BitcoinOrama Report on the KnCminer/OrSoC Open-day Mon 10/06/13 (Stockholm)

[Bitcoinorama]

It would be very useful to have an estimate on how many TH/s KnCMiner is planning to ship & deploy from September to the end the year. This is a very important point, as in the mining business if you deploy too many TH/s you are actually killing any ROI possibility for all your customers. I hope they have a plan to protect their customers investment - please advise.

I did ask and they said their customer's ROI is a priority. They can only sell items that give a return. That their pricing has never been too cheap, it's a case of predicting future global hashrate. They said they have a few options to make sure customers get a return.

Thanks for that but I guess everybody would appreciate a concrete answer. What they plan to do? Firstly and foremost, how many TH/s are they planning to ship&deploy, and how fast? This is the very first step in a "paln" to make sure customers get a return.

I'm not sure I can answer that question. Email Sam and ask. I know BFL weren't forthcoming when I asked. After the forum Q&A's were asked, questions around this area did surface and numbers were thrown around by other forum members which were in line with what had been sold at that point (a week ago). I'm not sure if that was on, or off-record so I won't comment unless allowed to. It wasn't a worry at that point. As JohnyJ stated; 28nm will lead the chip production for the foreseeable future as the benchmark should they achieve this.

[Korbman]

First, lots of current pre-orders, many of which bought with btc... those piles can't sit and have to be turned into chips, miners.  There will be sharp crashes like we saw a week ago.  Expect a few more.

How is it BitPay has been around this long and still so many people have no idea how the process works when you pay with Bitcoins...

[amencon]

There is another potential ASIC investor scenario that would have the opposite effect of the one you describe.  The investor has BTC either bought or mined when bitcoins were "cheap".  They spend BTC to buy ASIC miners, in essence doubling down on their BTC investment.  Those BTC get converted to USD now creating selling pressure on the price.  If/when the ASICs arrive they then use the ASIC equipment to restock/"hoard" the BTC they spent on the machinery.

I think both scenarios will play out but I have no clue in what percentages they will exist.

Yes this is definitely true. But if what has been seen in the KnC miner thread is a general trend, there are a worrying amount of people who aren't using btc. They are using credit cards, bank transfers and apparently someone even paid with cash.
The price of btc has dropped more than 30% in the last week and is bouncing along at $100. I'm not sure there are many people around that have been in a market with this kind of volatility. The people that have to sell  to pay off their debt will sell at any profitable price as they have no idea where the price will be next week.


 

Yes you're right, that is a scary thought.

[Bitcoinorama]

There is another potential ASIC investor scenario that would have the opposite effect of the one you describe.  The investor has BTC either bought or mined when bitcoins were "cheap".  They spend BTC to buy ASIC miners, in essence doubling down on their BTC investment.  Those BTC get converted to USD now creating selling pressure on the price.  If/when the ASICs arrive they then use the ASIC equipment to restock/"hoard" the BTC they spent on the machinery.

I think both scenarios will play out but I have no clue in what percentages they will exist.

Yes this is definitely true. But if what has been seen in the KnC miner thread is a general trend, there are a worrying amount of people who aren't using btc. They are using credit cards, bank transfers and apparently someone even paid with cash.
The price of btc has dropped more than 30% in the last week and is bouncing along at $100. I'm not sure there are many people around that have been in a market with this kind of volatility. The people that have to sell  to pay off their debt will sell at any profitable price as they have no idea where the price will be next week.


 

Yes you're right, that is a scary thought.

It's also precisely why anyone using debt to finance any of these mining ventures is nuts!

[Rampion]

There is another potential ASIC investor scenario that would have the opposite effect of the one you describe.  The investor has BTC either bought or mined when bitcoins were "cheap".  They spend BTC to buy ASIC miners, in essence doubling down on their BTC investment.  Those BTC get converted to USD now creating selling pressure on the price.  If/when the ASICs arrive they then use the ASIC equipment to restock/"hoard" the BTC they spent on the machinery.

I think both scenarios will play out but I have no clue in what percentages they will exist.

