ASICMINER: Entering the Future of ASIC Mining by Inventing It

[stslimited]

...
ASICMiner plans to increase its hashing capabilities by a large factor putting it closer to 33% or 40% of the hash rate, and this is not currently priced in to the stock price.
...

Imho this would be a very bad move, even 25% could be considered a threat to the system as they could potentially hold enough hardware in stock to exceed half the network capacity and at 40% they would almost certainly be capable of that. It might be good for dividends but it would be a potential threat and so devalue Bitcoin.

ASICMINER never said they plan to grab 33-40% of the network, afaik.

My guess is that their goal is to maintain the equivalent of < 50% of the network if you were to remove the largest mining pool.

they plan on adding X hundred terahashes, thats all I currently know

[1715267011]

1715267011

[1715267011]

1715267011

[1715267011]

1715267011

[1715267011]

1715267011

[nubbins]

Also, why is anyone selling shares under 3BTC? i just can't grasp it.

Because they watched BTC fall from $290 to $100 several weeks ago, and don't want to get caught holding the bag again.

BTC/USD has never been that high, it was $256, for a moment, 2 months ago.

Consider my statement suitably modified. People are selling because they think the price will fall.

[HeRetiK]

they plan on adding X hundred terahashes, thats all I currently know

They aim for about 280TH by September. If that equates to 24% of the network by then is a different question. Given the recent influx of new Asic projects it might be much less than that. If they all pull an BFL however, well, good for Asicminer Interesting times, let's see what happens!

[stripykitteh]

feel free to repost, and discuss this pricing analysis. This analysis does not include possible negative factors yet based on available information, this analysis does not see those negative factors rationalizing the share price being 1/3rd of the value computed above.

With respect, I think your assertion that a mining asset's value should correlate to its share of the network multiplied by the market cap of Bitcoin is wrong. The long term value from mining will be income from processing transactions. If the volume of transactions per unit of time doubled and the value of fees per unit of time doubled that would double the return from mining (making a mining asset twice as valuable). However the number of Bitcoins in circulation wouldn't change.

[ianp]

they plan on adding X hundred terahashes, thats all I currently know

They aim for about 280TH by September. If that equates to 24% of the network by then is a different question. Given the recent influx of new Asic projects it might be much less than that. If they all pull an BFL however, well, good for Asicminer Interesting times, let's see what happens!

If the current difficulty increase trend holds true until September, ASICMINER will need 519% more hashing power than they have today to maintain the current 24%. In other words, they'll need to increase their hashing power from 33.13 th/s to 171.94 th/s.

Whoops -- math was wrong. I should say October rather than September.

Edit #2 -- and three months after that, it will require 17 times today's hashing power to maintain the same ratio.  2.281 ph/s

[ning]

Also, why is anyone selling shares under 3BTC? i just can't grasp it.

Because they watched BTC fall from $290 to $100 several weeks ago, and don't want to get caught holding the bag again.

BTC/USD has never been that high, it was $256, for a moment, 2 months ago.

It was once $266.

[ThickAsThieves]

Also, why is anyone selling shares under 3BTC? i just can't grasp it.

Because they watched BTC fall from $290 to $100 several weeks ago, and don't want to get caught holding the bag again.

BTC/USD has never been that high, it was $256, for a moment, 2 months ago.

It was once $266.

Indeed! I sit corrected.

[ning]

The era of peta H/s is approaching.

[JordanL]

Also, why is anyone selling shares under 3BTC? i just can't grasp it.

Because they watched BTC fall from $290 to $100 several weeks ago, and don't want to get caught holding the bag again.

BTC/USD has never been that high, it was $256, for a moment, 2 months ago.

It was once $266.

Stop reminding those of use who were waiting for $300 to sell.   

[radiumsoup]

IMHO what you are describing here is exactly one of the problems we have with the current system... creating value out of thin air. A bit of overevaluation is fine, because in the end some companies will succeed, some will fail and we're somewhat even. A classic zero-sum game. An excess of overevaluation however leads to bubbles leads to disasters.

Either way, I'd be very careful in comparing Fiat based enterprises with Bitcoin operations. Right now $413 billion are 34.7% of all USD outstanding, but given inflation it won't stay that way. The volume might increase, but it's always a run from inflation. With Bitcoin however, there's a point where it will stop. Right now there's new coins coming in, but come 50-100 years and there will be 21,000,000 BTC. End. Who knows how many USD will be out there by then? They will just keep coming and coming...

Um... bitcoin is the very definition of value out of thin air. It can't be used for ANYTHING else other than trade. It can't be used in manufacturing like gold/silver/etc, it can't be made into jewelry like diamonds... it's a straight up thin air value placeholder. The original comparison was valid, and it's perfectly OK for market cap to be greater than available currency, because market cap represents the sum of what investors were willing to value shares (note - this is not the same as paying for shares, since not all shares were purchased at today's prices) up through today for returns in the future. Even if we suddenly rewrote the rules and made it so that mining never generated another bitcoin today, the companies that continue to provide profit to investors will trade at more than the profit they generate because investors see the value in future returns. See: P/E ratios. The economic mechanisms at work in open markets still work with bitcoin the same as fiat, and that's OK - the main difference between fiat and bitcoin is that fiat can be printed to the extent that a single unit can be practically worthless (inflationary) while bitcoin cannot, but it can be lost (deflationary).

