Quote from: Korbman on January 29, 2013, 06:42:36 PM

Quote from: pcm81 on January 29, 2013, 05:59:55 PM

To build a real ASIC it will be $1-$2 million in startup costs. With current bitcoin design 25 coins per 10 min plus transaction fees, call it 30 coins per 10 minutes, 180 coins per hour at the rate of $20 per coin we are talking $3600 per hour for full network capacity. How long you think it would take to make $3million, which is what end user would endup paying for ASIC? We are talking about 1000 hours to pay for hardware development cost alone with free power. And this is assuming that the ASIC will crush all other network capacity, which in reality it will not exceed 75%-90% of. The market is too small, it will simply not be worth the investment.

Where in the hell are you getting your numbers? I've reread this paragraph a couple times and I still can't piece together your thought process...

1) You don't need $1 million to develop an ASIC...though I suppose it would help.
2) You calculated (poorly) the full output of the network in terms of $$ to somehow justify hardware development. Why would this even matter?
3) I can't even...

Quote

And this is assuming that the ASIC will crush all other network capacity, which in reality it will not exceed 75%-90% of. The market is too small, it will simply not be worth the investment.

No. Just...no.

Users will buy hardware to make money. Would you buy $1000 chip if it did no good for you? The network capacity is relevant, because the only way a chip maker will comit to designing and making a chip is if they can sell enough of them to justify the R&D cost.

Do some math:
network btc is 150 btc/hr, which is $2700/hr. Your fraction of this would be based on your hash ratio to network total. Let's make the most favorable assumption that ASIC will drive all GPUs and FPGAs off the grid, so 100% of network hash rate is coming from ASIC. If total N asic units are made, the R&D cost per chip is X/N. Lets say that X is $1million, so R&D cost per chip is 1,000,000/N. When you buy 1 chip you get 1/N network capacity and so you are getting $2700/N/hr. Which means just to pay for R&D cost you will have to run your ASIC 370HR with FREE electricity. In reality ASIC will not have 100% of network hashrate, your electricity is not free and your actual cost will be at least 3x the RND cost since you need to pay for hardware itself. Which basically boils down to 370*3/F =1110/F Hours. F is the hashrate fraction of ASIC devices to the rest of the network. So in the most ideal case it will take you say 1110 hours of hashing with free electricity to pay for your ASIC chip.