I’ve been receiving a fair amount of feedback thus far, which is always helpful. I wanted to take a moment to address a few questions and suggestions that have been repeated a few times.
• Postpone dividends and put a heavier focus on reinvestment in new hardware.
While this would be a short-term and aggressive solution, it does present two primary concerns:
1) If the calculations show that, even under optimistic circumstances, hardware purchased at price “X” isn’t able to recoup that cost “X”, is it really worth it to make the purchase in the first place?
2) A change like this would require a vote, and one that would more than likely fail because it doesn’t present itself as a viable long-term solution to a perpetual problem.
• Stick it out and wait for the Bitcoin price to increase.
Unfortunately, gambling on when the BTC/USD exchange rate will go up isn't a practical long-term, or short-term, business model.
In order for us to grow in any substantial capacity (speaking solely to datacenter space and hardware purchases), the exchange rate would need to be above $750 per BTC. That price would give us the ability to increase our hashrate by 50%, datacenter space by 100%, and cover energy costs associated with adding another 20A circuit.
While it’s always a pleasure to see the exchange rate rise, we know it can also fall. It’s better to be realistic about the situation rather than hopeful, which is a hard lesson I’ve learned in years past.
• Are your ambitions as big as PETA’s?
I have some daunting ambitions, certainly, but we don’t have the capital resources (by a long shot) to grow even one hundredth of their size. Hosting space, energy costs, and time are also major preventative factors.
• Sell all hardware and use the proceeds to purchase new, more efficient devices.
Mining
something is better than mining nothing. I won’t even touch on the pain and aggravation we would experience if we had to sit through another preorder queue. Foregoing that would mean purchasing hardware that is available
now, which, in terms of efficiency, is on par with what we’re already using.
• What will happen to my shares if liquidation should occur?
Shares are left untouched in this process, and can still be traded when the KCIM market resumes. The last dividend will be paid out on a ‘per share’ basis and will be distributed after all equipment has been sold and funds are accounted for. At that point, trading will again be halted, and a summary of all assets and final dividend will be posted.
Once the dividend is paid and outstanding issues are resolved, the fund would be permanently closed.
• What do you estimate the final dividend to be?
Assuming full liquidation, the final dividend will be comprised of all remaining mining revenue, leftover funding from the previous model, our reinvestment fund, proceeds from the sale of all equipment, and any remaining Namecoins mined on BTCGuild. It’s hard to say what this value will be, but I estimate it to be anywhere from
BTC20-30 (0.00023 – 0.00035 per share, 10x more than a normal dividend).
Theoretically, selling the entire operation as is should net a bit more than that as there is value in
A) already having a listing on Havelock and
B) having an established investor base. A motivated individual or organization looking to build a mining farm would have the framework in place by buying us out instead of starting from scratch.
