[Proposal] Mining Co-Op

[allinvain]

Sorry I made a mistake in my earlier post. I accidentally linked back to this very thread when I was trying to link to the thread in which allinvain is looking for someone to write software to allow him to run CB remotely.

https://bitcointalk.org/index.php?topic=1239603

Btw, I hope you do realize that it's not just me doing this. It's not like I put this facility together via remote control. You linking to that thread is irrelevant to the scope of this thread.

[1714702095]

1714702095

[armedmilitia]

(massive dump of responses inbound)

edit: duh caught up on the thread have above answered...so say about 1600 usd and we get control of 1 miner ..paid out as a group per whatever schedule.....(some miners go bad ..but paid as a group?). So the total ball park coast for 6 months with hosting?

1.059KW @ 65 CAD/KW works out to $68.84 CAD/MO ($51.89 USD), or $311.34 for the 6 month term. We might be able to do better on that hosting rate depending on qty. It also seems like we can do a 3 month term at the same rate, so $155.67.

I'm not quite sure what multi-sig is, but I guess it's transactions that requiers mutiple signatures to be considered signed?
If so, what happens when you get hit by a bus? Is the money gone? Or does it only need 5/6 or 3/4 signatures to be verified?
I wouldn't mind Phillip, notlisted, dogie and you to hold keys, but I would like to know who they are, so that I can find the key-holders if needed. (So I know where to send the SR hitman.)

There's nothing like some casual death threats to know you're on bitcointalk.  

I'm sure there are plenty of forum members who know who I am and where I live. I purchase hardware frequently on bitcointalk (pretty extensive trading history), so all the people who have shipped to me know my name and address. No way I'm sharing that in public though. Same goes for philip, dogie, and (probably) notlist. Valkir has organized a small group buy in the past and is interested, so I figure he could hold a key too.

As for how the multisig works--we'll be using armory lockbox. When I say 5/6 multisig, it requires only 5 of the 6 key holders to sign any given transaction.

I just think, if you are going to go for, go for. If you are putting your money into something just to get a few dollars off, that's thinking of the short game. If you are investing in yourselves, this technology, and the future there are many paths to choose. Starting a co-op that could become a payment processor for the future, a data center for the next generation, and at the same time increase revenue while cutting costs is a titillating idea.

Woaaah there! I want to keep this as simple as possible. The goal for the purchase of Avalon6s is not just to save a few bucks, its to establish a viable structure for future buys--in particular the SP50 when that comes up for general sale. But the end goal is to save quite a few bucks, make ROI easier for small miners (including me!), and that's pretty much it.

That is definitely true, but it is something that we plan to have in the future. However, all our miners go on switched PDUs so if remote reboot is necessary that is an option. You guys can designate one guy to keep an eye on the gear and who will reboot gear when/if necessary. I do hope these Avalon6 miners are stable.

I am very concerned that this cryptoboreas company has come out of nowhere and appears to have no customers except this carlos guy. Assuming their operation is legit, the fact that they are doing this all with nobody on site makes me worry. Switched PDUs are a great idea if a machine needs to be rebooted. What if a fan burns out or a machine stops responding to reboots? Do we just suffer 100% downtime until allinvain has enough time to make the trek to his facility?

I also think torepia has a good idea about getting everything in writing.

I am fine with philipma and dogie having the keys since they are long-established members with good reputations. Thank you also to armedmilitia for doing all the legwork to put this deal together and I look forward to seeing final pricing.

As for the fan burning out concern--yes, that's true. Is it worth the cost of a faster response time? I'm not sure, since as of right now gnd is undercut by far--I think we'd recoup any losses from downtime because we're paying much less for hosting. Once again, for future buys we can always revisit GND--they should have their datacenter expanded by then.

And you're welcome! I feel that warm fuzzy feeling of gratitude.

As a side note, I just got an email from bitmain last night:

Good morning [my name],

Unfortunately we do not offer any discounts for orders of fewer than 100 units. For 100 units of the S7, we are able to offer a 0.5% discount on the listed price.

