nubbins



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LegendaryActivity: 1414Merit: 1001 Re: ASICMINER: Entering the Future of ASIC Mining by Inventing It July 01, 2013, 07:12:43 PM #9009 Quote from: Luckybit on July 01, 2013, 06:55:19 PM But I think the shares are worth around 5BTC and while I wouldn't buy them at 10BTC (I cannot afford to at that price) I'm sure some people can. It's a good place to put your Bitcoins and it's better than leaving it in cold storage or hot wallet. You might have to deal with the fluctuations but if it gets to 5BTC it's not going back down to 4.5 so the problem of fluctuations mostly affects people who get in too late. If you're getting in at 5+ then I would think it's far more risky than getting in right now at 4.5.



Emphasis mine, and I agree with the points in bold. To extend it another step, getting in at 4.5 is riskier than if you'd done so at 4.



If you bought in at a lower price (let's say <2 for the sake of the discussion), the question is not whether you lost or gained money, but how much profit you've made.



I disagree with your statement that share price won't drop to 4.5 once it passes 5; all I can see are those "hold, spartans!" memes on /r/Bitcoin when BTC /USD was $200+. If x can go up, x can go down, which leads me to your statement that AM is a better parking spot than cold storage; that's only true if AM shares don't decrease in value. Emphasis mine, and I agree with the points in bold. To extend it another step, getting in at 4.5 is riskier than if you'd done so at 4.If you bought in at a lower price (let's say <2 for the sake of the discussion), the question is not whether you lost or gained money, but how much profit you've made.I disagree with your statement that share price won't drop to 4.5 once it passes 5; all I can see are those "hold, spartans!" memes on /r/Bitcoin when/USD was $200+. If x can go up, x can go down, which leads me to your statement that AM is a better parking spot than cold storage; that's only true if AM shares don't decrease in value.

My OTC Web of Trust ratings / What's a PGP chain of custody? No longer buying/selling Casascius coins. Beware scammers.

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MemberActivity: 63Merit: 10 Re: ASICMINER: Entering the Future of ASIC Mining by Inventing It July 01, 2013, 07:46:19 PM #9011 Quote I disagree with your statement that share price won't drop to 4.5 once it passes 5; all I can see are those "hold, spartans!" memes on /r/Bitcoin when BTC/USD was $200+. If x can go up, x can go down, which leads me to your statement that AM is a better parking spot than cold storage; that's only true if AM shares don't decrease in value.

I fully agree with you there. However, it's relatively easy to deal with the risk of a stock price falling below initial investment. I have a simple script monitoring the exchange rate. If it drops below my average buy-in share price (+10%) it places a sell order at a price which should immediately be matched by open buy orders. I fully agree with you there. However, it's relatively easy to deal with the risk of a stock price falling below initial investment. I have a simple script monitoring the exchange rate. If it drops below my average buy-in share price (+10%) it places a sell order at a price which should immediately be matched by open buy orders.

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Hero MemberActivity: 714Merit: 500 Re: ASICMINER: Entering the Future of ASIC Mining by Inventing It July 01, 2013, 07:53:36 PM #9012 Quote from: nubbins on July 01, 2013, 07:12:43 PM Quote from: Luckybit on July 01, 2013, 06:55:19 PM But I think the shares are worth around 5BTC and while I wouldn't buy them at 10BTC (I cannot afford to at that price) I'm sure some people can. It's a good place to put your Bitcoins and it's better than leaving it in cold storage or hot wallet. You might have to deal with the fluctuations but if it gets to 5BTC it's not going back down to 4.5 so the problem of fluctuations mostly affects people who get in too late. If you're getting in at 5+ then I would think it's far more risky than getting in right now at 4.5.



Emphasis mine, and I agree with the points in bold. To extend it another step, getting in at 4.5 is riskier than if you'd done so at 4.



If you bought in at a lower price (let's say <2 for the sake of the discussion), the question is not whether you lost or gained money, but how much profit you've made.



I disagree with your statement that share price won't drop to 4.5 once it passes 5; all I can see are those "hold, spartans!" memes on /r/Bitcoin when BTC /USD was $200+. If x can go up, x can go down, which leads me to your statement that AM is a better parking spot than cold storage; that's only true if AM shares don't decrease in value.

