Swedish ASIC miner company kncminer.com

[s1gs3gv]

Hey, I just stopped back by on the KnC forum and saw that things have not got any better with the refunds.

KNC have been acting like they have serious cash flow problems for quite a while now.
With the last two projects (Neptune and Titan) major failures, and their overpriced hashing contracts unlikely to be flying out the door, they are probably living hand to mouth on the new Series A funding and trying to push through a new 14mm SHA-256 design quickly.

The future doesn't look good for KNC.

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[poodle63]

Knc still need our money in 10nm miner, don't go 14nm, not improve their hashing power that much, just go 10nm, that will has signification enhancement.

The major problem of them is they shot on their foot, due to lack shipping and update information and so on, even through I love their product, I still don't understand why they are make us to heat them.

[samsonn25]

I think at this point its almost impossible to build machines  to even positive ROI.

They would need to build under $330 for 1TH @.7 watts efficiency and .10 cents electricity just to break even.

[vesperwillow]

s1gs3gv/biffa, thanks for the correction. My math brain was focused too much on stuff at work. I guess I shouldn't bitcointalk while working

I remember there being a number which initially went unsold, but then heard rumor someone bought them all out for less than MSRP. Rumor is rumor, can't found it, but some users did report being unable to purchase the remaining 900 the same day. Because of this, and wanting to project 'worst-case' scenario for planning purposes, I presume the full 2500 to be sold.

As to building miners for dirt cheap, if KNC's profit margin is similar to the Jupiter series, they're making about 86-89% pure profit on the gear. So it could be done.. but.. the whole thing of they won't do it because they know they can just keep the money to themselves.

People shouldn't get into this game at this point with the thought of, my mining gear will positive ROI anytime in the near future. That window, for the most part, closed in 2013. Anyone mining now should have the mindset that they're banking on bitcoin value skyrocketing at some point.

Even still, it would be better to just buy bitcoin with your miner money.. and keep buying it if you believe the value will increase.

Mining is really fun though, so there's that. Can't say I'd drop several thousand just for that..

[s1gs3gv]

I remember there being a number which initially went unsold, but then heard rumor someone bought them all out for less than MSRP. Rumor is rumor, can't found it, but some users did report being unable to purchase the remaining 900 the same day. Because of this, and wanting to project 'worst-case' scenario for planning purposes, I presume the full 2500 to be sold.

I think that was just a face-saving maneuver by KNC, to close batch 1 and price reduce the remaining machines and call them batch 2 so they could get rid of the unsold stuff. I think KNC is probably regretting building the Titan as much as its customers are regretting pre-ordering the Titan.

On the mining side of things, they are getting killed by languishing BTC prices.

[s1gs3gv]

Mining bitcoin is like pulling teeth these days. Even if you had a 6TH SP35 running today you would barely make USD 30 a day.
If you believe that the price of bitcoin trends towards the cost of producing it during this early adoption phase, then the current value implies either the existence of some very low cost private mining facilities or a pending failure in the bitcoin ecosystem.

[vesperwillow]

I agree.

I believe many people are banking on a skyrocketting value in the near-term based on the 2 jumps it had last year, which IMO were synthetic jumps, one based on fear and another induced by the asia markets gathering BTC before they lost the legal easy means. I believe bitcoin will go up over time, I just don't see anything other than synthetic jumps in the near-term.

I love my mining gear and I let it continue doing its thing, but I wouldn't buy any new gear. I do get hold of secondhand stuff people dump for pennies on the dollar just to get out of the scene, and to me that's decent. Better than paying full price or premium, which is silly.

[poodle63]

I will go to GPU side next year, knc do not have enough capital to initial 14nm or 10nm process wafers, only AMD and Nvidia got enough capital and knowledge to do so.

I estimate next generation of both AMD and Nvidia their 599+ usd grade graphic card will introduce enough hashing power for us, and we really can get rid of nightmare of SHA256 hashing disasster, 6th/s for 0.04/day, WTF to making living that's totally fxxking me alot.

and the trend of bitcoin mining will belong to miner maker company like knc and bitmain, and so on, what we can do is use next generation powerful gpu to mine new algorithm and trade for bitcoin, or directly buy bitcoin and litecoin from market and hold it, virtual will never die, the market(supply/demand) will correct its self, and another thing we have to do is get a real day job make some saving and use our saving to preorder knc's future miner or GPU, and then we lost some money due to mining gear aged, so we have a day jod so we still can sustain for a while to wait coins pump, and miner makers get our money to operate their companty until the day we can't afford their expensive miner, then they will mine their self and we go buy coin from them or quit this game~~~ 

[vesperwillow]

If you're expecting this to make your living, you might be doing it wrong, especially since the inception of the movement wasn't so much to make a living ... it was to change the way we think and use transactions entirely, regardless of its value.

