Inwards Butterfly Labs: The ASIC bitcoin mining arms wedstrijd

Inside Butterfly Labs: The ASIC bitcoin mining arms race

CoinDesk’s Daniel Cawrey recently visited and toured the facilities at Butterfly Labs, one of the most vooraanstaand and written about producers of bitcoin mining technology. Te this 2nd part of this series, he reports on the factors involved ter the bitcoin mining arms wedloop.

Now that Butterfly Labs is shipping ASIC bitcoin miners at a sustained rhythm, their production plus that of Avalon and mining pools like ASICMiner are causing the mining difficulty to go up fairly quickly. What this means is that it takes more computational power to finish proof of work algorithms. It means that a wedloop is now on to suggest the most processing power, but will also mean that other technical elements will come into play very soon.

I asked Butterfly Labs if the rise te mining difficulty is causing an increase ter sales which might be leading to the price fluctuations. They didn’t seem overly worried about any price volatility. It seemed to mij that they have simply bot too busy to contemplate if mining had anything to do with the price on any given day. “I don’t think that anyone knows. It’s so uncharted”, Dave McClain, who works on account management, told mij during my latest visit to BFL.

Computational speed on the Bitcoin network. Source:

The current generation of bitcoin miners

Ter the previous FPGA generation, processing wasgoed measured ter hundreds of megahashes. The current generation of Bitcoin miners perform at a speed of gigahashes. The most powerful unit that Butterfly Labs offers is the 500 gigahash vanaf 2nd Mini Equipment SC, presently priced at $22,484. It comes with a Nexus 7 tablet that has a custom-built built BFL app for mining bitcoins, which is also known spil a “host” device since the miners need a software application to tell them what to do.

The Mini Equipment has a unique form factor. From the side, it pretty much looks like a gaming PC tower. But when you look at the width of the unit, you can see that it is something different altogether.

BFL Mini Equipment SC with the vuurlijn panel liquidated.

While Butterfly Labs is catering to the consumer bitcoin market, it’s clear that bitcoin mining will eventually not be viable for the mass market. BFL Chief Operating Officer Josh Zerlan made it clear that even if the mining difficulty were to be at a rate overheen 900 million (it is around 26 million right now), even the entry-level Jalapeno should still be able to make at least a little bit of money.

Mining at huis may not last

Of course, those are the company’s back-of-the-napkin calculations – it’s no ensure. Bitcoin pricing is volatile, so it’s hard to predict the future value of mining. You have to believe that the price of bitcoins are going to be much higher te the future if you want to be a part of the wedren towards more hashes. The best resource that I have found to be able to work out the variables that go into bitcoin mining is the profitability rekenmachine on Bitcoinx, which takes into account the mining difficulty, a miner’s hash rate and power consumption, among other factors. There is also an excellent bitcoin mining instrumentenbord that has bot created by TradeBlock.

What the Mini Equipment SC does is amalgamate many of BFL’s “longboard” PCB units. When a customer purchases a Single – the unit that’s one level above the entry-level Jalapeno – it comes with one of thesis boards. The Mini Equipment is a bunch of them ter a larger configuration connected with a USB. One of the very first things that I noticed about the unit is that it would sit fairly awkwardly inwards of a datacenter rack.

BitForce 500 GH/s mini-rig SC te operation

This is significant when you embark to realize where the future of bitcoin mining lies. For the most part, the past few years have bot utter of miners building equipments inwards of their houses. But with so much power and cooling needs that will be required ter the future, it is likely that a future with mining equipments ter the huis will no longer be possible.

Violet wand and warmth

It is the power and cooling that will become the most significant elements of mining going forward. It will only be a matter of time until a unit is capable of performing at the level of terahashes vanaf 2nd and beyond. While Butterfly Labs did not want to comment on their future plans, they made it pretty clear to mij that they are hard at work on developing the next generation of bitcoin hardware.

The key is going to be efficiency, ter terms of power and cooling. Unlike the Mini Equipment SC, it’s very likely that units are going to need to be configured te a blade form factor that can slide into a datacenter rack. I wasgoed told that water-cooling would be the most effective option for warmth reduction ter the future because it is cheaper overall than technology that utilizes liquid nitrogen cooling.

Even then, a traditional datacenter rack can only treat 20,000 watts of power at a time. According to the Butterfly Labs official FAQ, a Mini Equipment consumes Two,500 to Two,700 watts of power at any given time. Right now, that datacenter rack comprising of today’s average servers would only be able to treat about six Mini Equipments.

The BFL “Longboard”

The treadmill

The competition to make bitcoin mining hardware energy efficient yet maintain a high hashrate is going to be significant. Cooling is an facet of this, but it is going to take some creative thinking instead of just jacking up the hashrates. At some point, engineers are going to have to embark thinking more about power consumption than hashing.

So here’s what is happening with mining right at this uur, a reflection on future things to come. “The GPU miners are pulling down out. The cost of electro-stimulation versus the prize is going through the roof”, says McClain, the BFL account manager. Now that ASICs are here, the FPGA mining units cannot sustain. This example of what is going on at this ogenblik will ter fact be a continuous cycle te what is the bitcoin mining wedloop, an occurrence that the Butterfly Labs folks admitted is similar to a “treadmill”.

But is that going to zekering people from mining bitcoins? Is that going to zekering Butterfly Labs, Avalon and Terrahash, among others, from making money selling bitcoin mining to the masses? No, there is too much incentive. And if you believe te bitcoin, perhaps you’ll feel a little bit better about it if you own a part of the network.

It at least gives people the chance to own a part of financial technology. And that’s more than you can say about the banking industry today. You can own shares of a publicly traded bankgebouw, but even then that might not be the same thing spil being part of a decentralized network, no matter what kleuter of hardware wedstrijd might be going on. Actually, it can sometimes be joy to see technology mature ter this form. If you’re not caught ter the middle of this, it might be kleuter of titillating.

The leader ter blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a stringent set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests ter cryptocurrencies and blockchain startups.

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