ASICMINER Speculation Thread

[chanson]

So let's say - conservatively 3.1 BTC per share.

Your conservative revenue numbers are fantasyland. If AM mined 100% of the blockchain for an entire year (either by mining or through hardware sales priced to be premined for 1 year), that comes to only:

(25*6*24*365.25)/400000 = 3.28725 BTC/share yearly revenue

[shawshankinmate37927]

So let's say - conservatively 3.1 BTC per share.

Your conservative revenue numbers are fantasyland. If AM mined 100% of the blockchain for an entire year (either by mining or by premining through hardware sales), that comes to only:

(25*6*24*365.25)/400000 = 3.28725 BTC/share revenue

Does an investment need to have a dividend yield of over 100% per year to be worthwhile?

[bitfair]

ok, for the extremely short term, what happens today when the difficulty increases?  We see that the AM hasrate has dropped considerably over the last day or so, will they be able to ramp up to meet difficulty?

Short term, I don't believe the difficulty increase to have a significant price effect. However, I think "low" dividends on Wednesday will cause a sell-off from more inexperienced "investors" who have done too little research.

There appear to be a good number of shareholders that are panic-prone and have little understanding of both investing and the company they have invested in. They will see lower dividends than they were led to expect [since hardware is out of stock], declare the whole thing a scam, then sell shares at discount prices because they believe the sky is falling down. The kind of "investor" prone to this kind of panic behavior is not the same kind of investor that closely follows network hash rate, so I think Wednesday's price movement will drown out anything we may see today.

But then again, maybe not.

[bitfair]

So let's say - conservatively 3.1 BTC per share.

Your conservative revenue numbers are fantasyland. If AM mined 100% of the blockchain for an entire year (either by mining or through hardware sales priced to be premined for 1 year), that comes to only:

(25*6*24*365.25)/400000 = 3.28725 BTC/share yearly revenue

Surely AM will continue operating for more than one year!

Edit: However, it would be pertinent of me to add a discount factor to my "calculations" - but the effect would be tiny compared to the broad assumptions

[tinus42]

So let's say - conservatively 3.1 BTC per share.

Your conservative revenue numbers are fantasyland. If AM mined 100% of the blockchain for an entire year (either by mining or through hardware sales priced to be premined for 1 year), that comes to only:

(25*6*24*365.25)/400000 = 3.28725 BTC/share yearly revenue

His estimate was for the next 4 years, not one year.

[velacreations]

do you know the difference between bitcoin investing and bitcoin gambling?


bitcoin gambling is provably fair...

[shawshankinmate37927]

Surely AM will continue operating for more than one year!

If not, then I would agree that they are WAY OVERPRICED!!!

[shawshankinmate37927]

So let's say - conservatively 3.1 BTC per share.

Your conservative revenue numbers are fantasyland. If AM mined 100% of the blockchain for an entire year (either by mining or through hardware sales priced to be premined for 1 year), that comes to only:

(25*6*24*365.25)/400000 = 3.28725 BTC/share yearly revenue

His estimate was for the next 4 years, not one year.

365.25 days is only one year.  He would have to multiply by another 4.

[KarmaShark]

So let's say - conservatively 3.1 BTC per share.

Your conservative revenue numbers are fantasyland. If AM mined 100% of the blockchain for an entire year (either by mining or by premining through hardware sales), that comes to only:

(25*6*24*365.25)/400000 = 3.28725 BTC/share revenue

Does an investment need to have a dividend yield of over 100% per year to be worthwhile?

To you and I, no.


To the majority of potential investors, for this type of investment the answer is going to be "Yes".  Investing in someone they will never get to meet, see on TV, or have any traditional exposure to (CEO of a Fortune 500 company) will demand a much higher rate of return to offset this risk. Adding in that this opportunity exists within the infinitely small population of the CryptoCurrency Revolution, we are left with a very small pool of knowledgeable, risk tolerant investors who want to drive this future forward.

Now, within the CryptoCurrency Revolution, we have several investors that enter into ASICMINER as their first real investment opportunity. Looking at P/E ratio's is terminology outside of their comfort and knowledge zone, making a full 100% return on their initial investment by years end is key, anything less than "I got it ALL back super quick, PLUS", isn't good enough. This shows a clear, fundamental misunderstanding of money and investments. The 9/5 world is centrally planned and controlled, including finance. You do not open yourselves up to opportunities like this in the 'real world' unless it is an investment that is fraudulently run, period. This is no doubt why many a investors initial reaction to AM is "This is a Ponzi".or "This cannot last, get in and out ASAP". Nothing in the 9/5 investment world has prepared them for this new paradigm.



- Use your intelligence, research the investment and the industry it resides in. Compare that with your personal financial goals and your outlook for the World today, and do not look back.

[shawshankinmate37927]

Does an investment need to have a dividend yield of over 100% per year to be worthwhile?

To you and I, no.


