ASICMINER: Entering the Future of ASIC Mining by Inventing It

[blastbob]

I love the weekly payout, it feels better to convert that to USD, than selling shares.

Feels even better rolling them into more ASICMINER 

Been doing both But i got bills to pay.

I am just waiting for news on Second Gen Chips

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[joele]

Which is more profitable, buying 50 USB Erupter to mine BTC @home or buy AM shares?

Seems odd for you to ask this question when your profile indicates you are associated with/run this website: BTC.re

I like to see other experts opinion. I'm no expert btw.

[KarmaShark]

I love the weekly payout, it feels better to convert that to USD, than selling shares.

Feels even better rolling them into more ASICMINER 

Been doing both But i got bills to pay.

I am just waiting for news on Second Gen Chips

I hear that brother, those bills never stop.


Word on the street is The Fried One is around so perhaps we will get an update on those 2nd gen chips and much more soon.

[nebulus]

Was there an announcement on when gen 2 devices would roll out?

[KarmaShark]

Was there an announcement on when gen 2 devices would roll out?

Not that I know of, specifically. There are usually Thursday updates from Friedcat however he has been busy of late with keeping things running smoothly. When he does post the update any relevant information on hardware and anything else ASICMINER related will be available for digestion.

[Taxidermista]

What blades are you talking about?

It should work out approximately the same for both the Block Erupter Blade and the USB miner, since I imagine power consumption is approximately the same...

It must be some error in your calculations, usb miners can't never be profitable unless diff drops.

[BlackLilac Grant]

Was there an announcement on when gen 2 devices would roll out?

Come on guys, ASICMINER is still the only company selling gen 1 ASICs in any quantity, let's roll in that dough before we start thinking about gen 2. I hope for the sake of keeping the competition in the dark that friedcat doesn't mention a thing about the next gen devices until they are days away from shipping. Ideally that will be right around the time that BFL figures out how to put together a working device, and/or the companies using the Avalon chips come to market.   

[SaintFlow]

Was there an announcement on when gen 2 devices would roll out?

Come on guys, ASICMINER is still the only company selling gen 1 ASICs in any quantity, let's roll in that dough before we start thinking about gen 2. I hope for the sake of keeping the competition in the dark that friedcat doesn't mention a thing about the next gen devices until they are days away from shipping. Ideally that will be right around the time that BFL figures out how to put together a working device, and/or the companies using the Avalon chips come to market.   

Also known as the apple strategie 

[stripykitteh]

Was there an announcement on when gen 2 devices would roll out?

Come on guys, ASICMINER is still the only company selling gen 1 ASICs in any quantity, let's roll in that dough before we start thinking about gen 2. I hope for the sake of keeping the competition in the dark that friedcat doesn't mention a thing about the next gen devices until they are days away from shipping. Ideally that will be right around the time that BFL figures out how to put together a working device, and/or the companies using the Avalon chips come to market.   

I agree that it's commercially prudent for AM to keep their cards close to their chest. However I think the competition knowing in general what AM are up to won't help them much. AM's natural advantages are:

• proven IC design competence
• low cost of manufacture
• low cost of operation
• operational excellence
• strong cashflow and balance sheet
• reputation as a company that meets or exceeds customer expectations

Knowing what AM have in the pipeline won't matter much if you can't match them in those areas, and they are hard to execute or achieve.

BFL are flailing. They are in a death spiral at the moment; which is likely to take a couple of months to complete (either cash flow dries up or legal action puts them out of business). They are not experts in IC design and manufacture and the price for that will be corporate death.

I've been following KnCminer closely for a few weeks. I started off excited at the possibilities (28nm process, 350GH/s flagship product for $7K). However what I've seen in the last few days has persuaded me they're unlikely to even be as much of an annoyance to AM as BFL is today (i.e., nothing much at all). I doubt they will get any ASIC product to market unless they can fund their NRE cost.

100T/H / Metabank may yet provide some competition, but they sound a couple of months away from having any product so it's hard to predict where they will get to. I think even if they get their 65 nm product going AM will be able to match them fairly quickly. But doing so would put a bit of a dent in earnings, so their threat can't be ignored.

