If any hardware makers really want to succeed!!

[pizza]

Many of you guys posting about hardware builds with avalon chips, need to do a few things if you really want people to support you in the long term.

First have different offerings, so far the offerings are 10chips all the way hundreds of chips.
I want a 50-100gh/sec in one package, not a room with 100 boards.

Secondly,  stop charging in bitcoin that just screams greedy selfish asshole. Avalon bullshits us with their magical formula on how they come up with pricing, meanwhile their formula doesnt account for price change. If bitcoin was as stable as fiat and not have price swings of 300% then it would be ok.

75bitcoin x 250 and 75bitcoin x 50 is a really big difference. It's like Caterpiller changing the price of their mining equipment because the price of gold went up. Successful companies charge fixed costs they don't tie their price to something. Ohh corn prices tripled so did our harvester. Its just real scummy doing so, thats why avalon will die when real customer focused companies come out.

If anybody can do this and continue to do it they will completely crush the avalons and the butterfly labs. It might not happen now but sooner or later it will.

[1715049318]

1715049318

[1715049318]

1715049318

[erschiessen]

BigTimeCoin ordered his chips up front.

kcminer shows indications that they will accept fiat.

I concur with your thoughts on Avalon. BFL also seems hostile towards the folks that have trusted them with their BTC.

I don't understand it.

A company that delivers the goods, with only even pretending to respect customers, will make BTCoatloads.

[chipd]

BigTimeCoin ordered his chips up front.

kcminer shows indications that they will accept fiat.

I concur with your thoughts on Avalon. BFL also seems hostile towards the folks that have trusted them with their BTC.

I don't understand it.

A company that delivers the goods, with only even pretending to respect customers, will make BTCoatloads.

Simple... thats the difference between professionals and amateurs/hobbyists when it comes to running a successful business.
I would bet that many persons running bitcoin companies today don't have the education needed to run a real successful company, had a top management position, or even been employed at all.
Some will learn the hard way, most won't.

[fpgaminer]

Secondly,  stop charging in bitcoin that just screams greedy selfish asshole.

You're right, Bitcoin is worthless and nobody should sell their goods for bitcoins.

Should I call a European company greedy and selfish for charging EUR for their products?  Of course not, and so it makes no sense to call a Bitcoin company greedy and selfish for charging BTC for their product.

"But if I shop online, a European company will automatically convert EUR to USD for me!"  That's because neither EUR nor USD is an acceptable online currency; neither currency makes sense across borders.  Bitcoin does.  Bitcoin is an international, internet-compliant currency.  If I were shopping in Germany, should I expect to use USD to buy products?  Of course not, I would exchange my USD to the local currency  By the same reasoning, I should exchange my USD to BTC to shop online at a Bitcoin-based company.

The only reasons a Bitcoin company should charge local fiat for their products are A) as a convenience to their customers, or B) they don't have any faith in Bitcoin.

I agree that, right now, a company selling bitcoin mining equipment for local fiat will be more profitable.  But, during these early growing pains of the Bitcoin ecosystem, we really need pioneers to take the bull by the horns and drive the point home that BTC is a currency too.  I consider companies like Avalon more successful.

[pizza]

Secondly,  stop charging in bitcoin that just screams greedy selfish asshole.

You're right, Bitcoin is worthless and nobody should sell their goods for bitcoins.

Should I call a European company greedy and selfish for charging EUR for their products?  Of course not, and so it makes no sense to call a Bitcoin company greedy and selfish for charging BTC for their product.

"But if I shop online, a European company will automatically convert EUR to USD for me!"  That's because neither EUR nor USD is an acceptable online currency; neither currency makes sense across borders.  Bitcoin does.  Bitcoin is an international, internet-compliant currency.  If I were shopping in Germany, should I expect to use USD to buy products?  Of course not, I would exchange my USD to the local currency  By the same reasoning, I should exchange my USD to BTC to shop online at a Bitcoin-based company.

The only reasons a Bitcoin company should charge local fiat for their products are A) as a convenience to their customers, or B) they don't have any faith in Bitcoin.

I agree that, right now, a company selling bitcoin mining equipment for local fiat will be more profitable.  But, during these early growing pains of the Bitcoin ecosystem, we really need pioneers to take the bull by the horns and drive the point home that BTC is a currency too.  I consider companies like Avalon more successful.

Completely missed the point. The EUR or USD dont have 50-200% price swings in a months time. Im all for of using bitcoin to make purchases if it was stable.

