Tag Archives: ASICMiner

Why I Sold My ASICMiner Shares

DISCLAIMER: As always, do not take financial information from me or anyone without doing proper research yourself. Always assume that anyone giving you such information has ulterior motives that benefit them rather than you.

A few months ago, I posted an article on how to acquire ASICMiner shares. Since then… interesting things have happened in the cryptostock community and you’re now left with Havelock Investments as your only reliable option.

At the time, ASICMiner traded at around 0.8BTC per share. I have put a, to me, considerable amount of my BTC into ASICMiner and say a huge rise in value. And then I sold.

Yeah, I sold at 1.8BTC per share. The price later rose to over 5BTC per share, but I was happy to have gotten out when I did, and here’s why…

Fundamental Investing

I don’t know too much about investment strategies. In fact, I started with investments when I got into Bitcoin, mostly as a learning experience. I’ve since read tons of material about how people construct their strategies and discovered to my amazement that I was following an already established strategy of investing based on fundamentals.

What is that you ask? Well, it’s a fairly simple strategy. Find out what something is really worth. Buy at a price that is lower than that and sell at a price that is higher than that. Simple, right? Like anything that is simple, though, there is a lot of homework required to get to that real worth number.

For example, in a mining company, you need to look at what is the long-term outcome of the mining operation. It doesn’t matter than a mining company churns out cash like it’s going out of fashion because if they follow the pattern of most mining operations, that churning will quickly diminish and will do so long before you get your share price back.

Finding the fundamental value of a share requires a lot of research, a lot of calculation, and a fair amount of guessing, at least in a market that is as volatile as Bitcoin mining. However, once you find that value, investing is mostly a numbers game; a cheap share is a certain value so you buy (or don’t sell) and an expensive share is another certain value so you sell (or don’t buy).

What fundamental investing doesn’t take into account, though, is people. Crowds tend to follow the moment of the crowd and that drives prices up or down regardless of what the fundamental value really is. In fact, all investors tend to bet on this to a certain extent.

ASICMiner Fundamentals

At the time, which was early April 2013, I looked at a few important factors of ASICMiner. First and foremost, I looked at their ability to deliver long-term. In April, the mining scene looked like a giant vacuum, and any ongoing mining operation was cash cows for their owners.

Friedcat had estimated that ASICMiner would hold an average of 15% of the total network hashrate throughout 2013. This was an awesome amount, but even that seemed too low as they were in the process of reaching the famed 51% limit and had to start selling their blade miners to keep below that limit.

15% of the network for 9 months is the equivalent of 864,000 BTC. Deduct a modest 10% in operational costs, salaries, and so on, and you end up with 777,600 BTC. Divided by just 400,000 shares and you’re looking at profits of almost 2 BTC per share, and that’s just for 2013.

However, the big question remained: would ASICMiner actually be able to keep this share of the network? A lot of people seemed to think so, and it’s easy to understand why. ASICMiner kept up with the growth in the network and had kept their promises and even exceeded them considerably.

In hindsight, it is equally easy to see why it had to fail. With the insane amounts of money ASICMiner generated, other companies and investors would want a piece of the cake. That meant huge investments into Bitcoin mining, leading to much higher pressure on ASICMiner.

Those investors also learned from another mistake ASICMiner made. ASICMiner was using outdated technology, which meant that even if they could produce huge amounts of hash power, that technology also required huge amounts of power and facilities, which were very expensive and difficult to operate. The competitors opted to use more modern technology and eventually rode in circles around ASICMiner in terms of performance.

In fact, this lack of updated technology and the vacuum created by ASICMiner’s initial success continues to create problems for ASICMiner. Their strategy of sticking with cheaper and faster to produce chips hasn’t given them much in terms of catching up, and right now, ASICMiner is just a few percents of the total network hashrate, diminishing by the day.

When considering any long-term investment in Bitcoin mining, one needs to take into consideration the halving effect. In short, the halving effect comes as a result of the halving of the Bitcoin block reward for miners, that happens sometime in 2016. At that point, a ballpark estimate is that miner income drops to 50% of what it is now. In effect, any mining investment loses half its value overnight.

To account for this effect, investors should calculate how much that effect is and increase their expected output each month so that they get enough back to counter the halving when it occurs.

Note: I’ve written an article that explains the halving effect in more detail.

The bigger the profit, the higher the impact of the halving effect. ASICMiner was slated to be one if not the biggest player, so the impact of the halving would be massive. This effectively reduced the dividends by several percentage points each month, so although ASICMiner at times had expected ROIs of 75-80% in a year, the real number was much closer to 30-40% over time.