Yes this is definitely true. But if what has been seen in the KnC miner thread is a general trend, there are a worrying amount of people who aren't using btc. They are using credit cards, bank transfers and apparently someone even paid with cash.
The price of btc has dropped more than 30% in the last week and is bouncing along at $100. I'm not sure there are many people around that have been in a market with this kind of volatility. The people that have to sell  to pay off their debt will sell at any profitable price as they have no idea where the price will be next week.


 

Yes you're right, that is a scary thought.

Let me state something very clearly: anybody incurring in debt to invest in Bitcoin related businesses is a reckless and clueless dumbass that deserves to go broke. This is a super high risk investment, it's much riskier than just buying BTC, which is high-risk by itself. I think nobody is so stupid to have asked for a loan to buy mining equipment from KnCminer or others.

BTW: Bitcoinorama, you seem to know everything that needs to be known about KNC. Do you have an idea of what are those gray numbers just by the name of each unit? See the images below, I mean the "250" close to Jupiter and "34" close to Saturn:





BTW, there's seems to be a massive number of units still in stock.

Do we know if they already arrived to the initial goal? I mean: did they order the chips yet? Crucial question. Time is ticking.

If the "available units" on KNC's web are correct, that means that 1,000TH are still available. Considering the +150TH in Avalon chips, plus another 100TH by ASICMINER, and +400TH by BFL, that would take difficulty to at least to 200 million. Without even counting for Bitfury. ROI is going to be tough, guys. If there is someone so dumb to have asked for a loan to buy ASIC... He might better cancel his order, this is going to be a tough fight for peanuts - as mining has always been, apart from that small timeframe in which ASIC equipment supply was hyper-short, and the very lucky ones who had one unit took all the profits.

[szmarco]

There is another potential ASIC investor scenario that would have the opposite effect of the one you describe.  The investor has BTC either bought or mined when bitcoins were "cheap".  They spend BTC to buy ASIC miners, in essence doubling down on their BTC investment.  Those BTC get converted to USD now creating selling pressure on the price.  If/when the ASICs arrive they then use the ASIC equipment to restock/"hoard" the BTC they spent on the machinery.

I think both scenarios will play out but I have no clue in what percentages they will exist.

Yes this is definitely true. But if what has been seen in the KnC miner thread is a general trend, there are a worrying amount of people who aren't using btc. They are using credit cards, bank transfers and apparently someone even paid with cash.
The price of btc has dropped more than 30% in the last week and is bouncing along at $100. I'm not sure there are many people around that have been in a market with this kind of volatility. The people that have to sell  to pay off their debt will sell at any profitable price as they have no idea where the price will be next week.


 

Yes you're right, that is a scary thought.

Let me state something very clearly: anybody incurring in debt to invest in Bitcoin related businesses is a reckless and clueless dumbass that deserves to go broke. This is a super high risk investment, it's much riskier than just buying BTC, which is high-risk by itself. I think nobody is so stupid to have asked for a loan to buy mining equipment from KnCminer or others.

BTW: Bitcoinorama, you seem to know everything that needs to be known about KNC. Do you have an idea of what are those gray numbers just by the name of each unit? See the images below, I mean the "250" close to Jupiter and "34" close to Saturn:





BTW, there's seems to be a massive number of units still in stock.

Do we know if they already arrived to the initial goal? I mean: did they order the chips yet? Crucial question. Time is ticking.

If the "available units" on KNC's web are correct, that means that 1,000TH are still available. Considering the +150TH in Avalon chips, plus another 100TH by ASICMINER, and +400TH by BFL, that would take difficulty at least to 200 million. Without even counting for Bitfury. ROI is going to be tough, guys.

the number is SKU value.

[Bitcoinorama]

BTW: Bitcoinorama, you seem to know everything that needs to be known about KNC. Do you have an idea of what are those gray numbers just by the name of each unit? See the images below, I mean the "250" close to Jupiter and "34" close to Saturn:





BTW, there's seems to be a massive number of units still in stock.

