Bitcoin Forum

Hi guys!

I am currently in the process of planning a bitcoin mining operation. I have a start-up budget of roughly 150k USD. What do you recommend? Im not going with ANY pre-order start-up company as until such time that they prove to distribute product, Im not interested in sinking FIAT into any non established operation.

Essentially If you had 150k to spend on bitcoin machines what would you do?

Thanks. 

I would wait.
(i'm extremely serious).

I really appreciate the input. When can we expect most of the setups to be yielding products and will the difficulty at that point be too high to make the money back?

Unfortunately, the model that has been put forward by BFL (i.e. pre-orders paid in full) seem to be the modus operandi for mining hardware manufacturers.
If you wait until its safe, other more reckless than you will be taking risks... Some of them will get burned and some will be "modestly" rewarded.

I think probably the safest approach would be to hold and invest in the upcoming mining operators like 100TH or BTCGarden.  There will at least be a market for these shares so you can liquidate if needed.

I back up Cedivad's statement, and hopefully in enough time before the shark's circling you start to mass PM you!

Stay well clear until you have researched the area thoroughly and have seen how September/October pans out. Unless you can get tied to a real engineering firm, forget it, completely. 150k is a lot of money, but not a lot in ASIC development, and almost certainly futile in the current ASIC development race.

It may give you a fighting chance as a reseller, or a hosting investment op, once a benchmark is in place for Bitcoin ASIC tech.

Not now. At all. You will get burned!

And well it has to be if you develop customer ASICs and don't have millions to hand!

Hold, anyone PM'ing you about making "tons of BTC" or "doubling your investment" are trying to weasel you out of your money.

Please dont mistake this thread for ignorance on how this community works in terms of pre-orders. This isn't to say that some of the operations in play are not legit. But I will certainly not line the pockets of anyone until such time they have a proven working model in hand. This is just for a startup mining operation. If it is successful I will be ramping up to a much larger scale. I need to validate the project first before going forward. Waiting for sept/oct may prove to be a far better idea. But will 150k still yield any profits with the difficulty at that time?

Again, I really appreciate the input.

If no profits can be had after September due to difficulty, you are better off not starting the operation until that changes.

Any offer that make you via PM. Make it published in the forum. Avoid defraud you. Expect to September is good advice.
Another option buy BTC for under $ 100 and wait for it to rise.

With that large of an investment, I would be talking directly to AsicMiner, Terrahash, BFL, and KncMiner to see what they could do and perhaps arrange a deal where funds are held in escrow with very specific target delivery dates (i.e. deliver by August or else the deal is off, and no payment prior to delivery).

Companies may be willing to bend over backwards for a 150k order, and if they don't, I agree with others that waiting is probably your best option.

150k If a company is able to skip the delivery order. That does not tell you what if a customer comes back 300k to do the same.

True, but if funds are held in escrow contingent upon delivery, where is the risk to the OP? Either they deliver in August, or they don't and she still has her money and can re-evaluate the situation in September.

Opportunity cost?

Essentially this will function to test our infrastructure and location. I will be looking to spend a lot more once this proves successful.

When can I expect delivery from the following? I understand its all speculation.

KNCminer - Sept
Bitfury - ?
BFL - June 2018
Terrahash - ?

Thank you.

150k is nothing in this business right now. This is the main point. It was a lot of money 6 months ago, but what is it now? 10 avalon farting?

You can't have a direct contract with Avalon or BFL for this amount.

It's a market designed to be as competitive as possible and I only see revenue streams selling your hardware to others. The problem is that we don't have the hardware, and we are late in the game to develop ours. How late? It it worth trying? I often asked that to myself.

+1

But do not buy at any price. Maximum $ 100

I wouldn't at all, not for the short term. Lot's of idiots have ignored repeated advice not to use debt to finance mining.

Do you realise what this means when companies start to deliver and the hashrate is a lot greater?

A lot of coins being sold to recoup ROI, and cover debt.

This equals a likely fall in BTC price, unless mainstream adoption causes more parties to buy.

I would be bricking myself right now if I'd got into debt for ASIC development and pre-orders.

Of course this scenario may not happen like this, but market pricing is dependant on sellers vs. buyers, and blatantly there will be a sudden rush of sellers.

There is nothing courageous about using debt in this situation, or more than one can afford to lose. Only a total idiot would be buying ASIC pre-orders with borrowed money!

$100 is a very psychological number, a milestone, it's the reason we are bouncing around it now.

