8 ms·

Bitfury 400 GH/s Bitcoin Mining Rig Hits US Shores

71 points by cgi_man 13y ago

simonsarris 13y ago
I've got to commend Bitfury, the Levi's of bitcoin. Just as in every gold rush, it is a much more blessed position to be the one selling the blue jeans and shovels than to be the one attempting to sift and mine. I wonder if Bitfury accepts bitcoin as payment. I suspect they do not. EDIT: You can totally pay with bitcoin - http://www.bitfurystrikesback.com/checkout/ http://www.bitfurystrikesback.com/checkout/
- tinco 13y ago
  You think Levi's wouldn't accept payment in gold?
- anderspetersson 13y ago
  If that weren't the case they could just mine with them on their own.
astrodust 13y ago
You know, for $15,000 I'd expect them to throw in a $200 case.
- simias 13y ago
  I think in order for those products to be profitable they need to sell them very very quickly (because of the ever increasing difficulty of the bitcoin mining), so maybe they didn't take the time to design an enclosure and decided to start selling them as soon as they had something working. Very expensive hardware with a very short shelf life, it must be quite interesting (and stressful) to design.
  - astrodust 13y ago
    Butterfly Labs doesn't seem that stressed at all even though they're nearly a year behind on orders, still shipping those from July 2012.
jgeerts 13y ago
Why don't they plug them into their outlets themselves?
- TsiCClawOfLight 13y ago
  Because it isn't worth it.
- jeffasinger 13y ago
  They've probably plugged a few in, increasing the difficulty in the time that they're shipping them. That way they get most of the benefit of plugging them in, and also get the benefit of selling them.
- astrodust 13y ago
  That's not how a Ponzi scheme works, which is what Bitcoin is rapidly turning in to. If you don't double down, someone else will, and your hardware will be worthless. Therefore you need to keep spending to keep mining.
  - icebraining 13y ago
    It's not a Ponzi scheme, because the mining rig builders aren't promising profits, they just promise to deliver the machine. It may very well be a bubble, though.
- EwanToo 13y ago
  I'd guess it's a calculation in the order of: We build 50, plug them in, make $500,000 in 3 months We build 50, sell them all, make $250,000 in 1 month But I'm sure they'll have a couple they keep for themselves, and plug in at the same time as the early deliveries arrive.
- wcfields 13y ago
  They probably are for awhile, then selling them. Hence the delay. Riding out some mining, then slowly releasing them. I'm thinking if someones smart enough to built a specialized piece of hardware like this, they are smart enough to write up an algorithm that tells when to sell the hardware once the commodity hits peak level. A mass dump of these would too quickly devalue the market since the increase in new Bitcoins would cause inflation. edit: Ha, obviously they know it by taking Bitcoins and charging €700 difference in the price of one chip between a July & October delivery.
9ac345a5509a 13y ago
According to this calculator [0], in one month, you can expect to earn $20,724.53 dollars (ignoring price changes, difficulty changes, and operating costs). This seems too good to be true, however. Invoking the old adage, "In a gold rush, sell shovels." I wonder what effect all this has on the Bitcoin economy. If everyone begins doing this, then it will become extremely difficult to mine any Bitcoin without any sort of gear. Feathercoin [1] appears to try and stop this, although I am not sure how effective it is. [0] http://www.alloscomp.com/bitcoin/calculator [1] http://feathercoin.com/
- javert 13y ago
  > it will become extremely difficult to mine any Bitcoin without any sort of gear It already is and has been for a long time > Feathercoin [1] appears to try and stop this, although I am not sure how effective it is. IMHO, Feathercoin should not be taken seriously.
