This D.C. bitcoin company raised $2.3 million to ... mine more bitcoins

[tokeweed]

Bitcoin Shop, one of only a handful of D.C. companies that operate in the virtual currency industry, raised $2.3 million in venture capital last week, according to an SEC filing.

The investors were not disclosed by CEO Charles Allen, but include a mix of hedge funds and individual investors. The funds will be used to expand the company's "mining" operations — that's explained below.

http://www.bizjournals.com/washington/blog/techflash/2015/04/this-d-c-bitcoin-company-raised-2-3-million-to.html

[Chef Ramsay]

Bullish sign that hedge funds and likely wealthy individual investors are investing in local mining operations. Just another chink in btc's armor.

[kfarnan]

What is the vulnerability referred to?

[EternalWingsofGod]

It's a fairly interesting idea if they can mine more than cost.
Add hash to a secure network and raise the difficulty without adding much value to the network besides the miners, is the whole point of the company.
Keep control through their mining presence and get some coins.

In this sense, the system is self-perpetuating. Each transaction of bitcoins must be verified and added to the ledger by bitcoin miners, who are then rewarded for each successful verification. With more bitcoins.

[Mayuyu48]

I love to see some hedge funds interested to make bitcoin related company as part of their investment portfolio.
It means bitcoin have good response from financial expert out there also some individual investor there mean rich people
and that company use 2.3 million to mine bitcoin
Good to see this comment in that article :
Bitcoin is a virtual currency, yes, but what makes it special is that it's not really a currency in the traditional sense. There are no entities "printing" bitcoins anywhere. It's not linked to any single institution, meaning it is totally decentralized, one of the defining and most alluring characteristics of this bizarre monetary system.
If they invested heavily using USD fiat which can printed everyday by Fed, why they won't invest on non printable currency like bitcoin?

[Chef Ramsay]

This is my bullish factor so it's best that yall get with it or stay home.

[NUFCrichard]

It's a fairly interesting idea if they can mine more than cost.
Add hash to a secure network and raise the difficulty without adding much value to the network besides the miners, is the whole point of the company.
Keep control through their mining presence and get some coins.

In this sense, the system is self-perpetuating. Each transaction of bitcoins must be verified and added to the ledger by bitcoin miners, who are then rewarded for each successful verification. With more bitcoins.

I am surprised that a company in America can mine at a profit, and at such a profit that it is worth investors while to invest.
I wonder if they have some special mining equiptment, or if they have a renewable energy source that means they basically get free electricity.

Otherwise as far as I am aware, ROI is either luck or improbable!

[unamis76]

What are these guys supposed to be, more cloud mining stuff? Another web wallet? Whatever they're doing, someone has really hope they aren't some kind of ponzi/pyramid... Let's see where this goes. Not really convinced...

[countryfree]

Huge investment! Makes you confident in BTC's future.
I wonder where there will be based, as electricity costs can vary a lot from state to state.

[pawel7777]

Well, they have rather ambitious plans:

BTCS Digital Currency Mining

We're rapidly scaling our low cost bitcoin mining efforts and believe this will provide revenue growth as we build our ecosystem. We've secured an 83,000 square foot facility, about 1.4 times the size of a regulation NFL football field, to expand our mining operations. With minimal improvements, the new facility is anticipated to handle over 10 megawatts (mw) of power and can potentially house up to 40,000 TH/s of mining hardware.

http://www.bitcoinshop.us/index.php#mining

They also provide few other services: shopping engine, storage (multisig wallet), ATMs and are building own 'Universal Digital Currency Platform'.

All looks promising, but I have doubts whether they'll hit ROI on mining operations, unless they'll be selling hashpower as cloud mining.
 

[CryptoPanda]

So it's true VC give money for all kinds of stupid stuff?

[unamis76]

Well, they have rather ambitious plans:

BTCS Digital Currency Mining

We're rapidly scaling our low cost bitcoin mining efforts and believe this will provide revenue growth as we build our ecosystem. We've secured an 83,000 square foot facility, about 1.4 times the size of a regulation NFL football field, to expand our mining operations. With minimal improvements, the new facility is anticipated to handle over 10 megawatts (mw) of power and can potentially house up to 40,000 TH/s of mining hardware.

http://www.bitcoinshop.us/index.php#mining

They also provide few other services: shopping engine, storage (multisig wallet), ATMs and are building own 'Universal Digital Currency Platform'.

All looks promising, but I have doubts whether they'll hit ROI on mining operations, unless they'll be selling hashpower as cloud mining.
 

I don't see how they're not going to setup a cloudmining service. These investors need to know they'll get their money back + profits in almost no time, and I don't see how can they do that just by mining for themselves.

Also, they're trying to kill to many rabbits with one stone only. This seriously does not sound good, at last for me.

[RodeoX]

Just to be clearer. They are not mining more bitcoins they are competing for the bitcoins that will be mined by someone.

[pawel7777]

Also, they're trying to kill to many rabbits with one stone only.

What do you mean by that? Are you referring to them running multiple type of services? If so, what's wrong with that? It's a very good way to see which activities are profitable (and focus on those) and which ones are waste of time. Plus, it's a good way to maximise utilisation of their skills/equipment/facilities effectively reducing the costs.

[100bitcoin]

Bullish sign that hedge funds and likely wealthy individual investors are investing in local mining operations. Just another chink in btc's armor.

As the weak hands get off bitcoin, strong hands will get in. This is how long term trading works everywhere.

[manselr]

I was reading the other day about new revolutionary mining system which would basically consist of an underwater (or some sort of cooling liquid) mining cave, that would keep the machines cold 24/7 and running at maximum capacity. Anyone has the link for this?

[Mayuyu48]

I was reading the other day about new revolutionary mining system which would basically consist of an underwater (or some sort of cooling liquid) mining cave, that would keep the machines cold 24/7 and running at maximum capacity. Anyone has the link for this?

never heard about underwater mining cave cooling, it's too risky in my opinion. Because many organism live on that cave which possibly bother your mining process.
maybe this one?
http://www.theverge.com/2013/12/2/5165428/bitcoin-mine-in-hong-kong-uses-jelly-to-keep-cool
Open bath immersion cools computer components by submersing them in liquid with a particularly low boiling point.

[notbatman]

Is the "Bitcoin Shop Inc" for real or just some scam company boasting about how much money their mining ponzi took in while trying to bring in more marks?

I see on their website (www.btcs.com) they're also into ATMs, another Bitcoin ponzi space (so I've heard) where customers/investors are getting it up the poop chute.

The management team looks like a banker and two NASA henchmen...

[pawel7777]

Is the "Bitcoin Shop Inc" for real or just some scam company boasting about how much money their mining ponzi took in while trying to bring in more marks?
...

I haven't heard of them until I came across this thread. I'm not an expert but their accounts doesn't look very healthy (and frankly a little bit strange):

http://investors.btcs.com/xbrl/btcs-20141231/

Note the total revenue for the year (2014) of only $38k and 'general and administrative costs' of... $14 million, resulting in net loss of nearly $15m.
They'll be in trouble if they don't start to generate profits soon. Unless their goal is to raise as much of VC capital as possible, pay themselves nice salaries and dissolve.

We probably don't have the full picture though, so lets just wait and see.

[PolarPoint]

I think the company is not telling us everything. Mining is not that profitable anymore, not enough to validate a $2.3 million investment. They must be expanding into another market niche.