Works out to roughly $0.24 per kWh, which is fairly expensive even with all management / hosting fees included.

What's the purpose of disclosing who he is (especially as he's never tried to hide his identity)? James hasn't been a part of Havelock since the Panama Fund took it over from him last year...

Aw jeez, not one of these again. I swear, this is something like the fourth or fifth time a "super-amazing-mining-company" has attempted to create an offering on Havelock, even if this one is selling hardware as well.


Since when is noting (without a source, I might add) previous year's earnings considered a business strategy?

This is sort of the standard prospectus we've seen time and time again. Hype, incredibly over-exaggerated financials, lack of any meaningful information, and (my favorite) the tiny section where they disclaim the investors' fraction of the company they just funded. I see in this case you've reserved BTC3,520 ($2.28M) for yourself employee issuance.

I also like the hardware descriptions on page 12(?...seriously, no page numbers):

Where * denotes that you exclude all important variables in Bitcoin mining, completely and drastically skewing the reality of the situation. It gave me quite a chuckle

Anyway, no need to go any further at this point. Creating a direct-from-distributor store / in-house miner combo is a fairly nice idea, but whoever helped you develop this offering has absolutely no grasp on what it means to develop a Bitcoin security. There's no sensible reason why this venture should be funded.

Given reinvestment has been halted, there are no known plans for growth.

For a fund of this size, Cryptx may have had the capital, contacts, and space for growth, but their management and communication skills are...embarrassing...to say the least.

This is false. The only way to turn a profit is to generate revenue that more than covers expenses and equipment depreciation. This can be done on just about any hardware under the right circumstances, not necessarily the latest, greatest, mining machine.


Greed will skew the reality of any situation. Unless you're working with cheap (or free) energy costs, you'll find mining isn't nearly as profitable as you think it is.


True, ASICs developed for Bitcoin will also be able to mine other coins based on the same protocol (SHA-256). So far as I've been aware, none of these coins will ever come close to taking Bitcoin's place (or any Scrypt-based coin for that matter).

I used SurveyMonkey all the time for shareholder voting, and yes, the final results are only available to the issuer (though the Pro version may have more options). To get around this, I put all responses into a Google doc, obfuscated the email addresses, and shared the results. People who voted could still figure out their own email and verify their answer is accurately noted.

Seems in this case we just get to take Cryptx's word for it...which is obviously unacceptable.

That's a misconception, and it's more likely the opposite is true. If the Bitcoin price was 1/10th as much as it is right now, chances are we wouldn't see network growth nearly as rapid due to associated energy costs. A higher BTC/Fiat value gives miners a greater incentive to do what they do. Manufacturers don't care what the network difficulty or BTC/Fiat price is so long as they can meet demand.

As far as Litecoin goes, there are two major drawbacks to how it's viewed, which tie into one another:
1) It's primarily an arbitrage medium. Many Scrypt miners convert whatever they've made back into Bitcoin. For decent sized farms like ScryptX that sell everything they make back into BTC, that may contribute to a declining altcoin value.
2) Litecoin isn't nearly as widely accepted as Bitcoin. Until Litecoin can be used in everyday transactions, or at least garner some positive media attention, the exchange rate will continue to fluctuate to what's largely a niche crowd.

Quick note, total dividends for KCIM ended up being 0.001849 (though I do see your note on the bottom about being last updated on the 25th). Also, like HMF we split 100:1 as well, so the dividends were the equivalent of BTC0.1849 on an IPO of BTC1.0.

Not saying it's anything to be proud of, but I did want to make sure the chart was factual. Maybe an additional column noting any splits?

Anyway, this is a good chart to have. A comprehensive list of all successes and (overwhelming) failures on Havelock (or other exchanges) should be a good demonstration to anyone looking to invest their coins. Bitcoin-based securities are risky, to put it lightly. I'm not sure many people fully grasp that concept yet.

Closing Statements:

It’s been a time consuming and turbulent two years for this operation, but the time has come for us to close down. There were a number of factors contributing to our decline, from vast hardware delays to a rapidly rising exchange rate.

The game we play is a vicious one, and mining power will continue to concentrate among those with the resources to maintain it. Other farms have fallen before us, and more will fall after. It’s unfortunate I was unable to make this work, costing us more than we’d like to think about.

I’ve thought over our past actions and mistakes, trying to find out where we could have done better. The reality is, there wasn’t much on this front. We had hosting space provisioned, we had energy costs covered, and there wasn’t anything I could do about when we received any ordered hardware. The single largest oversight on my end was a gross underestimation on the growth of the network during 2013, leading to waiting on our orders from Butterfly Labs instead of continuing to purchase hardware from other vendors early on. This lies with me.

On another note, I recognize and appreciate the praises for my communication skills. It’s my hope that other managers will follow in my example.

As all remaining funds have been distributed as a final dividend, I’ve contacted Havelock to pull our listing on July 1st, and once that’s down I will also be closing this thread. If anyone is interested in a collaborative discussion, project advice, or even general inquiries, feel free to contact me via PM or email. I’m more than happy to talk about anything on your mind.

Best,
-Andrew

Hello everyone!

All equipment has been sold and so far the new owners are happy with their purchases, which is something I strive for. All cash purchases are visible from our public 'reinvestment' address. Some of you may have noticed that our outstanding shares have decreased as well. This is the result of some holders trading their shares for equipment.


Maaayyyybeeeee...



Sorry, I promise I have a sense of humor sometimes. 

0.00018 is close, but too low since you don't know how much is left in the KCIM reserves. 

Last I just quickly tallied, the dividend comes in at ~0.00025 per share (or thereabout). I converted our stockpiled Namecoins, which helped to give us a tiny boost as well. I'll have the final number tomorrow (after accounting for transfer fees...which obviously aren't much) when I combine all funds into the my Havelock manager's account for payout.

