Topic: BitForce SC - full custom ASIC - page 20. (Read 52532 times)

I'm not quite sure why BFL would take on MORE RISK after funding the development of an ASIC chip.

Good business managers know that risk mitigation is way more important than quick profits.

+1

I'm just curious as to why so many people think BFL somehow owes them an explanation for how they do things.  Some people felt "owed" (and still do) an explanation on how they acquire their chips for the Singles.  Some people feel they are "owed" and explanation for how they are able to produce the (as yet to be seen) mini-rigs for the price.  Now some people feel that BFL OWES them an explanation for their ASIC technology?  Really?

You people who feel you are owed an explanation for ANYTHING are delusional and your sense of entitlement is epic.  You are, quite literally, the reason so much of the world is shit.  You go around thinking you are entitled to things you have absolutely no stake in, things you have not earned.  The world does not owe you shit, you have to earn what you get.  You idiots demanding that BFL disclose proprietary information deserve absolutely nothing. You aren't owed anything.  

You have earned exactly two things Jack and Shit... and Jack left town.

Wouldnt be so sure. Have you tried selling $1M worth of bitcoins lately?


Lets wait and see what the announcement says. I agree it seems likely they dont have a (full wafer) maskset ready now, but its certainly not unthinkable and I havent seen them take pre orders or announce availability yet, so lets not start calling them scammers again

Also, a maskset for an older processes its more affordable then you may think, and if even that was outside of their financial possibilities, its possible they went for a shared maskset and will produce the chips using a stepper. That increases the per chip cost significantly but could be a valid tradeoff for a first bitcoin asic.

Ohh burrrn.

Even recovering the initial $1M would only take a few months.  And once a competitor appears you have a fully depreciated technology you can sell below your competitions cost.

BFL cannot have purchased any modern mask set.  They probably intend to collect pre-orders to fund one though.  They is no way I would give a dime to them for ASIC systems without proof of a mask being built.  Keep in mind it takes 3 months to move die through a fab.  Plus test and packaging.

If you have a valid VAT ID then you can also avoid customs duty VAT on outside-EU imports.

But thats not how it works. Whoever invested in an ASIC will likely have spent well over $1M, and can produce all the GH and TH he wants  for negligible extra cost. Now you can mine with that for 6 or 12 months to try to break even (dont forget you push difficulty up and if you sell all your coins, you likely push BTC rate down) but if anyone else comes along with an asic during that year, you are screwed.

OTOH, selling the equipment to miners who do math like you do, will probably net them a very tidy ROI.

Is anyone mining with a pure ASIC right now?  If so why haven't we seen a huge increase in the total network hashing power?  If no ASIC's ae online right now why not?  What is holding up the ASIC's right now?

As a matter of fact, I do have a VAT number and can avoid VAT if I am buying from a EU company

Maybe BFL can do something so we can avoid the customs duty VAT

Cablepair, I sympathize with you.  The entire purpose of BFL's announcement is to damage their competitors.  FUD (fear, uncertainty and doubt) has been used by unscrupulous companies against competitors for decades in the tech industry.  See my post #91 for an explanation of their motivations.

Looking at it another way, imagine you have access to tech that is merely 5x more efficient than today's hardware.  Call it $0.14 / MH.  That would be $140k per TH which would capture around 450 blocks a month right now.  Earning $115k / month!  Or 1.2 months to breakeven!  Would you sell this tech to anyone?  Would you tell anyone?  Of course not.  You would put your own money in and yield 100% returns.  You would spread your systems over datacenters worldwide, and hash through a dozen different pools, and no one would realize that you are reaping 80% of the hash rate in a a year.  Then you might start selling.

I suspect BFL is paying rent, lights and salaries with mini-rig orders they still haven't shipped. BFL prove me wrong:  publish a report from a lawyer or CPA showing that they are holding payments for these systems for you in escrow.

No miner is selling their hashes below market value, my conclusion above didnt refer to those buying hashes.

Look at BFL as the miner and the client buying the hardware as the buyer, the miner benefit the most directly in the GPUMAX scenario and in comparison BFL would benefit more by mining themself.

These are extremely low power units, they could in theory(if it performs like we all expect asic units to perform) run the current 11TH network in the space of a medium size office and power consumpion would be less to nothing in comparison to market price.

