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I don't understand why I see so many people happy about this?  That scares the hell out of me.  Not even BFL MiniRigs or KNC will be able to compete.  You'd have to buy a crap load of Jupiters and then ASICMiner will just bring another 2-5PH online quickly early next year at this rate.

I dunno, I'm just not too happy about it.  I was hoping we'd see a couple generation of ASIC's go by before bringing the network that large.  Nobody will be able to make much of anything except for a small select few.

Maybe I am calculating something wrong and don't understand their investment strategy.  Seems very piggish.  Managing your own hardware looks like it will quickly take a back seat into letting the Chinese do it all for you.

+1

The way I understand it is that they plan on bringing 800-1000TH online in the event that their market share (of global hash rate) falls significantly.
They planned to keep at least 10-20% of the network and add/remove hash rate as the total hash rate fluctuates. I can't see that they'll just bring online 1000TH and shoot straight to 90%+ of the network, as that might kill trust in Bitcoin (and thus the whole point of Asicminer's existence). If the network shoots up to 1000TH+, then I would expect them to start seriously flipping the power switches on new machines to keep up, but I doubt they'll bring online that much unless they need to.

It currently feels like they are in it for themselves.  Securing the network is only useful if dispersed among a wide range of independent miners.  Not consolidated into one.  What I see right now is all I can go on...and that currently is USB sticks & blades that are WAY overpriced that are being sold to suckers so they have the funds to continue growing their operation while mining with what they make.

Just save a little for the rest of us ASICMINER.  Otherwise we can't continue to keep buying your cheap Chinese stuff...lol  The West and the East needs to work together to destroy the fiat central banking overlords.  China is showing a growth path that will do a bit too much dominating for my liking.  I agree with you.  Bitcoin will fail if they grow the network too large too quickly.

I hope KNC has an upgrade path program when their 2nd generation ASIC's come online...sorta like what BFL did for their FPGA customers.  But if all I am doing is using all my BTC to keep up with each new generation because ASICMINER is pigging it all then it doesn't make much sense to stay in the game.

Well, you are free to buy stocks in ASICMiner if you do think they'll continue to do as well as they have.  So it's fair enough in that sense.

I am more worried that they will kill the price of BTC.  When mining is distributed, more of the miners keep the BTC or maybe spend it (I am a seller so I do have bias).  I do not see ASICminer spending BTC of things in the community, it could happen but it is not what they are set up to do. 

Basically ASICminer is a drain on the community.  This does not mean they are doing anything wrong or should be stopped, it is just in most small miners interest not to support them.   You buy a USB stick from them, you allow them to put up an equal (or greater) amount of hash power to balance out their share of the network.   Certainly they can put up a lot more hash power with $100 then they are selling for $100.  Same goes with blade sales.  Also so far, most buyers from ASICminer simply paid too much for the product. 

Yeah I think I read somewhere that they are taking all of their earnings and reinvesting it into more hardware for themselves?  That is a scary.

I'd much rather support KNC which will probably only use testnet.

Supporting ASICMINER's high prices will just help them grow exponentially larger each time.

I can't believe the amount of people on this board that want to support a hardware company that mines with what they develop.  This will be a fuckin' disaster.  China is taking advantage of stupid westerners with more money than common sense.

Although I am highly invested in Asicminer Shares, it is a bit disconcerting that they will control so much power under one single entity. 

It's very likely the current sales in Bitcoins causing the price to drop/ be suppressed are ASICminer liquidating stock. They are a single entity with the power to manipulate BTC price...

THIS!

They made those USB Miners and made a shit load of money and now they buy more hardware to mine. Those are the stupid guys who bought from them over price short life mining hardware!! Those middlemen and group buy made money but the users will suffer big time.

Friedcat has destroyed the entire infrastructure, everything. There will be no more bitcoin as we know it.

Edit: I just thought of something... any of the major hacking groups which support bitcoin will now see him as the enemy. Everything he owns is now in someone's digital crosshair somewhere. Or some idiot's. Imagine the affect on the hash rate if that PB of hardware burnt down.

Greed comes before pride come before a fire.

Common Friedcat where is your spirit of sharing, you don't have to be so greedy ya, give others some space to breath on.

请体谅，给别人一个机会来挖掘

Dude you should sell and get KNC instead.

Nobody should be supporting these assholes.  It would be a different story if they weren't mining with what they produce, but they are.

We really need a sticky or something explaining how this will kill the small miner.  It still isn't too late to apply the brakes to this if an information campaign is started.

How, we have no influence on him now. We let him issue 400,000 shares and value his company at $140m. We gave him $57m of capital, we bought $m's of hardware from him at a 95% markup, we [BFL] let him take such a large part of the network that no one can stop him.

We could raise $1b tomorrow and we wouldn't be able to catch him for 2 years, by which point the damage is done.

We lost the game, the greedy man ruined it for us all.

Time for someone to step up and defend ASICMINER here, I guess it will be me.

First of all, friedcat has been an outstandingly honest and upright member of this community for a long time, and the interests of ASICMINER are clearly aligned with most of this community. Greater network hash rate contributes to the security of Bitcoin and is good for all users - possibly with the exception of competing miners and hardware manufacturers. The transparency of their operation, such as signing each block they find, clearly demonstrates their good intentions.

Secondly, ASICMINER's pricing policy has been pertinent: ASICMINER has an obligation to maximize value for shareholders, and selling hardware below what the market is willing to pay does not achieve this. If they set a lower price point, they would only achieve being sold out quicker and the lucky few who managed to buy would simply sell their hardware on eBay at twice the price. That would hardly be a responsible way to run a company. ASICMINER has no obligation to sell hardware at charity prices so miners can net a big profit quickly - in that case they would be better off mining with their own hardware.

Thirdly, developing your own mining hardware and subsequently mining with it is not "evil". ASICMINER is a clever bunch, but they have used no unfair business tactics to achieve their current advantage and there is no reason any other sufficiently talented group of people could not compete on equal terms.

Fourthly, ASICMINER is clearly aware of the dangers of having too large share of the network hashing power and sell hardware in great enough quantities to avoid the possibility [although not at charity prices].

I have more points too, but that should be a start.

Disclaimer: I have a horse in this race, and I have a man-crush on friedcat and ASICMINER.

If ASICMiner gains too large a share, they will kill the golden goose. They have no plans to do so.
The current ASICMiner equipment is first generation bitcoin ASICs. KNCMiner will be far more efficient and much cheaper.
Follow on offerings of third and fourth generation ASICs will be even more efficient and cheaper.
ASICMiners current hardware will eventually be as outdated as GPUs are today.  ;)

The transition to ASICs is a bumpy one, but so was the transition to GPU mining.

Wow I didn't know they raked in that much money.

Too many people involved with Bitcoin don't understand economics.

Yeah I'd say it is too late.  You can slow the growth by not giving them any more money I suppose...only buy used eruptors and blades not directly from them.

The people that started the Federal Reserve also sounded cute and innocent in the beginning too.

This is a fuckin' ponzi that will benefit them most in the end.


This is the worst part that you mentioned.  Don't shrug it off like no big deal.

Actually, he issued 200,000 shares, which raised a little above $100K at the time (approximately one year ago). But the company has grown since then.

I agree that BFL's delays have benefited ASICMINER, but that can hardly be blamed on ASICMINER.

ASICMINER is just taking advantage of the stupidity.  I can't blame them for trying.  Ventures like this will turn mining into a scammy TV infomercial if they continue to be supported.

How does 1 person/company controlling the entire network secure the network? Even at 30-40%, if he wanted to he could cripple everything by forcing short lived forks.

You seem to think he keeps 20% hash rate and sells the rest of the hardware. WRONG. He only ever sold hardware because he had difficulties powering and cooling such extreme amounts. He has sold what... 500 blades? 5TH.

Look at May when he started selling. He had 20TH deployed, struggling for heat and power. Once sorted by the end of May, he has nearly 50TH and 35% of the market. Do you think he will stop there? Of course he won't - his previous estimates were to deploy 60TH by the end of July for that generation.

