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Author Topic: ASICMINER: Entering the Future of ASIC Mining by Inventing It  (Read 3885764 times)
mrb
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March 19, 2013, 07:42:20 AM
Last edit: March 19, 2013, 07:54:05 AM by mrb
 #2401

This point will make sense if we are still mining with GPU. To be more accurate try the history of price/diff ratio when we started GPU mining and consider that ASIC got way less vendors than GPUs.

This point will always make sense. The 3-month average of the price/diff ratio has always been either stagnating or decreasing over time (sometimes decreasing a lot during crashes), since Bitcoin was first traded on exchanges. This spans the CPU, GPU, and FPGA mining ages.

If you don't know that, then you don't know what you are doing by investing in any mining operation.

Mausini keeps talking about "in the future when operation costs will be high". But at that time, ASICs will be widely available (since competing ASICS will be what causes ASICMINER to have higher operation costs), therefore, again, miners will be able to quickly respond to increases of the exchange rate by deploying new mining capacity.
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March 19, 2013, 07:53:32 AM
 #2402

This point will make sense if we are still mining with GPU. To be more accurate try the history of price/diff ratio when we started GPU mining and consider that ASIC got way less vendors than GPUs.

This point will always make sense. The 3-month average of the price/diff ratio has always been either stagnating or decreasing over time (sometimes decreasing a lot during crashes), since Bitcoin was first traded on exchanges. This spans the CPU, GPU, and FPGA mining ages.

Mausini keeps talking about "in the future when operation costs will be high". But at that time, ASICs will be widely available (since competing ASICS will be what causes ASICMINER to have high operation costs), therefore, again, miners will be able to quickly respond to increases of the exchange rate by deploying new mining capacity.

this is only true in a long run (as it looks right now the long run is at least half a year). Neither BFL nor anyone else on the current market have any way of supplying enough machines to cover the demand. This might be different in half a year or in a year but so far ASICMINER is free to rake in the mining profit because there is not enough supply to cover the demand for ASIC devices.
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March 19, 2013, 08:04:01 AM
Last edit: March 19, 2013, 08:19:00 AM by mrb
 #2403

this is only true in a long run (as it looks right now the long run is at least half a year). Neither BFL nor anyone else on the current market have any way of supplying enough machines to cover the demand. This might be different in half a year or in a year but so far ASICMINER is free to rake in the mining profit because there is not enough supply to cover the demand for ASIC devices.

You do not understand what I said, or even what Mausini's argument was.

The short term is basically irrelevant. ASICMINER's relative operation costs are currently close to 0%. They will remain close to 0% until other ASIC vendors ship. Therefore the exchange rate can increase all it wants while other ASIC vendors scramble, it will not be an argument for increasing the fair value (numbered in BTC) of an ASICMINER share because they already inherently gain value through this BTC appreciation. See https://bitcointalk.org/index.php?topic=99497.msg1624754#msg1624754 How many times do I have to explain the same thing?
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March 19, 2013, 09:14:04 AM
 #2404

this is only true in a long run (as it looks right now the long run is at least half a year). Neither BFL nor anyone else on the current market have any way of supplying enough machines to cover the demand. This might be different in half a year or in a year but so far ASICMINER is free to rake in the mining profit because there is not enough supply to cover the demand for ASIC devices.

You do not understand what I said, or even what Mausini's argument was.

The short term is basically irrelevant. ASICMINER's relative operation costs are currently close to 0%. They will remain close to 0% until other ASIC vendors ship. Therefore the exchange rate can increase all it wants while other ASIC vendors scramble, it will not be an argument for increasing the fair value (numbered in BTC) of an ASICMINER share because they already inherently gain value through this BTC appreciation. See https://bitcointalk.org/index.php?topic=99497.msg1624754#msg1624754 How many times do I have to explain the same thing?

You will have to explain it as many times as it takes to make it become true. That is, infinity.
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March 19, 2013, 09:32:24 AM
 #2405

You do not understand what I said, or even what Mausini's argument was.

