be anyone that owns Bitcoin, because fork or not, they'll still win.

[Dalkore]

The sky is the limit...If BFL gets only 500 jalapeno orders look for a minimum hash rate increase of 1750Gh/s. Add in 10 rigs at 1000Gh/s and its not a pretty picture for mining difficulty.
CPU's made it an every mans game like tag, no equipment required. GPU's still lets every man with a few bucks to spend on a video card play, think snowboarding, without the gear and the lift ticket you can't play. ASIC's mean everyone who buys a special piece of hardware has a huge advantage over the average guy at home. So, You get your car and they get a helicopter to get to work.

If Joe the plumber cant make a few BTC he is not going to play and that is bad for BTC. Grandma is never going to buy into it then.
Environmentalists will see it as another way we waste natural resources on electricity.
For you conspiracy theory guys.. About $15 Million in BFL's for an "agency" buys over 500Th/s and messes with a $50million crypto-currency  economy.

Changing the entry requirements to serious players only alters this bitcoin experiment in bad way 

Well said

+1   I tried to state this as well but I was flamed for being a GPU having hater.   No one wants to talk about this reality.   At this point it seems to be a forgone conclusion and we will just need to sit back and watch.    The senior developers like Gavin really need to weigh in, I am still surprised we have heard nothing except an off-hand tweet calling the Jally "cool".

D

[Dalkore]

ASIC's are available to EVERYONE,just like a video card you need a few bucks,BUT,you don't need to know how to "build" anything(like a PC).Just buy it,setup the mining software & GO!!!!!!!!!!!!!!!

This IS for the layman & general public.It WILL secure the network like never before.

The sky is falling,wtf is everyone on drugs

You don't seem to be able to read the above comments and actually address what they are saying.  I am not trying to troll you, but some very valid points have been made and its like everyone seems to ignore it and then say, "ASIC's are available to EVERYONE,just like a video card you need a few bucks,BUT,you don't need to know how to "build" anything(like a PC).Just buy it,setup the mining software & GO!!!!!!!!!!!!!!!".   To make it clear, the argument against ASIC is that is will centralize the network over time because people will quit when it is not profitable AND an agency (gov) could easily come in and purchase enough capacity to pull off the 51% attack (their pockets are much deeper and it would be just a trickle in the bucket for them). 

This is what you should address first before the quote from you I quoted.

Sincerely,
D

[siggy]

OK.. so I have kind of a different take on where difficulty post-asic will wind up....

I have no idea in hard numbers / actual terms... but in relative terms, it will wind up wherever it needs to be for the break-even running costs point to be around 10 cents per Kw/hr..   (this will of course vary based upon the USD/BTC exchange rate)

So.. if your electric costs more than 10 cents, don't even bother getting on the waiting list.. you'll never get your money back.

If you pay between 5 and 10 cents.. your break even (initial purchase + running costs) will be 1 to several years...   Up to your individual confidince in bitcoin if you wanna play.....

If you pay less than 5 cents.. Time to beg/borrow/mortgage-the-farm and buy as many ASICs as you can.  You will be in the select few who will still be able to mint money mining. 

If you happen to live in the arctic circle, and heat with electric.. well then you might wanna consider robbing a few banks....  Just buy the company outright.

And one last thought...  just like the gold rush, ultimately the ones who make the most money will be those that provide the picks & shovels (errr ASICs).. not the miners. 

Sigg

[Unacceptable]

ASIC's are available to EVERYONE,just like a video card you need a few bucks,BUT,you don't need to know how to "build" anything(like a PC).Just buy it,setup the mining software & GO!!!!!!!!!!!!!!!

This IS for the layman & general public.It WILL secure the network like never before.

The sky is falling,wtf is everyone on drugs

You don't seem to be able to read the above comments and actually address what they are saying.  I am not trying to troll you, but some very valid points have been made and its like everyone seems to ignore it and then say, "ASIC's are available to EVERYONE,just like a video card you need a few bucks,BUT,you don't need to know how to "build" anything(like a PC).Just buy it,setup the mining software & GO!!!!!!!!!!!!!!!".   To make it clear, the argument against ASIC is that is will centralize the network over time because people will quit when it is not profitable AND an agency (gov) could easily come in and purchase enough capacity to pull off the 51% attack (their pockets are much deeper and it would be just a trickle in the bucket for them).  

This is what you should address first before the quote from you I quoted.

Sincerely,
D

The way I see it:What's easier to 51% attack,a 10TH network or a 250TH network...............................

I just don't see Bitcoin being centralized at any point,sorry.

BTW,I was hacked on MTgox & was told "call the police & get a report & send it to us",guess what the police said........wtf are BTC?...what do you want us to do?.............I don't think any gov agency will have anything to do with BTC anytime soon,(unless SR gets too big & money laundering gets out of hand)maybe many years down the road,MAYBE.

[Dalkore]

The way I see it:What's easier to 51% attack,a 10TH network or a 250TH network...............................

I just don't see Bitcoin being centralized at any point,sorry.

BTW,I was hacked on MTgox & was told "call the police & get a report & send it to us",guess what the police said........wtf are BTC?...what do you want us to do?.............I don't think any gov agency will have anything to do with BTC anytime soon,(unless SR gets too big & money laundering gets out of hand)maybe many years down the road,MAYBE.

The local authorities are not an issue and sadly like you experienced, not much help either.  A 12+THash (current avg) network is actually impressive by using off the shelf hardware and some specialized hardware.  

I am unsure the costs at this stage are going to be worth the network speed increase.  We are assuming bigger is better.   Profit Incentive is a very important aspect of the BTC concept.  It is what allows many disassociated parties to collectively work towards a common goal in not a purely socialistic or communistic manner other than the important fact that we all share in the benefits of the network.

[Unacceptable]

The way I see it:What's easier to 51% attack,a 10TH network or a 250TH network...............................

I just don't see Bitcoin being centralized at any point,sorry.

BTW,I was hacked on MTgox & was told "call the police & get a report & send it to us",guess what the police said........wtf are BTC?...what do you want us to do?.............I don't think any gov agency will have anything to do with BTC anytime soon,(unless SR gets too big & money laundering gets out of hand)maybe many years down the road,MAYBE.

The local authorities are not an issue and sadly like you experienced, not much help either.  A 12+THash (current avg) network is actually impressive by using off the shelf hardware and some specialized hardware.  

I am unsure the costs at this stage are going to be worth the network speed increase.  We are assuming bigger is better.   Profit Incentive is a very important aspect of the BTC concept.  It is what allows many disassociated parties to collectively work towards a common goal in not a purely socialistic or communistic manner other than the important fact that we all share in the benefits of the network.

I believe it IS worth it.I have done some figureing(up to 240th),I feel I can be as competitive with 50gh ASIC as I was with my 2gh of GPU's,for about 4 months,maybe less,but we'll see.Then I'll roll some of my profits into another 40gh & so on...................

The very low power consumption makes it VERY worthwhile.Up to 70% of my mining proceeds currently pay the electric bill  I will be INCREASING my profit margin,ALOT 

Until someone forks the chain This would be very destructive to the integrity of Bitcoin,at least for me, it will show that folks have lost faith in this concept.

[SgtSpike]

I'd just like to make a few points.

