ASICMINER: Entering the Future of ASIC Mining by Inventing It

[BitHub]

Can we just admit that this company once had a great run but its now completely over. We will never see this company ever do well like that again. This stock is now rated a trash stock. Hopefully you get the chance to get out before it completely collapses.

[dhenson]

Can we just admit that this company once had a great run but its now completely over. We will never see this company ever do well like that again. This stock is now rated a trash stock. Hopefully you get the chance to get out before it completely collapses.

Lol bithub, you show up every so often to bitch about AM/FC and then you disappear.  Nice to see you are still following along.

[lophie]

Additionally, I would like to posit this simple formula for investing in a bitcoin company:

1) Is the management honest? Well over 99% have proven in the end to be scams. It appears FC is honest in that he did shower IPO purchasers with rewards. He has also delivered products, unlike most other IPO offerings. Rate them as you choose on this catagory, but I don't see anyone rating higher at this point.

2) Is the management competent?  Can they deliver on promises? Once again, FC appears to pass this test. While not every expectation is achieved, AM has assuredly produced massive amounts of product and brought them to market. You cannot give them 100% on this, but once again, what company that you can buy shares in did better?

3) What is the growth potential? I suppose the growth potential for any company is pretty high, but AM has bank, distribution channels, name recognition, and a much higher chance of actually achieving that growth than just about anyone else.

From a long term standpoint AM is probably the best game in town. For the short term, there are plenty of opportunities that may offer a higher short-term reward. However, with that short-term reward comes higher risk. AM is not ideal for the short-term pump-and-dump crowd, although many still try to play it that way.

That said, even though AM is in my opinion the best of breed for stocks, simply purchasing and holding bitcoins is probably the superior long-term investment choice at this time.

To start being fair to AM since I have been lashing on them recently, All your points are very much valid and ASICMINER is really one of the best. We all know that this silence of the cat is bringing much much more profits and good business but it is with no doubt.... deafening.....

F.C. missed his own time line to pay divs..... I have a part in me desperately waiting for an update so it could vouch for AM for the rest of my mind that is screaming (AM is over).

How much exactly does one share worth to price on the market? The reason no one knows is because no one can really estimate at this point. Calculate all the information you want but we don't know when and if any will be given back as divs and at what rate, Which means all estimates are just playing with numbers to make us feel good, or bad.

[ThunderSheep]

...but a hugely successful gen4 could also mean a return to 1btc/shares.

More than the all-time ~0.60btc/share from the good days of mining when people were spending money recklessly? How did you got the 1btc/share number? How much revenue is needed in $ or BTC for that big big dividends?

10% of the network reward is about .0063 per share weekly IIRC, which would generally support a share price around 1.0.  Cost deductions offset by higher network % and/or sales profits could put it in the 1.0 - 1.5 range  if mining works out at all like friedcat has planned.  There's a few 'if's' in there, for sure, but thats my current view.

You got it wrong. It's not about the cost of 1 share. It's about the dividends! jommothy stated that a successful gen4 chip could bring in 1BTC per share in dividends form. I would like to know how he got to that number so I can see it's not just an attempt to raise the share price.

Dude, you should reread the post you quoted.  He said a return to 1BTC/share not a return of 1BTC/share.

[arnuschky]

3) As for the growth potential... this is the bitcoin mining industry, one of the few industries in the world that actually has a very well defined cap to its growth, at least in the medium term (likely next few years) while transaction fees remain a small part of block rewards. Not only does that bound any potential growth, it also makes the competition even more fierce, since competing companies can't simply expand into new and bigger markets or create new demand where demand didn't exist before, rather, they all compete for the same fixed, predetermined, amount of mineable bitcoins.

A very good point. Haven't considered that before.

[RoadStress]

No no. Not for Gen3. For Gen4! Gen3 will never hit 15%. Willing to bet some BTC on it!

I will ask you the same question that I've asked jimmothy: would you like to elaborate on the 1btc/share market value statement?

