ASICMINER vs. Cado.AvalonB3

[velacreations]

Still butthurt over Asicminer not listing on your exchange, heh?

obviously, he is.  

But thank goodness Friedcat could see through that nonsense.  He's done really well for the shareholders.

mining is a fixed income gig

yeah, just look at how fixed that income is...



I wonder what other security offers 45+% APR in dividends?

[1714050479]

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[1714050479]

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[1714050479]

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[MPOE-PR]

obviously, he is.  

But thank goodness Friedcat could see through that nonsense.  He's done really well for the shareholders.

yeah, just look at how fixed that income is...



I wonder what other security offers 45+% APR in dividends?

Read up on that: http://polimedia.us/trilema/2013/the-best-investments-in-the-history-of-bitcoin/

Anyway, these threads are pretty funny. April 2012 nobody had heard or cared of Asicminer, everyone was gaga over gigavps' mining thing, which also went to about 1.5 before disappearing into the pits of nothingness, leaving behind the usual 70% hole in "investors'" pockets. Exact same "arguments" coming from a different set of six-week-old experts, meanwhile silenced by the inexorable workings of capital flow. Nobody wanting to sit down and do the math of how exactly PMBs work and what portion of the "dividends" is actual yield and what portion reflects returned principal. Everybody knowing better on the grounds that hey, why not. It's the Internet.

I'm pretty sure come 2014 you'll be gone and I'll still be here, saying the same thing about the same nonsense while a similar bunch of nobodies will be telling me all about how I'm jealous over their pyrite find and whatnot. And I'll have one more bead in the track record of publicly humiliating forum experts, and the links to prove it, which no forum expert will have the patience to review. Too superficial for that and after all hey, why bother to do the work when you can imagine you're right anyway. It's the Internet!

Easiest job in the world, to be honest. I'm starting to like it.

[michaelGedi]

obviously, he is.  

But thank goodness Friedcat could see through that nonsense.  He's done really well for the shareholders.

yeah, just look at how fixed that income is...



I wonder what other security offers 45+% APR in dividends?

Read up on that: http://polimedia.us/trilema/2013/the-best-investments-in-the-history-of-bitcoin/

Anyway, these threads are pretty funny. April 2012 nobody had heard or cared of Asicminer, everyone was gaga over gigavps' mining thing, which also went to about 1.5 before disappearing into the pits of nothingness, leaving behind the usual 70% hole in "investors'" pockets. Exact same "arguments" coming from a different set of six-week-old experts, meanwhile silenced by the inexorable workings of capital flow. Nobody wanting to sit down and do the math of how exactly PMBs work and what portion of the "dividends" is actual yield and what portion reflects returned principal. Everybody knowing better on the grounds that hey, why not. It's the Internet.

I'm pretty sure come 2014 you'll be gone and I'll still be here, saying the same thing about the same nonsense while a similar bunch of nobodies will be telling me all about how I'm jealous over their pyrite find and whatnot. And I'll have one more bead in the track record of publicly humiliating forum experts, and the links to prove it, which no forum expert will have the patience to review. Too superficial for that and after all hey, why bother to do the work when you can imagine you're right anyway. It's the Internet!

Easiest job in the world, to be honest. I'm starting to like it.

gosh, you are quite hurt about something deep inside aren't you.

I'm not saying you're wrong mind, just that you have a real attitude problem. You watch out for that you hear? You might get high blood pressure and you might bleed out a bit faster when you fall from that high place you're on at the moment. You pro level understander of business you

[furuknap]

mining is a fixed income gig

yeah, just look at how fixed that income is...

I wonder what other security offers 45+% APR in dividends?

I don't think you quite catch the 'fixed' part. There's a fixed amount of BTC created each tick, and nothing AM can do will ever change that. That level is approximately 2 times what they're currently yielding or 4 times if they decide to screw Bitcoin over completely.

There is no way they can ever exceed that. Thus, fixed income, and the only thing that differs is the percentage of that fixed income that AM has.

At current price levels or perhaps slightly above, AM needs to maintain their current percentage for the rest of the current block reward rate to just cover the expected drop in value after block reward halving, meaning that any competitor entering the scene will drive the value (not price) per share down.

Of course, theory makes it possible for AM to go outside BTC denominated income, do currency conversion to increase its yield to some extent, or hope the uptake in BTC usage and subsequent transaction fee increase will catch up to the block reward subsidy drop.

