How to Buy ASICMiner Shares

Disclaimer: At the time of this writing, I am a shareholder with ASICMiner. I get a direct personal benefit from a high share price. Keep that in mind as you read this.

In fact, when reading anything about investment, it is a good idea to assume the author has an interest in promoting a certain message.

Also be aware that the Bitcoin stock market is, like Bitcoin, very immature and not regulated. The risks involved are far greater than for a traditional stock market.

With those disclaimers out of the way, thanks for stopping by, I’d be happy to answer your questions about how to get ASICMiner shares.

What is ASICMiner?

ASICMiner (AM) is a company that develops ASIC chips and equipment for Bitcoin mining. They currently both mine for Bitcoin block rewards and sell Bitcoin mining equipment to end users (albeit so far to somewhat technical end users).

If you don’t know what ASIC means, check out my article on what ASIC miners are and why they are so important.

ASICMiner is headed and fronted by friedcat, a user pseudonym on bitcointalk.org. It is owned by the public (holding 163,962 shares) and the shareholders of a company called Bitfountain (holding 236,038 shares).

Note: Technically, ASICMiner refers to the part of the Bitfountain company represented by the 163,962 shares, so the publicly traded shares are only that part of the full Bitfountain company. As such, ASICMiner is a virtual identity in which the public trades shares.

The first public announcement was made on August 9, 2012, on Bitcointalk.org. Since then, friedcat has kept the public informed on regular basis (often several times per week) on the progress of the development, plans for sales, as well as answering questions from the public. The thread has become quite long, but I recommend reading at least friedcat’s posts to make sure you understand the history and the company structure.

Today, ASICMiner runs mining operations at BTC Guild and OZCoin and have since February 2013 mined at a rate of between 6-8 TH per second.

At the time of this writing (April 26, 2013) ASICMiner is in the process of increasing their hashing rate to about 15 TH per second, and friedcat has also announced that ASICMiner will deploy 50 TH per second in the near future.

Further, ASICMiner also wants to sell ASIC mining equipment to end users. The first step in this plan was an auction sale held at Bitcointalk.org of 10 blades of ASIC chips called Erupter Blades. These blades, each with a hashing power of 10 GH per second, were sold for ฿75-76 each and were delivered immediately after the auction.

friedcat has stated that after receiving feedback from users, ASICMiner will start selling more Erupter Blades to the public, although the price has not been decided yet.

Finally, friedcat has also announced that they will sell a much smaller USB-stick type ASIC miner that hashes at 300 MH per second each. Pricing and availability is not clear at this point.

From an investor’s perspective, ASICMiner pays dividends on profit from mining operations and sales of equipment. Dividends are paid once per week on Wednesday, and dividends as well as dividend history are published on both stock exchanges that trade the stock (although stocks are traded as a pass-through. See below).

How Do I Buy ASICMiner Shares?

You have two ways of buying shares in ASICMiner. You can buy Pass-Through (PT) shares through two separate stock exchanges, BTC Trading (BTCT) and Bitfunder (BF). You can also buy directly from holders of real shares if you know them or they put their shares up for auction.

By far the easiest and quickest way is to buy Pass-Through shares at one of the two major stock exchanges, BTCT and Bitfunder. I personally prefer the former due to its easier interface, but either works.

On BTCT, the process of signing up for an account and starting trading is very quick. You simply sign up for an account with a username, password, email and a 4-digit pin code. You then fund your account by sending Bitcoins to an address provided by BTCT, and once those funds are confirmed (usually takes about 30 minutes) you can begin trading ASICMiner or other shares on the exchange.

For Bitfunder, the process is a bit more complicated, because Bitfunder uses an external service to handle its Bitcoins. Please review the Bitfunder process on their web site.

In either case, you should be able to buy your first ASICMiner PT share in less than an hour.

However, know that shares traded on both these exchanges are Pass-Through (PT) shares only. A PT means that you buy shares with someone who holds real shares with ASICMiner. Each share in the PT represents on ‘real’ share in ASICMiner and pays the same dividend less a fee to the PT operator.  In practice, a PT share is much the same as a ‘real’ share, but you don’t get voting rights, so keep that in mind. Also, the PT on BTCT has a 0.5% fee (which is waived for 90 days from March 5, 2013), whereas the PT on Bitfunder does not have any dividend fee.

