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Author Topic: [CLOSED] Call for investors. Let's build a huge bitcoin mining DC together.  (Read 11924 times)
Vladimir
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May 30, 2011, 02:22:26 PM
 #21

Gpu's are good because they can be used to do computational work on other problems to bitcoin...

Yep.

The real question is why don't we make a co-op and build bitcoin asic's?  Then sell them for profit... this means that we get GBP or other asset, while still helping the bitcoin community.

This is a great idea. I'd be happy to be a customer. But someone else would need to do it. I simply do not have expertise required for this.

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Bitsinmyhead
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May 30, 2011, 03:50:37 PM
 #22

Here you go...

tomorrow exchange rate of bitcoin goes to 0 and stays there forever. You've just lost 100% of your bitcoin investments while me and my investors will have some computer hardware and a working supercomputer which coluld be sold or may be used to mine namecoins or bitcoin 2.0 or towncoins or googlecoins or visacoins or ciacoins or even fedcoins or carotcoins to be rented out to GCHQ or something else.

Goodbye.

You didn't think it would be that easy...
It's time to look at the number once again...
Thats where the answers will be found...
Not in peoples lofty dreams...

So Im going to assume that if bitcoins fall to 0 overnight, the value of the equipment will probably fall to something like 50%. So your investors are risking:
1000 investment + 100 monthly payment - 500*65% value of investment after BTC becomes worthless = 775GBP

Now what I am going to do is buy coins today for 775GBP.
That would equal about 150 coins.

Now every month I will spend the 100GBP buying coins. With average difficulty level of 1M, I should be able to pick up at least on average 10 coins per month. After a year I have 260 coins this way and risked exactly the same as you.

You might argue, but what if price goes up a lot... Well then difficulty will do the same, so it will be worse for you because I get most of my coins in the beginning... Even giving you the very favorable assumption of average 1M difficulty over the next year, which I think most would agree is kinda unrealistic...

The end of the story is:
Your clients risk: 775GBP to gain 237 Bitcoins.
Buying bitcoins risk: 775GBP to gain 260 Bitcoins.

And that my friend is why its called a risk/reward profile and why you just don't look at the risk or reward in isolation.

Investing in bitcoin mining today is questionable...
Investing in bitcoin mining today keeping only 65% is outright terrible...
If its a bad investment...
There is no way you can play around with numbers to make it good...
Its the beauty of the game...

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Sign up through: http://www.plus500.com/?id=67176&pl=2 for €25 free, or become an affiliate here: http://www.500affiliates.com/?id=67176
Vladimir
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May 30, 2011, 05:05:03 PM
 #23

no comments

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Nefario
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May 30, 2011, 06:05:43 PM
 #24

Would you have have any problems if somebody (probably not me) took you up on your offer and divided that action up on GLBSE? (Of course they'd take a small management fee)


It is none of my business what my clients do with their mining capacity, as long as I am not burdened with significant administrative overhead.

Funding it via GLBSE and than distributing 'results of calculations' as dividend might be a great idea for someone. Moreover, it is certain that I will not list on GLBSE myself, because my legal counsel wont let me. Therefore, whoever uses GLBSE for this will not face competition from me directly.


Wise move, GLBSE is not suited for everyone. We'll have it up in about 8 hours, and the payment function will be working at that time.

PGP key id at pgp.mit.edu 0xA68F4B7C

To get help and support for GLBSE please email support@glbse.com
Sukrim
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May 30, 2011, 07:32:31 PM
 #25

I think on buying vs. mining, Bitsinmyhead made enough points already [pun intended! Tongue].

I did a few calculations on your 2 products and it seem like that after quite exactly 180 days the "Hashes solved per unit of money invested" ratio of investing into this business model starts to beat the 400 GBP/month mining contract (meaning the lower costs per day start to pay off compared to the high initial price)

HOWEVER:

What any investor needs to keep in mind is that the total hashing output is 35% lower, so unless the whole BTC system stays more or less stable on a certain difficulty level (doesn't really matter which) it might still be wiser to consider a high initial burst.
In which (mining) product to invest depends on if you believe that the difficulty will rise (Yes: Get as much capacity as possible NOW!, No: Get as much efficient capacity as possible, maybe even look into the OpenFPGA project [though that only pays off in a few years at it's current hashrate + initial price...] or similar stuff) and also how long you want to invest in it (everything below 180 days makes only sense to be invested in a mining contract).

I also did a more thorough spreadsheet on this, but I guess that's not in the general interest and can be calculated by anyone else.

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ribuck
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May 30, 2011, 11:49:21 PM
 #26

I would be prepared to make a significant investment into ASIC mining, but not into GPU mining anymore.
Sukrim
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May 31, 2011, 10:02:19 AM
 #27

This would only pay off, if difficulty stabilizes "soon (tm)" or if you intend to run the same hardware for a few years.

Otherwise high initial bursts with GPUs would pay off far more BTC for your investment, have a much higher resale value (BTC ASICs are nearly worthless except for BTC mining) and can be sold + upgraded if a more efficient model comes out.

It might both have it's pros and cons, but ASIC/FPGA mining is not the solution to everything (much like quantum computing).

[Edit: The above is again only valid for MINING investments, not for BITCOIN investments! As Vladimir already said: Investing in mining is something different from investing in BTC itself, as for example you have some "fiat value" through hardware components in there, some additional benefit for the network itself though hashing power and more flexibility what you use the computing power for. This comes (probably, as Bitsinmyhead calculated) at a price against buying BTC directly but is a different investment model!]

