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Author Topic: Why are people buying asic mining shares? are they insane?  (Read 9185 times)
newguy05
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June 14, 2013, 03:01:39 PM
 #1

I never got an answer. Just some first grade math here:

1) 2.5 BTC per share -> 0.036 weekly dividend = 0.145 btc a month = 17 month breakeven
2) 50 BTC (20 shares) = 3 btc a month
3) 50 BTC buys you a 13 GH asic card = 12 BTC a month  (factor in whatever difficulty increase it is still significantly better income, and keep in mind the mining shares dividend are also impacted by the difficulty increase).

So i really dont understand why anyone will buy asic shares? what is the point? the return on those are terrible, on top of absolutely insane counterparty risk dependent on some guy who is running a black box that tells you what dividend he will pay. 

Why would you not just have a physical card you own with no dependency on third party and make significantly more btc as income?  Yet so many smart people are buying those shares...there must be something i am missing?

waiting to be enlightened...

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newguy05
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June 14, 2013, 03:06:54 PM
 #2

the only valid explanation i heard is that you also get one-off dividends from hardware sales...so let me ask how much have you "shareholders" actually received per share for the hardware sales so far?

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June 14, 2013, 03:21:19 PM
 #3

A weekly dividend of more than 1% is very good.
And if the performance continues like it is, the shares will probably increase in price.
So bottom line: good investment.

I am selling in stock OneStringMiner boards, based on the Bitfury chips. Have a look here: https://bitcointalk.org/index.php?topic=495536.0
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June 14, 2013, 03:25:12 PM
 #4

if you buy ASIC hardware, you are fighting difficulty for a year without any chance of increasing your hashrate.  You would be right if difficulty was always going to be constant, but it's not.  Friedcat has a lot of money available to advance his technology, so he has the ability to fight a steep difficulty incline.  In 6 months, your hardware could be garbage as the 2nd generation of ASICS are ruling the network, then you will wish you had AM shares..
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June 14, 2013, 03:32:52 PM
 #5

you're missing the fact that you still have the value of the shares at the end.

if you buy a miner, you've lost that money (or it will depreciate in value until it is gone) and your hash rate is fixed - with an asic miner share, it can go up, (or down), and the hash rate you get will change upwards over time as they deploy new hardware.

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June 14, 2013, 03:44:12 PM
 #6

1) 2.5 BTC per share -> 0.036 weekly dividend = 0.145 btc a month = 17 month breakeven

what is the point? the return on those are terrible

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High-interest savings account: 2-3% per year
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what you seem to be missing here is the fact that you can sell your shares.

it's not a "17 month breakeven", it's DOUBLING YOUR INVESTMENT IN 17 MONTHS.

at the end of that 17 months, you have earned BTC2.5 in dividends, and you also have a share that's hopefully worth BTC2.5 or more.

only on bitcointalk will you find someone who says a stock with a 60% return is a terrible deal. i wonder what qualifies as a good deal?


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June 14, 2013, 03:45:21 PM
 #7

I never got an answer. Just some first grade math here:

1) 2.5 BTC per share -> 0.036 weekly dividend = 0.145 btc a month = 17 month breakeven
2) 50 BTC (20 shares) = 3 btc a month
3) 50 BTC buys you a 13 GH asic card = 12 BTC a month  (factor in whatever difficulty increase it is still significantly better income, and keep in mind the mining shares dividend are also impacted by the difficulty increase).

So i really dont understand why anyone will buy asic shares? what is the point? the return on those are terrible, on top of absolutely insane counterparty risk dependent on some guy who is running a black box that tells you what dividend he will pay. 

Why would you not just have a physical card you own with no dependency on third party and make significantly more btc as income?  Yet so many smart people are buying those shares...there must be something i am missing?

waiting to be enlightened...

Your looking at this completely wrong.  Your comparing apples and oranges.  When you buy shares of a company on the stock market, I dont know anyone that asks how long until the dividends completely repay the investment 100%.  The shares alone hold the value.

You are not considering the capital appreciation if the share prices rises, which it most likely will.  At any time you can sell back the shares and get the initial investment (and more) back so you dont have to sweat "breaking even"

For a piece of hardware however you do look at it that way... You want to know how long until you repay the initial investment because you are not able to sell the hardware down the line at the price you paid for it.  13 gh a month does not get 12 BTC either.  The way that hashing is increasing, you will be lucky to break even in a year.  


