ASICMINER: Entering the Future of ASIC Mining by Inventing It

[Xu]

Over 0.40 now. I don't get it. Worse dividends ever, no hope of anything better for weeks. Stock jumps up 50%.

[HeRetiK]

Over 0.40 now. I don't get it. Worse dividends ever, no hope of anything better for weeks. Stock jumps up 50%.

Panic buyers. People that have been waiting on the sidelines believe that the bottom has been found and are now buying in fearing that right now is as cheap as it gets.

[Pompobit]

Did I miss something?

1. Dividends are going lower because of Difficulty increase (-> Cointerra launch soon etc.)
2. No new statement from Friedcat
3. BTC price goes up
4. AM Share price goes up too ? (0.28 to 0.38@ Havelock] wtf?

I'm surprised too, I'd add to list that someone is deploying batch of 25TH/s each one on Eligius (currently 250 TH/s in total), and he's not AM, so some serious competitor is going to be revealed soon.
Gen3 tapeout is 17 jan but likely we will not see miners until march/april... what is going on?

By the way, I'm happy that the share price is recovering, just I really don't know why is happening

[Mabsark]

Over 0.40 now. I don't get it. Worse dividends ever, no hope of anything better for weeks. Stock jumps up 50%.

What a surprise, people clearly haven't done the maths on this one.

Looking at the genesis block, the network hash rate will be 132.6 Ph/s on 14th April. If AM had 100 Th/s (gen1 mines) at that time then:

* AM would have 0.1 * 100 / 132.6 = 0.075% of the network hash rate.
* With 50,400 BTC mined per round, AM would get 37.8 BTC per round.
* With 37.8 BTC mined per round by AM, that would equate to 0.0000945 BTC per round per share

That's what divs will fall to before the new chips come online. If we then plug in the numbers for AM's proposed batch size of 2-20 Ph/s and assume that this is put together by 14th May, using genesis block again gives the network hash rate to be 263.8 Ph/s. This gives the following:

* 2 Ph/s would represent 0.76% of the network, which is worth 383.04 BTC per round and 0.0009576 BTC per round per share.
* 20 Ph/s would represent 7.58% of the network, which is worth 3820.32 BTC per round or 0.0095508 BTC per round per share.

Let say the network hash rate was 250 Ph/s (based on genesisblock) and AM controlled 5% of the network. That 5% would represent 12.5 Ph/s. If the network hash rate increases by 20% that round, that would take the network hash rate to 300 Ph/s. In order for AM to maintain their network share, AM would need to add 2.5 Ph/s by the end of that round. In order to maintain their hash rate, the following extra hash power would need to be brought online by the end of each round:

Round 1 = 2.5 Ph/s
Round 2 = 3 Ph/s
Round 3 = 3.6 Ph/s
Round 4 = 4.32 Ph/s
Round 5 = 5.184 Ph/s
Round 6 = 6.2208 Ph/s

If AM had 20 Ph/s (max batch size according to AM), 12.5 Ph/s would be needed to control 5% of the network, leaving 7.5 Ph/s for sales and maintaining the network share until a new batch of chips arrived. The first 3 rounds require more than 9.1 Ph/s to be brought online to maintain 5%.

If the network hash rate is around 250 Ph/s and AM's batch1 is 20 PH/s then it can't maintain network share beyond 2 rounds even if it didn't sell a single chip. In reality, AM will sell a good portion of their chips.

Now, if you are reading this comment, and you come to the conclusion that AM is a good buy at above IPO price, the perhaps you could show us the maths which lead to that conclusion. All the numbers I'm seeing tell me to avoid AM.

This reminds me of when people where paying 4+ BTC per share. Some of us pointed out back then that such prices where insane because the maths didn't support it and the same is happening now. People are assuming AM will bring their new chips online, capture significant network share, maintain that network share and still sell a large chunk of hardware. That's just not possible tough based on the numbers being reported.

Do the maths, people.