FC claimed that 40nm should have hit .35W/GH if they hadn't made mistakes (that they have now identified and corrected).  AM is the only publicly traded company producing mining chips.  Once 28nm Gen 4 is announced and power estimates are realized, you will wish you had invested at these insanely low prices.

I'm already betting on it.

Nicely argument

You got it wrong. It's not about the cost of 1 share. It's about the dividends! jommothy stated that a successful gen4 chip could bring in 1BTC per share in dividends form. I would like to know how he got to that number so I can see it's not just an attempt to raise the share price.

Dude, you should reread the post you quoted.  He said a return to 1BTC/share not a return of 1BTC/share.

My mistake then!

[Rival]

3) As for the growth potential... this is the bitcoin mining industry, one of the few industries in the world that actually has a very well defined cap to its growth, at least in the medium term (likely next few years) while transaction fees remain a small part of block rewards. Not only does that bound any potential growth, it also makes the competition even more fierce, since competing companies can't simply expand into new and bigger markets or create new demand where demand didn't exist before, rather, they all compete for the same fixed, predetermined, amount of mineable bitcoins.

A very good point. Haven't considered that before.

Although the bitcoin reward over any given time is limited, the amount of good and services that can be purchased with it is not. A dividend of .006 may not buy much at $10/btc. At $65,000/btc it is another story altogether. Like any other medium of exchange, it is the goods and services we desire, not the currency itself.

[webbrowser]

I think you know the counter to that argument - if you believe bitcoin will go to the moon, just hodl bitcoin.

As for whether ASICMINER will ever return 0.17 btc over the rest of its lifetime, that's a bet that havelock traders are currently split on.

[triptamine]

As for whether ASICMINER will ever return 0.17 btc over the rest of its lifetime, that's a bet that havelock traders are currently split on.

Which makes the question:

Does one believe that AM's total dividend payments will be > BTC 68k (the amount above 68k representing ones desired ROI) within ones desired period of investment return?

If they, last year alone, paid out BTC 240k in dividends, this doesn't appear to be -wildly implausible- even considering stiffer competition over hash rate. The time scale is key here.

As another example: To justify a price of BTC 1 per share, AM needs to pay out > BTC 400k (the amount above 400k again representing ones desired ROI) in dividends within ones desired period of investment return, whatever it is. Whether or not one deems this scenario to be plausible is up to each individual shareholder, and in a rational market (which this is clearly not), this will determine the share price.

(obviously this doesn't account for any tradable assets accumulated by the company, but it's a simple and way of looking at AM share valuation)

[Puppet]

3) As for the growth potential... this is the bitcoin mining industry, one of the few industries in the world that actually has a very well defined cap to its growth, at least in the medium term (likely next few years) while transaction fees remain a small part of block rewards. Not only does that bound any potential growth, it also makes the competition even more fierce, since competing companies can't simply expand into new and bigger markets or create new demand where demand didn't exist before, rather, they all compete for the same fixed, predetermined, amount of mineable bitcoins.

The above logic lets you actually calculate the network speed, and therefore TAM for asicminer if you make assumptions for things like electricity cost and BTC exchange rate. I did this a year ago, and with the current exchange rate,  it seems we should be heading towards a 5-600PH network at $700/TH. So the TAM is on the order of 300PH which would be worth ~$200M. Or ~400K BTC. Or ballpark of ~1 BTC per AM share. Thats the total available market, how much AM will grab of that, and how much profit margin they will achieve, who knows, but I doubt its gonna be 100% of the market at 100% profit.

[jimmothy]

3) As for the growth potential... this is the bitcoin mining industry, one of the few industries in the world that actually has a very well defined cap to its growth, at least in the medium term (likely next few years) while transaction fees remain a small part of block rewards. Not only does that bound any potential growth, it also makes the competition even more fierce, since competing companies can't simply expand into new and bigger markets or create new demand where demand didn't exist before, rather, they all compete for the same fixed, predetermined, amount of mineable bitcoins.

