Topic: Why are people buying asic mining shares? are they insane? (Read 9314 times)

I would posit that every member of the human race can be considered insane in one fashion or another by the majority. This comes with being human, all of our judgments are passed through a unique prism of our own specific experiences. No one (and I do mean no one) has the corner on the market for truth. Understand this and you will quickly understand that trying to impose your own unique rationality upon others is futile at best, and destructive at it's worst. At any time any of us is as likely to be wrong as right.

Those who fail to realize this generally resort to name-calling or labeling when they fail to convince others that their "reality" is the only logical correct one. This would appear to a contradiction;  the person attempting to persuade others believes he is doing so out of altruism, that is, he is helping his misguided fellow man by providing him with valid information, but then lashes out when the other person is non-receptive, showing contempt for those he had originally intended to assist. This is a difficult thing to realize, and a difficult behavior to learn to overcome.

I have done well on most of my mining and investment ventures. No amount of name-calling can change the past. Please, feel free to present your case in the most logical manner you are capable of. But do not degrade the choices others make, for they are every bit as valid as yours. That is the nature of freewill and choice.

But I could be wrong.

I rarely post in most koolaid threads. This has to do with not taking the time to talk to people like you, which is to say newfags that are being idiots, rather than anything substantial.

Do carry on, you're only the what, fifth generation of sheepsies to the slaughter.

Totally wrong.
Since they produce in-house the chips, they can cut a huge part of the costs you would have if you were ordering the hardware from there.
Also, electricity is much cheaper there.
So, BS.

No really, do you drink a bottle of wine then come troll the forums?

Shouldn't you be trolling the official AM thread?

You know most have read your bull there and pay no mind to you (you stopped coming after you made blatant hater predictions that ended up being wrong?). I really shouldn't bother, but...

It's directly relevant because the person to which he responded basis his calculations on BFL, Avalon, Bitfury, KnC, and 100TH all shipping and coming online so quick that AM can't maintain 20-25% network share. If X if BFL, then X sucks, and X is not shipping shit close to their estimate, therefore Y is AM, and AM has a proven track record on estimates and delivery, and based on Y's estimates, it can keep up X's actual delivery record.

Mabsark says AM needs 6500 TH/s. At 20%, that's an additional 32500 TH/s by October (ha!).

I don't know where he gets his fantasy numbers, but one thing is he seems to be calculating an AM share purely as a mining bond, which it is not. Reading what the manufacturers estimate, it's 1200 TH by October, but even that is laughable. If it were 1200 TH, AM would only need to put up 270 TH to maintain 20%. Which based on their track record, they seem fully capable of doing, unlike every other single one.

BFL: delayed (string along ponzi crap, sell product X pre-orders, delay, sell product Y pre-orders, ship some of product X, delay, sell product Z pre-orders).
Avalon: delayed and mining with your shit (so that's already part of the current network hash rate).
Bitfury: delayed and don't know they work.
KnC: canceled mars and expensive and who knows how fast they can manufacture those things.

MPOE-PR, newguy05, Mabsark, return to this thread in October for a learning experience.

This "X sucks therefore Y" nonsense....

stages of childhood:
1. Find out Santa Clause isn't real, cry, move on
2. Find out BFL isn't real, cry, move on

It's okay, kid.. some day you'll grow up to be big like us

Maybe not 2 weeks, but some day others will enter, so to dismiss that fact is equally foolish as the OP saying we're all fools for owning ASICMINER shares.

Sure they do...two weeks, right?

You are absolutely right... as long as we assume every other player meets their targets and AM decides to not make any more hardware after their current batch arrives.  Good luck with your assumptions.

You are totally uninformed about ASICMINER. The company (friedcat/Bitfountain/ASICMINER) has already invested heavily in next generation ASICs. They have been extremely open about how much has been and will be spent on developing and deploying next gen devices, and what their expected hashrate will be.

Either you are just trying to spread FUD, our can't tell a well-run and extremely transparent business from a ponzi scheme... either way that's almost ignore button territory.

This exactly. It's amazing and a little scary that people who don't understand the basics are actually investing their own money.

ASICMINER has already been one of the best investments in the history of mankind, and there is the potential for it to increase in value ten or 20 times again within a year... yeah us investors must really be NUTS.

I understand if you compare to a normal high dividend paying stock such as a reit etf that returns 6% a year this sounds like a great return currently as everyone who responded to my original post keep pointing out.

Lets even ignore reality and put aside the fact this is just a guy in the basement paying you whatever he wants and could disappear tomorrow and it doesnt even have a legal binding contract holding the person liable or backed by a us-based llc. Lets assume this is legit triple A rated corp that will not disappear, and freidcat is the most honorable man in the world who returns 100% of the profit to the share holders.

Even with those assumptions if you just look at the term structure, there is a static pool of hash power which generates btc and they are distributed to the share holders. If the difficulty increases as it has, the payout becomes less & less. Then the argument becomes new hardware will be added to counter that, so where do you guys think the $$ for the new hardware will come from? friedcat is not going to pay for those hardware out of his own pocket just so you can maintain your payout, only way to pay the new hardware will be from the dividend which means all share holder will take a hit to maintain their future income, rinse and repeat as difficulty continues to rise. It's a zero sum game without a winner aka ponzi, as the cash flow (or in this case btc flow will always be negative)

This is not rocket science, it's no different than mining on your own but forced to pay a dividend each week to your brother who gave you the money to buy the hardware initially...as difficulty continue to raise.

