ASICMINER: Entering the Future of ASIC Mining by Inventing It

[freedomno1]

Confident enough to value a share at 10+ BTC.

10BTC per share sets the market cap of AM at 4 Million BTCs: With 21 Million BTCs ever in circulation, that's pushing it - The most likely option is we ride the bubble-train to those waters, then deflate at some bubble-defining-moment to more reasonable worth. That could be some big name getting in the game. Ask yourself how much you'd be willing to pay for an AM share if you just heard that Intel or AMD had started designing new chips specifically for mining. With the coming divs, remember to keep a cool head.
(Without anyone else in the game and those divs, I'd pay 6BTC. With AMD/Intel/competitor with strong product... 0.5 to 1BTC maybe?)

Excellent observation about the total bitcoins in circulation
When I was thinking that number I measured by Cap but if the market value went up to 10 billion from 1 billion in a years time
The value per bitcoin would be proportionately different and so would the share price per equivalent share in Asicminer would certainly be less than 10 btc as each bitcoin is a lot more valuable.
If AMD/Intel went in I would like to see for myself their chips capabilities before buying, making the firmware is well within their capabilities but of course would need to see how they run.
That said even if AMD/Intel came in I still think Klondike firmware would hold its own by the time they make that choice unless they adopt it themselves but it would be interesting to see how the market reacts to that type of news.
Asicminer would need to adjust its game

Good 2 bits

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[Caser]

Confident enough to value a share at 10+ BTC.

10BTC per share sets the market cap of AM at 4 Million BTCs: With 21 Million BTCs ever in circulation, that's pushing it - The most likely option is we ride the bubble-train to those waters, then deflate at some bubble-defining-moment to more reasonable worth. That could be some big name getting in the game. Ask yourself how much you'd be willing to pay for an AM share if you just heard that Intel or AMD had started designing new chips specifically for mining. With the coming divs, remember to keep a cool head.
(Without anyone else in the game and those divs, I'd pay 6BTC. With AMD/Intel/competitor with strong product... 0.5 to 1BTC maybe?)

You have a point about the potential risks but the number of bitcoins in circulation shouldn't have any bearing on the potential valuation of a company. The total value of an economy isn't just the money in that economy but all of the goods you can buy or trade with it, including financial instruments such as debt. A higher valuation of ASICMINER adds to the total value of the bitcoin economy.

[bobboooiie]

Confident enough to value a share at 10+ BTC.

10BTC per share sets the market cap of AM at 4 Million BTCs: With 21 Million BTCs ever in circulation, that's pushing it - The most likely option is we ride the bubble-train to those waters, then deflate at some bubble-defining-moment to more reasonable worth. That could be some big name getting in the game. Ask yourself how much you'd be willing to pay for an AM share if you just heard that Intel or AMD had started designing new chips specifically for mining. With the coming divs, remember to keep a cool head.
(Without anyone else in the game and those divs, I'd pay 6BTC. With AMD/Intel/competitor with strong product... 0.5 to 1BTC maybe?)

Now you are showcasing your just 2nd grader math skills. Just because some one share would be sold at 10btc/share doesnt matter the next share would be priced the same. All this company is worth SHARES X 1SHAREPRICE is just virtual valuation nothing else

[freedomno1]

Well to clarify

Bitcoin Exchange Rate 90 USD
ASIC 4 BTC
= 360 Value/Share
Market Cap 1 Billion Dollars
http://blockchain.info/charts/market-cap

Valuation can go up
But as measured in bitcoin less than the exchange rate

Example 2
Bitcoin Exchange Rate 180 USD
ASIC 3 BTC
= 540 Value/Share
Market Cap 2 Billion + Some Dollars (Assumes a FV and some more coins created)

Based on unit of measurement
21 Million Bitcoins
+ Growth in Bitcoin Economy market cap

Works the other way too

Example 3
Bitcoin Exchange Rate 50 USD
ASIC 7.2 BTC
Value 360/Share
Market Cap around 600 million

[AMuppInTime]

If AMD/Intel went in I would like to see for myself their chips capabilities before buying, making the firmware is well within their capabilities but of course would need to see how they run.
That said even if AMD/Intel came in I still think Klondike firmware would hold its own by the time they make that choice unless they adopt it themselves but it would be interesting to see how the market reacts to that type of news.
Asicminer would need to adjust its game

