Why Avalons greed is bad..
1) Only those who already own an ASIC can generate enough Bitcoins to buy the next Avalon ASIC run.
2) This will concentrate Bitcoin block solving power into just a small amount of hands.
3) This flies in the face of what Bitcoin was supposed to be, a large distributed network of nodes.
4) If this continues you run the risk of the Bitcoin community abandoning the project for LiteCoin.
Topic: Why Avalon's "greed" is good - page 2. (Read 2624 times)
TL;DR: Avalon's "greed" is good for bitcoin as a whole, good for the longevity and the future of bitcoin.
1. Pricing in BTC normalises pricing in BTC
2. BTC52000 (minimum) is a nice chunk of change to process in real transactions for batch 3
3. Anyone who drops US$6k on a bitcoin mining rig must* have some faith in the whole enterprise
4. Profits Profits Profits
*(must as in "should have" rather than "ooh look free money")
And I think I should elaborate on #4, because not only do I think that's the most important one, but because Avalon's profits are taken straight out of the pockets of their customers so it may be hardest for people (especially their customers and people who wanted to be their customers but can't afford it) to understand.
If you assume that Avalon merely broke even on their batch 1 and batch 2 orders at US$1500 (worst case and almost impossible to believe) then in fiat terms, at today's exchange rate of $70, the good people at Avalon are pulling US$2.8 MILLION dollars of profits for batch 3 alone. If you assume that batch 1 and batch 2 were profitable in their own right at $1500, then we're talking $2.8M in monopoly rents (a much more reasonable assumption).
If the prospect of over $2.8M in profits from a single "run" of 600 product isn't enough to get others with the skills/knowledge/capital seriously interested, then I don't know what will.
But what's good for bitcoin isn't necessarily good for me, and I'm not buying, not at that price with an uncertain future delivery date. If it were shipped tomorrow or next week, I'd be in. On top of BTC88 being close enough to all my coin, with things such as ASICminer, BFL, helveticoin, not to mention Avalon batches 1 and 2, floating around out there or soon to be, I think people who are imagining a "worst-case" 6 or 12 month ROI are not sure what "worst case" actually means. Even if the BFL and helveticoin are vapourware, once your ROI blows out past 6 months, you'll be competing with Avalon batch 4, maybe 5 customers too.
If the US$2.8M monopoly rent Avalon are extracting from batch 3 is enough to convince others to join the fray as well, your 12 month ROI could conceivably become never, because that's more than enough time for an organisation with the know-how to bring a product to market.
And I think that batch 3 becoming uneconomical with negative ROI (unless you've got free power) would be a good thing for bitcoin. For one, it would mean that there is multiple petahash of computation behind bitcoin, making the network that much stronger. For two, it would mean multiple ASIC vendors, with different types of products for all sorts of use cases. And all of that would (hopefully) come hand-in-hand with the mainstreaming of bitcoin.
1. Pricing in BTC normalises pricing in BTC
2. BTC52000 (minimum) is a nice chunk of change to process in real transactions for batch 3
3. Anyone who drops US$6k on a bitcoin mining rig must* have some faith in the whole enterprise
4. Profits Profits Profits
*(must as in "should have" rather than "ooh look free money")
And I think I should elaborate on #4, because not only do I think that's the most important one, but because Avalon's profits are taken straight out of the pockets of their customers so it may be hardest for people (especially their customers and people who wanted to be their customers but can't afford it) to understand.
If you assume that Avalon merely broke even on their batch 1 and batch 2 orders at US$1500 (worst case and almost impossible to believe) then in fiat terms, at today's exchange rate of $70, the good people at Avalon are pulling US$2.8 MILLION dollars of profits for batch 3 alone. If you assume that batch 1 and batch 2 were profitable in their own right at $1500, then we're talking $2.8M in monopoly rents (a much more reasonable assumption).
If the prospect of over $2.8M in profits from a single "run" of 600 product isn't enough to get others with the skills/knowledge/capital seriously interested, then I don't know what will.
But what's good for bitcoin isn't necessarily good for me, and I'm not buying, not at that price with an uncertain future delivery date. If it were shipped tomorrow or next week, I'd be in. On top of BTC88 being close enough to all my coin, with things such as ASICminer, BFL, helveticoin, not to mention Avalon batches 1 and 2, floating around out there or soon to be, I think people who are imagining a "worst-case" 6 or 12 month ROI are not sure what "worst case" actually means. Even if the BFL and helveticoin are vapourware, once your ROI blows out past 6 months, you'll be competing with Avalon batch 4, maybe 5 customers too.
If the US$2.8M monopoly rent Avalon are extracting from batch 3 is enough to convince others to join the fray as well, your 12 month ROI could conceivably become never, because that's more than enough time for an organisation with the know-how to bring a product to market.
And I think that batch 3 becoming uneconomical with negative ROI (unless you've got free power) would be a good thing for bitcoin. For one, it would mean that there is multiple petahash of computation behind bitcoin, making the network that much stronger. For two, it would mean multiple ASIC vendors, with different types of products for all sorts of use cases. And all of that would (hopefully) come hand-in-hand with the mainstreaming of bitcoin.
Jump to: