ASICMINER: Entering the Future of ASIC Mining by Inventing It

[Voodah]

Simply I just quit playing for now, lost 82% of my BTC asset. I don't blame anyone but my own poor judgement of investment. Without proper regulation and stable exchange, BTC securities investment is just a kid's play, of course, a dangerous one.

it's a kids play if you don't know how to play. Of course crappy exchanges are a big problem, I just hope the free market will take care of it in near future (meaning that there will be at least a few stable and reliant exchanges). I'm holding direct shares which is obviously the safest option right now but if I wanted to trade with them it's pretty hard.

Is there a way to play the game right now??

I have invested in both AM and KNC (2nd day order !) at different times, and both have seriously let me down.

I'm really worried about the mining ecosystem...

1. GHash.io is the largest pool. They have proven to be dishonest.
2. ASICMiner tanked and its health depends entirely on the promise of Gen3 for Q1.
3. I can't find an actual number..  but it seems to me like the vast majority of people who invested on (any) Gen1 ASIC lost money in terms of BTC. Let's not even mention the guys who pre-ordered BFL, they should've known.
4. All ASIC companies have pre-mined with the for-sale equipment (correct me if I'm wrong here, but that is my understanding).

For me it boils down to a dilemma I cannot wrap my head around:

If I make a money printing machine, why would I sell it for less than the money it can print?
If I sell it for less, who would wanna buy it?

It seems like all ASIC companies have chosen to sell for more than the machines can produce, and from their point of view, it was the correct decision.

They knew the answer to the second question: the inexperienced, the misinformed, the lazy and the gullible.

So what I want to know actually, is who profited the most out of Gen1 ?

Clearly it was not the customers.

All clues lead to the ASIC companies.

Why is it not reflected on div or cheaper costs for the next gen ??
How long can this strategy work, where all losses go to the customers and all profits to ASIC makers?

I'm not investing in mining again any time soon, but I see there are lots of people who think it's still a great idea to get on that 1st day pre-order..

I know there's a lot of experienced and heavily invested miners here. Maybe I'm missing something here? Can someone please enlighten me??

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[jimmothy]

Simply I just quit playing for now, lost 82% of my BTC asset. I don't blame anyone but my own poor judgement of investment. Without proper regulation and stable exchange, BTC securities investment is just a kid's play, of course, a dangerous one.

it's a kids play if you don't know how to play. Of course crappy exchanges are a big problem, I just hope the free market will take care of it in near future (meaning that there will be at least a few stable and reliant exchanges). I'm holding direct shares which is obviously the safest option right now but if I wanted to trade with them it's pretty hard.

Is there a way to play the game right now??

I have invested in both AM and KNC (2nd day order !) at different times, and both have seriously let me down.

I'm really worried about the mining ecosystem...

1. GHash.io is the largest pool. They have proven to be dishonest.
2. ASICMiner tanked and its health depends entirely on the promise of Gen3 for Q1.
3. I can't find an actual number..  but it seems to me like the vast majority of people who invested on (any) Gen1 ASIC lost money in terms of BTC. Let's not even mention the guys who pre-ordered BFL, they should've known.
4. All ASIC companies have pre-mined with the for-sale equipment (correct me if I'm wrong here, but that is my understanding).

For me it boils down to a dilemma I cannot wrap my head around:

If I make a money printing machine, why would I sell it for less than the money it can print?
If I sell it for less, who would wanna buy it?

It seems like all ASIC companies have chosen to sell for more than the machines can produce, and from their point of view, it was the correct decision.

They knew the answer to the second question: the inexperienced, the misinformed, the lazy and the gullible.

So what I want to know actually, is who profited the most out of Gen1 ?

Clearly it was not the customers.

All clues lead to the ASIC companies.

Why is it not reflected on div or cheaper costs for the next gen ??
How long can this strategy work, where all losses go to the customers and all profits to ASIC makers?

I'm not investing in mining again any time soon, but I see there are lots of people who think it's still a great idea to get on that 1st day pre-order..

I know there's a lot of experienced and heavily invested miners here. Maybe I'm missing something here?

Can someone please enlighten me??

Literally anything you do with btc will not yeild as much return as just holding btc due to the rapid increase in price. In terms of USD almost everyone who bought an asic or invested in asicminer came out ahead.

