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Author Topic: ASICMINER: Entering the Future of ASIC Mining by Inventing It  (Read 3914566 times)
astutiumRob
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August 18, 2013, 03:10:41 AM
 #11201

your pdf said $125/kW per month:
Based on the math I quoted from, 10% of the network would require 900 kW, so $1,125,000 per month
900*125 = 112,500 not 1,125,000 - you've multiplied it by 10
and the norm for a real datacentre would 1KW per sq-foot not 175w

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Even in the event that an attacker gains more than 50% of the network's computational power, only transactions sent by the attacker could be reversed or double-spent. The network would not be destroyed.
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Vycid
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August 18, 2013, 03:26:17 AM
 #11202

FC has already said he would be distributing operations in order to minimise geopolitical and other risks. Franchising further reduces those risks. FC is two steps ahead. Vycid is two steps behind.

Friedcat is planning to restructure his business (always risky) in order to remain competitive with a business model that his competitors will ostensibly have right off the bat.

Franchising is a good idea to go beyond 20% of the hashrate without appearing to threaten to the stability of the network. Since he's nowhere near 20% right now, it's just a good way to cut into profit margins.
Being in this business is risky; AM is evolving to stay ahead. Ostensibly has no basis in fact.

Franchising is an additional revenue stream. Hash rate fluctuates so 'right now' is irrelevant.

If you can come up with something worthwhile that doesn't equally apply to any upcoming potential competition then great, but otherwise all the red herrings, heavily biased opinion, and conjecture but no substance is getting very tiresome.


That's funny, because it seems to me that AM's current valuation is based primarily on red herrings, heavily biased opinion, and conjecture.

AM as a company is extremely high-risk. Its revenue stream is demonstrably unstable (whatever happened to the 20% FC was going to maintain?). It is beset by competition with extremely low barriers to entry. It is publicly traded but does not release detailed financial documents. Its profit margins are shrinking even as its revenue decreases. Management is competent but barely transparent.

Most importantly, the share price does not appear to appreciate the risk, and from a simple perspective:

1) There is no ability to short-sell the stock, enabling overvaluation

2) There are enormous dividends and few alternatives for diversification, resulting in a lot of dividend reinvestment and therefore overvaluation

As a reasonably successful value investor in the traditional exchanges, this is a textbook case of a company I'd continually buy put options on until adjustment.

If detracting opinions are tiresome to you, that's unfortunate, but I think it's healthy to have someone around here to disrupt the group-think. I assure you I am open to ideas I have not yet considered and my investment thesis is based on math and logic (or at least my version of those). If you disagree with me, and you can articulate why, I am happy to have that discussion.

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August 18, 2013, 03:37:48 AM
 #11203

well, most cryptocoin investments are either scam or high risk. The most conservative thing to do is to sit tight with bitcoin itself.
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August 18, 2013, 03:44:37 AM
 #11204

well, most cryptocoin investments are either scam or high risk. The most conservative thing to do is to sit tight with bitcoin itself.

Which is a high-risk proposition in itself.

I see a lot of "damn, 25% annual return from AM?! A real world-company would never have that!"

Well, first off - yeah, it would, if it was as risky as AM is. But the other thing is that it's bitcoin-denominated. 25% APR is the going rate for bitcoin investment:

https://www.coinlenders.com/feerebate

Now, that could be a ponzi scheme. So could AM, theoretically. But 25% is actually not impressive in bitcoin-land, because the risk involved in the whole deal has got a risk profile that would make gambling addicts reconsider.

I own bitcoins, but AM stopped being a good prospect for me a while ago.

Aside: real world mid-cap company with 12% annual div yield. http://finance.yahoo.com/q?s=PSEC

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August 18, 2013, 03:49:33 AM
 #11205

your pdf said $125/kW per month:
Based on the math I quoted from, 10% of the network would require 900 kW, so $1,125,000 per month
900*125 = 112,500 not 1,125,000 - you've multiplied it by 10
and the norm for a real datacentre would 1KW per sq-foot not 175w

thanks for that.  I did that calculation several times and read it wrong every time.  I appreciate the correction.

that data center pdf said 175w a sf, I was just quoting what I saw on that.

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August 18, 2013, 03:49:50 AM
 #11206

(...)
https://www.coinlenders.com/feerebate

Now, that could be a ponzi scheme. So could AM, theoretically. (...)

I think your theory is off - there is not even a "theoretical" way AM could be a ponzi scheme: the dividends paid out to investors are approximately five times the total investments they received.
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August 18, 2013, 03:52:26 AM
 #11207

(...)
https://www.coinlenders.com/feerebate

Now, that could be a ponzi scheme. So could AM, theoretically. (...)

