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ASICMiner Blade Prices Reduced 65% After Shares Crash

thegenesisblock.com

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Re: ASICMiner Blade Prices Reduced 65% After Shares Crash

#11

Post by wpietri »

joosters wrote: post #6
jacquesm wrote: post #2

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.

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.

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.

Re: ASICMiner Blade Prices Reduced 65% After Shares Crash

#12

Post by joosters »

tibbon wrote: post #9
joosters wrote: post #4

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

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…

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.

Re: ASICMiner Blade Prices Reduced 65% After Shares Crash

#13

Post by joosters »

wpietri wrote: post #11
joosters wrote: post #6

Earlier quoted context omitted.

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.

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.

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 :)

Re: ASICMiner Blade Prices Reduced 65% After Shares Crash

#14

Post by Osiris »

wpietri wrote: post #11
joosters wrote: post #6

Earlier quoted context omitted.

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.

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.

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.

Re: ASICMiner Blade Prices Reduced 65% After Shares Crash

#16

Post by tlrobinson »

joosters wrote: post #12
tibbon wrote: post #9

Earlier quoted context omitted.

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…

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.

"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.

Re: ASICMiner Blade Prices Reduced 65% After Shares Crash

#17

Post by yebyen »

Osiris wrote: post #14
wpietri wrote: post #11

Earlier quoted context omitted.

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.

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.

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

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.

Re: ASICMiner Blade Prices Reduced 65% After Shares Crash

#18

Post by 3pt14159 »

joosters wrote: post #4

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

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.

Re: ASICMiner Blade Prices Reduced 65% After Shares Crash

#19

Post by DerpObvious »

dfrey wrote: post #15

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.

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.

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