- It is likely that, as faith in Bitcoins increases, and price stability increases, more professional companies who are willing to look at ROI in terms of years instead of months, and who already get excellent incentives on electricity, will start making larger investments in mining equipment.
- There will always be an aspect of volatility.
- There will always be an aspect of the "average joe" being able to mine and make a profit.  If it is profitable for a company, it can be profitable for an average joe.  The break-even only has to do with electric rates, and the ROI will settle around a certain number of years of break even compared to electric rates.
- The ROI won't increase to years until we either have more faith in Bitcoin, or a significant price decrease in BTC.

- Why is a years-long ROI a bad thing?
- Why are large scale mining operations a bad thing?
- Why can't we push the merits of Bitcoin as a transactional system instead of a magic money making machine?

If ROI really is pushed out to years-long, then that means Bitcoin will be better secured than if ROI is months long, because it means more people and companies are mining. Isn't that a very GOOD thing? It means it is that much more difficult for someone to stage an attack on the network, does it not?

If large scale mining operations are put into place, isn't that also a very GOOD thing?  Again, more hashing power protecting Bitcoin, and more people taking it seriously (as evidenced by people making large-scale investments).  It also means that those mining companies would work hard to keep the price of Bitcoin stable - they want to have consistent returns, not returns where they might be losing money one day, and making twice as much the next.  If mining companies are holding back on the sale of coins to help stabilize the price, is that not a good thing?

On top of all of this, it will NOT be centralized mining.  It will be a variety of companies or business groups making a variety of investments in a variety of sizes of mining operations.  Just because you can't profitably mine at residential electric rates doesn't mean it is centralized.  It just means that mining has moved from a hobby to the real business world.

Centralized is the buzzword around here, but everyone is using it wrong.  If there was only one person or company in the world mining Bitcoin, then I would call that centralized.  But a group of businesses competing with each other is the opposite of centralization.

This is not the end of Bitcoin - this is just the beginning.  Sorry you don't like the way it is going, but deal with it.

[Raize]

Sgt, don't misinterpret my words as disgust regarding Bitcoin as a whole. I just think there are a LOT of miners that are not thinking things through and don't understand just how difficult mining is going to be getting, and that they could still become miners again after second-gen ASIC blows first gen out of the water.

I'm really worried about these sorts of things, because I get the impression that a lot of miners will be under the impression they are owed something for the work they do, and they aren't going to be very pleased with the reward halving for sure. It could be this translates into a hoarding of Bitcoin at some unspecific point around the beginning of the difficulty adjustments, but given that so many people will have already wrapped up funds in ASIC hardware, it could be these folks that miss out the most...

[SgtSpike]

Sgt, don't misinterpret my words as disgust regarding Bitcoin as a whole. I just think there are a LOT of miners that are not thinking things through and don't understand just how difficult mining is going to be getting, and that they could still become miners again after second-gen ASIC blows first gen out of the water.

I'm really worried about these sorts of things, because I get the impression that a lot of miners will be under the impression they are owed something for the work they do, and they aren't going to be very pleased with the reward halving for sure. It could be this translates into a hoarding of Bitcoin at some unspecific point around the beginning of the difficulty adjustments, but given that so many people will have already wrapped up funds in ASIC hardware, it could be these folks that miss out the most...

Ok, so your post is more of a warning to miners than anything else?  Fair enough, I can agree that that isn't a bad thing to do.  Plus, it disincentivises mining, thereby increasing your own mining profits in the meantime. 

[Raize]

Yes, but believe me, that's not my fullest intent. I do mine with FPGA and ASIC will "crush" my operation, but I have the financial capability to invest in first gen ASIC and I'm not because I see the early adopter advantage being very small, especially given the length of time any funds invested in such an operation will be held up. Too high of a risk vs. reward IMHO, but I suppose we'll see if I'm wrong.

I see a revisiting of the period of time when GPU miners first started considering buying more than one unit to mine with. Say, March 2011. And the followup of 6 months that took the price per coin from a low of $.60 to $30+. It wasn't profitable to buy GPU miners as much as it was to buy coin during that difficulty increase. In fact, had you bought just $500 of coin at $.80 in March, sold at $20 in July and started a GPU farm of 15 mining machines netting you an average profit of 12 Bitcoin/day (actual profit over this period of time was quite a bit higher where I live, and nearly double that when the difficulty hit its bottom), then today you would have at least 3,500 coin, enough to have paid off those GPU miners, invested in FPGA, and pocketed a nice profit instead of buying a dual GPU unit at that $500 when it was first viable. Still better would have been the guy that sold at $20 and rebought at $2, but folks still say you can't time the market (especially if you ignore when difficulty is falling and when it is recovering). I disagree.

I guess what I'm saying is that if you expect the price to be falling drastically from $6 then it's time to invest heavily in miners, and I just don't see that happening right now. Not with the inevitable difficulty increases ahead of us and the block reward halving. Especially with graphs like these showing Bitcoin interest and use at all time highs:
https://blockchain.info/charts/n-transactions-excluding-popular?timespan=1year&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=

https://blockchain.info/charts/market-cap

So if difficulty isn't falling and is, in fact, increasing exponentially, now is definitely not the time to be buying miners. It's too risky and we don't know where/when the difficulty increase is going to stop/decline.

[ldrgn]

- Why is a years-long ROI a bad thing?

Risk.  On top of that, remember that bitcoin mining is perfectly competitive - the longer this time period gets the closer you'll be getting to the magical long-term point where you are no longer profitable.

[sadpandatech]

BFL Trade-In impact on Bitcoin Difficulty
Speculation based on my complete mastery (not)

Time frame of 5 months.  Assuming BFL delivery matches past performance.
Per SC chip output velocity will be greater with at least 10x chips per SC Single.

25 BTC block reward.  It's too close to call whether BFL can get SC delivered prior to reward halving.

BFL Singles sold (estimate)

500

BFL Mini Rigs sold (estimate)

20

Network capacity represented

Singles - ~ 400 GH
Mini Rigs - ~ 500 GH


BFL Trade-In network capacity impact
using a trade-in scenario of 4 Singles (FPGA) converted to 3 SC Singles, 2 Jalapenos (90% trade-in conversion to SC)
Mini Rig.  Straightforward conversion.  1:1 plus capital.

4 Singles trade-in credit - $2,400
Trade-in cash obligation  - $2,400
$4,800

3 SC Singles - $4,500
2 SC Jalapenos - $300
$4,800

1 Mini Rig trade-in credit - $15,000
Trade-in cash obligation - $15,000
$30,000

SC Mini Rig - $30,000


Single capacity loss (FPGA)

360 GH

Mini Rig capacity loss (FPGA)

500 GH


SC Single/Jalapeno capacity gained

14.3 Terahash

SC Mini Rig capacity gained

20 Terahash

Current network capacity (Mini Rigs/Singles not yet delivered and online added)

~ 12.5-14.5 Terahash

Minus Single (FPGA) capacity

~ 12.1-14.1 Terahash

Minus Mini Rig (FPGA) capacity

~ 11.6 - 13.6 Terahash

Minus GPU attrition (Let's say an initial conservative loss of 70% GPU capacity where GPU is assumed to represent 85% of current network capacity)

~ 3.6-5.6 Terahash

Minus non BFL FPGA attrition (Same attrition estimates as GPU)

~ 2.7-4.7 Terahash

(As you can see the advent of ASICs for bitcoin hashing decimates prior technology.  In and of itself is fine.)

