LargeCoin Pricing Announced; Taking Pre-Orders

[ttul]

As many noted in this thread @ $30k a pop the ROI is terribly low and anyone investing in this would effectively be gambling for the next 24-36months hoping to get to breakeven and then start to profit.

I don't agree. The operating margin will always be 7 - 100x better with an ASIC-based mining rig versus an FPGA or GPU based rig. If you're placing a bet on Bitcoin, buying ASICs ensures you will receive an operating profit regardless of what happens to the exchange rate. Late last year, GPU miners had to switch off in many power jurisdictions. ASICs would have been strongly profitable the entire time.

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[Clipse]

As many noted in this thread @ $30k a pop the ROI is terribly low and anyone investing in this would effectively be gambling for the next 24-36months hoping to get to breakeven and then start to profit.

I don't agree. The operating margin will always be 7 - 100x better with an ASIC-based mining rig versus an FPGA or GPU based rig. If you're placing a bet on Bitcoin, buying ASICs ensures you will receive an operating profit regardless of what happens to the exchange rate. Late last year, GPU miners had to switch off in many power jurisdictions. ASICs would have been strongly profitable the entire time.

You fail to understand my logic, Im not doubting in ASIC, I am stating that your product and its price is not a good investment.

Of course cheaper ASIC solutions would be a far better choice than GPU/FPGA.

[cmg5461]

inb4 the license file can and will be cracked.

If you can afford a $30k unit, you can afford a cluster of GPU's to crack it.

[runeks]

If they sold them in Portugal they would need to give a 24 months warranty, wether they liked it or not.
Also, BFL said something about shipping from Germany, so I have good news. If they do that(and they said they would to avoid customs) they must follow European rules, and guess what: 2 years warranty
[...]

This only applies to consumer products. Ie. business-to-consumer sales. It seems like this isn't what LargeCoin is targeting ("well, duh" one might add, when we're talking about a $30,000 device).

Also, if LargeCoin only sells to businesses the purchaser can get a VAT refund, at least, in Denmark (where I live), and I suspect also in most other EU countries. It seems almost like a waste of money to *not* purchase this as a business in the EU, where each member state is required to have a minimum VAT rate of 15%.

[markm]

Many people doubted strongly that an ASIC would come along at all, due to supposedly HUGE startup costs.

If the claims about how prohibitive the initial research/development costs would be are valid, surely it would seem incongruous to have the first few units produced be dirt cheap. Quite the contrary, surely it is to be expected that the first production units would be sold to a select clientele at a premium price? If the price of these first few units were in the "reasonable" price ranges you folk would like to see them at doubtless that would have been taken as further proof it must be a scam, due to the evident failure to attempt to recoup some of the "prohibitive" development costs...

-MarkM-

[nmat]

I agree I was excited until I looked at the numbers and thought about the agreement.  

1. $4500 is enough to build a fake and run off with the pre-orders.
2. No one knows for sure you can accomplish this.
3. You have no reputation, or testimonials of your past accomplishments.
4. I want to see your face, and more of web presence with an address and phone number
5. You can't start small by selling low cost systems as part of building your rep between now and July?

Well, I hope you are not a fraud as I would love to buy a system.

I know that it doesn't prove anything, but during the past year ttul mentioned several times that they were working on an ASIC.

[DeathAndTaxes]

Many people doubted strongly that an ASIC would come along at all, due to supposedly HUGE startup costs.

If the claims about how prohibitive the initial research/development costs would be are valid, surely it would seem incongruous to have the first few units produced be dirt cheap. Quite the contrary, surely it is to be expected that the first production units would be sold to a select clientele at a premium price? If the price of these first few units were in the "reasonable" price ranges you folk would like to see them at doubtless that would have been taken as further proof it must be a scam, due to the evident failure to attempt to recoup some of the "prohibitive" development costs...

-MarkM-

Well no.  If one has a fixed cost of $1M then to amortize that over 1000 chips will be +$1000 over build cost per chip.  If you ammortize that over 20,000 chips it is $50.  If you amortize it over 100,000 chips it will be it will be $10 per chip.

ztex (as an example) won't get much lower prices even if he builds 10,000 boards BUT an ASIC w/ huge upfront costs acheives significantly lower cost by scaling production.

Keeping prices high for a select few means less units moved and higher cost per unit.  Both company and customer lose.  There also is the risk with high prices of slow volume and someone comes along w/ cheaper/faster/cooler unit before you ammortize.  Then you are left holding the proverbial bag.