[xstr8guy]

I will go to GPU side next year, knc do not have enough capital to initial 14nm or 10nm process wafers, only AMD and Nvidia got enough capital and knowledge to do so.

I estimate next generation of both AMD and Nvidia their 599+ usd grade graphic card will introduce enough hashing power for us, and we really can get rid of nightmare of SHA256 hashing disasster, 6th/s for 0.04/day, WTF to making living that's totally fxxking me alot.

and the trend of bitcoin mining will belong to miner maker company like knc and bitmain, and so on, what we can do is use next generation powerful gpu to mine new algorithm and trade for bitcoin, or directly buy bitcoin and litecoin from market and hold it, virtual will never die, the market(supply/demand) will correct its self, and another thing we have to do is get a real day job make some saving and use our saving to preorder knc's future miner or GPU, and then we lost some money due to mining gear aged, so we have a day jod so we still can sustain for a while to wait coins pump, and miner makers get our money to operate their companty until the day we can't afford their expensive miner, then they will mine their self and we go buy coin from them or quit this game~~~  

Poodle man, you've got to put the bong down once in awhile!

A smaller process node is not going to save mining, Scrypt, SHA or whatever, especially coming from AMD and Nvidia. They don't care about mining.  Future generations of graphics cards will not significantly improve on hash speeds above what the process node will allow. So even if hash speeds double, triple or quadruple with 10nm (which is still years away for graphic cards), ASICs are already way, way beyond that.

Hell, Nvidia's latest and greatest GPU is going to be released in a few days. And guess what, they are still at 28nm!
http://videocardz.com/52362/only-at-vc-nvidia-geforce-gtx-980-final-specifications

[samsonn25]

s1gs3gv/biffa, thanks for the correction. My math brain was focused too much on stuff at work. I guess I shouldn't bitcointalk while working

I remember there being a number which initially went unsold, but then heard rumor someone bought them all out for less than MSRP. Rumor is rumor, can't found it, but some users did report being unable to purchase the remaining 900 the same day. Because of this, and wanting to project 'worst-case' scenario for planning purposes, I presume the full 2500 to be sold.

As to building miners for dirt cheap, if KNC's profit margin is similar to the Jupiter series, they're making about 86-89% pure profit on the gear. So it could be done.. but.. the whole thing of they won't do it because they know they can just keep the money to themselves.

People shouldn't get into this game at this point with the thought of, my mining gear will positive ROI anytime in the near future. That window, for the most part, closed in 2013. Anyone mining now should have the mindset that they're banking on bitcoin value skyrocketing at some point.

Even still, it would be better to just buy bitcoin with your miner money.. and keep buying it if you believe the value will increase.

Mining is really fun though, so there's that. Can't say I'd drop several thousand just for that..

I dont think their profit margin is that high with the gear, their secret is to build the machines and then mine with them a couple months before giving to public.

Unable to pre sell to the public at inflated prices anymore, I doubt they can make mining gear at that profit margin again unless they can con more people as they are going private now, which is what the new strategy is I believe with the A series funding round.

[smoothrunnings]

Knc still need our money in 10nm miner, don't go 14nm, not improve their hashing power that much, just go 10nm, that will has signification enhancement.

The major problem of them is they shot on their foot, due to lack shipping and update information and so on, even through I love their product, I still don't understand why they are make us to heat them.

Likely the Neptune will be the last of their miners as it's clear they are moving the cloud mining, if there is a 14nm or 10nm chip it will only be in hardware they build for their own cloud.

[jomay]

As to building miners for dirt cheap, if KNC's profit margin is similar to the Jupiter series, they're making about 86-89% pure profit on the gear. So it could be done.. but.. the whole thing of they won't do it because they know they can just keep the money to themselves.

I dont think their profit margin is that high with the gear, their secret is to build the machines and then mine with them a couple months before giving to public.

