[HH] Bitcoin mining hardware

[Tom Metro]

Bitcoin has been all over the news this past week. I think the main
trigger was some significant price swings on the exchange rate. Then
there were follow-on stories talking about how mining activities are
using $150,000 in electricity every day.

Even if you don't care about alternative currencies, you may find the
hardware used to enable "mining" for coins to be of interest. Here's a
story talking about said hardware:

http://gizmodo.com/5994446/digital-drills-the-monster-machines-that-mine-bitcoin

The basic idea with Bitcoin is that you have a computer do some
intensive computational work, specifically compute hashes:

http://en.wikipedia.org/wiki/Bitcoin#Bitcoin_mining

  The mining process or proof-of-work process involves scanning for a
  value that when hashed with SHA-256, the hash begins with a number of
  zero bits. The average work required is exponential in the number of
  zero bits required, but can always be verified by executing a single
  hash.

And your reward for doing the work is you get a coin, which can be
exchanged for goods and services, or for US dollars on an exchange.

A clever part of the design is that it self-adjusts for the ever
increasing capabilities of the available hardware:

  To compensate for increasing hardware speed and varying interest in
  running nodes over time, the proof-of-work difficulty is determined by
  a moving average targeting an average number of blocks per hour. If
  they're generated too fast, the difficulty increases.

And this has led to:

  Today, bitcoin mining is a competitive field. An arms race has been
  observed through the various hashing technologies that are used to
  mine bitcoins and confirm transactions: High-end GPUs (Graphical
  Processing Units) common in many gaming computers, FPGAs (Field
  Programmable Gate Arrays) and ASICs (Application-specific integrated
  circuits) all have been used. The newest addition, ASICS, are built
  into specialized servers that can cost nearly $3000 USD a unit.

Also listen to:
http://www.grc.com/sn/past/2011.htm#287

for Steve Gibson's explanation of how the algorithm works.

In any case, the competition and the cost of power is driving miners to
FPGAs and ASICs. Pretty amazing that this made up currency scheme has
been profitable enough to justify the development of ASICs.

I have to assume that with this degree of profit motive, there must be
criminal organizations using zombie bot networks to do mining. When the
cost of the hardware and electricity is free, you clearly have an advantage.

The Gizmodo article has some interesting pictures showing racks of
open-frame computers, from CPU-era to GPU-era to FPGAs and finally
ASICs. They describe on ASIC solution (quoting Gizmodo):

  Meet the Avalon ASIC. ... Inside its unassuming grey case is an army
  of specialty chips that promise 65 gigahashes per second. This is
  $6,800 equipment...that, properly utilized, stands to be worth much
  more.
  [...]
  And while Avalon started the revolution, others are not far behind.
  Companies like ASICMiner, Butterfly Labs, and bASIC all offer similar
  systems--some that boast even more power--but none of those have
  managed to ship.
  [...]
  The Butterfly Labs BitForce Mini Rig SC, a 1,500 GHz/s machine. It's
  about 30 times more powerful than then current Avalon ASICs, or would
  be if it ever exists...
  [...]
  Bitcoin has always favored early adopters, bold ones especially.
  Because mining difficulty increases to compensate for increased power,
  all advantages are temporary. But it doesn't increase dynamically.
  Instead it hops up once every 14 days, so advantages can be leveraged.
  The first Avalon ASIC to be put to use paid for itself in a mere nine
  days, but every additional unit follows will have more and more ground
  to make up.

The treatment of the tech in this article is a bit superficial. It would
have been nice if they described in more detail what was depicted in
each photo. But probably a decent overview of the hardware, if you only
have a casual interest in Bitcoins.

A concluding thought:

  Ultimately, ASIC devices are the last great innovation in Bitcoin
  mining; once you've specialized down to the chipset, there's nowhere
  left to turn for a 100-fold computing power increase. And in that way,
  we're seeing the beginning of the end of the gold rush, just as
  Bitcoin fever reaches a fever-pitch.

That's kind of a defeatists view, and doesn't seem to acknowledge Moores
law. Over time the ASICs will shrink and you'll see more hashing engines
per chip.

How about Quantium computing?

More likely, the next innovation will come not from hardware but from
mathematics - finding an algorithmically more efficient way of arriving
at the same result.

 -Tom