I do agree with you p4man that they probably dont have the funds to build all of this for themself and the risk is likely too high to get investments directly to fund the asic units for personal use however that should raise the same redflags for miners who want to buy these units. If the company producing the units feel its to risky to self-fund and self-utilise the units then clearly its also the same risk involved when buying the units in the public space.

And yet so many miners do

I agree with the conclusion, not entirely with the reasoning. By selling hardware instead of mining yourself, you do get a lot of advantages:
- You offload the future difficulty/price risk to miners (but I guess that is more or less your point, and I agree too many miners will misjudge it and end therefore all may well end up losing money).
- You get far better cashflow position. Thats pretty important considering the investments involved.
- You dont compete with yourself as you develop newer iterations.
- You dont undermine the very currency your whole business is dependent on.

So no, I can see the sense of selling hardware even if mining yourself might be appear to be more profitable. In fact I think Vladimir is making a huge mistake by trying to develop his own hardware to mine with, rather than sell. But none of that changes the fact that if BFL prices their units at market price per GH to maximize their revenue, mining will become a waste of money instead of a somewhat risky investment.

I have one analysis that seems to make the most sense when they decide on pricing model.

If they end up selling ASIC units then these units will be priced at breakeven or a loss to miners over the next 12+ months simply because if anyone is capable of building ASIC units and mine with it in a profitable setup then it would be retarded to sell these units and lose out on your own market share where you could be earning more than selling it.

That said, whatever price they sell the units at it would be priced against realistic bitcoin earnings over running average market price per BTC. Think about it, why sell a unit for $5000 if it could realisticly earn you $20k or more within the next 12months ? Even as a engineering company it would simply be handing out free money and lets face it no business will pass off the chance of 3-4x more profit by simply using the units themself or pricing them higher than the market price.

Kind of like buying GPUMAX shares, why would any miner sell their hashes at below PPS or even 100% PPS rate, it simply doesnt make any business sense.

Does anybody know when the Mini-Rigs are supposed to start shipping?  I'm wondering when in June they'll announce more details.

I don't know what is considered throw-away money but a device with a price around 200$ max would create lots of impulsive small sales.

Decentralization is not only good for security it's also needed for greater adoption via fair initial distribution.  

BTW, I don't think Bitcoin's community's IQ benefited much from the hoard of gamers / miners.

If they do ship it from inside EU, how will that avoid VAT?
If there is a company, they need to charge VAT to any consumer inside the EU. They woudn't charge VAT if the buyer was a company, but I really doubt you can supply a valid VAT ID to avoid being charged VAT.
Or are you advocating that BFL should do some EU gimmick for tax evasion so you can buy their products tax free?

Thats because you still havent accepted the fact that production cost of asics is on the order of 100x less per GH than FPGAs. Its a much bigger jump than from cpus to gpus.

Now how long it will take for difficulty to go up that much and BFL thus having to cut their price correspondingly will depend mostly on a three things:
- BFLs pricing strategy. If they are confident they will retain a monopoly for some years, they may chose to start at current prices per GH and lower prices slowly and milk the market slowly. Think ArtForz gpu mining by himself. In that scenario its perhaps possible miners will earn their investment back, although by my reckoning, only if BFL prices their products well below what the market will bear or voluntarily limit their sales and price drops instead of maximizing revenue. Not something Id want to bet a lot of money on.
- How many people think like I do and wouldnt even consider buying something with more than, say, 3 months break-even. IF almost everyone thinks like me, ironically, the few ones that dont could mine profitably. However, given that nearly no one seems to agree with my point, and that price/difficulty will be determined by the highest bidders, this doesnt seem very likely. Looks like everyone is lining up to order.
- Appearance of an ASIC competitor. If, or rather when that happens, well things will go very fast because BFL will not only have to ensure their product is seen as a profitable investment compared to difficulty, they will have to price it against their competitor too. As always the result of competition is that prices (in this case, per GH) will approach marginal costs much faster, and remember how much lower they are than today.

The thing to note here, is that all of these factors are completely out of your hands, and your mining profitability will be at odds with BFLs profitability. Which one will you bet on?

i really don't expect to see BTC ASICs before 2013 if not 2014. Then alot of BTC economy could be different. The whole world economy could be
different!
but i am sure for one thing: ASICs are dedicated machines. You can't use it for something else than the application they are design to.
This is a major disadvantage versus GPUs and FPGAs
lets see...