The checkout page of our website includes a shipping cost calculator, which will provide you with the exact cost of shipping. The total cost depends on a few different factors, so it's difficult for me to give you an exact quote.

Please let me know if you have any further questions.

Best,
Jacob

A 0.5% bulk discount on over 100 units.  

[klondike_bar]

Was asked if I mind being a multisig key holder, and am okay with that. I think having more people improves the security and reliability of multisig.

Also, I would not suggest m-1/m (ie:5/6) because only two points of failure are needed, like one lost key and one AFK keyholder. 4/6 or 6/9 provide better distribution and simplify the act of having enough people act together when fund movement is necessary.

Still on the fence over the cost of hash power. 1btc/th is a lot better than before, but another 10-20% bitcoin price movement or competition from sptech/lketc/sidehack/etc could bring prices down <0.8btc/TH

[armedmilitia]

Was asked if I mind being a multisig key holder, and am okay with that. I think having more people improves the security and reliability of multisig.

Also, I would not suggest m-1/m (ie:5/6) because only two points of failure are needed, like one lost key and one AFK keyholder. 4/6 or 6/9 provide better distribution and simplify the act of having enough people act together when fund movement is necessary.

Still on the fence over the cost of hash power. 1btc/th is a lot better than before, but another 10-20% bitcoin price movement or competition from sptech/lketc/sidehack/etc could bring prices down <0.8btc/TH

4/6 sounds fine to me. Does anyone have objections? So far we have myself, valkir, klondike, and possibly phillip on board.

[ATCkit]

Was asked if I mind being a multisig key holder, and am okay with that. I think having more people improves the security and reliability of multisig.

Also, I would not suggest m-1/m (ie:5/6) because only two points of failure are needed, like one lost key and one AFK keyholder. 4/6 or 6/9 provide better distribution and simplify the act of having enough people act together when fund movement is necessary.

Still on the fence over the cost of hash power. 1btc/th is a lot better than before, but another 10-20% bitcoin price movement or competition from sptech/lketc/sidehack/etc could bring prices down <0.8btc/TH

4/6 sounds fine to me. Does anyone have objections? So far we have myself, valkir, klondike, and possibly phillip on board.

seems good.

Another alternative might be to simply "piggy back on the Get Hashing platform"..do something like this guy is doing:

https://forum.gethashing.com/t/abc-amalgabit-coin/4453
https://forum.gethashing.com/t/diversified-mining-token-dmt-formally-pm1/3957

I can see my assets and track my payouts here: https://www.coinprism.info/address/144ZmMmDtzeP6DjYWpxMhW3v1Y5xozydrT

The other cool thing is if i decide to sell my mining power, I can do it on GH Exchange which is part of the https://cloud.gethashing.com/

Get Hashing's platform will simplify your process and allow for complete transparency.

The only downside is they may not let you use it for your Group Buy as it competes with theirs - ie: GHX.

EDIT: Recent article about Get Hashing: http://insidebitcoins.com/news/gethashing-introducing-a-new-concept-for-cloud-mining/35447

[MrBitcoinMiner]

We have been around for a while - far more than a month or two. 

From what I read you used to run miners from your home but it is only in the last couple of months that you created cryptoboreas to be a real hosting company instead of your own personal mine. I am sorry if I misunderstood.

You linking to that thread is irrelevant to the scope of this thread.

How is it not relevant? We are discussing a group buy and where to host the miners. If I participate in this GB I will want the best deal for hosting. Since you are only now looking for someone to design your mine software that suggests your operation is still in its infancy. You can call it irrelevant if you want but I (and I think many others here) are not just interested in hosting price only but all other factors such as going with a well established host vs one that is just starting up or going with a host with people on site and a fast response vs a site that sits empty 99% of the time and requires someone to make a special trip.

