Bitcoin Forum

I've been thinking about this conundrum for a while now... here's my thoughts.

For those of you who have been patiently waiting for BFL to actually start shipping in anything that would resemble 'decent' numbers I feel bad for you. Because you are stuck in a pretty tight situation.

1. If you wait for your unit, it could still be a while -- and once you get it, the network difficulty is going to shoot up something fierce. So, you may be thinking... I want to unload my unit before that happens.

2. If you unload our unit before you get it, its still a pre-order and as such is going to get a pre-order price and everyone is skeptical about BFL right now... thus the price isn't going to be high.

3. If you wait until you receive the unit, the market will be flooded with units in hand that others are selling which will hammer down the price. If you decide not to sell it, your in situation #1 -- the difficulty making 5 GH/S or 60 GH/S not mine like what was expected.

Tough spot man :(

Not really, they can just cancel their order and go on with life.  Nobody is forcing them to do anything.  Of course its risky....

For sure this is an option (and the option I took myself, I cancelled a couple months ago). Just sucks that you did all that waiting just to cancel.

Waiting?  You act like its waiting in a line...  It should have physically taken you no longer than 20mins to place your order and cancel it. 

Geez, talk about first world problems....

How about those people that paid (like I did) and let BFL sit on thousands of dollars of their hard earned money for months. I'm sure they will have no hard feelings about paying for a product that should have (and was promised) many months ago and now have an option of 'canceling' as you suggest.

You can gloss over the 'problem' all you want and belittle it but that doesn't make it go away.

With interest rates so low I dont think you missed out on much.  Also, you were free to cancel your order and dispute the charge whenever you like.

Looks like a non-issue to me.  If you thought there was no risk of loss going in then you were a fool.

I think you are missing the point entirely but I will agree to disagree.

The point is that BFL buyers are not "damned if they do, damned if they dont".  They are free to keep their purchase and take the risk or cancel their purchase and dump the risk.  This is the case for any investment, speculative or otherwise.

Agreed.  I am a customer, and I do not feel damned.

Hey with BTC USD price dropping like its (NOT) hot, prob going to be a lot of people with tough decisions to make soon.

But ... Refund isnt more Possible !

Well, I suppose that means you feel don'ted ? I sure as heck do :(

As in... I don't have my 60GH/s Single SC's yet.

To me it is just keeping up with the curve. If you want to maintain a reasonable return for mining you have to have the hashing power or be left behind. So it was a non-plus to me that I had to order from someone and BFL looks like they aren't too far behind delivering soon which is why I have placed an order.

AFAIK you were just sent a mail where they clearly states that you can cansel your order, and they have been refounding others before, so why did they deny you? I'm gonna read that book.

Avalon users (and other ASIC deployments)  have already captured the ASIC first mover advantage. The bitcoin network hash rate has already quadrupled from the pre-ASIC strength (~20TH to ~80TH). Further shipments of ASICs will increase the network hash rate, but they are unlikely to quadruple it over the course of a couple of months.

If you are already a miner then there are really only two scenarios to consider:
Scenario A: BFL can't deliver in bulk. Then they will not affect the hash rate which means you do not have to have more ASICs to keep earning returns. Therefore you do not need to order from BFL.
Scenario B: BFL can deliver in bulk. Then you can wait until they do and then order from them. They are able to keep up to marketplace demand. The lack of a "second move advantage" means you will not miss out on the "early hasher gets the easy difficulty" time period. You might miss out on 2 weeks of +25% returns as the hash rate goes from 80TH to 100TH.

So, no rush. No dams.

Let us consider what might happen.

I invest 2499 dollars into BFL. The best investment i COULD put it in would promise me increases of 10% if i tie it down for at least 5 years (buying a windmill rig).

Lets say I buy it and it comes really late. Fuck, the hash rate in the network has gone to 320TH/s. my god, it sucks.

Now, lets say we take it that we have 40 million as a result of the quadrupling in hash rate. After twelve months, considering that per year, the investment looses 60% of its value in profitability...

That would be 11k dollars in the first year on this. That is a 400% ROI within twelve months. At todays price AFTER the crash.


So no one is damned. The only worst case scenario is BFL being bankrupt. Anything else, I want to answer with "Bitches, please, get back to the real world."

Some of the risks that you ignore with ASIC mining:

When you quote returns in dollars, you imply a stable BTC to USD exchange rate. That is masking one of the largest risk factors in mining BTC which would be a collapse in the exchange rate.

Also, people may not be using Bitcoin 1.0 at some point in the future but some alternate virtual currency (perhaps Bitcoin 2.0) that solved unforeseen issues that cropped up and rendered Bitcoin obsolete. This new currency may not be compatible with current ASICs.

Bitcoin mining is a zero sum game. A new competitor that enters the mining hardware market with a 5-10x improvement in price/performance would render existing ASIC hardware (which is really first generation stuff and can be improved upon) as obsolete as GPUs are now.

More entrants with first generation ASIC hardware flood the market and the Bitcoin network hashrate spikes even higher. This in combination with a short term exchange rate crash could render large rigs unprofitable for an extended period.

