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Cointerra Planning to Release 2 Petahashes of Mining Power by December

Op-ed - Cointerra Planning to Release 2 Petahashes of Mining Power by December

The mining company Cointerra has announced its official launch today, offering what may be the most advanced Bitcoin mining hardware currently on the market. The company’s signature miner, the 2-TH/s TerraMiner IV, is seeing its price reduced from $15,750 to $14,000, or a mere $7 per GH/s – ten percent less than what appears to be its main competition, the Butterfly Labs Monarch at $7.8 GH/s. Large-scale and industrial buyers will also be interested in its batch chip sales, offering the 10 TerraHash package for $57,400 ($5.74 per GH/s) and the 25 TerraHash package for $139,750 ($5.59 per GH/s), although it is important to stress that these are chips and not full devices, and for small-scale buyers the company is planning on introducing more affordable models soon. All in all, the company aims to release 2 PH/s – two petahashes, or 2,000 terahashes, of mining power by December – over three times as much as the current power of the entire Bitcoin network combined.

Cointerra also offers several other guarantees that make it stand out among mining companies. According to the press release, Cointerra’s consumer protection programs include:

  • Our December delivery commitment: If we do not deliver your confirmed December delivery within 30 days of our promise, we will credit your account 20 of the hash power.
  • Customer Exchange. If you have a confirmed order and your circumstances change, we will help you find someone who would like to take your place in the queue for our products. While we cannot guarantee there is a buyer for your order and place in the queue, we will do our best to help you find a prospect to buy your position.
  • Price protection on any undelivered orders. If we lower the price of an existing december delivery TerraMiner mining rig or ASIC TeraHash Package, we will re-price all existing undelivered orders and offer either a cash refund or larger and more valuable Hash Power credit. This means all existing orders will be re-priced to the new pricing based upon order quantity.

These three guarantees were designed to allay customers’ fears that they would see a repeat of previous Bitcoin mining mishaps; the first two were motivated by the long delays of Butterfly Labs, which released their devices in April 2013 rather than October 2012 as was originally intended, and the last guarantee is a response to ASICMiner, which has reduced the prices on their Block Erupter USBs from an initial 1.99 BTC to a low of 0.175 BTC, making ASICMiner buyers who had made the purchase at the initial high price feel like they had been cheated of their money. One guarantee that Cointerra does not make, but another business does, is that of Hashfast; as their own page on the subject describes it:

If the Bitcoin network hashrate increases so that your Baby Jet doesn’t generate more Bitcoins in ninety days than you paid for it, HashFast will give you additional ASICs. In fact, we will give you up to 400 more hashing capacity than the Baby Jet you purchased. Yes, that does mean that if you don’t make your money back in 90 days, we will increase your mining capacity to up to 2 Terahashes!

Hashcash’s mining stats are also impressive, offering $11.2 per GH/s ($2.8 if the guarantee kicks in) and shipping by October. Unfortunately, however, their own mining rigs are currently sold out.

In general, sheer growth of the Bitcoin mining economy is highly impressive. Five months ago, ASICMiner chief friedcat was met with a large amount of disbelief when he claimed that the power of the Bitcoin network would increase to at least 1000 TH/s by the end of the year. Now, the network is at 600 TH/s already, and Cointerra’s claim of 2 PH/s by December appears downright uncontroversial by comparison. Two months ago, KnCMiner, with their $20 per GH/s devices planned for shipping in October was all the rage; today, even they have slipped into the background as Butterfly Labs’ Monarch and now the TerraMiner have taken center stage.

The security of the Bitcoin network is increasing rapidly as a result. Taking an estimate of 1 MH/s per CPU, the Bitcoin network’s current hashrate of 600 TH/s is now so powerful that a botnet seeking to overpower the Bitcoin network and mount a 51 attack would need to literally take over nearly every computer in the world to be effective. And once Cointerra’s two petahashes come in, the threat of botnet takeover will be outright impossible. From here, it’s simply a matter of increasing the cost of a successful attack. So far, most people trying to estimate this cost start out by trying to figure out how much money it would take to purchase the right amount of ASICs or develop a fabrication facility in house – however, this is a very difficult thing to do accurately.

A more successful alternative strategy is to instead measure the “opportunity cost” – the potential profit of using the amount of mining power needed to pull off an attack honestly, which would be thrown away by using the power to attack Bitcoin instead. Resallex has an automatic calculator that does this; currently the price stands at $400 million, out of reach of the annual military budget of half of all governments in the world. Some of Resallex’s estimates are questionable; the 8 annual discounting rate on future returns, for example, is far too low given the inherent risk in the Bitcoin economy, and a more reasonable estimate of 20 would give Bitcoin a “takedown cost” of $150 million. In either case, however, the Bitcoin network is clearly becoming a force to be reckoned with.