Plus BFL Trade-in capacity

SC Singles

~ 17-19 Terahash

SC Mini Rigs

~ 37-39 Terahash


Resulting hashing difficulty increase

~ 181%

Average pre-existing BFL miner capacity increase (using trade-in figures above)

~ 39x increase in capacity

Current vs. BFL SC profitability per GH  (including block reward halving)

 -82%

BFL SC Profitability/ROI (Excluding prior investments.  Exchange rate remains constant.  Block reward - 25 btc.  Excluding all other factors that would lead to difficulty adjustments)

~ 62 days


What we can immediately take away from this (considering only the figures above)

1.  GPU currently represents a large portion of network capacity.  Immediate effects of BFL trade-in activity could be blunted by GPU attrition.  Depends how sensitive to electricity costs.
2.  Miner profitability will be, at a minimum, approximately 82% less profitable per GH.
3.  Once additional BFL SC sales beyond trade-in transactions occurs we are looking at a significant additional difficulty increase.
4.  If one hopes that GPU actors will not participate in BFL SC ROI calculation looks very good.


Now.  Let's see what happens when GPU actors participate in BFL ASIC.

Assumptions (attempting to be conservative with estimates)

1.  40% of former GPU actors (that's 40% of the actors representing 8 Terahash of current capacity - those that suffer attrition) leave mining.  60% remain to rebuild their operations using BFL SC.
2.  These 60% of GPU actors choosing to rebuild operations spend approx. 60% of their initial GPU capital outlays on BFL SC units.


Equating current GPU capacity to capital

60% (of those suffering attrition) of 8 TH.  4.8 TH at ~ $1,200 per GH. $5.7 million. 60% capital re-up - $3.4 million.

BFL SC approximate cost per GH.  $38

Additional network capacity from re-uping former GPU actors

~ 89 Terahash

Total network capacity

~ 127 Terahash

Resulting hashing difficulty increase (from current difficulty)

~ 840%

Current vs. BFL SC profitability per GH  (including block reward halving)

 -94%

BFL SC Profitability/ROI (overall.  Excluding prior investments.)

~ 205 days

Quoting this so it gets seen again.. Will you have my babies? ;p

[SgtSpike]

- Why is a years-long ROI a bad thing?

Risk.  On top of that, remember that bitcoin mining is perfectly competitive - the longer this time period gets the closer you'll be getting to the magical long-term point where you are no longer profitable.

You have only answered the question as to why years-long ROI is bad for miners.  But miners are self-balancing.  If years-long ROI's are too risky, then miners won't continue to invest to the point where years-long ROI's are the norm, thus keeping it down into the months.  If miners are willing to risk buying even with years-long ROI's, then they might be called stupid or crazy, but they're still helping to give Bitcoin more hashing power to protect it.

It's just like ANY other business out there.  The more people invest into a particular market, the less room there is for competitors.  The less room there is for competitors, the less attractive it is for investing, and the less people will invest.  Those who already invested in the market have sunk costs, and might choose to ride it out or sell out and take the hit.  Those who sell out will help increase the profit of those who don't, and the ROI would eventually sink back to months instead of years again.

It's like you guys are complaining that gas stations open up near each other and compete, and it makes it more risky because it'll take longer for gas stations to recoup their investments, and some of them might not be profitable.  Ok... so??

So again, I ask the question, why is a years-long ROI a bad thing?  And I'll make it more specific:  Why is it bad to Bitcoin?

[ldrgn]

You have only answered the question as to why years-long ROI is bad for miners.

Yes, sorry about that.  Was just meaning to pop in and make a correction.

  But miners are self-balancing.

See the bit about perfectly competitive markets again, in the long term they stop balancing.  Endgame for Bitcoin looks like an oligopoly of a few very large, very efficient miners with microscopic/no profit margins.

So again, I ask the question, why is a years-long ROI a bad thing?  And I'll make it more specific:  Why is it bad to Bitcoin?

Relating to the first point I'm not arguing if it was good or not, just pointing out the way the system works.  Whether or not it is good depends on your idea of what a digital currency should be: if you highly value decentralization and a large pool of small miners Bitcoin is not designed to satisfy you in the long run.

[proudhon]

If everything is acurate then they will have chip with base potencial of 3.5GH/s @ ~2W. With little "overclocking" it will be 4GH/s @2.5W. 10 of these will be in Single= 40GH/s and 250 in MiniRig=1TH/s. I doubt they design 3 different chips. How many they can realese to wild in one week? 100 for sure. Lets assume 500 per month = 2TH/s. So difficulty will double in summer next year... With cheap electricity GPU miners don't have to worry for at least one year.
Thats of course speculation, that don't include others ASIC manufacturers.
My guess is that price of bitcoin will drop signifficantly becuse they will be "made" cheaply, very cheaply.

This. 

[flower1024]

If everything is acurate then they will have chip with base potencial of 3.5GH/s @ ~2W. With little "overclocking" it will be 4GH/s @2.5W. 10 of these will be in Single= 40GH/s and 250 in MiniRig=1TH/s. I doubt they design 3 different chips. How many they can realese to wild in one week? 100 for sure. Lets assume 500 per month = 2TH/s. So difficulty will double in summer next year... With cheap electricity GPU miners don't have to worry for at least one year.
Thats of course speculation, that don't include others ASIC manufacturers.
My guess is that price of bitcoin will drop signifficantly becuse they will be "made" cheaply, very cheaply.

This. 

but that does not mean that there are more bitcoins available.

i am not sure, but i still think price will go down after reward halfing (only through speculation - too rip people off which invested before the reward halfing)

i dont think asics will have a huge influence on price.

[crazy_rabbit]

Well we know that at *Least* a quarter million dollars of ASIC was bought yesterday with Bitcoin.

http://www.marketwatch.com/story/bitpay-shatters-record-for-bitcoin-payment-processing-2012-06-26

So that means a minimum of about 8.3TeraHashes is coming down the pipe in October. Anyone care to crunch the numbers about what that represents for difficulty adjustment?

[sadpandatech]

Well we know that at *Least* a quarter million dollars of ASIC was bought yesterday with Bitcoin.

http://www.marketwatch.com/story/bitpay-shatters-record-for-bitcoin-payment-processing-2012-06-26

So that means a minimum of about 8.3TeraHashes is coming down the pipe in October. Anyone care to crunch the numbers about what that represents for difficulty adjustment?

5 posts up from yours, contains about all the math crunching one can hope for at this point.

[Raize]

So again, I ask the question, why is a years-long ROI a bad thing?  And I'll make it more specific:  Why is it bad to Bitcoin?

I think you're missing the point of concern here.

People buy a product like a BFL device and expect it to:
1. Be delivered by X date,
2. Pay itself off within Y months, and
3. Hash at Z rate.

BFL has over-delivered on point #3, but their horrible performance on #1 and #2 means people are setting up for disaster.

Case in point: which is shipping first, the SC Jalepenos or SC Singles? How are two different ASIC devices going to ship simultaneously?

So why is a "years-long" ROI bad? Well, because the first people to get them aren't going to have that "years-long" ROI, they are going to pay off their BFL device within weeks. It's all the other fools that get their devices last that are going to have "years-long" ROI, and if you think that isn't going to be bad to see that kind of divergence, you're just being silly.

