They make hardware for themselves, to try to stay around 30-35 percent of the total network hashing power and then they also sell the blades and USB miners on the side. They then distribute the earnings from those sales along with mining profits to the shareholders. The more hardware they sell, the more the shares will be worth. It's a win-win because when they start controlling too much hashing power they can just start pumping out hardware for resale.
Did not know that. That is a good plan. I'm not sure they worry about having too much hashing power. If I had 60% of the network and did not intend to use it to double spend, I would keep the 60% until all blocks are mined. I think their reason to sell hardware was to reduce the risk of owning too much of it. Cash is king.
I think over time they will make more from h/w sales than from mining on that hardware.
Just because they don't plan on double-spending, doesn't mean other people won't worry about them double-spending if they could double-spend. Selling their hardware is the right thing to do because it keeps mining stable and thus keep the bitcoin price from crashing.
I think their price will have to drop as we approach the next block halving in 3 1/2 years as mining will become less profitable then in terms of bitcoin.
Exactly. If anyone owns 51% of the hashing power it will severely hurt the credibility of Bitcoin. That would be extremely counterproductive.
And I think you're right about the block halving making the price drop in regards to mining revenues, but if that allows them to sell more hardware then that will counteract it to some extent. It's just too far out to know, Asics are still in their infancy.
True, but that still doesn't stop them from going to 51% if they feel like it. You can help prevent something if you use P2Pool. So please check it out.