Unable to pre sell to the public at inflated prices anymore, I doubt they can make mining gear at that profit margin again unless they can con more people as they are going private now, which is what the new strategy is I believe with the A series funding round.

What do you think is their profit margin?
I would expect at least 30% of ~25m$ pre-order sold (Batch 1). The NRE of a 28nm ASIC and production cost should run much about 10m$? Batch 2 was then pure profit for them, as R&D has been paid for. I'd expect the marginal cost to be comparable or lower than the Bitmain L1, so a Titan costs 1800$ to produce after R&D.
That said, this is pure speculation, I simply don't know.

The pre-order scams etc. will also damage Bitcoin and the hoped for spike in prices may not happen. At that point it's going to be difficult to make new hardware and profit from that as before, because the marginal increase in performance/watt does not justify the explosion in R&D costs. So from now on it'll be about "cheap", not about "quick to market" (IF they sell any)

[samsonn25]

As to building miners for dirt cheap, if KNC's profit margin is similar to the Jupiter series, they're making about 86-89% pure profit on the gear. So it could be done.. but.. the whole thing of they won't do it because they know they can just keep the money to themselves.

I dont think their profit margin is that high with the gear, their secret is to build the machines and then mine with them a couple months before giving to public.

Unable to pre sell to the public at inflated prices anymore, I doubt they can make mining gear at that profit margin again unless they can con more people as they are going private now, which is what the new strategy is I believe with the A series funding round.

What do you think is their profit margin?
I would expect at least 30% of ~25m$ pre-order sold (Batch 1). The NRE of a 28nm ASIC and production cost should run much about 10m$? Batch 2 was then pure profit for them, as R&D has been paid for. I'd expect the marginal cost to be comparable or lower than the Bitmain L1, so a Titan costs 1800$ to produce after R&D.
That said, this is pure speculation, I simply don't know.

The pre-order scams etc. will also damage Bitcoin and the hoped for spike in prices may not happen. At that point it's going to be difficult to make new hardware and profit from that as before, because the marginal increase in performance/watt does not justify the explosion in R&D costs. So from now on it'll be about "cheap", not about "quick to market" (IF they sell any)

Scrypt:  Bitmain at $5 MH in December.  KNC batch 2 $15 MH.   Bitmain cost maybe $3-3.50 but importantly BOTH Companies  use the money now from pre-ordrs to do something for 3 months.

The Titans are the Scrypt offshoot.  I haven't done calculations on those but the Asics Neptunes will mine back 2 btc lifetime (currently) for them mining them earlier beforehand and release to the public profits more because they have cheap electricity, if that was the case then means $950 manufacture or less to break even (or maybe make at a loss) , better yet take 10k 12k, 6k, from customers by preselling them and use for a few months then re-sell them back at (retail price) before or at order deadline.

[Searing]

I think at this point its almost impossible to build machines  to even positive ROI.

They would need to build under $330 for 1TH @.7 watts efficiency and .10 cents electricity just to break even.

yeah at 15c/kwh I'm out ..and to tell the truth the hosting I've looked at in USA comes out to almost exactly 15c/kwh
so it is a wash for that as an option......at this point in time imho you sit on cash watching it fall waiting to buy coin
on www.coinbase.com or you just plain do zip at all and scratch your head (or the oppissite end) in utter confusion

but the FUD the press has put out on bitcoin in combo with the price drop has .I hope... been the reason for this
'temporary' situation for the price drop and negativity...and it too will pass

anyway as a HOBBY it has all the drama of being in a parachute club with none of the real dangers except to my
ego so WTF ....at least it is interesting

(although those Ad's for the DESTINY game on PS/4 etc makes me want to go out and buy it...and the last game
I played was on an apple II ..I think I'm becoming an adrenaline junkie from my BTC watching)

anyway Titan will be coming soon (batch one) the NO ROI Titan as I've renamed it ..that should be as close to
I'll ever come in making a perpetual motion machine...ie instead of it should keep runnning w/o energy...it will
be the mantra ..it should make ROI..both instances are myth!

funny humans

[Searing]

Now my concern is when will knc start shipping batc 1 Titan and Titan mini, I already realize that impossible to ROI, so I just want my toy back to me and play it around:

Maybe made some shit coin to mine myself for fun, will knc fillful my humble wish? You know as a leading company in the mining industrial(bitcoin)!

well we can be sure of one thing with a scrypt miner we can always use the toy to make coin lots and lots of worthless coin..but then again
i have no life....if i want to run it for alt coins that are worth dust at least I can......

yeah I know I need a life

(but all the pretty alt coins....not worth zip ..but soooooo many.......soooo full wallet .....sooooooo sad is my life)

heh

[btc_uzr]

No Scrypt-N or other variants of Scrypt for Titan owners when it ships.
Maybe they realized that with Scrypt-N customers competition could be able to achieve ROI..??

