Bitcoin Forum

Let's get the formalities out of the way...

I am a newbie on here...I have just bought components for my first mining rig so I DO NOT know everything there is to know about mining.

This idea requires trust that I am not going to rip you off.

I do however have a business idea and a very big advantage over a vast majority of you for mining.  I legally and legitimately do not have to pay for electricity or heating and cooling and I am not in my parent's basement.

I am 100% open to suggestions and at this point and just looking for input.

Setting the stage: I have a wealthy family member that owns several large (100k sq/ft +) office buildings in Arkansas.  The people that lease these buildings are not on separate utility meters.  As per their lease contract, they pay a portion of the utilities based on their portion of leased space, ie a lessee with 50% of the building would be half the utility bill.  There are small 152-~400 sq/ft sections of these buildings that are kept unleased by the owner.  As per their contract the utility usage in these 'administrative spaces' is rolled into the other tenants space.  The AC is kept at 72-73 in the summer and 68 in the winter for the whole building and is not adjustable for individual leased spaces.  He is happy to have me use these spaces for whatever ridiculous thing I want for them as long as I do not damage the building in any way.  I explained to him the idea of bitcoin mining and he could care less about me using a lot of electricity.  There are 7 such spaces that I can use at the moment. 

The Basic Premise: You send me your mining rigs I plug them in and provide them with an internet connection.  I use an electrical meter to charge you a kwh price much less than anyone in the US can get, say .05 kwh or basically half the national average.  I make money selling you the electricity at a cut rate, you make extra money not having to pay for the electricity.  Of course this would most apply to someone that uses several hundred if not $1000+ a month in electrical cost before this is even worth it.  Each room would have a maximum current draw limited by the electrical feed to the panel so I could not shove infinity systems into each room in addition to thermal concerns since the space is not ridiculously huge so the amount of rigs per space is limited.

Cons and ways to address them:
P:You have to trust me with your hardware.
A: I can form an LLC and have itemized documentation on what I receive so you would have some legal recourse.  Obviously this does not protect you 100%.

P: Digital and Physical Security
A: The computers could obviously be managed remotely by you and it would be your responsibility to make sure that they are secure from outside digital intruders.  The buildings are as physically secure as a typical office building, however if ninjas decide to raid the place...I would be keeping insurance for property but it would not compensate you for downtime in the event of a ninja raid.

P: I have a life and your hardware is unstable
A: I thought I could manage the seven different locations in this manner:
Each location would get 1 day of the week assigned to it which would coincide with me being on site physically for a period of time.  I would be able to do anything that needed to be physically done, like push power buttons, replace or add GPUs etc.  With that being said if you cant remotely manage your rig and it would require me to do something to it physically on an OFF DAY then I would have to charge something to do it.  The spaces are all local to me but my time is worth something.  That means that if you have a crazy overclocked unstable POS rig this idea is probably not for you if I would have to deal with it in a physical manner often

P: Your mining rig looks like my 1YO put it together.
A: A massive nest of wires on a Walmart cart with a blower fan, while entirely functional is not very becoming to a well managed business.  I propose a standardized open box that would have plans available free online and cheap to build (<$25) that could either be built by you or built by me (not for free) and shipped to you to transfer your hardware onto so we could have a well organized and easy to manage hardware.

Thoughts, suggestions etc.!???

There was another proposition like this a few months ago. Yours looks much better (at least you thought of a lot more stuff than he did back then). Do you have any idea of the shipping costs?

Before you ship anything to this person, make sure that you do a full background check on him, have relevant ID sent to you and make sure that he has a valid historical online presence.

Carry on...

Here is what I figured.  If you are spending $1000 a month @ .10 kwh and you could halve that to $500 per month at .05 kwh, I would think that you could ship every rig, if they were modularized as I had mentioned on a standard palette for at most $300 via freight assuming you were on the east or west coast since I am centrally located in Arkansas.  I routinely have palettes delivered to my warehouse from LA for less than $300.00.  So you would be dollar positive at months end.

I would be happy to meet with people in person and talk with them in an un-anonymous way.  I also co-own a CNC machine shop and own independently a granite countertop fabrication company located in Little Rock.

I don't have all the ins and outs set up yet so no one should even consider sending me anything at this point.  I just wanted there to be open discussion about it.  I figured if I got some people interested it would take 30 days or so for me to get everything set up to receive rigs, like getting ATT over for internet etc.

I wasn't implying that you were a scammer by the way, but I just wanted to slap some of the blind-faith out of some of the people on these forums. It is painful watching so many people lose money.

But I do have a question: 50% of the mining rigs electricity costs are going to be paid for by the tenants of the building. Will they be aware of your venture? And if not, isn't it paramount to scamming them?

Questions:

- Are you sure these spaces can handle the extra heat load? I am running 20.5Gh in 800sqft and it requires a full 3 tons of AC blowing *directly* over the rack to keep the computers cool.

- What is your strategy for monitoring servers, environmental conditions and networking? Do these rooms have connections to the internet?