Based on this, I estimated ASICMiner’s real value to be somewhere around 1.20-1.35BTC per share, depending on how optimistic I was. Of course, I wanted to make a profit on my investment at 0.8BTC, so I sold when I saw the price climb to 1.8BTC.

Before you run off to buy ASICMiner shares now, and thinking that the current price of around 0.6BTC must be an awesome bargain, keep in mind that at the time, I was estimating ASICMiner’s share of the network for 2013 to be 5-10%. Right now, it is not even 2%, and it’s dropping every day.

I’m not going to make a prediction at what I think the price will be, but you may want to consider that I haven’t bought back into ASICMiner at this point.

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DISCLAIMER: As always, do not take financial information from me or anyone without doing proper research yourself. Always assume that anyone giving you such information has ulterior motives that benefit them rather than you.

Can 100TH Really be the Next ASICMiner? In a Word: No

Disclaimer: Please do not take this as financial advice. I have no idea what I’m talking about and you should not listen to anything I say. I may or may not hold shares in any company at any time, so as with everything you read, please be safe and assume that the author (in this case moi) has a direct benefit from a high or low share price. Do your own research, do not rush into investments until you understand the assets and the market, and never, ever, ever, ever, ever invest money you are not perfectly comfortable throwing out the window into a blazing pit of fire.

In the past couple of weeks, ASICMiner has seen a rocket like rise in price, trading at most over ฿3.3 which is a hefty 33 times its initial IPO value. Since then, it has subsided somewhat, and these days trade around ฿2.4-2.6 per share.

No wonder people have been looking for the next rocket to take off, and have been very curious to understand a relatively new mining operation called the 100TH project.

Can 100TH really be the next ASICMiner? In a word, no. In a few more words, no, 100TH is not the next ASICMiner because it is a completely different type of investment.

That doesn’t mean 100TH cannot be extremely profitable, though, just that they are two very different classes of assets. I’ve been doing some digging to attempt to understand the 100TH asset. Much of the research is based on the 100TH business plan as well as the discussions in the Bitcointalk forums. In addition, I have done some other research into the people behind the operation.

Let me share my findings in summary.

What is 100TH?

The 100TH project is the brainchild of two Polish entrepreneurs who together with a couple of other people decided to get into ASIC-based Bitcoin mining. Their first project was to build a 72TH mine, but that project didn’t work out. Instead, they re-launched the idea in January with a 100TH mine, this time in collaboration with Bitfury, a known entity in the community that designs and builds ASIC chips.

The 100TH mine is actually more like a bond than a share, so it is vital that you understand the differences. I’ll elaborate more on this when I compare 100TH to ASICMiner later in this article. The brief explanation, however, is that a share in 100TH is fixed at a predetermined rate of 200MH/s and will not increase over time unless the founders decide to change the asset completely.

Unlike ASICMiner, however, the 100TH project does not sell hardware. This is a plain Bitcoin mine, one with a predetermined output, making no attempts to stay competitive beyond those terms. As such, the evaluation becomes a bit simpler than ASICMiner because you need to focus on fewer areas to evaluate the stock.

ASICMiner versus 100TH

Before we begin comparing the two assets and their prospective revenues and profits, you need to understand the difference between the assets.

Note: I am explicitly not talking about the 100TH mine as a company because it isn’t one. Technically, neither is ASICMiner, but the shares act closer to those of a regular company. Bitfountain, of which ASICMiner is the publicly traded shares, is a real company.

100TH is a mine that has a given and fixed amount of hashing power per share. This amount will not increase over time, so what you are buying with a share of 100TH is exactly that hashing power for as long as the mine is operational.

ASICMiner is a company, or technically the name of the publicly traded shares of a company. ASICMiner both increases hashrate over time but in addition sells hardware when they have excess capacity that they can not otherwise utilize or when the market looks right.

Hashing Power

100TH gives 200 MH/s hashing power per share when it goes online in August.

ASICMiner currently has about 60 MH/s hashing power per share that is mining right now.

Dividends

100TH has no overhead for reinvestments, so after the management fee and costs are deducted, 100% of revenue goes out as dividends.

ASICMiner pays for costs, management, and other expenses plus they set aside a varying amount of revenue for future reinvestments before calculating a 90% dividend from the revenue.

Profitability

100TH is focused solely on yielding as much dividend as possible during its lifetime, knowing perfectly well that the lifetime will not be extended once the mining becomes unprofitable.