The bottom line is, the share holders are betting friedcat will be able to hold this up for at least 17 months to breakeven, then however much longer this operation lasts will be profit. Noone knows exactly how much income freidcat is actually getting, i am hoping he's getting significantly more income per share than the dividend paid, so he can maintain this 0.02 payout without much effort as difficulty continue to increase.  

Truly a game of musical chairs, and the last one left standing is the ...?

I suppose not everyone has hundreds or thousands of dollars to spend on such equipment.

I just bought $9 worth of mining shares with some BTC I wasn't using, I might only be making 3 cents a day, but thats 3c I didn't have this morning!

 

sorry to be rude, but let the mob doing same mistakes around anyway, I think short term is AM good choice and we will see later. It is better to have coins making new coins then just sit in some wallet and wait for capital appreciation. Graham is dead, I am not so much into conservative investing, prefer risky leveraged ETF trading for oil and silver

its not a direct comparison into buying mining hardware vs getting weekly dividends


you are missing the point that shareholders get huge weekly dividends which is an anomaly, yet ASICMiner does actually sell things and do things which people can verify up to an extent and are comfortable with


other assets dont offer that, anywhere across any markets

I find the certitude some posters display to be quite disturbing. There are a multitude of variables at play here when attempting to perform a reasonable analysis of the potential returns of the various available bitcoin investments. Most of those discussing this are limiting themselves to just a few, and by doing so provide themselves (and others) with projections of limited value.

The effects of the entire bitcoin ecosystem must be considered, and this of course also includes the fiat conversion rate of bitcoins. I find it odd that this particular variable gets ignored repeatedly, so perhaps it is worth exploring this aspect. Obviously many of the associated costs of mining and of hardware sales must be performed after a conversion to fiat. It is unlikely that Friedcat pays for the electricity in his farm directly with btc, nor does BFL pay their labor costs in btc. It should be safe to state that currently nearly all of those associated costs require a conversion to fiat. If one were to consider the values ONLY AT THE TIME OF CONVERSION you get an extremely different narrative. Imagine the following scenario:

Joe GPU is mining btc at home. He is making 1 btc per day. At $100/btc he makes $100/day.The difficulty doubles. Joe is sad, because now he finds that he is only mining 0.5 per day, for $50/day. But Joe does not need the money at the moment, so it just keeps going into his wallet. The difficulty doubles again. Joe is really pissed. Now it is only $25/day. You would assume at some point that eventually Joe's electricity cost would exceed his btc income, and then Joe will go extinct. All things being equal, you would be right. But all things are not equal. After all of these months of mining, the fiat conversion rate for btc has changed repeatedly. Suppose it is $500/btc when he is mining .02 btc /day. Amazingly, not only is Joe earning exactly the same amount (in fiat terms) as he was when he started, but the fiat value of his wallet has exploded in that timeframe. Miners who were running a GPU farms last year when the difficulties were low and the fiat value of a btc was $2 have seen this to be all too true.

Right now this scenario is being temporarily derailed by two factors, both related to ASICs. The first factor is the number of ASICs coming on line in a short time frame is causing btc to be mined at a rate higher than 6 blocks per hour. Although subsequent difficulty increases will stabilize the rate, the current supply glut is driving down the btc conversion rate driving down profits. This imbalance will inevitably self-correct with obvious consequences. The second factor is a desire by many miners to convert btc from ASIC mining to recoup the costs of the newly-delivered rigs in fiat form. Once these costs have been recouped, many miners will be more inclined to keep larger and larger potions of their btc in btc form, or to spend it within the btc ecosystem. Once the ASIC destabilization has corrected, the system should return Joe GPU (and now Mary ASIC) to the scenario above, wherein rising fiat conversions and rising difficulty rates work in sync to ensure stable mining rates (in fiat terms).

We have seen this relationship from another angle, that being the increase of share price (in btc) of ASICminer. In effect, we are all suffering from the Red Queen Syndrome when you look at it considering most of the variables. Miners are (in general) running as fast as they can just to stay where they already are. So are the investors in ASICminer. You may purchase a share of ASIC miner today for 3.0btc, which is $300 fiat. If in a year you may find yourself at a value of 3.0 btc, but a fiat value of $3000, with weekly dividends the same size today as measured in btc, but with a fiat value in excess of $100. Friedcat need only play the Red Queen in an environment of rising difficulty and rising fiat values, he needs only to maintain his share as the system grows and btc ecosystem expands. If you believe he can do so, then there is probably no better investment for btc at this time. But even if you believe he cannot, it is likely still a better investment than just sitting on coins or purchasing gear yourself.

No, you are talking nonsense because you haven't followed the conversation. The conversation was about dividends from hardware sales decreasing. So, selling out is completely irrelevant. The amount of hardware AM has for sale is limited. That is a fact. They have a limited number of USB miners and any other hardware sales come out of the mining operation, so they only sell what they no longer want. How many Blades did AM sell?

In AM and AMC. I'm just not fooling myself about AM though.

Get your articles right, they're important.

You are talking nonsense.

Unless you sold out and you are not able to produce more units, lowering the price might increase the profit.

So it's x and y and you are terribly misguided.