4 ms·

There's no technical reason there couldn't be a cloud version of this, but of course it makes absolutely no sense as a cloud service, which make me wonder what'

by mjs 13y ago

There's no technical reason there couldn't be a cloud version of this, but of course it makes absolutely no sense as a cloud service, which make me wonder what's going on here. An exchange of money for a thing usually means that the buyer wants the thing more than they want the money, and the seller wants the money more than they want the thing, but in this case the seller is selling ... money? Is, uh, the delivery date guaranteed?

mikeash 13y ago
It requires some work to set up and use and, probably more importantly, there's substantial risk involved. The $/year this thing can produce is not a fixed quantity, both because the BTC/$ exchange rate is not fixed, and because the BTC/hash rate is not fixed. If the $ made over the lifetime of the unit exceeds its cost, then the buyer wins, and the manufacturer could have theoretically made more money by hanging onto it and running the units themselves. However, that's not guaranteed, and it could be a net loss. In essence, they're selling a risky bet. It's like a lottery ticket, except more dependent on external factors. The buyers get to make a bet that might pay off, and the seller gets more concrete payment in exchange. It's sort of a physical embodiment of a financial instrument.
wmf 13y ago
There are "mining bonds" that are essentially cloud Bitcoin mining. As you said, they tend to not be worth buying. One exception is ASICMiner which has paid very nice dividends to their shareholders. It's not quite as simple as selling money, since the amount of money that the box will print depends on various factors like the difficulty, exchange rate, and delivery date. So it's really a question of whether the customer's risk analysis is better than the vendor's (which is doubtful given the information asymmetry; see also Goldman Sachs). And the delivery date is definitely not guaranteed; most vendors are shipping late.

by mjs 13y ago

mikeash 13y ago

It requires some work to set up and use and, probably more importantly, there's substantial risk involved. The $/year this thing can produce is not a fixed quantity, both because the BTC/$ exchange rate is not fixed, and because the BTC/hash rate is not fixed. If the $ made over the lifetime of the unit exceeds its cost, then the buyer wins, and the manufacturer could have theoretically made more money by hanging onto it and running the units themselves. However, that's not guaranteed, and it could be a net loss. In essence, they're selling a risky bet. It's like a lottery ticket, except more dependent on external factors. The buyers get to make a bet that might pay off, and the seller gets more concrete payment in exchange. It's sort of a physical embodiment of a financial instrument.

wmf 13y ago

There are "mining bonds" that are essentially cloud Bitcoin mining. As you said, they tend to not be worth buying. One exception is ASICMiner which has paid very nice dividends to their shareholders. It's not quite as simple as selling money, since the amount of money that the box will print depends on various factors like the difficulty, exchange rate, and delivery date. So it's really a question of whether the customer's risk analysis is better than the vendor's (which is doubtful given the information asymmetry; see also Goldman Sachs). And the delivery date is definitely not guaranteed; most vendors are shipping late.