ASIC Miners and Cryptocurrency

[FrgMstr]

This is actually a very good article over at Motherboard about ASICs and what sort of wide reaching effects those could have on the cryptocurrency markets. One side of me says, great, bring it on so we can finally buy GPUs at MSRP to get our game on. The other side of me says, dammit, they stopped making GPUs so they could make crypto ASICs. ASIC stands for "Application Specific Integrated Circuits," and these parts are nothing new and it is a generic terms for all intents and purposes. It is interesting how, when you produce and ASIC specific to cryptomining, you seem to piss off people on both sides of the fence. If you have never seen just how many resources are being devoted to cryptomining, the video below is from 3 years ago.


In related news, April continues on March's trend of being unkind to Bitcoin.


“With ASIC miners, right now things are still not too bad,” Buterin wrote in the 2014 blog. “Although ASICs are produced in only a small number of factories, they are still controlled by thousands of people worldwide. Soon, however, that may change. In a month’s time, what if the manufacturers realize that it does not make economic sense for them to sell their ASICs when they can instead simply keep all of their devices in a central warehouse and earn the full revenue?”

 

[Sonicks]

Pretty much the end of crypto currencies, then? If a large enough entity is capable of controlling 20%+, and upwards of nearly 50%, of the network capability on its own there is literally nothing from stopping them from completely manipulating the market. As the article says, this defeats the decentralized nature of these currencies. Prone to attack, prone to manipulation.

Edit: I guess there's more to it than that. That was a good morning read.

 

[oROEchimaru]

Some cryptos are not mining heavy like ripple/xrp etc.

 

[BasicCandor]

Isn't that Bitmain's MO? You buy their used ASIC after they mined with it and it's only borderline profitable.

Yea, they mined the hell out of Ethereum when it was was higher priced, but are now going to sell their ASICs after the market down. The developers behind Ethereum and other coins will change their algorithms to combat ASICs, however, now that it is known there are ASICs in existence for their cryptos.

 

[BasicCandor]

Pretty much the end of crypto currencies, then? If a large enough entity is capable of controlling 20%+, and upwards of nearly 50%, of the network capability on its own there is literally nothing from stopping them from completely manipulating the market. As the article says, this defeats the decentralized nature of these currencies. Prone to attack, prone to manipulation.

Edit: I guess there's more to it than that. That was a good morning read.

A single entity would have to have above 50% to do any manipulation. Any less and they have no chance to manipulate anything.

 

[iNViSiGOD]

A 51% attack.

 

[ecmaster76]

The catch is, who would be willing to buy a crypto currency where it is known that it cant be mined by the common folk? Thus if manufacturers completely hoard the supply they will end up mining a coin no one wants

 

[aaronspink]

A single entity would have to have above 50% to do any manipulation. Any less and they have no chance to manipulate anything.

It is pretty damn easy for a state actor to get to 50%. $1B in ASIC design and production for a spy agency can net they 10s of billions in black market cash for instance. And pretty much every major TLA has multiple ASIC teams and priority zero fab access.

 

[bugleyman]

Cryptos continue the downward trend. I'm heart-broken.

 

[BinarySynapse]

A single entity would have to have above 50% to do any manipulation. Any less and they have no chance to manipulate anything.

They have to have 51% to exclusively control a cyrpto network, but there are other attacks that can manipulate a network that only require 1/4 or 1/3 of the mining power.

 

[gamerk2]

Yea, they mined the hell out of Ethereum when it was was higher priced, but are now going to sell their ASICs after the market down. The developers behind Ethereum and other coins will change their algorithms to combat ASICs, however, now that it is known there are ASICs in existence for their cryptos.

The problem is ASICs are ALWAYS going to be more effective then GPUs will be at this type of task. The currencies can change their algorithms however they want; as long as the algorithms remain compute intensive, ASICs will be the way to go. And if they change the algorithm to something that, for example, is RAM intensive, then we'll just have the same problems with pricing with DRAM.

 

[HockeyJon]

But how many FPS do they get in Far Cry 5?

 

[BasicCandor]

The problem is ASICs are ALWAYS going to be more effective then GPUs will be at this type of task. The currencies can change their algorithms however they want; as long as the algorithms remain compute intensive, ASICs will be the way to go. And if they change the algorithm to something that, for example, is RAM intensive, then we'll just have the same problems with pricing with DRAM.