And now his new generation, arriving in the next 7-14 days.... As he said himself, he's going to put 10-15x that amount down in the next 6 months.

The questions is who bought all these Over Price Hardware from him? Especially the USB AsicMiner? Who is help by a group of co-hots namely those who started the group buys and those middle men who go for the Quick Buck. It is the Westerners who bought all of these over price stuffs from him. Who to blame? Avalon may go big time into mining nobody knows. If all the Westerners boycott Chinese Mining Hardware from China that may slow down the growth of AM and those from China.

Yes, he issued 200k shares to the public, kept 200k shares for himself. He has since sold another 40k shares into the wild which generated him pure cash.

http://www.asicminer.co/about.html

And the difficulty will keep raising much faster than anticipated because of it since he is constantly reinvesting in more hardware for himself.

This really does suck.  It is turning mining into a stock market with digital paper promises at the benefit of the Chinese.

Now we have somebody who will keep issuing "shares" to infinity.  You just created a new central bank.

I can't believe people are STILL misreading friedcats comment and getting worked up about it.

He says he projects "The" networks total hash to be 800-1000TH by year end, "The" meaning the whole bitcoin network, not his network, and then goes on to tell of plans to bring AM up to 200TH.



Or, whoops, sorry did I butt in on one of those long cons to make noobs think mining is hopeless so you trolls can buy their gear dirt cheap?

Pursuit for benefit is quite normal for a company. Monopolized by several big mining companies will be the trend of BTC mining industry.

Well that's a little better but 200TH is still too damn much for one person.

Do you forget why we like Bitcoin in the first place?  It was to escape fiat.  By him reissuing shares to infinity via an ever-growing mining operation he basically created his own central bank.

It's amazing the defenders can't figure this out.  I guess they were never libertarians to begin with and don't care when the money supply increases anyway in their own country.

may be someone need to report to the authorities in China about this illegal thing, AM is doing or get someone to shut down or destroyed his mining farm is doable for sure. Does anyone has the IP Address, that can be track.?

I have good contacts in the Central Committee in the CP of China. and also know those mayors in Guangdong province pretty well. Just a phone call would do the Job. Maybe he will run to the US Embassy.

I do have to say, it's refreshing seeing a thread full of this much negativity that is not directed towards BFL.

Disclaimer- I own shares of ASICMiner and fully support them and think they are awesome. I also am not a big fan of BFL.

Well that's going a bit far, probably best to just look from space at the giant glowing building :D

But in all seriousness, he's putting a massive target on his back for people who have alternate investments in deals we have no idea about, risking fortunes we can only dream about. People bothered to sabotage a few 66GH Avalon units, imagine what they'll conjure up for 200TH.

If I were him I'd have kept my hash rate reasonable, my head down low and sold hardware.

Well I don't like governments so I can't say I'd condone this.  But the free market can naturally slow this activity down if it isn't supported.

But they're not. Avalon/ASICMiner gen 1 are similar efficiencies. BFL is 50% more efficient on gen 1, but they cant even deploy a few TH after 12 months. ASICMiner gen 2 is here in a few weeks, BFL has no answer for that for a LONG time.

Mining was designed to be a competitive business from the start and not a charity. ASICMINER is playing by the same rules as everybody else - and they are very good at it!


Yes, he and the other founders kept 200k shares as "sweat equity" and that was clearly stated in their contract. What difference does that make? And I don't believe he has sold another 40k shares, but then again, what difference does that make? There has been no dilution - the total number of shares has always been 400k.


Are you making it an ethnic argument now? Us vs. Them? What difference does it make that ASICMINER is based in China?


I assume you are referring to the price of the hardware again. They have no obligation to sell their hardware for less than they think it is worth - which is what the highest bidder is willing to pay. Nobody is obliged to sell you a Ferrari at the price of a Toyota just because your notion of "fair" says so. ASICMINER has an obligation to maximise value for shareholders, and that is what they are doing.

Anyway, if you have any suggestions on how things can be done differently, then please make them - but "just slow down and let others win the race" does not really make sense business-wise.

Agree. 2 guys compete, then others blame on the winner.
Don't you think it's strange?

Anybody can do what they want but my original point still stands that you yourself pointed out.


Only support companies like KNC, BFL, and Avalon who all claim to only use testnet before shipping to customers.

Again the only reason why I care about this is to disperse the network hashrate democratically.  It is really not a good idea to let one person control so much.  Yes more big companies will come along eventually, but don't let it happen willfully if you can help it.  Those bigger companies down the road will have a harder time if more miners are involved.

Not people buying shares so one guy can mine more.  Christ.  Central bank shit right there.  And people still proudly admit to supporting it.  **face_palm**

People really have no idea what they are helping to grow there.

Poor thing a lot of these AM trolls or Shills really counting on AM. Better sell off your shares.

I can't speak for the veracity if friedcat's claims...

What I can say is this. ASICMINER is the middle of the road for current gen asics. They better be milking the cow beyond just "building more units" because they're going to have to downsize the process to keep up long term. If They don't... then they'll rolled up by the middle of next year at the latest (or whenever knc ships which should imo be around the same time). Even if I'm completely wrong... and they don't understand this... and keep just making more... eventually the side costs will kill them...

They also have the disadvantage of having shareholders... so some of the profit is probably going there. I have doubts about their ability to keep up if a much smaller process comes out...

I don't agree - BFL chip use too much power 60 GH single should have being 60 watts not 280 watts --BFL may deliver 800 to 1000 TH but all it means is a lot of miner will  have bad roi--- - maybe kncminer with there 100GH chip which is suposed to be low power .

I'm not quite sure what you mean by that: 400k shares were issued approximately one year ago when the company first started. Approximately 160k were sold at 0.1 BTC each to raise funds for the fabrication of the first chips, and the remaining shares belong to the founders. No more shares have been issued, so there has been no dilution in the equity.

Care to explain more closely what you mean by that statement, I'm not sure I understand entirely what you are implying?

a bit of bashing now they worry about their investments in those virtual shares from AM. Better sell them off.

Look at the link I gave you http://www.asicminer.co/about.html
163,962 are now owned by AM. So a further 36,038 were sold into the market to generate cash.

You are reading it wrong. 163,962 ASICMINER shares were sold to the public during the IPO approximately one year ago, and 236,038 shares are held by the founders (a.k.a. Bitfountain). As far as I know, these numbers have not changed since the IPO was complete.

BFL ASICs ROI gets shaky with a $60 bitcoin at 1,500,000,000 difficulty ... but I guess there's Europeans with 50c per kilowatt/hour power bills.


To any actual buyers, seriously, I mean SERIOUSLY complaining about AM's first round hardware pricing, I'd say it was probably a cheap lesson in impulse control, vs ending up on a murder charge or something. If you were oblivious at the time, some 90% of the bitcoin world were standing back, pointing, and laughing at you.

The scarcity of btc is being replaced by a system of shares.  The dilution will come by an ever expanding hardware investment of re-issuance.

You wouldn't trust GLD or SLV paper metals but you'll help grow this operation.  This just isn't a good idea.  I've seen this before.  It's being replicated in the digital sense.  Well, paper stocks are digital but you hopefully get my point.

Now AM investors are kind of nervous because they investments hardware are in great China and anything can happens. No search warrant needed and can come as they wish, hope AM has hide those mining babies pretty well ;D

It isn't the high price of their hardware I'm worried about.  It is what they are doing with their reinvestment that is really scary combined with an issuance of "shares".

At least one of us is confused. Both of us are probably imagining that it is the other. I am ready to admit I do not understand what you mean by that.

I think you added a few too many zeros.
http://www.coinish.com/calc/#
BFL 50GH/s @ $2499 (straight from their product page) will never generate a return @ 80,000,000 difficulty, $94/BTC and 1.2788% growth rate.

ASICMiner is looking at this same curve. Very soon it will not make sense for ASICMiner to deploy their own hardware.