  - deleted 13y ago
    [deleted]
  - Groxx 13y ago
    Litecoin as well? I think the goal (forcefully allowing a wider base by reducing the ability of big players) seems like a good one. It prevents centralization, which is kinda the point of the whole thing.
    - javert 13y ago
      People could still create humongous litecoin mining farms if it were profitable to do so, leading to the same centralization issue of having large mining pools/firms that are somewhat dominant. That said, the point of Bitcoin is not to avoid that; it is to avoid forced centralization by governments (among other things), which we have for fiat money, and it is succeeding at that. Bitcoin is not supposed to be a democratic experiment where the little guy gets some kind of special treatment. It is a digital currency that is not backed by force. I don't think there is any real point in having more than one cryptocurrency. Litecoin could have been great if it had come first, but Bitcoin came first, so I think there is little to no point in having Litecoin.
deleted 13y ago
[deleted]
mjs 13y ago
There's no technical reason there couldn't be a cloud version of this, but of course it makes absolutely no sense as a cloud service, which make me wonder what's going on here. An exchange of money for a thing usually means that the buyer wants the thing more than they want the money, and the seller wants the money more than they want the thing, but in this case the seller is selling ... money? Is, uh, the delivery date guaranteed?
- mikeash 13y ago
  It requires some work to set up and use and, probably more importantly, there's substantial risk involved. The $/year this thing can produce is not a fixed quantity, both because the BTC/$ exchange rate is not fixed, and because the BTC/hash rate is not fixed. If the $ made over the lifetime of the unit exceeds its cost, then the buyer wins, and the manufacturer could have theoretically made more money by hanging onto it and running the units themselves. However, that's not guaranteed, and it could be a net loss. In essence, they're selling a risky bet. It's like a lottery ticket, except more dependent on external factors. The buyers get to make a bet that might pay off, and the seller gets more concrete payment in exchange. It's sort of a physical embodiment of a financial instrument.
- wmf 13y ago
  There are "mining bonds" that are essentially cloud Bitcoin mining. As you said, they tend to not be worth buying. One exception is ASICMiner which has paid very nice dividends to their shareholders. It's not quite as simple as selling money, since the amount of money that the box will print depends on various factors like the difficulty, exchange rate, and delivery date. So it's really a question of whether the customer's risk analysis is better than the vendor's (which is doubtful given the information asymmetry; see also Goldman Sachs). And the delivery date is definitely not guaranteed; most vendors are shipping late.
DigitalJack 13y ago
So how adaptable is something like this to password cracking?
- wmf 13y ago
  Not at all due to the fact that Bitcoin uses double SHA-256 and I don't think any passwords are stored that way.
twentysix 13y ago
Just nitpicking, but isnt the unit supposed to be GHz? 400 Giga Cycles/s makes more sense, unless I am missing something.
- mrb 13y ago
  Gh/s means gigahash/second. 1 billion "Bitcoin hash" per second. With 1 hash defined as SHA256(SHA256(80-byte block header)) I don't have my notes with me but these Bitfury chips run around 150-250 MHz individually. There are 256 of these chips in the 400 Ghash/sec device. Each spits out about 10 hashes per clock cycle.
ultimoo 13y ago
