The simple fact is that to enter production of a 28nm asic has high up front cost that must be financed somehow (investors or pre-orders). Taking pre-orders is effectively crowd funding, and its very effective as everyone could potentially win (provided the company can be trusted to ship when they say they will). Its a very similar risk to backing a Kickstarter campaign. We (the miners) get to place our bets on which horse(s) to back. and the mining asic companies get to raise the production costs that they need to enter full scale production and deliver to their customers. Im fine with this model and have previously ordered from KnC (and I intend to order from the other new guys too when they let me)
The older generation asic companies doing 55, 65, 110 or 130nm didn't have the same problem because the up front production costs were much lower... (NRE's in the thousands instead of millions!) and even then, some of those still pursued the pre-order strategy (and failed to deliver - yes, I am one of those still waiting for my BFL boxes, which I assume will not be delivered to me in a commercially useful time)
and as someone else said, if these companies raised their production costs some other way, and didn't need to take pre-orders to finance their production... then either their price of hardware would be much more expensive (to cover the investor's return) or, as was mentioned, they wouldn't need to sell any and would be mining themselves like asicminer and no doubt some others out there.
there are other models that might work too, for instance, building out a mine and selling terahashes on it (like what cloudhash and coinlab are doing). but theyre still taking prepaid orders to fund their purchases of stock from all the usual suspects.
of course, you could always find someone wealthy to back you (like the insane rumour of joe lewis backing a bitcoin asic).. but the sums involved don't seem to make sense to the investors.. and if it were true, there is no chance that this asic would be offered for sale to miners like us.
I wouldn't be surprised if the mining asic companies that can raise their production costs without doing presales, probably wont sell their mining gear until after they've used it to mine some coins themselves and will sell it when it gets a bit longer in the tooth, while they move onto the next asic.
You say its insane to make preorders without any assurance.. but how do you get assurance other than the word of the company and presumably knowing who the principals of the company are, and whether they have backgrounds you believe in. any order of anything in the bitcoin space has a level of risk attached to it that isn't present in the real world when you order a book from amazon. Youre betting on the execution risk of a startup, and betting on bitcoin at the same time. The only way you can decide whether its a good bet is to look closely at the people behind the company and decide if you think theyre up to the challenge. Its exactly the same way that VCs make investment decisions in the real world. Bet on the people behind the company.
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The "We hate pre-orders" crowd isn't thinking clearly. They want massive profits with zero risk. But chip makers have no reason to sell chips at anything less then what they think the chips would produce over the next 6, 12, months or whatever timeframe they have.
I don't know why people refuse to get this - if mining companies have chips on hand, and they don't have customer pre-orders to fill, then they are just going to mine with them, and will only sell at exorbitant prices!
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The "We hate pre-orders" crowd isn't thinking clearly. They want massive profits with zero risk. But chip makers have no reason to sell chips at anything less then what they think the chips would produce over the next 6, 12, months or whatever timeframe they have.
I don't know why people refuse to get this - if mining companies have chips on hand, and they don't have customer pre-orders to fill, then they are just going to mine with them, and will only sell at exorbitant prices!
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The problems with your argument start with your premises. In IRL pre-order, zero risks are implicit -- that's the standard. IRL.
A pre-order purchase are not wagers on whether a company will deliver.
It is not a wager on whether the company intends to deliver.
It is not a wager on whether a company exists.
It is a purchase -- like any other.
It is also not an investment in a company -- those are called "investment," or, when little info is available, "gamble" or "foolishness."
Further, referring to Cointerra "mining company" is wholly unfounded. By its own admission, Cointerra is presently doing no mining, owns no mining hardware, mining components or has any other tangible links to mining.
If we chose to be loose & liberal with our terminology, we could call Cointerra "virtually a virtual mining company but not quite" or "possibly a fabless ASIC company with no ASICs to its name, but prob'ly just trolling."
Further still, claiming that a fully-funded ASIC manufacturer would simply mine with its own chips only exposes *another layer of absurdity,* a different topic i'd be happy to chat about later. For now, suffice it to say it's one of the oddest justifications for giving money to strangers that i've ever heard. Yes, buying mining gear may be a fool's errand, but buying it with no assurance the gear will ever materialize, or that you'll ever receive it? Sillier still.