Update: The BTCT and Bitfunder PTs no longer have dividend fees.

Note: Yeah, I know, a lot of abbreviations… These are the abbreviations that are used in the community, though, so you probably should learn them.

You should also know that PT operators may offer a conversion between PT shares and regular shares. That means that if you hold PT shares, you can contact the PT operator and request your shares be converted from PT shares to regular shares. You can also convert regular shares into PT shares. Contact the PT operator for information and terms.

Finally, you’ll also find several 100PT shares. These are just like normal PT shares, except each share represents 1/100 of a share (in other words, one hundred 100PT shares represent one regular share). Because each normal PT share can cost up to $200, a 100PT share makes it easier to invest the exact amount you want to invest.

Make sure you read up on the description of each PT share so you understand any fees and condition for that share.

For regular shares, ASICMiner do not sell those directly. They were sold initially at a now defunct stock exchange (GLBSE) which turned into a bit of a disaster. After that, friedcat decided he did not want the shares traded on any exchange for fear of similar accidents.

That said, there are a lot of people that hold regular shares, and these are sometimes put on auction over on Bitcointalk.org (check https://bitcointalk.org/index.php?board=73.0). If you participate and win shares in one of these auctions, the seller will transfer the sold amount by sending a message to friedcat with your email address and your Bitcoin address for dividends, and you are now the proud owner of ASICMiner shares.

I suggest using one of the escrow service providers on that forum to ensure the transfer goes smoothly and safely. Several escrow providers will do this for free, but it is customary to tip a few bitcents for their service. Look around in the forum and ask what their terms and availability are.

This process can take a few days, depending on how long auction lasts, but the transfer afterwards should be quick, and usually takes less than a day.

Now you can sit back and wait for the next Wednesday when you will receive your first ASICMiner dividends.

Dividends for PT shares are paid to your exchange account and directly held shares are paid directly from friedcat to your Bitcoin address on file.

Beyond that, ASICMiner does not have a web page per se, but they keep everyone informed several times a week here:https://bitcointalk.org/index.php?topic=99497.0

Like I said, be very careful about investing in Bitcoins and cryptocurrency stocks. There is no regulation, no recourse, and seldom any personally identifiable information. Oh, and always consult a tax advisor before investing in anything.

And again, for those that forgot:

Disclaimer: At the time of this writing, I am a shareholder with ASICMiner. I get a direct personal benefit from a high share price. Keep that in mind as you read this.

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12 thoughts on “How to Buy ASICMiner Shares

  1. So I’m looking at the BTC-TC website and it appears as though if I buy a single Asicminer share at roughly 2.5btc, it will return roughly .038btc every Wednesday, correct? That seems like a fairly large investment for only about $16/month return. Is that just the way it is or am I missing something?

    1. The return per weeks is highly variable, but the previous week was at that level, yes. Keep in mind, over a year, this correlates to 60% yield. You should go to your bank and ask for a 60% interest or ask any investor in the world what investments they can make that will give 60% return over a year.

      Don’t get me wrong, I’m not encouraging you to invest; that must be up to you, but you seem disappointed in a return at that level, and to be honest, the returns here are astronomical compared to traditional investing, even at these price levels.

      .b

      1. That’s a good point which I did not consider. The return on asicminer shares is quite high when compared with other investments. I guess my fear at this point is that the value of an Asicminer share will plummet from ~2.5btc and completely negate the ~.038btc/week dividend it was earning me.

        Thanks for the informative post and the quick response.

  2. (Bear with me, I’m new to this)
    Why would a share-holder turn their share into a PT? The fee, by default, to the PT operator would be smaller than the dividend. I’m just not seeing the benefit.

    Thanks, and this blog is amazing. Keep up the great work!!!

    1. One benefit of a PT is increased liquidity. If you need to reduce your number of shares, for example, doing so for direct shares is more cumbersome because you have to find a buyer yourself, send emails to friedcat, and ensure proper payment.

      .b

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