This is why all Gen 2 ASIC Pre-Orders are a losing bet!

[User705]

Forget about all the tech mumbo jumbo.  By now most ASIC manufactures can self fund since they collected plenty of money over and above their costs some on these 1st batches others straight pre-order.  Whoever isn't a total outright scam have plenty of information regarding speed of production and capacity, hash rates and power consumption, possible sales price points, wholesaler and consumer demand, btc/fiat prices they are willing to pay in relation to all the other factors, etc...  So the only reason to do pre-orders now is because they think what they are getting now will be a lot more then what they possibly can get if they simply built it and sold it as it is coming in.  And that's the nice business version.  The nasty version is they collect pre-order money build it and if it is worth more then what's collected they will sell a bunch out the back door or give out to friends and relatives first before starting to ship.  What can be a counter argument to this?

[Vorksholk]

Forget about all the tech mumbo jumbo.  By now most ASIC manufactures can self fund since they collected plenty of money over and above their costs some on these 1st batches others straight pre-order.  Whoever isn't a total outright scam have plenty of information regarding speed of production and capacity, hash rates and power consumption, possible sales price points, wholesaler and consumer demand, btc/fiat prices they are willing to pay in relation to all the other factors, etc...  So the only reason to do pre-orders now is because they think what they are getting now will be a lot more then what they possibly can get if they simply built it and sold it as it is coming in.  And that's the nice business version.  The nasty version is they collect pre-order money build it and if it is worth more then what's collected they will sell a bunch out the back door or give out to friends and relatives first before starting to ship.  What can be a counter argument to this?

It's important to remember, though, that that there is still quite a large reason for these companies to sell their product. If I was making ASICs, and I had a device that would return 50BTC in its lifetime, I'd be more than happy to sell it for 30BTC. Why? I can make a huge inventory of them, quite likely more than I could ever run myself, and can quickly pay off the debts incurred through the production process. Sure, I would keep some for myself, but the quick returns of selling the hardware often outweigh the eventual profit margin above market value.

[eve]

Butterfly Lab are coming out with another new scam, Stay Away Don't Buy any Pre Orders because they Don't have stocks and they Don't Accept Credit Cards.

[Ytterbium]

Forget about all the tech mumbo jumbo.  By now most ASIC manufactures can self fund since they collected plenty of money over and above their costs some on these 1st batches others straight pre-order.  Whoever isn't a total outright scam have plenty of information regarding speed of production and capacity, hash rates and power consumption, possible sales price points, wholesaler and consumer demand, btc/fiat prices they are willing to pay in relation to all the other factors, etc...  So the only reason to do pre-orders now is because they think what they are getting now will be a lot more then what they possibly can get if they simply built it and sold it as it is coming in.  And that's the nice business version.  The nasty version is they collect pre-order money build it and if it is worth more then what's collected they will sell a bunch out the back door or give out to friends and relatives first before starting to ship.  What can be a counter argument to this?

It's important to remember, though, that that there is still quite a large reason for these companies to sell their product. If I was making ASICs, and I had a device that would return 50BTC in its lifetime, I'd be more than happy to sell it for 30BTC. Why? I can make a huge inventory of them, quite likely more than I could ever run myself, and can quickly pay off the debts incurred through the production process. Sure, I would keep some for myself, but the quick returns of selling the hardware often outweigh the eventual profit margin above market value.

Of course, and the more you sell the more money you have but the less money your customers each get.

At the same time, though this is what the bitcoin protocol was intended to do. The point is to increase the security of the network, rather then keep things profitable for miners.

[User705]

Forget about all the tech mumbo jumbo.  By now most ASIC manufactures can self fund since they collected plenty of money over and above their costs some on these 1st batches others straight pre-order.  Whoever isn't a total outright scam have plenty of information regarding speed of production and capacity, hash rates and power consumption, possible sales price points, wholesaler and consumer demand, btc/fiat prices they are willing to pay in relation to all the other factors, etc...  So the only reason to do pre-orders now is because they think what they are getting now will be a lot more then what they possibly can get if they simply built it and sold it as it is coming in.  And that's the nice business version.  The nasty version is they collect pre-order money build it and if it is worth more then what's collected they will sell a bunch out the back door or give out to friends and relatives first before starting to ship.  What can be a counter argument to this?

It's important to remember, though, that that there is still quite a large reason for these companies to sell their product. If I was making ASICs, and I had a device that would return 50BTC in its lifetime, I'd be more than happy to sell it for 30BTC. Why? I can make a huge inventory of them, quite likely more than I could ever run myself, and can quickly pay off the debts incurred through the production process. Sure, I would keep some for myself, but the quick returns of selling the hardware often outweigh the eventual profit margin above market value.

That's true but I think people making pre-orders need to look at the above statement and ask themselves why pre-order when the companies will still make these products and will still have to sell them and it's much easier to make a determination if you want to buy when it's coming next day instead of maybe two months away.  Also reasons about network security are pointless since even if one asic company like avalon before had enough asics on hand to have 100%or even 200% of the network it still is more profitable for them to sell the devices then try to double spend in real life and tank the exchange rate.  There is no easy way to double spend millions with destroying btc value but there is an easy way to sell a lot of these asics supporting the btc value.

[bcp19]

Why limit this to Gen 2 ASICs?  The last month has shown an extreme speed up in network hash.  50TH jumps took from 22Jun to 7Jul, 7 Jul to 27 Jul, 27Jul to 5 Aug, 5 Aug to 10 Aug, 10 Aug to 14 Aug, 14 Aug to 18 Aug.  It currently looks like 18 to 20 Aug may be the next jump.

BFL is shipping. (yea yea, make all the fun you want, they are still shipping)
ASICMiner is dumping overpriced USB sticks.
Avalon just shipped 240-350TH of chips depending on who you listen to.
BitFury is supposedly up over 50TH
KNCMiner is coming soon
Cointerra?




I'm sorry, but if you don't have it in hand today, I highly doubt you will get anywhere close to RoI.

Had a guy in chat yesterday offering to sell 60GH BFL's he had in hand for $8000 each.  I told him he was high and that I doubted I could make RoI at $4000 and would only offer him $3000 if he paid shipping and guaranteed them to be here today.

A lot of these companies are going to go bankrupt if enough people put 2 and 2 together and see their money disappearing into an uncontrollable hash increase and start demanding refunds.  Why oh why do you think BFL has been denying refunds??? If they truly have only shipped 10-20% of all paid orders, that's a huge chunk of change to lose.