[repentance]

More than any of this, the first company to abandon the pre-order model will succeed.  The time from payment to delivery is still absurdly long and that gap needs to be closed.  Vendors either need to start taking a non-refundable deposit of 10% of order value with the balance payable when they're ready to ship, or they need to bite the bullet and sell on a purely FIFO basis once they have units available for delivery.  

That none of them are doing this almost a year into the ASIC game is worrying because it suggests that they don't have adequate financial backing and are relying too heavily on pre-order funds to meet current costs rather than using the profits from pre-orders to fund production of the next batch (allowing the never-ending pre-order cycle to be broken).  

[pizza]

More than any of this, the first company to abandon the pre-order model will succeed.  The time from payment to delivery is still absurdly long and that gap needs to be closed.  Vendors either need to start taking a non-refundable deposit of 10% of order value with the balance payable when they're ready to ship, or they need to bite the bullet and sell on a purely FIFO basis once they have units available for delivery.  

That none of them are doing this almost a year into the ASIC game is worrying because it suggests that they don't have adequate financial backing and are relying too heavily on pre-order funds to meet current costs rather than using the profits from pre-orders to fund production of the next batch (allowing the never-ending pre-order cycle to be broken).  

I left this out as it was obvious that the preorder route is getting real old, but your right on point. Whats mind boggling is how Avalon with 1-2 people and butterfly labs with millions of dollars still hasnt delivered. Thats disturbing with Avalon they should have more than enough to produce units ready to be sold. Instead of still taking pre orders.

[pizza]

Another interesting thing to think about is, why are all these companies building the final product themselves? Your having a chinese company manufacter the chips, im sure its not hard to have them or another build the complete unit and ship you completed units. First it would cut costs on production and increase speed to market.

Just like every other normal functioning company in the world.

[fpgaminer]

Completely missed the point. The EUR or USD dont have 50-200% price swings in a months time. Im all for of using bitcoin to make purchases if it was stable.

I, too, wish BTC was not so volatile.  What we need is exactly what companies like Avalon are doing, though.  The more commerce in strictly BTC, the lower the variance will be.  As a Bitcoin miner, it only makes sense to do everything in my power to improve the value of BTC, and actually using BTC to make purchases is a great way to do that.

Whether miners like it or not, they are buying their mining equipment with BTC.  Mining equipment income is first and foremost in BTC.  If a miner purchases equipment for USD, they are buying "X BTC over Y amount of time for Z USD."  I will give a concrete example:

Sally buys an Avalon for $5000, and sells all her income for $.  Dave buys an Avalon for 80BTC and holds BTC.  They both make 200BTC over the course of a year.  In one scenario, BTC falls to be worth $1.  Sally lost $4800, and Dave gains 120BTC ($120).  In another scenario, BTC rises to $200.  Sally gains $35,000, and Dave gains 120BTC ($24,000).

As can be seen, buying mining equipment with USD, and expecting to trade the income out for USD, is margin trading.

TL;DR: Bitcoin mining equipment is worth a constant amount of BTC, and buying it with BTC will yield a relative safe and known BTC return.

[sunblaster]

it would probably take 1 week for Intel's lead engineer to redesign Core-i7 into ASIC with 8 cores@ 4Ghz and doing 32Gh/s on a single chip surely someday.

[pizza]

Completely missed the point. The EUR or USD dont have 50-200% price swings in a months time. Im all for of using bitcoin to make purchases if it was stable.

I, too, wish BTC was not so volatile.  What we need is exactly what companies like Avalon are doing, though.  The more commerce in strictly BTC, the lower the variance will be.  As a Bitcoin miner, it only makes sense to do everything in my power to improve the value of BTC, and actually using BTC to make purchases is a great way to do that.

Whether miners like it or not, they are buying their mining equipment with BTC.  Mining equipment income is first and foremost in BTC.  If a miner purchases equipment for USD, they are buying "X BTC over Y amount of time for Z USD."  I will give a concrete example:

Sally buys an Avalon for $5000, and sells all her income for $.  Dave buys an Avalon for 80BTC and holds BTC.  They both make 200BTC over the course of a year.  In one scenario, BTC falls to be worth $1.  Sally lost $4800, and Dave gains 120BTC ($120).  In another scenario, BTC rises to $200.  Sally gains $35,000, and Dave gains 120BTC ($24,000).

