Eyes to the horizon: A bitcoin ASIC project will be announced in June

[Super T]

Assuming $100 per BTC, 10 million shares at 0.0185 btc each would be an IPO valuation of $18,500,000. If the network as a whole is producing 100kBTC a month, - about $10 million dollars worth a month.

If the network is 1,000 THash by the end of the year, and they succeed in getting 10% of that, then they'll be looking at 1 BTC/mo for every 100 shares, which would getting about 1 bitcoin a month (off a 1.85BTC investment).

So maybe this will pay out over one or two months, but after that its' going to be declining returns as the network is flooded with cheap ASICs from all over the place.

I think your math is out by a factor of 10.

10,000 BTC / 10,000,000 shares = 1BTC for every 1000 shares, per month.

...or 0.001BTC per share, meaning 18.5 month ROI ignoring risk of share dilution, failure to maintain hashrate proportion etc.

[Ytterbium]

I think your math is out by a factor of 10.

10,000 BTC / 10,000,000 shares = 1BTC for every 1000 shares, per month.

...or 0.001BTC per share, meaning 18.5 month ROI ignoring risk of share dilution, failure to maintain hashrate proportion etc.

Uh, yeah... you're right. It would be 18.5 months, which is a bit ridiculous in bitcoin time, especially given how unstable the hashrate is going to be over the next few months as all these ASICs come online. And of course they'd need to reinvest in new hardware to keep up so that means even lower dividends.

The funny thing is I initially thought it looked like a crap deal, then when I did the math wrong I though, huh, maybe it's not so bad... But yeah I think I forgot to include that 10% figure in my calculations even though I mentioned it

It's annoying, all these companies trying to rip off miners with ridiculously over-priced equipment, or in this case over-priced shares.

[Loredo]

I'll admit up front I didn't read the details of this IPO very closely, since there is no way I'd invest in this enterprise. 

That said, though, it seems that a problem many are having is that the issue does not sufficiently distinguish, and maybe confuses, the usage and meaning of the standard stock terms : authorized, issued, and outstanding.  (See http://financial-education.com/2007/03/08/shares-authorized-issued-and-outstanding/ for example).

The only other things I want to mention are these: 

First, keep in mind that any time someone offering an investment uses the term "may," you should read that as meaning "will certainly." 

Secondly, if dilution is feasible given differences between issued and outstanding shares, and secondary offering terms are not well defined initially, expect that your position will be diluted to the fullest possible extent.

[aiwill]

All serious replys are welcomed and appreciated. However i cannot follow upstair`s math.What is 10%? Did any part of my state mention such a percentage?    if you define variable quantities all by yourself ,you dont even need to read it at all.

We are trying to achieve 35% of the whole net in long term，it may be very hard,but we ll keep trying that.

In terms of the "may = will certainly" ，No comment. Please ignore our project and thank you.

[Super T]

Aiwill, you should think about the kind of relationship you would like to have with your shareholders.

One of the reasons people LOVE Asicminer shares is the fact that each share will always represent 1/400000 of the voting and dividend rights.  Asicminer (BitFountain) have retained a proportion of these shares (over 50%) to derive the funding for further investment and growth, and are demonstrating the viability of such a model without the need for further share dilution.

Secondly, the Asicminer IPO was priced very reasonably based primarily on the capital requirements of the group at startup, Friedcat knew he did not have the credentials to charge a premium for a company with no profit making history, and structured the deal accordingly.

The terms of your offer appear stacked in your favour, with very little chance of making shareholders rich, and a very high chance of making you rich.

Why not respond to the concerns being raised here by restructuring the terms of your IPO?

1. Promise zero share dilution.
2. Reprice the IPO (to say 10% or less of current valuation).  If you truly believe this is too far underpriced then add a clause to clawback a greater proportion of dividend payments for a period of time should the stock subsequently rise to a certain price (e.g. your original valuation).
3. Retain a proportion of the shares to fund future growth and to line your pockets in the event you make a success of the company.

[aiwill]

Aiwill, you should think about the kind of relationship you would like to have with your shareholders.

One of the reasons people LOVE Asicminer shares is the fact that each share will always represent 1/400000 of the voting and dividend rights.  Asicminer (BitFountain) have retained a proportion of these shares (over 50%) to derive the funding for further investment and growth, and are demonstrating the viability of such a model without the need for further share dilution.

Secondly, the Asicminer IPO was priced very reasonably based primarily on the capital requirements of the group at startup, Friedcat knew he did not have the credentials to charge a premium for a company with no profit making history, and structured the deal accordingly.

