"Condo" for your Avalon chips: Price Drastically Reduced!

[flyonwall]

Not to worry. In time, people will see how serious I am about this. The chips won't arrive until July.

[1714761895]

1714761895

[mrb]

Price in Bitcoins = ((Hashing power in GH/s) * 155,520,000) / (Current Difficulty) * (1 + (Months to come online from today)))

A 10-chip unit has hashing power of about 2.82 GH/s, and I figure I can have the first condo system running by July, so each condo unit is priced at

2.54 BTC <-- new price per condo unit, minus the cost of your chips

Either your math, or your formula is wrong. The price for a 2.82 Gh/s unit should be, assuming 2 months to come online from today:

(2.82*155520000/8974296.01488785)*(1+2) = 146.60 BTC, not 2.54 BTC

Your math is wrong, your terminology is confusing, you are not re-assuring people you have EE skills to assemble the chips in functional units, etc... I don't think you will attract any customer this way.

[flyonwall]

My discussions with Shibaji has enlightened me to the fact that my previous price was too high, so I lowered the price drastically. I just based it on Avalon's Batch 3 pricing. I will now remove the formula.

[wrenchmonkey]

My discussions with Shibaji has enlightened me to the fact that my previous price was too high, so I lowered the price drastically. I just based it on Avalon's Batch 3 pricing. I will now remove the formula.

Wait, so is 2.54BTC per 10-chip "floor" (plus chips) the newer pricing? Not to rain on your parade, but there are others offering to build and send users a 10-chip unit for 80 Euros (about $105USD). Compared to your 10-chip unit (which I don't even get to keep) for $355.60 at a $140USD/BTC exchange rate. PLUS they have to pay management fees, etc.

I'm not trying to be rude here, but what's the draw? Why would somebody pay 3+ times as much money for boards they can't possess that they're stuck paying "management fees" on, to some guy they don't know, who forever holds their stuff in a foreign country? What happens if something goes wrong, and a bunch of boards get fried. How do you decide whose boards those were, and who's not gonna get paid anymore? What if the building you're hosting them in gets flooded? Do you have insurance? Are you going to be able to pay people back for their damaged equipment? What about lost revenue?

Most people are better off paying way less money to have somebody else assemble it, owning the equipment, running it themselves for no mangement fee, using electricity costs as a tax write-off. Again, I'm not being mean. I just really don't understand what it is that you're offering to people that is better than what's already out there?

[flyonwall]

No, you are not being rude. I am glad you brought this up, because I want to make this deal as good as possible both for the buyer and Centerus. If nobody raises the questions you are now raising, I will never know why nobody's attracted to the whole deal. I should thank you.

This is designed for people who bought the chips but don't have the time or the skills to build their own systems. If you can build it yourself, that's perfect. Yes, $355.60 is more than triple the European design you mentioned. (I think I know which design you are talking about.) Here are the advantages:

1. If you are outside of that country where this cheaper system is built, you will have to factor in the costs of shipment, and most specially import tariff. There is also risk involved during transit. In the case of the condo deal, what gets shipped to you are Bitcoins.

2. What are you really after when you bought these chips? Are you after the fun of having the machine in your house, something to show to your friends? Or are you after the potential earnings?

3. As for the maintenance fees and electricity fees, these will be minimal. The condos will be guarded 24/7, and there will be at least one person on site during the day. Labor is cheap in Cebu, so these won't cost much. The building these condo systems will be housed in has its own emergency electricity generators. If you put your mining equipment in your own home, you yourself will have to make sure that your systems are all up and running every day.

4. We will strive for maximum uptime. If there is downtime, everybody in the condo system that's down don't earn the Bitcoins they should be earning. If only one of the four "floors" in a system is down, the whole condo system will have to be shut down to fix that single floor. (All four floors in a condo system share the same power supply.)

5. At this point there is no provision for insurance, so if a natural calamity hits the building where the systems are located, tough luck. However, I can tell you that there are critical operations of some U.S. companies housed in some of those IT Center buildings. The typhoons that hit Cebu are not as severe as those that hit Manila. The IT Centers in Cebu don't get flooded.

What I am offering here is simply less hassle, less headache. You give me your chips, and part with some of your Bitcoins, and I will take care of the rest. If I damage one of your chips in any way, then I will replace it. (That's one of the reasons why Centerus just bought some chips ourselves.) We will test your chips to determine that all your chips work when these arrive at the site. If a chip arrives with its functionality impaired, we will let you know and you can either pay us for replacement chip(s) or reduce your portion of the condo income.

[eclipse81]

EDIT:Seems I was typing this at same time OP was replying to previous posts.


