(...) we're speaking about a multi-million company now, not just three guys doing everything from A to Z in their garage! (...)
Does one actually exclude the other? And does anyone know if there are any employees, or if there are just the three founders? I mean, what they have managed is pretty impressive, and there are good reasons to keep the ship tight and not incur too much overhead if it can be avoided. |
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I find Prediction Markets extremely interesting tools for information aggregation and forecasting. With Intrade now folded, I am really missing a good source of information, and I think a decent prediction market for Bitcoin would attract a lot of positive attention (how many journalists quoted Intrade during the presidential campaign?) and provide plenty of useful information.
[Please, don't make me explain once again what is wrong with the parimutuel BetsOfBitcoin and BitBet model!]
After coding several working examples of a Bitcoin prediction market (launch ready!), I realize that I do not have the time to operate it [even though it could probably be quite lucrative].
That is why I have been thinking a lot lately about how to take myself out of the whole equation, and I have come up with a design for distributed prediction markets. The idea is pretty simple and I have coded up the basic foundation - now I thought it would be time to throw the idea out there and see what the response is like, and get ideas of how it can be improved.
The basic idea is simple, let me illustrate with an example:
Alice wants to create a prediction market for a [binary] question with outcomes Q=0 or Q=1. She then creates 18 bitcoin addresses, and announces: if you believe there is a 10% chance Q=1 send bitcoins to ADDRESS1, if you believe there is a 10% chance Q=0 send bitcoins to ADDRESS2, etc. A simple trade matching engine matches transactions with each other when their prices (probabilities) intersect as they appear in the blockchain. Furthermore, all participants can verify the transactions, trades and see which transactions are unmatched because it is in all in the blockchain for everyone to see - as long as all the participants have agreed on how the transactions will be matched. So everybody can see and verify the trades and the order book. When the outcome is determined, the matched trades can be paid out by Alice, who controls the addresses, and the unmatched orders can be returned [all to their originating address].
It is pretty foolproof, but it has some drawbacks: (1) trades/updating book happens in blocks every ten minutes (2) not always a good idea to return funds to senders address, etc.
The code I have written so far is simply to monitor the blockchain, match trades and hold the order book. It is not quite ready to be distributed yet, it's very rudimentary.
Depending on the feedback here, I may release it pretty soon.
Any suggestions, questions or comments? Would anybody consider using such a distributed prediction market?
[If you want to see it happen faster, help me justify spending more time on it: 1LCxFUwBWchSf9nRnNNSRGDEygm5iv52p1]
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I wouldnt feel good with AM accepting credit card payments. Thats way too risky. Similar to getting paid with paypal.
So all the websites that accept credit cards are doomed and should immediately stop ?  No, but this is a BTC business and it is in all of our best interests that they only sell for BTC. I kind of agree, but kind of disagree too. Selling mining gear in traditional currencies might engage people who cannot get hold of BTC otherwise. Then again, selling for BTC grows the "bitcoin economy". In my opinion, one doesn't need to necessarily exclude the other, as long as risks are properly considered... |
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• "Which is ASICMINER's bus factor?"
His post history indicates the answer is: 3. I've looked over friedcat's history and didn't see anything that indicated that. Do you have any specific posts that provided that information? According to this post (July 3, 2012) there are three founders: "We" the founders are three people at this moment. One of the partner has been working on the hardware section of a general purpose CPU design group. The other one has been working on the software section of a embedded-system-oriented CPU group but is heavily involved in the front-end of hardware design.
So we have the ASIC experience, but in different larger projects, and as smaller roles than, say, "they are made by just us".
My assumption is that having three founders means that the business would be able to continue even in the absence of a single person. Whether or not that satisfies an arbitrary person's request for an explicitly stated "bus factor" is up to them, I am at least happy with this statement together with my assumption. |
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On that note, I think someone should compile a list of FAQ from shareholders that have gone unanswered. This list should be have no more than 3 questions at a time, and be posted in some kind of clear, concise way here, and in a pm to Friedcat. We should not waste his time with bullshit requests, but real relevant questions would be nice.
• "Which is ASICMINER's bus factor?" His post history indicates the answer is: 3. |
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NEED DATE!
Kiba NEEDs moderation rights in this forum ! Kiba needs a button that lets him taze someone across the internet... |
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What blades are you talking about?
It should work out approximately the same for both the Block Erupter Blade and the USB miner, since I imagine power consumption is approximately the same... It must be some error in your calculations, usb miners can't never be profitable unless diff drops. Double negative statement is false. Your ROI will take longer when diff increases, but eventually it would be reached. Not necessarily. If income is limited by device lifetime or user patience, (say ~ four years) then with increasing difficulty an ROI may never be reached. My calculation shows that marginal revenue exceeds marginal costs until network hash rate reaches 30 peta-hash (using current prices). It has nothing to do with an ROI calculation, which is quite different, because I disregarded (sunk) fixed costs. I think most people would regard profitability as the amount of income they receive after costs. If you're disregarding the amount you paid for the device, then of course they will earn you more btc than your ongoing costs, and for a long time. The point is, will enough btc ever be earned to pay for the device? Hard to say, but it might not happen. I agree that ignoring fixed costs is hard/impossible/unreasonable/unwise for a consumer purchasing a miner. I may have made myself misunderstood, because the point I was trying to make was slightly different: I was thinking more about the power efficiency of the current-gen technology, and at what point mining no longer pays for the electricity consumed. When mining revenue no longer pays for the electricity consumed, then I would consider the technology obsolete. So that if you have, say 30 TH of mining power, with this technology already deployed, it makes financial sense to continue mining until network hash rate reaches 30 PH. At that point, the technology will be obsolete and only more power efficient devices should continue mining. It means there is plenty of room to expand, even with current-gen technology. |
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What blades are you talking about?
