The ASIC Window

In this post, I'll be talking about the hottest new technology in the bitcoin scene, ASIC mining units. More specifically, their impact and profitability.

If you have seen the websites for Avalon and Butterfly Labs (BFL), or heard about these in other blogs, on forums, or in chats, then you know they stand to change bitcoin mining drastically.

ASIC chips (and Josh of BFL reflected)

One might think at first that these are fantastical money making boxes that will pour the wealth of Midas into your bitcoin wallet, especially if you run some calculations based on their hashing power and the current difficulty of the network.  You would be wrong.

Into gold you say?

While those lucky souls who get the first Bitforce Mini Rig SCs from BFL will most certainly earn a goodly number of bitcoins in the first days or weeks of thier introduction, the window of opportunity for this is not that big.

Avalon's first batch of 300 has mostly shipped, though is not really enough hashing power to do much more than quadruple the difficulty.  Despite being the runners-up in the race to release this tech, BFL is set to ship a vast number of units.  Enough units to change the entire landscape of bitcoin mining in the course of a few days; there are even fears that it could cause a collapse or monopolization of the currency were they to release them all at once.  They're not doing that thankfully, but estimates of the increase in difficulty are anywhere between 10x and 40x after their introduction.

Difficult.

Bitcoin mining isn't really such direct competition, but I'll use war as an analogy.  A few automatic assault rifles have already been shipped and are being used to great effect, but a shipment of tens of thousands are scheduled to arrive on the battlefied any time now.  The advantage of having one before anyone else is clear, but when most other people have them too things become balanced (unless of course you are a GPU miner and are still in the trenches with a flintlock).

So then, the real question becomes not "Will I get super rich?" but "Will it pay for itself and eventually become profitable?"

Depending on when (if some would say) you are able to actually get and use one of these mining units, it does have a chance to be quite profitable.  The order queue at BFL is rumoured to be upwards of twenty thousand long, and none have shipped yet.  Reportedly if ordered today (16 March 2013), you could expect it to arrive in the vicinity of June 2013.  

Mini Rig SC from BFL

By that time, it is not a certainty that the low-end Jalapeño model will actually be able to make the escape velocity needed to beat the rise of difficulty and network hashing rates to pay for itself and begin earning a profit.  More powerful units will of course have a larger 'launch window' for making money, but they are by no means a golden ticket despite costing nearly their weight in gold.

For real though, the Mini Rig SC costs nearly this much.