ASICMINER: Entering the Future of ASIC Mining by Inventing It

[aahzmundus]

The value of ASICMiner:

The value of ASICMiner depends on the total profit it can generate. Let's do some math.
Total bitcoins to be mined: 9,600k
ASICMiner takes 20% of total hash power. This will generate 1,920k.
Assuming hardware sale income is 30% of mining profit, so this part is 576k.
(1920k+576k)/400k=6.24B/share
This is the total profit one can expect for 1 share of ASICMiner in the next 20 years.

value of 1 share of ASICMiner = share price + dividend = 6.24

How will the 6.24B be distributed between share price and dividend? Well, this depends on the investors' emotion and their view of the risk of future income. The gap between 6.24 and share price is risk compensation.
IMO, the share price will fluctuate between 3.x and 4.x in the future. 5+ price is too risky.

My 2 Satoshi.

Transaction Fees.

[msm595]

The value of ASICMiner:

The value of ASICMiner depends on the total profit it can generate. Let's do some math.
Total bitcoins to be mined: 9,600k
ASICMiner takes 20% of total hash power. This will generate 1,920k.
Assuming hardware sale income is 30% of mining profit, so this part is 576k.
(1920k+576k)/400k=6.24B/share
This is the total profit one can expect for 1 share of ASICMiner in the next 20 years.

value of 1 share of ASICMiner = share price + dividend = 6.24

How will the 6.24B be distributed between share price and dividend? Well, this depends on the investors' emotion and their view of the risk of future income. The gap between 6.24 and share price is risk compensation.
IMO, the share price will fluctuate between 3.x and 4.x in the future. 5+ price is too risky.

My 2 Satoshi.

You forget the ever-important hardware sales. ASICminer is, first and fore-most, a hardware company.

[huhai0978]

The value of ASICMiner:

The value of ASICMiner depends on the total profit it can generate. Let's do some math.
Total bitcoins to be mined: 9,600k
ASICMiner takes 20% of total hash power. This will generate 1,920k.
Assuming hardware sale income is 30% of mining profit, so this part is 576k.
(1920k+576k)/400k=6.24B/share
This is the total profit one can expect for 1 share of ASICMiner in the next 20 years.

value of 1 share of ASICMiner = share price + dividend = 6.24

How will the 6.24B be distributed between share price and dividend? Well, this depends on the investors' emotion and their view of the risk of future income. The gap between 6.24 and share price is risk compensation.
IMO, the share price will fluctuate between 3.x and 4.x in the future. 5+ price is too risky.

My 2 Satoshi.

You forget the ever-important hardware sales. ASICminer is, first and fore-most, a hardware company.

Hardware sales are included. So far less than 30% of mining income.

[huhai0978]

The value of ASICMiner:

The value of ASICMiner depends on the total profit it can generate. Let's do some math.
Total bitcoins to be mined: 9,600k
ASICMiner takes 20% of total hash power. This will generate 1,920k.
Assuming hardware sale income is 30% of mining profit, so this part is 576k.
(1920k+576k)/400k=6.24B/share
This is the total profit one can expect for 1 share of ASICMiner in the next 20 years.

value of 1 share of ASICMiner = share price + dividend = 6.24

How will the 6.24B be distributed between share price and dividend? Well, this depends on the investors' emotion and their view of the risk of future income. The gap between 6.24 and share price is risk compensation.
IMO, the share price will fluctuate between 3.x and 4.x in the future. 5+ price is too risky.

My 2 Satoshi.

Transaction Fees.

TX fee is negligible. Note, there is also cost of running a company,electricity, chip design, manufacture,etc.
TX fee encourages hoarding, punishes spending, which is bad.

[vlaoou321]

ASICMINER Weekly Write-up 07/03/2013

Dividend: BTC0.02297025
Previous 5wk Avg: BTC0.0269764
Previous All Time Avg: BTC0.01655679625

Hashrate estimate: 29.46TH/s
Network percentage: 15.3%

Share Price: BTC4.77
7day low: BTC3.266
7day High: BTC5.17

Friedcat Updates:
No posts from Friedcat save for 3 confirmations on the number of shares held by specific individuals.