[freedomno1]

I guess that's one way to gage the sidelines post in speculation and watch what the bench does
Interesting question as to the price rising though but that was quite fast
Maybe some news on the Chinese side they always get the info a bit faster than us
Either way to my knowledge the schedule still remains Jan 20
http://thegenesisblock.com/asicminer-gen3-hardware-announcement-sees-muted-market-reaction/

[101111]

Do the maths, people.

I think you're way off base.

AM probably won't even do much mining, as FC said "It is a safe bet that we will be moving more to pure chip distribution".

[Mabsark]

Do the maths, people.

I think you're way off base.

AM probably won't even do much mining, as FC said "It is a safe bet that we will be moving more to pure chip distribution".

Like I said,

In reality, AM will sell a good portion of their chips.

The problem here though, is that people will be expecting profits like those from gen 1 chips. That's clearly not going to be the case though. As I pointed out months ago when shares were trading at 4+ BTC, AM had a monopoly at the time which is why they could charge outrageous prices for their hardware. As soon as competition came out, the profits from hardware sales plummeted. Everyone thought I was mad back then for saying that but that's exactly what happened.

This time around, AM don't have a monopoly and there's a lot of competition. We don't really know anything about AM's new chips but they won't have as high a hash rate as the 28nm chips. They may have lower power consumption but that doesn't really matter that much for individuals buying a mining rig or two.

So, AM will be releasing new chips into a highly competitive market and they're unlikely to take the performance (Gh/s) crown. Why should people buy AM hardware if they can get better performance elsewhere? The answer has to be because AM is cheaper per hash.

Lets say that AM got 20 Ph/s and sold the lot in one go and distributed the profits as divs. What would those divs have to be like to make you think a share price of 0.4 BTC was good value?

[Xu]

Methinks Mabsark is upset  he missed the under 0.30 boat.

The goal has long been to get 10% of the network. FC can do it. He has the technology, the resources, the facilities, and is the only one with a plan for what the market will look like in 4 months. At 10% of the network, that would support a share price of 1 btc assuming a 30% annual ROI from dividends alone. Hardware sales can boost it up much higher. This stock is a great long term bet. I just wonder why the move now, today. Inside information? FC has been known to drop good surprises on us.

My best theory is that when the price didn't plummet after the last dividend round with such crappy dividends, people on the sidelines decided that finally we reached bottom and started buying back in. If so, then we just found our support level and are solid until gen3 is released.

[101111]

Do the maths, people.

I think you're way off base.

AM probably won't even do much mining, as FC said "It is a safe bet that we will be moving more to pure chip distribution".

Like I said,

In reality, AM will sell a good portion of their chips.

So why did you pose those elaborate (albeit wrong) mining scenarios then challenge us to fault your maths? (rhetorical Q)

The problem here though, is that people will be expecting profits like those from gen 1 chips. That's clearly not going to be the case though. As I pointed out months ago when shares were trading at 4+ BTC, AM had a monopoly at the time which is why they could charge outrageous prices for their hardware. As soon as competition came out, the profits from hardware sales plummeted. Everyone thought I was mad back then for saying that but that's exactly what happened.

This time around, AM don't have a monopoly and there's a lot of competition. We don't really know anything about AM's new chips but they won't have as high a hash rate as the 28nm chips. They may have lower power consumption but that doesn't really matter that much for individuals buying a mining rig or two.

So, AM will be releasing new chips into a highly competitive market and they're unlikely to take the performance (Gh/s) crown. Why should people buy AM hardware if they can get better performance elsewhere? The answer has to be because AM is cheaper per hash.

Lets say that AM got 20 Ph/s and sold the lot in one go and distributed the profits as divs. What would those divs have to be like to make you think a share price of 0.4 BTC was good value?

What? So you're saying AM goes out of business? 20Ph and that's that?

in edit: personally I wouldn't mind if FC said no divs, re-investing in development. I hope he has aggresive and ambitious projects in the pipeline.