Avalon seem to be happy to be the vanguard of the open-source movement. I think it's a smart idea on their part; it means they don't have to try to compete head-to-head with AM in building finished products. They get to grow a market that will sit beside the finished product and mining markets.

AM are the only company of any substance exhibiting *any* professionalism at the moment in building finished products or mining.

[Maciek]

Why some people are mining on 20+ or 30+ USB sticks?
Isn't it better idea to be mining on 12gh/s ASIC Blade?

[kibblesnbits]

What blades are you talking about?

It should work out approximately the same for both the Block Erupter Blade and the USB miner, since I imagine power consumption is approximately the same...

It must be some error in your calculations, usb miners can't never be profitable unless diff drops.

Double negative statement is false.  Your ROI will take longer when diff increases, but eventually it would be reached. 

[organofcorti]

What blades are you talking about?

It should work out approximately the same for both the Block Erupter Blade and the USB miner, since I imagine power consumption is approximately the same...

It must be some error in your calculations, usb miners can't never be profitable unless diff drops.

Double negative statement is false.  Your ROI will take longer when diff increases, but eventually it would be reached. 

Not necessarily. If income is limited by device lifetime or user patience, (say ~ four years) then with increasing difficulty an ROI may never be reached.

[bitfair]

What blades are you talking about?

It should work out approximately the same for both the Block Erupter Blade and the USB miner, since I imagine power consumption is approximately the same...

It must be some error in your calculations, usb miners can't never be profitable unless diff drops.

Double negative statement is false.  Your ROI will take longer when diff increases, but eventually it would be reached. 

Not necessarily. If income is limited by device lifetime or user patience, (say ~ four years) then with increasing difficulty an ROI may never be reached.

My calculation shows that marginal revenue exceeds marginal costs until network hash rate reaches 30 peta-hash (using current prices). It has nothing to do with an ROI calculation, which is quite different, because I disregarded (sunk) fixed costs.

[organofcorti]

What blades are you talking about?

It should work out approximately the same for both the Block Erupter Blade and the USB miner, since I imagine power consumption is approximately the same...

It must be some error in your calculations, usb miners can't never be profitable unless diff drops.

Double negative statement is false.  Your ROI will take longer when diff increases, but eventually it would be reached. 

Not necessarily. If income is limited by device lifetime or user patience, (say ~ four years) then with increasing difficulty an ROI may never be reached.

My calculation shows that marginal revenue exceeds marginal costs until network hash rate reaches 30 peta-hash (using current prices). It has nothing to do with an ROI calculation, which is quite different, because I disregarded (sunk) fixed costs.

I think most people would regard profitability as the amount of income they receive after costs.

If you're disregarding the amount you paid for the device, then of course they will earn you more btc than your ongoing costs, and for a long time.

The point is, will enough btc ever be earned to pay for the device? Hard to say, but it might not happen.

[runeks]

Why do you say hardware sales is a short-term opportunity?

I would say it's the other way around. Income from mining will not go much above what it is currently, because of the 51% issue. Income from selling mining hardware is still far from saturated. People are bidding up USB miners to +$400 on eBay! The demand is huge and I think it would be a lot more profitable for shareholders if ASICMiner were to focus more on hardware sales now when there is such a large demand to satisfy.

The simple explanation is that AM is far behind in technology with their current models. 130nm is comparable to a Pentium III and when the competitors are researching i7 chips, it's only a matter of time before you can't give away the blades that AM currently produces.

To catch up, AM needs to design a new chip and we have no information about the current status of that, whether it's already financed, or what timeframe we're looking at.

We know one thing and that is that friedcat recently announced that they have decided to go with 65nm on the second generation chip. That tells at least me that they have some ways to go, and Bitbury for one is just days away from having a working 65nm chip. At that point, Bitfury will be filling that urgent need for ASICs and AM will have to play catchup either by lowering prices or skipping a generationand going straight for something like 28nm to remain competitive.

So yes, AM should sell everything including the kitchen sink while they still can. Two months from now, Bitfury may be pumping 65nm ASICs into the market (they contractually delivers in October but states it will be delivered in August). At that point, those existing blades will be worth less than their packaging material because anyone can jump across the street at get far superior performance at a tentatively much lower price (120GH/s for just north of $2K anyone?).

