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Race To Mine Bitcoins Drives Enthusiasts Into the Chip Making Business

Posted by Soulskill on from the build-your-own-chips-to-build-your-own-currency dept.

holy_calamity writes "MIT Technology Review looks at the small companies attempting to build dedicated chips for mining Bitcoins. Several are claiming they will start selling hardware based on their chips early in 2013, with the technology expected to force many small time miners to give up. However, as happened in the CPU industry, miners may soon be caught in an expensive arms race that pushes development of faster and faster chips."

8 of 320 comments (clear)

  1. Great by Anonymous Coward · · Score: 5, Insightful

    An unregulated currency plagued by theft and controlled by an elite cabal of basement-dwelling enthusiasts who can afford the thousands of dollars worth of hardware to drive smaller players out of the market. I'm sure nothing will go wrong.

    1. Re:Great by Anonymous Coward · · Score: 5, Insightful

      Bitccoin is partly regulated. Inflation is regulated by the laws of math. Better than the government printing money at the whim of bad political agendas.

  2. Um? by The+Grim+Reefer · · Score: 5, Interesting

    If mining Bitcoins was so profitable why would they want to sell the chips? Wouldn't they be better off keeping these chips and mining the Bitcoins for themselves?

    1. Re:Um? by Anonymous Coward · · Score: 5, Insightful

      Because the companies themselves don't believe in the Bitcoin. They're basically in the divining rod business. The only reason they wouldn't just use the rods themselves to find gold is because...

    2. Re:Um? by korgitser · · Score: 5, Insightful

      By that logic, you would want to do everything by yourself. Well, if you are a fisherman, you probably will not start a bank yourself even if being a bank looks profitable. Unless you are from Iceland, that is.
      There is a thing called the division of labour which says that if each of us specialize, we will get more stuff done as a whole. This is what built the civilization.
      Also, if you are looking into investing, you can choose between a high-risk high-profit endeavour, like building chips for your own mining operation, or a low-risk low-profit endeavour, like building chips for other's mining businesses. By going the second route, you can hedge yourself against the uncertain final success of bitcoin, while pulling your profit from the general public's current and certain interest in bitcoin.

      --
      FCKGW 09F9 42
    3. Re:Um? by ourlovecanlastforeve · · Score: 5, Insightful

      Most of the money made during the gold rush was made by merchants selling mining and panning equipment.

  3. Re:Remember the Gold Rush lesson by ArcadeMan · · Score: 5, Interesting

    What you just said is a quote from Mark Twain: "When everyone is looking for gold, it's a good time to be in the pick and shovel business."

    --
    Get free satoshi (Bitcoin) and Dogecoins
  4. Not really worth it with current technology by ourlovecanlastforeve · · Score: 5, Insightful

    I was mining bitcoins with two AMD Radeon 9790 cards and was barely turning a profit. The problem is that the electricity cost to run the computer and the video cards is very expensive. It tripled my electricity bill. Then the difficulty was doubled, now I'm making negative profit. There is very little chance that if I continued to mine, the bitcoins I have in my wallet would ever become worth enough to make the money back. The same is true for everyone else: The more GPU's you add the more electricity costs and so you need so much hardware to break even that you'll never go into profit. The only hope is that you're one of the lucky few first people to receive one of the ASIC units from the two companies that claim to be close to shipping. Of course neither of those companies has actually shown a working unit even though they've taken thousands of orders (including two orders from me, one to each company).