ASICMINER: Entering the Future of ASIC Mining by Inventing It

[dhenson]

http://blockchain.info/block-index/408762/000000000000002661e7868b26511a32259d595d20bc056b87e6ca1e00a7bf11

For those that think being poorly connected doesn't matter.  First AM block found in 7 hours and it's an orphan.

[Vycid]

...

your complete lack of understanding of companies' life cycles.  Let's go through the points:

1 - check
2 - check
3 - check(exactly the type of competitive advantage I have been describing)
4 - does not apply to bitcoin securities as they cannot issue debt
5 - check, and is why friedcat is paying dividends
6 - check

So yes, thanks for posting the link.  You are correct, it is mature.

Let's ACTUALLY go through them, yeah?

1: Revenue growth is approaching growth rate in economy.

Hell, we don't even KNOW the revenue growth rate, because the financials aren't published (pretty mature, right?). But it's pretty clear that whatever the revenue growth rate is (positive or negative), it surely hasn't stabilized to the growth rate of the wider economy. It is currently dictated by the rate of increase in the difficulty rate, something completely external to AM and not at all "stable".

2: Margins are established.

I can't fucking believe you just said "check" for this one. Did you read it at all? This was the core of my argument that you actually agreed with. "Another feature shared by growth companies is that they tend to have stable margins". Hurp durp.

3: Competitive advantages?

The advantage is having a product. That's called the "first-mover advantage" and is NOT a hallmark of mature companies for reasons I really, really hope I don't need to explain.

4: Debt capacity

Uh, they could issue bitcoin bonds, no trouble... but AM has no reason to have ever attempted to do so, so this one is sorta irrelevant.

5: Cash build up and return?

This one I agree with, AM fits the bill.

6: Inorganic growth

WTF? What inorganic growth has AM seen?

Please get your head out of your ass.

[Mausini]

My hypothetical vision of the most valuable company in Bitcoin-land is not just a mining company, but instead a company that really capitalizes on Bitcoin as a PLATFORM instead of a currency - for example, enabling USD->BTC->USD transactions for significantly less than credit card fees. Then we are talking about a company with the potential to be worth many billions USD, AND with the potential to create miner fees that will help synergistically fuel its mining business. Why sit around and wait for transaction fees that may not materialize before your competition erodes all your market share - why not create the infrastructure to make Bitcoin accessible to the wider market?

I also believe the biggest mistake friedcat made was not to build cars and sell them. Cars could well be sold for bitcoin (as a PLATFORM instead of a currency), you know. Billions of dollars!!! Many transaction fees! Synergistically fuel its mining business!

You just disqualified yourself. What are you smoking? Thank you for shutting up.

[Vycid]

My hypothetical vision of the most valuable company in Bitcoin-land is not just a mining company, but instead a company that really capitalizes on Bitcoin as a PLATFORM instead of a currency - for example, enabling USD->BTC->USD transactions for significantly less than credit card fees. Then we are talking about a company with the potential to be worth many billions USD, AND with the potential to create miner fees that will help synergistically fuel its mining business. Why sit around and wait for transaction fees that may not materialize before your competition erodes all your market share - why not create the infrastructure to make Bitcoin accessible to the wider market?

I also believe the biggest mistake friedcat made was not to build cars and sell them. Cars could well be sold for bitcoin (as a PLATFORM instead of a currency), you know. Billions of dollars!!! Many transaction fees! Synergistically fuel its mining business!

You just disqualified yourself. What are you smoking? Thank you for shutting up.

Gosh, I see how silly I am, now. I might as well have said "cars", since cars are obviously just as adjacent a market to bitcoin mining as a bitcoin exchange would be!

If you don't know what I mean by "platform", look up the difference between "bitcoin" and "Bitcoin".

[superduh]

yes! Friedcatmobile - coming in two week (tm)

[Vycid]

