The latest Avalon announcement in China(Translated). Batch #3, price and more.

[Flatlinezor]

At BTC, you'll pay for it in about a month.  That's their point - that it's unreasonable to expect units to be priced at a point where they'll pay for themselves in days.  They're leaving themselves plenty of room to adjust the price downwards as difficulty changes and more TH hit the network.  There's only going to be a short time when expecting a unit to pay for itself within a couple of months is reasonable.  As more ASICs hit the network, the break even point will blow out.  When it blows out to a point where sales drop off, vendors will likely drop their prices to keep it at an "acceptable" time-frame.

The point that the vendor conveniently eschews is that it was not his capital that paid for this development. Sorta like skepsidyne rehashed, or in other words never trust a Bitcoin miner. (That link is instructive of the entire "capital doesn't matter" attitude of miner folk, by the way).

In practical terms, the hash rate is ~50 Gh currently, even if units were delivered normally you'd be paying 100 BTC for 0.1% of current hash output, which means you'd be even in roughly a month if hash output stays put and your electricity is free. That sort of deal isn't interesting at all, let the very "ethical" ngzhang run his own rigs to his heart's content.

Which brings to the fore the following issue: two Chinese brothers were born the same day. One, AbelMiner, came to the community, took 20k BTC worth of equity which was called equity, built miners, faced all sorts of challenges, troubles and problems but eventually got about 6 Gh online. The other, Caivalon, came to the community, took 20k BTC worth of equity which was called "pre-orders", built miners, faced all sorts of challenges, troubles and problems but eventually delivered about 6 Gh worth of units to shareholders and then walked away from the deal under the guise of a broken pricing model.

Granted, this isn't quite as much of a scam as BFL. It's more of a scam than Asicminer (at least so far) and I would say on the scale these things are normally judged it counts as a scam. That the sheeple aren't quite immediately aware this is the case...well...this is how Bitcoin mining "ventures" go, isn't it? Gigavps launched bonds, paid 3-40 cents to the coin to date (but you can dilute that if you wish to "upgrade", of course); hashking launched "investments", paid 30 cents or less; amazingrando idem, this is the story since day one.

Eventually the sort of people that go for these sorts of deals will run out of Bitcoin. Sometime in 2050 or whatever.

 

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[hope2907]

very simple answer
nobody buy and they will drop price
if you can afford to lose ~$6000 then it is oki to take a risk, else it is not recommended

[muyuu]

At BTC, you'll pay for it in about a month.  That's their point - that it's unreasonable to expect units to be priced at a point where they'll pay for themselves in days.  They're leaving themselves plenty of room to adjust the price downwards as difficulty changes and more TH hit the network.  There's only going to be a short time when expecting a unit to pay for itself within a couple of months is reasonable.  As more ASICs hit the network, the break even point will blow out.  When it blows out to a point where sales drop off, vendors will likely drop their prices to keep it at an "acceptable" time-frame.

The point that the vendor conveniently eschews is that it was not his capital that paid for this development. Sorta like skepsidyne rehashed, or in other words never trust a Bitcoin miner. (That link is instructive of the entire "capital doesn't matter" attitude of miner folk, by the way).

In practical terms, the hash rate is ~50 Gh currently, even if units were delivered normally you'd be paying 100 BTC for 0.1% of current hash output, which means you'd be even in roughly a month if hash output stays put and your electricity is free. That sort of deal isn't interesting at all, let the very "ethical" ngzhang run his own rigs to his heart's content.

Which brings to the fore the following issue: two Chinese brothers were born the same day. One, AbelMiner, came to the community, took 20k BTC worth of equity which was called equity, built miners, faced all sorts of challenges, troubles and problems but eventually got about 6 Gh online. The other, Caivalon, came to the community, took 20k BTC worth of equity which was called "pre-orders", built miners, faced all sorts of challenges, troubles and problems but eventually delivered about 6 Gh worth of units to shareholders and then walked away from the deal under the guise of a broken pricing model.

Granted, this isn't quite as much of a scam as BFL. It's more of a scam than Asicminer (at least so far) and I would say on the scale these things are normally judged it counts as a scam. That the sheeple aren't quite immediately aware this is the case...well...this is how Bitcoin mining "ventures" go, isn't it? Gigavps launched bonds, paid 3-40 cents to the coin to date (but you can dilute that if you wish to "upgrade", of course); hashking launched "investments", paid 30 cents or less; amazingrando idem, this is the story since day one.

Eventually the sort of people that go for these sorts of deals will run out of Bitcoin. Sometime in 2050 or whatever.

We live in a shady world, don't we.

https://bitcointalk.org/index.php?topic=33835.0

[DrG]

very simple answer
nobody buy and they will drop price
if you can afford to lose ~$6000 then it is oki to take a risk, else it is not recommended

There's no need for the price to drop.  The unit can make 88BTC, the question is when and how long.  If Avalon has to ship a unit to another country and the unit is not mining for 2 weeks that is lost BTC (unrealized).