1) Invest into CPU/GPU/FPGA mining is not an option anymore, you will not earn you invested money back.

2) Only option left is to buy ASIC. There are few companies that produce them, but:
    - Avalon (http://launch.avalon-asics.com/). There are rumors that batch 4 of their devices is coming for sell. This might be profitable, it depends on price they will ask for ASICs). But, they fail to ship ordered batch 2 and 3 devices for few months now. I would invest in batch #4 only after confirmations here on forum that batch #2 and #3 devices are delivered.
    - Butterfly Labs (http://www.butterflylabs.com/). Only few people recently have received orders from last year. And it is unknown when everybody else will receive them. Anyway, it will take months for BFL to ship current orders after they will start, and few more months to process new orders. If you will order ASICs from them now - you can expect to wait at least 4 months before delivery. Good news is that even in this case you should get some profit, but expect at least another 4 months for roi.
    - KNCminer (https://www.kncminer.com/). They seems to be legit, but no working device prototype is shown yet. Good news is that they promise to start delivering products in autumn, with instant delivery of new orders.
    - ASICminer. They sell ASICs with instant delivery, but roi for them is smth like a year in a best case, do not mess with this.
    - Custom created mining devices from chips (Avalon and BFL produce and sell chips with btc calculation logic, but electronic boards are not sold for them). It's kinda tricky. Companies with certified engineers spend months trying to create working boards that will work with these chips. And some people promise to do the same in their garage. I can't believe they can do this so easily. Anyway, you can search this forum for topics where people sell complete clones of Avalon devices and order, I think these devices will be worth it.
    - everything else is a scam, if will not be proven else.

So, I would do smth like this:
1) Buy all custom created Avalon copies from this forum
2) Invest half of money left into Butterfly Labs (50%)
3) Wait for Avalon actions. If Avalon will ship devices from batches #2 and #3, and will start to sell batch #4 - I would invest half of money left (25%)
4) Wait for KNCminer actions. If they will start to ship existing orders, with minimal delay before shipping new orders - I would invest all money thet left (25%)

Agreed. Each bitcoin was only worth 10$ at the beginning of the year, so it's not impossible for it to go back to $10 in the near term which would destroy the profitability of ASIC pre-orders paid for in USD. The $100 BTC is the main reason for the insane ASIC ROI at the moment.

And what about bitfury? Arent they expected to deliver in July?

There is no difference in the logic behind investing $15,000 or $150,000 in bitcoin.

I would invest 1/4 in BTC.

I would spend 1/4 on a mining stock (e.g. ASICminer).

I would spend 1/4 on the most promising pre-order (probably currently KNCminer unless you live in Russia-then consider Bitfury/Metabank).

I would keep 1/4 in fiat and wait for the next best new opportunity to appear (bitgarden? labcoins?).

I don't think he is looking to gamble (relatively) on preorders. I wouldn't with that amount of money.

I certainly wouldn't go anywhere near BTCGarden/Aiwill/BTCMan, the guy is a xenophobic ars*hole.

New players with better offerings will be joining the party in July.  ;)

My advice... a little bit of patients might uncover a lot more options.

No disrespect to XCrowd, we'll have to see what they have on offer, but last time they surfaced they were making some wild claims, which may well be proven, but had snatched a logo from XCrowd.com (not affiliated to them) and were using it as their own, which set alarm bells off in my mind at the time...site is totally different now though, with an original logo (presumably).

Also the owner checked out as a Muslim Lady's fashion store owner based in Birmingham, UK (definitely not a tech hub by any means), with no relevant tech experience to be seen, though he said he had Silicon Valley contacts...

Quote from their page: "Expected delivery date is early August, but not later that October".
Batch #1 preorder is closed, and there is no info about batch #2.
They promised to deliver full device specification in early June. There is almost July already, but no specifications provided. Only thing they can demonstrate are chip prototypes, which they have promised to ship to anybody interested. But I have not heard any feedback about them yet. Basically, they now are developing electronic board for these chips, software, run into overheat problems, etc. Like a BFL last year. So, in half a year they probably will provide something.
Its a something like Russian KNCminer, but with unknown info about next batch order date and problems with delivery (they do not ship outside Russia, you have to find somebody who will pass your order to them and ship it to you). Now I would just stick with KNC.

These concerns have already been addressed on the thread linked below.

https://bitcointalk.org/index.php?topic=192519.0

FYI it's my clothing line, but that doesn't matter anyways since I'm no longer involved with it.

