I don't believe that there is some massive conspiracy here. Apart from the real scammers, I think that most companies have probably underestimated the effort involved in designing an ASIC, and then producing a viable mining rig based around it. This probably leads to some questionable behaviour in some cases.
The pre-order piece makes sense (to the ASIC manufacturers) as the competition have proven that there is a queue of miners prepared to take the risk, and the money funds them (hopefully) through the development stage. If they are delayed, then the flow of pre-order money keeps the lights on until they ship, but some of them just won't make it. If they realise this then they might just keep taking money in the hope that they will recover and become quasi-ponzi schemes, or might have to mine using customer kit to get themselves out the hole.
We blame the ASIC producers, but it is demand from the mining community that fuels this arms race that we are all in.
Topic: Why release ASIC miners? - page 2. (Read 2053 times)
This one has been bothering me for a while now. Why did companies like butterfly labs release ASIC miners. Back when they first made them, 5 gh/s was hard to come by and the ASIC did it in just one unit. Here is the thing that makes me confused, they release the units for a small profit and they flood the market with them, making it even harder to mine. Why not keep them for themselves and mine the majority of the bitcoins using the ASIC units. With as much processing power they have, they could of found a bitcoin block everyday. I understand there was competition too, but still, why? 
Steps:
1. They need money to produce ASIC this is why preorder.
2. They delay shipment and mine themselves
3. They start sending the units once their facilites cannot use more miners because of electricity capacity usage.
Dont know if all steps done, but it would make sence
Steps two and three are not necessary because they are selling their miners for more bitcoins that they can ever mine.
This one has been bothering me for a while now. Why did companies like butterfly labs release ASIC miners. Back when they first made them, 5 gh/s was hard to come by and the ASIC did it in just one unit. Here is the thing that makes me confused, they release the units for a small profit and they flood the market with them, making it even harder to mine. Why not keep them for themselves and mine the majority of the bitcoins using the ASIC units. With as much processing power they have, they could of found a bitcoin block everyday. I understand there was competition too, but still, why?
Steps:
1. They need money to produce ASIC this is why preorder.
2. They delay shipment and mine themselves
3. They start sending the units once their facilites cannot use more miners because of electricity capacity usage.
Dont know if all steps done, but it would make sence
I imagine people would be less likely to support bitcoin if they knew 1 company was producing hardware that could potentially dominate the network. Also, selling ASICs does not preclude them from using their own ASICs to mine.
Shoot if I ran a company that made the chips and the devices, I'd be hard pressed to sell any of them. I'd probably just setup a farm and maybe sell hosting. Screw all the headaches dealing with customers, customs, shipping, returns, etc.
I do know why they do it, someone has to hype BTC to increase its value. Targeting the geeks with new toys is a pretty slick way of doing it. Its pretty hilarious how much people will pay for this stuff though, for geeks you would thing they would be smarter than that. They must be spending daddy's money.. LOL
While you buy miners, they buy bitcoins, the bitcoin price raise more fast than the bitcoins you can mine with the miners.
When you send them 25 000 USD for a ASIC, they buy bitcoins, by the time you get your machine, their bitcoins double in price, they make profits. You instead will have to wait much longer to maybe break even.
It's more profitable to sell the machines and buy bitcoins for them than mine for bitcoins.
When you send them 25 000 USD for a ASIC, they buy bitcoins, by the time you get your machine, their bitcoins double in price, they make profits. You instead will have to wait much longer to maybe break even.
It's more profitable to sell the machines and buy bitcoins for them than mine for bitcoins.
So I had a choice, buy a bottle of Scotch for $40 or buy 4 Block Erupters for $40. The Scotch would have been fun for a weekend, but the Block Erupters have been fun for 3 months now and I made at least enough to buy a couple more bottles of Scotch. LOL
I bought my first 4 with cash, not BTC and they arrived in 3 business days. The other five I got with the BTC they mined so that was one for free.
BTW, even the ones I got with BTC arrived 3 business days after I ordered them. Of course I ordered most of them from a company in my own state. Seriously? You say that my statement isn't true and you bring as an example the usb block erupters? ROI wise the worst miner in the history of bitcoin?
The only miner that noone ever made roi of?
The only miner that noone ever made roi of?
I'm just telling you my experience. I have seen quite a few people say this crap for each device that is released, generally followed by, "you should just buy BTC instead" garbage. Your ability to ROI depends on your initial investment. Since mine was only $40 for 2.016GH/s, I didn't have far to go.
I imagine people would be less likely to support bitcoin if they knew 1 company was producing hardware that could potentially dominate the network. Also, selling ASICs does not preclude them from using their own ASICs to mine.
because as much as we like bitcoin, today dollars are more safe. So they made a lot of dollars by selling bitcoin miners.
because it would be very difficult to find buyers for all your BTC. This way they get USD immediately.
i believe they were very important for bitcoin economt still. if they were to do what you think then they would instantly gain monopoly causing users to abandon the coin bringing the price down.
Because they sell them for more btc that they can ever mine. You should ask why people are buying them instead...
It's the alure of get rich quick. ASICs are a a shiny new toy that promises to magically pour out money, but they halve in efficiency so often that they barely break even...
