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  • Chillin1248 - Tuesday, August 27, 2013 - link

    During the gold rush, it was the guys who sold the shovels who made the real money.

    The fact that they are selling these systems instead of using the machines themselves is very telling.
    Reply
  • Crono - Tuesday, August 27, 2013 - link

    In an arms race, you can either be the one stockpiling weapons or be the one selling them.
    Perhaps the only winning move is not to play. ;)
    Reply
  • beginner99 - Wednesday, August 28, 2013 - link

    good point. but then you could say it's also about risk. the $14'000 they get for sure, the return not. Reply
  • martyrant - Wednesday, August 28, 2013 - link

    I want to know who's buying anything from them, period. The most widely used tool for calculating your investment's return has had Cointerra poised to run red even at these new prices...

    Great talent, but I think they're foolish if they think they can capture any of the market with even their "new" pricing model.
    Reply
  • Flunk - Thursday, August 29, 2013 - link

    Bitcoin isn't about being rational. Most people who are mining Bitcoin right now have either made very little or are in the red. ASICs are expensive and the difficulty keeps increasing exponentially. If Cointerra does drop these $14,000 behemoths it will make all lesser products obsolete nearly immediately.

    Anyway, I don't recommend anyone get into Bitcoin now it's just too volatile. I wouldn't be surprised if someone launches a 100TH ASIC next year.
    Reply
  • martyrant - Thursday, August 29, 2013 - link

    Obviously you don't know much about Bitcoin, either. These $14,000 "behemoths" are per GH/s stupidly priced and would not make anything obsolete. They are coming so late to the game, I'm curious if they're going to gain any noticeable market share without some seriously aggressive pricing (which they certainly aren't doing with 2TH/s for $14k).

    While some people may be making very little or are in the red, there are plenty of savvy users and even business professionals that are cornering this mostly untapped market and making good money whether it be in mining or services. The fools who see it as a "get rich quick scheme" who bought either vaporware or over priced miners that will never ROI seem to be the ones you are talking about, who generally have done little to no research on the Bitcoin market.
    Reply
  • ithinker - Wednesday, August 28, 2013 - link

    ASICMINER does both: they sell hardware AND they mine, so it really depends on the outfit. Some specialize, some diversify and some fail! Reply
  • ganeshts - Tuesday, August 27, 2013 - link

    Even big companies like Intel, AMD and NVIDIA don't sell A0 steppings of their silicon.

    Irrespective of the complexity of the design, if this company thinks their A0 stepping will be good enough to ship to customers, I would be pleasantly surprised. December seems to be very very optimistic if they are still in the physical design stage.

    It is pretty strange that a 15-year silicon industry veteran is talking up their product when they are still doing layouts and yet to tapeout. Usually, the industry only talks about upcoming chips if they already have the initial steppings out and lab debug is going on. Exactly the reason why companies like Butterfly Labs have earned the ire of many of their prospective customers.
    Reply
  • Ungo - Wednesday, August 28, 2013 - link

    It's possible for A0 to be a perfectly good stepping if it's not a complex device. I've worked on a project where we could've in principle sold A0 to some customers, and A1 was the final version -- and this was a very complex SoC with a lot of new IP.

    These Bitcoin ASICs are large, yet at the same time, from the design perspective they're the stupidest simple chips you can imagine: nothing but an array of identical hashing engines and a tiny bit of logic to manage them. No CPU cores, no complex clocking, few or no asynchronous domain crossings, little I/O. The design and design validation efforts should both be pretty trivial.

    For a good team, that is. Butterfly Labs showed signs of being inexperienced and terrible all along. If these guys actually are as experienced as claimed, it should not be hard for them. The only seriously challenging issues are power density and power distribution. However, depending on how the contract with their fab partner is structured, that might be partially or completely the other party's responsibility.

