Why are people cheering that ASICMINER will bring 800-1000TH online this year?

[firefop]

The greedier ASICMINER gets, the less profit they make on each coin, that's because their energy costs rise as fast as they add gear. At some point they wont be able to pay a dividend as all their revenue will be going into running the bloated ASIC farm, for roughly the same number of coins each week. Then there is a good chance they will have to close up shop, leaving a  lot of worthless shares, but also that means 1,000TH/s+ suddenly disappears from the BTC net hash rate, and confirmation times blow out until ridiculous, effecting everyone.

Best possible scenario imho. I've got nothing against any ASIC manufacturer... but the concentration of hashpower in a nation where property rights are... marginal at best worries me... Then again, China is kicking the rest of the worlds ass on the whole 'following free market economics' thing. So I guess I'm not as worried as I would be if ASICMINER were located in the USA or EU.

I can just imagine that headline now... DHS seizes asicminer warehouse and kills bitcoin.

[DeathAndTaxes]

The greedier ASICMINER gets, the less profit they make on each coin, that's because their energy costs rise as fast as they add gear. At some point they wont be able to pay a dividend as all their revenue will be going into running the bloated ASIC farm, for roughly the same number of coins each week. Then there is a good chance they will have to close up shop, leaving a  lot of worthless shares, but also that means 1,000TH/s+ suddenly disappears from the BTC net hash rate, and confirmation times blow out until ridiculous, effecting everyone.

Of course it is so obvious, they are doomed.  Wait why couldn't they just stop expanding?

[k9quaint]

The greedier ASICMINER gets, the less profit they make on each coin, that's because their energy costs rise as fast as they add gear. At some point they wont be able to pay a dividend as all their revenue will be going into running the bloated ASIC farm, for roughly the same number of coins each week. Then there is a good chance they will have to close up shop, leaving a  lot of worthless shares, but also that means 1,000TH/s+ suddenly disappears from the BTC net hash rate, and confirmation times blow out until ridiculous, effecting everyone.

Of course it is so obvious, they are doomed.  Wait why couldn't they just stop expanding?

That would require simple mathematics, basic business sense, and a pulse. Most people around here are only batting .333 on that list. 

[tinoki]

The greedier ASICMINER gets, the less profit they make on each coin, that's because their energy costs rise as fast as they add gear. At some point they wont be able to pay a dividend as all their revenue will be going into running the bloated ASIC farm, for roughly the same number of coins each week. Then there is a good chance they will have to close up shop, leaving a  lot of worthless shares, but also that means 1,000TH/s+ suddenly disappears from the BTC net hash rate, and confirmation times blow out until ridiculous, effecting everyone.

Best possible scenario imho. I've got nothing against any ASIC manufacturer... but the concentration of hashpower in a nation where property rights are... marginal at best worries me... Then again, China is kicking the rest of the worlds ass on the whole 'following free market economics' thing. So I guess I'm not as worried as I would be if ASICMINER were located in the USA or EU.

I can just imagine that headline now... DHS seizes asicminer warehouse and kills bitcoin.

DHS or any enforcement agencies need a search warrant, they can't simply bust in and catch you. In China no search warrant require and can go after you anytime of the day or night.

[erk]

The greedier ASICMINER gets, the less profit they make on each coin, that's because their energy costs rise as fast as they add gear. At some point they wont be able to pay a dividend as all their revenue will be going into running the bloated ASIC farm, for roughly the same number of coins each week. Then there is a good chance they will have to close up shop, leaving a  lot of worthless shares, but also that means 1,000TH/s+ suddenly disappears from the BTC net hash rate, and confirmation times blow out until ridiculous, effecting everyone.

Of course it is so obvious, they are doomed.  Wait why couldn't they just stop expanding?

If they are going from 29TH/s a month ago, to 800-1,000TH/s as suggested by the OP, that's exponential growth, and exponential growth is seldom sustainable.  http://www.peakprosperity.com/crashcourse/chapter-3-exponential-growth

[dentldir]

So slide 47 is where the figures are quoted from.  Anyone here read enough Chinese to tell us what it really says?

http://wk.baidu.com/view/ede0631876c66137ee06192f?pcf=2

Is it their hash rate or total network hash rate?

[Rampion]

How, we have no influence on him now. We let him issue 400,000 shares and value his company at $140m. We gave him $57m of capital, we bought $m's of hardware from him at a 95% markup, we [BFL] let him take such a large part of the network that no one can stop him.

We could raise $1b tomorrow and we wouldn't be able to catch him for 2 years, by which point the damage is done.

We lost the game, the greedy man ruined it for us all.

Actually, he issued 200,000 shares, which raised a little above $100K at the time (approximately one year ago). But the company has grown since then.

