Quote from: dropt on October 30, 2014, 07:34:31 AM

Quote from: MrBig on October 29, 2014, 10:53:43 PM

Quote from: labsbitforum on October 29, 2014, 08:31:21 PM

Quote from: brg444 on October 29, 2014, 07:47:58 PM

You do know that likely the biggest mining company out there, BitFury, sells industrial mining gears to other miners. I would say this qualifies as "enabling others to compete with them". They actually offer the service of building data centers and supplying mining equipment for mining operations i.e. other Bitcoin miners.

In fact, every mining companies in the ecosystem probably mine Bitcoins themselves AND sell mining gear. So your point really doesn't make any sense, at all.

So if a mining company makes a rig that is projected to generate $10,000 worth of bitcoin what do you think they will sell it for?

A. $8,000 basically giving someone $2,000 because they just love people and support bitcoin.
B. $10,000 because it allows them to get the $10K right away upfront locking in maximum profit right away. (This leaves the buyer $0 in profit because they paid what it was going to produce)
C. $12,000 Suckers! Person buying looses $2,000 because they were overly optimistic about something.

The answer is C or some form of it. KNC characterized their shift to just mining themselves as more honest.

unfortunately, most of the naysayers would choose option A, as they believe that mining companies are some of the biggest supporters of BTC.

What's wrong with option A? As the manuf. you sell for $8,000 today or try to mine the $10,000 over the next five months, but really you have to mine more than $10,000 because you have to pay for power and somewhere to put the machine. That's not evem considering the possibility that the exchange rate may go to shit. While you might actually earn more BTC than it would have net you if you had just sold the unit outright, the shit exch. rate means you actually lost money relative to the $8,00 you could have made from the get go. Further that's not even considering the opportunity cost by having your return tied up in a miner which has to earn it back over time.

But, yes. C

I do believe that many ASIC/rig makers adopted a variant of A. There is a discount that should be given to lock in 80% of what you think its worth up front and remove the uncertainty. They don't have perfect insight in to where the price is going either. They have lots of capital in play and I'm sure spend a tremendous amount of time obsessing about their profitability projections and trying to stay competitive with other makers.

As mining has evolved over the past year or so you can see it shifting much more to C and then to D:

D. Not for sale. We have enough capital now to grow on our own. We didn't expect the price was going to fall so much and leave our customers so far under water. Sorry. We decided we can do better on our own. The real production costs are not that high now that we are up and running. Having customers or limited share holders does not provide enough benefit to outweigh the issues associated with them.

I'm sure some manufacturers are good and some are evil greedy bastards. In the end it doesn't matter and they are all competing as businesses do. The normal evolution of business is consolidation to get scale. Capitalism is a great motivator and makes things move very fast. But, its eventual outcome often is monopoly which is a horrible end result. If market forces don't change the fundamentals to knock out monopolies then enter government and regulation to break it up and restart the cycle. At least that is what should happen. More and more you see business subvert the government to prevent the regulation and break up of their monopoly. History shows that will lead to public uprising and revolt. A horrible prospect to envision happening in modern times.

Bitcoin was intended to be more egalitarian, liberating, and peer-to-peer. More like bittorrent, seti@home, folding@home, etc. It sprung out of those those ideas. Satoshi wasn't trying to launch a get rich quick scheme for himself or others. Quite the opposite.

It's too bad that bitcoin allowed dedicated silicon (FPGA/ASIC) to participate. If they had adapted to prevent it there still would be large farms of CPU/GPU miners. But it would be a more level playing field and there would be more use of having that much computational power in play that could also be solving real problems and not just generating a lot of heat and having an overabundance of SHA256 brute force engines lying around.