I have talked to data centers and they will only let you do so many kilowatts per sqft without extra cooling equipment. This is a big can of worms unless you are trained in this kind of thing or are willing to learn the hard way.

I only say this from direct experience.

This doesn't sound right.  The electricity isn't "free", the expenses are just shifted onto somebody else - the tenants of this building, as you seem to have described it.  So it is somewhat unsustainable.  It's kind of a theft.  It's one thing to do that for your personal mining rig, yet another to do it as a money-making business for a whole zoo full of 'em.

I have been able to push my power bill up near $1000 with just four mining rigs.  Granted that includes my house power and all my A/C etc, but the mining rigs were at least half of that.  You can't just put a zillion mining rigs somewhere and not have anybody notice the bill going up.

This would sound better if it said, "I live right next to a hydroelectric dam and power is cheap because it's pretty much unlimited here, costs us next to nothing, and any power not used around here is just wasted".

As per the lessee's contracts they are aware that the 'administrative space' that my family member has in each building is part of the utility pool that he is NOT required to pay into.  So yes they ARE AWARE if they read their contract.  With that being said the electrical bills for the building are astronomical due mainly heating and cooling the 100k+ sq/ft (one is over 400,000 sq/ft), our mining rigs in such a small space which of course will hit its thermal and electrical limit before anything thus I wouldn't expect to get maybe more than 10 loaded rigs per building...which is a drop in the bucket % wise.

In short, the owner of the building is OK with it, the other tenants are OK with as per their contract and our total electrical usage per building will not even hit 1% of total usage.

Heat will be an issue, I am open to suggestions.  As stated earlier the whole building is controlled centrally so these rooms I have access to, I can't crank the AC way down.

I have not paid for it yet, each room can have access to the internet either through a building wide shared connection or a discrete connection most likely through ATT DSL.

So its ok then. They've signed a contract, therefore it is ok to burden other businesses with potentially astronomical power costs during a recession, just as long as you get your cut? Are you sure how much power mining rigs consume? And have you factored in the power costs of the extra air conditioning and fans needed?

You have a really dirty business idea which scams unknowing victims into covering a large percentage of the power costs. You should get into contact with Bruce. He'll know how to make your scam work.

Except that that would be false, power from that dam can go anywhere in the grid (US, Canada, northern parts of Mexico)

I do think that it is OK to do what I am talking about. 

If you were the owner of another one the companies leasing space would I notice or care about a 1% increase in utility costs on a monthly basis?

As an owner of a skyscraper would it be morally wrong to lease out some of the space to a datacenter on FSG (full service gross) terms because they would use more power than the law firm next door?

What about as the building owner changing the temperature 1 degree one way or the other for the whole building?

Ok then, I'll reply to the points one by one.

Just as someone might not care if they notice someone has taken $1 out of their wallet, knowing there is $99 left in there. What you are proposing is morally the same and is still theft.

I'm sure you'll find that in a professional skyscraper, each unit would be individually metered.

That temperature change is benefited by the entire building. Your mining rigs will cause the air conditioning to work even harder to maintain their current temperature.

I know bitcoins are saturated with libertarians, but seriously, how can you not see that what you are proposing is nothing short of theft?

I give up.

[Edit] Why would anyone trust you with their mining rigs if you think it is ok to scam innocent businesses out of electricity? Or are there various degrees of honesty these days? What, you'll only steal 1% of the rigs you receive?

Whether this is contractually supportable depends on what assurances they where given at the time they signed it. If they where told. "Don't worry half the space is empty anyway" or "They are just typical offices" They can avoid the material alterations or non-disclosures of the true terms of the contract. There are concepts such as "unjust enrichment" and common law duties of good faith and fair dealing. Unless they are an energy intensive operation themselves they will notice the higher cost .

Secondly and most importantly , you business model is based on reselling electricity and having a 3rd party pay for it. A better business model might be forgetting the energy basis for computing cost especially when you know a 3rd party is paying for the service you are providing but receiving no additional consideration in return. You will lose in a jury trial.

Now if you just split profits or sub-lease space at least there wouldn't be the appearance of fraud. You have to add value. You can't just piggyback on someone else's lease agreement as a business model.

Only in America would some try and pass off an obvious fraud as legitimate without blinking. The kleptocracy is alive and well.

This sounds like co-lo mining operation. Couldnt we just send to a co-lo center? Im sure they could cut us a nice deal on power

Why not just run a long extension cord through the hallway and into one of the occupied offices?  It's basically the same thing.

Because, assuming the breaker didn't trip after the third or fourth rig, the extension cord would quickly smoke and catch fire if it had to power the whole operation! =)

not if there's a pre-existing written contract that says under this tenancy '$1 may be removed from your wallet'.

this is why we have written contracts.

(sorry i haven't read the rest of the thread thoroughly)

Sorry I don't trust you I'm not going to donate you my shares in BHP Billiton and Rio Tinto, sorry.