I would like to believe AM has a shot, but we're talking David vs. Goliath. It would take a month for either to catch up to AM, then another month to leapfrog over them via the hordes of PHDs on payroll eager to produce new designs and get them produced right away: the meager advantage AM has over Bitcoin chipmakers/miners currently is irrelevant to the mastodons of the real world. Best case they enter the game very late and by then AM has established itself as a viable company (tour de force already - overtaking legal, scaling, R&D...) able to work the niche and maintain some HW resale that chipmakers don't care for, Divs exist but are very small.

You have a point about the potential risks but the number of bitcoins in circulation shouldn't have any bearing on the potential valuation of a company. The total value of an economy isn't just the money in that economy but all of the goods you can buy or trade with it, including financial instruments such as debt. A higher valuation of ASICMINER adds to the total value of the bitcoin economy.

I'm struggling with the concept - if AM's valuation is disconnected from the currency and it's core functionality is the verification of transactions, then how is it different from the Federal Reserve / Quantitative Easing? That would be artificially devaluating the currency.
I can understand the concept but I struggle to imagine it - in my head we're working a zero-sum world, there cannot be more valuation than the total worth of all the currency available.

[canth]

All this concern about AMD/Intel/Nvidia getting in the game is really silly, IMO. The market cap on selling ASIC chips for mining hardware resellers isn't anywhere near interesting enough for these firms to bother putting any R&D into. AM is successful not because of the chips they sell, but because they mine with their own turnkey hardware and sell it at the same time. No existing chip manufacturer is going to try the same business model as AM.

It's the smaller Shenzhen based companies with ASIC manufacturing capabilities that I'd be concerned about. A private firm could try and replicate the AM business model, without any public investments.

[Eric Muyser]

Confident enough to value a share at 10+ BTC.

10BTC per share sets the market cap of AM at 4 Million BTCs: With 21 Million BTCs ever in circulation, that's pushing it - The most likely option is we ride the bubble-train to those waters, then deflate at some bubble-defining-moment to more reasonable worth. That could be some big name getting in the game. Ask yourself how much you'd be willing to pay for an AM share if you just heard that Intel or AMD had started designing new chips specifically for mining. With the coming divs, remember to keep a cool head.
(Without anyone else in the game and those divs, I'd pay 6BTC. With AMD/Intel/competitor with strong product... 0.5 to 1BTC maybe?)

Now you are showcasing your just 2nd grader math skills. Just because some one share would be sold at 10btc/share doesnt matter the next share would be priced the same. All this company is worth SHARES X 1SHAREPRICE is just virtual valuation nothing else

Thank you...

I was just about to say that. Valuation has nothing to do with circulation.

First of all, Friedcat holds half of the shares so technically half of that 400,000 hasn't even touched any BTC in circulation.
Second, many of those shares would have been valued below and leading up to 10 BTC, and you can't just liquidate them all at once at 10 BTC so the hypothetical value is the price the stock was purchased at, which would be far lower than your calculation.
Third, if Friedcat doesn't sell, the amount of BTC in circulation means nothing, because he wouldn't be trying to collect the amount that is in circulation.

If he did then the valuation would go down...

Supply and demand man.

[freedomno1]

If AMD/Intel went in I would like to see for myself their chips capabilities before buying, making the firmware is well within their capabilities but of course would need to see how they run.
That said even if AMD/Intel came in I still think Klondike firmware would hold its own by the time they make that choice unless they adopt it themselves but it would be interesting to see how the market reacts to that type of news.
Asicminer would need to adjust its game

I would like to believe AM has a shot, but we're talking David vs. Goliath. It would take a month for either to catch up to AM, then another month to leapfrog over them via the hordes of PHDs on payroll eager to produce new designs and get them produced right away: the meager advantage AM has over Bitcoin chipmakers/miners currently is irrelevant to the mastodons of the real world. Best case they enter the game very late and by then AM has established itself as a viable company (tour de force already - overtaking legal, scaling, R&D...) able to work the niche and maintain some HW resale that chipmakers don't care for, Divs exist but are very small.

