ASICMINER: Entering the Future of ASIC Mining by Inventing It

[MrTeal]

mrb... what you still dont take into account is that we speak about bitcoins and bitcoins constantly raise in value[citation needed]. That means all the real world cost, like power and asic-production are paid in normal currencies... while the income is in btc, that are worth constantly more. For example, i bought my shares of asicminer short before glbse closed. And i bought them with btc that were worth $12.5. Now the btc are worth nearly 4 times that much and so is the dividend i get.
So maybe the competition will rise and there will be less btc mined at some point but the mined bitcoins will be worth much more. And this business only has to fight with real world expenses.
So it looks to me like this business can run some while. Even after that the following business is already planned with selling asics... and im sure friedcat and team will look into future and make plans even for the time if that wont work anymore.

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[SebastianJu]

MrTeal... you want to make me proof this? I only see its constantly rising the past and only in the short time between the death of glbse and now it is nearly 4 times more worth. And i see no hint that this development will stop. Of course it remains a guess.

[Jutarul]

They may become a competitive hardware manufacturer and some kind of payment processor, depending how Bitcoin will evolve in the coming years. They might even stop producing chips altogether and build farms around the world. Or they could become the standard chip developer. It's an unknown future.

Yes. After the dust from the initial deployment settles, the company has to redefine the mission statement. Building professional mining systems (>$1M investment per customer) will be a very viable market. Bitfountain will have the reputation and the expertise to do this. If they play the cards right, Bitfountain will be the Cray of bitcoin mining.

[mrb]

mrb... what you still dont take into account is that we speak about bitcoins and bitcoins constantly raise in value.

Yes I do take it into account: my point is that investing 0.6 BTC in Bitcoin may be more profitable than investing 0.6 BTC in ASICMINER. Because if BTC appreciates to $1000, then at the end of the day 0.6 BTC will be worth $600, whereas your ASICMINER share will be worth $250 (assuming my hypothetical example where the share is worth close to nothing after having returned only 0.25 BTC in dividends).

So, in your investment decisions, you need to compare them against holding BTC. If an investment does worse than merely holding BTC, then it is not an optimal investment.

if you buy a share at 0.6 BTC today, and recoup 0.25 BTC by the end of 2013, and if after that the share's worth is close to 0 (because by that time ASICMINER will generate negligible profits), then you have not made any profit. You have lost 0.35 BTC per share.

That's quite right. If you think that ASICMINER will generate negligible profits after one year of operation, you shouldn't value it 0.6 per share. I for one don't understand why I should think that though.

I think that because friedcat has communicated very little in terms of future plans. What is his vision for growth beyond the next 12 months? What technical strategy will he adopt to compete with more efficient miners? Will he develop more efficient chips? Does he have the expertise in-house or will he have to hire it? Will he relocate the miners to a location with cheaper electricity? Will he have to hire foreign employees to manage them, or rent expensive oversea colo space? Will he consider building his own data center like Tytus (for his 100 Th/s farm which will be located in Wenatchee where power is only $0.02/kWh). Etc.

[optimator]

mrb... what you still dont take into account is that we speak about bitcoins and bitcoins constantly raise in value.

Ahhhh. In this case make bank as a currency trader and forget asic. 

[VeeMiner]

mrb... what you still dont take into account is that we speak about bitcoins and bitcoins constantly raise in value.

Yes I do take it into account: my point is that investing 0.6 BTC in Bitcoin may be more profitable than investing 0.6 BTC in ASICMINER. Because if BTC appreciates to $1000, then at the end of the day 0.6 BTC will be worth $600, whereas your ASICMINER share will be worth $250 (assuming my hypothetical example where the share is worth close to nothing after having returned only 0.25 BTC in dividends).

So, in your investment decisions, you need to compare them against holding BTC. If an investment does worse than merely holding BTC, then it is not an optimal investment.

if you buy a share at 0.6 BTC today, and recoup 0.25 BTC by the end of 2013, and if after that the share's worth is close to 0 (because by that time ASICMINER will generate negligible profits), then you have not made any profit. You have lost 0.35 BTC per share.

That's quite right. If you think that ASICMINER will generate negligible profits after one year of operation, you shouldn't value it 0.6 per share. I for one don't understand why I should think that though.

I think that because friedcat has communicated very little in terms of future plans. What is his vision for growth beyond the next 12 months? What technical strategy will he adopt to compete with more efficient miners? Will he develop more efficient chips? Does he have the expertise in-house or will he have to hire it? Will he relocate the miners to a location with cheaper electricity? Will he have to hire foreign employees to manage them, or rent expensive oversea colo space? Will he consider building his own data center like Tytus (for his 100 Th/s farm which will be located in Wenatchee where power is only $0.02/kWh). Etc.

you seem to be an intelligent guy mrb. So let me tell you what I think. Some of your objections make sense, but I don't understand what you're trying to prove. No one is forcing you to buy ASICMINER shares for 0.6. The shares value is created by the market (and will be obviously more exact once there is a trading platform). So if you think they're too expensive - don't buy them. We get your point. Some people think ASICMINER will not be profitable in the future, some think otherwise. Some people think that if the company will be even more successful, they will be trading for 1 BTC a piece in the future. Why not? Friedcat proved that he can deliver and there is more hashrate on the way.

[HorseRider]

you seem to be an intelligent guy mrb. So let me tell you what I think. Some of your objections make sense, but I don't understand what you're trying to prove. No one is forcing you to buy ASICMINER shares for 0.6. The shares value is created by the market (and will be obviously more exact once there is a trading platform). So if you think they're too expensive - don't buy them. We get your point. Some people think ASICMINER will not be profitable in the future, some think otherwise. Some people think that if the company will be even more successful, they will be trading for 1 BTC a piece in the future. Why not? Friedcat proved that he can deliver and there is more hashrate on the way.

