Post
Topic
Board Securities
Re: Next generation 14nm mining grid
by
EBM
on 06/12/2013, 08:27:05 UTC
Why is bitcoin suddenly attracting the lowest rang of scammers,

Because bitcoiners don't understand finance?

Anyway, some interesting thought.  I don't know if I have enough info/background to make numerical estimates, but I imagine this is what their per-customer margin looks like:

bitcoin dust
less: marginal cost of mining servers/generic work servers
less: marginal cost of advertising (acquiring customers)
less: marginal cost of promotions (avg lottery payout)

The dust revenue is just so, so low do you think that you'll be bumping against problems with just the marginal cost of having a constant connection to a server and getting new shares?  The cost of one network connection to one mining pool has got to be incredibly tiny but so is the revenue you're making from dust.  Bitcoin mining is both your most reliable source of income but also your most server expense-hungry and concurrent network connection-intensive choice.

Advertising: really tricky as you're still being trapped under the upper bound of your dust revenue.  How do you keep your average cost of acquiring a customer that low?  I guess raising tons of investor money in a formal investment series gives you a pass here for now.

Finally, I don't think non-bitcoin sources are going to be moneymakers for these guys.  People who need scientific computing aren't known for their deep pockets - they are funded by grants.  The web scraping thing makes it sound like you've already got a customer which is cool, but I don't see the sustainability for that business model (and I don't know who would pay for it in the first place).  People scrape the web so they can store, index it and query it at a later time.  Your army of smartphones is only going to give you a small bandwidth saving compared to downloading the pages yourself.  Does the cost of outsourcing it to a 3rd party with an elaborate system to manage its workers (aka higher per-scraper cost) going to work out financially?

A few key points here, I'll try to address them all...

The obvious one: mining BTC doesn't pay nearly as well as scientific and/or commercial computing. Nor is it what CE is designed to do (as I said, we're a computing platform, not a mining company). And yes, those guys are often on tight budgets. But that's great, because our platform is basically the cheapest computing you can hire - approx 10x cheaper than Amazon EC2, for example.

It's not as flexible as the likes of AWS or Azure, but for pile-it-high-sell-it-cheap raw computing you cannot beat volunteer-based grids like ours. We sell computing time for 1c per typical core/hour, and we also do massively distributed storage now (think RAID 10,000).

The distributed web-crawling is the stalking horse, perhaps even more so than the mobile mining, because mobile devices on wifi can web-crawl pretty much as well as any PC. It's a very CPU-light task. In fact, it's about the best possible use for a distributed grid of mobile devices.

The money in it is huge: Google alone spends over a billion dollars per year and uses 500k+ servers just for web-crawling. They have no choice if they want the search engine to stay up to date. Even back when they invented it, Brin & Page knew a distributed system would be the most efficient method but nobody knew how to persuade the public to participate (see 2nd para, 9.2: http://infolab.stanford.edu/~backrub/google.html )

Lots of other companies need web-crawling, too. From seeking out phishing websites to scanning Twitter for stock market 'emotion' keywords, it's not just search engines. Plus, a distributed grid has the huge advantage of every node having its own unique IP address. Facebook, Twitter and many other sites restrict visitors to one page per second per IP address, just to foil crawlers. Doesn't affect us.

Website diagnostics, pen testing, anything that really just needs bandwidth and lots of nodes: also ideal for a grid of mobiles quietly working at night time.

(Mobiles can also compute, of course. They're nowhere near PC level, but they are virtually free to use, power-wise, and a quad core 1.5 GHz chip with 2GB RAM isn't useless by any means. Especially if you have a few million of them.)

Mining on our grid will only be a big deal when these cellphone SHA-256 chips appear, because by then we'll have been running the CE Android app for months anyway (mainly web-crawling), and should have some big install numbers. And although we've no idea what the little things will actually earn, we do know they'll be the most efficient chips out there. Samsung and friends don't do last-gen processes.

Cheers,
Mark