With the final dividend going out tomorrow morning, the plan at this point is to completely cease operations by the 30th (delisting that day, or shortly after depending on Havelock). I'll post my closing statements on the 29th.

Hi All,

Trading will once again be halted this afternoon at 3PM EDT. We'll be going over some final updates, payment schedules, closing statements after then.

True, but that's only if the water sits around long enough to get hot. Assuming the pump and radiator are working correctly and efficiently, there should a steady stream of cold water to quickly whisk away heat from several chips in a series. If it works for double/triple SLI and Crossfire setups, it should work for some BFL chips. Then again this is BFL we're talking about, so I doubt they've planned that far ahead.

I suppose it depends on how much energy these chips will consume (and give off as heat). If they meet their power specs (they won't), then it would be reasonable. CoinTerra, for example, has their water blocks set up in a parallel configuration (last I looked), which may be the result of each chip consuming ~500W.

It's hard to say. The goal is to reinvest at the same (or greater) pace as difficulty; if difficulty increases by 10%, then increase your hashrate by 10% or more. Now the question becomes "what does it cost to increase by 10%?"...to which the answer will vary based on access to hardware, cost of that hardware, and payment methods (BTC or Fiat).

Keeping it simple, let's say PETA generates BTC1.0 of revenue during 2016 blocks. If difficulty goes up 10%, it may cost PETA BTC0.5 in hardware purchases to increase their hashrate by the same amount to maintain that revenue stream of BTC1.0. 50% profit, 50% reinvestment.

That's also why I wanted to emphasize my previous point about active communication and voting. The PETA operators have the most comprehensive understanding of their current assets, expenses, and sources for hardware...which should make them the only people who can properly calculate reinvestment rates. If reinvesting 90% of their revenue into new hardware keeps them floating, then by all means do it. But if voters think that 50% is better for the company (when it's not), then you slowly start entering the downward spiral of never being able to catch up to difficulty increases because the funding isn't there.


EDIT:

Patience. I'm not on all day every day lol

EDIT 2:
I'd also like to point out that Puppet is correct, regardless of what others would like to believe. So long as commercially available hardware isn't able to achieve a positive return on its own (meaning spend BTC1 on hardware, mine back BTC1.1 for example), then no amount of reinvestment will help. Spending 100% of revenue on unprofitable miners won't magically make them profitable.

I don't mean to encroach on the question posed to Puppet, but I can answer this from experience.

Yes, developing and maintaining a mining operation is a exactly like a dog chasing its tail. It's a cycle of finding better hardware to temporarily outpace difficulty...which ultimately increases the difficulty...which leads you back to finding more efficient / large quantities of hardware. It doesn't matter how large or how small the farm is, this same cycle will have an effect on all participants in one capacity or another.

This cycle is so vicious that there will be a period of time when only miners with unlimited, free energy will profit.

Heck, it hasn't even been two years since ASICs have been released and we're already pushing into "4th Generation Chips" territory. The product lifecycle we're working with is insane!

While technically true, this is still a misdirected statement.

Investors who cast their votes can only base their decisions off of available information, including speculation. If 100 people are left to their own calculations, diligence, and intuition and cast a vote for one of three choices (35/65, 50/50, 65/35), they will vote for what they think makes sense and not necessarily in the best interest of the organization. Is that their fault? No. They may not have all the facts and they may not know the first thing about PETA's operations behind the scenes,...nor will they until the fund operators step up to actively (and properly) manage investor relations.

It's the job of the PETA operators to explain, in detail, the cause and effect of each option during a vote. They need to provide their view on each option and why one makes more sense than another. If you're opening your company to changes based a public vote, the more you can communicate with your investors, the better.

For every security that has passed through here, how is it there are only a handful of us that take communication seriously?

Guys, the dividend is scheduled for today. My guess is it'll go through sometime in the afternoon, which is what happens to me whenever I schedule them.

Quick off topic note here, but I figured I should address it:
KCIM has not been profitable, that's why we're closing. We don't have the resources to continually expand to meet our minimum hashing requirements.

As for B.MINE / B.SELL, those are derivatives and not tied to any actual hardware.

I second this.

They obviously already have a very solid business in place, or so their prospectus leads me to believe...so why create an offering in the first place? From what we've seen in the past, usually there's some monstrous amount of total shares (e.g. 111.6K "A" units out of 1,000,000 released to the public, giving them an instant value of BTC28,000). This is speculation of course, but I am a genuinely curious.

Recent Update:

To all interested parties,

We currently have several miners up for sale right now:
-- 2 x CoinTerra TerraMiner IVs [1.6TH/s, 2kW)
-- 1 x KnC Jupiter October edition, one upgraded board (~575GH/s, 560W)

One AntMiner has been sold already, and the other is on reserve. I've also had one person come forward for a CoinTerra unit, though I haven't heard back from them yet.

Anyone interested in purchasing a miner should get in touch with me either via email, forums, or IRC. I price all equipment competitively.

Ah, exactly! And just like that, you've caught a glimpse of what it's like to run a publicly funded mining farm.



This. 1000 times, this.

It's a perpetual cycle of perceived returns, ultimately leading to a loss for many people. There are very, very few people who profited quite well off of mining, mainly from the early days when ASICs first started coming out (think of the first Avalon or ASICMiner units, back when difficulty was still under 5M).

Since then it's been: Pay BTC5.0 for a miner. First month, mine BTC2.5 ..second month, mine BTC1.25 ..third month, mine BTC0.625 ...etc, etc. It's a trend that won't continue forever, sure, but until there's a plateau in hardware development we can probably expect to see a similar pattern for a while.