Bitcoin Forum

Why do mining companies sell their miners?  In other words, why would anyone honestly sell a money making machine?

I am interested in hearing a reasoning that I have not yet come across before.

Do not post if you are going to say that:

mining companies mine with the machines and sell old hardware for profit. (people exceed ROI on certain machines)

mining companies need pre-orders as start-up money for their company.

companies do not have space to run their miners.

just because...

they believe in the idea of having decentralized servers.


     These are all good explanations but I want to hear from another angle.

Answering shortly: Why would anyone "sell" a money making machine?
To sell it and prduce another one and sell it and produce another and another...

Main reason. ;]

Because there are people who need (i mean want) to buy them.

If: you setup a company and make the machines and use them for yourself,
And: everyone else does like you,
Then: the people who cannot setup their own companies and make machines will still be left out in the cold
Hence: there will come someone who caters for the needs of those people out in the cold
Why: it is no so innocent, as per the previous reply, they need money to make their own machine, where do they got the money from? you of course.
How much: the ratio is 6 to 1. For every 6 dollars you pay, 5 go into their pockets, 2 of those are costs and 3 of those are to make machines, so using your own money to finance them and beat you 3:1.
Finally: since one such company existed, other people copy the idea, like they copy the bitcoin.

indeed! :) You said it in very nice way!

Cheers indeed!

It would take a massive amount of electricity for a company to use even a small percentage of the amount if hardware they could sell.

They can sell money printers for more than they will print in their life. And as someone said once you have the money upfront from selling the hardware you can make/sell another batch while the customers are left slowly hashing away.

Also nobody is saying that they don't use their own hardware because they all most likely do. Just that selling hardware is much more profitable than mining alone.

What do you think "delays" actually means? Not that the units aren't ready in most cases.

+1

Exactly.
The manufactures can get more bitcoin selling the hardware, and they can get it right away (instead of operating the hardware for a year or so).

Cash up front NOW guaranteed, as opposed to possible undetermined cash potential in the future, that costs you money, before it makes you money.

That... and this...

Charge them 100% more than it costs to make...

1 for me *
1 for bob
1 for me *
1 for sue
1 for me *
1 for joe
1 for me *
1 for dave
1 for me *
1 for jess

Total:
5 for me (50% of the market)
5 for others (50% of the market, or 10% each x5)

End of the day, I spent $0 for my 50%, and you spent 200% for your 10%... I win. Not to mention, I can cash-out 100% faster than any one of the 5x miners can... at a lower price. Take your money both ways... Have a nice day!

Also...

Make 1000, keep the best 500 for yourself, sell the 500 slower ones... (Future market security)

P.S. China, selling you USD prices for the same miners are making 3 for them, 1 for you. You are paying 4x more then it costs them to make them.

Maybe the answer is simple - they want fiat money not btc as btc is volatile and because they can use this money to make a new hardware and sell it again and get another profit

It's like the tortoise and the hare.
Say it takes a day to build a machine that costs $90 in parts, sells for $100 and which earns $1/day net allowing for power costs etc.
A builder can build a new machine every day.
If they keep their machines and create a "farm" they need a lot of money to finance the parts.
If they sell the machines they make a daily profit of $10.
The farm doesn't break even for 180 days and is $4005 in debt on day 90.
The sales plan has made 900 on day 90  ($4905 ahead of the farm) and $1800 on day 180  ($1800 ahead of the farm)
but the farm catches up with the sales plan on day 200 and thereafter earns much more.
Most small operators can't get over the initial loss period and prefer to make steady profits selling machines.
They probably also have limited space to run a machine farm so start selling them when that is maxed out.

Capital... You get pre-orders you can pay the stuff to make miners. Which you sold...

You don't have money, you can't make stuff to sell...

And we are quite far beyond the point when mining was a good profitable way for manufactures. Now it's finding a fool who buys the stuff they are currently making...

I am also wondering why companies are selling their machine that can mine a lot of bitcoins.

The cost of powering and cooling miners does not scale linearly.

Electrical Services can either be at secondary voltage or primary voltage.

Secondary services are generally simple to setup since they are built to standards.  These types of services are usually found in residential and light commercial installations.

Primary service are not so simple to setup since they are engineered.  These types of services are usually found in heavy commercial and light industrial installations.

