Im not sure what Im missing. At $1 per GH, 40K chips x  650GH per chip = $26M, so that chip inventory alone is worth at least $20M (assuming they are chips, not dies).
Just as importantly, there is the maskset and IP that allows a nearly unlimited number of chips to be produced, almost certainly for a cost that is below $100 per chip in volume (my actual estimate is $35), and a market value that of course will drop, but is still >$500 today and will remain well above $100 for quite some time.

Im just a bystander, but chapter 11 makes most sense to me. Perhaps with a forced change of management, but clearly there is potential to turn this around.

YOu clearly have not thought this through. Reinvestement is not different from a regular investment, the only difference is the source of the funds. If reinvesting makes sense than so does investing. But guess what, its not always smart to invest in mining, and certainly it will not always be, and most certainly not at price points and conditions you have no control over. What hardware will cryptx buy, at what price and when? You have no idea, you are just guessing he makes the smart move (and doesnt pocket the kickbacks).


If cashing out weekly does not recover your initial investment and running costs, plunging in more money will not make it better, it will make it worse. The only difference is that the "amateur" may be able to recoup at least a part of his original investment while the professional idiots who throw all their revenue back in to mining gear time and again, no matter what the market conditions are, may well ultimately be left with basically nothing from their original investment. You are making the gamble bigger, but you are not changing the odds. If you dont grasp this concept, try your reinvesment strategy on Satoshi Dice, let me know how it works out.

Time to bust a myth; reinvestment is not a good thing for investors, its a very bad thing. It does little more than locking in future revenue for additional purchases that may or may not make sense at that time. If you were paid out all profits in dividends, you would be free to determine at any future point if it makes financial sense to purchase more, newly issued shares and at what price. Being robbed of that choice is a liability, not an asset. You seem to assume that any expansion at any price and any point in the future is automatically a good investment.

IANAL, but the above Im pretty sure is completely incorrect. Even oral contracts are usually enforceable:
http://blogs.findlaw.com/law_and_life/2011/10/are-oral-contracts-enforceable.html

And in this case, its written down, and not by a random sales rep, but by one of the company's principle officers and cofounder.

Actually, most asic vendor are also selling bare chips.
Cointerra, Spoonsomething, Bitfury, HF Bitmine, ..

They may not focus on it (yet) like AM does, but AM's business model is hardly unique.

Oh, Im pretty sure he already is in trouble over selling unregistered securities to unsophisticated buyers, if nothing else. But whatever deal he struck with HF, I dont quite see what would be illegal about that for him to do. ANd if you are hoping on clawback's from Belize, good luck.

VMC. They are selling both the old HF boards as "Fast-Hash One Prospector", rated at 512GH, and the new yoli evo whatever boards as "Fast-Hash One Gold Rush" rated at 750GH. Its not like they tried very hard to cover that up, just flipping the name lol. Both are reportedly in stock.

http://virtualminingcorp.com/shop1/index.php?id_category=15&controller=category

VMC is wholly owned by ActiveMining, registered in Belize and run by a very shady person. Their funding comes from  a bitcoin IPO.

Actually that spread is smaller than I would have expected intuitively. How did you calculate it? Did you base it on the assumption that on  average a block is found every x minutes (and then applying a poisson distribution), or did you use crunch the numbers calculating for every GH/s the chance of finding a block ? The result might (should?) be the same, but Im a little hesitant to accept that as fact.

Actually, an average of 5% per difficulty adjustment (assuming that is what you meant) for the next two years is extremely unlikely at todays price. That would mean difficulty in two years would be more than 100x higher than today rendering even the most power efficient machines operationally unprofitable for almost anyone. Of course the last ~18 months of that 24 month contract dont really matter, and during the first 6 months it will be well above 5%, so you wont hear me saying this is a sound investment, but on average difficulty adjustment over that period of time will be FAR below 5%, assuming constant BTC price. So how much do you want for that bridge?

My sources tell me TSMCs 20nm finfet+ process is in such  terrible state that you should expect close to zero devices this year. Everyone and their dog is scrapping 20nm products and/or running from TSMC.

Now Ill grant that a bitcoin asic is by far simpler than a CPU/SoC/GPU,  so if anything can be made to work on their process, it may well be a bitcoin asic, but to say that things go worse than planned would be quite an understatement. So Im not holding my breath.

In other news, lead time for 28nm just increased to 16 weeks:
http://www.kitguru.net/components/anton-shilov/tsmc-extends-28nm-chip-lead-time-to-16-weeks-puts-chip-designers-at-risk/

Thats just TSMC, but Id expect spill over effects to the other fabs just as well.

Their estimates are averaged over a different period. The latter averages over 504 blocks, the former Im guessing over 24 hours.

Using your calculator, its actually 0.013% since you should be looking at the cumulative probability, ie, the chance of hitting 90 blocks or more when 59.4 is expected.
So it would happen more than once per year on average.

But Id also like to see which blocks we are talking about, not sure anyone accounted for the fact that time stamps on these blocks can be wildly off, up to two hours IIRC.

Not a funny feeling no. But Id gladly bet all my coins its AMT posting yet again using alias accounts.

SO how does that work? Because exchange XYZ can prove it holds all the bitcoins it owes today, that by itself to you is a guarantee they wont lose yours tomorrow? Sounds like you dont understand the difference between an audit and a deposit insurance.

Obviously. Although I would call it a statistical normality. You are not measuring hashrate, you are measuring the rate at which blocks are found, and we all (should) know thats inherently variable.

Amazon is already on record that they will not be implementing bitcoin for now:
http://recode.net/2014/04/14/amazon-says-no-to-accepting-bitcoin-maybe-to-building-an-amex-or-visa-competitor/

As for "to the moon"/"big things", Virgin Galactic already accepts bitcoin, so that would be old news.

Im guessing Bitpay is being taken over. Quite possibly by Paypal.

Not a bad article, although I dont quite follow you on the conclusion: "Ultimately it is unclear how the mining dilemma can end up having a happy ending for anyone but the energy suppliers". Pretty much all asic suppliers (that dont get sued in to bankruptcy or worse) will have their founders enjoying a happy ending sipping pina colada's on an exotic beach. Thats a happy ending in my book .

How do you define a crash of the mining market? If you mean that hashrate will implode, fat chance . IF you mean that mining hardware sales will dry up, well, think about the consequence of that. If indeed hardly anyone were to buy miners anymore, the one thing that will surely happen is that prices will plummet, considering most mining asics are still sold at the very least 10x above marginal production cost Clearly vendors would prefer to sell at 5x, 3x, 2x marginal cost over barely selling anything at all.  And if prices plummet, miners will buy again. Its this very mechanism, a spiral of death of exploding difficulty and plummeting prices that caused this, what you call bubble (and what I warned you against if you remember). Its not stopping anytime soon.

"Again you need evidence that lowering voltage to increase efficiency is possible"

 Quod est demonstrandum. Back to ignore.

You're missing the fact there is/was a discussion going about scaling of power efficiency.  For every asic you could draw a similar plot, and power efficiency can be traded for performance per chip. Something obvious to anyone who knows anything thing about asics, but apparently impossible to grasp for jimmothy.  As for pricing, current market prices are so far detached from variable production cost, that for now, this is a moot point. Vendors will charge whatever fools are willing to pay, there is basically no correlation with production costs yet. That will only happen once price per GH has dropped another order of magnitude or so.

As for my "options". The only sensible option is the same one since the very first asic was announced: stay away from them, just invest in bitcoin. Doing that has yielded me 100% BTC denomnated ROI or ~10000% when expressed in dollar. How many miners can say that?