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Bitmain announces Antminer S4

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Antminer S4 promotional image.

Mining hardware maker Bitmain released a teaser image today (and very little else) for their upcoming Antminer S4 unit. According to Bitmain’s website, the unit will run at 2 TH/s and the first batch ship at the end of September. Beyond that, everything else about the unit is a mystery, including the price.

Given Bitmain’s somewhat embarrassing last-minute revisions to the S3’s hashing power estimates it’s not entirely surprising that they’ve decided to keep the details of the S4 under wraps until the launch. The S3 is a 441 GH/s device retailing at 0.64 BTC, meaning the price would need to be no more than 2 or 3 BTC per unit to be competitive with their own products.

The unit appears to use the same housing and form factor as the controversial S2, and a stark departure from the double-vented shoebox design of the S3. As such, it’s possible that the S4 is simply a revision of the S2’s build with an improved version of the S3’s ASIC blades. In that case, the S4 might be more accurately called the “S3.5.”

It is possible that Bitmain has an ace up their sleeve with the S4, however. ASIC improvements have been huge in the last year, and the near-stealth launch could prove to be a canny marketing strategy. Then again, releasing a new line so soon after the lackluster launch of the S3 could indicate nothing more than Bitmain having a lot of S3 ASIC blades and S2 form factors to clear out of their warehouse. Only time will tell.

Bucking the cloud-mining trend, Spondoolies-Tech announces new 1.7 TH/s home miner

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SP20-Jackson promo image.

"As I’m sure you know, a lot of people have declared home mining to be a thing of the past," Spondoolies-Tech VP of Marketing Gadi Glikberg recently told CryptoCoinsNews. “That however is only true if home miners do not have access to the most efficient ASIC in the market.”

Glikberg’s pointed comment comes as the Israeli company prepares to launch its latest consumer-level miner, the SP20-Jackson. Though not exactly on the bleeding edge of mining hardware specs, the 1.7 TH/s, 8-chip ASIC machine pulls a reasonable 1100 watts at the wall, and is overclockable to 1.8 TH/s.

With a $1,190 price tag, it’s not the best deal on the market, but it is priced within the range of a hobbyist. According to Glikberg, that’s the point. He told CCN that the SP20-Jackson was intended to “spread the hash rate” and put “power back in the hands of home miners.”

The hardware itself seems to still be in development, however. The company is currently taking pre-orders, with an expected ship date sometime in October.

Even if the Spondoolies-Tech hardware isn’t exceptional, there’s something to be said for a mining hardware maker giving priority to the home-mining market. With bitcoin mining becoming an increasingly industrial-scale, venture-capital driven business, many small miners are likely to be squeezed out. With centralization an increasingly worrying problem, the existence of a robust home-mining community is more important than ever.

KnCMiner to cease mining hardware sales to customers in favor of hosted, cloud-based model

KnCMiner’s “Arctic Cloud” facility in Sweden.

According to the Wall Street Journal, KnCMiner is out of the home cryptocurrency mining market. The mining hardware maker behind the Saturn, Jupiter and Titan lines told the news outlet that even with $70 million in first-year sales, direct sales to customers was rapidly becoming a losing game. The company plans to reposition itself as a cloud-based mining operation and chip designer, relying heavily on the $14 million cash injection it received from Creandum to launch a new dedicated hashing center.

That new facility, Clear Sky Farm, is located in northern Sweden, a region with plenty of cheap electricity and even more cheap cooling. KnCMiner currently controls about 7 PH/s, largely built from unsold Neptune units. With even the best of the KnCMiner line now looking like an increasingly bad investment from an ROI perspective, and with a particularly painful series of delays making even pre-ordered equipment a loss of customers, the company has decided to close the door or direct-to-customer sales.

“We don’t like people sitting in these queues for five months. It’s terrible. We generate a lot of stress for people,” KnCMiner CEO Sam Cole told the WSJ. Cole also noted that hundreds of customers had opted to simply have their money refunded rather than take possession of the mining equipment. That unclaimed mining hardware may already be in use at Clear Sky Farm.

Cole also declined to say if cloud-based mining contracts were actually profitable for customers.“We don’t give indications of returns,” Cole told the WSJ. “That would be bad for business. We are not a financial adviser. We cannot guarantee the performance they will get. The customer will have to do this.”

60,000 sq ft Michigan warehouse to become home to co-op hashing center

The HRP hashing center, ready to host miners.

If all goes according to plan, a giant warehouse in Michigan may soon become one of the largest bitcoin hashing centers in the U.S. Mining startup Hash Rack Power (HRP) announced yesterday that it will be converting the 60,000 sq ft space (location undisclosed, but likely in the outskirts of Detroit) to a “co-op style hosting center” for bitcoin miners. The location is already equipped to handle 2.7 megawatts of power, and the group claims that this could easily be increased to 8.7 MW should the need arise.

