Hello Noruka,

A 20,000 USD mining rig could be assembled off 35 AntMiner S1 systems, each of which consumes 360W of electricity. All of them together consume 12,600W of electricity, which at 15¢ per KW/h means you’re paying $1,360 in electricity. My numbers are not off.

Greetings

To answer most of the questions since I wrote my last message:

The price of electricity in Venezuela is indeed 0.3 ¢ of USD per KW/h. This is in part because of energy subidies and in part because of heavy devaluation of the local currency with an artificial pegging of the USD to the VEF. The official cost of electricity would be around 0.25 ¢ of USD per KW/h. Nobody in their sane mind would get local currency at the official rate, about ten times lower than the free (black) market rate.

Duties are very high, but they are calculated using the low artifical magic exchange rate that the government has established. Therefore you end up really paying about 2% in duties.

Greetings.

Cost of electricity in Venezuela is effectively close to 0.003 $ per KW/h. That is 0.3 ¢.

As soon as I put my hardware there, I will send pictures of the place. At launch there will be six Avalon Batch 2, two BFL Mini Rigs, and twenty AntMiner S1 systems. I would be willing to do escrow. I hope to attract mostly miners that are at the edge of profitability in the USA and EU. Southern hemisphere electricity, hosting and Internet tends to be cheaper, so there’s not so much pressure for them to move their hardware to a more cost-effective jurisdiction.

It must be noted that if your hardware has already been “spent” and you’re at the edge of profitability, the risk of sending your equipment to Venezuela is a lot lower.

I don’t have mining credentials, whatever that means. 

Blackouts won’t damage miners. Power surges damage miners. There have been two brownouts in Caracas during 2014. If it becomes too much of an issue, gas is extremely cheap too. I would buy a generator. Power surges and voltage variations will be dealt with using appropriate equipment.

Miners have a limited lifetime because of the increase in difficulty. Operating older unprofitable miners in Venezuela can bring new life to them.

I have my own mining hardware, and the facility is being prepared to receive this hardware over the next couple of weeks. I will be buying additional end-of-life older ASIC hardware myself to plug it there, but there is enough space, cooling and energy in the building to host more hardware than what I am bringing in.

When all is said and done, if the Bitcoin price stagnates, and the power efficiency of chips stop increasing dramatically, mining power will stabilize at a point where it is barely profitable at EU/USA electricity prices. Having cheap electricity is advantageous.

My own operating costs are three times less by sending this hardware there. This makes the difference between breaking even and making a profit on an ASIC investment. If I add other miner’s hardware, my own operating costs would lower even more. Scale is good.

The reason data centers are in developed countries is because they are cooler, and they have good Internet links. Venezuela has little undersea fiber connecting it to the rest of the world, therefore bandwidth and latency are a problem for most services. Also much of the country is steady at 27-35°C throughout the whole year. My facility is in at an altitude of 1500m over sea level near Caracas, so there’s better electricity and Internet connection than in rural areas, and temperatures are much lower than at sea level (16-22°C). But it is not in the city center, so the space itself is cheap and there’s land to continue building more space for mining as required.

For the trust issue, and escrow, that can be done. We definitely need to discuss that further. Is there anyone who has older ASIC hardware that is nearing the edge of profitbility?

If your 20,000 USD rig consumes 6,000 W of electricity, it would cost you only 860 USD per month total to host it with me. That’s probably what you pay right now only in electricity, excluding other hosting costs. I will reduce the fee by 25% after the first two months when the operation is up and running, and it’s very likely I will reduce fees even further as time goes by. I can further reduce fees significantly because the electricity in Venezuela is virtually free. Your rig can remain profitable even when it cannot pay for electricity where you live.

I am building a Bitcoin mining data center in Venezuela, a country with very cheap electricity. I am planning on offering full hosting at first for the equivalent of 0.20 USD per KW/h to cover initial costs, then reducing the fee to 0.15 USD per KW/h, or even lower, including space, Internet, electricity, and cooling. No setup costs. You send the equipment, and we plug it in and set it hashing. I would like to gauge interest in such an arrangement.