However on the very narrow point you mention, is it bad for Bitcoin? Absolutely not. Now's the time to buy, IMHO, time to take advantage of all the suckers that just wrapped up a quarter of a million USD in non-refundable deposits!

[SgtSpike]

So again, I ask the question, why is a years-long ROI a bad thing?  And I'll make it more specific:  Why is it bad to Bitcoin?

I think you're missing the point of concern here.

People buy a product like a BFL device and expect it to:
1. Be delivered by X date,
2. Pay itself off within Y months, and
3. Hash at Z rate.

BFL has over-delivered on point #3, but their horrible performance on #1 and #2 means people are setting up for disaster.

Case in point: which is shipping first, the SC Jalepenos or SC Singles? How are two different ASIC devices going to ship simultaneously?

So why is a "years-long" ROI bad? Well, because the first people to get them aren't going to have that "years-long" ROI, they are going to pay off their BFL device within weeks. It's all the other fools that get their devices last that are going to have "years-long" ROI, and if you think that isn't going to be bad to see that kind of divergence, you're just being silly.

However on the very narrow point you mention, is it bad for Bitcoin? Absolutely not. Now's the time to buy, IMHO, time to take advantage of all the suckers that just wrapped up a quarter of a million USD in non-refundable deposits!

...

So your ONLY point is that people who buy later than the first adopters will get a lower return?  Well, duh, they're coming to the party later!  And anyone who doesn't do the math before buying DESERVES to have a lower/longer ROI than they expected.

People are making a huge deal out of nothing, IMO.  It's the end of the world because some people might make bad investments that take a while to recoup?  Big freaking deal...

[nedbert9]

So again, I ask the question, why is a years-long ROI a bad thing?  And I'll make it more specific:  Why is it bad to Bitcoin?

I think you're missing the point of concern here.

People buy a product like a BFL device and expect it to:
1. Be delivered by X date,
2. Pay itself off within Y months, and
3. Hash at Z rate.

BFL has over-delivered on point #3, but their horrible performance on #1 and #2 means people are setting up for disaster.

Case in point: which is shipping first, the SC Jalepenos or SC Singles? How are two different ASIC devices going to ship simultaneously?

So why is a "years-long" ROI bad? Well, because the first people to get them aren't going to have that "years-long" ROI, they are going to pay off their BFL device within weeks. It's all the other fools that get their devices last that are going to have "years-long" ROI, and if you think that isn't going to be bad to see that kind of divergence, you're just being silly.

However on the very narrow point you mention, is it bad for Bitcoin? Absolutely not. Now's the time to buy, IMHO, time to take advantage of all the suckers that just wrapped up a quarter of a million USD in non-refundable deposits!

Yes,  BFL needs to up their game on point 1.  I want them to answer the specific question of how many staff will be operating each assembly line.

I don't believe their assurances that they can get these units out the door quickly.  And with the ridiculous amount of cash they will be pulling in BFL can certainly afford cheap final assembly labor.

I'm optimistic on ASIC chip production.  The chips are produced at a small fraction of the cost of FPGA and it's not like BFL will have any sourcing problems.  They alone are the customer.

So, if BFL doesn't up their delivery game it makes them look much, much worse.  I hope people get this.

[Raize]

So your ONLY point is that people who buy later than the first adopters will get a lower return?

One person bought a SC Jalepeno, one person bought an SC Bitforce Single, both yesterday. What is your bet that both receive product on the same date? That's not an "early adopter advantage" that's a vast difference in ROI.

[SgtSpike]

So your ONLY point is that people who buy later than the first adopters will get a lower return?

One person bought a SC Jalepeno, one person bought an SC Bitforce Single, both yesterday. What is your bet that both receive product on the same date? That's not an "early adopter advantage" that's a vast difference in ROI.

And? If either one of them didn't account for that possibility, they only have themselves to blame.

[Raize]

And? If either one of them didn't account for that possibility, they only have themselves to blame.

So you admit that wasn't, in fact, my only point. No purchaser of BFL products today knows which ASIC is going to be run first, that's pretty imperative for preordering without the chance for a refund.

A cursory glance at the forums seems to show that they clearly don't think they are the only ones to blame.

Let me ask you this question to show how silly your argument is: Why was the allinvain hack bad for Bitcoin?

After all, it wasn't an underlying security issue with the blockchain. Plus, if he should have stored most of his Bitcoin in an offline wallet or multiple offline wallets, right? Duh, everyone should know that by now and should have known by then, too.

If you think new Bitcoin miners "screwing themselves" over because of a lack of understanding on difficulty adjustment isn't a big deal for Bitcoin, I guess you're just an ass. I'm all for survival of the fittest here, but to not see even a need to educate people on this? That's asinine.

[SgtSpike]

And? If either one of them didn't account for that possibility, they only have themselves to blame.

So you admit that wasn't, in fact, my only point. No purchaser of BFL products today knows which ASIC is going to be run first, that's pretty imperative for preordering without the chance for a refund.

A cursory glance at the forums seems to show that they clearly don't think they are the only ones to blame.

Let me ask you this question to show how silly your argument is: Why was the allinvain hack bad for Bitcoin?

After all, it wasn't an underlying security issue with the blockchain. Plus, if he should have stored most of his Bitcoin in an offline wallet or multiple offline wallets, right? Duh, everyone should know that by now and should have known by then, too.

If you think new Bitcoin miners "screwing themselves" over because of a lack of understanding on difficulty adjustment isn't a big deal for Bitcoin, I guess you're just an ass. I'm all for survival of the fittest here, but to not see even a need to educate people on this? That's asinine.

I never said there wasn't a need to educate people about the potential for long-term ROI's on these ASIC investments.  I just think it's silly to highlight the fact that there is risk involved, when that should be common sense for just about anyone entering any sort of investment to start with.

[dlasher]

http://www.sfgate.com/business/prweb/article/BitPay-Shatters-Record-for-Bitcoin-Payment-3663354.php

According to that article, Butterfly took >$250,000 in prepayments for ASIC's. I suspect we're looking at difficulty D-day assuming they deliver. Assuming they sold mostly "singles", that's  192 of them. 192 x 40Ghash = 7,680 Ghash... I can't guess for removal of old hardware, but that's a 50% increase in network wide-hash rate.

And I would guess there's at least that much waiting in the wings to see if BFL actually ships... So at least 2x the difficulty well before the reward drop doesn't seem out of the realm of possibility.

<btw, outstanding writeup nedbert9..>

[sadpandatech]

http://www.sfgate.com/business/prweb/article/BitPay-Shatters-Record-for-Bitcoin-Payment-3663354.php

According to that article, Butterfly took >$250,000 in prepayments for ASIC's. I suspect we're looking at difficulty D-day assuming they deliver. Assuming they sold mostly "singles", that's  192 of them. 192 x 40Ghash = 7,680 Ghash... I can't guess for removal of old hardware, but that's a 50% increase in network wide-hash rate.

And I would guess there's at least that much waiting in the wings to see if BFL actually ships... So at least 2x the difficulty well before the reward drop doesn't seem out of the realm of possibility.