How does investing engineering effort in designing mining ASICs and spending dollars to purchase what is essentially a currency generating machine help us as a community? I wish we were just as enthusiastic and race to solve other problems too -- like spreading education, finding out ways to purify water, or maximizing agriculture throughput in famine, or predicting when the next hurricane, tsunami, or earthquake is coming our way.
- slg 13y ago
  The obvious answer is incentives. Bitcoin mining has real financial rewards. It is hard to make a profit off of ending famine. That is the point of things like XPRIZE. It attaches a capitalistic incentive behind technological advancements that benefit society.
- icelancer 13y ago
  Put up a few million dollars as the prize to solve said problems and I bet you get a fair share of applicants. What are you waiting for?
  - oscargrouch 13y ago
    you are just reinforcing what hes saying.. those things shouldnt need to have prizes in Money to people start working on it.. the point being maded by ultimoo (and i agree with it) is that WE need to change the way we think about things.. the way we are.. we need to change our prizes, and become happy with other sort of payments.. (like be happy to help others to have a better life) if we get to manage to have a income to our needs, and do what we like.. be happy with it, and help others in the process.. what could be better than that? Is such a waste to have so many bright people working to make rich people even more richier, while there are so many simple needs that all of those good brains could be helping to solve.. there are people that doesnt even have basci needs like water, food security, eletricity, education, dignity, etc.. meanwhile all the rich people problems "how i can get even more rich?" get all the brains working for it.. doesnt it say something about us all?
    - 13y ago
cantankerous 13y ago
I gotta say, am I the only one who see's the numbers and then immediately goes to the Bitcoinx calculator to see how much "money" I could make in a day if I bought one of these rigs? On paper it seems like some of these things could pay for themselves in relatively short order if you could actually get your hands on one and run it day and night...and liquidate your mined coins asap at the current prices. A lot of ifs. Has anybody met somebody who's managed to pay off a big rig in short order? I'd really like to see a "success story" with Bitcoin mining.
- dwaltrip 13y ago
  http://blockchain.info/charts/hash-rate http://blockchain.info/charts/hash-rate -- This graph shows the total network hashing power, a.k.a. mining competition. As ASICs are finally being released/shipped on a noticeable scale, the network hash power is massively increasing and will probably increase 1-2 orders of magnitude more. Mining profits will most likely be driven to almost zero. EDIT: another thing to consider is that the ASIC companies have had much trouble shipping on schedule, affecting ROI calculations
eliben 13y ago
I wonder when BitCoin will reach the stage at which mining is not economically viable because the expended electricity is more expensive than the amount of BC gained. It is my understanding that such a point should be eventually reached due to the mathematical nature of BCs.
- wmf 13y ago
  The price of electricity varies by location. I expect within 9 months Bitcoin mining will only be profitable for people with the cheapest electricity. Essentially there will be three phases: first, ASICs will get more efficient as they move from 130 nm to 28 nm (this is in progress with KnC and HashFast), then profit margins will reduce from 90% down to ~10%, and finally there will be an endgame where even a 28 nm ASIC sold at cost won't be profitable unless you have super-cheap electricity.