Digital Chinese Bernie Madoff.  Scarcity and your soul is being replaced for digital fiat promises.  Investors in the beginning may make some coin.  He could probably pull what you claim is shares you own.  He is selling out everyone who is too lazy to mine with their own hardware for his own benefit.  I'll laugh if he attempts a reverse stock split.

Long story short, you are helping someone to consistently, eventually, own 50% of the network at all times so long as they replace their own hardware and what they sell to others with current ASIC tech.  With that kind of ching and cheap chinese manufacturing connections, I see no reason why he can't keep up with developing ever smaller ASIC chip sizes.

Would you like it if Bernanke owned 50% of the network at all times?  I don't know how I can describe it in any other way.

Someone with that much coin in the end can create their own bubbles to their own benefit and really fuck with the btc economy.

I own some shares in AM if the authorities shut down AM, does AM refund back my hard earn money? Does he guarantee money back in case of something happens? Do they have a court of law in China that is impartial?

Yeah, but I heard they have laser turrets surrounding the building, so no problem.

It may surprise some of you that China is a fairly civilized country and has laws too!

Reading some of the posts in this thread, I'm reminded of those guys in South Park who always say "they took our jobs!"

paladin.......... you seem extremely confused and i don't think you understand WHAT asicminer IS.
it's not using the products it sells on the btc chain. it sells brand new products.
it DOES hash using it's own equipment WHICH it is supposed to be doing. that is what the company is.
1) hash first 2) sell a bit on the side
you seem really really confused by this somehow.
the last thing they would probably want is to destroy the system that brings them considerable perpetual wealth.

Paladin has it exactly correct. Just take a deep breath and think about this for a moment guys. Manufacturing, products that aren't turned on... if a China decided to kill bitcoin all that ASICMINER hardware is right there waiting to be seized and used against us.

The only ethical thing for friedcat to do is sell off all the existing asicminer hardware so it's at least distributed... and sell out each batch completely before making more of it. I imagine that shareholders would be annoyed but would gladly take their share of the profits.

In China, the authorities are all powerful and untouchable. They can't be judge but they can judge you. The more risks you are in the more un secure you becomes. They is no law the CP Government is the law. Remember the Tienanmen Square incidents in the 1980's when 1000 of students were killed, did the army and police got indicted or judge?

It is better to have a trustworthy operator than BFL it is the fault of the competition for doing so damn awful.
We wouldn't even be worrying about this if they could just perform.
That said I agree that they have the capacity but they will only use it if they need it they have a reason to ensure their network control remains less than what they can maximize.
That said the power to back up the claim is impressive in that respect.
I see no reason though to initiate a 50% attack on the network not only would the bitcoin price drop significantly, all profits from mining would as well.
That result would be illogical to profit maximization and from a libertarian perspective would be unusual.
Basically they are able to scale up as needed based on competition growth on the network.
BFL customers are going to panic as they realize that they are getting ever more squeezed which probably is part of the reason BFL is not refunding now.
That said for the libertarians
Klondike is a real project and when its finished more competition will arrive so just enjoy the ride for now

Off side
ASICminer holder but the negativity is refreshing  ;)
Criticism is nice
But I hope your not trying to cause a share price collapse to buy more shares rofl
At least your argument was better than some I have seen but it makes less sense going for a 50% attack for the reasons above
Still surprising though the most inefficient version of ASIC's is the most profitable and as they grow they start catching up to the more advanced spec competitors naturally
If real competition shows up with superior units and cheaper prices well that would be different and this fear would be muted.

The BOM on the USBs is ~$4. Of course it will be.

I didn't want to go down the conspiracy path but yes, that's sorta why I mentioned Bernanke.  He's just some dude.  Hell, he could be working for the Chinese government for all we know.  Their state run media has been airing bitcoin news a lot lately.

I hope you realize that you are making some fairly serious accusations against a well-respected member of the community, and implying that one of the best-run companies in Bitcoin-land is a scam.

Nevertheless, let me tell you: ASICMINER is not selling shares any more, and have not sold shares for the last 10 months or so, when their IPO was finished. The founders sold shares in the company to finance the production of the first batch of chips and raised a little over $100k. After the IPO, ASICMINER has not sold any more shares and all shares on the market since the IPO was finished have been "second hand".

The only thing ASICMINER is selling is mining hardware.

But you are right that ASICMINER is earning a lot of money, and can "create their own bubbles" if they like. The same way anyone with a large enough amount of cash has some power to influence markets. But having enough money to do something and actually doing it are two very different things. Bill Gates also has enough money to manipulate markets, but for some reason he isn't normally accused of doing it...

I do completely agree that it would be detrimental to their own business to do such an attack...just always a bit concerned when one even has that option to consider, hah.  Seems the idea of decentralization is great but it can end up in a monopoly quite easy...Perhaps with more competition it will create less concern.

Regarding your side notes, I do hope not everyone thinks that people raising concerns or praising Asicminer are automatically thought of as shills or trying to create  or collapse a bubble.  Always nice to have some new ideas to ponder vs the standard discourse.

ACTUALLY:

At 640,000,000 difficulty a BFL SC SINGLE will still be making ~ 1.32 btc per month. You're numbers are just plain wrong and ASICMINER about twice as power hungry as bfl gear (and 2/3 as avalon).

~

If you had a SC SINGLE in hand right now - you'd roi in under 2 weeks. @ 80,000,000 difficulty it's still under 3 weeks.

Having family in asia, they do indeed have laws that are generally obeyed.  However, lets not dance around the fact that they can change the rules at their own discretion, and at any point.  I do not feel this will have an impact on asicminer at this point however.  But if they decided they wanted to shut it down, I have no doubt they would simply go in and do so with no regard.  It really is that simple over there unfortunately.

Although perhaps not much of a consolation, I would guess that the "political risk" (so to speak) would be as large in the US as it is in China.

A lot of rich people thought Madoff ran a very good company too.  He did make a lot of money for his clients before taking it all.  He can't take coins but he could retract shares.

I dunno, I've said my peace.  I don't like it.  Money is the root of all evils.  I've learned to never trust anyone but myself.  He could sell more shares again in the future.  All I am saying is it is a genius system if you're in it for yourself to keep growing.  There really is no stop to it if he wanted.  So long as people keep buying the devices.

We now just have to trust he won't be mining with his equipment in the future?

Bill Gates would cause a huge bubble if he got in via gox or some exchange.  The best way to do it is mine your way in and not buy any.  The manipuFlation comes later.

I've seen this type of expansion before on the S&P500.  Commodities that can also be traded on paper.  Your governments do this to you all the time.  In this case the terms are different but the scam is the same.

People can laugh at me all they want.  This just isn't good.

Yes, as simple as that " if they decided they wanted to shut it down, I have no doubt they would simply go in and do so with no regard."

Remember the Tienanmen Square incidents in the 1980's when 1000 of students were killed, did the army and police got indicted or judge? a few days ago in Xinjiang, China quite a number about 50 people or more were killed by the police and the Uygur minorities. What is lives to them??

All your shares in AM gone. ;)

Link plz.

No, BFL and Avalon are the assholes.

People are just jealous because ASICMiner is doing it right.  They didn't mess up like the others did and actually delivered a working product.

Fortunately, you can buy their shares so if you can't beat em, join em.

That's what my friend said when he joined the military.  He couldn't beat them, but now he gets a paycheck bombing little kids in the middle east.

AsicMiner is too greedy.The arm competition is not good for bitcoin. It will become more centralized.

So far there is no evidence that ASICMINER management has done anything unethical. In fact, there is a growing body of evidence that they have acted honestly and with integrity at every opportunity.

But you are of course right that they could one day decide not to honor their commitments. Trusting a stranger on the internet is risky business, and there is little legal recourse.

They have held their word so far, I expect them to continue to honor their commitments.

[By the way, ASICMINER is a company that (1) mines bitcoin and (2) sells bitcoin mining hardware. Of course he mines with his equipment!]

sure a lot of investors will be throwing away their shares. wouldn't want to loose everything in the event the police shut them.

