ASICMINER: Entering the Future of ASIC Mining by Inventing It

[phr33]

I was referring to long term plans and development towards a real business, as described by furuknap.

IMHO, premature planning is useless and may result in unnecessary burdens (you can ask how concrete business plans and commitments are working for BFL). How long has it even been since the blades became operational?

We need to let the market shape itself up first, and in the meantime contribute our ideas. I'm sure you'll get more transparency when the dust begins to settle.

When making investments you try to see what is comming, not what has been in the past.

As far as I know, AM isn't looking for new investment currently, so I don't see why this part is their responsibility.

True. It might be too early to "get serious" now.

Regarding investment I was referring to ppl buying shares on the market. But then the market price does not affect the AM operation. Heck, AM is making so much money it probably never going to need any external investors at all. Interesting to speculate in what that could mean

Anyway, keep up the good work AM!

[1714778261]

1714778261

[SebastianJu]

I was referring to long term plans and development towards a real business, as described by furuknap.

IMHO, premature planning is useless and may result in unnecessary burdens (you can ask how concrete business plans and commitments are working for BFL). How long has it even been since the blades became operational?

Youre right... long plans cant be done. But friedcat most probably knew since some days that the dividend will be cut because they need money for 2 investments. It would have been nice to know this some time before, not that at the point with the highest tension the awaitings are crushed. Knewing it before most probably would have had an impact on shareprice on the exchanges but that shouldnt matter much. It would only be nice to know it before instead getting disappointed in the last moment.
Only saying...

[radiumsoup]

I think we should be careful not to fall into the fallacy that all profits are shareholders' unless something comes up... in reality, all profits are retained by the company unless a dividend is declared. The difference here is that there's no minimum dividend to speak of, so instead of being pleasantly surprised from time to time by the appearance of more than the minimum dividend, we're all left trying to calculate all of the dividends without knowing what the actual business costs are. Solving a single equation with two unknowns is quite a trick, after all.

[curiousone]

Sorry, how do I buy friedcat's ASIC mining device?  Read through the first post but theres no instruction for purchase.

[arklan]

Sorry, how do I buy friedcat's ASIC mining device?  Read through the first post but theres no instruction for purchase.

currently you... don't. there have been two auctions for a total of 60 blades (10 ghash each) so far, but both are completed at this time, so unless one of the winners is reselling, you can't buy hardware from asicminer this instance. there should be an auction of the smaller usb miners soon. when, specifically? don't know.

[talnted]

Great work with the Deployment Friedcat!  I am one proud shareholder

[gramma]

Looking like 0.00735415/share this week

Confirmed 0.00735415

In fact its 0.00735416BTC per share. Im not sure why but all shareholders always drop the confirmation satoshi per share. Its not much of course but it is a satoshi...

Maybe not all - the PT shareholders don't get the satoshi

[furuknap]

ASICMiner moves at the speed of light compared to other equities.  I have been left a bit wanting for more though, with the weekly announcements.  I appreciate the hard work that Friedcat and his team have performed, but I do think we deserve more information than the updates give us.  We get three lines of thought per week lately.  I certainly hope that board members are getting more information than us mere shareholders are getting, and that intelligent planning is taking place based upon those discussions.

dude, chill... Who cares about long lines of information, when the important thing is that ASICMINER delivers. What friedcat says, he does. Who cares about how many words he uses in an update?

No, this is not the important thing.

Right now, at current trading levels, investors get 0.5% dividends per week and we're ecstatic about that. However, we have no idea whether that is sustainable next week, much less three weeks from now, and not to mention five months from now.

A 0.5% dividend is easy for a few weeks or even a couple of months, but that's pointless if it turns out all the funds earned have been spent or paid out and we're now living hand-to-mouth, week-by-week.

Any unexpected event (a bad delivery, datacenter burns down, factory goes bankrupt, anything) can be a complete disaster, and having historically paid dividends is about as useful as grafiti on a duck. If investors are left paying for that with future dividends then we're basically screwed, regardless of friedcat's honesty and intentions.

Because we have no financial data, we do not know what maintains the profitability. For all we know, the rise in BTC value is the only thing keeping the ship afloat. With today's crash in BTC/USD (or RMB) price, that may mean that earnings drop considerably; we just don't know because we don't know what the financials look like.

Allow me to speculate a bit, though, and feel free to point out errors when you find them.

At these levels, 0.5% per week means 100% ROI (ie get back what you put in) is longer than the time to block reward halving. At that point, we can expect a huge drop in profitability and thus a gradual drop in share price.