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June 14, 2013, 03:50:56 PM
 #8

I never got an answer. Just some first grade math here:

1) 2.5 BTC per share -> 0.036 weekly dividend = 0.145 btc a month = 17 month breakeven
2) 50 BTC (20 shares) = 3 btc a month
3) 50 BTC buys you a 13 GH asic card = 12 BTC a month  (factor in whatever difficulty increase it is still significantly better income, and keep in mind the mining shares dividend are also impacted by the difficulty increase).

So i really dont understand why anyone will buy asic shares? what is the point? the return on those are terrible, on top of absolutely insane counterparty risk dependent on some guy who is running a black box that tells you what dividend he will pay. 

Why would you not just have a physical card you own with no dependency on third party and make significantly more btc as income?  Yet so many smart people are buying those shares...there must be something i am missing?

waiting to be enlightened...

there is a book called Intelligent Investor by Benjamin Graham... or Security analysis. Try before you write something, ehm, stupid
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June 14, 2013, 04:39:03 PM
 #9

I would counter that anyone selling Asicminer shares at the moment is insane. I bought in a few months ago and the share price has more than doubled. I don't see any reason why the share value shouldn't increase more. The thing most people are missing is that the shares never expire, so unless Bitcoin dies or Asicminer goes out of business, you will get paid the dividends until all coins have been mined which will definitely not be anytime in the near future.
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June 14, 2013, 04:49:20 PM
 #10

I would counter that anyone selling Asicminer shares at the moment is insane. I bought in a few months ago and the share price has more than doubled. I don't see any reason why the share value shouldn't increase more. The thing most people are missing is that the shares never expire, so unless Bitcoin dies or Asicminer goes out of business, you will get paid the dividends until all coins have been mined which will definitely not be anytime in the near future.

I love AsicMiner, but @2.9btc I think it is overpriced. Thats 1,200,000 btc for the whole company!!
And bitcoin changes really fast, you don't know what is going to happen. This starts to remember me before the bitcoin crash at @266$ all the people was greedy like now and just speaking how rich they're going to be.
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June 14, 2013, 05:01:35 PM
 #11

I think it's going to break BTC3.0 Tuesday night before dividends and then drop quite a bit back down. To maybe 2.7. Hardware sales have sold out so I assume the dividend should be reduced. Maybe in the 0.02X range.
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June 14, 2013, 05:32:23 PM
 #12

I think it's going to break BTC3.0 Tuesday night before dividends and then drop quite a bit back down. To maybe 2.7. Hardware sales have sold out so I assume the dividend should be reduced. Maybe in the 0.02X range.

I am good with 0.02X range. I went in at around 1.6 (now 3BTC) hoping for consistent .02 range. Needless to say, I've been pleased.  Cool

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June 14, 2013, 06:00:17 PM
 #13

Your looking at this completely wrong.  Your comparing apples and oranges.  When you buy shares of a company on the stock market, I dont know anyone that asks how long until the dividends completely repay the investment 100%.  The shares alone hold the value.

You are not considering the capital appreciation if the share prices rises, which it most likely will.  At any time you can sell back the shares and get the initial investment (and more) back so you dont have to sweat "breaking even"

I see, so most of you buying those shares are considering this similar to buying stocks in a publicly listed company with sec oversight and proper financial reporting, you are assuming you really own part of the asic miner "company" and all profits made by the "company" are reinvested in growth and shared among its share holders. And this is not just some guy in a basement with a spreadsheet that has your name on it and decide what he wants to pay you each week...

Ok now it's clear, i just couldnt figure out why people are buying those "shares".


there is a book called Intelligent Investor by Benjamin Graham... or Security analysis. Try before you write something, ehm, stupid

It was a question, no need to be rude. Well aware of what value investing is, i work in the capital markets for a living. Maybe you should ask graham what he thinks about paying $250 for an asic miner "share" Smiley

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June 14, 2013, 06:13:47 PM
 #14

I see that lol
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June 14, 2013, 06:33:26 PM
 #15

I would counter that anyone selling Asicminer shares at the moment is insane. I bought in a few months ago and the share price has more than doubled. I don't see any reason why the share value shouldn't increase more. The thing most people are missing is that the shares never expire, so unless Bitcoin dies or Asicminer goes out of business, you will get paid the dividends until all coins have been mined which will definitely not be anytime in the near future.

I love AsicMiner, but @2.9btc I think it is overpriced. Thats 1,200,000 btc for the whole company!!
And bitcoin changes really fast, you don't know what is going to happen. This starts to remember me before the bitcoin crash at @266$ all the people was greedy like now and just speaking how rich they're going to be.

