ASICMINER Speculation Thread

[freedomno1]

I'm just amused we have hit 1 PH and the example they used was how many 10/GH ASICMINER Blades it would take to overheat the building
I mean fill the area

http://blog.standardcrypto.com/2013/09/15/what-does-one-petahash-look-like/

The bitcoin mining network run on Gen 1 hardware consists of about one One Wilshire-sized data center filled with Blades. Somewhat confirmatory of our ballpark estimate, One Wilshire sold for 437.5 million dollars last month.

(And yes Friedcat must be hot in the server room lol)

[romerun]

interesting to see at what amount of hash will we need the entire electricity of a nuclear powerplant or will we ever reach that point.

[HorseRider]

A summarize of the most recent franchising payments is below. It is about 711 Bitcoin in the last diff periods, which equivalent 11.3T hashing rate's output. As the franchising model is just at the beginning of the test, franchisee needs time and learning curve before they can handle large farms, so we can expect the fast expansion of the franchising revenue.

https://blockchain.info/tx/15140b1da466764950e059ee2e7e17cca7e045f32645124aceefe69f53c0dea8

185


https://blockchain.info/tx/1cde47ad212a69ba891a8c368054c7c2d247bd7208a9f20eb8c5dae837c3aaa4

248


https://blockchain.info/tx/d5f87cdd3651ed988dc673408fababaf32bba011d756f36118c46f0781fc18bf

35

https://blockchain.info/tx/5aab0b06331ccde10c45b8bdb4bac3d6a001ab0c89667d03c6fb374b51057ac2

48

https://blockchain.info/tx/c1eaaa2608a5ffc9dfc8905e647e2bf3e46c883d812f92976d555db29036d90d

42


https://blockchain.info/tx/312456452d65828326ce1825e28aef4b45f12ca0bc3f0e830bec47860f6b0980

153

[runeks]

... about AM's fair value.

You made me curious. What do you think the fair value of bitcoin is?

In my humble opinion, determining the "fair value" of a non-earning asset is not possible.

First I'd probably want a definition of "fair value". What does it mean? What does "fair" mean in this context?

What is the fair value of water, glass or a rock?

Maybe I'm just talking out of my ass here, but the best estimate of the fair value of a non-earning asset is its market price, because it's the price most people agree on.

[Aedius]

How did you estimate profit margins Vycid?

Educated guess. Yes - that means "I don't know". I am fairly confident I am close enough to reach a reasonable conclusion, though, which is what is important. I have estimated conservatively; AM will have to perform exceptionally well to be worth more than my price target.

I've estimated that it costs FC $1.50/GH currently. That will drop for Gen 2. Based on estimates for the competition (which are much higher, in general), I think it is possible he will continue to dominate for the next year - although a 75% profit margin is pretty extreme. I'm sorta playing the waiting game with the year-forward margin. It's not going to go up much (obviously it's impossible to go higher than 100% anyway), but it could go down a lot if the competition shows unexpected strength.

30% is a very impressive profit margin, but not out of the question for year 3 of an immature industry.

20% beyond year 3 is very generous. Most mature companies do not make that kind of margin, and ASIC mining is a low-barrier industry, so that's all faith in Friedcat right there.

20% profit margin is very generous? The largest company in the world has a 22% net profit margin and gross margins in the high 30s, which is common knowledge among investors with a 'pedigree' in value investing.

[velacreations]

Let's look at the USB miners.  if cost is $1.5 /GH, and they have .33 GH, then their cost is $.5. At .1 btc per USB, the revenue is ($12.5-.5= $12). $12 is 96% of $12.5.

Is my math right?  96% profit margin (ignoring shipping) on the USBs at .1 btc?

How many did they sell at 2 btc and 1 btc?

And if the blades are $15 to make, and sell for 4 btc ($500), then they have a profit margin of 97%.

I think my math must be wrong somewhere...

If all of this is true (I am doubting it myself), then even if they match Cointerra's vaporware prices of $3/GH, then they are still 50% profit margin.  The cost for Gen 2 might be less, as well.

No wonder FC is selling hardware instead of mining with it.  Mining isn't profitable enough!

[Vycid]

How did you estimate profit margins Vycid?

Educated guess. Yes - that means "I don't know". I am fairly confident I am close enough to reach a reasonable conclusion, though, which is what is important. I have estimated conservatively; AM will have to perform exceptionally well to be worth more than my price target.

