<p>That point has already been reached.</p>

<p>For most people, Bitcoin mining is not profitable unless you live in a place like Iceland (i.e. with access to cheap, abundant electricity) or you have an already-installed solar panel/wind-mill installation that's already paid for itself and can divert some of that electricity into feeding your ASIC.</p>

<p>Electricity expenses are the single most important fixed cost for miners and, with the current continuous escalation of both hashing power and difficulty, should you buy a machine now you'd never recover your initial inversion unless Bitcoin had another round of 10x increases in prices versus fiat.</p>

<p>Likewise for scrypt-based coins, buying graphic cards and refrigeration equipment is not worth it anymore unless you have access to darned cheap electricity.</p>

<p>That's what happens in a completely free market: since there are no hard or legally mandated barriers to entry (or to exit) profitability for first comers drops very fast due to the continuous improvements in productivity that newcomers are bringing forth. So unless you can keep innovating (as an ASIC producer) or buying new equipment (as a pro-miner) you'll be left behind and become unprofitable.</p>

CC BY-SA 3.0
2014-05-21T10:38:27.920Z
2014-05-21T10:38:27.920Z
Joe Pineda
<p>I'm not an expert, but as far as I understand it, Moore's Law applies to ASICs just like other chips. So, every two years you get newer ASICs which can hash more, even though the chip design is not all the different from the previous ASICs, the number of transistors that chip has on it is doubled.  So, there is always going to be a cost of keeping up with the latest chips. This is part of what prevents a 51% attack, since there are literally not enough ASICs is the world for one big bank or something, or one scammer, to buy them all up to mine with.  World BitCoin Network on YouTube goes into this in more detail in the 51% attack video.  </p>

<p>Moore's Law isn't going to hit a limit in the near term, since when we get so small we are on the scale of just a couple of atoms, we will just start stacking chips on top of each other.  Itel is already researching liquid cooling between chip stacks.  So, for the forseeable future, Bitcoin mining is not just going to be a function of cheap energy, or optimized chips, but the financial treadmill of buying new ASICs every two years.</p>

CC BY-SA 3.0
2014-05-21T10:40:31.557Z
Even if the physical limit of miniaturization is reached after having transistors of just a couple atoms, another cheap productivity increase could be brought simply by bringing back the Soviet-tested, long abandoned idea of ternary-based computers. Actually I wonder why no ASIC producer has tried to use those ideas again yet...
Joe Pineda
CC BY-SA 3.0
2014-05-18T21:16:44.723Z
2014-05-19T21:22:18.383Z
2014-05-19T21:22:18.383Z
Guest
<p>My assumption is that ASIC miners optimize for the "hashes per joule" metric, as did GPU miners over CPU miners.</p>

<p>It would seem that after some time, the decision to mine Bitcoins would be based on if you could source energy cheaply enough.</p>

<p>When do we reach that point?</p>

<p>I'm not a hardware guy so I'm curious to understand what the upperbound limits are of ASIC mining from a technical perspective. How much more can we optimize?</p>

<p>Thanks!</p>

<mining-hardware><energy-consumption>
What are the limits of ASIC Mining?
locksley
# What are the limits of ASIC Mining?

(Asked by: username_0 on 2014-05-10)

My assumption is that ASIC miners optimize for the "hashes per joule" metric, as did GPU miners over CPU miners.

It would seem that after some time, the decision to mine Bitcoins would be based on if you could source energy cheaply enough.

When do we reach that point?

I'm not a hardware guy so I'm curious to understand what the upperbound limits are of ASIC mining from a technical perspective. How much more can we optimize?

Thanks!

**Tags:** mining-hardware, energy-consumption


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## 2 answers

### Answer by username_1 on 2014-05-21. Score: 2

That point has already been reached.

For most people, Bitcoin mining is not profitable unless you live in a place like Iceland (i.e. with access to cheap, abundant electricity) or you have an already-installed solar panel/wind-mill installation that's already paid for itself and can divert some of that electricity into feeding your ASIC.

Electricity expenses are the single most important fixed cost for miners and, with the current continuous escalation of both hashing power and difficulty, should you buy a machine now you'd never recover your initial inversion unless Bitcoin had another round of 10x increases in prices versus fiat.

Likewise for scrypt-based coins, buying graphic cards and refrigeration equipment is not worth it anymore unless you have access to darned cheap electricity.

That's what happens in a completely free market: since there are no hard or legally mandated barriers to entry (or to exit) profitability for first comers drops very fast due to the continuous improvements in productivity that newcomers are bringing forth. So unless you can keep innovating (as an ASIC producer) or buying new equipment (as a pro-miner) you'll be left behind and become unprofitable.


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### Answer by username_2 on 2014-05-18. Score: 2

I'm not an expert, but as far as I understand it, Moore's Law applies to ASICs just like other chips. So, every two years you get newer ASICs which can hash more, even though the chip design is not all the different from the previous ASICs, the number of transistors that chip has on it is doubled. So, there is always going to be a cost of keeping up with the latest chips. This is part of what prevents a 51% attack, since there are literally not enough ASICs is the world for one big bank or something, or one scammer, to buy them all up to mine with. World BitCoin Network on YouTube goes into this in more detail in the 51% attack video.

Moore's Law isn't going to hit a limit in the near term, since when we get so small we are on the scale of just a couple of atoms, we will just start stacking chips on top of each other. Itel is already researching liquid cooling between chip stacks. So, for the forseeable future, Bitcoin mining is not just going to be a function of cheap energy, or optimized chips, but the financial treadmill of buying new ASICs every two years.

> **Comments:**
> **username_1**: Even if the physical limit of miniaturization is reached after having transistors of just a couple atoms, another cheap productivity increase could be brought simply by bringing back the Soviet-tested, long abandoned idea of ternary-based computers. Actually I wonder why no ASIC producer has tried to use those ideas again yet...  

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