Topic: ASICMINER: Entering the Future of ASIC Mining by Inventing It - page 1129. (Read 3917568 times)

yea, i know. i'm not complaining about it. heck, i'm organizing a group buy of em. but you can't deny it surprised a lot of people, and not in a good way. that kind of thing strikes me as exactly the sort of thing that effects the sentiment around a stock.

USB miners has roughly the same hashing power at a fraction of the size and power usage. If they don't want them, they can stick with their GPUs and all their issues.

i can't help but wonder if the share price is being effected by the reaction to the whole 1.99 usb miner thing. lot of people were caught of guard by that, to say the least.

I'm going to quote the Oracle of Omaha here, and let you come to your own decision.

Dec. 10, 2001: Warren Buffett on the stock market
"To refer to a personal taste of mine, I'm going to buy hamburgers the rest of my life. When hamburgers go down in price, we sing the 'Hallelujah Chorus' in the Buffett household. When hamburgers go up in price, we weep. For most people, it's the same with everything in life they will be buying -- except stocks. When stocks go down and you can get more for your money, people don't like them anymore..."

Full quote here: http://money.cnn.com/magazines/fortune/fortune_archive/2001/12/10/314691/

  just cancelled a 1300 dollar order with bfl and plan to buy shares of am with the 1300

On PTs until lately there was almost nobody willing to buy shares even at 0.5 btc... Meaning that; Selling 60 shares would have dropped the price to 0.01BTC , Right now 130 share drop the price to 0.01

You can value AM at more than 50m$ if you want but only handful of BTC agree with that.

Nobody know of ASICMINER*,  You may think everything is all so well detailed in this thread but nothing is further from the truth.

This thread is a complete clusterfuck to anyone but a few dozens early shareholders.

There are board members but they must be either clueless or NDA quiet.

The update are coming drop by drop, lost in these 230 pages, it's as if the whole operation was run by Friedcat alone,,, How will that thing scale ?

*relatively speaking

I hope you're right.

A BFL miner is what I bought when I was new to all this.

Suffering buyer's remorse I decided to do my due diligence afterwards, and that convinced me to cancel the order and put the proceeds into AM.

I guess if AM do as well as I think they might in a crazy way I'll have to thank BFL for scaring the bejeezus out of me.

locked for now: https://bitcointalksearch.org/topic/unofficial-asicminer-announcement-thread-197545

I believe that part of this is due to the way information abouot the security is disseminated.  There are some very strong indicators for long term success for the company, but many of the good pieces of information are buried deep within various forum threads which most potential investors aren't following.  A centralized source of information that isn't tied up with commentators (eg, an 'announce' thread from AM or a prospectus as a living document) would go a long way towards providing up-to-date information about current operations and future plans for AM to stakeholders and potential stakeholders.  If there is impacting news or updates, such as an ETA on new hashing power or other 'number' updates, the pass-through operators might also consider posting this on the exchanges in the form of a 'News' post associated with the passthrough (though admittedly, as a pass-through, they may wish to keep that news section solely for information specific to operating the passthrough and not about the AM company in general).   I like the Google documents, particularly the one tracking the daily hashrate, but I think if this was presented as part of a whole package of information about the company that this would have a positive impact on stock price.

This isn't to complain...  in fact, I think that buying in at the current rates is a pretty decent deal considering what they have in the pipeline for the future, and I consider investing at this undervaluation as a reward for performing diligent research on the company.

Probably for now, most people with BTC sitting around that would invest into ASICMINER have done so.  Newer adopters to BTC are probably still coming to terms with the risk of holding BTC, let alone investing that btc into a security.

There are many barriers to entry, and it scares people off... All the better for those of us with no fear that poured  our money into this. Lets hope this basket can hold my eggs, and keep them safe!  because they are ALL in there.

Assuming that BTC transaction volume increases is a long shot. It's safer to assume that the granularity changes (i.e. more transactions with smaller BTC amounts) due to an increase in BTC price. Thus more transactions are needed to move the same amount of BTC, making transaction volume more valuable, and thus increasing the incentive to include a larger fee.

Just a rough estimate based off the last few blocks, but it looks like they are currently averaging ~.3BTC per block (just over 1% of the built-in reward).  If transaction volume increases 10x in a year (definitely possible with growth), 3BTC per block becomes pretty significant.

This is a very good point.  But there needs to be behavioral change to make transaction fees an expected thing with Bitcoin.  Right now anyone handling more than a few coins can get free transactions processed as quickly as transactions with fees attached.  MT. Gox in particular abuses this to not pay any fees to miners.

If you are solomining, this is easily addressed by reducing the size of the fee free pool in each block by adding the blockprioritysize parameter to bitcoin.conf.  The default value is 27000 bytes.  

Reducing the size of the free transaction pool until zero fee transactions take 4-5 hours to be accepted would be a good start on changing the culture.  A major player who is about to begin solo mining might consider making a 1 line edit to help make that change happen.  

