Beware of ASIC pre-orders

The ongoing arms race in the development of Application-Specific Integrated Circuits (ASICs) has not just led to mining at an increasing scale. It has also created a conflict of interest for most ASIC-manufacturers, and sparked a large number of ASIC-related scams.

Conflict of interest

With a strong demand for more efficient ASIC-miners, ASIC-manufacturers are rapidly improving the machines they can deliver. As more efficiency means more profitability, manufacturers face the situation where they are normally the first party to own the most profitable mining equipment. This immediately creates a conflict of interest, as they will be tempted to use the miners for themselves first. This can be done until the point where selling them becomes more profitable than continuing to mine. This would leave the final client with an expensive miner that does not live up to its full potential once finally received.

Scammers

Moreover, miners are normally pre-ordered requiring a deposit in advance. Delivery dates are often not more than estimates. Getting a refund for cancelling a pre-order can be challenging if possible at all, and compensation in the case of a delay is rare. Last but not least, clients are regularly offered upgrades to their pre-ordered products – which could be an attempt by the manufacturer to buy time to mine. Altogether, it makes many of these manufacturers look like scammers, even though in many cases a product is delivered eventually. Others will try to imitate this process in an attempt to get a lot of preorder money before running off with it. If you pay thousands of dollars for an ASIC miner that is not even able to earn itself back once received, you are likely to feel scammed regardless.

Avoiding scams

The best way to avoid the previous would be to buy a miner from a company with a fair track record that has their offered product in stock. It might look less profitable on paper, but there is a good chance you will not be receiving your pre-ordered miner until its profitability has dropped to about the same level.

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