The reason we are seeing such a price dip is because gen2 chips from AM were skipped which lead to a long gap between new hardware. The reason it was skipped was due to unsatisfactory performance and FC believes gen3 is more promising. Also by skipping gen2, gen3 will arrive sooner.

[Voodah]

Literally anything you do with btc will not yeild as much return as just holding btc. In terms of USD almost everyone who bought an asic machine or invested in asicminer came out ahead.

Thinking in terms of USD makes no sense when you paid in BTC. It is just a way of justifying a bad investment.

Most people paid in BTC. Even in the case of KNC, who only sold in USD. Groupbuys were in BTC.

And still, you said it, buying BTC with those USD would've netted a whole lot more.

So...  what's the point?

I love paying for a more secure network, but not even that is happening. Quite the opposite.

Seems like we are just paying for greater ASIC maker profits, that never get reinvested in the customers making them rich.

What is the future of mining? Will it play out this same way for the next couple years?

Is this sustainable?

This is not an AM flame.. I've just been thinking about this a lot lately and I'd love some opinions from the experienced people that are actually in the business of mining.

[jimmothy]

Literally anything you do with btc will not yeild as much return as just holding btc. In terms of USD almost everyone who bought an asic machine or invested in asicminer came out ahead.

Thinking in terms of USD makes no sense when you paid in BTC. It is just a way of justifying a bad investment.

Most people paid in BTC. Even in the case of KNC, who only sold in USD. Groupbuys were in BTC.

And still, you said it, buying BTC with those USD would've netted a whole lot more.

So...  what's the point?

I love paying for a more secure network, but not even that is happening. Quite the opposite.

Seems like we are just paying for greater ASIC maker profits, that never get reinvested in the customers making them rich.

What is the future of mining? Will it play out this same way for the next couple years?

Is this sustainable?

This is not an AM flame.. I've just been thinking about this a lot lately and I'd love some opinions from the experienced people that are actually in the business of mining.

I don't understand what you mean by we are paying for asic maker profits. AM sold as much gen1 as they could and are preparing for much more efficient gen3.

I assume the plan is to replace all the solomining chips with gen3 bringing AM back to 10% network hashrate and add hardware sales on top of that. Could very well be sustainable if AM is able to provide competitive hardware.

And when you invest in AM you are investing in bitcoin mining as a whole. We know that literally every single ASIC yielded less than if you were to just buy btc at the time and hold.

[Voodah]

The reason we are seeing such a price dip is because gen2 chips from AM were skipped which lead to a long gap between new hardware. The reason it was skipped was due to unsatisfactory performance and FC believes gen3 is more promising. Also by skipping gen2, gen3 will arrive sooner.

Yeah, I know that, I follow the thread. But where's all the money from Gen1 ?

Traditionally in the stock market, divs are a function of books and profits.

Here, we cannot see the books and divs ran to the promise of 10% network share, that was silently dropped.

I'm sure as hell there has been a lot of profits.

Why aren't they used to sustain the stock div if it is known that the 10% promise is unattainable and will be dropped?

We're talking about the customers who are funding your own growth.. why wouldn't you take care of them?

Soon competition will flow like crazy. It'd be good to give something back and gain some very valuable loyalty.

[jimmothy]

The reason we are seeing such a price dip is because gen2 chips from AM were skipped which lead to a long gap between new hardware. The reason it was skipped was due to unsatisfactory performance and FC believes gen3 is more promising. Also by skipping gen2, gen3 will arrive sooner.

Yeah, I know that, I follow the thread. But where's all the money from Gen1 ?

Traditionally in the stock market, divs are a function of books and profits.

Here, we cannot see the books and divs ran to the promise of 10% network share, that was silently dropped.

I'm sure as hell there has been a lot of profits.

Why aren't they used to sustain the stock div if it is known that the 10% promise is unattainable and will be dropped?

We're talking about the customers who are funding your own growth.. why wouldn't you take care of them?

Soon competition will flow like crazy. It'd be good to give something back and gain some very valuable loyalty.

The financial info is public and you can find it under FC's posts.

The money from Gen1 was distributed to shareholders as dividends.

Around half of the btc from dividends was from mining and half from hardware sales iirc.

The divs are not retained to constantly pay out 10% this was just the goal for AM solomine (which could not be kept due to gen2 being skipped).