I've estimated that it costs FC $1.50/GH currently. That will drop for Gen 2. Based on estimates for the competition (which are much higher, in general), I think it is possible he will continue to dominate for the next year - although a 75% profit margin is pretty extreme. I'm sorta playing the waiting game with the year-forward margin. It's not going to go up much (obviously it's impossible to go higher than 100% anyway), but it could go down a lot if the competition shows unexpected strength.

30% is a very impressive profit margin, but not out of the question for year 3 of an immature industry.

20% beyond year 3 is very generous. Most mature companies do not make that kind of margin, and ASIC mining is a low-barrier industry, so that's all faith in Friedcat right there.

20% profit margin is very generous? The largest company in the world has a 22% net profit margin and gross margins in the high 30s, which is common knowledge among investors with a 'pedigree' in value investing.

You can't see why ASIC mining is going to be a low-margin industry? Exceptionally low startup cost and startup time, fast breakeven, little regulatory difficulty in many jurisdictions.

You're incorrect, BTW. Walmart's profit margin is 3.67%. Royal Dutch Shell, 5.2%. Exxon Mobil, 8.98%.

http://en.m.wikipedia.org/wiki/List_of_largest_companies_by_revenue

[Vycid]

Let's look at the USB miners.  if cost is $1.5 /GH, and they have .33 GH, then their cost is $.5. At .1 btc per USB, the revenue is ($12.5-.5= $12). $12 is 96% of $12.5.

Is my math right?  96% profit margin (ignoring shipping) on the USBs at .1 btc?

How many did they sell at 2 btc and 1 btc?

And if the blades are $15 to make, and sell for 4 btc ($500), then they have a profit margin of 97%.

I think my math must be wrong somewhere...

If all of this is true (I am doubting it myself), then even if they match Cointerra's vaporware prices of $3/GH, then they are still 50% profit margin.  The cost for Gen 2 might be less, as well.
No wonder FC is selling hardware instead of mining with it.  Mining isn't profitable enough!

$1.50/GH is for the blades only. USBs would be different (possibly cheaper on a per-hash basis).

50% profit margin is under my projections and I am comfortable being bearish.

[velacreations]

Let's look at the USB miners.  if cost is $1.5 /GH, and they have .33 GH, then their cost is $.5. At .1 btc per USB, the revenue is ($12.5-.5= $12). $12 is 96% of $12.5.

Is my math right?  96% profit margin (ignoring shipping) on the USBs at .1 btc?

How many did they sell at 2 btc and 1 btc?

And if the blades are $15 to make, and sell for 4 btc ($500), then they have a profit margin of 97%.

I think my math must be wrong somewhere...

If all of this is true (I am doubting it myself), then even if they match Cointerra's vaporware prices of $3/GH, then they are still 50% profit margin.  The cost for Gen 2 might be less, as well.
No wonder FC is selling hardware instead of mining with it.  Mining isn't profitable enough!

$1.50/GH is for the blades only. USBs would be different (possibly cheaper on a per-hash basis).

oh, I see.  Still, that makes current blade pricing highly profitable and explains why he's not adding any more Gen1 to the mining farm.

There's a lot of room for him to decrease those prices to match competition.  I wonder if his costs go down with volume, I would assume they do.  That would give him a slight advantage against some of the new competitors that are currently ordering considerably less (like <100 TH) than AM

[puck2]

Let's look at the USB miners.  if cost is $1.5 /GH, and they have .33 GH, then their cost is $.5. At .1 btc per USB, the revenue is ($12.5-.5= $12). $12 is 96% of $12.5.

Is my math right?  96% profit margin (ignoring shipping) on the USBs at .1 btc?

How many did they sell at 2 btc and 1 btc?

And if the blades are $15 to make, and sell for 4 btc ($500), then they have a profit margin of 97%.

I think my math must be wrong somewhere...

If all of this is true (I am doubting it myself), then even if they match Cointerra's vaporware prices of $3/GH, then they are still 50% profit margin.  The cost for Gen 2 might be less, as well.
No wonder FC is selling hardware instead of mining with it.  Mining isn't profitable enough!

$1.50/GH is for the blades only. USBs would be different (possibly cheaper on a per-hash basis).

oh, I see.  Still, that makes current blade pricing highly profitable and explains why he's not adding any more Gen1 to the mining farm.

