800,000 Avalon Bitcoin Mining ASICs Expected Over Next Month

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It appears the Avalon ASIC drought may turn into a hashing power tidal wave as reports surface that the first 20,000 out of a remaining 800,000 ASIC chips are on their way to customers. Application specific integrated circuits (ASIC) are specialized chips that perform bitcoin mining calculations. Starting in mid-April, Avalon sold bulk orders of ASIC chips in batches of 10,000, with each chip hashing at an estimated 400 MH/s overclocked. Although Avalon initially estimated a 10-week lead time after orders were placed, hundreds of thousands of chips are already two months late. Compounding the delays was a lack of clear communication from Avalon on what was causing it or when customers could expect delivery.

Avalon’s Announcements

On August 9, Avalon gave a long-awaited announcement but it was not what many were expecting – they had been receiving extortion threats in China and were not willing to discuss the matter until it was resolved. Additionally, 200,000 chips that they had tried to ship to customers were being held up in customs for undisclosed reasons. The last verified order arrived in Switzerland on July 24th, almost 1 month ago.

On August 19th, Avalon announced they were again able to begin shipments through “other routes” and that customers could expect them to ship 40-50,000 chips per day (16-20 TH/s). It is unclear from Avalon’s statement whether there was a resolution from customs or manufacturing problems, but with customers having little recourse regardless of the cause many are excited to see the ASICs start flowing again.

Estimating the Order Queue

Buried in Avalon’s August 9th announcement was the fact that 800,000 chips (totalling 320 TH/s) were in production and scheduled to be delivered within a tight time frame. With their estimate of 40-50,000 chips shipped per day, they should be able to clear the order backlog in 25 days. Given that the network is currently about 500 TH/s, being in the front or the end of this queue will make a significant impact on a miner’s expected return. Avalon announced that they will be shipping to customers in the order payments were received but customers have not gotten information regarding their place in order queue. Many of the orders were organized group purchases where customers pooled smaller orders together to reach the 10,000 chip minimum size. Community members were able to organize a rough order of purchases, but this only accounted for 240,000 of the 800,000 remaining chips.

One benefit of the publicly visible transaction system in the bitcoin block chain is all payments sent to Avalon’s bulk order address can be observed. Beyond the massive 75,780 BTC ($9,000,000) that address has received, customers are able to identify the exact time that each order is placed. Paul3 on the bitcointalk.org forums was able to draft a spreadsheet matching each group buy to the purchases publicly available at Avalon’s address. This provided significant insight to members of group purchases as to where they are in the queue (data derived from this spreadsheet is provided at the end of this article). It is also worth noting that there were at least six transactions that went to other addresses and are not included in this list. This analysis also shows approximately 800,000 chips remaining, which provides further reinforcement for the accuracy of Avalon’s chip estimate in their 8/9 announcement.

Deliveries Resume

The last reported delivery was Zefir’s Batch #1 (Order #5 on the table) on July 24th. The one month hiatus appears to be over as two group buys recently reported shipment information. On August 20, Big Time Coin reported that a DHL package (Order #6) was on it’s way and on 8/21 Zefir reported his 2nd batch (Order #7) also received a DHL number. These two orders were likely part of the 50,000 chip shipment that Avlon reported in their 8/19 announcement.

growth since june 26th

Network growth since June 26th – the original delivery date
Source: mining.thegenesisblock.com

The painful truth for many Avalon customers is that the current network hash rate is significantly higher than many anticipated when they placed their order April. The current speed of 500 TH/s is 2.9x higher than the rate when these orders were supposed to arrive at the end of June (175 TH/s) and 2x higher than the rate was on July 25 (250 TH/s) when these batches should have arrived if Avalon had continued their normal rate of production without the one-month break. Even more upset may be the customers at the end of the order queue, where the network hash rate will likely be over 900 TH/s with the addition of Avalon’s shipment alone – not including any other ASIC manufacturers that may come online.

avalon_schedule

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About the author  ⁄ Phillip Archer

5 Comments

  • Reply
    j03
    August 22, 2013

    Thank you Avalon for flooding the market with hashing power and destroying any chance for the average Joe to mine Bitcoins. Where’s the network responsibility at? Maybe Bitcoin needs some regulation in regard to mining becoming concentrated in the hands of a few? I believe a free-for-all market favors monopolies and we end up with the plutocrats trading amongst themselves, while “the rest of us” become irrelevant.

    • Reply
      joep
      August 22, 2013

      Don’t whine, move to LTC if you have a problem with bitcoin mining. You know the network is becoming more and more strong this way aren’t you? Just the same as average joe doesn’t have the tools to dig a massive gold pit mine.

    • Reply
      btc_lover
      August 23, 2013

      j03 – it’s a pretty ironic post there…

      Avalon chip group buys have spawned a whole ecosystem of sub $500 mining device options (burnin mining, klondike / stumptown / mitten mining etc); other ASIC manufacturers have stuck to $1000+ devices for the most part.

      Unfortunately, delays have destroyed a lot of value…

      I agree with the KNC / cartel issue (but I think ASICMiner “started it”)

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