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It's really important that manufacturers start responding to cryptocurrency induced shortages with auctions. The demand from the cryptocurrency users will be e

by nullc 6y ago

It's really important that manufacturers start responding to cryptocurrency induced shortages with auctions. The demand from the cryptocurrency users will be extremely high until they've spent a particular amount in total. They can do that with 1000 units, or with 5000 units. Obviously auctioning off units would be bad for having predictable prices for retail customers but that is irrelevant if aggressive miner buying is buying up all the supply. Moreover, shareholders at the manufacturers should be demanding it: they're leaving money on the table.

hdhrnnrkrkf 6y ago
Burning your regular customers is terrible business practice. It's not always about the money. Also, remember when Martin Shkreli increased the price of an anti-parasitic drug by 5000%? That upset a lot of people, and arguably it's what put him in jail. Of course, HDDs are not quite the same as vital medicine.
- orev 6y ago
  An auction is not an arbitrary increase just because you can. It’s the exact opposite- a natural market where supply and demand reach the optimal price. Yeah it’s bad for regular customers, but if there’s no supply then what would they be able to get anyway?
  - nine_k 6y ago
    Regular customers usually have long-term contracts and preferential treatment. Nobody in their right mind is going to show them the middle finger. But for them, availability will also be limited, and next-term prices will get higher. Also, increasing production of a highly-demanded item is not unheard of! But it will take months.
AlexandrB 6y ago
This sounds great. Hard drive prices will start increasing until building a computer is prohibitively expensive unless you're a large scale OEM that can make bulk contracts. Another example of cryptocurrency empowering individuals.
IAmGraydon 6y ago
This is asinine. You would be making the product only available to those who can turn the highest profit from it and would lose the rest of your customer base to your competitor who is smart enough to not use an auction model. The entire cash flow would come from one narrow sector which would eventually collapse, leaving you with no customers. Business models evolve toward efficiency, and there is a good reason no one is doing this.
- dehrmann 6y ago
  You realize capitalism is a system for allocating scare goods, right? An auction model means manufacturers benefit directly, and unless they're in a cartel, the high prices incentivize them to increase production. We see this happen all the time in the oil marker with marginal producers entering and exiting the market. Without an auction, anyone lucky enough to win the HDD lottery will have the same incentive, only they'll sell it on ebay.
  - noogle 6y ago
    The problem is the network effect. With GPUs, substantial effort has been done to build products and tools on top of Nvidia's proprietary framework (CUDA). The community invested in a proprietary system under the understanding that Nvidia will supply the hardware and not monopolize this investment. Should the community have divested from Nvidia's proprietary format and spread its resources on multiple platforms? Concentrating effort can benefit everyone, but it requires trust. In addition, part of this community investment was funded by government research grants, adding a legal/public policy aspect to the issue. Should taxpayer money be spent on creating private, abusive, monopolies?
- the8472 6y ago
  That sounds like a one-shot model. Auctions for mass-produced goods would be per batch. Nullc's argument is that driving up the price of auctions would exhaust whatever cash pile the miners are sitting on faster, which means they would gobble up fewer harddrives than they will if the prices are kept low.
- gruez 6y ago
fpgaminer 6y ago
1) Nvidia et al. have to work with Big Retail (tm) [i.e. Walmart, Target, Best Buy]. Big Retail isn't interested in doing auctions. They function off the tried and true MSRP model. No matter how much money is being left on the table. This applies just as much to GPUs and hard drives as it does to the recent console shortages. I've worked with Big Retail execs before. They're old school and conservative (in the business sense). In a smoke filled CES hotel room they shook hands on a deal of X for $Y, and that's how it's going to stay for the next decade. 2) Risk. These shortages and cryptocurrency demand spikes are a blip on the history of these companies. It'd be stupid to suddenly change their entire business models and retail relationships for something that could disappear next month. As much as I believe cryptocurrency and hence mining is here to stay, I can't fault these companies for not believing the same and acting accordingly. Especially given the cycles of boom and bust that cryptocurrencies have gone through.
- dannyw 6y ago
  Miner demand for cards alone exceed all big retail sales. Sorry, but Walmart, Target and Best Buy can be made irrelevant now.