There's a lot of room for him to decrease those prices to match competition.  I wonder if his costs go down with volume, I would assume they do.  That would give him a slight advantage against some of the new competitors that are currently ordering considerably less (like <100 TH) than AM

I've been thinking this for a while... Do you think FC is selling off blades as he makes room for gen2 blades?

[Aedius]

How did you estimate profit margins Vycid?

Educated guess. Yes - that means "I don't know". I am fairly confident I am close enough to reach a reasonable conclusion, though, which is what is important. I have estimated conservatively; AM will have to perform exceptionally well to be worth more than my price target.

I've estimated that it costs FC $1.50/GH currently. That will drop for Gen 2. Based on estimates for the competition (which are much higher, in general), I think it is possible he will continue to dominate for the next year - although a 75% profit margin is pretty extreme. I'm sorta playing the waiting game with the year-forward margin. It's not going to go up much (obviously it's impossible to go higher than 100% anyway), but it could go down a lot if the competition shows unexpected strength.

30% is a very impressive profit margin, but not out of the question for year 3 of an immature industry.

20% beyond year 3 is very generous. Most mature companies do not make that kind of margin, and ASIC mining is a low-barrier industry, so that's all faith in Friedcat right there.

20% profit margin is very generous? The largest company in the world has a 22% net profit margin and gross margins in the high 30s, which is common knowledge among investors with a 'pedigree' in value investing.

You can't see why ASIC mining is going to be a low-margin industry? Exceptionally low startup cost and startup time, fast breakeven, little regulatory difficulty in many jurisdictions.

You're incorrect, BTW. Walmart's profit margin is 3.67%. Royal Dutch Shell, 5.2%. Exxon Mobil, 8.98%.

http://en.m.wikipedia.org/wiki/List_of_largest_companies_by_revenue

I knew I was dealing with an amateur masquerading as an analyst. Apple is the largest company in the world, with a market capitalization of $412 billion. Exxon Mobil is second with a market capitalization of $391 billion and Walmart isn't even in the top 10 with a market capitalization of $244 billion. This is all VERY common knowledge in investment analyst circles...

Thanks for linking a wikipedia page on highest revenue companies, I got a good laugh out of you using it to justify your argument in claiming that I'm not correct.

[Anotheranonlol]

I knew I was dealing with an amateur masquerading as an analyst

Welcome to planet earth 

[runeks]

Let's look at the USB miners.  if cost is $1.5 /GH, and they have .33 GH, then their cost is $.5. At .1 btc per USB, the revenue is ($12.5-.5= $12). $12 is 96% of $12.5.

Is my math right?  96% profit margin (ignoring shipping) on the USBs at .1 btc?

How many did they sell at 2 btc and 1 btc?

And if the blades are $15 to make, and sell for 4 btc ($500), then they have a profit margin of 97%.

I think my math must be wrong somewhere...

If all of this is true (I am doubting it myself), then even if they match Cointerra's vaporware prices of $3/GH, then they are still 50% profit margin.  The cost for Gen 2 might be less, as well.

No wonder FC is selling hardware instead of mining with it.  Mining isn't profitable enough!

I very much doubt that AM can produce a USB miner for 50 cents.

Here's one attempt to go through the components on the USB Block Erupter and looking up the part codes on Digikey:

Top left: NXP Semiconductor 74HC574 (octal D-type flip-flop), about 0.12 USD
Top middle: Atmel ATTiny2313 (8 bit microcontroller), about 0.72 USD
Top right: Silicon Laboratories CP2102 (USB to UART interface), about 2.30 USD
Bottom right: Alpha & Omega Semiconductor AOZ1021 (3A synchronous buck regulator), about 0.50 USD

So that's $3.64 for the non-ASIC ICs only. Add to that: Block Erupter chip, PCB, heatsink, USB connector. Not sure what these parts cost, but I'd say they add up to at least an additional $1.36, which brings up the total marginal cost to $5, or $15/GH - ie. 10 times the $1.5/GH figure.

That's a 60% profit margin.

[JimiQ84]

Let's look at the USB miners.  if cost is $1.5 /GH, and they have .33 GH, then their cost is $.5. At .1 btc per USB, the revenue is ($12.5-.5= $12). $12 is 96% of $12.5.

Is my math right?  96% profit margin (ignoring shipping) on the USBs at .1 btc?

How many did they sell at 2 btc and 1 btc?

