ASICMINER: Entering the Future of ASIC Mining by Inventing It

[freedomno1]

If friedcat has an idea to start another line of business (possibly outside Bitcoin) that could be a better avenue for reinvestment.

I think that's what the point of Bitfountain is.  I think he will use that as a mechanism to provide some capital to new ventures for a controlling interest in a venture.  He may publically offer the other part (a la ASICMINER) or not.  Either way, I think Bitfountain will be one of the big players in Bitcoin down the road, probably moreso than ASICMINER will be.

Yes, you're probably right. There'd be a few ASICminer success story early investors that will throw BTC at him whatever he turns his hand to next, if he offers part of it.

Person with success would throw some at him too
hmm from a few links back
http://deepfriedcat.com/
Who wanted to make him edible Xd
Guess we'll see

[eiprol]

If friedcat has an idea to start another line of business (possibly outside Bitcoin) that could be a better avenue for reinvestment.

I think that's what the point of Bitfountain is.  I think he will use that as a mechanism to provide some capital to new ventures for a controlling interest in a venture.  He may publically offer the other part (a la ASICMINER) or not.  Either way, I think Bitfountain will be one of the big players in Bitcoin down the road, probably moreso than ASICMINER will be.

Yes, you're probably right. There'd be a few ASICminer success story early investors that will throw BTC at him whatever he turns his hand to next, if he offers part of it.

You are right, I bought 100 shares at IPO with the first 10btc I bought a year ago, and now look at the shares prices and dividends.. And immagine those who bought many more shares!
So yes, I would invest on anything of friedcat

[SebastianJu]

Are you better at optimizing mining production with ฿ than friedcat? If not, then share value has probably suffered from the high dividends, not gained from it.

Im not better for sure... but why do you think there are investments gone lost that could have lead to even higher return? I mean AM paid already for everything possible to invest. Of course a financial cussion would be good for bad times... but only piling up bitcoins for no reason doesnt make much sense. Then i would be better in optimizing these bitcoins myself.
It looks a bit like you think friedcat cashes out divs while in fact he knows that there are better things to invest for even brighter dividends future? Im not sure where you got this impression. I think there is nothing worth to invest, otherwise friedcat would do it.
But i think this discussion we had already...

[SmiGueL]

Person with success would throw some at him too
hmm from a few links back
http://deepfriedcat.com/
Who wanted to make him edible Xd
Guess we'll see

My newest version also include the paid dividends (the red dots )
The site will probably be updated soon

_{Or click here}

[freedomno1]

Person with success would throw some at him too
hmm from a few links back
http://deepfriedcat.com/
Who wanted to make him edible Xd
Guess we'll see

Newest version also include the paid dividends (the red dots )
The site will probably be updated soon

_{Or click here}

O_O color me impressed nice doc
Also on a sidenote siteadvisor was being weird on deepfriedcat site so even though I know there was no issues at least it won't pester me about google docs

[SmiGueL]

Also on a sidenote siteadvisor was being weird on deepfriedcat site so even though I know there was no issues at least it won't pester me about google docs

That website isn't mine, the owner just asked me if he could use my charts to put on his website
I already sent him a message yesterday to update it for the new charts.

[furuknap]

Im not better for sure... but why do you think there are investments gone lost that could have lead to even higher return? I mean AM paid already for everything possible to invest. Of course a financial cussion would be good for bad times... but only piling up bitcoins for no reason doesnt make much sense. Then i would be better in optimizing these bitcoins myself.

In a growing market, dividend payments are rarely a long-term strategy, and by gosh this is a growing market. Opportunities arise at a moment's notice. Having cash on hand is never a bad idea, and it wouldn't be worse for investors as long as they are confident in friedcat and his abilities to run the shop.

Let's imagine, hypothetically of course, that one mining company ACME Mining had a huge order for next-gen chips in production, paid for, but not delivered, and then went belly-up for whatever reason. With a few piles of cash, ASICMiner would snap up the order and possibly make a killing.

Let's further imagine that the server center housing a chunk of AM miners burned down and that due to a clerical error, the insurance for whatever reason covered only 75% of the losses. Now friedcat could say "Fine, we'll cover the remaining 25% from our holdings while we fight this in court" instead of "sorry guys, we won't get a dime from the insurance until we've fought this in court".

Let's imagine that a perfect data center went up for sale that would reduce AM costs by 5% due to, I don't know, better ventilation, shorter travel time, free cocaine for the staff... Now friedcat could say "great, I've always wanted a dedicated data center" and swipe his cell phone, saving 5% cost in a few minutes before the competition could arive.

There are plenty of scenarios where AM having a chunk of cash would benefit the solidity of the company.

Be aware, though, that the current policy of paying 90% of profits looks fine on paper, but could ultimately doom AM. If prices of electricity rose and prices of BTC dove, the profit would shrink drastically because, I suspect, most costs for AM is denominated in RMB.