As an example, let's assume that in late 2016, the share price drops 50% due to a 50% drop in block reward. From this level, that means the share price will be ฿0.65. In other words, for you to not lose money, the dividends by that time must be at least ฿0.65.

There are 191 weeks until January 1, 2017. Divide the expected price loss by 191, and every week on average, ฿0.003 per share 'dies' due to the block reward halving.

This, of course, does not take into account that you may want to actually earn something from your investment. These figures solely assume you don't want to lose money. There's no profit for investors, no risk premium for essentially lending that money to AM, no accounting for competition increasing, etc.

Right now, the dividends have been more than ฿0.003 and have, in fact, been almost twice that. If that is maintainable, that means by the end of 2016, a share will have paid ฿0.65 in dividend _more_ than the block halving will cause. Over 191 weeks, that comes down to roughly 14% per year in return on investment, in other words what we as investors get from risking our money.

This is still assuming that a ฿0.006 per share per week is maintainable, but if we need to fund AM with ฿2K every couple of weeks or even once per month from this point, the equivalent of 0.005 per share, then we're screwed, to put it mildly. ฿2K less per month means 25% reduction in total dividend earnings, dropping the ROI from 14% to around 10%, and now we're suddenly talking NASDAQ index levels.

If, on the other hand, AM does not have funds on hand, like their recent withholding of short-term earnings may indicate, then any event such as those mentioned above can be a complete disaster. Even if they have the best insurance in the world, a fire in the data center will be a complete disaster because you can't just take your insurance money and stop my Radioshack on the way home to pick up new ASICs. If friedcat has a heart attack tomorrow, it will take weeks, maybe months for someone else to step in and get everything back in order.

Suddenly, 10% yield per year is not looking so swell. Why would any investor with serious money back a massive risk startup in a completely unproven field then they can buy index funds that yield almost the same return? What we're left with is people that won't or don't know how to do the math, even at these basic levels, and those are essentially just suckers looking at historical performance as an indication of future profit, which is madness.

Note that nowhere do I even guess at what happens when competition enters the scene, or speculate in difficulty changes, or anything like that. I simply say that if the current levels of dividends are maintained, any investor worth their salt would be much better off buying NASDAQ Composite.

Important information is that:

- we have hashrate of 12 Thashs/s and rising

We've been expecting 50 with no words or plans on how that's going.

- very successful sales of blades and development of USB miners

Will that need to be done every week to maintain dividend levels?

what more do you want? Other companies (BFL) keep on babbling and they can't deliver. ASICMINER doesnt care about product names, websites, logos and all this useless crap. This company is efficient and delivers what it promises. That's what's important.

No, not really. Not unless the value of AM is hype, in which case, we're selling to suckers and hoping nobody notices before the air goes out of the balloon.

.b

EDIT: Just to be clear, I'm still optimistic and a strong believer. I have no issues with huge risk, and there may be huge rewards. I would like more transparency, though, and I'm hopeful that friedcat can make that happen like he seems to want.

[gramma]

I think we should be careful not to fall into the fallacy that all profits are shareholders' unless something comes up... in reality, all profits are retained by the company unless a dividend is declared. The difference here is that there's no minimum dividend to speak of, so instead of being pleasantly surprised from time to time by the appearance of more than the minimum dividend, we're all left trying to calculate all of the dividends without knowing what the actual business costs are. Solving a single equation with two unknowns is quite a trick, after all.

^^^^^  This.

Theoretically, we're all invested here because we believe that the company has a particular skill at using our investment more profitably than we personally can. If we felt otherwise, we'd be doing those other things with our BTC instead.

This is why - in general - it is better for a company to retain earnings, the assumption being that they will put those funds to the good use that our investments are hoping for.  I am not going to say that dividends are bad. There are many reasons to have them.  But it's up to the company to decide when those reasons apply, and to act accordingly.  As investors, our role is to decide whether we agree with the company's decision, and retain (or not) our investments as we see fit.

I am loving getting dividends, and they do provide a tiny hedge against a drop in share value.  But I'd rather see the funds re-invested if that's what it takes to continue to be profitable going forward.

I am only a tiny shareholder, and PT at that (should have mined more and played WoW less...), but I am so far satisfied, and have a long-term view.

EDIT:  This is not to suggest that we should just lean back and not worry about financials. I am just addressing the general theme of dividends, and my general feeling about this security in the wild wild west of this investing space.  I'd love to see more about the financials and projections.  Still, by "long term" I mean to say I am not looking to flip shares when the magical trendlines tell me to.