As can be seen, buying mining equipment with USD, and expecting to trade the income out for USD, is margin trading.

TL;DR: Bitcoin mining equipment is worth a constant amount of BTC, and buying it with BTC will yield a relative safe and known BTC return.

You can accomplish the same thing by giving a price in USD or EUR and allowing people to pay in bitcoin. So the price of bitcoins will fluctuate not fiat. Doing it the other way around just screams greed. Scenerios are great but they are just scenerios the people who paid 15-20k for an avalon are fucked right now, and in the future when their break even shoots out even longer.

[repentance]

More than any of this, the first company to abandon the pre-order model will succeed.  The time from payment to delivery is still absurdly long and that gap needs to be closed.  Vendors either need to start taking a non-refundable deposit of 10% of order value with the balance payable when they're ready to ship, or they need to bite the bullet and sell on a purely FIFO basis once they have units available for delivery.  

That none of them are doing this almost a year into the ASIC game is worrying because it suggests that they don't have adequate financial backing and are relying too heavily on pre-order funds to meet current costs rather than using the profits from pre-orders to fund production of the next batch (allowing the never-ending pre-order cycle to be broken).  

I left this out as it was obvious that the preorder route is getting real old, but your right on point. Whats mind boggling is how Avalon with 1-2 people and butterfly labs with millions of dollars still hasnt delivered. Thats disturbing with Avalon they should have more than enough to produce units ready to be sold. Instead of still taking pre orders.

Avalon has been open about needing the pre-order money to produce the units (it's extremely unlikely that they made sufficient profit on Batch 1 and Batch 2 to fund Batch 3, if they made any profit at all).  It's not ideal, but they're not taking unlimited pre-orders for a product which exists only on paper.  They're producing limited batches which have a known delivery date.

BFL has always maintained that pre-order money wasn't being used to fund development.  If they don't actually need pre-order money to cover expenses, then it makes no sense for them to continue taking pre-orders at the moment (pre-orders should be a liability on their books) - or at least it doesn't make sense for them to still be requiring 100% payment upfront for a product which will not ship for many months under the best case scenario.  A financially stable company doesn't need to do that - you can use non-refundable deposits to maintain people's places in order queues.

If there is one question all companies doing the pre-order thing should be explaining, it's how pre-order money is being used.  

[pizza]

it would probably take 1 week for Intel's lead engineer to redesign Core-i7 into ASIC with 8 cores@ 4Ghz and doing 32Gh/s on a single chip surely someday.

Supposedly in an article i read they mentioned mobile chips within a years time will surpass asic's.

[repentance]

Another interesting thing to think about is, why are all these companies building the final product themselves? Your having a chinese company manufacter the chips, im sure its not hard to have them or another build the complete unit and ship you completed units. First it would cut costs on production and increase speed to market.

Just like every other normal functioning company in the world.

Small custom runs are extremely expensive.  Even finding a company willing to do them can be a hassle.  Your pissy little order for 50,000 units is going to be squeezed in when they have time and that might be months after you wanted the product because they will always give priority to rush orders from their big customers.

No ASIC vendor is big enough right now to have much leverage with suppliers, so they can't even go the Dell "just in time" route and have all the components delivered at the same time for assembly by a third party.

The "normal" companies you're talking about order chips, boards and cases by the millions and their orders are enormously important to their suppliers.

[CoinHoarder]

I want a One Terra hash rig made up of Avalon chips... that would be sexy!

[SebastianJu]

*lol* sounds like "Dont let you pay with bitcoins... thats dubious" while in fact you want to mine bitcoins with it, you want, most probably, that bitcoin is a more used currency, but please... not take bitcoins in the very root of the bitcoin-empire... the miners.

Its true that Bitcoins are volatile... and? Volatility is a risk like everything other. So if a company takes bitcoins it has to take the risk of a crash too.

And by the way... what the heck is the difference when you could pay in fiat? I mean the only thing you have then is a warm feeling, nothing more. Because if you exchange your bitcoins back to fiat to buy the miner and get the same fiat back some months later, because the company doesnt work out, what will be if the exchange course went up in the meantime? Right... you will feel warm because you got the exact amount of fiat back. But if you wouldnt have exchanged that money into fiat it would be worth much more now. So no, you cant run the volatility.

So what effect should this bring?

[pizza]

Another interesting thing to think about is, why are all these companies building the final product themselves? Your having a chinese company manufacter the chips, im sure its not hard to have them or another build the complete unit and ship you completed units. First it would cut costs on production and increase speed to market.