Yes, I haven't forgotten about the fees, but to keep my post to a reasonable length I haven't considered them. Until they become significant it's probably closer to correct to ignore them rather than try to price them.

Yeah, I see your point. I agree the price looks cheap at the moment; I guess my comment about the boat anchor was that as long as AM shares are traded in BTC it means that the price can never get absurdly high. Probably doesn't apply to the context of your original point though. I think the general anonymity of AM and the fact that there are sellers wanting to diversity are applicable in the short term. In the long term I think transaction fees will get much more important so that will help keep the rewards for mining high.

Miners are competing for about 4 million fixed BTC reward within the next 3-4 years. However, people usually forget to include the fees in that picture.

With increasing market adoption, the fees will make up a significant portion of the mining reward. And increasing the block size limit proportionally to the market adoption should only result in lowering the average fee per transaction, not the total reward from fees per block. It's hard to estimate what the equilibrium for the transaction fee reward will be. Right now we have a transaction volume of about 400,000k BTC per day which is about 2700 BTC per block on average. If you take a conservative estimate of 1% transaction fee you arrive at 27 BTC fee per block.

Thus the future mining income is likely to be considerably higher than 4 million BTC within the next 3-4 years and reward from fees will eventually outperform the fixed BTC reward. But it's hard to project the timeline of that development. Transaction fees is a market which is currently neglected by mining companies, but it will become more and more important as bitcoin matures.

I'm not sure I agree with the conclusion of this, although I recognize the facts. Selling hashrate is an immediate return on investment that can be cashed out at high prices, securing revenue and capital. As a shareholder, I like this in terms of long-term plans and in my eyes it should contribute to a higher share price.


The fixed market reward is true for the Bitcoin mining part of the company, but not for the sales of equipment or other operations.

Long-term and due to their unique first-mover experience (and FM is really a benefit in a marked that talks about generations as if they were financial quarters), AM can easily supplement or replace mining revenue by selling hardware. They can lead development of new generations to keep mining profitable (higher efficiency), migrate to other coins if that is deemed worthwhile, and so on.

There are a range of supplemental areas where AM can move their knowledge and resources, so although I realize the halving issue in 2016, I don't see that as a threat to profitability, simply because there are so many other venues the company can pursue.

.b

Yeah, I've thought about that a bit and I find comfort in the fact that people pay a premium for what they perceive as 'real' shares, despite the fact that in reality, there isn't much difference between a PT and a regular share (except you get friedcat's email address, which isn't all that secret, really).

This can mean that buyers are idiots who will throw thousands of dollars at something without doing at least basic research, and I doubt that very much, or it can mean that they see the shares as something to hold on to for a long time and not trade at all, which is very comforting.

However, there's one pice of the puzzle that doesn't fit; I've bought shares at auction over the previous weeks, and I've managed to purchase them below bid price at least on BTCT. In other words, at that time (just a couple of weeks ago), buyers were not interesting in long-term holding, or there was some other reason. This piece of the puzzle bothers me a bit. I can't find a reason, rational or otherwise, why this may be the case.

.b

My thoughts:

• AM is still not widely known yet even among people who know something about Bitcoin and mining. Probably for every 50 people who order from BFL there is 1 person interested in investing in AM. AM do not have a pretty website. Heck, they don't even have a website. I only found out about AM from reading bitcointalk and talking to a colleague who also reads bct.
• At current prices AM has to perform well for the remainder of the 25BTC/block era to provide a decent return. They are one of the *BIG* winners of the ASIC gen 1 era. However there's always a risk something goes wrong or someone else will beat them to the punch at ASIC gen 2 or ASIC gen 3.
• Most of the early investors in AM (pre-IPO or IPO) have just made spectacular profits, especially considering the btc:USD exchange rate appreciation since late 2012. A lot of those people now have a significant portion of their wealth measured in fiat in AM, and are looking to diversify.
• AM compete in a fixed reward market. They can only be a certain percentage of the network before it becomes uneconomic to add more capacity. They can compensate for this to a degree by selling a fraction of their hardware to customers who effectively become their competition, so they get a return from a larger part of the network than they contribute to directly. However the fixed reward is is a boat anchor on the share price, and always will be.

All of the above probably means there are more motivated sellers than buyers of AM right now, even though they appear to be performing flawlessly. This is not supposed to be a recommendation to sell AM, just a collection of facts that are widely known and in my opinion have an effect on the share price. I hold a few AM but I don't think the price is going to the moon.

Maybe the traders on btcco and bitfunder only see the dividends and dont know about the hashrate? Otherwise i dont know why its sold now. I mean next wednesday we have the chance of a double dividend in comparison to the week before. Normally that should lead to way higher shareprice. Instead the relatively small income from auctioning miners leads to a 50% raise in price. Im not complaining... i bought lower because of that...