I was wondering the same thing.Burnin was one of the first(that I was aware of) but not the only designer to put forth the 10 chip board solution and he is fairly confident in his 80 EUR/105USD pricing(I believe he said +/- 10% MAX) and others who have said that should be the sweet spot also.At this moment Gox average is 142$ and if we look at the last 2 weeks of market data we will see that there has been some serious buy walls at 120$USD so chances are low that we will see price go below that this week.But even at 120 per btc your prices are really really unreasonable IMO for the service and product you offer.I am not attacking you I am just trying to make you aware of the current environment for similar offerings.To break it down

Prices based on MTGOX Weighted Average on April 30 6:17 GMT

Your offer-$363.27 USD (2.54btc*143.02$)+Electricity costs and Maintenance Fee(yet to be determined)

-You install 10 of my chips on a board made specifically to operate in a custom setup referred t as a condo

-You install this board into a custom setup you call a condo

-You  handle operation of this condo

-You keep my hardware in the Phillipines (i am gonna assume if I ever want my hardware ill have to pay you shipping,not that i am sure itll be much use outside of your "condo")

-You allocate me my share of mining proceeds

Burnins (and a few other developers) offer-$105 USD +/_- 10% (this is ballpark but research and BOM shows it to be fairly accurate)

-they install 10 of my chips into standalone unit with daisy chaining/modular capabilities

-they ship unit to me

-I handle operating costs

-I handle mining

-I have hardware in hand to do with as I please

-Most likely bulk discounts


For most people this seems like the choice is obvious.I woul dconsider changing your pricing structure to be more competitive in what is gearing up to be a very competitive market.just my 2 cBTC

[flyonwall]

-they ship unit to me

Who's taking care of shipping costs? What about tariff? If you are in the same country as the person building the system for you, then it's OK.

Given all this, what do you think would be a reasonable price for the condo deal?

[eclipse81]

Yes it is cheaper if you are in same country as assembler.However I have products shipped form EU to US fairly often and the total costs should not exceed 25 dollars by my estimate.so we are still at less then 1 BTC at current market value.I think 10 chip modules should not exceed $150 USD and that is at the most.Many people want product in hand,however there may be a few who may not be able to miner to have a miner at home or just dont want to deal with it and those are the people your offer is catered towards.But that niche I do not think will pay what you are asking.Also keep in mind that some developers have already brought up the idea of them hosting their own products for a maint/elec fee.and if they do theyre product before fees is less then hlaf of yours and then they would be offerin gan almost identical service.Put up a poll with some well researched prices and see what people think.Competition makes any market healthier in my opinion so best of luck to you.

[flyonwall]

It definitely costs much more than $25 to ship from Europe to the U.S.

Here's how much UPS charges for shipping something worth $105, weighing 5Lbs, from Germany to USA: $211.42 (UPS Express Saver)

From Sweden to USA: $222.45 (UPS Expedited -- lowest cost)

You are really much better off shipping Bitcoins than physical objects.

[BenTuras]

I posted a box with a total weight of 11 pounds from the Netherlands to the USA, insured(€3000), track & trace and have to be signed for when received for €60 yesterday. €60 is us$78. It will arrive in 4-8 working days.

[flyonwall]

I posted a box with a total weight of 11 pounds from the Netherlands to the USA, insured(€3000), track & trace and have to be signed for when received for €60 yesterday. €60 is us$78. It will arrive in 4-8 working days.

That's well and good, from the Netherlands. This is using normal post, right? As opposed to using either UPS or Fedex? How about tariff or customs tax?

Can anybody else tell us how much it would cost to ship from Germany using normal post?

[flyonwall]

Quoting myself above:

4. We will strive for maximum uptime. If there is downtime, everybody in the condo system that's down don't earn the Bitcoins they should be earning. If only one of the four "floors" in a system is down, the whole condo system will have to be shut down to fix that single floor. (All four floors in a condo system share the same power supply.)

How about this: to make it even more compelling, in case of downtime, I will guarantee less than ten minutes of downtime, even if your condo system  breaks down. While it is being repaired, we will switch all owners in that condo system over to one of the Centerus systems. We take the loss, not you. The condo management software will do the switch, automatically; that's how I can guarantee less than ten minutes downtime.

[BenTuras]

I posted a box with a total weight of 11 pounds from the Netherlands to the USA, insured(€3000), track & trace and have to be signed for when received for €60 yesterday. €60 is us$78. It will arrive in 4-8 working days.

That's well and good, from the Netherlands. This is using normal post, right?
As opposed to using either UPS or Fedex? How about tariff or customs tax?