For those willing to take the plunge, the space does seemingly offer some interesting amenities:

Service elements will be in place, such as high security, monitoring, carrier grande Internet, climate control, live remote hands by experienced IT personnel 7/24 service and the whole 60,000 of space covered with high powered industrial air conditioning and air balancing equipment power that will be ducted to the mining equipment.

Those services are nice, but the project will live or die by the price of electricity. Michigan has a huge power infrastructure from the state’s days as an industrial center, and at the moment power is relatively inexpensive there. HRP is currently pricing power for co-op members at $60 for 500kW per month, but said in the press release that lower rates could be negotiated if participation was high enough.

Early members of the co-op will receive shares in the company, allowing the organization to eventually transition to a for-profit model once the infrastructure is in place. Should the location prove profitable, HRP noted that the property has significant acreage for future growth, and that similar warehouse spaces are readily available in the area.

KnCMiner and Bitmain announce new cloud-mining services

Mining hardware makers KnCMiner and Bitmain formally announced plans this week to launch new cloud-based mining services. Both announcements were widely anticipated, with both manufacturers lagging a few months behind their competition in offering the contract-based service. Neither service is yet live, with only pre-order subscriptions currently available.

The KnCMiner facility, dubbed Clear Sky Farm, is billed as a 7 PH/s hashing center in northern Sweden. The system is built from “excess” Neptune “Hash While You Wait" units that had been previously put to use to offset customer losses due to shipping delays of their 20nm line.

In an interview about the launch with CoinDesk, KnCMiner’s marketing director Nanok Bie said:

“We’re launching cloud services because of shifts in the market and demand from would-be customers. Home mining is becoming more and more difficult because of energy costs etc. Having your mining in the cloud has obvious advantages – we can source green electricity cheaper for instance, and have other bulk advantages.”

Instead of building up a new hashing center, Bitmain simply decided to buy an existing one. The “Antminer” maker purchased Hashnest.com, and will be independently developing a new cloud-mining platform. Of particular interest is Bitmain’s annoucement that the new ANTPOOL platform will be fully integrated with 51% attack resistant pool system P2Pool.

We are investing significant resources into the development of p2pool mining protocol. … The development of contributed into p2pool is almost completed, and in the final testing and deploying. … We have a focused team who are developing the p2pool mining protocol, and the goal is to have 80% of the total network hash rate join p2pool within next 12 months. At that time, the whole Bitcoin community will never be anxious about the potential risks of the decentralization risk associated with the pool mining model now.

Bitmain noted that the first contributor to the ANTPOOL system will be adding around 4 PH/s to the P2Pool network.

The Coinsman visits another Chinese bitcoin mega-mine

One of many revealing images from the Coinsman’s blog post. Source: http://www.thecoinsman.com/2014/08/bitcoin/inside-one-worlds-largest-bitcoin-mines/

Earlier this month, bitcoin blog The Coinsman reported on the internal workings of a massive hashing center in Northeastern China, revealing key details on the operations of the mining operation. This week, the Coinsman visited another Chinese hashing center, this one being a “larger, even more secretive operation” than the last.

Bitcoin mining is clearly a booming enterprise across the globe, but this massive, four-building facility is something new. As the Coinsman noted: “This wasn’t a repurposed factory like the previous mine I visited… this was an entire facility being constructed just for bitcoin mining!”

According to the report, each warehouse-like space has around 3,000 square meters of floor space (9842.52 square feet). All told, the site will eventually have eight such buildings, all dedicated to creating a true behemoth of industrial bitcoin mining power.

How soon with it be complete? The answer is staggering, both from a logistical and safety perspecitve:

The mine operators told me that each warehouse took fifteen days to construct, and an additional ten days to fill up with hardware and get it all hashing away. The concrete was still drying on some of the buildings.

The buildings are clearly designed for bitcoin mining and little else, with a wall of industrial fans on one side and the opposite wall covered in what appears to be a cardboard-based evaporative cooling system. Not only is the system inexpensive, it’s also seemingly effective, keeping the internal temperatures of the hashing centers at 77 °F.

And inside? Racks and shelves filled with brand-new mining hardware. It seems that the center is equipped for both bitcoin and alt-coin mining, and has new equipment from a variety of ASIC vendors arriving constantly. The Coinsman estimates that the center may already have several petahashes of mining power under its command, and may already account for as much as 5% of the entire bitcoin network.

If you’ve been wondering why the bitcoin difficulty rate has been spiking of recent, look no further than China’s digital gold rush.

With cheap electricity and free cooling, has digitalBTC’s Iceland hashing center cracked the profitability puzzle?

Iceland’s Jökulsárlón, a glacial lake. Image source: https://www.flickr.com/photos/krmuir/142110701/

Bitcoin industry blog CoinDesk published a profile of Australian bitcoin-mining company DigitalBTC this week, revealing the company’s fiendishly cost-effective vision for the future of industrial-scale hashing centers. At the core of their plan: Low-cost renewable power, and a naturally cold climate.

The company is building its new hashing center at the Verne Global data center in Iceland. Powered entirely by geothermal and hydroelectric sources, the data center can take advantage of Iceland’s famously inexpensive electricity costs (roughly $0.10 per kWh). Given that Australian electricity can be hugely expensive (around $0.31 kW/h in 2012), those savings alone could be enough to justify relocating a mining operation.

