ASICMINER: Entering the Future of ASIC Mining by Inventing It

[vortex1878]

fc "kind of" answered to the BTC/USD issue. Although I honestly don't really get what he means with that.

(...)

2) How many months of inventory do you estimate that represents?

Depending on the Bitcoin price. Under this price we expect it to be 1-1.5.

(...)

That means the market demand for Gen3, it depends on the BTC price. With a higher BTC price, we can expect a higher inventory turnover. For $700/BTC, it's 1-1.5.

That makes sense. Thank you.

[bitcoiner49er]

Sales price will be adjusted if BTC rises.

So if we link the current price of 0,5$ to the current BTC price of 666$ we get a to-date sales price of 0.00075 BTC/G.

Using a factor of 0.9 for an average future price and retaining 1/3 for Gen4, I come to a gross-income per share of 0.06756757 BTC for the 60P.

Forget to ask FC will they change the chip price based on BTC price. It may sound silly, but I don't think the chip price is so flexible. That is a huge risk, because BTC price can be really crazy.

Maybe we can suggest a BTC buy/sell program where "X" amount of BTC is bought or sold each day to average prices and maintain a BTC to USD ratio.

[shawshankinmate37927]

Maybe we can suggest a BTC buy/sell program where "X" amount of BTC is bought or sold each day to average prices and maintain a BTC to USD ratio.

Controlling the USD/BTC exchange rate is far beyond AM's control.  All they can do is raise or lower their own risk of exposure.

[whalezy]

Sales price will be adjusted if BTC rises.

So if we link the current price of 0,5$ to the current BTC price of 666$ we get a to-date sales price of 0.00075 BTC/G.

Using a factor of 0.9 for an average future price and retaining 1/3 for Gen4, I come to a gross-income per share of 0.06756757 BTC for the 60P.

Forget to ask FC will they change the chip price based on BTC price. It may sound silly, but I don't think the chip price is so flexible. That is a huge risk, because BTC price can be really crazy.

Maybe we can suggest a BTC buy/sell program where "X" amount of BTC is bought or sold each day to average prices and maintain a BTC to USD ratio.

We should ask FC how he plans to deal with the BTC price risk, you cannot collect a huge amount of cash and throw it in the BTC market, it would be a tragedy for us.

[necro_nemesis]

We have the technology to convert fiat to BTC in the form of mining. We have the printing press. Maybe it's time to run it.

[aahzmundus]

[atx.btc]

https://i.imgur.com/5FKuUUB.jpg

fuck yes, I missed that picture!

I also just wanna say to all of the haters in this thread - fucking told you so.

[kaerf]

Sales price will be adjusted if BTC rises.

So if we link the current price of 0,5$ to the current BTC price of 666$ we get a to-date sales price of 0.00075 BTC/G.

Using a factor of 0.9 for an average future price and retaining 1/3 for Gen4, I come to a gross-income per share of 0.06756757 BTC for the 60P.

Basically correct, but I believe we can't sell for $0.5/GH/s in the future. That batch will be sold within the next 1.5 months, so we'll achieve a price of about $0.35/GH/s. And we should brace for a price above $700. Also, FC's wording seems to suggest that we won't adjust the chip price that much but rather sell more chips.

My calculation for those interested: https://bitcointalk.org/index.php?topic=99497.msg7148348#msg7148348

I used to worry about the rising USD/BTC exchange rate, but it appears that AM has the production capacity to pump out chips.

If the exchange rate goes up and AM doesn't change the price per chip, then sales volume should increase to offset volatility. ....because as USD/BTC goes up, each chip earns more USD (also need to account for difficulty increase).

[vortex1878]

Sales price will be adjusted if BTC rises.

So if we link the current price of 0,5$ to the current BTC price of 666$ we get a to-date sales price of 0.00075 BTC/G.

Using a factor of 0.9 for an average future price and retaining 1/3 for Gen4, I come to a gross-income per share of 0.06756757 BTC for the 60P.