In a perfect world, where investors do their math, they are currently investing in the potential for such earnings, not in the potential mining value of AM, even if they manage to stay alive for the full current block reward and maintain their current share of the hash rate.

.b

[furuknap]

Anyway, these threads are pretty funny. April 2012 nobody had heard or cared of Asicminer, everyone was gaga over gigavps' mining thing, which also went to about 1.5 before disappearing into the pits of nothingness, leaving behind the usual 70% hole in "investors'" pockets. Exact same "arguments" coming from a different set of six-week-old experts, meanwhile silenced by the inexorable workings of capital flow. Nobody wanting to sit down and do the math of how exactly PMBs work and what portion of the "dividends" is actual yield and what portion reflects returned principal. Everybody knowing better on the grounds that hey, why not. It's the Internet.

This isn't a situation unique to Bitcoin or PMBs at all, it is a situation in all cross-currency investment. If you bought Apple shares denominated in US$ by selling Euros and the price of USD/Euro shifted, you'd have the same situation. The volatility of BTC makes this 'problem' more apparent, but it's far from unique.

Try running the same numbers for a stock denominated in Zimbabwe Dollars and you'd see you'd make a killing with a US$1 investment, having trillions or percent profit, but on the other hand, you'd still be stuck with $1 worth of assets when you convert your gazillion Z$ back to USD (assuming that was possible, of course).

It does depend on how you denominate your assets. Having ฿40 worth of mining equipment at $200/฿BTC is exactly the same as having ฿100 worth at $80 if you denominate your portfolio in USD. Thus, investing in mining is always a bet that prices of BTC goes down more than the depreciation of your USD-denominated equipment. Again, this is exactly the same as any cross-currency investments; If you invest in something denominated in currency A that produces revenue in currency B, you want currency B exchange rate to go down more than the depreciation of your A-denominated assets.

.b

[romerun]

Batch 3 ? Good luck.

but if their 2nd generation ASICs fail to impress, then they're looking at some serious competition that is probably ready to deploy better hardware before them.

has they announced the 2nd gen plan ?

[furuknap]

Batch 3 ? Good luck.

but if their 2nd generation ASICs fail to impress, then they're looking at some serious competition that is probably ready to deploy better hardware before them.

has they announced the 2nd gen plan ?

I haven't found anything firm, but keep in mind, AMs ASICs are currently _very_ first generation (130nm). Even Avalons (110 nm) are second generation compared to AM. Upcoming (or potential) products have 90nm, 65nm or even 28nm technology, leaving AMs efficiency far behind in terms of power per square inch and kw/h. That means AM needs far more space and power to produce the same hash rate (roughly similar to running on Pentium III cpus compared to an i7). 

Right now, that's not a problem because AM is so profitable that whether the power cost is $.01 or $.20 doesn't really matter, but once the competition starts rolling out more efficient units, profitability per device will drop considerably for AM. AM can keep a distance by coming up with more modern chips, but I don't have any knowledge of their plans or progress of such chips, sorry.

.b

[MPOE-PR]

gosh, you are quite hurt about something deep inside aren't you.

I'm not saying you're wrong mind, just that you have a real attitude problem. You watch out for that you hear? You might get high blood pressure and you might bleed out a bit faster when you fall from that high place you're on at the moment. You pro level understander of business you

Yeah. I'm bleedin'.

I don't think you quite catch the 'fixed' part. There's a fixed amount of BTC created each tick, and nothing AM can do will ever change that. That level is approximately 2 times what they're currently yielding or 4 times if they decide to screw Bitcoin over completely.

There is no way they can ever exceed that. Thus, fixed income, and the only thing that differs is the percentage of that fixed income that AM has.

Exactly.

Of course, theory makes it possible for AM to go outside BTC denominated income, do currency conversion to increase its yield to some extent,

Amusingly enough the exact same theory with currency conversion etc was what idiots like Gigavps and scammers like oh, I won't bother to name the lot were proposing is allowing Pirate to pay out "exceptional" APR. Just a thought.

This isn't a situation unique to Bitcoin or PMBs at all, it is a situation in all cross-currency investment. If you bought Apple shares denominated in US$ by selling Euros and the price of USD/Euro shifted, you'd have the same situation. The volatility of BTC makes this 'problem' more apparent, but it's far from unique.

Try running the same numbers for a stock denominated in Zimbabwe Dollars and you'd see you'd make a killing with a US$1 investment, having trillions or percent profit, but on the other hand, you'd still be stuck with $1 worth of assets when you convert your gazillion Z$ back to USD (assuming that was possible, of course).