DigitalBTC told CoinDesk that it expects to see an energy savings of around 40% following the center’s launch, with additional savings coming from cooling. Although relatively mild by comparison to deceptively named neighboring island Greenland, Iceland’s temperature is still exceptionally cool, ranging from an average of 55 °F in the summer to a bone-chilling 14 °F  in winter. For an industry that is increasingly reliant on effective cooling technology to keep warehouses of ASIC hardware operating efficiently, Iceland seems like a veritable mining Shangri-La.

Ironically, due to the country’s capital control laws and the policies of the Icelandic Central Bank, bitcoin and other cryptocurrencies are unambiguously illegal for transactions within Iceland. Iceland’s government, the Althing, has been harshly opposed to cryptocurrency adoption, most notably during the failed launch of the Auroracoin alt-coin earlier this year. With an increasing number of industrial-scale mining operations looking for low-cost options, and Iceland increasingly looking for outside investments, that attitude may be about to thaw.

Miners skeptical of CoinBau’s 0.19 joules/GH claim

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CoinBau promotional image from: https://bitcointalk.org/index.php?topic=719143.0

Last week, the Wall Street Journal published a profile of Dresden-based mining hardware startup CoinBau AG and their plan to bring German engineering to the ASIC market. The company claims to have created a custom 28nm chip design that can achieve 0.19 joules per gigahash, an unheard of efficiency in an already cutting-edge industry. By comparison, today’s best-performing real-world ASICs operate at around 0.35 joules/GH.

The company is attempting to raise between $10 and $15 million to mass-produce the new chip, dubbed Wolfblood Extreme Efficiency, although it has admitted that testing of the design has been limited to simulations.

The ever-skeptical mining community has been questioning CoinBau’s claims since the company announced plans to fund chip development by selling shares of an eventual mining operation once the ASICs went into production. With no publicly testable version of their first-generation chip, and no plans to release the second-generation chip into the wild until funding is complete and their hashing center operational, CoinBau is asking investors to take quite a leap of faith.

Should CoinBau’s chips prove up to the task and find funding, the company estimates packing around 4.8 TH/s into a 19” case, and with a targeted energy consumption of 0.27 W/GH/s per case. While impressive in theory, this performance isn’t terribly far removed from several products already announced for Q4 of 2014, meaning that it might be standard performance by the time CoinBau could reasonably expect to test and release a product in mid-2015.

Demand for GAW Miners new Hashlet program briefly crashes Shopify

Over the weekend, GAW Miners launched their cloud-based mining platform Hashlet. The system, which allows users to buy, rather than lease, hashing power in a cloud-based mining operation, was expected to have a significant demand as it went live. What wasn’t expected was that demand would be so high for the service that it would temporarily crash GAW Miners’ payment service, Shopify.

Reports on a variety of bitcoin-focused news sites claim that the traffic was high enough to effectively create a “natural DDoS” attack on Shopify’s servers, causing the payment gateway to return errors on over 100,000 online stores. The problem was quickly resolved by Shopify’s tech staff.

Speaking to Cryptocoins News about the event, GAW Miners CEO Josh Garza said: “We use Shopify, the largest e-commerce system in the world.
And we literally just brought it to its knees! … We knew the response was going to be big, but we didn’t know just how big it’d get.”

Garza added: “We’ve been politely asked to give advance warning next time.”

While the demand for a new product like Hashlet is understandable, from a mining perspective it’s not entirely clear if the pay-per-GH/s model GAW Miners has created is any more profitable than traditional mining systems, or offers significant advantages over lease-based mining.

Spike in the bitcoin network hashing power indicates a return to double-digit difficulty growth

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Image source: https://bitcoinwisdom.com/bitcoin/difficulty

After three consecutive single-digit difficulty increases, bitcoin miners are bracing for a return to steep growth in the hashrate and steadily diminishing returns for old hardware. If the current hashrate increase holds, the next difficulty increase will happen around August 19, and will increase roughly 20 percent. 

While not exactly welcome, this is a moderate increase by bitcoin standards. Considering that the network has gained nearly 30 Petahash of power since the last increase on August 8, and currently tops out at around 177.5 PH/s, the situation could certainly be worse. That said, with nearly a week until the next increase, those estimates could change quickly.

What’s to blame for the increase? A better question might be “Why has the difficulty been so low for the last six weeks?” Did we see the results of the bitcoin mining community holding its collective breath until the delivery of new ASICs? Or is the situation more complex and nuanced than that?

Clearly the changes have something to do with the delivery and activation of new mining hardware, and perhaps a boost in new investment in industrial-scale hashing centers. It’s also possible that a reshuffling of mining pools in the wake of the GHash.io 51% incident may have played a role.

For many miners, however, the time for speculation about the past is over. Instead, it’s back to the grind of pool selection, hardware upgrades and ongoing cost/benefit analysis.