You have a point about the potential risks but the number of bitcoins in circulation shouldn't have any bearing on the potential valuation of a company. The total value of an economy isn't just the money in that economy but all of the goods you can buy or trade with it, including financial instruments such as debt. A higher valuation of ASICMINER adds to the total value of the bitcoin economy.

I'm struggling with the concept - if AM's valuation is disconnected from the currency and it's core functionality is the verification of transactions, then how is it different from the Federal Reserve / Quantitative Easing? That would be artificially devaluating the currency.
I can understand the concept but I struggle to imagine it - in my head we're working a zero-sum world, there cannot be more valuation than the total worth of all the currency available.

First movers do have the advantage but your right in that case it is AM's game to lose of course adaptability is important. But AM does have cheap production in China that said the competition if they were sharks could just outbid their manufacturers and raise their costs till they are unprofitable then it becomes a battle of mobility. The only way to counter that is to own the means of production aka factories by controlling capacity and their supply chain management then they can handle the big dogs instead of being manipulated by their competitors.


Going into economy now he-he
Expanding that into real market economy the variations of exchange demand determine the market price
Basically hoarding is equal to saving and saving will be used to promote growth simply put the economy moves itself based on true profits to be had vs holding
I'll just refer to here explanations are sound
https://en.bitcoin.it/wiki/Deflationary_spiral
https://en.bitcoin.it/wiki/Controlled_supply

Because the monetary base of bitcoins cannot be expanded, the currency would be subject to severe deflation if it becomes widely used. Keynesian economists argue that deflation is bad for an economy because it incentivises individuals and businesses to save money rather than invest in businesses and create jobs.

The Austrian school of thought counters this criticism, claiming that as deflation occurs in all stages of production, entrepreneurs who invest benefit from it. As a result, profit ratios tend to stay the same and only their magnitudes change. In other words, in a deflationary environment, goods and services decrease in price, but at the same time the cost for the production of these goods and services tend to decrease proportionally, effectively not affecting profits. Price deflation encourages an increase in hoarding — hence savings — which in turn tends to lower interest rates and increase the incentive for entrepreneurs to invest in projects of longer term.

Asicminer by distributing its dividends to all shareholders acts as a faucet to the community if I went simple on it of course its more technical than that but one could view it that way.
The magnitude of investment changes but profit is the same people need savings to build a business, and entrepreneurs need capital to start a business hoarding/saving helps to provide the capital to make the real economy grow.
By having a diverse set of shareholders receiving dividends the capital distributes itself efficiently between individuals to promote growth in the economy of bitcoin otherwise it is held.
Whatever makes the most effective profit

Another point of note is that if bitcoin ever gets replaced and another protocol is adopted that uses mining.
ASIC has the ability to build units for their systems and has hard assets to do so.
If I recall correctly though Friedcat said that if they ever do that another company would be created and the risk would be different Asic shareholders would not need to take that risk unless they invested in the new company. Anyways leaves this for discussion

PS: Waits for Divs too he-he

[AMuppInTime]

All this concern about AMD/Intel/Nvidia getting in the game is really silly, IMO. The market cap on selling ASIC chips for mining hardware resellers isn't anywhere near interesting enough for these firms to bother putting any R&D into. AM is successful not because of the chips they sell, but because they mine with their own turnkey hardware and sell it at the same time. No existing chip manufacturer is going to try the same business model as AM.

It's the smaller Shenzhen based companies with ASIC manufacturing capabilities that I'd be concerned about. A private firm could try and replicate the AM business model, without any public investments.

You're right and I'm looking forward to divs. However too many folks appear lost in dreamworld in anticipation of "where AM is going" and I'm thinking out loud.  

[hamiltino]

Confident enough to value a share at 10+ BTC.

10BTC per share sets the market cap of AM at 4 Million BTCs: With 21 Million BTCs ever in circulation, that's pushing it - The most likely option is we ride the bubble-train to those waters, then deflate at some bubble-defining-moment to more reasonable worth. That could be some big name getting in the game. Ask yourself how much you'd be willing to pay for an AM share if you just heard that Intel or AMD had started designing new chips specifically for mining. With the coming divs, remember to keep a cool head.
(Without anyone else in the game and those divs, I'd pay 6BTC. With AMD/Intel/competitor with strong product... 0.5 to 1BTC maybe?)

