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Can someone explain why Bitmain controls such a large share of the global hashing power? Why can't competitors produce Bitcoin mining chips as good as Bitmain's

by runeks 10y ago

Can someone explain why Bitmain controls such a large share of the global hashing power? Why can't competitors produce Bitcoin mining chips as good as Bitmain's? Is the case simply that Bitmain were first with 16nm-based miners, and when everyone else get there too, Bitmain will have no advantage left?

stickfigure 10y ago
Why can't competitors produce Bitcoin mining chips as good as Bitmain's? The problem is far more daunting than just creating a chip. You need to rigidly hit a schedule or it's immediate game-over. Most of the people who created and worked at HashFast are friends of mine; I got an up-close view of how that fiasco played out. Hardware depreciates rapidly as the difficulty goes up. If you slip by a few months, it may cut the expected value each box will generate in half. How many hardware kickstarters deliver on time? When you have a delay, you're not facing some yuppie whining about having to wait for their toy - it's a commercial buyer watching their ROI diminish with every passing day. They'll sue, dox you personally, and generally act like the least mature elements of 4chan. Bitcoin hardware is a shitty business with shitty customers and zero brand loyalty. Whoever has slightly more hashes per second per dollar gets all the sales. Every product is obsolete when it ships, so there's zero tolerance for mistakes in the learning curve. I'm not surprised at all that a single company dominates. You'd be a fool to get into this business.
pmorici 10y ago
There were many many other companies in the market 3 years ago but they all went bust because they all scammed their customers in one way or another. Antminer was the only one that didn't follow shady business practices that is the main reason they are still around. The reason a segment of the bitcoin world likes to hate on them is because they are an outspoken supporter of bigger blocks and bigger block threatens the business plan of certain non-mining interests.
- nadaviv 10y ago
  > The reason a segment of the bitcoin world likes to hate on them is because they are an outspoken supporter of bigger blocks and bigger block threatens the business plan of certain non-mining interests. I think that people are primarily pissed with them for blocking SegWit for absolutely no good reason [0], against the wishes of the industry and community. [0] one potential explanation is that SegWit blocks a covert performance boost that Bitmain secretly built into their ASICs. https://bitcoinmagazine.com/articles/breaking-down-bitcoins-asicboost-scandal-solutions/ https://bitcoinmagazine.com/articles/breaking-down-bitcoins-...
  - h1d 10y ago
    > against the wishes Since when do businesses have to play nice along others' wishes? Stop blaming financial incentives... While they have been acting somewhat hostile to the rest of the community, this "please be nice even by sacrificing yourself or you're evil" sounds crap as a real world claim.

by runeks 10y ago

stickfigure 10y ago

Why can't competitors produce Bitcoin mining chips as good as Bitmain's? The problem is far more daunting than just creating a chip. You need to rigidly hit a schedule or it's immediate game-over. Most of the people who created and worked at HashFast are friends of mine; I got an up-close view of how that fiasco played out. Hardware depreciates rapidly as the difficulty goes up. If you slip by a few months, it may cut the expected value each box will generate in half. How many hardware kickstarters deliver on time? When you have a delay, you're not facing some yuppie whining about having to wait for their toy - it's a commercial buyer watching their ROI diminish with every passing day. They'll sue, dox you personally, and generally act like the least mature elements of 4chan. Bitcoin hardware is a shitty business with shitty customers and zero brand loyalty. Whoever has slightly more hashes per second per dollar gets all the sales. Every product is obsolete when it ships, so there's zero tolerance for mistakes in the learning curve. I'm not surprised at all that a single company dominates. You'd be a fool to get into this business.

pmorici 10y ago

There were many many other companies in the market 3 years ago but they all went bust because they all scammed their customers in one way or another. Antminer was the only one that didn't follow shady business practices that is the main reason they are still around. The reason a segment of the bitcoin world likes to hate on them is because they are an outspoken supporter of bigger blocks and bigger block threatens the business plan of certain non-mining interests.

nadaviv 10y ago
> The reason a segment of the bitcoin world likes to hate on them is because they are an outspoken supporter of bigger blocks and bigger block threatens the business plan of certain non-mining interests. I think that people are primarily pissed with them for blocking SegWit for absolutely no good reason [0], against the wishes of the industry and community. [0] one potential explanation is that SegWit blocks a covert performance boost that Bitmain secretly built into their ASICs. https://bitcoinmagazine.com/articles/breaking-down-bitcoins-asicboost-scandal-solutions/ https://bitcoinmagazine.com/articles/breaking-down-bitcoins-...
- h1d 10y ago
  > against the wishes Since when do businesses have to play nice along others' wishes? Stop blaming financial incentives... While they have been acting somewhat hostile to the rest of the community, this "please be nice even by sacrificing yourself or you're evil" sounds crap as a real world claim.