cancis



Offline



Activity: 38

Merit: 0









NewbieActivity: 38Merit: 0 An ASIC Company's Guide to Maximizing Profit while Destroying Bitcoin March 22, 2013, 04:00:26 PM

Last edit: March 23, 2013, 03:16:27 PM by cancis #1 Here's a fun little scenario I came up with the other day. Below I describe the most profitable business model for an ASIC hardware company to follow if they are looking to solely maximize profit without regard to protecting the Bitcoin network.



I sincerely hope for the sake of Bitcoin that no company decides to go this route - but where there is massive profit potential with no legal repercussions, there's fire:



Step 1. Recruit the team needed to make a legitimate ASIC offering



Step 2. Get in bed with SEC/FBI/[whatever three-letter agency that wants to see Bitcoin fail while painlessly hiding their involvement in it's failure]



Step 3. Start taking pre-orders and begin furnishing all pre-order information (full names, addresses, payment info) to the given Three Letter Agency. Three Letter Agency now has a dataset containing a very large portion of the United States population that could be considered a legitimate threat to national economic activities. To make it into this list of pre-orders, it implies the following about you:



a.) you have a significant interest in anonymous, decentralized cryptocurrency (this could be argued as an interest in "anti-economic activities" depending on which Three Letter Agency and their interests)

b.) you have the resources to invest significant sums of cash into these "anti-economic activities"

c.) you possess a higher-than-average intelligence and capacity for critical thinking, and further

d.) you have taken definitive and documented action to utilize the above resources to further your interests in these activities (placing a pre-order for a mining device)



Step 4. Continue collecting large pre-order USD/BTC sums, assemble first batch of ASICs



Step 5. Slowly bring ASIC units online in different pools (maybe even your OWN mining pool for maximum control!) as well as solo-mining, and begin funneling your mined BTC to a central location



Step 6. Delay, delay, delay as long as possible to maximize mined BTC profits and lure in any stragglers for pre-orders



Step 7. At some point - the "tipping point" as I will refer to it - you announce that you are on the verge of delivering on all pre-orders. Several important things now happen:



a.) Take your substantial USD assets and artificially inflate the exchange rate (the "pump")

b.) Hold this exchange rate long enough to create a massive bid wall at a desirable USD rate

c.) Execute the "dump" at this favorable exchange rate, turning your pile of BTC into a monolithic pile of USD



Step 8. Congratulations! You've devalued BTC massively, walked away with pre-order profits + mining profits, all amplified by massive and controlled speculation, and to top it all off you got some extra cash from Three Letter Agency and a Get out of Jail Free card for playing ball with them. Now all you have to do is deliver on the (now essentially worthless) hardware, and you have mitigated all your civil suit liability as well!



BONUS ROUND: Do a 51% attack right before delivering to really upset folks' confidence in the market

BONUS ROUND 2: Cancel orders and return BTC to their owners (although they're hardly worth anything now). Continue 51% attacks to keep Bitcoin from recuperating!





I hope you all have enjoyed my theoretical scenario, and I'll look forward to your comments and speculations. Oh, I am so totally not writing this to implicate any specific company either, in case anyone was drawing correlations that I did not intend.









philipma1957



Offline



Activity: 2926

Merit: 2627









LegendaryActivity: 2926Merit: 2627 Re: An ASIC Company's Guide to Maximizing Profit while Destroying Bitcoin March 23, 2013, 12:37:06 PM #4

So BFL ,Avalon and asicminer all could be mining a lot of Th on the sneak. As much as 10 maybe 15Th. While not true or true we can not verify all of the unknown hashing.