We're basking in comfort right now because we own 30% of all generated coin, but companies are drooling over their chip designs to get at that money, and if AM isn't staying ahead, having no cash at hand could easily lead to a situation where they can't afford to pay for the next generation of chips required to leap ahead again.

Finally, if you go to bed now and wake up in early December 2016, you'll find out that dividends have at least halved simply from the drop in block reward. This will also affect share prices, at least when the herd realizes that the eventual halving needs to be pro-rated from today's price.

Because there is roughly 40ish months left until the halving, the share value will be, in a perfect equation, reduced by 1/80 every month. At the current price of ~฿1.7, that means 0.0215 per month of 0.0053 per week, but note that this is share price, not value.  

Start deducting 0.005 from your dividends each week and see how much is left, if AM gets its expected 10% of the network hash rate on average throughout 2013. I guess the ROI looks somewhat different then.

Despite this, I am still bullish about AM. I'm just not as certain at these prices if the extreme dividends people expect are paid out.

So, a high dividend in a growing market is not a long-term strategy. Having cash at hand allows AM to seize oportunities that we as individuals wouldn't get and will give them better options for maintaining profitability also beyond 2016.

.b

[Lohoris]

Dividends are paid high and often because this is a mining company, which for many people is basically a substitute of buying themselves mining equipment.
I.e. see it less like a company, and more like a consortium: people who want to be mining but instead of doing it directly they delegate it somewhere else.

That said, I'm also skeptic to the whole "non-dividend company" idea: what would be the point of owing any share, then? What would give the shares their value? Why should I buy those shares, other than for speculation? (but why would I speculate on something which has no inherent value?)
I guess I miss something here.

[arklan]

Dividends are paid high and often because this is a mining company, which for many people is basically a substitute of buying themselves mining equipment.
I.e. see it less like a company, and more like a consortium: people who want to be mining but instead of doing it directly they delegate it somewhere else.

That said, I'm also skeptic to the whole "non-dividend company" idea: what would be the point of owing any share, then? What would give the shares their value? Why should I buy those shares, other than for speculation? (but why would I speculate on something which has no inherent value?)
I guess I miss something here.

that goes right to the core of the stock market in general. i mean, apple, google, etc... do they pay dividends? i don't believe so. so yea, it IS pure speculation.

[furuknap]

Dividends are paid high and often because this is a mining company, which for many people is basically a substitute of buying themselves mining equipment.
I.e. see it less like a company, and more like a consortium: people who want to be mining but instead of doing it directly they delegate it somewhere else.

That said, I'm also skeptic to the whole "non-dividend company" idea: what would be the point of owing any share, then? What would give the shares their value? Why should I buy those shares, other than for speculation? (but why would I speculate on something which has no inherent value?)
I guess I miss something here.

I guess you are...

Let's say, one day in early 1964, you had a hefty $11 and wanted to go bananas buying a share in, I don't know, a textile mill. That company decides to never pay a dime in dividend. Well, maybe once.

You know what happened 50 years later to that $11? Try this: https://www.google.com/search?q=BRK.A

A share is ownership of a company. When the company has piles of cash, you own a part of that pile of cash. If they pay out that pile of cash, your share is valued less, but you have that cash in hand, which is fine if you know better than the company what to do with that cash.

.b

[Lohoris]

A share is ownership of a company. When the company has piles of cash, you own a part of that pile of cash.

Ok, but the company allows you to cash out that part of the cash, rescinding the share?
If it does, fine, I understand... if it doesn't, then I miss the point again, since that would be "virtual" cash that can't be spent (i.e. worthless).

[furuknap]

A share is ownership of a company. When the company has piles of cash, you own a part of that pile of cash.

Ok, but the company allows you to cash out that part of the cash, rescinding the share?
If it does, fine, I understand... if it doesn't, then I miss the point again, since that would be "virtual" cash that can't be spent (i.e. worthless).

No, the comapny does not allow you to take out parts of that cash. If you own an Apple share, you can't just walk into Cupertino and ask for money.

I do suggest you read up a bit on this. Investing is a complex art, and these are fairly basic principles that you apparently do not understand fully.

In any case, this is way off topic, so I suggest we let it go now.

.b

[michaelGedi]

hi guys, just wondering when dividends come again?

[JimiQ84]

hi guys, just wondering when dividends come again?

later today. I am more interested in information about namecoins that had AM mined.

[stripykitteh]

hi guys, just wondering when dividends come again?

In a few hours, unless friedcat decides to buy BFL at fire-sale prices. 

[SebastianJu]

I own shares because i see it as an investment. I doesnt care about the shareprice because its the dividend im interested it. I would buy the best paying stocks in normal share too because im no speculator. I wouldnt care about Asicminer when it is only a company that earns money for itself. I invested because i get a reward.