When you want to buy something you have to point out what's wrong with the item and make the price lower.

[Mausini]

They may become a competitive hardware manufacturer and some kind of payment processor, depending how Bitcoin will evolve in the coming years. They might even stop producing chips altogether and build farms around the world. Or they could become the standard chip developer. It's an unknown future.

Yes. After the dust from the initial deployment settles, the company has to redefine the mission statement. Building professional mining systems (>$1M investment per customer) will be a very viable market. Bitfountain will have the reputation and the expertise to do this. If they play the cards right, Bitfountain will be the Cray of bitcoin mining.

It might even be a good idea to accept pre-orders for consumer and/or professional products now to increase liquidity and cover investment costs. Friedcat and his team achieved high reputation and proved to be more reliable than all competitors. Why not finance future endeavors with pre-orders, as they actually make sense now?

Initial Mining Operation -> Reputation -> Competitive advantage for pre-orders -> Consumer produts

[Mausini]

Yes I do take it into account: my point is that investing 0.6 BTC in Bitcoin may be more profitable than investing 0.6 BTC in ASICMINER. Because if BTC appreciates to $1000, then at the end of the day 0.6 BTC will be worth $600, whereas your ASICMINER share will be worth $250 (assuming my hypothetical example where the share is worth close to nothing after having returned only 0.25 BTC in dividends).

So, in your investment decisions, you need to compare them against holding BTC. If an investment does worse than merely holding BTC, then it is not an optimal investment.

That's just plain wrong for ASICMINER shares. Appreciation of BTC only has a positive effect on ASICMINER share value, because they earn you BTC. It does however apply to SatoshiDice, because betting volume (and hence profit) sure does correlate with USD/BTC.

[romerun]

It's just a question of which will grow faster or stop growing. To have businesses doing business on a currency grow slower than the currency itself is unheard of. SDICE and AM are the top dogs and yet are expected be outpaced by bitcoin.

[Mausini]

It's just a question of which will grow faster or stop growing. To have businesses doing business on a currency grow slower than the currency itself is unheard of. SDICE and AM are the top dogs and yet are expected be outpaced by bitcoin.

True for SD, wrong for AM. AM cannot be outpaced by bitcoin.

[JordanL]

Dividend day thread spam: just got BTC0.023786 per share.   

[friedcat]

Still more than one week to finish the first clause of ASICMINER's investor protection.

687 Bitcoins have been excluded from the dividends to pay for the premium of pcb production, assembly and components of the next batch, as well as the operation costs.

[DutchBrat]

Still more than one week to finish the first clause of ASICMINER's investor protection.

687 Bitcoins have been excluded from the dividends to pay for the premium of pcb production, assembly and components of the next batch, as well as the operation costs.

Thanks for the update and dividend !

By next batch, do you mean the other 6TH or the 50Th ?

Thanks

[friedcat]

Still more than one week to finish the first clause of ASICMINER's investor protection.

687 Bitcoins have been excluded from the dividends to pay for the premium of pcb production, assembly and components of the next batch, as well as the operation costs.

Thanks for the update and dividend !

By next batch, do you mean the other 6TH or the 50Th ?

Thanks

The ~50TH/s batch.

[VeeMiner]

Still more than one week to finish the first clause of ASICMINER's investor protection.

687 Bitcoins have been excluded from the dividends to pay for the premium of pcb production, assembly and components of the next batch, as well as the operation costs.

Thanks for the update and dividend !

By next batch, do you mean the other 6TH or the 50Th ?

Thanks

The ~50TH/s batch.

great to hear that! I'm sure upon these news the price of shares will rise even more!

[Mausini]

Fantastic, friedcat! I'm happy, your well deserved massive profits will kick in after next week!

[puck2]

Still more than one week to finish the first clause of ASICMINER's investor protection.

Let's say for the sake of argument that ASICMINER hashrate remains constant... what would expected dividends be once "the first clause of ASICMINER's investor protection" is fulfilled?

While we're at it, what would expected dividend be (assuming constant difficulty), upon arrivval of additional 50TH after "the first clause of ASICMINER's investor protection" is fulfilled?

[mrb]

Yes I do take it into account: my point is that investing 0.6 BTC in Bitcoin may be more profitable than investing 0.6 BTC in ASICMINER. Because if BTC appreciates to $1000, then at the end of the day 0.6 BTC will be worth $600, whereas your ASICMINER share will be worth $250 (assuming my hypothetical example where the share is worth close to nothing after having returned only 0.25 BTC in dividends).

So, in your investment decisions, you need to compare them against holding BTC. If an investment does worse than merely holding BTC, then it is not an optimal investment.

That's just plain wrong for ASICMINER shares. Appreciation of BTC only has a positive effect on ASICMINER share value, because they earn you BTC.

No. They earn BTC, but they are also priced in BTC to start with. Therefore if BTC doubles in value, then both their earning and price already implicitly double in USD value, hence preserving the value proposition of the shares. There are no economic reasons for their numerical BTC value to further increase on top of that change.

Another way to look at it is that the same share priced "X" BTC will return the same "Y" BTC of dividends regardless of the USD/BTC exchange rate. Variation of the exchange rate alone is insufficient to rationally cause "X" to increase while Y" remains constant. In fact, irrational investors who would buy more and more shares for no reason (pushing X up) would cause the dividend yield (Y/X) to decrease therefore making investing in ASICMINER less and less attractive compared to just holding BTC.

[bitfair]

The ~50TH/s batch.

Thanks, friedcat and friends, keep up the great work!

What stage is the 50TH/s batch at right now?