ASICMINER: Entering the Future of ASIC Mining by Inventing It

[101111]

The point about asicminer shares being shares in a company as compared to products from a company, seems to get lost on some.

What could asicminer shares be worth in 5 years, 10 years, 20 years time? How much would they have earned by then in divs; what revenue streams will there be from applications and earning channels undreamed of yet?

Sure some hot new product may come onto the market, and you can keep product comparisons to that for interest sake if you must, but c'mon, these graphics cards and such with built-in rapid obsolescence are no comparison to AM shares.

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[philipma1957]

The point about asicminer shares being shares in a company as compared to products from a company, seems to get lost on some.

What could asicminer shares be worth in 5 years, 10 years, 20 years time? How much would they have earned by then in divs; what revenue streams will there be from applications and earning channels undreamed of yet?

Sure some hot new product may come onto the market, and you can keep product comparisons to that for interest sake if you must, but c'mon, these graphics cards and such with built-in rapid obsolescence are no comparison to AM shares.

mci was a stock company as countless others.


 I like AM they made money for me just because I am not on the same page as others when it comes to pricing of the gear that  they sell it does not mean that they have not made money for a lot of people.  Myself included.

[101111]

yes, it's not often you can get shares in a tech startup making $ from day 1.

[JordanL]

Has there been any word about the price of blades and/or USBs being reduced? I'm an advocate for selling them at as high a price point as the market allows, even though I'm purchasing them, but with with the recent spike in difficulty it would seem to make sense to consider a price reduction. A definitive yes or no over the next week or two would be great, I can't be the only one hesitating to place more orders due to this uncertainty.

[ThatDGuy]

yes, it's not often you can get shares in a tech startup making $ from day 1.

Very remarkable indeed!

[Aajo]

pretty pointless discussion going on..
AM will make new price finding auctions as soon as its necessary, the update tells us it is still not.
Also the guess with 30-40$ cost per stick is propably much too high since the blades cost them around 100$ in production. The margin must be somewhat equal or they wouldnt take the hassle. My guess is 5-10$ for a stick.

[fiaskow]

The comparison is faulty because AM is a company and the other alternatives are hardware.

Why is that relevant, you ask? Well, AM will (hopefully) continuously renew itself and its strategy in order to keep earnings high, whereas the hardware simply gets outdated and earns progressively less and less as time goes along. So: buying hardware may earn you more in the short term, shares in AM may earn you more in the long term.

Comparison is NOT faulty. It is a comparison of "investment" (whether in hardware or a company) and "return" (whether mined bitcoins or dividends paid out as bitcoins). I think most people will agree that the value of hardware (GPU or ASICs) will generally depreciate over time, so that is a "known." The big unknown is AM, which as you point out is a company. We hope they will continuously renew itself, but anything can happen.

It is faulty. Usually "return" is calculated as the appreciation in share price + dividends. If we make the assumption that the share price stays the same indefinitely, you will certainly realise a positive return whenever you choose to sell your shares. Obviously we would like to see the share price appreciate as well.

The rest of the investment examples are correct and you fix your GH/BTC rate when you purchase. With AM, your GH/BTC investment will increase overtime as Friedcat expands his mining effort and switch to 2nd gen ASICS etc. In the long term, this is where you want to be!

[237]

It feels like the same discussion is repeating itself after 10-20 pages over and over.

[philipma1957]

pretty pointless discussion going on..
AM will make new price finding auctions as soon as its necessary, the update tells us it is still not.
Also the guess with 30-40$ cost per stick is propably much too high since the blades cost them around 100$ in production. The margin must be somewhat equal or they wouldnt take the hassle. My guess is 5-10$ for a stick.

 so AM sold 1btc blade for 50btc.    and a .3btc stick for 2btc

 this was pushed into divs payout  and divs have been huge.


All I am saying is 3 income sources;

1) blade sales
2)stick sales
3)mining   

AM will not keep 1 and 2 as high as they have been.  3) is kind of fixed in BTC count 22-30% of the hash. So expect an adjustment in divs and in stock price.

[Mausini]

pretty pointless discussion going on..
AM will make new price finding auctions as soon as its necessary, the update tells us it is still not.
Also the guess with 30-40$ cost per stick is propably much too high since the blades cost them around 100$ in production. The margin must be somewhat equal or they wouldnt take the hassle. My guess is 5-10$ for a stick.

 so AM sold 1btc blade for 50btc.    and a .3btc stick for 2btc

 this was pushed into divs payout  and divs have been huge.


All I am saying is 3 income sources;

1) blade sales
2)stick sales
3)mining   

AM will not keep 1 and 2 as high as they have been.  3) is kind of fixed in BTC count 22-30% of the hash. So expect an adjustment in divs and in stock price.

you are ridiculous. get out of here

[VeeMiner]

Has there been any word about the price of blades and/or USBs being reduced? I'm an advocate for selling them at as high a price point as the market allows, even though I'm purchasing them, but with with the recent spike in difficulty it would seem to make sense to consider a price reduction. A definitive yes or no over the next week or two would be great, I can't be the only one hesitating to place more orders due to this uncertainty.

they should be taken off the market for a while and then offered for lower price later as not to piss off the early buyers too much Obviously there is a lot of space for cheaper prices as ASICMINER can produce the blades and USB sticks really cheap.

and yes, this has been discussed before and I'm sure will be discussed again.