71 points by cgi_man 13y ago

I've got to commend Bitfury, the Levi's of bitcoin. Just as in every gold rush, it is a much more blessed position to be the one selling the blue jeans and shovels than to be the one attempting to sift and mine. I wonder if Bitfury accepts bitcoin as payment. I suspect they do not. EDIT: You can totally pay with bitcoin - http://www.bitfurystrikesback.com/checkout/ http://www.bitfurystrikesback.com/checkout/

tinco 13y ago
You think Levi's wouldn't accept payment in gold?
anderspetersson 13y ago
If that weren't the case they could just mine with them on their own.

astrodust 13y ago

You know, for $15,000 I'd expect them to throw in a $200 case.

simias 13y ago
I think in order for those products to be profitable they need to sell them very very quickly (because of the ever increasing difficulty of the bitcoin mining), so maybe they didn't take the time to design an enclosure and decided to start selling them as soon as they had something working. Very expensive hardware with a very short shelf life, it must be quite interesting (and stressful) to design.
- astrodust 13y ago
  Butterfly Labs doesn't seem that stressed at all even though they're nearly a year behind on orders, still shipping those from July 2012.

jgeerts 13y ago

Why don't they plug them into their outlets themselves?

TsiCClawOfLight 13y ago
Because it isn't worth it.
jeffasinger 13y ago
They've probably plugged a few in, increasing the difficulty in the time that they're shipping them. That way they get most of the benefit of plugging them in, and also get the benefit of selling them.
astrodust 13y ago
That's not how a Ponzi scheme works, which is what Bitcoin is rapidly turning in to. If you don't double down, someone else will, and your hardware will be worthless. Therefore you need to keep spending to keep mining.
- icebraining 13y ago
  It's not a Ponzi scheme, because the mining rig builders aren't promising profits, they just promise to deliver the machine. It may very well be a bubble, though.
EwanToo 13y ago
I'd guess it's a calculation in the order of: We build 50, plug them in, make $500,000 in 3 months We build 50, sell them all, make $250,000 in 1 month But I'm sure they'll have a couple they keep for themselves, and plug in at the same time as the early deliveries arrive.
wcfields 13y ago
They probably are for awhile, then selling them. Hence the delay. Riding out some mining, then slowly releasing them. I'm thinking if someones smart enough to built a specialized piece of hardware like this, they are smart enough to write up an algorithm that tells when to sell the hardware once the commodity hits peak level. A mass dump of these would too quickly devalue the market since the increase in new Bitcoins would cause inflation. edit: Ha, obviously they know it by taking Bitcoins and charging €700 difference in the price of one chip between a July & October delivery.

9ac345a5509a 13y ago

According to this calculator [0], in one month, you can expect to earn $20,724.53 dollars (ignoring price changes, difficulty changes, and operating costs). This seems too good to be true, however. Invoking the old adage, "In a gold rush, sell shovels." I wonder what effect all this has on the Bitcoin economy. If everyone begins doing this, then it will become extremely difficult to mine any Bitcoin without any sort of gear. Feathercoin [1] appears to try and stop this, although I am not sure how effective it is. [0] http://www.alloscomp.com/bitcoin/calculator [1] http://feathercoin.com/

javert 13y ago
> it will become extremely difficult to mine any Bitcoin without any sort of gear It already is and has been for a long time > Feathercoin [1] appears to try and stop this, although I am not sure how effective it is. IMHO, Feathercoin should not be taken seriously.
- deleted 13y ago
  [deleted]
- Groxx 13y ago
  Litecoin as well? I think the goal (forcefully allowing a wider base by reducing the ability of big players) seems like a good one. It prevents centralization, which is kinda the point of the whole thing.
  - javert 13y ago
    People could still create humongous litecoin mining farms if it were profitable to do so, leading to the same centralization issue of having large mining pools/firms that are somewhat dominant. That said, the point of Bitcoin is not to avoid that; it is to avoid forced centralization by governments (among other things), which we have for fiat money, and it is succeeding at that. Bitcoin is not supposed to be a democratic experiment where the little guy gets some kind of special treatment. It is a digital currency that is not backed by force. I don't think there is any real point in having more than one cryptocurrency. Litecoin could have been great if it had come first, but Bitcoin came first, so I think there is little to no point in having Litecoin.

deleted 13y ago

[deleted]

mjs 13y ago

There's no technical reason there couldn't be a cloud version of this, but of course it makes absolutely no sense as a cloud service, which make me wonder what's going on here. An exchange of money for a thing usually means that the buyer wants the thing more than they want the money, and the seller wants the money more than they want the thing, but in this case the seller is selling ... money? Is, uh, the delivery date guaranteed?

mikeash 13y ago
It requires some work to set up and use and, probably more importantly, there's substantial risk involved. The $/year this thing can produce is not a fixed quantity, both because the BTC/$ exchange rate is not fixed, and because the BTC/hash rate is not fixed. If the $ made over the lifetime of the unit exceeds its cost, then the buyer wins, and the manufacturer could have theoretically made more money by hanging onto it and running the units themselves. However, that's not guaranteed, and it could be a net loss. In essence, they're selling a risky bet. It's like a lottery ticket, except more dependent on external factors. The buyers get to make a bet that might pay off, and the seller gets more concrete payment in exchange. It's sort of a physical embodiment of a financial instrument.
wmf 13y ago
There are "mining bonds" that are essentially cloud Bitcoin mining. As you said, they tend to not be worth buying. One exception is ASICMiner which has paid very nice dividends to their shareholders. It's not quite as simple as selling money, since the amount of money that the box will print depends on various factors like the difficulty, exchange rate, and delivery date. So it's really a question of whether the customer's risk analysis is better than the vendor's (which is doubtful given the information asymmetry; see also Goldman Sachs). And the delivery date is definitely not guaranteed; most vendors are shipping late.

