It seems strange to even sell these units at all right now. If they really can pay for their (retail!) value within a week, the real money is in running them, continuously, until the difficulty gets so high that they can only pay for themselves within, say, 6mo or more.
It may be that the competition has driven manufacturers to attempt to sell so they can offload their stock. But Avalon claims that they are made-to-order.
If it were me, I would've built 1000 of these, made them pay for themselves and then some, then started dumping as soon as it looked like a competitor was about to launch. And again, this sale is too early for that to make sense.
Yeah, this. They're crowdsourcing the funding for the NRE and associated costs of spinning an ASIC. They're also diversified a bit by being both miners, and shovel-merchants.
That must be it. The money is in keeping a significant portion of what they make for themselves, and using the sales to fund production of even more equipment, for themselves.
Then, eventually, these things will be worth very little but the money will be made.
I would imagine this will drive BTC prices pretty far downward. A few guys with a couple hundreds BTC mining ASICs can monopolize the vast majority of BTC being mined. And given the current price, they might want out soon.
I'm starting to understand it a little better after studying it a bit. I don't think it will drive BTC "prices" down because there is a finite amount of the currency that is possible to be created. I don't think it can create a glut (I could be wring on that). There are a couple of incentives not to hoard all of the computing power.
1. Benevolent users want to avoid the "51%" attack. It could undermine confidence and perhaps cause users to flee.
2. It's possible that we'll see a hashing power arms race where several cycles of ASIC production supersede or render the previous generation unprofitable. While it may be possible to go it alone and win, it's still a risky prospect, for the above reason, and for the risk associated with ASIC development. Therefore, ASIC developers have an incentive to distribute the machines into the hands of BTC users at large, and quickly.
These ASIC miners are going to have a limited profitability lifetime. While it may be years before they are uneconomical in terms of the cost of the electrical power to run them, they could be rendered barely profitable by a faster generation of ASIC based machines, or by an unfavorable turn in Bitcoin exchange rates; which could happen on a time scale of months or even weeks.
It may be that the competition has driven manufacturers to attempt to sell so they can offload their stock. But Avalon claims that they are made-to-order.
If it were me, I would've built 1000 of these, made them pay for themselves and then some, then started dumping as soon as it looked like a competitor was about to launch. And again, this sale is too early for that to make sense.