Creating an offical Bitcoin mining company?

[CaptChadd]

Would making a Bitcoin mining company based in the UK, along with an online store selling items that can be bought with BTC, be a good idea? The company will be registered and will pay full tax contributions as any other regular company.

This company would then be supporting the Bitcoin network with consistent mining and would also come under UK business laws, which would give the company and anyone that deals with it, a form of security.

Would this be a good idea? If not, what are the reasons?

Is there any problems that the company could face in the future?

Thanks

[Lethos]

Yes, if you think you'll profit from it (you should) then yes it would be a good idea.
Enterpoint is based in England so you will at the least have a local supplier of FPGA's.
Also once you grow, like some get yourself listed on GLBSE and sell a portion of your mining as a security as shares.
One thing I've learnt since I got into bitcoin, don't wait around to do something if you think it might be a good idea, atleast give it a go.

[CaptChadd]

Yours has got to be the best reply I think I have ever had on a forum. Thank you so much, really helpful.

I have been thinking about doing this for a while but never thought anyone would back it.

It's the initial capital that I need to get it started and I am seeing what the UK system can do to assist me.

All new businesses normally need an initial investment in some way I would feel.

I am not just going to me a mining company and will once I am set up, will create some form of online shop, that sells something worthwhile.

The only thing I don't have right now is a company name, got everything else but that.

[finkleshnorts]

Very cool!

Even thought it is a great time to mine, now is probably the worst time to start a mining operation in my opinion, because this new ASIC wave + the reward drop brings so many unknowns into the equation. You should wait it out until at least the reward drop.

Just my humble opinion.

[CaptChadd]

You point is a very good one and with the reply email I have gotten from Butterfly Labs I am thinking that this is going to be a slow process. Its is a shame that the high hash rate boards are coming out as it will pretty much stop people who are just starting out mining, most likely using there graphics card to get a feel for Bitcoins.

I guess the same was said when GPU mining started and all the people with just good CPU's were left behind.

If the mining side as to be delayed, then I will still push for the online store accepting Bitcoins. No bidding or selling things that people don't need but a serious online store selling goods people actually want.

[Lethos]

I agree, It is a time of uncertainty, but it's also a time for great profit with the value of bitcoin keep rising due to I expect is a nice mixture of an increased activity in the currency exchange and securities markets, as well difficulty rising to an increase use of FPGA's. News of ASIC is also fueling a buying craze right now, which drives the price up. Speculation is driving the market right now, it's great but crazy time.

It's not too late to get in on buying ASIC's, pre-orders I admit, or investments into the development of ASIC's, it's not just BFL anymore. Check out Block Erupter, they are based in china, very open about the entire process. FPGA are doing pretty good right now, nothing wrong with doing a mixture of building a small farm and investing in bitcoin securities yourself, to help invest in the future costs of doing business.

Do your research, calculate your risks and see if it's worth it. If you at least start planning now, by the time you need to act, you won't miss your chance.

[Bitcoin Oz]

The only problem is that you will be competing with other mining companies who dont pay tax at all.

[CaptChadd]

Would it not be good for Bitcoin to have a Bitcoin mining company that pays TAX?

Having official registered companies that pays the country that they are operating all legal TAX's might bring other companies into the fold and gain trust from people who are still on the fence with Bitcoin?

[Lethos]

Would it not be good for Bitcoin to have a Bitcoin mining company that pays TAX?

Having official registered companies that pays the country that they are operating all legal TAX's might bring other companies into the fold and gain trust from people who are still on the fence with Bitcoin?

To be honest, it don't think it would make a big of a difference as you might think. Banks and governments are still on the edge about bitcoin, not because we aren't paying our taxes (or even if we are), but because bitcoin threatens the "system" as they see it and like it. It's something they don't control, can't regulate and it's not owned by a corporation, it's owned by the people.

It will certainly help your long term goal to be paying your taxes, since the government will have less of a reason to hassle you, if it makes you feel better and you want to do your bit to promote your business this way and bitcoin of course. Taxes are not exactly cheap in the UK, hope you got a good accountant who can use a lot of the same loop holes those investment/financial companies use.

[CaptChadd]

I agree with what you say totally. I am still very new to Bitcoin mining. I have been doing it as a hobby for only a year now and with GPU's but I would like to take it further and only if it is going to be viable.

I am looking at hardware now and have had contact with BL's and their prices are good but I am not sure how much customs would charge me to get a Single or the new ASIC's when they get released. Enterpoint have not got back to me yet but with them I would not have to worry about customs charges and I can pay the VAT straight up.

The more I can show that I am totally legit and paying everything that I should, the easier it should be with me. I know that many people hear are mining and running legit businesses but I have to see it from a investors perspective and with the nature of what Bitcoin is, as in not controlled or owned by any one person or company and being pretty much anonymous, would doubts into some of their minds.   

With the hardware about to potentially get a big shake up, the block reward halving and the difficult rising, business regarding is very much up in the air.

