why fpga unit seller is not mining itself?

[parsa2011]

imagine there is a street in your city and diamonds are spread out there anyone can take them sell them and make money but they are 0.5 underneath the street every body is looking for them and trying to find more diamonds, you invent a machine which can show you where exactly the diamonds are, whats your reason to start selling the machine instead of looking for diamonds?!!
i mean it dosent make sense! it dosent look to be useful machine! why with unit which you can make 3000+  usd a month you will sell them for 1000+ u , and can make 3000+ a month you will start selling them instead making money with them?!

any idea?

[Isokivi]

imagine there is a street in your city and diamonds are spread out there anyone can take them sell them and make money but they are 0.5 underneath the street every body is looking for them and trying to find more diamonds, you invent a machine which can show you where exactly the diamonds are, whats your reason to start selling the machine instead of looking for diamonds?!!
i mean it dosent make sense! it dosent look to be useful machine! why with unit which you can make 3000+  usd a month you will sell them for 1000+ u , and can make 3000+ a month you will start selling them instead making money with them?!

any idea?

1. You know someone can and will eventually develop a more efficient device doing the same thing, quite likeley so efficient that your machine wont cover it's running costs.
[edit] 1.1 Perhaps you could yourself develop a much more efficient device, but lack the massive funding needed and choose to use your initial hardware to fund the second one.
2. You consider diamonds a too volitale store of value.

[gyverlb]

imagine there is a street in your city and diamonds are spread out there anyone can take them sell them and make money but they are 0.5 underneath the street every body is looking for them and trying to find more diamonds, you invent a machine which can show you where exactly the diamonds are, whats your reason to start selling the machine instead of looking for diamonds?!!
i mean it dosent make sense! it dosent look to be useful machine! why with unit which you can make 3000+  usd a month you will sell them for 1000+ u , and can make 3000+ a month you will start selling them instead making money with them?!

any idea?

That's been asked by many people before. The usual answer is that people selling mining tools during the gold rush where the ones making sure profits. The miners had diverse luck based on when and where they looked for gold.
This is the same situation now: selling mining hardware is a simple business model (especially if you use preordering), mining is more hazardous, being profitable depends on when you buy the hardware, when it gets delivered and when you sell your mined coins.

[bonker]

imagine there is a street in your city and diamonds are spread out there anyone can take them sell them and make money but they are 0.5 underneath the street every body is looking for them and trying to find more diamonds, you invent a machine which can show you where exactly the diamonds are, whats your reason to start selling the machine instead of looking for diamonds?!!
i mean it dosent make sense! it dosent look to be useful machine! why with unit which you can make 3000+  usd a month you will sell them for 1000+ u , and can make 3000+ a month you will start selling them instead making money with them?!

any idea?

That's been asked by many people before. The usual answer is that people selling mining tools during the gold rush where the ones making sure profits. The miners had diverse luck based on when and where they looked for gold.
This is the same situation now: selling mining hardware is a simple business model (especially if you use preordering), mining is more hazardous, being profitable depends on when you buy the hardware, when it gets delivered and when you sell your mined coins.

I don't buy this analogy. Bitcoin rewards are much more rational and predictable than gold mining.

The most rational business model at present is to use ASICs to mine not sell on. OP has it right.

[DeathAndTaxes]

OP has it wrong (and so do you) because you forget about the concept of risk and capital.

None of the ASIC designers had the capital to build ASICs without outside investment (either VC and/or pre-order funding).  Selling the miner is a much lower risk activity than mining yourself.   With VC they want a guaranteed risk profile before writing checks in the six figures and saying "we will build X miner devices at 200% gross markup and repay capital within 4 months is a a LOT  more attractive to a VC then well we will build lots of miners and we should break even within a couple months unless someone else does the same thing in which case it might be more like a year, unless someone releases a superior product to the general public in mass volume in which case we likely are going to lose everything".

Pre-orders are even better (from builder's POV) source of capital because the builder gets a cut of the profits and the buyer/miner takes all the risk.   I mean that scenario is like ... me taking your money playing Satoshi Dice and getting a % of all the wagers and you either win or lose.  Now granted if you win you may win much bigger than me but I would love a business model where I take all your money, and you take all the risk and we split the profits in some fashion.

Not only is the risk lower, the return on capital is also much higher.  Once the pre-orders have shipped BFL has already collected their capital back plus profits plus a share of the profits on the pre-orders capital (w/ the buyer taking all the risk).  The company can then do it again.  Same product cut the price 20%, then 40% then 50%, then 80%, then time to move to 32nm (double output per watt and per $), then cut the price 50%, then 70% .... etc.  Each time the timeframe on the return on capital is short.