Not so much as AM competition needs to put up not shut up ^^
Actually that quote doesn't work they won't shut up but they need to put up lol
Edit Again: Nvm it works just read it as an irony

Given a device that hashes at 50GH/s for $2499 (https://products.butterflylabs.com/)
The first day at 80,000,000 difficulty, the device generates 0.314321 BTC.
Here is the series for bitcoins generated per week for 28 weeks with a 9.4% difficulty adjustment per week starting at 80,000,000 difficulty.
2.2 + 1.99 + 1.81 + 1.64 + 1.48 + 1.34 + 1.22 + 1.10 + 1.00 + .90 + 0.82 + 0.74 + 0.67 + 0.61 + 0.55 + 0.50 + 0.45 + 0.41 + 0.37 + 0.28 + 0.23 + 0.21 + 0.19 + 0.17 + 0.15 = 21.92 ($2126)
On the first day of the 28th week the device generates 0.0218 BTC

I checked that series with the following calculators and using a spreadsheet.
http://www.bitcoinx.com/profit/
http://tpbitcalc.appspot.com/
http://www.coinish.com/calc/#
https://bitclockers.com/calc

For a while I thought maybe this would be attempted via CoinLab infiltration and their CEO Mr.Yes_Regulate_Us_Please where this would've happened first.  I had it wrong.  It's looking like it could happen on the other side of the pond.

The Peoples Liberation Army is the biggest and most powerful. Who is gonna stand on their way. They are brutal and fearless. Death is glory to them and life is nothing. Who control them- the CP of China. So beware.  

Instead of blaming ASICMINER for delivering what they promised, why not blame the "competition" for failing to deliver anything on time? If they did, ASICMINER wouldn't stand out so much. Their only fault is delivering on time.

If BFL delivers the rest of their orders (unlikely but possible) and KNCMiner delivers and Bitfury delivers and Avalon delivers their batch of chips, then the ASICMiner hardware will be obsolete.

ASCIMiner will still be able to make a small return on their hardware at wholesale prices. They won't be raking in the cash and we won't have to worry about them owning the blockchain.

ASICMiners only advantage is that they can deliver product.

Actually, they have one more advantage: lower production costs than all the competitors.

Meaning: in a price war, they have considerable ammo.

Edit: And also, products that are proven to work on a large scale since they eat their own dogfood.
Edit 2: Not to forget their full warchest!
Edit 3: And an almost fanatical devotion to th... oh damnit, I'll come in again...

Foxconn and Quanta have phones. You can call them and get low production costs. ASICMiner does not have a monopoly on chinese manufacturing.  :D

Their products do work on a large scale, but we don't have any insight yet into MTBF however.

Me neither. What is MTBF?

Mean Time Between Failures. How reliable are ASICMiner blades when you run them 24/7 for a year? Might be very reliable, might not.

True that. I would, however, expect them to identify and fix design issues much faster than some of their competitors which do not mine with their own hardware.

The cat is out of the bag, there's no coming back... Bitcoin mining is already taken over by few guys, few more will take a piece in next few months and others will fight for mall stuff that is left.

What's most interesting to me is who in his right mind is paying 4 BTC for AM share. What the fuck are they doing to people for them to become so irrational in buying anything Am related at such lunatic prices..

I'm curious to know: what would you consider a fair price and why?

Average Network percentage * Unit Sales / Total Value of All Bitcoins
Price is justified if bitcoin wealth keeps growing relative to network

So not only is the hardware expensive, but so are the shares it sounds like.  What does a share get you?

I'd consider fair price the one that doesn't need 3 lifes to meet ROI from dividends in such unpredictable and risky business like BTC.

It's absolutely crazy price, even 1 BTC for share is huge one in such a risky business, 4+ BTC is wow, I don't have words.

I know people are now expecting that they might sell it for more but it has to stop somewhere and buying it at this point is grrr ...

 .. and much earlier too though I obviously underestimated people's irrational economic behavior in BTC market and refused to buy it when it was below 1 BTC though I'm not complaining, I'm pretty much on same gain by trading and learned much more than I would with holding AM share.

There's just no a single economic justification for Am share price, it's amazingly lunatic one.

What are you talking about? People spending bitcoins is irrelevant of whether AM or AM products do the mining. That will come from advancements and mainstreaming over time. People will need to purchase the coins. If miners are holding, then the price goes up as demand increases.

This thread is amazing.  So much impotent rage!  ::)

Right. ASICMINER promised, what, -to never own more then 1/3 of the network and to maximise profit for shareholders. That's what he is doing all that time.

ASICminer has mined approx (3200×30d×10m×0.20networkShare) = 192 000 coins in last 10 months = 19 200 this month alone. KnC sold 500+ orders in days = somewhere around 20 000 - 40 000+ BTC. TerraHash did well too, and many other ASIC makers and "makers". My bet is that there is over 100K BTC dumped because needed fiat for new ASICs. That is almost a percent of all the coins out there, dumped in days to our quite shallow markets. What would happen to gold price if one percent of all the gold is dumped on the markets? In that sense, 19 200 BTC with ASICminer / month, does not look like the biggest a problem. Maybe a part of it, yes, but not most.


This I just don't get. Drain? With this much of share holders you call this a drain? With that logic, what you call BFL? They took the BTC and are going to keep all the money. If moon is in the right angle rest of the year, maybe even send some ASICs.  So are all the rest ASIC makers. They do not share their profits, as ASICminer does.

Your reasoning sound like jealousy.

Most people are stupid. You can do the rest with hype. ;-)

as Far as I know. Kncminer will provide 160 Real Thash/s at least once the thousands of miner made deployed completely while BFL miner is another questions.

Perhaps the people currently using contract to power the thing up. It is not just race issue as you have supported them...

Actually this entire thread reminds me of the South Park Wal-Mart episode. Even if (some) people hate Wal-Mart, they can't stop being attracted to the falling prices.

*Disclaimer* I am an unapologetic AM shareholder. I will agree that it's somewhat of a concern having 1 company (individual) control a large portion of the BTC network. However, at least this is being done in an honest and mostly transparent fashion. It would be MUCH worse to have a private wealthy individual choose to create their own mining hardware and mine not for profit but for network manipulation - this still is a concern that we should all be worried about. Realistically it would take perhaps only a few tens of millions of dollars to make this happen.

AM on the other hand has shareholders to answer to and in order to maximize long-term profit, it's not in their best interest to attempt to control the network any further than their stated goals.

How about focusing this thread on which AM competitors actually have a chance to sell competitive hardware? Anything else is just whining.

A price he can buy in cheaply at.

At least you admit concern.  That is all I am asking people to do before they invest in the ponzi.  A lot of people start off nice and sweet and innocent.  He won't 51% the network without harming himself, but you're potentially contributing to a scheme that is already going to half the reward to 12.5 for independent miners before we even get there in 3 years.  There is no stopping this from growing to 50% if he wants.  This is dangerous territory.

How about this...lets focus on competitors to BFL...like KNC.  Not competitors to AM.  YUCK.  Now you want to bring the reward for small miners down even further to something like 6.25 if you help another guy similar to AM do the same thing?  Don't help any competitors of AM with a similar "strategy".  BTC-garden is attempting the same thing it looks like.  Avoid.  Then you have ASICMiner with potentially 50%, BTC-garden @ 25% with the potential to keep growing, and who's next?  Soon there won't be much of anything left for the small miner.  We need to disperse the hash rate among as many people as possible.

Why do you want to let others mine for you?  That's terrible.  Isn't this the reason why we despise wall street people?  Hedge fund and mutual fund managers?  Mine for yourself.  Buy your own hardware.  If you can't do that, at least collocate or something.

This is such a bad, bad, fucking idea.  The defenders just aren't thinking this through...at all.  Why would you buy paper metals?  You buy your own and hold it.  Same goes for BTC hardware.

I don't get this logic.