    People who want to buy these should put in some serious thought about what intrinsic value there is to bitcoins (hint: none, it's a tulip bubble in progress) before jumping in. There's a reason why these guys aren't just going to mine for themselves, and it's not any of the "don't scare away the customers" reasons Ravi Iyengar gave in the interview.
    Reply
  • SunLord - Wednesday, August 28, 2013 - link

    A0 steppings are sold all the time they just almost never exist in the retail channel. If you want to find an A0 stepping look into OEM chips for example I have a few OEM LSI SAS controllers that have A0 stepping chips which were never used or shipped on any LSI branded product. A0 stepping are usually fully functional but might not hit a few key performance metric Reply
  • Dentons - Tuesday, August 27, 2013 - link

    Iyengar was clearly trying to duck the following question:

    Butterfly Labs have announced a similar 28nm product shipping around the same time frame in a PCIe card type-form factor. Are they reselling your product?


    Why would he not answer that question? The most likely answer is that Butterfly is indeed reselling their product, perhaps even an investor.
    Reply
  • QFH1 - Wednesday, August 28, 2013 - link

    "There is sometimes a difference compared to PR and what happens – I was under the impression that BFL would be shipping around February."

    He didn't dodge the question. He basically said you shouldn't believe BFLs press releases because they have a track record of failing to live up to them. "
    Reply
  • Dentons - Wednesday, August 28, 2013 - link

    He absolutely dodged the question.

    All he had to say was yes or no. He didn't. Maybe he didn't mean to dodge it, maybe he screwed up, but he certainly didn't provide an answer to the question.

    If he didn't intend to dodge the question, why does the second part of his answer completely change the topic?

    Answering a question that wasn't asked is the definition of "dodging the question".
    Reply
  • Flunk - Thursday, August 29, 2013 - link

    Butterfly Labs' reputation is so bad I think he doesn't want to be associated with them. Being more than a year behind on pre-orders will do that for you. Reply
  • Dentons - Thursday, August 29, 2013 - link

    Which is probably why he so blatantly ducked the question.

    It suggests Butterfly Labs has a contractual reseller agreement with CoinTerra, they may even be investors. Clearly, the interviewee doesn't want the association with Butterfly. He realized that were he to admit the truth, the lede story across many tech sites could be, "CoinTerra associated with Butterfly Labs" or worse, "CoinTerra a re-branding of Butterfly Labs?"

    So what does he do? He takes a minor shot at Butterfly, then completely ducks and dodges the question by answering a completely different, unasked question.

    The obvious conclusion to be drawn is yes, Butterfly Labs does have a reseller agreement with CoinTerra, and may even be investors.
    Reply
  • Cyrax89721 - Tuesday, August 27, 2013 - link

    This seems like one of those "too good to be true" scenario's. This is my first time hearing about the machine, but is it really as simple a consumer spending $14,000 on this thing and making four times the return in a month? Reply
  • madmilk - Tuesday, August 27, 2013 - link

    From this: "CoinTerra plan to drop 2000 TH/s of power in December, despite the global hashrate of only 500 TH/s now" we can expect difficulty to increase by about 400%. That would mean that the return on investment would fall to ~20% of its current value... which means you're actually losing money based on current rates.

    On the other hand, without this device you're completely sunk. GPU mining is dead; this thing is a four thousand times faster than a 7970, and costs less than 50 times more. Even older ASICs will have trouble keeping up.

    If CoinTerra really thought these boxes would be profitable, they wouldn't sell them.
    Reply
  • JarredWalton - Tuesday, August 27, 2013 - link

    Your math is wrong on the returns. If difficulty increases by a factor of 4x, all that means is your rate of production drops to 1/4. So instead of recuperating your costs in one week it would take four weeks.

    Good luck getting the money out of BTC, though! And this of course is assuming it actually ships any time soon. BFL is still shipping "soon" for many of their poor customers.
    Reply
  • Madpacket - Tuesday, August 27, 2013 - link

    As an owner of several BFL ASIC machines currently mining around 125GH, Cointerra is the first company that looks to have something to really shake up the market but we can't forget about KNC or Bitfury (not mentioned in the article for some reason?). They should have solutions selling well before Cointerra or BFL's 28nm super ASIC chips arrive driving the difficulty up to insane levels. Also despite what people think of BFL (I hate them) they are shipping at much faster rates which currently contributing the massive difficulty increases as of late.