So pick 1.5Th at todays prices that is more the 10,000 usd a day!



https://bitclockers.com/calc



using 1.5Th as hashrate

70 as coin price

4.8 million as difficulty





Now all 3 builders of asics good "hide" 1.5Th in unknown. But can they hide 15Th or half the unknown pool? Not as easy takes more work. So my guess is some asics are in the unknown pool that belong there and some are there on the sneak. Parts of your post ring of truth. Companies can mine with asics as I type in the unknown part of the networks hash rate. So on Sat March 23rd 2013 the Full rate is 52Th about 30Th is Unknown.So BFL ,Avalon and asicminer all could be mining a lot of Th on the sneak. As much as 10 maybe 15Th. While not true or true we can not verify all of the unknown hashing.So pick 1.5Th at todays prices that is more the 10,000 usd a day!using 1.5Th as hashrate70 as coin price4.8 million as difficultyNow all 3 builders of asics good "hide" 1.5Th in unknown. But can they hide 15Th or half the unknown pool? Not as easy takes more work. So my guess is some asics are in the unknown pool that belong there and some are there on the sneak. I see BTC as the super highway and alt coins as taxis and trucks needed to move transactions.

cancis



Offline



Activity: 38

Merit: 0









NewbieActivity: 38Merit: 0 Re: An ASIC Company's Guide to Maximizing Profit while Destroying Bitcoin March 23, 2013, 03:13:41 PM #8 Quote from: theta on March 22, 2013, 11:09:56 PM Quote from: cancis on March 22, 2013, 04:00:26 PM a very large portion of the United States population that could be considered a legitimate threat to national economic activities.



Mining or speculating in bitcoins is not a "threat to national economic activities" by any stretch of imagination. Contrary to the fantasies of some delusional conspiracy theorists, the government is not threatened by the existence of alternative currencies nor does it give a damn about it, nor it ever will.

Mining or speculating in bitcoins is not a "threat to national economic activities" by any stretch of imagination. Contrary to the fantasies of some delusional conspiracy theorists, the government is not threatened by the existence of alternative currencies nor does it give a damn about it, nor it ever will.

Such language is standard-issue spin terminology for getting those less-informed/less able to be informed/less capable of being informed to join the pitchfork party.



It's a thought experiment, not a reflection of my actual thinking.



That being said, the issue of whether Bitcoin is or is not a "threat to national economic activities" has less to do with reality and more to do with how governments decide to label it. I'm no conspiracy nut, but when motive and opportunity meet with no legal recourse, it is in your best interest to examine where that path leads.



Quote from: VinceSamios on March 23, 2013, 02:46:06 PM Please cancel your pre-orders and STFU



Thankyou :-)



One such popular ASIC hardware company has this to say about canceling pre-orders: "Payments made for pre-orders of ASIC based products now under development should be considered non-refundable until products begin shipping or 1 January 2013, whichever is earlier." Such language is standard-issue spin terminology for getting those less-informed/less able to be informed/less capable of being informed to join the pitchfork party.It's a thought experiment, not a reflection of my actual thinking.That being said, the issue of whether Bitcoin is or is not a "threat to national economic activities" has less to do with reality and more to do with how governments decide to label it. I'm no conspiracy nut, but when motive and opportunity meet with no legal recourse, it is in your best interest to examine where that path leads.One such popular ASIC hardware company has this to say about canceling pre-orders: "Payments made for pre-orders of ASIC based products now under development should be considered non-refundable until products begin shipping or 1 January 2013, whichever is earlier."

PatMan



Offline



Activity: 924

Merit: 1000





Watch out for the "Neg-Rep-Dogie-Police".....







Hero MemberActivity: 924Merit: 1000Watch out for the "Neg-Rep-Dogie-Police"..... Re: An ASIC Company's Guide to Maximizing Profit while Destroying Bitcoin March 23, 2013, 03:51:36 PM #10



One little point though, it's not just americans who have an interest in bitcoin, in fact I think there's more people active in bitcoin outside of the US than there is inside the US, I'm not sure. But I am sure of one thing, those who are outside the US don't give a monkeys about all the 3-5 lettered US gestapo agencies...



I know I don't.



