Avalon ASIC Batch #2 Income Sharing; arrived and hashing

[ProfMac]

Can you tell me the quotient MH/s/share?

That is public knowledge.

I see numbers of about 65 Gh/s quoted for the Avalon Batch #2 unit.
The entire output of the unit is set at 100 shares.

I think that comes to 650 MH/s  / share

It would be interesting to calculate how many high end Radeon GPUs 1 share is equivalent to.

[theGECK]

Can you tell me the quotient MH/s/share?

That is public knowledge.

I see numbers of about 65 Gh/s quoted for the Avalon Batch #2 unit.
The entire output of the unit is set at 100 shares.

I think that comes to 650 MH/s  / share

It would be interesting to calculate how many high end Radeon GPUs 1 share is equivalent to.

It looks like a 7970 can get around 1000-1200 Mh/s with the right settings, but working ones cost around $400 on eBay and use more power than an ASIC, plus the (hopefully small) power cost of the computer running the mining software. So 1 share looks to be roughly equivalent to 1/2 of a properly configured 7970, and roughly equivalent to 1 7970 being run with standard settings (according to numbers higher on the page).

[ProfMac]

...

The Offer


I may buy back your shares at the same price at any time and for any reason.  
I may allow overbooking in order to buy a 4 module Batch #3 unit.
Any buy-back will be Last Purchased, First Refunded and sent to the original purchasing address.  Buy soon, not late!

...

I will pay by epochs.  A new epoch begins when someone purchases shares.
An epoch ends when I receive mining income or when I refund shares; it may end each week or month by declaration.
No gaps exist between epochs.
Bitcoin is not taxed

There is activity in my PM on the issue of buy-back.  One concern is that I will contrive a "free loan" and another concern is about how the timing plays out between income to the venture and any payback that I initiate.

I tried to make a sensible offer up front.  
I think that people get uncomfortable if the offer changes after they have put money in.
I tried to make the rules minimal, because the more complicated they are, the more difficult it is to understand them.
I was in a hurry to try to fund a batch #3, so there is always a chance that I crafted a really bad rule in there somewhere, I hope not.  

So here are some scenarios:

1.  Spring flood puts my house underwater.  I can't mine any more.  I refund everyone their coin.  This scenario is covered under the offer.
2.  Drama Queen makes a purchase, and takes a vastly excessive amount of attention.  I refund him his money, and everyone can read the bit-chain and verify this.  It's covered under the offer.
3.  A big payment comes in, and I don't want to share.  I refund everyone's money.  Oops!  The epoch ended when the payment came in, I can't manipulate things this way.
4.  Snipe wants to buy in as late as possible so that he gets paid without having his coin tied up.  I think he has a chance of missing a payment by buying in late and that offsets the advantage he might get by buying late.  I thought the rules were "good enough" to handle this.

5.  Greed tries to buy 300% of my production.  Hmm.  I can refund back down to about 90% sold out.  I can keep the coin and buy more hashing power, provided that the pay schedule is met.  Both scenarios are ok with the rules of the offer.

6.  Hopper wants to get their money back and move on.  I'll try to be cool.  If I can buy back,  I'll announce a buy-back here even though I don't have to.  I'll refund everyone who bought in more recent than the bored dude.  Everyone then decides if they really want back in, want back in stronger, or whatever.  It's covered under the scenario.  It is a tad tedious.  This is the place where I will tweak the rules in any new venture.

There is a Batch #2 pre-order for sale.  Woo Hoo!  Buy shares now!

I don't think making more and more rules makes a deal safer.  That goes for any deal, not just this one.  Honey scammer don't care.  Ultimately, you have to trust the good guys and distrust the bad guys.  Good luck if figuring out who is who.

I'm interested in crafting the rules for deals, so I welcome discussion on this, and I will tweak the rules for the next venture that I start.

[ProfMac]

• Profitability decline per year: I would suggest to insert 0.3 or lower (difficulty will raise fast. For my own calculations I usually use 0.1)

I think this is reverse. 0.3 means in next year you are expected to earn 30% less. So, 0.1 means 10% less (i.e., you retain income level at 90% of first year). So, to be pessimistic, put in higher value.

