ASICMINER: Entering the Future of ASIC Mining by Inventing It

[phantastisch]

[...] because of lower operating / development cost.

I already told if BTC went up, relative operating costs can at best go from ~3% to ~0%. That is insignificant.

If BTC doubles from $50 to $100, a share at 0.6 BTC already implicitly gains value ($30 -> $60 = doubling). It would not go to 1.2 BTC ($30 -> $120 = quadrupling). I do not know how to explain it more simply.

This would only remain true if the overall hashrate of the network isnt rising much. I mean when its way more competition then the mined coins will be less and the powercosts will rise because more asics are needed for the same bitcoins mined. And if the bitcoin price is rising then its something that works against the powercost. Because the same power will cost less bitcoins.
So the small operating cost now is only temporary. It will rise with more competition. Its only because asics are new now. But every miner hardware at some point has to fight with the powercosts to remain profitable.

Regarding the price... while Asicminer shares are highly overvalued... i want to buy 168 Asicminer shares for 0.68BTC each. So someone wants to make a good trade for this way too high share price? Of course only with escrow. Someone from this list https://bitcointalk.org/index.php?topic=108716.msg1180916#msg1180916 maybe johnthedong or some other trusted member.

Asicminer shares are still undervalued. Good Luck with finding someone who will sell at only 0.68.

[creativex]

Nothing but respect for what the ASICMiner guys have accomplished, but I agree the share price has gotten a little soggy around the mid section.

[mrb]

This would only remain true if the overall hashrate of the network isnt rising much. I mean when its way more competition then the mined coins will be less and the powercosts will rise because more asics are needed for the same bitcoins mined. And if the bitcoin price is rising then its something that works against the powercost. Because the same power will cost less bitcoins.
So the small operating cost now is only temporary. It will rise with more competition. Its only because asics are new now. But every miner hardware at some point has to fight with the powercosts to remain profitable.

Ah, I see what you mean, and what you are missing is that as the operating costs increase, the share's fair value would decrease as well, cancelling the later effect of the shares regaining value as the exchange rate increasing.

Example: let's assume the share's fair value is 0.6 BTC today. If the relative operating costs were to increase from 3% to 50% due to increased Bitcoin difficulty, the profit margin would halve from 97% to 50%, thereby reducing the share's fair value in half, from 0.6 to 0.3 BTC. Later, if the BTC exchange rate increases and reduces the operating costs from 50% back to 3%, the share's fair value would double, from 0.3 to 0.6 BTC, and we are back to its original value! This is my whole point: today share's fair value is pretty much as high as it can ever be, because relative operating costs are as low as they can ever be.

[lophie]

Any estimation on the exchange? I would give us a better view to speculate on the price of the shares. Plus I want to sell some shares and I need to be very sure they are not undervalued.

- Just IMO the shares will not lose the value of 0.7BTC fir a very long time.

[ThickAsThieves]

Any estimation on the exchange? I would give us a better view to speculate on the price of the shares. Plus I want to sell some shares and I need to be very sure they are not undervalued.

- Just IMO the shares will not lose the value of 0.7BTC fir a very long time.

IMO, everyone should either leave their shares with Friedcat, or move them to BitFunder/BCTC. I just can't see justifying the distraction of the Bitfountain team to create that which already exists.

[Mausini]

This would only remain true if the overall hashrate of the network isnt rising much. I mean when its way more competition then the mined coins will be less and the powercosts will rise because more asics are needed for the same bitcoins mined. And if the bitcoin price is rising then its something that works against the powercost. Because the same power will cost less bitcoins.
So the small operating cost now is only temporary. It will rise with more competition. Its only because asics are new now. But every miner hardware at some point has to fight with the powercosts to remain profitable.

Ah, I see what you mean, and what you are missing is that as the operating costs increase, the share's fair value would decrease as well, cancelling the later effect of the shares regaining value as the exchange rate increasing.

Example: let's assume the share's fair value is 0.6 BTC today. If the relative operating costs were to increase from 3% to 50% due to increased Bitcoin difficulty, the profit margin would halve from 97% to 50%, thereby reducing the share's fair value in half, from 0.6 to 0.3 BTC. Later, if the BTC exchange rate increases and reduces the operating costs from 50% back to 3%, the share's fair value would double, from 0.3 to 0.6 BTC, and we are back to its original value! This is my whole point: today share's fair value is pretty much as high as it can ever be, because relative operating costs are as low as they can ever be.

hi there, one more post sorry for being a little offensive. you got the mechanisms right, but nobody here is missing the fact that higher difficulty means higher cost, lower profit and share value. nobody! we were discussing the effect of usd/btc increase on share value isolated from difficulty increase due to competition. there, you dont seem to have figured out the big picture, but i'm sure you will.

[mrb]

we were discussing the effect of usd/btc increase on share value isolated from difficulty increase due to competition.

And I explained to you why it will not affect them: https://bitcointalk.org/index.php?topic=99497.msg1624754#msg1624754 But you ignored this post (because your reasoning breaks down?).

(I have been mining and investing in the Bitcoin market since Dec 2010. I have written tools to archive historical Bitcoin economic data and model various investment strategies. I know very well how this market responds to the economic factors we have discussed.)