[Mabsark]

So why did you pose those elaborate (albeit wrong) mining scenarios then challenge us to fault your maths? (rhetorical Q)

Those mining scenarios are neither wrong nor elaborate. It's a simple scenario I created because people seem to be expecting AM to just recapture 10% of the network with their new chips. I was highlighting the fact that even if AM didn't sell any hardware, they couldn't even maintain a 5% share for more than two rounds under those conditions.

What? So you're saying AM goes out of business? 20Ph and that's that?

No, I'm not. Friedcat has claimed the first batch will between 2 and 20 Ph/s. How long will it take to produce a new batch of miners? What will be the size of that batch? What will the network hash rate be when the miner start to come online, etc.

This is the same mistake people made when they were buying shares for 4+ BTC. The 2nd batch of chips will be nowhere near as profitable as the 1st batch.

[Mabsark]

Methinks Mabsark is upset  he missed the under 0.30 boat.

The goal has long been to get 10% of the network. FC can do it. He has the technology, the resources, the facilities, and is the only one with a plan for what the market will look like in 4 months. At 10% of the network, that would support a share price of 1 btc assuming a 30% annual ROI from dividends alone. Hardware sales can boost it up much higher. This stock is a great long term bet. I just wonder why the move now, today. Inside information? FC has been known to drop good surprises on us.

My best theory is that when the price didn't plummet after the last dividend round with such crappy dividends, people on the sidelines decided that finally we reached bottom and started buying back in. If so, then we just found our support level and are solid until gen3 is released.

If AM had 20 Ph/s in their mines and the network hash rate was 250 Ph/s (as predicted by genesisblock), then it isn't possible for AM even get 10% of the network. That would require 25 Ph/s. Once their chips are all used up, it's all downhill until new chips arrive.

Clearly, you didn't even bother reading what I said.

[Mabsark]

Methinks Mabsark is upset  he missed

Wouldn't be surprising as his whole posting history is failed predictions.

Over 0.40 now. I don't get it. Worse dividends ever, no hope of anything better for weeks. Stock jumps up 50%.

Unless you account AM is in development mode again - same way shares that did not deliver anything yet, but promise future revenue, get traded.

Really pankkake? Remember when shares where going for 4+ BTC and I said this:

It's my opinion that a lot of investors simply don't understand how mining works. If they did, then they would understand that AM hardware and shares are vastly overpriced.

Just like a lot of people paying silly money for mining bonds have found out, AM investors will come to the same realisation that share prices are currently way overpriced.

LISTEN AND LISTEN CAREFULLY. The only reason why AM is able to charge such outrageous prices is because they've had no competition. By the end of the year, there will be plenty of competition. Here's a quick comparison:

AM Block Erupter Blade
10 Gh/s
50 BTC = 5,000 USD @ 100 USD/BTC
2 Mh/s per USD

KNC Jupiter
350 Gh/s
7,000 USD @ 100 USD/BTC
50 Mh/s per USD

It should be blatantly obvious to anyone with half a brain that there's going to be a lot less income from hardware sales due to competition. That same competition will also decrease AM's share of the network hash rate.

AM share holders are going to get hit by a good dose of reality in the coming months. Perhaps then they will stop listening to idiots trying to flog them overpriced stuff and do the maths themselves.

To which you replied:

AM will probably have better hardware to sell than what they have now by then. They will also be able to sell their old, less-efficients ASICs (sure it will be for less) if they replace them in their datacenter.

They have the experience and people know they ship. So I doubt they'll have trouble selling new hardware.

and,

You're missing the part where I think they will have better hardware, and while it will have to be priced better, it will also be still competitive. The selling of older hardware is just icing on the cake.

ASICMINER has a history of shipping and no false promises.

Also, I renew my scepticism of KNC having access to 28nm fabs.

Remind me how that turned out again. You guys are all blinded by greed again and you're all going to get burned again. I've shown you guys the numbers, if you don't believe those numbers, then use your own values and do the maths yourselves. Look at the facts.

