The value of ASICMiner:
The value of ASICMiner depends on the total profit it can generate. Let's do some math.
Total bitcoins to be mined: 9,600k
ASICMiner takes 20% of total hash power. This will generate 1,920k.
Assuming hardware sale income is 30% of mining profit, so this part is 576k.
(1920k+576k)/400k=6.24B/share
This is the total profit one can expect for 1 share of ASICMiner in the next 20 years.
value of 1 share of ASICMiner = share price + dividend = 6.24
How will the 6.24B be distributed between share price and dividend? Well, this depends on the investors' emotion and their view of the risk of future income. The gap between 6.24 and share price is risk compensation.
IMO, the share price will fluctuate between 3.x and 4.x in the future. 5+ price is too risky.
My 2 Satoshi.
Transaction Fees.
TX fee is negligible. Note, there is also cost of running a company,electricity, chip design, manufacture,etc.
TX fee encourages hoarding, punishes spending, which is bad.
1) in your own #s, then at the current price of 4.7BTC AM is still undervalued if it will generate 6.4BTC.
2) If you apply that type of reasoning to real life companies then you would rarely invest - APPL was likely never going to survive the 90s because its stock was overpriced right?
3) Buying AM is believing friedcat & Co. can do more with BTCs than you can. They might open new services or create new income streams (meanwhile reducing income seem unlikely.)
4) Txs, Txs Txs. By the time all Bitcoins have been mined, the transaction fees will make it worthwhile for the miners (Satoshi's white paper)
Here are my answers:
1) It's not called "undervalued". It's called "risk compensation" as I said. The question is, do you want 4.7BTC now or do you want to wait 20 years to get 6.24BTC?
2) I'm not in US. I have no idea about how APPL survived 90s. APPL sounds like a miracle, but miracles do not happen everyday. BTW, 40x of value increase of AM is already a miracle. Do you expect one miracle after anther one?
3) Your third point sounds so religious. I'll not going to touch this one.
4) Satoshi is great. He solved one important technical problem. But, trust me, he doesn't know how money works. Why should we encourage hoarding? Why should we punish those who is spending? We, as bitcoiners, would someday come to a conclusion that let the total number of bitcoins increases 3% every year and make the mining a sustainable career.
1) This also ignores the present value of money. NPV + risk easily explains that differential. I think the risk is currently not fully appreciated, either: what would you peg the chances of AM getting shut down by the Chinese or friedcat getting hauled off to jail in the next 20 years? What would you peg the chances of being outcompeted by a major company at? How about Chinese nationalization?
2) What? It's
easier for overpriced companies to survive because they can liquidate shares as a source of capital. By the way, many of the most celebrated and successful investors in the world (Buffett, Lynch) buy
undervalued companies and then wait for the correction. Apple is an example of growth. It may well have been overvalued in the 90s! (Aside: AM doesn't have much room for growth, since the block reward is fixed, unless you're counting on transaction fees with little indication of materializing any time soon)
3) Yeah, this sentiment is why buying AM seems like such a risky proposition: people are buying blindly.
4) So, by most estimates, Bitcoin has on the order of a million serious users now. Would you mind telling me how much the transaction fees have gone up per block?
My 2 mBTC.
Vycid