ASICMiner intends to run as a company over a long time and must take a longer lifespan into account when determining dividends and policy.

Halving Effect

The halving effect takes a moment to explain. In short, the block reward for mining goes down to half in late 2016, so at that point, revenue will most likely go down dramatically. As this date comes closer, the remaining profitability of a mining operation goes down. To some extent, this effect may be mitigated by increased adoption of Bitcoin which in turn may increase transaction rewards from mining.

To calculate the halving effect, take the number of months from now until November 2016 (when the halving occurs) and then divide half of the share price by that number of months. The result is the average cost of the halving effect if the block reward goes to exactly half of what it currently is. You may want to decrease this amount by some factor depending on the development of transaction fees ratio of the mining reward.

The formula is: (Current Price/2)/Months until 11/2016=Average halving effect loss per month

Example: ASICMiner trades at ฿2.5, with 43 months left until halving occurs. Assuming a halving effect of exactly 50%, we take ฿2.5, divide by two to get ฿1.25, and then divide that by the number of months left (at the time of this writing 43 months) to get ฿0.03. This is the value that ASICMiner will drop each month on average due to the halving effect.

Note: This is a simplified view of reality because only dividends are affected by the halving.

100TH will take the full blow of the halving effect and revenues will drop by approximately 50% when the block reward goes down.

ASICMiner may mitigate the halving effect by diversifying its business model, for example by maintaining hardware sales. The mining part of ASICMiner will bear the full blow of the halving effect.

Hashrate Increase

100TH will not increase it’s hash rate per share, regardless of what happens in the market, because it is a fixed rate asset. Adding hashing power is unlikely because it means the issuer is essentially giving money away for free.

ASICMiner may increase it’s hash rate per share by deploying new miners or develop new chips to yield higher efficiency. Adding hashing power is likely because the issuer also benefits from the higher revenue.

Battle of Numbers

In the end, any investment in mining always comes down to number crunching. In fact, other factors, like hardware sales in the case of ASICMiner, is so speculative that it is really close to impossible to predict with any accuracy more than a couple of months in advance.

Note: Please remember that these numbers carry with them certain assumptions. These assumptions may or may not hold true, but are required to make any analysis possible. Make sure you evaluate the assumptions and whether they fit your own research.

Which numbers are important? That greatly depends on your perception of the future, what other competitors enter the scene, how quickly ASIC hashing power becomes available to the masses, and a number of factors.

Let me set up a couple of examples here. In this scenario, I am using the average percentage of the total network power that an asset holds over three years because this simplifies the predictions to some extent.

Keep in mind that the percentage will likely be high in the beginning for fixed asset like 100TH and then decline over time as total network power increases. For ASICMiner, the ratio can be increased up to around 35% (but cannot under any circumstance exceed 50%).

Please note that in the scenarios below, hardware sales for ASICMiner is excluded. To determine dividends from hardware sales, divide the expected hardware sale by 400,000 (number of shares outstanding) and add to the dividend net yield projections below.

Current Situation:

Assumptions: None

  ASICMiner 100TH
Hashrate 24 TH/s 0 TH/s
Percentage 25% 0%
Price/share ฿2.5 ฿0.2
Dividends/month ฿0.06 ฿0
Halving Effect -฿0.03 -฿0.004
Net Yield per Month ฿0.03 -฿0.004
Yield per year 14% -2%

August 2013, 10% increase per month (low network increase):

Assumptions: 100 TH mining comes online as expected, 10% increase in network hash rate per month (total 116 TH/s) excluding 100TH, ASICMiner increase hashrate by 400%

  ASICMiner 100TH
Hashrate 96 TH/s 103 TH/s
Percentage 43% 47%
Price/share ฿2.5 ฿0.2
Dividends/month ฿0.11 ฿0.099
Halving Effect -฿0.03 -฿0.004
Net Yield per Month ฿0.07 ฿0.095
Yield per year 33% 570%

August 2014 10% increase per month (low network increase):

Assumptions: 100 TH mining mines as expected, 10% increase in network hash rate per month (total 468 TH/s) excluding 100TH, ASICMiner maintains 43%

  ASICMiner 100TH
Hashrate 200 TH/s 103 TH/s
Percentage 43% 15%
Price/share ฿2.5 ฿0.2
Dividends/month ฿0.11 ฿0.031
Halving Effect -฿0.03 -฿0.004
Net Yield per Month ฿0.07 ฿0.027
Yield per year 42% 166%

August 2014 20% increase per month (high network increase):

Assumptions: 100 TH mining mines as expected, 20% increase in network hash rate per month (total  1232 TH/s) excluding 100TH, ASICMiner maintains 43%

  ASICMiner 100TH
Hashrate 529 TH/s 103 TH/s
Percentage 43% 7.7%
Price/share ฿2.5 ฿0.2
Dividends/month ฿0.11 ฿0.016
Halving Effect -฿0.03 -฿0.004
Net Yield per Month ฿0.07 ฿0.012
Yield per year 42% 84%

A couple of things are worth noting about this last scenario.

