CoinTerra announces its first ASIC - Hash-Rate greater than 500 GH/s

[dhenson]

Agree with all other comments here, this thing will never pay for itself, too late into the market and too over priced:
http://mining.thegenesisblock.com/a/294c1f0fab

The sad thing is, this is more likely:
http://mining.thegenesisblock.com/a/1edc4b3911

You lose 75% of your investment.

Yes difficulty reaching >1 trillion is highly likely.  

I would point out that even with free hardware, $0.10 electricity and <1W per GH the exchange rate would need to be $42,860 per BTC.  In other words miners would be paying $42,860 in electricity (or more if they have less efficient rigs) to mine one BTC.  

Awesome analysis.

If people were waiting until hardware was available to purchase then you would be correct.  Do you think all of these pre-orders are going to be delivered and not used?

Eventually the exponential network hashrate increases will level off and stabilize.  The problem is, I don't believe these devices will ROI before that happens.  Sure, you'll be the only one making more than electricity costs, but it'll take you years to break even.

Damned if you do and all that...

edit...
Do you really want to spend 15k on a product that MIGHT break even, and even if it does will only barely cover electricity costs until 22nm <.6 W/Gh technology hits the market?  The bitcoin space has more lucrative investment possibilities.  This is a loser at the current price point.

[DeathAndTaxes]

I am not saying you should buy this or it is a good deal.  For the record you probably shouldn't and I don't think this is a good deal.

Regardless it doesn't make your projection of difficulty breaking 700 million in January and 1.1 trillion by the end of 2014 any less dubious.  At some point growth will move from exponential to linear (i.e. + x GH/s per month ).

[dhenson]

I am not saying you should buy this or it is a good deal.  For the record you probably shouldn't and I don't think this is a good deal.

Regardless it doesn't make your projection of difficulty breaking 700 million in January and 1.1 trillion by the end of 2014 any less dubious.  At some point growth will move from exponential to linear (i.e. + x GH/s per month ).

I completely agree.  It has to, there simply aren't that many rich idiots floating around.  The question is, at what point will it level off and at what efficiency will you be profitable.

Cointerra had an opportunity here to be the far and away clear choice for long term mining.  They have effectively missed the boat and I'm admittedly a little bitter about it.

[BKM]

I am not saying you should buy this or it is a good deal.  For the record you probably shouldn't and I don't think this is a good deal.

Regardless it doesn't make your projection of difficulty breaking 700 million in January and 1.1 trillion by the end of 2014 any less dubious.  At some point growth will move from exponential to linear (i.e. + x GH/s per month ).

Fair enough - the point being here is that there are too many variables that are unknown but in the aggregate any scenario does not favour (yes, I am Canadian) consumer or retail miners. Mining will go institutional and be a dividend or yield driven investment much like the 'regular' investment market. Nominal returns will level out to be market competitive with bonds. An (ahem) investment in mining hardware will no longer be a proxy for speculating in the future value of BTC. The reason we are having these conversations now is because of the circumstances around a preorder driven market place. The next 3 - 6 months will see a huge shift in BTC mining away from retail and into a ultra high net worth individual, corporate or institutional paradigm.

It will also be a very interesting time for the Scrypt based altcoin world.

[BKM]

Cointerra had an opportunity here to be the far and away clear choice for long term mining.  They have effectively missed the boat and I'm admittedly a little bitter about it.

Bingo - Cointerra blew it big time. Great engineering team -- lousy marketers. If they had even been 10 - 15% below the Monarch they would have nailed it. BFL is not a tough act to follow and there are no other producing or prospective US based competitors even close on $/GH level. Completely ridiculous.

[CoinHoarder]

Cointerra had an opportunity here to be the far and away clear choice for long term mining.  They have effectively missed the boat and I'm admittedly a little bitter about it.

Bingo - Cointerra blew it big time. Great engineering team -- lousy marketers. If they had even been 10 - 15% below the Monarch they would have nailed it. BFL is not a tough act to follow and there are no other producing or prospective US based competitors even close on $/GH level. Completely ridiculous.

