Sorry to revive this, but I have been researching this and here is a general outline of the processes. I am not a lawyer. This should put many in the right direction, but it would take an idiot to neglect to fact check this.

1. Upon receiving the award, both parties are notified.

2. As the award winner you must give ample time for the other party to pay, this is usually 30 days.
   You may wish to POLITELY, inform the other party with a written letter (that you will copy, sign, and send) of their obligation to pay, or at least to try to pay.

3a. If the defaulter does not try to work with you, you will need to petition a state court to confirm your award. You will want to petition a court that has jurisdiction over the defaulter (such as the court of the state they live in).
     In case you do not know, confirmation (in this context) is the process of a judge reviewing the award and then passing a judgement on it.
     In case you do not know, petition (in this context) is a formal written document asking the court to act in some way. Such as to confirm something.
     If a judgement is passed on your award, it will be legally binding.
     If your award is approved by the courts, they will issue what is called a "fi fa", which will charge the sheriff with seizing and liquidating the assets of the defaulter.
     Confirmation of arbitration awards is generally regarded as procedural, and if everything was done correctly it should be relatively painless to pursue.

3b. Many states have a specific application you can fill out to petition the courts. They may also require additional information such as (but not limited too):
     1. Proof that the other party was informed that you would petition the courts.
     2. A copy of the Arbitration agreement.
     3. A copy of the Arbitration Award.
     4. An affidavit regarding the arbitration award (2-4 are available for a $35 fee at arb-net).
     5. A Proposed Order, telling a court what relief you are seeking.
     6. A memorandum of law, basically stating legal precedent for why the judge should confirm.
     7. Possibly others...

Since arb-net is a binding arbitration, and US law caters to arbitration willingly, you should have no problem getting a a judgement on your award, provided you follow all the steps required of you.

Also, many UN nations have ratified several treaties upholding arbitration, and you may find it easily enforceable internationally as well.

3c. Some applications to petition a court for confirmation of your award may require an additional fee as well. This will vary from state to state.

3d. Do not forget to consider time, energy, and postage when pursuing your award.

3d. You may have to physically appear before the court, but this is not always the case.

3e. Some states will allow you to claim the expenditures that you make to confirm your award, as part of your award. This may not always be the case, do be careful. You don't want to lose your award for daring to give a scam-er what they deserve.

3g. You need to get the award confirmed within a year of receiving it. If not, you may lose the ability to confirm it due to federal law.

4. It will generally take 2 -14 months before you will receive your money once the process has started.

Interesting note: A judgement is entered into the public record, which credit companies check. This process will likely harm the defaulters credit score for 5-10 years.

Other note: With the amount of time and energy involved, it may not be worth pursuing for anything less than a couple hundred dollars.

Also: You probably will not need a lawyer (you can represent your self with a petition), but you might if they try to contest it with their own representation.

Lastly: statistically most defaulters will try to accommodate once courts enter the conversation. It maybe worth pursuing, at least to a point, even if not 100%.

I hope this helps some people.

Yes, It would be nice to hear from others too. lol.

So basically newer hardware costs about $3-$10 per 1GH/s of mining power. Just the hardware. This is for most of the 28nm units that have released and are continuing to be released.

Unfortunately most of these units right now cost in the thousands of dollars which many of us cannot afford in one go.

There is also the issue of power bill, space, heat, ect...

You very well may be familiar with this, but I'm trying to be thorough.

Basically the current model would sell a 6 month contract for a 1GH/s piece of the hardware at 9⁹⁵... and the option to extend the contract for 6 months at a time for $4⁹⁵

Every day or twice a week, you would receive all the bitcoins that your hashing power created.

When your contract is up, you would be sent $3.50 worth of BTC per contract per initial 9⁹⁵ contract, essentially selling us back the hardware you bought. (The hardware we are looking at now costs 3.50 per 1 GH/s).

So for every 1 GH/s you add to your account you will pay 9⁹⁵ upfront and 6⁹⁵ in the long term.

A 6 month renewal will cost 4⁹⁵ thereafter.

The model works this way, because most offers like this make profits off of their customers. We will make a profit but very insignificant (and reasonable considering space and heat constraints). Most of the profit that will be made off of the service will be from mining with un-contracted hashing power which will vary from time to time.

This is beneficial to customers because they can get cheap hosted hashing power, where they will not be responsible for paying for hardware 2-3x over like other companies and will pay for none of it in the long term.

It is beneficial to us because without offering the service, acquiring the capital to stay ahead of the mining curve on a large scale would be more difficult.

The relationship here is mutually beneficial as it should be.

What can you make off of this?
Well that is hard to say. I've plugged the numbers in on several different calculators against several different scenarios. I have seen a margin of -1.63 to +$60.00 on one contract over the course of 6 months at the current price point assuming difficulty continues to rise almost 2.6% a day.

I encourage you to test scenarios yourself on other calculators, and also try to account for the possibility of such a contract not coming due for another 3-5 months (where difficulty may be higher by some factor greater than or less that 2.6% a day).

Any other questions or concerns?

So, I have been talking to some close friends and fellow bitcoin enthusiasts about the project, trying to enlist their help. And they have offered me some support and helped me to promote a new strategy.

We are thinking about lowering the price and starting a crowd funding campaign that is make or break for our idea. If we raise the funds we can launch, and if not then it is all over.

We are going to try and match what we raise via crowd funding, provided that the customer base is there to raise a minimal amount to begin with.

If we can get 230+ people/contracts interested I think we can launch it. Otherwise we will "go home".