First, regarding ASICMiner, to maintain a 43% part of the network, ASICMiner needs to grow to 529 TH/s. Using current technology where 1 TH/s costs approximately US$10,000 to put online, that means ASICMiner either needs to invent new technology or invest approximately $3,000,000 in current generation technology. At current prices of $132 per BTC, that means an average monthly cost of ฿946. This does not include hardware for resale so that cost will come on top. A price per BTC below $132 increases the BTC cost too, so revenues in a growing market will depend on a high BTC price.

Second, and this is very important, for 100TH, if network hashrate increases at this rate, the halving effect period will be much shorter than 2016 because the mine will be unprofitable long before that. This reduces the yield per year substantially and you need to look at the overall yield per lifetime instead, which will be shorter than three years.

Note: A 20% increase on average is extremely high and unlikely to be sustainable. To put it in perspective, this will mean that the network speed exceeds 11 PH/s (more than 120 times its current speed) by September 2015, just over two years from now. By October 2016, one year later, the network speed will exceed 117 PH/s or more than 1200 times the current speed. One day later, the revenue for all miners drop to half.

Incredible breakthroughs in technology must happen for that to be even remotely profitable.

To help understand that scenario, I’ve set up a table that can show the rate of return given the current trading price of roughly ฿0.2 per 100TH share and an average monthly increase in network speed of 20%.

image

(Click for full-size image)

The interesting part here is the total yield and the ROI, which shows you how much you get back for your investment. Total Yield is an absolute number and ROI is based on a price of ฿0.2 per share.

As you can see, at ฿0.2 per share and assuming the network crows in average by 20%, you’ll triple your money in a year and almost quadruple it in two years. Even then, the mine continues to be profitable for more than a year more, although the dividends total does not exceed 7% for the remaining time until October 2016, and the mine will probably shut down before that.

Note: Remember, this is based on the view that a 20% increase per month is sustainable for two years.

Even if you pay 0.5 for a share today, you’re still looking at more than 50% return on investment over two years, which incidentally beats NASDAQ composite by more than 300%. The majority of your return also comes back to you early so you’ll get you money back in just a few months and can reinvest in other interesting projects at that time.

If you’re very optimistic and possibly borderline naïve, you might want to imagine what happens if the network rate only increases by 10% on average per year. Well, here is the table for that.

image

(Click for full-size image)

I would not recommend you consider such a low number, but in this case, your ROI should reach 671% by the end of year two.

After July 2015, however, profitability for 100TH declines to almost zero, whereas ASICMiner may continue to impress with new technology for sale and ever higher hash rates. ASICMiner may yield lower ROI on its shares, but can maintain it for longer than 100TH.

The decision must be yours, as well as the assumptions on network size and how that will evolve. Both companies are great investments if everything goes according to plan. However, they are very different investments, so the decision about which company in which to invest will depend on your profile and your evaluation of the risks involved.

Speaking of which…

Risks

Like with all investments, there are risks you need to evaluate to see whether an investment makes sense. In the cryptocurrency world, there are far more risks that you need to consider. You should know about these general risks before you undertake any investments, but still there are asset specific risks that are unique to 100TH.

Let me briefly discuss a few of the risks as I see them.

Update: I’ve felt the need to add a very real risk on June 14 following a very strange move from the stock exchange at which 100TH trades. Please read on, and I’m sorry to say this is not as much a risk as a serious issue with an unregulated market now made manifest by Picostocks.

Market Manipulation

Picostocks, the stock exchange on which 100TH is traded, has a track record of market price manipulation whenever there are good news regarding 100TH. The price manipulation is done by dumping large amounts of shares on the market just above or even below current trading prices, preventing investors who takes huge risks from getting huge rewards from those risks.

Effectively, this kills off 100TH as an investment to me. As any experienced investor will know, you balance risk against potential reward, and usually expect a large risk to come with the potential for a large reward. With Picostocks manipulation and dumping of shares, this isn’t really the case anymore and investors only carry the risk without the potential reward.

Note: Picostocks is run by the same people that run 100TH. In fact, all the assets on Picostocks are run by the same people.