[Eric Muyser]

Here's why I think we're headed to 3.5:

1) The most important reason is during the first BTC crash to 100, many people sold AM down to 2.25 so they could get their BTC out into fiat. Many people (some new) were waiting for just that opportunity. AM quickly recovered even with BTC below 100. I think the reason we have seen it rally now is being some people have regret that decision and have been making their way back in. I figure a lot are still holding fiat because BTC is bearish and are waiting for a bottom below the 90s. If BTC recovers, and that's an if, then these people will dive back into AM.
2) I see being are that the walls are broken down at 2.5, giving us a solid base of new comers at 2.5, and 3.0 isn't quite profitable enough to cause much selling off (0.5 profit when you're expecting more, you hold).
3) The way AM is going, even with an average dividend of 0.02 (we've been seeing 0.03+ recently), then the yearly earning on 1 share at 3.5 BTC is 1.04 BTC, which is 29.7% APR. I think 25-30% APR is the right amount of interest for a people to get in on a venture like this.
4) AM is advertising, bringing in people who hadn't considered or overlooked AM for a while (as shown by recent posts).
5) AM CEO, friedcat, is doing everything right, and following through. Under-promising and over-delivering.
6) Higher hashrate per share.

Note: if AM sold out of blades already, and I suspect may have utilized them to match incoming hashrate (BFL), then the dividend may be around 0.02. Based on the yearly average that is still damn fine, but lower than last week. Since people are barely selling and realize the value of AM now, I don't suspect a sell-off just because of a dividend that's smaller but still significant. 

I'm all in on AM, so that makes it easy for me to assess an opinion in this way.

[velacreations]

Here's why I think we're headed to 3.5:

1) The most important reason is during the first BTC crash to 100, many people sold AM down to 2.25 so they could get their BTC out into fiat. Many people (some new) were waiting for just that opportunity. AM quickly recovered even with BTC below 100. I think the reason we have seen it rally now is being some people have regret that decision and have been making their way back in. I figure a lot are still holding fiat because BTC is bearish and are waiting for a bottom below the 90s.
2) I see being are that the walls are broken down at 2.5, giving us a solid base of new comers at 2.5, and 3.0 isn't quite profitable enough to cause much selling off (0.5 profit when you're expecting more, you hold).
3) The way AM is going, even with an average dividend of 0.02 (we've been seeing 0.03+ recently), then the yearly earning on 1 share at 3.5 BTC is 1.04 BTC, which is 29.7% APR. I think 25-30% APR is the right amount of interest for a people to get in on a venture like this.
4) AM is advertising, bringing in people who hadn't considered or overlooked AM for a while (as shown by recent posts).
5) AM CEO, friedcat, is doing everything right, and following through. Under-promising and over-delivering.

I'm all in on AM, so that makes it easy for me to assess an opinion in this way.

I agree with all of your points, but what makes me nervous is the speed at which the share price is rising.  It feels a bit like a bubble.  People are excited, I get that, the sell walls are gone, etc, etc, lots of reasons for the price to go up.  But, what are the reasons for the price to jump from 2.5 to 2.9 in a day?  Is it real value or speculation?

I just hope the new guys don't freak on Weds when the dividend will be considerably lower than last week.

That being said, I'm all in, too, and I believe in AM.  But, I won't be buying at 3 right now, and to be honest, anything above ~2.6 seems too high for me, right now.

[Birdy]

I have sold two shares, when BTC started to crash again hoping that shares would dip down a second time.
Seems like people have learned this time and it isn't happening again.

(Still got shares left, so it's not too bad.)

[Eric Muyser]

I have sold two shares, when BTC started to crash again hoping that shares would dip down a second time.
Seems like people have learned this time and it isn't happening again.

(Still got shares left, so it's not too bad.)

Yah I did too. Thought it would be an easy flip, selling right before BTC crashed, and ended up eating a "loss" when there was literally ZERO sells into the bids. No one wants to let it go for less than the asking price.

East coast already woke up and BTC went to 98 and AM went to 2.7 briefly then back up to 2.89 (wall). Probably sold into the bids THEN read up. AM is very resilient and persistent right now. We just need more BTCs to make their way back from the exchanges.