It doesn't make since to me. They had the benefit of being one of the last companies on the scene. They could of undercut everyone's prices by 10% and been the easy choice of what to buy in mining hardware. At this point they're just another ASIC company. If they are a month late, then their pre-order customers will lose half of their investment. That's not a good way to start off in this industry, then they'll have their own herd of haters just like BFL.

The thing is these companies don't care. We pay for the expensive R&D and after they're done with that, they don't need us anymore. They can make as many units as they want and self mine if it's more profitable than selling them. All they need us for is to fund the R&D so that they can make ASICs for themselves at cost for the rest of eternity. Everyone seems to be thinking that we're helping out the bitcoin economy by ordering from these companies, but in reality we're just increasing their pocketbooks.

[zedicus]

Cointerra had an opportunity here to be the far and away clear choice for long term mining.  They have effectively missed the boat and I'm admittedly a little bitter about it.

Bingo - Cointerra blew it big time. Great engineering team -- lousy marketers. If they had even been 10 - 15% below the Monarch they would have nailed it. BFL is not a tough act to follow and there are no other producing or prospective US based competitors even close on $/GH level. Completely ridiculous.

It doesn't make since to me. They had the benefit of being one of the last companies on the scene. They could of undercut everyone's prices by 10% and been the easy choice of what to buy in mining hardware. At this point they're just another ASIC company. If they are a month late, then their pre-order customers will lose half of their investment. That's not a good way to start off in this industry, then they'll have their own herd of haters just like BFL.

The thing is these companies don't care. We pay for the expensive R&D and after they're done with that, they don't need us anymore. They can make as many units as they want and self mine if it's more profitable than selling them. All they need us for is to fund the R&D so that they can make ASICs for themselves at cost for the rest of eternity. Everyone seems to be thinking that we're helping out the bitcoin economy by ordering from these companies, but in reality we're just increasing their pocketbooks.

Well said.

[JohnyBigs]

I am not saying you should buy this or it is a good deal.  For the record you probably shouldn't and I don't think this is a good deal.

Regardless it doesn't make your projection of difficulty breaking 700 million in January and 1.1 trillion by the end of 2014 any less dubious.  At some point growth will move from exponential to linear (i.e. + x GH/s per month ).

I completely agree.  It has to, there simply aren't that many rich idiots floating around.  The question is, at what point will it level off and at what efficiency will you be profitable.

Cointerra had an opportunity here to be the far and away clear choice for long term mining.  They have effectively missed the boat and I'm admittedly a little bitter about it.

What they did was blatantly lie. Or stretch the wording so much that in the real world you would call them scumbag liars. They come out with quotes "that if you like replacing miners every few months go with our competitors".

Yet, these fucking morons are priced even worst then their competition and their devices will be even more useless. Their ROI based on their delivery date is insulting, are they really expecting people to pay $16,000 to potentially months later make a $4,000.

These guys are just as bad as BFL, it's funny though they think they can get away with it and not be called out on it. They are even grimier than BFL.

Cointerra FUCK YOU SCUM

[CYPER]

I am not saying you should buy this or it is a good deal.  For the record you probably shouldn't and I don't think this is a good deal.

Regardless it doesn't make your projection of difficulty breaking 700 million in January and 1.1 trillion by the end of 2014 any less dubious.  At some point growth will move from exponential to linear (i.e. + x GH/s per month ).

1.1 trillion 
I assume you are using the long scale?

[gkm22d]

For all this talk of efficiency, it seems that in comparing knc vs cointerra on tgb calc, the monthly profit seems to go negative pretty much within a month of each other.
Electricity costs are negligible at this stage of the game.

Also, I agree with everyone who thinks it is overpriced, though when people were thinking 10% below BFL, I was thinking more like 50% would have been okay.