    The future of Bitcoin mining machines will need to be sold at seriously reduced prices, the cost of the current hardware is astronomical compared to the returns expected adjusting for difficulty. The only the thing to offset this will be the price of BTC, if it can double or triple in value it will work out good for the miners but this is hard to predict.

    For anyone getting into BTC mining now, good luck. It's been a fun couple of years for my own adventures but the future looks pretty pointless if you're expecting any sort of large returns.

    Have a look at this calculator to get an idea of the returns expected for many of the popular ASIC brands arriving in the next quarter(s). Pretty depressing TBFH.

    http://mining.thegenesisblock.com/

    Good luck all!
    Reply
  • Nagorak - Wednesday, August 28, 2013 - link

    If you've made out well, now might be the time to consider transitioning your gains, or "winnings" or whatever out. That would be my suggestion anyway. Reply
  • QFH1 - Wednesday, August 28, 2013 - link

    Iyengar wants to sell his company to a big player in a few years for hundred of millions of dollars.

    He doesn't care about grabbing a cut of the relatively much smaller value of newly mined coins.
    Reply
  • jwcalla - Wednesday, August 28, 2013 - link

    Who are these 150 people that can drop $14k so whimsically? Reply
  • Nagorak - Wednesday, August 28, 2013 - link

    Perhaps those who have been mining BitCoins hard from the start. If someone had the money to just drop a few $100K a few years back on mining equipment, they may have managed to make a substantial amount of money. On paper it looked like it could work, but it was also very risky. If you come in with a large investment, and too many others do as well, the return utterly dries up.

    On top of that, you'd have to worry about whether BTCs would simply lose favor, leaving you holding a bag of useless virtual particles. They have no inherent value so they can go to zero or close to zero if people's sentiment changes. It doesn't even exist physically, like gold, or have the backing of a country/economy behind it.

    However, if some did come in big like that, they may now have the resources to keep buying better equipment. They're still fighting against everyone else out there who can do the same thing, though.

    My honest opinion is that at some point the party is going to end, and many of those who think they've made out well, will end up with pretty much nothing. It actually wouldn't surprise me if the transition to where the average person can't mine anymore, due to GPUs being too slow compared to ASICs, ends up being the death knell of people's interest in BTCs.
    Reply
  • Daniel Egger - Wednesday, August 28, 2013 - link

    Actually those things might be usable for massive password cracking or computation for rainbow tables as well... Reply
  • Ammaross - Thursday, August 29, 2013 - link

    Seems you missed what "ASIC" actually means: it does one thing really really well, in this case, the SPECIFIC hashing used for bitcoins. Reply
  • extide - Thursday, August 29, 2013 - link

    Yeah, they are good at computing SHA hashes. That ability could be used for other things in the hands of the right people... (not you) Reply
  • Flunk - Thursday, August 29, 2013 - link

    Maybe the Winklevoss Twins bought them all? Reply
  • dishayu - Wednesday, August 28, 2013 - link

    Pardon my ignorance, but does the "mining" process lead to some actual, useful computation work in the background or is it just an electronic equivalent of mining for gold? Reply
  • Nagorak - Wednesday, August 28, 2013 - link

    It's mostly just wasted power. I briefly considered BitCoin farming a few years ago. On the face of it, it appeared profitable, and maybe it would have been. But the sheer power consumed caused me to turn away from the idea. We're talking about absolutely insane amounts of power, for what is really a very questionable use.

    And you'd be constantly stuck climbing a down escalator. It's basically a race to get a more and more powerful mining setup to stay ahead of your competitors. If someone came in and dropped a lot of money early on, they could have basically cornered the market, but there was substantial risk involved. And getting all those profits back out of BTCs would be another problem.