09:00 (S) 2 @ 3.50500000 ASICMINER-PT
09:00 (S) 2 @ 3.50500000 ASICMINER-PT
09:00 (S) 1 @ 3.50600000 ASICMINER-PT
09:00 (S) 8 @ 3.50700000 ASICMINER-PT
09:00 (S) 2 @ 3.51000000 ASICMINER-PT
09:00 (S) 1 @ 3.55000000 ASICMINER-PT
08:59 (S) 15 @ 3.56000000 ASICMINER-PT
08:59 (S) 1 @ 3.56200000 ASICMINER-PT
08:59 (S) 1 @ 3.57000000 ASICMINER-PT
08:59 (S) 1 @ 3.58000000 ASICMINER-PT
08:58 (S) 3 @ 3.58100000 ASICMINER-PT
08:58 (S) 1 @ 3.58200000 ASICMINER-PT
08:56 (S) 2 @ 3.60000000 ASICMINER-PT
08:56 (S) 5 @ 3.60000000 ASICMINER-PT
08:56 (S) 10 @ 3.60100000 ASICMINER-PT
08:56 (S) 2 @ 3.60100000 ASICMINER-PT
08:56 (S) 3 @ 3.60200000 ASICMINER-PT
08:56 (S) 2 @ 3.60200000 ASICMINER-PT
08:56 (S) 2 @ 3.60300000 ASICMINER-PT
08:56 (S) 1 @ 3.60400000 ASICMINER-PT
08:56 (S) 2 @ 3.60500000 ASICMINER-PT
08:56 (S) 2 @ 3.60600000 ASICMINER-PT
08:56 (S) 1 @ 3.60800000 ASICMINER-PT
08:56 (S) 1 @ 3.60900000 ASICMINER-PT
08:56 (S) 10 @ 3.60900000 ASICMINER-PT
08:56 (S) 1 @ 3.61000000 ASICMINER-PT
08:56 (S) 1 @ 3.61000000 ASICMINER-PT
08:56 (S) 1 @ 3.61000000 ASICMINER-PT
08:56 (S) 6 @ 3.61100000 ASICMINER-PT
08:56 (S) 1 @ 3.61100000 ASICMINER-PT
08:56 (S) 5 @ 3.61200000 ASICMINER-PT
08:56 (S) 2 @ 3.61300000 ASICMINER-PT
08:56 (S) 1 @ 3.61700000 ASICMINER-PT
08:56 (S) 2 @ 3.62000000 ASICMINER-PT
08:56 (S) 1 @ 3.62100000 ASICMINER-PT
08:56 (S) 1 @ 3.62100000 ASICMINER-PT
08:56 (S) 1 @ 3.62500000 ASICMINER-PT
08:56 (S) 1 @ 3.64000000 ASICMINER-PT
08:56 (S) 1 @ 3.67100000 ASICMINER-PT
08:56 (S) 1 @ 3.67200000 ASICMINER-PT
08:56 (S) 1 @ 3.67300000 ASICMINER-PT
08:56 (S) 4 @ 3.68000000 ASICMINER-PT
08:56 (S) 1 @ 3.68100000 ASICMINER-PT

Thar she blows...

There's now a 0.2 bid/ask spread. MMs must be having a good time.

[Mausini]

My hypothetical vision of the most valuable company in Bitcoin-land is not just a mining company, but instead a company that really capitalizes on Bitcoin as a PLATFORM instead of a currency - for example, enabling USD->BTC->USD transactions for significantly less than credit card fees. Then we are talking about a company with the potential to be worth many billions USD, AND with the potential to create miner fees that will help synergistically fuel its mining business. Why sit around and wait for transaction fees that may not materialize before your competition erodes all your market share - why not create the infrastructure to make Bitcoin accessible to the wider market?

I also believe the biggest mistake friedcat made was not to build cars and sell them. Cars could well be sold for bitcoin (as a PLATFORM instead of a currency), you know. Billions of dollars!!! Many transaction fees! Synergistically fuel its mining business!

You just disqualified yourself. What are you smoking? Thank you for shutting up.

Gosh, I see how silly I am, now. I might as well have said "cars", since cars are obviously just as adjacent a market to bitcoin mining as a bitcoin exchange would be!

If you don't know what I mean by "platform", look up the difference between "bitcoin" and "Bitcoin".

I already didnt get what you mean with "growth". Does that have something to do with http://en.wikipedia.org/wiki/Superpower in combination with http://en.wikipedia.org/wiki/Alice_in_Wonderland? I suppose wonderland is the platform? You genius!

[JimiQ84]

What I don't understand is why is vycid trying to convince anyone about anything. If you don't believe in AM then don't buy shares.

[Vycid]

My hypothetical vision of the most valuable company in Bitcoin-land is not just a mining company, but instead a company that really capitalizes on Bitcoin as a PLATFORM instead of a currency - for example, enabling USD->BTC->USD transactions for significantly less than credit card fees. Then we are talking about a company with the potential to be worth many billions USD, AND with the potential to create miner fees that will help synergistically fuel its mining business. Why sit around and wait for transaction fees that may not materialize before your competition erodes all your market share - why not create the infrastructure to make Bitcoin accessible to the wider market?

I also believe the biggest mistake friedcat made was not to build cars and sell them. Cars could well be sold for bitcoin (as a PLATFORM instead of a currency), you know. Billions of dollars!!! Many transaction fees! Synergistically fuel its mining business!