I don't think that the people at cointerra are stupid as much as I guess they must have found all the investments they need from somewhere else, cuz I can't see them getting it here.

It might be a good buy in November, when we have a better idea what the difficulty will be in December. But there is too much between now and then.

[BitCoin Operated Boy]

For all this talk of efficiency, it seems that in comparing knc vs cointerra on tgb calc, the monthly profit seems to go negative pretty much within a month of each other.
Electricity costs are negligible at this stage of the game.

Also, I agree with everyone who thinks it is overpriced, though when people were thinking 10% below BFL, I was thinking more like 50% would have been okay.

I don't think that the people at cointerra are stupid as much as I guess they must have found all the investments they need from somewhere else, cuz I can't see them getting it here.

It might be a good buy in November, when we have a better idea what the difficulty will be in December. But there is too much between now and then.

Agreed :-)

[klee]

I don't think that the people at cointerra are stupid as much as I guess they must have found all the investments they need from somewhere else, cuz I can't see them getting it here.

This!

[Tsukene]

For all this talk of efficiency, it seems that in comparing knc vs cointerra on tgb calc, the monthly profit seems to go negative pretty much within a month of each other.
Electricity costs are negligible at this stage of the game.

Also, I agree with everyone who thinks it is overpriced, though when people were thinking 10% below BFL, I was thinking more like 50% would have been okay.

I don't think that the people at cointerra are stupid as much as I guess they must have found all the investments they need from somewhere else, cuz I can't see them getting it here.

It might be a good buy in November, when we have a better idea what the difficulty will be in December. But there is too much between now and then.

+1

[Anenome5]

Why - tell me why - did I sign up for the cointerra email when thegenesisblock breaks the story on their offering? Nothing updated on the cointerrra site yet.

http://thegenesisblock.com/cointerra-announces-2ths-asic-bitcoin-miner-for-15750/

Also, while I am at it.... what a wasted opportunity to establish market leadership - they simply matched the price of BFL on a / GH basis.

Barely breaks even based on the recent rate of increase in difficulty if they actually deliver in December.

http://mining.thegenesisblock.com/a/6f382061fa
Input your own difficulty rate increase assumption if you don't agree with 75% per month

Wow. I am very underwhelmed.

You have to realize that Cointerra got into this as blind as customers of other ASIC vendors. Cointerra couldn't predict Hashfast nor KNC nor Bitfury, etc., etc. Matching price is a necessity forced on them that is also a big bummer for them. They were likely hoping on a price at least 3 times that amount.

You figure the cost of this custom hardware after NRE probably comes down to a few hundreds of dollars.

There was major major major money to be made, and Avalon proved it charging $7k for some ASIC hardware that was otherwise inexpensive to make. Avalon probably made 500% or more on each unit, who knows.

Huge profit margins draw competitors. They've arrived now. But they're not able to charge what they were hoping they'd be able to charge. They're just as aced out as the people who bought miners looking at what they could've generated months ago (like Avalons were 15 bitcoin a day back in april).

Price competition has not only hit, it's going to scare off other competitors. The value of hardware is going to crash so quickly after september that it's likely that many people formerly planning to startup an ASIC venture have now tossed those plans entirely, too much competition. And now people are worried that Nov/Dec asics might not ROI at all.

Mining should always return to the point where the cost of electricity is just under the cost of mining bitcoin, long term.

If I were an ASIC company wanting to stay in this biz long term rather than going for the homerun, facing all these fence-swingers right now, I'd be making incredibly high efficiency ASICs, air cooled, and plan to sell them for a slight markup and make up the difference on volume. A 10gh USB stick for $20 would be a market winner, even as the large asics begin dying like flies at the end of this year.

[btc_uzr]

I have excepted a lower price than 15K for 2TH/s as well for the point in time of delivery and my interpretation of their promises.
In addition I can not afford to spend that much which increases my disappointment.