[radiumsoup]

Has there been any word about the price of blades and/or USBs being reduced? I'm an advocate for selling them at as high a price point as the market allows, even though I'm purchasing them, but with with the recent spike in difficulty it would seem to make sense to consider a price reduction. A definitive yes or no over the next week or two would be great, I can't be the only one hesitating to place more orders due to this uncertainty.

they should be taken off the market for a while and then offered for lower price later as not to piss off the early buyers too much Obviously there is a lot of space for cheaper prices as ASICMINER can produce the blades and USB sticks really cheap.

and yes, this has been discussed before and I'm sure will be discussed again.

Why bother taking them off the market for any time at all? It's not like the buyers expected the price to stay high forever - every single one of them paid a high premium for immediate delivery while difficulty was (relatively) low compared to other device offerings. All buyers of dedicated single-purpose mining hardware know the hardware is a depreciating asset, it should come as absolutely no surprise to them when the price drops. If people get upset about it, it's their own damned fault for having unrealistic expectations.

[twmz]

No problem learning more and getting less confused with each clarification
In Friedcat's dividend where did that 0.00000001 come from?

Before friedcat sends the dividends transaction, he sends another transaction that is used to identify how many shares each address owns.  If you own 1 share, you get paid 0.00000001.  If you own 5 shares, you get paid 0.0000005.  If you own 2000 shares, you get paid 0.00002000, etc.  Since there are people that do own only 1 share, this transaction always has at least one 0.00000001 payment in it and so it always looks like spam.

Thanks for explaining the client change and hope that algorithm adaption occurs sometime in the near future
Is their any time-frame at this stage on that

Gavin didn't say.

[JSMill]

Why bother taking them off the market for any time at all? It's not like the buyers expected the price to stay high forever - every single one of them paid a high premium for immediate delivery while difficulty was (relatively) low compared to other device offerings. All buyers of dedicated single-purpose mining hardware know the hardware is a depreciating asset, it should come as absolutely no surprise to them when the price drops. If people get upset about it, it's their own damned fault for having unrealistic expectations.

I agree that people should not be upset about the price dropping, but at the same time customers may be hesitant to buy if prices are always dropping (may reduce long term revenues).  I am a fan of keeping the price stable if there is still strong demand as friedcat stated.  

Currently AM still has 0 competition in terms of companies that can reliably ship you an ASIC in a reasonable time frame.  Until BFL and other companies actually do catch up and start shipping in a timely fashion, I don't think AM should react to their pricing.

[JordanL]

Has there been any word about the price of blades and/or USBs being reduced? I'm an advocate for selling them at as high a price point as the market allows, even though I'm purchasing them, but with with the recent spike in difficulty it would seem to make sense to consider a price reduction. A definitive yes or no over the next week or two would be great, I can't be the only one hesitating to place more orders due to this uncertainty.

they should be taken off the market for a while and then offered for lower price later as not to piss off the early buyers too much Obviously there is a lot of space for cheaper prices as ASICMINER can produce the blades and USB sticks really cheap.

and yes, this has been discussed before and I'm sure will be discussed again.

Why bother taking them off the market for any time at all? It's not like the buyers expected the price to stay high forever - every single one of them paid a high premium for immediate delivery while difficulty was (relatively) low compared to other device offerings. All buyers of dedicated single-purpose mining hardware know the hardware is a depreciating asset, it should come as absolutely no surprise to them when the price drops. If people get upset about it, it's their own damned fault for having unrealistic expectations.

I believe he's thinking along the lines of those who would purchase blades days/hours before the price reduction.

An idea: announced, incremental price decreases. Blades mine ~X per hour/day... price of each blade/USB decreases by ~X per hour/day.

Dang I'm a smart one. Sitting around thinking of more work for friedcat.

[binaryFate]

An idea: announced, incremental price decreases. Blades mine ~X per hour/day... price of each blade/USB decreases by ~X per hour/day.

Not a good idea IMHO. I'd find better to offer discounts for large orders, with these offers changing over time. Something along these lines. Little step by little step you can change pricing policy in a more subtle way than just saying "yesterday was 2.5, today is 1.5".

[metavox]

pretty pointless discussion going on..
AM will make new price finding auctions as soon as its necessary, the update tells us it is still not.
Also the guess with 30-40$ cost per stick is propably much too high since the blades cost them around 100$ in production. The margin must be somewhat equal or they wouldnt take the hassle. My guess is 5-10$ for a stick.

 so AM sold 1btc blade for 50btc.    and a .3btc stick for 2btc

 this was pushed into divs payout  and divs have been huge.


All I am saying is 3 income sources;

1) blade sales
2)stick sales
3)mining   

AM will not keep 1 and 2 as high as they have been.  3) is kind of fixed in BTC count 22-30% of the hash. So expect an adjustment in divs and in stock price.

