ASICMINER: Entering the Future of ASIC Mining by Inventing It

[webbrowser]

A lot of people are pissed right now because they bought in to the hype when the whales were quietly making their way to the exits. They deluded themselves.

Did they?

If I count correctly, the publicly traded shares on bitfunder + havelock amounts to just 25k full shares, out of 400k total.  Not sure how many are issued on 796.  Regardless of whether the whales traded privately to exit, the bulk of the shares are still held privately by other whales.

[SebastianJu]

I would like to ask friedcat too that he is releasing infos in this thread or in the rep-forum. I guess if a chinese girl can ask him then most probably there is someone in rep-forum who can ask friedcat too so we get the infos fast.

I guess infos first given to big shareholders is not a problems since where should they sell 5000 shares fast? I dont see how.

If I were in friedcat's position I would do exactly what he seems to do:
- keep hashing with existing hardware that has already been paid for multiple times,
- research new hardware tech to be ready to put it online ASAP,
- keep selling what customers want to buy and maybe install what is not selling quick enough/is partially defective in the mine to avoid wasting it.

Though the divs obviously show that the sales arent so great. So either he should order more chips to sell them or mine with them. Self mining at least has the advantage that its a relatively constant income stream.

He probably only complained because the divs... If we still would have the nice divs we once had the shareprice would be still high and no one would complain. Though the selling seems not to work too good and mining isnt built up.
Though it may be that deploying more own mining is a big work with not good return now since the old tech means way more work at deploying then newer chips mean.

I hope everyone purchased more shares now that they are cheap*, because as the following numbers may break some bear spines..

To put the ASICMINER financial report in some perspective:

...

Like ex-trader wrote... that includes hardware sales. Would you treat other miner selling companies like this you probably would get a network hashrate a multiple as big as it is really.

What i would like to know... when we had 30% of the network hashrate... we sold miners too... i guess if you calculate it your way we easily could have 100% of the total network at that time.

The share price has nothing to do with whether they maximized profit. AM got way overvalued because it was for a while the only ASIC company with a good reputation that you *could* invest in. The correction was inevitable.

Thats not correct. When it was at 4.5BTC the shareprice was so high that it had a 30% annual profit. Now the shareprice again is 30% of the annual return the divs are bringing. So no, the shares werent overpriced back then. Otherwise it would mean the shares are overpriced now too.

[Rival]

It does not take a genius to see the obvious trend of AM share value matching the 30% APR of dividends.

What apparently it does take is a genius to realize is that FC has literally eviscerated the dividends over the last few months in order to raise millions for reinvestment, and so basing the AM share value on dividends alone is using deficient logic. If all of that income diverted to reinvestment went into a black hole and lost forever with no return whatsoever, then one would expect the current value of AM to be reasonable at 30% APR. If you believe that all of the dividends held back are gone forever with no possibility of return on them, then for you the current price is correct.

On a basic level, if one were to assume that FC held back 50% of dividends, then by the rationale above the share prices should be worth at least double what they currently are.

To extrapolate, if one assumes that for every btc FC holds back now he will generate 2 btc in profit later, then the correct price of a share should be 4x the current value.

Usually stocks are priced to accommodate expected future dividends, not purely an expression of historical dividends. When dividends are held back for reinvestment and expansion, the historical data is much less valid.

[prancing_around]

Once AM rolls out the blockchain based exchange, or if BTCT resurrects, we will start to see the true value. 

Is there any estimated date for when the blockchain based exchange will open?

[velacreations]

demand for these has tumbled.

citation required

as far as I can see, AM has sold out of hardware, so that doesn't indicate that demand has decreased.

[webbrowser]

demand for these has tumbled.

citation required

as far as I can see, AM has sold out of hardware, so that doesn't indicate that demand has decreased.

You do realise that price is the intersection of demand and supply, and you cut out the part where he pointed out that price tumbled?

And yes, the price was tumbling even before the new 500TH.

[gyverlb]

Thats not correct. When it was at 4.5BTC the shareprice was so high that it had a 30% annual profit. Now the shareprice again is 30% of the annual return the divs are bringing. So no, the shares werent overpriced back then. Otherwise it would mean the shares are overpriced now too.

