7 ms·

ASICMiner Blade Prices Reduced 65% After Shares Crash

38 points by CrunchyJams 13y ago

jacquesm 13y ago
Funny how even bitcoin hardware producers can get caught out by the volatility of everything associated with bitcoin. Tip: Don't price your stock and inventory in btc.
- CrunchyJams 13y ago
  Bitcoin is definitely still too volatile to be a reliable store of wealth, but this is related to the exponential growth of the bitcoin network, not the volatility of the currency itself.
- joosters 13y ago
  It's not the bitcoin volatility that has triggered this price drop (BC has been relatively stable recently), it's the fact that they were overpriced.
  - wpietri 13y ago
    Oh, I'd call them correctly priced. During the gold rush, eggs were selling for the modern equivalent of $83 each. Cheese was $700 per pound. And this was paid by miners who were making the equivalent of a few hundred bucks per day. When crazy people want to give you a lot of money, you raise your prices. When they get over their madness, you can always lower them again.
    - joosters 13y ago
      But the price is still too much. High prices, great. Higher prices than the potential reward, not great. It is like trying to sell those same eggs for more than the miners' daily wage. You need extra-crazy customers, not just plain crazy :)
      - wpietri 13y ago
        That's what happens in bubbles. Prices get higher than the rationally expected reward. Now that the bubble is popping a little, they are correctly dropping their prices. But I think it's fair to say that bubbles make crazy people extra-crazy, so maybe that's exactly what's going on.
    - Osiris 13y ago
      Exactly, except that overnight the population of miners doubles so everyone is getting half the gold that they were just yesterday and they can no longer afford the $83 eggs, and the prices drop. The same thing is happening with mining hardware. Over the last two months, the difficulty has from 21m to 65m. My ASICs are generating 0.6 BTC per day versus 2 BTC / day in early July.
      - yebyen 13y ago
        Look at this sad, sad graph. It will get better when I rewrite my business plan to have something other than "Mine bitcoins" in it. https://www.beeminder.com/yebyenw/goals/christmas-bitcoins https://www.beeminder.com/yebyenw/goals/christmas-bitcoins I cashed in 22BTC in January to buy two BFL Jalapenos. I paid an extra $100 each just last week to get the 2GH/s bonuses added, because I knew they'd be shipping soon. They just arrived with one bad power cord, I'm starting to recoup my losses now. It's going to take some mental anguish to get myself over the idea that "I'll never have that much disposable money again, at least not in five more years of saving." The calculator says I can still mine $512 in 43 days, but I'm skeptical it will be more like 75 or 120 days, given the pace of the various difficulty graphs that I've seen.
        mahyarm 13y ago
        That is why you put a hard percentage cap of assets on any speculative ventures.
        yebyen 13y ago
        You don't understand at all. I've never invested more than $50USD in any bitcoin schemes, and I've cashed out of them all without loss. That 22BTC was what I generated and earned myself mining. At the time it was worth no more than $12/BTC. I spent it on more mining equipment. It's really true what they say, sell shovels.
        yebyen 13y ago
        Or maybe you understand in spite of the fact that there aren't any USD involved. Buying a new miner is a risky venture. Even in the face of the coming obsolescence of my existing (working) mining rig. Whether you use bitcoins or USD to do it.
jevinskie 13y ago
> After reaching an all-time high of 5.15 BTC per share on July 3rd they have dropped 48% to 2.71 BTC per share as of today. Pardon? Is there a stock market that trades in BTC?
- ramchip 13y ago
  Yes of course: https://btct.co/ https://btct.co/ https://bitfunder.com/ https://bitfunder.com/ http://mpex.co/ http://mpex.co/ https://www.havelockinvestments.com/ https://www.havelockinvestments.com/ It's all risky and low volume, as you might expect. Then there's also OTC with people doing auctions on forums, etc.
  - tveita 13y ago
    > * This is a virtual stock exchange using virtual currency. Virtual goods utilized on this site are for entertainment and educational purposes only. So the favorable interpretation would be that this is a toy exchange... The other possibility being a conveyor of unregistered securities.
    - ewillbefull 13y ago
      > The other possibility being a conveyor of unregistered securities. ding ding ding BTCTC also announced they were considering blocking all U.S. users to avoid confronting the SEC, even though I believe they run in another country.
      - cgi_man 13y ago
        A few days after they posted they were considering it, they said they decided not to and will be continuing operations to US citizens with an added disclaimer.
- w1ntermute 13y ago
  https://btct.co/security/ASICMINER-PT https://btct.co/security/ASICMINER-PT
- 13y ago
joosters 13y ago
3.5 bitcoin is roughly $450. If you bought one now and started it running in September, you will likely never break-even or make a profit: http://mining.thegenesisblock.com/a/a65c154190 http://mining.thegenesisblock.com/a/a65c154190
- tibbon 13y ago
  I think that's the point though right? Its an arms race with a nearly perfectly efficient market that will (in the future) not be a get-rich-quick scheme for miners. If there's profit to be made easily, the some people will react by mining more and then it 'fixes' the market. Assume that some people will act irrationally and mine inefficiently, or with the hope that the market will skyrocket- these people will bring the profit yield down to unprofitable levels by at least a few %. I liked mining with a GPU a while back, because I figured at least I could use the GPU for gaming as well and it just helped to keep me on the newer GPU cards with less guilt (since I want fancy GPUs, but almost never game so rarely use them).
  - joosters 13y ago
    Not really. If you're trying to sell a bitcoin miner, you want at least the chance for the operators to make money. If you can take the specs of the box and calculate that you won't make a profit even if it was running right now, why would you buy it? The company selling them is going to do badly. It's like trying to sell shovels to gold prospectors, but for more money than the price of the gold that they'll dig up.
    - tlrobinson 13y ago
      "It's like trying to sell shovels to gold prospectors, but for more money than the price of the gold that they'll dig up." I'm sure that has happened quite a bit in actual gold rushes. People aren't always rational, and no one really knows exactly how fast the mining difficulty will increase.
      - ssharp 13y ago
dfrey 13y ago
Who buys this crap? If I a company builds hardware that can profitably mine bitcoins, it will keep the hardware and do the mining itself rather than selling it into the market.
- DerpObvious 13y ago
  I don't know that this automatically follows: lots of companies produce equipment for other companies to use on making profit in markets they themselves don't work in. It's entirely possible for a company to want to manufacture ASICs/boards and not want to run a server farm and deal with that level of IT for bitcoin mining.
  - marvin 13y ago
    I think the intersection between such hardware companies and companies with enough domain knowledge of Bitcoin to make a bitcoin ASIC, is zero. The most plausible explanation I've heard is that these hardware companies need deposits to pay the development costs, then plan to run the chips themselves. Anyone who doesn't use such a strategy, is not expecting their customers to break even on their investment.
- ewillbefull 13y ago
  ASICMiner does run its own mine: http://asicminercharts.com/ http://asicminercharts.com/
- sp332 13y ago
  For example, Butterfly Labs built their first big batch of miners using money from pre-orders. By the time the devices existed, they already owed them to customers.
- smackfu 13y ago
  Generally they are selling pre-orders in order to fund the development and production costs. In theory, they could use investors instead, but maybe they couldn't find one.
- SilasX 13y ago
deleted 13y ago
[deleted]

