Quote deleted on request.
It was around an incident at btcguild that led to a high loss: https://bitcointalksearch.org/topic/m.1610708
Asicminer didnt get an overpayment:
https://bitcointalksearch.org/topic/m.1612647
If someone wants to help maybe donate some dividend...
Topic: ASICMINER: Entering the Future of ASIC Mining by Inventing It - page 1231. (Read 3917029 times)
removed, got misunderstood..
So guys, is Asicminer a good business after all or not?
Here's my story, you be the judge.
I invested about $50 (was new to BTC at the time) into coins in early Fall ( around $6/each IIRC ). Bought 80 shares of ASICMINER at 0.1BTC.
Now:
80 Shares are valued at 60BTC (say 0.75BTC Each).
I have earned about 5BTC in Dividends - about 1.7BTC a week
Total: 65 BTC from a 8 BTC Investment
1 BTC = $47USD
65 BTC = $3055USD
And $80/week dividends ($240/month). Not huge. But it pays my alcoholism (I'm joking).
These numbers/dates aren't accurate. I should have kept a log... but I didn't.
Now lets hope that bitcoin exchange course and asicminer share price remains stable or is going up only. With Bitcoin there isnt much risk. Even the last fork didnt lead to a real drop in exchange course. I only can imagine a crash if governments ban bitcoin.
And a crash in Asicminer share price can only happen if friedcat turns out to be a scam which is highly unlikely now, after he proved his trustworthiness.
So the future looks good in my opinion...
So guys, is Asicminer a good business after all or not?
Here's my story, you be the judge.
I invested about $50 (was new to BTC at the time) into coins in early Fall ( around $6/each IIRC ). Bought 80 shares of ASICMINER at 0.1BTC.
Now:
80 Shares are valued at 60BTC (say 0.75BTC Each).
I have earned about 5BTC in Dividends - about 1.7BTC a week
Total: 65 BTC from a 8 BTC Investment
1 BTC = $47USD
65 BTC = $3055USD
And $80/week dividends ($240/month). Not huge. But it pays my alcoholism (I'm joking).
These numbers/dates aren't accurate. I should have kept a log... but I didn't.
So guys, is Asicminer a good business after all or not?
No update from friedcat today it seems... i would like to know why deployment nearly stopped the second week now. Hope the problem isnt a serious one...
we were discussing the effect of usd/btc increase on share value isolated from difficulty increase due to competition.
And I explained to you why it won't affect them: https://bitcointalksearch.org/topic/m.1624754 But you ignored this post (because your reasoning breaks down?).
I have been mining and investing in the Bitcoin market since Dec 2010. I know very well how this market responds to all the economic factors we have discussed. I have written numerous tools to model and predict various investment strategies. Believe me, they have been successful and accurate.
I sure hope your mining and investing operations went well during all that time
Current AM share price is based on investors' expected future (!) profit. As you know, however, difficulty will increase in the future and converges to an equilibrium of operational costs and profits. This implies that it's completely wrong to say operational costs are insignificant. They will be very significant in the future and of course have an effect on today's share valuation. If usd/btc goes up, operational costs go down (in btc). That leads to higher profits (until again an equilibrium is reached), higher dividends and hence higher share valuation.
Can we agree on that? Peace?
Edit: Editing posts doesn't count
we were discussing the effect of usd/btc increase on share value isolated from difficulty increase due to competition.
And I explained to you why it will not affect them: https://bitcointalksearch.org/topic/m.1624754 But you ignored this post (because your reasoning breaks down?).
(I have been mining and investing in the Bitcoin market since Dec 2010. I have written tools to archive historical Bitcoin economic data and model various investment strategies. I know very well how this market responds to the economic factors we have discussed.)
This would only remain true if the overall hashrate of the network isnt rising much. I mean when its way more competition then the mined coins will be less and the powercosts will rise because more asics are needed for the same bitcoins mined. And if the bitcoin price is rising then its something that works against the powercost. Because the same power will cost less bitcoins.
So the small operating cost now is only temporary. It will rise with more competition. Its only because asics are new now. But every miner hardware at some point has to fight with the powercosts to remain profitable.
So the small operating cost now is only temporary. It will rise with more competition. Its only because asics are new now. But every miner hardware at some point has to fight with the powercosts to remain profitable.