Basically correct, but I believe we can't sell for $0.5/GH/s in the future. That batch will be sold within the next 1.5 months, so we'll achieve a price of about $0.35/GH/s. And we should brace for a price above $700. Also, FC's wording seems to suggest that we won't adjust the chip price that much but rather sell more chips.

My calculation for those interested: https://bitcointalk.org/index.php?topic=99497.msg7148348#msg7148348

I used to worry about the rising USD/BTC exchange rate, but it appears that AM has the production capacity to pump out chips.

If the exchange rate goes up and AM doesn't change the price per chip, then sales volume should increase to offset volatility. ....because as USD/BTC goes up, each chip earns more USD (also need to account for difficulty increase).

Ideally BTC/USD should rise equivalently to the difficulty. In that scenario a stable $ sales-price would make sense.

[whalezy]

Sales price will be adjusted if BTC rises.

So if we link the current price of 0,5$ to the current BTC price of 666$ we get a to-date sales price of 0.00075 BTC/G.

Using a factor of 0.9 for an average future price and retaining 1/3 for Gen4, I come to a gross-income per share of 0.06756757 BTC for the 60P.

Basically correct, but I believe we can't sell for $0.5/GH/s in the future. That batch will be sold within the next 1.5 months, so we'll achieve a price of about $0.35/GH/s. And we should brace for a price above $700. Also, FC's wording seems to suggest that we won't adjust the chip price that much but rather sell more chips.

My calculation for those interested: https://bitcointalk.org/index.php?topic=99497.msg7148348#msg7148348

I used to worry about the rising USD/BTC exchange rate, but it appears that AM has the production capacity to pump out chips.

If the exchange rate goes up and AM doesn't change the price per chip, then sales volume should increase to offset volatility. ....because as USD/BTC goes up, each chip earns more USD (also need to account for difficulty increase).

Agree with that, a rising BTC price would expand Gen3's lifecycle. Anyway, hope the mining farm could deploy earlier to offset the BTC price problem.

[stompysteve]

they need to start up that 25% global btc mine they used to have so they can just pay out divs from there and not have to worry about the btc conversion problem they currently have             
 

[Franktank]

they need to start up that 25% global btc mine they used to have so they can just pay out divs from there and not have to worry about the btc conversion problem they currently have            
 

In due time, friedcat said it best here:

Our pricing strategy was discussed in the board before, which targets low margin large quantity instead of high margin small quantity because: 1) If both device producers and miners can have real profit after risk premium, we will develop reliable consumer of chips in the long time.

If the mine was set up first, the total network hashrate would sky rocket → high network hashrate leads to lower hardware sales for hardware partners → lower sales for hardware partners, they'll find other options → lower chip sales overall → lower div yield in the long run; mining divs is not sustainable (long term) once everyone else gets their hardware online

However, if chip sales start first → hardware partners sells large quantities; end-users make profit early on → network rises but chip volume sales is high → sets up large scale mine → high chip sales and decent mining revenue → better, sustainable div yield; this allows all parties to make funds and be happy

A flawed metaphor but appropriate: Look at the video graphics card market, it's why you see it dominated by hardware partners like EVGA, PNY for Nvidia or Sapphire, XFX for AMD or ASUS, Gigabyte for both. You don't see too many OEM cards going out in high volumes. Similarly, you don't see Intel or AMD producing entire computers but primarily focus on the processor. When everyone makes money, the industry as a whole grows (and not cannibalize itself).

Now if friedcat is going the route where hardware partners get chips first around $0.4-$0.5 a GH and still believes that mining is still feasible afterwards, that means he's getting a significantly lower rate than the quoted <$0.2 a GH.

While it's quick and easy to jump in glee after that informative update, it still has to be executed. Receiving hardware within the scheduled time frames; partners needing to be up-to-date with latest Gen3 info to produce efficient miners; ensuring that end-users get their hardware in a timely fashion; and setting up the mine later on are all things need to happen correctly for it to go well. How these events occur will be more telling of the dividend yield, as opposed to just taking the hashrate accounted for and multiplying by the BTC/USD ratio and the going rate of GH/s sold.