I will gladly pay 2.9 Bitcoins for a chance (and a good one IMO) to receive dividend payments for the rest of my life. There is no doubt that the shares will pay for themselves many times over as long as Asicminer stays in business long enough. The question is how much you believe in them, but up to now I have seen only positive growth which I think has exceeded everyone's expectations.
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June 14, 2013, 06:42:37 PM
 #16


I see, so most of you buying those shares are considering this similar to buying stocks in a publicly listed company with sec oversight and proper financial reporting, you are assuming you really own part of the asic miner "company" and all profits made by the "company" are reinvested in growth and shared among its share holders. And this is not just some guy in a basement with a spreadsheet that has your name on it and decide what he wants to pay you each week...



1) SEC Oversight:
Enron...
Worldcom...
Bernie Madoff...

2) "proper financial reporting"
I love getting reports from ASICMiner every week or two, and dividends every week. In the absence of a thick stack of regulations, information seems to flow much more freely and frequently.

3) "Just some guy...with a spreadsheet"
Ultimately, that's what everything is. Your point here amounts to double-counting SEC-oversight as two separate points.


To your implied point about risk/trust, yes, bottom line, investors DO have to trust the operators of ASICMiner. Why do we trust them? Well, history to date, both of terms of operational performance and meeting their word every step of the way. Note that in any investment where you hand your money over to someone else, you have to trust them to some extent. Yes, it's harder to get away with massive fraud in an SEC-regulated company, but I consider the upside to ASICMiner to far outweigh the risks. The PE and Div yield on ASICMiner crush anything in the traditional stock market. I've evaluated the risks, and I think it's a clear buy for a fraction of my portfolio.


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June 14, 2013, 06:43:04 PM
 #17

the only valid explanation i heard is that you also get one-off dividends from hardware sales...so let me ask how much have you "shareholders" actually received per share for the hardware sales so far?

Last week was ~0.017 from hashing, ~0.02 from hardware sales.
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June 14, 2013, 06:46:59 PM
 #18

The other thing to keep in mind is that not everybody has 50 BTC to spend on a miner.  I personally don't even have enough to buy a full ASICMiner share, but my TAT.ASICMiner is affordable.  In the few weeks that I've held it, I've received enough in dividends to buy another share.  I'll be buying another share next week.

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June 14, 2013, 07:27:34 PM
 #19

I never got an answer. Just some first grade math here:

1) 2.5 BTC per share -> 0.036 weekly dividend = 0.145 btc a month = 17 month breakeven
2) 50 BTC (20 shares) = 3 btc a month
3) 50 BTC buys you a 13 GH asic card = 12 BTC a month  (factor in whatever difficulty increase it is still significantly better income, and keep in mind the mining shares dividend are also impacted by the difficulty increase).

So i really dont understand why anyone will buy asic shares? what is the point? the return on those are terrible, on top of absolutely insane counterparty risk dependent on some guy who is running a black box that tells you what dividend he will pay. 

Why would you not just have a physical card you own with no dependency on third party and make significantly more btc as income?  Yet so many smart people are buying those shares...there must be something i am missing?

waiting to be enlightened...

BFL 5 GH/s = $274
18 Mh/s per USD
1.8 Gh/s per BTC @ 100 USD/BTC

1 AM share costs more than 2.74 BTC at the moment and the exchange rate is at 100 USD/BTC. Assuming that AM was at 2.74 BTC per share, then 1 share would need to provide 5 Gh/s in order to offer the same value as a 5 Gh/s BFL. At 5 Gh/s per share, AM would need a hashrate of 5 Gh/s/share * 400, 000 shares = 2,000 Th/s.

People claiming that AM continuously adding hashing power is a reason why share prices are currently undervalued need to take a serious look at the numbers. With a share price of 2.74 BTC, AM needs a hash rate of 2,000 Th/s in order to be competitive with a 5 Gh/s BFL. Their initial wafer order was for 50 Th/s. The current wafer order is for 200 TH/s in two parts. These should be coming online over the next couple of months. That's a maximum of 250 Th/s.

With the rate at which BFL is dispatching back orders, they should be shipping from the shelf by the time AM bring that 250 Th/s online. Going by this site's numbers, BFL have about 400 Th/s to bring online.

