Bitcoin Mining Innovation Avalon ASIC Miner Testament of Free Market
As Silver Vigilante wrote recently, with the number of bitcoins in production being halved due to the algorithm which controlled the production changing, the number of innovations that would come to the free market in order to balance things out again and keep the price of bitcoin from toppling out of control. Well, the price of Bitcoin has yet to be tempered, as it has been roaring ever since the halving of the production network took place. Quickly thereafter, a slew of news hit the wires regarding just how convenient, practical and sensible Bitcoin is. Even Mayor Bloomberg’s Bloomberg is having to report on the bet of the century: bitcoin – the bet on the internet.
One of the first technologies to hit the market as late aimed at helping miners produce more coins for fewer watts is the Avalon ASIC. Jeff Garzik, core developer of Bitcoin software, wanted to make sure he was one of the first to get this technology, and so he did.
The only thing that really matters, in the end, is the amount of power used and the amount of shares submitted upstream. Unfortunately my Kill-A-Watt is missing in action, so we only have half the picture, output.Performance is much higher than announced. 60 Ghps was announced. The unit’s cgminer self-reports 67.5 Ghps. mining.bitcoin.cz reports between 65 Ghps and 67 Ghps (see previous post). This is a significant increase over the announced speed. When you consider that it is possible to add a 4th ASIC module, it is even more impressive.After 20 hours of mining, the unconfirmed + confirmed rewards equal 14.98832170 BTC. Note that slush’s pool was very lucky recently, in addition to some blocks with abnormally high TX fee income, so that number skews much higher than expected.Grade: N/A Want to write A+… but we cannot judge fully without power numbers.
This is what the free market is for. It was easy to foresee that Bitcoin was about to have a volcanic rise. Nonetheless, many people missed that boat once again. Perhaps not as clear, but also easy to see, was that the open-source, community oriented nature of Bitcoin would ensure that the proper innovations would come to market to ensure that the halving of bitcoin product to 10.5 at the end of 2012 would not lead to pump and dump of Bitcoin.
Custom chips from Butterfly Labs, a Kansas City company, are designed to plug into a USB of a computer and augment the efforts to mine Bitcoin. These new lines of products from Butterfly labs will range in price from $150-$30,000. Thousands of customers have placed advanced orders for the technology. Butterfly is not the only company working on a such technology, and several companies are working on application-specific integrated circuits, or ASICs. This is an excellent example of the free-market regulating itself. These advents come into being just as the BTC mining production was halved due to the existence of 10.5 million Bitcoins as a product of continued mining.
ASICs are very expensive, usually starting in the low hundreds of thousands of dollars, despite Butterfly’s low-cost options. They are etched from blocks of silicon with microscopic precision. If the company’s products do make it onto the market, there will be an arm’s race for ever speedier versions.
And that is the free market. Instead of new rules whenever the inevitable is scheduled to happen, the free market allows that which must happen, happen, and then makes the necessary adjustments to continue functioning.