Topic: ASICMINER Speculation Thread - page 265. (Read 808860 times)

I was discussing yearly revenue (which bitfair had ballparked at 4.2btc/share a few posts before the one I finally replied to).

AM dividends are already impossible to exceed 0.063btc/week. Of course, it's also the case for AM to sell hardware at prices that are very unlikely to ever mine their price (c.f. USB Eruptor). There is a finite supply of suckers though, so that can't last forever particularly in the face of a price war which seems on the near horizon.

Well put.

Some look at AM and say it's way overvalued.  While others look at it and say the yield is too good to be true--it must be a scam.  Crazy.

To you and I, no.


To the majority of potential investors, for this type of investment the answer is going to be "Yes".  Investing in someone they will never get to meet, see on TV, or have any traditional exposure to (CEO of a Fortune 500 company) will demand a much higher rate of return to offset this risk. Adding in that this opportunity exists within the infinitely small population of the CryptoCurrency Revolution, we are left with a very small pool of knowledgeable, risk tolerant investors who want to drive this future forward.

Now, within the CryptoCurrency Revolution, we have several investors that enter into ASICMINER as their first real investment opportunity. Looking at P/E ratio's is terminology outside of their comfort and knowledge zone, making a full 100% return on their initial investment by years end is key, anything less than "I got it ALL back super quick, PLUS", isn't good enough. This shows a clear, fundamental misunderstanding of money and investments. The 9/5 world is centrally planned and controlled, including finance. You do not open yourselves up to opportunities like this in the 'real world' unless it is an investment that is fraudulently run, period. This is no doubt why many a investors initial reaction to AM is "This is a Ponzi".or "This cannot last, get in and out ASAP". Nothing in the 9/5 investment world has prepared them for this new paradigm.



- Use your intelligence, research the investment and the industry it resides in. Compare that with your personal financial goals and your outlook for the World today, and do not look back.

365.25 days is only one year.  He would have to multiply by another 4.

If not, then I would agree that they are WAY OVERPRICED!!!

do you know the difference between bitcoin investing and bitcoin gambling?


bitcoin gambling is provably fair...

His estimate was for the next 4 years, not one year.

Surely AM will continue operating for more than one year!

Edit: However, it would be pertinent of me to add a discount factor to my "calculations" - but the effect would be tiny compared to the broad assumptions

Short term, I don't believe the difficulty increase to have a significant price effect. However, I think "low" dividends on Wednesday will cause a sell-off from more inexperienced "investors" who have done too little research.

There appear to be a good number of shareholders that are panic-prone and have little understanding of both investing and the company they have invested in. They will see lower dividends than they were led to expect [since hardware is out of stock], declare the whole thing a scam, then sell shares at discount prices because they believe the sky is falling down. The kind of "investor" prone to this kind of panic behavior is not the same kind of investor that closely follows network hash rate, so I think Wednesday's price movement will drown out anything we may see today.

But then again, maybe not.

Does an investment need to have a dividend yield of over 100% per year to be worthwhile?

Your conservative revenue numbers are fantasyland. If AM mined 100% of the blockchain for an entire year (either by mining or through hardware sales priced to be premined for 1 year), that comes to only:

(25*6*24*365.25)/400000 = 3.28725 BTC/share yearly revenue

we're just talking and guessing. If people accept this as advice for anything, that's their problem.

that's an important thing to consider.  We haven't paid for Gen 2, yet, so some of that extra profit from Gen 1 will have to pay for Gen 2, eventually.

ok, for the extremely short term, what happens today when the difficulty increases?  We see that the AM hasrate has dropped considerably over the last day or so, will they be able to ramp up to meet difficulty?

According to some more calculations I did, gen 1 hardware continues to be profitable in operation until network hash rate reaches 29 peta-hashes per second, regarding the initial investment as a sunk cost - meaning that gen 1 hardware will remain profitable for a very long time still (unless BTCUSD drops dramatically). It is likely cheaper to produce gen 1 hardware than gen 2 hardware, so devices can be sold more cheaply and undercut the prices of competitors - and given that the devices will remain profitable for a long time still, I believe there will still be plenty of demand if the price is right. In my opinion, gen 1 is not ready to be retired after this 200 TH order is delivered. In fact, it may be just getting started.

Gen 2 will be an important step, and I am happy to see development happen right now because it takes time to design and plan. But it may actually not be lucrative for miners to buy, taking into account USD/GH and operational costs of gen 1, until network hash rate rises to double-digit peta-hash.

In the end, I don't know the production costs of Gen 2, but they play an important role in the dynamics of the situation.

Hopefully there will be other competitors soon, but I still believe AM can retain a 25% market share (mining+sales).

Edit: Does not constitute investment advice, all statements about the future are uncertain.

They are not at 25% now, and I think it is a mistake to assume they will gain much in terms of network percentage.

edit: ok, I see what you are saying, if you assume hardware+mining = 25%

yes, they did that without any competitors, which will not last forever.  By the time they get the full 262TH online, there will be at least another competitor producing.  That means that maintaining that 25% will become harder, more expensive, and less profitable.

No, I don't think they will be expanding beyond the 262 TH in gen 1.  I believe the plan is to get that online by the time gen 2 is ready to go (Nov?)

Optimism has worked out pretty well so far.

The estimate takes into account decreasing mining revenue, but may be on the optimistic side.

Let's do another one. First assume that selling hardware and mining generate the same revenue, then assume that AM hardware keeps mining 25% of the network hash rate - because of the first assumption it doesn't matter whether it is friedcat and friends that are hashing it or someone who bought AM hardware, revenue for AM is assumed to be the same in both cases. Say there's 5 million BTC to be mined over the next four years, then it works out to approx. 3.1 BTC per share.

Looking at the competitive landscape, can AM churn out 25% of hashing hardware? Well, they have already manufactured hardware for 46% of the current network hash rate. They have an established production line, great cash flow, no debt, undelivered orders already paid, and a production cost that (I'm pretty sure) outcompetes all the other companies. I am confident they can manufacture at least 25% of all hashing hardware for an extended period of time, possibly significantly higher than 25% in the short term.

So let's say - conservatively 3.1 BTC per share.

This is under the assumption that there are no plans to expand beyond the announced 262 TH/s. Do you think friedcat and the rest of the folks at BitFountain are saying "We've mined enough coins, we'll just let ASICMiner fade away now"? Once there is enough network hashrate online, I'm sure shareholders will be hearing more about further expansion plans....

wow, that's a whole lot of optimism!

They won't be getting the same value for the blades as they were before, mainly because of competitors, and lowering ROI.

Also, mining revenue (as we have just discussed) will probably be decreasing.  It doesn't matter that they have 200TH, because 200 TH in 2 months is not the same as 200TH today. Instead, think of it as a % of the total hash rate.  If they can keep 20%, then we are looking at consistent .015/share per week.