Edit: Totally outdated now!  I did a new update on my projections, for mining only (this does not include profits from hardware sales!).Considerations:Klondikes mining at August (worst case)Avalon chips overclocked to 380MHz, since they will be running on Springfield Underground data centerNovember (worst case) hashrate increase from the low-volume process, using BTC3.6 per chip+assembly cost, chips at 16GH/s, not overclockedDecember (worst case) forward hashrate increase from the high-volume process, using BTC1.2 per chip+assembly cost, chips at 16GH/s, not overclocked50% of mining dividends used to buy new Fast-Hash-One 16GH/s chips
( http://i40.tinypic.com/2ymwvub.png) Conclusions:Investors are fully reimbursed of their paid BTC.0025/share around February next year, at worstThe MH/s/share and MH/s/BTC are indeed crazy profitableAs soon as the unit price of chips gets down (it will drop 1/3 to 1/4 even before going to easicopy), the hashrate can rise even much furtherHaving direct access to buy hardware at manufacturing cost is what really makes this possibleThe effect of hardware sales will be just icing on the cake
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LOL there is complaints about the chassis the miner is to be housed in. Lots of tears over the images being stolen, without any realization that those generic chassis' from chenbro are in fact what the miner will go in.
There! https://www.flickr.com/photos/98907028@N08/9282024072/ An ungeneric one straight from VMC's shop!  |
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How come I can't find anywhere what hardware have you guys already ordered and the time for the mining to start? If the network reaches something like 500TH in August/September, everyone's shares just take a hit of ~50% value without you guys even starting!  |
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Low-volume chips will cost something around ~ BTC3 per chip, since they will immediately be available just after 3 months of paying for the NRE, so let's say October. Let's also say the 6.377 TH are online somewhere in August, with the network hashrate being around 500TH at that time, so ~ BTC1500-1600 per month considering expenses. If BTC1000 go for growth and the rest for dividends, 1000/3 = 333.33 chips * 16GH/s is a 5333.28 GH/s increase in just one month. The high-volume process should deliver chips at no more than ~ BTC1 per chip, so the growth potential should be at minimum 3x for the same price when those come in 4-4.5 months in November/December. Once these start arriving, it's gonna be om nom nom nom nom time on the network, that's for sure. The higher the volume of chips bought, the cheap they become also (y-axis is chip unit price):  |
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Trip to Springfield - Quick Summary I am going to give a very quick summary of my meeting with Ken. I am going to be busy tomorrow, so I will try to get a thorough report out in a few days. I also need to clarify a few things with Ken and let him review anything he might not want revealed at this time or at all. Overall Impression - Good/Positive Ken and I talked for a few hours. I told Ken a little bit about myself, but we mostly talked about his endeavors. He's got quite a bit of experience in all types of businesses and some good business philosophies to back it up. I have the impression that Ken is a driven, honest, and frugal person. I definitely did not sense any red flags at any time during our conversation. Ken drove me over to Springfield Underground and VMC headquarters. Here are the pictures I took. More details to come in a few days. http://www.flickr.com/photos/98907028@N08/That thorough report would be nice now!  |
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Vbs: do you work for VMC? You seem like Ken's PR.
No, but I did my homework and keep doing it everyday. You don't think a company raising 6-7 figure amounts from the community based on the promise of a future product with no guarantees whatsoever that it's not a giant scam should disclose as much information about it to its investors? The typos and such are a secondary issue but they are relevant as that site, along with Ken's posts here, are the image of the company.
Deserving of my outrage? Certainly. And it should be for all of us as when we only ask mediocrity and invest in it, mediocrity is all we can expect back.
Mediocrity? Ken has spent a whole year developing the xilinx RTL code for the chip so that any of this is possible. He also got one of the best companies on the boat, eAsic, to finalize the chip's development in record time and mass produce it. Of course the web site can be improved but I would be CRAZY to invest on this based only on web-site cleanness and "company image". The meat is in the inside, not on the outside. |
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The fact they would put even put up a site of this quality, with only buzzwords and no substance to sell its products - that don't even exist yet - while asking people to invest tons of money speaks volumes. Frankly I find it is insulting to your investor base.
Why should the community raise you a million dollars to build a mining operation and spend thousands on mystery chips when you give out so little actual info about your key product and you don't even bother to proof read your company's profile on a poorly built site with prices that seem to be different depending on where you land?
At the very least these are strong symptoms of a company with very poor quality assurance and professionalism.
Should Ken spend money to hire a professional design firm to build the website then? I'm sure that perfect websites really speak volumes for how a company is able to deliver their products in time. I do not feel insulted at the least, I know he has plenty on his hands right now. There is a lot of info already out about the chips to whoever wants to read it and even more info about eAsic's process of design and manufacture. |
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I would prefer _not_ to follow BFL; not to offer any pre-orders at all. Auction mines after they are ready, and ship immediately. This should be the company's unique differentiator.
Raise shareholder capital + possibly take business loans to pay for NRE + assembly.
Unfortunately BFL is a very special case.  The main issue with them is that they are using 65nm chip, so the time-frame for the hardware to be profitable has a pretty close expiration date. This is another main benefit of ActM going directly 28nm -- it protects the buyers as much as possible from receiving something outdated. What happens when BFL is shipping their current line and ActM is also shipping Fast-Hash machines using 28nm with 16GH/s@15W per chip? Not pretty for them... |
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My suggestion: Put a batch of production-ready mines on an auction at VMC. Not pre-orders. Actual and working mines.
And place a very small minimum ask of each mine, near production costs.