No, it does not work like that. Play with that variable in http://www.bitcoinx.com/profit/ and you will see

Does anyone want to predict delivery date for the Batch #2 devices, or perhaps give an update on the anticipated earnings per share?

[dchou]

I've been playing around with the mining profitability calculator.  It's such a moving target. There are just too many variables that have a significant impact on the bottom line.

That said.... I came up with about 0.9BTC/share for the first month. 

[ProfMac]

Edited 2013-03-29 19:28:07 UT

I just made a deposit of 7.680025  BTC into the account.  The first deposit, 0.9906 BTC, is also mine, so I have 9.985748 shares.  These shares will be paid just like the others, and are the mechanism to guarantee the electric bill and other expenses.  In time, I will make another payment so that I own exactly 10 shares.

I have made the adjusting payment of 0.012375 BTC so that I own 10 shares in the original offer.

At this time, I will stop accepting payment to account 17Pq8oPtk8rikxZhF1wENFqR9YtDyLyr8E.

I will open a new account to sell additional shares.  I will post those details below.

The new address is 17DCms43Vu2yusDjmpjHJuZihSSWkNzgSH
I have seeded a tiny payment, 0.04965694 BTC, to this address to be sure things are working.

Yo! Look Here!  This is an auction.  It is open now!

The auction partially ends on or about Friday, May 10, 2013
To be considered, your bid must be included in or before block 235,532.  If you are low on time, tip the miners generously.



Anyone may submit a payment in any amount at any time to this address.
The address initially represents a total of 10 shares.
The 10 incoming addresses that send the most total bitcoin will each have 1 share (1% of the mining income)
N.b. it does not matter how much the total of payments is, 1 address gets 1 share.  It is a multiple winner auction.
I can't tell if 1 person sends payments from several addresses.  Just letting you know that I know.  I think focus is a better strategy.

For each epoch, I will decide whether to increase the total number of shares represented by the address, or keep it the same.
From time to time I will refund payments from addresses that are not in the top cut.

[ProfMac]

Edited 2013-03-29 19:28:07 UT

I just made a deposit of 7.680025  BTC into the account.  The first deposit, 0.9906 BTC, is also mine, so I have 9.985748 shares.  These shares will be paid just like the others, and are the mechanism to guarantee the electric bill and other expenses.  In time, I will make another payment so that I own exactly 10 shares.

I have made the adjusting payment of 0.012375 BTC so that I own 10 shares in the original offer.

At this time, I will stop accepting payment to account 17Pq8oPtk8rikxZhF1wENFqR9YtDyLyr8E.

I will open a new account to sell additional shares.  I will post those details below.

The new address is 17DCms43Vu2yusDjmpjHJuZihSSWkNzgSH
I have seeded a tiny payment, 0.04965694 BTC, to this address to be sure things are working.

Anyone may submit a payment in any amount at any time to this address.
The address initially represents a total of 10 shares.
The 10 incoming addresses that send the most total bitcoin will each have 1 share (1% of the mining income)
N.b. it does not matter how much the total of payments is, 1 address gets 1 share.  It is a multiple winner auction.
I can't tell if 1 person sends payments from several addresses.  Just letting you know that I know.  I think focus is a better strategy.

For each epoch, I will decide whether to increase the total number of shares represented by the address, or keep it the same.
From time to time I will refund payments from addresses that are not in the top cut.

A question came in on the status of the first deal.  Nothing has changed on that deal.  If you bought 1 share representing 1% of the mining output, you still own it.  I still hope everyday to receive news that the Avalon has shipped.  I am doing behind the scenes preparation to bring it online. 

The only news there is that I'm not letting anyone else buy in at that price.

But I think that deal is undervalued.  I don't know what the market value is.  So I am holding an auction on another 10% of the mining output.  I notice that no one has bid.  That really surprises me.  At the moment, a bid of 0.01 BTC would buy a share.  I thought there would be a feeding frenzy.

[dchou]

I sent in my dollar.  Hopefully that will kick things off.