To the majority of potential investors, for this type of investment the answer is going to be "Yes".  Investing in someone they will never get to meet, see on TV, or have any traditional exposure to (CEO of a Fortune 500 company) will demand a much higher rate of return to offset this risk. Adding in that this opportunity exists within the infinitely small population of the CryptoCurrency Revolution, we are left with a very small pool of knowledgeable, risk tolerant investors who want to drive this future forward.

Now, within the CryptoCurrency Revolution, we have several investors that enter into ASICMINER as their first real investment opportunity. Looking at P/E ratio's is terminology outside of their comfort and knowledge zone, making a full 100% return on their initial investment by years end is key, anything less than "I got it ALL back super quick, PLUS", isn't good enough. This shows a clear, fundamental misunderstanding of money and investments. The 9/5 world is centrally planned and controlled, including finance. You do not open yourselves up to opportunities like this in the 'real world' unless it is an investment that is fraudulently run, period. This is no doubt why many a investors initial reaction to AM is "This is a Ponzi".or "This cannot last, get in and out ASAP". Nothing in the 9/5 investment world has prepared them for this new paradigm.



- Use your intelligence, research the investment and the industry it resides in. Compare that with your personal financial goals and your outlook for the World today, and do not look back.

Well put.

Some look at AM and say it's way overvalued.  While others look at it and say the yield is too good to be true--it must be a scam.  Crazy.

[chanson]

So let's say - conservatively 3.1 BTC per share.

Your conservative revenue numbers are fantasyland. If AM mined 100% of the blockchain for an entire year (either by mining or by premining through hardware sales), that comes to only:

(25*6*24*365.25)/400000 = 3.28725 BTC/share revenue

Does an investment need to have a dividend yield of over 100% per year to be worthwhile?

I was discussing yearly revenue (which bitfair had ballparked at 4.2btc/share a few posts before the one I finally replied to).

AM dividends are already impossible to exceed 0.063btc/week. Of course, it's also the case for AM to sell hardware at prices that are very unlikely to ever mine their price (c.f. USB Eruptor). There is a finite supply of suckers though, so that can't last forever particularly in the face of a price war which seems on the near horizon.

[Luckybit]

When the next 200th comes online we will see 3.5 easy.

When do you expect that to happen?  I doubt we'll see that before August, but who knows.

The thing is, it seems like they are trying to stay at around 20% of the network, so even with the 200TH, mining revenue won't be increasing.

So, how much are the shares really worth when they are receiving around .015 dividend each week?

Wouldn't it depend on how many shares you have and the exchange rate of Bitcoins at the time? So if you have 100 shares you could be rolling in money but if you have 10 shares maybe not.  I think what people are buying is based on the expectation that the exchange rate for Bitcoins will rise.

So the value of ASICminer shares will correlate with the exchange rate of Bitcoins. How much do you think Bitcoins will go for in a few years? $500? $1000? If you own 100 shares now, if Bitcoin keeps growing then you'll slowly get richer until you can live entirely off dividends. How long that will take depends on how many shares you have and high how Bitcoins goes.

I'm not currently as bullish as I was a month ago. I could see Bitcoin getting to $500 next year, $1000 in 2015 and from there it's anyones guess. The reason I don't see it exploding to $1000 in 2013 like I saw when it was growing at 5% a day is because the Max Block Size issue restrains the growth rate of Bitcoin. It's in the code that it cannot grow at 5% a day without reaching a ceiling at around $500. It will not make it to $1000. The ceiling however is a software ceiling and that is the good news, it's not a demand ceiling.

What this means is when the software ceiling is resolved, and when it's easy enough to buy Bitcoins (Coinbase has really helped with this), then it's just a matter of time. $1000 a Bitcoin is not a lot and if the software ceiling issue weren't there I would say it could reach $1000 this year. Instead I see Litecoins reaching $20 this year and Bitcoin being around $100-200 until they fix the software and remove that ceiling or cap.

[bitfair]

So let's say - conservatively 3.1 BTC per share.

Your conservative revenue numbers are fantasyland. If AM mined 100% of the blockchain for an entire year (either by mining or by premining through hardware sales), that comes to only:

(25*6*24*365.25)/400000 = 3.28725 BTC/share revenue

Does an investment need to have a dividend yield of over 100% per year to be worthwhile?

I was discussing yearly revenue (which bitfair had ballparked at 4.2btc/share a few posts before the one I finally replied to).

AM dividends are already impossible to exceed 0.063btc/week. Of course, it's also the case for AM to sell hardware at prices that are very unlikely to ever mine their price (c.f. USB Eruptor). There is a finite supply of suckers though, so that can't last forever particularly in the face of a price war which seems on the near horizon.

In that scenario, I assumed there would be hardware sales the next year. With hardware sales, the revenue can exceed what is mined in that year, because old money buys new gear. For AM, it brings revenue forward in time - instead of mining 25 BTC with a Blade over the next few years, they can sell the Blade for 25 BTC get the money immediately. So in that sense, it doesn't "break the laws of mathematics", so to speak.

(For the same reasons, it IS possible to exceed 0.064 btc/week dividend - by time-travelling revenue through hardware sales!)