<btw, outstanding writeup nedbert9..>

That announcement is only first 24 hours sales. By the time they, Bit-Pay, came to the forums to announce it, they were up to 46k BTC. That does not account for orders after that in BTC up until now. It also does not account for bank-wire orders.

I'm guaging more like 10.5TH to 35TH. The other catch is we have absolutly zero way to know what exactly BFL will actually deliver and when. COuld be only Jalepenos. Could be only SC's. COuld be only 500 of each and a few 1TH minis. We have no clue unfortunatly. :/

What we can guage is that unless the miners actually buy like 90TH worth and it is actually delivered all at once. Is that everyone who does get an asic will be very profitable until either BFL lower the prices or find a way to get more sales. Unlike the gpu/gaming market there is only so many people who actually want to mine.

cheers

[crazy_rabbit]

http://www.sfgate.com/business/prweb/article/BitPay-Shatters-Record-for-Bitcoin-Payment-3663354.php

According to that article, Butterfly took >$250,000 in prepayments for ASIC's. I suspect we're looking at difficulty D-day assuming they deliver. Assuming they sold mostly "singles", that's  192 of them. 192 x 40Ghash = 7,680 Ghash... I can't guess for removal of old hardware, but that's a 50% increase in network wide-hash rate.

And I would guess there's at least that much waiting in the wings to see if BFL actually ships... So at least 2x the difficulty well before the reward drop doesn't seem out of the realm of possibility.

<btw, outstanding writeup nedbert9..>


I actually assume they sold the 1,000USD version the most. I'm small time and it didn't even cross my mind to go for the single, and why would you go for a single? As far as I can tell, this could be the last opportunity to mine bitcoin. I doubt ASIC will get much cheaper- or faster. As we get closer and closer to the end of mining, buying rigs will make less and less sense, thus no manufacturer of ASIC has any incentive to sell in volume with price discounts. AS for getting faster- I doubt it, unless some engineer really thinks they can squeeze a large chunk of extra performance by redesigning a new chip why bother?

IMHO. :-)

[nedbert9]

http://www.sfgate.com/business/prweb/article/BitPay-Shatters-Record-for-Bitcoin-Payment-3663354.php

According to that article, Butterfly took >$250,000 in prepayments for ASIC's. I suspect we're looking at difficulty D-day assuming they deliver. Assuming they sold mostly "singles", that's  192 of them. 192 x 40Ghash = 7,680 Ghash... I can't guess for removal of old hardware, but that's a 50% increase in network wide-hash rate.

And I would guess there's at least that much waiting in the wings to see if BFL actually ships... So at least 2x the difficulty well before the reward drop doesn't seem out of the realm of possibility.

<btw, outstanding writeup nedbert9..>


I actually assume they sold the 1,000USD version the most. I'm small time and it didn't even cross my mind to go for the single, and why would you go for a single? As far as I can tell, this could be the last opportunity to mine bitcoin. I doubt ASIC will get much cheaper- or faster. As we get closer and closer to the end of mining, buying rigs will make less and less sense, thus no manufacturer of ASIC has any incentive to sell in volume with price discounts. AS for getting faster- I doubt it, unless some engineer really thinks they can squeeze a large chunk of extra performance by redesigning a new chip why bother?

IMHO. :-)

Let's just hope, don't hold breath, that bitcoin adoption and tx fees start to represent a decent incentive.



On the bright side, if you are a bitcoin believer, appropriately priced ASICs (eventually nearer to production cost - com'on competition) will allow one to support bitcoin transactions at a very reasonable cost.

[Raize]

I just think it's silly to highlight the fact that there is risk involved, when that should be common sense for just about anyone entering any sort of investment to start with.

This sounds like saying that people shouldn't be informed, which contradicts your first sentence.

Have you been paying attention to all the new posters in this forum every single week asking if the "Unknown" mining pool is a threat?

Hundreds of new miners appear to have entered into what could be better called an "nonrefundable three-month layaway". There is no real-world precedence for this in the world of retail, so it is NOT common sense.

Due to the nature of Bitcoin, what if BFL can't raise enough funds to do an ASIC run and Bitcoin increases in value 100% after they've been selling them for USD? They now can't deliver the goods and they can't return the coin, the best they can do is return a dollar investment in coin, and let's sure hope they are backing up their order info in the process!

How could you possibly be opposed to someone bringing these sorts of issues to bear?

[SgtSpike]

I just think it's silly to highlight the fact that there is risk involved, when that should be common sense for just about anyone entering any sort of investment to start with.

This sounds like saying that people shouldn't be informed, which contradicts your first sentence.

Have you been paying attention to all the new posters in this forum every single week asking if the "Unknown" mining pool is a threat?

Hundreds of new miners appear to have entered into what could be better called an "nonrefundable three-month layaway". There is no real-world precedence for this in the world of retail, so it is NOT common sense.

Due to the nature of Bitcoin, what if BFL can't raise enough funds to do an ASIC run and Bitcoin increases in value 100%? They can't deliver the goods and they can't return the coin, the best they can do is return a dollar investment in coin, and let's sure hope they are backing up their order info in the process!

How could you possibly be opposed to someone bringing these sorts of issues to bear?

I suppose I am just expecting too much common sense out of people then.  To me, all of the things you just wrote about are simply stating the obvious.

[dlasher]

Let's just hope, don't hold breath, that bitcoin adoption and tx fees start to represent a decent incentive.

^^ This ^^

Together they could make processing transactions based on fees alone possible, and potentially profitable.

[DILLIGAF]

I just think it's silly to highlight the fact that there is risk involved, when that should be common sense for just about anyone entering any sort of investment to start with.

This sounds like saying that people shouldn't be informed, which contradicts your first sentence.

Have you been paying attention to all the new posters in this forum every single week asking if the "Unknown" mining pool is a threat?

Hundreds of new miners appear to have entered into what could be better called an "nonrefundable three-month layaway". There is no real-world precedence for this in the world of retail, so it is NOT common sense.

Due to the nature of Bitcoin, what if BFL can't raise enough funds to do an ASIC run and Bitcoin increases in value 100%? They can't deliver the goods and they can't return the coin, the best they can do is return a dollar investment in coin, and let's sure hope they are backing up their order info in the process!

How could you possibly be opposed to someone bringing these sorts of issues to bear?

I suppose I am just expecting too much common sense out of people then.  To me, all of the things you just wrote about are simply stating the obvious.

I have found that common sense is not all that common, that phrase is a misnomer.

[SgtSpike]

I just think it's silly to highlight the fact that there is risk involved, when that should be common sense for just about anyone entering any sort of investment to start with.

This sounds like saying that people shouldn't be informed, which contradicts your first sentence.

Have you been paying attention to all the new posters in this forum every single week asking if the "Unknown" mining pool is a threat?

Hundreds of new miners appear to have entered into what could be better called an "nonrefundable three-month layaway". There is no real-world precedence for this in the world of retail, so it is NOT common sense.

Due to the nature of Bitcoin, what if BFL can't raise enough funds to do an ASIC run and Bitcoin increases in value 100%? They can't deliver the goods and they can't return the coin, the best they can do is return a dollar investment in coin, and let's sure hope they are backing up their order info in the process!

How could you possibly be opposed to someone bringing these sorts of issues to bear?

I suppose I am just expecting too much common sense out of people then.  To me, all of the things you just wrote about are simply stating the obvious.

I have found that common sense is not all that common, that phrase is a misnomer.