[theGECK]

Looks like 3 people have placed bids now. How long will this auction be open? If you don't raise enough, will all amounts be refunded, or will the bids be honored?

[dchou]

My understanding is:

Money sent to this address represents 10% of a Batch 2 Avalon.

Each bid put in represents 1% of output regardless of how much the bid is.

Only the top 10 bids will each get 1% of output.  The rest will get refunded.

Auctioning off this 10% is a way to value the investment of the original offer, where people paid .8683 BTC per 1% share.

[ProfMac]

My understanding is:

Money sent to this address represents 10% of a Batch 2 Avalon.

Each bid put in represents 1% of output regardless of how much the bid is.

Only the top 10 bids will each get 1% of output.  The rest will get refunded.

Auctioning off this 10% is a way to value the investment of the original offer, where people paid .8683 BTC per 1% share.

Yes.  Although as an editorial style I try to say either bitcoin or USD.  In this case, bitcoin.
Each bid, yes.  Not each transaction.  The total amount from each send address is 1 bid.
Yes, & yes, refunded.
Hmm.  I suppose.  Or perhaps it is a way to let me imagine I could have made untold riches "if only."  In a closer more pragmatic sense it is a way to value this 10% under the current market conditions.

[ProfMac]

Looks like 3 people have placed bids now. How long will this auction be open? If you don't raise enough, will all amounts be refunded, or will the bids be honored?

I have already fully paid for the Batch #2 machine, so I can deliver on my promise from the very first coin that was bid, and all the winning bids will be honored.  As a policy statement, even a 1 Satoshi winning bid will be honored.  I am betting on a stronger auction.  LOL.  If I were primarily a marketing guy, I would title this thread 1% of Avalon from 1 Satoshi & up.

I have stayed up late wondering if I need to announce a closing time.  I know that some people want to have very rigid rules about such things.  I don't know.  

It is not relevant, but I thought I might mention that I lived in the French Quarter, New Orleans some years ago, and the bars there don't close.  The people there think it that a closing time causes people to chug drinks, drive drunk, act reckless, and be dangerous.

I can imagine different scenarios that I need to handle, but I still don't know how I will decide.

1.  There are plenty of good bids, and another bid comes in.  I increase the number of shares in the auction, and the number of bids that I accept.  I probably keep the auction open.
2.  The lowest bid really is for 1 Satoshi.  I really want to keep the auction open.
3.  The machine arrives.  I could just start it up, and make the first payment with no announcement or fanfare.  
4.  Someone asks to be let out.  Sometimes there are compelling personal reasons.  
  a. Keeping the auction open will let this happen without special intervention.
  b. Keeping the top 1 or 2 unsuccessful bids for several days before making the refund lets them become successful again if I do make a refund.
5.  I just throw a dart at the calendar, and announced a closing time in advance.


Of course, please feel free to discuss this.  You may mention something important that I haven't thought of.

[svenp]

That's a lot of scenarios.  Given #2, you should just set a minimum bid.  People have already bid, but still, if you aren't going to accept low bids, might as well clear that up now with a minimum.  Speaking for myself, having a fixed end time is necessary and would encourage participation.

[ProfMac]

That's a lot of scenarios.  Given #2, you should just set a minimum bid.  People have already bid, but still, if you aren't going to accept low bids, might as well clear that up now with a minimum.  Speaking for myself, having a fixed end time is necessary and would encourage participation.

I don't like changing the rules after people are using them.  The low bid stands, since I have already published it. 

Are you saying you would not even bid 1 Satoshi if the auction does not have a fixed end time?

[theGECK]

That's a lot of scenarios.  Given #2, you should just set a minimum bid.  People have already bid, but still, if you aren't going to accept low bids, might as well clear that up now with a minimum.  Speaking for myself, having a fixed end time is necessary and would encourage participation.

I don't like changing the rules after people are using them.  The low bid stands, since I have already published it. 

Are you saying you would not even bid 1 Satoshi if the auction does not have a fixed end time?