As for the fan burning out concern--yes, that's true. Is it worth the cost of a faster response time? I'm not sure, since as of right now gnd is undercut by far--I think we'd recoup any losses from downtime because we're paying much less for hosting. Once again, for future buys we can always revisit GND--they should have their datacenter expanded by then.

I have only operated a couple of miners ever but in my experience it is not uncommon to encounter problems that a reboot doesn't solve. This depends on the equipment as well of course as some manufacturers make more reliable machines than others.

When you say GND is undercut does that mean you spoke with your contact again recently? From what I read on here it looks like they offer very similar pricing to CB except that in order to get good rates with CB you need to prepay months in advance. Did you get an updated quote from GND for 6 months prepayment? Did they refuse to match or come close to the CB price? If they are asking too much money then I would not be interested in using them but if GND and CB are competing with each other we could let them fight each other to see who will give us the best price until one of them gives up.

If GND matched CB's price, would CB drop their price further and give us an even better deal?

[philipma1957]

Was asked if I mind being a multisig key holder, and am okay with that. I think having more people improves the security and reliability of multisig.

Also, I would not suggest m-1/m (ie:5/6) because only two points of failure are needed, like one lost key and one AFK keyholder. 4/6 or 6/9 provide better distribution and simplify the act of having enough people act together when fund movement is necessary.

Still on the fence over the cost of hash power. 1btc/th is a lot better than before, but another 10-20% bitcoin price movement or competition from sptech/lketc/sidehack/etc could bring prices down <0.8btc/TH

4/6 sounds fine to me. Does anyone have objections? So far we have myself, valkir, klondike, and possibly phillip on board.

I see problems with 4 of 6 or 6 of 9

I also see the problem with 5 of 6

how about two sets of 3  each at 2 of 3?

follow  this logic:
 at  5 of six if two people are offline or worse yet have crashed coins could be lost or delayed.
at 4 of 6   armedmilitia and I  can't freeze a transaction and 4 others could rob us.

 worse yet with 6 of 9.  armed militia myself and valkir can not freeze out the other six if they go rouge.

with two sets of 3  
 all different people
  each set at 2 of 3
 coins could be safer and worst case only half lost vs all lost.  I am going to try to download armory via windows 10 and see what happens.

[spiccioli]

A 0.5% bulk discount on over 100 units.  

I've been lurking for a while and this urges me to add my voice here

Avalon6 and BitMain's S7 are overpriced, too much, they're actually priced for 2-3c/kWh electricity.

I mean, BitMain in China does not have access to such cheap electricity (I don't have any proof, just long reads here about cheapest electricity in China) so they have to be sure that nobody can earn more than themselves when selling an S7.

BTW, they sell it on Hashnest as well, so Hashnest's price is a little lower since you're paying .10c/kWh there.

What we should find, IMHO, is cheap electricity, like .05c or .04c and a bunch of second hand S5s or SP20s, which are overpriced as well (from the WTS offers I see here on bitcointalk), but not as much as a new S7 and should possibly ROI no further than April next year and be able to be marginally profitable (thanks to cheap electricity) beyond next halving.

Spending 1600 USD/unit now to earn 98 USD 400 or more days from now... well, is not that thrilling as a proposition, not to mention that a single failing unit wipes out the earnings of 16 more units.

spiccioli

[philipma1957]

A 0.5% bulk discount on over 100 units.  

I've been lurking for a while and this urges me to add my voice here

Avalon6 and BitMain's S7 are overpriced, too much, they're actually priced for 2-3c/kWh electricity.

I mean, BitMain in China does not have access to such cheap electricity (I don't have any proof, just long reads here about cheapest electricity in China) so they have to be sure that nobody can earn more than themselves when selling an S7.

BTW, they sell it on Hashnest as well, so Hashnest's price is a little lower since you're paying .10c/kWh there.

What we should find, IMHO, is cheap electricity, like .05c or .04c and a bunch of second hand S5s or SP20s, which are overpriced as well (from the WTS offers I see here on bitcointalk), but not as much as a new S7 and should possibly ROI no further than April next year and be able to be marginally profitable (thanks to cheap electricity) beyond next halving.

