ASICMINER vs. Cado.AvalonB3

[furuknap]

Because that ~0.03 dividend is hard to argue with right now. 

No, it isn't. It's very easy to argue with (I assume you meant against). In fact, it's easy as hell unless you think of AM as a short-term blip that will be gone or seriously crippled in a couple of years.

It's a bit of a gold rush here and people are rushing to cash in as quickly as they can, not realizing that they are damaging the long-term viability by hyping up the dividend yield like they are.

Despite what a lot of people will tell you, AM isn't "a special company"; it is a completely normal and potentially very profitable company. There aren't any "special circumstances" that dictate that AM should follow any kind of completely unique and innovative way of conducting business. They are subject to exactly the same math, the same rules of expenses and income, the same goals, as every other startup on the planet.

You know what the most retarded argument I hear is? "People invest in ASCIMiner rather than mining themselves, so they expect a quick profit". This speaks to a fundamental lack of understanding of how any investment market works, so serious that I recommend anyone thinking this for even a second should step back, read up on the basics of how stock markets work, and realize that the skillset required to run a slightly modified computer are far, far different than what is required to operate in the cut-throat world of stock markets.

I'm not trying to sound negative. I'm still confident that AM is one of the most promising companies in the cryptocurrency world, but there are very simple reasons why companies like Coinbase attract millions of dollars in investments, and that reason isn't that Wall Street suddenly became very stupid and cannot possibly understand how AM operates.

.b

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[jjdub7]

Because that ~0.03 dividend is hard to argue with right now. 

In fact, it's easy as hell unless you think of AM as a short-term blip that will be gone or seriously crippled in a couple of years.

No, I agree with this entirely.  What happens to those share prices once we get another TH/s-level mining company on the map?  Tbh, I'm monitoring dividends and I'm just waiting for the correction to happen.  Most of my investments are in perpetual mining bonds that have a consistently small bid/ask spread so I can earn and get back out at a good price.

[jjdub7]

My point about the ~0.03 BTC dividend is that its hard to argue with "right now", but once shit hits the fan and we see serious competition in terms of hashing power, what happens to share prices?  The correction will be enormous, especially with all these new blades, ASICs, and other Gh/s-level mining units start to hack away at the network.

The best bet I can think of is investing in a difficulty security.  I know there is at least one on BitFunder that pays out the difficulty level at the end of the month.  I'll be putting coin into that fund all summer.  I expect difficulty to hit 50 million by the end of July with the added hashing power of the now-shipping units.

[MikeMark]

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.

And here we are about a week later with ASICMiner around BTC2.40 - BTC2.60. Don't know about you, but I'm glad I didn't sell out.

I've also been considering the fact that AM is selling Blades at a very healthy rate and very nice price (for the seller). That's essentially tapping into future mining, now. That means AM has effectively increased their total hashrate by the number of miners sold (less some possibly small percentage if you wish).

I read earlier where someone said it wasn't possible for AM to go beyond the 51% limit without essentially destroying BTCitcoin. That isn't true. Selling mining cards gives them essentially the ability to do just that: capture future mined BTCitcoin now.

That's why the dividend can be so far above the mine production rate.

I also notice that it's possible they are holding some of the proceeds from those sales to use for R&D or future dividends. That's excellent business management. I'm certain others have noticed also, and that's part of the reason for the current high share price. And it may continue.

[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.

And here we are about a week later with ASICMiner around BTC2.40 - BTC2.60. Don't know about you, but I'm glad I didn't sell out.

I've also been considering the fact that AM is selling Blades at a very healthy rate and very nice price (for the seller). That's essentially tapping into future mining, now. That means AM has effectively increased their total hashrate by the number of miners sold (less some possibly small percentage if you wish).

I read earlier where someone said it wasn't possible for AM to go beyond the 51% limit without essentially destroying BTCitcoin. That isn't true. Selling mining cards gives them essentially the ability to do just that: capture future mined BTCitcoin now.

That's why the dividend can be so far above the mine production rate.

I also notice that it's possible they are holding some of the proceeds from those sales to use for R&D or future dividends. That's excellent business management. I'm certain others have noticed also, and that's part of the reason for the current high share price. And it may continue.

They were pushing further up to around 3 BTC at the end of last week.  And yeah, the price isn't so important as is the rate of return via dividends.  It could very well be possible that people are just willing to accept a lower yield from AM in exchange for the safety of the asset.

[Streets 2.0]

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.

And here we are about a week later with ASICMiner around BTC2.40 - BTC2.60. Don't know about you, but I'm glad I didn't sell out.

I've also been considering the fact that AM is selling Blades at a very healthy rate and very nice price (for the seller). That's essentially tapping into future mining, now. That means AM has effectively increased their total hashrate by the number of miners sold (less some possibly small percentage if you wish).

