Ah got it. I wasn't aware of the previous disparity on BFL equipment. Still...I'm voting for Inaba to win. I want efficient equipment

That makes me curious as to what hardware would actually be necessary to run 1TH/s devices efficiently. If a RPi can handle a Single without a problem now, where would the hardware bottleneck occur if you switched to a Single SC or Mini SC on the same RPi? RAM, Processor speed, FSB, etc?

And on that note, good news on new RPi devices!

Umm..what? Let me get this straight..
Runeks is betting that the chip won't meet a certain power efficiency.
Inaba...who is employed by ButterflyLabs...disagrees.
A bet ensues, with 500:1 odds that Runeks' statement is correct?

Why the hell would you bet the person WHO WORKS FOR THE COMPANY that their OWN PRODUCT won't meet your ideals?

Am I missing something?

Pretty much. The way I originally calculated it out, the 10x comes from not only the preorders posted by BFL, but also from other ASIC ventures, and all over the course of 12 months or so. I think I'll rework my numbers at the end of October/November, assuming more data is put out to the public (such as raw numbers on preorders/sales from BFL and other ASIC companies).

Very much likely. In my analysis last month I predicted 7x increase minimum, but 10-12 is more likely.
Reference: https://docs.google.com/document/d/1L8hKZinune9Cc7tWY9Pmx8J17BOxor7QNQAV03xROOc/edit



And where can we find these calculations?

I see they've pushed back from October to November for release dates as well.

Probably right on this one.

I'll just leave this here.. http://business.ftc.gov/documents/alt051-selling-internet-prompt-delivery-rules

Precisely!! Which is why I'm wondering why admins and mods all seem to have varying definitions. To permanently label a member of the bitcoin community...to stigmatize them with the lowest of low...requires a set of conditions that can easily be applied to various situations. You can't be like "oh that guy was a dumbass, looks like he gets the Scammer tag". You have to show that the individual not only stole from someone else, but that their actions on the whole imitated that of deceit and refusal to cooperate.

Can someone who thinks differently argue their side? In all seriousness, I want to see if there's something I'm missing from the discussion that would maybe change my mind.

I'm not quite sure how people seem to be defining 'Scammer' in this thread. It seems to be by their own definition, or anything that may break a law in society.

I'll help you guys out. Scam, according to Dictionary.com, is defined as:

Now, in which of the original four scenarios does this definition fit...which of the four results in the original poster gaining more than they had before? The first 2 are nothing, they break even. The third they lose money. And the fourth is unclear.


More likely, it would be better to associate the Scammer tag with someone who's fraudulent, noted as:

In this case, you don't necessarily have to make a gain from your actions in order to receive the tag. Arguably scenarios 2, 3, and 4 could fit under this definition as the person wasn't honoring their end of the deal, intentional or not. I'm assuming this is how the majority of people are thinking during these scenarios.

If anything, the 'Scammer' tag should be changed to 'Fraudster' as the definition encompasses both the definitions noted above. Though it makes it a bit unclear as to what the person could have done to warrant the tag, it can be applied to a variety of situations. Scammer just implies that the person took money from someone else in one way or another. That's what I think when I see the tag on a user's profile.

Am I the only one that thinks this way?

But that would mean you'd need no less than 9,000BTC to make the purchases? Or are you just looking for 8,000 to get started (and judge how your investors feel) and then increase the amount later on to cover the other SC purchases and whatever else?

Other than that, mining with your initial equipment is a decent way to build up a little equity until the IPO is fully underway.



Cool beans. I'm curious to see how CHM formulates out contracts for people, so update us when it's all set!



Honestly, it's a bit hard to answer since it all depends on your finances. I have my Buybacks structured in a way that increases over time, starting with a period of 1.10BTC (initial value of the Bonds is 1.0BTC), and eventually increasing to 1.20. I can do this because I'm buying back a certain percentage of Bonds per month, and mining would cover the costs of the percentage. You'll also need to take into account Coupon Rates, which represent the interest on the Bond returned to investors. For example, my Rate starts at 1% during the months when mining isn't taking place, and this amount is by and large paid out of my own pocket. It's only until mining takes place and there is an income that I can increase the Rate.