[furuknap]

I think we should be careful not to fall into the fallacy that all profits are shareholders' unless something comes up... in reality, all profits are retained by the company unless a dividend is declared. The difference here is that there's no minimum dividend to speak of, so instead of being pleasantly surprised from time to time by the appearance of more than the minimum dividend, we're all left trying to calculate all of the dividends without knowing what the actual business costs are. Solving a single equation with two unknowns is quite a trick, after all.

I fully agree. In fact, I have said this before and will gladly repeat it: I would love for AM to reduce dividends massively (say to 10% of its current level) if that means the long-term viability and stability of the company increases.

Right now, AM is priced based solely on previous earnings and hope, but with no clear plans or founded expectations for the future. That's a bad thing on the best of days, but add those two unknowns to the other unknown unknowns, and there's a whole lot of unknown...

.b

[imsaguy]

dont even mention that shit in connection to asicminer!! firedcat and his team are the most reputable and trustworthy people in bitcoin land. you probably have no idea whats going on here. asicminer has already paid back EVERYTHING from ipo and is just delivering massive profit after massive profit for their shareholders. share value in USD has appreciated by a factor greater than 100 since ipo. bitfountain is not selling any additional shares to the public. tell me, how the fuck can this be a scam?

LOL.  I used those same arguments when defending pirate.  He was highly trusted on -otc, was delivering on time every 3 days (and then every week), etc
 
ASICMINER has demonstrated their hashpower on the pool, but with the move to solo mining, the only way to verify hashing is via what they inject into the blocks they mine.  A run of bad luck will look identical to a run of no hashing at all.

Asking for more information/better transparency is a burden every company must shoulder.

ASICMiner moves at the speed of light compared to other equities.  I have been left a bit wanting for more though, with the weekly announcements.  I appreciate the hard work that Friedcat and his team have performed, but I do think we deserve more information than the updates give us.  We get three lines of thought per week lately.  I certainly hope that board members are getting more information than us mere shareholders are getting, and that intelligent planning is taking place based upon those discussions.

dude, chill... Who cares about long lines of information, when the important thing is that ASICMINER delivers. What friedcat says, he does. Who cares about how many words he uses in an update?

No, this is not the important thing.

Right now, at current trading levels, investors get 0.5% dividends per week and we're ecstatic about that. However, we have no idea whether that is sustainable next week, much less three weeks from now, and not to mention five months from now.

A 0.5% dividend is easy for a few weeks or even a couple of months, but that's pointless if it turns out all the funds earned have been spent or paid out and we're now living hand-to-mouth, week-by-week.

Any unexpected event (a bad delivery, datacenter burns down, factory goes bankrupt, anything) can be a complete disaster, and having historically paid dividends is about as useful as grafiti on a duck. If investors are left paying for that with future dividends then we're basically screwed, regardless of friedcat's honesty and intentions.

Because we have no financial data, we do not know what maintains the profitability. For all we know, the rise in BTC value is the only thing keeping the ship afloat. With today's crash in BTC/USD (or RMB) price, that may mean that earnings drop considerably; we just don't know because we don't know what the financials look like.

Allow me to speculate a bit, though, and feel free to point out errors when you find them.

At these levels, 0.5% per week means 100% ROI (ie get back what you put in) is longer than the time to block reward halving. At that point, we can expect a huge drop in profitability and thus a gradual drop in share price.

As an example, let's assume that in late 2016, the share price drops 50% due to a 50% drop in block reward. From this level, that means the share price will be ฿0.65. In other words, for you to not lose money, the dividends by that time must be at least ฿0.65.

There are 191 weeks until January 1, 2017. Divide the expected price loss by 191, and every week on average, ฿0.003 per share 'dies' due to the block reward halving.

This, of course, does not take into account that you may want to actually earn something from your investment. These figures solely assume you don't want to lose money. There's no profit for investors, no risk premium for essentially lending that money to AM, no accounting for competition increasing, etc.

Right now, the dividends have been more than ฿0.003 and have, in fact, been almost twice that. If that is maintainable, that means by the end of 2016, a share will have paid ฿0.65 in dividend _more_ than the block halving will cause. Over 191 weeks, that comes down to roughly 14% per year in return on investment, in other words what we as investors get from risking our money.

This is still assuming that a ฿0.006 per share per week is maintainable, but if we need to fund AM with ฿2K every couple of weeks or even once per month from this point, the equivalent of 0.005 per share, then we're screwed, to put it mildly. ฿2K less per month means 25% reduction in total dividend earnings, dropping the ROI from 14% to around 10%, and now we're suddenly talking NASDAQ index levels.

