Topic: ASICMINER Speculation Thread - page 264. (Read 808860 times)

BitMinter was DDoSed earlier. Other pools might have been hit as well, but I haven't heard anything of the sort.

Since this thread is for speculation -- what does everyone think is going on with the hashrate? ~23 th/s for the past 8 hours..

People only have so much money to spend. Wait'll Tuesday to see what the price does again. And then watch the price react to whatever the divs are. If divs are .03+ again, expect to see 3btc price again. If divs are  less then .025 expect to see us fall back to 2.5ish again.

Personally, I think the stock is easily worth 3btc, but the market is what it is!

Bitcoin not designed to go over $500..?

I'd say the volume has been pretty high the last few days, things are settling down for a bit.  A lot of shares have changed hands.

share price continues to slide today, the demand has disappeared.

was that rise to 3 an artificial pump?

Yeah, hackers, bots, DDOS, market manipulators, and the fact that Bitcoin isn't designed to go over $500 are all reasons why it can't reach $1000 right now, but when those problems are solved then it can. Demand is clearly there as you can see by the media attention and businesses adopting it.

Speculation noob here.

It seems to me that one of the short term collateral aspects of the ASIC war that's ramping up will be an exceedingly large supply of bitcoins in a low demand market. There are very little people actually using bitcoin, the exchange activity is mostly bots and whales, and acquiring bitcoin is a difficult task for your average internet user. On the other hand, there are LOTS of miners selling their bitcoins for fiat.

I'm bullish on Bitcoin long-term, but in the current context, $1000 a Bitcoin is impossible. We're struggling to keep three digits, and nothing in the horizon suggests any kind of reversal (more likely the opposite).

Please enlighten me if I'm missing something.

262,800 / 400,000 = .657

You are correct, you cannot expect both rising difficulty and steady returns to coexist except in the special case where your personal hash rate increases to ensure a steady percentage of global hash. This I believe is the special case we see in AM, as their stated goal is to maintain a steady percentage of the global hash. If I misunderstand the intention of AM then I stand corrected.

That's correct, and difficulty increases to normalize the number of blocks solved. But continuously rising difficulty happens because the blocks are found in shorter periods of time. My point is more about the assumptions people make, versus the calculations they make. You can't assume rising difficulty and constant revenue at the same time. If you assume difficulty changes, you have to update your revenue projections accordingly, because rising difficulty happens because blocks are being found too quickly. (More blocks than projected over each period.)

Everyone ignores the constantly growing (and eventually larger than block rewards) transaction fees in all of these estimates.

 Yes transaction fees are only 2% of block rewards right now, but they will increase in % by design.

Aside from temporary distortions caused by excessive hash rate increases over short periods of time, the number of blocks solved (and therefore btc mined) remains constant over time, this is precisely the function that increasing difficulty performs.

25 coins x 6 blocks/hr x 24 hours x 365 days = 1,314,000 total btc mined in the entire universe per year. This on average will remain stable until the next halving. If AM maintains 20% of the total hash, they will receive 262,800  coins per year from mining. With 400,000 shares outstanding that breaks down to 0.707 coins per year per share before expenses.

If you assume that AM can keep at 20%, this number is fixed regardless of hash rate or difficulty. 0.707 coins per share per year.

Once you move past this point you are playing with all sorts of variables that are pretty much just best guesses. We don't know their expenses, but we can guess. We don't know what hardware sales will be, but there are no shortage of guesses. We definitely have no idea what the btc/fiat conversions will be one year from now. By playing with those numbers you can pretty much end up with any results you like, from AM shares having a fiat value of anywhere from zero to a million and beyond. It just depends on what values you wish to assign to the variables. For example:

Assume AM keeps 20% market share, makes an additional 10,000 btc profit from hardware, and one btc becomes worth $200. The math becomes pretty simple.

262,800 from mining, 10.000 from hw for 272,800 coins x $200 = $54,560,000, divided by 400,000 shares = $136.40 per year income per share. That is about 45% of the current cost of a share.  1000 shares would net you $136,400 per year, on an investment of $300,000. This also ignores the increase in value of AM shares that would inevitably occur. Factoring that in, and you may find yourself a millionaire very quickly.

But of course, like I said, change any of the variables just a little and these results jump all over the place. That is really what investing is all about. Plug in your worst case, best case, and most likely scenarios and see where you end up.

