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.

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...

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!"

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.

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.

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?

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.

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.

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.

AM ASICs are certainly well-tested. That's one of the advantages of AM running their own mining operation alongside the hardware sales - it's an excellent way to ensure that you're putting out quality products.

Eating your own dogf... err.. catfood, as it were! (http://en.wikipedia.org/wiki/Eating_your_own_dog_food)

Great news! Thank you for all your hard work and dedication, OgNasty, it is greatly appreciated.

Edit: Also a huge round of applause for Mr. President Nonnakip!

A lot of people believe that it will have no effect.

However, I believe a high BTC price will increase the incentives to mine, so network hash rate will increase dramatically. This is definitely negative for mining revenues. For hardware revenues, it will reward the producers that can pump out hardware the fastest - it could go both ways for AM.

Overall, [in my opinion] a significant rise in USDBTC is bearish for AM shares (in terms of BTC).

No baked cat up date today? 

That's like comparing a computer from Apple to shares in Apple. One is a share in a company, the other is a product from a company.

The hardware has no capability to grow or to strategically adapt, but the company has - and in my opinion you are underestimating that ability.

It's hard to believe you are working on ASIC mining hardware and don't even know how to secure your coins.

How is your ASIC going? Will it be half the price of the competitors and use a die size of one tenth, perhaps?

Something is happening:

https://bitcointalk.org/index.php?topic=217104.0

(USB Miner price lowered to 0.99 BTC, distributors announced!)

Sold!

Edit: Escrow of your choice, I will even tip handsomely!

Undeniable facts:
1) There's certainly no shortage of dribbling fools amongst AM investors.
2) Competition is coming, and will give AM a run for its money - no doubt!

But I am curious: how do you go from "competition is arriving" to "share is overpriced"?

Most investors are not complete idiots (well, at least some!), and have taken that into account - and in my opinion, the share price currently reflects that. So, could you show how you calculate a fair share price based on your assumptions?

Then we agree on that point. What makes you think the possibility of the scenario you describe is not already priced in?

As I see it, if that scenario was not already priced in to some degree, the share price would be much, much higher.

I agree with this part:


However, I believe most investors have considered it too (particularly those with more than "half a brain"), and that it is priced into the share price at the moment. There's no surprise that there will be competition. But AM has enormous competitive advantages - they won't be able to sell at 50 BTC anymore, but their process (130 nm) is most likely cheaper than all competitors, giving them better profit margins on their products.

So the current monopoly-situation will eventually end, but AM has everything it takes to compete head-on with the competitors (and win) when they eventually arrive.