Edit: I urge everyone to go back to page 20 of the speculation thread. The argument I made back then was blatantly obvious to me, yet I could count the number of people who understood that on one hand. People delude themselves into believing nonsense simply because they want that nonsense to be true. Unfortunately, reality does not work like that.

[101111]

So why did you pose those elaborate (albeit wrong) mining scenarios then challenge us to fault your maths? (rhetorical Q)

Those mining scenarios are neither wrong nor elaborate. It's a simple scenario I created because people seem to be expecting AM to just recapture 10% of the network with their new chips. I was highlighting the fact that even if AM didn't sell any hardware, they couldn't even maintain a 5% share for more than two rounds under those conditions.

What? So you're saying AM goes out of business? 20Ph and that's that?

No, I'm not. Friedcat has claimed the first batch will between 2 and 20 Ph/s. How long will it take to produce a new batch of miners? What will be the size of that batch? What will the network hash rate be when the miner start to come online, etc.

This is the same mistake people made when they were buying shares for 4+ BTC. The 2nd batch of chips will be nowhere near as profitable as the 1st batch.

I appreciate your opinion, but we have very different perspectives. A lot of this is subjective, some of the numbers rubbery at best, there's too many unknowns, life is short. I'll leave it at that.

[electerium]

Over 0.40 now. I don't get it. Worse dividends ever, no hope of anything better for weeks. Stock jumps up 50%.

What a surprise, people clearly haven't done the maths on this one.

Looking at the genesis block, the network hash rate will be 132.6 Ph/s on 14th April. If AM had 100 Th/s (gen1 mines) at that time then:

* AM would have 0.1 * 100 / 132.6 = 0.075% of the network hash rate.
* With 50,400 BTC mined per round, AM would get 37.8 BTC per round.
* With 37.8 BTC mined per round by AM, that would equate to 0.0000945 BTC per round per share

That's what divs will fall to before the new chips come online. If we then plug in the numbers for AM's proposed batch size of 2-20 Ph/s and assume that this is put together by 14th May, using genesis block again gives the network hash rate to be 263.8 Ph/s. This gives the following:

* 2 Ph/s would represent 0.76% of the network, which is worth 383.04 BTC per round and 0.0009576 BTC per round per share.
* 20 Ph/s would represent 7.58% of the network, which is worth 3820.32 BTC per round or 0.0095508 BTC per round per share.

Let say the network hash rate was 250 Ph/s (based on genesisblock) and AM controlled 5% of the network. That 5% would represent 12.5 Ph/s. If the network hash rate increases by 20% that round, that would take the network hash rate to 300 Ph/s. In order for AM to maintain their network share, AM would need to add 2.5 Ph/s by the end of that round. In order to maintain their hash rate, the following extra hash power would need to be brought online by the end of each round:

Round 1 = 2.5 Ph/s
Round 2 = 3 Ph/s
Round 3 = 3.6 Ph/s
Round 4 = 4.32 Ph/s
Round 5 = 5.184 Ph/s
Round 6 = 6.2208 Ph/s

If AM had 20 Ph/s (max batch size according to AM), 12.5 Ph/s would be needed to control 5% of the network, leaving 7.5 Ph/s for sales and maintaining the network share until a new batch of chips arrived. The first 3 rounds require more than 9.1 Ph/s to be brought online to maintain 5%.

If the network hash rate is around 250 Ph/s and AM's batch1 is 20 PH/s then it can't maintain network share beyond 2 rounds even if it didn't sell a single chip. In reality, AM will sell a good portion of their chips.

Now, if you are reading this comment, and you come to the conclusion that AM is a good buy at above IPO price, the perhaps you could show us the maths which lead to that conclusion. All the numbers I'm seeing tell me to avoid AM.

This reminds me of when people where paying 4+ BTC per share. Some of us pointed out back then that such prices where insane because the maths didn't support it and the same is happening now. People are assuming AM will bring their new chips online, capture significant network share, maintain that network share and still sell a large chunk of hardware. That's just not possible tough based on the numbers being reported.

Do the maths, people.