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Mail me at Bitmessage: BM-BbiHiVv5qh858ULsyRDtpRrG9WjXN3xf
Nefario
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May 31, 2011, 11:11:26 AM
 #28

Was talking about ASIC with someone not too long ago, we came to the conclusion that we would probably need something along the lines of USD$1Million. We also came to the conclusion that the bitcoin economy couldn't handle a venture that size at the moment as it would essentailly be a 1million withdrawl from the bitcoin economy.

Right now I don't think the price of bitcoin is high enough to justify something like this.

PGP key id at pgp.mit.edu 0xA68F4B7C

To get help and support for GLBSE please email support@glbse.com
Vladimir
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May 31, 2011, 01:58:36 PM
 #29

Was talking about ASIC with someone not too long ago, we came to the conclusion that we would probably need something along the lines of USD$1Million. We also came to the conclusion that the bitcoin economy couldn't handle a venture that size at the moment as it would essentailly be a 1million withdrawl from the bitcoin economy.

Right now I don't think the price of bitcoin is high enough to justify something like this.

This is exactly results of my research done half year ago. Investing into ASIC's makes not much sense before 1 BTC hits 100$. Though, if someone proves me wrong, I will not be surprised.

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speeder
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May 31, 2011, 04:11:44 PM
 #30

I have some significant money lying around... But not enough to invest directly...

So, can someone open something on GLBSE? Please? Cheesy

casascius
Mike Caldwell
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May 31, 2011, 09:35:09 PM
 #31

tomorrow exchange rate of bitcoin goes to 0 and stays there forever. You've just lost 100% of your bitcoin investments while me and my investors will have some computer hardware and a working supercomputer which coluld be sold or may be used to mine namecoins or bitcoin 2.0 or towncoins or googlecoins or visacoins or ciacoins or even fedcoins or carotcoins to be rented out to GCHQ or something else.

Don't forget Casascius coins!  Tongue

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
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May 31, 2011, 09:42:39 PM
 #32

 It is estimated that it will cost, on per Ghps basis, 1000£ to build and deploy the hardware followed by 100£ per month to run it.


Are the 100£ per GHPS per month covered by the 30% revenue to the operator?

No.

Edit: Seriously, read the thread!

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Vladimir
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June 01, 2011, 01:46:05 AM
 #33

Q3. What type of hardware are investors investing in?
A3. GPU based high end mining systems. Only high quality components with mix of 6990's and 5970's. As they say... a picture is better than 1000 words and I have two pictures for you. This is shelf 1 in DC1, fairly typical unit, DC3 will be quite similar.




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Jack of Diamonds
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June 01, 2011, 09:33:53 PM
 #34

You miss the point. He doesn't lose "everything" even if the value of bitcoins crashes to a cent and the currency becomes outlawed on all 5 continents under the penalty of death. He can just suspend the electricity, internet access etc.. Until it becomes profitable again (either for himself or his clients).

Even if it doesn't, he has physical hardware that can either

1. be easily sold for around 60-80% of it's original value depending on how soon this hypothetical massive crash and outlawing would occur (yes you can argue this is a loss, but depreciation of 20% is better than 99.999% depreciation through direct purchase of BTC)

2. used for any other number crunching/cryptographic scheme that requires mass computational power.

Mining bitcoins is a much more economically sound strategy than large direct, speculative purchases.

1f3gHNoBodYw1LLs3ndY0UanYB1tC0lnsBec4USeYoU9AREaCH34PBeGgAR67fx
Vladimir
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June 03, 2011, 12:13:57 PM
 #35

F.A.Q Updated

Q4. Do you hand out guarantees/contracts/SLAs that include also commitments/penalty payments from your side if a rig goes down?
A4. Indeed I do offer a SLA in form of zero-variance computational results delivery. When a customer elects zero-variance option he will receive on daily basis as many bitcoins as statistically expected for given Ghps hashing capacity. For comparison, some pools charge as much as 10% for "reduced variance" which is even not as good as my zero-variance delivery.

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Vladimir
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June 04, 2011, 12:43:00 AM
 #36

one more picture :-)



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REF
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June 04, 2011, 02:06:37 AM
 #37

ooh thats sexy. i had a box about 3/4 that size with 5850s  just a day ago. To bad i didnt have more money or i would really think about giving this a shot. im keeping my eye on this thread i want to see how this turns out and how to see you succeed with this.
SyRenity
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June 09, 2011, 06:18:00 AM
 #38

Hi.

Is there already glbse posted for this project?

I've contemplated setting such DC myself, seeing that my mining halted to a grind, but would be definitely interested to invest in such opportunity.
Vladimir
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June 09, 2011, 06:32:19 AM
 #39

As far I know no GBLSE project posted yet related to this. I am definitely not going to do it myself. But will do my best to help whoever does it.

Sorry, if I was slow to respond to queries related to this thread in last two days. Lot's of things are going on right now here. I have finished all the formalities and got the keys from DC3 site yesterday. Move in works are in progress right now. Lots to do.

Below is a picture of a bunch of 5870's waiting deployment in DC3:





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speeder
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June 09, 2011, 11:38:10 AM
 #40

Where you found those?

DISHWARA is trying to buy 8*3 of those and found only two. :/

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