The terms of your offer appear stacked in your favour, with very little chance of making shareholders rich, and a very high chance of making you rich.

Why not respond to the concerns being raised here by restructuring the terms of your IPO?

1. Promise zero share dilution.
2. Reprice the IPO (to say 10% or less of current valuation).  If you truly believe this is too far underpriced then add a clause to clawback a greater proportion of dividend payments for a period of time should the stock subsequently rise to a certain price (e.g. your original valuation).
3. Retain a proportion of the shares to fund future growth and to line your pockets in the event you make a success of the company.

Your advises are serious and make sense, thank you. However,I highly recommend you to learn a lot with regards to the price of large-scale hashrate deployment & the cheapest price for 40nm chips`s Layout & mass production(our 2ed gene). Then lets see whether it is over priced.

In terms of ASICMINER,

1. I have met & talked with friedcat for several times,who s a nice guy and gave a lot of advices to us. I can safely speaking that I know how to learn from AM better than others.
2. We are not at the period of ASIC`s startup,which means 7TH can never be a good start anymore, we re talking about 200th as beginning.


"10% of current valuation", refers to this, I d going to show you how much we have already paid and please let me know at once no matter whoever can hold such a scale of the enterprise with "10% or less of current valuation" .

In terms of " share dilution" , since the community is strongly opposed to this ,we are still re-thinking about it to be honest. We are going to keep this possibilitty, which is def not equal to "we will certainly". We will give our final offer in another offical thread once we figure this out.

[Super T]

Your advises are serious and make sense, thank you. However,I highly recommend you to learn a lot with regards to the price of large-scale hashrate deployment & the cheapest price for 40nm chips`s Layout & mass production(our 2ed gene). Then lets see whether it is over priced.

In terms of ASICMINER,

1. I have met & talked with friedcat for several times,who s a nice guy and gave a lot of advices to us. I can safely speaking that I know how to learn from AM better than others.
2. We are not at the period of ASIC`s startup,which means 7TH can never be a good start anymore, we re talking about 200th as beginning.


"10% of current valuation", refers to this, I d going to show you how much we have already paid and please let me know at once no matter whoever can hold such a scale of the enterprise with "10% or less of current valuation" .

In terms of " share dilution" , since the community is strongly opposed to this ,we are still re-thinking about it to be honest. We are going to keep this possibilitty, which is def not equal to "we will certainly". We will give our final offer in another offical thread once we figure this out.

Thank you, I think.

On share dilution, a good start would be to guarantee of no dilution beyond the 10,000,000 being issued (of which the company is initially retaining 7,600,000).  Then at least people can see what they are getting into.

On the price, please do provide visibility of your operational startup costs, if you do this I am sure you would have no trouble achieving an IPO sale which more than covers them.  My point was primarily that you have valued your company based on assumed success and profitability, an outcome which is not guaranteed and for which for which you are asking shareholders to take on the overwhelming majority of the financial risk.

Also - with 76% of ongoing mining revenue, I would expect the company should be capable of funding further large scale expansion (again - I do not have your specific costs, but please do enlighten me).

Could you also confirm whether dividends will reflect 100% of mining revenue, or just mining profit (i.e. revenue - cost of operation).

Finally - it would be good to understand the tax obligations you anticipate needing to comply with, and for instance whether such costs will also be deducted before shareholder profit is confirmed.

[onecent]

Aiwill, you should think about the kind of relationship you would like to have with your shareholders.

One of the reasons people LOVE Asicminer shares is the fact that each share will always represent 1/400000 of the voting and dividend rights.  Asicminer (BitFountain) have retained a proportion of these shares (over 50%) to derive the funding for further investment and growth, and are demonstrating the viability of such a model without the need for further share dilution.

Secondly, the Asicminer IPO was priced very reasonably based primarily on the capital requirements of the group at startup, Friedcat knew he did not have the credentials to charge a premium for a company with no profit making history, and structured the deal accordingly.

The terms of your offer appear stacked in your favour, with very little chance of making shareholders rich, and a very high chance of making you rich.

Why not respond to the concerns being raised here by restructuring the terms of your IPO?

1. Promise zero share dilution.
2. Reprice the IPO (to say 10% or less of current valuation).  If you truly believe this is too far underpriced then add a clause to clawback a greater proportion of dividend payments for a period of time should the stock subsequently rise to a certain price (e.g. your original valuation).
3. Retain a proportion of the shares to fund future growth and to line your pockets in the event you make a success of the company.

