7 ms·

$100k of FPGAs, Mining Bitcoins at 110 Ghash/sec

73 points by mrb 14y ago

drtse4 14y ago
Just to give you an idea of how does it compare to different solutions: https://en.bitcoin.it/wiki/Mining_Hardware_Comparison https://en.bitcoin.it/wiki/Mining_Hardware_Comparison
mrb 14y ago
Discussion thread on bitcointalk.org: https://bitcointalk.org/index.php?topic=82941.0 https://bitcointalk.org/index.php?topic=82941.0 I don't know what the skeptics think, but to me, the fact that at least 2 wealthy individuals or entities have invested $100k in 360-FPGA farms should send a signal that at least some consider Bitcoin sufficiently reliable, trusted, and stable to warrant this kind of investment. They put their money where their mouth is. I will soon write a blog post documenting the numerous other FPGA board vendors that started designing custom boards targetting the Bitcoin mining market. Disclosure: I am myself a long-time miner.
- taligent 14y ago
  The more logical conclusion is that they simply see money to be made. I don't believe they are sending ANY signal that Bitcoin is reliable, trusted or stable. In fact I personally see this as a clear sign that Bitcoin is fundamentally unfair and easily gamed.
  - celticninja 14y ago
    How is it easily gamed? Production of bitcoins is related to processing power, if you can purchase the processing power you can increase your capacity to mine.
  - etherael 14y ago
    Wait, what? it's a sign that it's fundamentally unfair and easily gamed that the market is responding to the incentives implicit in the design? Miners don't just suck away all the value in the system, they are the value in the system; no mining, no blockchain, no blockchain, no transactions. More mining, more secure blockchain, etc.
  - Andys 14y ago
    They are taking a huge risk with this investment. With the mining reward set to automatically halve in 2013, and the currency still in its infancy, its a bold move. And despite dropping 6 figures on the hardware it barely a percent of the total hash rate.
    - maxerickson 14y ago
      They are only risking the amount that the hardware depreciates while they own it, which is apparently quite a lot less than the purchase price for this hardware.
  - wamatt 14y ago
    > I personally see this as a clear sign that Bitcoin is fundamentally unfair and easily gamed. Curious that you used the word "unfair". It is quite likely that the fairness of bitcoin, is not related to it's future viability. Disparity is alive and well in the real world, and seems to be doing just fine.
  - wr1472 14y ago
    Who said the creation of wealth should be or is fair? (not that I think it shouldn't be)
  - excuse-me 14y ago
    Mining is the problem - these people at Newmont/BHP/Barrick are trying to destroy the economy by digging gold out of the ground.
- bigiain 14y ago
  Isn't it a lot like historical "gold rushes"? These guys are selling shovels to the miners. "Step right up! Get your ~10k/month bitcoin mining gear right here! Only $90,000 and _guaranteed_ to make you rich!"
  - jerguismi 14y ago
    > "Step right up! Get your ~10k/month bitcoin mining gear right here! Only $90,000 and _guaranteed_ to make you rich!" I don't see any false advertising here. I think the people who invest to these things know the risks. After all, bitcoin is pretty open project. You can easily calculate how much you will be making money with this with current difficulty/exchange rate. Of course both of them will probably fluctuate heavily in the coming years.
    - gravitronic 14y ago
      Tell that to all the people who bought expensive video cards only to see the price of bitcoin fall until their recoup period's measured in years.
