The concept of new Bitcoin mining machines in the future

Providing Thermodynamic Boost to a New Generation of Miners

In this article, the author describes what he thinks mining will look like in the future and how proof of work will be distributed.

What is the easiest way to motivate people to take action? Pay them. Or at least give them a material reward for the action you want. This has been proven by the Bitcoin network, which has better secured the network by increasing hash power. It is also clearly demonstrated by the process of Paypal getting its first customer. With this in mind, we are now designing a new type of miner to incentivize home mining. We want the network to pay people, so that they can become new participants in the Bitcoin revolution.

Theoretical basis

Proof of Work is based on the thermodynamic loss of energy (heat). This is why Bitcoin miners are built into water heaters. If you already use an electric water heater, your electricity costs about $15 to $40 a month. So why not use the same electricity to run silicon chips first, generating heat and income (in the form of Bitcoin) at the same time?

The process behind it is simple though. If you have already spent money on electricity, miners simply pay themselves for the ROI (return on investment). This is the biggest benefit of this type of miner. Another advantage of centralized miners is that we cannot use our own equipment to make money. Since the cost of capital is higher than for ordinary miners, it is only possible to make a profit by setting up multiple value streams. You can only make money if you use the waste heat to balance the associated waste costs. Personal subsidies are also used in anti-centralization mechanisms.

Also, because there is a second value stream of hot water from electricity, the lifecycle of mining profits can be extended to the end of the hardware's working life (when the hardware breaks). This allows more time to achieve ROI, greatly reducing the risk of difficulty, and thus the cost of participation. You can spend a lot of energy to get a few dollars reward, because you are heating water anyway. The only thing you pay on the mining side is the opportunity cost of buying a new more efficient mining machine. On the hot water side, you can use a heat pump water heater to reduce operating costs. While the front-end cost of such a water heater is about the same as our miner/heating element, our system will be cash flow positive very quickly - or, in other words, a good investment (plus, the cash flow from the network income is much cooler than the money saved on electricity). You will find that miners can get rewards faster when the price of Bitcoin rises. This is all based on greatly reduced risk, unlike mining for fun (ie. losing money out of altruism and/or moonshots).

Our revenue curve looks like this. The red line is the normal miner, and the blue line is our new type of miner: We don’t have final data yet, and we don’t know the exact positions in the chart, but their relative positions and general shape and trend are right.

Although we don’t know the final price and ultimate efficiency of our mining machines, you can see that the subsidized electricity costs will inevitably push the ROI curve to the limit of flatness. The hash rate in this chart is pure Moore’s Law, which assumes that the demand for Bitcoin is constant (the price/coin doubles when the halving occurs). Even if the hash rate is halved when the halving occurs, the mining machine with double red value flow is still a good choice. Your profit is higher after the price drop because you will be the last miner to stop working, so you can get a larger share in the new mining pool equilibrium.

Most of the work on our new mining machines has already been done.

We started with a thermal hydraulic experiment to verify that the basic characteristics of heat conduction required by the miner were completely possible. After the results of that experiment met the most basic requirements (and exceeded expectations to a large extent), we continued to design the final shape of the miner. I have already built a prototype of the machine, and the first prototype of the heat conversion coil has also been produced. Of course, we still need ASIC chips to complete the entire design and build a fully functional miner.

The manufacturers of mining chips (also called centralized miners) have no reason to sell them to us. It is understandable that their sunk costs need to be protected. But while protecting their investment, they also force us to trust them more and create a higher barrier to entry for newcomers. To enter the mining field now, you need 10-20 million US dollars for development and to manufacture your own ASIC. We don't have that much money, and it takes a lot of effort to raise funds. We released this information and hope to get feedback from the community to make sure our idea is a good one. Maybe we are just hot-headed. We have been testing and verifying data for some time, and it turns out that it is indeed feasible. We are developing a calculator that can show how price affects mining. When we are done, everyone can calculate whether our mining machine is profitable on it. You can see some approximate numbers from our brief technical introduction.

Please contact us with your suggestions, or run a small survey to let us know what you think. We want your feedback. We have been working on this idea for 2 years, but have only recently found a marketable price point. We feel we have a handle on the mining market, and we tried to present our current thinking about Bitcoin on the blog, hoping to help you understand why we think this miner is a must.

This type of computing could be applied to many other areas in the long run.

Original article: http://blog.bitheat.io/bitcoin-plus-water-heater/
By Julian Stahl
Translator: gsj
Reward address: 1DHs7hZMdx6tgUHdqXiub3XrovrF6Pte7y
Editor: printemps
Source (translation): Babbitt Information (http://www.8btc.com/new-mining-machine ‎)