That's a shortsighted view: back then it was obvious that ASICMINER wouldn't be able to maintain its network share indefinitely without eating the profits to reinvest. The value of a share shouldn't be linked to the short-time dividend history but take their future evolution into account (after all past dividends have zero value for someone buying shares, only future ones do).

The question today is if ASICMINER will be able to raise its future dividends. The last ones were nearly 100% mining income and 0% hardware sales. As they are on the path to gen2, if there's no accident obviously in the future they will raise hardware sales and maybe mining income too.

This is why I think it made sense to sell at 4.5 and it makes sense to buy now. Basing sell/buy decisions just on the last dividends is a recipe for losing bitcoins in my opinion.

[SebastianJu]

Thats not correct. When it was at 4.5BTC the shareprice was so high that it had a 30% annual profit. Now the shareprice again is 30% of the annual return the divs are bringing. So no, the shares werent overpriced back then. Otherwise it would mean the shares are overpriced now too.

That's a shortsighted view: back then it was obvious that ASICMINER wouldn't be able to maintain its network share indefinitely without eating the profits to reinvest. The value of a share shouldn't be linked to the short-time dividend history but take their future evolution into account (after all past dividends have zero value for someone buying shares, only future ones do).

The question today is if ASICMINER will be able to raise its future dividends. The last ones were nearly 100% mining income and 0% hardware sales. As they are on the path to gen2, if there's no accident obviously in the future they will raise hardware sales and maybe mining income too.

This is why I think it made sense to sell at 4.5 and it makes sense to buy now. Basing sell/buy decisions just on the last dividends is a recipe for losing bitcoins in my opinion.

Right... shareprice should look different... but you can see its relatively strict connected to the divs. And i think its not a miracle why this is the case. Friedcat is relatively silent and this means doubts. Of course we can think it will jump to 2BTC soon... we only dont know.

And even if its relatively certain... selling now could still make sense because we dont have a clue if the price wont drop to 2.5btc soon. A loss never could be made in by divs in the short time. That means one could buy the double amount of shares then. (Except big shareholders of course.) But the small traders "make" the prices and the orderbook is way too thin.

When i look at the market... Asicminer is at 0.64BTC and ActiveMining at 0.0008BTC. They both work on 28nm process node if im not mistaken. Both have shown in the past that they can do IPO's though friedcat is the only one that has shown he can bring out ASIC's. Asicminer has 400,000 shares while ActiveMining has 10,000,000 shares. Thats 25 times more. So ActiveMinings Price compared would be 0.02BTC to get the same percent of the company like one asicminer share has. Both have relatively good chances to succeed but only the divs keep asicminer's share price high.

If the shareprice really would be set because of future grows then activemining should be valued way higher i think.

[canth]

Right... shareprice should look different... but you can see its relatively strict connected to the divs. And i think its not a miracle why this is the case. Friedcat is relatively silent and this means doubts. Of course we can think it will jump to 2BTC soon... we only dont know.

And even if its relatively certain... selling now could still make sense because we dont have a clue if the price wont drop to 2.5btc soon. A loss never could be made in by divs in the short time. That means one could buy the double amount of shares then. (Except big shareholders of course.) But the small traders "make" the prices and the orderbook is way too thin.

When i look at the market... Asicminer is at 0.64BTC and ActiveMining at 0.0008BTC. They both work on 28nm process node if im not mistaken. Both have shown in the past that they can do IPO's though friedcat is the only one that has shown he can bring out ASIC's. Asicminer has 400,000 shares while ActiveMining has 10,000,000 shares. Thats 25 times more. So ActiveMinings Price compared would be 0.02BTC to get the same percent of the company like one asicminer share has. Both have relatively good chances to succeed but only the divs keep asicminer's share price high.

If the shareprice really would be set because of future grows then activemining should be valued way higher i think.

Let's not forget that there are ~ 400K AM shares vs ~ 10M ActM shares. Assuming they ever reach the same market cap it would be 0.64 BTC/share for AM vs 0.0256 BTC/share for ActM.

[velacreations]

You do realise that price is the intersection of demand and supply, and you cut out the part where he pointed out that price tumbled?

And yes, the price was tumbling even before the new 500TH.

"tumbling" is an inaccurate description.  The price had been reduced a few times, but demand has not been reduced. 

Prices were still higher than reasonable ROI, so that's an indication that demand is still very healthy.  Sure, prices had to come down as the network expands and competition came on to the market, but AM sold all of the hardware they had for sale.