Spending 1600 USD/unit now to earn 98 USD 400 or more days from now... well, is not that thrilling as a proposition, not to mention that a single failing unit wipes out the earnings of 16 more units.

spiccioli

I have my doubts for this project. For a lot of reasons.  
miner prices are one issue.
I am nervous about  data center
I am nervous about getting miners from avalon.
I am nervous about coin security.

Lastly I am a known quality many people on this site know my home address.  If this goes sideways I can see people knocking on my door.

I would be fine with that if I had more control ,

but  I don't  and I do not like the idea of  being responsible for 50 Avalon 6's or 65k usd. That are mining in another country 1000 plus miles from my house.

I am going to bail on this at the key level.

If I do anything at all maybe I will buy 1 avalon 6 and contribute that way as a simple miner.

[armedmilitia]

I totally get it, there's lots of potential for things to go sideways.
Thanks for your interest though.

[schwab]

I just think, if you are going to go for, go for. If you are putting your money into something just to get a few dollars off, that's thinking of the short game. If you are investing in yourselves, this technology, and the future there are many paths to choose. Starting a co-op that could become a payment processor for the future, a data center for the next generation, and at the same time increase revenue while cutting costs is a titillating idea.

Woaaah there! I want to keep this as simple as possible. The goal for the purchase of Avalon6s is not just to save a few bucks, its to establish a viable structure for future buys--in particular the SP50 when that comes up for general sale. But the end goal is to save quite a few bucks, make ROI easier for small miners (including me!), and that's pretty much it.

You are essential doing it, except without the legal backing for recourse against potential problems and clear definitions of what happens next. Currently this is actually a more convoluted way to accomplish the goal with less recourse/assurances should problems occur sooner or later.

Phillip mentions some the problems that could arise with multi-sig funds, those are unavoidable at present set up. These multi-sig holders are basically the elected board in a legal business venture/co-op set up. Though it is being based here, by only a few people with mere interest in the group buy and no firm commitments or deposits.

There's talk about what comes after the prepaid period, or the determined period of time of mining, selling miners off or renewing contract. This is the share voting, except without clear instructions, rules, or alternatives to what if risk scenarios.

What if enough people want to cash out, pushing the remaining group buyers that want to continue on to do so without the discounts already in place. The ability to buy/sell shares helps eliminate this threat to those that would continue on with the group, should a significant number choose to cash out and sell.

Then there are the legal ramifications. What if someone runs off with the money, is there only internet posts and witch hunting/doxxing to try and figure out where each user's money went. Having a clear structure with the details needed to be a trustee/board member of an incorporation help clarify the individual(s) accountable in case there is theft or mismanagement.

What if it all goes broke, GND/CB burn to the ground or disconnect and run off ala FriedCat. Would there then be multiple suits brought out by individuals at each their own cost or legal fees?

If the true goal is to allow lower costs and higher profits with increase in ROI, there are still plenty of legal ways to accomplish this outside of gentlemen's agreements via web boards. At the estimates mentioned, it is handling initially around ~>$60,000 of users money to provide a stable set up, and a system to be used for future purchases. Everything is going the right way but without the legal backing if anything should ever go wrong or into disarray.

• Multi-Sig Holders - Board of Trustees/Board of Directors
• Miners/Buyers - Share Holders voting on future of the group
• Hosting - Contracted signatory in charge of use and upkeep of equipment
• Web Board Messages - Voted on by-laws the Co-Op is held accountable to.Better the interests' of share holders with clear definitions

Everyone interested in this buy, needs to think about the risks involved and the futures at stake here in the beginning, before a snowball is set in place.

*edit a couple of fuckery wording

[philipma1957]

I just think, if you are going to go for, go for. If you are putting your money into something just to get a few dollars off, that's thinking of the short game. If you are investing in yourselves, this technology, and the future there are many paths to choose. Starting a co-op that could become a payment processor for the future, a data center for the next generation, and at the same time increase revenue while cutting costs is a titillating idea.