You just disqualified yourself. What are you smoking? Thank you for shutting up.

Gosh, I see how silly I am, now. I might as well have said "cars", since cars are obviously just as adjacent a market to bitcoin mining as a bitcoin exchange would be!

If you don't know what I mean by "platform", look up the difference between "bitcoin" and "Bitcoin".

I already didnt get what you mean with "growth". Has that something to do with http://en.wikipedia.org/wiki/Superpower in combination with http://en.wikipedia.org/wiki/Alice_in_Wonderland? I suppose wonderland is the platform? You genius!

Your failure to understand does not constitute a logical inconsistency.

Neither do your straw man arguments.

What I don't understand is why is vycid trying to convince anyone about anything. If you don't believe in AM then don't buy shares.

I'm short via an options position, obviously. That position alone is not the motivation, though, as I don't think I really have much leverage in influencing the price level. It's got a lot more to do with my interest in AM as an apparent violation of rational markets theory.

[Elokane]

What I don't understand is why is vycid trying to convince anyone about anything. If you don't believe in AM then don't buy shares.

This is a discussion forum where people exchange opinions and information.

[Mausini]

Your failure to understand does not constitute a logical inconsistency.
Neither do your straw man arguments.

I'm short via an options position, obviously. That position alone is not the motivation, though, as I don't think I really have much leverage in influencing the price level. It's got a lot more to do with my interest in AM as an apparent violation of rational markets theory.

There are no arguments in my statements. Arguments would just trigger more bullshit from you. Again, I can only laugh at your "being short" explanation.

[Vycid]

There are no arguments in my statements. Arguments would just trigger more bullshit from you.

Spoken like a man with no arguments to make.

[stripykitteh]

I'm short via an options position, obviously. That position alone is not the motivation, though, as I don't think I really have much leverage in influencing the price level. It's got a lot more to do with my interest in AM as an apparent violation of rational markets theory.

Vycid, are you selling calls or buying puts? (I'm not an options guru btw, if you respond, ELI5 thanks).

[Jutarul]

My hypothetical vision of the most valuable company in Bitcoin-land is not just a mining company, but instead a company that really capitalizes on Bitcoin as a PLATFORM instead of a currency - for example, enabling USD->BTC->USD transactions for significantly less than credit card fees. ... Who is more trusted and better funded to have done all this than AM?

You ask for utilizing bitcoin as a platform, yet you fall back to traditional thinking and are constrained by the notion of bitcoin as a unit of account.

If you really want to look into the future of this emerging technology you have to take the 50,000 feet view and realize that bitcoin combined a few concepts which are revolutionary beyond monetary use. You now have a decentralized transactional database for irreversible record keeping: the blockchain. This has a tremendous utility for the global society beyond monetary uses. For starters, it allows you to build tamper-detection into every database in the world by computing incremental hashes and submitting them as a bitcoin transaction. Maybe the whole software distribution system can be standardized by letting software developers issue a bitcoin transaction, whenever they release software, making the current system of using certificates obsolete (e.g. a potential application of colored coins).

Whatever the future of bitcoin holds, ASICMINER is a project to serve the mining community first and foremost. Google's "innovation" to go into the "ad" space was not really an innovation - it was the realization that users are willing to pay services by delivering their private information. And that there are companies who a willing to pay cash for that private information. Are you suggesting that ASICMINER should try to develop new monetizing strategies for their deployed hashing power? E.g. by offering a zero-transaction fee inclusion in exchange for something the user is willing to give up? Or maybe even a reward, based on the mining subsidy?

[Vycid]

I'm short via an options position, obviously. That position alone is not the motivation, though, as I don't think I really have much leverage in influencing the price level. It's got a lot more to do with my interest in AM as an apparent violation of rational markets theory.

Vycid, are you selling calls or buying puts? (I'm not an options guru btw, if you respond, ELI5 thanks).

I bought a loooot of puts over the last couple months at a reasonable spread of strikes.

It's easy for me to leverage my short position, actually. For example - I bought 3-month puts at a strike of 3.2 BTC for a ~0.30 BTC premium. That means that I have the right to sell a share of AM for anytime in the 3 months after the contract is issued for 3.2 BTC, in exchange for an up-front payment of 0.3 BTC.

So in the hypothetical situation that I buy 10 of these puts, I spend a modest 3 BTC. If the stock price drops to 2.9 and I buy 10 shares for 29 BTC, then sell them for 32 BTC, I've broken even.

If the price drops to 2 BTC, I buy 10 shares for 20 BTC and sell for 32 BTC, I've made 12 BTC for a 300% profit.