[CanadianGuy]

Here's why I think we're headed to 3.5:

1) The most important reason is during the first BTC crash to 100, many people sold AM down to 2.25 so they could get their BTC out into fiat. Many people (some new) were waiting for just that opportunity. AM quickly recovered even with BTC below 100. I think the reason we have seen it rally now is being some people have regret that decision and have been making their way back in. I figure a lot are still holding fiat because BTC is bearish and are waiting for a bottom below the 90s.
2) I see being are that the walls are broken down at 2.5, giving us a solid base of new comers at 2.5, and 3.0 isn't quite profitable enough to cause much selling off (0.5 profit when you're expecting more, you hold).
3) The way AM is going, even with an average dividend of 0.02 (we've been seeing 0.03+ recently), then the yearly earning on 1 share at 3.5 BTC is 1.04 BTC, which is 29.7% APR. I think 25-30% APR is the right amount of interest for a people to get in on a venture like this.
4) AM is advertising, bringing in people who hadn't considered or overlooked AM for a while (as shown by recent posts).
5) AM CEO, friedcat, is doing everything right, and following through. Under-promising and over-delivering.

I'm all in on AM, so that makes it easy for me to assess an opinion in this way.

I agree with all of your points, but what makes me nervous is the speed at which the share price is rising.  It feels a bit like a bubble.  People are excited, I get that, the sell walls are gone, etc, etc, lots of reasons for the price to go up.  But, what are the reasons for the price to jump from 2.5 to 2.9 in a day?  Is it real value or speculation?

I just hope the new guys don't freak on Weds when the dividend will be considerably lower than last week.

That being said, I'm all in, too, and I believe in AM.  But, I won't be buying at 3 right now, and to be honest, anything above ~2.6 seems too high for me, right now.

Friedcats post regarding better eruptor blades by late june or july could have had something to do with the constant price rise.

[stripykitteh]

I just hope the new guys don't freak on Weds when the dividend will be considerably lower than last week.

I hope the new guys do freak because I like to buy things that are undervalued. I've increased my share holding by 8.19% in 6 weeks only by reinvesting dividends at the market price and I'd like to keep on getting away with it forever.

[aahzmundus]

I just hope the new guys don't freak on Weds when the dividend will be considerably lower than last week.

I hope the new guys do freak because I like to buy things that are undervalued. I've increased my share holding by 8.19% in 6 weeks only by reinvesting dividends at the market price and I'd like to keep on getting away with it forever.

I think this is also a significant cause for the price to go up... I dedicate over half my divs to purchasing more shares... no matter what the price at the time on Wednesday.  I imagine many other people are like me.  So even if no one new got into ASICminer the price would go up... and we know we have new blood entering.

[Franktank]

It is very possible that there will be people that get their hands on the redesigned Block Eruptor blade before some people get their Avalon batch 3? And let's not get started with BFL...

[HeRetiK]

IMHO what you are describing here is exactly one of the problems we have with the current system... creating value out of thin air. A bit of overevaluation is fine, because in the end some companies will succeed, some will fail and we're somewhat even. A classic zero-sum game. An excess of overevaluation however leads to bubbles leads to disasters.

Either way, I'd be very careful in comparing Fiat based enterprises with Bitcoin operations. Right now $413 billion are 34.7% of all USD outstanding, but given inflation it won't stay that way. The volume might increase, but it's always a run from inflation. With Bitcoin however, there's a point where it will stop. Right now there's new coins coming in, but come 50-100 years and there will be 21,000,000 BTC. End. Who knows how many USD will be out there by then? They will just keep coming and coming...

Um... bitcoin is the very definition of value out of thin air. It can't be used for ANYTHING else other than trade. It can't be used in manufacturing like gold/silver/etc, it can't be made into jewelry like diamonds... it's a straight up thin air value placeholder. The original comparison was valid, and it's perfectly OK for market cap to be greater than available currency, because market cap represents the sum of what investors were willing to value shares (note - this is not the same as paying for shares, since not all shares were purchased at today's prices) up through today for returns in the future. Even if we suddenly rewrote the rules and made it so that mining never generated another bitcoin today, the companies that continue to provide profit to investors will trade at more than the profit they generate because investors see the value in future returns. See: P/E ratios. The economic mechanisms at work in open markets still work with bitcoin the same as fiat, and that's OK - the main difference between fiat and bitcoin is that fiat can be printed to the extent that a single unit can be practically worthless (inflationary) while bitcoin cannot, but it can be lost (deflationary).

I wasn't talking about gold/silver/etc though, but USD. What other use has the Dollar other than trading?

It's true that it's OK for the market cap to be greater than available currency, I just don't think that it's healthy. It's of course also true that future returns are part of the value.

However I think that the question of the market cap of an enterprise / operation is inherently different in an inflationary system (ie. USD) then in a deflationary market (ie. Bitcoin). For example a sum of TWO TRILLION DOLLAR (cue Dr. Evil) is more USD than exist today, but might very well exist in 50 years and therefore be at least hypothetically transferred. A sum of 30 MILLION BITCOINS however, will always remain a fantasy. Therefore these market caps have to be viewed differently. Just my two dutch tulips.

[tinus42]

I hope the new guys do freak because I like to buy things that are undervalued. I've increased my share holding by 8.19% in 6 weeks only by reinvesting dividends at the market price and I'd like to keep on getting away with it forever.

I do the same, the divs from my direct share go to an offline secure wallet, the divs from my 85 Havelock TAT.AM shares are reinvested. Wish I could afford to buy moar right now but alas, I'm quite happy with what I have already.