A fixed end time gives people the certainty that they won't randomly lose their share 8 months into the project because somebody sent 1 satoshi more than them. Also as soon as you are hashing, people will start bidding because you will have proved it's a real thing, and that will be a lot of paperwork to keep up with - will you just keep a running tally of the top 10? What will you do with the ones underneath that, renew the BTC or will it just sit there forever in case they want to up their bid?

An open auction has a lot of room for abuse on both your end and on our end. I would say a good "end date" is after the first day of hashing. Personally, I wouldn't do an auction - I would have stuck with your plan #1, closed it on the first day of hashing, then re-released shares at an increased price once you've sent out payments to those who bought in to show you're actually legit(ish, at minimum). Many people are not going to buy into something from some guy who has non-standard terms that may or may not be better but even so the unit still hasn't arrived and there's no guarantee that you won't just walk away with the BTC. The people buying in are taking on a lot of risk (you'll walk away, the unit won't arrive, you won't pay out fully, the unit will break, your terms say you can buy them out at anytime, there's no guaranteed uptime to name a few) with no control. So, you only get the people who are willing to take more of a risk with BTC that's now worth over $100USD each, and that are looking into the Custom Hardware sub-forum. Pretty slim pickings, if you ask me. You'd probably do better if you put your post in the services section (mods willing), that you're auctioning off a portion of your ASIC mining and you will manage the mining for the people who can't buy one themselves. Just my two satoshis.

[Rampion]

Prof: your terms are quite complicate indeed. Just an advice: the simpler, the better.

[ProfMac]

Prof: your terms are quite complicate indeed. Just an advice: the simpler, the better.

That is very good advice.  The difficulty is in making it so.

[theGECK]

1. If I send you 10 BTC, what exactly do I get?

I think this is the thing that is confusing to people. It's difficult to parse the terms and figure out exactly what is being offered, especially with the many changes. It might be best to refund auction money (since there's very little in there) and get some simple terms hashed out to start again, this time with terms that are more simple.

Also, change the OP - move the text and put strikethrough through what isn't an option any more if you don't want to delete it. It's very confusing.

I'll PM you with some thoughts on simplifying the terms.

[ProfMac]

I went through all 3 pages of this thread but the more I read the less I understand the deal here. What I need to know is this:

1. If I send you 10 BTC, what exactly do I get? If I understood right, I get shares.
2. If at some point I decide to sell shares - cash out - I'd need to find a buyer for those shares, or you would buy them?

In other words, unless deal is as simple as me investing 10 BTC and getting 10+ BTC out of the deal easily, I don't see anything worth investing in there.

If you buy 1 share, you get 1% of the bitcoin from my batch #2 Avalon.  Some people think the payout will be large.
The only action on your end is to make 1 payment, with careful attention to both the paying and the receiving address.
If you set your price right, you will automatically get more back than you put in, no additional action from you.
All things end, and in time this rig will be decommissioned.  You will automatically get your original coin back at that time, with no additional action on your part.
I don't know how to make it simpler than a 1 payment action.

The new address is 17DCms43Vu2yusDjmpjHJuZihSSWkNzgSH
I have seeded a tiny payment, 0.04965694 BTC, to this address to be sure things are working.

This 2nd phase is not a fixed price purchase, it is an auction.  No matter what size payment you send, you are buying 1 share, 1%, only.  A 10 BTC purchase for 1 share only makes sense if you believe that the rig will mine more than 1,000 BTC during it's lifetime.

If you are outbid, you will be paid back, no additional action required on your part.  A day or so delay in payout will give you time to up your bid, and me time to handle my other life.

[ProfMac]

Prof: your terms are quite complicate indeed. Just an advice: the simpler, the better.

That is very good advice.  The difficulty is in making it so.

Check this deal, it worked flawlessly so far. I bought 1 module, that will be hosted in China.

https://bitcointalk.org/index.php?topic=158986.0

That is a great deal.  My electricity cost is much lower than his, perhaps you will have him ship his unit to my location.  It would save $950 / year.
 365 * 24 * 0.650 * ((25-8.2)*0.01)

My electricity rates are below 8.2¢ / kwh.