Tytus, the CEO of the operation, promised after the first dump in May to give advance notice to the market before dumping shares. However, on June 14, 2013, he broke that promise by putting up a massive dump of shares right after 100TH announced that the chips had shipped from the factory.

Of course, even when 100TH starts mining, there is no guarantee that this price manipulation will cease, so I’m sorry to say, this no longer is a viable asset to me.

Delivery?

100TH is still in development and has not started mining yet. In fact, they don’t even have completed chips at this point (May 26, 2013). Their scheduled start is sometime this summer; with full force mining scheduled from August 1. However, there is a risk that something goes wrong or the chips to not perform according to expectations. So far, Bitfury’s tests and simulations have been in line with what they expect, and the project has been keeping their expected timeline within reason.

In case the chips to not work, however, the backup plan is outlined in the business plan, as quoted:

“If the chips fail to meet the expected performance the manufacturer will provide the mine with additional boards to achieve the expected hashrate of 100TH/s. […] If the chips fail completely a substantial delay in mining will occur.”

Until the mine is actually up and running, a lot of things can cause delays or worst case stop the entire project. The main risk according to the business plan is failure of the chips.

Scam?

In the world of Bitcoin or cryptocurrency assets, the first and default state of any new idea is that “this must be a scam”. This is a cultural thing and a method for the community to protect itself because over the years, a lot of people have been trying and succeeded in scamming people out of their money.

It is important to understand that this is the default state and one every new idea must go through. Being called a scam is about as common as being called newbie. In this sense, you are guilty of being a scammer until you have proven yourself innocent, and any idea will be compared to every previous failure or scam imaginable. Presenting a new idea, especially one that means your clients must part with real valuables in return for some future benefit, means you must defend yourself against such accusations before you are given the time of day of any rational analysis.

You may agree or disagree with this attitude and approach, but unless you know about it, you can easily be scared into thinking that everything must be a scam because everyone says it is.

However, regardless of what the practice of the community is, there is always a risk that this can be an elaborate hoax to trick people into investing into air and hope. You should spend some time evaluating whether you want to trust the issuers and the project.

Operational Failure?

Even if everything turns out perfect, everybody is honest, the chips mine at the expected rates, and the mine comes up according to schedule, the mine can always run into operational problems. This can range from smaller problems with individual chips or boards to catastrophic failures that take the whole mine out. The business plan explains that there is a four year warranty on the boards, but in case of catastrophic events, mining may need to be stopped until replacement boards can be made, which in a time-critical industry like Bitcoin mining can lead to significant loss in revenue.

Profitability Decline

The most likely risk factor, however, is the profitability decline of the mine. In short, difficulty increases will mean that the 200 MH/s mining capacity per share will continually decline as difficulty increases. Because the hashrate is fixed, this decline is inevitable as long as more network power comes online, as explained in the Battle of the Numbers. Further, if new competitors arrive on the scene with either more efficient chips or more boards, this will rapidly increase the total network hashrate beyond what the mine business plan predicts.

The prediction from the business plan, however, is that the network hashrate will be 600 TH/s by the time the mine starts operating, and will increase by 200 TH/s per month throughout 2013. These numbers are very high and it seems unlikely that the network will reach 600 TH/s by August (which means an eight-fold increase in just over a month).

Further, adding 200 TH/s per month will mean that new technologies or massive new mines must come online, and knowing the pace at which ASIC development and deployment happens, this may also be on the high end of the realistic estimates at least in the short to medium term. We’re already pushing the limits of what is technically feasible with some chip producers now attempting to design and produce 28nm chips. ASICMiner, for example, uses 130nm chips, and lower is better but also massively more difficult and orders of magnitude more expensive.

Difficulty and total network hashrate is a highly speculative topic, so you want to do your own estimations on what you think is likely and whether the 600 TH/s by August plus 200 TH/s per month throughout 2013 is realistic. Perhaps you have different predictions? I encourage you to run the numbers yourself based on the model with which you are comfortable.

Despite this and the even higher numbers from this analysis, however, 100TH may remain profitable well into the summer of 2015.

Disclaimer: Please do not take this as financial advice. I have no idea what I’m talking about and you should not listen to anything I say. I may or may not hold shares in any company at any time, so as with everything you read, please be safe and assume that the author (in this case moi) has a direct benefit from a high or low share price. Do your own research, do not rush into investments until you understand the assets and the market, and never, ever, ever, ever, ever invest money you are not perfectly comfortable throwing out the window into a blazing pit of fire.

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.

.b