I think your theory is off - there is not even a "theoretical" way AM could be a ponzi scheme: the dividends paid out to investors are approximately five times the total investments they received.

The paper value of AM's securities (over 200k shares) are well above the dividends they've paid out. I agree that it is much less likely, particularly because they sell hardware. Hard to fake that.

But they could announce some patently false "great news", spike the share price, dump as many shares as they could manage, and run off with the hardware. Nothing stopping them, really, since these virtual shares probably won't hold water in a courtroom.

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August 18, 2013, 03:56:11 AM
 #11208

(...)
https://www.coinlenders.com/feerebate

Now, that could be a ponzi scheme. So could AM, theoretically. (...)

I think your theory is off - there is not even a "theoretical" way AM could be a ponzi scheme: the dividends paid out to investors are approximately five times the total investments they received.

The paper value of AM's securities (over 200k shares) are well above the dividends they've paid out. I agree that it is less likely, however.

Yes. But the shares are sold only in secondary markets - when you buy a share, none of that money actually goes to AM (hence it cannot be included in the dividends).
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August 18, 2013, 03:57:38 AM
 #11209

(...)
https://www.coinlenders.com/feerebate

Now, that could be a ponzi scheme. So could AM, theoretically. (...)

I think your theory is off - there is not even a "theoretical" way AM could be a ponzi scheme: the dividends paid out to investors are approximately five times the total investments they received.

The paper value of AM's securities (over 200k shares) are well above the dividends they've paid out. I agree that it is less likely, however.

Yes. But the shares are sold only in secondary markets - when you buy a share, none of that money actually goes to AM (hence it cannot be included in the dividends).

AM can sell their shares on those secondary markets... am I missing something?

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August 18, 2013, 04:06:45 AM
 #11210

AM can sell their shares on those secondary markets... am I missing something?

Yes, you are missing something. The secondary market share offerings are controlled by third parties (trusted third parties for the most part).  For AM to magic some shares into existence and dump them on the secondary markets would require the complicit actions of at least some of these third parties.  Not to mention the number of people that would notice that all of a sudden the number of shares on issue jumping.  Doing something like this would destroy the reputations of everyone involved, and the chances of it going on long enough to make it worthwhile is slim.

Honestly, if friedcat wanted to do a dodgy, all he has to do is stop paying dividends and say "so long suckas".  He's got the key to the datacentre, if he wanted to screw shareholders he wouldn't need to be sneaky about it.

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Vycid
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August 18, 2013, 04:14:18 AM
 #11211

AM can sell their shares on those secondary markets... am I missing something?

Yes, you are missing something. The secondary market share offerings are controlled by third parties (trusted third parties for the most part).  For AM to magic some shares into existence and dump them on the secondary markets would require the complicit actions of at least some of these third parties.  Not to mention the number of people that would notice that all of a sudden the number of shares on issue jumping.  Doing something like this would destroy the reputations of everyone involved, and the chances of it going on long enough to make it worthwhile is slim.

Honestly, if friedcat wanted to do a dodgy, all he has to do is stop paying dividends and say "so long suckas".  He's got the key to the datacentre, if he wanted to screw shareholders he wouldn't need to be sneaky about it.

Wait, am I misunderstanding how this whole thing works?

I thought that Friedcat was the one who keeps track of the direct shares, and his inventory of those shares is not audited. Is that correct?

And it is possible to have direct shares transformed into PT shares, right? And individuals do that legitimately all the time?

If that's all true - Friedcat couldn't get all 200k shares sold, I am sure (nor could the market absorb that much volume in the first place), but I bet he could get ten to twenty thousand through (40k-80k BTC, $4M-8M) before things fell apart. And then all the hardware is his on top of that.

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August 18, 2013, 04:23:10 AM
 #11212

And it is possible to have direct shares transformed into PT shares, right? And individuals do that legitimately all the time?
he needs the PT party to set the transfer into the market.  You can only do a transfer to BTCT with both FC and burnside.  just FC will only give free shares to burnside. Burnside then transfers them to the owner in the PT.

I imagine it is similar on the other exchanges.

I think burnside would notice 40K extra shares in his account all of a sudden.

Quote
I thought that Friedcat was the one who keeps track of the direct shares, and his inventory of those shares is not audited. Is that correct?
it may not be audited, but public lists are kept and distributed.

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August 18, 2013, 04:24:19 AM
 #11213

And it is possible to have direct shares transformed into PT shares, right? And individuals do that legitimately all the time?
he needs the PT party to set the transfer into the market.  You can only do a transfer to BTCT with both FC and burnside.  just FC will only give free shares to burnside. Burnside then transfers them to the owner in the PT.