Excellent tutorial, and well written. We should see more like this!

I'm happy to help a bit..or at least throw in my 2cents.

First, regarding the plan:
I'm assuming this is a..bond? Not quite clear, but usually for company equipment purchases Bonds are used over Stock. I don't have an issue with Mining Bonds like others do (and not because I have my own IPO out there). Mining Bonds are notoriously low risk when implemented correctly, mainly since mining is predictable (you can figure out how many BTCs you'll get at a certain difficulty, etc).

One thing the plan is missing, however, is detail. You're looking for 8,000 BTC ($100,000USD) for ASIC devices, but for how many? Where are your financials that show how purchases will be made, Buybacks/Dividends paid, timeframe on how everything will happen, etc. What if you only raise 4,000 BTC, how does your plan change?
What about electricity requirements, insurance costs, bandwidth costs, or other fixed expenses?

Regarding the contract:
Like the plan, you need detail, detail, detail. Contracts are legally bind agreements that link you to your investors. Be as detailed as you can when creating a contract. Tell us how everything will play out when I invest my 1 BTC with you. Where will that coin go? When can I start to see I return? What happens if everything fails?


These are just starter questions of course, but remember that the biggest thing you can do for investors is transparency. Let us know exactly what you want to do with our money, let us see where our money goes, and show to us that you can maintain a ridged scheduled payback (Buybacks if bonds, dividends if stock).

Oh, and..

+1 good sir...I'm starting to feel the same way, but I keep hoping things will turn around soon.


You can check out my current layout here: https://bitcointalk.org/index.php?topic=112232.0
I've got a Google Doc that leads to my finances (two pages, one of data, the other of my actual 15 month financial plan).
It's not perfect (and feedback is always appreciated), but it should still help out a bit.

[Reserved - Misc.]

[Reserved - Future Company Documentation, Links]

Risks and Compensation for Investors:
The object here is for me to pay my investors first. They put their hard earned (or mined) money with me, so the least I can do is pay them back in the most efficient manner.
Profits – Investors receive the first cut of any profits. Substantial profits as a result of the equipment will result in increased Buyback and Coupon Rate percentages.
Adjustments – The financial state of the company will be adjusted in the event that our Monetary Goal is not reached for the purchase of Five [5] BFL SC “Mini-Rigs”. Meaning, if I can’t afford 5, then I’ll buy as many as I can that still results in a stable financial sheet over the course of 15 months (October 1st, 2012 to December 31st, 2013).
Fund Failure – In the event that not enough money is raised for any purchases [or if the IPO is no longer feasible given extraordinary circumstances], I plan on buying back Notes at a rate 1.005x the Par Value (initial purchase price).
Transparency – All investors will have access to financial statements and documents regarding the progress of the Parent Company and Notes over the course of the asset’s lifetime.
Risk – All investors, whether in the actual New York Stock Exchange or the guy lending you $20, assume a certain degree of risk. As proprietor of the Notes, it is my job to try and minimize risk. As the investor, it is your job to understand the risks you take.

QA:
I freely admit that I am basing these questions off of Friedcat’s post (https://bitcointalk.org/index.php?topic=99497.0). I thought they were well written and addressed many of the questions a typical investor might have, so why not use them as well

Q: Wait, what? What’s a “Note”?
A: A Note is similar to a Bond in that they both pertain to taking on debt for company purchases. A Bond is typically used to finance a large corporate purchase, has a maturity date of over 10 years, and is typically underwritten by an investment bank.

A Note, on the other hand, has a maturity date greater than one year but less than 10, does not need to be underwritten when under $1.5 million in requested funding, and does not need to be registered by the SEC (here in the US) when designed as a Secured Promissory Note. For this reason, a Note is much more aptly applied to my fund compared to a Bond or a Bill (secured debt with a maturity date established for less than one year).


Q: Really? Another Mining Equipment Note? Why…
A:  I’m not entirely sure why there is so much resentment towards these sort of Notes. A stock is issued to help grow a company; a Note is issued to help with purchases for said company, particularly for equipment.
 