Woaaah there! I want to keep this as simple as possible. The goal for the purchase of Avalon6s is not just to save a few bucks, its to establish a viable structure for future buys--in particular the SP50 when that comes up for general sale. But the end goal is to save quite a few bucks, make ROI easier for small miners (including me!), and that's pretty much it.

You are essential doing it, except without the legal backing for recourse against potential problems and clear definitions of what happens next. Currently this is actually a more convoluted way to accomplish the goal with less recourse/assurances should problems occur sooner or later.

Phillip mentions some the problems that could arise with multi-sig funds, those are unavoidable at present set up. These multi-sig holders are basically the elected board in a legal business venture/co-op set up. Though it is being based here, by only a few people with mere interest in the group buy and no firm commitments or deposits.

There's talk about what comes after the prepaid period, or the determined period of time of mining, selling miners off or renewing contract. This is the share voting, except without clear instructions, rules, or alternatives to what if risk scenarios.

What if enough people want to cash out, pushing the remaining group buyers that want to continue on to do so without the discounts already in place. The ability to buy/sell shares helps eliminate this threat to those that would continue on with the group, should a significant number choose to cash out and sell.

Then there are the legal ramifications. What if someone runs off with the money, is there only internet posts and witch hunting/doxxing to try and figure out where each user's money went. Having a clear structure with the details needed to be a trustee/board member of an incorporation help clarify the individual(s) accountable in case there is theft or mismanagement.

What if it all goes broke, GND/CB burn to the ground or disconnect and run off ala FriedCat. Would there then be multiple suits brought out by individuals at each their own cost or legal fees?

If the true goal is to allow lower costs and higher profits with increase in ROI, there are still plenty of legal ways to accomplish this outside of gentlemen's agreements via web boards. At the estimates mentioned, it is handling initially around ~>$60,000 of users money to provide a stable set up, and a system to be used for future purchases. Everything is going the right way but without the legal backing if anything should ever go wrong or into disarray.

• Multi-Sig Holders - Board of Trustees/Board of Directors
• Miners/Buyers - Share Holders voting on future of the group
• Hosting - Contracted signatory in charge of use and upkeep of equipment
• Web Board Messages - Voted on by-laws the Co-Op is held accountable to.Better the interests' of share holders with clear definitions

Everyone interested in this buy, needs to think about the risks involved and the futures at stake here in the beginning, before a snowball is set in place.

*edit a couple of fuckery wording

well put it  voices just about all my concerns.

I have seen a lot go wrong via the net when it comes to btc.

You missed 1 point we all go in and we whale we smoke we levitate as  coins go to 5000. even 10000.

do we sell? must we sell.  hey I am 58 I have an okay cash setup for me and my wife with out  any coins.

but if coins explode and go 10x fast I would want out.

this happened with dz coop  I begged the coop to sell ½ the gear when coins went to 1100 and we were in at 100 or 125.

I could not convince the group.  coop crashed and burned for many reasons about 5 months later.

We just saw coins go from 230 to 500 in under 60 days. 

[armedmilitia]

I just think, if you are going to go for, go for. If you are putting your money into something just to get a few dollars off, that's thinking of the short game. If you are investing in yourselves, this technology, and the future there are many paths to choose. Starting a co-op that could become a payment processor for the future, a data center for the next generation, and at the same time increase revenue while cutting costs is a titillating idea.

Woaaah there! I want to keep this as simple as possible. The goal for the purchase of Avalon6s is not just to save a few bucks, its to establish a viable structure for future buys--in particular the SP50 when that comes up for general sale. But the end goal is to save quite a few bucks, make ROI easier for small miners (including me!), and that's pretty much it.

You are essential doing it, except without the legal backing for recourse against potential problems and clear definitions of what happens next. Currently this is actually a more convoluted way to accomplish the goal with less recourse/assurances should problems occur sooner or later.