Kurt
Today, 09:45 AM

The forum has exploded with questions concerning the titan and scrypt-n and you have refused to answed any of them?!!
Will the titan be able to mine scrypt-n out of the box or after a firmware update?
What speed will it hash scrypt-n at?

If you do not have a clue then please say so instead of being rude and just ignoring the questions.

Hi,
The Titan was designed for several variants of the Scrypt algorithm, including Scrypt-N, this however, will not be implemented within the very first firmware revision as our main priority as it stands is to improve the core Titan firmware.

As mentioned in our latest newsletter, the firmware is in continuous development and we do expect to enable the functionality to mine different variants of Scrypt in the near future.

'near future' means forever, when shipping 'soon' means actually 'in some weeks'....

[vesperwillow]

As to building miners for dirt cheap, if KNC's profit margin is similar to the Jupiter series, they're making about 86-89% pure profit on the gear. So it could be done.. but.. the whole thing of they won't do it because they know they can just keep the money to themselves.

I dont think their profit margin is that high with the gear, their secret is to build the machines and then mine with them a couple months before giving to public.

Unable to pre sell to the public at inflated prices anymore, I doubt they can make mining gear at that profit margin again unless they can con more people as they are going private now, which is what the new strategy is I believe with the A series funding round.

What do you think is their profit margin?
I would expect at least 30% of ~25m$ pre-order sold (Batch 1). The NRE of a 28nm ASIC and production cost should run much about 10m$? Batch 2 was then pure profit for them, as R&D has been paid for. I'd expect the marginal cost to be comparable or lower than the Bitmain L1, so a Titan costs 1800$ to produce after R&D.
That said, this is pure speculation, I simply don't know.

The pre-order scams etc. will also damage Bitcoin and the hoped for spike in prices may not happen. At that point it's going to be difficult to make new hardware and profit from that as before, because the marginal increase in performance/watt does not justify the explosion in R&D costs. So from now on it'll be about "cheap", not about "quick to market" (IF they sell any)

I based my figures off of Jupiters batches 1 and 2, where KNC's internal insurance invoiced their value at $1000USD when being shipped back to them, or within their company controls. These figures came out hundreds of pages back. A company won't take a loss on a product in RMA when it can be insured, and would insure it for what their cost would be plus return shipping.

Further examination of the individual components also correlates to that value. BeagleBone value was around $99 back then. Arctic Cooler has remained $35. The other four fans ran around $9. Aluminum casing about $15 at most. Examining those costs:

Beaglebone 1 @ 99
Arctic Cooler 4 @ 35
Arctic Case Fan 4 @ 9
Aluminum Case 1 @ 15
Subtotal: 290
Bulk Discount 15%: 43
Potential Total: 247

Mining boards at their lowest were being sold for $200 I believe, and there was discussion a thousand pages back that the chip costs were likely close to $30 each. So figuring PCB components and the chip costs add up to internal cost of somewhere between $125-$150/ea, speculative pricing but close to real-life costs based on other industries.

If that's the case, 4 mining boards @ $150 = 600. Add on maybe $35 for the controller board.

So now the estimate is at $635+$247=$882. With the remainder on that shipping, which is close to their public original pricing of $150 UPS Air.

That's how I, and others, arrived at an internal KNC cost of $1k per Jupiter for 2013. Honestly, if you think about it, it absolutely makes sense. They crowdfunded their R&D / standup / profit buffers with the very first sale. They didn't have to sell batch 2 to make profit, they were making profit with batch 1. They simply kept the margins high after that, while still giving you guys a break, and it makes it seem like everyone is a winner.

Consider how many tens of millions they took home in profit on their tax statement. Their profit margins weren't 30%, they were generously higher.

[lucazane]

BFL : shipping in two weeks.
KnC: near future

[s1gs3gv]

KnC: near future

They're still trying to get the firmware on the Titan working … its shaping up to be another major fail.