If, on the other hand, AM does not have funds on hand, like their recent withholding of short-term earnings may indicate, then any event such as those mentioned above can be a complete disaster. Even if they have the best insurance in the world, a fire in the data center will be a complete disaster because you can't just take your insurance money and stop my Radioshack on the way home to pick up new ASICs. If friedcat has a heart attack tomorrow, it will take weeks, maybe months for someone else to step in and get everything back in order.

Suddenly, 10% yield per year is not looking so swell. Why would any investor with serious money back a massive risk startup in a completely unproven field then they can buy index funds that yield almost the same return? What we're left with is people that won't or don't know how to do the math, even at these basic levels, and those are essentially just suckers looking at historical performance as an indication of future profit, which is madness.

Note that nowhere do I even guess at what happens when competition enters the scene, or speculate in difficulty changes, or anything like that. I simply say that if the current levels of dividends are maintained, any investor worth their salt would be much better off buying NASDAQ Composite.

Important information is that:

- we have hashrate of 12 Thashs/s and rising

We've been expecting 50 with no words or plans on how that's going.

- very successful sales of blades and development of USB miners

Will that need to be done every week to maintain dividend levels?

what more do you want? Other companies (BFL) keep on babbling and they can't deliver. ASICMINER doesnt care about product names, websites, logos and all this useless crap. This company is efficient and delivers what it promises. That's what's important.

No, not really. Not unless the value of AM is hype, in which case, we're selling to suckers and hoping nobody notices before the air goes out of the balloon.

.b

EDIT: Just to be clear, I'm still optimistic and a strong believer. I have no issues with huge risk, and there may be huge rewards. I would like more transparency, though, and I'm hopeful that friedcat can make that happen like he seems to want.

+1

[furuknap]

dont even mention that shit in connection to asicminer!! firedcat and his team are the most reputable and trustworthy people in bitcoin land. you probably have no idea whats going on here. asicminer has already paid back EVERYTHING from ipo and is just delivering massive profit after massive profit for their shareholders. share value in USD has appreciated by a factor greater than 100 since ipo. bitfountain is not selling any additional shares to the public. tell me, how the fuck can this be a scam?

LOL.  I used those same arguments when defending pirate.  He was highly trusted on -otc, was delivering on time every 3 days (and then every week), etc
 

I'm not saying we shouldn't trust friedcat, AM or Bitfountain. They may be perfectly honest, but the business behind it is too murky to effectively evaluate the company.

.b

[imsaguy]

dont even mention that shit in connection to asicminer!! firedcat and his team are the most reputable and trustworthy people in bitcoin land. you probably have no idea whats going on here. asicminer has already paid back EVERYTHING from ipo and is just delivering massive profit after massive profit for their shareholders. share value in USD has appreciated by a factor greater than 100 since ipo. bitfountain is not selling any additional shares to the public. tell me, how the fuck can this be a scam?

LOL.  I used those same arguments when defending pirate.  He was highly trusted on -otc, was delivering on time every 3 days (and then every week), etc
 

I'm not saying we shouldn't trust friedcat, AM or Bitfountain. They may be perfectly honest, but the business behind it is too murky to effectively evaluate the company.

.b

I totally agree with you. I was just highlighting Mausini's slightly flawed thinking.

[lduck]

...
No, not really. Not unless the value of AM is hype, in which case, we're selling to suckers and hoping nobody notices before the air goes out of the balloon.
...

WE are not selling. maybe few shareholders are selling, but not WE.  
everybody who bought shares in last few weeks of months was supposed to make homework before buying and then he would see, what level of information you can expect.
if you was expecting more and now you see your possible earnings differently, then sorry, but that is calling risk and you accepted it at buying.
if you bought at 0.1_something, and you are not satisfied with AM, you are free to sell for 10 times more than you spend. or you can organize voting about some change.
my point is, AM is not asking for any new investment, so posting  information every hour to make prices "fair" is not in the interest of EVERY shareholder. (as it cost men-hours) How much information get average shareholder of Google/Apple/... ?
on the other hand, we should probably know at least few of other people that are in board and around Friedcat. Or in some other way responsible for AM decisions.

[imsaguy]

my point is, AM is not asking for any new investment, so posting  information every hour to make prices "fair" is not in the interest of EVERY shareholder. (as it cost men-hours) How much information get average shareholder of Google/Apple/... ?
on the other hand, I we should probably know at least few of other people that are in board and around Friedcat. Or in some other way responsible for AM decisions.

Google/Apple are required to submit financials at least quarterly and be independently audited at least yearly.  Obviously people bought into AM without having the same requirements.  Asking for expanded information from the few sentence 'updates' is fair.  How much effort does it really take to compose a paragraph write up about what you did over the past week or two and what your plan is for the next two or four weeks?  Don't even post it in English.  Post it in your native language and I'll sit with the translator to parse it myself.  I understand the fallacy with trying to plan too far in the future, but that doesn't mean you don't plan at all.

