2021, time for a new general & diff speculation thread...

[alh]

I've often wondered why Bitmain bother selling miners rather than just using them.

Bitmain sells its miners at a high price. The price Bitmain sells its miners for is the expected value of mining revenue, based on anticipated future growth in difficulty, and estimated costs associated with running the miner (electricity, and repairs), and the price of bitcoin, minus some discount rate to account for the possibility that difficulty will rise faster than anticipated, or that the price of bitcoin will be lower than anticipated.

So in essence, Bitmain is removing the risk of high difficulty growth from their balance sheet and allowing their customers to assume this risk. As Phil alluded to, this also happens to help them finance their manufacturing operation.

While it's possible that Bitmain does the kind of analysis and planning that you suggest, my bet is that they will essentially charge whatever the market will bear.  There are a variety of factors that fit into that, but competition usually matters as well. The semiconductor shortage has thrown a monkey wrench into every miner manufacturer's plans. We have seen Bitmain adjust pricing in response to competition in the past (e.g Spondoolies in particular).

BTC price and current trends in BTC uptake all factor into what folks are willing to pay. We have seen in the past a batch sell out in record time, and then the next batch is announced a few days later at a higher price. While I haven't paid close attention at an individual level, I don't expect that the practices of the past are ignored.

[philipma1957]

Selling 870 million worth of gear with a 9 month delivery date.

gear cost them 145 million to build.
so the terms are ⅓ down or 290 million.

...

I very much doubt it costs them $2000 to build a miner

we purchased a s19 for 2650. add shipping and import tax it was pushing 3900

so yeah 2000 is a high estimate for an s19

I used it because it clearly shows why  doing the buy now pay ⅓ now method is great for bitmain.

especially since they must be short chips.

I will sell you this now
fully clear a profit with the first downpayment
and not have to send gear until sept-nov of 2022

a racket for bitmain. to say the least.

[eectechnology]

Selling 870 million worth of gear with a 9 month delivery date.

gear cost them 145 million to build.
so the terms are ⅓ down or 290 million.

...

I very much doubt it costs them $2000 to build a miner

OK, what's your guess?

[PrimeNumber7]

I've often wondered why Bitmain bother selling miners rather than just using them.

Bitmain sells its miners at a high price. The price Bitmain sells its miners for is the expected value of mining revenue, based on anticipated future growth in difficulty, and estimated costs associated with running the miner (electricity, and repairs), and the price of bitcoin, minus some discount rate to account for the possibility that difficulty will rise faster than anticipated, or that the price of bitcoin will be lower than anticipated.

So in essence, Bitmain is removing the risk of high difficulty growth from their balance sheet and allowing their customers to assume this risk. As Phil alluded to, this also happens to help them finance their manufacturing operation.

While it's possible that Bitmain does the kind of analysis and planning that you suggest, my bet is that they will essentially charge whatever the market will bear.  There are a variety of factors that fit into that, but competition usually matters as well. The semiconductor shortage has thrown a monkey wrench into every miner manufacturer's plans. We have seen Bitmain adjust pricing in response to competition in the past (e.g Spondoolies in particular).

BTC price and current trends in BTC uptake all factor into what folks are willing to pay. We have seen in the past a batch sell out in record time, and then the next batch is announced a few days later at a higher price. While I haven't paid close attention at an individual level, I don't expect that the practices of the past are ignored.

I would argue that Bitmain charging what the market will bear, and charging a price in accordance with what I describe in my above post are one and the same.

Any rational buyer will perform the above analysis before buying a miner, so it would be sensible for a rational seller (Bitmain) to perform the above analysis to know what a rational buyer would be willing to pay.

Obviously, the difficulty is unknown. The semiconductor shortage has resulted in the EV of miners increasing because the difficulty has not increased at the rate that one might expect it to increase prior to the shortage.

[kano]

Selling 870 million worth of gear with a 9 month delivery date.

gear cost them 145 million to build.
so the terms are ⅓ down or 290 million.

...

I very much doubt it costs them $2000 to build a miner

OK, what's your guess?

https://bitcointalk.org/index.php?topic=5307087.msg58035240#msg58035240

[NotFuzzyWarm]

Happy New Year folks!
Phil's 2022 thread starts here 
Thread now locked