Avalon batch 3 is almost $6000

[Jutarul]

In my opinion, the rise from 1500 to 6000 is due more to the rise in the trading price of bitcoin, and the comparative profit potential of a machine that can make 3 btc per day (currently)

Based on your opinion, let's predict the price of batch#3 by assuming the BTC price drops?
Let's say the BTC price drops to $1 and this machine have the potential of making 3 BTC per day.
Based on your opinion, they should sell batch#3 for around 100 BTC which worth around $100USD.
Don't you think it's ridiculous?

If BTC price crashes to $1 people will stop mining and buy BTC instead, which provides some stability against a race to the bottom and bring the price back up. Thus, the bitcoin price is backed my the price of energy and the efficiency of the mining devices. As far as the pricing goes... of course the minimum price is production cost + healthy profit margin. But Avalon was faced with a dilemma to distribute the hashing power fairly - and the only way to do that is to market the devices based on projected profits, which they could have easily set to a higher level btw.

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[freeworm]

if BFL ever delivers you'll be shit out of luck cause they'll pump out 200-300 units a day.

I lose a little more faith in humanity each time I hear someone still believing in these absurd tales.

Even if there's no more other competitors releasing any asic product to the market, the ROI of batch#3 would be around half a year from the time you pay for it.
Let's compare this with GPU mining.  Let's say we buy a second hand 6990 for $350 USD (current market price).
Based on the calculation at http://www.dustcoin.com with the current difficulty, the ROI of one 6990 is 2.5 months.  Since the difficult is increasing, we may need 4 months to mine $350 USD from now.
But the ROI time is still less than or comparable to the batch#3 asic.  

Plus, you can sell your 6990 for $200-300USD  4 months later in case BTC price drops or the difficulty is too high.

So the question is why people invest $6000 in batch#3 with high risk while even investing in GPU(not to say FPGA) mining is more/equal profitable with no risk?

[SebastianJu]

many people ordered batch 1 at around 100 BTC. so the price measured in BTC has actually dropped.

People need to stop measuring value in dollars, the time of central bank controlled fiat is coming to an end (though it may still take years)

What sense does it make to calculate the price in Bitcoins? Its the value that matters. And if you can buy way more in the real world now with the same bitcoins then the machine is way more expensive now.

[Doff]

I dunno I still get paid in USD, so that means I need to earn now $6536 USD to purchase. I wont argue the value of the Avalon because I still think its worth it however I wont be able to earn one any time soon.

Sad part is I planned on buying one at the 1499 price, and had the money saved to do so.

Id rather the BTC prices stayed tied to whatever we get Paid in, until maybe one day we get paid in BTC, or heck maybe you already are getting paid in BTC.

[opentoe]

Why do we obtain the "price" of BTC from usd conversion whenever we compare historically, but never the other way round ? Shouldn't it be consistent ? If intrinsic value of BTC has increased, then current price of an object should cost less btc, and vice versa, Don't you think ?

So, it will be consistent if fiat conversion value/price is completely taken out of equation. Oh wait - then how do we measure the value ? Looks like we do not have any :-(

Normally you are right, given that the inflation of the USD is 0 (which it isn't). But mining equipment is a special case, because you have to account for opportunity cost, i.e. the increase in purchasing power of the BTC.

The problem of high inflation, high deflation and the likes is that it blows your mind when trying to plan in microeconomic terms. That's one of the reasons why economies go into recession when the monetary base becomes unstable.

I admit I don't understand the technical aspect behind the economics of this industry and while it considered an experiment people are still putting up thousands of BTC each day. For my stand point since I have to pay my bills in US Dollars and not BTC, I have to compare the BTC value against something that is worth something to me. A dollar. If I could pay my mortgage with btc and my cable bill, electric bill then I could understand more...but since I can't it is hard for me to wrap my head around the high price, which in my mind is 3 mortgage payments. It is so mind boggling! If the cost of it was $3k, I would do it.  I'm just more surprised they went from $1500 to $6000 in one swoop. I guess because of that large increase they are expecting BFL to deliver maybe? IF BFL does delivery, will Avalon even have a 4th batch? If not, then what about warranty and stuff like that? Hardware issues?

I apologize if I came off a bit aggressive in my original post. I just assumed that someone with over 250 posts on this forum would have some understanding of the underlying fundamentals.

In my opinion, the rise from 1500 to 6000 is due more to the rise in the trading price of bitcoin, and the comparative profit potential of a machine that can make 3 btc per day (currently)

As an example, consider that for the price of 3 months mortgage payments, you could purchase a device that would essentially print enough money to pay your mortgage each month. that's the way it would work if the price were fixed and the difficulty never changed.

The problem is, that the price is not fixed, and the difficulty does change. This means that there is a great deal of risk (and possible reward) involved in mining. There is no warranty, there are no guarantees. "You pays your money and you takes your chances."

If you really want to understand the aspects behind the driving forces of bitcoin, I suggest you start here -> The Money Masters <- that's where I started.

The road is long and winding. I cannot tell you where it might lead, all I can show you is the path.

:edit: if you watch the linked video, you will see that it is the ones that are in control of issuing the money that have the power. With the advent of bitcoin, that power has been distributed into the hands of the miners (and perhaps the people that create the devices that allow such issuance of money (ASIC producers)) This will perhaps explain why such a premium is placed on acquiring these devices.

Apology accepted. If post count matched up to knowledge level there would be A LOT of really stupid people out there.