@cointerra: I'm looking forward for lower priced products (starting at $500)

Anyways I'm a little confused about the negative ROI predictions mentioned here several times.
When I put in the following numbers as start parameters which is not likely to be happen at all I assume:

2TH/s,
1200W,
hw=$15750,
btc=$100,
electricity=$0.15
1.000M difficulty with 5% increase

=> It shows to me 33% ROI in the first year and break even after 250days when btc is $100
=> Even at difficulty 2.079M monthly revenue is $1,420 and profit $1,290
http://mining.thegenesisblock.com/a/569aadb633

At 10.000M difficulty you still make >$160 a month,
at a difficulty of 22.800M and BTC=$100 you reach the $0 profit line: http://mining.thegenesisblock.com/a/137e040147

So I do not understand that it will never be possible to get ROI in fiat - am I missing a major point 

Do you just complain for the fun of it?
When you do your calculations with difficulty > XXXXM, do you even think about what 10% increase means..?
Do you expect a money printing machine paying your daily life ??
Serious questions I'm asking myself..

[PuertoLibre]

I am not saying you should buy this or it is a good deal.  For the record you probably shouldn't and I don't think this is a good deal.

Regardless it doesn't make your projection of difficulty breaking 700 million in January and 1.1 trillion by the end of 2014 any less dubious.  At some point growth will move from exponential to linear (i.e. + x GH/s per month ).

I completely agree.  It has to, there simply aren't that many rich idiots floating around.  The question is, at what point will it level off and at what efficiency will you be profitable.

Cointerra had an opportunity here to be the far and away clear choice for long term mining.  They have effectively missed the boat and I'm admittedly a little bitter about it.

What they did was blatantly lie. Or stretch the wording so much that in the real world you would call them scumbag liars. They come out with quotes "that if you like replacing miners every few months go with our competitors".

Yet, these fucking morons are priced even worst then their competition and their devices will be even more useless. Their ROI based on their delivery date is insulting, are they really expecting people to pay $16,000 to potentially months later make a $4,000.

These guys are just as bad as BFL, it's funny though they think they can get away with it and not be called out on it. They are even grimier than BFL.

Cointerra FUCK YOU SCUM

You post pretty much sums up this company.

Everyone should read it at least once.

[CryptoCluster]

Why - tell me why - did I sign up for the cointerra email when thegenesisblock breaks the story on their offering? Nothing updated on the cointerrra site yet.

http://thegenesisblock.com/cointerra-announces-2ths-asic-bitcoin-miner-for-15750/

Also, while I am at it.... what a wasted opportunity to establish market leadership - they simply matched the price of BFL on a / GH basis.

Barely breaks even based on the recent rate of increase in difficulty if they actually deliver in December.

http://mining.thegenesisblock.com/a/6f382061fa
Input your own difficulty rate increase assumption if you don't agree with 75% per month

Wow. I am very underwhelmed.

You have to realize that Cointerra got into this as blind as customers of other ASIC vendors. Cointerra couldn't predict Hashfast nor KNC nor Bitfury, etc., etc. Matching price is a necessity forced on them that is also a big bummer for them. They were likely hoping on a price at least 3 times that amount.

You figure the cost of this custom hardware after NRE probably comes down to a few hundreds of dollars.

There was major major major money to be made, and Avalon proved it charging $7k for some ASIC hardware that was otherwise inexpensive to make. Avalon probably made 500% or more on each unit, who knows.

Huge profit margins draw competitors. They've arrived now. But they're not able to charge what they were hoping they'd be able to charge. They're just as aced out as the people who bought miners looking at what they could've generated months ago (like Avalons were 15 bitcoin a day back in april).

Price competition has not only hit, it's going to scare off other competitors. The value of hardware is going to crash so quickly after september that it's likely that many people formerly planning to startup an ASIC venture have now tossed those plans entirely, too much competition. And now people are worried that Nov/Dec asics might not ROI at all.

Mining should always return to the point where the cost of electricity is just under the cost of mining bitcoin, long term.

