Topic: [Archive] BFL trolling museum - page 127. (Read 69394 times)

QFT



Dare I say, never? Well, never say never, but not for a very, very long time IMO.  I foresee a mid term future where the mining market is completely saturated and asic miners will struggle to operate profitably (and most will long have given up on earning back their investment). Under those circumstances, its almost impossible to warrant the multi million dollar investment needed for a new maskset unless you could achieve another "quantum leap" in power efficiency and production cost. Or bitcoin rises in value spectacularly.  

well, shite.

I am going to guess they won't take a huge loss on it, simply because they probably got such a good deal on the FPGAs in the first place. In fact, if I were BFL I would take the existing MiniRigs that are returned, remove the old singles units, swap in the new SC ones, and return it. Remove the heatsinks/FPGAs/other valuable components, resell the used FPGAs at a minimal loss.

Even if they take a loss of a couple thousand bucks on each flip, that's a pretty cheap unsecured 6 month loan.

I think they priced it competitively enough that some of those fears should be assuaged, but there's still a huge amount of risk involved especially given BFL's penchant for missing deadlines and long lead times. I don't think it's really possible to estimate the effect on the network these will have. You're probably just as well to bet the money on whether Pirate will default or not. If they do collect the preorders to add 100TH to the network and ship out after the block split, you might have a 4 month ROI on your $30k with $10BTC and a profitability decline of 0.5/year. That seems pretty reasonable. If they ship 200TH worth of hardware in 6 months and then another 600TH in the year after it and if BTC stays at $10 it would take a year to pay off your investment, not counting having your money in limbo 6 months waiting on hardware. If they ship 400TH, you'll never see your money back.

Pull out your crystal ball and channel Miss Cleo, it will be about as effective as trying to estimate profitability in the next year.

A redesign of the board might save some on the costs, but justifying a new ASIC will depend on BTC price in the future. BFL might be able to tweak some extra performance out of their current design, but a large jump forward in power would likely require a redesign on a smaller process and the new mask set to go along with it. The first mask set is justifiable because it is such a huge leap forward over existing designs. Spending another $1M in a year or two to increase performance by a much smaller margin will be a much harder decision though, I would think price would have to go much higher for that to be worthwhile. How soon after this hits the street do you think we'll see a refresh?

it's either Go all in now, or gtfo!!!!!!!!

Awesome plan for bfl

That's my theory, yes.

As was seen at this time last year when the massive amounts of hashing power was being added the diff can/will increase 4x in 3 days not 2 weeks and will continue to do so as long as the hashing power continues to be added just like it did then for weeks in a row even after the bubble burst as they continued to pile on.

As will everyone else. But thats were the paradox here lies; if enough people "watch it closely" and dont invest, you might think that the ones that do buy them, should actually break even. But I dont think they will, because if too many people wait and see, BFL will just be enticed to lower their prices until they sell enough and the problem will remain exactly the same.

Its really quite an interesting economic case, but no matter how you slice it, in the end I cant see anyone other than a monopolistic vendor of the ASIC profiting significantly. Should a competitor appear around the same time, I can well imagine everyone ending up with a loss, including the asic vendors.

The trade-in offer seemed odd to me from the beginning because I don't see how it makes economical sense for BFL. They can resell the FPGA, but they will take a huge loss on this : the margin on the FPGA units will be eaten by the work needed to remove the FPGA from the units before selling them at the same price (or lower) than the price they acquired them in the first place.
So a $ for $ trade-in is a net loss for them which they'll take quite some time to absorb.

There is one existing explanation : they don't want to antagonize their existing customers and have orders canceled which would deprive them of some most needed cash.

What isn't clearly explained by this theory is why selling castrated SCs (less efficient but by design) without a trade-in offer wouldn't be more profitable for them on the long term and as profitable short-term ? Don't obsolete the existing products (which are quite competitive today) but make the new one the best on the market by an healthy margin, wait a bit for competition and release new hardware when needed. This is assuming they can deliver ASICs in large quantities. But what if they don't, what if ASICs will suffer the same problems than the BFL's FPGAs (relatively low count in the hand of customers, large delays) ?

