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News BioStar teases BTC-24GH Bitcoin hashing board

Discussion in 'Article Discussion' started by Gareth Halfacree, 18 Mar 2014.

  1. Gareth Halfacree

    Gareth Halfacree WIIGII! Lover of bit-tech Administrator Super Moderator Moderator

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  2. Maki role

    Maki role Dale you're on a roll... Lover of bit-tech

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    Ever since ASICs popped into the scene, I've been curious about the economics. Surely a purchaser will intend to make a profit by using one? But if that's the case, hasn't the manufacturer basically created something akin to a money printing machine? If it were profitable, wouldn't they just go ahead and use them themselves instead?

    Unless they decide that the R&D plus production costs will be covered faster if they sell the machines, which others buy with the promise of generating a profit. But then the larger number of machines would drive difficulties up (a solid reason for selling the machines rather than using them to begin with) which would result in no profit being made by the user, rendering the purchase pointless?

    Ends up sounding like a case of selling shovels if you ask me.
     
  3. schmidtbag

    schmidtbag What's a Dremel?

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    You make a very interesting point, though if every company thought this way then bitcoin would never be an interest to anybody. Perhaps corporations find bitcoins to be a little too un-trustworthy. They're not as easy to exchange as "real" currency, there are security risks involved in using them, and their results are a little too unpredictable to be of any use.

    What I find interesting is, as far as I'm aware, bitcoins aren't taxable. If you can find an online store that accepts bitcoins, that's a good way to cheat your way out of not paying government taxes. This is something that you'd think corporations would love to have.

    Personally, I find bitcoins a little too sketchy. I don't understand how they can possibly have any real value.
     
  4. Cthippo

    Cthippo Can't mod my way out of a paper bag

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    The only reason paper money, or even gold for that matter, has any value is because we all agree that it does. So long as people accept bit coins in exchange for goods and services they will have value.

    The whole thing is based on a theoretical, rather than intrinsic, value, but then so is all forms of money.
     
  5. schmidtbag

    schmidtbag What's a Dremel?

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    Most countries have actual gold in their treasuries to represent how much money they really have, and/or how much their money is worth. I don't fully understand how the system works, but there is an actual physical representation behind monetary value. It just seems so theoretical when you consider how countries like the US are in severe debt. I'm not sure how "real" the values are (of any country) today, but the major difference with a country's currency and bitcoins is at some point, a unit of currency was TRADED for something of equal value. For example, a "buck" in the US is $1, and at one point, deer (buck) skins were worth $1. But bitcoins literally come out of thin air, basically at random. There's a definite amount of how many can exist, and there is no physical object to determine its value. This matters because if something has a 100% virtual value, then in principal, it is worthless.
     
  6. Harlequin

    Harlequin Modder

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    24 GH/s is too little now if your getting into the game to mine a lot - the TH/s ASIC`s are coming out soon.

    as for cost - I have 12 GH/s from my U1 usb powered antminers (6 of them @ 2GH/s each -16 watts at max) - these boards have 64 ASIC`s meaning they are only running at 400mh/s each (or so)
     
  7. kirk46

    kirk46 Cheesecake Nom Nom

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    +1

    i was just about to post something similar
     
  8. Umbra

    Umbra What's a Dremel?

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    Have to agree with that, who made the most money, the hardware shop selling the shovels or the occasional prospector who hit gold?
     
    Last edited: 19 Mar 2014
  9. Bede

    Bede Minimodder

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    Absolutely a case of selling shovels.

    There is a little more to it though:

    Companies spend a lot of time and effort projecting revenues and costs. They do this because otherwise they'd go bust pretty quickly. Bitcoins are highly volatile commodities, in a liquid but very opaque market. It is not possible to make an estimate of revenues even a quarter ahead if your commodity has shown an ability to lose 50pc of its value in a week. They are not a currency.

    Motherboards retailing for £200/unit though, those are much more easy to work into a revenue forecast.
     