Peace Pretty good!One little point though, it's not just americans who have an interest in bitcoin, in fact I think there's more people active in bitcoin outside of the US than there is inside the US, I'm not sure. But I am sure of one thing, those who are outside the US don't give a monkeys about all the 3-5 lettered US gestapo agencies...I know I don't.Peace

Amazon UK BTC payment service -

http://www.ae911truth.org/ - http://rethink911.org/ - http://rememberbuilding7.org/ "When one person is deluded it is called insanity - when many people are deluded it is called religion" - Robert M. Pirsig. I don't want your coins, I want change.Amazon UK BTC payment service - https://bitcointalk.org/index.php?topic=301229.0 - with FREE delivery!

mik3



Offline



Activity: 248

Merit: 104







Full MemberActivity: 248Merit: 104 Re: An ASIC Company's Guide to Maximizing Profit while Destroying Bitcoin March 23, 2013, 04:01:16 PM #11 Quote from: PatMan on March 23, 2013, 03:51:36 PM

those who are outside the US don't give a monkeys about all the 3-5 lettered US gestapo agencies...

You don't have to care about them, but if the CIA/FBI/whatever sees that bitcoin can be a thread to the mighty US dollar, you bet your ass they will do anything they can to stop it. Look at the US sticking their nose anywhere and everywhere the past 100 years. And with the amount of money they have, they can definitely perform a 51% attack by building a shitload of ASICs. You don't have to care about them, but if the CIA/FBI/whatever sees that bitcoin can be a thread to the mighty US dollar, you bet your ass they will do anything they can to stop it. Look at the US sticking their nose anywhere and everywhere the past 100 years. And with the amount of money they have, they can definitely perform a 51% attack by building a shitload of ASICs.

cancis



Offline



Activity: 38

Merit: 0









NewbieActivity: 38Merit: 0 Re: An ASIC Company's Guide to Maximizing Profit while Destroying Bitcoin March 23, 2013, 04:15:44 PM #12 Quote from: mik3 on March 23, 2013, 04:01:16 PM Quote from: PatMan on March 23, 2013, 03:51:36 PM

those who are outside the US don't give a monkeys about all the 3-5 lettered US gestapo agencies...

You don't have to care about them, but if the CIA/FBI/whatever sees that bitcoin can be a thread to the mighty US dollar, you bet your ass they will do anything they can to stop it. Look at the US sticking their nose anywhere and everywhere the past 100 years. And with the amount of money they have, they can definitely perform a 51% attack by building a shitload of ASICs.

You don't have to care about them, but if the CIA/FBI/whatever sees that bitcoin can be a thread to the mighty US dollar, you bet your ass they will do anything they can to stop it. Look at the US sticking their nose anywhere and everywhere the past 100 years. And with the amount of money they have, they can definitely perform a 51% attack by building a shitload of ASICs.

You know, now that I think about it, it would be trivial for the government to indict an ASIC company right before they start shipping. Through the discovery and asset seizure processes, they'd be able to snatch all the ASICs and pre-order lists and do what they please. This would be a bit more nefarious from the government's angle, but I assess it as a higher possibility than collaboration between an ASIC co. and the government from Day 1.



On the other hand, collaboration from Day 1 would be a higher likelihood if the government already had an upper hand/bargaining position on an owner of the company (e.g. the person is a felon, on probation or parole, former military, or something along those lines).



You know, now that I think about it, it would be trivial for the government to indict an ASIC company right before they start shipping. Through the discovery and asset seizure processes, they'd be able to snatch all the ASICs and pre-order lists and do what they please. This would be a bit more nefarious from the government's angle, but I assess it as a higher possibility than collaboration between an ASIC co. and the government from Day 1.On the other hand, collaboration from Day 1 would be a higher likelihood if the government already had an upper hand/bargaining position on an owner of the company (e.g. the person is a felon, on probation or parole, former military, or something along those lines).