Noteworthy Information:

• Rockxie, the distributor of ASICMINER products in China "leaked" some new information - Presentation - Translation
• Jutarul, a large holder of ASICMINER shares, held a public fixed price auction of 1,000 shares at BTC4.5 - Auction Post
• Rival posted some thoughts on the position and future of ASICMINER - Post

(http://www.asicminercharts.com/)


(http://runeks.dk/bitcoin/)

For more information on ASICMINER please visit https://asicminer.info/

Please send any comments, corrections, additions or suggestions to Aahzmundus.

Was this information valuable?  Consider leaving a tip at: 1AahzKNU7NgNJyQPx7BJDLSiFRhgSA2P7c

THANK YOU!

[bigbeninlondon]

Here's my thoughts.  If ASICminer retains X% of the mining network, then he will maintain X% of the reward.  Rival made some points about increasing your competitors so you can gain more market share.  But if the network increased by Y, then ASICminer needs to increase their hashing power by Y * X% to maintain X%.  This is just to stay even in the mining realm.

In fact, the only way ASICminer can increase their dividends is to sell hardware.  If they increase their network percentage, they risk pushing the value down.  They can't increase their dividends by mining, since they've capped themselves at the max % of network rewards they can make without causing a 51% scare.  Which makes me think they will be increasingly present in the mining hardware market.

[AMuppInTime]

The value of ASICMiner:

The value of ASICMiner depends on the total profit it can generate. Let's do some math.
Total bitcoins to be mined: 9,600k
ASICMiner takes 20% of total hash power. This will generate 1,920k.
Assuming hardware sale income is 30% of mining profit, so this part is 576k.
(1920k+576k)/400k=6.24B/share
This is the total profit one can expect for 1 share of ASICMiner in the next 20 years.

value of 1 share of ASICMiner = share price + dividend = 6.24

How will the 6.24B be distributed between share price and dividend? Well, this depends on the investors' emotion and their view of the risk of future income. The gap between 6.24 and share price is risk compensation.
IMO, the share price will fluctuate between 3.x and 4.x in the future. 5+ price is too risky.

My 2 Satoshi.

Transaction Fees.

TX fee is negligible. Note, there is also cost of running a company,electricity, chip design, manufacture,etc.
TX fee encourages hoarding, punishes spending, which is bad.

1) in your own #s, then at the current price of 4.7BTC AM is still undervalued if it will generate 6.4BTC.
2) If you apply that type of reasoning to real life companies then you would rarely invest - APPL was likely never going to survive the 90s because its stock was overpriced right?
3) Buying AM is believing friedcat & Co. can do more with BTCs than you can. They might open new services or create new income streams (meanwhile reducing income seem unlikely.)
4) Txs, Txs Txs. By the time all Bitcoins have been mined, the transaction fees will make it worthwhile for the miners (Satoshi's white paper)

[nubbins]

4) Txs, Txs Txs. By the time all Bitcoins have been mined, the transaction fees will make it worthwhile for the miners (Satoshi's white paper)

I don't think you even need to look that far ahead. If Tx fees haven't reached BTC12.5 per block by the time the reward halves again, BTC is probably dead in the water.

[tinus42]

1) in your own #s, then at the current price of 4.7BTC AM is still undervalued if it will generate 6.4BTC.
2) If you apply that type of reasoning to real life companies then you would rarely invest - APPL was likely never going to survive the 90s because its stock was overpriced right?
3) Buying AM is believing friedcat & Co. can do more with BTCs than you can. They might open new services or create new income streams (meanwhile reducing income seem unlikely.)
4) Txs, Txs Txs. By the time all Bitcoins have been mined, the transaction fees will make it worthwhile for the miners (Satoshi's white paper)

True, AM shareholders also have a stake in Bitfountain, the mother company.