It does depend on how you denominate your assets. Having ฿40 worth of mining equipment at $200/฿BTC is exactly the same as having ฿100 worth at $80 if you denominate your portfolio in USD. Thus, investing in mining is always a bet that prices of BTC goes down more than the depreciation of your USD-denominated equipment. Again, this is exactly the same as any cross-currency investments; If you invest in something denominated in currency A that produces revenue in currency B, you want currency B exchange rate to go down more than the depreciation of your A-denominated assets.

.b

This is absolutely correct, but the combination of fixed income, commodified market and huge fx risk has to have a name. Something like the widowmaker, for that's what it is. In fact this particular tarpit has killed more BTC names than any other.

[jjdub7]

mining is a fixed income gig

yeah, just look at how fixed that income is...

I wonder what other security offers 45+% APR in dividends?

I don't think you quite catch the 'fixed' part. There's a fixed amount of BTC created each tick, and nothing AM can do will ever change that. That level is approximately 2 times what they're currently yielding or 4 times if they decide to screw Bitcoin over completely.

There is no way they can ever exceed that. Thus, fixed income, and the only thing that differs is the percentage of that fixed income that AM has.

At current price levels or perhaps slightly above, AM needs to maintain their current percentage for the rest of the current block reward rate to just cover the expected drop in value after block reward halving, meaning that any competitor entering the scene will drive the value (not price) per share down.

Of course, theory makes it possible for AM to go outside BTC denominated income, do currency conversion to increase its yield to some extent, or hope the uptake in BTC usage and subsequent transaction fee increase will catch up to the block reward subsidy drop.

In a perfect world, where investors do their math, they are currently investing in the potential for such earnings, not in the potential mining value of AM, even if they manage to stay alive for the full current block reward and maintain their current share of the hash rate.

.b

^This.  Correct.  Mining is an infinitely scalable business (theoretically in the short run), so AM will only ever garner a share of the revenues equal to its market share (i.e. share of the hashing power, we don't have much speculation here in the way of variation of returns between firms, etc.).

So given these assumptions, shouldn't we all be able to determine the value of each mining share (within an expected range) of different companies at any given time using a time-weighted first-order Taylor approximation based on mining power?  At least it should be able to prove efficiency one way or another.

[velacreations]

Read up on that: http://polimedia.us/trilema/2013/the-best-investments-in-the-history-of-bitcoin/

Best thing I ever did was sell my S.Dice and bought AM @ .4.  I like companies that increase share value.

[furuknap]

So given these assumptions, shouldn't we all be able to determine the value of each mining share (within an expected range) of different companies at any given time using a time-weighted first-order Taylor approximation based on mining power?  At least it should be able to prove efficiency one way or another.

For pure mining assets, yes. What AM does to throw a wrench in it is to not do mining only and by operating in a country where costs are artificially low. These factors, however, only come into play in the long run; the first when we've seen some of the competitors come online and the latter when commoditization of ASIC mining has come a lot further than now.

However, factors come into play to make the profitability evaluation very complex here too. Right now, AM is leading the mining race _because_ they have and can build those Pentium IIIs and nobody else has anything of importance. However, we know that others are coming out with Pentium 4s, Xeons, Core 2 Duos, i7s and so on, and we know there are others setting up computation farms.

The big question is whether AM has the time, resources, and know-how to catch up; their current 20 TH/s is peanuts a few months down the line. Even the promised 200 TH/s isn't much.

friedcat himself has estimated on average 10% of the network speed, which correlates to ~฿10K/month on average. When they net ฿20K in one week and a bit right now, that actually represents 1/6 of what friedcat thinks they'll make in a year.

Yes, those 20K includes hardware sales, which makes the situation somewhat interesting and throws in that wrench I mentioned. AM can adjust their income by shifting between mining and other operations, so if they are losing competitiveness on mining they can shift to hardware sales while they develop new technology, in a very simplified sense. This brings strength through flexibility to AM shares compared to pure mining shares or pure hardware shares. This flexibility would be like Intel both renting out computing power and selling cpus and could move from one focus area to another depending on where the highest profitability lies.

Thus, in order to properly evaluate the value of AM, you need to look at what yields the highest profit from mining and hardware sales because AM can ride both waves. I believe the recent price hike is a result of AM demonstrating that they are able to ride both waves, first by mining profitably and then by selling and delivery hardware profitably. Compare this to some mining bonds (no one in particular) who promises some kind of revenue sometime in the future and hardware manufacturers who promise some kind of hashrate sometime in the future.