      - sp332 14y ago
        The rate of BTC generation falls off in a very predictable way. The only gamble is USD/BTC exchange rate.
        gravitronic 14y ago
        USD/BTC is not the only gamble. BTC Generation system-wide is predictable, but you can't predict the size of the mining industry. So your 1GH/day contribution will be worth a smaller and smaller cut as more people like you are mining. These mining rigs are in competition with one another.
    - bigiain 14y ago
      Sure - I wasn't intending to imply any "false advertising" (and apologies if I did). I just saw a real parallel with local (Australian) school taught history of the gold rushes in the late 1800s - a few people got rich mining gold, but a lot _more_ people got rich selling shovels and camping gear to all the people who _didn't_ get rich looking for gold. Another notable modern example is Apple and the App Store - sure Rovio "struck it rich" with Angry Birds, which Apple "only" skimmed 30%off the top, but how much _more_ money do you suppose Apple has made as a result of Rovio's success spurring on many many imitators? (all of whom pay Apple $100/yr + 30% of whatever success they manage)
- otterley 14y ago
  I think it's telling that the manufacturer doesn't accept payment in BitCoins.
peteretep 14y ago
I'm not sure what 110 Ghash/sec means. Can someone give me an idea of: at current Bitcoin <-> currency conversion rates, what return per hour should you expect from this?
- mrb 14y ago
  Roughly this farm makes $10k per month. 110e9 (hash/sec) * 3600 (sec/hour) * 730 (hour/month) / (2^32 * 1733208 (current difficulty factor)) * 50 (coins/block) * 5.1 (current exchange rate: usd/coin) = $9903 per month Minus about $730/month in electricity for the 10kW it consumes, assuming an average worldwide rate of $0.10/kWh.
  - hackermom 14y ago
    So if all goes well for the ol' Bitcoin, this expensive monstrosity may generate an actual income after 10-11 months of continuous use.
  - Retric 14y ago
    So, 9k per month.
  - peteretep 14y ago
    I think I'm right to say this will drop off as the potential number of Bitcoin dwindles (although I don't know the mechanics)... I wonder how long until this thing pays for itself, assuming Bitcoin value stays roughly constant
Andys 14y ago
Using the excess heat for household hot water and space heating is a great idea.
- hexagonal 14y ago
  Not really "excess". You put 10kw of electricity in, you get 10kw of heat out.
  - dantiberian 14y ago
    Excess heat in the sense that it is unwanted heat.
  - driverdan 14y ago
    Perhaps you should read up on the laws of thermodynamics. You do not get "10kw" of heat out.
    - Retric 14y ago
      He is more than 99.9% accurate, so perhaps you need to go read the laws of thermodynamics. Heat is energy transferred from one system to another by thermal interaction.
    - nicksuan 14y ago
      He is mostly correct, since the only work being done in a computer system is the motion of the fans and hard disks.
Jabbles 14y ago
I think the incentives of the bitcoin system to hoard money and the massive bias towards early adopters will be the downfall of bitcoin. All the advantages of anonymity and irreversibility are voided if there is every reason to keep hold of your money and let it increase in value. Several people on HN claim to have hundreds of thousands of bitcoins, making them worth more than 0.1% of the entire economy. Whilst the real world has its (possibly unfair) share of billionaires, the majority of these have come through substantial business innovation. Bitcoin "billionaires" come through luck and early adoption, and in my view it makes it more unfair than our current system. I think that bitcoin will continue to have some success in areas that wish for privacy, but will not reach the heights that some people predict.