Can anybody else tell us how much it would cost to ship from Germany using normal post?

It's indeed normal post, and not UPS or Fedex.
No idea what you mean by tariff and custom tax, if any, will be paid by the recipient.

[flyonwall]

Thanks, BenTuras. Appreciate the input.

I want input on this: which mining pool should the whole condo complex join?

If the condo complex is large enough, it should be its own mining pool. Or are there still advantages to just joining a mining pool even in this case?

[wrenchmonkey]

EDIT:Seems I was typing this at same time OP was replying to previous posts.


I was wondering the same thing.Burnin was one of the first(that I was aware of) but not the only designer to put forth the 10 chip board solution and he is fairly confident in his 80 EUR/105USD pricing(I believe he said +/- 10% MAX) and others who have said that should be the sweet spot also.At this moment Gox average is 142$ and if we look at the last 2 weeks of market data we will see that there has been some serious buy walls at 120$USD so chances are low that we will see price go below that this week.But even at 120 per btc your prices are really really unreasonable IMO for the service and product you offer.I am not attacking you I am just trying to make you aware of the current environment for similar offerings.To break it down

Prices based on MTGOX Weighted Average on April 30 6:17 GMT

Your offer-$363.27 USD (2.54btc*143.02$)+Electricity costs and Maintenance Fee(yet to be determined)

-You install 10 of my chips on a board made specifically to operate in a custom setup referred t as a condo

-You install this board into a custom setup you call a condo

-You  handle operation of this condo

-You keep my hardware in the Phillipines (i am gonna assume if I ever want my hardware ill have to pay you shipping,not that i am sure itll be much use outside of your "condo")

-You allocate me my share of mining proceeds

Burnins (and a few other developers) offer-$105 USD +/_- 10% (this is ballpark but research and BOM shows it to be fairly accurate)

-they install 10 of my chips into standalone unit with daisy chaining/modular capabilities

-they ship unit to me

-I handle operating costs

-I handle mining

-I have hardware in hand to do with as I please

-Most likely bulk discounts


For most people this seems like the choice is obvious.I woul dconsider changing your pricing structure to be more competitive in what is gearing up to be a very competitive market.just my 2 cBTC

I agree with this poster, that the cost cannot reasonably exceed $150/unit, and be appealing to most people. $200, I think, would be your upper limit. These boards aren't going to be that heavy. So maybe shipping 1 board for $200 (that seems REALLY high) isn't a huge difference in cost between your offerings. But if somebody has 2-10 boards, the shipping price isn't going to really increase much at all. So now when you divide that cost by 10 boards, the shipping costs becomes $20 in shipping per 10-chip-board, or $125 total cost shipping included.

As you said, I'm buying chips to make money. If I buy 100 chips, and send them to you (still have to pay shipping to you, right?) that's $3600 just for the "condo units" in addition to my $1100 or so for chips. How long is my $4700 investment going to take to pay back, after paying management fees, etc?

Conservatively, we'll say that your solution for 100 chips is $1500-$2000 more of an investment. We'll stick to the low end and say it's only $1500 more. If (again, conservatively) assume that difficulty has only risen to 40Million by the time these go online, that would mean I would have to have 31 days of power outage at a difficulty of 40Million, before I even lost as much as I would have by purchasing units from you (before fees).

Assuming difficulty rises to 60Million, it becomes 41 days. The more difficulty rises, the less this 'downtime insurance' is worth. The most I have EVER been without power has been 5 days one year, when I lived in an extremely rural area that was hit by severe ice storms that destroyed a large number of power lines. Something that happens maybe once every 10-15 years out there. Most of the time, power outages in the U.S. (except for California and NY) last maybe 15-20 minutes, and happen once per year or less.

Just some food for thought, as you develop your plan. Again, I think your idea is a good one on its face, but I just don't think the numbers work for most people at this price.

Also, just a thought, if you're hosting potentially many many TH of processing power, I think a P2P pool, or better yet, solo mining is more realistic, or perhaps creating a new pool, so that owners can also collect transaction fees, rather than losing them to the pool they're mining for. I don't know how much fees really amount to in the long run, but the ability to collect on transaction fees might add appeal to your solution.

Update: I just read Burnin's thread, and now he's shifted to an anticipation of do double density (20 chips per board), for 100 Euro ($132USD) per board. Meaning a system of 100 chips (minus chip cost) can be done for $660 +shipping. Even if you assume $200 in shipping, you're talking about a per-chip cost of $8.60 to have them put into a fully functional system, and shipped to your door. Compared to $36.30 (plus whatever it costs to have the chips shipped). A difference of 425% in initial investment, before the fees start.

