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Bitcoin The Almighty Buck Hardware

Race To Mine Bitcoins Drives Enthusiasts Into the Chip Making Business 320

Posted by Soulskill
from the build-your-own-chips-to-build-your-own-currency dept.
holy_calamity writes "MIT Technology Review looks at the small companies attempting to build dedicated chips for mining Bitcoins. Several are claiming they will start selling hardware based on their chips early in 2013, with the technology expected to force many small time miners to give up. However, as happened in the CPU industry, miners may soon be caught in an expensive arms race that pushes development of faster and faster chips."
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Race To Mine Bitcoins Drives Enthusiasts Into the Chip Making Business

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  • Re:Um? (Score:4, Informative)

    by Lagmo (972467) on Wednesday December 05, 2012 @10:21PM (#42199637)

    Actually one of the more serious projects(ASICMINER) DO plan to use the first batches of chips to compensate the IPO investors by using them for mining and later to possibly help fund more R&D and production runs. Additional and future income will be based on sales of the hardware

    And since this is /. Preliminary chip info:
    Built on 130nm node process (approximately comparable to the Pentium III generation)
    It'll use a 15 x 15mm BGA package.
    It's expected to run at around 200-300Mhz
    It'll be a couple orders of magnitude more power efficient than GPUs and serveral times more than current FPGAs at hashing the SHA256 algorithm.
    More info here: https://bitcointalk.org/index.php?topic=99497.980 [bitcointalk.org] and older (but more geek bait): https://bitcointalk.org/index.php?topic=91173.0 [bitcointalk.org]

    Project is only about 2/3rds of the way through the foundry process, so atleast a month left till these chips could be active on the BTC network.

  • by llZENll (545605) on Wednesday December 05, 2012 @11:32PM (#42200163)

    As I understand it, no matter the speed of calculating, there are only a set number of bitcoins given out per time, for one year this is 1,310,400 BTC, which are currently worth $13 so roughly $17M total will be awarded. Your amount is only based on what percent of the mining force you represent, it will never go over this. So lets say butterfly could dominate and take 50% of the computational force (which is highly unlikely since there are 5 companies making ASICS and the huge stock of FGPAs and GPUs still online), regardless this would bank them perhaps $8M. Making a HUGE assumption the exchange rate of BTC doesn't fall, which I think it will (explained below). In threads on butterflys website you can read that they have already sold 20k units, and are expecting 2 more rounds of 30k units each, at $150/pop this is $13.5M, already over what they would expect to make mining themselves. Note manf costs are irrelevant in comparisons since butterfly has to make the units if they keep themselves or if they sell them.

    I think the exchange rate price is going to tank for 2 reasons, first it will take a while for the difficulty to catch up with the new onslaught of computing power, as is always the case since it is adjusted once per week, during this time there will be a flood of BTC on the market driving the price down. Secondly you will see a huge shift of BTC production from small groups with GPUs to much larger capital intensive groups with ASICS, this is not a graphics card you are using in your spare time, this is a custom built piece of hardware built solely for the purpose of speculating on mining bitcoins, and is worthless otherwise. This will vastly reduce the population mining BTC and thus reduce the number of people using and interested in BTC. As the BTC mining industry ramps up it may be the very thing that unravels interest in BTC. Coupled with more BTC for sale it could crash the market, again.

  • by Anonymous Coward on Thursday December 06, 2012 @12:03AM (#42200409)

    The US treasure is not a privately held cartel. It also doesn't print money.

    The US Federal reserve IS, and DOES. To quote Wikipedia ". The Federal Reserve System has both private and public components, and was designed to serve the interests of both the general public and private bankers. "

    http://en.wikipedia.org/wiki/Federal_Reserve_System

    So, while what you said is true, its irrelevant. The people who make the money, are bankers. Banks are insolvent. The Feds job is to keep banks afloat. The banks benefit. Banks are privately owned. Etc. Etc Etc.

  • by tftp (111690) on Thursday December 06, 2012 @12:57AM (#42200741) Homepage

    Google is useful, and GP is correct. The US Department of Treasury is not a bank at all, let alone the central bank. Per Wikipedia:

    The Treasury prints and mints all paper currency and coins in circulation through the Bureau of Engraving and Printing and the United States Mint. The Department also collects all federal taxes through the Internal Revenue Service, and manages U.S. government debt instruments.

    The Federal Reserve System (also known as the Federal Reserve, and informally as the Fed) is the central banking system of the United States.

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