I agree that BFL's delays have benefited ASICMINER, but that can hardly be blamed on ASICMINER.

THIS.

People spits figures without even reading the relevant posts on beforehand.

ASICminer has been a perfect example of flawless management in a 100% underground Bitcoin operation... For the IPO investors it has been the best investment in the Bitcoin world up to date, hands off.

[tinoki]

are AM investors concern about their investments??

[Pierre]

are AM investors concern about their investments??

The AM share price is going nuts. It seems that the only thing investors are concerned about is trying to afford more shares! 

[tinoki]

are AM investors concern about their investments??

The AM share price is going nuts. It seems that the only thing investors are concerned about is trying to afford more shares! 

Authorities can move in anytime and your shares will really becomes Nuts. Ticking Time Bomb

[polarhei]

So slide 47 is where the figures are quoted from.  Anyone here read enough Chinese to tell us what it really says?

http://wk.baidu.com/view/ede0631876c66137ee06192f?pcf=2

Is it their hash rate or total network hash rate?

The Total Hashrate at the moment, at least 141Thash/s, The document you mentioned, Is their hash rate,41Thash/s at least.

To increase the Hash rate. It would be difficult to do at the moment, Increasing 800Thash/s within a year? Unless they have ordered some miners to do. Otherwise may be too risky as the circuit size cannot be shrunken lower than 28nm format at a moment.

[batcoin]

Too many people involved with Bitcoin don't understand economics.

Oh, the unbelievable irony of unbelievable ironies! Thank you for making that statement. Thank you for making my day! 

[Rampion]

TL;DR -> people is cheering ASICMiner deployment plan because they are heavily invested in it.

So far, ASICMiner managed flawlessy their business - taken into consideration how good they managed their venture so far, you can be quite sure they won't do any stupid thing to destroy their own investment (like owning a too high % of the network).

Thus, this thread is mostly FUD fueled by people who missed the AM train.

[TsuyokuNaritai]

Authorities can move in anytime and your shares will really becomes Nuts. Ticking Time Bomb

The CPC doesn't seem to want to bring down bitcoin. They've been pushing it on their state TV:
https://bitcointalk.org/index.php?topic=194937.0
http://www.forexminute.com/bitcoin/china-loves-bitcoins-7723

There is always risk, but Friedcat is dealing with this:

2. Does ASICMINER/Bitfountain have any legal risks by doing business in China? Are cryptocurrencies or mining of virtual currencies allowed there?

...

OFFICIAL RESPONSE FROM FRIEDCAT

2. Cryptocurrencies or mining of virtual currencies are OK. Exchanging them for fiat is less OK but the legal risk is mostly on the exchange operators' side. However as everyone knows, the policy in China is never predictable so there is indeed risks in the future. We have been considering and coping with this uncertainty from the day our chips passed the test and are on the start of building offshore company structures.

[🏰 TradeFortress 🏰]

Be an ASICMINER shareholder then. I'm happy to own 1/800th of ASICMINER.

[freedomno1]

Be an ASICMINER shareholder then. I'm happy to own 1/800th of ASICMINER.

9/800th more to the board 

[TsuyokuNaritai]

Friedcat has now announced franchising plans to avoid directly controlling too much of the network as ASICMiner grows in the future:

https://bitcointalk.org/index.php?topic=263007.msg2810185#msg2810185

[jspielberg]

With the asic genie out of the bottle, I have trouble believing they are going to be able to maintain anything close to 20% much less 50%.  Its easy to horse races when you are driving a car around the track.  In about 3 months, everyone else will have cars as well... I hope they are working on planes or they are going to be left way behind.

[TsuyokuNaritai]

With the asic genie out of the bottle, I have trouble believing they are going to be able to maintain anything close to 20% much less 50%.  Its easy to horse races when you are driving a car around the track.  In about 3 months, everyone else will have cars as well... I hope they are working on planes or they are going to be left way behind.

They are. Planes are expected starting November-December this year.

[Flashman]

Well, well well, how things change in a few months. I am sure friedcat was much misquoted originally and intended to put online 200TH when he was expecting the entire network to hit a petahash....

SINCE he said that though, KNC has popped up, as have Bitfury, and VMC although there in the background before has announced ASICs of their own. That all points to having about 3 or 4 Petahash if it all gets delivered and online by end of 2013.

And then, hashfast, well they seem to be shooting for Pluto, if they only hit the moon, it's bad. Missing targets by a factor a four would still see them churning out multiple times the hash of the network.

So if friedcat didn't originally intend to put up a petahash, he should be seriously thinking about it now, and that might not even have AM with 10% of the network in early 2014.

Upshot of that is, don't freak out that friedcat might have a petahash up his sleeve, freak out that we're gonna be talking 10s of petahash going into 2014