Ah, I see what you mean, and what you are missing is that as the operating costs increase, the share's fair value would decrease as well, cancelling the later effect of the shares regaining value as the exchange rate increasing.
Example: let's assume the share's fair value is 0.6 BTC today. If the relative operating costs were to increase from 3% to 50% due to increased Bitcoin difficulty, the profit margin would halve from 97% to 50%, thereby reducing the share's fair value in half, from 0.6 to 0.3 BTC. Later, if the BTC exchange rate increases and reduces the operating costs from 50% back to 3%, the share's fair value would double, from 0.3 to 0.6 BTC, and we are back to its original value! This is my whole point: today share's fair value is pretty much as high as it can ever be, because relative operating costs are as low as they can ever be.
hi there, one more post
sorry for being a little offensive. you got the mechanisms right, but nobody here is missing the fact that higher difficulty means higher cost, lower profit and share value. nobody! we were discussing the effect of usd/btc increase on share value isolated from difficulty increase due to competition. there, you dont seem to have figured out the big picture, but i'm sure you will. 
Any estimation on the exchange? I would give us a better view to speculate on the price of the shares. Plus I want to sell some shares and I need to be very sure they are not undervalued.
- Just IMO the shares will not lose the value of 0.7BTC fir a very long time.
- Just IMO the shares will not lose the value of 0.7BTC fir a very long time.
IMO, everyone should either leave their shares with Friedcat, or move them to BitFunder/BCTC. I just can't see justifying the distraction of the Bitfountain team to create that which already exists.
Any estimation on the exchange? I would give us a better view to speculate on the price of the shares. Plus I want to sell some shares and I need to be very sure they are not undervalued.
- Just IMO the shares will not lose the value of 0.7BTC fir a very long time.
- Just IMO the shares will not lose the value of 0.7BTC fir a very long time.
This would only remain true if the overall hashrate of the network isnt rising much. I mean when its way more competition then the mined coins will be less and the powercosts will rise because more asics are needed for the same bitcoins mined. And if the bitcoin price is rising then its something that works against the powercost. Because the same power will cost less bitcoins.
So the small operating cost now is only temporary. It will rise with more competition. Its only because asics are new now. But every miner hardware at some point has to fight with the powercosts to remain profitable.
So the small operating cost now is only temporary. It will rise with more competition. Its only because asics are new now. But every miner hardware at some point has to fight with the powercosts to remain profitable.
Ah, I see what you mean, and what you are missing is that as the operating costs increase, the share's fair value would decrease as well, cancelling the later effect of the shares regaining value as the exchange rate increasing.
Example: let's assume the share's fair value is 0.6 BTC today. If the relative operating costs were to increase from 3% to 50% due to increased Bitcoin difficulty, the profit margin would halve from 97% to 50%, thereby reducing the share's fair value in half, from 0.6 to 0.3 BTC. Later, if the BTC exchange rate increases and reduces the operating costs from 50% back to 3%, the share's fair value would double, from 0.3 to 0.6 BTC, and we are back to its original value! This is my whole point: today share's fair value is pretty much as high as it can ever be, because relative operating costs are as low as they can ever be.
Nothing but respect for what the ASICMiner guys have accomplished, but I agree the share price has gotten a little soggy around the mid section.
[...] because of lower operating / development cost.
I already told if BTC went up, relative operating costs can at best go from ~3% to ~0%. That is insignificant.
If BTC doubles from $50 to $100, a share at 0.6 BTC already implicitly gains value ($30 -> $60 = doubling). It would not go to 1.2 BTC ($30 -> $120 = quadrupling). I do not know how to explain it more simply.
This would only remain true if the overall hashrate of the network isnt rising much. I mean when its way more competition then the mined coins will be less and the powercosts will rise because more asics are needed for the same bitcoins mined. And if the bitcoin price is rising then its something that works against the powercost. Because the same power will cost less bitcoins.
So the small operating cost now is only temporary. It will rise with more competition. Its only because asics are new now. But every miner hardware at some point has to fight with the powercosts to remain profitable.
Regarding the price... while Asicminer shares are highly overvalued... i want to buy 168 Asicminer shares for 0.68BTC each.
So someone wants to make a good trade for this way too high share price? Of course only with escrow. Someone from this list https://bitcointalksearch.org/topic/m.1180916 maybe johnthedong or some other trusted member.Asicminer shares are still undervalued. Good Luck with finding someone who will sell at only 0.68.