    Personally, I expect the whole thing to implode at some point, like the Ponzi scheme it is.
    Reply
  • nathanddrews - Wednesday, August 28, 2013 - link

    Not a Ponzi scheme, just a standard economic bubble ("tulip bubble" as Ungo called it). Not everything that has risk is a Ponzi scheme or a bad investment.

    From the outside looking in, not having even attempted mining, it sure seems like the gold rush is over for the common man. Now instead of needing only a shovel and a pan, he needs Dynamite and an army of loaders, trucks, chemical separators, etc. I was excited to see BTC drive some level of CPU/GPU compute innovation, not churn out single-use ASICs.

    For all I know, this is just the beginning of a second wave of the gold rush and in two years I'll be kicking myself for not buying four of these CoinTerra machines. Hmm... nope, I think I'll stick with boring ol' 401K and IRAs.
    Reply
  • Abdussamad - Sunday, September 22, 2013 - link

    Mining is how bitcoin transactions are verified by the global community of bitcoin users. It is integral to the bitcoin economy. Reply
  • chubbypanda - Wednesday, August 28, 2013 - link

    "... silicon is expected to arrive for system building in December and ship the same month."

    I know nothing about ASICs development, so I'll assume his estimates are reasonable. Thought the whole process doesn't stop with finished ASIC, once they get ahold of functional ASIC, they'd need to assemble logic board and spend time there: hw debugging, validation, second PCB revision, reliability & performance testing (on system level), and at some point start manufacturing in order to ship. All this within a month?! Extremely ambitious!
    Reply
  • Daniel Egger - Wednesday, August 28, 2013 - link

    Actually since the interconnect will be SPI it should connect and scale easily (i.e. without the device needing hundreds of I/Os like current CPUs do) and they might even simulate a smaller version of their chip using an FPGA and test their PCB with that. The only really nasty thing about the PCB and the chips will be power planes and the cooling that will have to be massive...

    NB: Companies have designed far more complex PCBs than that in only one or two iterations.
    Reply
  • Krysto - Wednesday, August 28, 2013 - link

    When the ASIC's saturate the market, just like CPU's did in the Bitcoin land, then GPU's then FPGA's - what's next? D-Wave quantum computers? Or is there another mid-ground for an order of magnitude more powerful computing hardware? Reply
  • extide - Thursday, August 29, 2013 - link

    There is no 'next' thing. ASIC's are the end game. The only thing left is more powerful ASIC's. Reply
  • James5mith - Wednesday, August 28, 2013 - link

    One thing I don't understand... (Which might answer Krysto's question too):

    How close are we to being done with the mining phase? Bitcoins have an inherent limit of something like 20 million bitcoins, right? It was designed into the system all along. Once that limit hits, no new ones are created. They are just shuffled between people. All of this hardware will be dead weight once the 20 millionth coin is mined. What is the long term strategy here?
    Reply
  • IanCutress - Wednesday, August 28, 2013 - link

    The reward for finding a block cuts in half every 4-5 years or so, meaning coins will continue to be generated until 2140. At that point, the reward for finding a block will be the sum of all the transaction fees in that block. Reply
  • Rick83 - Wednesday, August 28, 2013 - link

    I wonder how useful these things are to do some brute force cryptanalysis.
    Especially generating rainbow tables for a large number of IVs should become quite cost-effective, with this kind of hashing power.
    Reply
  • maximumGPU - Wednesday, August 28, 2013 - link

    Interesting article.
    However i have to lean on the "too good to be true" side.
    I don't know that much about bitcoin mining, but It certainly looks like arbitrage opportunities in the financial markets. Only the very first and quickest will profit from it, and that action by itsef makes the opportunity disapear.
    Seems that a few will have some reward from these machines, but most will end up with useless junk with no resale value.
    Reply
  • Rocket321 - Wednesday, August 28, 2013 - link

    You should have asked Ravi, "but can it run Crysis?"