Phillip mentions some the problems that could arise with multi-sig funds, those are unavoidable at present set up. These multi-sig holders are basically the elected board in a legal business venture/co-op set up. Though it is being based here, by only a few people with mere interest in the group buy and no firm commitments or deposits.

There's talk about what comes after the prepaid period, or the determined period of time of mining, selling miners off or renewing contract. This is the share voting, except without clear instructions, rules, or alternatives to what if risk scenarios.

What if enough people want to cash out, pushing the remaining group buyers that want to continue on to do so without the discounts already in place. The ability to buy/sell shares helps eliminate this threat to those that would continue on with the group, should a significant number choose to cash out and sell.

Then there are the legal ramifications. What if someone runs off with the money, is there only internet posts and witch hunting/doxxing to try and figure out where each user's money went. Having a clear structure with the details needed to be a trustee/board member of an incorporation help clarify the individual(s) accountable in case there is theft or mismanagement.

What if it all goes broke, GND/CB burn to the ground or disconnect and run off ala FriedCat. Would there then be multiple suits brought out by individuals at each their own cost or legal fees?

If the true goal is to allow lower costs and higher profits with increase in ROI, there are still plenty of legal ways to accomplish this outside of gentlemen's agreements via web boards. At the estimates mentioned, it is handling initially around ~>$60,000 of users money to provide a stable set up, and a system to be used for future purchases. Everything is going the right way but without the legal backing if anything should ever go wrong or into disarray.

• Multi-Sig Holders - Board of Trustees/Board of Directors
• Miners/Buyers - Share Holders voting on future of the group
• Hosting - Contracted signatory in charge of use and upkeep of equipment
• Web Board Messages - Voted on by-laws the Co-Op is held accountable to.Better the interests' of share holders with clear definitions

Everyone interested in this buy, needs to think about the risks involved and the futures at stake here in the beginning, before a snowball is set in place.

*edit a couple of fuckery wording

Phillip has a point with the multisig--the less people needed to sign off on a transaction, the better odds that a few people go rogue and take the funds. We need to be careful in choosing who holds keys.

You know what though--you're right. Doing this "informally" works totally fine, right up until something goes wrong. I wouldn't want this to spiral out of control.
If we were to form an actual cooperative, AFAIK members would have equal rights in voting regardless of investment. That probably won't work, because people with the largest shares will be underrepresented.

Now, my knowledge of corporations/cooperatives in Canada is limited, but I'm certain we'll be on the hook for taxes on income/incorporation fees. I've read that if we have less than 50 shareholders, we can avoid a lot of legal trouble with Canada's Securities Act (but I am not a lawyer!). We'll definitely need a lawyer to take a look at the articles of incorporation. This stuff is expensive and takes time. I need to sleep on this, and think of a plan going forward.

At a glance though, this seems like a web of legalese.

[Finksy]

Armed has contacted me about purchasing PSU's (the IBM 2880W PSU's) to power the Co-Op, I am going to be putting some bulk pricing together to operate the miners as I feel they are the most reliable/cost effective PSU's for medium-large scale at present.

Here are some of my thoughts on the Co-Op:

The biggest challenge here seems to be where to store the accumulated funds in between confirming commitment and the actual payment to the manufacturer.  Instead of organizing this as a Co-Op, why not just run it as a Group Buy?  If you wanted to keep it extremely simple, break "shares" down to 1 full Avalon6 (so that everyone that buys in owns that hardware, and after the committed hosting period individuals could make arrangements with the Data Center to return/rehost/sell the miner).

Shares would be valued at price of the miner + VAT/Duty + Shipping + PSU cost + X month pre-paid hosting fee.  After that hosting period is done, it would be up to the owner to re-commit to another group hosting timeframe or sell the miner and have the Hoster ship it/host it for someone else, or just have it returned to them.