[...] because of lower operating / development cost.
I already told you that if BTC went up, relative operating costs can at best go from ~3% to ~0%. This is insignificant.
If BTC doubles from $50 to $100, a share at 0.6 BTC already implicitly gains value ($30 -> $60 = doubling). You seem to think there is an economic reason which would further increase its fair value, say to 1.2 BTC ($30 -> $120 = quadrupling). That makes no sense. I do not know how to explain it more simply to you.
poly: this is why I defined the bet as "at least 10 units shipped" for me to win it
wrong again.. sorry man. operating cost may be negligible now. in the future (i hope not so near future) they will DEFINE what is profitable or not.
Wrong? This does not contradict what I said. In fact, thanks for bringing this point: because relative operating costs are guaranteed to increase in the future (mining will never stay this much profitable), they should cause the company's worth (hence the fair value per share) to decrease over time. More precisely, if the BTC price/difficulty ratio stays constant, the company's worth will stay constant. But if difficulty increases faster than the BTC price (which is inevitable as miners transition to more and more efficient ASICs), the company's worth will naturally decline.
Which goes back to my original point that the current high share price (IMHO) can only be justified if ASICMINER develops more efficient chips to maintain profitability, and high dividends.
Except there is no room for relative costs to go down. Assuming 0.10/kWh (worldwide average), ASICMINER's electrical costs currently represent only 0.28% of their BTC revenues (friedcat disclosed an efficiency of 167 Mhash/Joule). Assuming their other operating costs are 10x higher (salaries, data center space, etc), they represent only 2.8% of their BTC revenues.
So if BTC were to appreciate a lot today, making operating costs completely negligible, their profit margin and dividends would at most be increased by ~3%...
So if BTC were to appreciate a lot today, making operating costs completely negligible, their profit margin and dividends would at most be increased by ~3%...
wrong again.. sorry man. operating cost may be negligible now. in the future (i hope not so near future) they will DEFINE what is profitable or not.
Wrong? This does not contradict what I said. In fact, thanks for bringing this point: because relative operating costs are guaranteed to increase in the future (mining will never stay this much profitable), they should cause the company's worth (hence the fair value per share) to decrease over time. More precisely, if the BTC price/difficulty ratio stays constant, the company's worth will stay constant. But if difficulty increases faster than the BTC price (which is inevitable as miners transition to more and more efficient ASICs), the company's worth will naturally decline.
Which goes back to my original point that the current high share price (IMHO) can only be justified if ASICMINER develops more efficient chips to maintain profitability, and high dividends.
ok my last post on this: current AM share value represents future profits. if usd/btc inreases, value of AM shares increases aswell because of lower operating / development cost.
btc up -> AM up
btc up -> SD down
poly: this is why I defined the bet as "at least 10 units shipped" for me to win it
wrong again.. sorry man. operating cost may be negligible now. in the future (i hope not so near future) they will DEFINE what is profitable or not.
Wrong? This does not contradict what I said. In fact, thanks for bringing this point: because relative operating costs are guaranteed to increase in the future (mining will never stay this much profitable), they should cause the company's worth (hence the fair value per share) to decrease over time. More precisely, if the BTC price/difficulty ratio stays constant, the company's worth will stay constant. But if difficulty increases faster than the BTC price (which is inevitable as miners transition to more and more efficient ASICs), the company's worth will naturally decline.
Which goes back to my original point that the current high share price (IMHO) can only be justified if ASICMINER develops more efficient chips to maintain profitability, and high dividends.
Except there is no room for relative costs to go down. Assuming 0.10/kWh (worldwide average), ASICMINER's electrical costs currently represent only 0.28% of their BTC revenues (friedcat disclosed an efficiency of 167 Mhash/Joule). Assuming their other operating costs are 10x higher (salaries, data center space, etc), they represent only 2.8% of their BTC revenues.
So if BTC were to appreciate a lot today, making operating costs completely negligible, their profit margin and dividends would at most be increased by ~3%...
So if BTC were to appreciate a lot today, making operating costs completely negligible, their profit margin and dividends would at most be increased by ~3%...
wrong again.. sorry man. operating cost may be negligible now. in the future (i hope not so near future) they will DEFINE what is profitable or not.