But whether or not it is a plausible scenario, is an exercise left to the reader!

[romerun]

They said 0.42 for AM was that crazy price while I was going for a snorkeling trip, but the boat was 15 minutes late and I saw Jaturol god selling for 0.5, so I took 280 shares from him that day just for the sake of dividend, best moment of my bitcoin career.

I see bitfury and kncminer are the threat to AM, but I still don't think anyone can make asic cheaper than AM residing in China, cheapest place for pumping chips, along with their current lead in what they're doing. Plus, no need that preorder bullshit to raise fund.

[kokojie]

They said 0.42 for AM was that crazy price while I was going for a snorkeling trip, but the boat was 15 minutes late and I saw Jaturol god selling for 0.5, so I took 280 shares from him that day just for the sake of dividend, best moment of my bitcoin career.

I see bitfury and kncminer are the threat to AM, but I still don't think anyone can make asic cheaper than AM residing in China, cheapest place for pumping chips, along with their current lead in what they're doing. Plus, no need that preorder bullshit to raise fund.

I regret that I didn't want to get in AM due to the difficulty of not having an exchange. I only got in after it was available on btct as a PT, at 0.65.

[ex-trader]

I bought some at 1.3, spiked the market and everyone thought the market movement was mad at the time, only a month or two back.

I've recently sold out though.

Not because I have any lack of faith in ASICMiner or the great work they've already done, but quite simply I think the price is high right now because:

They are now a $120m value company that was created for well under $1m, with no unique or patented technology in a market clamouring for more of the same or generic product (ie sales and mining are really the same market for all ASICs).

The problem therefore isn't if someone will replicate them, or multiple people, it's when. Now the fact that some of the others are slow on deliveries right now (Avalon/BFL) and others may or may not be vaporware, the reality is that in one years time there'll be a lot of companies both selling and mining this stuff and in a crowded market the shares of sales/mining and the price for hardware will all tumble.

It is therefore the case that current dividends whilst very impressive, should not be used to predict future cashflows or values.

Lets put it like this, if I was going to invest $1m personally now, there no way I'd buy under 1% of ASICMiner, I'd be offering $1m funding to any team that could prove they can build and deliver ASICs within 6 months from scratch and I'd own 100% of that business. It could easily be made to happen and I'm sure that whats others are thinking.

[Mastergerund]

You can't assume 6*24*365.25 blocks per year and assume difficulty is rising at the same time. If difficulty has an average rise of ~10%, it's because 2016 blocks takes ~18000 minutes instead of 20160. (The actual calculations are based on seconds, not minutes.) If difficulty rises an average of 10% over the whole year, the total blocks found would be ~59000, instead of 52596.

Assuming 10% difficulty rise each readjustment, if AM maintains 25% of total hashrate, gives annual mining revenue of BTC0.92 per share, which is .0177 per week, not the .015 or .016 I keep seeing.

It is important if you are doing valuation calculations that your calculations are consistent across your assumptions.

[freedomno1]

Tracking for reference posts
^_^
Aka redirect to here thanks for handling the chaos 

[Rival]

Aside from temporary distortions caused by excessive hash rate increases over short periods of time, the number of blocks solved (and therefore btc mined) remains constant over time, this is precisely the function that increasing difficulty performs.

25 coins x 6 blocks/hr x 24 hours x 365 days = 1,314,000 total btc mined in the entire universe per year. This on average will remain stable until the next halving. If AM maintains 20% of the total hash, they will receive 262,800  coins per year from mining. With 400,000 shares outstanding that breaks down to 0.707 coins per year per share before expenses.

If you assume that AM can keep at 20%, this number is fixed regardless of hash rate or difficulty. 0.707 coins per share per year.

Once you move past this point you are playing with all sorts of variables that are pretty much just best guesses. We don't know their expenses, but we can guess. We don't know what hardware sales will be, but there are no shortage of guesses. We definitely have no idea what the btc/fiat conversions will be one year from now. By playing with those numbers you can pretty much end up with any results you like, from AM shares having a fiat value of anywhere from zero to a million and beyond. It just depends on what values you wish to assign to the variables. For example:

Assume AM keeps 20% market share, makes an additional 10,000 btc profit from hardware, and one btc becomes worth $200. The math becomes pretty simple.

262,800 from mining, 10.000 from hw for 272,800 coins x $200 = $54,560,000, divided by 400,000 shares = $136.40 per year income per share. That is about 45% of the current cost of a share.  1000 shares would net you $136,400 per year, on an investment of $300,000. This also ignores the increase in value of AM shares that would inevitably occur. Factoring that in, and you may find yourself a millionaire very quickly.

But of course, like I said, change any of the variables just a little and these results jump all over the place. That is really what investing is all about. Plug in your worst case, best case, and most likely scenarios and see where you end up.

[conv3rsion]

Everyone ignores the constantly growing (and eventually larger than block rewards) transaction fees in all of these estimates.

 Yes transaction fees are only 2% of block rewards right now, but they will increase in % by design.