Ugh network hashrate today is roughly 12 Ph/s. By 7/2014 the mining forum says it should lie between 40-160 PH/s

[dmcdad]

If AM had 20 Ph/s in their mines and the network hash rate was 250 Ph/s (as predicted by genesisblock), then it isn't possible for AM even get 10% of the network. That would require 25 Ph/s. Once their chips are all used up, it's all downhill until new chips arrive.

Clearly, you didn't even bother reading what I said.

I do agree that the days of AM self-mining 10 to 20% of total network hash are likely over. But that doesn't matter.

AM isn't going to sell 20P and then go out of business. That is the FIRST BATCH of their next gen chips, which based on the prelim target specs will be highly competitive both in wafer cost and power efficiency.

It doesn't matter if AM self-mines, sells turnkey miners, or just sells chips as long as they are maximizing their profit. Is the profit margin for selling mining hardware decreasing? Of course, but based on the specs AM will be able to get a very healthy profit from their chips and/or miners.

[Rival]

There appears to be quite a bit of speculation as to whether AM is capable of capturing 5% or 10% of the global hash again. I think it it premature to suggest they cannot. It is still very early in the game and the future of bitcoin has not yet been written. The only certainty is that the landscape will be very different in a few years.

There is one projection i will make though: If AM manages to seize 5%, 10% or 20% of the global hash, it will give the term "butthurt" a whole new meaning for quite a few people in the mining business, both great and small. It does not appear that anyone anywhere is factoring in that possibility in their calculations.

[superduh]

whatever happens friedcat should do some form of update... hopefully soon

[kingcrimson]

Methinks Mabsark is upset  he missed

Wouldn't be surprising as his whole posting history is failed predictions.

Over 0.40 now. I don't get it. Worse dividends ever, no hope of anything better for weeks. Stock jumps up 50%.

Unless you account AM is in development mode again - same way shares that did not deliver anything yet, but promise future revenue, get traded.

Really pankkake? Remember when shares where going for 4+ BTC and I said this:

It's my opinion that a lot of investors simply don't understand how mining works. If they did, then they would understand that AM hardware and shares are vastly overpriced.

Just like a lot of people paying silly money for mining bonds have found out, AM investors will come to the same realisation that share prices are currently way overpriced.

LISTEN AND LISTEN CAREFULLY. The only reason why AM is able to charge such outrageous prices is because they've had no competition. By the end of the year, there will be plenty of competition. Here's a quick comparison:

AM Block Erupter Blade
10 Gh/s
50 BTC = 5,000 USD @ 100 USD/BTC
2 Mh/s per USD

KNC Jupiter
350 Gh/s
7,000 USD @ 100 USD/BTC
50 Mh/s per USD

It should be blatantly obvious to anyone with half a brain that there's going to be a lot less income from hardware sales due to competition. That same competition will also decrease AM's share of the network hash rate.

AM share holders are going to get hit by a good dose of reality in the coming months. Perhaps then they will stop listening to idiots trying to flog them overpriced stuff and do the maths themselves.

To which you replied:

AM will probably have better hardware to sell than what they have now by then. They will also be able to sell their old, less-efficients ASICs (sure it will be for less) if they replace them in their datacenter.

They have the experience and people know they ship. So I doubt they'll have trouble selling new hardware.

and,

You're missing the part where I think they will have better hardware, and while it will have to be priced better, it will also be still competitive. The selling of older hardware is just icing on the cake.

ASICMINER has a history of shipping and no false promises.

Also, I renew my scepticism of KNC having access to 28nm fabs.

Remind me how that turned out again. You guys are all blinded by greed again and you're all going to get burned again. I've shown you guys the numbers, if you don't believe those numbers, then use your own values and do the maths yourselves. Look at the facts.

Edit: I urge everyone to go back to page 20 of the speculation thread. The argument I made back then was blatantly obvious to me, yet I could count the number of people who understood that on one hand. People delude themselves into believing nonsense simply because they want that nonsense to be true. Unfortunately, reality does not work like that.

