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Cryptocurrency miners are renting Boeing 747s to ship graphics cards
- elmar 9y agoAnother source speakes more of ether. https://news.ycombinator.com/item?id=14885294 https://news.ycombinator.com/item?id=14885294
- aphextron 9y agoIs this the real story behind nVidia's insane stock spike over the last year?
- brndnmtthws 9y agoMining with GPUs hasn't been profitable since around 2014. GPUs have largely been replaced by ASICs (although certain coins are still mineable with GPUs, like Ethereum[1], as discussed in the article). Bitmain[2] is (AFAIK) the manufacturer of ASICs for mining. [1]: https://motherboard.vice.com/en_us/article/59zdjq/an-idiots-guide-to-building-an-ethereum-mining-rig https://motherboard.vice.com/en_us/article/59zdjq/an-idiots-... [2]: https://www.bitmain.com/ https://www.bitmain.com/
- patpending 9y agoIf mining is profitable at all, why wouldn't a manufacturer of ASICs or GPUs run its own mining operation?
- literallycancer 9y agoPain in the ass to run. Competition will torch your facility if you don't spend enough money and effort on security. You're going to need your own power plant, etc. If you are the manufacturer, why not let the customer take the risk? You are planning and spending years ahead, why gamble more than you need on cryptocurrency price?
- abiox 9y agoi wouldn't be surprised if they do.
- Strom 9y agoFor the same reason why shovel manufacturers don't dig their own gold. Why take the risk of uncertainty that comes with the whole mining operation?
- strictnein 9y agoMining for Ethereum is entirely GPU based. Mining for Bitcoin/Litecoin is entirely ASIC based now.
- klodolph 9y agoMiners use AMD cards because they have better integer performance, unless I'm mistaken.
- usaphp 9y agoI thought they use AMD cards because they consume less power
- dragontamer 9y agoNVidia actually consumes less power in most games. But AMD cards use less power with integer performance.
- jackyinger 9y agoThis is the reason, Nvidia is good for floating point. Which is why people use them for deep learning.
- mamp 9y agoThe main reason is library support. Still no widely supported (or ported) equivalent to Cuda/CuDNN for AMD.
- lostmsu 9y agoPower does not matter that much if you spend $3 of it to earn $100 every month. It mostly depends on payback time.
- aarongolliver 9y agoThose two statements are basically equivalent when it comes to mining. cost/hash/second is the metric you optimize for. AMD cards can do the integer operations required with less power (and faster!)
- rothbardrand 9y agoIt depends on what you are mining, and your cost modeling. For instance, NVIDIA cards have better memory bandwidth and both dagger-hashimoto and equihash are memory hard algorithms, and NVIDIA cards have better expected resale value (though this will vary based on your expected sales channel.) AMD is generally more popular among hobbyist miners, I think, because early on they had a performance advantage in Ethereum and hobbyists tend to follow each other like a herd because they have limited time to do experimentation and exploration (and this is not a criticism of them, they have day jobs and it takes a lot of effort to even get miners going, let alone optimize them across multiple parameters.)
- nl 9y agonVidia is close to the only useful thing for deep learning. Which is also kinda a big thing.
- ctz 9y agoAny actual source for this? (Like a waybill, or customs documents. Not a press release.)
- joezydeco 9y agoThe 747 is needed because it's filled fore-to-aft with cards? Or just because it sounds good in an article? A ticketed courier could deliver a large number of cards just as quick, if not quicker.
- DrScump 9y agoOr just because it sounds good in an article? Exactly. I bet if you took the cargo capacity (I'm guessing that with any packaging to speak of, volume would be the limiting factor rather than weight) of an air cargo configured 747, months worth of Genesis' card consumption would easily fit in one flight. That one hyperbole quote generated at least a half-dozen different articles in this media genre, most of which have been posted multiple times on HN over the past 4 days.
- piva00 9y agoNot only that, would probably be cheaper as a courier already saves a lot in economies of scale.
- notjesse 9y agoThe article title makes Genesis Mining sound like a bunch of amateurs, but they are a fairly large private company. Ordering express bulk freight for any company of this size doesn't sound so crazy.
- eth1 9y agoBut it's feels so good to make fun of crypto guys. Right guys?