I read earlier where someone said it wasn't possible for AM to go beyond the 51% limit without essentially destroying BTCitcoin. That isn't true. Selling mining cards gives them essentially the ability to do just that: capture future mined BTCitcoin now.

That's why the dividend can be so far above the mine production rate.

I also notice that it's possible they are holding some of the proceeds from those sales to use for R&D or future dividends. That's excellent business management. I'm certain others have noticed also, and that's part of the reason for the current high share price. And it may continue.

They were pushing further up to around 3 BTC at the end of last week.  And yeah, the price isn't so important as is the rate of return via dividends.  It could very well be possible that people are just willing to accept a lower yield from AM in exchange for the safety of the asset.

This is exactly it.  It doesnt matter to me, and I am sure many, what it costs to get shares of ASICminer.  Buy in regardless of price on late Monday early Tuesday, sell Wednesday night or early Thursday, gain extra BTC from dividends, repeat. Price fluctuation from Tuesday to Wednesday is nill 

[CMMPro]

To me it actually doesn't matter what the overall TH rate is...what they seem to be able to do is maintain the ~30% of the total hash rate for the indefinite future if they have 266 TH (in reserve).

If they took 99% of the total hash rate we would all shit a brick about a 51% attack...that's no good either, whether or not it is a valid concern the perception would be bad.

If they add TH as other companies come online and are able to keep hauling in ~30% of every bitcoin mined per day...I'll feel like a safe investor with consistent returns. The hardware sales are nice bumps to the div's too.

[jjdub7]

So then the question remains: what's to stop AM from reaching an absurd amount of the network hashing power to even accidentally initiate a 51% attack?  Obviously friedcat would tune down reinvestment and pay out higher dividends unless more mining companies come in to ameliorate the hashing disparity.  The only problem I see is the same problem we all see in the world economy right now, a lack of access to capital for competing startups, an effect thats compounded by the fact that AM is actually producing pure capital itself rather than a good or service thats sold through secondary fiat currency markets.

Nobody's willing to lend to the dodgy "BTC ASIC MINING RIG" posts on BTCjam, nobody's willing to take venture risks on emerging companies, and nobody's stepping up to combat the AM monopoly (hey Winklevoss twins, feel free to step in and found a decently competitive mining conglomerate here).  So with the status quo, what's to stop AM (in the long run) from gaining the maximum level of hashing power possible without initiating a 51% attack?  If they control that much of the hashing power, its definitely going to peg BTC/fiat prices to AM's output.  It would be a similar situation if there were only one gold mining company in the whole world...that one company and its shareholders would be able to dictate the global price to an extent (although generally the effect would only become significant if AM shareholders controlled 25% or more of the network hashing power and/or total BTC supply).

Would this price-AM output pegging be beneficial for BTC holders or detrimental?

[glendall]

^^^^^ it's really quite simple. Why would ASICMINER want to destroy Bitcoin, and the lovely highly profitable company they have made, with a 51% attack. That doesn't make any sense.

And it's not exactly an easy task to accidentally get over 51%, and accidentally then breaking everything. 1% of the Bitcoin mining network is an incredible amount of processing power. It's not like AM will be at 46% and than accidentally turn one too many 100 T/H server blades on and then destroy everything.

[jjdub7]

^^^^^ it's really quite simple. Why would ASICMINER want to destroy Bitcoin, and the lovely highly profitable company they have made, with a 51% attack. That doesn't make any sense.

And it's not exactly an easy task to accidentally get over 51%, and accidentally then breaking everything. 1% of the Bitcoin mining network is an incredible amount of processing power. It's not like AM will be at 46% and than accidentally turn one too many 100 T/H server blades on and then destroy everything.

Sorry I started to ramble a bit there, but my main point was that I was wondering if it would ever be possible for prices to be pegged to AM's output.  This was the bigger question in my mind, although now that I think about it, the 51% attack actually would serve as a limiting upper bound in the market for that exact reason (that AM would never push beyond the 51% mark).  However, if they were in the 40-45% range (assuming they'd set up a buffer of sorts to make sure they didn't go past the 51), wouldn't they still be able to collectively control prices?  I mean obviously this is mostly a theoretical argument, but after studying economics in school, you start to postulate about these kind of things for fun.

[lophie]

^^^^^ it's really quite simple. Why would ASICMINER want to destroy Bitcoin, and the lovely highly profitable company they have made, with a 51% attack. That doesn't make any sense.

And it's not exactly an easy task to accidentally get over 51%, and accidentally then breaking everything. 1% of the Bitcoin mining network is an incredible amount of processing power. It's not like AM will be at 46% and than accidentally turn one too many 100 T/H server blades on and then destroy everything.

