6 ms·

I wonder if YC would fund a new Bitcoin mining ASIC startup. I often regret not being able to pivot my previous company from FPGAs into ASICs :/

pcwalton 10y ago
I hope not. From a business point of view, Bitcoin and hardware are both risky; putting the two together is exceptionally so. From an ethical point of view, the environmental impact of large-scale Bitcoin mining is a real problem.
- fpgaminer 10y ago
  I'm not a VC, but I would assume the question is not whether a venture is risky or not, but whether it is worthwhile. All startups are exceptionally risky. YC has already funded at least one Bitcoin startup, which is currently doing quite well for itself (Coinbase). Of all the ASICs that could be built, mining ASICs are the least risky. Their logic is simple, repetitive, and self testing. They have the highest yield and are the most flexible for binning. And cryptocurrency mining has a _long_ history of pre-sales. That effectively eliminates all risk.
  - sanswork 10y ago
    We don't actually know how well Coinbase is doing just that they seem to still be regularly raising money and doing it from weird places.
- CyberDildonics 10y ago
  > the environmental impact of large-scale Bitcoin mining is a real problem This is completely ridiculous. I've never seen anyone supply numbers to remotely back this up. A few people have linked to a blog post that through extrapolation and gross misunderstanding asserted that bitcoin mining used up as much electricity as all of Ireland (lets use our very best judgement). The truth is the financial industry is 8% of GDP. How much power does it take to air condition all the banks of world? Beyond that there is the fact that not all electricity has significant environmental impact and the fact that bitcoin mining ends up happening in places where electricity is the cheapest and most plentiful, which means it probably is not being generated with coal or oil. This assertion is an enormous detachment from reality based on gut feeling.
  - fpgaminer 10y ago
    Alright, well, here's some math. The Bitcoin network hashrate is currently at ~3,800,000,000 GH/s. The most efficient miners are at ~0.1W/GH. So the Bitcoin network, at its most efficient, would be using 380,000,000 Watts right now. I'm not sure what to compare that against. I looked up and found this article: https://www9.nationalgridus.com/non_html/shared_energyeff_office.pdf https://www9.nationalgridus.com/non_html/shared_energyeff_of... That article says that office buildings use ~1.53 Watts per square foot to cool the building (that's an average 1.53 throughout the year). So the power used to secure the Bitcoin network is equal to cooling ~248 million square feet of office space. Sounds like a lot, but pulling up a random office building, 55 Water Street, and I see it's 3.5 million square feet. The U.S. as a whole uses 446,689,497,716 Watts on average. So Bitcoin is using 0.085% of the total U.S. power consumption. Or, 0.015% of world power consumption. I have no idea if what we are currently spending on the Bitcoin network, in terms of natural resources, is more or less efficient than our current banking system. But those are the numbers. Personally, I don't think any of its relevant. Reducing energy consumption should not be the primary focus of our species. We should focus on increasing sustainable energy _production_. Energy production is a core attribute of our economy and our civilization. It may even be the _most_ important thing to us, as a growing species. Obviously reducing waste when we can is good, but I'd rather expend the majority of our resources building out solar installations rather than quibbling about whether Bitcoin is power efficient or not.
    - snowwindwaves 10y ago
      Generally a house that isn't electrically heated or cooled uses 1 kWh per hour. So 380 megawatts for Bitcoin mining is the around the same amount of energy that 380,000 houses would use on a nice day.
    - deleted 10y ago
      [deleted]
  - asymmetric 10y ago
    Here's some numbers[0] from a study done by the Natuonal University of Ireland. They conclude that "the power currently used for Bitcoin mining is comparable to Ireland’s electricity consumption." [0]: https://karlodwyer.github.io/publications/pdf/bitcoin_KJOD_2014.pdf https://karlodwyer.github.io/publications/pdf/bitcoin_KJOD_2...
- _coldfire 10y ago
  Bitcoin mining has congregated around cheap sources of energy, In China at least, many are using surplus energy from the grid in cutprice deals with provincial govts. Undoubtedly there is huge amounts of energy being pumped into Bitcoin daily, but it's environmental effects seem over-hyped compared to many other human endeavours.
  - acdha 10y ago
    Those other activities produce something of value. A pure fiat currency like Bitcoin has no value other than the consensus: gold has a lower bound capped at industrial use and you could at least plant tulip bulbs but if people stop using Bitcoin or switch systems all of that effort will be wasted.
mikeyouse 10y ago
After 21.co lit that mountain of money on fire trying to build their own miners, I doubt any investors will be too quick to follow suit..
- fpgaminer 10y ago
  Did 21.co try to build miners? I didn't pay _too_ much attention to them. All I heard was that they were trying to get mining cores into cellphones and their platform devices, so that the devices would have a passive stream of bitcoins with which to provide and access microservices. If that's accurate, then that's not the same as building a mining chip. The mining, for them, was just a way to make their microservices stuff viable. Everyone I ever heard who discussed those offerings of theirs knew that the tiny mining cores weren't profitable, and said as much. It's obvious that any chip which isn't 100% dedicated to mining won't be economically viable.
  - sanswork 10y ago
    Their first business was mining with their own miners. And they moved a lot of blocks leading up to their jumbo round. They apparently hoped to use that chip set for the whole "an energy sink in every device" business plan which was obviously never going to work.
  - mikeyouse 10y ago
    They spent a ton of cash building their own miners and mined something like 1,500 blocks: https://www.blocktrail.com/BTC/pool/21inc https://www.blocktrail.com/BTC/pool/21inc The chips on devices thing was a pivot once their initial idea didn't work.
aresant 10y ago
Sounds like maybe you have some existing IP that could be utilized. What level of capital commitment would you need to build a proof of concept?
- fpgaminer 10y ago
  > Sounds like maybe you have some existing IP that could be utilized. Yes, I co-founded a company a few years back that designed, built, and sold FPGA mining equipment. We are probably one of the very few hardware Bitcoin mining companies to ship hardware on-time with nothing but happy customers. I designed the FPGA firmware (which is open source), embedded firmware, and drivers. Others designed the boards, software, etc. > What level of capital commitment would you need to build a proof of concept? Depends on what kind of proof of concept. A small scale proof of concept, where you have a board in your hands that's mining Bitcoin, would cost ... nothing. I'd just lend my devkits to the company :P Or the existing FPGA miners that we built. Sometimes it's required to simulate a significant percentage of the final ASIC design. That would require a much higher end FPGA devkit; ~$10k-$20k. Sometimes you can get FPGA vendors to loan you the kits, though. If the goal of the company is merely to sell mining equipment, or if that's necessary to promote a crowd funding round, then the proof of concept should probably be closer to what that shippable product would be. I'd rough that out to maybe $100k to pay a board designer to do layout and fund a spin or two of small quantity prototypes based on FPGAs for simulation. That board design would then be re-used once the ASICs are ready. That's back of the napkin; could be more or less depending on scope but generally in that 6 figure ballpark.
apapli 10y ago
I'd love a bitcoin miner that doubles as a household heater. Imagine turning the heater on and making money from it. But it would need to look like a standard household heater, and operate as quietly as one too. If you want to make one let me know, I'll happily be a tester for you!
- dest 10y ago
  There was http://www.bitheat.io/ http://www.bitheat.io/ but the project seems dead.

