
Bitfury 400 GH/s Bitcoin Mining Rig Hits US Shores - cgi_man
http://thegenesisblock.com/bitfury-400-ghs-bitcoin-mining-rig-hits-us-shores/
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simonsarris
I've got to commend Bitfury, the Levi's of bitcoin.

Just as in every gold rush, it is a much more blessed position to be the one
selling the blue jeans and shovels than to be the one attempting to sift and
mine.

I wonder if Bitfury accepts bitcoin as payment. I suspect they do not. EDIT:
You can totally pay with bitcoin -
[http://www.bitfurystrikesback.com/checkout/](http://www.bitfurystrikesback.com/checkout/)

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tinco
You think Levi's wouldn't accept payment in gold?

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9ac345a5509a
According to this calculator [0], in one month, you can expect to earn
$20,724.53 dollars (ignoring price changes, difficulty changes, and operating
costs). This seems too good to be true, however. Invoking the old adage, "In a
gold rush, sell shovels."

I wonder what effect all this has on the Bitcoin economy. If everyone begins
doing this, then it will become extremely difficult to mine any Bitcoin
without any sort of gear. Feathercoin [1] appears to try and stop this,
although I am not sure how effective it is.

    
    
      [0] http://www.alloscomp.com/bitcoin/calculator
      [1] http://feathercoin.com/

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Osiris
_in one month, you can expect to earn $20,724.53 dollars_

They were selling the kit for $22,000, so it'll take at least 5 weeks for the
ROI, probably longer given there will be at least 2 difficulty resets in that
time frame.

I looked at investing in one but I couldn't come up with the funds. Instead I
have pre-orders out for gear due in October.

 _If everyone begins doing this, then it will become extremely difficult to
mine any Bitcoin without any sort of gear_

This is already the case. I'm mining at about 250GH/s with 3 Avalons and I
earn on average about 1.2 BTC per day per machine. A month ago is was closer
to 2BTC per machine per day. Right now, GPU mining is dead. It's literally
cheaper to buy a bunch of USB sticks that mine at 350MH/s for $100 each than
to buy a bunch of video cards as the USB sticks are more power efficient. Even
so, depending on the difficulty, those USB sticks could take a year to earn
back the 1BTC.

~~~
makmanalp
If it's so difficult to earn currency, then is it viable to use for end users?
Is it just that everyone uses fractions of BTCs now?

~~~
Groxx
> _is it viable to use for end users?_

For mining, no. This was always seen as the future state, it was just a
question of when. Not too long before the first ASICs started coming out, it
was already basically not profitable for most people, you had to be running a
limited set of GPUs and be in a place that had cheap electricity to make any
real money.

> _Is it just that everyone uses fractions of BTCs now?_

Since they're roughly $100 each, yes, basically everyone uses fractions.
Thankfully they're way more divisible than e.g. pennies, and if the value /
userbase goes up by a couple orders of magnitude, they can be made _more_
divisible, also unlike pennies.

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ultimoo
How does investing engineering effort in designing mining ASICs and spending
dollars to purchase what is essentially a currency generating machine help us
as a community?

I wish we were just as enthusiastic and race to solve other problems too --
like spreading education, finding out ways to purify water, or maximizing
agriculture throughput in famine, or predicting when the next hurricane,
tsunami, or earthquake is coming our way.

~~~
derekp7
I already know how to purify water. I go to Walmart and buy a replacement
filter for my Britta pitcher. As for fixing famine, that I have no clue where
to start.

However, I do know how to write code, and if I can take some of the money I've
earned to buy one of theses "useless" devices which can also make me some
money, maybe one of the engineers at that company can spend his paycheck to
send his daughter to college, where she can study ways to fix these other
problems you mentioned.

In other words, read up on the economic theory called "guns and butter".

~~~
EliRivers
_As for fixing famine, that I have no clue where to start._

Whilst there will always be localised crop failures and unlucky weather, true
famine requires incompetent government; historically, either no effective
government (through war or some other circumstance) or a government able and
willing to enforce agricultural insanity. Peoples who have been farming for
generations know about crop failure and unlucky weather; incompetent
government is just plain stupid.

Mao's famine, for example, despite the constant claims that it was really bad
weather, was an endless cycle of stupid agricultural decisions, totalitarian
enforcement of stupid decisions, a horrifically useless harvest reporting
scheme, massive movement of people, refusal to give people stored food as they
were starving, efforts to save face internationally, on and on in a perfect
storm of government created famine.

North Korean famine of the nineties; whilst it's hard to get data on
government policy at the time, it seems that there was a move to implement
utterly inappropriate terrace farming, which was subsequently disrupted (or
indeed, washed away) by pretty normal rains, rendering those terraces useless
and also causing new flooding (as the terraced fields use to be water
absorbers and rain diffusers).

Ethiopian famine of the eighties; civil war going on.

Soviet famine of 1947; an awful lot like Mao's famine.

On and on. Certainly in modern times; obviously there's a lot less explanation
of the causes as one goes further back, and it is in the nature of incompetent
government to blame the weather.

I suppose what I'm saying is that to prevent famine, we need competent
government.

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mjs
There's no technical reason there couldn't be a cloud version of this, but of
course it makes absolutely no sense as a cloud service, which make me wonder
what's going on here.

An exchange of money for a thing usually means that the buyer wants the thing
more than they want the money, and the seller wants the money more than they
want the thing, but in this case the seller is selling ... money?