And this ASIC-Business is something different from real world businesses. In real world there are many opportunities to invest in. A mining company doesnt have much areas to invest in. What should they buy? Solar panels? It would be a loss in fact because of the low ROI. So a normal mining company might be comparable, when they mine with GPUs or FPGAs because the profit is way lower.
So whats the investment tha AM could do now that would lead to even higher returns? Because thats whats investments are for. Not for stockpiling money without a plan. Im with you with a financial cussion for bad times... but collecting bitcoins without common sense... i dont see why.

I think you dont see the enourmous profits AM is making. You speak like AM has to collect many weeks of money to buy something. In fact AM collects each week so enourmous much money that it can pay nearly everything with it.

Let's imagine, hypothetically of course, that one mining company ACME Mining had a huge order for next-gen chips in production, paid for, but not delivered, and then went belly-up for whatever reason. With a few piles of cash, ASICMiner would snap up the order and possibly make a killing.

Why should AM buy a new ASIC-Company? First there would be competitors that would like to buy this company too and second... AM wouldnt have a gain from it. They already have ASICs, they can bring 1TH of hashingpower only for $10000 only. So buying another ASIC-Company would be a waste of money for AM. Or what do you think would be worth it to outbid other interested parties?

Let's further imagine that the server center housing a chunk of AM miners burned down and that due to a clerical error, the insurance for whatever reason covered only 75% of the losses. Now friedcat could say "Fine, we'll cover the remaining 25% from our holdings while we fight this in court" instead of "sorry guys, we won't get a dime from the insurance until we've fought this in court".

I doubt there is an insurance. Or that an insurance company is willing to invest into Bitcoins and ASICs for a reasonable price. They would see it as a high risk and would demand high rates that doesnt make it useful to use the insurance.
You know that there are 40000 or so unsold shares? And you know that bitfountain owns 200000 shares? Im not sure if all the div for these shares are paid out to the actual persons behind AM or if there isnt some kept in bitfountain. I would guess so.
A burning down would mean a good chunk of weeks without dividend of course. And im sure the costs for coming back to the feet are already there. And when you see that it only needed one of the old low dividends to pay for 200TH... then i dont feel insecure with such possible happening. It could be handled without problems. Of course this can change once ASICs are weay less profitable in mining but thats not the case yet.

Let's imagine that a perfect data center went up for sale that would reduce AM costs by 5% due to, I don't know, better ventilation, shorter travel time, free cocaine for the staff... Now friedcat could say "great, I've always wanted a dedicated data center" and swipe his cell phone, saving 5% cost in a few minutes before the competition could arive.

Nope... i would say thats a bad investment. Buying a new datacenter is way way more expensive than simply churn out some more TH of hashingpower. They already created a datacenter for their needs anyway, so im sure its perfect for mining.

Finally, if you go to bed now and wake up in early December 2016, you'll find out that dividends have at least halved simply from the drop in block reward. This will also affect share prices, at least when the herd realizes that the eventual halving needs to be pro-rated from today's price.

Thats natural for mining ventures. But till now AM has space to grow. Until thats not maxed out this effect wont come into the game. It will. And maybe then another politics is needed, but thats far away now.

Because there is roughly 40ish months left until the halving, the share value will be, in a perfect equation, reduced by 1/80 every month. At the current price of ~฿1.7, that means 0.0215 per month of 0.0053 per week, but note that this is share price, not value. 

Start deducting 0.005 from your dividends each week and see how much is left, if AM gets its expected 10% of the network hash rate on average throughout 2013. I guess the ROI looks somewhat different then.

Despite this, I am still bullish about AM. I'm just not as certain at these prices if the extreme dividends people expect are paid out.

So, a high dividend in a growing market is not a long-term strategy. Having cash at hand allows AM to seize oportunities that we as individuals wouldn't get and will give them better options for maintaining profitability also beyond 2016.

Im not fearing the dividend going down. In fact i think its natural when AM has saturated his field of possibilities. But it would still be a great opportunity because AM can churn out TH for low money. There would have to be a company that can beat this. For example a better chip with double hashpower that doesnt cost the double price in production.

[bitfair]

[...] I invested because i get a reward. [...]

I guess everybody did. But the important part is the rewards over the lifetime of the company, which is why keeping some of the earnings in order to grow the company can be a sensible idea.

I trust the management to make those decisions, they have a very impressive track-record of making excellent business decisions so far.

[philipma1957]

I own shares because i see it as an investment. I doesnt care about the shareprice because its the dividend im interested it. I would buy the best paying stocks in normal share too because im no speculator. I wouldnt care about Asicminer when it is only a company that earns money for itself. I invested because i get a reward.

