3 ms·
They probably will. This needs to be repeated every time btc ASICs are discussed: ASIC economics don't work like most physical products, and instead work more
by Tuna-Fish 13y ago
They probably will.
This needs to be repeated every time btc ASICs are discussed: ASIC economics don't work like most physical products, and instead work more like software. For high-performance asics, the costs of design and masks completely overshadow the costs of actually making chips unless your volume is in the millions. To make the first chip costs many millions, to make the next chip costs $15. The most valuable assets they have are the masks. One of the least risky ways of bootstrapping an ASIC venture is to presell enough chips to pay off R&D, and when you can make them for cheap, keep the rest.
- sliverstorm 13y agoOh shit, so what you are saying is once the R&D is paid for, they can just stop selling them and manufacture as many $15 400GHash units as they please. At that point they would have virtually zero worry about "breaking even", it's pretty much pure profit as soon as they plug in the device.
- maxerickson 13y agoAt the moment, those $15 (or so) units are 1.7 (or whatever it was) GHash/sec. They integrate a bunch of them to get to 400. In the long term, the mining rigs should barely be paying for the electricity required to operate them.
- sliverstorm 13y agoYup, and that is the great irony of Bitcoin in my eyes. In the long term, the value of Bitcoin will probably continue to stabilize around the price of electricity, which is of course defined in US dollars. In other words, Bitcoin will be anchored to the value of USD (with some factor comprised of average rig efficiency and prices per watt)
- Tuna-Fish 13y ago> Yup, and that is the great irony of Bitcoin in my eyes. In the long term, the value of Bitcoin will probably continue to stabilize around the price of electricity, which is of course defined in US dollars. No, you have completely misunderstood how bitcoin mining works. The bitcoin value won't ever stabilize to electricity, the rewards of mining will. The effective reward per Ghash can go up or down independently of the bitcoin price, and tends towards costs (ie, electricity). Electricity costs have no bearing on the actual bitcoin value.
- sliverstorm 13y agoThe difficulty only changes every 2 weeks or so though.
- makomk 13y agoPretty much, and there's a bunch of other companies that can do the same thing,
- sliverstorm 13y agoPerfect, so bitcoin mining will be dominated by a few private entities!