ASICMINER: Entering the Future of ASIC Mining by Inventing It

[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...

[Vycid]

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...

For guys that believe in Bitcoin, you have surprisingly little faith in the free market.

[Vycid]

For guys that believe in Bitcoin, you have surprisingly little faith in the free market.

What?

The capability of the competition to rapidly assemble and bring products to market has been a much-maligned topic in this thread in the past few months. The "everyone else is incompetent" mindset flies in the face of free market theories, which suggests that competent competition will arrive in any sector where there is profit to be made.

Clearly the evidence of competent competition is here and the opinion has shifted. But your surprise remains - did you really think this opportunity for profit wasn't going to get exploited? That isn't a very free-market way of thinking.

[Franktank]

Just did my second report here.

[woodles]

For guys that believe in Bitcoin, you have surprisingly little faith in the free market.

What?

The capability of the competition to rapidly assemble and bring products to market has been a much-maligned topic in this thread in the past few months. The "everyone else is incompetent" mindset flies in the face of free market theories, which suggests that competent competition will arrive in any sector where there is profit to be made.

Clearly the evidence of competent competition is here and the opinion has shifted. But your surprise remains - did you really think this opportunity for profit wasn't going to get exploited? That isn't a very free-market way of thinking.

It seems to me that even free market people couldn't predict just how fast the network would grow. When even staunch supporters are proven to be too conservative, I think that shows just how powerful a free market is. And yes, it is surprising when the market out performs the expectations of pretty much everyone.

[Jutarul]

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...

Calculate again (http://en.wikipedia.org/wiki/Sigmoid_function). The trick is to know where you are in the curve (hint: the asymptotic level depends on bitcoin production costs). Expect a conversion from exponential into linear growth after we cross 1-2 PH, given current price levels. (bitcoin price increases will move the asymptotic line and cause bitcoins to rotate back into mining investments, delaying the exponential to linear growth conversion).

[Vycid]

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...

Calculate again (http://en.wikipedia.org/wiki/Sigmoid_function). The trick is to know where you are in the curve (hint: the asymptotic level depends on bitcoin production costs). Expect a conversion from exponential into linear growth after we cross 1-2 PH, given current price levels. (bitcoin price increases will move the asymptotic line and cause bitcoins to rotate back into mining investments, delaying the exponential to linear growth conversion).

Undamped and underdamped systems do not follow sigmoidal growth trajectories.

There is a huge impetus to increase hashrate, because the yearly block rewards are worth something like 100M USD. In the short run, models of the increase in hash power may cause the rational observer to consider mining hardware a good investment. The problem is, if every rational actor in the market sees an opportunity for profit, then the growth will necessarily exceed projections; there is a time lag between when the hardware is ordered and when it comes online (very large for preorders). Greed is considered a rational market response.

Here is a simple mathematical representation of overshoot: http://en.wikipedia.org/wiki/File:Sine_integral.svg

The larger the growth rate, and the larger the time lag between the investment in growth and the return on that growth (relative to the growth rate), naturally the larger the overshoot.

This is the core of my bearish outlook on any mining security, as anyone who has been paying attention already knows.

The simplest example of overshoot in nature I can provide is the "rabbit example". Suppose you have rabbits in an ecosystem, and their population is stable over time, living in healthy balance with their food supply and their predators.

Suddenly, a plague wipes out their predators, which was previously the downward force on their population (here, the BTC/USD price exploded alongside the ASIC revolution). What happens, of course? The rabbits reproduce exponentially, vastly exceeding the carrying capacity of their environment - food (block rewards). Then, after all of these rabbits reach maturity (hardware delivery), starvation occurs (failure to meet ROI).

In industry, we deal with overshoot in situations where the setpoint (difficulty) is changing with cascaded PID controllers (http://en.wikipedia.org/wiki/PID_controller). That produces a damped scenario. The controls in the ASIC market (rational actors) are equivalent to a single PID controller, and we are headed for overshoot.

[Jutarul]

The larger the growth rate, and the larger the time lag between the investment in growth and the return on that growth (relative to the growth rate), naturally the larger the overshoot.
... and we are headed for overshoot.

There will likely be an overshoot - but only if price levels grow slower than hashrate. One scenario where an overshoot may be avoided is when the friction to scale is sufficiently large and/or jurisdictions interfere with the deployment or the sale of new hardware. Companies who are able to minimize this friction will be the ones who benefit the most from the network growth.

In industry, we deal with overshoot in situations where the setpoint (difficulty) is changing with cascaded PID controllers (http://en.wikipedia.org/wiki/PID_controller). That produces a damped scenario. The controls in the ASIC market (rational actors) are equivalent to a single PID controller, and we are headed for overshoot.

I disagree. I think there is solid proof out there that a great portion of the mining community has different assumptions about the market - ranging from expert to naive, from optimistic to pessimistic. This causes the mining investments to more or less experience an expectation value, i.e. the smart money is moving in or out first in the right direction.

Supplier companies like ASICMINER are facilitators in the market and just need to make sure that
a) they are a competitive option for getting invested in mining
b) survive times of depression in mining (hibernation ability), e.g. caused by the bitcoin price to collapse below production costs

I see a lot of companies out there striving for a). It will be interesting to see how many companies are prepared for b).