The short term is basically irrelevant. ASICMINER's relative operation costs are currently close to 0%. They will remain close to 0% until other ASIC vendors ship. Therefore the exchange rate can increase all it wants while other ASIC vendors scramble, it will not be an argument for increasing the fair value (numbered in BTC) of an ASICMINER share because they already inherently gain value through this BTC appreciation. See https://bitcointalk.org/index.php?topic=99497.msg1624754#msg1624754 How many times do I have to explain the same thing?

You will have to explain it as many times as it takes to make it become true. That is, infinity.

Yes, when BTC doubles from $25 to $50, a 0.6 BTC share also doubles from $15 to $30. I know this reality is quite hard for you to grasp... Obviously, you are now either running out of arguments, or just trolling Roll Eyes
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March 19, 2013, 09:34:44 AM
 #2406

You do not understand what I said, or even what Mausini's argument was.

The short term is basically irrelevant. ASICMINER's relative operation costs are currently close to 0%. They will remain close to 0% until other ASIC vendors ship. Therefore the exchange rate can increase all it wants while other ASIC vendors scramble, it will not be an argument for increasing the fair value (numbered in BTC) of an ASICMINER share because they already inherently gain value through this BTC appreciation. See https://bitcointalk.org/index.php?topic=99497.msg1624754#msg1624754 How many times do I have to explain the same thing?

You will have to explain it as many times as it takes to make it become true. That is, infinity.

Yes, when BTC doubles from $25 to $50, a 0.6 BTC share also doubles from $15 to $30. I know this reality is quite hard for you to grasp... Obviously, now, either you ran out of arguments, or you are just trolling  Roll Eyes
Let's assume that BTC crashed down to $10. While the value of ASICMINER's shares in BTC shouldn't change, there will be people selling all their BTC assets and wanting to get out of BTC. It's likely that the BTC rally contributed to increased pressure / higher prices, but I don't think that is the only contributor, more of how ASICMINER is going to deploy a truckload of hashpower..
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March 19, 2013, 09:42:19 AM
 #2407


Yes, when BTC doubles from $25 to $50, a 0.6 BTC share also doubles from $15 to $30. I know this reality is quite hard for you to grasp... Obviously, you are now either running out of arguments, or just trolling Roll Eyes

I agree with you that since ASICMINER is a bitcoin-based system, (deals in bitcoin mining, sends dividends in bitcoins)there's no point in thinking in USD value. It does not matter much what is the price of BTC in USD or whatever other fiat currency for the price of ASICMINER shares. However you still haven't proven your initial point in saying the ASICMINER shares are overpriced. Wherever I look (BTCfunder, btct.co, bitcointalk.org auctions) The price of the shares is 0.8 or higher. So say whatever you want to say, the market for the ASICMINER shares says that the shares are worth a lot more than 0.6 which you said was too much. I think this should conclude the discussion and if you want to keep talking about the shares price maybe we should move to another thread so we don't clutter this one up.
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March 19, 2013, 04:31:56 PM
 #2408

You do not understand what I said, or even what Mausini's argument was.

The short term is basically irrelevant. ASICMINER's relative operation costs are currently close to 0%. They will remain close to 0% until other ASIC vendors ship. Therefore the exchange rate can increase all it wants while other ASIC vendors scramble, it will not be an argument for increasing the fair value (numbered in BTC) of an ASICMINER share because they already inherently gain value through this BTC appreciation. See https://bitcointalk.org/index.php?topic=99497.msg1624754#msg1624754 How many times do I have to explain the same thing?

You will have to explain it as many times as it takes to make it become true. That is, infinity.

Yes, when BTC doubles from $25 to $50, a 0.6 BTC share also doubles from $15 to $30. I know this reality is quite hard for you to grasp... Obviously, you are now either running out of arguments, or just trolling Roll Eyes

My initial point was that ASICMINER shares can only profit from higher USD/BTC rates in comparison to SatoshiDice shares that will go down, because their profit in BTC arguably correlates with the amount of USD, players are willing to bet.

