[Chugalug] ButterFly ASIC Single arrived -- My review

Eric Wolf ebwolf at gmail.com
Tue Sep 3 19:51:28 UTC 2013


In a nutshell, you are correct. The economics of mining doesn't make sense.
But that's the fundamental lesson of economics over the past couple
decades. People don't behave rationally. I like the little USB miners
because they make blinky lights and appear to generate something of value.
It's a hobby.

Last year, if you could leverage cheaper electricity with the ability to
run lots of high end video cards, you could have an edge. I started down
this route but was working form home and didn't want the fan noise in my
environment. That was a mistake because it caused me to miss the bubble
when the first generation  ASICs hit. I also cashed in my BTC at $7 because
I didn't believe there would be a bubble (even though someone on the list,
I forget who, accurately predicted it).

Now, mining has largely become a matter of getting your hands on the newest
miners early enough to generate a profit (barring another bubble). There
are very few technical barriers to mining other than cash. Right now, that
requires a minimum $5K investment and may not deliver returns any time soon
(if at all). That is, barring another bubble.

I probably should sell my USB miners and buy some Raspberry PIs and
Arduinos. But that'd make too much sense!


Eric B. Wolf                           720-334-7734

On Tue, Sep 3, 2013 at 1:18 PM, Lynn Dixon <boodaddy at gmail.com> wrote:

> Dan, exactly.  Maybe I did a poor job of explaining it.  After 2000 blocks
> the network evaluates the time it took to hash those blocks.  If it
> generated more than the targeted 6 blocks per hour, then the hash
> difficulty is increased as an efford to make it 'harder" for the network as
> a whole to "guess" the hash. Currently the reward for finding a block is 25
> BTC.  This reward decreases with time.  The larger the difficulty, the
> longer it will take a machine to guess the hash.
> The blocks per hour rate never changes, the network will adjust difficulty
> to always maintain 6 blocks per hour.
> On Tue, Sep 3, 2013 at 2:36 PM, Dan Lyke <danlyke at flutterby.com> wrote:
>> On Tue, Sep 3, 2013 at 10:46 AM, Lynn Dixon <boodaddy at gmail.com> wrote:
>> > The supply of bitcoins is controlled by the network to maintain 6 blocks
>> > per hour.
>> I think I understand blocks vs coins differently. The block supply is
>> moderated by the network to handle latency issues, so that processors
>> aren't working on the same problem over and over again, but the coin
>> supply is moderated by mathematics.
>> When block latency is adjusted, what's being changed is how much
>> computation information is transmitted in a block, not how many hashes
>> per hour the machines are evaluating.
>> ie: Hook a gazillion machines up suddenly and even though your
>> blocks-per-hour rate gets adjusted down, the number of hashes
>> evaluated goes way way up.
>> Of course having those gazillion machines then becomes a liability,
>> because if the block rate is limited to 6 per hour, there's a much
>> higher chance you're repeating calculations done by other machines...
>> Dan
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