ASICMINER: Entering the Future of ASIC Mining by Inventing It

[Rival]

It was pointed out in a PM that an equity could avoid the fate of being taken out in the yard and shot if consistent increases in price per share accompanied the dividend in such a way that it compensated for the increase in btc value. I stand corrected.

If the price per share is in BTC, then all it has to do is stay fixed in order to make money when the price of bitcoin goes up.

Assuming it pays no dividends, then yes, you are correct. You will make the same amount as if you had bought and held btc. It would be a reflection that the value of the equity had increased at the same rate that the value of bitcoins did. (in a rational market)

A) This market has clearly demonstrated a variety of characteristics not present in a rational market.

B) You are then needlessly assuming counterparty risk for no benefit over counterparty risk-free BTC.

Both assertions are accepted as correct. I would suggest that as the market matures and grows it should more closely resemble a rational market. There are certainly many opportunities for short-term profits by exploiting that irrationality today. A year from now, probably not quite so much. As far as AM is concerned, I feel confident enough in the abilities of FC that his company will be capable of overcoming the deflationary pressures of the currency as well as the increasing global hash. For those reasons I continue to accumulate shares, only time will tell if my guess is correct. If AM fails to be a viable investment vehicle in a deflationary currency, I have serious doubts that anyone else will ever be able to be one.

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[Vycid]

It was pointed out in a PM that an equity could avoid the fate of being taken out in the yard and shot if consistent increases in price per share accompanied the dividend in such a way that it compensated for the increase in btc value. I stand corrected.

If the price per share is in BTC, then all it has to do is stay fixed in order to make money when the price of bitcoin goes up.

Assuming it pays no dividends, then yes, you are correct. You will make the same amount as if you had bought and held btc. It would be a reflection that the value of the equity had increased at the same rate that the value of bitcoins did. (in a rational market)

A) This market has clearly demonstrated a variety of characteristics not present in a rational market.

B) You are then needlessly assuming counterparty risk for no benefit over counterparty risk-free BTC.

Both assertions are accepted as correct. I would suggest that as the market matures and grows it should more closely resemble a rational market. There are certainly many opportunities for short-term profits by exploiting that irrationality today. A year from now, probably not quite so much. As far as AM is concerned, I feel confident enough in the abilities of FC that his company will be capable of overcoming the deflationary pressures of the currency as well as the increasing global hash. For those reasons I continue to accumulate shares, only time will tell if my guess is correct. If AM fails to be a viable investment vehicle in a deflationary currency, I have serious doubts that anyone else will ever be able to be one.

Those that come to mind:

Coinbase
Bitpay
SatoshiDice

Public securities come with market maturity. EVERY Bitcoin company is currently a startup, so why would you expect them to be publicly traded?

[Ytterbium]

Those that come to mind:

Coinbase
Bitpay
SatoshiDice

Public securities come with market maturity. EVERY Bitcoin company is currently a startup, so why would you expect them to be publicly traded?

SDICE was traded on exchanges, but the shares got pulled when MtGox bought them. Are bitpay and coinbase US Companies?  If so, we're more likely to see them publicly traded on real exchanges then virtual ones. There's no reason bitcoin companies can't be listed on traditional, fiat exchanges in the future if they're mature enough and large enough.

[sunnankar]

Savers get wealthier every day by doing nothing.

...

The deflation is like and endless juggernaut, it never stops, and the base prices of everything priced in it must by definition drop and drop and drop. Market fluctuations and speculation can mask it for a time, but in the end it is relentless as gravity and it will reign supreme in the end.

Your assertions are totally incorrect. Perhaps you need to read more Mises and Rothbard.

Savers, in a deflationary currency, do something extremely important which you incorrectly interpret as nothing. They are choosing to allocate capital into the currency instead of into some other venture which, in their subjective view, does not have as good a prospect of generating a decent return. This speaks to the demand for money which is rarely talked about outside of the Austrian school of economics. And as Bitcoin gets more developed with deeper capital pools and more sophisticated financial products then it will get a better pricing mechanism for the cost of money or Bitcoin's interest rate; just like gold has an interest rate.

All a deflationary currency does, compared to our current system of fiat currency and fractional reserve banking, is reveal with greater accuracy and transparency the risk individuals are taking when allocating their capital to be used by others instead of just sitting safely in their Bitcoin wallet.

The deflation juggernaut ends based on subjective value theory as applied to the interest rate, demand for money, counter-party risk assessment, expectation of profitable investments and several other factors. Sure, it does not 'speed up capital' like the current system that does which encourages destruction and dissipation of capital, like with bailouts, etc. by privatizing the gains and socializing the losses. But a deflationary system will be much more effective at helping individuals generate and accumulate savings. And those savings will provide a foundation of capital that will result in wealth creation and generation like never before seen in history.