Suffice to say - if the share price drops much below 2.8 BTC or so, I will do more than break even.

My hypothetical vision of the most valuable company in Bitcoin-land is not just a mining company, but instead a company that really capitalizes on Bitcoin as a PLATFORM instead of a currency - for example, enabling USD->BTC->USD transactions for significantly less than credit card fees. ... Who is more trusted and better funded to have done all this than AM?

You ask for utilizing bitcoin as a platform, yet you fall back to traditional thinking and are constrained by the notion of bitcoin as a unit of account.

If you really want to look into the future of this emerging technology you have to take the 50,000 feet view and realize that bitcoin combined a few concepts which are revolutionary beyond monetary use. You now have a decentralized transactional database for irreversible record keeping: the blockchain. This has a tremendous utility for the global society beyond monetary uses. For starters, it allows you to build tamper-detection into every database in the world by computing incremental hashes and submitting them as a bitcoin transaction. Maybe the whole software distribution system can be standardized by letting software developers issue a bitcoin transaction, whenever they release software, making the current system of using certificates obsolete (e.g. a potential application of colored coins).

Whatever the future of bitcoin holds, ASICMINER is a project to serve the mining community first and foremost. Google's "innovation" to go into the "ad" space was not really an innovation - it was the realization that users are willing to pay services by delivering their private information. And that there are companies who a willing to pay cash for that private information. Are you suggesting that ASICMINER should try to develop new monetizing strategies for their deployed hashing power? E.g. by offering a zero-transaction fee inclusion in exchange for something the user is willing to give up? Or maybe even a reward, based on the mining subsidy?

I don't doubt there are many potential paths AM could have taken, and you are right that I am taking a constrained view of Bitcoin. I have neither expended the time thinking about the potential uses, nor am I particularly gifted at appreciating growth possibilities. Apparently, neither is Friedcat.

I am a value investor first and foremost. I have beaten the market by an appreciable amount for five years in a row now, based on a simple value investment strategy. That strategy depends heavily on selecting boring companies that I can understand. In the past, that has included traditional mining companies. Now it happens to mean a bitcoin mining company; and instead of being undervalued, it's overvalued. So be it.

If this was truly acting like a growth company (and it should be - it's a year old!), I would never have bought those options. But, for whatever reason, Friedcat doesn't want to explore the rich possibilities available here. Franchising is his greatest innovation - a solution to a problem he doesn't have (threatening network stability because he's got too much hashpower). And the simple corporate structure (well, they mine bitcoins, and sell things that mine bitcoins) leads me to conclude, with a certainty that is all but impossible in traditional markets, that this thing is overvalued.

So, the question is - does the market stay irrational longer than I stay solvent? I guess I'm a gambler after all.

[ft73]

So, the question is - does the market stay irrational longer than I stay solvent? I guess I'm a gambler after all.

Considered the kind of market we deal with, we're probably all gamblers here (and yes, i find it disturbing).

I can't agree much with your AM view though, i think you are missing some underlying market mechanics.
Good luck however.

[Vycid]

So, the question is - does the market stay irrational longer than I stay solvent? I guess I'm a gambler after all.

Considered the kind of market we deal with, we're probably all gamblers here (and yes, i find it disturbing).

I can't agree much with your AM view though, i think you are missing some underlying market mechanics.
Good luck however.

Yeah, I can't argue with that. The fact that AM is a bitcoin-denominated security makes this insanely volatile already.

I'm curious as to what market mechanics you're referring to, though?

[ft73]

So, the question is - does the market stay irrational longer than I stay solvent? I guess I'm a gambler after all.

Considered the kind of market we deal with, we're probably all gamblers here (and yes, i find it disturbing).

I can't agree much with your AM view though, i think you are missing some underlying market mechanics.
Good luck however.

Yeah, I can't argue with that. The fact that AM is a bitcoin-denominated security makes this insanely volatile already.

I'm curious as to what market mechanics you're referring to, though?

Greed and fear most notably.
In my view you are leveraging on the latter.
The former at the moment pushes quite some vapourware.
Market correlation is a third and important element, you'll be able to collect quite some evidence.

So many key elements play a role in AM share value, other than actual fundamentals.
I think we have to (carefully) live with it.

[BitThink]

The key for AM to survive now is to keep "low profile". If AM really begins growing fast, we all need to be careful. Although I believe friedcat will not do like that.

[Rival]

Things move a warp-speed in the bitcoin universe. This generates a particular form of time-dilation that has the effect of compressing the "Yes, but what have you done for me lately" syndrome. It is a disease of perception closely related to "Space Madness".

"Others promise, Friedcat delivers." This is as true today as it was yesterday.