- alexchamberlain 14y ago
  I don't disagree with you, but there are a significant number of hereditary billionaires (in the real world), which inherit money through luck and early adoption (of business or banking)
- joelthelion 14y ago
  That was my opinion in the beginning, but I'm not convinced anymore. First of all, the bitcoin billionaires have a strong incentive to spend, because if they don't, the currency will crash and they will lose their money. Second, if you were to create "inflatacoin", with a small but real inflation rate, who would adopt it? It would probably be better economically speaking, but people prefer putting their money in things that stay stable or grow over time.
  - Jabbles 14y ago
    If people are spending their money in fear of a crash then hoarding is not bitcoin's main problem. I don't know the solution to bitcoin's deflation, but IMO it's still a problem.
- jerguismi 14y ago
  > Bitcoin "billionaires" come through luck and early adoption, and in my view it makes it more unfair than our current system. I don't see how the hoarding/early adopter thing would destroy bitcoin. Bitcoin isn't fair, but lack of fairness doesn't necessarily make the project unsuccessful.
sschueller 14y ago
I wonder how long until we see worms/botnets that use the infected PCs to mine bitcoins.
- kalmi10 14y ago
  They already do: "I operate a ~10k botnet using a ZeuS software I modified myself, including IRC, DDoS and bitcoin mining (13GH/s - 20GH/s atm)." - reddit IAmA http://www.reddit.com/r/IAmA/comments/sq7cy/iama_a_malware_coder_and_botnet_operator_ama/ http://www.reddit.com/r/IAmA/comments/sq7cy/iama_a_malware_c... http://news.ycombinator.com/item?id=3960034 http://news.ycombinator.com/item?id=3960034
- Bootvis 14y ago
  They already do: http://www.reddit.com/r/IAmA/comments/sq7cy/iama_a_malware_coder_and_botnet_operator_ama/ http://www.reddit.com/r/IAmA/comments/sq7cy/iama_a_malware_c...
- ibotty 14y ago
  already happening. not for a short time.
fratido 14y ago
A great way to sell showels in a gold rush.
DanBC 14y ago
Anyone know enough about Amazon and Bitcoin to know how many bitcoins you'd get for a $10,000 spend on Amazon EC2 GPU clusters?
- alexchamberlain 14y ago
  It's not worth it. See: https://bitcointalk.org/index.php?topic=8405.0 https://bitcointalk.org/index.php?topic=8405.0
  - cperciva 14y ago
    ... unless you're paying for them using stolen credit cards.
    - wr1472 14y ago
      or just use the stolen cards to buy goods from amazon?
      - cperciva 14y ago
        Handling physical goods is an easy way to get caught. Bitcoins are a very effective way for criminals to cover their tracks.
        wr1472 14y ago
        They would still have to buy the BTC using the credit card, although I agree it is not as easy to trace as physical goods, the eventual BTC for physical transaction could be traced all the way back to the credit card payment for BTC. So could be a case of security by obscurity here?
        cperciva 14y ago
        They wouldn't be buying the bitcoins, they would be mining the bitcoins -- and newly mined bitcoins don't have any history showing who paid for the GPUs which found them.
twog 14y ago
I started a small bitcoin consultancy as well. I thought bitcoin was going to be the next gold rush and replace currency all together, so I started building a super efficient OS. I have since moved on, but I still believe in bitcoin. If anyone is interested in the project, you can check it out here: http://projects.tonigemayel.com/bitcoin-os/ http://projects.tonigemayel.com/bitcoin-os/

