It's called profit.  It's what people do when they sell stuff.  If you don't like it, don't buy it - free market at work.

I've searched the forums, and the ASICMINER thread, at 137 pages long, is rather opaque.  Forum searches turn up lots of noise, as with google searches.

So, as someone who is considering buying in to ASICMINER, I have a few questions, such as
- does ASICMINER have a website
- what's the current (and future) hashing capacity
- how many shares on issue (now and future)
- how are dividends calculated, what is the maintenance costs, what's the dividend payment schedule
- if I "buy" shares from the auction forum, how do I know the person offering the shares actually has shares to sell?
- How are share transfers handled
- would I be better off buying on btct.co than the auction forum, or maybe on some other venue I'm unaware of

Thanks in advance

While I agree with the sentiment, and I agree that people should be warned against pre-ordering promises from people who have shown no track record of delivery, I'm not sure about using the ban hammer.

Then again, this ain't kickstarter, so maybe, as I said above only half in jest, "GH/s or gtfo" is an option. 

Ultimately I think it's up to the community to self-enforce.  If people stopped throwing coins at every scam that came along promising rainbows and unicorns and untold riches, the scams would go away (or at least, slow down).

This is a tough one, and this certainly isn't the thread to continue this line of discussion - sounds like it belongs in the Meta board.

Shouldn't that be "GH/s or gtfo"?

How would one buy ASICminer shares?  I've searched the forums and it seems my googlefu is weak.

IANAA, but I think anyone who tries to argue that Bitcoin falls through the cracks of tax law will find themselves very quickly disabused of that notion by the army of lawyers that the ATO has at its disposal.

I see it this way - you bought something, and then later you sold it.  Either you made a profit or you didn't.

If you made a profit, then your gains are taxable (either as income or capital gains).  Of course, if you made a taxable profit then any costs associated with making that profit can be offset against that profit (capital costs - miners, electricity, trading losses).

Now practially, if you bought a dozen Bitcoins at $2 and sold them the other day at $60, there is a good chance your accountant would laugh at you if you tried to declare the income.

However if you bought BTC10k at $0.01 a few years ago (as I wish I had) and sold them yesterday at $60, you'd be playing a dangerous game if you tried to pretend you didn't have any profit to declare to the ATO.

Just my 2 Satoshi's worth.

This.  And as was mentioned here


It's hard to emphasise this point strongly enough, especially since most people don't get it.  In our world of fiat currency, money is created out of nothing, based on little more than the existence of debt.  And given those conditions, deflation can certainly be a concern.  But under a currency that operates to different rules (eg. physically backed, or fixed supply) the conclusion that deflation is bad is erroneous.

I hope I'm not alone in not buying this whole "deflation is bad" argument.  By your logic, Samsung should be broke because the SGS3 that used to retail for $800 is now available for $350.  And by the same logic, I will never buy a computer because in a month's time it will always be cheaper than buying today.

Any business that borrows money to make/sell widgets needs to do price/expense/cash flow management to decide if the venture is profitable and sustainable.  The cash flow implications of falling sale prices over time is no different to falling sales volume over time (ie. saturating the market), or any other rising input cost.

Just because a business agrees to pay back +X% over a 12 month loan when they know the price they can sell their goods at will fall by Y% per month doesn't mean they'll necessarily go broke - and if they do, it's because their outgoings are more than their incomings.  That their outgoings are falling slower than their incomings (due to deflation) doesn't make deflation bad in and of itself.  It just means they didn't do their sums.

If it costs BTCX to make a widget, then you better sell that widget for more than BTCX, inflationary, stable or deflationary environment.  If that means you can't drop the selling price of your widget as much as your competitors, then you don't deserve to be in business any more.

And as for assertions that:

Again, I don't buy it.  Deflation just raises the bar for what is deemed an acceptable return on your funds.  If you can make X% through deflation, then any investment must make >X%.  Some could argue that inflation lowers the bar too far, allowing malinvestment to consume valuable resources that would be better deployed elsewhere.

And for the person who asked

The loan and repayment of borrowings are part of the capital stock of the currency (I may be muddling my words here).  Interest payments comes from the flow of money through the system.  The amount of money in the system hasn't changed - what changes is the distribution.

Funny thing is, people were pulling out that exact chart when we had our first "bubble" up to $30 (or whatever it was) and subsequent crash back to $3 (or whatever it was). 

And in 12 months time, when we've spiked to $1000, people will be saying it again.

You'renot  assuming no more capacity before    your  unit is  delivered . You assume no more until    your unit is paid off .

This is not the "Avalon batch 3 will be profitable" thread, so as much as I want to pull your numbers apart, I won't.  But my original post includes reasons why I think that the 3 month ROI that you presume may easily become "never".

  I tell you, if BFL ship, I'll be straight on to that boat.

1) False.  People with cash can do so too (as evidenced by BFL mini-rig orders)
2) Several hundred owners of round 3 Avalons isn't exactly "small".  
3) Anyone is free to buy - distribution isn't being artificially limited, other than only those who can afford to buy have the option to buy - which is the same for everything in the world
4) If Avalon make a mint, it encourages BFL, ASICminer, helveticoin, and other people we may not have even heard of yet, to step up, making bitcoin stronger in the long run.

