Topic: ASICMINER Speculation Thread - page 172. (Read 808757 times)

They have no chips now.

http://www.asicme.com/en/post?id=100047 seems that there is a lot of similar "franchise" projects planned

The advantages of hardware franchising as I see it are that AM doesn't have to dedicate resources to building and running a data centre, or worry about becoming 51% of the network. They also don't have to worry about inventory (undeployed/unsold stock). It is probably cheaper to make a lot of stock in a short time rather than make stock in dribs and drabs.

In a perfect world in one run of a 2-3 weeks they would make enough stock for 3 months and within a couple of weeks it is all either in their own data centre, in a franchisor's data centre, in the hands of a distributor or en route to a retail customer.

Sorry, I missed that gem !!

Solution 1 is also in the works 

See the leaked PPT presentation about the next 6 months.

I believe one of the major drivers of this decision to bring in external mining partners is simply to mitigate risk.

Risk to be reduced: AM has a single mining farm in one location, producing essentially all its income, so a single point of failure. What if that gets damaged / destroyed by whatever means? AM is out of business. Our shares drop back to 0.1 BTC 

Solution 1: Build a 2nd factory somewhere.
Solution 2: Partner up with miners in diverse locations round the world, and "spread the love".

Solution (2) makes perfect sense if the numbers add up. This *was* a problem that needed to be addressed to reduce risk investing in AM.

The schedule for this business activity has not been released. At this stage it is likely that interested and capable individuals will start negotiations with friedcat and plan for scalable deployment.

The offering is particular interesting for miners who have the technical skills and/or distribution channels in place, but no privileged access to the technology (chips). Under the hardware sales scheme, these miners would be forced to buy hashing power at market prices and carry the full risk of depreciation. Under the franchise scheme, this risk is carried by ASICMINER, which should lead to a more sustainable partnership between the mining community and the supplier.

Well with 40% ownership a reverse transaction is still possible although we trust Friedcat it might scare some of the conspiracy theorists if any entity had that power which is why Franchising is a good idea

https://en.bitcoin.it/wiki/Weaknesses#Attacker_has_a_lot_of_computing_power

An attacker that controls more than 50% of the network's computing power can, for the time that he is in control, exclude and modify the ordering of transactions. This allows him to:
Reverse transactions that he sends while he's in control. This has the potential to double-spend transactions that previously had already been seen in the block chain.
Prevent some or all transactions from gaining any confirmations
Prevent some or all other miners from mining any valid blocks

With less than 50%, the same kind of attacks are possible, but with less than 100% rate of success. For example, someone with only 40% of the network computing power can overcome a 6-deep confirmed transaction with a 50% success rate.

Anyways that's not a worry really with ASIC it's just something worth noting related to why a Franchising Plan is important as it reduces costs of mining with units as well
With the competitors still not around in big scales and ASIC's production rising they need to cover these scenarios

Friedcat

This model is similar to hardware sales in the aspect that we do not have in control on how the users make use of our devices, therefore has more decentralization in spirit. And like with self-mining, it aims at settings in scale, enjoying the reduction of NRE cost and operating cost overall, and reducing potential marketing/advertisement/customer service costs.

I like that he has a plan should we get close to 50%, but still currently at 20%.  I hope he hold off franchising until he ASICMINER at least at 40% - assuming that even ever occurs.

Friedcat believes he can hit over 50% of the hashrate or somewhere around that range given enough time but does not want to scare bitcoiners with a 50% ownership of the network by franchising the units to other people ASIC would be able to maintain more than 50% of the network without directly controlling it. Solving the network issue without needing to wait for the network to grow to handle increased mining.

(Note that is an opinion )

But it is very Bullish news

Friedcat

We will rent the excessive hashing power to financial and technical capable people, accepting full deposits at the market price, shipping the devices and collecting a certain PPS rate based on the theoretical hashrate. The PPS rate, the dividing of cost coverage, as well as warranty/exit strategy are being discussed in detail and executed as small-scale experiments.

This model is similar to hardware sales in the aspect that we do not have in control on how the users make use of our devices, therefore has more decentralization in spirit. And like with self-mining, it aims at settings in scale, enjoying the reduction of NRE cost and operating cost overall, and reducing potential marketing/advertisement/customer service costs.

I do not understand the leasing - unless we get close to 50% of total hashrate, no reason for it. 

I agree will be interesting to see how the Franchising Plan will affect revenues as well.
Mining Selling Blades/Sticks and Later Franchising Revenue

On the positive side, the new "franchising" plan indicates FriedCat believes AM can keep their market share over the next 12 months, AND can produce extra hashpower to sell. This is very good news.

This wider distribution of AM's hashing power reduces some of the risk and stresses associated with running one centralized hashing farm..

On the downside, we are currently down at 18TH/s. That really sucks! Sure its temporary  

"Buy the rumor and sell the news" has been an axiom for decades.

It doesn't matter much to me that no one is jumping on this...I can see the potential new income stream.

Plus, if he has the hardware to do this now, he can push out more hashing power before the other vendors by a month or two.

True it is an ever raising bar but nonetheless the solution to the problem remains impressive

Expectations were already high and this only met them, did not exceed them.  The problem with always beating expectations consistently, is when you just meet them, it is a disappointment.  Same problem Apple has.  I would call it a high quality problem to have.

Surprised we aren't seeing increased volume after this news

Yes, for sure. It is a creative way to lift that 51% glass ceiling.
They still make money from the miners, but they aren't in direct control of the miners so a 51% threat can't occur.

This way he could technically "rent out" more than 51% to external customers.

Essentially he figured out a way to unleash the extra hash power he has been holding back as soon as it can be rented out wihout waiting for the rest of the network to balance his hashing power to a non-threatening level.

This is very positive for shareholders and future profits.

Great power emanates from Friedcat as such I am satisfied