Topic: If any hardware makers really want to succeed!! - page 2. (Read 2464 times)

completely agree, don't know what you are replying to bitcoin being worthless? Of course they won't why would they sell something for 3-5K when they can sell it for 15-20K, but that will be their downfall when a company actually comes in delivers an actual product and charges a reasonable amount, these companies will vanish or then finally be forced to compete, but they will still have a hard time as they have demonstrated that their business model doesn't revolve around the customer.

If BTC were really worthless, we wouldn't be involved in this giant market startup. Think of the amount of money going through Avalon and BFL right now with how many orders they've taken, in BTC or not. It's all to mine for bitcoins that puts money in your pocket, or for fun for the hobbyist.

If it were worthless you wouldn't waste your time considering entering the market because your efforts would then be as "worthless" as the currency itself, which does have its flaws.

You are correct in stating that these companies pricehandling methodology is flawed when it comes to the exchange rate. I guess you can't expect them to change with the rate when they know they'll make the extra money off of it.

One Phash/s.

You've been waiting a long time, what is cool?

One Thash/s isn't cool. You know what's cool?

Nobody said its efortless but it can def. be done with some effort, and i wouldnt put to much faith on Josh's word lol

Avalon has contacts at the fab (if you've never done business with Asian companies, it's difficult to grasp how critical this is).  They have made no secret of this.  Avalon also does a great deal of stuff themselves which BFL contracts out (which is one reason Avalon's batches have been so small to date).  They have had problems sourcing some components (an issue which they appear to have resolved now).

The small run thing is not conjecture.  Josh has posted about the problems they had with the facilities (including US facilities) they were using not considering their order "urgent" even though they were paying extra to expedite their order.  Hell, they had problems even getting information about where their order was really up to.

Yes, there are thousands of factories in Asia.  Many of them only offer specific processes (this is one reason why people were able to take an educated guess at which fabs the ASIC vendors were using).  Which facilities are reliable?  More importantly, which facilities does your personal representative have relationships with (because nothing is getting done without leveraging a relationship - you can't just pick a factory out of the yellow pages and hope for the best)?

Using third parties for assembly requires impeccable timing.  They don't want your components sitting around in their facility for weeks while they wait for one last manufacturer to deliver a component so they can process your order.  If you miss the "window" they'd set aside for you, there may not be another available for weeks.  Idle machines and idle workers cost them money so they aren't just sitting around waiting for your order.  If you're not ready when they're ready for your order, they'll just go ahead with someone else's and fit you in wherever.

Companies which have their shit together make all of this stuff look effortless.  It isn't.

Not to mention the miner you buy could lose its value by 2-3x. If you buy the miner for $5k guess what 2-3months later its still worth around the same.

You buy a miner at 75bitcoin x 200 = for $15k that investment fell all the way to $3,750, and is now worth about $7.5k so you just lost half of your money, if you cant see the difference good luck in life, your going to need it.

I don't yet have a miner.
That means that I need to purchase BTC.
That means that I am paying someone arbitrage fees.
The local guy takes cash at a premium... not quite 10%... but still... 10% is quite a bit.
Or I can throw money at what seem to be fly-by-night organizations that hold my fiat for days before allowing me to use my fiat, and hope they don't get hacked, or DDOS'd or hope that once I have my BTC, the price isn't FUD'd before I make my purchase.

Once I have a miner and begin to hold coins that I earned by strengthening the chain --- then it will be easier to purely think in BTC terms.
The cost for me to do biz in BTC isn't simple.

??

1. The company has 0 risk of a bitcoin crash unless they are retarded. In the case of Avalon they take pre order money and immediately pay the suppliers either in bitcoin or fiat converted from the bitcoins. Since they are not hokding on to the coins for extended period of time they have almost no risk. Secondly, they can immediately convert their bitcoins into fiat and eliminate their risk.

2. The difference for the consumer is he takes on substantial risk of a crash as he doesnt start using his investment right away. Like mentioned before the people who spend 15-20k on an avalon are screwed with a longer return on their investment. Wheras if the purchased the unit for say $5k fiat they wouldnt be in such a bad position.

I shouldnt really have to explain this its pretty simple to understand. The value of my investment isnt going to drop by 100% in a short time with fiat because i didnt overpay by 10 times. Bitcoins volatility allows the problem of overpayment for the device, whereas fiat significantly reduces this risk by being much less volatile.