Naturally there are some risks. As many of you already know, Venezuela is a country with a hybrid regime, terrible property rights, violent crime, civil unrest, very high inflation, censorship, and electricity brown-outs that are a bit more frequent than they should (1-2 times per month for a couple of hours).

Nonetheless, cheap electricity is what a miner needs, not necessarily a very stable supply. If electricity falters too often, I will install power generators since petrol is extremely cheap in Venezuela as well.

Would you put your miners in Venezuela if I were to offer such a service?

It is important to setup a network of cash exchanges and improve liquidity locally. I am already talking to other exchangers locally to get that done. They will not be able to stop us bitcoiners.

The TOS states that they can do that with sixty days notice, and that’s what they did.

Ulster Bank ROI sent me a letter stating that I have sixty days to find myself another bank. They have closed my account, as well as my wife’s. I’m not going to open a new Irish bank account. I’m going to attempt to live with Bitcoin and cash exchanges only from now on.

The bank didn’t state a reason for my account being closed. I suspect it is because my only source of income seems to be monthly transfers from certain Slovenian company called Bitstamp.

Testnet3 faucet available at: http://faucet.xeno-genesis.com/.

Old address testnet.mojocoin.com is no longer available.

Sorry for the inconvenience.

I'm certainly not new to Bitcoin, but I'm new to this forum.

I'm glad to notify that the bank has released the funds back to me, and my account is fully unlocked.

A few days ago I completed a transaction over LocalBitcoins.com to a buyer called bitspeeds (currently blocked). The buyer sent me the funds through a SEPA transfer, and I released the bitcoins to him once the money was visible in my account.

My bank called me yesterday to inform that the sender of the funds wanted to have them returned. I refused. When I was back at my computer I communicated with LocalBitcoins.com to let them know that the buyer was a scammer. I also changed the review that I originally posted, giving him a bad reputation and accusing him to be a scammer.

This morning my bank account was frozen, and LocalBitcoins.com had responded with an email stating that the person was connecting from Russia, and probably used a stolen back account to pay me, and that I'd probably get my account frozen, which was the case.

I went to my bank and told everything to the agent. I got my account unfrozen, but the funds are now marked as being in dispute. I'm going to fight this one. I did not get my computer hacked or my bank account hijacked, and I definitely do not want to be the one that loses in this occasion.

Bank transfers aren't hard enough to deal with bitcoins. Only cash and metal should be used. Scammers are using hijacked bank accounts to buy bitcoins, then the funds are being forcefully returned to sender once the bank realizes the transfer came from a phishing victim. Since practically everyone can be a phishing victim, transfers should not be trusted.

It's reasonable to expect that the RNG will work fine. You entrust cryptography to cryptography experts. It's an abstraction that usually works well, and if you mess with it even for bening purposes, you may end up breaking it.

See what happened to OpenSSH in Debian a few years ago for an example on why usually writing your own crypto or even messing with existing crypto code is a bad idea.

I emailed to a journalist from The Register how I discovered that the Android PRNG affected BitcoinJ applications in Android. Here's a copy of the email I sent to the journalist:

I discovered this flaw and made it known to Mike Hearn, Andreas Schildbach and Ben Reeves. It's been quite a week.

haimcn, was your wallet generated using the Android Blockchain.info app or was it generated from a regular PC using the web browser interface to Blockchain.info?

My friend has an Android phone with Andreas Schildbach Android Wallet in it. Last night it sent all the bitcoins in the phone to that same Bitcoin address. We don't understand how it got hacked yet. We're investigating. This is the transaction:

https://blockchain.info/tx/211c135e58dc55bcce4c71dc02eae2dffc5a55387c29e8144bf1cd1e8878e52e

rojtfnbkDWaEou1mTWBMXQwWkqE3seCRX

I got my units delivered today. All of them hash like cheetahs.