If you have real working mines traded at VMC at auction, we would *solve* the stupid Supply/demand issue in a short order.
Great suggestions, especially the auction idea. Having pre-orders before they are available for auction might help pay for the NRE though so maybe an auction system could be implemented down the road, and the pre-orders get the benefit of lower pricing since their money was tied up for months. I agree, pre-orders are an accepted convention in Bitcoinland now. The problem is manufacturers have delayed or failed to deliver. ActM will deliver shortly after accepting pre-orders, so I think this is a legitimate and sensible way to raise capital. +1 Remember that this is not a "let's design a chip from 0 to 100%", but rather a "let's finish the design of a chip from ~85 to 100%". The margins of error are really different between both scenarios, that's why eAsic guarantees those quick time-frames and grew 980% in the last year alone. |
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I agree with you about the two markets. That's why I propose the pre-IPO auction, which serves as the primary market.
However, your napkin math is flawed.
Let's say that you own 10 of 100 shares worth 1 BTC each. If you buy a share from the issuer for 1 BTC, here are now 101 shares total, each still worth 1 BTC. You now have 11 shares worth 11 BTC.
If you buy a share from someone else at 0.95 BTC, there are still 100 shares worth 1 BTC each. You now have 11 shares worth 11 BTC plus the 0.05 BTC you saved. Plus, now you own 11% of the company instead of 10.9%.
If you buy a share from someone at 0.95 BTC and donate 0.05 BTC to the company, there are still 100 shares, but they are now worth 1.0005 BTC each. You now have 11 shares worth 11.0055 BTC.
Regardless. the smartest thing to do is to not invest in an undercapitalized company at all.
Yes, you are quite correct on the math. The is problem is that scenario one is still a win-win for both sides, scenario two is a win-lose and scenario three is a win-(win pocket change). I would still opt for scenario one when I believe the reason for the Follow-On Public Offer (FPO) is really worth it, as using your example, I'm sacrificing only -0.1% ownership for the company to get +1% in value. If the destination of those funds is worth it, the share value will increase. |
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You don't need to do this. Investors preferring to buy at the company's price can just buy at the discounted price and donate the difference to the company. It will be the better for the company because subsequent purchases will have to be bought from the company plus they get a donation.
Still leaves the problem unsolved. The main issue is that both markets serve different purposes. Also, it's still better for an investor to buy from the issuer depending on how much he already owns of the asset (for assets that are company-like). Using a napkin math example, if I own 10% of the stock, I get back 10% of what I invest directly in increased book value of the shares I own. At best, I would only buy from someone else if they were selling 10% cheaper than the issuer price. |
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There is a clear need for a primary and secondary market in the current bitcoin stock exchanges. A primary market is used when assets need to raise equity, either by IPO or FPO, a very different purpose than what the secondary market is used for. The question is not so simple as to only want to buy from the issuer when undercutting is just one satoshi less. The more you own of a certain asset, the more you are interested into buying shares directly from the issuer, as the increase in asset equity/book value trickles down to all the shares you own (you get a bigger piece of the pie and the whole pie also got bigger) vs simply buying from anyone else (you get a bigger piece of the pie but the whole pie still has the same size). What is a primary market? https://www.youtube.com/watch?v=7Vgzqhjm_RUWhat is a secondary market? https://www.youtube.com/watch?v=GVtl814yFbICurrently assets have no guaranteed clear path to raise equity, which is indeed very bad. |
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based on what i saw - ken sold off on coins @65$. if he had waited a week more he'd have gotten 30% more $. these kind of things will eat away at his business unless he is able to maximize the time and amount he sells. that would probably help him a great deal to pace out his exchange orders (and not in a way to crash the market)
That was needed for an immediate payment of the Klondike boards I believe. |
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okay kslaughter, don't be greedy, bitcoin's exchange rate has appreciated again, drop the bid wall again to reflect that
Our Plans For Shares and the NRE:
When we reach our goal of funding for the NRE from any of the following sources (shares sales, machine sales, chip sales, private funding, mining, loans etc) with a bit of leeway for other expenses, I will make a post here in the thread and then take down the wall immediately.
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Sadly this thinking destroys companies.
First to market trumps technology currently. Eventually it will be cut throat enough where Power Consumption plays a key role but that won't be for a while.
I'd rather have 1 TH right now consuming 10,000W vs 1 TH 3 months from now consuming 1,000W.
If the time to make the chips is the same (or very close) regardless of nm size then I would opt for the better one.
I'd say it destroys uninformed customers much more than it destroys companies. Companies can calculate their profit margins and time-frames with great expertise. What happens when the Avalon bought today is the GPU of 2014? |
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Conversly, look at the amount of chips inept BFL was able to sell, and we all know the sentiment carried for that POS. People are ASIC crazy, chip sales will be high
I think the ASIC craze will die down quite a bit after many miners fail to reach their ROI in the coming months—the massive increase in difficulty may squash late order BFLs, block eruptors, and the latest asicminer blades. However, there will always be an enormous demand for the newest, fastest, most efficient mining tech. At some point people will realize that unless they go directly to the most recent die shrink (currently 28nm) they are just throwing money away. Asicminer's and Avalon's 110nm tech is from ~2003, BFL's 65nm is from ~2006, Bitfury's 45nm is from ~2008. The current 28nm tech is from 2011-2012, with the next one being 20nm in ~2014. Targeting 28nm from the get go is the only thing that makes sense at the moment, since it's the only one that guarantees you'll have the most time available to use the equipment until it stops being profitable. |
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