<p><a href="http://arstechnica.com/gadgets/2013/06/how-a-total-n00b-mined-700-in-bitcoins/3/" rel="noreferrer">http://arstechnica.com/gadgets/2013/06/how-a-total-n00b-mined-700-in-bitcoins/3/</a></p>
<blockquote>
<p>In fact, if it's so profitable, why on earth is Butterfly Labs selling these devices? Why not rent a warehouse, fill it with miners, and make infinity bitcoins?</p>
<p>The answer is two-fold. First, BFL required a great deal of capital in order to design and manufacture the ASICs that power its boxes and then to assemble the miners themselves. This capital was provided in no small part by pre-selling the miners; hanging onto them to do some BTC mining with them is sketchy at best and at worst illegal. Plus, there are practical considerations: a giant BTC warehouse adds overhead costs, and I can't even begin to take a guess at the bookkeeping implications of warehousing capital like that.</p>
<p>However, the second reason is far more practical: bitcoins, for all their current value, are still speculative. A large amount of US dollars is a large amount of US dollars no matter which way you cut it. It can be readily exchanged for goods and services. Bitcoins themselves don't necessarily hold value, and it's difficult to exchange them in large quantities for an equivalent amount of dollars. So selling Bitcoin miners for dollars guarantees a certain number of dollars; investing capital into mining a truly large number of bitcoins might work well as a short-term hedge, but the value of the trade is utterly impossible to predict.</p>
<p>This, I suppose, is part of the nature of high-risk investments. But in this case, Butterfly Labs can simply charge whatever it wants for its gear in order to make whatever margin it deems is sufficient. Why bet on the future of a relatively new virtual currency that may go up or down when you can simply get a bunch of real US dollars?</p>
</blockquote>

CC BY-SA 3.0
2013-07-09T04:51:28.973Z
Good point well made Vijay I would credit your answer if I had enough reputation
Bill
CC BY-SA 3.0
2013-07-09T04:14:09.360Z
2013-07-09T04:14:09.360Z
2020-06-16T11:10:03.350Z
Vijay Boyapati
<p>Why do bitcoin mining companies sell hardware and make ASICS if the hardware they are selling makes them money? Surely they would hold onto the profitable hardware and sell it when it's less profitable?</p>

<p>Does this actually happen?</p>

CC BY-SA 3.0
2013-07-09T10:08:50.763Z
they need to guarantee a profit, and cant risk going under due to negative market movements.
Loourr
CC BY-SA 3.0
2013-07-09T13:42:22.810Z
Why does somebody sell tomatoes instead eating them?
powtac
CC BY-SA 3.0
2013-07-09T22:42:34.363Z
because when you eat a tomato it does not generate you money whereas utilizing money generating hardware does.
Bill
<mining-profitability><mining-hardware><asic>
Why do bitcoin mining companies sell hardware if the hardware they are selling makes them money?
Bill
# Why do bitcoin mining companies sell hardware if the hardware they are selling makes them money?

(Asked by: username_0 on 2013-07-09)

Why do bitcoin mining companies sell hardware and make ASICS if the hardware they are selling makes them money? Surely they would hold onto the profitable hardware and sell it when it's less profitable?

Does this actually happen?

**Tags:** mining-profitability, mining-hardware, asic

> **Comments:**
> **username_1**: they need to guarantee a profit, and cant risk going under due to negative market movements.  
> **username_2**: Why does somebody sell tomatoes instead eating them?  
> **username_0**: because when you eat a tomato it does not generate you money whereas utilizing money generating hardware does.  

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## 1 answers

### Answer by username_3 on 2013-07-09. Score: 6

<http://arstechnica.com/gadgets/2013/06/how-a-total-n00b-mined-700-in-bitcoins/3/>

> In fact, if it's so profitable, why on earth is Butterfly Labs selling these devices? Why not rent a warehouse, fill it with miners, and make infinity bitcoins?
>
> The answer is two-fold. First, BFL required a great deal of capital in order to design and manufacture the ASICs that power its boxes and then to assemble the miners themselves. This capital was provided in no small part by pre-selling the miners; hanging onto them to do some BTC mining with them is sketchy at best and at worst illegal. Plus, there are practical considerations: a giant BTC warehouse adds overhead costs, and I can't even begin to take a guess at the bookkeeping implications of warehousing capital like that.
>
> However, the second reason is far more practical: bitcoins, for all their current value, are still speculative. A large amount of US dollars is a large amount of US dollars no matter which way you cut it. It can be readily exchanged for goods and services. Bitcoins themselves don't necessarily hold value, and it's difficult to exchange them in large quantities for an equivalent amount of dollars. So selling Bitcoin miners for dollars guarantees a certain number of dollars; investing capital into mining a truly large number of bitcoins might work well as a short-term hedge, but the value of the trade is utterly impossible to predict.
>
> This, I suppose, is part of the nature of high-risk investments. But in this case, Butterfly Labs can simply charge whatever it wants for its gear in order to make whatever margin it deems is sufficient. Why bet on the future of a relatively new virtual currency that may go up or down when you can simply get a bunch of real US dollars?

> **Comments:**
> **username_0**: Good point well made Vijay I would credit your answer if I had enough reputation  

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