In all honestly, mining equipment is the easiest way for me to build capital for my firm. Though my revenue stream would be based around block difficulty and BTC/USD value, it will still prove to be relatively stable over the coming year or two. I wrote an analysis on the feasibility of ASIC devices after a mass switch from FPGA, difficulty spike, and reward split, and as it turns out my idea is still quite profitable.

Remember, I’m not trying to be a “one trick pony” here. The object is to build my firm. Once that is set, profits from mining will be folded over into dividends for stock holders.

Q: An investment firm, eh? What do you plan on investing in?
A: There are actually a ton of ideas flowing through my head when asked this. My favorite investments are in technology, clean energy, and property/land. I plan on creating various investment portfolios over time that deal with all of these. I plan on creating portfolios that deal with things like microfinance (through companies such as Kiva [kiva.org], or Lending Club [lendingclub.com]). You name it, if it looks like a solid long term investment, then I will consider it.

In other words, the ‘Too Long; Didn’t Read’ version is:
•   Portfolio Management
•   Venture Capital
•   Microfinance
•   Property Management

Q: Is your company actually real?
A: As a matter of fact, all of the paperwork has been filed and approved, so Korb and Co. Investments, LLC is quite real!

To that end, I am also currently abiding by all United States Federal and Vermont State laws (where I live). I have also spoken to a public finance lawyer and a business attorney regarding my plans. In short, there shouldn’t be any issue with gathering virtual funds to cover mining equipment costs. This is because A) I’m working 100% in bitcoins (which do not meet the SEC’s definition of a security under current government regulations), B) I’m creating a secured Note to finance the company equipment, and C) my total funds are under $1.5 million. As a result, I shouldn’t run into any problems with the SEC or FINRA because a Secured Note at this value does not need to be registered by the SEC or underwritten by an investment bank.

Q: What about a Securities and Exchange Commission crackdown and regulation change? How would your company and fund react?
A: In the event of a SEC crackdown, I would have a 30 day grace period (soon to be extended under the JOBS Act) to file for a Regulation A exemption. To qualify as an Investment Company, I would need to have more than just “Investments” in my company name. I would also need an investment business plan and I would need to file regulation paperwork to the SEC and to FINRA. If I don’t qualify for Regulation A, I would need to file for a Regulation D.504 exemption instead, which would allow for my existing fund to continue because of its small size.

Q: Any other company owners?
A: Nope! I’m the sole owner. This means I have the flexibility to make all of the decisions. If any investors have a particular idea or request, I’d be happy to hear them out!

Q: Why should I trust you?
A: Trust isn’t given, it’s earned. I hope that by letting my investors in on the entire business plan, letting them know who I am, and letting them see what I am doing, they’ll see that is in an actual investment. I want to establish myself as a reputable Financial Manager, and I can’t do that if I go around scamming people

Q: Are you qualified to run a fund?
A: Technically anyone can run a fund, regardless of experience. I’d like to think I’m a bit ahead of the curve because of my investing background and business familiarity.

Q: Why start your fund before ASICs are on the market and tested?
A: The object is to have funds available and preorders in before the devices are released to market. This way, we can get our Rigs and start mining earlier than others. Otherwise, the Buyback period would need to be extended to compensate for the later delivery dates.
As for whether or not the ASIC Rigs will perform as promised, I trust that they would. Butterfly Labs has proven with their FPGA devices that the specs promised were also delivered. I don’t see why they would lie about their new ASIC products. Plus, imagine the outrage when $150,000 of equipment doesn’t do what it was promised to do!

Q: Why not look toward borrowing money for this venture?
A: I’m pretty sure most lenders would laugh at me while I described making money through mining bitcoins   ..Not to mention the extensive process, fees, and APR would lead to an infeasible project…and all the process of explaining what a “Bitcoin” is!

Q: What is your fundraising target?
A: In USD, it would be around $375,000, which is equal to raising all 50,000 Notes at a market rate of $7.50. This would more than cover the cost of equipment and electricity, pay initial Coupon Rates until mining is fully underway, and have enough left over for Buybacks before the March 2013 ‘official’ buyback period.

