ASICMINER Speculation Thread

[freedomno1]

On the positive side, the new "franchising" plan indicates FriedCat believes AM can keep their market share over the next 12 months, AND can produce extra hashpower to sell. This is very good news.

This wider distribution of AM's hashing power reduces some of the risk and stresses associated with running one centralized hashing farm..

On the downside, we are currently down at 18TH/s. That really sucks! Sure its temporary  

I agree will be interesting to see how the Franchising Plan will affect revenues as well.
Mining Selling Blades/Sticks and Later Franchising Revenue

I do not understand the leasing - unless we get close to 50% of total hashrate, no reason for it.  

Friedcat believes he can hit over 50% of the hashrate or somewhere around that range given enough time but does not want to scare bitcoiners with a 50% ownership of the network by franchising the units to other people ASIC would be able to maintain more than 50% of the network without directly controlling it. Solving the network issue without needing to wait for the network to grow to handle increased mining.

(Note that is an opinion )

But it is very Bullish news

Friedcat

We will rent the excessive hashing power to financial and technical capable people, accepting full deposits at the market price, shipping the devices and collecting a certain PPS rate based on the theoretical hashrate. The PPS rate, the dividing of cost coverage, as well as warranty/exit strategy are being discussed in detail and executed as small-scale experiments.

This model is similar to hardware sales in the aspect that we do not have in control on how the users make use of our devices, therefore has more decentralization in spirit. And like with self-mining, it aims at settings in scale, enjoying the reduction of NRE cost and operating cost overall, and reducing potential marketing/advertisement/customer service costs.

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[mechs]

On the positive side, the new "franchising" plan indicates FriedCat believes AM can keep their market share over the next 12 months, AND can produce extra hashpower to sell. This is very good news.

This wider distribution of AM's hashing power reduces some of the risk and stresses associated with running one centralized hashing farm..

On the downside, we are currently down at 18TH/s. That really sucks! Sure its temporary  

I agree will be interesting to see how the Franchising Plan will affect revenues as well.
Mining Selling Blades/Sticks and Later Franchising Revenue

I do not understand the leasing - unless we get close to 50% of total hashrate, no reason for it.  

Friedcat believes he can hit over 50% of the hashrate or somewhere around that range given enough time but does not want to scare bitcoiners with a 50% ownership of the network by franchising the units to other people ASIC would be able to maintain more than 50% of the network without directly controlling it. Solving the network issue without needing to wait for the network to grow to handle increased mining.

(Note that is an opinion )

But it is very Bullish news

I like that he has a plan should we get close to 50%, but still currently at 20%.  I hope he hold off franchising until he ASICMINER at least at 40% - assuming that even ever occurs.

[freedomno1]

On the positive side, the new "franchising" plan indicates FriedCat believes AM can keep their market share over the next 12 months, AND can produce extra hashpower to sell. This is very good news.

This wider distribution of AM's hashing power reduces some of the risk and stresses associated with running one centralized hashing farm..

On the downside, we are currently down at 18TH/s. That really sucks! Sure its temporary  

I agree will be interesting to see how the Franchising Plan will affect revenues as well.
Mining Selling Blades/Sticks and Later Franchising Revenue

I do not understand the leasing - unless we get close to 50% of total hashrate, no reason for it.  

Friedcat believes he can hit over 50% of the hashrate or somewhere around that range given enough time but does not want to scare bitcoiners with a 50% ownership of the network by franchising the units to other people ASIC would be able to maintain more than 50% of the network without directly controlling it. Solving the network issue without needing to wait for the network to grow to handle increased mining.

(Note that is an opinion )

But it is very Bullish news

I like that he has a plan should we get close to 50%, but still currently at 20%.  I hope he hold off franchising until he ASICMINER at least at 40% - assuming that even ever occurs.

Well with 40% ownership a reverse transaction is still possible although we trust Friedcat it might scare some of the conspiracy theorists if any entity had that power which is why Franchising is a good idea

https://en.bitcoin.it/wiki/Weaknesses#Attacker_has_a_lot_of_computing_power

An attacker that controls more than 50% of the network's computing power can, for the time that he is in control, exclude and modify the ordering of transactions. This allows him to:
Reverse transactions that he sends while he's in control. This has the potential to double-spend transactions that previously had already been seen in the block chain.
Prevent some or all transactions from gaining any confirmations
Prevent some or all other miners from mining any valid blocks

With less than 50%, the same kind of attacks are possible, but with less than 100% rate of success. For example, someone with only 40% of the network computing power can overcome a 6-deep confirmed transaction with a 50% success rate.

Anyways that's not a worry really with ASIC it's just something worth noting related to why a Franchising Plan is important as it reduces costs of mining with units as well
With the competitors still not around in big scales and ASIC's production rising they need to cover these scenarios

Friedcat

This model is similar to hardware sales in the aspect that we do not have in control on how the users make use of our devices, therefore has more decentralization in spirit. And like with self-mining, it aims at settings in scale, enjoying the reduction of NRE cost and operating cost overall, and reducing potential marketing/advertisement/customer service costs.

[Jutarul]

I like that he has a plan should we get close to 50%, but still currently at 20%.  I hope he hold off franchising until he ASICMINER at least at 40% - assuming that even ever occurs.

The schedule for this business activity has not been released. At this stage it is likely that interested and capable individuals will start negotiations with friedcat and plan for scalable deployment.

The offering is particular interesting for miners who have the technical skills and/or distribution channels in place, but no privileged access to the technology (chips). Under the hardware sales scheme, these miners would be forced to buy hashing power at market prices and carry the full risk of depreciation. Under the franchise scheme, this risk is carried by ASICMINER, which should lead to a more sustainable partnership between the mining community and the supplier.