Extraordinary claims requires extraordinary evidence and we'd be happy to
provide it once we're ready. Not that we plan to take on customers pre-order funds.

Cool buddy, as I said, no disrespect, keen to see a UK player on board, but the forum need transparency as to who they are dealing with. You made some grand claims before...

If I was bothered I'd ask what these grand claims were since we haven't claimed anything yet. When we do; we'll be more than happy to assist in reasonable due diligence inquiries and invite others who aren't vested in KNC and etc to meet us at the trade shows we attend.

Care to provide some information to those who are interested?

For now it seems I will be holding onto my lovely FIAT until such time someone can convince me that they have a good product.

Thank you for all the feedback, really appreciate it.

I was polite, but I'll take that as a snipe.

So what if I have a vested interest in KnC?! I've been encouraging wherever else is legitimate, and have a 100% success rate at calling out scams so far.

I'm not saying you are a scam, yet. I am saying I'd genuinely like to see a UK entrant 'Abdi Mahamud'.

As for your grand claims, you're a retail clothing re-seller (apparently now an ex-retail clothing re-seller) from Birmingham that, in your own words have promised;

- 5-6 months when working on 28nm ASIC designs and 3d packaging ip cores.

- Sub $1, 000 products will be in the same range of hashing power as Avalon and BFL current releases.

- Products that will return a ROI in 30-45 days depending on the network.

By all means deflect any interest I have in seeing a genuinely competitive ASIC development environment proven to exist without scamming other members, by alleging my sole allegiance is to that of one of the few credible entrants. Which is total bullshit.

I rate Bitfury, I admire Yifu, I'm happy to see BFL customers finally start to receive goods. Your above claims are wild to say the least unless you have a real engineering firm working with you on this. I don't see where you experience has forged those connections. Prove that to us if you want investment, and don't snub me from a trade show because I'm keen to see the scams with ASICs laid to rest!

You were happy to speak with me a couple of months backs when I expressed interest. You appeared on the scene around the same time as asicrigs.com, asic-technologies.com, and Cedartec. All of which I busted. If you've got nothing to hide, I'll happily write a positive report to the contrary, just like I did when I attended KnC's open day as long as the evidence stacks up. I certainly did not to that for KnC, wasn't paid by KnC, it was part if my iterative process in deciding to proceed with a vested interest, and I wanted to give something back to the Bitcointalk forum after becoming excited with what they had to offer, and likewise would be the same for you, as I live in the UK. Besides which, my attention to detail has kinda gone down pretty well with the community here...

Scams are still very much prevalent, the following appears to be asicrigs.com all over again. They were also UK based;  https://bitcointalk.org/index.php?topic=241380.0

Hi!

You can join us if you want to make a new ASIC. We are currently developing one and would accept investors.

PM us if you're interested.

Regards!

The power of ASICs over GPUs is the Elec. that the GPUs use. Find a crazy stupid, almost free source of Elec. and video cards could more than hold their own against ASICs and could be in service right now. Think outside the box.

Quite a bit underhand there. By the way, that wasn't meant as a snipe but that got under your skin for some reason.

Working on anything below 65nm isn't a garage operation and we worked that out quite a long time ago. Most the R&D is currently being outsourced to a design partner with close ties to the foundry we'll be using.

All that matters is time to market and price and with the added value of a lack of a risky pre-order deposit we haven't got much to worry about.

Personally my belief, and I've said this several times, but as it requires some start-up capital to afford a developer. Be creative and think of a way to offer products and services (does not have to be mining related) that will accept Bitcoins as payment.

That is still very much virgin territory with respect to mainstream acceptance, get that first mover advantage in place and help increase and stabilise Bitcoins value as a currency. You could potentially profit wayy more than becoming another ASIC player.

Look at what other websites exist online that except soley fiat and look for opportunities and improvements in having such ideas embrace crypticurrencies...

How did you get $150k without having any idea what you were going to do with it?  Pay me some % as a consultant and I'll give you some advice.

Who was underhand, me, or you? I know I wasn't. I just stated facts. You just alluded to me having a less than innocent intention, which is crap, and totally underhand. Follow my posting history. I started out on this forum busting scams. There's nothing to bust with KnC, so don't cry foul play on my part there. Me visiting them is just my commitment to due diligence on my part. My sharing of that info, is nothing more than I attended and others have a right to know what went down. Nothing untoward there, they have talent, fact. I'd sure as hell visit you before investing, because you're appearing on this scene as a nobody. If you're not a scam, there is nothing to worry about, and you'll undoubtedly do your best to provide evidence to the contrary. Just be aware that people are jaded with BS, and no one knows who you are, or your intentions. You've yet to meet Phinneaus Gage and have him scrutinise you...

