Topic: ASICMINER: Entering the Future of ASIC Mining by Inventing It - page 1233. (Read 3917543 times)

Yes I do take it into account: my point is that investing 0.6 BTC in Bitcoin may be more profitable than investing 0.6 BTC in ASICMINER. Because if BTC appreciates to $1000, then at the end of the day 0.6 BTC will be worth $600, whereas your ASICMINER share will be worth $250 (assuming my hypothetical example where the share is worth close to nothing after having returned only 0.25 BTC in dividends).

So, in your investment decisions, you need to compare them against holding BTC. If an investment does worse than merely holding BTC, then it is not an optimal investment.



I think that because friedcat has communicated very little in terms of future plans. What is his vision for growth beyond the next 12 months? What technical strategy will he adopt to compete with more efficient miners? Will he develop more efficient chips? Does he have the expertise in-house or will he have to hire it? Will he relocate the miners to a location with cheaper electricity? Will he have to hire foreign employees to manage them, or rent expensive oversea colo space? Will he consider building his own data center like Tytus (for his 100 Th/s farm which will be located in Wenatchee where power is only $0.02/kWh). Etc.

Yes. After the dust from the initial deployment settles, the company has to redefine the mission statement. Building professional mining systems (>$1M investment per customer) will be a very viable market. Bitfountain will have the reputation and the expertise to do this. If they play the cards right, Bitfountain will be the Cray of bitcoin mining.

MrTeal... you want to make me proof this? I only see its constantly rising the past and only in the short time between the death of glbse and now it is nearly 4 times more worth. And i see no hint that this development will stop. Of course it remains a guess.

2014 is a long time from now and China is a big place. 

They have plenty of freezing, snow covered mountains and hydroelectric dams.

AM may deploy later batches to such places, obviating the disadvantages of the 130nm process.

British Columbia or Washington would work too, with better connectivity to boot.   

That's quite right. If you think that ASICMINER will generate negligible profits after one year of operation, you shouldn't value it 0.6 per share. I for one don't understand why I should think that though.

also need to take into account the intrinsic value of the security at the end of your calculations. you should add on how much will you be able to sell shares for (if anything).

...or the competition continues to fall flat on their face.

No, the 0.25 BTC return that I estimated does average out the period of time after and before shareholders have recouped their IPO investment. In other words, ASICMINER will represent 10% of the global hashrate on average, from the moment they launched until the end of 2013 (IOW right now they are at 15% and it will go down to 5%).


No, that would not be a 10% profit. What I explained is that if you buy a share at 0.6 BTC today, and recoup 0.25 BTC by the end of 2013, and if after that the share's worth is close to 0 (because by that time ASICMINER will generate negligible profits), then you have not made any profit. You have lost 0.35 BTC per share.


Even if you make power free or ignore all operating costs, ASICMINER won't generate significant profits: if the difficulty increases by 30x by early 2014, which is a reasonable estimate, then one share (assuming they are at 50 Thash/s) will generate merely 0.014 BTC per month ignoring operating costs. Assuming you buy a share at 0.6 BTC today, and assuming you recoup about half the investment by early 2014 (by my estimate in my previous post), you have 0.3 BTC remaining to be recouped, and at 0.014 BTC per month, at a constantly increasing difficulty, you will basically never do it...

The only shareholders who will make money are those who bought low (0.1-0.3 BTC, eg. those who went in the IPO), or those who manage to buy & sell at the right time (the share may be volatile enough to have lows & highs despite being overpriced). That, or you may make money if ASICMINER's future unknown plans about scaling beyond 50 Thash/s with more efficient chips turn out to be at least moderately successful. Maybe they will but that is not certain at all.

https://btct.co/security/PAJKA.BOND
as well

Then we agree on the essentials. There are many uncertainties about the evolution of the mining market, but each potential path will likely bring a new opportunity. My hope is that Bitfountain can develop itself by seizing these.


Mostly yes, but I'm not sure this will be valid far into the future. Depends on what sort of devices other manufacturers come up with. If too many of these pop up, even merging development efforts might begin to make sense.

Im interested in buying shares from ASICMINER but Im confused about the math to know my expected ROI.

Can anyone help me?