Aren't you the guy who was pumping Labcoin and so arrogant/confident how it would play out. Be sure to quote those posts too so we can see for every correct prediction you make an equally moronic one.

[jimmothy]

Methinks Mabsark is upset  he missed

Wouldn't be surprising as his whole posting history is failed predictions.

Over 0.40 now. I don't get it. Worse dividends ever, no hope of anything better for weeks. Stock jumps up 50%.

Unless you account AM is in development mode again - same way shares that did not deliver anything yet, but promise future revenue, get traded.

Really pankkake? Remember when shares where going for 4+ BTC and I said this:

It's my opinion that a lot of investors simply don't understand how mining works. If they did, then they would understand that AM hardware and shares are vastly overpriced.

Just like a lot of people paying silly money for mining bonds have found out, AM investors will come to the same realisation that share prices are currently way overpriced.

LISTEN AND LISTEN CAREFULLY. The only reason why AM is able to charge such outrageous prices is because they've had no competition. By the end of the year, there will be plenty of competition. Here's a quick comparison:

AM Block Erupter Blade
10 Gh/s
50 BTC = 5,000 USD @ 100 USD/BTC
2 Mh/s per USD

KNC Jupiter
350 Gh/s
7,000 USD @ 100 USD/BTC
50 Mh/s per USD

It should be blatantly obvious to anyone with half a brain that there's going to be a lot less income from hardware sales due to competition. That same competition will also decrease AM's share of the network hash rate.

AM share holders are going to get hit by a good dose of reality in the coming months. Perhaps then they will stop listening to idiots trying to flog them overpriced stuff and do the maths themselves.

To which you replied:

AM will probably have better hardware to sell than what they have now by then. They will also be able to sell their old, less-efficients ASICs (sure it will be for less) if they replace them in their datacenter.

They have the experience and people know they ship. So I doubt they'll have trouble selling new hardware.

and,

You're missing the part where I think they will have better hardware, and while it will have to be priced better, it will also be still competitive. The selling of older hardware is just icing on the cake.

ASICMINER has a history of shipping and no false promises.

Also, I renew my scepticism of KNC having access to 28nm fabs.

Remind me how that turned out again. You guys are all blinded by greed again and you're all going to get burned again. I've shown you guys the numbers, if you don't believe those numbers, then use your own values and do the maths yourselves. Look at the facts.

Edit: I urge everyone to go back to page 20 of the speculation thread. The argument I made back then was blatantly obvious to me, yet I could count the number of people who understood that on one hand. People delude themselves into believing nonsense simply because they want that nonsense to be true. Unfortunately, reality does not work like that.

Aren't you the guy who was pumping Labcoin and so arrogant/confident how it would play out. Be sure to quote those posts too so we can see for every correct prediction you make an equally moronic one.

Not sure if mabsark is a troll or actually believes what he is posting. Either way I've found that by betting against mabsarks predictions you literally cannot lose money.

[Mabsark]

Aren't you the guy who was pumping Labcoin and so arrogant/confident how it would play out. Be sure to quote those posts too so we can see for every correct prediction you make an equally moronic one.

Yes, I stated on many occasions that Labcoin would be very profitable if it wasn't a scam. And it would have been. Unfortunately for a lot of people, it was a scam. How is that relevant? My arguments are based on the available data. Simple as that.

Not sure if mabsark is a troll or actually believes what he is posting. Either way I've found that by betting against mabsarks predictions you literally cannot lose money.

Pretty much everyone called me a troll back when shares were going for 4+ BTC, ignored my arguments, told everyone else to ignore my argument and put me on their ignore list, then carried on buying shares at 4+ BTC. Those people lost shit loads of money. The arguments I made were completely obvious yet most people could not help deluding themselves. Take a look at the argument yourself and tell me if you think it was obvious. Those people lost money because they ignored the facts and listened to people blinded by greed.

I'm not telling people to take my word as gospel, I'm telling people - as I always do - to do the maths themselves.