The answer is simple:
Rising difficulty from increased competition.
It should have been obvious to any early ASICMiner investor that there was no way their dividends could last forever.
The only reason why ASICMiner was so successful was because both BFL and Avalon had serious delays in shipping so ASICMiner pretty much dominated mining.
And since people were desperate to get their hands on any miner and ASICMiner hardware was the only hardware available they did very well with hardware sales.
But now we have KNCMiner, Bitfury, and HashFast at least beginning to ship (bitfury already is), BFL is shipping, and Avalon is shipping their discrete chips and difficulty is soaring. All the new companies have better technology that is faster and consumes less power.
ASICMiner doesn't have a large piece of the pie anymore. And it obvious that it is only going to shrink further. And the smart investor sells BEFORE their piece shrinks in order to get out before everyone else. Ideally you sell at the peak, when things seem to be going well. I wanted to sell at 5.00 but it never really got there. I ended up selling my 100 shares at an average of 4.10 or so, which still isn't bad but I was a little late.
For those of you still sitting on your shares hoping for a huge profit, it's not going happen. The time a mining company will be profitable is always limited. At the best, a mining companies profits will always be cut in half every 4 years due to the block halving. Timing is everything. No mining company has a business model that is viable for consistent long term profits. It's all about making a quick buck and getting out.
I'm holding it long term, i'm thinking in the end he will still be one of the top miners / ASIC producers.
and thats all that really matters...
The idea here isn't to make a quick buck, it's to own a piece of the bitcoin mining industry.
a blocks total TX fees, will increase with time this should compensate somewhat for the reward halving. We might have a few hard months ahead but in the end bitcoin mining will prove to be a profitable venture, i think.
Transaction fees will not increase that much in the next 3 years when the next halving takes place.
Currently, transaction fees are 0.59% (for today) of the block reward or about 0.1475 BTC. For there to be enough transactions to make up for the 12.5 BTC we will lose with the next halving, we would have to have roughly 85 number the transactions we have today!
I don't doubt that will happen someday if Bitcoin really succeeds. But it isn't going to happen in the next three years.
Here is the bad part though: Let's say we actually had 85 the number of transactions. The easiest way for that to happen is if 85 times as many people started using bitcoin. Well, then bitcoin would be essentially 85 times as popular and there would be a HUGE surge in its price. At that point 1 BTC would easily be worth a couple of thousands of dollars. So what would happen to the transaction fees? If they stayed at 0.0005 what was once a $0.05 fee now is 50 cents or a dollar or more! The transaction fee would be dropped to compensate, probably to 0.0001 or even 0.00005. This would have the effect of the block reward transaction portion to drop by 5 or 10 or so. So that 12.5 BTC transaction reward is now only 2.5 BTC or 1.25 BTC.
There is no way transactions can ever make up for the block reward halving, at least not in the next couple of decades.
