

Pioneering Bitcoin hardware company to offer full refunds for all chip orders - cyphersanctus
http://arstechnica.com/business/2013/09/pioneering-bitcoin-hardware-company-to-offer-full-refunds-for-all-chip-orders/

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s_q_b
Are there any reliable Bitcoin ASIC providers at the moment? Butterfly Labs is
shipping units now, but it's all in a trickle. Also, the difficulty rate is
going to go way up once those machines come online.

Seems like if you bought the FPGA miners at the right moment, you earned
massive ROI, but that now the market's too mature and mining profits are in a
race to zero. If bitcoin sticks around, mining is destined to become a large-
scale low margin business, with companies with investing large amounts of
CapEx into massive farms of specialized hardware, thus squeezing out the
remaining profit through scale.

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jared314
> If bitcoin sticks around, mining is destined to become a large-scale low
> margin business

Large scale, yes. Low margin, no. The dedicated hardware will replace software
mining, just like GPU mining replaced CPU mining. But, mining is only
initially funded by the direct reward, and is meant to transition to a
transaction-fee based reward structure. (It's like starting a fire with
lighter fluid.) With the decrease in miners, increase in network transaction
activity (and thus transaction fees), and a rise in the bitcoin's value, the
people who invest in the network will get the most out of it. I think of it as
aligning incentives.

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IanCal
I don't see how that contradicts the "low margin" part. If the hardware is
reasonably available then anyone can buy it and start getting some transaction
fees. This should drive the required fees down as people drop their prices to
compete.

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mashmac2
Note: this is chip orders of 10,000+ only. Avalon shipped stand-alone Bitcoin
miners (each with several hundred chips in them) several months ago.