Your advises are serious and make sense, thank you. However,I highly recommend you to learn a lot with regards to the price of large-scale hashrate deployment & the cheapest price for 40nm chips`s Layout & mass production(our 2ed gene). Then lets see whether it is over priced.

In terms of ASICMINER,

1. I have met & talked with friedcat for several times,who s a nice guy and gave a lot of advices to us. I can safely speaking that I know how to learn from AM better than others.
2. We are not at the period of ASIC`s startup,which means 7TH can never be a good start anymore, we re talking about 200th as beginning.


"10% of current valuation", refers to this, I d going to show you how much we have already paid and please let me know at once no matter whoever can hold such a scale of the enterprise with "10% or less of current valuation" .

In terms of " share dilution" , since the community is strongly opposed to this ,we are still re-thinking about it to be honest. We are going to keep this possibilitty, which is def not equal to "we will certainly". We will give our final offer in another offical thread once we figure this out.

appreciate your ambititon, I will keep on following this thread, however share dilution is indeed an obstacle to gain investors' trust, what they are looking for is a certain level of investment return, share dilution makes it very uncertain.  anyway, good luck 

[Anenome5]

Why not respond to the concerns being raised here by restructuring the terms of your IPO?

Because the point of the IPO is to make him rich, why else? He's already lost the trust of the community in large measure by being so blatantly self-serving. It's over for him. This IPO is dead.

[eve]

Why not respond to the concerns being raised here by restructuring the terms of your IPO?

Because the point of the IPO is to make him rich, why else? He's already lost the trust of the community in large measure by being so blatantly self-serving. It's over for him. This IPO is dead.

Ya, No IPO and No Pre Order

[Franktank]

Before people go crazy with torches and pitchforks, they are aware of the outcry and plan to make changes to the IPO (as seen above). I have it on very good authority that they are also planning an "alternative method for share ownership." Stay tuned.

[bitpop]

Sweepstakes. no purchase necessary. Alternative method of entry. Amoe.

[kingcoin]

How big is the die? The Encounter screenshot looked a bit "empty" Which cell library is used with SMIC?

[Ytterbium]

All serious replys are welcomed and appreciated. However i cannot follow upstair`s math.What is 10%? Did any part of my state mention such a percentage?    if you define variable quantities all by yourself ,you dont even need to read it at all.

We are trying to achieve 35% of the whole net in long term，it may be very hard,but we ll keep trying that.

Well, with 35% of the network your shares will pay off in 5.2 months with no dilution, and very low costs to add capacity.

The 10% was an arbitrary estimate. Just because you want 35% of the network doesn't mean you'll achieve it.

 ASICMiner has 20%, and they're going to work to keep their share as well. Do you think others will stand still? How are you going to compete with KnC miners with their 28nm design with your what, 130nm design?

If their design works, they'll end up with far more hash/sec/wafer.  They might be more constrained on the number of wafers that they can get made at 28nm rather then 130 - but still, you don't know that for sure.

And how do you know there isn't some other group with chips as high density as KnC's planning on dominating a certain % of the network as well. (Simply writing them off as Lazy Nordics who only work 2 hours a day 4.5 days a week is not going to cut it, btw)

And here's the thing, if you have 10 groups aiming control 20% of the network, then some of those groups are going to lose.  What assurances do investors have that you'll be the winner here?

As far as I can tell, there aren't any.  My guess you won't even achieve 10% of the network.  Things aren't where they are when Asicminer and Avalon started up.  You can't just throw a few hundred BTC worth of money to design cheapo IC anymore. 

[burnside]

I apologize for how long it has taken, but I have finally had a chance to read through the prospectus, check out the websites, and read through this thread.

The asset admin lock has been removed.  The issuer can remove the issuer lock whenever they are ready for voting to begin.  I strongly recommend making sure the prospectus is finalized prior to removing the issuer lock.

Cheers.

[eve]

What is the difference between IPO and Pre order they are practically the same, using the your customer money to finance your venture. You don't even have a proven product to show, now you have indicate your chip will only be available in October, blaming the fab and other excuses. Remember no IPO.

[aiwill]

I apologize for how long it has taken, but I have finally had a chance to read through the prospectus, check out the websites, and read through this thread.

The asset admin lock has been removed.  The issuer can remove the issuer lock whenever they are ready for voting to begin.  I strongly recommend making sure the prospectus is finalized prior to removing the issuer lock.

Cheers.

THANK YOU BURNSIDE.  Also, big +1 for the final decision u made relating to USA BTCers.