I imagine it is similar on the other exchanges.

I think burnside would notice 40K extra shares in his account all of a sudden.

So now suddenly Friedcat is an idiot? Of course he wouldn't do it all at once...

I 100% want to believe Friedcat is a good guy. I believe in Bitcoin, and I own bitcoins, and this community needs heroes. But I have to observe that not long ago people spoke of Yifu like he could do no wrong. I'm a lot more skeptical these days of anyone who asks you to accept their word on faith.

Isn't the point of Bitcoin the decentralization of trust? We're not supposed to have to trust individuals (or groups), because individuals (or groups) can be scammers. But here we are anyway.

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August 18, 2013, 04:25:33 AM
 #11214

So now suddenly Friedcat is an idiot? Of course he wouldn't do it all at once...
oh, right, so now burnside is an idiot and would ignore magical shares in his account?

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August 18, 2013, 04:28:36 AM
 #11215

So now suddenly Friedcat is an idiot? Of course he wouldn't do it all at once...
oh, right, so now burnside is an idiot and would ignore magical shares in his account?

I'm still not clear on how Burnside would know they're magical. Isn't Friedcat the one who verifies them?

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August 18, 2013, 04:36:13 AM
 #11216

So now suddenly Friedcat is an idiot? Of course he wouldn't do it all at once...
oh, right, so now burnside is an idiot and would ignore magical shares in his account?

I'm still not clear on how Burnside would know they're magical. Isn't Friedcat the one who verifies them?

no, that's what I am trying to tell you.  FC handles direct shares.  To convert direct shares to an exchange, basically FC puts shares into burnsides name, then sends a message to burnside saying the shares have been transferred.  Burnside then enters those shares into his site software and attaches them to the correct username.

For your scheme to work, both burnside and FC have to be in on it (or alternative PT operator).

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August 18, 2013, 04:39:06 AM
 #11217

I'm a lot more skeptical these days of anyone who asks you to accept their word on faith.
FC has never asked me anything, so I don't know wtf you are talking about.  Does FC message you asking you to take his word on faith?

Isn't the point of Bitcoin the decentralization of trust? We're not supposed to have to trust individuals (or groups), because individuals (or groups) can be scammers. But here we are anyway.
some level of trust is always required for a transaction.  Someone has to go first, even with an escrow.  

I don't know how you run a security exchange without even a basic level of trust, at least of the software running the system (provided that you took out all humans along the way).  I'm sure it exists, but every BTC exchange market requires you to at least trust the exchange itself.

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August 18, 2013, 04:39:27 AM
 #11218

So now suddenly Friedcat is an idiot? Of course he wouldn't do it all at once...
oh, right, so now burnside is an idiot and would ignore magical shares in his account?

I'm still not clear on how Burnside would know they're magical. Isn't Friedcat the one who verifies them?

no, that's what I am trying to tell you.  FC handles direct shares.  To convert direct shares to an exchange, basically FC puts shares into burnsides name, then sends a message to burnside saying the shares have been transferred.  Burnside then enters those shares into his site software and attaches them to the correct username.

For your scheme to work, both burnside and FC have to be in on it (or alternative PT operator).

... Uhhhhh... So, FC makes up some direct shares that don't exist, tells burnside they're legit shares belonging to some made-up usernames (which FC controls, of course) ...

...

I must be pretty dumb, because I'm not seeing the difficulty.

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August 18, 2013, 04:43:36 AM
 #11219

I'm a lot more skeptical these days of anyone who asks you to accept their word on faith.
FC has never asked me anything, so I don't know wtf you are talking about.  Does FC message you asking you to take his word on faith?

Isn't the point of Bitcoin the decentralization of trust? We're not supposed to have to trust individuals (or groups), because individuals (or groups) can be scammers. But here we are anyway.
some level of trust is always required for a transaction.  Someone has to go first, even with an escrow.  

I don't know how you run a security exchange without even a basic level of trust, at least of the software running the system (provided that you took out all humans along the way).  I'm sure it exists, but every BTC exchange market requires you to at least trust the exchange itself.

Actually, there's some pretty cool discussion about using the Bitcoin protocol to enable trust-free exchanges with "colored coins".

https://bitcointalk.org/index.php?topic=237501.0

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August 18, 2013, 05:09:28 AM
 #11220

Actually, there's some pretty cool discussion about using the Bitcoin protocol to enable trust-free exchanges with "colored coins".

https://bitcointalk.org/index.php?topic=237501.0

that's great, what exchange uses that protocol?

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