This discussion led to the question if AM share valuation in BTC would even increase with higher USD/BTC rates or if it would remain constant. We were of different opinion. Here is a little thought experiment: Let's assume AM's electricity bill was paid in BTC, meaning that kwh have a constant price in BTC and it would be the same all around the world. We would still have the competition between miners in terms of mining hardware quantity and efficiency. Now, if USD/BTC appreciates like today (woooooha), the same amount of btc (and that means more USD) as before the appreciation are going to the electricity provider. ASICMINER could pay less dividends - as they do now - to shareholders and hence share evaluation would be lower. Fortunately however, ASICMINER does pay it's electricity bill in USD and conclusively profits from BTC appreciation.

Please feel free to challenge my thoughts, but do not tell me how many great models you calculated, how long you have been doing something and how many times you said something.
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March 19, 2013, 09:40:04 PM
 #2409

I am currently selling up to 100 shares of ASICMINER for 0.94 BTC per share. Happy to use escrow if needed.

PM me if interested.
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March 19, 2013, 09:42:29 PM
 #2410

You do not understand what I said, or even what Mausini's argument was.

The short term is basically irrelevant. ASICMINER's relative operation costs are currently close to 0%. They will remain close to 0% until other ASIC vendors ship. Therefore the exchange rate can increase all it wants while other ASIC vendors scramble, it will not be an argument for increasing the fair value (numbered in BTC) of an ASICMINER share because they already inherently gain value through this BTC appreciation. See https://bitcointalk.org/index.php?topic=99497.msg1624754#msg1624754 How many times do I have to explain the same thing?

You will have to explain it as many times as it takes to make it become true. That is, infinity.

Yes, when BTC doubles from $25 to $50, a 0.6 BTC share also doubles from $15 to $30. I know this reality is quite hard for you to grasp... Obviously, you are now either running out of arguments, or just trolling Roll Eyes

My initial point was that ASICMINER shares can only profit from higher USD/BTC rates in comparison to SatoshiDice shares that will go down, because their profit in BTC arguably correlates with the amount of USD, players are willing to bet.

This discussion led to the question if AM share valuation in BTC would even increase with higher USD/BTC rates or if it would remain constant. We were of different opinion. Here is a little thought experiment: Let's assume AM's electricity bill was paid in BTC, meaning that kwh have a constant price in BTC and it would be the same all around the world. We would still have the competition between miners in terms of mining hardware quantity and efficiency. Now, if USD/BTC appreciates like today (woooooha), the same amount of btc (and that means more USD) as before the appreciation are going to the electricity provider. ASICMINER could pay less dividends - as they do now - to shareholders and hence share evaluation would be lower. Fortunately however, ASICMINER does pay it's electricity bill in USD and conclusively profits from BTC appreciation.

Please feel free to challenge my thoughts, but do not tell me how many great models you calculated, how long you have been doing something and how many times you said something.


one correction, if I may, since its based in China I believe the bill is in CNY.
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March 20, 2013, 01:41:45 AM
 #2411

I agree with you that since ASICMINER is a bitcoin-based system, (deals in bitcoin mining, sends dividends in bitcoins)there's no point in thinking in USD value. It does not matter much what is the price of BTC in USD or whatever other fiat currency for the price of ASICMINER shares.

Right. You and I agree on that.

However you still haven't proven your initial point in saying the ASICMINER shares are overpriced. Wherever I look (BTCfunder, btct.co, bitcointalk.org auctions) The price of the shares is 0.8 or higher. So say whatever you want to say, the market for the ASICMINER shares says that the shares are worth a lot more than 0.6 which you said was too much.

When a stock is said to be overpriced, it does not mean the market does not want to buy it. It means the fair value of the stock (I estimated 0.25-0.4 BTC) is lower than the price demanded by the irrational market (0.6+ BTC). The vocabulary I use ("overpriced", "fair value") is well defined. It comes from the investment philosophy called value investing. So, again, the fact buyers are willing to spend 0.6+ BTC does not mean 0.6 BTC is a fair value by the definition of this term.

