Scrypt ASICs Update

I want to revisit the topic of Scrypt ASICs. The reason for this is two-fold: first, mining income from Scrypt mining with GPUs is basically at (or just above) the break even point right now for most of the major coins, and that's only if you happen to have someone inexpensive power. Second and perhaps more importantly, Alpha Technologies sent out an email stating they are now entering the final 60 days of development on their Scrypt Viper ASICs, and thus the call has come for the final 70% payment from those that pre-ordered. As I mentioned a while back, I went in 50-50 with a good friend on one of the then-25MH Viper ASICs, and while I was nervous I figured it was worth the chance.

The payment request is sort of a good news/bad news scenario, unfortunately. The good news is that the ASICs are nearly done, right? The bad news is that some of the stuff surrounding the final couple of months is sounding all too familiar to me. I remember the Butterfly Labs fiasco, and while they did eventually ship the products and they delivered the expected/promised performance, it took so much longer to ship that even the somewhat early orders basically got hardware that hardly mattered on arrival. Today, 5GH of SHA256 hashing power is practically worthless, and even with power requirements of "only" 40W or so (which is a far cry from their earlier target of <5W), at the current difficulty level you would net around $2 per month.

The reason I mention Butterfly Labs is that, despite better communication, Alpha Technologies is basically unproven as far as cryptocurrency mining hardware is concerned. And what really makes me nervous is that they've gone from 25MH to 90MH (5 to 18MH on the lesser Viper), and now they've pushed the limits of credibility by promising 250MH (50MH for the small Viper)! I don't want to look a gift horse in the mouth, but we're now talking about a 10X increase in performance over the initial specs, all "due to increased competition". The competition of course comes from various places: KnCMiner, a company that has at least proven capable of delivering SHA256 ASICs in quantity, is offering 300MH for $10000. That's good but other companies are already shipping, including Gridseed (from various sources), Innosilicon, and Zeusminer.

While it's possible that A-Tech has managed to improve performance dramatically, much of the increase comes from trimming "extra" features like an integrated LCD display and doubling the number of ASICs instead -- all with a higher power requirement and a larger chassis of course. Ultimately they are giving away a lot of "free" extra performance to batch one customers. If they deliver that will generate a lot of good will, but there's a second possibility. Let's assume you have a bunch of preorders, and you've been paid a lot of money but still have costs and you need to get more money to finish the project. What do you do? Well, you can't really tell your customers, "Oops...we underestimated our initial costs; please pony up so we can finish!" So instead you tell them that you're "nearly ready to ship -- please remit the final 70% of your payment." And to further entice everyone to pay as quickly as possible, you then nearly triple the promised performance of a product where you already increased performance by 3.6X!

I really, really hope that they aren't going to disappear into the night with all the money from their customers, but let's be real: it wouldn't be the first time something like that happened in the world of cryptocurrencies! The size and power requirements of course have jumped, so what was going to be a 1U 25MH system became a 4U 90MH system, and now it will apparently be something like an 8U 250MH system... and it will require nearly 2000W (via three 750W PSUs last I heard)! It's a gamble still, as are all of the other non-shipping Scrypt ASICs, and if I lose it will hurt -- but thankfully income from other cryptocurrencies has basically got me covered.

Now with that all out of the way, let's talk about the performance and cost of running these Scrypt ASICs compared to standard GPU mining. This is why Scrypt GPU mining is about to die (assuming the ASICs are actually delivered). We'll start with my standard mining rig (3xR9 280X), then look at the ASICs from Gridseed, Innosilicon and Zeusminer (these are shipping; Gridseed is readily available, and the other two are both shipping as well now), and wrapping up with Alpha-Technologies and KnCMiner (not shipping yet).

Graphics Mining (3x280X):
Hash Rate: ~2.1MH
Power: ~750W
Price: ~$1500 for a complete system
Efficiency: 2.8KH per Watt
Daily Income: $2.60 (LTC)
Power Cost: $1.80

Gridseed Specs:
Hash Rate: ~70KH per chip, 300KH per "mini USB miner"
Power: ~1.3W per chip, ~7W for mini USB (~60W if hashing 9GH SHA256 as well)
Price: $1079 for a 5.2MH 80-chip blade that draws 140W
Efficiency: 37KH per Watt
Daily Income: $6.47 (LTC)
Power Cost: $0.34

Innosilicon A2:
Hash Rate: 86MH
Power: ~550W (?)
Price: ~$12000 for a complete system
Efficiency: 156.4KH per Watt
Daily Income: $107 (LTC)
Power Cost: $1.32