An example:
Hypothetically (excluding profit margin, risk, volume pricing on production runs, etc)
$1M NRE cost.
$100 wafer cost per chip (1 GH/s)

Sell 1000 chips = $100 ea + $1000 NRE share = $1100 per chip ($22,000 per 20GH/s box)
Sell 5,000 chips = $100 ea + $200 NRE share = $300 per chip ($6,000 per 20 GH/s box)
Sell 25,000 chips = $100 ea + $40 NRE = $140 per chip ($2,800 per 20 GH/s box)
etc...

So someone selling a few units at very high cost seems counterintuitive to the economics of ASICS.  With ASIC your non sunk cost will be very low.  It is in your best interest to undercut everyone else, be the clear choice and line up tens of millions of dollars in orders.

If you want to sell a few units at high premium get early access to 28nm chips.  No sense and pricing them low as your cost won't go down much when ramping up volume.

[ttul]

inb4 the license file can and will be cracked.

If you can afford a $30k unit, you can afford a cluster of GPU's to crack it.

Best of luck with that.

[ttul]

I agree I was excited until I looked at the numbers and thought about the agreement.  

1. $4500 is enough to build a fake and run off with the pre-orders.
2. No one knows for sure you can accomplish this.
3. You have no reputation, or testimonials of your past accomplishments.
4. I want to see your face, and more of web presence with an address and phone number
5. You can't start small by selling low cost systems as part of building your rep between now and July?

Well, I hope you are not a fraud as I would love to buy a system.

I know that it doesn't prove anything, but during the past year ttul mentioned several times that they were working on an ASIC.

These are all legitimate concerns, and I'd have many of the same concerns if I was considering putting $4,500 into escrow, let alone spending $30K on a box. Let me take each of your points in turn:

1. $4500 is enough to build a fake and run off with the pre-orders.

I'd suggest you could build a fake for even less than $4,500. But in this case, we can't run off with the $4,500 because it will be sitting in a trust account with a law firm. That money won't be released to us until the units are validated to be working consistent with the specifications in the escrow agreement with each customer. Having the money in escrow helps us to know there's demand for the units, but we're not drawing on those funds in any way until shipment happens.

2. No one knows for sure you can accomplish this.

I can't argue this point.

3. You have no reputation, or testimonials of your past accomplishments.

True. Here is my LinkedIn profile: http://linkd.in/zh5OFB, and that of the co-founder: http://linkd.in/ynNuuO. These are consistent with LargeCoin Inc.'s incorporation data, which is available from Industry Canada: http://bit.ly/AkqCwM

As you can see from our LinkedIn profiles, the founders have product management experience with semiconductor companies, investment experience, and years of experience building and running technology companies.

4. I want to see your face, and more of web presence with an address and phone number

Check the LinkedIn profile. Or, fill in the order form http://bit.ly/zliQFj and I'll call you so that we can chat live.

5. You can't start small by selling low cost systems as part of building your rep between now and July?

No, this is impractical. The major hurdle is producing the ASIC, which just takes time. And, as others have pointed out, costs money too.

[Clipse]

Regarding the ESCROW funds, you state that it wont be released until you ship the product ?

That is the concern yet again, shipping a product is different from product arrive and works as advertised thus if you clear the funds upon shipment you could still run with $4500 before the product reach the customer?

[rjk]

3. You have no reputation, or testimonials of your past accomplishments.

True. Here is my LinkedIn profile: http://linkd.in/zh5OFB, and that of the co-founder: http://linkd.in/ynNuuO. These are consistent with LargeCoin Inc.'s incorporation data, which is available from Industry Canada: http://bit.ly/AkqCwM

As you can see from our LinkedIn profiles, the founders have product management experience with semiconductor companies, investment experience, and years of experience building and running technology companies.

4. I want to see your face, and more of web presence with an address and phone number

Check the LinkedIn profile. Or, fill in the order form http://bit.ly/zliQFj and I'll call you so that we can chat live.

5. You can't start small by selling low cost systems as part of building your rep between now and July?

No, this is impractical. The major hurdle is producing the ASIC, which just takes time. And, as others have pointed out, costs money too.

This stuff needs to be in the first post, and should have been there to begin with.

[CanaryInTheMine]

I think this product would need to be in the $10,000-$15,000 range to garner any real interest.

Would you buy one if it was $15K?

yes

[bulanula]

I think this product would need to be in the $10,000-$15,000 range to garner any real interest.

