I have Inaba on ignore.  But I assume he's busy claiming to not be a liar.  Here is case in point, posted today:

What are you talking about?

I am talking about nearly every thread created by BFL pitching their ASICs in the late spring / early summer of 2012 being hidden in off-topic.

I can't say when they were moved, but there were many threads full of claims that were obviously false by early 2013 that were no longer where they belonged when I looked in that time frame.

Who moved them?  And why?

How many threads full of BFL's lies from 2012 were moved from this forum to 'OFF-TOPIC'?

Moderators have taken an active and quite biased role in the development of this ridiculous business model.

People are still handing BFL money for vaporware.

Concerning yourself with the future actions of others is a waste of energy.

In your shoes I would be more concerned with figuring out when you actually will get batch I orders fulfilled.  Do you know how long it takes to make a volume build of circuit boards?  How much expediting the builds costs?

Ever wonder why the recent statements about shipping sound an awful lot like what Josh was saying for 9 months straight?

Your approach is good, but the numbers are bad.

AMD buys components for 100s of millions of boards. They have full time staff ordering quarters in advance and negotiating hard over every 10th of a penny (literally!).  At best mining hardware supplies will build a few 10s of thousands of systems.  At that level, the manufacturers of components won't even pick up the phone.  They will have to buy from a distributor who buys from a wholesaler with markups at every stage.  Double the component cost and you'd have a good number for the end of next year when manufacturers can negotiate based on a stable build plan.

Packaging costs for the kind of silicon being used here often higher than the silicon.  And yield can suck at both the silicon level and the packaging level, especially with the multi-chip modules being used by Hashfast and Cointerra (I have no idea what bullshit labs is doing, and will never care).  Packaged silicon costs are going to be more like $150-$200 per Th/s at best.

That just gets you to a bare board.  To get to a system level you still need cooling (high performance = high cost), a case, and power supply.  All that puts you in the range of $400 / Th/s cost at best.

Then you need to account for overhead.  Each of the professional companies have staffing on the order of 10 people, many of whom command high salaries.  Offices, health care, travel and marketing all have to be shared over the units sold.  Let's assume your typical company moves 50 Ph/s in 2014, and has $2.5M in operating expenses.  (that would be tremendous sales, and low costs).  That would add another $50 / Th/s to the system cost.

Now, how much profit is going to be acceptable?  Especially since the alternative is to keep the hardware and operate it yourself.

Prices will come down, but not as much as you think.

At today's BTC prices you won't see anything getting turned off until we are in the 75 Ph/s region. Even then, the gear that is no longer cost effective to operate will be a small part of the total rate, so the result won't be noticeable.

A larger factor in network growth will be the time to break even on the hardware investment.  Puppet is very optimistic about price reductions, with his lowest hardware cost being less than 1/2 of the cheapest pre-order prices.  On top of that, deployments at any scale have substantial facility costs for racks, network gear, cooling and power.  These can easily approach $1000 / Th/s.

Without more massive bitcoin appreciation, the risk reward for buying hardware will look pretty ugly by the end of Q1 2014.  Paying 10s of thousands of dollars, 4 months in advance is tempting when you earn your money back in 2 weeks.  When it will take 6 months of hashing with stable difficulty and exchange rates, the smart money is going to step back.

Batch 1 customers have a contract as well. 

I'm beginning to think you are just a troll.

No troll at all.  I said .000001 would be a decent risk if you like gambling.

If you aren't going to lose everything you had better learn how to value things.  Start with a simple proposition.  How much is this company worth?  Divide that by 25 million for the number of shares.  Then you can decide whether to buy, hold or sell.  If you do the work, you'll probably think my number is pessimistic, but you'll also see that .001 is laughable to the point of insanity.

Simple analysis like that made me a ton of BTC last year.  This year won't be quite as easy.

Every wonder why there aren't hundreds of BTC millionaires on this site?  Most of the early adopters were ripped off in forums like this and have little to no bitcoin to show for all their efforts.

Tapeout to finished silicon is ~45 days with a hot lot.  After that you have bumping and packaging, board assembly and test, etc.

 

I expect the network to be 100 Ph/s by the end of march.  It could happen sooner if the rumors I hear about silicon valley stealth operations turn out to be true.

What bitfury did was a herculean task.  He hand designed every transistor for the bitcoin proof of work.  And it is buggy as hell with 20% invalids due to design errors as I understand things.  It sets a standard for everyone else to aim for though.  And you can count on it that every design coming to market has benchmarked against that standard.  Even if ASICMINER matches that design in 40 nm, he's going to be overwhelmed by the sheer volume of 28 nm devices.  And on the retail side, you have customers that were ripped off (by their own choice) at prices that would never break even, and a lousy reputation because of the very high rate of failures being reported now.

