Bitcoin Forum

Hello there fellow bitcoin miner. I'll try to be as specific and simple as possible.

In 6 days I will have a meeting with an entrepreneur mentor that will tutor and guide me how to finance my company.
And it's not any company, it's a mining company in which I will invest 8000$. The plan is to buy four butterflylabs 60 GH/s Bitcoin Miner and let them mine a steady salary for me.

Now, I checked the math a million times to and check for fails and holes but I can't find any. (This is where you come in, I want hard criticism)

This is how it goes: [DIF=difficulty factor, Ex=Exchange Rate $/B]
Possibility 1; {DIF=6,6*10^6, EX=113, 240Gh/s}~62000$/month
Possibility 2; {DIF=1,07*10^8, EX=113, 240Gh/s}~6200$/month
Possibility 3; {DIF=6,6*10^8, EX=113, 240Gh/s}~620$/month
Possibility 4; {DIF=1,07*10^8, EX=10, 240Gh/s}~342$/month
Possibility 5; EX=<10 Buy bitcoins

Answer 1; Everything stays the same, I know it will not happen.
Answer 2; The DIF increases with 1600%. Dreams can come true!
Answer 3; The DIF increases  with 10000%. This is still really good payment.
Answer 4; The DIF Increases with 1600% but the price drops to 10$. Hay, it pays rent.
answer 5; If this happens. I'll buy bitcoins for 3000$ and wait for it to rise.

In any scenario, the investment will still be paid back within 2 Years and that's a good investment.

The reason behind 1600% increase came from the this https://bitcointalk.org/index.php?topic=89258.msg984426#msg984426 and then I just doubled it to be on the safe side. Kind of.

Now, where are the flaws. What is the worst thing could?

Something could happen to mtgox (or any other major bitcoin catastrophe) and the bottom of the entire market could fall out. The price of a BTC could go to 0 if a security flaw is found, thus rendering your entire investment kaput.

Yes, you can't lose more than what you invested (8k USD).

But lets say BTC value falls down to 0. Then you just buy 3000 bitcoin and wait for a rise. Cause I feel like BTC will never really lose it's value forever, sooner or later it will rise again. Because lets face it. bitcoin has made it really easy for people to launder money and buy drugs. So there's always going to be some interests in it.

I mean could bitcoin actually become totally useless, how would that happen?

Yes of course, a security breach can destroy the whole system.
https://bitcoin-central.net/ has been down for 3 days ...

Some failure can erase all the BTC in the world.
Anyway, BTC is not going to last forever, sooner or later it will disappear.

I'd say your biggest risk is getting those machines delivered to actually start mining. You could invest $8,000 and not see any machines until next January. I'd buy from the company that has a track record of delivering but those are so backlogged for good reason.

Did you include electricity cost? Its not hard to imagine BFL Singles will be unprofitable in 1 year in europe where electricity cost is high

Actually yes I have also considered and its not that high were I live. It's something like 0.05-0.1$ kw/h and I have considered the fact that the BFL singles is unreliable on shipping. So I have decided to invest 2500$ in them and rest in computers. That way I can mine other coins like TRC, FRC, LTC with the computers and use the BFL product when it comes out on BTC. So far I check my budget and it looks good, in an estimate that the bitcoins worth doesn't go below 60$(Like in the last crasch) and a difficulty increases with maximum of 1000% this year.

The entrepreneur mentor really loved it and right now I'm looking into making a more formal and long term business plan. I just hope that they'll like it enough to get me a loan.

Here's why it's a bad idea:

You have no idea when BFL will actually deliver, or if they ever will.

I could be mistaking, but isn't it important to know what your hashrate is in comparison to the total network? A block is found every 10 minutes right? So what are the chances that you or your pool is going to find that block? In my opinion that depends on the strenght of your pool in combination with your strength relative to the pool. So what I'm trying to say; once BFL starts shipping (and Avalon has a 4th and 5th release) you are going to make as much with a BFL as you do with a 7970 now..

Then again, I'm relatively new to the scene so I might be mistaking :D

HTH

Yeah bust since it's suppose to be a company I'm going to take a new loan as soon as the first one is paid off and use that loan to buy in more units for hashrate. So the company evolve with the difficulty. Sooner or later when the company is big enought. I'll expand into new things like, Own mining pool, own exchange site etc..