    At least with a high-end CPU/GPU, you end up with a nice desktop to play games on. :)
    Reply
  • heliot - Wednesday, August 28, 2013 - link

    You should have asked Ravi, "will it blend?"

    Fixed.
    Reply
  • kwrzesien - Wednesday, August 28, 2013 - link

    I'm going to laugh real hard, or maybe even cry, when we find out this entire bitcoin hashing thing is really just an NSA cover for a distributed cracking system to read our encrypted emails. Reply
  • Guspaz - Wednesday, August 28, 2013 - link

    This is a dead-end business... or at least the window is very narrow. The difficulty to mine bitcoins goes up exponentially, so it's a game of diminishing returns. Already half of all possible BitCoins have been mined, and in just four years, three quarters of all BitCoins will be mined. There's no long-term future for a business making mining equipment.... Reply
  • heliot - Wednesday, August 28, 2013 - link

    You seem to implicitly assume that the actual trade value of Bitcoin is fixed. In such a scenario, mining Bitcoin is a fool's game, particularly for those who don't get in while the getting's good. However, given that increased acceptance and prevalence of this currency, I simply cannot fathom anyone believing that Bitcoin in coming years will be worth what it is now - it will be worth much, much more.... Reply
  • Daniel Egger - Wednesday, August 28, 2013 - link

    When the amount of currency is fixed but the total value increases the individual value also needs to increase. So basically it's not only a betting against the computation power but also against the future value of BTC.

    Interestingly if someone had the spare money to mine a few coins and keep them instead of selling them right away if Bitcoin really succeeds they will be rich as hell. I can only recommend always having a few coins stashed. ;)
    Reply
  • BFSB - Wednesday, August 28, 2013 - link

    Please correct your article. Bitfury ASIC has demostrated COP of 0.5J / GHash. Bitfury ASIC is a shipping product and available from bitfurystrikesback.com Reply
  • heliot - Wednesday, August 28, 2013 - link

    The BFL misinformation makes it look like this article was written by the bitcointalk forum trolls. BFL wasn't a year late, they were six months late which is the same as AMD's latest video card release delay. The pain as a result of that delay is what has caused so much venom. They were always upfront about their selling pre-orders. Either way, they've been delivering lots of hardware for several months now and that's why the network difficulty is going up. I would conservatively estimate that they already represent 150TH/s of the network - and they're not even done! If they'd done so earlier, the difficulty would be out of control now and there wouldn't be any room for any of these ASIC alternatives and would-be upstart competitors. Cointerra looks like a good option, to be sure, but honestly it's somewhat alarming to see all these quick & dirty competitors come in with promises of a short timeline for the production of a finished product. I mean, there's got to be proof that they can actually do what they claim they'll do. Without prior efforts demonstrating that they've gone through the needful R&D steps to produce a product, it is rather unclear that they will be able to do what they say they will do. Reply
  • michal1980 - Wednesday, August 28, 2013 - link

    Sorry this article sounds like a fluff bullshit piece. If the author follows bitcoin, he would know that diffculity has been sky rocketing. Going up ~20% every 12 days. If got the unit in December 1st. Your earning potential for the first 2 weeks would already be about 1/3rd of the 54,000 dollars. ie about 8thosand the first two weeks. and only goes down from there Reply
  • ShieTar - Thursday, August 29, 2013 - link

    Sure, but remember that the value of bitcoin is defined by the interest of people in them. Everybody who owns bitcoin right now has a personal interest in getting the rest of the world interested in investing into them, because once the interest is fading, their value will quickly drop to 0$. Reply
  • MadAd - Thursday, September 05, 2013 - link

    agreed, I plugged in the cointerra machine with a very conservative 100% (conservative considering 1 month to date actually saw ~130% rise) per month difficulty increase and even from december a buyer wouldnt break even on the machine+power cost Reply
  • Dustinthewind - Thursday, August 29, 2013 - link

    Thankfully scypt based coins like Feathercoin and Litecoin as somewhat immune to ASICs. Reply

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