- Chyzwar 9y agoThis is a gold rush[1]. People that were early in BitCoin already cashed, now profit is made on exchanges and by hardware suppliers. It is even worse than Gold because you can't just hold when market crash. https://en.wikipedia.org/wiki/California_Gold_Rush https://en.wikipedia.org/wiki/California_Gold_Rush
- eth1 9y agohttps://m.youtube.com/watch?v=vMKNUylmanQ https://m.youtube.com/watch?v=vMKNUylmanQ
- placeybordeaux 9y ago> It is even worse than Gold because you can't just hold when market crash. Could you elaborate?
- fnovd 9y agoWhat good are your altcoins when the developers/miners give up on the project? A bar of gold is always a bar of gold, no matter what the price of gold is.
- mdns33 9y agoyou dont have a clue. do you.
- dang 9y agoWe've banned this account for violating the site guidelines. If you don't want to be banned on HN, you're welcome to email hn@ycombinator.com and give us reason to believe that you'll follow the rules in the future.
- quickthrower2 9y agoA bar of gold is pretty useless though.
- throw2016 9y agoImagine all these people wasting time, energy and power, the last of which is a crime against the environment and an affront to good sense at a time of global concern. But when it comes to money, greed and self interest always triumph and there will be dozens stretching logic and apologism as far as it can go. 'Proof of work' has to the most hare-brained, wasteful, anti-environment scheme ever thought of. Responsible people should not just be wasting electricity in this manner.
- literallycancer 9y agoWhy don't you do the calculation, and come back when you figure out just how tiny fraction of the whole energy spending this represents.
- rothbardrand 9y agoHe also needs to do the calculation for credit cards, the banking industry and central banks, for comparison purposes.
- tedunangst 9y agoGoing to go out on a limb here and predict credit cards have a better $/watt ratio than bitcoin.
- slyfocks 9y agoAccording to a recent estimate, ~4000 times more energy intensive. It’s an incredible waste of resources for most current use cases. https://motherboard.vice.com/en_us/article/ypkp3y/bitcoin-is-still-unsustainable https://motherboard.vice.com/en_us/article/ypkp3y/bitcoin-is...
- rothbardrand 9y agoSilly. Comparing the entire infrastructure of bitcoin to just a tiny sliver of the credit infrastructure. You need to include on the other side, all the energy the employees use, the buildings, the gas in their cars, the computers they run, and all of this for the related companies and the like. Or you just look at the cost in energy of finding the one correct hash for that block-- which again is going to be two or three orders of magnitude less than a credit card swipe (and the communications systems it needs for an auth) Further, the cost per transaction in bitcoin a year from now will be about 1,000,000 times lower due to Lightening Network. I know there's a political desire to demonize bitcoin (this is vice, not exactly an objective source) and that ignoring one side of the equation to try and make bitcoin out to be an environmental evil seems the best approach you can get but its' absurd on its face.
- chx 9y agoThis just sounds grandiose but really, renting a 747-400F is not such a big deal. This http://www.opshots.net/2015/04/aircraft-operating-series-aircraft-operating-expenses/ http://www.opshots.net/2015/04/aircraft-operating-series-air... article gives a figure of 24-27000 USD an hour. You need it how long? Ten hours? Twelve? Using a random card Amazon gives us a box size of 13.4 x 9.5 x 3.1 about 400 cubic inches. Say http://www.cargolux.com/our-expertise/cargo-equipment/aircraft/747-400f-specifications http://www.cargolux.com/our-expertise/cargo-equipment/aircra... we have 21 347 ft^3 that is some 36 887 616 cubic inches which means some 92 000 such boxes give or take. There are inefficiencies etc so let's say it's 30 000 cards. Say at 300 USD each. That's a cool ten million bucks. The plane likely costs less than half a mil. It's not a biggie. But do they really? https://motherboard.vice.com/en_us/article/zmemza/cryptocurrency-mining-fueling-a-gpu-shortage https://motherboard.vice.com/en_us/article/zmemza/cryptocurr... says "Enigma started with an installation of about 700 GPUs and now consists of several larger buildings," Schindler told me in an email. "Obviously at this size the operation draws attention from the hardware manufacturers directly and we have agreements with them." Compared to that I have some doubts they need to fly thirty thousand cards in. Maybe they rented a pallet in a 747F...