Q: Why 50,000 Notes at 1BTC each?
A: Sort of an arbitrary number I suppose, but I knew that I wanted more than enough funds by the end of the sale to cover all costs. Not to mention I like working with Integers, so 1BTC each kept things steady.

Q: $150,000 in ASIC assets is quite substantial. How will you secure it?
A: One of the perks of working as a SysAdmin is getting to know people who work in datacenters. The equipment would be run and stored in the center for a monthly price (to be determined, since I'm still shopping around). Under most datacenters, equipment is insured against theft, fires, floods, and/or any other destruction. If anything happens, the insurance would cover the cost of replacing the equipment.

Q: So for each 1BTC I invest, what sort of return am I looking at?
A: That all depends if your Notes are bought back 100% before the initial Buyback period, or if you make it all the way to December 31st, 2013.
Minimum: You’re looking at Five [5] months of 1% coupon earnings before the Initial Buyback, plus the 1.10BTC March buyback. So that would leave you a return of 15% (1.15BTC on a 1BTC investment…remember, this isn’t compounding so the math is pretty straightforward).
Maximum: For a 15 month holding, you will have received Five [5] months of 1% coupons, Seven [7] months of 2% coupons, Two [2] months of 4% coupons, One [1] month of 6% coupons, and a final buyback of 1.20BTC. This would mean a 53% return, or 1.53BTC per 1BTC invested.
Average: For the average investor, you have a 50% chance of making between the minimum (15%) and 19% (by April 2013 or so 30,155BTCs will be bought back out of the 50,000), which is still relatively substantial. The largest investors will undoubted last the longest.

It is key to remember, however, that this is all calculated under the best circumstances. If Butterfly Labs isn’t able to deliver their products (or is substantially late like the FPGAs), then I will modify the Buyback timeframe to reflect such instances. The same goes for Coupon Rates and actual hashing rates. If the difficulty absolutely skyrockets past even my predicted ‘worst case scenario’, then the Coupon Rate and Buyback costs will reflect as much.

I will work my financials to ensure that both my investors and I are in a mutual ‘win-win’ situation. The object is for everyone to make money, especially those who invested with me. I strive to take care of them first.

Q: How can I contact you with questions?
A:  Either via my email [ASICInvestments@gmail.com], through the forum PM system, or directly on this thread.

Note Details:
With the upcoming Butterfly Labs ASIC rigs (set to be launched October 2012), Hashes / sec will begin to make the transition from GH/s to TH/s for typical miners over the next 12 months. Basic devices are set to start out at 4.5GH/s, while full mining rigs will go up to an astounding 1.5TH/s.

I'm looking to make a purchase of 5 BFL SC "Mini-Rigs" (highest end @ 1.5TH/s apiece). At the current price of $30,247USD each ($29,899 + $348 shipping), purchasing 5 rigs amounts to $151,235USD, which is a substantial goal to meet under some of the best financial circumstances.

To reach my equipment requirements, I am looking to issue 50,000 Notes, priced at 1BTC apiece with a buyback period starting at in March 2013 (Five [5] months after rigs are released to market, Three [3] after assumed arrival time) and extending to December 31st, 2013 (based on funds available).

Each Note will have a Coupon Rate of 1% per month until March 2013, during which the rate will increase to 2%, until October when it goes to 4%. In December 2013, the Rate will increase one last time to 6% to pay back the final Note holders.

The starting buyback price will be 1.10BTC for the first 6 months (March - September 2013), 1.15BTC for 3 months (September - November 2013), and 1.20BTC for the last month. This would mean a 15 month holding (October 1st, 2012 to December 31st, 2013). The largest Note Holders will receive the most ROI as their holdings will last the longest.

This is all possible as a result of 32% (calculated as the most efficient percent) of all remaining Notes being purchased back during the Buyback Period per month. For example, if all 50,000 Notes are in the market during March, then 16,000 Notes will be purchased back, followed by 10,880 during April, and so on. This will continue until December 2013 when all remain Notes will be purchased back with maximum Coupon Rates and Buyback price.