Even if say BFL decided not to release any ASICs and had the millions in capital to build them all internally and was willing to take that risk what happens when a competitor releases ASICs to the general public.  
While "internal-BFL" may limit their production runs to maximize profit the competitor selling to the general public will face no such obstacle.  Their method to maximize profit would be to sell as many ASICs as possible and thus drive difficulty up many mangitudes.  This would cripple "internal-BFL" business plan.  

Unless one feels likely they can maintain a monopoly on ASIC technology there is a massive amount of risk trying to corner the market.  Maybe the profits are somewhat lower by selling the miners but it is a much more efficient use of capital AND the seller gets to unload all the risk on the miner.

Of course the miners don't even see it coming.  They are taking all the risk chasing this dream of insane profits and the only one who will be making those profits will be the ones handing out shovels.

[parsa2011]

all replies are useful thank you all

ok , so if we assume for miners like me an ordinary people using such products is more efficient than mining with rigs with high power usage and high price investment , so when its get easier,cheaper and achievable to mine the difficulty goes up to control the mining procedure and it causes btc become more valued , and it dosent effect the time frame i have seen which shows the difficulty tends to infinity in 2030, am i right?

[bonker]

OP has it wrong (and so do you) because you forget about the concept of risk and capital.

Unless one feels likely they can maintain a monopoly on ASIC technology there is a massive amount of risk trying to corner the market.  Maybe the profits are somewhat lower by selling the miners but it is a much more efficient use of capital AND the seller gets to unload all the risk on the miner.

An interesting arguement. But let's be pragmatic, if it is more profitable for an ASIC company to mine rather than sell, then mining is what is going to happen.
I'm sure the VC guys would agree.

With regards to monopoly, I suggest that the cartel option would be the most profitable for ASIC companies, so long as it is kept quiet.

[DeathAndTaxes]

OP has it wrong (and so do you) because you forget about the concept of risk and capital.

Unless one feels likely they can maintain a monopoly on ASIC technology there is a massive amount of risk trying to corner the market. Maybe the profits are somewhat lower by selling the miners but it is a much more efficient use of capital AND the seller gets to unload all the risk on the miner.

An interesting arguement. But let's be pragmatic, if it is more profitable for an ASIC company to mine rather than sell, then mining is what is going to happen.
I'm sure the VC guys would agree.

With regards to monopoly, I suggest that the cartel option would be the most profitable for ASIC companies, so long as it is kept quiet.

Meh you are still stuck on this naive black or white thinking.  No VC woulnd't agree than any profit for any level of risk is better.  They wouldn't be VC for very long with that attitude.

Imagine two scenarios.  90% chance of 400% gain in a year vs 50% chance of 500% gain in a year.  Selling shovels (or mining rigs) is the the former, and trying to monopolize an open market is the later.   Nothing wrong with taking the "safe" easy bet and turning a million into four million and rolling that into new projects and ventures if/when the margins get squeezed.

On the topic of cartels they tend not to survive outside of governmental interference or natural monopolies neither of which exist in mining.  Any cartel would be quickly crushed by an outside selling millions upon millions of ASICs to the general public.  Natural monopolies aren't just monopolies they are ones which exploit the limitation or unequal distribution of the physical world.  For example OPEC is somewhat effective at controlling prices because oil distribution is "lumpy" and they can control enough to influence price, however a cartel of solar panel manufacturers would quickly be crushed by outsiders seeking to make a cut on the juicy cartel created profits.

[parsa2011]

all replies are useful thank you all

ok , so if we assume for miners like me an ordinary people using such products is more efficient than mining with rigs with high power usage and high price investment , so when its get easier,cheaper and achievable to mine the difficulty goes up to control the mining procedure and it causes btc become more valued , and it dosent effect the time frame i have seen which shows the difficulty tends to infinity in 2030, am i right?

any idea?

[DeathAndTaxes]

all replies are useful thank you all

ok , so if we assume for miners like me an ordinary people using such products is more efficient than mining with rigs with high power usage and high price investment , so when its get easier,cheaper and achievable to mine the difficulty goes up to control the mining procedure and it causes btc become more valued , and it dosent effect the time frame i have seen which shows the difficulty tends to infinity in 2030, am i right?

any idea?

None of that made any sense which is likely why you didn't get a response.  It would be like saying the road moves at 60mph for increased car prices to infinity ... 2030.

It is hard to guess what you do mean but:
a) price drives difficulty, difficulty doesn't drive price.  Never has, never will. 
b) difficulty is based on global hashrate.  if global hashrate doubles then difficulty will double.  If global hashrate declines by 50% then difficulty will decline by 50%.
c) difficulty can't be projected as it is based on the global hashrate.  difficulty in theory could decline for a decade in row inf the gobal hash rate keeps declining.
c) difficulty can't go to infinity and not sure what you mean by "in 2030".