.b

I think the point is not about hardware sales vs self-mining. The point is that right now, at this very moment, the profit margin on ASIC mining hardware is huge, almost regardless of the technology used. And when this happens, competitors will be working on taking a piece of that pie.

But in that light it doesn't matter whether ASICMiner sells hardware or mines itself; both approaches will render current-technology hardware useless over time, because of better technology. But the thing about hardware sales is that we have not, in any way, reached saturation. That's evident from the price in the secondary market (buyers of ASICMiner devices re-selling devices). Self-mining is saturated, at the time. Not much room for improvement, if we want to stay comfortably below 51%.

But it would surprise me if ASICMiner weren't aware of this. And weren't working hard on producing hardware to sell.

Average AM hashrate for last 6hrs is 30.57TH

A 6-hour average for the hash rate is not reliable. But I'm sure you know this.

The 24-hour average has varied between 25 and 15 Thash/s in the past ~24 hours: http://runeks.dk/bitcoin/



But in any case, the shareholders earn money for every block that is found.

[bitfair]

What blades are you talking about?

It should work out approximately the same for both the Block Erupter Blade and the USB miner, since I imagine power consumption is approximately the same...

It must be some error in your calculations, usb miners can't never be profitable unless diff drops.

Double negative statement is false.  Your ROI will take longer when diff increases, but eventually it would be reached. 

Not necessarily. If income is limited by device lifetime or user patience, (say ~ four years) then with increasing difficulty an ROI may never be reached.

My calculation shows that marginal revenue exceeds marginal costs until network hash rate reaches 30 peta-hash (using current prices). It has nothing to do with an ROI calculation, which is quite different, because I disregarded (sunk) fixed costs.

I think most people would regard profitability as the amount of income they receive after costs.

If you're disregarding the amount you paid for the device, then of course they will earn you more btc than your ongoing costs, and for a long time.

The point is, will enough btc ever be earned to pay for the device? Hard to say, but it might not happen.

I agree that ignoring fixed costs is hard/impossible/unreasonable/unwise for a consumer purchasing a miner.

I may have made myself misunderstood, because the point I was trying to make was slightly different: I was thinking more about the power efficiency of the current-gen technology, and at what point mining no longer pays for the electricity consumed. When mining revenue no longer pays for the electricity consumed, then I would consider the technology obsolete.

So that if you have, say 30 TH of mining power, with this technology already deployed, it makes financial sense to continue mining until network hash rate reaches 30 PH. At that point, the technology will be obsolete and only more power efficient devices should continue mining.

It means there is plenty of room to expand, even with current-gen technology.

[jabetizo]

But in any case, the shareholders earn money for every block that is found.

precisely; why do people/shareholders care about the hashrate (as long as it's not close to 50% of course)?

hoping for a serious answer unlike last time

[nubbins]

If income is limited by device lifetime or user patience, (say ~ four years) then with increasing difficulty an ROI may never be reached.

just thinking out loud here...

when ASICS increase the network hash rate enough, GPUs will stop earning enough money to recoup electricity costs. when that happens, GPUs will start dropping off the network in droves, causing difficulty to either drop, or grow more slowly.

i wonder what's the total hashing power of all the GPUs on the network right now?

AM as a mining company doesn't seem to want a bigger % of the network than they already have, so you can ignore their effect on the hash rate and just focus on everybody else.

[CanadianGuy]

If income is limited by device lifetime or user patience, (say ~ four years) then with increasing difficulty an ROI may never be reached.

just thinking out loud here...

when ASICS increase the network hash rate enough, GPUs will stop earning enough money to recoup electricity costs. when that happens, GPUs will start dropping off the network in droves, causing difficulty to either drop, or grow more slowly.

i wonder what's the total hashing power of all the GPUs on the network right now?

AM as a mining company doesn't seem to want a bigger % of the network than they already have, so you can ignore their effect on the hash rate and just focus on everybody else.

I like this post.. very clear perspective!

[nubbins]

I like this post.. very clear perspective!

don't get me started on how everyone dumping their GPUs at the same time is going to affect the resale value.