Bitcoin News
Daily diary of what's happening with Bitcoin.
Motherboard’s Alec Liu (@sfnuop) interviews Yifu Guo, creator of the Avalon ASIC — one of two reasons Bitcoin mining capacity has been coming online at a faster pace than ever. Excerpts:
“And quietly in the background, a company called Avalon shipped the first ASIC-based bitcoin miners, custom-built rigs with specially-designed chips for efficiently printing the market’s hottest commodity, ushering in what can be considered the internet’s first gold rush. (Someone recently paid $20,000 for a $1,500 miner from batch two on eBay. At the time of this writing, another auction has a batch two Avalon miner going for over $19,000.)”
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“After opening up its third batch of 600 miners for sale yesterday, customers from around the world from countries like Argentina, the UK, and even Egypt (although the majority of orders came from the big three of the U.S., Russia, and China) made sure Avalon’s units sold out in fifteen minutes. We had the chance to sit down with Avalon’s founder, Yifu Guo to talk bitcoin, mining, and the future.”
“If bitcoin is a $1 billion market, and it only takes less than $1 million to secure the network right now, that’s not a lot of money for someone to try and take over the mining scene. The faster the technology progresses, the more secure the network is, because it will be that much harder for a malevolent entity to mess with the system. We want to [improve performance …] The sooner the better so we’ll never again have this scenario where one company like Avalon essentially controls more theoretical computing power than the entire network’s hash rate. This will never happen again.”
- http://bit.ly/14lT6cd
- http://bitcointalk.org/index.php?topic=159125.0 (Further discussion of the article)
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The latest from Vitalik Buterin of Bitcoin Magazine (@BitcoinMagazine) covers this significant day for Bitcoin — the day the first ASIC mining rig has been powered up by a consumer. Excerpts:
“Now the Bitcoin community can finally rest easy knowing that the long-awaited ASICs are indeed real.”
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“[Recipient of the first unit, Bitcoin developer Jeff Garzik] followed up with a message on Bitcoin IRC announcing the news that Bitcoin enthusiasts everywhere have all been waiting for: ‘mining!’, soon followed by a statistic: the machine’s average hashrate is 68252.65 MH/s.”
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“Avalon is not releasing its next batch until early March, and Avalon and Butterfly Labs may well be working nonstop for the foreseeable future as more and more customers line up to buy their own. The Bitcoin ASIC revolution, far from nearing its finish line, is now only beginning.”
- http://bitcoinmagazine.com/working-avalon-asic-confirmed
- http://bitcointalk.org/index.php?topic=139704.0 (Further Avalon-ASIC discussion)
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A post on Bitcoin Miner (@BitcoinMiner) looks into whether this is the end for the GPU used for mining. Excerpts:
“In less than six months, block 210,000 will be reached and with that event the block reward will drop by half, to the level of just 25 BTC.”
“Mining operators are preparing by either switching over to more efficient mining equipment or are liquidating operations outright — oftentimes due to the higher capital requirements needed to acquire the modern forms of mining hardware.”
“Even though the GPUs from this post’s photo are offered for sale as being used previously for mining (presumably for many months) they still have a relatively high market value compared to the price when they are purchased brand new.”
“There will be a rotation of hashing equipment. GPUs are being decommissioned where power is expensive and those same cards remain a valued commodity to those with access to power that is relatively cheap.”
Available for download on CoinDL (@CoinDL) is a 30-page guide (eBook PDF). Subtitled “A Guide for Gamers, Geeks and Everyone Else”, the eBook explains the background of mining, the tools used, and a few techniques that help get the most for your efforts.
Though the eBook is free, the author, David R. Sterry (founder of CoinDL), is requesting donations, as was stated in his forum post announcement of the eBook. The proceeds will be used towards the purchase of an ISBN so that the additional marketing and sales channels.
- https://www.coindl.com/page/item/201
- http://bitcointalk.org/index.php?topic=82428
A post by Bitcoin Miner describes how hitting the 8.4 million BTC milestone means that 80% of the “Easy” bitcoins (issued 50 BTC per block) and 40% of all bitcoins (out of the total 21 million that will ever be issued) are now behind us. Excerpt:
“There is uncertainty if this drop is already factored into today’s price, or if investors have not yet realized that soon the rate of currency inflation will suddenly drop by half.”
“Miners considering starting up or adding capacity at this point are faced with some long-term challenges. There is now competition from those using FPGAs, they are faced with a flat or declining exchange rate for the bitcoins they produce, and they face the upcoming 50 to 25 BTC drop in the block reward.
A post by Amir Taaki (genjix) on Bitcoin Media (@BitcoinMedia) describes how and why bitcoin mining performs “work”. Excerpts:
“Another property of a good hash function is small changes in input lead to large changes in output. This makes it difficult (practically impossible) to reverse a hash function”.
“A bitcoin miner is constantly hashing a block to see if it passes the above check. If not then it slightly modifies the block and tries again. It keeps doing this until it finds a block that passes. A valid block has been found, and the miner will broadcast this block to the network”.
“A miner’s task is to make a block and keep modifying that block so that it produces a different hash, until that hash passes a [specific] test”.
“Creating a block is not easy. It takes computational processor cycles. Ergo it takes electricity. Ergo it costs money. Creating a block usually has miniscule profit or even negative expected value. As more people mine and create blocks, the network drives up the difficulty squeezing out all the profit”.
Silas Barta writes on the technical details of the cryptographic technology in Bitcoin that are pre-requisites for a full understanding on how it all works.
“A lot of [public key cryptography] ‘primitives’ (building blocks) are used in Bitcoin, and the protocols used are heavily studied by professional cryptographers”.
“First primitive: public key-based digital signatures”.
“Second primitive: (cryptographically secure) hash functions”.