Likewise, I have found that particular phrase commenting on a phrase to be cliche.  But still, it may be true nonetheless. 

[zvs]

OK.. so I have kind of a different take on where difficulty post-asic will wind up....

I have no idea in hard numbers / actual terms... but in relative terms, it will wind up wherever it needs to be for the break-even running costs point to be around 10 cents per Kw/hr..   (this will of course vary based upon the USD/BTC exchange rate)

So.. if your electric costs more than 10 cents, don't even bother getting on the waiting list.. you'll never get your money back.

If you pay between 5 and 10 cents.. your break even (initial purchase + running costs) will be 1 to several years...   Up to your individual confidince in bitcoin if you wanna play.....

If you pay less than 5 cents.. Time to beg/borrow/mortgage-the-farm and buy as many ASICs as you can.  You will be in the select few who will still be able to mint money mining. 

If you happen to live in the arctic circle, and heat with electric.. well then you might wanna consider robbing a few banks....  Just buy the company outright.

And one last thought...  just like the gold rush, ultimately the ones who make the most money will be those that provide the picks & shovels (errr ASICs).. not the miners. 

Sigg

like some others have said,

people will simply lose interest in bitcoins. 

so a couple dozen people spend lots of $$ on ASICs, it's not worth mining for anyone else.  now why do we care about bitcoins?   so hobbyists can try to recoup their investments?

myself + a handful of friends became interested initially because we could generate a quarter of a bitcoin a day or w/e.  we could have some actual involvement.   

nobody i know spends bitcoins to buy drugs.  i'm not particularly concerned with using USD on anything I buy.

it just won't matter anymore

[crazy_rabbit]

OK.. so I have kind of a different take on where difficulty post-asic will wind up....

I have no idea in hard numbers / actual terms... but in relative terms, it will wind up wherever it needs to be for the break-even running costs point to be around 10 cents per Kw/hr..   (this will of course vary based upon the USD/BTC exchange rate)

So.. if your electric costs more than 10 cents, don't even bother getting on the waiting list.. you'll never get your money back.

If you pay between 5 and 10 cents.. your break even (initial purchase + running costs) will be 1 to several years...   Up to your individual confidince in bitcoin if you wanna play.....

If you pay less than 5 cents.. Time to beg/borrow/mortgage-the-farm and buy as many ASICs as you can.  You will be in the select few who will still be able to mint money mining. 

If you happen to live in the arctic circle, and heat with electric.. well then you might wanna consider robbing a few banks....  Just buy the company outright.

And one last thought...  just like the gold rush, ultimately the ones who make the most money will be those that provide the picks & shovels (errr ASICs).. not the miners. 

Sigg

like some others have said,

people will simply lose interest in bitcoins. 

so a couple dozen people spend lots of $$ on ASICs, it's not worth mining for anyone else.  now why do we care about bitcoins?   so hobbyists can try to recoup their investments?

myself + a handful of friends became interested initially because we could generate a quarter of a bitcoin a day or w/e.  we could have some actual involvement.   

nobody i know spends bitcoins to buy drugs.  i'm not particularly concerned with using USD on anything I buy.

it just won't matter anymore

If you already have GPU mining rigs, I assume you (and most people) will switch to Litecoin. In the past few days it's actually been a bit more profitable to mine LTC and sell for BTC then to mine BTC directly. And there are also a lot more Litecoins that can be mined. We just have to keep the interest of people like you a bit longer so that more services can be developed.

[westkybitcoins]

You don't seem to be able to read the above comments and actually address what they are saying.  I am not trying to troll you, but some very valid points have been made and its like everyone seems to ignore it and then say, "ASIC's are available to EVERYONE,just like a video card you need a few bucks,BUT,you don't need to know how to "build" anything(like a PC).Just buy it,setup the mining software & GO!!!!!!!!!!!!!!!".   To make it clear, the argument against ASIC is that is will centralize the network over time because people will quit when it is not profitable AND an agency (gov) could easily come in and purchase enough capacity to pull off the 51% attack (their pockets are much deeper and it would be just a trickle in the bucket for them). 

I don't see how anyone is thinking the release of ASICs is in any way going to centralize Bitcoin mining.

For example, I personally could already be mining, but the reason I haven't done it isn't hardware cost. A cheap graphics card isn't exactly extravagant. It's because of (1) the hassle (mainly heat output, but also other problems if scaling up) and (2) the electrical costs. That's just not convenient for casual mining.

Now, I can pre-order a $150 device that draws less power than a fluorescent light bulb and has nearly-negligible hassle, and keep it turned on for the heck of it. I'm helping secure the network, and making a little in the process... it's about like CPU mining before the GPU days, but with a small(ish) upfront cost. And the fact that I have pre-ordered one, but had no intention of GPU (or FPGA) mining just proves that the market of potential miners has expanded, not contracted.

Seriously, I don't understand the fuss.

(Even the 51% attack is less feasible... with more people mining, and a higher hash rate per miner, it's win/win. And it's not as if some agency couldn't just make their own ASICs if no one else did, although eventually someone was bound to.)

[sadpandatech]

Now, I can pre-order a $150 device that draws less power than a fluorescent light bulb and has nearly-negligible hassle, and keep it turned on for the heck of it. I'm helping secure the network, and making a little in the process... it's about like CPU mining before the GPU days, but with a small(ish) upfront cost. And the fact that I have pre-ordered one, but had no intention of GPU (or FPGA) mining just proves that the market of potential miners has expanded, not contracted.

+1 to this. My orginal intention in mining was akin to that of the same reasons I processed seti@home shares, human genome(sadly corp scum think it's their right to copyright life and got access to this results), various boinic programs.

Bitcoin just seemed something with a much broader scope to move over to atm. Yes, eventually I got enough equipment to 'profit', whch is great. But I am sure there are more with this same mindset.



edit; I just hope that before too long more companies will have similar offerings.

[Gabi]

OK.. so I have kind of a different take on where difficulty post-asic will wind up....

I have no idea in hard numbers / actual terms... but in relative terms, it will wind up wherever it needs to be for the break-even running costs point to be around 10 cents per Kw/hr..   (this will of course vary based upon the USD/BTC exchange rate)

So.. if your electric costs more than 10 cents, don't even bother getting on the waiting list.. you'll never get your money back.

If you pay between 5 and 10 cents.. your break even (initial purchase + running costs) will be 1 to several years...   Up to your individual confidince in bitcoin if you wanna play.....

If you pay less than 5 cents.. Time to beg/borrow/mortgage-the-farm and buy as many ASICs as you can.  You will be in the select few who will still be able to mint money mining. 

If you happen to live in the arctic circle, and heat with electric.. well then you might wanna consider robbing a few banks....  Just buy the company outright.

And one last thought...  just like the gold rush, ultimately the ones who make the most money will be those that provide the picks & shovels (errr ASICs).. not the miners. 

Sigg

like some others have said,

people will simply lose interest in bitcoins. 

so a couple dozen people spend lots of $$ on ASICs, it's not worth mining for anyone else.  now why do we care about bitcoins?   so hobbyists can try to recoup their investments?

myself + a handful of friends became interested initially because we could generate a quarter of a bitcoin a day or w/e.  we could have some actual involvement.   

nobody i know spends bitcoins to buy drugs.  i'm not particularly concerned with using USD on anything I buy.

it just won't matter anymore

Protip: mining is not a get rich quick scheme

and no, bitcoin won't disappear because you are unable to become rich via mining.