[furuknap]

everybody who bought shares in last few weeks of months was supposed to make homework before buying and then he would see, what level of information you can expect.
if you was expecting more and now you see your possible earnings differently, then sorry, but that is calling risk and you accepted it at buying.
if you bought at 0.1_something, and you are not satisfied with AM, you are free to sell for 10 times more than you spend. or you can organize voting about some change.
my point is, AM is not asking for any new investment, so posting  information every hour to make prices "fair" is not in the interest of EVERY shareholder. (as it cost men-hours) How much information get average shareholder of Google/Apple/... ?

Actually, we don't know whether they are asking for new investment, which is sort of my point. Are they properly funded to cover investments for the next 5 months? Will they need another capital injection in a year?

I agree, though, that everyone needs to do their own math. It can be easy to get 'sucked in' when there is a board chanting in praise. Im' perfectly comfortable with the amount I paid for my shares and I'll sell when I feel the price is right. Right now, I do not know whether the price is right, which is why I would like more information, not about what friedcat had for dinner or when he goes to sleep, but what happens a month or two from now, even if five months is too long.

Look, they've just said they needed a ฿2,000.00 deposit for buying more ICs. That looks like at least the start of something, so why can't they disclose what those ICs are for? Are they for the bees? If so, how many? Are they for new blades? If so, when will they come online according to the plan? If ฿2K is a deposit, what is the full amount and when is it due?

Right now, it's looking very much like they need more funding at some point, and if so, how do they propose to get that funding? Sell more of the BF shares? Withold dividends? Use backup money?

I don't think these questions in any way are unreasonable from an investor as part of determining the value of the company.

on the other hand, we should probably know at least few of other people that are in board and around Friedcat. Or in some other way responsible for AM decisions.

Cool, that's another very valid question, for example (if they don't want to disclose personal details), what are the dead man's switch implementations at AM?

.b

[SebastianJu]

Looking like 0.00735415/share this week

Confirmed 0.00735415

In fact its 0.00735416BTC per share. Im not sure why but all shareholders always drop the confirmation satoshi per share. Its not much of course but it is a satoshi...

Maybe not all - the PT shareholders don't get the satoshi

Yes, i noticed that... its a conspiracy between both PT-Issuers...  

[memvola]

Seeing that a mere retention of some profits, which is expected to happen regularly, is causing so many worries, I would suggest friedcat to retain all profits from now on and release quarterly dividends, announcing the exact amount one week in advance.

[lduck]

my point is, AM is not asking for any new investment, so posting  information every hour to make prices "fair" is not in the interest of EVERY shareholder. (as it cost men-hours) How much information get average shareholder of Google/Apple/... ?
on the other hand, I we should probably know at least few of other people that are in board and around Friedcat. Or in some other way responsible for AM decisions.

Google/Apple are required to submit financials at least quarterly and be independently audited at least yearly.  Obviously people bought into AM without having the same requirements.  Asking for expanded information from the few sentence 'updates' is fair.  How much effort does it really take to compose a paragraph write up about what you did over the past week or two and what your plan is for the next two or four weeks?  Don't even post it in English.  Post it in your native language and I'll sit with the translator to parse it myself.  I understand the fallacy with trying to plan too far in the future, but that doesn't mean you don't plan at all.

they made statement about planing to have average 10% till the end of year. every percent  more AM will have in average for 2013 year is bonus. if someone expected more, because they mentioned they payed for mask(long time investment), and are planing to deliver 200TH/s(without mentioning when and without mentioning it was payed for it), then it is/was speculation. (-- I personally think all 200TH/s would not be online at the end of 2013, but that's just my speculation.)
so some plans are. we will see how they will end.

furuknap: they made statement that no more than 200000 shares will be sold. so there is just one real source of money for everything - mining. and it's hard to make any statement how many % they will use when BTC price is unstable.

I would like to see more information too, but I don't see why I would deserve it.

[SebastianJu]

Seeing that a mere retention of some profits, which is expected to happen regularly, is causing so many worries, I would suggest friedcat to retain all profits from now on and release quarterly dividends, announcing the exact amount one week in advance.

What sense would this make? If asicminer would have to overtake other companies or would have other investing opportunities then i would say that makes sense. But till now the needed money for investment is only a small part of the created money. So it would be useless to stockpile huge amounts of bitcoins laying around. Thats fully different to other companies that could use this money for something.