As for the funds, you could simply ask for a down-payment as a reservation fee, and once you have all the commitments in place all the funds could be transferred individually to the manufacturer's wallet and the order could be made up/shipped out, similar to how RoadStress ran the SP20 Group Buy last Winter (small deposit left with RS, remaining balances were paid to SP-Tech individually and the SP-20's shipped to individuals.  In this case instead all miners would go to hosting facility).  You would specify a date range for commitment & initial deposit, and then a firm date to send the balance of funds to the manufacturer, otherwise deposit is forfeit and you are excluded from GB.

[Finksy]

Phillip has a point with the multisig--the less people needed to sign off on a transaction, the better odds that a few people go rogue and take the funds. We need to be careful in choosing who holds keys.

You know what though--you're right. Doing this "informally" works totally fine, right up until something goes wrong. I wouldn't want this to spiral out of control.
If we were to form an actual cooperative, AFAIK members would have equal rights in voting regardless of investment. That probably won't work, because people with the largest shares will be underrepresented.

Now, my knowledge of corporations/cooperatives in Canada is limited, but I'm certain we'll be on the hook for taxes on income/incorporation fees. I've read that if we have less than 50 shareholders, we can avoid a lot of legal trouble with Canada's Securities Act (but I am not a lawyer!). We'll definitely need a lawyer to take a look at the articles of incorporation. This stuff is expensive and takes time. I need to sleep on this, and think of a plan going forward.

At a glance though, this seems like a web of legalese.

I am a Canadian and my business is incorporated.  Getting articles of incorporation is in the $1,500-$2,000 CAD range and is very straight forward as far as I know, it can even be done individually online (whether or not that's prudent is another thing).  I do not know anything about < or > 50 shareholders, and the applicable laws however if the Corporation is controlled by non-resident shareholders, it is not considered a CCPC and there are different tax implications: http://www.taxspecialistgroup.ca/public/taxtips.asp?n=11-02&site=tsg

What I do not know is if "Transaction Verification Services" are considered an active form of income or investment income, the corporate tax rates here for each are considerably different.

The benefit to registering as a Canadian Corporation would be the corp would save the 5% GST charged for importing the miners here, and if I'm not mistaken the Corporation could claim back 5% of the hosting fee in GST; since no GST is charged in mining, it would be a full tax refund.

The issues are, as a non-CCPC there are no capital gains exemption (CCPC's are entitled to an $800,000 exemption on capital gains when selling their shares in the Corp.) And any income paid out by the corporation would be taxed AFTER corporate tax is paid (Canadians would get taxed as dividend income I believe, I'm not sure how Americans would be taxed).

For these reasons, a Group Buy where everyone is still an individual (with individual hardare using purchasing power together) would make more sense to me.

[notlist3d]

Phillip has a point with the multisig--the less people needed to sign off on a transaction, the better odds that a few people go rogue and take the funds. We need to be careful in choosing who holds keys.

You know what though--you're right. Doing this "informally" works totally fine, right up until something goes wrong. I wouldn't want this to spiral out of control.
If we were to form an actual cooperative, AFAIK members would have equal rights in voting regardless of investment. That probably won't work, because people with the largest shares will be underrepresented.

Now, my knowledge of corporations/cooperatives in Canada is limited, but I'm certain we'll be on the hook for taxes on income/incorporation fees. I've read that if we have less than 50 shareholders, we can avoid a lot of legal trouble with Canada's Securities Act (but I am not a lawyer!). We'll definitely need a lawyer to take a look at the articles of incorporation. This stuff is expensive and takes time. I need to sleep on this, and think of a plan going forward.

At a glance though, this seems like a web of legalese.

I am a Canadian and my business is incorporated.  Getting articles of incorporation is in the $1,500-$2,000 CAD range and is very straight forward as far as I know, it can even be done individually online (whether or not that's prudent is another thing).  I do not know anything about < or > 50 shareholders, and the applicable laws however if the Corporation is controlled by non-resident shareholders, it is not considered a CCPC and there are different tax implications: http://www.taxspecialistgroup.ca/public/taxtips.asp?n=11-02&site=tsg

What I do not know is if "Transaction Verification Services" are considered an active form of income or investment income, the corporate tax rates here for each are considerably different.