Sorry I started to ramble a bit there, but my main point was that I was wondering if it would ever be possible for prices to be pegged to AM's output.  This was the bigger question in my mind, although now that I think about it, the 51% attack actually would serve as a limiting upper bound in the market for that exact reason (that AM would never push beyond the 51% mark).  However, if they were in the 40-45% range (assuming they'd set up a buffer of sorts to make sure they didn't go past the 51), wouldn't they still be able to collectively control prices?  I mean obviously this is mostly a theoretical argument, but after studying economics in school, you start to postulate about these kind of things for fun.

If you meant by controlling prices that they control how many new coins to introduce to the market then I think you did not consider that the mined coins are given to the shareholders as dividends weekly.

[jjdub7]

True, I guess you'd have to make the assumption that all AM shareholders have the same liquidity/cash needs in order for this to be true.  And my point about the output being pegged to price, looking back now that I've had my morning coffee, is completely irrelevant because the total output scheduling is fixed by the code, and AM's hashing power only determines what share of that output they're collecting.  So the price should (big, big 'should' there) just be fixed to the inflation rate (assuming no speculation-driven changes in price).  I was drawing my original musings from the gold mining analogy, but obviously that doesn't hold here.

[freedomno1]

 

3.4BTC * 400,000 = 1360,000BTC
> 0.136 billion USD

Q: How much hashing power does Bitfountain plan to deploy within this year?
Friedcat: 800-1000T within this year.

Q: What are the specs of the second batch? When will the mass production begin?
Friedcat: The exact numbers will only be known when the chips are out of fab, currently we only have simulated results. Mass production will be in October the earliest.

Q: What would be the physical address of the offshore company be to registered?
Friedcat: It will be on an island where financial freedom is more possible to achieve.

Q: Do you have plans for future other than mining and selling hardware?
Friedcat: ASICMINER's business is confined within mining and selling mining hardware. We might do some   
periphery work, but that won't be too distant.

Q: What kind of investors or business partners are you keeping in touch with?
Friedcat: We currently don't accept external funds, so there is no private investors. The partners we keep in touch with are mostly tech related.

Q: After the batch shipping from Avalon and BFL, how would the manufacturers in Shenzhen compete with them?
Friedcat: Our advantage to manufacture chips at the cost price is invincible.

Q: Are you hiring? What kind of people do you need?
Friedcat: We need people specialized in analog electronics, but we don't put much hope in finding this kind of people within China.

Q: Any plans or strategies that are suitable for the public to know?
Friedcat: We will be focusing more on the area that we have the most advantage in. It depends on whether we have more advantage in chip design or the ability to deployment fast.

Q: Why the hashing power of AM is not stable?
Friedcat: The variance of solo mining itself is relatively huge. And the whole network is being DDOS'ed lately, the 0.8.3 version of the software has fixed some bugs so as to prevent DDOS.

[jjdub7]

Hashrate can be found at BTCGuild as user 67117 and BitMinter user realasicminer :-)

Any updated info on hash rates?

[JimiQ84]

Hashrate can be found at BTCGuild as user 67117 and BitMinter user realasicminer :-)

Any updated info on hash rates?

http://www.asicminercharts.com/live/

[jjdub7]

Hashrate can be found at BTCGuild as user 67117 and BitMinter user realasicminer :-)

Any updated info on hash rates?

http://www.asicminercharts.com/live/

Good call.  Many thanks.

[davesag]

Now Bitfunder is closing I'm wondering if Cado.AvalonB3 is going to offer a migration path like TAT have done so we can get our shares out before the bitpocolypse.

Anyone know anything?

[niner]

Bitfunder was going to transfer all shares back to the issuer. @Candoo I think is the issuer.
How do we get our shares or some compensation for our shares that have been transfered back to the issuer?

[elitenoob]

How do we get our shares or some compensation for our shares that have been transfered back to the issuer?

This project has ended now...he sold the avalons and the dividend plus hardware sale will be payed as a last dividend.
You need to send him a signed message of your bitfunder address to 1b34iev@gmail.com with a note that this is ok for you to get your dividend send to xxx address.

The thread is here https://bitcointalk.org/index.php?topic=194505.0 wonder why there is no translation in english for you guys...

[niner]

How do we get our shares or some compensation for our shares that have been transfered back to the issuer?

This project has ended now...he sold the avalons and the dividend plus hardware sale will be payed as a last dividend.
You need to send him a signed message of your bitfunder address to 1b34iev@gmail.com with a note that this is ok for you to get your dividend send to xxx address.

The thread is here https://bitcointalk.org/index.php?topic=194505.0 wonder why there is no translation in english for you guys...

Thank you Elitenoob!