Re: ASICMINER: Entering the Future of ASIC Mining by Inventing It
I want to share some thoughts on funding and the danger represented by Bitfury.
First of all I see no reason to doubt in honesty of statements made by FC (or Jutarul). If he says AM is able to operate for some time regardless of Btc price (btw - touching 200$ is a realistic possibility) then most probably it is the case. This is very important because we could face low prices still for some time. A game changer in this topic could be approval of first bitcoin ETF but I have no idea when (if) SEC could do it.
Bitfury, bitfury ... They are very canny with tapping fresh VC funds and creating sense of confidence. But, please, don't confound VC money with so called 'smart' money. I assure you, there are a lot of 'not that smart' VC money. What's worth noting is the inability of Bitfury to fund itself internally. If history repeats (rhymes
) they could just burn those new 20mln - especially if Btc hovers around 200$ in 2015-2016. Does this mean Bitfury is not a real danger for AM?- 'au contraire'! With such funding they could be able to try to flood everybody with new cost effective equipment sometime in 2015. But remedy is simple: AM must
a) stay cost effective
b) be innovative (gen4 success seems to be 'a must')
c) never succumb into fallacy of 'le grandeur' which, for example, in current environment means no debt.
If AM works this way then I don't see how Bitfury's new chip could bankrupt AM. Of course, dividends will highly depend on competition performance. Seems, interesting period ahead of us.
First of all I see no reason to doubt in honesty of statements made by FC (or Jutarul). If he says AM is able to operate for some time regardless of Btc price (btw - touching 200$ is a realistic possibility) then most probably it is the case. This is very important because we could face low prices still for some time. A game changer in this topic could be approval of first bitcoin ETF but I have no idea when (if) SEC could do it.
Bitfury, bitfury ... They are very canny with tapping fresh VC funds and creating sense of confidence. But, please, don't confound VC money with so called 'smart' money. I assure you, there are a lot of 'not that smart' VC money. What's worth noting is the inability of Bitfury to fund itself internally. If history repeats (rhymes
) they could just burn those new 20mln - especially if Btc hovers around 200$ in 2015-2016. Does this mean Bitfury is not a real danger for AM?- 'au contraire'! With such funding they could be able to try to flood everybody with new cost effective equipment sometime in 2015. But remedy is simple: AM musta) stay cost effective
b) be innovative (gen4 success seems to be 'a must')
c) never succumb into fallacy of 'le grandeur' which, for example, in current environment means no debt.
If AM works this way then I don't see how Bitfury's new chip could bankrupt AM. Of course, dividends will highly depend on competition performance. Seems, interesting period ahead of us.
I do not think Bitfury has to be externally funded, but it is a smart move for sure (why risk your own capital?). I also do not think Bitfury will bankrupt AM either, but they will make it a lot less profitable. Moving forward I think AM will hang in there, but will they be highly profitable? (pretty unlikely in my opinion). I really doubt anyone investing will ever see great returns moving forward. The mining market is just not hugely profitable anymore for manufactures. The move to cloud mining was a good one for sure...seems they are finally selling a decent amount of AMHash these days. I think AM should stick to what they can handle -> Bulk chips and this could mining setup (avoid selling miners to end users completely).