- pmorici 9y agoA side business I run supplied them with components in 2016. Based on what I shipped them I'd say they deployed some where in the neighborhood of 18,000 graphics cards in 2016 and they were supposedly ramping up to go even bigger in 2017. I don't have any insight into what they are currently up to because that scaling apparently involved hiring a eastern European engineer on the cheap to masquerade as a customer to try and obtain confidential hardware design details from me so he could rip off my product for them.
- hueving 9y ago>I don't have any insight into what they are currently up to because that scaling apparently involved hiring a eastern European engineer on the cheap to masquerade as a customer to try and obtain confidential hardware design details from me so he could rip off my product for them. Sounds like an interesting story here. How did you out him/her?
- Thriptic 9y agoI'm consistently surprised at how tepid AMD's embrace of mining has been. If I was them and noticed that my product was literally sold out everywhere because of mining, I would embrace it, open a mining division, and immediately get to work trying to create specialized hardware optimized for mining. The fact that they seem to be pretending that this use case does not exist and stubbornly declare themselves to be exclusively a gaming company is baffling to me.
- kbaker 9y agoI don't know... demand can drop instantly, maybe permanently, if the price crashes. Not the best long-term strategy...
- maxerickson 9y agoIf their hardware is sold out because of mining, all they have to do to serve the mining segment is make more of that hardware. There is no urgent need to undercut themselves. Brief research suggests that the entirety of Etherium mining is roughly equivalent to 1 quarter of AMDs GPU sales. It seems gaming is the much bigger chunk of demand (Nvidia sells 3x what AMD sells, so annual gaming sales are roughly 10x the total Etherium spend).
- literallycancer 9y agoWasn't there a time few years ago when AMD overestimated the demand and then had 4 times the production capacity idle? It's not exactly cheap to build too.
- arkitaip 9y agoOr set up a startup thru which they mine coins themselves.
- seanp2k2 9y agoStart a REIT that does cryptocurrency mining.
- martinald 9y agoI'd be surprised if GPUs and CPUs were ever shipped by sea instead of air. 6-8 weeks at sea Vs 12 hrs flight is quite serious deprecation, even if you're not mining them.
- jdavis703 9y agoIn GAAP you don't have to do calendar time-based depreciation (assuming you're dealing with something that doesn't have a finite life, e.g. nuclear fuel rods). There's also usage based depreciation, so, for example, you only depreciate the cost of the GPU while the computer is powered-on or the cost of a truck based on how many miles it's gone.
- kgwgk 9y agoI think he's concerned about the opportunity cost, not accounting issues.
- zdkl 9y agoGAAP or not if I have $BIGINT tied up on a boat haul (there's a joke about liquidity in here somewhere) with no returns while the operational cost of the task to be done rises, there's a cost.
- caf 9y agoDepreciation is probably not a concern, but inventory management sure would be. 6-8 weeks shipping implies you have 6-8 weeks worth of sales at sea at any one time, which is potentially a lot of money to be tied up.
- umanwizard 9y agoI think the point was that due to upgrade cycles being what they are, a given model of graphics card will be less valuable in actual reality after a few months at sea; not just less valuable according to accounting.
- martinald 9y agoYes exactly, say you are on a 12month refresh cycle of your GPUs at Nvidia/AMD - 2 months is nearly 1/6th of that. AMD or NVidia could 1up them by air shipping, which is very low cost considering the value per kg of the shipment.
- rothbardrand 9y agoThese headlines are annoying and what I consider to be "fake news". -- EG They are blowing up some factoid or partial fact to make a false impression. Here's the reality-- -- Ethereum is going to PoS soon. Even if it doesn't fully switchover it will decline in profitability for miners quite a bit. -- Ethereum is down %50 in the past couple weeks. The GPU boom is over (for now) and supply should be loosening. -- There are just not that many coins out there that are GPU mineable to support really massive operations, like a full 747 of GPUs. BTC is $45B and ETH is $18B market cap. As far as GPU mineable coins looking at the top hundred on CoinMarketCap I see about $2-$3B market cap for them all combined. You aren't going to take the hash power of securing ETH at $18B and dump it into ETC and ZEC without thinking twice, and if you do you aren't going to be shipping 27,000 GPUS in at a time 2 months before you have to jump from your big pond into those tiny ponds. -- And if there were, the labor to bring that many machines up, even if you already have the physical and electrical capacity is weeks of work, unless you're employing a very large labor force which you are going to turn around and fire right after they've built your very cost intensive and valuable and hard to secure warehouse full of miners. Reality is, the industry may be buying one 747 worth over the next several months but they are all getting them a few at at time and constrained by electrical and physical capacity and labor availability, and parts of everything else. At even low scale these are non-trivial issues, when you start building 10 rigs at a time it is at least 10 times harder, 10 times more likely a part is out, etc etc.