And if the blades are $15 to make, and sell for 4 btc ($500), then they have a profit margin of 97%.

I think my math must be wrong somewhere...

If all of this is true (I am doubting it myself), then even if they match Cointerra's vaporware prices of $3/GH, then they are still 50% profit margin.  The cost for Gen 2 might be less, as well.

No wonder FC is selling hardware instead of mining with it.  Mining isn't profitable enough!

I very much doubt that AM can produce a USB miner for 50 cents.

Here's one attempt to go through the components on the USB Block Erupter and looking up the part codes on Digikey:

Top left: NXP Semiconductor 74HC574 (octal D-type flip-flop), about 0.12 USD
Top middle: Atmel ATTiny2313 (8 bit microcontroller), about 0.72 USD
Top right: Silicon Laboratories CP2102 (USB to UART interface), about 2.30 USD
Bottom right: Alpha & Omega Semiconductor AOZ1021 (3A synchronous buck regulator), about 0.50 USD

So that's $3.64 for the non-ASIC ICs only. Add to that: Block Erupter chip, PCB, heatsink, USB connector. Not sure what these parts cost, but I'd say they add up to at least an additional $1.36, which brings up the total marginal cost to $5, or $15/GH - ie. 10 times the $1.5/GH figure.

That's a 60% profit margin.

Can we be sure that those parts aren't cheaper in China when bought in bulk?

[VeeMiner]

Can we be sure that those parts aren't cheaper in China when bought in bulk?

China is the place to be when designing/manufacturing electronics. You can't get stuff cheaper anywhere in the world today. So I'm pretty sure that friedcat is getting the parts cheaper...

[binaryFate]

Can we be sure that those parts aren't cheaper in China when bought in bulk?

China is the place to be when designing/manufacturing electronics. You can't get stuff cheaper anywhere in the world today. So I'm pretty sure that friedcat is getting the parts cheaper...

He explicitly said that their advantage regarding manufacturing cost was invincible. 

[runeks]

Let's look at the USB miners.  if cost is $1.5 /GH, and they have .33 GH, then their cost is $.5. At .1 btc per USB, the revenue is ($12.5-.5= $12). $12 is 96% of $12.5.

Is my math right?  96% profit margin (ignoring shipping) on the USBs at .1 btc?

How many did they sell at 2 btc and 1 btc?

And if the blades are $15 to make, and sell for 4 btc ($500), then they have a profit margin of 97%.

I think my math must be wrong somewhere...

If all of this is true (I am doubting it myself), then even if they match Cointerra's vaporware prices of $3/GH, then they are still 50% profit margin.  The cost for Gen 2 might be less, as well.

No wonder FC is selling hardware instead of mining with it.  Mining isn't profitable enough!

I very much doubt that AM can produce a USB miner for 50 cents.

Here's one attempt to go through the components on the USB Block Erupter and looking up the part codes on Digikey:

Top left: NXP Semiconductor 74HC574 (octal D-type flip-flop), about 0.12 USD
Top middle: Atmel ATTiny2313 (8 bit microcontroller), about 0.72 USD
Top right: Silicon Laboratories CP2102 (USB to UART interface), about 2.30 USD
Bottom right: Alpha & Omega Semiconductor AOZ1021 (3A synchronous buck regulator), about 0.50 USD

So that's $3.64 for the non-ASIC ICs only. Add to that: Block Erupter chip, PCB, heatsink, USB connector. Not sure what these parts cost, but I'd say they add up to at least an additional $1.36, which brings up the total marginal cost to $5, or $15/GH - ie. 10 times the $1.5/GH figure.

That's a 60% profit margin.

Can we be sure that those parts aren't cheaper in China when bought in bulk?

The quoted prices are bulk prices. Price per unit for 10,000 pieces.

I don't see why a Chinese IC manufacturer would sell 10,000 pieces to ASICMiner for much less than what they can get for it in the rest of the world. Unless the IC company in question is run by the state, they want the highest price they can get.

Even if we assume AM can get the parts 10% cheaper (and I don't think they can), that would still be $3.28 for ICs only.

I'm not sure of anything, but again I'm not presenting this as the absolute truth, only what seems to be most likely.

[Vycid]

How did you estimate profit margins Vycid?

Educated guess. Yes - that means "I don't know". I am fairly confident I am close enough to reach a reasonable conclusion, though, which is what is important. I have estimated conservatively; AM will have to perform exceptionally well to be worth more than my price target.