38 points by CrunchyJams 13y ago

Funny how even bitcoin hardware producers can get caught out by the volatility of everything associated with bitcoin. Tip: Don't price your stock and inventory in btc.

CrunchyJams 13y ago
Bitcoin is definitely still too volatile to be a reliable store of wealth, but this is related to the exponential growth of the bitcoin network, not the volatility of the currency itself.
joosters 13y ago
It's not the bitcoin volatility that has triggered this price drop (BC has been relatively stable recently), it's the fact that they were overpriced.
- wpietri 13y ago
  Oh, I'd call them correctly priced. During the gold rush, eggs were selling for the modern equivalent of $83 each. Cheese was $700 per pound. And this was paid by miners who were making the equivalent of a few hundred bucks per day. When crazy people want to give you a lot of money, you raise your prices. When they get over their madness, you can always lower them again.
  - joosters 13y ago
    But the price is still too much. High prices, great. Higher prices than the potential reward, not great. It is like trying to sell those same eggs for more than the miners' daily wage. You need extra-crazy customers, not just plain crazy :)
    - wpietri 13y ago
      That's what happens in bubbles. Prices get higher than the rationally expected reward. Now that the bubble is popping a little, they are correctly dropping their prices. But I think it's fair to say that bubbles make crazy people extra-crazy, so maybe that's exactly what's going on.
  - Osiris 13y ago
    Exactly, except that overnight the population of miners doubles so everyone is getting half the gold that they were just yesterday and they can no longer afford the $83 eggs, and the prices drop. The same thing is happening with mining hardware. Over the last two months, the difficulty has from 21m to 65m. My ASICs are generating 0.6 BTC per day versus 2 BTC / day in early July.
    - yebyen 13y ago
      Look at this sad, sad graph. It will get better when I rewrite my business plan to have something other than "Mine bitcoins" in it. https://www.beeminder.com/yebyenw/goals/christmas-bitcoins https://www.beeminder.com/yebyenw/goals/christmas-bitcoins I cashed in 22BTC in January to buy two BFL Jalapenos. I paid an extra $100 each just last week to get the 2GH/s bonuses added, because I knew they'd be shipping soon. They just arrived with one bad power cord, I'm starting to recoup my losses now. It's going to take some mental anguish to get myself over the idea that "I'll never have that much disposable money again, at least not in five more years of saving." The calculator says I can still mine $512 in 43 days, but I'm skeptical it will be more like 75 or 120 days, given the pace of the various difficulty graphs that I've seen.
      - mahyarm 13y ago
        That is why you put a hard percentage cap of assets on any speculative ventures.
        yebyen 13y ago
        You don't understand at all. I've never invested more than $50USD in any bitcoin schemes, and I've cashed out of them all without loss. That 22BTC was what I generated and earned myself mining. At the time it was worth no more than $12/BTC. I spent it on more mining equipment. It's really true what they say, sell shovels.
        yebyen 13y ago
        Or maybe you understand in spite of the fact that there aren't any USD involved. Buying a new miner is a risky venture. Even in the face of the coming obsolescence of my existing (working) mining rig. Whether you use bitcoins or USD to do it.