Heavy Industrial installations are usually served at transmission voltage which is a whole different matter.

In any event if you where going to find a space to mine your Bitcoin, which type of service would you think is the cheaper?  A secondary service is cheaper by an order of magnitude sometimes 2 orders of magnitude depending on how many parties are involved.

So if I was building Bitcoin miners, there will be a point where I need to concentrate on either building Bitcoin miners OR building Bitcoin mining facilities.

Most Bitcoin miner manufacturers dabble in mining but stick to building miners because building Bitcoin mining facilities is a whole other industry.

New mining equipment are not made for household.

You should go to a datacenter that does co-location and rent space and vpn and cooling and power for them.

By them time you get three, you wouldn't be putting one (1) device , you would be putting more, hence big capital for you as a miner.

Mining Bitcoin at home for kids is ancient history, go mine maxcoin or something, it has become highly professional.

I completely agree, couldn't have said it better myself lol ;)

Because these money makers lose value every day.

if only Miner company's mined Bitcoin then there would be no value to the coin.

because they can make more money faster selling machines  ;)

Because first they make money by selling and then by mining on you pre order machines.As the difficulty rises and customers gets fucked up by not getting their machines in time after then they ship the machines.

When a money making machine is no longer profitable, the best thing to do is selling the thing xD

It's like the California gold rush. You could pick up a sieve and go find a little gold, or you can make thousands of sieves and sell it to thousands of prospectors.

Some people like the rush of being prospectors and aren't in it for ROI. Don't get me wrong. ROI is certainly nice but after a while, the feeling that you are part of something much bigger than just seeking ROI becomes exhilarating.

I used to think that way but it's not true.  Gold prospecting is luck based because a guy with a shovel can possibly find more gold than a guy with a bulldozer but the profit from bitcoin mining is much steadier and dependent on the size of investment due to pool mining.  Having said the previous, I just purchased 6 Antminer S1's from Bitmain and 3 psu's from Tigerdirect so I am back to mining.  The difficulty did not spike as expected so I decided to get back into the game.  Bitmain is a great company to buy from because their Antminer S1's are available now(not pre-order) and they decrease the purchase price as mining difficulty goes up.   People who bought from Cointerra or Bitmain earlier this year made some pretty good money.

In the hole world the companies making and selling the machines for printing fiat are currently no more than 4
They are selling them instead of printing some for themselves because they do not control the $ EURO or other currency.

I guess same is the bitcoin the control is not with KNC BFL or BITMAIN but to you to me to any user that reads this post and mines or owns bitcoin.
Having said that added to my collection one more antminer S1

Note to self in future: Never pre-order from BFL again (again)

Because it is easier to sell the mining machine for a fixed price, then mining bitcoins and dealing with the huge hassle of selling them on exchanges for god knows what price. You also aren't sure if the exchange will ever even pay you out. Most of these bucket shop's use pre-orders to finance their builds.

It is simply easier to run a business with actual invoices paid in dollars, then having to explain your bank account flooded with unknown wire transfers from shady locations. Simply stated, you will become a millionaire faster selling "mining equipment".

Well miners are finding it difficult making a profit with increasing difficulty and faulty hardware. So the hardware makers are probably making more. 

Lol, BFL is still selling their lovely 10 g/h Jalapeno for ONLY $349.  2 Jalapenos $700 for 20 g/h or 1 Antminer S1 + psu $750 for 180 g/h, decisions....decisions...

Umm, 2 Jalapenos bought at once cost more than two bought individually? ;D

A Jalapeno in hand worth two Monarchs in the bush

Most of the companies sell there miners at the same cost that they will ever mine. This is the safest play for the companies instead of mining with them and guessing that the diff will not go up too fast and having to "wait" for there money.

So you reccomend to mine by yourself?

if the electricity worth more than profit It can take, than just sell it.

Because designing and a building a new machine is fun, but it all needs to be paid for.

With their logic, possibly.

Oh,ihave to say there are several reasons
First the company need cash flow,if they keep the machine ,it will take about 2month to recover the cash,but if they sell it ,it only need
about 2 weeks .This will let them make more money.
Second, when they sell machine which can make money for buyer,they also atract a lot of people to know btc ,to use btc.I think it is good.

Not only that but they will mine with the machines for a week or a month or more before they sell (re-sell) them to you (the retail buyer).  LOL

HAHA