pcwalton 10y ago

I hope not. From a business point of view, Bitcoin and hardware are both risky; putting the two together is exceptionally so. From an ethical point of view, the environmental impact of large-scale Bitcoin mining is a real problem.

fpgaminer 10y ago
I'm not a VC, but I would assume the question is not whether a venture is risky or not, but whether it is worthwhile. All startups are exceptionally risky. YC has already funded at least one Bitcoin startup, which is currently doing quite well for itself (Coinbase). Of all the ASICs that could be built, mining ASICs are the least risky. Their logic is simple, repetitive, and self testing. They have the highest yield and are the most flexible for binning. And cryptocurrency mining has a _long_ history of pre-sales. That effectively eliminates all risk.
- sanswork 10y ago
  We don't actually know how well Coinbase is doing just that they seem to still be regularly raising money and doing it from weird places.
CyberDildonics 10y ago
> the environmental impact of large-scale Bitcoin mining is a real problem This is completely ridiculous. I've never seen anyone supply numbers to remotely back this up. A few people have linked to a blog post that through extrapolation and gross misunderstanding asserted that bitcoin mining used up as much electricity as all of Ireland (lets use our very best judgement). The truth is the financial industry is 8% of GDP. How much power does it take to air condition all the banks of world? Beyond that there is the fact that not all electricity has significant environmental impact and the fact that bitcoin mining ends up happening in places where electricity is the cheapest and most plentiful, which means it probably is not being generated with coal or oil. This assertion is an enormous detachment from reality based on gut feeling.
- fpgaminer 10y ago
  Alright, well, here's some math. The Bitcoin network hashrate is currently at ~3,800,000,000 GH/s. The most efficient miners are at ~0.1W/GH. So the Bitcoin network, at its most efficient, would be using 380,000,000 Watts right now. I'm not sure what to compare that against. I looked up and found this article: https://www9.nationalgridus.com/non_html/shared_energyeff_office.pdf https://www9.nationalgridus.com/non_html/shared_energyeff_of... That article says that office buildings use ~1.53 Watts per square foot to cool the building (that's an average 1.53 throughout the year). So the power used to secure the Bitcoin network is equal to cooling ~248 million square feet of office space. Sounds like a lot, but pulling up a random office building, 55 Water Street, and I see it's 3.5 million square feet. The U.S. as a whole uses 446,689,497,716 Watts on average. So Bitcoin is using 0.085% of the total U.S. power consumption. Or, 0.015% of world power consumption. I have no idea if what we are currently spending on the Bitcoin network, in terms of natural resources, is more or less efficient than our current banking system. But those are the numbers. Personally, I don't think any of its relevant. Reducing energy consumption should not be the primary focus of our species. We should focus on increasing sustainable energy _production_. Energy production is a core attribute of our economy and our civilization. It may even be the _most_ important thing to us, as a growing species. Obviously reducing waste when we can is good, but I'd rather expend the majority of our resources building out solar installations rather than quibbling about whether Bitcoin is power efficient or not.
  - snowwindwaves 10y ago
    Generally a house that isn't electrically heated or cooled uses 1 kWh per hour. So 380 megawatts for Bitcoin mining is the around the same amount of energy that 380,000 houses would use on a nice day.
  - deleted 10y ago
    [deleted]
- asymmetric 10y ago
  Here's some numbers[0] from a study done by the Natuonal University of Ireland. They conclude that "the power currently used for Bitcoin mining is comparable to Ireland’s electricity consumption." [0]: https://karlodwyer.github.io/publications/pdf/bitcoin_KJOD_2014.pdf https://karlodwyer.github.io/publications/pdf/bitcoin_KJOD_2...
_coldfire 10y ago
Bitcoin mining has congregated around cheap sources of energy, In China at least, many are using surplus energy from the grid in cutprice deals with provincial govts. Undoubtedly there is huge amounts of energy being pumped into Bitcoin daily, but it's environmental effects seem over-hyped compared to many other human endeavours.
- acdha 10y ago
  Those other activities produce something of value. A pure fiat currency like Bitcoin has no value other than the consensus: gold has a lower bound capped at industrial use and you could at least plant tulip bulbs but if people stop using Bitcoin or switch systems all of that effort will be wasted.