To be more detailed, ASICMINER has 200,000 shares in total. Each share gets
1/400,000 of the voting power of, and the regular dividends from, the Bitfountain
IC company registered in China.

http://asicminer.info/asicminer-official-update-august-09-2012-original-post/

AM shareholders even have extra privileges compared to regular Bitfountain shareholders:

Q: Why don't you use Bitfountain for your GLBSE ticker?
A: Because the ASICMINER shareholders (GLBSE investors) have an extra set of privileges upon Bitfountain shareholder (us).

http://bitcointalk.org/index.php?topic=99497.msg1088045#msg1088045

[superduh]

4) Txs, Txs Txs. By the time all Bitcoins have been mined, the transaction fees will make it worthwhile for the miners (Satoshi's white paper)

I don't think you even need to look that far ahead. If Tx fees haven't reached BTC12.5 per block by the time the reward halves again, BTC is probably dead in the water.

what are you talkingggg about?! that will actually be a really good thing. tx fees will be negligible PER transaction but if a block has 5000 transactions and packs a nice neglible fee per amount of bitcoins sold it PROVES that bitcoin works well. and keep in mind if bitcoins are worth a lot of money than even 5 bitcoins per block could be worth thousands

[Luckybit]

4) Txs, Txs Txs. By the time all Bitcoins have been mined, the transaction fees will make it worthwhile for the miners (Satoshi's white paper)

I don't think you even need to look that far ahead. If Tx fees haven't reached BTC12.5 per block by the time the reward halves again, BTC is probably dead in the water.

what are you talkingggg about?! that will actually be a really good thing. tx fees will be negligible PER transaction but if a block has 5000 transactions and packs a nice neglible fee per amount of bitcoins sold it PROVES that bitcoin works well. and keep in mind if bitcoins are worth a lot of money than even 5 bitcoins per block could be worth thousands

Thousands might not mean as much when mining equipment costs tens of thousands.

[TsuyokuNaritai]

I wonder why Friedcat still hasn't announced to his loyal shareholders yet some things he announced days ago in Shanghai.

[superduh]

4) Txs, Txs Txs. By the time all Bitcoins have been mined, the transaction fees will make it worthwhile for the miners (Satoshi's white paper)

I don't think you even need to look that far ahead. If Tx fees haven't reached BTC12.5 per block by the time the reward halves again, BTC is probably dead in the water.

what are you talkingggg about?! that will actually be a really good thing. tx fees will be negligible PER transaction but if a block has 5000 transactions and packs a nice neglible fee per amount of bitcoins sold it PROVES that bitcoin works well. and keep in mind if bitcoins are worth a lot of money than even 5 bitcoins per block could be worth thousands

Thousands might not mean as much when mining equipment costs tens of thousands.

by that time, mining equipment will be much more efficient and cost less too and friedcat will have solar panels powering his operation

[nubbins]

I don't think you even need to look that far ahead. If Tx fees haven't reached BTC12.5 per block by the time the reward halves again, BTC is probably dead in the water.

what are you talkingggg about?! that will actually be a really good thing. tx fees will be negligible PER transaction but if a block has 5000 transactions and packs a nice neglible fee per amount of bitcoins sold it PROVES that bitcoin works well. and keep in mind if bitcoins are worth a lot of money than even 5 bitcoins per block could be worth thousands

I'm not sure you understood me correctly. I think it would be a good thing as well. Your bolded statement is exactly my reasoning behind my bolded statement.

Put another way, within the next four years you will see one of two scenarios: (1) Tx fees will be very, very important, or (2) Bitcoin is doomed to die the slow death of flowers in a vase.

[Vycid]

The value of ASICMiner:

The value of ASICMiner depends on the total profit it can generate. Let's do some math.
Total bitcoins to be mined: 9,600k
ASICMiner takes 20% of total hash power. This will generate 1,920k.
Assuming hardware sale income is 30% of mining profit, so this part is 576k.
(1920k+576k)/400k=6.24B/share
This is the total profit one can expect for 1 share of ASICMiner in the next 20 years.

value of 1 share of ASICMiner = share price + dividend = 6.24

How will the 6.24B be distributed between share price and dividend? Well, this depends on the investors' emotion and their view of the risk of future income. The gap between 6.24 and share price is risk compensation.
IMO, the share price will fluctuate between 3.x and 4.x in the future. 5+ price is too risky.

My 2 Satoshi.

Transaction Fees.

TX fee is negligible. Note, there is also cost of running a company,electricity, chip design, manufacture,etc.
TX fee encourages hoarding, punishes spending, which is bad.

This computation is incorrect. The block reward is going to halve again in ~3.5 years.

Also, assuming that AM will have 20% of net mining income as profit, in perpetuity is unreasonable. They can get 20% profit easily right now, because the hardware and electricity cost is small compared to the value of the BTC mined; but as competition ramps up, margins will disappear. You can argue that next-gen chips will help alleviate that, but next-gen designs will not represent significant performance increases within a few years (i.e., designs will catch up to the state-of-the-art in semi processing technology).