I have made a full business plan which not only shows everything I want to do and the costs/returns involved but I have also had to add a big section just to explain what a Bitcoin is, as so many people have never even heard of a Bitcoin.

What I would like to do to start with is get a FPGA's rig to showcase, so I can actually show what is it I am doing and not just have to read it on paper. I have to do this as I am going to need some sort of financial backing and I have a feeling that a bank would not even touch this venture.

The major problem at the moment is that many people simply do not fully understand what a Bitcoin is, let alone mining one.

[Lethos]

Customs and delivery costs can be pretty expensive, for the bulk buyer buying internationally, especially since BFL use heavy power chargers, instead of the more energy efficient PSU powered route many FPGA makers went with.
I'm personally holding off buying more FPGA's and holding out for ASIC, I've put more into securities based investments and seeing what ASIC provides.
Since I've already got a few FPGA's I figured I'm set into the next generation comes around.

[CaptChadd]

What advice would you give for me at the moment?

Hold off until October (I have a feeling that the roll out of the new ASIC's is going to take a long time) or at least find out what the investors/Government think or can assist me with?

[Lethos]

What advice would you give for me at the moment?

Hold off until October (I have a feeling that the roll out of the new ASIC's is going to take a long time) or at least find out what the investors/Government think or can assist me with?

Depends:

1) Can you afford to spend a £10000+ on FPGA's and Pre-order ASIC's to build your farm now?
or
2) Do you need to prove it to backers to fund this?

If it's more 1, go ahead buy what seems to be the most cost effective option and a lot of them, mostly FPGA's at first later ASIC's so you got something to mine with. Looking into generating your own security on GLBSE for people to buy shares in the company for a portion of your hash rate.
It will help you keep building the farm up.

If it's more 2, buy 1 or 2 as example pieces and invest anything you have left and generate into investing in shares in ASIC based securities. Once the backers decide to invest, Buy up some ASIC's since their is no chance they'll do it any time soon and it easily be october or later. ASIC's will be the it thing to buy by then and you'll have ASIC's on the way and shares to hopefully bring a nice ROI.

[CaptChadd]

For me it is going to be 2.

Even though I have been mining as a hobby for a year, I have not had access to an FPGA and so have limited experience with them.

As I am in the UK where do you think is the best place for me to buy my first FPGA to use as a show piece?

I have checked out Enterpoint but have not had an email back yet.

Any other places?

[Lethos]

For me it is going to be 2.

Even though I have been mining as a hobby for a year, I have not had access to an FPGA and so have limited experience with them.

As I am in the UK where do you think is the best place for me to buy my first FPGA to use as a show piece?

I have checked out Enterpoint but have not had an email back yet.

Any other places?

Find it strange you've not got an email back yet, I've always had contact back in a matter of hours, at reasonable times of the day.
Have you tried reaching Yohan via these forums he's active here. Yes enterpoint would be the best option.

Out of curiosity what questions were you asking enterpoint?

[CaptChadd]

I asked them if they do full FPGA mining rig builds that are assembled and ready to go.

I am ok with the mining side and configuration but I am not so good with electronics.

I have worked in IT support so I know my way around the inside of a PC but this hardware is totally different.

[Lethos]

I asked them if they do full FPGA mining rig builds that are assembled and ready to go.

I am ok with the mining side and configuration but I am not so good with electronics.

I have worked in IT support so I know my way around the inside of a PC but this hardware is totally different.

Yeah they are quiet different. It helps to have a good understanding of Linux where like most FPGA's are best suited.
They do a bulk purchase discount, but they don't really do "rigs". But they have come up with a few interesting things to link many of them together to reduce cable clutter.

[Vernon715]

To keep costs to a minimum, could set this as a Cayman Islands based company, in order to avoid taxes.

It would still be a legit business but it would have low or no taxes.

[CaptChadd]

Had a great response from Enterpoint today so will be looking to them for my hardware needs as my first choice. Its good that BFL has some healthy competition and also that they are in the UK.

I guess it really comes down to what happens in October and what effect that is going to have on mining in general. A good guess would be a massive increase in difficulty do to hash rate increase.

I have delayed my meeting that was for today to discuss my business plan as I feel alot more research is needed on my part, this forum is helping loads.

Thanks to everyone that has posted on this thread so far to help me.

[Lethos]

Had a great response from Enterpoint today so will be looking to them for my hardware needs as my first choice. Its good that BFL has some healthy competition and also that they are in the UK.

I guess it really comes down to what happens in October and what effect that is going to have on mining in general. A good guess would be a massive increase in difficulty do to hash rate increase.

I have delayed my meeting that was for today to discuss my business plan as I feel alot more research is needed on my part, this forum is helping loads.

Thanks to everyone that has posted on this thread so far to help me.

Good to hear, let me know how things go, as a fellow UK miner, it will interest me. Curiosity