- mrb 9y agoYou severly underestimate the number of GPUs mining other cryptos. For example ZEC has half a million GPUs right now (200 MSol/s).
- rothbardrand 9y agoI'm not sure what your point is. Do a similar calculation for the ETH difficulty and there are a lot more GPUs mining ETH....which are going to crowd into ZEC and ETC. IF you have 10,000 GPUS mining ETH and you have to move them in a few months, are you going to now be adding another 1,000 GPUS?
- abiox 9y agomust be nice having the resources to buy that many gpus. do they make money mining these days? seems like the average person barely breaks even after paying the home electric bill.
- jdavis703 9y agoIf you can get wholesale electric rates (I'm assuming if you're paying millions to buy and ship graphics cards you know what you're doing), then the power companies in California will pay you to burn electricity when the sun is at the highest [0]. [0]: https://qz.com/953614/california-produced-so-much-power-from-solar-energy-this-spring-that-wholesale-electricity-prices-turned-negative/ https://qz.com/953614/california-produced-so-much-power-from...
- guy_c 9y agoIn general the profits are wafer thin, but Ethereum price skyrocketed a few months ago. Far quicker than people could build mining machines. Back in mid-June a single GTX1070 was on target for $150/month profit (even with expensive electricity). Now profits dropped to only $30/month https://whattomine.com/merged_coins/2-eth-sc?utf8=%E2%9C%93&hr_eth=25.0&fee_eth=2.0&hr_sc=390&fee_sc=0.0&p=150.0&cost=0.19&commit=Calculate https://whattomine.com/merged_coins/2-eth-sc?utf8=%E2%9C%93&...
- kelvin0 9y agoOne weird trick to mine crypto-currencies.
- yuhong 9y agoIt would be fun to buy graphic cards in places where power costs are high and ship them to where power costs are low.
- free_everybody 9y agoThis is great news. I can't wait until people realize that Ethereum is a largely useless network and GPUs rain down like manna from the heavens.
- isubkhankulov 9y agoits useful for conducting unregulated securities offerings and launching dapps. i just haven't found any useful dapps yet. dapps are mostly used when you need censorship resistant functionality.
- everheardofc 9y agoMost dapps I've seen are literally pyramid schemes or gambling.
- davotoula 9y agohttps://prism.exchange https://prism.exchange
- bdcravens 9y ago> unregulated securities offerings Not for long. https://techcrunch.com/2017/07/25/sec-regulators-are-coming-after-icos/ https://techcrunch.com/2017/07/25/sec-regulators-are-coming-...
- elipsey 9y agoanyone else here sell their gpu? i couldn't resist...
- jagger27 9y agoYeah, I managed to dump an old 7950 for well above its reasonable gamer-oriented price a few weeks ago but I'm glad I got my RX 480 before the craze.
- MichaelMoser123 9y agoi wonder if these massive mining operations have enough power to cheat the system: couldn't they quickly compute a series of valid blocks with the cheated transaction if they band together? the longer chain of blocks would win against a shorter one. On the other hand they would have a self interest to preserve the system, if trust in cryptocurrencies collapses then the big miners would have a lot to loose.
- lewi 9y agoCorrect. I think it takes only 3-4 companies to collude to 'attack' the network. But that' d knee cap the value of the currency. Which in turn would nuke their profits and render their capital outlays useless.