Is, uh, the delivery date guaranteed?

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wmf
There are "mining bonds" that are essentially cloud Bitcoin mining. As you
said, they tend to not be worth buying. One exception is ASICMiner which has
paid very nice dividends to their shareholders.

It's not quite as simple as selling money, since the amount of money that the
box will print depends on various factors like the difficulty, exchange rate,
and delivery date. So it's really a question of whether the customer's risk
analysis is better than the vendor's (which is doubtful given the information
asymmetry; see also Goldman Sachs). And the delivery date is definitely not
guaranteed; most vendors are shipping late.

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cantankerous
I gotta say, am I the only one who see's the numbers and then immediately goes
to the Bitcoinx calculator to see how much "money" I could make in a day if I
bought one of these rigs? On paper it seems like some of these things could
pay for themselves in relatively short order if you could actually get your
hands on one and run it day and night...and liquidate your mined coins asap at
the current prices. A lot of ifs. Has anybody met somebody who's managed to
pay off a big rig in short order? I'd really like to see a "success story"
with Bitcoin mining.

~~~
dwaltrip
[http://blockchain.info/charts/hash-rate](http://blockchain.info/charts/hash-
rate) \-- This graph shows the total network hashing power, a.k.a. mining
competition. As ASICs are finally being released/shipped on a noticeable
scale, the network hash power is massively increasing and will probably
increase 1-2 orders of magnitude more. Mining profits will most likely be
driven to almost zero.

EDIT: another thing to consider is that the ASIC companies have had much
trouble shipping on schedule, affecting ROI calculations

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DigitalJack
So how adaptable is something like this to password cracking?

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wmf
Not at all due to the fact that Bitcoin uses double SHA-256 and I don't think
any passwords are stored that way.

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jgeerts
Why don't they plug them into their outlets themselves?

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Tuna-Fish
They probably will.

This needs to be repeated every time btc ASICs are discussed: ASIC economics
don't work like most physical products, and instead work more like software.
For high-performance asics, the costs of design and masks completely
overshadow the costs of actually making chips unless your volume is in the
millions. To make the first chip costs many millions, to make the next chip
costs $15. The most valuable assets they have are the masks. One of the least
risky ways of bootstrapping an ASIC venture is to presell enough chips to pay
off R&D, and when you can make them for cheap, keep the rest.

~~~
sliverstorm
Oh shit, so what you are saying is once the R&D is paid for, they can just
stop selling them and manufacture as many $15 400GHash units as they please.
At that point they would have virtually zero worry about "breaking even", it's
pretty much pure profit as soon as they plug in the device.

~~~
maxerickson
At the moment, those $15 (or so) units are 1.7 (or whatever it was) GHash/sec.
They integrate a bunch of them to get to 400.

In the long term, the mining rigs should barely be paying for the electricity
required to operate them.

~~~
sliverstorm
Yup, and that is the great irony of Bitcoin in my eyes. In the long term, the
value of Bitcoin will probably continue to stabilize around the price of
electricity, which is of course defined in US dollars.

In other words, Bitcoin will be anchored to the value of USD (with some factor
comprised of average rig efficiency and prices per watt)

~~~
Tuna-Fish
> Yup, and that is the great irony of Bitcoin in my eyes. In the long term,
> the value of Bitcoin will probably continue to stabilize around the price of
> electricity, which is of course defined in US dollars.

No, you have completely misunderstood how bitcoin mining works. The bitcoin
value won't ever stabilize to electricity, the rewards of mining will. The
effective reward per Ghash can go up or down independently of the bitcoin
price, and tends towards costs (ie, electricity). Electricity costs have no
bearing on the actual bitcoin value.

~~~
sliverstorm
The difficulty only changes every 2 weeks or so though.

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eliben
I wonder when BitCoin will reach the stage at which mining is not economically
viable because the expended electricity is more expensive than the amount of
BC gained. It is my understanding that such a point should be eventually
reached due to the mathematical nature of BCs.

~~~
wmf
The price of electricity varies by location. I expect within 9 months Bitcoin
mining will only be profitable for people with the cheapest electricity.
Essentially there will be three phases: first, ASICs will get more efficient
as they move from 130 nm to 28 nm (this is in progress with KnC and HashFast),
then profit margins will reduce from 90% down to ~10%, and finally there will
be an endgame where even a 28 nm ASIC sold at cost won't be profitable unless
you have super-cheap electricity.

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astrodust
You know, for $15,000 I'd expect them to throw in a $200 case.

~~~
simias
I think in order for those products to be profitable they need to sell them
very very quickly (because of the ever increasing difficulty of the bitcoin
mining), so maybe they didn't take the time to design an enclosure and decided
to start selling them as soon as they had something working.

Very expensive hardware with a very short shelf life, it must be quite
interesting (and stressful) to design.

~~~
astrodust
Butterfly Labs doesn't seem that stressed at all even though they're nearly a
year behind on orders, still shipping those from _July 2012_.

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twentysix
Just nitpicking, but isnt the unit supposed to be GHz?

400 Giga Cycles/s makes more sense, unless I am missing something.

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mrb
Gh/s means gigahash/second. 1 billion "Bitcoin hash" per second. With 1 hash
defined as SHA256(SHA256(80-byte block header))

I don't have my notes with me but these Bitfury chips run around 150-250 MHz
individually. There are 256 of these chips in the 400 Ghash/sec device. Each
spits out about 10 hashes per clock cycle.