Now, the only debatable point is what is the fair value of the stock. And one must attempt to estimate it by looking at assets and present and future revenues, like I did initially to prove my point: see here and here.

Mausini: your thought experiment merely shows their valuation would decrease a lot faster if their operating costs were a fixed amount of BTC. It does not show their valuation would increase if the costs are paid in USD... This is at least the 3rd or 4th time I explain to you their operating costs are only ~3%, that they can't go lower than that, that the USD costs are already as low as they can be, and that in the future this percentage will increase, a lot:
https://bitcointalk.org/index.php?topic=99497.msg1622421#msg1622421
https://bitcointalk.org/index.php?topic=99497.msg1623418#msg1623418
https://bitcointalk.org/index.php?topic=99497.msg1624754#msg1624754
https://bitcointalk.org/index.php?topic=99497.msg1625480#msg1625480
Your thought experiment does not add anything new. I don't know how else to explain it. There must be a comprehension issue that you are not raising to me (is english your native language?)

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March 20, 2013, 04:55:10 AM
 #2412

Lets look at another angle of this, What about the next reward halving? It is supposed to cut the fair value by half for ASICMINER and half its dividends.

You could argue that BTC price would double so it is the same but that also means that if you sold your shares just before the halving and its effect. You sacrifice the future divalents to DOUBLE the worth of your shares!

What do you think guys?

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March 20, 2013, 05:30:16 AM
 #2413

Lets look at another angle of this, What about the next reward halving? It is supposed to cut the fair value by half for ASICMINER and half its dividends.

You could argue that BTC price would double so it is the same but that also means that if you sold your shares just before the halving and its effect. You sacrifice the future divalents to DOUBLE the worth of your shares!

What do you think guys?

Err, that isn't scheduled to happen until 2017, so not worth considering.
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March 20, 2013, 06:08:12 AM
 #2414

Lets look at another angle of this, What about the next reward halving? It is supposed to cut the fair value by half for ASICMINER and half its dividends.

You could argue that BTC price would double so it is the same but that also means that if you sold your shares just before the halving and its effect. You sacrifice the future divalents to DOUBLE the worth of your shares!

What do you think guys?

Err, that isn't scheduled to happen until 2017, so not worth considering.

Not worth considering? It absolutely is.
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March 20, 2013, 06:15:36 AM
 #2415

Lets look at another angle of this, What about the next reward halving? It is supposed to cut the fair value by half for ASICMINER and half its dividends.

You could argue that BTC price would double so it is the same but that also means that if you sold your shares just before the halving and its effect. You sacrifice the future divalents to DOUBLE the worth of your shares!

What do you think guys?

Err, that isn't scheduled to happen until 2017, so not worth considering.

Not worth considering? It absolutely is.
2016

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Help keep Bitcoin secure by mining on pools with full block verification on all blocks - and NO empty blocks!
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March 20, 2013, 06:18:27 AM
 #2416

And it is 2013 now.
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March 20, 2013, 06:28:12 AM
 #2417

Lets look at another angle of this, What about the next reward halving? It is supposed to cut the fair value by half for ASICMINER and half its dividends.

You could argue that BTC price would double so it is the same but that also means that if you sold your shares just before the halving and its effect. You sacrifice the future divalents to DOUBLE the worth of your shares!

What do you think guys?

Err, that isn't scheduled to happen until 2017, so not worth considering.

Not worth considering? It absolutely is.
2016

OK Nov 25th, 2016 as per https://en.bitcoin.it/wiki/Mining

Between now and then we have:
1) the upcoming transition of almost the entire network from GPU mining to 1st gen ASIC mining.
2) At least one perhaps more transitions to newer generation fo ASIC mining hardware.

How Friedcat handles these transitions, (especially the first one) as opposed to the competition, is going to have a much bigger impact on the daily price of ASICMINER shares than an event that is approximately 1330 days in the future. We have no way of knowing if ASICMINER will still exist, or be the biggest fish in the mining sea.