mikeyouse 10y ago

After 21.co lit that mountain of money on fire trying to build their own miners, I doubt any investors will be too quick to follow suit..

fpgaminer 10y ago
Did 21.co try to build miners? I didn't pay _too_ much attention to them. All I heard was that they were trying to get mining cores into cellphones and their platform devices, so that the devices would have a passive stream of bitcoins with which to provide and access microservices. If that's accurate, then that's not the same as building a mining chip. The mining, for them, was just a way to make their microservices stuff viable. Everyone I ever heard who discussed those offerings of theirs knew that the tiny mining cores weren't profitable, and said as much. It's obvious that any chip which isn't 100% dedicated to mining won't be economically viable.
- sanswork 10y ago
  Their first business was mining with their own miners. And they moved a lot of blocks leading up to their jumbo round. They apparently hoped to use that chip set for the whole "an energy sink in every device" business plan which was obviously never going to work.
- mikeyouse 10y ago
  They spent a ton of cash building their own miners and mined something like 1,500 blocks: https://www.blocktrail.com/BTC/pool/21inc https://www.blocktrail.com/BTC/pool/21inc The chips on devices thing was a pivot once their initial idea didn't work.

aresant 10y ago

Sounds like maybe you have some existing IP that could be utilized. What level of capital commitment would you need to build a proof of concept?

fpgaminer 10y ago
> Sounds like maybe you have some existing IP that could be utilized. Yes, I co-founded a company a few years back that designed, built, and sold FPGA mining equipment. We are probably one of the very few hardware Bitcoin mining companies to ship hardware on-time with nothing but happy customers. I designed the FPGA firmware (which is open source), embedded firmware, and drivers. Others designed the boards, software, etc. > What level of capital commitment would you need to build a proof of concept? Depends on what kind of proof of concept. A small scale proof of concept, where you have a board in your hands that's mining Bitcoin, would cost ... nothing. I'd just lend my devkits to the company :P Or the existing FPGA miners that we built. Sometimes it's required to simulate a significant percentage of the final ASIC design. That would require a much higher end FPGA devkit; ~$10k-$20k. Sometimes you can get FPGA vendors to loan you the kits, though. If the goal of the company is merely to sell mining equipment, or if that's necessary to promote a crowd funding round, then the proof of concept should probably be closer to what that shippable product would be. I'd rough that out to maybe $100k to pay a board designer to do layout and fund a spin or two of small quantity prototypes based on FPGAs for simulation. That board design would then be re-used once the ASICs are ready. That's back of the napkin; could be more or less depending on scope but generally in that 6 figure ballpark.

apapli 10y ago

I'd love a bitcoin miner that doubles as a household heater. Imagine turning the heater on and making money from it. But it would need to look like a standard household heater, and operate as quietly as one too. If you want to make one let me know, I'll happily be a tester for you!

dest 10y ago
There was http://www.bitheat.io/ http://www.bitheat.io/ but the project seems dead.