If I were an ASIC company wanting to stay in this biz long term rather than going for the homerun, facing all these fence-swingers right now, I'd be making incredibly high efficiency ASICs, air cooled, and plan to sell them for a slight markup and make up the difference on volume. A 10gh USB stick for $20 would be a market winner, even as the large asics begin dying like flies at the end of this year.

You got some good points here.

I expect that few of ASIC manufacturers that hoped to earn a lot of cash on "selling shovels" will start to mine instead of selling anything to the public. It will be their (desperate) attempt to recover NRE costs. They could build dedicated facilities in somewhere where electricity is dirt cheap and put all small-time-miners out of business thanks to economic of scale (28nm silicon cost should be around 1-2$/GH excluding NRE).

Centralization of Bitcoin mining might happen sooner than anyone could have expected...

[Minor Miner]

Agree with all other comments here, this thing will never pay for itself, too late into the market and too over priced:
http://mining.thegenesisblock.com/a/294c1f0fab

The sad thing is, this is more likely:
http://mining.thegenesisblock.com/a/1edc4b3911
You lose 75% of your investment.

Yes difficulty reaching >1 trillion is highly likely. 
I would point out that even with free hardware, $0.10 electricity and <1W per GH the exchange rate would need to be $42,860 per BTC.  In other words miners would be paying $42,860 in electricity (or more if they have less efficient rigs) to mine one BTC. 
Awesome analysis.

I do not understand why you bother with the sarcasm.   It will be lost on them.   No one is going to read the long string that you put up that had thoughtful analysis of where the network could go based on marginal costs and highlighting how the pre-order process effs up rational economic decision making.   Stop wasting your typing.   Let them use their website models to explain everything to themselves.     A great question at HBS in first year finance for modeling "If you model a company growing at 6% per year and USA GDP is growing at 3%, how large that company become over time?"
Excel has allowed people with no understanding of compounding to come up with solutions that do not pass the most basic sanity checks.

[PuertoLibre]

Agree with all other comments here, this thing will never pay for itself, too late into the market and too over priced:
http://mining.thegenesisblock.com/a/294c1f0fab

The sad thing is, this is more likely:
http://mining.thegenesisblock.com/a/1edc4b3911
You lose 75% of your investment.

Yes difficulty reaching >1 trillion is highly likely. 
I would point out that even with free hardware, $0.10 electricity and <1W per GH the exchange rate would need to be $42,860 per BTC.  In other words miners would be paying $42,860 in electricity (or more if they have less efficient rigs) to mine one BTC. 
Awesome analysis.

I do not understand why you bother with the sarcasm.   It will be lost on them.   No one is going to read the long string that you put up that had thoughtful analysis of where the network could go based on marginal costs and highlighting how the pre-order process effs up rational economic decision making.   Stop wasting your typing.   Let them use their website models to explain everything to themselves.     A great question at HBS in first year finance for modeling "If you model a company growing at 6% per year and USA GDP is growing at 3%, how large that company become over time?"
Excel has allowed people with no understanding of compounding to come up with solutions that do not pass the most basic sanity checks.

Funny, my results lined up 2 months into the future within an error margin of just a few days.

Can I say that this will be true in 6 months? No, why? Because reality is showing an even steeper curve than I used in Excel. So my models will at best, a best case scenario.

[PuertoLibre]

The only thing I see happening is that CoinTerra is not lowering it's prices. It's set them pretty high.

There was a unanimous opinion that it is set too high and is rediculous. Will some pay it? Yes, then they will lose money to basic math and reality.

----------------------

The rest of the miners who want to believe in a pipe dream are crying out loud in public "It can't be so!". The math must be wrong? Bullshit.

You folks just don't want the companies to come to the conclusion that they either need a game plan that accounts for these violent market changes or they will be out of business before they even ship.

What happened to Avalon will happen again, only to multiple companies if they are not prepared. Reality has already rung your doorbell. You can either ignore it (and go out of business) or adapt.