Bitcoin Forum

Hello all,

If I were to offer a 1 year Bitcoin mining contract for $3.00 - $3.24 per GH/s for Pre-Order, would you consider it to be a good deal or a great deal?

Contract period: January 1, 2014 to December 31, 2014.
Fully hosted solution in a Tier III data center.
Purchased in blocks of 250 GH/s for $810 each or purchased in blocks of 5 TH/s for $15,000 each (additional blocks of 250 GH/s for $750 each).
Bi-weekly payouts (with no transaction fees) and all payouts will be in BTCs, no exceptions.
Transparent payout calculations based on your percentage of the total Bitcoin network's hash rate (calculated every 2016 blocks - in sync with difficulty changes).
Secured website to monitor all of your payments and manage your Bitcoin payment addresses.
No other fees.

If I were to offer such a deal, I would do the following:
Accept BTC as the preferred payment method.
Accept Credit Cards through PayPal or Amazon.
Accept Dwolla.
Provide refunds minus any transaction fees.
Guarantee that you will have at least as much BTCs in returns as you invested (I will make for the shortfall if necessary). If you paid in fiat currency, your equivalent amount of BTCs will be locked in when your payment was processed using the following rate table (https://bitpay.com/bitcoin-exchange-rates). Who else is going to make such a guarantee without the fear of losing BTCs.

Some background info:
I have 15 years of experience as a Systems Administrator, Systems Integrator, and a Network Architect. (I hold many certifications)
Some background in Electrical/Electronics Engineering.
Started mining Bitcoin in late 2009 on my Virtex-6 LX240T FPGA development board.

You lost me there.

I lasted a bit longer.  :)

It would be great deal if it started mining a year ago. ::)

I like your sense of humor. Where is my Dorothy to say to me: "you had me at hello".

I would offer 25k for 10TH...

I would need to see proof of concept and verifiable proof of the business plan.

The January start is essential to hold this price.

Cheers,

It's about 3x better than BFL's deal.

And if you factor in when they'll start mining and assume you start January 1st, it's about 30x better.

Regardless of how much better it is than the 'competition' and I use that word very loosely, in the end all the purchaser wants is a good chance at a decent ROI.

At 10 USD per TH like BFL is looking to charge in Jan/Feb 2014 there is little or no chance to every break even.

Cheers...

I completely agree that it all comes down to making a decent return on your investment. For me, I would never purchase a Bitcoin mining hardware or contract just to have a chance of breaking even. But from what I have seen, it does not seem to stop a lot of people from making such purchases.

However, no one can truly guarantee a return on your investment in fiat currency when it comes to Bitcoin. But you can guarantee a return in BTCs, it is just a simple matter of how many BTCs you have in reserve  just in case. If someone is mining for Bitcoins with the sole purpose of exchanging them for fiat currency right away, then there are no guarantees and your milage will vary.

Also from what I have seen, the best seat in the house right now belongs to ASIC manufactures for Bitcoin mining hardware, they are the only ones guaranteed to make a decent ROI. I am very tempted to join them.

That is very true...

The idea here is mine more BTC then spent on the mining setup. Cashing in will come later once the BTC has appreciated a bit.

That being said, I am interested as previously stated.

Cheers...

Awesome business strategy.  Sign me up.  Also since you are guaranteeing BTC why even take payments.  I'll sign up and if the contract earns more then the guarantee just send that to me and if it earns less well you guaranteed it so we'll just be even.  Right?

My eyes glazed over once I read the words 'pre-order'.

10 TH/s for a Bitcoin mining contract commencing January 1, 2014 for a year in a the Tier III data center for $25K?

It is not going to happen anytime soon and here is why: KnCMiner charges $3,960 per year for their Jupiter miner hosting plus you must purchase their Jupiter miner separately, and there are some people who consider it to be a good deal. However, there is no reason for them to drop their hosting prices by much as long as many people consider it to be a good deal.

You are correct except for the question of why even take payments, and here is your answer:

If I go at it alone, my purchasing power is limited to about 2 PH/s of processing power for Jan. 2014, and doing so will account for just about all of my BTC holdings. It is never a wise decision to empty ones bank account for a high risk investment. But if I were to raise half of the funds from Pre-Orders and put in the other half, I will still get a volume discount for purchasing hardware and cut my up-front risks by half. Also, my ROI will be cut by half which is more than acceptable to me.

So in a nutshell, it is all about better risk management. Half of the funds that I would have otherwise spent up-front to receive volume pricing, will become my reserve to cover the shortfall for others if it ever came to that. I would rather go 12 rounds in the boxing match and take my changes than stand the risk of getting knocked out in the first round.

If I see some poof of concept 30k is doable.

Cheers...

Hmm let's see.  You have enough btc to buy hardware but you want others to "invest" with you so you can use their btc to buy hardware.  Then you'll keep your btc "in reserve" to cover the "investors" aka "suckers" with your "guarantee".  I got it.  Oh and then you got another member possibly a sock here throwing around big numbers to make it all sound super duper.  Thread reserved for future entertainment value. 