Your basic analysis is correct, but your conclusions assume AM has no gameplan for this scenario.  Any company selling products in a competitive space needs to assume this will happen.  Products sell for premiums when there is minimal competition.  Prices drop to increase sales volume when competition increases and demand lowers.  Margins shrink.  Meanwhile, any responsible company will already have a successor product in the pipeline to bring on the market when the conditions are correct (profit has dropped too far, old inventory has cleared, competitive environment is favorable, etc).  The fact that they sold ~40% of their sticks at top premium price is amazing.  I'm sure they will offer price reduction soon enough to move the rest of the inventory.

At this point, we're looking toward the first conclusion of a product cycle within the ASIC space as competition comes online.  What AM does here is pivotal to investor confidence.  If they have been planning well, we won't see a huge change in business performance.  If they haven't planned for this, we'll see the gap you are predicting.  Place your bets.

[CanadianGuy]

It's obvious the only people who want the price to decrease are the ones WANTING TO BUY SOME at a discount, with little to no interest in friedcats success.   These fools are inexperienced at life and half no idea how supply and demand works.  If he can get away with selling these sticks for 2 bitcoins, he will!  If he could get away with selling them for 5 bitcoins, he would!  Don't kid yourselves, the mining industry isn't as easy to get into as it used to be.  If you want to make easy bitcoins, go roll some satoshidice with your BFL preorders.  Ignorant punks!  lol  

[metavox]

Has there been any word about the price of blades and/or USBs being reduced? I'm an advocate for selling them at as high a price point as the market allows, even though I'm purchasing them, but with with the recent spike in difficulty it would seem to make sense to consider a price reduction. A definitive yes or no over the next week or two would be great, I can't be the only one hesitating to place more orders due to this uncertainty.

they should be taken off the market for a while and then offered for lower price later as not to piss off the early buyers too much Obviously there is a lot of space for cheaper prices as ASICMINER can produce the blades and USB sticks really cheap.

and yes, this has been discussed before and I'm sure will be discussed again.

Why bother taking them off the market for any time at all? It's not like the buyers expected the price to stay high forever - every single one of them paid a high premium for immediate delivery while difficulty was (relatively) low compared to other device offerings. All buyers of dedicated single-purpose mining hardware know the hardware is a depreciating asset, it should come as absolutely no surprise to them when the price drops. If people get upset about it, it's their own damned fault for having unrealistic expectations.

I believe he's thinking along the lines of those who would purchase blades days/hours before the price reduction.

An idea: announced, incremental price decreases. Blades mine ~X per hour/day... price of each blade/USB decreases by ~X per hour/day.

Dang I'm a smart one. Sitting around thinking of more work for friedcat.

Demand drives pricing.  That's it.  If people are buying, and demand is high, you always charge a premium price. Always.  When demand changes, you shift your price *reactively*.  The AM guys are the only ones who know the true demand.  If they feel demand is still high, there is no business motivation to change pricing.  If they feel it is lagging, and if they have a lot more inventory to move, I guarantee that the prices will start to correct downward to compensate.

[sngwinner]

pretty pointless discussion going on..
AM will make new price finding auctions as soon as its necessary, the update tells us it is still not.
Also the guess with 30-40$ cost per stick is propably much too high since the blades cost them around 100$ in production. The margin must be somewhat equal or they wouldnt take the hassle. My guess is 5-10$ for a stick.

 so AM sold 1btc blade for 50btc.    and a .3btc stick for 2btc

 this was pushed into divs payout  and divs have been huge.


All I am saying is 3 income sources;

1) blade sales
2)stick sales
3)mining   

AM will not keep 1 and 2 as high as they have been.  3) is kind of fixed in BTC count 22-30% of the hash. So expect an adjustment in divs and in stock price.

Your basic analysis is correct, but your conclusions assume AM has no gameplan for this scenario.  Any company selling products in a competitive space needs to assume this will happen.  Products sell for premiums when there is minimal competition.  Prices drop to increase sales volume when competition increases and demand lowers.  Margins shrink.  Meanwhile, any responsible company will already have a successor product in the pipeline to bring on the market when the conditions are correct (profit has dropped too far, old inventory has cleared, competitive environment is favorable, etc).  The fact that they sold ~40% of their sticks at top premium price is amazing.  I'm sure they will offer price reduction soon enough to move the rest of the inventory.

At this point, we're looking toward the first conclusion of a product cycle within the ASIC space as competition comes online.  What AM does here is pivotal to investor confidence.  If they have been planning well, we won't see a huge change in business performance.  If they haven't planned for this, we'll see the gap you are predicting.  Place your bets.

I also think the OPs point about the share price dropping is probably not right. The dividends are not going to be this high forever. I think everyone knows this and this is priced into the share price. At the current dividends you have an annual return of something crazy like 52-65%(ball parking). I don't think people are going to be dumping shares in droves because they will only be getting a 25% annual return. Especially when there aren't many actual ways to put saved bitcoins to work. If AM continues to keep their share of the total hash rate constant I don't think the share price will be dropping in any significance.

Huge dividends from hw sales are a nice bonus but a consistent 25% annual return is great compared to most other investment opportunities with your btc.