Avalon's 3 batches should be online by then as well, which is another 100 Th/s. Avalon chips should be shipping by then as well, so we'll see a number of new mining systems based on them. That's another 150 Th/s. 100 Th/s should come online in July and August from 100TH and 50 Th/s should come online from Metabank in August and September. In September and October, KnC should also be bringing 200 Th/s online.

The next gen chips from Avalon and AM are due in October and Yifu said said that Avalon would be using 55 nm. The BitFury chips used by 100TH and Metabank are also 55 nm and I'd assume AM will also be 55 nm. At this point, most of the hashing power will be coming from BFL products, and Avalon and AM having a similar amount at around 250 Th/s. BitFury and KnC should also have similar amounts at around 200 Th/s.

AM needs 2,000 Th/s to be competitive with a 5 Gh/s BFL, to be competitive with a Metabank BitFury 120, we have the following:

Metabank BitFury 120
120 Gh/s
2160 USD
55.556 Mh/s per USD
5.556 Gh/s per BTC

ASICMINER
6,500 Th/s
400,000 shares
16.25 Gh/s per share
2.93 BTC per share
5.556 Gh/s per BTC

It truly boggles my mind how anyone could believe that ASICMINER is undervalued.
ianp
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June 14, 2013, 07:35:30 PM
 #20

I never got an answer. Just some first grade math here:

1) 2.5 BTC per share -> 0.036 weekly dividend = 0.145 btc a month = 17 month breakeven
2) 50 BTC (20 shares) = 3 btc a month
3) 50 BTC buys you a 13 GH asic card = 12 BTC a month  (factor in whatever difficulty increase it is still significantly better income, and keep in mind the mining shares dividend are also impacted by the difficulty increase).

So i really dont understand why anyone will buy asic shares? what is the point? the return on those are terrible, on top of absolutely insane counterparty risk dependent on some guy who is running a black box that tells you what dividend he will pay. 

Why would you not just have a physical card you own with no dependency on third party and make significantly more btc as income?  Yet so many smart people are buying those shares...there must be something i am missing?

waiting to be enlightened...

BFL 5 GH/s = $274
18 Mh/s per USD
1.8 Gh/s per BTC @ 100 USD/BTC

1 AM share costs more than 2.74 BTC at the moment and the exchange rate is at 100 USD/BTC. Assuming that AM was at 2.74 BTC per share, then 1 share would need to provide 5 Gh/s in order to offer the same value as a 5 Gh/s BFL. At 5 Gh/s per share, AM would need a hashrate of 5 Gh/s/share * 400, 000 shares = 2,000 Th/s.

People claiming that AM continuously adding hashing power is a reason why share prices are currently undervalued need to take a serious look at the numbers. With a share price of 2.74 BTC, AM needs a hash rate of 2,000 Th/s in order to be competitive with a 5 Gh/s BFL. Their initial wafer order was for 50 Th/s. The current wafer order is for 200 TH/s in two parts. These should be coming online over the next couple of months. That's a maximum of 250 Th/s.

With the rate at which BFL is dispatching back orders, they should be shipping from the shelf by the time AM bring that 250 Th/s online. Going by this site's numbers, BFL have about 400 Th/s to bring online.

Avalon's 3 batches should be online by then as well, which is another 100 Th/s. Avalon chips should be shipping by then as well, so we'll see a number of new mining systems based on them. That's another 150 Th/s. 100 Th/s should come online in July and August from 100TH and 50 Th/s should come online from Metabank in August and September. In September and October, KnC should also be bringing 200 Th/s online.

The next gen chips from Avalon and AM are due in October and Yifu said said that Avalon would be using 55 nm. The BitFury chips used by 100TH and Metabank are also 55 nm and I'd assume AM will also be 55 nm. At this point, most of the hashing power will be coming from BFL products, and Avalon and AM having a similar amount at around 250 Th/s. BitFury and KnC should also have similar amounts at around 200 Th/s.

AM needs 2,000 Th/s to be competitive with a 5 Gh/s BFL, to be competitive with a Metabank BitFury 120, we have the following:

Metabank BitFury 120
120 Gh/s
2160 USD
55.556 Mh/s per USD
5.556 Gh/s per BTC

ASICMINER
6,500 Th/s
400,000 shares
16.25 Gh/s per share
2.93 BTC per share
5.556 Gh/s per BTC

It truly boggles my mind how anyone could believe that ASICMINER is undervalued.

You forgot to account for the fact that ASICMINER sells hardware as well.

I'm not sure how much hashing power ASICMINER had on the market when they went live, but I'd be interested to know. If anyone has this information, please post it up.
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