Friedcat is a smart guy.  But it appears to me that his team has made more money than they ever dreamed of already, and don't particularly care about being the best any longer.

40 nm power efficiency will be completely un-marketable against 28 nm.

And ASICMINER's facilities will just be spit in a bucket for internal deployment.

It's still the wild west.  But the Pinkertons and maybe even some US Marshals are starting to work up the nerve to show their faces.

The first half of 2012 was insane.  You had thieves like Pirateat40, GigaVPS, BurtW etc., treated as heroes.  What wasn't being stolen by Ponzi schemes was being robbed blind in 'mining bonds' priced like perpetual annuities.  BFL raised several million dollars for their vapor-ware solely on a reputation for delivering a handful of FPGAs months after they had promised.

Nefario was letting any shyster list a company on his 'stock exchange' for a few BTC.  I don't think he even required ID.

Bitfloor was bankrupt after losing 25000 bitcoin in a 'hack'.  Roman didn't even bother to leave the parties at the London conference to handle the outcome. And people actually continued to do business with him!


Fun times.  But you needed a firm grip on your wallet.

Many were expecting a large price jump when the block reward halved.  That happened in November 2012 but price didn't respond as expected.  So sentiment wasn't all that strong.

Most of the speculation centered on how rich everyone with pre-orders of BFL gear would get in '2 weeks' when their toys shipped.

I didn't pay much attention to the forum in that time period.  I was busy operating the FPGA farm I bought knowing that Josh and BFL were frauds.

Friedcat definitely missed a huge opportunity on the sales side.  It was obvious in March that the demand for hardware would persist into the 10s of Ph/s.  ASICMINER could have supplied a very large chunk of that.

I'm sure it was amusing selling hardware at >$500 / Gh/s to fools that would never see BTC breakeven on the gear.  But he could have just as easily sold several Ph/s at $50 to smart investors who stood on the sidelines and kept their money in hand.  That would have been >$100M in sales. 

I actually contacted Friedcat regarding this direction as my family had resources in China and the US to support distribution at this scale.  Even though I was a large shareholder at the time, he never bothered to respond.

Now he's planning to come to market with a 40 nm product when at least 5 groups will have a 28 nm device available before him.  Talk about bringing a knife to a gun fight!

/100

The suggested maximum buy price, that is.  At <.00001 there is a decent risk/reward argument to be made.

I personally wouldn't touch it at any price, but there are no shortage of degenerate gamblers that enjoy investing in degenerate drunks.

It's already been seen.  This is bitcoin, things happen fast.

I couldn't care less what is done 3 months from now.  By then the network will be 100 Ph/s or more.

Bailing on Friedcat, but holding Ken Slaughter?

Interesting choices.

Sorry, but I have to weigh in whenever Mish is cited as any kind of authority.

Mish is a fraud looking to get rich quick.  He is the Ron Hubbard of financial advisors.

I knew him back in the 1997-2003 timeframe when he was on silicoininvestor (talk.techstocks.com for the archives).  He often spouted about what a scam being a financial advisor was.  Later, the quit his job as an engineer and became a financial advisor.  He spent a lot of time developing himself as a pundit as a marketing ploy.

Go read the archives.  You will see what he really thinks (and he was a pretty lousy investor too).

Sorry, but this is too classic to not be preserved.  It shows exactly how bad you have to be at math to invest in this disaster.

Nano is a SI scalar for units of measure.  It is 10^-9 or 1 billionth.

That is,  1 nm equals exactly 1 billionth of a meter.

There is absolutely nothing that supports your claim.  A 2% blip on the network hashrate graph is not significant and happens all the time.

Hashfast's incentives are heavily weighted to ship ASAP.  Their batch 1 customers have a strong case for bitcoin refunds, and the exchange rate shifts, and network hashrate change means that HF could only resell those units for ~10% of the refunds.  I think they will miss the ship window for many customers, and it will be interesting to see how the situation plays out.  Will people give up their place in line in hopes of a refund?

OP: aerobatic has given you a good summary of the situation to date.  The thing to watch for now is actual performance data.  Both HF and CoinTerra have selected very aggressive sizes for their hardware.  They have to meet their power targets to actually deliver.  If not, the thermal budget is far to high at the package level, and power consumption is equally bad at the system level.  If they do meet their targets, 1 Th/s is the new normal, and the network size continues to shoot up over the next 2 quarters at least.