So I am the 'sock' in this scenario?

http://kevinmurcko.com

I am a real person...

And I would not go forward in ANY venture without proof of concept and some type of guarantee that I am getting what I paid for. However there is little reason to spout off on a public forum about my intentions. If the venture comes to fruition my interest is on record and at that point I can do the needed due diligence and decide to move ahead or not.

Cheers...

If you think there's nothing wrong with OP saying give me x amount of money and I guarantee to generate a number greater then x with no risk for you then I wish you luck with your "business".

I take his post as I would any forum post...

I am 'interested' in the project if I can verify it's existence and am comfortable with his business plan.

Right now it is a forum post, nothing more, and anyone can write anything they want on a public forum.

He asked IF we, as forum users, would be interested in such an offer, and I would be, provided I can vet the offer, and not via some lame 'vetted by X forum member' either.

Real world business means real world vetting.

If it is BS then I won't be investing.

Cheers...

Guarantee that you will have at least as much BTCs in returns as you invested

That would be insane to offer. Just insane.
Unless its a scam.

Guaranteed return. No risk.

Massive red flag. No such investment exists.

The word investment IMPLIES risk, economics 101.

Even with a guarantee there is risk, whether it's time related or default related.

Again for me, if the price is right, and the business plan is sound, and the plan comes to fruition...then I am interested.

What's wrong with this forum software? Even after waiting for several hours I keep receiving the same error message when I attempt to make a reply to a post, I need to wait for 360 seconds. Did this software even pass QA? Anyway, moving forward with my reply.

It is a guarantee against loss not profit in terms of BTCs, completely different meaning. For example: you exchange $1000 USD for 10 BTC today, and a year from now, you exchange 15 BTC for $750 USD. You acquired more BTCs but you actually suffered a loss, so it is not risk free. The exchange rate between BTC and USD is very volatile, this is your risk. You know what it is now and not a year from now.

I have purchased many different types of insurance coverages over the years that protected me against a loss. And without such converges, there are many things that I would not have done.

I am not making such an offering at this time. But, I am in the position to make such an offering if there will be enough customers to move forward with my volume purchase. I already have the volume purchase pricing for hardware and the data center pricing to host it. And the following two things must also happen:
Gauge market demand - without market demand the plan is DOA.
Establish credibility - if there is market demand but if I cannot establish an acceptable level of credibility, the plan is DOA.

For now, I am simply gauging interest, and establishing credibility is going to be the difficult part. I am up for the challenge when it comes to that step.

Watch these YouTube videos if you would like to be entertained. I enjoyed watching them so much that I saved the links:

http://www.youtube.com/watch?v=S3xhyj-e0Kk

http://www.youtube.com/watch?v=6qSj24_E_lU

http://www.youtube.com/watch?v=wgr3qEjbstM

Now, that's what I call entertainment.

Enjoy.

So I assume OP would have no objections putting investors backup guarantee coins safely in escrow for safe keeping?

Yes with the following requirements:

1), It must be a muli-signature escrow. The seller, the buyer, and the escrow manager each hold a key to the buyer's reserves -  any 2 out of 3 keys can release funds.

2). The escrow manger must reside in the USA.

In that case I wish you good luck. Investment not for me as it involves pre-ordering. But best of luck anyway.

With this new awesome news lets review the business plan again.  I the buyer send BTC to you and you send it to escrow.  Lets just simplify that step as it seems unnecessary.  I send BTC direct to escrow.  You proceed to order gear to start mining in January and send me the mined BTC.  If I don't get back more BTC then what's in escrow I call up the escrow and get the extra BTC from there.  Does that sound about right?  I wonder if we shouldn't simplify even further.  I sign up and you just send me any extra BTC you will mine next year since the whole escrow is redundant because I am guaranteed to get more BTC then I put into it anyways.  Right?

Sounds good to me. I'll sign up.  :D

You are correct and your logic still holds. Let us work out an example:

You sign up with zero BTC.

I calculate your percentage of the Bitcoin network's hashing rate as (0 x HashRate) = 0

At the end of the year, you will have zero BTC and you will be no worse of than when you started.

$3 per Gh/s is an excellent price for a mining contract, IMHO.

Edit: if this comes out as the equivalent of lending money at an unknown interest rate, from as low as 0% as up to whatever BTC worth can be made from the mining contract, then it may be a decent deal for ME. It's better than an investment fund. To each, his own.

I just want that a way is provided to be 100% sure that I get at least my money back.

Well may be or not a Scam, I feel is someone not considering all the costs, For january the best deal looks Cointerra for about u$s 3 per GH.

But to operate the miner 1 year costs another $3.

So the lowest possible cost today is like u$s 6 for January. BFL probably will shot Feb or March and will be a total loss.

You cant check many offers more "tangible" some will start mining in October if you still found some available contracts.

http://www.topminingcontracts.com

TMC

Yeah Id love to play satoshi dice with such a guarantee too.. Guess what, its not gonna happen unless santaclaus goes in to hosted mining business (or bitcoin gambling).

You are new...