[bitcool]

If you already have GPU mining rigs, I assume you (and most people) will switch to Litecoin. In the past few days it's actually been a bit more profitable to mine LTC and sell for BTC then to mine BTC directly. And there are also a lot more Litecoins that can be mined. We just have to keep the interest of people like you a bit longer so that more services can be developed.

Just curious, how difficult is it to modify a ASIC rig to mine LTC?
I suppose there's always the possibility of a new xyzCoin based on different hashing algorithm(s), which will screw the ASIC?

[Gabi]

If you already have GPU mining rigs, I assume you (and most people) will switch to Litecoin. In the past few days it's actually been a bit more profitable to mine LTC and sell for BTC then to mine BTC directly. And there are also a lot more Litecoins that can be mined. We just have to keep the interest of people like you a bit longer so that more services can be developed.

Just curious, how difficult is it to modify a ASIC rig to mine LTC?
I suppose there's always the possibility of a new xyzCoin based on different hashing algorithm(s), which will screw the ASIC?

It is impossible to mine LTC with that ASIC

You need to make a new ASIC, make the project, invest some millions $ to start making the chip and then you can mine LTC with your new ASIC.

[DILLIGAF]

If you already have GPU mining rigs, I assume you (and most people) will switch to Litecoin. In the past few days it's actually been a bit more profitable to mine LTC and sell for BTC then to mine BTC directly. And there are also a lot more Litecoins that can be mined. We just have to keep the interest of people like you a bit longer so that more services can be developed.

Just curious, how difficult is it to modify a ASIC rig to mine LTC?
I suppose there's always the possibility of a new xyzCoin based on different hashing algorithm(s), which will screw the ASIC?

It is impossible to mine LTC with that ASIC

You need to make a new ASIC, make the project, invest some millions $ to start making the chip and then you can mine LTC with your new ASIC.

It was supposed to be impossible to mine it on a GPU, look how that turned out they are hashing away right now..

[bitcool]

It is impossible to mine LTC with that ASIC
You need to make a new ASIC, make the project, invest some millions $ to start making the chip and then you can mine LTC with your new ASIC.

It was supposed to be impossible to mine it on a GPU, look how that turned out they are hashing away right now..

So LTC was the one design for CPU-mining only? Since they both use SHA-256, it won't be a surprise a LTC ASIC maker will be able to reuse most of the BTC ASIC design. In order to be truly effective, it has to make the hashing algorithm prohibitively complex for ASIC.

[rjk]

If you already have GPU mining rigs, I assume you (and most people) will switch to Litecoin. In the past few days it's actually been a bit more profitable to mine LTC and sell for BTC then to mine BTC directly. And there are also a lot more Litecoins that can be mined. We just have to keep the interest of people like you a bit longer so that more services can be developed.

Just curious, how difficult is it to modify a ASIC rig to mine LTC?
I suppose there's always the possibility of a new xyzCoin based on different hashing algorithm(s), which will screw the ASIC?

It is impossible to mine LTC with that ASIC

You need to make a new ASIC, make the project, invest some millions $ to start making the chip and then you can mine LTC with your new ASIC.

It was supposed to be impossible to mine it on a GPU, look how that turned out they are hashing away right now..

GPUs are programmable devices, custom ASICs are single-purpose. A custom ASIC could be designed to be programmable, but then all you have is an expensive and slow FPGA or CPU kind of thing.

So LTC was the one design for CPU-mining only? Since they both use SHA-256, it won't be a surprise a LTC ASIC maker will be able to reuse most of the BTC ASIC design. In order to be truly effective, it has to make the hashing algorithm prohibitively complex for ASIC.

If an ASIC was specifically designed for Scrypt (the LTC proof-of-work), it would be many magnitudes faster than anything else. LTC does not make use of SHA256 for the proof-of-work.

[Gabi]

If you already have GPU mining rigs, I assume you (and most people) will switch to Litecoin. In the past few days it's actually been a bit more profitable to mine LTC and sell for BTC then to mine BTC directly. And there are also a lot more Litecoins that can be mined. We just have to keep the interest of people like you a bit longer so that more services can be developed.

Just curious, how difficult is it to modify a ASIC rig to mine LTC?
I suppose there's always the possibility of a new xyzCoin based on different hashing algorithm(s), which will screw the ASIC?

It is impossible to mine LTC with that ASIC

You need to make a new ASIC, make the project, invest some millions $ to start making the chip and then you can mine LTC with your new ASIC.

It was supposed to be impossible to mine it on a GPU, look how that turned out they are hashing away right now..

Congratulation, you fail at logic!
Comparing GPU with ASIC is retarded. So, since it was supposed to be impossible THEN everything else must be true. Look, a flying donkey. What? It is impossible? Well, it was supposed to be impossible to mine it on a GPU, look how that turned out they are hashing away right now so i expect donkey able to fly!

[crazy_rabbit]

If you already have GPU mining rigs, I assume you (and most people) will switch to Litecoin. In the past few days it's actually been a bit more profitable to mine LTC and sell for BTC then to mine BTC directly. And there are also a lot more Litecoins that can be mined. We just have to keep the interest of people like you a bit longer so that more services can be developed.

Just curious, how difficult is it to modify a ASIC rig to mine LTC?
I suppose there's always the possibility of a new xyzCoin based on different hashing algorithm(s), which will screw the ASIC?

It is impossible to mine LTC with that ASIC

You need to make a new ASIC, make the project, invest some millions $ to start making the chip and then you can mine LTC with your new ASIC.

It was supposed to be impossible to mine it on a GPU, look how that turned out they are hashing away right now..

GPUs are programmable devices, custom ASICs are single-purpose. A custom ASIC could be designed to be programmable, but then all you have is an expensive and slow FPGA or CPU kind of thing.

So LTC was the one design for CPU-mining only? Since they both use SHA-256, it won't be a surprise a LTC ASIC maker will be able to reuse most of the BTC ASIC design. In order to be truly effective, it has to make the hashing algorithm prohibitively complex for ASIC.

If an ASIC was specifically designed for Scrypt (the LTC proof-of-work), it would be many magnitudes faster than anything else. LTC does not make use of SHA256 for the proof-of-work.

Hopefully that litecoin ASIC is far in the future. I'm more concerned about all the Bitcoin GPU's jumping to the LTC ship in October/november.

[smoothie]

If you already have GPU mining rigs, I assume you (and most people) will switch to Litecoin. In the past few days it's actually been a bit more profitable to mine LTC and sell for BTC then to mine BTC directly. And there are also a lot more Litecoins that can be mined. We just have to keep the interest of people like you a bit longer so that more services can be developed.

Just curious, how difficult is it to modify a ASIC rig to mine LTC?
I suppose there's always the possibility of a new xyzCoin based on different hashing algorithm(s), which will screw the ASIC?

It is impossible to mine LTC with that ASIC

You need to make a new ASIC, make the project, invest some millions $ to start making the chip and then you can mine LTC with your new ASIC.

It was supposed to be impossible to mine it on a GPU, look how that turned out they are hashing away right now..