Wrong? This does not contradict what I said. In fact, thanks for bringing this point: because relative operating costs are guaranteed to increase in the future (mining will never stay this much profitable), they should cause the company's worth (hence the fair value per share) to decrease over time. More precisely, if the BTC price/difficulty ratio stays constant, the company's worth will stay constant. But if difficulty increases faster than the BTC price (which is inevitable as miners transition to more and more efficient ASICs), the company's worth will naturally decline.
Which goes back to my original point that the current high share price (IMHO) can only be justified if ASICMINER develops more efficient chips to maintain profitability, and high dividends.
Centralized mining is always more profitable (time/energy/money) than decentralized. That's how the world works. Big factory makes more stuff, cheaper. But, please make "ASICminer shares are too high" thread or something, we cannot do anything about the price. It is determined by free market at this point, no matter what is our opinion. This trivial debate only clutters this thread.
poly: I will win because I did not bet they will ship all units, but merely 10 or more
wrong again.. sorry man. operating cost may be negligible now. in the future (i hope not so near future) they will DEFINE what is profitable or not.
Wrong? This does not contradict what I said. In fact, thanks for bringing this point: because relative operating costs are guaranteed to increase in the future (mining will never stay this much profitable), they should cause the company's worth (hence the fair value per share) to decrease over time. More precisely, if the BTC price/difficulty ratio stays constant, the company's worth will stay constant. But if difficulty increases faster than the BTC price (which is inevitable as miners transition to more and more efficient ASICs), the company's worth will naturally decline.
Which goes back to my original point that the current high share price (IMHO) can only be justified if ASICMINER develops more efficient chips to maintain profitability, and high dividends.
Except there is no room for relative costs to go down. Assuming 0.10/kWh (worldwide average), ASICMINER's electrical costs currently represent only 0.28% of their BTC revenues (friedcat disclosed an efficiency of 167 Mhash/Joule). Assuming their other operating costs are 10x higher (salaries, data center space, etc), they represent only 2.8% of their BTC revenues.
So if BTC were to appreciate a lot today, making operating costs completely negligible, their profit margin and dividends would at most be increased by ~3%...
So if BTC were to appreciate a lot today, making operating costs completely negligible, their profit margin and dividends would at most be increased by ~3%...
wrong again.. sorry man. operating cost may be negligible now. in the future (i hope not so near future) they will DEFINE what is profitable or not.
Wrong? This does not contradict what I said. In fact, thanks for bringing this point: because relative operating costs are guaranteed to increase in the future (mining will never stay this much profitable), they should cause the company's worth (hence the fair value per share) to decrease over time. More precisely, if the BTC price/difficulty ratio stays constant, the company's worth will stay constant. But if difficulty increases faster than the BTC price (which is inevitable as miners transition to more and more efficient ASICs), the company's worth will naturally decline.
Which goes back to my original point that the current high share price (IMHO) can only be justified if ASICMINER develops more efficient chips to maintain profitability, and high dividends.
AM shares can only profit from higher USD/BTC exchange rates, because of lower maintenance, power, development etc. costs in btc.
See my response to iCEBREAKER below.
They earn BTC, but they are also priced in BTC to start with. Therefore if BTC doubles in value, then both their earning and price already implicitly double in USD value, hence preserving the value proposition of the shares. There are no economic reasons for their numerical BTC value to further increase on top of that change.
ASICMINER's (the company) expenses and debts are denominated in fiat, not btc.
As btc appreciates vs fiat, ASICMINER Inc.'s relative operating costs go down, their profit margin goes up, and dividends increase accordingly.
[...]
Except there is no room for relative costs to go down. Assuming 0.10/kWh (worldwide average), ASICMINER's electrical costs currently represent only 0.28% of their BTC revenues (friedcat disclosed an efficiency of 167 Mhash/Joule). Assuming their other operating costs are 10x higher (salaries, data center space, etc), they represent only 2.8% of their BTC revenues.
So if BTC were to appreciate a lot today, making operating costs completely negligible, their profit margin and dividends would at most be increased by ~3%...
Your argument works for gold mining companies, because their relative operating costs are a lot higher than ~3%.
wrong again.. sorry man. operating cost may be negligible now. in the future (i hope not so near future) they will DEFINE what is profitable or not.
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