People won't keep buying ASICs that become useless if the developers keep changing the algorithms in response. You can mine with any Bitcoin ASIC miner today because the developers are OK with the ASIC miners. If the Bitcoin algorithm was changed, all of those billions of dollars worth of Bitcoin ASIC miners become literally useless.

So, yes, ASICs are more efficient in theory, but not when rendered useless in practice and new ones have to be produced each time.

Unless I am misunderstanding something, this is how it plays out.

 

[jnemesh]

People won't keep buying ASICs that become useless if the developers keep changing the algorithms in response. You can mine with any Bitcoin ASIC miner today because the developers are OK with the ASIC miners. If the Bitcoin algorithm was changed, all of those billions of dollars worth of Bitcoin ASIC miners become literally useless.

So, yes, ASICs are more efficient in theory, but not when rendered useless in practice and new ones have to be produced each time.

Unless I am misunderstanding something, this is how it plays out.

In theory, theory is the same as practice, but in practice, it's not.

 

[Deleted member 93354]

People won't keep buying ASICs that become useless if the developers keep changing the algorithms in response. You can mine with any Bitcoin ASIC miner today because the developers are OK with the ASIC miners. If the Bitcoin algorithm was changed, all of those billions of dollars worth of Bitcoin ASIC miners become literally useless.

So, yes, ASICs are more efficient in theory, but not when rendered useless in practice and new ones have to be produced each time.

Unless I am misunderstanding something, this is how it plays out.

Embedded in the chain is the method from which the chain was encrypted. So you can change the chain anytime you want. HOWEVER, the methods of computing a unique number which represents a transaction is limited. Lets say you do a XOR left bit shift, SIMD, MIMD, and an XOR left bit shift in that order and the ASIC is set up the pipe for those operational sequences. You can alter the algorithm to SIMD XOR RIGHT bit shift, MIMD, XOR left bit shift. But guess what, all the bits and pieces of hardware for that operation are ALREADY there. They may not be as efficient as before, but more efficient than a GPU which is a GP miner which hardware resources are limited to a general pool already with overhead.

 

[aaronspink]

People won't keep buying ASICs that become useless if the developers keep changing the algorithms in response. You can mine with any Bitcoin ASIC miner today because the developers are OK with the ASIC miners. If the Bitcoin algorithm was changed, all of those billions of dollars worth of Bitcoin ASIC miners become literally useless.

So, yes, ASICs are more efficient in theory, but not when rendered useless in practice and new ones have to be produced each time.

Unless I am misunderstanding something, this is how it plays out.

If you keep changing the way the blockchain works then you really don't have a currency. And any currency that isn't ASIC is ALWAYS suspect because someone can make an ASIC and take over the whole thing before anyone notices. AKA, ASICs actually increase the viability and security of a coin, not lessen it. With a stable algorithm and ASICs you have a functioning system with known parameters, if you are changing the algorithm every time there is a whisper of an ASIC, how do you know you aren't just playing right into the ponzi scheme (aka how do you know the new algorithm wasn't picked because the developer had an ASIC for it ready to go?).

 

[RC-Heli-3D]

Down with Miners!

 

[Deleted member 184142]

ASIC have been around for a long time for crypto, however they tend to be very expansive. They require lots of cash up front, many being 10k a pop. While GPUs allow just about anyone to mine, and build up over time, they can also move from one coin to the next unlike ASIC and a number of coins are being made so ASIC can't be used on them. If a coin that the ASIC was made for tanks, it's also worth nothing, while a GPU can be sold, which is a big consideration for many miners, their ROI includes the resale of the GPU.

 

[Master_shake_]

Now we're back to butterfly labs.

Hahahaha!

 

[RC-Heli-3D]

ASIC have been around for a long time for crypto, however they tend to be very expansive. They require lots of cash up front, many being 10k a pop. While GPUs allow just about anyone to mine, and build up over time, they can also move from one coin to the next unlike ASIC and a number of coins are being made so ASIC can't be used on them. If a coin that the ASIC was made for tanks, it's also worth nothing, while a GPU can be sold, which is a big consideration for many miners, their ROI includes the resale of the GPU.

There isn't a ROI using GPU miner these days. Waste of time and power, profits are not worth the hassle.

 

[Azphira]

Cryptocurrency: Because people worry more about the 2nd amendment than the 16th.

 

[Sycraft]

Pretty much the end of crypto currencies, then? If a large enough entity is capable of controlling 20%+, and upwards of nearly 50%, of the network capability on its own there is literally nothing from stopping them from completely manipulating the market. As the article says, this defeats the decentralized nature of these currencies. Prone to attack, prone to manipulation.