On the one hand, ASICMINER has hardware capable of 70%+ of the hashing and control of the network, but you trust them to not turn all of it on.

On the other, ASICMINER could just use all their hardware, and you could trust them to not 51% attack the network.

Either way requires trust, and either way could destroy the network if ASICMINER feels it necessary.

Well of course they could just turn it all on and shoot straight to 70%+ of the network and bag all the coins.

I trust that they won't, because if they do then Bitcoin would effectively be centralized around Asicminer. If bitcoin isn't decentralized then it's just like any other currency and has no "USP". If  that's the case, I don't think that people would invest in Bitcoin, which of course could mean that whether Asicminer has 70% of the network or 10% of the network it wouldn't be worth anything if people don't trust Bitcoin enough to invest.

I think it's very possible that they could switch 1PH online and if they did they wouldn't maliciously attack the chain, but the fact that it could kill potential investment into Bitcoin is why I can't see them doing that.

The analogy is not correct. The AM shares pay dividends in real BTC. As far as I know, paper metals do not pay you any real dividends (though some generate taxable artifacts and report those as dividends).

My analogy is spot on and you aren't thinking it through.  This isn't about raw BTC.  I'm comparing paper promises which require trust in Comex to selling out your ability to have your own hashrate to a digital Chinese Comex.  I view hashrate as wealth when it comes to independent mining.  That's where the similarities are here.

This is a bad fucking idea.  You people are comfortable with trusting 2 or 3 big companies to handle everything in the end here.  I don't know where this could go.  It will get that bad one day so long as people keep helping companies like AM grow.  Then the community needs to fork and all of your BTC is worthless anyway.

That's how democracy works... if it's fine with us you can either join us, or leave bitcoin forever.

Go vote for a liberal or a neocon.  We are in this so we can escape the shitty monopolies.  You're happy with it, apparently.

I'm not saying it can be stopped.  But the least you can do is not help support it further.

ASICMiner is in the position they are in right now because their competition is so incompetent. I doubt they will be able to maintain so much domination of the Bitcoin network into next year as competition comes online, so current shareholders should take note regarding the current bubble like share prices...

In order to have a strong, decentralized Bitcoin network we should all root for Avalon, BFL, KncMiner, and BitFury to actually deliver ASICs in quantity before the end of the year.

I agree.  I would have no problem with ASICMiner if they were just selling tested hardware on testnet.  No hardware developer that mines en masse with their own stuff should ever be trusted.  This is why testnet exists in the first place.

God damnit people...god damnit...lol

The spot price exploding so quickly which alerted the economic illiterate to BTC before ASIC had enough competitors will be looked back on as why this experiment failed.  I wasn't joining the "ASIC will kill Bitcoin" camp until I learned about investment ventures such as this.  This is horrible stuff people.  Seriously think it through.  Only support companies that use testnet.

Quite an accusation. Care to back it up? Because I have two blades on my desk, that doesn't fit in your ponzi claim.


Why not seek safety in numbers? Noh! I say NO. Disperse so that every one needs to pay more for electricity! That is the way to do it! And with the same deal, waste more time managing your hardware. Double the expense, with less profit! Disperse I say! Off you go.


Why you are not a doctor? That is terrible. Everyone should be a doctor. If you can't be a doctor, then be a nurse. If not, at least be a patient. But don't you be coming here to fund our operation, because people with resources can't talk to people with out them and collaborate. Don't you dare. Communism good, capitalist baaad!


Please, tell one thing in this world that is profitable, where people are not collaborating via shares to distribute risk and to reduce costs (labor/time/energy)? Aka creating companies. One. Just one.

An illusion of decentralized hashing power isn't worth shit either.

I am confident Friedcat is greedy enough not crash the market by doing double-spends.

When you refer to the competition, you're not just referring to other manufacturers, but everyone else mining. That includes me... I am competing with ASICminer.

I have no chance even to come close to leveling the playing field. My only hope is to pay some seriously inflated preorder price and pray that I receive something.

If I just buy a blade or whatever from ASICminer at their inflated price, they can reinvest that money into more equipment. Everytime someone buys something from ASICminer, they are probably able to replace whatever unit they sold with 10x more units. In effect, you are just giving your money to your own competitor and strengthening them. You are damning yourself and everyone else.

They are dictating the market as they see fit. Sure, you could say that they are doing the right thing or are trustworthy, but the fact of the matter is that they can do what they wish, and I'd rather not have an entity with that kind of power. The blanket statement "they are transparent and doing the right thing" has also been applied to many centralized governments. For those of you who have forgotten, this is the reason bitcoin exists.

They are monopolizing both mining equipment and hashrate. You have a 1/3 chance that recently mined bitcoins you buy are being generated by them. They are squeezing the profits from everyone except themselves... This is a serious problem. Remember, as a decentralized collection of miners, we are the bank. We are the market... With one entity controlling 30%, there is too much influence.



 

I agree with much of what you said, but no-one is forcing anyone to buy overpriced mining hardware from ASICMiner. Sometimes, the most prudent thing to do is either buy BTC directly or simply save fiat and wait for a better opportunity.

I can't really blame ASICMiner for ripping people off if folks are dumb enough to overpay.

Overpaying ASICMiner for mining hardware just because they are shipping now is a terrible option.

True that. But, the fact that it is happening and I'm squeezed out of btc mining (along with everyone else who does not own an asic) casts a shadow over the entire btc network in my mind. What I am seeing is the money supply and hashrate being dictated by a few people with access to better connections or technologies or even capital. That was always the fear right? A country or entity with better technology and capital taking over the network? Well folks, it is happening right now.

We are all being bottle necked by technology and access. Those who choose to take the leap to asics are paying a hefty premium right now (either in real money terms or risk). We are being middle-maned... Call it a tax if you will.

In the end, ASICminer will be replaced by another. But, there will always be a hefty tax.

So much hate in chinese guys, we all know that chinese are powerfull, just see BFL was the first to annouce a asic, but avalon and asicminer appeared and first come first serves.

Chinese guys are strong will own the world.

This.

The amount of sour grapes in this thread is ridiculous.

Remember that it is BFL that is NINE MONTHS delivering their product. And it doesn't look like they are going to make the 90 day promise they made about a month ago either. Their promise of delivery back as far as October was completely fraudulent. They must have known they were months away from delivering every time they said they'd be shipping in 2 weeks. BFL customers should be pissed as this was blatant illegal behavior.

Avalon is also multiple months late on batch 2 and just last week they said they'd be finished shipping by the end of the month. Well, here it is July 1st and all of batch 2 has not been shipped out yet. Also there is plenty of evidence that they were mining with customers machines in the meantime. That is bad. Very bad.

Now, let's look at ASICMiner. They developed a working product, and have both mined and sold it and sold shares which have returned higher dividends than anyone could have expected. If you bought shares just a few months ago you would have 5 times your money just from the share price alone!

Their hardware was expensive, but they delivered immediately and the hardware worked as claimed so plenty of people bought it anyways. IMO, they priced the hardware PERFECTLY. Any lower and they would have been screwing over their shareholders! Remember that they had no competition for mining hardware at the time! Neither Avalon nor BFL could sell you a product they would deliver right away. ASICMiner has been nothing but trustworthy so far. If you are frustrated by their success, just buy some shares and share in the profits.

Centralization of this kind will always happen. Power compounds. I'm just glad friedcat doesn't seem to be the sort of person who just wants to watch the world burn. If such a person ever ends up in the same position some day in the future, Bitcoin is in trouble.

seems like they are selling their coins for fiat !!

People still believe Bitcoin is decentralized because the code tells them it's suppose to be. In reality, this asic phase is turning it into a centralized currency.

At least Banks have regulations to conform to and their books can be examined. Asicminer can do whatever they want and pay dividends at whatever rate they want and you will have no clue as to how much profit they are making. You really think this is a better situation for a currency?