If demand had been reduced as well, price would have dropped a lot more to increase demand.

[ex-trader]

If demand had been reduced as well, price would have dropped a lot more to increase demand.

Will someone cleverer than me please work out the breakeven purchase price for a Blade given current difficulty and compare it to the last sale prices for the same hardware. That'll tell you what 500TH of these chips will be worth.

[bitcoin.newsfeed]

PR & Communications
1. The board has committed to meeting even more often than we have been, and intentionally gleaning whatever info can be shared from each meeting, and posting it to public.
2. The board will be assisting with writing these posts to make things easier for Friedcat.

The first & last update "by the Board" is from October 2nd  (almost one month old)

should we expect update soon? board? ...

reminder : also "end of October" deadlines are here.

[ThickAsThieves]

PR & Communications
1. The board has committed to meeting even more often than we have been, and intentionally gleaning whatever info can be shared from each meeting, and posting it to public.
2. The board will be assisting with writing these posts to make things easier for Friedcat.

The first & last update "by the Board" is from October 2nd  (almost one month old)

should we expect update soon? board? ...

reminder : also "end of October" deadlines are here.

Friedcat has been updating news himself lately. The board hasn't needed to help as there is no additional public news to report.

[EskimoBob]

If demand had been reduced as well, price would have dropped a lot more to increase demand.

Will someone cleverer than me please work out the breakeven purchase price for a Blade given current difficulty and compare it to the last sale prices for the same hardware. That'll tell you what 500TH of these chips will be worth.

ex-trader, http://mining.thegenesisblock.com/ will help you with those calculations.

[Rival]

Unfortunately trying to guess btc/fiat values and then trying to extrapolate difficulty increases are voodoo at best. These are the inherent weaknesses of any mining return calculator.

[ex-trader]

Will someone cleverer than me please work out the breakeven purchase price for a Blade given current difficulty and compare it to the last sale prices for the same hardware. That'll tell you what 500TH of these chips will be worth.

ex-trader, http://mining.thegenesisblock.com/ will help you with those calculations.
[/quote]

Thanks - I had looked at that and I'm very impressed by the site. My problem is that it seems that the rate of increase in future in the key to ROI calcs and as is stated in the post by rival thats voodoo at best.

It certainly seems to me like nothing you can buy right now can make ROI when measured in BTC, in which case the logical buyer should just buy BTC instead.

[dexX7]

I discovered http://bitcoinwisdom.com/bitcoin/calculator some time ago, the charts aren't bad either: http://bitcoinwisdom.com/bitcoin/difficulty.

[Strange Vlad]

It certainly seems to me like nothing you can buy right now can make ROI when measured in BTC, in which case the logical buyer should just buy BTC instead.

Yes.  And it's not even close to ROI, because for now hardware demand greatly exceeds supply.

[SebastianJu]

When i look at the market... Asicminer is at 0.64BTC and ActiveMining at 0.0008BTC. They both work on 28nm process node if im not mistaken. Both have shown in the past that they can do IPO's though friedcat is the only one that has shown he can bring out ASIC's. Asicminer has 400,000 shares while ActiveMining has 10,000,000 shares. Thats 25 times more. So ActiveMinings Price compared would be 0.02BTC to get the same percent of the company like one asicminer share has. Both have relatively good chances to succeed but only the divs keep asicminer's share price high.

Let's not forget that there are ~ 400K AM shares vs ~ 10M ActM shares. Assuming they ever reach the same market cap it would be 0.64 BTC/share for AM vs 0.0256 BTC/share for ActM.
[/quote]

I included it. ActiveMining is at 0.0008b and has 25 more shares in total than Asicminer. So in order to have the same percent of Activemining you would have with one asicminer share you would need to spend 0.02BTC in ActiveMining now.

Im really unsure if i should hold any of my shares now. Asicminer may drop to even half of its value until friedcat at least is announcing good news or good things happen. ActiveMining only will bring out good news in weeks. And labcoin... seems to be a scam where i lost anyway. Keeping the shares as a gamble is the best thing now.

It certainly seems to me like nothing you can buy right now can make ROI when measured in BTC, in which case the logical buyer should just buy BTC instead.

True.

[superduh]

25,000,000 Act Mining shares, 10 mil are the public ones