Wednesday, December 5, 2012

"Custom Chips Could Be the Shovels in a Bitcoin Gold Rush"

I've been reading about bitcoin mining for bitcoins. There is now special hardware optimized for running the calculations:

"When ASICs do arrive, they could force many bitcoin miners to give up. Since Nakamoto’s system adjusts the difficulty of mining to keep the rate of production constant, it will become significantly more difficult once the new chips go online. Many small-time miners will find that their outmoded equipment will no longer be able to pay for its own electricity bills. 'It will become more of a business,' says Butterfly Labs’ Zerlan. He believes that will help strengthen the Bitcoin economy and enable it to be taken more seriously."
There's an arms race between bitcoin miners. Another Red Queen race, just like trying to maintain production in the Bakken.

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