AM has killed off a lot of the uncertainty and people reward that with a higher share price.

Of course, most people are barely able to wrap their head around evaluating mining profitability, so throwing hardware sales profitability into the mix leads to inevitable chaos. That uncertainty leads to prices fluctuating because when there is no relatively easy way to say a share's value is X then what drives the price is hype and expectations, founded or otherwise.

.b

[furuknap]

Of course, theory makes it possible for AM to go outside BTC denominated income, do currency conversion to increase its yield to some extent,

Amusingly enough the exact same theory with currency conversion etc was what idiots like Gigavps and scammers like oh, I won't bother to name the lot were proposing is allowing Pirate to pay out "exceptional" APR. Just a thought.

Yeah, but snipping an argument mid-sentence sort of ruins the point :-)

AM has 'other revenue streams' which makes them more flexible and less susceptible to mining profit fluctuations or other issues that affect mining profitability.

In my view, a company has a good reason to pay out dividends when there is no way they can utilize their cash to grow their current market. AM right now is in that position so this is actually the very first time I'm comfortable with AM paying out dividends.

I would much rather see a company with potential growth hold on to any coin like their lives depended on it. As a share holder, I won't see any difference; a huge pile of cash on the books increases the share value, assuming an informed market.

The company, I trust implicitly with my investment, is better at evaluating how to utilize their money for growth than I am, so me getting money out of a company reduces the share value, not just by the amount paid out but from the lost opportunity that the company would have had with that cash. This is why Berkshire Hathaway has increased in value despite not paying a dime (except once) in dividends. Apple is in a similar position, where it is limited how much more they can grow their market share with money.

This turns a bit OT, but my point in this is that dividends in a growth company is bad, and I see AM more as a growth company (despite the aforementioned fixed income) than I see it as a mining operation with benefits.

This is absolutely correct, but the combination of fixed income, commodified market and huge fx risk has to have a name. Something like the widowmaker, for that's what it is. In fact this particular tarpit has killed more BTC names than any other.

Again, I don't believe these are the only legs on which AM stands. Where a two-legged stool is a complete disaster, with one more leg it's the most stable configuration there is.

Yeah, I know argument by analogy is really swell.

.b

[MPOE-PR]

What AM does to throw a wrench in it is to not do mining only

This "not mining only" is perhaps mostly a red herring. Sure some sliver of market exists made up by people interested to "feel like they're part of something" who will be spending 2 BTC on gear that will never in its useful lifetime mine 2 BTC. However these aside Asicminer's model is strictly mining. Whether it sells or deploys the units they still count towards the same ceiling. Logically it will sell a fraction and deploy a fraction. Even admitting that the buyers pay more than what their purchase is worth, how much more can that be? 10% overall? So if the sell/deploy splits out evenly this wrench being thrown is 5% worth of extra icing?

[circuitry]

Wow. Panic selling already?

[furuknap]

This "not mining only" is perhaps mostly a red herring.

I don't think so, which is probably why I have shares there still :-)

I understand that concern, though, but again, compared to holdings that have only one leg on which they stand (mining or sales, but not both) AM is infinitely more stable.

Whether the current price is anywhere near a real representation of value plus expectations... Well, that's part of the speculation game, isn't it?

.b

[jjdub7]

Wouldn't AM have much more to gain by opening their own exchange to replace gox?

[ThickAsThieves]

Wouldn't AM have much more to gain by opening their own exchange to replace gox?

Uhh, that is so far from their specialty. They need to focus on what they are best at. Yes, they should diversify a bit more in the future, but don't underestimate ASICMINER, they are smart cookies.

[velacreations]

AM dividend this week: .0362 per share.

That's the highest ever.  It also represents about 2.1% (109% APR) of the current share price on Bitfunder.

[lophie]

EDIT: wrong thread..... oh god...

[jjdub7]

Speaking of this same share-of-mining-power argument though, are there any other assets/funds that have as robust of a expansion plan as AM though?  Because that ~0.03 dividend is hard to argue with right now.  That being said, I'm still rating AM as a "hold" rather than a "buy".  Wouldn't sell my shares (TAT's PT shares, actually...thanks again btw, TAT), but at the base shares trading at a price of >1.7 BTC, I can't really afford to throw down on additional shares atm, so I'm stuck where I'm at nonetheless.