  10. mclean007

    mclean007 Officious Bystander

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    Yes, except that the only reason (beyond curiosity) for someone to buy one of these is to mine bitcoins, and if the bitcoin market isn't sufficiently robust to make it at least reasonably likely a purchaser will make a return on his capex (motherboard and associated hardware) and opex (ongoing electricity cost), he's unlikely to invest in the hardware.

    To use the gold analogy - how would the demand for shovels be affected if gold suddenly dropped 50% in value overnight, or if someone else came out with a new type of shovel that magically made it an order of magnitude less likely that anyone with a conventional shovel would find any gold?
     
  11. Sloth

    Sloth #yolo #swag

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    Taking things to their extreme, gold itself is no different as Cthippo says. Some use or desire for it was found, and a value emerged. Paper currency backed with gold is only piggybacking off this process. If the whole world suddenly decided gold wasn't so special afterall then the value would plummet.

    Bitcoins start the process all over again from the beginning rather than piggybacking, but it's still the same process. An item of limited quantity is discovered (or created in this case). Someone trades it for a good, and a value emerges. One bitcoin for one deer skin, and one US dollar for one deer skin. Therefore, one bitcoin is worth one US dollar.
     
  12. John_T

    John_T Minimodder

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    No, I'm afraid that's not true, not any more. What you're referring to is the 'gold standard' and that was abandoned many decades ago. There were a couple of attempts to go back to it, (or systems like it) but they failed. Most countries do keep some reserves of bullion, but it nowhere near covers the amount of currency in play. If we were still on a gold standard then all the 'quantitative easing' (printing money) that much of the world has done would not have been possible.

    The system we use now is called 'fiat money', (fiat is Latin meaning 'let it be') and as Cthippo said, it has value based on the fact that the government of the issuing country says it does - it is not backed by hard assets. There's a bit more to it than that though, as it's not just valued on the say-so of a couple of dozen blokes in power - it's mandated into law that the currency is to be used by the country in question, so if you think about it, a currency like the US dollar is really backed by the work, industry, economic output and assets of the three hundred million plus people who live in the US - that's what the US dollar is really judged on. But it is a perception thing - which is why markets can get 'spooked' and different currencies can fluctuate up and down rapidly for no apparent reason, (or for reasons which seem out of context to the actual currency movement).

    Bitcoins on the other hand are obviously not backed by tangible assets, nor are they backed by nations of millions of people who are legally forced to use them - they truly are only of value because some people think they are. There is nothing to stop them doubling in value overnight, and there is nothing to stop them halving in value overnight. Equally, there is nothing to stop them going up a hundred-fold in one night, or crashing to 1% of the previous days value. As Bede said, they are therefore impossible to plan a business (let alone a nation) on - therefore they are not a real currency.

    Good luck to anyone who has made a lot of money from them, like any pyramid scheme, those who got in early enough (and leave at the right time) will make a lot of money. But it is a fad 'get rich quick' scheme in which some people will eventually lose confidence, followed by more and more and then it will reach a tipping point where it will cascade and fail. There are enough past examples to see it will happen, it's just a question of when.
     
  13. John_T

    John_T Minimodder

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    But it's not the same process, that's the whole point. Gold is a solid, tangible asset. A deerskin is a solid, tangible asset. Neither can simply be 'created'. Gold has to be discovered and mined at great expense and there are finite amounts of it, (and people have universally been in love with it for many thousands of years). Deerskins had to be caught wild (or farmed) and processed, again, at great effort and expense. Bitcoins are literally created from nothing.

    It is simply not the same process.
     
  14. LordPyrinc

    LordPyrinc Legomaniac

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    I had 12 deer in my front yard the other evening. Judging by lack of any antlers, that was a lot of doe.... or was it a lot of dough?
     
  15. TheDarkSide

    TheDarkSide What's a Dremel?

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    Replace gold with bitcoins..
     
