
$100k of FPGAs, Mining Bitcoins at 110 Ghash/sec - mrb
http://bitfury.org/bitfury110.html
======
Jabbles
I think the incentives of the bitcoin system to hoard money and the massive
bias towards early adopters will be the downfall of bitcoin. All the
advantages of anonymity and irreversibility are voided if there is every
reason to keep hold of your money and let it increase in value. Several people
on HN claim to have hundreds of thousands of bitcoins, making them worth more
than 0.1% of the entire economy. Whilst the real world has its (possibly
unfair) share of billionaires, the majority of these have come through
substantial business innovation. Bitcoin "billionaires" come through luck and
early adoption, and in my view it makes it more unfair than our current
system.

I think that bitcoin will continue to have some success in areas that wish for
privacy, but will not reach the heights that some people predict.

~~~
mrb
No. The "hoarding" argument has been beaten to death. Evidence shows people
are not hoarding the coins: every day, 40 thousand coins change hands on the
single largest exchange: <http://bitcoincharts.com/markets/mtgoxUSD.html> This
is six times the number of coins created daily (7 thousands).

In other words, people are not hoarding them, but are trading them very, very
frequently.

And this is _just_ measuring MtGox's volume. Other trades (merchant sales,
other exchanges, etc) are likely surpassing MtGox's volume in aggregate...

~~~
Duff
How many coins were created daily 3 years ago?

~~~
jerguismi
The same 7200, it halves every 4 years.

Add: so 7200 coins/day in 2009, 3600 coins/day starting 2013, 1800 coins/day
starting 2017 etc.

------
mrb
Discussion thread on bitcointalk.org:
<https://bitcointalk.org/index.php?topic=82941.0>

I don't know what the skeptics think, but to me, the fact that at least 2
wealthy individuals or entities have invested $100k in 360-FPGA farms should
send a signal that at least some consider Bitcoin sufficiently reliable,
trusted, and stable to warrant this kind of investment. They put their money
where their mouth is.

I will soon write a blog post documenting the numerous other FPGA board
vendors that started designing custom boards targetting the Bitcoin mining
market.

Disclosure: I am myself a long-time miner.

~~~
taligent
The more logical conclusion is that they simply see money to be made.

I don't believe they are sending ANY signal that Bitcoin is reliable, trusted
or stable. In fact I personally see this as a clear sign that Bitcoin is
fundamentally unfair and easily gamed.

~~~
Andys
They are taking a huge risk with this investment. With the mining reward set
to automatically halve in 2013, and the currency still in its infancy, its a
bold move. And despite dropping 6 figures on the hardware it barely a percent
of the total hash rate.

~~~
maxerickson
They are only risking the amount that the hardware depreciates while they own
it, which is apparently quite a lot less than the purchase price for this
hardware.

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peteretep
I'm not sure what 110 Ghash/sec means. Can someone give me an idea of: at
current Bitcoin <-> currency conversion rates, what return per hour should you
expect from this?

~~~
mrb
Roughly this farm makes $10k per month.

110e9 (hash/sec) * 3600 (sec/hour) * 730 (hour/month) / (2^32 * 1733208
(current difficulty factor)) * 50 (coins/block) * 5.1 (current exchange rate:
usd/coin) = $9903 per month

Minus about $730/month in electricity for the 10kW it consumes, assuming an
average worldwide rate of $0.10/kWh.

~~~
peteretep
I think I'm right to say this will drop off as the potential number of Bitcoin
dwindles (although I don't know the mechanics)... I wonder how long until this
thing pays for itself, assuming Bitcoin value stays roughly constant

------
drtse4
Just to give you an idea of how does it compare to different solutions:
<https://en.bitcoin.it/wiki/Mining_Hardware_Comparison>

------
DanBC
Anyone know enough about Amazon and Bitcoin to know how many bitcoins you'd
get for a $10,000 spend on Amazon EC2 GPU clusters?

~~~
alexchamberlain
It's not worth it. See: <https://bitcointalk.org/index.php?topic=8405.0>

~~~
cperciva
... unless you're paying for them using stolen credit cards.

~~~
wr1472
or just use the stolen cards to buy goods from amazon?

~~~
cperciva
Handling physical goods is an easy way to get caught. Bitcoins are a very
effective way for criminals to cover their tracks.

~~~
wr1472
They would still have to buy the BTC using the credit card, although I agree
it is not as easy to trace as physical goods, the eventual BTC for physical
transaction could be traced all the way back to the credit card payment for
BTC.

So could be a case of security by obscurity here?

~~~
cperciva
They wouldn't be _buying_ the bitcoins, they would be _mining_ the bitcoins --
and newly mined bitcoins don't have any history showing who paid for the GPUs
which found them.

~~~
wr1472
I don't see how paying for the GPU instances using a credit card is any more
anonymous and less traceable than paying for physical goods?

Sure mine the BTC and it won't be possible to trace back to the machine.

------
Andys
Using the excess heat for household hot water and space heating is a great
idea.

~~~
hexagonal
Not really "excess". You put 10kw of electricity in, you get 10kw of heat out.

~~~
driverdan
Perhaps you should read up on the laws of thermodynamics. You do not get
"10kw" of heat out.

~~~
Retric
He is more than 99.9% accurate, so perhaps you need to go read the laws of
thermodynamics. _Heat is energy transferred from one system to another by
thermal interaction._

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fratido
A great way to sell showels in a gold rush.

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twog
I started a small bitcoin consultancy as well. I thought bitcoin was going to
be the next gold rush and replace currency all together, so I started building
a super efficient OS. I have since moved on, but I still believe in bitcoin.

If anyone is interested in the project, you can check it out here:
<http://projects.tonigemayel.com/bitcoin-os/>

------
sschueller
I wonder how long until we see worms/botnets that use the infected PCs to mine
bitcoins.

~~~
kalmi10
They already do: "I operate a ~10k botnet using a ZeuS software I modified
myself, including IRC, DDoS and bitcoin mining (13GH/s - 20GH/s atm)." -
reddit IAmA
[http://www.reddit.com/r/IAmA/comments/sq7cy/iama_a_malware_c...](http://www.reddit.com/r/IAmA/comments/sq7cy/iama_a_malware_coder_and_botnet_operator_ama/)
<http://news.ycombinator.com/item?id=3960034>

