You may know a bit about Bitcoin, the digital currency. One part of the system is “mining” new bitcoins, analogous to mining new gold when we were on the gold standard, creating “money” out of thin air but at a cost of doing the actual mining.
Here is an interesting aside. When I lived in France the father of one of my daughter’s friends was a gold prospector for an Australian mining company. I asked him what they did about the volatility of the price and he said they didn’t care. They would borrow real gold from a bank, the actual physical stuff, and sell it. Then they used the money to build and operate the mine. And they paid back the gold as gold, the physical stuff, so they didn’t much care how the price moved in the meantime.
Anyway, back to bitcoin. The difficulty of doing bitcoin mining is set to make sure that they don’t get found too fast. New bitcoins are called hashes. Bitcoin mining difficulty has been going up by a factor of 10 every 3 months. And you thought Moore’s law was pretty steep.
Originally people used powerful PCs to mine new coins. But it is an arms race to build faster and faster machines to do this. With the difficulty (and hence the price) going up people were ordering high powered machines on the basis that the price made it a no-brainer, only to find a month later that the price had dropped so much their machine was already useless. If you were lucky you might pay $5,000 for a machine, mine $25,000 worth of stuff in the first few weeks and then find your machine was a boat anchor. Or you might pay $5,000 and have it be useless before you recovered the price. Currently, using a high end PC, it takes 5 years to mine one coin, that is how hard it has got. That won’t even cover the electricity.
The next step was to use GPUs and arrays of GPUs to do the mining. That failed to be competitively fast once people switched to making custom FPGA based miners. And what is faster than FPGAs? That would be 28nm ASIC silicon.
This week CoinTerra announced the first terrahash per second product:With blazing performance approaching two terahashes per second, the TerraMiner IV is the first self-contained Bitcoin mining solution to smash the one terahash per second barrier and with its $5999 price point it also delivers a dollar per gigahash proposition unmatched in the marketplace today.
The machine is based on CoinTerra’s new GoldStrike I processor, which has a peak performance of 6500 gigahashes per second. It is a 28nm chip build by GlobalFoundries. Another company, Butterfly Labs is also building miners using GlobalFoundries 28nm silicon. Forbes has a report that TSMC, GlobalFoundries and AMD sold over $200M of silicon for bitcoin miners. There are 2 boards each with 2 chips in each TerraMiner.
And how fast did GlobalFoundries build it. As Asim Salim of OpenSilicon (who did the physical design) said:“Manufactured on GlobalFoundries 28nm technology node, the silicon was delivered in a special custom package with testing completed in an unprecedented cycle time of 49 days from tapeout.”
I’m guessing the economics are such that 28nm ASIC is about as fast as you can reasonably build right now so the difficulty will stabilize. It certainly won’t be improving in performance at 10X every three months. But it will be competitive. GlobalFoundries have at least 4 other engagements. So what is the next step in the arms race for faster and faster hardware. Well, GlobalFoundries already has customers talking to them about 20nm and 14nm processors. Maybe I’ve just found a good niche for Intel 14nm foundry business! If anyone knows how to build silicon for fast processors it is Intel.
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