I think you will want to decide to either make your money off of hardware sales, or off of management fees, but probably not both.

If the cost of hardware in one of your condos was comparable to the cost of owning my own hardware, I believe you would have folks willing to pay a reasonable management fee to have their hardware run off-site.

In fact, I've considered offering a hosting service here in the U.S. similar to what you are offering, where people can send in their hardware and have it managed and monitored. Running a large enough farm would allow breaks on energy pricing; if there were a large enough farm, it could be run as its own "pool" allowing for transaction fees to be kept by those who mined it. And people don't have to worry about uptime.

I think you'll find a reasonable interest in those services, provided you can get the hardware pricing more in line with other current offerings, but I don't think you'll find a lot of people who are prepared to pay a 425% premium for hardware, just for the privilege of using those hosting services.

[flyonwall]

These boards aren't going to be that heavy. So maybe shipping 1 board for $200 (that seems REALLY high) isn't a huge difference in cost between your offerings. But if somebody has 2-10 boards, the shipping price isn't going to really increase much at all. So now when you divide that cost by 10 boards, the shipping costs becomes $20 in shipping per 10-chip-board, or $125 total cost shipping included.

Just to remove any doubt about the UPS shipping cost, here is a snapshot of the UPS page, which anybody can verify for themselves on the UPS site itself. This is shipping something weighing 2 lbs. from Dresden, DE to Columbia, SC, USA. (You can also see there's a difference in price between this and shipping something heavier, as my other example above.)



The point still is that shipping from Germany to the US is not cheap. Be that as it may, I am looking into other options that can lower the system build cost.

There is one big change in the plans: the condos will not be located in Cebu. As it turns out, the electricity cost per kWh for businesses in Cebu (in fact all over the Philippines, at 30 cents), is more than DOUBLE that here in the U.S., at 14 cents. (Part of the reason for this is the downward trend of the US Dollar against the Philippine Peso.)

There will be no 24/7 guards, nobody physically manning the systems during daytime, but I will be hiring a small outfit in the Philippines through ODesk to man the systems REMOTELY 24/7. The downtime guarantee still holds.

The condo management system software will be built in Cebu. I still have to determine where the hardware will be built, but most probably it will be in the U.S.

So now you can send your chips to me locally here in the US: much lower cost, more reliable shipping, no import taxes to worry about.

[wrenchmonkey]

Another thing to consider is "General Service" (industrial) power rates. Here in Utah, General service is WAAAY cheaper, if you are consuming more than 5Kw. If you're consuming 5kW, General Service only costs $261/mo, as opposed to $504 for 14¢/KwH residential. Nearly half the cost.

Personally, I'll only be drawing about 300 watts with my 120 chip system, so I can't benefit from the economy of scale, but if you were running a farm of more than 2000 chips (5kw minimum), you can offer people a lower power cost (higher return) by off-site hosting.

I made a quick spreadsheet that calculates general service costs based on number of chips in your operation. It's totally scaleable. Just punch in the number of chips in your system, current difficulty, and a given exchange rate, and it will calculate your power bill, your gross earnings, and net earnings (after power).

Anyway, if you'd like access to be able to play around with the numbers, send me a PM with your google address, and I'll give you editing privileges.

The only numbers that need to be changed are the ones in the white box. Everything else is calculated off of those 3 fields, based on Utah power rates.

https://docs.google.com/spreadsheet/ccc?key=0Aoe35iPRQzfodExmdE5DdHo2OWo4YVUtUHZpNEg5X0E#gid=0

[flyonwall]

Thanks for the suggestion about industrial power rates. Isn't this kind of usage taxed higher?

About the spreadsheet: that is cool! Thanks wrenchmonkey. I am sending you a PM.

Still another option is to locate in the deserts of Arizona for solar power, but that would require more upfront capital allocation.

[dan99]

I can probably do even better with electricity costs that I have   developed countries with low electricity costs and IT infrastructure is none other than Singapore and Malaysia.. in south east Asia .. no fighting or civil wars compares to other countries in south east Asia.. do a Google search you will know.. Thailand and Philippines fighting insurgency in the south, Burma .. ethnic issues .. countries with high Chinese population are usually stable..

[wrenchmonkey]

Thanks for the suggestion about industrial power rates. Isn't this kind of usage taxed higher?

About the spreadsheet: that is cool! Thanks wrenchmonkey. I am sending you a PM.

Still another option is to locate in the deserts of Arizona for solar power, but that would require more upfront capital allocation.

Even the best pricing for solar in the best sun areas in the world still have a minimum 3-5 year ROI. In 3-5 years, these miners will most likely be obsolete.