Some divs were retained to pay for gen3 as FC announced.

AM has given back to its investors more than any other btc investment.

Dividends alone equal to 500% initial investment of 0.1 btc/share.

[Voodah]

I don't understand what you mean by we are paying for asic maker profits. AM sold as much gen1 as they could and are preparing for much more efficient gen3.

I assume the plan is to replace all the solomining chips with gen3 bringing AM back to 10% network hashrate and add hardware sales on top of that. Could very well be sustainable if AM is able to provide competitive hardware.

And when you invest in AM you are investing in bitcoin mining as a whole. We know that literally every single ASIC yielded less than if you were to just buy btc at the time and hold.

I'm sorry if you don't understand.

You sound like a broken cassette player looping the latest announcement.

I'm interested in a honest discussion and learning about the mining ecosystem, and how it works from the inside.

[jimmothy]

I don't understand what you mean by we are paying for asic maker profits. AM sold as much gen1 as they could and are preparing for much more efficient gen3.

I assume the plan is to replace all the solomining chips with gen3 bringing AM back to 10% network hashrate and add hardware sales on top of that. Could very well be sustainable if AM is able to provide competitive hardware.

And when you invest in AM you are investing in bitcoin mining as a whole. We know that literally every single ASIC yielded less than if you were to just buy btc at the time and hold.

I'm sorry if you don't understand.

You sound like a broken cassette player looping the latest announcement.

I'm interested in a honest discussion and learning about the mining ecosystem, and how it works from the inside.

You clearly know nothing about BTC mining and don't want to learn anything.

As you said you are here to flame AM. Go read FC's post history and learn something new.

[bitmoon]

Literally anything you do with btc will not yeild as much return as just holding btc due to the rapid increase in price. In terms of USD almost everyone who bought an asic or invested in asicminer came out ahead.

The reason we are seeing such a price dip is because gen2 chips from AM were skipped which lead to a long gap between new hardware. The reason it was skipped was due to unsatisfactory performance and FC believes gen3 is more promising. Also by skipping gen2, gen3 will arrive sooner.

i checked friedcats posts, and i don't see any statement where he says gen2 is skipped, etc

any link to source where it says gen 2 is stopped/skipped?

[jimmothy]

Literally anything you do with btc will not yeild as much return as just holding btc due to the rapid increase in price. In terms of USD almost everyone who bought an asic or invested in asicminer came out ahead.

The reason we are seeing such a price dip is because gen2 chips from AM were skipped which lead to a long gap between new hardware. The reason it was skipped was due to unsatisfactory performance and FC believes gen3 is more promising. Also by skipping gen2, gen3 will arrive sooner.

i checked friedcats posts, and i don't see any statement where he says gen2 is skipped, etc

any link to source where it says gen 2 is stopped/skipped?

I believe it was mentioned in the interview and was confirmed by board member jutarul.

[Jutarul]

Is this sustainable?

This is not an AM flame.. I've just been thinking about this a lot lately and I'd love some opinions from the experienced people that are actually in the business of mining.

The current situation is more or less a mess, because either companies are actively involved in fraud or have not developed the necessary pricing schemes to protect customers enough from the market volatility and network growth. AM is currently pioneering a business model which should insulate customers from network growth projection errors, but it will likely be reserved for larger businesses and collaborations (franchise).

The only way to make profit right now in terms of btc is to take advantage of the tech arbitrage between the cost of building your miner and the yield. That's why AM (dependent on valuation) is principally a better choice than just outright buying a miner at market value. That narrative will change to power cost arbitrage, but not before the operating profit margins from mining are down to less than 2-5 fold.

[Voodah]

I don't understand what you mean by we are paying for asic maker profits. AM sold as much gen1 as they could and are preparing for much more efficient gen3.

I assume the plan is to replace all the solomining chips with gen3 bringing AM back to 10% network hashrate and add hardware sales on top of that. Could very well be sustainable if AM is able to provide competitive hardware.

And when you invest in AM you are investing in bitcoin mining as a whole. We know that literally every single ASIC yielded less than if you were to just buy btc at the time and hold.

I'm sorry if you don't understand.

You sound like a broken cassette player looping the latest announcement.

I'm interested in a honest discussion and learning about the mining ecosystem, and how it works from the inside.