It should work out approximately the same for both the Block Erupter Blade and the USB miner, since I imagine power consumption is approximately the same... It must be some error in your calculations, usb miners can't never be profitable unless diff drops. Double negative statement is false. Your ROI will take longer when diff increases, but eventually it would be reached. Not necessarily. If income is limited by device lifetime or user patience, (say ~ four years) then with increasing difficulty an ROI may never be reached. My calculation shows that marginal revenue exceeds marginal costs until network hash rate reaches 30 peta-hash (using current prices). It has nothing to do with an ROI calculation, which is quite different, because I disregarded (sunk) fixed costs. |
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What blades are you talking about?
It should work out approximately the same for both the Block Erupter Blade and the USB miner, since I imagine power consumption is approximately the same... |
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Just wanted to share a short calculation I made that put some things into perspective.
I asked myself the question: until when will these blades continue to be profitable to mine with?
And the answer is surprising*: The marginal cost to produce one BTC with ASICMINER hardware is currently 0.435 USD.
At the current price of ~130 USD/BTC, it continues to be profitable to mine with this until the total network hash rate reaches around 30 peta-hashes per second - or to put it differently, until network hash rate has grown by a factor of around 250.
TL;DR - "prev-gen" (130 nm) hardware to continue to be profitable for a long time!
* Assumptions: 0.10 USD/kWh power costs, and assume away all fixed costs (hardware costs, operation, space rental, etc.), that is, focus on the marginal cost.
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(...) competitors are weeks away from delivering 30x the efficiency (...)
Ever since August 2012 competitors have been weeks away from delivering more efficient hardware. But where did you get "30x the efficiency" from? As far as I know, there is no technology that provides that, even 22nm would not achieve 30x the efficiency... |
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I agree. Just setting-up a professional-looking website, AM could sell astonishing quantities in pre-order for up to one year from here without problem, because their competitors look slower (to say the least  ) and because of the incredibly good reputation AM has (justified). I would imagine people canceling BFL order to jump on this. Please no pre-orders! :S Pre-orders gone awry can really taint a company's reputation, better to stick with friedcat policy: sell when ready to ship!  Edit: Apart from that, I agree - if it were easier to buy (i.e. didn't require PMing back and forth, organising group buys for hundreds of people, etc.), the hardware would command a higher price! |
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Looking forward to today's update, looks like deployment has progressed the last week and sales are strong.
Would also be interested in hearing where in the process the 200TH order is, and how far the planning for next-gen chips has progressed.
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You'd better add a correctly formatted date to your title and a link to the article quickly - before Kiba comes around and throws a hissy fit!
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(...) The offering price will be 0.0005 Bitcoins (...)
100 million shares at 0.0005 BTC/share - does that mean that a month-old company whose only apparent tangible assets is a non-delivered order for 6 avalon machines has a value of USD 6.6 million? No, the capitalization is the number of issues shares times the share price. This would be 40,000,000 * .0005 = $2,640,000 http://en.wikipedia.org/wiki/Market_capitalizationUnderstand. Company: established 2 months ago, assets amounting to one non-delivered order of 6 avalon machines (and some plans about future growth). Market value: USD 2.6 million. Correct? |
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(...) At 40% AM would receive 2400 a day on average (40% of the average of 6000 coins per day) (...)
Just a small correction on this: 25 BTC per block * 6 blocks per hour * 24 hours per day = 3600 BTC per day. 40% of 3600 = 1440. (Assuming steady-state difficulty and hashrate.) Now please continue with your previously scheduled discussion... |
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(...) The offering price will be 0.0005 Bitcoins (...)
100 million shares at 0.0005 BTC/share - does that mean that a month-old company whose only apparent tangible assets is a non-delivered order for 6 avalon machines has a value of USD 6.6 million? |
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Seems like the mining revenue for ASICMINER is going to 1HtUGfbDcMzTeHWx2Dbgnhc6kYnj1Hp24i: https://blockchain.info/address/1HtUGfbDcMzTeHWx2Dbgnhc6kYnj1Hp24iAt least the coinbase transactions in their solo-mined blocks, and some transactions that appear to come from pools. Total received at this address: 50433 BTC  Edit: Relax about the unconfirmed transactions, guys, seems the network is low on luck today (~1 hr since last block at the moment). |
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Update
The mass production of Block Erupter USB is to be done today. Busy testing and packaging will start.
About the argument of dividend payments, our view is that we will distribute the net income after necessary costs are excluded and funds for foreseeable future (expansion, gen-2 chips) are reserved. Bitcoin is already an investment itself having a great potential. Any investment, no matter how profitable, based on "turning Bitcoins to fiat first" requires double consideration. We can invest the RMBs to bonds and they are almost bound to be more profitable than just holding the RMBs, but we can never say the same to Bitcoins.
So we feel that it is most responsible to let the shareholders decide how to do with the abundant Bitcoins. We will of course find other investments (which are focused on helping the Bitcoin economy therefore benefit all Bitcoin holders), but they are all involved in different risk and return model than a mining/mining hardware company. The shareholders of ASICMINER are in principle not supposed to bear the new different risks on doing other business than Bitfountain's. So if there are new investments, they will be as new adventures, in new collaboration structures, and after a significant period of time since ASICMINER is always the most important job for us to do before the company could gradually run itself with a little less founder involvement.
Thank you, friedcat. Your strategy sounds both wise and prudent. Congratulations on the success of you and your team, you certainly deserve it. |
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[...] I invested because i get a reward. [...]
I guess everybody did. But the important part is the rewards over the lifetime of the company, which is why keeping some of the earnings in order to grow the company can be a sensible idea. I trust the management to make those decisions, they have a very impressive track-record of making excellent business decisions so far. |
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