Do we know if they already arrived to the initial goal? I mean: did they order the chips yet? Crucial question. Time is ticking.

Don't know, have wondered about the grey figures myself, used to think it was order relevant and just thought it wasn't important. First, need to finish this next bit I have almost written-up, and want to post the video, then I will ask...

[szmarco]

SKU(stock keeping unit),It tells you how big the parcel you delivered is.

[KS]

SKU(stock keeping unit),It tells you how big the parcel you delivered is.

SKU is just a unique reference number for an item.

[szmarco]

SKU(stock keeping unit),It tells you how big the parcel you delivered is.

SKU is just a unique reference number for an item.

no. i don't think so.

[bitpop]

Lol how big?
I got a 10" sku for you

[KS]

SKU(stock keeping unit),It tells you how big the parcel you delivered is.

SKU is just a unique reference number for an item.

no. i don't think so.

It's your stock reference for that item. So, if people order from you and use the SKU number, they are certain to get that specific item. If they give you the description of what they want, you might have several variations of the same item (say different languages, colors, etc). With the SKU, they know exactly what they will get (unless you mess up the order/delivery).

(SKU != serial number.)

[Bitcoinorama]

SKU(stock keeping unit),It tells you how big the parcel you delivered is.

SKU is just a unique reference number for an item.

no. i don't think so.

It's your stock reference for that item. So, if people order from you and use the SKU number, they are certain to get that specific item. If they give you the description of what they want, you might have several variations of the same item (say different languages, colors, etc). With the SKU, they know exactly what they will get (unless you mess up the order/delivery).

(SKU != serial number.)

http://en.wikipedia.org/wiki/Stock_keeping_unit

[Bitcoinorama]

Also was reading this;

http://www.fincen.gov/news_room/speech/pdf/20130613.pdf

I suggest everybody else does as well...

[szmarco]

sorry, My mistake. Thanks for your information.

[KS]

SKU(stock keeping unit),It tells you how big the parcel you delivered is.

SKU is just a unique reference number for an item.

no. i don't think so.

It's your stock reference for that item. So, if people order from you and use the SKU number, they are certain to get that specific item. If they give you the description of what they want, you might have several variations of the same item (say different languages, colors, etc). With the SKU, they know exactly what they will get (unless you mess up the order/delivery).

(SKU != serial number.)

http://en.wikipedia.org/wiki/Stock_keeping_unit

SKU can also refer to a unique identifier or code that refers to the particular stock keeping unit.

Dude, I use SKUs everyday. My suppliers use SKUs everyday. When we talk SKUs, this^ is what it means. I'm sure we're all wrong, but that's how it's used.

[Bagpipe]

As for the KnC miner numbers, they totally, utterly had a plan of flooding the market with something that may be a collective 30% saturation. The numbers sold by the preorders were far less than what they expected to sell ...

How do you know it was far less than they expected?

... and the expenses for this project will run into 4 to 6 million USD when we count their engineering work too.

I'm sure they have surpassed 7 million USD by this point.  Does anyone have the actual sales numbers yet?

So selling KnC miners at least to a break-even point and NOT ruining the BTC network seems like an impossible task.

So, you are thinking that KnC miners will ruin the BTC network? 

There are so many factors to consider:  Will KnC be able to deliver by September?  Who else will flood the market with ASICs before KnC gets their products delivered?  Where will the exchange-to-BTC rate be in September ... what if the exchange rate drops back down to 5 USD per BTC?  How will this flood of ASICs affect us little guys who are mining for only pennies a day?

On the other hand, could this be a really good thing for the Bitcoin economy?  Will the Bitcoin economy become stronger, more effective, efficient and resilient, with this increased flooding of ASICs on the market? 

