A word on the ASICMiner share auctions

[meowmeowbrowncow]

Trying to find a spot on the forum for this that wont get dumped by a mod.


Speculation is divination.  It's error prone and subject to changing market/technology conditions.  Investing in a private mining operation, where they have access to technology at cost, seems to be a good idea.

ASICMiner has the initiative.  They've started hashing first (in quantity).  Good news from the perspective of a potential investor.  Currently, ASICMiner is obviously in a very profitable position.  Over the next couple of months the hashing landscape will likely be stabilized (relatively) as the Big 3 mfg's roll out their ASIC equipment.


Now, consider that there are auctions going on for ASICMiner shares going as high as .35 BTC.  In some cases, much higher for small amounts of shares.


Is .35 BTC / share a good deal?  Hmmm.  Looking at my numbers only if ASICMiner takes aggressive action.


Here are samples from my data at points relevant to achieving ROI.  The major assumptions, among others, backing these numbers being.

1. At approx. mid March aggregate network capacity will have an upper bound daily growth of 4.5 TH.  Growth is adjusted based on the rate of difficulty adjustments.  This is done in order to satisfy the condition where ASIC consumers achieve, what has been considered in the past, an acceptable ROI term.

2. USD/BTC rate remain in the current range.  Continues to influence ASIC adoption positively.

3. ASICMiner builds and maintains a mining capacity of approx. 27% of the total network capacity.


Totals below are running totals.

Headings
(a) - Total Network Capacity TH
(b) - ASICMiner Capacity TH
(c) - ASICMiner Gross BTC
(d) - ASICMiner Overhead USD (Elec/Rent with both scaling linear to capacity)
(e) - ASICMiner Net USD
(f) - ASICMiner Retained Earnings (Board approved percentage of Net retained for re-investment - Friedcat mentions a min. of 20%)
(g) - ASICMiner Dividend
(h) - ASICMiner Dividend per share BTC and USD (1/400000 *The 1/200000 temporary privilege is fulfilled in the first record.)
(i) - ROI % @ .35 BTC or ~8 USD per share

d-g in Millions USD

Date            (a)       (b)       (c)           (d)           (e)          (f)           (g)          (h)                (i)
2013.03.11     37        12        32400       0.003 M   0.74 M     0.15 M     0.59 M     0.13 (2.95)      37%
2013.07.05    401       114       163850     0.070 M   3.30 M     0.66 M     2.64 M     0.35 (8.08)     101% 
2013.09.01    600       157       220420     0.138 M   4.38 M     0.88 M     3.50 M     0.44 (10.23)    128%
2013.12.26    907       244       327517     0.333 M   6.37 M     1.27 M     5.10 M     0.62 (14.23)    178%



So, a 5 month ROI isn't bad, right?  Well, this performance is only seen with ASICMiner having 27% share of total capacity.  Will BTC remain in the 20's? 

Will both of these key determinants be realized?  Doubtful.


Overvalued?  Discuss?

[1715287616]

1715287616

[1715287616]

1715287616

[1715287616]

1715287616

[1715287616]

1715287616

[1715287616]

1715287616

[LazyOtto]

At just a first glance, your column (b) goes vastly beyond the currently stated plans.

Starting at just the second row with 114 versus 50.

[Korbman]

1. At approx. mid March aggregate network capacity will have an upper bound daily growth of 4.5 TH.  Growth is adjusted based on the rate of difficulty adjustments. 

At first, this may be very true. But 6 months down the line, no. Growth would only resemble this until all the initial preorders for all manufacturers are filled. After that, it depends on how many new users bitcoin attracts, the value of a coin, and whether or not "average joe" is willing to purchasing mining equipment.

I'm not saying we won't get to a 1PH/s on the network, but anyone who says it'll happen by the end of this year hasn't really done any statistical research into Bitcoins mining base. It's sort of like the switch from CPU to GPU...it's a massive gain at first, but ultimately plateaus in comparison. I imagine the switch from GPU/FPGA to ASIC will happen about the same way.

3. ASICMiner builds and maintains a mining capacity of approx. 27% of the total network capacity.

Where did he say he was going to maintain 27% of the network at all times?

[meowmeowbrowncow]

1. At approx. mid March aggregate network capacity will have an upper bound daily growth of 4.5 TH.  Growth is adjusted based on the rate of difficulty adjustments.

At first, this may be very true. But 6 months down the line, no. Growth would only resemble this until all the initial preorders for all manufacturers are filled. After that, it depends on how many new users bitcoin attracts, the value of a coin, and whether or not "average joe" is willing to purchasing mining equipment.

I'm not saying we won't get to a 1PH/s on the network, but anyone who says it'll happen by the end of this year hasn't really done any statistical research into Bitcoins mining base. It's sort of like the switch from CPU to GPU...it's a massive gain at first, but ultimately plateaus in comparison. I imagine the switch from GPU/FPGA to ASIC will happen about the same way.

3. ASICMiner builds and maintains a mining capacity of approx. 27% of the total network capacity.

Where did he say he was going to maintain 27% of the network at all times?

1.  Agreed.  I anticipate a certain amount of overbuying or ASIC saturation in the market, though.  To what degree I'm not sure.  Such a condition will certainly kill network growth.
(The numbers in the OP are actually determined using an algorithm that follows sales volumes and ROI terms - of course, my algorithm could be optimistic)

2.  He didn't.  This is entirely for speculative purposes.  Specifically, in attempt to understand exactly (if even possible) how aggressive ASICMiner will need to be in the future in order to make
.35 - .4 BTC / share a worthwhile deal.


Actually, it's very concerning to me that ASICMiner does not plan to be aggressive in self-mining.  A shift in business model to consumer sales opens the question: how well will ASICMiner perform in getting market share away from the likes of BFL.

And then, a consumer sales based model, will introduce cyclical revenue patterns related to consumer ROI.


But ultimately, when per unit ASIC prices drop to near mfg cost, the better business model is to sell to a consumer rather than to host and operate an ASIC farm.


So, my concern may not be too great of an issue.  We would just hope for good decisions on ASICMiner's part.