Zeusminer Thunder X3:
Hash Rate: ~28MH
Power: ~1050W
Price: ~$3100 (no PSU?)
Efficiency: 26.7KH per Watt
Daily Income: $35 (LTC)
Power Cost: $2.52

A-Tech Viper (250MH):
Hash Rate: 250MH
Power: ~1900W (?)
Price: ~$10000 for a complete system
Efficiency: 131.6KH per Watt
Daily Income: $312 (LTC)
Power Cost: $4.56

KnCMiner Titan:
Hash Rate: 300MH
Power: Unknown? (1500W?)
Price: $10000 (no PSU)
Efficiency: 200KH per Watt
Daily Income: $373 (LTC)
Power Cost: $3.60

So first things first, in terms of efficiency even the Gridseed ASISs are about 13x what you'll get from a good GPU mining rig. The Zeusminer is actually the least efficient ASIC and it's still 10X what you'll get from GPUs. Move to the Innosilicon and A-Tech and we're looking at around 50X better efficiency, while if my power guess on the Titan is accurate we're talking over 70X more efficient mining compared to GPUs. When these ASICs arrive en force, GPU mining for Scrypt basically dies, and it will die fast. The only "good" news is that the initial ramp up in production means it will take a bit longer before things really escalate, and as I've mentioned in the past, GPUs can still be used for other algorithms -- Scrypt-N, Scrypt-Jane, X11, X13, etc.

There's another aspect we need to discuss, of course: how long to recover your investment with these ASICs? Well, assuming income remains constant (which is way better than any realistic best-case scenario), we're looking at nearly six months for the Gridseed, 113 days for the Innosilicon, 95 days for the Zeusminer... and if it really delivers, only 32.5 days for the Viper 250MH! KnC Titan would be the best result of course, given it's the highest hash rate, paying you back in around 27 days, but we're still likely three or more months away from the Titan shipping. Of course, by the time the Viper and Titan ship, I suspect profitability of Scrypt mining might be down another 50% or more, but even if it's 60 days to break even I'll be quite happy.

The only problem is whether or not the darn things actually ship in July (or 2014 if they pull a Butterfly Labs). Let's just hope that doesn't happen.... And if you didn't take a chance on a Scrypt ASIC six months back, now you can be sad... and glad at the same time that you're not out $10,000 and wondering whether you'll actually receive the promised hardware -- on time or perhaps ever.


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Hashcows Christmas Eve Hack -- What Now?

I've been around the BTC world for a while now, and people running off with your coins is far from unusual. I lost about 50 BTC in the implosion of Bitcoinica, and I witnessed all the PirateAt40 shenanigans, for example, and there have been more than a few collapsed exchanges and pools. When things go wrong, everyone starts by talking a good game -- "We'll figure out what went wrong and then reimburse people as we're able!" A few days turns into a few weeks, then a month, and then suddenly silence. Then maybe a final message saying, "We're almost done and will reimburse next week..." and that's it.

So what's going to happen with Hashco.ws? At first I thought they might just fix a minor security flaw and then move on, maybe with some 0% fees for those that had BTC stolen, or maybe paying out refunds as they were able. After all, we're "only" talking about a 40BTC heist, give or take. However, 40BTC is still worth roughly $30,000 so for two guys running a pool that could represent a lot of money. And if they can't actually fix the security vulnerability properly, calling it quits might be best.

At present, the Hashco.ws site is in "read-only mode" for BTC withdrawals, and if you weren't actively logged in at the time the site went into lock down, you can't see your balances, workers, etc. I'm lucky in that I have a PC that was logged in, so I can see what's going on. I have nearly 0.40 BTC in earnings I haven't not yet collected, and I'm certainly worried that I may never be able to collect. Not surprisingly, my choice has been to move my mining operations elsewhere on most of my systems -- Middlecoin is my poison of choice for now, so we'll see how that goes.

I wish those involved with Hashco.ws the best of luck, and I really hope they can rectify the problems and get the site back up and running, but even though my current estimated payout per day is looking quite good (something like 0.02 BTC per MHash), I'm not going to risk mining there until they're running properly, with working logins and payouts. I'd suggest at the very least diversifying your mining portfolio in the short term.

Merry Christmas -- definitely a lousy way to wake up, which is why I'm glad I don't run a mining pool!


Update: Hashco.ws has posted the following as of this evening. It looks like they're trying to do the right thing and cover the losses for most of the miners. How long will it be before the site is back to normal and regains all trust? That's yet to be determined....