Just like every other normal functioning company in the world.

Small custom runs are extremely expensive.  Even finding a company willing to do them can be a hassle.  Your pissy little order for 50,000 units is going to be squeezed in when they have time and that might be months after you wanted the product because they will always give priority to rush orders from their big customers.

No ASIC vendor is big enough right now to have much leverage with suppliers, so they can't even go the Dell "just in time" route and have all the components delivered at the same time for assembly by a third party.

The "normal" companies you're talking about order chips, boards and cases by the millions and their orders are enormously important to their suppliers.

Don't assume that the thousands of factoried in China are all booked to the core with million dollar orders. If that was the case Avalon wouldnt be able to buy chips. Or cases, or power supplies, or every other material they need. The fact that they have produced a product means they can easily ship all matetials to a manufacterer and have them put it together.

Their batches are selling out in hours if they left orders open for a week im sure they would get 5-10k in orders which there are pleanty of manufacturers that would produce and assemble them for you.

[pizza]

*lol* sounds like "Dont let you pay with bitcoins... thats dubious" while in fact you want to mine bitcoins with it, you want, most probably, that bitcoin is a more used currency, but please... not take bitcoins in the very root of the bitcoin-empire... the miners.

Its true that Bitcoins are volatile... and? Volatility is a risk like everything other. So if a company takes bitcoins it has to take the risk of a crash too.

And by the way... what the heck is the difference when you could pay in fiat? I mean the only thing you have then is a warm feeling, nothing more. Because if you exchange your bitcoins back to fiat to buy the miner and get the same fiat back some months later, because the company doesnt work out, what will be if the exchange course went up in the meantime? Right... you will feel warm because you got the exact amount of fiat back. But if you wouldnt have exchanged that money into fiat it would be worth much more now. So no, you cant run the volatility.

So what effect should this bring?

??

1. The company has 0 risk of a bitcoin crash unless they are retarded. In the case of Avalon they take pre order money and immediately pay the suppliers either in bitcoin or fiat converted from the bitcoins. Since they are not hokding on to the coins for extended period of time they have almost no risk. Secondly, they can immediately convert their bitcoins into fiat and eliminate their risk.

2. The difference for the consumer is he takes on substantial risk of a crash as he doesnt start using his investment right away. Like mentioned before the people who spend 15-20k on an avalon are screwed with a longer return on their investment. Wheras if the purchased the unit for say $5k fiat they wouldnt be in such a bad position.

I shouldnt really have to explain this its pretty simple to understand. The value of my investment isnt going to drop by 100% in a short time with fiat because i didnt overpay by 10 times. Bitcoins volatility allows the problem of overpayment for the device, whereas fiat significantly reduces this risk by being much less volatile.

[erschiessen]

And by the way... what the heck is the difference when you could pay in fiat?

I don't yet have a miner.
That means that I need to purchase BTC.
That means that I am paying someone arbitrage fees.
The local guy takes cash at a premium... not quite 10%... but still... 10% is quite a bit.
Or I can throw money at what seem to be fly-by-night organizations that hold my fiat for days before allowing me to use my fiat, and hope they don't get hacked, or DDOS'd or hope that once I have my BTC, the price isn't FUD'd before I make my purchase.

Once I have a miner and begin to hold coins that I earned by strengthening the chain --- then it will be easier to purely think in BTC terms.
The cost for me to do biz in BTC isn't simple.

[pizza]

And by the way... what the heck is the difference when you could pay in fiat?

I don't yet have a miner.
That means that I need to purchase BTC.
That means that I am paying someone arbitrage fees.
The local guy takes cash at a premium... not quite 10%... but still... 10% is quite a bit.
Or I can throw money at what seem to be fly-by-night organizations that hold my fiat for days before allowing me to use my fiat, and hope they don't get hacked, or DDOS'd or hope that once I have my BTC, the price isn't FUD'd before I make my purchase.

Once I have a miner and begin to hold coins that I earned by strengthening the chain --- then it will be easier to purely think in BTC terms.
The cost for me to do biz in BTC isn't simple.

Not to mention the miner you buy could lose its value by 2-3x. If you buy the miner for $5k guess what 2-3months later its still worth around the same.

You buy a miner at 75bitcoin x 200 = for $15k that investment fell all the way to $3,750, and is now worth about $7.5k so you just lost half of your money, if you cant see the difference good luck in life, your going to need it.