Post
Topic
Board Hardware
Re: [Block Erupter Blade (New Model)]Low Price, Limited Quantity
by
Endlessa
on 03/09/2013, 14:27:50 UTC
4 btc/$560 cost basis for 10gh + starting difficulty 88,000,000 + only 15% per difficulty increase = $27 profit after 12 months.  No go.

Mining is dead, long live mining!

What calculations for % gain in BTC price?
Sorry for the tangent of the thread... but I feel it's relevant.

If you spend 4BTC, and it never returns 4BTC... then who cares what USD price of BTC is?

The less than 4BTC you earn with the hardware will never be worth as much as the 4BTC spent for the hardware, no matter what the price of BTC is...



This alone is reason enough. . . . and there is more. . .

AM had the chance to crush the competition and dominated the market by supplying hardware at competitive prices.  If they had focused on an expanded supply line and competing on price.  They could have owned asic production and created an economy of scale with much more long term profit, but instead they focused on maximizing their short term profit.  This in turn left room in the market for another 4-6 companies to pop up.  This is good for customers, but truly bad news for AM.  the current competitive pricing is around $7-$8 a gigahash and this costs $52.  The only reason they are selling is there are a lot of frenzied people who can't do simple math/logic and realize that 4 BTC is  worth more than the return on the mining output of 10 gh/s.  When marketing product, instead of just leveraging frenzy, a company needs to attract customers by offering an advantage.  Everybody would buy from AM if they gave a good price.  

Next thing that typical AM fan boi blindness types have to say is "AM will lower the prices when they need to".  That'll be great, except we will have all found supply lines and created loyal relationships with companies that we know won't face rape us on prices when they feel like they can or have us over a barrel. No one will want to trust them.  The customer base they have now will have gone broke buying overpriced hardware with no ROI and had to leave the mining game.   That's the essence of it.  Can AM do this? Yes and they have the right too.  Will it lead to a bright and sun-shiny future? No, somebody will step up and compete properly and will invest in the long term.  AM will have bled their customer base dry of funds.  And the 10s of thousands of miners deploying massively superior hashing products will have overwhelmed their ability to deploy in the mining operation side.

So go ahead AM, keep on keeping on.  Then one day there will be no customers left. . .imho

g' luck