If we can get that level of support then we can start the price at:

1 GH/s per 6 months.
This will of course be in the same spirit of the above points.
No fees. No charging of what you produce. No crap.
Daily/Biweekly payouts etc.
Price: 9⁹⁵

This would mean that contracts would not actually start for another 3-5 months however. Which should be taken into account. I still think it would be a good deal. But I don't want to hide that fact from people.

Finally! Starting to see some very fair prices huh? Of course, this requires more of a grassroots kind of mining operation considering the crowd funding, but I feel that suits bit-coin rather well.

With Moore's law taken into consideration, 28nm/poorly made 20nm chips are going to be king for some time right now in bitcoin hardware. While making a killing on the new asci chips may not always be feasible, some degree of profitability should remain in the long term.

Bringing hashing prices down below $10 a piece should remain relatively profitable for some time, and I expect that the price above will easily drop with the price of hardware in the long term.

Any one have questions, comments, concerns, praise, or even criticism?

Hello, I am a new member to the boards, but I am not new to them (yes, I am a former lurker) lol.

At any rate, I've noticed a lot of scam mining contracts going up, and I was curious to see if I could develop a model that... well wasn't a complete scam.
I guess with all the frenzy around bitcoin lately, mining contracts are finding that they don't have to offer a legitimate service to make a killing.

At any rate, I've gone through a handful of proposals in my research and business plan and now I have two plans I wanted to bring into scrutiny before running with it, or dropping it all together.

Option1: 
1 GH/s MINIMUM (with a prorate of the minimum hashing power 2-4 times a year)
Length of service is a minimum of 4 years. It will last longer if the contracts current hash rate can keep up with power consumption.
No reinvestment fees.
No siphoning the initial payment.
No service or maintenance fees for the first 4 years. Up to 5% thereafter.
Daily payouts.
Price: 24⁹⁹

Option2:
2 GH/s MINIMUM (with 1 prorate at 3 months)
Length of service is 6 months
No reinvestment fees.
No siphoning the initial payment.
No service or maintenance fee.
Daily Payouts
Price 24⁹⁹

As for the size of the prorate. The minimum prorate is 50% a year. But I plan to try and Prorate at 100% or more. It is mostly going to depend on the eveolution of hardware over the course of the contract.
Option 1 is a share model. So it will fluctuate in power but never fall below the minimum.

So thoughts?
Better ideas perhaps?

If I were to start offering a service like this, I feel like it should be transparent. So I am trying to expose and relay the groundwork alongside the bitcoin community.

So, two scammers walk into a bar. One says "hey, give me all your money" and the other says

"but I already have all your money!"

The moral of the story you ask? I don't know.

But I agree with the 5 post and 4 hours rule... even if I have been lurking the forums on and off for like 2 years.

Check your user name. you forgot to log into your alt account.

Sorry for double post.

Alternative price points could be:

12⁹⁹ for 1 GH/s/6 months
24⁹⁹ for 2 GH/s/6 months
54⁹⁹ for 5 GH/s/6 months

Theoretically no minimum purchase.

That is off the top of my head, I might be able to work them down if I review my model.

Does anyone else have an opinion of the renewable fixed contracts versus practically indefinite shares

If I were to offer something like that, what do you think the price should look like? reasonably speaking?

The reason why I offered the 4 year share, is because when I researched competitors to create my model, I noticed that mining contractors where charging people for the hardware and for future hardware. In extreme cases they even charge their customers for making a profit.

As I reviewed the different models it seemed to me that the best way to insure that my customers could produce a profit would be to treat them as if I was selling them a physical piece of hardware. Where the profits are their own.

1 GH/s isn't going to produce a profit for 4 years.
But because it is prorated with a minimum number of years, it is almost like I'm selling hardware that grows and comes with a 4 year warranty.

As opposed to renew contracts, customers would purchase more shares every so often if it remained profitable. I plan to increase the minimum share hashing power every 6 months at a minimum which I think will help to keep up with difficulty.

But obviously, if that's not popular I can rework the numbers and see what I can do.

Such as offer more GH/s for a short but fixed period as you seem to suggest.

Hello, my name is Shane Farrar. While I am not new to bitcoin or the forums (lurker) I have finally made an account here.

I noticed that there are a lot of places selling mining contracts that are scams, with only a few legitimate ones. I created a business plan in an attempt to offer a legitimate service for mining contracts. While there service is not up yet and things are subject to change I was hoping to get some feed back on the price point that I have come up with for the service. I wanted to put it up to scrutiny as I finalize it in the coming weeks. If it holds, I hope to start kick this thing off.

Basically I am hoping to offer shares at $24.99 each. These shares will come with:

• A MINIMUM guarenteed 1 GH/s at any given time.
  • There will be soft prorates that will increase hashing power of a share for an unspecified amount of time. And there will be hard prorates that will increase the MINIMUM atleast twice a year at an amount depending on hardware improvements.
• A minimum of 4 years service. Contracts will continue to run after 4 years if they remain profitable.
• No mandatory Reinvestment
• No hidden fees
• No skimming of the coins produced by the shares.
• No repair, power, or equipment fees for the first 4 years (up to 5% of production thereafter)

What do you guys think?

To think, I once had over 220 coins a year or two back. I spent my whole part time fast food paycheck all on coins. Because I believed BTC would get big. Then I pulled them out because I put to much stock in what others were telling me. "your an idiot, your craxy". That week I watched my paycheck turn into a years pay.

The only thing worse than losing when you put your money where your mouth is, is losing for not keeping your money where your mouth is.

I am not making the same mistake twice.

Yeah that is true. Its diffrent from what (i think) people are used to. But (i think) that is a good thing.

Yeah, I like to focus on the part where it returns power to the consumer. But it does have its draw backs. Can't say I wouldn't do what coinbase is doing now in this regard.