I've estimated that it costs FC $1.50/GH currently. That will drop for Gen 2. Based on estimates for the competition (which are much higher, in general), I think it is possible he will continue to dominate for the next year - although a 75% profit margin is pretty extreme. I'm sorta playing the waiting game with the year-forward margin. It's not going to go up much (obviously it's impossible to go higher than 100% anyway), but it could go down a lot if the competition shows unexpected strength.

30% is a very impressive profit margin, but not out of the question for year 3 of an immature industry.

20% beyond year 3 is very generous. Most mature companies do not make that kind of margin, and ASIC mining is a low-barrier industry, so that's all faith in Friedcat right there.

20% profit margin is very generous? The largest company in the world has a 22% net profit margin and gross margins in the high 30s, which is common knowledge among investors with a 'pedigree' in value investing.

You can't see why ASIC mining is going to be a low-margin industry? Exceptionally low startup cost and startup time, fast breakeven, little regulatory difficulty in many jurisdictions.

You're incorrect, BTW. Walmart's profit margin is 3.67%. Royal Dutch Shell, 5.2%. Exxon Mobil, 8.98%.

http://en.m.wikipedia.org/wiki/List_of_largest_companies_by_revenue

I knew I was dealing with an amateur masquerading as an analyst. Apple is the largest company in the world, with a market capitalization of $412 billion. Exxon Mobil is second with a market capitalization of $391 billion and Walmart isn't even in the top 10 with a market capitalization of $244 billion. This is all VERY common knowledge in investment analyst circles...

Thanks for linking a wikipedia page on highest revenue companies, I got a good laugh out of you using it to justify your argument in claiming that I'm not correct.

Careful with those accusations.

Market cap measures VALUE. So the most valuable public company in the world is the one with the highest market cap. Not the largest. If you knew the first thing about valuation you would know this.

An honest listing of company size NEVER uses market cap. It is usually revenue (sometimes number of employees, depending on what you are looking for).

Based on this information, why should we be unsurprised that the company with the highest market cap also has such a high margin?

Really, all you have done is proven that 20% margin is exceptional.

[Vycid]

I knew I was dealing with an amateur masquerading as an analyst. Apple is the largest company in the world, with a market capitalization of $412 billion. Exxon Mobil is second with a market capitalization of $391 billion and Walmart isn't even in the top 10 with a market capitalization of $244 billion. This is all VERY common knowledge in investment analyst circles...

Thanks for linking a wikipedia page on highest revenue companies, I got a good laugh out of you using it to justify your argument in claiming that I'm not correct.

Careful with those accusations.

Market cap measures VALUE. So the most valuable public company in the world is the one with the highest market cap. Not the largest. If you knew the first thing about valuation you would know this.

An honest listing of company size NEVER uses market cap. It is usually revenue (sometimes number of employees, depending on what you are looking for).

Based on this information, why should we be unsurprised that the company with the highest market cap also has such a high margin?

Really, all you have done is proven that 20% margin is exceptional.

Just wanted to back this up with some data, so you don't make a bigger fool out of yourself by arguing over semantics.

http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/margin.html

I invite everyone to google "biggest company" and see what comes up.

Anyone else want to attack my credibility?

[velacreations]

I very much doubt that AM can produce a USB miner for 50 cents.

Here's one attempt to go through the components on the USB Block Erupter and looking up the part codes on Digikey:

Top left: NXP Semiconductor 74HC574 (octal D-type flip-flop), about 0.12 USD
Top middle: Atmel ATTiny2313 (8 bit microcontroller), about 0.72 USD
Top right: Silicon Laboratories CP2102 (USB to UART interface), about 2.30 USD
Bottom right: Alpha & Omega Semiconductor AOZ1021 (3A synchronous buck regulator), about 0.50 USD

So that's $3.64 for the non-ASIC ICs only. Add to that: Block Erupter chip, PCB, heatsink, USB connector. Not sure what these parts cost, but I'd say they add up to at least an additional $1.36, which brings up the total marginal cost to $5, or $15/GH - ie. 10 times the $1.5/GH figure.

That's a 60% profit margin.

even at 60% profit margin, that's pretty good, considering how many they sold at .5 btc or better.

Has anyone done a similar breakdown with the components of the blades?

Even at 60% profit margin, it makes no sense to mine with this hardware if you have sellers (which I assume they do, as they keep selling out).