73 points by mrb 14y ago

Just to give you an idea of how does it compare to different solutions: https://en.bitcoin.it/wiki/Mining_Hardware_Comparison https://en.bitcoin.it/wiki/Mining_Hardware_Comparison

mrb 14y ago

Discussion thread on bitcointalk.org: https://bitcointalk.org/index.php?topic=82941.0 https://bitcointalk.org/index.php?topic=82941.0 I don't know what the skeptics think, but to me, the fact that at least 2 wealthy individuals or entities have invested $100k in 360-FPGA farms should send a signal that at least some consider Bitcoin sufficiently reliable, trusted, and stable to warrant this kind of investment. They put their money where their mouth is. I will soon write a blog post documenting the numerous other FPGA board vendors that started designing custom boards targetting the Bitcoin mining market. Disclosure: I am myself a long-time miner.

taligent 14y ago
The more logical conclusion is that they simply see money to be made. I don't believe they are sending ANY signal that Bitcoin is reliable, trusted or stable. In fact I personally see this as a clear sign that Bitcoin is fundamentally unfair and easily gamed.
- celticninja 14y ago
  How is it easily gamed? Production of bitcoins is related to processing power, if you can purchase the processing power you can increase your capacity to mine.
- etherael 14y ago
  Wait, what? it's a sign that it's fundamentally unfair and easily gamed that the market is responding to the incentives implicit in the design? Miners don't just suck away all the value in the system, they are the value in the system; no mining, no blockchain, no blockchain, no transactions. More mining, more secure blockchain, etc.
- Andys 14y ago
  They are taking a huge risk with this investment. With the mining reward set to automatically halve in 2013, and the currency still in its infancy, its a bold move. And despite dropping 6 figures on the hardware it barely a percent of the total hash rate.
  - maxerickson 14y ago
    They are only risking the amount that the hardware depreciates while they own it, which is apparently quite a lot less than the purchase price for this hardware.
- wamatt 14y ago
  > I personally see this as a clear sign that Bitcoin is fundamentally unfair and easily gamed. Curious that you used the word "unfair". It is quite likely that the fairness of bitcoin, is not related to it's future viability. Disparity is alive and well in the real world, and seems to be doing just fine.
- wr1472 14y ago
  Who said the creation of wealth should be or is fair? (not that I think it shouldn't be)
- excuse-me 14y ago
  Mining is the problem - these people at Newmont/BHP/Barrick are trying to destroy the economy by digging gold out of the ground.
bigiain 14y ago
Isn't it a lot like historical "gold rushes"? These guys are selling shovels to the miners. "Step right up! Get your ~10k/month bitcoin mining gear right here! Only $90,000 and _guaranteed_ to make you rich!"
- jerguismi 14y ago
  > "Step right up! Get your ~10k/month bitcoin mining gear right here! Only $90,000 and _guaranteed_ to make you rich!" I don't see any false advertising here. I think the people who invest to these things know the risks. After all, bitcoin is pretty open project. You can easily calculate how much you will be making money with this with current difficulty/exchange rate. Of course both of them will probably fluctuate heavily in the coming years.
  - gravitronic 14y ago
    Tell that to all the people who bought expensive video cards only to see the price of bitcoin fall until their recoup period's measured in years.
    - sp332 14y ago
      The rate of BTC generation falls off in a very predictable way. The only gamble is USD/BTC exchange rate.
      - gravitronic 14y ago
        USD/BTC is not the only gamble. BTC Generation system-wide is predictable, but you can't predict the size of the mining industry. So your 1GH/day contribution will be worth a smaller and smaller cut as more people like you are mining. These mining rigs are in competition with one another.
  - bigiain 14y ago
    Sure - I wasn't intending to imply any "false advertising" (and apologies if I did). I just saw a real parallel with local (Australian) school taught history of the gold rushes in the late 1800s - a few people got rich mining gold, but a lot _more_ people got rich selling shovels and camping gear to all the people who _didn't_ get rich looking for gold. Another notable modern example is Apple and the App Store - sure Rovio "struck it rich" with Angry Birds, which Apple "only" skimmed 30%off the top, but how much _more_ money do you suppose Apple has made as a result of Rovio's success spurring on many many imitators? (all of whom pay Apple $100/yr + 30% of whatever success they manage)
otterley 14y ago
I think it's telling that the manufacturer doesn't accept payment in BitCoins.

peteretep 14y ago

I'm not sure what 110 Ghash/sec means. Can someone give me an idea of: at current Bitcoin <-> currency conversion rates, what return per hour should you expect from this?

mrb 14y ago
Roughly this farm makes $10k per month. 110e9 (hash/sec) * 3600 (sec/hour) * 730 (hour/month) / (2^32 * 1733208 (current difficulty factor)) * 50 (coins/block) * 5.1 (current exchange rate: usd/coin) = $9903 per month Minus about $730/month in electricity for the 10kW it consumes, assuming an average worldwide rate of $0.10/kWh.
- hackermom 14y ago
  So if all goes well for the ol' Bitcoin, this expensive monstrosity may generate an actual income after 10-11 months of continuous use.
- Retric 14y ago
  So, 9k per month.
- peteretep 14y ago
  I think I'm right to say this will drop off as the potential number of Bitcoin dwindles (although I don't know the mechanics)... I wonder how long until this thing pays for itself, assuming Bitcoin value stays roughly constant

Andys 14y ago

Using the excess heat for household hot water and space heating is a great idea.

hexagonal 14y ago
Not really "excess". You put 10kw of electricity in, you get 10kw of heat out.
- dantiberian 14y ago
  Excess heat in the sense that it is unwanted heat.
- driverdan 14y ago
  Perhaps you should read up on the laws of thermodynamics. You do not get "10kw" of heat out.
  - Retric 14y ago
    He is more than 99.9% accurate, so perhaps you need to go read the laws of thermodynamics. Heat is energy transferred from one system to another by thermal interaction.
  - nicksuan 14y ago
    He is mostly correct, since the only work being done in a computer system is the motion of the fans and hard disks.