DigitalJack 13y ago

So how adaptable is something like this to password cracking?

wmf 13y ago
Not at all due to the fact that Bitcoin uses double SHA-256 and I don't think any passwords are stored that way.

twentysix 13y ago

Just nitpicking, but isnt the unit supposed to be GHz? 400 Giga Cycles/s makes more sense, unless I am missing something.

mrb 13y ago
Gh/s means gigahash/second. 1 billion "Bitcoin hash" per second. With 1 hash defined as SHA256(SHA256(80-byte block header)) I don't have my notes with me but these Bitfury chips run around 150-250 MHz individually. There are 256 of these chips in the 400 Ghash/sec device. Each spits out about 10 hashes per clock cycle.

ultimoo 13y ago

How does investing engineering effort in designing mining ASICs and spending dollars to purchase what is essentially a currency generating machine help us as a community? I wish we were just as enthusiastic and race to solve other problems too -- like spreading education, finding out ways to purify water, or maximizing agriculture throughput in famine, or predicting when the next hurricane, tsunami, or earthquake is coming our way.

slg 13y ago
The obvious answer is incentives. Bitcoin mining has real financial rewards. It is hard to make a profit off of ending famine. That is the point of things like XPRIZE. It attaches a capitalistic incentive behind technological advancements that benefit society.
icelancer 13y ago
Put up a few million dollars as the prize to solve said problems and I bet you get a fair share of applicants. What are you waiting for?
- oscargrouch 13y ago
  you are just reinforcing what hes saying.. those things shouldnt need to have prizes in Money to people start working on it.. the point being maded by ultimoo (and i agree with it) is that WE need to change the way we think about things.. the way we are.. we need to change our prizes, and become happy with other sort of payments.. (like be happy to help others to have a better life) if we get to manage to have a income to our needs, and do what we like.. be happy with it, and help others in the process.. what could be better than that? Is such a waste to have so many bright people working to make rich people even more richier, while there are so many simple needs that all of those good brains could be helping to solve.. there are people that doesnt even have basci needs like water, food security, eletricity, education, dignity, etc.. meanwhile all the rich people problems "how i can get even more rich?" get all the brains working for it.. doesnt it say something about us all?
  - 13y ago

cantankerous 13y ago

I gotta say, am I the only one who see's the numbers and then immediately goes to the Bitcoinx calculator to see how much "money" I could make in a day if I bought one of these rigs? On paper it seems like some of these things could pay for themselves in relatively short order if you could actually get your hands on one and run it day and night...and liquidate your mined coins asap at the current prices. A lot of ifs. Has anybody met somebody who's managed to pay off a big rig in short order? I'd really like to see a "success story" with Bitcoin mining.

dwaltrip 13y ago
http://blockchain.info/charts/hash-rate http://blockchain.info/charts/hash-rate -- This graph shows the total network hashing power, a.k.a. mining competition. As ASICs are finally being released/shipped on a noticeable scale, the network hash power is massively increasing and will probably increase 1-2 orders of magnitude more. Mining profits will most likely be driven to almost zero. EDIT: another thing to consider is that the ASIC companies have had much trouble shipping on schedule, affecting ROI calculations

eliben 13y ago

I wonder when BitCoin will reach the stage at which mining is not economically viable because the expended electricity is more expensive than the amount of BC gained. It is my understanding that such a point should be eventually reached due to the mathematical nature of BCs.

wmf 13y ago
The price of electricity varies by location. I expect within 9 months Bitcoin mining will only be profitable for people with the cheapest electricity. Essentially there will be three phases: first, ASICs will get more efficient as they move from 130 nm to 28 nm (this is in progress with KnC and HashFast), then profit margins will reduce from 90% down to ~10%, and finally there will be an endgame where even a 28 nm ASIC sold at cost won't be profitable unless you have super-cheap electricity.