As repentance said, at this stage of the network anyway, hashing power will concentrate to those with the money to buy the equipment.  When equipment is commoditised, hashing power will concentrate to those with cheap electricity (or with the money to jump on the "next generation").

PM sent.

TL;DR: Avalon's "greed" is good for bitcoin as a whole, good for the longevity and the future of bitcoin.

1. Pricing in BTC normalises pricing in BTC
2. BTC52000 (minimum) is a nice chunk of change to process in real transactions for batch 3
3. Anyone who drops US$6k on a bitcoin mining rig must* have some faith in the whole enterprise
4. Profits Profits Profits

*(must as in "should have" rather than "ooh look free money")

And I think I should elaborate on #4, because not only do I think that's the most important one, but because Avalon's profits are taken straight out of the pockets of their customers so it may be hardest for people (especially their customers and people who wanted to be their customers but can't afford it) to understand. 

If you assume that Avalon merely broke even on their batch 1 and batch 2 orders at US$1500 (worst case and almost impossible to believe) then in fiat terms, at today's exchange rate of $70, the good people at Avalon are pulling US$2.8 MILLION dollars of profits for batch 3 alone.  If you assume that batch 1 and batch 2 were profitable in their own right at $1500, then we're talking $2.8M in monopoly rents (a much more reasonable assumption).

If the prospect of over $2.8M in profits from a single "run" of 600 product isn't enough to get others with the skills/knowledge/capital seriously interested, then I don't know what will.

But what's good for bitcoin isn't necessarily good for me, and I'm not buying, not at that price with an uncertain future delivery date.  If it were shipped tomorrow or next week, I'd be in.  On top of BTC88 being close enough to all my coin, with things such as ASICminer, BFL, helveticoin, not to mention Avalon batches 1 and 2, floating around out there or soon to be, I think people who are imagining a "worst-case" 6 or 12 month ROI are not sure what "worst case" actually means.  Even if the BFL and helveticoin are vapourware, once your ROI blows out past 6 months, you'll be competing with Avalon batch 4, maybe 5 customers too.

If the US$2.8M monopoly rent Avalon are extracting from batch 3 is enough to convince others to join the fray as well, your 12 month ROI could conceivably become never, because that's more than enough time for an organisation with the know-how to bring a product to market.

And I think that batch 3 becoming uneconomical with negative ROI (unless you've got free power) would be a good thing for bitcoin. For one, it would mean that there is multiple petahash of computation behind bitcoin, making the network that much stronger.  For two, it would mean multiple ASIC vendors, with different types of products for all sorts of use cases.  And all of that would (hopefully) come hand-in-hand with the mainstreaming of bitcoin.

I don't get it.  All I can say is "bring on the free market competition".  Come on BFL.  Come on whoever else is out there and has been sniffing around BTC.

There is a very real chance that someone who splashes out 88btc on an Avalon batch 3 unit is going to get burned, given the estimated time to delivery.  In the end it is up to each and every one of us to decide the risk of the network hash rate going up by a factor of, say, 10 in the next 3 to 6 months, and weigh it up compared to the reward if it doesn't.

Free market, Avalon can do what they want, and we can buy or not buy.  But those of us who would like to buy but find the product to expensive are free to complain.  And Avalon are free to ignore.  And you are free to buy anyway. 

For me you've nailed it.  For one, they are now gouging us because they can, selling a product that was profitable for $1500 for $6000, and that just feels wrong to me as a customer.  And for two, they are taking out a huge chunk of batch 3 miner profits through this price increase, while the batch 3 miners are still wearing all the uncertainty and risk (risk of adverse btc movement, risk of BFL shipping, risk of huge difficulty increase, risk of ASICminer doubling up, risk of another player bringing something to market).

Thinking about it more - there was a good chance this would happen.  With a single supplier in the market, they can charge as much as they want (as long as they clear their stock).  Classic supply/demand curve.  Without more supply (BFL?), we are at the mercy of a monopoly supplier.

On the plus side, a market where people can charge $6000 for a product that is profitable at $1500 (assuming the batch 1/batch 2 prices in the $1500 ballpark was profitable for them) is a pretty decent incentive for other players to enter the market.   At a batch size of 600, and a monopoly profit of $4500 per unit, that is $2.7 MILLION of monopoly profit for that one batch.

That kind of money is more than the cost of developing an ASIC-based product (based on nothing more than what I've gleaned from these forums).  So assuming batch 3 sells out (which I don't doubt it will, and if I had picked up hundreds of coins in the sub-dollar days I'd probably buy one just to support the network), then what you're looking at is a guaranteed ROI for someone else to join the fray.

Even assuming BFL actually ship something soon (any maybe that's the reason for the price - this could be Avalon's last hurrah before BFL ship a superior product), there seems like there is still plenty of room for another player or two.

And more food for thought - what do you think Avalon are going to do with the 54000 (approx) btc they get for this batch sale?  At least some of that will have to be sold to pay "real" money to their suppliers, pay wages, expenses etc.  Unless they decide to keep a significant portion of the sale proceeds and monopoly profits in btc, then there will be a decent chunk of btc for sale in the market in the near future.  Which is fine by me - I'm a believer, and any dip is an opportunity to buy more as far as I am concerned.

I'm glad I'm not the only one feeling this.  As much as I want to support btc, at this price I'm afraid my support will be limited to buying stuff using btc when I can.  It's a shame, because I _want_ to support the network.