Topic: why does everyone rushes to buy ASIC? (Read 1316 times)

There are a number of sites that can calculate this for you. I use: http://tpbitcalc.appspot.com/


When looking at the bigger picture, Niko is exactly right. The "rush" you're seeing isn't from the general public coming in to purchase equipment, it's from a few hundred of us dedicated miners here in this community.

A lot of people are using the wait and see approach due to the delays and companies going bust etc.

Although there's no denying that the early adopters are huge also.

Now ASIC mining rigs are out it doesn't make sense using other technologies.  Early adopters will get a better rate of return as the network hash rate starts to go up.  Eventually it will stabilise at some point based on total network hash rate, cost of equipment and electrical costs.

If you are a late adopter then you will either need to get really cheap equipment (everyone will be competing for it) or have really cheap power.

Here in Qatar power is cheap as we pay about USD $0.015 per KW so I guess it will make sense to use older and cheaper equipment over here and still hope to make a reasonable return.  I just have to wait for the cost of ASIC rigs to go down.

Andy

Not everyone is rushing. In fact, the majority od bitcoiners are not buying ASICs.

how much money can you make a day with a typical 60GH/s ASIC?
How long will it stay this good?

Investing in mining rigs is not so much math, BTC/USD(/EUR) value plays too much of a role in there for my liking. You just take a little change like a lottery and hope for the best on your investment returns.

But that is exactly my point! you do not necessarily earn more if you buy early. It depends also on BTC/USD rate.
I feel  like a broken record but we have a live example for my argument:

Avalon batch 2 part 1 buy hardware for 75 BTC
Avalon batch 2 part 2 buy hardware for 56 BTC only 2 weeks later!

So will part 1 earn more money because they ordered earlier? obviously it is not certain!
Part 1 will earn more only if they mine 19 BTC before part 2 starts mining (they may have only 2 weeks to achieve this).

So how can it be that early buyers earn less than late buyers? because BTC/USD value is also a factor here not difficulty alone

You are assuming that the price of an ASIC miner is based on current mining difficulty.  In reality the price of an ASIC miner [just like the price of anything else] is based on demand for it - how much people are willing to pay.

Right now there seem to be lots of people who are interested to pay ~$1,500 USD for ASIC miners.  Avalon sold 600 in their batch 2.1 in under a day.  Hell, I've seen one thread on here where someone offered $10,000 for a working Avalon delivered in person.  That's a hell of a lot of demand out there.

Because of the competitive nature of Bitcoin mining, it will be some time until the ASIC mining rigs go down in price.  Sure, it will quickly weed out the "casual" miners, or turn them into more serious Bitcoin farmers, but ASIC tech is currently the most efficient way of solving blocks.

I think of ASICs as being the equivalent of shovels (and other tools) at the peak of a Gold Rush. Sure they could make you a small fortune but you carry all the risk in the purchase thereof as opposed to the developers of ASICs (ie the shovel sellers).

If I were to play with money in regards to ASICs; I would consider placing it with an ASIC developer (provided the product is in near ready to ship status and other due diligence to minimize risk of losing the investment) as the short term profit here would IMO net me a greater return than I would be able to achieve in ASICs (as there is the problem of having to upgrade whenever the developer improves their product lest you fall behind, being with the developer part of the equation would remove the recurring sales requirement on investment as a Bitcoin miner).

For the record I have nothing against Bitcoin Mining/ASICs (I do a little bit myself with a HD5850 while still somewhat viable) but ultimately I couldn't see myself rushing into ASIC mining given the above thoughts (without digging too deeply into the subject).

edit - typos.

Some want to keep up to date, support bitcoin. Others want to "print" free money . Third group like me (and many others), will completely pass on it.

I am planning on selling some IT equipment that i acquired from an old job. I am planning on waiting for BFL to release, as the power usage is a fraction of the Avalons. I wonder with most people switching to stratum mining with ASICs, how that will effect transactions being grabbed and blocks being completed. As of right now or before ASICs single users do not finish an entire blocks its a majority of users. Difficulty change will be the equalizer.

It's sort of a mix between all the topic answers so far.

One of the biggest factors (over the past few months anyway) has been both fear and speculation...coming from the whole notion that "if you don't preorder your device now, the difficulty will be too high later and you won't make any money".

During the first preorders for both BFL and Avalon, purchasing an ASIC was more of the "logical next step" for those people willing to continue mining on a large scale. It was only matter of time that custom chips would be designed specifically for the purposes of processing SHA hashes for Bitcoin. It was time for a mass move to faster and vastly more efficient hardware, compared to CPUs/GPUs/FPGAs. The massive increase in speed that thousands of distributed ASICs would bring to the network ultimately help to secure it.. stabilizing Bitcoin a bit.

When more and more people started to preorder and prepare for the transition, we (as a community) began to wonder what the future of the network will look like. How fast will it be? How high will the difficulty be? How many people are purchasing ASIC mining gear? Etc. Asking these questions, and subsequently attempting to seek answers, helped to drive fear into many people who were not necessarily looking to become early adopters...resulting in more ASIC orders.

And then there's the potential profits for those who buy in early. If you're able to get your device earlier than the majority of others, you stand to make quite a bit of coin..more than enough to pay off your initial purchase in a timely manner. One of the first ASIC owners, for example, has been pulling in nearly 60 Bitcoins per week for a month now...vastly more than enough to pay for the $1300 Avalon rig they purchased. Imagine what you could be making at 60GH/s on a 30m difficulty if you bought in now, compared to a 50m difficulty if you buy 2 months from now...that feeling of "oh, I should buy now" is what drives people to "rush" for ASICs. Timing is everything


TL;DR
Why does everyone rush to buy an ASIC?
Overarching theme: Fear / Speculation and the "Get in Now" scenario
1) ASICs are the logical next step for miners.
2) Difficulty growth and total order speculation
3) Potential Profits for early adoption

It's pretty much why I'm looking to sell my gift cards for bitcoins .. so I can buy myself an ASIC machine.. it's hard though.

I'm expecting the value of BTC to USD or EUR to drop when so much new hashing power will be added to the pools. Hopefully the demand for BTC stays high and even grows so we don't get to see any drops of value soon. Luckily those new ASICs create some demand for BTC when people place orders for them as it seems to be an usual payment method.

I hope that the price of BTC stays close to what it is, if not higher.. my wallet has doubled in value in the last couple months. if the BTC to USD drops i will have to work alot harder to get an ASIC.

Though i think when difficulty goes up the price of BTC will drop.

to make some more money before the network jumps to the next difficulty level

What happens when all the pre-orders get their asics and the difficulty sky rockets?  Are these companies going to lower their prices to stay in business? I am thinking if one missed out on the pre-order thing it might be best to just wait for the prices to come down and down...  or do people expect the price of BTC to keep going up high enough that the current price of asics will still be good?   

First person to get that rig will be a happy camper.  I'm waiting to see who claims bragging rights to the first week of low difficulty terahash mining.  Should be interesting.

because they think they'll be the first to get their asics.

yes.