ASICMiner Blade Prices Reduced 65% After Shares Crash

http://thegenesisblock.com/asicminer-blades-reduced-65-to-3-5-btc/

by CrunchyJams • 13 years ago

38 47 13 years ago

jacquesm• 13 years 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• 13 years 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.

joosters4• 13 years 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.

wpietri2• 13 years 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.

jevinskie• 13 years 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• 13 years ago

Yes of course:

https://btct.co/

https://bitfunder.com/

http://mpex.co/

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• 13 years 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.

w1ntermute• 13 years ago

https://btct.co/security/ASICMINER-PT

vannevar• 13 years ago

It looks like Bitcoin has risen in value about 30% during that time period compared to stable currencies, so the share drop is not really that dramatic.

joosters4• 13 years 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

tibbon• 13 years 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).

joosters4• 13 years 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.

3pt14159• 13 years ago

That assumes a certain growth in mining rate. This is predictable, but wrong. ASIC is the last wave of advancements. After this it will probably grow linearly until network becomes the bottleneck.

bradleysmith• 13 years ago

Yeah, no kidding.

I got an opportunity to buy (10) USB BE's at 0.11BTC per and even had enough coin purchased at well under $100, and I'm still worried about break-even. Even if I make my money back, I know in the back of my mind the opportunity cost of selling the miners now makes mining with them a theoretical loss. They'll make great mementos of the early ASIC's anyway.

People are getting rich quick (not a good thing) off of selling hardware to quick-to-decide geeks that like the idea of btc, and making money from a terminal line. I'll be the first to admit that I'm one of those geeks.

a-priori• 13 years ago

Someone with a better understanding of Bitcoins please correct me here if I'm wrong. But if I understand things correctly, mining is one way (the only way?) to get untraceable Bitcoins because they're created out of thin air by the network. By paying your electricity bill to run a miner, you're effectively converting your local currency into Bitcoins.

As as long as you credit the mining reward to a wallet that has no connection to your real-world finances, and take other safety precautions, those coins would not be traceable to you. So this could be used to launder money through the Bitcoin network. The only evidence that you were doing something would be an abnormally large electricity bill.

Mind you, without this turning into Office Space, I'm sure there's more effective ways to launder money...

But if that's true, then I would expect the supply of mining capacity to settle above the point where it's profitable, because some fraction of miners don't really care about being profitable as long it's a reasonable loss.

bdcravens• 13 years ago

That's one way of looking at it. Keep in mind that it's not uncommon for electric companies to report huge jumps in electricity usage to the police, as high bills are considered evidence of marijuana growth, and have led to serious busts.

jessaustin2• 13 years ago

It's my impression that obtaining BTC isn't the interesting problem for most would-be launderers. After all, you just have to sell some CC #s or provide custom DDOS services or do whatever nefarious shit you do that makes laundering a good idea, and presto you have BTC. The real problem is trading those fat stacks of BTC for fast cars, palatial mansions, the intimate attentions of beautiful people, etc. without the fuzz connecting those riches back to the nefarious shit that earned them. That is, as for regular money laundering, the trick is make dirty funds clean. It's actually straightforward to obtain dirty funds in the first place, for a criminal.

See here for more on this topic: https://news.ycombinator.com/item?id=6291546

dfrey• 13 years 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• 13 years 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• 13 years 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.

ewillbefull2• 13 years ago

ASICMiner does run its own mine: http://asicminercharts.com/

sp332• 13 years 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• 13 years 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.

SilasX2• 13 years ago

Kinda like how nobody sells mining drills because "if using that drill were profitable, they would use it themselves"?

chollida1• 13 years ago

Kinda like how nobody sells mining drills because "if using that drill were profitable, they would use it themselves"?

Which is a really awful comparison as real world mining requires things like:

- mining rights

- land title

- skilled workers

- processing plants that will take your ore

- government connections

Mining bitcoin requires only a computer or specialized gear.

Or in other terms, its an awful comparison as anyone can mine bitcoin, while only a very few select folks can mine in the real world.

ASICMiner Blade Prices Reduced 65% After Shares Crash

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