The difference is the amount of money it takes to attempt to compete.  With bitcoin it's zero.  You don't have to pay any politicians, purchase permission to mine, appease 48 different states to mine in the US, file any information with any regulators, all you have to do is have the parts to compete.  In the traditional banking system, they have put so many layers in place that no one can even try to compete without millions of capital to throw at regulations.  In bitcoin, all you need is the hardware.

It may be centralized now, but that's just because ASICMiner was first to market.  First mover advantage is a big one.  But there's no barrier to entry.  I am making money mining right now.  Maybe not much, but I, as an individual with a small amount of capital and a belly for risk, am making money even though ASICMiner is raking it in.  And because I want to keep making money, I'm rolling profits over into new ventures.  Maybe I'll succeed, maybe I won't, but ASICMiner can't line politician's pockets to forcefully keep me from competing.  The only way for them to stay in front is to be better.  I much prefer that method to the current method, where you have to know people or have oodles of money to even play the game.

I back it up by watching his percentage continually grow.  I never said he wasn't sending people what they paid for.  Those are two seperate issues.  I only have issues with the former, which is a ponzi.  I wouldn't care that he is selling overpriced equipment if he wasn't using the funds to grow his own operation.  Nobody should deal with a big hardware development company that mines on anything but testnet if you care about keeping mining independent and in as many hands as possible.  Mining with what is developed on such a grand scale will lead to centralization.

Would you trust Bitcoin if the Federal Reserve was doing the same thing?  Like bank loan products based on a fractional reserve system, you are being sold products that actually hurt you.  Every loan devalues your own purchasing power that much more.  In this case it is hashrate.  You are getting screwed twice.  Once with high prices and second devaluation of your own hashrate worth by the same guy selling you the shovels he is using for himself.

The Federal Reserve has the luxury of printing their own dollars that are used against you to enrich themselves.  The same thing is happening here if the term dollars is replaced with hashrate.

It boggles my mind that people can't understand why this is a problem.

May I ask, why did you care to pay so much for blades?  Or did you get them second-hand?  The latter would be better.  The former helps him grow and screw you over.


What is a waste of time is paying for overpriced blades for the sole benefit of the creator to increase their operation to continually screw you over with each adjustment.  Unless you bought for cheap second-hand, you are paying for your mistake twice over.  It's like taking out a loan at the bank to buy something and getting charged interest on debt notes that were given to you.

FYI, I have no problem with group buys.


Your analogy doesn't work.  I am making comparisons to the financial industry.  Not a health care service sector where plenty of competition exists.  Health "insurance" actually causes prices to rise along with your premiums but that is a different topic.


You are confused.  Re-read what I said.  Now I'm not even sure why I replied to your post to begin with because you don't seem to understand the concern, at all.

I thought Deepbit was taking over Bitcoin.
Wait, it is still 2012 right?

You keep using that word. I do not think it means what you think it means.

+1 very well articulated. ASiCminer is also powerful enough to manipulate BTC market pricing now by suppressing the price offloading coins they harvest 25% the total of.

This.  If Bitcoin never gets any bigger then it doesn't really matter what ASICMiner share is but if/when Bitcoin rises significantly in valuation the global mining revenue will bring in new players with deeper pockets.  Global mining revenue is ~$130M annually today.  That is the pie that ASIC developers are fighting over.  It doesn't matter if a company is building hardware for internal use, or selling that hardware to the public the potential revenue (either by directly mined BTC or from hardware sales) come from that same pool of $130M/yr of potential revenue.

Now like I said if Bitcoin doesn't get larger then all this is just a tempest in a teacup.  Does it really matter who is the king of the anthill?  Without continual growth and improvement, Bitcoin will be an experiment that limps along and eventually is replaced by something superior. Under that scenario it doesn't matter if ASICMiner goes bankrupt or runs 100% of the network.  

However lets say (over some period of time, months, years, decades) global mining revenue increases by an order of magnitude.  Suddenly ASIC developers are fighting over $1B potential revenue.  That is going to bring in companies with deeper pockets.  Today the potential revenue is (relatively) low and the risk is high but the longer Bitcoin continues without dying, the more regulatory issues get ironed out, and the higher the valuation the more it shifts the risk vs reward to one where larger players are interested. 

Forget AMD/Intel there are dozens of companies which make specialized ASICs for all types of industries who already have the expertise, staff, and industry contracts to roll out SHA256 ASIC and do so in a streamlined efficient manner (think shrinkwrapped build quality, ease of use, support, and distribution you would expect from say a home router).  However a slice of $100M at very high risk is simply not something they are interested in yet.  $1B+ potential revenue at a lower risk well that is a different story.

Edited for clarity.

Exactly this.  Competition will always be possible in the bitcoin realm.  The more valuable it gets, the more sophisticated the competition will get.  As long as governments don't come along and force monopolies by imposing multi-million dollar entry fees regulations, competition will always have the opportunity to compete.

Well ASICMiner is a "company" (maybe not in the legal sense of the word but in practical application) a large portion of the coins mined are returned to shareholders in the form of dividends.  If those shareholders independently choose to sell coins how is it any different than someone with their own (owned) hardware choosing to sell coins?

As the number of coins climb and the block subsidy declines the influence of new coins on price will also decline.

Today there are ~11.4 million BTC and daily only 3600 or 0.03% of total are being produced.  The number of coins traded daily on the major exchanges (~50,000 BTC) already significantly dwarfs these new coins (even if 100% of them are sold as soon as they are mined).  By the time of the next subsidy cut there will be ~15.8 million BTC and the daily generation rate will have declined to 1,800 or ~0.01% of total. 

Nobody said ASICs are disruptive but if it wasn't ASICMiner it would be someone else and without ASICs increasingly the odds would be on the "someone else" being a hostile actor. 

Why are you worried? Their very existence depends on BTC having value. If they kill BTC they would kill themselves! Your worry makes no sense.

Yup it is just as likely as Barricks Gold (worlds largest gold ore miner) doing something to undermine the confidence in gold bullion. 

If you can't see the pyramid of growing a personal operation by selling suckers overpriced equipment, I think you are the one who lacks the notion what it means.

Thank you.  I've been avoiding mentioning what you did because I have no proof.  But yes, if he is selling for fiat it would explain why the spot has been doing a lot of bed-shitting lately.  the price has been slowly dropping around the same time ASICMiner really started to grow.

I won't travel down that path without proof, but it certainly is suspect.

I don't really care personally if people sell...the movement is a natural market force.  But, yeah, it does suck.  People investing in ASICMiner are getting screwed three ways then instead of two.

#1 Overpriced equipment (don't really care so much as people can do what they want)
#2 High prices being used for personal reinvestment in their own mining operation.  (this is the biggest issue.  A USB stick of 330 MH could be increasing his own network speed 4x greater for all we know)
#3 Selling what he has, reducing everyones value.  (Long-term this doesn't matter if BTC survives, but it does suck short term for independent guys that would like to buy hardware at a higher spot)

The nature of Bitcoin doesn't allow me to prove #3 so I tend to avoid that issue.

I can't see the link between selling suckers overpriced equipment and Ponzi scheme.

btw, I bought does overpriced USB sticks, first batch, sold them for twice as much.

A ponzi scheme pays new investors dividends with their own money or money from subsequent investors, the scheme itself is not profitable and requires that more and more money be "invested" in order to continue to function. If ASICMiner is forced to do this, that means their mining operation is neither profitable nor sustainable. If ASICMiner is a ponzi scheme then it will eventually unravel and you need not worry about them taking over the Bitcoin mining world.

The only way for ASICMiner to be a threat to Bitcoin is if they can continue to grow and reinvest actual profits from their mining activities. Actual profits precludes them from being a ponzi scheme.

If you were a middle-man who consistently did that, you would be part of the pyramid below him.  :P

I probably shouldn't be giving people any ideas who care about their own greed over Bitcoin.

It is called price discovery.  Someone believes the price is too low, someone believes it is too high.  The trade occurs where the market will bear it.  If USB stick miners are overpriced the price will drop (IIRC it already has once).  No reason one of the people buying chips in bulk (~$7 ea IIRC) couldn't build competing single chip USB stick miners. If the price is too high then someone will to scoop up that easy profit.