I just thought of another possibility that could fit the situation nicely : what if they have more orders than FPGA units they can actually deliver ? Isn't offering a trade-in solution, getting back FPGA units, testing them quickly and sending them to the waiting customers and letting the original purchasers wait for SC whatever time needed to remain profitable a nice way to handle the shortage problem ?

The more I think of it, the more it makes sense : you don't have to spend too much on FPGAs to fulfill orders paid upfront this way, you could send the same units to 2, 3 or more customers, benefit from the good feedback of the first wave to have a "they're not so bad" reputation as they manage to be profitable.

Then you find an existing ASIC in short supply that is better than FPGAs, inflate its capabilities in an announcement (rings a bell ?), rinse and repeat (first wave of customers satisfied, huge backlog of waiting orders, ...).

It's just a theory and I've no facts to back this up but I've learned than when things are to good to be true, usually they aren't. The implications are huge though : only a very small proportion of BFL customers would ever be profitable if the theory matches the real situation and it will end in a very ugly way. If I were about to send money to BFL, I'll ask for quite some delivery guarantees...

haha, maybe retarded was too strong a word, maybe not. ;p  The part I bolded would keep me from making any sort of disruptive financial decission on a new investment there. Hopefully I am not alone and will be watching that factor very, very closely..

They are completely different. If the difficulty change is time-based, we could theoretically mine 21 million bitcoins instantly. But this is not true

No, not at all. But profitability in the asic era will be determined mostly by the ones that are most retarded, and frankly, reading the forums they alone would pose a serious threat

On a more serious note, its not a matter of being retarded; you cant estimate the speed at which these things will sell and subsequently drop in price, and therefore the speed at which the difficulty will be going up. In a way, buying those asics at ANY price (well, above, say 5x marginal cost) is potentially "retarded". Its a bit like a dollar auction. let me quote wikipedia:

..a paradox brought about by traditional rational choice theory in which players with perfect information in the game are compelled to make an ultimately irrational decision based completely on a sequence of rational choices made throughout the game.
http://en.wikipedia.org/wiki/Dollar_auction

Buying ASICs is a bit like that. Except, you wont have perfect information, unless BFL opens its books and shows you the orders and backlogs and production schedule.
Did I mention a competitor yet?

well...i know that everybody should have their own opinion on this...
but my guess that this asic thing will definitly ruin bitcoin as a worldwide system....

and its sure way to early to make those rigs so quick in calculations...

they couldve atleast make then twice as fast for the same price as bfl single...
but why make them so fast?

I'll be shorting AMD stocks.   The flood of use cards is not gonna help.

LOL at the June 18th HD7970 raffle,,,

you know what I meant.....

Wrong. The difficulty changes every 2016 blocks, not 2 weeks.

I think anyone would find it hard to disagree that difficulty will go up to match the $/MH. But would not the miners for profit still do the same costs/roi caluclations. I.e., if difficulty is then at 14.8mil that would be the number I would use when considering whether or not 15 grand worth of hardware investment is worth it. Also considering whether or not difficulty is on the climb, etc, etc.

Everything you say is accurate except that it assumes miners for profit are all retarded. ;p

cheers

Well, considering their minirig SC will sell for $30K, some of those assumptions make sense. But once difficulty has gone up enough to require prices per GH to go down by >10x or 50x, it will make equal sense to redesign for cost efficiency and not have 25 daughter boards with their own power circuitry etc.

Anyway, this discussion is missing the big picture. Even if you are right and prices would bottom out above $1000 per TH, thats still, what,  500x lower than today? And therefore, difficulty would be ~500x higher. Good luck estimating the ramp on that and earning back the investment of your minirig sc.