GPUs are programmable devices, custom ASICs are single-purpose. A custom ASIC could be designed to be programmable, but then all you have is an expensive and slow FPGA or CPU kind of thing.

So LTC was the one design for CPU-mining only? Since they both use SHA-256, it won't be a surprise a LTC ASIC maker will be able to reuse most of the BTC ASIC design. In order to be truly effective, it has to make the hashing algorithm prohibitively complex for ASIC.

If an ASIC was specifically designed for Scrypt (the LTC proof-of-work), it would be many magnitudes faster than anything else. LTC does not make use of SHA256 for the proof-of-work.

Hopefully that litecoin ASIC is far in the future. I'm more concerned about all the Bitcoin GPU's jumping to the LTC ship in October/november.

The more I read about FPGAs and how much cache litecoin requires to do computations it may be a while before the hardware exists in a realistic cost/price manner to allow production without spending a ton.

[Gabi]

Making a Litecoin ASIC is possible, you just need to make it, go at a foundry, pay for the masks and everything (millions $$$) and then start making chip.

[AzN1337c0d3r]

Making a Litecoin ASIC is possible, you just need to make it, go at a foundry, pay for the masks and everything (millions $$$) and then start making chip.

Why would you go out and make a Litecoin ASIC?

Scrypt (which is used by litecoin) is dominated by main memory speed, and modern day DRAMs already are one of the most cost-effective solutions you can buy anyways.

[rjk]

Making a Litecoin ASIC is possible, you just need to make it, go at a foundry, pay for the masks and everything (millions $$$) and then start making chip.

Why would you go out and make a Litecoin ASIC?

Scrypt (which is used by litecoin) is dominated by main memory speed, and modern day DRAMs already are one of the most cost-effective solutions you can buy anyways.

Because you can build a fast cache into a custom ASIC, and it would be far faster than just using commodity DRAM, no matter what way you sliced it.

[AzN1337c0d3r]

Because you can build a fast cache into a custom ASIC, and it would be far faster than just using commodity DRAM, no matter what way you sliced it.

Do you understand that the large proportion of die area in a CPU is devoted to cache space already? Furthermore that cache is pretty much AS FAST as we can make it, ASIC or otherwise.



What's that in the middle of the CPU? Oh it's the gigantic 20MB L3 cache of the Xeon E5/i7-39xx series.

Even if you were to produce full wafers of just cache, it wouldn't make sense to LTC mine with them unless you are generating thousands and thousands of wafers.

It's much cheaper to take advantage of economies of scale to buy COTS CPUs and LTC mine that way.

[rjk]

It would perform better with a huge L1 cache, from what I understand. And all those 8 cores have extra x86 cruft that could be deleted to make room for more cache and dedicated hashers. Once you reach the magical memory mark of however many MB of cache you need, the rest is just processing power. If you are under that magical number (which for LTC is actually lower than reference Scrypt implementations, so it would be easier), then you have to worry about swapping out to slow onboard dram and that's where the performance loss is incurred.

[2112]

It would perform better with a huge L1 cache, from what I understand.

Using cache memory is just a waste of power and die space, primarily because cache is a combination of CAM (Content-Addressable Memory) and SRAM (Static RAM). What one would need is eDRAM (embedded DRAM, http://en.wikipedia.org/wiki/EDRAM).

The other obvious savings are:

1) paging MMU: significant saving of power and huge gain in overclocking headroom. Segmented memory would be just fine, up to 4GB on x86 with paging disabled.

2) no need for TLB when paging is disabled

3) because scrypt is 100% predictable all thats really required is a huge pipelined read buffer, write buffer is much less important

4) when going off-chip the pipelined read buffer would need to be combined with narrower bus to avoid transfering useless data

5) when using on-chip eDRAM one can completely dispense with the need to have separate refresh circuitry and refresh cycle stealing. scrypt() is guaranteed to keep the dynamic memory regularly refreshed

I'll say that there's a lot of room for improvement when implementing scrypt() on FPGAs and ASICs and in comparison with the general purpose CPUs and GPUs.

[AzN1337c0d3r]

1) paging MMU: significant saving of power and huge gain in overclocking headroom. Segmented memory would be just fine, up to 4GB on x86 with paging disabled.

2) no need for TLB when paging is disabled

3) because scrypt is 100% predictable all thats really required is a huge pipelined read buffer, write buffer is much less important

4) when going off-chip the pipelined read buffer would need to be combined with narrower bus to avoid transfering useless data

5) when using on-chip eDRAM one can completely dispense with the need to have separate refresh circuitry and refresh cycle stealing. scrypt() is guaranteed to keep the dynamic memory regularly refreshed

I'll say that there's a lot of room for improvement when implementing scrypt() on FPGAs and ASICs and in comparison with the general purpose CPUs and GPUs.

All this is true from a hardware design standpoint, but not from an economical standpoint. Even if you implement these things, you would not be able to beat out Intel's economies of scale in producing CPUs.

Your LTC-specific ASIC might be 10x faster, use 10x less power than a CPU (being extremely generous here). However, unless you are going to make millions of the things, you will never be able to make it anywhere as cheap as Intel makes a CPU on a MH/$ basis if you wish to recover your NRE.

[lame.duck]

All this is true from a hardware design standpoint, but not from an economical standpoint. Even if you implement these things, you would not be able to beat out Intel's economies of scale in producing CPUs.

Your LTC-specific ASIC might be 10x faster, use 10x less power than a CPU (being extremely generous here). However, unless you are going to make millions of the things, you will never be able to make it anywhere as cheap as Intel makes a CPU on a MH/$ basis if you wish to recover your NRE.

You are missing some points: Intel sells CPUs for other purposes besides mining, so the prices are determined by other markets besides mining. A CPU cache has only a limited number of ports, which are limiting access speed. Having dedicated small(er) separate memory blocks for each (LTC) hashing unit would give much more performance.

Producing dedicatet LTC-ASICs could use smaller die sizes, which would result in higher yield per Wafer, and one could use much simpler die packaging.

While IBM offers eDRAM up to 10? Mbit per ASIC, i doubt if the savings in chips space will compensate for the (much) lower cycle time. There is a reason why the chip caches are build in SRAM technology (in the past, at least DEC used DRAM technology for the cache on their µVAX?II? Chips).

[2112]

While IBM offers eDRAM up to 10? Mbit per ASIC, i doubt if the savings in chips space will compensate for the (much) lower cycle time.

Maybe yes, maybe no. scrypt() was designed by Colin Percival to intentionally interleave the memory access for blocks with Salsa20/8 block-mixing. There is even a parameter "r" describing how many Salsa's to apply (which ArtForz set to 1).

So the ultra-high-bandwidth with ultra-low-latency memory may be an overkill for scrypt() brute-forcer which does several scrypt() computations in parallel. The key to good performance is to avoid register spills to memory when doing Salsa rounds.

[AzN1337c0d3r]

You also aren't going to compete with Intel cache speed/size unless you are on leading edge process nodes like 40 nm or 32 nm. Masks costs for one of those in on the order of 2-4 million dollars... Wafer costs: $3000-$5000.

Even if you produce 10,000 so called LTC-ASIC miners. Assuming 300 die/wafer (~200mm^2/die), you're still looking at minimum $210/die.

This is ignoring yield issues, packaging costs, and assumes that you get a functional mask set in 1 go (unlikely).