[ryepdx]

None of us have gotten dividends since then. Dividends are coming once AM is cashflow-positive again, according to friedcat's update a few hours ago.

[vortex1878]

I have 10 shares of ASICMINER, but haven't gotten a dividend since March 30th. Should I contact friedcat, or did I miss some news?

Everything was answered in friedcat's latest post: https://bitcointalk.org/index.php?topic=99497.msg7147330#msg7147330

Yes. You are very smart. That is why you just entered the ignore-lists of many people.

[stompysteve]

they need to start up that 25% global btc mine they used to have so they can just pay out divs from there and not have to worry about the btc conversion problem they currently have            
 

In due time, friedcat said it best here:

Our pricing strategy was discussed in the board before, which targets low margin large quantity instead of high margin small quantity because: 1) If both device producers and miners can have real profit after risk premium, we will develop reliable consumer of chips in the long time.

If the mine was set up first, the total network hashrate would sky rocket → high network hashrate leads to lower hardware sales for hardware partners → lower sales for hardware partners, they'll find other options → lower chip sales overall → lower div yield in the long run; mining divs is not sustainable (long term) once everyone else gets their hardware online

However, if chip sales start first → hardware partners sells large quantities; end-users make profit early on → network rises but chip volume sales is high → sets up large scale mine → high chip sales and decent mining revenue → better, sustainable div yield; this allows all parties to make funds and be happy

A flawed metaphor but appropriate: Look at the video graphics card market, it's why you see it dominated by hardware partners like EVGA, PNY for Nvidia or Sapphire, XFX for AMD or ASUS, Gigabyte for both. You don't see too many OEM cards going out in high volumes. Similarly, you don't see Intel or AMD producing entire computers but primarily focus on the processor. When everyone makes money, the industry as a whole grows (and not cannibalize itself).

Now if friedcat is going the route where hardware partners get chips first around $0.4-$0.5 a GH and still believes that mining is still feasible afterwards, that means he's getting a significantly lower rate than the quoted <$0.2 a GH.

While it's quick and easy to jump in glee after that informative update, it still has to be executed. Receiving hardware within the scheduled time frames; partners needing to be up-to-date with latest Gen3 info to produce efficient miners; ensuring that end-users get their hardware in a timely fashion; and setting up the mine later on are all things need to happen correctly for it to go well. How these events occur will be more telling of the dividend yield, as opposed to just taking the hashrate accounted for and multiplying by the BTC/USD ratio and the going rate of GH/s sold.

I was mostly making a joke, but good explaination

I always like watching blocks being found by AM though

[dmcdad]

Thanks for the detailed information friecat -- that helps clear up quite a bit.

 And kudos to all those that were able to load up on shares < 0.2BTC.

[spartan82]

All I have to say is LOL to those who ridiculed the man and to those that had no faith and sold out days too early!

[xhomerx10]

All I have to say is LOL to those who ridiculed the man and to those that had no faith and sold out days too early!

 Well it's odd that we didn't get any real communication until the "ridicule" began.  The squeaky wheel gets the grease - apparently we are lubed up.
To the moon!!

PS - Thanks for the info FC

[necro_nemesis]

Without a doubt the trader's have a large influence on the daily share price through their trading actions but I wouldn't go as far as saying the complaints posted here were nothing more than a barometer of shareholder discontent with respect to the limited information forthcoming from AM. I suspect a level of concern expressed by the large stakeholders communicated the need to pacify the masses as a result of profound under valuation of their shares and resulted in the information we were given. What this implies is there remains interest at the management level in the valuation of AM shares.

[VolanicEruptor]

I agree with necro.. feeling shitty about your shares when there is very limited information about what's going on is a pretty natural thing.  This would explain why the price dropped so bad.  Bad shareholder confidence affected everyone.