As has been mentioned in an earlier update, on December 24th 2013 someone was able to modify the Bitcoin payout addresses of many users of Hashcows, and trigger a manual cashout of current balances. 754 total users (out of a total of 8,142 registered users, 5,000+ of which have a BTC balance > 0) had BTC removed from their accounts, accounting for approximately 14.2% of users who held BTC on Hashcows. A total of 40.7815 BTC was removed and sent to address 13R87ropkDKzDEuVeQoX64kkcLvPWVdTKH. Hashcows staff have followed up with all major exchanges and a number of other large pools to confirm if they had any trace of this address in their systems, which as of this time has not turned up any useful results.

Since the attack was noticed on the 24th, we've placed the site in a locked down read-only mode, and disabled all payouts. While we understand this has caused some frustration among users, not being able to see if their accounts were affected, we felt it was the responsible course of action to take, given we knew we were unable to dedicate the time required to diagnose and address the security issues on Christmas Eve and Christmas Day.

We've been working since this time, both in determining the cause of the attack, and its potential scope, including an external audit of the source code by a trusted 3rd party. At this time the belief is still sql injection, based on the nature of the attack and how it was carried out. However, regardless of the technical results of ongoing audits, 2 things are confirmed. #1 The web instance and the mining/stratum instances are physically seperate. The mining instance remains unnafected by the web based lockdown, which is why mining continues to function as usual. #2 The web front-end is undergoing a rebuild from scratch as we speak, by both myself and another developer, utilizing different technologies, improved security features, and new hardware. We hope to have a basic version of this up in the coming days.

What does this mean in the immediate future? We'd prefer to not turn on write access for the website in its current form, but obviously understand people can't be expected to wait much longer for balances held up by the system (both old balances still intact, and earnings mined over the days since lockdown). We'll be posting a simple tool for people to use, allowing you to login with your credentials, at which point it will send out an email verification link, including your current balance and payment address the site has for you. Once clicked, your balance will be sent to the address specified. If you need to make changes to these details, instructions will be provided on the tool page. We hope to have this posted by tomorrow.

Last but not least, perhaps the question many have been waiting for an answer on. What does Hashcows plan to do about the missing 40 BTC? We've thought long and hard on this, and its obviously one of the most important decisions we'll have made in our short existence as a pool and community. Its a situation and decision that has hung over us throughout the last couple days spent with family.

Hascows will be re-imbursing every miner 100% of losses incurred on earnings made within the last 7 days prior to the incident (Dec 17th's payout inclusive). This means any funds you earned between Dec 17th and Dec 24th that were cashed out of your account by the attacker, will be re-added to your account at Hashcows expense. This payout will recover 100% of losses for 463 of the 754 affected users. For the remaining 291 users, we'll be offering reduced fees of 0.5% for at least the next 60 days to help with any shortfall.

In closing, both aTriz and I want to make a statement on more of a personal level, we have been absolutely stunned by the community that you have all created with this pool. There has been a tremendous amount of support and encouragement through these not so fortunate times and we would personally like to say Thank You. We look forward to the future of this pool while we begin the rebuilding stage which will continue to bring this wonderful community more features, more safety, more support, and more cows!

nearmiss.

LTC4You: Fun with uLTC

I'll keep this short, but a few days ago a family member (cousin) posted on Facebook about LTC. I thought, "What the heck -- she doesn't know about computers, what's she posting about LTC for?" Turns out it was for the site LTC4You.com, which gives away free LTC, plus a 50% bonus on all games played by people you refer. I have a blog and it gets a decent amount of traffic (around 5K views per day at present), so I thought, "What the heck, let's give it a shot!"

I registered early on December 11, so two days later I have played 13 games. Every time so far I have only received the 40 uLTC reward, so for my clicking and typing captchas that works out to a whopping 520 uLTC. Thanks to referral bonuses, however, I'm totally rolling in the uLTC: my current balance is 4410 uLTC, meaning almost 10X as much from my referrals.

Here's the problem: uLTC is essentially worthless. 4410 uLTC sounds like a big number, but the "u" is for micro, or one millionth of a Litecoin. After two days, the total earnings I have received from my games and the 35 referrals is valued at $0.13. So one penny for typing a captcha is my current rate (with referrals), and you can only do at most 24 per day.

Put another way, I type reasonably fast at around 65 WPM. Even with zero delay between games, accounting for refresh time plus the time to actually play the game, at best you might be able to play 10 times in a minute (being generous), and you'd be stuck staring at the screen all day. That would be 14,400 games per day, most winning 40 uLTC, for a grand total of 0.576 LTC in a day. I don't know about you, but as a best-cast scenario I don't think $15 per day is worth the effort, and realistically you're more likely to get about $0.05 per day.

You've been warned. Now all of you go play off my referral link so I can earn another $0.10 for this awesome post! </sarcasm>