1) I asked
2) I was talking expenses, not ORDERS, that is how much money you send to taiwan

[johnyj]

Even current ASIC manufacturers make some organization like OPEC, due to there are hidden players developing ASICs mining for themselves, that does not work either. One of the most important mission of ASIC miner manufacturers is to promote the bitcoin-only sale to support the price of bitcoin (hence their own income)

This is simply not true... and even if it was, it would be disastrous to bitcoin long term considering all you have at that point is an exclusive club where the only persons who have access to the tools of the trade are those that had got into the mining market at ground level and have a hoard of bitcoin. Meanwhile these companies producing their mining products are reliant on third-party vendors to exchange their bitcoin to pay the vendors that only accept local currency for the raw material needed to make the finished products. This is NOT good for business.

This practice is just not tenable and you can see that in the moves that most of the major ASIC manufacturers are making towards including PayPal's shitty service into their payment options (ie. BFL, Terrahash, KNCMiner) because they know that people that weren't in the game before are already scared as it is moving into a highly volatile new currency let alone, the promise of generating it, and will need a comfortable entry point into the market in order to have any chance of growth.

Sure you can counter argue the use of Mt.Gox and other exchanges are there to serve as intermediaries but the reality is people are lazy, scared, and resistant to change... And the easier you make for them to enter into the market, the more sustainable the growth and confidence in it will be long term. The companies know/are learning this and is one of the best chances that Bitcoin has to succeed.

Just because people can always use fiat money to do the purchase, there is no need for bitcoin, and if there is no need for bitcoin, it's value will be heavily affected by speculators on exchanges

Avalon already done bitcoin-only sales and based on recent report their bitcoin income never cashed out to fiat, this is a great approach for a bitcoin related business, but I think not every one understand the meaning behind this move

This is the huge difference between a bitcoin entrepreneur and a classical entrepreneur. A classical entrepreneur only cares about his profit, because the value of fiat money is not his business. A bitcoin entrepreneur usually care about promoting the value of bitcoin itself, because in this economy no one can change the money supply, so in general their business decision will all have a impact on the value of bitcoin

[johnyj]

Three main factors

First, lots of current pre-orders, many of which bought with btc... those piles can't sit and have to be turned into chips, miners.  There will be sharp crashes like we saw a week ago.  Expect a few more.

Then later in the year, all these new miners will want to grab their ROI and you can have more selling and selling.   This will go until end of next winter.

but the third factor is the other way...  if more and more of the marketplace grows you can see the need for btc out pace or at least lessen the selloffs.  

That's why I tell anyone who already made small fortures in btc that they would be better off expanding the marketplace than to double down and try to mine in this next phase.   They can gain so much more in protecting and expanding what their current wealth already is, instead of risking it just squeeze more coin out and then even if they do, the support can shrink and then what do they have?

One of the main reasons btc has value is in the EFFORT that is put in to use it.  Just because there will only be 21 million does not create value, it restricts it from being debased.  The efforts on using it is what really translates into the value of the coin

Exactly, if there are many bitcoin-only products, then just like euro-only products in Germany, it is possible to create a whole bitcoin economy as strong as German's economy, but has no any physical form of country/government

All currency's value, to its root, is backed by the economy behind it

[Bitcoinorama]

Three main factors

First, lots of current pre-orders, many of which bought with btc... those piles can't sit and have to be turned into chips, miners.  There will be sharp crashes like we saw a week ago.  Expect a few more.

Then later in the year, all these new miners will want to grab their ROI and you can have more selling and selling.   This will go until end of next winter.

but the third factor is the other way...  if more and more of the marketplace grows you can see the need for btc out pace or at least lessen the selloffs.  

That's why I tell anyone who already made small fortures in btc that they would be better off expanding the marketplace than to double down and try to mine in this next phase.   They can gain so much more in protecting and expanding what their current wealth already is, instead of risking it just squeeze more coin out and then even if they do, the support can shrink and then what do they have?

One of the main reasons btc has value is in the EFFORT that is put in to use it.  Just because there will only be 21 million does not create value, it restricts it from being debased.  The efforts on using it is what really translates into the value of the coin

Exactly, if there are many bitcoin-only products, then just like euro-only products in Germany, it is possible to create a whole bitcoin economy as strong as German's economy, but has no any physical form of country/government

All currency's value, to its root, is backed by the economy behind it

+1