Well, ya. It is beyond silly that the hard core crypto nuts think that it'll keep power from centralizing. It won't no matter what you do with regards to your crypto, you have the issue that people with money can buy more of it, and they can spend money to develop things to do it better. If the crypto currency really does take off, well then they'll make even more, and thus be able to buy even more and centralize even more. You'll wind up with a small number of people having the majority of control (something we already have with Bitcoin and many others). Only unlike banks, there's no regulation, no oversight. So all of the downsides of central control with none of the upsides.

 

[griff30]

ASIC have been around for a long time for crypto, however they tend to be very expansive. They require lots of cash up front, many being 10k a pop. While GPUs allow just about anyone to mine, and build up over time, they can also move from one coin to the next unlike ASIC and a number of coins are being made so ASIC can't be used on them. If a coin that the ASIC was made for tanks, it's also worth nothing, while a GPU can be sold, which is a big consideration for many miners, their ROI includes the resale of the GPU.

 

[darrpara]

I wonder why someone doesn't just make an updateable FPGA board that can be remotely updated when the algorithm changes.

 

[Sycraft]

I wonder why someone doesn't just make an updateable FPGA board that can be remotely updated when the algorithm changes.

FPGAs are much slower and more energy intense than dedicated circuits. That's why we don't use them for everything. If they could compete efficiency wise they'd be basically the only thing in use. As such you only see them when you are either doing a small enough production run of something that making your own chip isn't cost effective, or when the reconfiguration in the field is a prime asset. Given that energy use is a major factor in crypto currency profitability, they are a bad candidate.

 

[Yiffy]

I wonder why someone doesn't just make an updateable FPGA board that can be remotely updated when the algorithm changes.

I'd like to see FPGA's make a comeback.

 

[Yiffy]

FPGAs are much slower and more energy intense than dedicated circuits. That's why we don't use them for everything. If they could compete efficiency wise they'd be basically the only thing in use. As such you only see them when you are either doing a small enough production run of something that making your own chip isn't cost effective, or when the reconfiguration in the field is a prime asset. Given that energy use is a major factor in crypto currency profitability, they are a bad candidate.

Yeah they can't catch a dedicated chip for mining but at least it wouldn't be useless when a hard fork happens. I haven't been keeping up on crypto mining much but I recall they do preform pretty well compared to GPU's. Just yeah.. cost those damn things are expensive :O

 

[griff30]

Yeah they can't catch a dedicated chip for mining but at least it wouldn't be useless when a hard fork happens. I haven't been keeping up on crypto mining much but I recall they do preform pretty well compared to GPU's. Just yeah.. cost those damn things are expensive :O

Actually the newest one listed was reported at $800
https://www.digitaltrends.com/computing/ethereum-asic-miner-gpu-pricing/
They utterly destroy the output from GPUs.

You should buy! It's cheaper than any top end graphics card.
Buy all you can afford and leave the feeble GPUs to gamers.

 

[Aix.]

Yea, they mined the hell out of Ethereum when it was was higher priced, but are now going to sell their ASICs after the market down. The developers behind Ethereum and other coins will change their algorithms to combat ASICs, however, now that it is known there are ASICs in existence for their cryptos.

Why would a developer "change their algorithms to combat ASICs"? Isn't the purpose of the currency simply to exist and be traded? The finite number of coins keeps the supply in check and ASICs would be the most efficient way of maintaining the network, no?

ASIC have been around for a long time for crypto, however they tend to be very expansive. They require lots of cash up front, many being 10k a pop. While GPUs allow just about anyone to mine, and build up over time, they can also move from one coin to the next unlike ASIC and a number of coins are being made so ASIC can't be used on them. If a coin that the ASIC was made for tanks, it's also worth nothing, while a GPU can be sold, which is a big consideration for many miners, their ROI includes the resale of the GPU.

Ah, you've highlighted the key to this whole craze: people just want their free money. Everyone wants to generate something from nothing and sell it for US$20,000; if you miss one, just mine another one and hope for the best.

 

[Sycraft]

Why would a developer "change their algorithms to combat ASICs"? Isn't the purpose of the currency simply to exist and be traded? The finite number of coins keeps the supply in check and ASICs would be the most efficient way of maintaining the network, no?