[Mausini]

we were discussing the effect of usd/btc increase on share value isolated from difficulty increase due to competition.

And I explained to you why it won't affect them: https://bitcointalk.org/index.php?topic=99497.msg1624754#msg1624754 But you ignored this post (because your reasoning breaks down?).

I have been mining and investing in the Bitcoin market since Dec 2010. I know very well how this market responds to all the economic factors we have discussed. I have written numerous tools to model and predict various investment strategies. Believe me, they have been successful and accurate.

I sure hope your mining and investing operations went well during all that time  

Current AM share price is based on investors' expected future (!) profit. As you know, however, difficulty will increase in the future and converges to an equilibrium of operational costs and profits. This implies that it's completely wrong to say operational costs are insignificant. They will be very significant in the future and of course have an effect on today's share valuation. If usd/btc goes up, operational costs go down (in btc). That leads to higher profits (until again an equilibrium is reached), higher dividends and hence higher share valuation.

Can we agree on that? Peace?

Edit: Editing posts doesn't count

[SebastianJu]

No update from friedcat today it seems... i would like to know why deployment nearly stopped the second week now. Hope the problem isnt a serious one...

[beekeeper]

So guys, is Asicminer a good business after all or not?

[VJain]

So guys, is Asicminer a good business after all or not?

Here's my story, you be the judge.

I invested about $50 (was new to BTC at the time) into coins in early Fall ( around $6/each IIRC ). Bought 80 shares of ASICMINER at 0.1BTC.

Now:
80 Shares are valued at 60BTC (say 0.75BTC Each).
I have earned about 5BTC in Dividends - about 1.7BTC a week

Total: 65 BTC from a 8 BTC Investment

1 BTC = $47USD
65 BTC = $3055USD

And $80/week dividends ($240/month). Not huge. But it pays my alcoholism (I'm joking).

These numbers/dates aren't accurate. I should have kept a log... but I didn't.

[SebastianJu]

So guys, is Asicminer a good business after all or not?

Here's my story, you be the judge.

I invested about $50 (was new to BTC at the time) into coins in early Fall ( around $6/each IIRC ). Bought 80 shares of ASICMINER at 0.1BTC.

Now:
80 Shares are valued at 60BTC (say 0.75BTC Each).
I have earned about 5BTC in Dividends - about 1.7BTC a week

Total: 65 BTC from a 8 BTC Investment

1 BTC = $47USD
65 BTC = $3055USD

And $80/week dividends ($240/month). Not huge. But it pays my alcoholism (I'm joking).

These numbers/dates aren't accurate. I should have kept a log... but I didn't.

Now lets hope that bitcoin exchange course and asicminer share price remains stable or is going up only. With Bitcoin there isnt much risk. Even the last fork didnt lead to a real drop in exchange course. I only can imagine a crash if governments ban bitcoin.
And a crash in Asicminer share price can only happen if friedcat turns out to be a scam which is highly unlikely now, after he proved his trustworthiness.

So the future looks good in my opinion...

[ghostshirt]

Another dividend already?
http://blockchain.info/tx-index/60288731/77fc221d2a9bca039720a23e67104fe38e3dae1410bd85abbb6b2045012fc8f1

[beekeeper]

removed, got misunderstood..

[SebastianJu]

Quote deleted on request.

It was around an incident at btcguild that led to a high loss: https://bitcointalk.org/index.php?topic=49417.msg1610708#msg1610708

Asicminer didnt get an overpayment:
https://bitcointalk.org/index.php?topic=49417.msg1612647#msg1612647

If someone wants to help maybe donate some dividend...

[beekeeper]

removed, got misunderstood..

[eleuthria]

beekeeper, please do not bring unwarranted attacks into the ASICMINER thread.  While you have one point (the hot wallet was larger due to ASICMINER's presence), they have helped BTC Guild significantly with their presence.  Since ASICMINER has joined, we've received many new signups, putting the pool's % of network hash rate back to its highest level since July 2011.  Even if ASICMINER left, the pool has received secondary benefits just due to the publicity of the first large scale ASIC operation starting on BTC Guild.  The pool will earn back its losses faster thanks to these facts.

[beekeeper]

..
I believe in Darwin..
..

I'll try again to simplify again what I am trying to say.
Asicminer isn't more faulty than me, or anyone else mining at btcguild. Or he isn't more faulty than a meateater that chickens are killed to get their meat.
I was just trying to ask them for a donation for btcguild, and I will ask everyone in top 50 on btcguild to make a small one, if possible, ofc...

[Jutarul]

I believe in Darwin..

..but obviously don't understand it. It has nothing to do with usefulness. It's about survivalism and procreation.
The mining landscape is destined to change dramatically throughout the next 2 years. That means bitfountain will have to adapt their business model as well, as the focus moves from technological edge towards competence edge.

[kano]

...
BTCguild is missing 1250 BTC, did you donated 1 btc for it?
...

BTCGuild has had a higher income due to ASICMINER mining there.

BTCGuild is missing BTC coz he made a mistake.

Blaming that on someone else is clearly delusional.

Visit a doctor please.