Now you are showcasing your just 2nd grader math skills. Just because some one share would be sold at 10btc/share doesnt matter the next share would be priced the same. All this company is worth SHARES X 1SHAREPRICE is just virtual valuation nothing else

Of-course 4 Million BTC valuation only has meaning if all shares are selling and buying @ 10BTC at the same time. But it does give some indication how long a 10BTC price point can be sustained.

[Eric Muyser]

I'd sell before 10BTC that's for sure

I said I would sell at 5 BTC, but in that time things have changed and I've grown to have a, while biased and speculative, belief that this company will surely surpass 5 BTC without being overvalued or inflated. They are the only ASIC company I could rely on now, and the other "competitors" to emerge have yet to prove themselves. As far as financials go, AM is top notch and gone unstopped will see a much higher valuation. I feel we will hover below 10 BTC in the hopes a competitor proves themselves worthy (we don't want a monopoly and we want cheaper better ASICs), and if they do not, 10 BTC cannot be stopped. Being that things move so fast in Bitcoin world, I suspect this will be around January.

I feel Bitcoin swinging too low, or too high, can (but may not) cause a crash in AM. Think about whales wanting to cash out their BTC if it hits 200+ again. These whales may be invested in AM.

[Rival]

I'd sell before 10BTC that's for sure

I feel Bitcoin swinging too low, or too high, can (but may not) cause a crash in AM. Think about whales wanting to cash out their BTC if it hits 200+ again. These whales may be invested in AM.

In a year's time anyone holding 5 shares may be a whale. Buy and hold investor dynamics are often counter-intuitive. One would think that as it becomes accepted as a smart investment, investors would accumulate larger and larger positions. While this is true to a certain degree, history shows that the opposite trend occurs. As prices increase, "whales" tend to sell fractions of their holdings, taking profits off of the table. The average size of holdings decreases dramatically, and the number of shareholders increases in proportion. If one would assume that today that the average shareholder had 100 shares (just a number I picked out of a hat) and there were 500 total shareholders, one would expect in an environment of increasing valuations that at some point the average shareholder would have 10 shares, spread more or less across 5000 shareholders. Each day that goes by the effect of whales cashing out becomes smaller and smaller, until it becomes almost negligible, as each whale becomes a smaller and smaller percentage of total shares.

We are still at the point where whale sales can disrupt share prices substantially. I do not expect that will be a danger in the future if historic trends hold.

[Eric Muyser]

I'd sell before 10BTC that's for sure

I feel Bitcoin swinging too low, or too high, can (but may not) cause a crash in AM. Think about whales wanting to cash out their BTC if it hits 200+ again. These whales may be invested in AM.

In a year's time anyone holding 5 shares may be a whale. Buy and hold investor dynamics are often counter-intuitive. One would think that as it becomes accepted as a smart investment, investors would accumulate larger and larger positions. While this is true to a certain degree, history shows that the opposite trend occurs. As prices increase, "whales" tend to sell fractions of their holdings, taking profits off of the table. The average size of holdings decreases dramatically, and the number of shareholders increases in proportion. If one would assume that today that the average shareholder had 100 shares (just a number I picked out of a hat) and there were 500 total shareholders, one would expect in an environment of increasing valuations that at some point the average shareholder would have 10 shares, spread more or less across 5000 shareholders. Each day that goes by the effect of whales cashing out becomes smaller and smaller, until it becomes almost negligible, as each whale becomes a smaller and smaller percentage of total shares.

We are still at the point where whale sales can disrupt share prices substantially. I do not expect that will be a danger in the future if historic trends hold.

It's a good observation but don't you think 1 year is a bit quick? Bitcoin moves fast, but not that fast?

I don't expect to see that affect fully unfold for dozens of years, and the current AM whales are quite huge (ocean sized whales).

[Rival]

I'd sell before 10BTC that's for sure

I feel Bitcoin swinging too low, or too high, can (but may not) cause a crash in AM. Think about whales wanting to cash out their BTC if it hits 200+ again. These whales may be invested in AM.