While you buy miners, they buy bitcoins, the bitcoin price raise more fast than the bitcoins you can mine with the miners.
When you send them 25 000 USD for a ASIC, they buy bitcoins, by the time you get your machine, their bitcoins double in price, they make profits. You instead will have to wait much longer to maybe break even.
It's more profitable to sell the machines and buy bitcoins for them than mine for bitcoins.
When you send them 25 000 USD for a ASIC, they buy bitcoins, by the time you get your machine, their bitcoins double in price, they make profits. You instead will have to wait much longer to maybe break even.
It's more profitable to sell the machines and buy bitcoins for them than mine for bitcoins.
But how long ago did you start? And how long did it take you to even out?
I started with the Block Erupters in October. Since I got 2 for free and 4 for $10 each, ROI on those only took a couple weeks, however I reinvested all that in more, again for $10-15 each. Once I got 8, I had to get a hub, which took another week and a half. All together, it will be three months next week and I currently still have 0.11 BTC.
So for me dollar wise with electricity an all, two months ROI and a month to get the 0.11 BTC. My son bought 10 Block Erupters all at once for $15 each and it took him three months to ROI. Last week we combined our hashing power into a single worker on BTCGuild and we get a payout per day (24-26 hours) at 8.4GH/s, which at this point is all profit minus our electricity costs.
Because they sell them for more btc that they can ever mine. You should ask why people are buying them instead...
I simply don't think this statement is true. I started with 6 USB Block Erupters. They not only paid for themselves, I was able to buy 5 more and a 10 port hub with the profits. I now have 11 USB Block Erupters running at 100% profit minus electricity costs. So people are making money on these things, just not as fast as everyone would like I suspect.
Seriously? You say that my statement isn't true and you bring as an example the usb block erupters? ROI wise the worst miner in the history of bitcoin?
The only miner that noone ever made roi of?
Because they sell them for more btc that they can ever mine. You should ask why people are buying them instead...
I simply don't think this statement is true. I started with 6 USB Block Erupters. They not only paid for themselves, I was able to buy 5 more and a 10 port hub with the profits. I now have 11 USB Block Erupters running at 100% profit minus electricity costs. So people are making money on these things, just not as fast as everyone would like I suspect.
the problem is people calculate the profits they would make when they got instantly delivered, and than compare the profit 3 months later to the profit today and they become disappointed. It's better to guess what they would make if the difficulty quadripled and see if they'd still be worth it.
Some aren't, especially not when they get delivered too late (looking at you BFL), but others are.
Because they sell them for more btc that they can ever mine. You should ask why people are buying them instead...
I simply don't think this statement is true. I started with 6 USB Block Erupters. They not only paid for themselves, I was able to buy 5 more and a 10 port hub with the profits. I now have 11 USB Block Erupters running at 100% profit minus electricity costs. So people are making money on these things, just not as fast as everyone would like I suspect.
But how long ago did you start? And how long did it take you to even out?
Because they sell them for more btc that they can ever mine. You should ask why people are buying them instead...
I simply don't think this statement is true. I started with 6 USB Block Erupters. They not only paid for themselves, I was able to buy 5 more and a 10 port hub with the profits. I now have 11 USB Block Erupters running at 100% profit minus electricity costs. So people are making money on these things, just not as fast as everyone would like I suspect.
This one has been bothering me for a while now. Why did companies like butterfly labs release ASIC miners. Back when they first made them, 5 gh/s was hard to come by and the ASIC did it in just one unit. Here is the thing that makes me confused, they release the units for a small profit and they flood the market with them, making it even harder to mine. Why not keep them for themselves and mine the majority of the bitcoins using the ASIC units. With as much processing power they have, they could of found a bitcoin block everyday. I understand there was competition too, but still, why?
It's a conspiracy, they sell them because they need a small amount of money to 'make more miners for themselves' and make it look like other people stand a chance, but in reality no individual does against these corporations
Read more here: https://bitcointalksearch.org/topic/m.3712424
I'm pretty sure they all have a mining farm. Just now they call it hosting. Can you tell which one is your and which one is theirs? 
They sell them because they need to raise typically about $5 million in funds to produce an ASIC.
They will have the pick of the best chips and the earliest run, you will take whatever is handed you.
I always predicted ASICs would kill the Bitcoin network. We've ended up getting rid of one elite with the printing press and replacing it with another. Litecoin waits in Bitcoin's shadow for it's moment to shine as the true peoples currency.
They sell them because they need to raise typically about $5 million in funds to produce an ASIC.
They will have the pick of the best chips and the earliest run, you will take whatever is handed you.
I always predicted ASICs would kill the Bitcoin network. We've ended up getting rid of one elite with the printing press and replacing it with another. Litecoin waits in Bitcoin's shadow for it's moment to shine as the true peoples currency.
I would think that they would sell the hardware they are making to promote their company brand in the event that they are mining using that same hardware. Plus, it offers a lot of security for the company because if Bitcoin ever experiences a massive price drop, they won't suffer from heavy losses from their assets that are then deemed as worthless.
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