It seems you don't believe or are afraid of free markets.  Nobody "needs" to buy an ASIC miner.  They do so because they believe it is in their best interest.  Now personally I believe a lot of potential miners are for lack of a better word, delusional and thus demand drives prices up.  Eventually reality will hit and it will drive prices down.  If nothing else as profits get harder to eek out I would expect to see a lot of used ASIC gear for sale at 50% to 80% off the purchase price.

And when he makes the market 10x the size? You now earn 10% what you did, and you'll never, ever pay back the costs of buying hardware when you didn't manufacture it.

I like how Asicminer is going business. I won't buy any of their hardware simply because the price is outside my comfort zone on ROI. They did good this generation. But there's a new generation right around the corner that will obsolete them unless they upgrade.

I really do not see why you guys are complaining about someone upping their hash rate by a factor of 10x.

You got people on the forums buying up hundreds of Avalon chips and other group buys, probably raising their hash rate by a factor of 10 or more. Nobody seems to be complaining about that.

AM is not going to take over the network and kill their business in the process. They aren't stupid.

Hash rate is going to increase by at least a factor of 10. That's just technology progressing. Anybody that is not adding hash rate at the same rate is going to be left in the dust. End of story.

Full disclosure: my personal hash rate went up by a factor of 2 in the past month, and will continue to do so for the immediate future.

Why should I be surprised that a company with far larger resources is doing the same thing? I'm not.

You're right.  Flipping inflated-price, fundamentally worthless things is the stuff of bubbles, not of Ponzi schemes.

Your comment is iconic of the fundamental problems with bitcoin, and with the mining hardware industry.  There is no bitcoin economy.  Sure, there's some gambling, some economic innovation, some daytrading, some flipping of promises or the rare and wonderful gadget, occasionally a chance to buy a pizza or something at some points in time, but, by and large, nothing. 

Real capital is not going to go into bitcoin with the current levels of volatility in real terms.  So bitcoin gets Sonny Vlesides, scammers, and a couple groups of young guys who had the right university-days contacts and the right juice in the right shops to get some chips made.  That's what ASICminer is; that's what Avalon is.  I'm not dissing them; they've done well, as entrepeneurs.  As businesses, though, they both suck.

The guys who are asking themselves if there is a business here will have the following as the first question: 

what if some day soon, because of Emperor's Clothes phenomenon, or because of the concentration, or because of the inability to do any meaningful mining in private any longer, a critical mass of people decide whatever they came to bitcoin for is gone, and a couple of entities are holding a third of the inventory?  What then?

Beyond the terms Ponzi, Pyramid, Scam, Fraud, and Bubbles, there's another term that's potentially relevant to bitcoin today: Musical Chairs.

Epic! I love a thousand words via a picture. Two important ones...FRIED and CAT....

Only this is BBQ CAT. Lol

The greedier ASICMINER gets, the less profit they make on each coin, that's because their energy costs rise as fast as they add gear. At some point they wont be able to pay a dividend as all their revenue will be going into running the bloated ASIC farm, for roughly the same number of coins each week. Then there is a good chance they will have to close up shop, leaving a  lot of worthless shares, but also that means 1,000TH/s+ suddenly disappears from the BTC net hash rate, and confirmation times blow out until ridiculous, effecting everyone.

Based on the dividends per share, I suspect they are hoarding a great number of coins and will jump onto the next virtual coin bandwagon before Bitcoin collapses.

Best possible scenario imho. I've got nothing against any ASIC manufacturer... but the concentration of hashpower in a nation where property rights are... marginal at best worries me... Then again, China is kicking the rest of the worlds ass on the whole 'following free market economics' thing. So I guess I'm not as worried as I would be if ASICMINER were located in the USA or EU.

I can just imagine that headline now... DHS seizes asicminer warehouse and kills bitcoin.

Of course it is so obvious, they are doomed.  Wait why couldn't they just stop expanding?

That would require simple mathematics, basic business sense, and a pulse. Most people around here are only batting .333 on that list.  ;D

DHS or any enforcement agencies need a search warrant, they can't simply bust in and catch you. In China no search warrant require and can go after you anytime of the day or night.

If they are going from 29TH/s a month ago, to 800-1,000TH/s as suggested by the OP, that's exponential growth, and exponential growth is seldom sustainable.  http://www.peakprosperity.com/crashcourse/chapter-3-exponential-growth

So slide 47 is where the figures are quoted from.  Anyone here read enough Chinese to tell us what it really says?

http://wk.baidu.com/view/ede0631876c66137ee06192f?pcf=2

Is it their hash rate or total network hash rate?

THIS.

People spits figures without even reading the relevant posts on beforehand.

ASICminer has been a perfect example of flawless management in a 100% underground Bitcoin operation... For the IPO investors it has been the best investment in the Bitcoin world up to date, hands off.

are AM investors concern about their investments??

The AM share price is going nuts. It seems that the only thing investors are concerned about is trying to afford more shares!  :o

Authorities can move in anytime and your shares will really becomes Nuts. Ticking Time Bomb

The Total Hashrate at the moment, at least 141Thash/s, The document you mentioned, Is their hash rate,41Thash/s at least.

To increase the Hash rate. It would be difficult to do at the moment, Increasing 800Thash/s within a year? Unless they have ordered some miners to do. Otherwise may be too risky as the circuit size cannot be shrunken lower than 28nm format at a moment.

Oh, the unbelievable irony of unbelievable ironies! Thank you for making that statement. Thank you for making my day!  ;D

TL;DR -> people is cheering ASICMiner deployment plan because they are heavily invested in it.

So far, ASICMiner managed flawlessy their business - taken into consideration how good they managed their venture so far, you can be quite sure they won't do any stupid thing to destroy their own investment (like owning a too high % of the network).

Thus, this thread is mostly FUD fueled by people who missed the AM train.

The CPC doesn't seem to want to bring down bitcoin. They've been pushing it on their state TV:
https://bitcointalk.org/index.php?topic=194937.0
http://www.forexminute.com/bitcoin/china-loves-bitcoins-7723

There is always risk, but Friedcat is dealing with this:

Be an ASICMINER shareholder then. I'm happy to own 1/800th of ASICMINER.

9/800th more to the board  ;)

Friedcat has now announced franchising plans to avoid directly controlling too much of the network as ASICMiner grows in the future:

https://bitcointalk.org/index.php?topic=263007.msg2810185#msg2810185

With the asic genie out of the bottle, I have trouble believing they are going to be able to maintain anything close to 20% much less 50%.  Its easy to horse races when you are driving a car around the track.  In about 3 months, everyone else will have cars as well... I hope they are working on planes or they are going to be left way behind.

They are. Planes are expected starting November-December this year.

Well, well well, how things change in a few months. I am sure friedcat was much misquoted originally and intended to put online 200TH when he was expecting the entire network to hit a petahash....

SINCE he said that though, KNC has popped up, as have Bitfury, and VMC although there in the background before has announced ASICs of their own. That all points to having about 3 or 4 Petahash if it all gets delivered and online by end of 2013.

And then, hashfast, well they seem to be shooting for Pluto, if they only hit the moon, it's bad. Missing targets by a factor a four would still see them churning out multiple times the hash of the network.

So if friedcat didn't originally intend to put up a petahash, he should be seriously thinking about it now, and that might not even have AM with 10% of the network in early 2014.

Upshot of that is, don't freak out that friedcat might have a petahash up his sleeve, freak out that we're gonna be talking 10s of petahash going into 2014

Of course, that also requires they not do anything that might damage the price of bitcoin, like getting 51% of the network (Although they could split their hashrate among several pools to hide that fact if they wanted - In fact, they'd also be hiding it from their shareholders as well)

On the other hand, it also means they might take some of their money and invest it in promoting bitcoin, to help get the price up.