They could just make them and have them mining on site until somebody is willing to spend the 88BTC.  On their end it probably doesn't cost more than 10 BTC to build a unit, so they could just build up a farm and eventually sell to a company with a model like ASICMiner.  Or sooner or later somebody will say "the hell with my my 200GPU farm, I just want 1 little box".

I have no doubt the units will sell out quickly even at 88BTC (God knows I tried for every batch before).  Greed is a very powerful motivating factor and sometimes people just can't think straight.

[peetah]

This is terrible!  We have to do maths? What has this world come to? Casual buyers have to pay the SAME price as serious buyers? Call the charity police!

Well if they priced it any lower than 79 bitcoins then there will be a justified and uniform (B1&B2) yell of rip-off. From people who ACTUALLY would have been ripped off, as opposed to the uninformed side-lined spectator. As a B2 buyer, right now I'm mulling over the fact that 9 bitcoins was the price of trust placed on the premium. All I get is a 10 percent discount? WTF?

Anyway, I was hoping for some in depth analysis of the predictions and maths involved, but after 12 pages of bickering it appears to me that those of you who continue to count in USD will never get it, and those of you equipped with proper spreadsheets aren't ready to share the love.

And so. Neither will I. For now. Nevertheless I want to get the ball rolling. Frankly I'm sure we're all working on the same formulae in our spreadsheets, just with differing assumptions for our best/base/worst case scenarios.

So here's my 1cent: at batch 2, my estimated two year production was 250 (worst case scenario assumptions).
My other cent says: asicminer has taken one step forward and BFL has taken two steps back. Considering also B2 now in the wild, the projected difficulty escalation over time is roughly the same as it was when batch 2 opened. So factor in the increased base difficulty my guess is 200.

And yes I know batch 1 made 250 in a month and batch 2 will do so in 3 months, but from a decision making point of view, 88 for 200 is the one I'm looking at.

Care to share? Friday is just around the corner, so we better figure it out before ending up mulling over the batch 4 premium.

[DoomDumas]

I really wish the BTC to crash hard just after Avalon starts taking order. We shall see what happens to their BTC 88 - 115 payment plan. Greedy bastards.

My guess:  BTC will still rise, BFL will ship, AsicMiner will grow, so Avalon miner may take up to five month mining back their BTC..  5 month for a free Avalon is a free miner anyway..
They are not greedy bastards, they are a business, the goal of a business is to make money.. They will sell all batch 3, even if those price are as high as it seems.  Buyers will mine back their BTC.  No one will be at lost, so please, if you're not to buy, dont whine !

[DoomDumas]

That's fine - it is a business decision. Please consider attaching a USD price as well, and give an option to pay with USD - that will enable people to buy the unit who do not have enough BTC

Ever heard of http://bitinstant.com?

+1

SHIBAJI : If you have enought USD, just buy BTC !!!   That's the point !

[DoomDumas]

It is hard to go through bitinstant. Limit is 500 USD - now it is less than 10BTC ; coinbase has limit 10BTC and does not work most of the time. Buying from others has high % premium.

But anyway, it was just a request - if not possible, it would be good to know when ordering may begin, and give sufficient time to collect BTC through various means.

You are not buying BTC for a while now ?  I'm buying since 20, and will still be a buyer in the 100s...

[Korbman]

[...] why would ASIC vendors sell a machine for $1500 that make 6-8k a month? I think this answers the question pretty clearly, They wouldn't!

Seems you've forgotten about Batches #1 and #2...

I distinctly remember BTC being worth around $6 a piece for batch 1 and a volatile $25 for batch 2.

Pretty much. And now half of Batch #1 is mining at $65 pulling in $10k a month so far. Hence the original confusion...

[DoomDumas]

I have great respect for team Avalon.  After all, in the Asic game, they are the BIG WINNER !  thumbs up, Gratz.

That said...

Please, BUY or SHUT UP !

[hope2907]

I have great respect for team Avalon.  After all, in the Asic game, they are the BIG WINNER !  thumbs up, Gratz.

That said...

Please, BUY or SHUT UP !

=)) if you don't understand what we are discussing about, then keep silent, please

[Aseras]

[...] why would ASIC vendors sell a machine for $1500 that make 6-8k a month? I think this answers the question pretty clearly, They wouldn't!

Seems you've forgotten about Batches #1 and #2...

I distinctly remember BTC being worth around $6 a piece for batch 1 and a volatile $25 for batch 2.

Pretty much. And now half of Batch #1 is mining at $65 pulling in $10k a month so far. Hence the original confusion...

and the other half still doesn't have their units, all of batch two doesn't and they are trying to push batch 3 at a huge markup in value and another unclear delivery date with a break thrown in.

and before the whole btc=btc and batch 1 cost 100+ btc each remember the terms of the sale were you were agreeing you sold your coins for mtgox value the day of the sale. so the units were really the USD value, not $5500+ the btc would be worth today.

[SyRenity]

and the other half still doesn't have their units, all of batch two doesn't and they are trying to push batch 3 at a huge markup in value and another unclear delivery date with a break thrown in.

Any one from Batch 2 at least got any tracking numbers?