  16. Cthippo

    Cthippo Can't mod my way out of a paper bag

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    If you were to take a quantity of gold dust, or deer skins, to your local grocery store and attempt to pay for food with them, do you think they would be accepted? If you sold something to a stranger and they tried to pay in gold or buckskins would you accept it? Would you have any idea how much gold or how many buckskins is a fair price to pay for goods?

    I'm guessing probably not, which means that neither gold, nor skins, are a convertible currency. While each has value and is an intrinsic physical object, that value is only in the context of little pieces of paper with dead people printed on them.

    Oddly enough, you're more likely to be able to buy groceries with bitcoins today than you are with actual gold.
     
  17. Cthippo

    Cthippo Can't mod my way out of a paper bag

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    I know I'm double posting, but this is a thought in an entirely different direction...

    It's interesting to me how fast manufacturers can come up with specialized hardware when they perceive that there is a market there. Bitcoins haven't been around very long, but we've gone from CPU based to GPU based to highly specialized ASICs that will soon be running in the TH/s range.

    It makes me wonder what could be done if there was similar interest in doing something more useful than making money, say, folding at home.

    If the while cryptocurrency thing implodes can these pieces of hardware be used for distributed computing, and I have to wonder what could be done in terms of DC work units if there was as much interest there as there is in cryptocurriencies.
     
  18. John_T

    John_T Minimodder

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    No, don't replace gold with bitcoins.

    Just because the inventors have purposely used the same language as a real world activity to give it an aura of respectability, it doesn't make it the same thing. If Coral / Ladbrookes / *bookmaker of your choice decided to stop using the phrase 'laying a bet' and instead chose to call it 'making an investment' - that wouldn't alter the nature of what it was. Making an investment on your favourite horse at the 3:15 at Stowmarket would still be making a bet, regardless of the language used.
     
  19. John_T

    John_T Minimodder

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    You can't go down to your local Tesco's and pay for your food in US dollars either, nor can you pay your gas bill in Swiss francs - what's your point? It doesn't mean either of them aren't worth anything.

    I also have no idea how much a sack of coffee beans is worth, nor a tonne of rice, a tonne of pork bellies or a thousand gallons of milk - that doesn't mean they aren't commodities traded globally on a daily basis. They are readily convertible to currency, just not necessarily by everyone in their everyday lives.

    I just want to be clear: I have no problem with people engaging in bitcoin. If people want to 'mine' or trade in it, good for them. I hope they do well. What I have a problem with is people apparently trying to convince others it's a perfectly respectable and safe practice and that it's 'just like' every other currency when it palpably isn't.

    If people want to play poker / roulette / blackjack, or bet on horses / dogs / football matches, that is entirely their business - but I don't want to see people trying to pass that off as some kind of safe and respectable way of investing money either. Do it by all means, just understand what it is.
     
  20. Gareth Halfacree

    Gareth Halfacree WIIGII! Lover of bit-tech Administrator Super Moderator Moderator

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    Not much, sadly. The reason that ASICs for Bitcoin mining came along so quickly, and the reason that they've increased in speed so rapidly, is that Bitcoin mining is nothing more than an SHA256 hashing function. When a system is mining, all it's doing is generating SHA256 hashes over and over and over from very small data. It's a relatively small, simple algorithm - the perfect thing to put on a chip.

    Sadly, in the real world, that's not so useful. Folding@Home, to use your example, performs lots of very different calculations on frequently large data. Sure, you could theoretically build an ASIC for a particular portion of a particular Folding@Home project - but it would be far larger, more complex and more expensive than the simple hashing ASIC for Bitcoin. It would also become entirely useless when that portion of the project is over, moving on to different calculations that the ASIC can't perform.

    Back in the day, we used to build computers to do one particular task; if we then needed to do a different task, we built a different computer. We gave that up when we came up with the concept of a universal machine and its implementation in reprogrammable computers, and have little desire to go back to the dark old days beyond very small and very specific areas such as DSPs and networking ASICs where the algorithms are simple, the data small and speed valued more than built-in obsolescence.

    TL;DR: Don't hold your breath for a Folding@Home ASIC.
     

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