[empoweoqwj]

I believe one of the major drivers of this decision to bring in external mining partners is simply to mitigate risk.

Risk to be reduced: AM has a single mining farm in one location, producing essentially all its income, so a single point of failure. What if that gets damaged / destroyed by whatever means? AM is out of business. Our shares drop back to 0.1 BTC 

Solution 1: Build a 2nd factory somewhere.
Solution 2: Partner up with miners in diverse locations round the world, and "spread the love".

Solution (2) makes perfect sense if the numbers add up. This *was* a problem that needed to be addressed to reduce risk investing in AM.

[Franktank]

Solution 1: Build a 2nd factory somewhere.

Solution 1 is also in the works 

See the leaked PPT presentation about the next 6 months.

[empoweoqwj]

Solution 1: Build a 2nd factory somewhere.

Solution 1 is also in the works 

See the leaked PPT presentation about the next 6 months.

Sorry, I missed that gem !!

[stripykitteh]

The advantages of hardware franchising as I see it are that AM doesn't have to dedicate resources to building and running a data centre, or worry about becoming 51% of the network. They also don't have to worry about inventory (undeployed/unsold stock). It is probably cheaper to make a lot of stock in a short time rather than make stock in dribs and drabs.

In a perfect world in one run of a 2-3 weeks they would make enough stock for 3 months and within a couple of weeks it is all either in their own data centre, in a franchisor's data centre, in the hands of a distributor or en route to a retail customer.

[forensick]

http://www.asicme.com/en/post?id=100047 seems that there is a lot of similar "franchise" projects planned

[yuchuanzhen]

http://www.asicme.com/en/post?id=100047 seems that there is a lot of similar "franchise" projects planned

They have no chips now.

[binaryFate]

The news about hardware franchising is really, really great in my opinion! 

Most people tend to judge share price through APR, and 25~30% seems to be commonly considered interesting enough considering the risk.
If hash rate market share can be multiplied by 2, maybe even a bit more (without any threat to the network!), it means mining income can be regularly twice or slightly more as they are. That would give a regular basis of ~0.035. Add a (conservative) 0.005 from hardware sales, we get to an average (still conservative) 0.04 overall. As the company will get a bit older, more and more established, with decentralized locations, the inherent risk will be reduced. For me it means 25% for the APR will be perfectly acceptable for most.
The above assumptions would lead a share price of 8.3BTC.

If 20% APR becomes acceptable for the majority, we'd be looking at >10BTC per share.

I don't see that happening short term, but if things continue to go well this could be the real consequence of the hardware franchising in 6 months to a year from now, for share holders.
That's truly a brilliant idea 

[empoweoqwj]

The news about hardware franchising is really, really great in my opinion! 

Most people tend to judge share price through APR, and 25~30% seems to be commonly considered interesting enough considering the risk.
If hash rate market share can be multiplied by 2, maybe even a bit more (without any threat to the network!), it means mining income can be regularly twice or slightly more as they are. That would give a regular basis of ~0.035. Add a (conservative) 0.005 from hardware sales, we get to an average (still conservative) 0.04 overall. As the company will get a bit older, more and more established, with decentralized locations, the inherent risk will be reduced. For me it means 25% for the APR will be perfectly acceptable for most.
The above assumptions would lead a share price of 8.3BTC.

If 20% APR becomes acceptable for the majority, we'd be looking at >10BTC per share.

I don't see that happening short term, but if things continue to go well this could be the real consequence of the hardware franchising in 6 months to a year from now, for share holders.
That's truly a brilliant idea 

Very bullish target price but I agree the strategy to diversify into mining partnerships is the right move and can only be good for the share price of AM, providing AM can provide the hardware necessary for all this expansion! If anyone can, friedcat can.

[VeeMiner]

I agree that the financial statement and the franchise project is great news.

Any guesses about the dividend this week? I think we're going to stay around 0.025 BTC like last week, since USB sales are still going strong, but we have to wait for blades for next week...

[empoweoqwj]

I agree that the financial statement and the franchise project is great news.

Any guesses about the dividend this week? I think we're going to stay around 0.025 BTC like last week, since USB sales are still going strong, but we have to wait for blades for next week...

Haven't got an answer for that but do have related question....

Will USB eruptor sales keep running once the blades go on sale? If so, bumper dividends in August.

Or is there an announced cut-off point when they will stop being sold?

[VeeMiner]

I agree that the financial statement and the franchise project is great news.

Any guesses about the dividend this week? I think we're going to stay around 0.025 BTC like last week, since USB sales are still going strong, but we have to wait for blades for next week...

Haven't got an answer for that but do have related question....

Will USB eruptor sales keep running once the blades go on sale? If so, bumper dividends in August.

Or is there an announced cut-off point when they will stop being sold?

there is no cut-off point AFAIK. I think they will keep selling until there is any demand for them. Right now the supply obviously can't meet the demand because they are really hard to get for a price around 1 BTC

[velacreations]

yeah, I'm predicting .024 for a dividend today.

[velacreations]

how do people think the recent burnside discussion about closing BTCT to US investors will affect the price of AM?  Should US investors move to BF?

BF suffered a bit lately, mainly because of the security vulnerability.  I know several people that move to BTCT since then, and the AM price has certainly been lower over there, as well as the volume.

What do folks think about this?

[velacreations]

I guess the price crash on BTCT answers my question...

[chanson]

I guess the price crash on BTCT answers my question...

What crash?

[velacreations]

the one that just happened with every buy order above 4.55 got filled.

Price went from 4.8 to 4.55

TAT went to .0438