Would you buy one if it was $15K?

yes

Why do that when you can get the Rig Box

Rig Box

30k 50 ghash/s reputation so MH/$ ratio is 1.6

LargeCon

15k 20 ghash/s no reputation so MH/$ ratio is 1.3

Maybe less power but it still does not amortize over the long run enough to matter so what is the point even at 15k ?

[Brian DeLoach]

Why do that when you can get the Rig Box

Rig Box

30k 50 ghash/s reputation so MH/$ ratio is 1.6

LargeCon

15k 20 ghash/s no reputation so MH/$ ratio is 1.3

Maybe less power but it still does not amortize over the long run enough to matter so what is the point even at 15k ?

Do you just not take into account that the c200 is ten times more efficient than the rig box?

[bulanula]

Why do that when you can get the Rig Box

Rig Box

30k 50 ghash/s reputation so MH/$ ratio is 1.6

LargeCon

15k 20 ghash/s no reputation so MH/$ ratio is 1.3

Maybe less power but it still does not amortize over the long run enough to matter so what is the point even at 15k ?

Do you just not take into account that the c200 is ten times more efficient than the rig box?

No because TBH 2500W vs 100W is not really relevant to me and probably lots of others with cheap electric rates.

All that matters is MH/$ and the ability to deliver the product.

All this DRM is just total BS. I don't want any backdoors from the gov. in my miners.

[rjk]

I think this product would need to be in the $10,000-$15,000 range to garner any real interest.

Would you buy one if it was $15K?

yes

Why do that when you can get the Rig Box

Rig Box

30k 50 ghash/s reputation so MH/$ ratio is 1.6

LargeCon

15k 20 ghash/s no reputation so MH/$ ratio is 1.3

bulanula, since you have free power, 20x Rig boxes makes sense for you. However, my local datacenter would refuse to provide me with 400 amps of 120vac, so I need something lower power.

But $30 grand still isn't worth it to me for 20ghash. I'd rather buy just one Rig Box and dump the rest of my miners out the window.

[Raoul Duke]

I'll ask again and if I'm ignored I'll start yelling SCAM...

WHO'S THE ESCROW?

No, I won't PM you asking for an answer, I want a public answer and it's on your best interest to give it.
Or do you have something to hide?

[ttul]

I'll ask again and if I'm ignored I'll start yelling SCAM...

WHO'S THE ESCROW?

No, I won't PM you asking for an answer, I want a public answer and it's on your best interest to give it.
Or do you have something to hide?

The escrow will be with a Canadian law firm based in Vancouver, British Columbia; escrow funds will be held in a lawyer's trust account in accordance with stringent trust account rules of the BC Law Society. I will be happy to share the escrow agreement with the forum when it's ready for release.

[nmat]

Well no.  If one has a fixed cost of $1M then to amortize that over 1000 chips will be +$1000 over build cost per chip.  If you ammortize that over 20,000 chips it is $50.  If you amortize it over 100,000 chips it will be it will be $10 per chip.

ztex (as an example) won't get much lower prices even if he builds 10,000 boards BUT an ASIC w/ huge upfront costs acheives significantly lower cost by scaling production.

Keeping prices high for a select few means less units moved and higher cost per unit.  Both company and customer lose.  There also is the risk with high prices of slow volume and someone comes along w/ cheaper/faster/cooler unit before you ammortize.  Then you are left holding the proverbial bag.

An example:
Hypothetically (excluding profit margin, risk, volume pricing on production runs, etc)
$1M NRE cost.
$100 wafer cost per chip (1 GH/s)

Sell 1000 chips = $100 ea + $1000 NRE share = $1100 per chip ($22,000 per 20GH/s box)
Sell 5,000 chips = $100 ea + $200 NRE share = $300 per chip ($6,000 per 20 GH/s box)
Sell 25,000 chips = $100 ea + $40 NRE = $140 per chip ($2,800 per 20 GH/s box)
etc...

So someone selling a few units at very high cost seems counterintuitive to the economics of ASICS.  With ASIC your non sunk cost will be very low.  It is in your best interest to undercut everyone else, be the clear choice and line up tens of millions of dollars in orders.

If you want to sell a few units at high premium get early access to 28nm chips.  No sense and pricing them low as your cost won't go down much when ramping up volume.

What puzzles me is: why are they only selling 25 units? Does this mean that later on they will sell them cheaper?

[ttul]

What puzzles me is: why are they only selling 25 units? Does this mean that later on they will sell them cheaper?

We only have enough chips in our first run to build 25 units. We don't want to run more than this off the presses until we know that there's enough demand for these ASICs. Once the first batch is out, it will be relatively easy and quick to produce more. Yes, future prices will probably be lower, given Moore's law.