The above logic lets you actually calculate the network speed, and therefore TAM for asicminer if you make assumptions for things like electricity cost and BTC exchange rate. I did this a year ago, and with the current exchange rate,  it seems we should be heading towards a 5-600PH network at $700/TH. So the TAM is on the order of 300PH which would be worth ~$200M. Or ~400K BTC. Or ballpark of ~1 BTC per AM share. Thats the total available market, how much AM will grab of that, and how much profit margin they will achieve, who knows, but I doubt its gonna be 100% of the market at 100% profit.

The fact that you have to make assumptions about electricity cost, btc exchange rate, hardware cost, hardware efficiency, and miner rationality means you can't actually predict the future hashrate.

[Puppet]

You dont have to guess variables like electricity cost, we have a pretty good idea what it costs. Many of the other variables also to a large extend, cancel each other out for AM if you do the math. Eg, lower hardware costs would result in higher overall network speed on my curves, but decrease the TAM per TH. THe BTC value isnt impacted much at all within the range of reasonable estimates. 

Of course what you end up with is an estimate of the TAM, but its not going to be off by a factor 10x (like most other predictions were last year. I dare say I pretty much nailed it so far).  If you prefer valuing this share by gut feeling instead, be my guest. Happy buying at 1BTC.

[hdbuck]

could be a wise move:

http://blogs.wsj.com/venturecapital/2014/09/05/for-kncminer-time-to-forget-selling-bitcoin-machines-to-at-home-miners/

the comments are lulzy tho
nothing to do with AM  

[glendall]

Seems like a lot of rose-colored glasses in here IMHO. Last year AM was poised to be a giant, but they have fell pretty far. They just weren't quick enough and didn't have as many resources as the other giants who entered the field.

There huge first mover advantage was not fully taken advantage of. When the price was 0.25 for a long stretch I thought AM was overvalued, as I said about 20 pages back or so. But 0.16 does seem much more reasonable. But I do not see how anyone can expect any grandiose movements some people are going on about here.

I get the sense that the profitable elements of the company have been removed, or planned to be removed, from AM's stock and into other entities.

I still think Friedcat and his team have tons of talent and know-how but it just seems like AM share holders are really secondary, the leadership is pursuing sustainable profits off the books.

All heresay and speculation, just my 2 cents, seeing this company go from +4 BTC share down to 0.15. The bitcoin space changed massively in a year.

[hdbuck]

if not FC, any board member to give us something at this point? pleaaaase? Jutarul?!

[chairforce1]

could be a wise move:

http://blogs.wsj.com/venturecapital/2014/09/05/for-kncminer-time-to-forget-selling-bitcoin-machines-to-at-home-miners/

the comments are lulzy tho
nothing to do with AM  

Dat VC money. I instantly think of "age of exahash".

[ensurance982]

The sentiment and general air around here seems to be really really tense again... Does FC even read this thread? Sometimes I hope he doesn't it's just distracting and keeps reminding me of a bar fight...

[hdbuck]

could be a wise move:

http://blogs.wsj.com/venturecapital/2014/09/05/for-kncminer-time-to-forget-selling-bitcoin-machines-to-at-home-miners/

the comments are lulzy tho
nothing to do with AM  

Dat VC money. I instantly think of "age of exahash".

What would happen if some VC money comes in AM? Do we get diluted? How would that exactly affect the share price? 

[aahzmundus]

They would have to buy shares on the open market, there was a strong pledge to never dilute the original 400,000 shares.  Although, I am not sure why FC would take VC money, I do not think operating capital is currently a limiting factor, I may be wrong.

[Mabsark]

I think you know the counter to that argument - if you believe bitcoin will go to the moon, just hodl bitcoin.

As for whether ASICMINER will ever return 0.17 btc over the rest of its lifetime, that's a bet that havelock traders are currently split on.

Traders don't care about lifetime profits. They don't even care about company profits at all. They care about making profit on their trades