Jabbles 14y ago

I think the incentives of the bitcoin system to hoard money and the massive bias towards early adopters will be the downfall of bitcoin. All the advantages of anonymity and irreversibility are voided if there is every reason to keep hold of your money and let it increase in value. Several people on HN claim to have hundreds of thousands of bitcoins, making them worth more than 0.1% of the entire economy. Whilst the real world has its (possibly unfair) share of billionaires, the majority of these have come through substantial business innovation. Bitcoin "billionaires" come through luck and early adoption, and in my view it makes it more unfair than our current system. I think that bitcoin will continue to have some success in areas that wish for privacy, but will not reach the heights that some people predict.

alexchamberlain 14y ago
I don't disagree with you, but there are a significant number of hereditary billionaires (in the real world), which inherit money through luck and early adoption (of business or banking)
joelthelion 14y ago
That was my opinion in the beginning, but I'm not convinced anymore. First of all, the bitcoin billionaires have a strong incentive to spend, because if they don't, the currency will crash and they will lose their money. Second, if you were to create "inflatacoin", with a small but real inflation rate, who would adopt it? It would probably be better economically speaking, but people prefer putting their money in things that stay stable or grow over time.
- Jabbles 14y ago
  If people are spending their money in fear of a crash then hoarding is not bitcoin's main problem. I don't know the solution to bitcoin's deflation, but IMO it's still a problem.
jerguismi 14y ago
> Bitcoin "billionaires" come through luck and early adoption, and in my view it makes it more unfair than our current system. I don't see how the hoarding/early adopter thing would destroy bitcoin. Bitcoin isn't fair, but lack of fairness doesn't necessarily make the project unsuccessful.

sschueller 14y ago

I wonder how long until we see worms/botnets that use the infected PCs to mine bitcoins.

kalmi10 14y ago
They already do: "I operate a ~10k botnet using a ZeuS software I modified myself, including IRC, DDoS and bitcoin mining (13GH/s - 20GH/s atm)." - reddit IAmA http://www.reddit.com/r/IAmA/comments/sq7cy/iama_a_malware_coder_and_botnet_operator_ama/ http://www.reddit.com/r/IAmA/comments/sq7cy/iama_a_malware_c... http://news.ycombinator.com/item?id=3960034 http://news.ycombinator.com/item?id=3960034
Bootvis 14y ago
They already do: http://www.reddit.com/r/IAmA/comments/sq7cy/iama_a_malware_coder_and_botnet_operator_ama/ http://www.reddit.com/r/IAmA/comments/sq7cy/iama_a_malware_c...
ibotty 14y ago
already happening. not for a short time.

fratido 14y ago

A great way to sell showels in a gold rush.

DanBC 14y ago

Anyone know enough about Amazon and Bitcoin to know how many bitcoins you'd get for a $10,000 spend on Amazon EC2 GPU clusters?

alexchamberlain 14y ago
It's not worth it. See: https://bitcointalk.org/index.php?topic=8405.0 https://bitcointalk.org/index.php?topic=8405.0
- cperciva 14y ago
  ... unless you're paying for them using stolen credit cards.
  - wr1472 14y ago
    or just use the stolen cards to buy goods from amazon?
    - cperciva 14y ago
      Handling physical goods is an easy way to get caught. Bitcoins are a very effective way for criminals to cover their tracks.
      - wr1472 14y ago
        They would still have to buy the BTC using the credit card, although I agree it is not as easy to trace as physical goods, the eventual BTC for physical transaction could be traced all the way back to the credit card payment for BTC. So could be a case of security by obscurity here?
        cperciva 14y ago
        They wouldn't be buying the bitcoins, they would be mining the bitcoins -- and newly mined bitcoins don't have any history showing who paid for the GPUs which found them.

twog 14y ago

I started a small bitcoin consultancy as well. I thought bitcoin was going to be the next gold rush and replace currency all together, so I started building a super efficient OS. I have since moved on, but I still believe in bitcoin. If anyone is interested in the project, you can check it out here: http://projects.tonigemayel.com/bitcoin-os/ http://projects.tonigemayel.com/bitcoin-os/