I think a lot of people are just upset that chip companies aren't lining up to sell them ASIC hardware as cheaply as possible, with just a few % of profit for themselves, the way CPUs/GPUs/etc are sold.

But Intel and AMD can't make any money hording their own chips. And mostly they're just used for entertainment anyway. (PC games and the like).  And they can't compete with companies like Google and Amazon, because those companies spent tons of money on special software, and already have market share.

But with bitcoin it's not like that.  There's not much reason for a company to sell you a chip with a low margin, unless they're taking pre-orders to fund development (like KnC, Avalon and - lol - BFL)

So the thing is, small miners are simply at a serious competitive disadvantage. With GPUs and FPGAs - there was a nearly linear ratio between investment and return: buy X GPUs for $X*Y, pay X*Z in electricity and make BTCX*B.  The minimal investment was just the cost of a GPU (plus mobo, etc)

With ASICs the initial NRE is huge, and miners who don't have tens, hundreds or even millions of dollars can't compete at all.

At least with bitcoin, there really disincentives for companies to own too much of the network - since the network is stronger when you have a huge number of individual participants.

ASICMIner makes something like 720,000$ per day, yes?

Half goes directly to friedcat.

320,000$ per day

Asicminer can add 1 TH for 10,000$.
Asicminer pays ~0.02 c/kWh (Industrial rates)

There is not ONE. SINGLE. COMPETITOR. ANYWHERE CLOSE TO THIS MARGINAL COST

ONLY a company that BOTH DIRECTLY CAN BUY CHIPS FROM TSMC AND MINES THEMSELVES COULD EVER HOPE TO MATCH THEM

That means he can afford to add 32 Terahash PER DAY based on his income.

He's supposedly adding "only" 200 TH this year?

That's literally less than ONE WEEK of profit.

And you fucking believe him?

Do you have any fucking clue how EASY it is to add hardware and RUN IT PRETENDING TO BE SOMEONE ELSE?

Do you seriously think they're immune to the greed and tragedy of the fucking commons that literally is the fucking lifeblood and driving force behind all bitcoin mining?

It is a shady organization, of which we know only one person's online alias, probably only a small handful of people, based in china that nobody knows anything about.  You are LITERALLY trusting in him to "please, don't keep adding mining hardware despite the fact it's 5x more profitable for you than for anyone else.  Please don't lie and mine as someone else"


reminder : conspiracy theories require a grand involvement of lots of people.  This would require about 1 days work of the small group of people involved at ASICminer.  You'd never be able to detect it, you'd never be able to find out, you'd never be able to stop it, and it's literally the difference of millions of dollars of extra profit for them.  Why WOULDN'T THEY FUCKING DO IT?

Every single miner on this board would do it, if they could.

No one would kill a milking cow.They smart enough to keep on milking. Balance is inevitable.

No

Right now Asic miner is milking one teet, leaving the other unmilked.  They can milk the cow even more just by pretending to be "regular users", they have literally no limit to how much of the network hashrate they control.

https://bitcointalk.org/index.php?topic=99497.msg2788821#msg2788821
Franchising of course

You got a source for this or did you just pull a number out of your ass?

By my (limited) calculations the total BTC mined per day is:

24 hours x 6 blocks per hour (maybe 7 in reality) x 25 coins per block = 3600 BTC (or maybe 4200).

The total value of these coins at the time of writing is about 3600 x US$87.9 (from BTC-e) = $316 440.

ASICMiner has about 10-20% of this which is $31 644 - $63 288 per day.

How do you know Friedcat takes half of ASICMiner's profit?  Isn't he entitled to make a lot of money since he had the balls and foresight to start up ASICMiner? This is a capitalist economy, if you don't like it get out of ASICMiner/BTC.

Disclaimer: I own ~1.4 AM shares. Yay me :)

i said 'yes?' because i wasn't sure, i had seen that # thrown around on the board

I recall seeing friedcat listed the total profits and stuff, i think it was ilke 180,000 BTC?

That's like 16.2 Mil, call half 8 Million.  If he's adding 200 TH only, that's 2 Million dollars.  So he's re-investing only 25% of the profit.. even though the ROI is fucking fantastic for him with his hardware costs?

Never said he is not entitled to it.  I'm simplying analyzing the numbers.  50% of the profits go to share holders, the other 50% to friedcat.

We don't know who else, how many people, etc are involved with ASICminer, I don't think we know anyones names, where they actually are (just somewhere in china, presumably), anything.

But it would be insanely trivial to just add your own hashing power, have the correct proxies/vpn/vps/anonmizing services in place, and split it up into reasonable "BFL miners" or "Avalon miners" on all various pools.  Launder the coins through a mixer, boom.  There's no limit to how much hashing power you can add, and they can do lip service to "preventing a 51% attack and holding up the 'integrity' of bitcoin."

However, if he can sell hardware at a 1000% markup, that may very well be more profitable at the current time.

I simply don't believe he would only spend say, 10% of his profits to make more miners.  Especially when his insanely low $/TH and power rates means that asicminer, and asicminer alone, can keep adding hardware long after it never makes sense for ANYONE else (i.e. 22,500$ or so for 1TH from KNC is the best you can get, Asicminer only pays 10,000$).  The only limit to when it stops making financial since is as he approaches something abusrd like 80%+ and he'd just be taking marginally less away from the scraps left over for everyone else.

We'll see how the next year or two plays out.  I bet he can hit 7,500$/TH or better with the next line

The whole point of bitcoin is that it inverts the tragedy of the commons - everyone trying to take as much as they can actually makes the network stronger - the goal is to benefit the people holding the currency, not indefinitely allow miners to make massive profits.  The huge wealth was really only meant to go to the 'early' adopters, and we're no longer in the early adopter phase.


Friedcat can do it, so can any other rich person who can afford to fab their own chips. KnC, HashFast and could both easily.  They have superior chip technology and could easily push ASICMiner out.

And that's the problem with assuming that Friedcat could take over the network: If it's a 100% sure-fire way to make money, other people will try to do it as well.  BTCGarden is trying to startup with the same business model.

Anyway, it sounds like you're just mad he has a better cost structure then you.  In the GPU days, everyone had access to basically the same hardware at a pretty low unit cost. Now, people who can spend hundreds of thousands of millions of dollars in R&D costs can fab their own chips and blow the little guys out of the water.  

Does it suck for the average miner?  Obviously.  Is that how the free market works? Uh, yeah.  It is.

___

Also, there is a point of diminishing return when it comes to adding more hash, because if you make up a significant percentage of the network, adding capacity will add a significant amount to the difficutly.

So, for example if you have 90% of the network, and you double your capacity, you obviously cant have 180% of the network, right?   What you actually get is about 94.75%, about 5.5% more then what you started with.

If you own 20% of the network, and you double capacity while no one else does anything, you only you go from 20% to 33.3%, not 40%. So the cost relative to the share goes up as you try to increase your share.

Man this is why I love all the PoW+PoS coins, thank you Sunny King for PPC and Balthazar for NVC.

Why.  By any account ASICMiner shareholders have a huge stake of coins (unless they sold them). 

This.  The cost is relatively linear.  Electricity is perfectly linear, chip costs are nearly linear because as total production volume increases the % that is the fixed NRE declines.

So hypothetical numbers. 
ASICMiner has 40TH/s.  Network is 200 TH/s. 
Cost = X Network Share = 40/200 = 20% Revenue Share = 20%.
Revenue Share per unit of cost (X) = 20%/1 = 20%

ASICMiner adds 40 TH/s.
ASICMiner has 80TH/s.  Network is 240 TH/s.
Cost = 2X Network Share = 80/240 = 33% Revenue Share = 33%.
Revenue Share per unit of cost (x) = 33%/2 = 16%

ASICMiner adds another 80 TH/s.
ASICMiner has 160TH/s.  Network is 320 TH/s.
Cost = 4X Network Share = 160/320 = 50% Revenue Share = 50%.
Revenue Share per unit of cost (x) = 50%/4 = 12%

Each doubling of capacity produces less revenue for the same amount of cost.