Don't assume that the thousands of factoried in China are all booked to the core with million dollar orders. If that was the case Avalon wouldnt be able to buy chips. Or cases, or power supplies, or every other material they need. The fact that they have produced a product means they can easily ship all matetials to a manufacterer and have them put it together.

Their batches are selling out in hours if they left orders open for a week im sure they would get 5-10k in orders which there are pleanty of manufacturers that would produce and assemble them for you.

*lol* sounds like "Dont let you pay with bitcoins... thats dubious" while in fact you want to mine bitcoins with it, you want, most probably, that bitcoin is a more used currency, but please... not take bitcoins in the very root of the bitcoin-empire... the miners.

Its true that Bitcoins are volatile... and? Volatility is a risk like everything other. So if a company takes bitcoins it has to take the risk of a crash too.

And by the way... what the heck is the difference when you could pay in fiat? I mean the only thing you have then is a warm feeling, nothing more. Because if you exchange your bitcoins back to fiat to buy the miner and get the same fiat back some months later, because the company doesnt work out, what will be if the exchange course went up in the meantime? Right... you will feel warm because you got the exact amount of fiat back. But if you wouldnt have exchanged that money into fiat it would be worth much more now. So no, you cant run the volatility.

So what effect should this bring?

I want a One Terra hash rig made up of Avalon chips... that would be sexy!

Small custom runs are extremely expensive.  Even finding a company willing to do them can be a hassle.  Your pissy little order for 50,000 units is going to be squeezed in when they have time and that might be months after you wanted the product because they will always give priority to rush orders from their big customers.

No ASIC vendor is big enough right now to have much leverage with suppliers, so they can't even go the Dell "just in time" route and have all the components delivered at the same time for assembly by a third party.

The "normal" companies you're talking about order chips, boards and cases by the millions and their orders are enormously important to their suppliers.

Supposedly in an article i read they mentioned mobile chips within a years time will surpass asic's.

Avalon has been open about needing the pre-order money to produce the units (it's extremely unlikely that they made sufficient profit on Batch 1 and Batch 2 to fund Batch 3, if they made any profit at all).  It's not ideal, but they're not taking unlimited pre-orders for a product which exists only on paper.  They're producing limited batches which have a known delivery date.

BFL has always maintained that pre-order money wasn't being used to fund development.  If they don't actually need pre-order money to cover expenses, then it makes no sense for them to continue taking pre-orders at the moment (pre-orders should be a liability on their books) - or at least it doesn't make sense for them to still be requiring 100% payment upfront for a product which will not ship for many months under the best case scenario.  A financially stable company doesn't need to do that - you can use non-refundable deposits to maintain people's places in order queues.

If there is one question all companies doing the pre-order thing should be explaining, it's how pre-order money is being used.  

You can accomplish the same thing by giving a price in USD or EUR and allowing people to pay in bitcoin. So the price of bitcoins will fluctuate not fiat. Doing it the other way around just screams greed. Scenerios are great but they are just scenerios the people who paid 15-20k for an avalon are fucked right now, and in the future when their break even shoots out even longer.

it would probably take 1 week for Intel's lead engineer to redesign Core-i7 into ASIC with 8 cores@ 4Ghz and doing 32Gh/s on a single chip surely someday.

I, too, wish BTC was not so volatile.  What we need is exactly what companies like Avalon are doing, though.  The more commerce in strictly BTC, the lower the variance will be.  As a Bitcoin miner, it only makes sense to do everything in my power to improve the value of BTC, and actually using BTC to make purchases is a great way to do that.

Whether miners like it or not, they are buying their mining equipment with BTC.  Mining equipment income is first and foremost in BTC.  If a miner purchases equipment for USD, they are buying "X BTC over Y amount of time for Z USD."  I will give a concrete example:

Sally buys an Avalon for $5000, and sells all her income for $.  Dave buys an Avalon for 80BTC and holds BTC.  They both make 200BTC over the course of a year.  In one scenario, BTC falls to be worth $1.  Sally lost $4800, and Dave gains 120BTC ($120).  In another scenario, BTC rises to $200.  Sally gains $35,000, and Dave gains 120BTC ($24,000).

As can be seen, buying mining equipment with USD, and expecting to trade the income out for USD, is margin trading.

TL;DR: Bitcoin mining equipment is worth a constant amount of BTC, and buying it with BTC will yield a relative safe and known BTC return.

Another interesting thing to think about is, why are all these companies building the final product themselves? Your having a chinese company manufacter the chips, im sure its not hard to have them or another build the complete unit and ship you completed units. First it would cut costs on production and increase speed to market.

Just like every other normal functioning company in the world.