Because some of the devs are "true believers". They think that crypto currency will destroy the banks, put the power of money in the hands of the masses and so on, despite all the evidence to the contrary. So they try to slap fixes on things when power inevitably does consolidate.

Ah, you've highlighted the key to this whole craze: people just want their free money. Everyone wants to generate something from nothing and sell it for US$20,000; if you miss one, just mine another one and hope for the best.

Ya well that's what 99%+ of it comes down to. People want free money and are convinced they've found an infinite source of it.

 

[craigdt]

I dunno- my earnings have actually been up the last few days.

 

[RanceJustice]

Until we have inexpensive, swiftly available, open source/spec ASICs that are NOT manufactured and run by the manufacturer to max profit before sending them out - ASIC will remain a bane to cryptocurrency for the average person.

I know a lot of people are going to praise how maybe this will mean less GPU mining, but frankly that's not a good thing. Cryptocurrencies and their major backers barked on and on about democratizing money, getting away from the big banks and their predator behavior etc... but I continually see the same kind of decisions and shifty "we've got ours, fuck everyone else to get theirs too" attitudes that have infested mainstream finance. It happens all over the industry, made worse by the kind of things that would be illegal in more well traveled waters (ie pump and dump schemes, insider trading stuff, scam ICOs etc). ASICs essentially again centralize cryptocurrency benefits among a small amount of people with lots of money and first mover advantages.

The people who manufacture them, especially Bitmain (who as Archaea has mentioned are particularly shifty even in an exploitative industry) are of course at the top of the heap. They take lots of money for pre purchases with obscene terms and then essentially send them out "used" so to speak, which jumps the difficulty for the crypto because of the massive hashrate increase. Then the buyers for these ASICs (which can cost several hundreds at minimum up to thousands for performant types during a worthy-use window) finally get them into their hands and of course, rush to mine all they can to make ROI, ramming the difficulty further. Typically by the time ASICs are involved in any quantity it means that as a side effect, nearly everyone NOT using ASICs are outmoded. So a coin that someone with a single GPU or even a mining rig they built used to give pretty decent returns now go into the toilet. Of course, the ASIC users make less and less and eventually their expensive ASIC box may not even cover what it cost, depending. So its on to look for another coin and the cycle repeats! ASICs essentially ruin a mining capable coin for everyone else - sure, those with lots of money to invest will always get more out etc... but with CPU or even GPU miners the hardware itself has value and everyone can get a piece of the action. Its so disappointing to watch many coins, even those with really good long-term plans like DASH , essentially focused on a cabal of elites thanks to a ASICs (and in DASH's case the cost of a Masternode).

The crypto industry seems to be little than Wall Street when it comes to the "pull the ladder up behind me, FUCK YOU" dynamic, in many ways. ASICs seem to be the technical side of that issue.

 

[d3athf1sh]

So, yes, ASICs are more efficient in theory, but not when rendered useless in practice and new ones have to be produced each time.

isn't there a way to update an asic? ..you know, to workaround the monkeywrench??

 

[gamerk2]

isn't there a way to update an asic? ..you know, to workaround the monkeywrench??

At that point, you're better off building around an FPGA. ASICs are fast because they are designed to do ONE THING.

 

[JerRatt]

"In related news, April continues on March's trend of being unkind to Bitcoin."

Couldn't help yourself but throw in another jab on par with HardOCP's continual anti-Bitcoin stance over the past few months... Here's a clue, the entire crypto market has suffered, not just Bitcoin. But keep up the fake news by dropping context.

 

[griff30]

"In related news, April continues on March's trend of being unkind to Bitcoin."

Couldn't help yourself but throw in another jab on par with HardOCP's continual anti-Bitcoin stance over the past few months... Here's a clue, the entire crypto market has suffered, not just Bitcoin. But keep up the fake news by dropping context.

REeeeeeeeee!!!

 

[BSmith]

A single entity would have to have above 50% to do any manipulation. Any less and they have no chance to manipulate anything.

Unless there is collusion amongst the owners. No reason why there could not be, afterall it is not illegal to do so with crytocrap.

 

[d3athf1sh]

"In related news, April continues on March's trend of being unkind to Bitcoin."

Couldn't help yourself but throw in another jab on par with HardOCP's continual anti-Bitcoin stance over the past few months... Here's a clue, the entire crypto market has suffered, not just Bitcoin. But keep up the fake news by dropping context.

well as long as YOU have the money to get a new graphics card/ram/..computer. then the rest of us are ok with it. no worries!