Otherwise the whole deal starts to look more and more problematic.

[MPOE-PR]

I really wish the BTC to crash hard just after Avalon starts taking order. We shall see what happens to their BTC 88 - 115 payment plan. Greedy bastards.

My guess:  BTC will still rise, BFL will ship, AsicMiner will grow, so Avalon miner may take up to five month mining back their BTC..  5 month for a free Avalon is a free miner anyway..
They are not greedy bastards, they are a business, the goal of a business is to make money.. They will sell all batch 3, even if those price are as high as it seems.  Buyers will mine back their BTC.  No one will be at lost, so please, if you're not to buy, dont whine !

Right dood, because when you go buy a computer the price is not based on what it costs to make one, the price is based on what you could be earning on a computer if you lived in China and worked elance.com 12 hours a day.

The cost of computing hardware goes down as the generations go up. The price is to follow value. There's zero economical reason for batch 3 to cost even half as much as batch 1 on a fiat basis. 20 BTC give or take.

If there's demand for 60,000 units at 20 BTC, make 60,000 units and walk home with 100k BTC in earned profit rather than this medieval nonsense of "we're only making 600 so we're charging 5x a reasonable price so as to have 97.5% profit margins" netting you a few ks. Business 101, corporatism 101 etc.

Of course...being a company is hard. Being a retarded asshole is easy. Big surprise when wannabe-companies turn out the retarded asshole eh.

[Aseras]

If you owned Avalon how much would you charge?

If it were me, I'd be mining the hell out of units before I shipped them and call it QA.

I'm assuming avalon was/is doing this, delaying batch 1 ship so long as well as batch 2.

you can have an expensive niche, or make it up in volume.

in the real world the development costs are virtually the same it's only a logistical difference.

avalon would do better to just double the price to 3,000 and open up orders, FIFO, no more batches. BFL style. Just take backorders. Get the cash up front and hire some cheap labor to bang the units out. QA mine them and start shipping them in volume. They are in china, there's dozens upon dozens of shops and labor places they can just upload specs to and consign it.

making an artificial restriction and pricing in a hypothetical ROI is a poor business move. especialy considering the goals of securing the bitcoin network. lots of asics are better than a few elite ones.

[Korbman]

If you owned Avalon how much would you charge?

That's actually a complicated question. Are you saying if one of us was swapped right into the mess Avalon has created, what would we do? Or if we were able to control how everything went right from the beginning? I'm guessing the former..

I'd figure out the current demand and determine a price point that maximizes profitability. Simple as that. Price gouging customers isn't ever good for your business (unless you're in the Oil industry, but that's a topic for a later day)..but neither is charging below your potential, especially given the current market conditions and the company monopoly. I wouldn't be able to come up with a set price unless I knew answers to all the variables.

[Vicus]

Any one from Batch 2 at least got any tracking numbers?

Someone failed to read start post in this topic...

Right dood, because when you go buy a computer the price is not based on what it costs to make one, the price is based on what you could be earning on a computer if you lived in China and worked elance.com 12 hours a day.

The cost of computing hardware goes down as the generations go up. The price is to follow value. There's zero economical reason for batch 3 to cost even half as much as batch 1 on a fiat basis. 20 BTC give or take.

If there's demand for 60,000 units at 20 BTC, make 60,000 units and walk home with 100k BTC in earned profit rather than this medieval nonsense of "we're only making 600 so we're charging 5x a reasonable price so as to have 97.5% profit margins" netting you a few ks. Business 101, corporatism 101 etc.

Of course...being a company is hard. Being a retarded asshole is easy. Big surprise when wannabe-companies turn out the retarded asshole eh.

Same cry I heard, when rules for batch #2 were published...

[vdragon]

If it would be 10k - now at this moment, delivered overnight - everyone would pay. But sadly, its maybe delivered 3 months from now ...

[muyuu]

If you owned Avalon how much would you charge?

I like being honest, so I would auction them 1 by 1 as I mounted them, and ship them immediately with tracking and everything. I'd have let the auctions run in parallel depending on availability, there's plenty of demand to cover several parallel auctions.

Prices would have probably gone up to 7-8K if not more for the first batches and now they'd be going slightly down.

I understand they needed pre-selling for the first batches to recoup investment, but I'm not willing to believe that's the case any more.

I would have also kept a few miners connected and online for long-term testing. Openly and with access to their stats in whichever pool I chose.

To guarantee decentralisation I'd have put some limits per region and I'd have given priority to some old timers in the first auctioned units.

Note that if they can provide as many as 500 units per month as it seems the case, they'd have killed it before BFL could even say "engineering".

[tosku]

If you owned Avalon how much would you charge?

I like being honest, so I would auction them 1 by 1 as I mounted them, and ship them immediately with tracking and everything. I'd have let the auctions run in parallel depending on availability, there's plenty of demand to cover several parallel auctions.

That's an awesome idea. Interestingly enough, a complete infrastructure to auction these miners off is readily available at Bitmit, so there's really nothing stopping Avalon from doing exactly this, should they want to do it.