You clearly know nothing about BTC mining and don't want to learn anything.

As you said you are here to flame AM. Go read FC's post history and learn something new.

Wow. Why do people get so fanatical?

Just ignore my posts and keep on doing your thing.

[Voodah]

Is this sustainable?

This is not an AM flame.. I've just been thinking about this a lot lately and I'd love some opinions from the experienced people that are actually in the business of mining.

The current situation is more or less a mess, because either companies are actively involved in fraud or have not developed the necessary pricing schemes to protect customers enough from the market volatility and network growth. AM is currently pioneering a business model which should insulate customers from network growth projection errors, but it will likely be reserved for larger businesses and collaborations (franchise).

The only way to make profit right now in terms of btc is to take advantage of the tech arbitrage between the cost of building your miner and the yield. That's why AM (dependent on valuation) is principally a better choice than just outright buying a miner at market value. That narrative will change to power cost arbitrage, but not before the operating profit margins from mining are down to less than 2-5 fold.

That's more like it. Thanks for the honest intelligent answer.

Could you expand on this:

That narrative will change to power cost arbitrage, but not before the operating profit margins from mining are down to less than 2-5 fold.

[bitmoon]

Literally anything you do with btc will not yeild as much return as just holding btc due to the rapid increase in price. In terms of USD almost everyone who bought an asic or invested in asicminer came out ahead.

The reason we are seeing such a price dip is because gen2 chips from AM were skipped which lead to a long gap between new hardware. The reason it was skipped was due to unsatisfactory performance and FC believes gen3 is more promising. Also by skipping gen2, gen3 will arrive sooner.

i checked friedcats posts, and i don't see any statement where he says gen2 is skipped, etc

any link to source where it says gen 2 is stopped/skipped?

I believe it was mentioned in the interview and was confirmed by board member jutarul.

jutarul is in this forum? link?

any reason why friedcat didn't want to include update of gen2 progress(skipped or whatever) in his couple of latest updates?

edit: oh never mind, i see jutarul, lol i am red face 

[empoweoqwj]

Simply I just quit playing for now, lost 82% of my BTC asset. I don't blame anyone but my own poor judgement of investment. Without proper regulation and stable exchange, BTC securities investment is just a kid's play, of course, a dangerous one.

it's a kids play if you don't know how to play. Of course crappy exchanges are a big problem, I just hope the free market will take care of it in near future (meaning that there will be at least a few stable and reliant exchanges). I'm holding direct shares which is obviously the safest option right now but if I wanted to trade with them it's pretty hard.

Is there a way to play the game right now??

I have invested in both AM and KNC (2nd day order !) at different times, and both have seriously let me down.

I'm really worried about the mining ecosystem...

1. GHash.io is the largest pool. They have proven to be dishonest.
2. ASICMiner tanked and its health depends entirely on the promise of Gen3 for Q1.
3. I can't find an actual number..  but it seems to me like the vast majority of people who invested on (any) Gen1 ASIC lost money in terms of BTC. Let's not even mention the guys who pre-ordered BFL, they should've known.
4. All ASIC companies have pre-mined with the for-sale equipment (correct me if I'm wrong here, but that is my understanding).

For me it boils down to a dilemma I cannot wrap my head around:

If I make a money printing machine, why would I sell it for less than the money it can print?
If I sell it for less, who would wanna buy it?

It seems like all ASIC companies have chosen to sell for more than the machines can produce, and from their point of view, it was the correct decision.

They knew the answer to the second question: the inexperienced, the misinformed, the lazy and the gullible.

So what I want to know actually, is who profited the most out of Gen1 ?

Clearly it was not the customers.

All clues lead to the ASIC companies.

Why is it not reflected on div or cheaper costs for the next gen ??
How long can this strategy work, where all losses go to the customers and all profits to ASIC makers?

I'm not investing in mining again any time soon, but I see there are lots of people who think it's still a great idea to get on that 1st day pre-order..

I know there's a lot of experienced and heavily invested miners here. Maybe I'm missing something here? Can someone please enlighten me??

Keep your money in BTC

[empoweoqwj]

Literally anything you do with btc will not yeild as much return as just holding btc due to the rapid increase in price. In terms of USD almost everyone who bought an asic or invested in asicminer came out ahead.