Tracking for reference posts
^_^
Aka redirect to here thanks for handling the chaos 

You can't assume 6*24*365.25 blocks per year and assume difficulty is rising at the same time. If difficulty has an average rise of ~10%, it's because 2016 blocks takes ~18000 minutes instead of 20160. (The actual calculations are based on seconds, not minutes.) If difficulty rises an average of 10% over the whole year, the total blocks found would be ~59000, instead of 52596.

Assuming 10% difficulty rise each readjustment, if AM maintains 25% of total hashrate, gives annual mining revenue of BTC0.92 per share, which is .0177 per week, not the .015 or .016 I keep seeing.

It is important if you are doing valuation calculations that your calculations are consistent across your assumptions.

I bought some at 1.3, spiked the market and everyone thought the market movement was mad at the time, only a month or two back.

I've recently sold out though.

Not because I have any lack of faith in ASICMiner or the great work they've already done, but quite simply I think the price is high right now because:

They are now a $120m value company that was created for well under $1m, with no unique or patented technology in a market clamouring for more of the same or generic product (ie sales and mining are really the same market for all ASICs).

The problem therefore isn't if someone will replicate them, or multiple people, it's when. Now the fact that some of the others are slow on deliveries right now (Avalon/BFL) and others may or may not be vaporware, the reality is that in one years time there'll be a lot of companies both selling and mining this stuff and in a crowded market the shares of sales/mining and the price for hardware will all tumble.

It is therefore the case that current dividends whilst very impressive, should not be used to predict future cashflows or values.

Lets put it like this, if I was going to invest $1m personally now, there no way I'd buy under 1% of ASICMiner, I'd be offering $1m funding to any team that could prove they can build and deliver ASICs within 6 months from scratch and I'd own 100% of that business. It could easily be made to happen and I'm sure that whats others are thinking.

I regret that I didn't want to get in AM due to the difficulty of not having an exchange. I only got in after it was available on btct as a PT, at 0.65.

They said 0.42 for AM was that crazy price while I was going for a snorkeling trip, but the boat was 15 minutes late and I saw Jaturol god selling for 0.5, so I took 280 shares from him that day just for the sake of dividend, best moment of my bitcoin career.

I see bitfury and kncminer are the threat to AM, but I still don't think anyone can make asic cheaper than AM residing in China, cheapest place for pumping chips, along with their current lead in what they're doing. Plus, no need that preorder bullshit to raise fund.

In that scenario, I assumed there would be hardware sales the next year. With hardware sales, the revenue can exceed what is mined in that year, because old money buys new gear. For AM, it brings revenue forward in time - instead of mining 25 BTC with a Blade over the next few years, they can sell the Blade for 25 BTC get the money immediately. So in that sense, it doesn't "break the laws of mathematics", so to speak.

(For the same reasons, it IS possible to exceed 0.064 btc/week dividend - by time-travelling revenue through hardware sales!)

But whether or not it is a plausible scenario, is an exercise left to the reader!

Wouldn't it depend on how many shares you have and the exchange rate of Bitcoins at the time? So if you have 100 shares you could be rolling in money but if you have 10 shares maybe not.  I think what people are buying is based on the expectation that the exchange rate for Bitcoins will rise.

So the value of ASICminer shares will correlate with the exchange rate of Bitcoins. How much do you think Bitcoins will go for in a few years? $500? $1000? If you own 100 shares now, if Bitcoin keeps growing then you'll slowly get richer until you can live entirely off dividends. How long that will take depends on how many shares you have and high how Bitcoins goes.

I'm not currently as bullish as I was a month ago. I could see Bitcoin getting to $500 next year, $1000 in 2015 and from there it's anyones guess. The reason I don't see it exploding to $1000 in 2013 like I saw when it was growing at 5% a day is because the Max Block Size issue restrains the growth rate of Bitcoin. It's in the code that it cannot grow at 5% a day without reaching a ceiling at around $500. It will not make it to $1000. The ceiling however is a software ceiling and that is the good news, it's not a demand ceiling.

What this means is when the software ceiling is resolved, and when it's easy enough to buy Bitcoins (Coinbase has really helped with this), then it's just a matter of time. $1000 a Bitcoin is not a lot and if the software ceiling issue weren't there I would say it could reach $1000 this year. Instead I see Litecoins reaching $20 this year and Bitcoin being around $100-200 until they fix the software and remove that ceiling or cap.