- rothbardrand 9y agoThis is a sybil attack and it would take wide collusion and would be difficult to pull off, and it would allow you to do what? Reverse some transactions that you had the keys for. It's really expensive attack to get back the $5 you paid for Starbucks. So you would want to do it with a multi-million dollar transaction. However, the thing is, anyone you pay a multi-million dollar transaction to is going to let it clear for more than just one block... probably for many blocks...before handing you the goods. Because everybody is aware of this risk. Chains reorganize anyway, just naturally when sometimes two blocks are found within the propagation delay. Trying to run ahead is very hard. Wallets like Electrum show one confirmation in red, and several in yellow and only after the chain has gotten extremely expensive to unwind will it show them in green.
- dbcooper 9y agoAMD announced the Vega 10 based GPUs today (on sale August 14). https://news.ycombinator.com/item?id=14889357 https://news.ycombinator.com/item?id=14889357 Apparently they are going to bundle most of them with games and hardware discounts initially, to discourage buy ups by the miners. http://www.anandtech.com/show/11680/radeon-rx-vega-unveiled-amd-announecs-499-rx-vega-64-399-rx-vega-56-launching-in-august/2 http://www.anandtech.com/show/11680/radeon-rx-vega-unveiled-... The RX Vega 56 part has 50% higher SP compute per watt than the RX 580 and 570 (50 SP GFLOP/watt), and is only $399 MSRP.
- rothbardrand 9y agoEDIT: I see these bundles are definitely to limit demand on the early cards. I expect they will keep miners at bay until they start having volume on the single cards. That's fine. Single Point calculations per watt or per second are not really the relevant measure for miners, it's all about memory bandwidth. We will see how these stack up.
- dbcooper 9y agoOK. Memory bandwidth for the Vega 56 part is 410GB/s, vs. 256 and 224 for the RX 580 and 570 respectively.
- rothbardrand 9y agoRight, those are good numbers for the price, comparable to the 1080 Ti, so this bodes well for using them for mining... however we will have to see if there are any gotchas (the access patterns for mining are different than for games, so for instance GDDR5X was less effective than GDDR5 despite being theoretically faster.)
- dbcooper 9y agoWas that due to increased latency?
- captainmuon 9y agoIt's a bit sad that cryptocurrencies tend to encourage concentration and centralisation. It's very hard for an individual to take part and earn if you "miss the time". And the negative side effects are large, like energy expense, or selling out of GPUs. I think this is a general shortcoming of proof-of-work. I wonder if this could be fixed with a different scheme, e.g. reputation-based, or proof-of-(something socially desirable and not centralizable)?
- EugeneAZ 9y agoYes, it can be. Approve in your country a Torrens title system with a replicated database among citizens. Then anyone can buy your country land ownership, which price is much more stable.
- LeoPanthera 9y agoYou seem to assume that mining is the point of a cryptocurrency, and I don't think it is. Even Satoshi, when he was still around, predicted that mining would eventually be out of reach of the normal user. But you can still "take part" by using it for what it actually is - a currency.
- taw55 9y agoThe big problem with cryptocurrencies is that they're really not currencies... I don't know anyone who would want to use BC for anything other than speculation. Speculation that undermines the stability of the currency, which isn't conducive to use as currency. There are proper cryptocurrencies that don't require mining but they don't seem to get nearly as much attention.
- deleted 9y ago[deleted]
- captainmuon 9y agoI see the following uses for cryptocurrency: - Turning my "being good with computers" / learning about it early on the internet into money - Buying illegal stuff on the darknet (which I didn't do yet) - Speculating / Gambling - Transferring wealth across borders while avoiding high conversion fees While these are typical money functions, they are all fringe activities. I don't see myself ever using bitcoin as a replacement for Euros - that is for receiving my salary, for buying things (that I can get legally), for investing or saving. One reason is I don't share the crypto-idealists idea of an anarcho-capitalist utopia...
- crb 9y agoIf people are this serious, why don't they just set up their mining operation next door to the factory? I imagine the factories are where they are in part because land and power is cheap?
- gnode 9y agoMining happens where power is cheapest; often near hydropower in agricultural china. Factories are usually in places with good shipping links.
- dx034 9y agoIs electricity there really cheaper than places like Iceland? Aluminium smelters in Iceland tend to get contracts around $3c/kwh, other large clients should be able to get the same.
- readhn 9y agoi just cant wait to see when this whole crypto-concurrency gold rush inevitably collapses. This is no different from the tulip mania of the 17th century. Yes tulips still have value today and cost something after all but not the absurd amount of money they once fetched.