Why do you think thats needed? I mean they already kept the money needed for loans and investments and didnt pay it out as dividend. The money needed for investing in new asics and other things seems to be peanuts at the moment, so dividends still are possible. Of course investment comes before dividend, but i dont see a problem at this point. It looks to me like Bitfountain is handling it this way already.


I dont think they will soon. I mean a better chip with less electricity and more Hashingpower would be nice... but it would be way more efficient now, and possibly far into future, to simply buy 2 old asics and still have more revenue from it than with a better chip. Plus smaller manufacturing means a higher price for the units too.
Of course, if bitfountain lives longer they have to create better chips at some point...

@All... do you think that the bitcoin exchange price will take a big drop once the news about the fork will find its way into the mass media?

I don't understand this. Revenue is revenue. Actually, I would value the company far less if they promised to pay dividends, or if they indeed paid regular dividends. Dividends directly mean that they don't have means to expand the company to make it more profitable. I hope to see no dividends after the initial investors get paid (of course accompanied with better accounting books, audit reports, inventory and such). I hope people on the board share this view as well.


If I counted on them successfully producing a more efficient chip and deploy it faster than competition, I would value it much much more than 0.6 per share. It is almost impossible.

What I believe is that they will continue doing what they have proven that they can for a long time: seize opportunities and successfully implement plans. This will get me far more than 0.6 per share. They may become a competitive hardware manufacturer and some kind of payment processor, depending how Bitcoin will evolve in the coming years. They might even stop producing chips altogether and build farms around the world. Or they could become the standard chip developer. It's an unknown future.

yep

Anyway, it seems like the whole 6,159.22 GH/s hashrate was moved to BTC Guild now (nothing seems to be left on OzCoin)

in current difficulty we should be mining ฿4,964.10 per week, so it should be around 0.0248 per share - not counting the bitfountain shares and electricity/ maintenance cost

pfffff seems like all the non-shareholders have a very sophisticated estimations of share value  

Friedcat did his calculations based on the assumption of 10% network hashing speed over a long period of time. That's just a back of the napkin calculation, yet highly conservative and realistic. It's just something to get a feeling for the numbers. Still there is a lot of uncertainty (difficulty, competiton, deployment speed) and also some risk, but honestly if anyone has proven himself it's friedcat and his team.

And all these misconceptions about dividend halving...
And sure, China has no competitive electricity prices...

Go make your bets on avalon, bfl, oh wait a minute... and primeasic, suckers!

Once a proper trading platform is setup the market will find the correct price.

Best you tell us what percentage dividend/month it is that you think is the barrier below which something is totally unthinkable.  Becasue from where I'm standing if we took that .25/share in 9 months and instead made it .25 a year (i.e. taking out 25% of mined coins for costs and development/expansion) investors still get 2%+ per month on a share price of 1 BTC and not far short of 4% on a share price of .6 BTC.  Which to most people is pretty decent.  Do you want to try making a list of companies returning more than that?   It would be a pretty small list.

When you take the electricity prices into account you cant only take BTC to it, but instead the price a BTC has in exchange for USD for example. And i think the powercosts wont be something that will have such a heavy weight.
But like i already said... it was a simplified calculation, maybe overentusiastic. At least i think 10% over the year is a statement when friedcat thought the competition will be way more powerful. I still dont see this competition and it doesnt really look like they will be a danger soon.
And i already claimed that the dividends will halve. With that i mean that not only the sold shares will get a dividend but the whole stock.
Plus i dont see why you doesnt take into account that we only mine with 6TH at the moment. I mean you know there are much more coming soon. Only justifying the price on a 10% statement that was made in the past for a not so bright future like it is now isnt the best. We already are better now than this prediction. And im confident that friedcat thought about the possibilites how to make deployment faster. At least it sounds this way.
So no, im not at all convinced that the shares are worth 0.25btc only.

This is the situation AFTER the IPO have been paid back. How much revenue will be used to R&D is anyone's guess. But if BTC keeps rising, that is getting smaller and smaller.


In the real world (dunno, haven't been there a while) I could have sworn that 10% profit a year was a good year. This being the internet and BTC, I assume we need to complain if the revenue isn't at least 100%/share/a year.