28nm, in a few months, with sub $1,000 products is a bold claim from Industry experts, let alone a rag trader from Birmingham. Why do you have an issue with me questioning that?

If you think that's someone being anything less than cautious, I suggest you be less sensitive, because any proposal you follow through here will be torn to pieces and every minor aspect questioned. Your partners better be comfortable with that as well, as people are going to want to know everything you care to share that is not sensitive competitively speaking.

Good luck, genuinely I want to see more European representation, and being British as well am waiting with anticipation and an open mind...

I genuinely wasn't hinting at anything. I think the amount of hours you've spent on this forum is clouding your judgement. We'll welcome the scrutiny once we start marketing anything. The reason why I've invested in our own chip development is simply because none of the previous suppliers were up to the standards we usually expect in the world outside of Bitcoin.

In that case I sincerely look forward to seeing what you have to offer and apologise for any crossed wiring. Best of luck, again.

And I'll give you some for free, which will be worth every penny you pay for it.

By autumn, 150K will likely buy you, retail off the rack, between 10 and 15 Thps.  By then (think Avalon, KnC, bitfury coming online in force, and BFL at their rate) the network could easily be as high as 750 to 1000 Thps.  You would then be, at that rate, somewhere around (1/10)% of the network, or somewhere around 4 (rounded) BTC per day.

At that constant rate, and under $100 BTC xRate, you would be looking at around 50 weeks for gross revenue to cover capital investment.  Alternatively, you could back-of-envelope pro forma 1000 Thps steady state for the network, and thus, use that 4 BTC as a "constant" rate.

Money for Nothing and Chicks for Free is in it's final few weeks of run.  Make sure you and/or your investors understand bitcoin mining is rapidly morphing, best-case, into an attractive-to-some, reasonable-risk-adjusted return business.    

This.

The guy knows what he's talking about, he have run a big mining op.

If I had 150k, I would work on designing a highly efficient FPGA.  Then maybe turn it into an ASIC chip with FPGA to ASIC Conversion.


OR I would do DIY ASIC like Avalon.  Chips are ~100k USD, hundreds of PCB run in thousands range.

You should use them to cooperate with some university researchers to get the next generation quantum mining chips out  :)

Or you just buy bitcoin with those money, average down

 I would suggest to stay away from machines with that kind of money . The difficulty just rises up all the time and your ROI would be very long whereas you can have a start-up that takes bitcoin as a payment or even basically selling and buying is more than enough.

 When you buy 100k worth of bitcoins at 98 and sell it 102 , thats enough profit to keep going on that path :D

I tend to disagree with both of the bolded statements.  With regards to the first one, ~3600 coins a day is ~3600 coins a day and it will be ~3600 coins a day until the next BH.  There is already a percentage of mined coins that are turned in to fiat quickly from miners so technically all that can happen is that percentage increases by a variable/unknown amount.  I think you are over valuing the miners contribution to the price of BTC.  11+ million coins, a 1+ billion USD market cap should be able to absorb any "extra" coins being turned into fiat quite easily with little to no affect on the price IMO.

With regards to the second one we are only hovering around the $100 range because that is the value currently set by the market and the market demands.  If a shit ton of coins hit the market somehow the price will drop, if supply slows down the price will go up.  Remember we flirted (or did we actually hit $300 usd) which is much more "psychological" than $100, remember not everyone has been around since $3.00 or $10.00 coins.

if i had 150k to invest i'd maybe buy 1 or 2 in hand avalons and buy btc with the rest and then buy AM shares in auction on this forum n btct...but that is just me...I'm crazy like that :D

but good luck to you and i hope you don't lose any money :)

Maybe contact Yifu and see if you can do a big block order like horserider did.

That run up is all the more interesting because it coincided with the banking crisis in Cyprus, where there was a clear, present, and, ultimately, not totally unfounded threat to large foreign deposits (a large plurality of which were Russian, of reported questionable origins).

If it did happen that there were large BTC purchases as flight from "hard" currencies (I know, "fiat," but until they no longer trade trillions of USD per day in the open markets, they are real currencies), or as flight from such bank accounts, it would have been one of the first instances of true, large demand for BTC rather than flow from  speculative scalp trading of the xRate.

And that, again, if it happened, speaks well for the value of BTC if and when adoption and acceptance spreads to a critical mass.