And this ASIC-Business is something different from real world businesses. In real world there are many opportunities to invest in. A mining company doesnt have much areas to invest in. What should they buy? Solar panels? It would be a loss in fact because of the low ROI. So a normal mining company might be comparable, when they mine with GPUs or FPGAs because the profit is way lower.
So whats the investment tha AM could do now that would lead to even higher returns? Because thats whats investments are for. Not for stockpiling money without a plan. Im with you with a financial cussion for bad times... but collecting bitcoins without common sense... i dont see why.

I think you dont see the enourmous profits AM is making. You speak like AM has to collect many weeks of money to buy something. In fact AM collects each week so enourmous much money that it can pay nearly everything with it.

Let's imagine, hypothetically of course, that one mining company ACME Mining had a huge order for next-gen chips in production, paid for, but not delivered, and then went belly-up for whatever reason. With a few piles of cash, ASICMiner would snap up the order and possibly make a killing.

Why should AM buy a new ASIC-Company? First there would be competitors that would like to buy this company too and second... AM wouldnt have a gain from it. They already have ASICs, they can bring 1TH of hashingpower only for $10000 only. So buying another ASIC-Company would be a waste of money for AM. Or what do you think would be worth it to outbid other interested parties?

Let's further imagine that the server center housing a chunk of AM miners burned down and that due to a clerical error, the insurance for whatever reason covered only 75% of the losses. Now friedcat could say "Fine, we'll cover the remaining 25% from our holdings while we fight this in court" instead of "sorry guys, we won't get a dime from the insurance until we've fought this in court".

I doubt there is an insurance. Or that an insurance company is willing to invest into Bitcoins and ASICs for a reasonable price. They would see it as a high risk and would demand high rates that doesnt make it useful to use the insurance.
You know that there are 40000 or so unsold shares? And you know that bitfountain owns 200000 shares? Im not sure if all the div for these shares are paid out to the actual persons behind AM or if there isnt some kept in bitfountain. I would guess so.
A burning down would mean a good chunk of weeks without dividend of course. And im sure the costs for coming back to the feet are already there. And when you see that it only needed one of the old low dividends to pay for 200TH... then i dont feel insecure with such possible happening. It could be handled without problems. Of course this can change once ASICs are weay less profitable in mining but thats not the case yet.

Let's imagine that a perfect data center went up for sale that would reduce AM costs by 5% due to, I don't know, better ventilation, shorter travel time, free cocaine for the staff... Now friedcat could say "great, I've always wanted a dedicated data center" and swipe his cell phone, saving 5% cost in a few minutes before the competition could arive.

Nope... i would say thats a bad investment. Buying a new datacenter is way way more expensive than simply churn out some more TH of hashingpower. They already created a datacenter for their needs anyway, so im sure its perfect for mining.

Finally, if you go to bed now and wake up in early December 2016, you'll find out that dividends have at least halved simply from the drop in block reward. This will also affect share prices, at least when the herd realizes that the eventual halving needs to be pro-rated from today's price.

Thats natural for mining ventures. But till now AM has space to grow. Until thats not maxed out this effect wont come into the game. It will. And maybe then another politics is needed, but thats far away now.

Because there is roughly 40ish months left until the halving, the share value will be, in a perfect equation, reduced by 1/80 every month. At the current price of ~฿1.7, that means 0.0215 per month of 0.0053 per week, but note that this is share price, not value. 

Start deducting 0.005 from your dividends each week and see how much is left, if AM gets its expected 10% of the network hash rate on average throughout 2013. I guess the ROI looks somewhat different then.

Despite this, I am still bullish about AM. I'm just not as certain at these prices if the extreme dividends people expect are paid out.

So, a high dividend in a growing market is not a long-term strategy. Having cash at hand allows AM to seize oportunities that we as individuals wouldn't get and will give them better options for maintaining profitability also beyond 2016.

Im not fearing the dividend going down. In fact i think its natural when AM has saturated his field of possibilities. But it would still be a great opportunity because AM can churn out TH for low money. There would have to be a company that can beat this. For example a better chip with double hashpower that doesnt cost the double price in production.

 Buying a new data center is the most important thing AM must do.  I bolded your quote because you are wrong about the part I bolded. IMO
 Flood happen
 earthquakes happen
 fires happen.   
Tsunamis happen. 

 Having 2 locations to mine with is a must. 

 I would like AM to have 2 locations with extra off line blades.  In both locations.  Also a third location with offline gear stored.   AM is about hashing multiple locations allow for disasters to be less harmful.

[JimiQ84]

I would like AM to have 2 locations with extra off line blades.  In both locations.  Also a third location with offline gear stored.   AM is about hashing multiple locations allow for disasters to be less harmful.

I agree. Now that AM is ~ $70M company, it needs to focus on security.

[JimiQ84]

and apparently Avalon starts shipping #2