-helixone
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March 20, 2013, 06:31:50 AM
 #2418

Lets look at another angle of this, What about the next reward halving? It is supposed to cut the fair value by half for ASICMINER and half its dividends.

You could argue that BTC price would double so it is the same but that also means that if you sold your shares just before the halving and its effect. You sacrifice the future divalents to DOUBLE the worth of your shares!

What do you think guys?

Err, that isn't scheduled to happen until 2017, so not worth considering.

Not worth considering? It absolutely is.
2016

OK Nov 25th, 2016 as per https://en.bitcoin.it/wiki/Mining

Between now and then we have:
1) the upcoming transition of almost the entire network from GPU mining to 1st gen ASIC mining.
2) At least one perhaps more transitions to newer generation fo ASIC mining hardware.

How Friedcat handles these transitions, (especially the first one) as opposed to the competition, is going to have a much bigger impact on the daily price of ASICMINER shares than an event that is approximately 1330 days in the future. We have no way of knowing if ASICMINER will still exist, or be the biggest fish in the mining sea.

-helixone
The block reward isn't something that is going to happen or not happen - mining rewards will be cut in half. It's something you look at when considering the future revenues, and just because it's in 2016 doesn't mean it's not going to happen.

It's very hard to say what the mining sector will look like in a few years, but block reward halving matter and shouldn't be ignored.
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March 20, 2013, 07:03:22 AM
 #2419

Lets look at another angle of this, What about the next reward halving? It is supposed to cut the fair value by half for ASICMINER and half its dividends.

You could argue that BTC price would double so it is the same but that also means that if you sold your shares just before the halving and its effect. You sacrifice the future divalents to DOUBLE the worth of your shares!

What do you think guys?

Err, that isn't scheduled to happen until 2017, so not worth considering.

Not worth considering? It absolutely is.
2016

OK Nov 25th, 2016 as per https://en.bitcoin.it/wiki/Mining

Between now and then we have:
1) the upcoming transition of almost the entire network from GPU mining to 1st gen ASIC mining.
2) At least one perhaps more transitions to newer generation fo ASIC mining hardware.

How Friedcat handles these transitions, (especially the first one) as opposed to the competition, is going to have a much bigger impact on the daily price of ASICMINER shares than an event that is approximately 1330 days in the future. We have no way of knowing if ASICMINER will still exist, or be the biggest fish in the mining sea.

-helixone
The block reward isn't something that is going to happen or not happen - mining rewards will be cut in half. It's something you look at when considering the future revenues, and just because it's in 2016 doesn't mean it's not going to happen.

It's very hard to say what the mining sector will look like in a few years, but block reward halving matter and shouldn't be ignored.

So should we be considering that all bitcoins will have been mined by 2033 and will have to transition to a transaction based incentive model?

I say no, because the profitability of an investment in ASICMINER today will largely be impacted by how quickly Friedcat brings the next 50+ TH online, as opposed to if and when BFL can ship their upcoming production run of ASIC mining gear.

It's this simple: if you feel that Friedcat is gonna have his gear up for a solid period of time before BFL has shipped a significant portion of their backordered gear, then price will go up to reflect the dividends being paid, and he'll will have the monetary reserves to invest heavily and early into the next generation of HW. If not, well... let's not talk about that.

So far it looks like he is doing well, and he has a good chance to beat BFL to market with his second production run. The bigger question is how many weeks/months will he be ahead? (Oh course the more the better for current investors).
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March 20, 2013, 07:11:13 AM
 #2420

The block reward isn't something that is going to happen or not happen - mining rewards will be cut in half. It's something you look at when considering the future revenues, and just because it's in 2016 doesn't mean it's not going to happen.

It's very hard to say what the mining sector will look like in a few years, but block reward halving matter and shouldn't be ignored.
Yes ... but the transaction fees will partially compensate with increasing number of transactions during the next 3-4 years
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