If substantial funds remain during the final 3 months of 2013, up to 75% of all profit will go to current Note holders in the form of a further increased Coupon Rate and Buyback price. The other 25% will be reinvested in the company.

Assuming the Bitcoin market stays in stable state during the next 12 months after the transition from GPU to ASIC mining and the reward split in December 2012, mining at 7.5TH/s is set to have a payback period of around 6-8 months. This includes accounting for a substantial difficulty increase (1250%), a total network hash rate of 250TH/s, and 25BTC per block. Realistically, the hash rate will start off around 150TH/s and increase to 300TH/s over 12 months.


Note Info:
Ticker Symbol: ASICMining.B
Company: ASIC Investments (under parent company Korb and Co. Investments, LLC)
Notes to be sold: 50,000
Price (ea.): 1BTC
Monetary Goal to Raise: $375,000 [Any extra funds beyond equipment needs are used for Early Buybacks]

Blog, Twitter, Forum, and Email
Email: ASICInvestments@gmail.com
Website: korbman.webs.com
Twitter: A_Korb (though admittedly I barely ever use twitter)
Blog: korbman.webs.com
Google Docs Accounting Info: https://docs.google.com/spreadsheet/ccc?key=0AhnW49twNMNbdEpXb2VyU3NGYS1VQ2dJUmVtaWlMOHc
Forum Thread: https://bitcointalk.org/index.php?topic=112232.0



Basic Contract Information:
My fund offers Note holders exposure to the underlying equipment investments for Korb and Co. Investments, LLC, herein known as the ‘Parent Company’, currently in development.

Each Note has an initial value of 1BTC, currently backed 10% by funds held by the Parent Company. Current Coupon Rate is set for 1% every last day of the month until the start of the Buyback Period (March 1st, 2013). Upon that time, the Coupon Rate will double to 2%, 4%, and eventually to 6% during the last month of Buybacks.

Initial fund offering is currently established for October 1st, 2012 at 12:00EST (GMT-5). Orders for the BFL SC "Mini-Rig" will be placed during the next two (2) months until December 31st, 2012. Funds left over from any "Rig" not purchased by January 1st, 2013 will be issued as Early Buybacks.

March 1st, 2013 starts the initial Buyback Period, where Notes will be repurchased for 1.10BTC apiece, and otherwise equivalent to a 10% return on investment (ROI) for holding the Note for Six (6) Months. Starting September 1st, 2013, Buybacks will increase to 1.15BTC, equivalent to a 15% ROI for an 11 month holding period. Lastly, starting December 1st, 2013 repurchases will be increased to 1.20BTC to reward Note Holders with a 20% ROI for a 15 Month holding.

Profit gained (up to 75%) during the Buyback Period (March 1st, 2013 - December 31st, 2013) will lead to increased Coupon Rates and Buyback prices.

The Issuer reserves the right to buy back any outstanding Notes at a price equal to 1.005 times the Initial (Par) Value before the Buyback Period begins, stated as “Early Buybacks”.

The Issuer reserves the right to extend and/or otherwise modify the Buyback period and ROI after reevaluating current market conditions, block difficulty, BFL SC "Mini-Rig" 'received' dates, and general feasibility.

The Issuer also reserves the right to modify the Coupon Rate to accurately reflect market conditions, income, and profitability. This rate can be modified higher or lower to correctly compete with other market values for similar Stocks, Bonds, and/or Notes.

In the unlikely event that Butterfly Labs is unable to fulfill their orders or is otherwise not accepting purchases, the Issuer reserves the right to Buyback any outstanding Notes at 97.5% Par Value to cover expenses and fees.

These are nonvoting Notes.
The Issuer will strive to achieve the promises made in this document to the best of their human ability.

We've moved to: https://bitcointalk.org/index.php?topic=119628.0

Hi all! I’ve been working on creating my new Fund, which was completed in August (though hasn’t been posted yet), but I figured it’s time for a brief presentation  

Also, as a result of the GLBSE fiasco, I'll be moving my fund to another exchange. At this time, I'm currently looking for suggestions on where to move it to.

