Why do companies like Bitmain sell AISC machines to the public? Doesn't that...

[Stockypotty]

Sorry all got some noob questions if you don't mind.

So if companies like Bitmain sell AISC machines en mass to the public, won't that just increase the hash difficulty of specific coins?

Why don't they just operate a private farm and continue to use their profits to make better machines (that they keep to themselves)?

Just trying to work this all out

Thanks in advance!

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[Emoclaw]

Bitmain already owns a private farm. By selling ASICs they make more profit.

Bitmain makes tons of money from selling ASICs, they wouldn't have enough money to make better machines if all they did was use them to mine for themselves. The difficulty would be lower but so would the efficiency of every miner.

[Stockypotty]

Thanks for the reply Emoclaw.

>The difficulty would be lower but so would the efficiency of every miner

By this do you mean because they wouldn't have the funds to create better miners, although the difficulty would be low their hardware / setup wouldn't be as good due to lack of funds to developer better miners?

So they sell AISC machines for cash flow / to have enough money up front to develop faster machines?

Thanks a bunch

[Jamievs]

Thanks for the reply Emoclaw.

>The difficulty would be lower but so would the efficiency of every miner

By this do you mean because they wouldn't have the funds to create better miners, although the difficulty would be low their hardware / setup wouldn't be as good due to lack of funds to developer better miners?

So they sell AISC machines for cash flow / to have enough money up front to develop faster machines?

Thanks a bunch

Also for strategic reasons. If they have all the hashrate they control the network so the price of the coin will drop

[Stockypotty]

Hi Jamie,

Sorry do you mean the price will drop because people will be concerned that they own x amount of x and therefore the perceived value will go down meaning the actual price will go down?

[dbc23]

I think liquidity and cash on hand plays a big part of it.  They could build and mine all day long, but then they'd hold a TON of coins with little cash on hand.  Rather than trying to exchange and sell ALL that bitcoin for cash to pay the bills, it's easier to mark up their hardware and sell that off for operating capital and let their mining farm make all their profits, would be my guess.

[Stockypotty]

I think liquidity and cash on hand plays a big part of it.  They could build and mine all day long, but then they'd hold a TON of coins with little cash on hand.  Rather than trying to exchange and sell ALL that bitcoin for cash to pay the bills, it's easier to mark up their hardware and sell that off for operating capital and let their mining farm make all their profits, would be my guess.

Yeah certainly makes sense! Thanks all

[jmpFCE2]

Question has been asked a gazilion times,the ASIC miner producers sell the miners after the pump into slow death.

Else they would have kept it and mined for them greedy selves you morons, only get a miner if it has another purpose , like running your game on HD in 1001 FPS

[jmpFCE2]

like buy a baikal miner now:D

[wheelz1200]

Guaranteed instant profit.  Especially preorders.  They make instant profit on something that isnt even made yet and let the little folks fight over the reward crumbs that are left after they pump them out.

[jmpFCE2]

or sign up for a Genesis mining contract and get some more vaseline

[Apneal]

It's also reasonable to assume that they're implementing higher profitability equipment than they're selling.

[toptek]

atm only three major seller you can trust if you buy the gear you get it but it's not cheap

Bitmain
Avalon

and

INNOSILICON

I would trust

and one or two smaller ones, I'm not to sure about right now for X11 miners there is issue with them .

Why don't they just operate a private farm and continue to use their profits to make better machines (that they keep to themselves)?

most of them do like BW , bitfury but bitfury is selling chips to some on the forums that make miner look up sidehack .


So if companies like Bitmain sell AISC machines en mass to the public, won't that just increase the hash difficulty of specific coins?
 
 not because of the Public in general bitmain is smart they win both ways and bitmain and a  few others  that don't sell the public jacked up the difficulty, if they all would take it a little slower the coins might be worth more even now with a lower difficulty,.... i don't think most user would  want to or even do it ...because of how it hurts others ..

[leowonderful]

atm only three major seller you can trust if you buy the gear you get it but it's not cheap

Bitmain
Avalon

and

INNOSILICON

I would trust

and one or two smaller ones, I'm not to sure about right now for X11 miners there is issue with them .

Innosilicon would barely be on the list with me, they've also had issues and they're barely better than some X11 asic producers. Of the three, Innosilicon and Avalon are generally the cheapest. Avalon is a little more reliable.

[buggy166]

Sorry all got some noob questions if you don't mind.

So if companies like Bitmain sell AISC machines en mass to the public, won't that just increase the hash difficulty of specific coins?

Why don't they just operate a private farm and continue to use their profits to make better machines (that they keep to themselves)?

Just trying to work this all out

Thanks in advance!

1 thing you should always assume is that whoever makes the machines, already has been using them for months, before the public knows about them. Both for profit and testing purposes. Once a certain amount of time passes, they release the "not super new" technology to the masses, in small quantities, and make even more profit than what they already mined.

a 2nd thing is, the point of these currencies is to be de-centralized. AKA if 1 guy has all or most of the coins, everyone else will disappear like a fart in the wind, and those coins will be worth next to nothing. Its not like physical cash.

The only way profits can be made is by circulating the ecoins among users, holding onto vast amounts actually reduces their value as it can scare people off. Having rich people dictate what the entire currency does, is basically what we already have in the real world. If that happens with ecoins, whats the point of ecoins? I'd rather just have cash in hand, safer than e-wallets, or in the bank, where you're covered for losses if any "hacking" were to happen.

So they do use the machines, they just dont advertise it, and its primarily because their public business image is as hardware manufacturer, not mining farms. They need to maintain that image, in order to keep selling hardware. There's little value in advertising yourself as a farm, unless your business model involves selling contracts.

[Stockypotty]

Yeah really good points buggy!

[Ayers]

liek they said selling their miner is always profitable than mining with them, in fact their miners are overpriced, but i think they first mine with them a bit for one or two months, then when the diff is high enough they sell, and this si the best strategy to do, if you mien forever with your gear you lose only good profit in the long run

[buggy166]

Yeah really good points buggy!

here's a good article in regards that what i said:

http://www.helenabitcoinmining.com/2016/03/09/we-can-now-confirm-that-the-ibelink-dm384m-x11-asic-miner-is-real/

"The last part of our initial impressions that did not leave us very happy is the fact that there was quite a bit of dust buildup inside the miner, way more than there should be from a normal testing of new hardware before shipping to customer for example. The outside of the miner makes an impressions that it is new (cleaned well), but on the inside – the fans and the heatsinks of the blades with chips have dust that is hard to cleanup with just compressed air without taking the device apart. The amount of dust we should normally be associated with at least of few weeks of usage in normal everyday environment (non server room) and we don’t think that these devices are tested in a very dusty room. So it seems that they have been “tested” for some more time before being shipped to customers…"

[Spill]

It's also reasonable to assume that they're implementing higher profitability equipment than they're selling.

  X2


I feel the same way they sell the old stuff to us losers, keep the new and better stuff for themsleves. 
I feel bitfury does the same stuff also.

[KougarLOB]

(Speculation)
In the case of Bitmain, I think they run the machines privately for a while before they sell them.  Bitcoin difficulty made a sudden and significant jump recently even after Bitmain was sold out of S9s.  Lo-and-behold 1000 machines hit the cloud shop two weeks later.  They likely only go public once machines hit a certain profit point.

Same is probably true for LTC/L3.  Someone could probably check block records from a month ago to see who was forcing up the difficulty.  I'm too lazy.