jevinskie 13y ago

> After reaching an all-time high of 5.15 BTC per share on July 3rd they have dropped 48% to 2.71 BTC per share as of today. Pardon? Is there a stock market that trades in BTC?

ramchip 13y ago
Yes of course: https://btct.co/ https://btct.co/ https://bitfunder.com/ https://bitfunder.com/ http://mpex.co/ http://mpex.co/ https://www.havelockinvestments.com/ https://www.havelockinvestments.com/ It's all risky and low volume, as you might expect. Then there's also OTC with people doing auctions on forums, etc.
- tveita 13y ago
  > * This is a virtual stock exchange using virtual currency. Virtual goods utilized on this site are for entertainment and educational purposes only. So the favorable interpretation would be that this is a toy exchange... The other possibility being a conveyor of unregistered securities.
  - ewillbefull 13y ago
    > The other possibility being a conveyor of unregistered securities. ding ding ding BTCTC also announced they were considering blocking all U.S. users to avoid confronting the SEC, even though I believe they run in another country.
    - cgi_man 13y ago
      A few days after they posted they were considering it, they said they decided not to and will be continuing operations to US citizens with an added disclaimer.
w1ntermute 13y ago
https://btct.co/security/ASICMINER-PT https://btct.co/security/ASICMINER-PT
13y ago

joosters 13y ago

3.5 bitcoin is roughly $450. If you bought one now and started it running in September, you will likely never break-even or make a profit: http://mining.thegenesisblock.com/a/a65c154190 http://mining.thegenesisblock.com/a/a65c154190

tibbon 13y ago
I think that's the point though right? Its an arms race with a nearly perfectly efficient market that will (in the future) not be a get-rich-quick scheme for miners. If there's profit to be made easily, the some people will react by mining more and then it 'fixes' the market. Assume that some people will act irrationally and mine inefficiently, or with the hope that the market will skyrocket- these people will bring the profit yield down to unprofitable levels by at least a few %. I liked mining with a GPU a while back, because I figured at least I could use the GPU for gaming as well and it just helped to keep me on the newer GPU cards with less guilt (since I want fancy GPUs, but almost never game so rarely use them).
- joosters 13y ago
  Not really. If you're trying to sell a bitcoin miner, you want at least the chance for the operators to make money. If you can take the specs of the box and calculate that you won't make a profit even if it was running right now, why would you buy it? The company selling them is going to do badly. It's like trying to sell shovels to gold prospectors, but for more money than the price of the gold that they'll dig up.
  - tlrobinson 13y ago
    "It's like trying to sell shovels to gold prospectors, but for more money than the price of the gold that they'll dig up." I'm sure that has happened quite a bit in actual gold rushes. People aren't always rational, and no one really knows exactly how fast the mining difficulty will increase.
    - ssharp 13y ago

dfrey 13y ago

Who buys this crap? If I a company builds hardware that can profitably mine bitcoins, it will keep the hardware and do the mining itself rather than selling it into the market.

DerpObvious 13y ago
I don't know that this automatically follows: lots of companies produce equipment for other companies to use on making profit in markets they themselves don't work in. It's entirely possible for a company to want to manufacture ASICs/boards and not want to run a server farm and deal with that level of IT for bitcoin mining.
- marvin 13y ago
  I think the intersection between such hardware companies and companies with enough domain knowledge of Bitcoin to make a bitcoin ASIC, is zero. The most plausible explanation I've heard is that these hardware companies need deposits to pay the development costs, then plan to run the chips themselves. Anyone who doesn't use such a strategy, is not expecting their customers to break even on their investment.
ewillbefull 13y ago
ASICMiner does run its own mine: http://asicminercharts.com/ http://asicminercharts.com/
sp332 13y ago
For example, Butterfly Labs built their first big batch of miners using money from pre-orders. By the time the devices existed, they already owed them to customers.
smackfu 13y ago
Generally they are selling pre-orders in order to fund the development and production costs. In theory, they could use investors instead, but maybe they couldn't find one.
SilasX 13y ago

deleted 13y ago

[deleted]