by nullc 6y ago

hdhrnnrkrkf 6y ago

Burning your regular customers is terrible business practice. It's not always about the money. Also, remember when Martin Shkreli increased the price of an anti-parasitic drug by 5000%? That upset a lot of people, and arguably it's what put him in jail. Of course, HDDs are not quite the same as vital medicine.

orev 6y ago
An auction is not an arbitrary increase just because you can. It’s the exact opposite- a natural market where supply and demand reach the optimal price. Yeah it’s bad for regular customers, but if there’s no supply then what would they be able to get anyway?
- nine_k 6y ago
  Regular customers usually have long-term contracts and preferential treatment. Nobody in their right mind is going to show them the middle finger. But for them, availability will also be limited, and next-term prices will get higher. Also, increasing production of a highly-demanded item is not unheard of! But it will take months.

AlexandrB 6y ago

This sounds great. Hard drive prices will start increasing until building a computer is prohibitively expensive unless you're a large scale OEM that can make bulk contracts. Another example of cryptocurrency empowering individuals.

IAmGraydon 6y ago

This is asinine. You would be making the product only available to those who can turn the highest profit from it and would lose the rest of your customer base to your competitor who is smart enough to not use an auction model. The entire cash flow would come from one narrow sector which would eventually collapse, leaving you with no customers. Business models evolve toward efficiency, and there is a good reason no one is doing this.

dehrmann 6y ago
You realize capitalism is a system for allocating scare goods, right? An auction model means manufacturers benefit directly, and unless they're in a cartel, the high prices incentivize them to increase production. We see this happen all the time in the oil marker with marginal producers entering and exiting the market. Without an auction, anyone lucky enough to win the HDD lottery will have the same incentive, only they'll sell it on ebay.
- noogle 6y ago
  The problem is the network effect. With GPUs, substantial effort has been done to build products and tools on top of Nvidia's proprietary framework (CUDA). The community invested in a proprietary system under the understanding that Nvidia will supply the hardware and not monopolize this investment. Should the community have divested from Nvidia's proprietary format and spread its resources on multiple platforms? Concentrating effort can benefit everyone, but it requires trust. In addition, part of this community investment was funded by government research grants, adding a legal/public policy aspect to the issue. Should taxpayer money be spent on creating private, abusive, monopolies?
the8472 6y ago
That sounds like a one-shot model. Auctions for mass-produced goods would be per batch. Nullc's argument is that driving up the price of auctions would exhaust whatever cash pile the miners are sitting on faster, which means they would gobble up fewer harddrives than they will if the prices are kept low.
gruez 6y ago

fpgaminer 6y ago

1) Nvidia et al. have to work with Big Retail (tm) [i.e. Walmart, Target, Best Buy]. Big Retail isn't interested in doing auctions. They function off the tried and true MSRP model. No matter how much money is being left on the table. This applies just as much to GPUs and hard drives as it does to the recent console shortages. I've worked with Big Retail execs before. They're old school and conservative (in the business sense). In a smoke filled CES hotel room they shook hands on a deal of X for $Y, and that's how it's going to stay for the next decade. 2) Risk. These shortages and cryptocurrency demand spikes are a blip on the history of these companies. It'd be stupid to suddenly change their entire business models and retail relationships for something that could disappear next month. As much as I believe cryptocurrency and hence mining is here to stay, I can't fault these companies for not believing the same and acting accordingly. Especially given the cycles of boom and bust that cryptocurrencies have gone through.

dannyw 6y ago
Miner demand for cards alone exceed all big retail sales. Sorry, but Walmart, Target and Best Buy can be made irrelevant now.