The benefit to registering as a Canadian Corporation would be the corp would save the 5% GST charged for importing the miners here, and if I'm not mistaken the Corporation could claim back 5% of the hosting fee in GST; since no GST is charged in mining, it would be a full tax refund.

The issues are, as a non-CCPC there are no capital gains exemption (CCPC's are entitled to an $800,000 exemption on capital gains when selling their shares in the Corp.) And any income paid out by the corporation would be taxed AFTER corporate tax is paid (Canadians would get taxed as dividend income I believe, I'm not sure how Americans would be taxed).

For these reasons, a Group Buy where everyone is still an individual (with individual hardare using purchasing power together) would make more sense to me.

If you form a corporation would that not mean you would not be paying taxes on the mining operation?   If it's like a us Corporation it makes it a LOT less liability to be a officer/owner but there is double taxing.   Taxes for corporation and taxes for payments to it's people as well.

I can see why the top of the group would really want corporation to limit personal assets being touched.  But I think your opening yourself to a whole lot of costs.

[armedmilitia]

It looks that there are numerous legal and practical problems of joint ownership and joint custodialship of funds, and I think we can approach this better.

We can run the GB similar to the roadstress christmas GB. Everyone retains ownership of the miners (no corporation needed), the vast majority of funds are never held by me, and at the end of the hosting term they can do whatever the hell they want with em--although they have the option to renew hosting.

Here's the game plan:

• I take a 0.06BTC (per miner) deposit from those committing to miners. If you back out you lose your deposit, if we don't make the MOQ then everyone gets their deposit back.
• BlockC provides payment address, everyone pays for the miners.
• At the same time, Finksy provides payment address, everyone pays for the PSUs.
• Once miners arrive and are running at CryptoBoreas, Allinvain provides a single payment address and everyone pays for the hosting.
• If someone doesn't pay for the hosting by a set due date, their hardware is seized to pay for the cost of hosting.
• The buyers sign a message containing their username with the BTC address(s) they paid with.

Once hosting has been paid for, everyone gets their deposit back (except those who didn't pay at some stage).

I will sign the hosting agreement and will provide allinvain with your pool information so he isn't inundated with PMs. If you want pools changed, I will have remote access to the miners and will be able to do it for you in a jiffy.

Finksy PM'd me a full fee schedule of the PSUs, the prices are very good. I will post that when I make the official GB thread tomorrow.

[allinvain]

I'd like to add that if you guys go with Finsky for PSUs you can save on shipping costs because a member of our team lives in Toronto, so he can just personally pickup the PSUs and we'll drive them up to Labrador free of charge. I would also recommend buying the necessary PSUs _before_ the miners ship, this way the PSUs are ready and waiting in Labrador.

[armedmilitia]

I'd like to add that if you guys go with Finsky for PSUs you can save on shipping costs because a member of our team lives in Toronto, so he can just personally pickup the PSUs and we'll drive them up to Labrador free of charge. I would also recommend buying the necessary PSUs _before_ the miners ship, this way the PSUs are ready and waiting in Labrador.

Good idea there. I'll send finksy a message about that.

I just got off the phone with blockC. They've underclocked the units to 3.5TH/s pending a firmware update from Avalon (same efficiency). They expect that there will be new firmware in 5 weeks which should get them back to 3.65, but in the meantime they've lowered their price accordingly.

I'll be opening this GB tomorrow to collect deposits (so we know who's seriously interested). I'll give a detailed price breakdown of all expenses then. Once we have the quantity picked out, we can get an exact price on our Avalon6 units, and then we can start this ball rolling.

[philipma1957]

This seems to be a better method of setup.

Depending on kilo17 and my other options I may do 1-2 units here.