Topic: Avalon/ASIC purchase logic error (Read 716 times)

Yes, Avalon has delivered on their promisses, even within reasonable estimated power consumption (600 Watts, over the
400 Watts they calculated for the naked ASICs tested)



You are referring to the business model ASICminer is using, they also produced an ASIC solution but are hosting it themselves. They funded themselves by issuing shares

There are two issues:

0. where do you get the initial funding from to develop an ASIC? You can do pre-orders like Avalon, get venture (vulture?)
capital like BFL claims to have done or sell shares in the company like ASICminer did

1. if you are going to host 50 TH of computer power, you will run into all sorts of practical hosting issues, mostly excess power consumption and heat (read the ASICminer thread, it's not that simple). Remember you are not hosting this in a bedroom or even office building, it needs cooling, redundant power and protection against theft and sabotage.


If you have a data center ready that can deal with 1/3rd of a MW, then we can talk ;-)

The Avalon batch #1 units (66 GH/s) cost BTC 88 + shipping + customs


Don't underestimate the increase in difficulty, it really cuts into profit in the long run

http://bitcoindifficulty.com/



In about 1 month time, it doubled, thus halving payout...


You are not just competing with Avalon, but also the 50 TH ASICminer is deploying. And then once BFL gets their power issues sorted out, another big batch will be dumped onto the market

More importantly, you are betting the $US price vs the BTC rate stays stable. It has gone down dramatically in the past.
If you depend on your weekly produced BTC to pay the hosting bill, then good luck if that happens...

You don't think that you as an individual trying to sell of $36mil / year worth of BTC would affect the price?


I think the safe bet for the BFL situation is lack of ASIC experience and bluff, they managed to convince people to pony up large sums of money since July last year and have failed to show anything within the specifications (GH/s and power consumption) they promised. And they are about 6 months over their initial delivery date. Oh and in that period, they continued to spread FUD and insulting the competition, trying to take away market share from them. It will be interesting to see what kind of return on their investment their customers get once they take delivery of their mini rigs in June...


Yes, a crystal ball to predict the future, like difficulty and $USD/BTC rate ;-)

Avalon has a business mission of bringing ASIC to the masses, by selling the devices and later the chips, to put more ASIC power into the hands of many, thus securing the network. It's actually a very noble thing they are doing it and they are doing it in their own stubborn style, not following a traditional path. They are willing to delay delivery of their products to avoid becoming the dominant player in the market for example.

And don't forget that in the time of the great gold rush, only a few struck it rich, but those always making money were the ones selling the mining equipment to the masses...

I considered that...but hashing faster doesn't increase or foster bitcoin adoption -- in fact I'd wager it consolidates the mining instead of distributing it...with $1500-$30000 needed to even make it worthwhile in power, everyone but the big guys are shut out. Bitcoins are generated at the same rate regardless of the network hash rate. So the only benefit to a faster hasher is when you're the only one with it and it's a monetary benefit.


Possibly...still just seems too good to be true without some sort of catch-22 somewhere.

Maybe they're are just young people who really believe in Bitcoin.

And maybe they need customers money in order to fund development.

Momma always said...if it's too good to be true, it probably isn't.


Other factors to consider would be of course competitors reducing your share of the hashrate...but with a conservative 2 month break-even I'm not sure if that even qualifies.

You know, I really wouldn't doubt it.  If I had so many units that could mine gold over the Internet, I wouldn't let anyone else have it.

Ok. I've been GPU mining at ~3GH/s in the shadows for a year or so now and don't want to get left behind. Looks like I'm going to have to buy an ASIC to keep up.

Apparently Avalon is the reputable one, has shipped units, the whole 9 yards. They don't have any availability right now, but I'm sure soon will.

What I'm trying to figure out is:
Why would they sell a 60GH/s unit for $1500, or even $6500 when a single unit sitting in their labs will make this in a month(at half the current BTC price)

If I have 600 units that will make me $60k/year, why would I sell them for a total of $3.6mil when they could make me $36mil in a single year. It doesn't make sense to me and is what is preventing me from sending 62BTC to them.

Even if you consider the increase in difficulty...it's 1 block every 10 mins right?

Current network hash rate 52TH/s. 600 asics at 60GH/s each is 36TH/s, hash rate would increase to 88TH/s. So the asics would command 40% of the network hash rate. They generate a block every 24mins (40% of 6 blocks/hour) or 60 blocks/day. 25 coins/block = 1500BTC/day. Assuming the current bubble pops, $40/btc = $60k/day = their total sales made in bitcoins in 2 months and they still have the hardware.

Butterfly Labs pricing for their (so far) vaporware is even more perplexing...or perhaps they're doing exactly what I'm questioning...

Or am I missing something?