Bitcoin Mining Makes Its Way to CES

Bitcoin mining: Who's doing it, and where is it headed?

Jan 18, 2014 at 12:30PM

The Fool headed out to Vegas to check out the 2014 International Consumer Electronics Show. With more than 3,200 exhibitors, including 88% of the top retailers in consumer electronics, the CES is the place to be to see what's coming up in tech.

Bitcoin is everywhere, and CES 2014 is no exception. The Fool stops by the Butterfly Labs booth to check out some Bitcoin mining chips and find out who's using them and what makes them tick.

It's technology like this that's led David Gardner to impossible gains like 926%, 2,239%, and 4,371%, and he's ready to do it again. You can uncover his scientific approach to crushing the market today by simply clicking here now. Access is limited, so act fast!

A full transcript follows the video.

Eric Bleeker: Hey, Fools. I'm Eric Bleeker from the floor of CES. No doubt you've watched Bitcoin's explosion across the past year, and CES is ground zero as well for this.

Butterfly Labs is here; you guys actually create mining tools for Bitcoin, among other areas. Let's talk about the products that you're showing off here. You've got a couple of Bitcoin miners -- it looks like one for more heavy-duty applications and one more for maybe a consumer angle.

Butterfly Representative: Yes, we have a wide range of products. What we see on every side of us here -- there are miners everywhere -- this is our newest card here; it is what's called our 28-nanometer ASIC.

We're actually kind of designing it for everybody. It's intended to potentially be put in a data center in a bunch of racks -- so you'd have hundreds of them somewhere -- but you can also use it outside of a computer, and plug it in via USB to your laptop or your tablet, or what have you. It's kind of an all-in-one unit, for the big guy and the little guy.

Bleeker: Fantastic. Could you talk a little bit about the demand you've seen? We've all seen the roller coaster that Bitcoin's been on -- obviously a revolutionary technology. People, though, of course, are worried about it being a bubble, with the kind of price appreciation we've seen. Where has the demand been coming from, across the past year, in terms of your customer base?

Butterfly Representative: It primarily started from the garage user, the hobbyist user, and everything.

The demand seems to be shifting more to the professional arena, to the professional miner, to the companies that that's all they do -- they are a mining company -- and then to some larger merchants. They want to mine for themselves, that sort of thing, to maybe not have to pay their transaction fees, or for whatever reason. They are starting to come to us and talk to us about what we may be able to do for them.

Bleeker: When you're looking at buyers in this market, what's their main consideration? Obviously, the areas that we've seen ... Quartz, a major website on business, had done an analysis where the cost to mine Bitcoin, in electricity, was several times over what you were getting out from Bitcoin at this point. What would you have to say about that? Does that lead to power efficiency being the killer app that users are looking for?

Butterfly Representative: Absolutely. The end result of Bitcoin mining will always be the power efficiency. As we've seen the explosion of Bitcoin over the past year, power efficiency hasn't been that big of a focus because the rise in Bitcoin has far outstripped any efficiency or lack of efficiency in the chips.

As we move forward, Bitcoin will probably still continue going up for ... who knows? The sky's the limit on that. Power efficiency will still be important, but not as important as it will be when Bitcoin starts to stabilize. At that point, it will be the absolute most important thing.

Bleeker: Got you. Do you mind talking about some of the components within your devices? I assume you're going for massively parallel computing here. Are you going with NVIDIA (NASDAQ:NVDA)? ATI? Do you have a preferred graphics vendor?

Butterfly Representative: No, we actually custom design the chips. We custom design everything, so the ASIC chip was custom designed by our facility. Each chip has a 64-core double round SHA256 engine in it, and they're all parallel, so we basically have 128 cores on this card, and they all run in parallel.

Bleeker: Wow. Could you talk about, are your competitors using off-the-shelf stuff from major companies like NVIDIA or AMD (NASDAQ:AMD)? Is this a competitive advantage for you, to design it yourselves? Why did you go that route?

Butterfly Representative: No, actually, all of our competitors are all custom designed, because while AMD and NVIDIA, their GPU chips were what was primarily used a year and a half ago or so, they just don't have the power efficiency, so we've moved into the era of, this is all they do, that's what they do. Everyone's pretty much going down some form of that route.

Bleeker: Awesome. Really fascinating there, entirely custom within the industry, it looks like. Some of the more general-purpose GPUs have gotten pushed out as we've moved toward more customization.

Do you have any final thoughts about the market, maybe, as we head into 2014, or some areas that really excite you?

Butterfly Representative: Well, you know, the whole Bitcoin market, I think we haven't seen anything yet in terms of growth and acceptance. I think we're just seeing the very tip of the iceberg, and I think 2014 is going to go down as something huge in Bitcoin-land.

Bleeker: Awesome. Thanks for tuning in. Remember for all your CES news, check back to Fool on.

Eric Bleeker, CFA owns shares of NVIDIA. The Motley Fool recommends NVIDIA. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information