
Avalon ASIC Bitcoin Miner – Prices for Batch #2 - DiabloD3
http://launch.avalon-asics.com/#prices
======
angersock
It would seem to me that a winning strategy would be to make these units, sell
them, and ship them.

In the delays for step 2 & 3, have them sitting around plugged in mining,
paying for their use. The final sale defrays the cost of building the thing,
and you effectively get free Bitcoins--right before the market for mining
tanks due to your dispersal of mining ASICs.

Is this reasonable?

~~~
DanBC
If they build many machines, and use them all to mine at the same time, aren't
they suddenly crashing the value?

I guess if they get a good deal for energy (or need to heat the factory) "soak
testing" is a good way to get a bit of money back.

~~~
imatworkyo
crashing the value of what?

Bitcoin price is not tied to computational effort spent on mining. The
creation rate of new Bitcoins is already constrained and well defined.
Producing more machines would just mean Avalon would get a larger portion of
the new Bitcoins.

~~~
STRML
That's the thing - this is not a traditional market but it is possible to
'crash' the difficulty. If enough of these things show up globally they can
make mining so difficult for everyone else that they will have to give up.

This is a very unhealthy thing for the BTC market in general as only a few
players will have the ASICs to mine profitably, and everyone else will be
spending far too much per kW to do any mining at all.

One of the weaknesses of BTC, as far as I understand, is that anyone with a
majority of the global hashing power can rewrite new transactions on the
blockchain. If regular GPU miners give up and a few players spin up some
massive ASICs, we may very well see this become a reality.

------
dustcoin
The launch was a disaster again, with most requests timing out, carts going to
checkout only to ask for a few USD of payment instead of the full $1500, and a
report a of a customer seeing other customer's name.

Avalon has insisted on using a different payment processor for each of their
batches, I assume as way of supporting the community. This almost ensures
there will be issues with their store every batch.

Great product, lousy store.

------
noonespecial
What do you do to get rich during a gold rush? Sell shovels to miners.

~~~
dustcoin
Would you sell shovels to other people if the shovels mined gold on their own?

The real reason that the ASIC companies take preorders is to pay for the high
upfront engineering costs. Additionally, a single entity controlling a
majority of the bitcoin network would decrease confidence in Bitcoin, so it is
in everyones best interest to spread out the mining devices.

------
Xcelerate
I like the idea of Bitcoin, but it bothers me that the computational power
gets spent on such a useless project (hash function calculation). Isn't there
anyway that the _system_ of Bitcoin could remain the same while the
computational power goes into something like... I don't know... protein
folding or weather prediction?

~~~
DennisP
The hash function is not arbitrary. Its purpose is to put the global list of
transactions in an unambiguous sequence that everyone agrees on, to solve the
double-spending problem. The inputs to the hash function are transactions.

When a block of transactions is successfully hashed, the miner is awarded new
bitcoins, as an incentive to do that necessary work of putting those
transactions in order.

I was worried about energy consumption, until I worked out how much the
numbers. Starting with an extreme assumption that the bitcoin money supply
reaches parity with the dollar by 2021 or so, total power consumption used
directly for mining is only a couple gigawatts, about a tenth of a percent of
the world's total. I worked that out like this:

First assume the cost of mining equals the value returned. If mining is very
profitable, more people will mine and difficulty goes up. If mining loses
money, people drop out and difficulty goes down. Overall mining will always
tend to be in the neighborhood of breakeven, with just barely enough profit to
keep people from dropping out (though that's the equilibrium, and in periods
of rapid growth we could be far from equilibrium at times).

Pick a date, figure out how many reward halvings we'll have between now and
then, and you get how many coins we award every ten minutes. Multiply by coin
price to get value awarded each time. If you assume electricity is half the
mining cost, divide that value in half. Then divide by the cost per kWh to get
kWh per ten minutes. Multiple by six to get kWh per hour, which is the same as
just kilowatts.

And now you know how much power production you need to support the bitcoin
economy given your assumptions.

~~~
Dylan16807
The hash function is completely arbitrary. An infinitesimal amount of the work
that goes into a block is actually processing the transactions. After that
it's all proof of work, and you can slot in any proof of work.

The problem is that 'useful' calculations aren't suited for extremely fast
verification.

~~~
DennisP
I guess that depends how you define it. The only thing it's doing is taking
transactions as input, along with a random number, and hashing them. It's just
that the result is required to have a certain number of zeros to be considered
valid, so you have to do it over and over again with different random numbers.

If you didn't require a difficult computation, anyone could compute a
different order of transactions and it would look just as valid. Easier
hashing would not accomplish the goal of making a universally-agreed-upon
transaction order.

~~~
Dylan16807
That's why I said you can slot in any _proof of work_. Anything slow to do but
quick to verify will suffice.

~~~
DennisP
Any proof of work with bitcoin transactions as the input will suffice.
Generating similar hashes of, say, public astronomical data, wouldn't do the
job at all.

~~~
Dylan16807
You only need to feed in a handful of bytes of bitcoin data. One fake star, or
slight perturbations of water molecules in frame 0 of a simulation, would be
enough. The problem is that it's difficult to make an algorithm that is both
proof of work and actually useful for something.

------
polskibus
Can someone describe what Avalon's hashrate: 66 Gh/s means in terms of bitcoin
production (or better, in terms of money). How many days would Avalon need to
work 24/7 to provide 100% ROI ? I don't know much about bitcoin, I would
imagine such info should be the first thing a potential customer reads on
Avalon's front page.

~~~
deutronium
I don't think they could put how much money you'd be expected to make, as that
fluctuates in relation to the dollar etc.

But I'd be interested to know what 66 Gh/s means in practical terms too!

Just found this site, that calculates your profit
<http://www.bitcoinx.com/profit/>

Edit: This makes me wonder, why would you release this technology to the
public.

~~~
SODaniel
I would say it's a safe bet that the developers of the machine has been
running it for quite a while themselves and have meticulously calculated
exactly the breaking point at which these machines will drive up the
difficulty enough that it's more profitable selling them than it is running
them for BTC.

~~~
wmf
If Avalon was running 20 TH/s somewhere, it would show up (considering that
the entire Bitcoin network is only 25 TH/s).

------
stcredzero
At this point, I think Bitcoin just has to survive. If it survives long
enough, enough people will have heard of them and start to believe that
they're money, it will be a defacto currency. So long as there aren't any
disasters that kill its credibility, this will happen in a matter of a few to
several years.

------
calinet6
Someone explain this to me: if I have extra computing power just lying around
being unused (and say I have a lot), should I be mining or what?

~~~
wmf
No. You need specialized ASICs to mine Bitcoin profitably.

------
gesman
Best business is instead of digging for gold - to sell showels to gold
diggers.

------
eof
yeah but when will these things ship??

~~~
DiabloD3
Sometime in March. They're already shipping their first batch as we speak.