You are correct, but is not as bad as you make it seem. I already have all of the infrastructure equipment (firewalls, switches, servers, etc) because of my line of work

Power contract for the data center = $0.036 kWh
Power Usage Effectiveness (PUE) = 1.5
Device = 2 TH/s (2,000 GH/s)

DaysPerMonth = 30.4
HoursPerDay = 24
KiloWattHour = $0.036
DevicePowerUsage = 1.2 kW
PUE = 1.5

(30.4) x (24) x (0.036) x (1.2) x (1.5) = $47.28 per device per month.

 $47.28 is your base monthly cost per device, and you host 8 devices (9.6 kW) per rack = $378.24 per rack = ($0.024 per GH/s)

The data center charges me $933 per rack (at wholesale) per month. As you can see, this is excellent wholesale pricing for data center space and power.

So now let us look at the bigger picture for 1 year. To host 1 PH/s @ 1.2 kW per device, you need 63 racks = ($933 x 63 x 12) = $705,348.

I sale 1,000,000 GH/s for $3.00 per GH/s = $3,000,000 - $705,348 = $2,294,652

 $2,294,652 go towards the purchase of hardware at volume pricing plus I pay for the difference out of pocket.


I am betting that I will make enough in transaction fees for a net a profit of 5% ($150,000) or less over 12 months. Also I will have 1 PH/s of equipment at the end of the year and that is when I will start to make a decent profit. I already sold 100 TH/s to another early adopter last week with no BTC guarantees, 90% to go.

And the cooling? Cooling may double your electricity cost.

All the best

TMC

Cooling is part of the Power Usage Effectiveness (PUE).

Thank You.

OP, ignore the snobs and thread crappers. $3 is an excellent price per Gh/s, and being a junior member does not mean anything for credibility. Yes, going forward with this there must be assurances, but _anyone_ must do such before I throw money at their direction.

However, $810 is too steep for entry level

You can have such a guarantee in some countries

Sorry buy you need to review all the plan.

TMC

Sorry but you need to understand PUE
http://en.wikipedia.org/wiki/Power_usage_effectiveness
Hes right on track, except I would charge a lot less to host than a data center :P

I founded and sold 2 ISPs in my life one with a quite big hosting and colocation data center.

If he plan to use Cointerra devices is 1200 W +/- 20% each, the to cool down in a "regular" data center 2440 W per unit with the electricity cost Supercomputing is saying, what is not possible in most States and in just few countries he will need much more money, Is not the same to host 2 or 3 machines that create excessive heat and power usage in a Data Center, that is lost in all the facility, you have 95% customers using less than expected energy and cooling and one 5% over the limit at the end you dont care, If the same guy wish 50 racks all changes, and you review all after seeing your premium customers complaints about the Room temperature and after receiving the electricity bill, as a Data Center owner you call the guy and say "hey joe this is not working for us".

Bitcoin mining require a different Data Center, one where cooling is very cheap and probably uses the outside cool air in some way and outside air needs to be cool, and a lot of electricity, Electricity in bitcoin mining is like the Bandwidth in a regular data center.

We can discuss it if you wish but really Supercomputer has a nice idea but he is not considering many things in the costs area and not only in Data Center, he is doing the number like if a miner is a standalone server that you leave it there and works alone, and the equipment is almost experimental you require to manage the volume of machines he wishes 2 guys 24/7 on site, with knowledge of bitcoin mining, so you need 8 bitcoin mining admins, plus lets say one chief, how he is going to pay that?

The plan is a nice idea but needs a lot of improvement, total cost per machine will be over u$s 250 near $400 most probable.

TMC

You are forgetting something which is very important, dissipating 629 kW of power will be handled differently by various data centers. If you are running a dinosaur of a data center which wasn't designed with high efficiency in mind, you will pay for it. I choose to host my equipment in a modern day data center with an efficient design.

There is one thing that you cannot deny in life, different people are good at different things. It is a fact of life.

Sounds good go for it and prove everyone wrong. i will agree though with the previous post that your costs at that level will be high, 629kW is a lot of power and alot of cooling. bit mining is a HOT game. Dose your data center understand this? do they have experience of running BitCoin Mining Rigs?

i personally do this for a hobby and something to keep me occupied , i also support this new style of doing business & god knows i hate the fucking EVIL banks.
More Details needed i dont think this is possible with current tech the margins are too close for something to go wrong, what insurance will you give if you get a weeks worth of DDoS ? or bitcoins fall massively in price?
can i cancel a contract at any point ? too many factors for me to invest in this . i dont have faith in other people im afraid

Does this exist?

if you need to cut costs, just change the contract period to 9 months.

i will buy this if this is available.

No, sorry. However, I am working to put up a 5 megawatt (mostly hydro and wind powered) green facility by the end of 2014. I will even have much better, hosting only, deals then. My contribution to the Bitcoin community will be to provide ridiculously inexpensive hosting solutions. Who would have imagined that I would be trading at $1,100 USD per Bitcoin in 2013.

i wouldn't even spend 1 ฿.  not that i have that much anyway  :'(

I got a contract for 4.5 /ghs  hopefully its not a scam :/