ASIC hardware could have a short operational lifetime due to hardware failures. A MTBF of 500 hours would crush everyone's anticipated returns.

If you bought a windmill rig, you could rely on long term contracts with your local utility. It is also a reasonable assumption that people will still be using electricity over the next 2 years. Windmills are designed and manufactured by firms with lots of experience and mature product lines (like GE), so we can rely on them to operate for extended periods of time. Thus buying a windmill rig is much less risky that mining Bitcoins, and it's return reflects this.

The network is going to be way higher than that. Avalon alone will bring that much power online in the next few months.

Avalon is sending out 1200 units and 490.000 chips, am i correct? That would come to somewhere around 240th/s if about 80% of the units are 85gh/s ones...

Hm, might work. We could also consider a quintupling of hash rate. Still profitable... still way more than 10% on an investment in twelve months...

Keep going. Avalon is still taking orders for chips. Asicminer will be building more blades. BFL will start shipping in volume. If you believe BFL (why would you order if you didn't?), they can ship 300 TH/s in a single month.

Very hard to say whats profitable since no one can forecast the exchange rate. Hash rate i think is contingent on exchange rate. If btc drops to $2, still think there's a quintuple in hash rate?  there's some correlation there. Forgot who posted it , but saw someone else chart this.

I'd be actually quite interested in historical market data and difficulty data.

I'd love to do some analysis on it after i am finished with my current research project.
Taking all the cryptocoins and running statistics on them like crazy might be interesting.

Not too worthwhile, but enough to see what is going on.

But if it drops to $2, we will see one thing especially: ASICs sales on ebay. I know i will be buying...

Sure is. But when there are a lot of units doing 5GH at 40W, and those units have no other function, I don't see them beeing turned off.
With a difficulty of 300 millions and a BTC price of 2USD, they still make a produce more money than the cost of the electricity they consume.

Not to mention that you can sell the unit to someone who think the price might rise to $4, $10 or even (gasp) $15.

Right but barely profitable at that point, the opportunity cost of money better spent on anything else(bonds and eww- bank interest). People would stop ading more asics, unless they are thinking like amazon.com make up the low profit margin with HUGE volume. So hash rate would stop rising inversely to btc price.

Here is what you do,

You have a  BFL pre-order. Hopefully for a Jally or Single or something. Check? Good.

1) Sell it on Ebay, for 60k, the prices over there are crazy for Mining devices.

With that money, if it's not held by Paypal. You are responsible and on the hook for delivery instead of BFL. Great.

2) When they fail to deliver your order, simply panic and refund 60K as well as have your Paypal card revoked. Sucks right?

3) Sell a non-existent pre-order on "a wing and a prayer" and get your customer to pay you in BTC. That way you can join in on the "scam" of (yet to be built) Pre-Orders.

You will be like a BFL Mini-me.

Sounds great right?

---------------------------

Alot of people in the near future are going to lose either:

A) Their Paypal Privileges and cards/Accounts.

B) Their shirts and shoes when they spend that money initially and have to then give it back because they couldn't take delivery.

C) Turn into BTC black holes as people demand their money back when the deliveries aren't shipped on time.

D) Immigrate to Jamaica or Cuba.

There is currently a waiting time of 2 weeks for email responses and therefore....for refunds.

Or more last time i need 4 Weeks to Clearify a simple Question ...
Which Payment date i got ?
The answer was #20** Number ( Payed via Bitinstant )

Yup, this has nothing to do with anybody being damned. Those who stay in are choosing to ride the speculation wave on their investment. Those who don't are choosing to cut their losses. Pre-orders are always a speculative buy.

The idea of "Sunk Cost" in game theory is the only thing that fools people into thinking they're damned if they don't. They've got a lot of emotional investment, but they'll walk away with exactly the same amount of money they invested, if they chose to walk away.

If they chose to stay, they're still riding the speculation wave. Whether they win on it is another matter. And many people will continue to play the "what if" game, whether they choose to stick it out, or not.

No matter what people decide, some of them will be kicking themselves, and others will be patting themselves on the back...

There is no "cut their losses".  Maybe "cut their opportunity costs".  But everyone gets a full refund, so no losses...

I thought I clarified that as saying that the only "losses" are emotional ones. But yes, that's the point I was trying to make.

I like your attitude.

Life goes on, for most of us, no matter what... until it doesn't.

Noisy thread.

The network hashrate hasn't gone up anywhere near what most people thought. GPU mining is still proftiable; of course BFL rig mining will be profitable; they'll get the hardware and mine with it!

Thats only because asics are delayed. They calculated in all the hash * orders.

How does anyone know the hashrate?

I emailed Butterfly a couple of weeks back and was given the following response:

I apologize. We do not share the number of TH that has been sold.

So I anything else is a best guesstimate, is it not?

Correct. guess on the # of orders, also that spreadsheet thats out that has people orders. Not entirely accurate since people haven't addded themselves(or removed themselves).

Or just damned?