[Vycid]

4) Txs, Txs Txs. By the time all Bitcoins have been mined, the transaction fees will make it worthwhile for the miners (Satoshi's white paper)

I don't think you even need to look that far ahead. If Tx fees haven't reached BTC12.5 per block by the time the reward halves again, BTC is probably dead in the water.

what are you talkingggg about?! that will actually be a really good thing. tx fees will be negligible PER transaction but if a block has 5000 transactions and packs a nice neglible fee per amount of bitcoins sold it PROVES that bitcoin works well. and keep in mind if bitcoins are worth a lot of money than even 5 bitcoins per block could be worth thousands

Thousands might not mean as much when mining equipment costs tens of thousands.

by that time, mining equipment will be much more efficient and cost less too and friedcat will have solar panels powering his operation

And we'll all be living on clouds and drinking wine from golden chalices, and everyone will love each other and war and sickness and poverty will be nothing but the bedtime stories of a forgotten past for our beautiful children.

Or, perhaps, mining equipment will be more expensive because maintaining 20% of the hashrate will be much more difficult, and solar panels will still be as unreasonable in a few years as they are right now? Understand: his operation already gets $0.06/kWh, but that can't compete with upper Washington state ($0.01/kWh). Also, solar panels sorta don't work at night, and I bet you don't want to give up half of your income.

[WildFire.ca]

One of the fastest computers on the planet and it's run in PVC racks held in by zap straps.. I love it.

[Vycid]

One of the fastest computers on the planet and it's run in PVC racks held in by zap straps.. I love it.

Is the block erupter sized so that it fits snugly into PVC pipe racks?

Sounds like friedcat  

[velacreations]

I wonder why Friedcat still hasn't announced to his loyal shareholders yet some things he announced days ago in Shanghai.

cause he doesn't want the share price to hit 10 btc today...

[huhai0978]

The value of ASICMiner:

The value of ASICMiner depends on the total profit it can generate. Let's do some math.
Total bitcoins to be mined: 9,600k
ASICMiner takes 20% of total hash power. This will generate 1,920k.
Assuming hardware sale income is 30% of mining profit, so this part is 576k.
(1920k+576k)/400k=6.24B/share
This is the total profit one can expect for 1 share of ASICMiner in the next 20 years.

value of 1 share of ASICMiner = share price + dividend = 6.24

How will the 6.24B be distributed between share price and dividend? Well, this depends on the investors' emotion and their view of the risk of future income. The gap between 6.24 and share price is risk compensation.
IMO, the share price will fluctuate between 3.x and 4.x in the future. 5+ price is too risky.

My 2 Satoshi.

Transaction Fees.

TX fee is negligible. Note, there is also cost of running a company,electricity, chip design, manufacture,etc.
TX fee encourages hoarding, punishes spending, which is bad.

1) in your own #s, then at the current price of 4.7BTC AM is still undervalued if it will generate 6.4BTC.
2) If you apply that type of reasoning to real life companies then you would rarely invest - APPL was likely never going to survive the 90s because its stock was overpriced right?
3) Buying AM is believing friedcat & Co. can do more with BTCs than you can. They might open new services or create new income streams (meanwhile reducing income seem unlikely.)
4) Txs, Txs Txs. By the time all Bitcoins have been mined, the transaction fees will make it worthwhile for the miners (Satoshi's white paper)

Here are my answers:
1) It's not called "undervalued". It's called "risk compensation" as I said. The question is, do you want 4.7BTC now or do you want to wait 20 years to get 6.24BTC?
2) I'm not in US.  I have no idea about how APPL survived 90s. APPL sounds like a miracle, but miracles do not happen everyday. BTW, 40x of value increase of AM is already a miracle. Do you expect one miracle after anther one?
3) Your third point sounds so religious. I'll not going to touch this one.
4) Satoshi is great. He solved one important technical problem. But, trust me, he doesn't know how money works. Why should we encourage hoarding? Why should we punish those who is spending? We, as bitcoiners, would someday come to a conclusion that let the total number of bitcoins increases 3% every year and make the mining a sustainable career.