The reason we are seeing such a price dip is because gen2 chips from AM were skipped which lead to a long gap between new hardware. The reason it was skipped was due to unsatisfactory performance and FC believes gen3 is more promising. Also by skipping gen2, gen3 will arrive sooner.

i checked friedcats posts, and i don't see any statement where he says gen2 is skipped, etc

any link to source where it says gen 2 is stopped/skipped?

I believe it was mentioned in the interview and was confirmed by board member jutarul.

jutarul is in this forum? link?

any reason why friedcat didn't want to include update of gen2 progress(skipped or whatever) in his couple of latest updates?

edit: oh never mind, i see jutarul, lol i am red face 

You still talking about Gen2 ? agggh! This stuff was put to be 2 monthsa go, please

[Jutarul]

Could you expand on this:

That narrative will change to power cost arbitrage, but not before the operating profit margins from mining are down to less than 2-5 fold.

There are two factors which need to be considered:
a) In the future no single ASIC hardware producer can install and maintain the amount of equipment they are able to produce, causing them to rely on customers to buy/rent the equipment
b) Different customers have different power and overhead costs. E.g. 0% operating profit at $0.20/kWh mean 100% operating profit at $0.10/kWh mean 900% operating profit at $0.02/kWh. There are only so many places around the world with low power costs...

That leads to a situation where there are simply not enough buyers for ASIC hardware at some point, forcing ASIC hardware producers to lower prices if they still want to keep selling equipment (and thus making lower and lower operating profit margins viable).

However, that said - the tech arbitrage can still go on for some time - I expect it to persist until the bitcoin price hits six to seven digits.

[bitmoon]

Literally anything you do with btc will not yeild as much return as just holding btc due to the rapid increase in price. In terms of USD almost everyone who bought an asic or invested in asicminer came out ahead.

The reason we are seeing such a price dip is because gen2 chips from AM were skipped which lead to a long gap between new hardware. The reason it was skipped was due to unsatisfactory performance and FC believes gen3 is more promising. Also by skipping gen2, gen3 will arrive sooner.

i checked friedcats posts, and i don't see any statement where he says gen2 is skipped, etc

any link to source where it says gen 2 is stopped/skipped?

I believe it was mentioned in the interview and was confirmed by board member jutarul.

jutarul is in this forum? link?

any reason why friedcat didn't want to include update of gen2 progress(skipped or whatever) in his couple of latest updates?

edit: oh never mind, i see jutarul, lol i am red face 

You still talking about Gen2 ? agggh! This stuff was put to be 2 monthsa go, please

yes, i searched this forum and only see some person say, its failed,  other say its not failed, just skipped.
what i don't see is friedcat post doesnt mention what happen to gen 2

[101111]

Maybe in the next set of Q's to FC we could ask if there's any progress on the Payment system and the Blockchain-based exchange, unless anyone knows something?

[Voodah]

Could you expand on this:

That narrative will change to power cost arbitrage, but not before the operating profit margins from mining are down to less than 2-5 fold.

There are two factors which need to be considered:
a) In the future no single ASIC hardware producer can install and maintain the amount of equipment they are able to produce, causing them to rely on customers to buy/rent the equipment
b) Different customers have different power and overhead costs. E.g. 0% operating profit at $0.20/kWh mean 100% operating profit at $0.10/kWh mean 900% operating profit at $0.02/kWh. There are only so many places around the world with low power costs...

That leads to a situation where there are simply not enough buyers for ASIC hardware at some point, forcing ASIC hardware producers to lower prices if they still want to keep selling equipment (and thus making lower and lower operating profit margins viable).

However, that said - the tech arbitrage can still go on for some time - I expect it to persist until the bitcoin price hits six to seven digits.

Oh wow.. I didn't expect things could last that long this way.

What solution do you see for the pricing scheme issues, thinking in terms of regular new Bitcoin end-users (not big miners or franchises)?
Is it a problem ASIC companies are interested in solving or is it part of the tech arbitrage? (BFL clearly isn't...)

The mass adoption of Ghash (at very high GH prices!) and their irresponsible use of the network power really frighten me. I would much rather have new people acquiring AM / KNC (either alone or in groupbuys), but I don't think the companies are making it easy for people to adopt them/stay loyal.