Emphasis mine, and I agree with the points in bold. To extend it another step, getting in at 4.5 is riskier than if you'd done so at 4.If you bought in at a lower price (let's say <2 for the sake of the discussion), the question is not whether you lost or gained money, but how much profit you've made.I disagree with your statement that share price won't drop to 4.5 once it passes 5; all I can see are those "hold, spartans!" memes on /r/Bitcoin when/USD was $200+. If x can go up, x can go down, which leads me to your statement that AM is a better parking spot than cold storage; that's only true if AM shares don't decrease in value.

There is no reason to move the Bitcoins because there is nothing else paying dividends this much. So where else will people put their savings? You keep it in a cold storage and it doesn't collect 20-30% APR. And there is really nothing to spend it on except BFL and we see where that goes.



For the next month dividends will be high and there is no better investment. In August we can look at the share price then but I suspect it could be over 6 or even over 7 by then and the pressure will exist to sell but will that be enough to out pace demand? If the price of Bitcoins keep dropping then I would say no. The cheaper Bitcoins are the more demand there will be for these particular shares. There is no reason to move the Bitcoins because there is nothing else paying dividends this much. So where else will people put their savings? You keep it in a cold storage and it doesn't collect 20-30% APR. And there is really nothing to spend it on except BFL and we see where that goes.For the next month dividends will be high and there is no better investment. In August we can look at the share price then but I suspect it could be over 6 or even over 7 by then and the pressure will exist to sell but will that be enough to out pace demand? If the price of Bitcoins keep dropping then I would say no. The cheaper Bitcoins are the more demand there will be for these particular shares.

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Hero MemberActivity: 490Merit: 500 Re: ASICMINER: Entering the Future of ASIC Mining by Inventing It July 02, 2013, 04:46:53 AM

Last edit: July 02, 2013, 05:03:03 AM by Rival #9015 ASICMiner- Letting the cat out of the bag.



Recent analysis has led me to some interesting conclusions. I would like to present them to the community for discussion. Feel free to shoot holes in it as you desire.



In the early 1990's, Microsoft made a huge investment in their direct competitor, Apple. Apple was failing, and common wisdom dictated that this was done to keep from getting impaled by anti-trust lawsuits. I would suggest that it was nothing of the sort. I believe they were just doing it to grow the market, so that the value of their share would increase. Witness AM. AM has demonstrated a capability to completely dominate the entire global hash if they so desired. I don't think this is conjecture, but rather a demonstrable fact. But unlike Microsoft, they had to deal with a very important restraint: they could not ever under and circumstances breach 50% of market share. This placed a practical limit on their growth. They could never grow to more than 50% of the current hash. So what is the obvious solution? Increase the hash that they do not control, and the easiest way to do that is to supply their competitor (Joe and Jane miner) with devices that could hash. AM, in order to grow, increased the hash of their competition by selling them hardware that they could have easily put into their own farm. AM effectively put themselves into the catbird seat by not only profiting from their own farm, but from hardware sales as well. The tertiary profit came from increased hashrate allowing them to expand even further. They raised the value of the cap.



I have no doubt that many have realized this strategy already, in fact, there have been several posts that have alluded it to it. What I think most have missed however is much more complicated.



As specialized hardware is required to make any sort of profit, the actual number of miners has been decreasing. The costs of obtaining the latest hardware continue to increase leading to only one conclusion: That eventually no individual will be able to own hardware capable of hashing a profit. We will eventually reach a point where there exist only a handful of companies with the resources to purchase and operate the hardware required... and instead of owning hardware, we will all own shares in farms. Just as the wildcat oil-drillers gave way to Standard Oil. But Friedcat has a trick up his sleeve, there will be no Standard Oil. Friedcat appears to have embarked on a strategy that pays attention to history. He knows the result of a monopoly, and knows it is poison to bitcoins. He welcomes the competition. he encourages it, and above all else, he profits from it. He knows he needs it. So he ensures it exists.



Where will this lead? The obvious conclusion is a system wherein Friedcat runs the bitcoin mining ecosystem in the same manner the federal Reserve manages dollars. A total domination on almost every level. Avalon kicking up the hash? Excellent, we can just increase to match, and sell even more block erupters to everyone who is trying to keep up. More profit for shareholders. BFL actually delivering? Pop the cork, we can now bring another 10 Terrahash online and sell even more USB miners! More profit for shareholders!



And so, we end up with AM ensuring no entity ever gets 51%, protecting the bitcoin system, and rewarding shareholders with an almost endless stream of dividends. It almost looks like it is all tied up with a pretty bow. When you read it like this, it is hard to wonder if Friedcat and Satoshi might be in some way... related.



Oh, well, off to bed. It was a good bedtime story if nothing else. Please deposit the tinfoil hats in the bin as you leave.