Thus, a deflationary currency will result in the vast bulk of humanity much better off than the current financial and monetary system.

[Lohoris]

If a stock costs 1 btc and the value of btc doubles, all things being equal the stock price should move to 0.5 btc.

Wrong; this is only true if that stock issues dividends also based on the BTCUSD rate.
If that stock issues BTC dividends not affected by the BTCUSD rate, than its value should be unaffected too.

[Vycid]

If a stock costs 1 btc and the value of btc doubles, all things being equal the stock price should move to 0.5 btc.

Wrong; this is only true if that stock issues dividends also based on the BTCUSD rate.
If that stock issues BTC dividends not affected by the BTCUSD rate, than its value should be unaffected too.

Right. The value embodied by a company is a distinct quantity, and is not bound to any particular currency. In a sense, shares of a company are their own currency, and the price of those shares is actually their exchange rate to other currencies.

If the price of BTC doubles, AM shareprice is (theoretically) unaffected, since both their shares and their revenue streams are denominated in BTC. In the real world, we have factors such as relative USD expenditures decreasing (electricity, rent, boards, chips), market irrationality, and people cashing out on the higher BTC/USD rate that influence share price.

Frankly, attempting to predict AM price movements based on the BTC/USD ratio is foolhardy - it is what I would call a technical movement. The only thing you have any hope of figuring out is the true value of the underlying company - everything else in the markets is white noise and, in my experience, trying to profit from technicals will get you burned. And, even then, regardless of the validity of your valuation, the market may take an indefinite amount of time to correct to fair value.

[supert]

SDICE was traded on exchanges, but the shares got pulled when MtGox bought them.

Sorry, what? Gox bought SatoshiDice?!?

[freedomno1]

SDICE was traded on exchanges, but the shares got pulled when MtGox bought them.

Sorry, what? Gox bought SatoshiDice?!?

The true buyer choose to remain anonymous
(Although there are rumors on whodunit Mtgox was one EH seeing it as a cash cow and own buying etc.)

[Lauda]

SDICE was traded on exchanges, but the shares got pulled when MtGox bought them.

Sorry, what? Gox bought SatoshiDice?!?

Oh god why. Hopefully this isn't true.

[101111]

Bitfunder AM @ BTC1.8 

[twentyseventy]

Bitfunder AM @ BTC1.8 

That was a big sell. Back up to 2.0 now.

[101111]

Bitfunder AM @ BTC1.8 

That was a big sell. Back up to 2.0 now.

Yep, and excellent buying at that price.

[superduh]

Bitfunder AM @ BTC1.8 

That was a big sell. Back up to 2.0 now.

Yep, and excellent buying at that price.

1.8 is a steal - anyone offering direct shares at that price now?

[gramma]

Bitfunder AM @ BTC1.8 

DAMMIT I hate missing stuff like that.  Whatever the arguments about whether AM was ever worth 5 BTC, to my mind, it's clearly worth in excess of 1.8.

[DeaDTerra]

Keep in mind BitFunder and whoever is managing the PT now has been very unresponsive, late on dividends, etc.

The price difference isn't such a random thing.

I am usually quite responsive
The PT has now been handed over to Ukyo.
Hopefully he will be able to offer faster dividends and better transfers in and out.
//DeaDTerra

[superduh]

Keep in mind BitFunder and whoever is managing the PT now has been very unresponsive, late on dividends, etc.

The price difference isn't such a random thing.

would still be worth it to buy at 1.8!! and transfer out to direct shares

[David Chen]

Keep in mind BitFunder and whoever is managing the PT now has been very unresponsive, late on dividends, etc.

The price difference isn't such a random thing.

would still be worth it to buy at 1.8!! and transfer out to direct shares

You can transfer out to direct shares only if you have at least 250 shares on the Bitfunder.

[FNG]

Are we back or have we been getting lucky?   4 out of the last 8 blocks

[JimiQ84]

Are we back or have we been getting lucky?   4 out of the last 8 blocks

probably just luck, it was shitty last 24 hours

[Strange Vlad]

If you think the network will reach 1 Petahash before the end of the year, then you're too naive.  The Petahash is quite likely to come even before October!  And by the end of 2013 it will likely go far beyond 2 PH, maybe even approach 3 PH.

Looks like I was too conservative!
We are going to hit 1PH way before October...  Like, within the next couple of weeks.
And then if the daily growth is kept around 2.5%, then we'll see 2PH in October, 4PH in November, 8PH in December and, possibly... 10PH in the last days of 2013.
Holy cat, I don't believe my own calculations!  But then I didn't believe them in July either, and the growth just keeps accelerating...