In a one sentence summary, here’s the overarching idea: Establishment of my Investment Firm.

To reach this goal, I’ve split my idea into two parts.
Part 1) Creation of a Note fund to raise capital for ASIC Equipment.
Part 2) Creation of a Stock IPO to raise capital to establish my company in a small office to hold server equipment (for the pool) and possibly the mining equipment raised by the Notes. The parent company to the online moniker “ASIC Investments” is Korb and Co. Investments, LLC. This LLC is the ‘real world’ company that deals not only in bitcoins, but eventually normal investments as well (and for accounting and tax purposes).

Each requires a substantial amount of work, but the most important part here is the equipment, so I focused my work on the Notes to start. The equipment will allow for a revenue stream until my Stock release, as well as other investment opportunities outside of bitcoin, comes to fruition.

But first, a bit about me.
My name is Andrew Korb, and I currently live in South Burlington, Vermont.
I’m a 23 year old, 2011 college graduate with a Bachelor of Science in Business Administration (and soon to be working on my second degree in Computer Science, with a long term goal of Information Systems Management).

I currently work as a Systems Administrator for a small consulting company called Open Approach, Inc based in Bristol, Vermont, though I work out of Burlington (and we don’t have a website yet). We oversee the deployment and expansion of servers and networks for small businesses (under 500 employees), coupled with standard Help Desk support.

Financial Management and Investing has been a long time hobby of mine (over a decade now). During college I came up with my Investment Firm ‘Korb and Co. Investments’ with a friend of mine with the idea of someday having the capital to establish the company and make meaningful investments. Though the idea has fallen by the wayside for him, it still flourishes in me.

Creation of these funds is a way to help me realize these dreams (or at the very least, put me on the right path), so I’m 100% vested in the success of this venture. I want to do anything I can to make it a ‘Win-Win’ situation for everyone involved.

High-five to Nefario! Cool stuff, I'm interested to see how everything will play out.

I'm not disagreeing with you, I'm just saying that there aren't any specific securities laws that deal solely in cryptocurrencies. There are definitely generic laws that can be manipulated to cover any form of currency exchange.


Exactly. Securities Law of 1933 is all about pushing transparency, and 1934 is all about giving the SEC broad power to regulate the sale of any security. I'm sure any lawyer worth their salt could use these laws as a basis of attack for taking down GLBSE because it acts as a Security Exchange. The SEC seeks to regulate all types of investment schemes. The question is, is GLBSE that big of a deal to make it worth the SECs time to go after it? By and large, bitcoin is still very much a niche market with 200,000 global active users on Mt Gox (used as my basis since it's the most popular exchange, https://mtgox.com/press_release_20120831.html) trading for normal currencies. Let's say there are 1 million active users throughout the world (which isn't too far fetched I think)...that's a sexy .015% of the total population.


I partially agree with this, mainly since the JOBS Act is all about helping businesses get funding, but a business started within GLBSE and solely based on Bitcoins wouldn't be subject to the same stipulations. This is because Bitcoins aren't a recognized form of currency under the government, it isn't backed by any entity or asset, and the value of the coin is solely determined by users of the coin. The business may have the equivalent of $10 million in funding one week, but $8 million the next..or $12 million the week after that. The regulations would probably come into play when the business exchanges Bitcoins for regulated currency, but I think the IRS would be quite a bit more interested in that than the SEC.

Anyway, Securities Law is INSANELY complex.


Agreed. I came to GLBSE because I had an idea and I wanted to see if I could make that idea come to fruition. Adding tons of requirements and restrictions that bars those of us without an established business defeats the point of GLBSE and Bitcoin.

...Contract 'A' in this case is equal to GLBSE's Terms of Service...

Invoking specific subcontracts for any number of securities would be one hell of a hassle. The object is to make a list of generic, broad, statements that can cover all circumstances with ease. Remember, these are just placeholders until the Owner comes through with a Contract of their own...