In a year's time anyone holding 5 shares may be a whale. Buy and hold investor dynamics are often counter-intuitive. One would think that as it becomes accepted as a smart investment, investors would accumulate larger and larger positions. While this is true to a certain degree, history shows that the opposite trend occurs. As prices increase, "whales" tend to sell fractions of their holdings, taking profits off of the table. The average size of holdings decreases dramatically, and the number of shareholders increases in proportion. If one would assume that today that the average shareholder had 100 shares (just a number I picked out of a hat) and there were 500 total shareholders, one would expect in an environment of increasing valuations that at some point the average shareholder would have 10 shares, spread more or less across 5000 shareholders. Each day that goes by the effect of whales cashing out becomes smaller and smaller, until it becomes almost negligible, as each whale becomes a smaller and smaller percentage of total shares.

We are still at the point where whale sales can disrupt share prices substantially. I do not expect that will be a danger in the future if historic trends hold.

It's a good observation but don't you think 1 year is a bit quick? Bitcoin moves fast, but not that fast?

I don't expect to see that affect fully unfold for dozens of years, and the current AM whales are quite huge (ocean sized whales).

"A week in bitcoins is like a year on Wall Street."

[arklan]

this just leaves me cursing, yet again, that i HAD 5 shares, which i sold before the whole GLBSE thing collapsed... now i just have 1, and not remotely enough btc to buy more.

[stslimited]

10 BTC would put ASICMiner yield at more relatable levels. the market cap on the other hand might not make sense

for their hardware sales, they will need to get their die process to smaller nanometers

[empoweoqwj]

10 BTC would put ASICMiner yield at more relatable levels. the market cap on the other hand might not make sense

for their hardware sales, they will need to get their die process to smaller nanometers

And what makes u think if others can do 65nm or 28nm then AM can't? I believe they can, and they will when the time is right. But their genius lies in knowing that this market is 100% about what you can deliver now, not promise to deliver some point in the future.

Actions speak louder than words. With bitcoin mining, words are almost irrelevant. Which is why we are all happy friedcat says so few 

[arklan]

10 BTC would put ASICMiner yield at more relatable levels. the market cap on the other hand might not make sense

for their hardware sales, they will need to get their die process to smaller nanometers

And what makes u think if others can do 65nm or 28nm then AM can't? I believe they can, and they will when the time is right. But their genius lies in knowing that this market is 100% about what you can deliver now, not promise to deliver some point in the future.

Actions speak louder than words. With bitcoin mining, words are almost irrelevant. Which is why we are all happy friedcat says so few 

we alreayd know that AM is working on second generation chips. safe to assume they're a smaller NM.

[aahzmundus]

this just leaves me cursing, yet again, that i HAD 5 shares, which i sold before the whole GLBSE thing collapsed... now i just have 1, and not remotely enough btc to buy more.

ARKLAN!!!  I swear... >50% of your posts are complaining about how few BTC/AM shares you hold.  JUST CHANGE that fact.  How many USB miners are you mining with?  With how many I think you still having mining away for you you should have gotten enough btc to buy a share... at least one.  Hell, if you cant buy a full share just buy a TAT share!  If you cant afford a single tat share... just drink a water instead of a coffie/soda next time you get a drink.  BAM enough money to buy 1 TAT share.

tl;dr Arklan, STOP complaining about how little you hold, and DO SOMETHING about it.

[arklan]

this just leaves me cursing, yet again, that i HAD 5 shares, which i sold before the whole GLBSE thing collapsed... now i just have 1, and not remotely enough btc to buy more.

ARKLAN!!!  I swear... >50% of your posts are complaining about how few BTC/AM shares you hold.  JUST CHANGE that fact.  How many USB miners are you mining with?  With how many I think you still having mining away for you you should have gotten enough btc to buy a share... at least one.  Hell, if you cant buy a full share just buy a TAT share!  If you cant afford a single tat share... just drink a water instead of a coffie/soda next time you get a drink.  BAM enough money to buy 1 TAT share.

tl;dr Arklan, STOP complaining about how little you hold, and DO SOMETHING about it.

fair point. i can afford tat shares... and yea, i'm mining a fair amount - but been using it for other things. so, my own fault of course.