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Author Topic: Mom's Basement Mining Contracts - From $52 per week!  (Read 12195 times)
Reikoku
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June 24, 2011, 06:35:57 AM
 #1

Mom's Basement Mining Contracts

What is This?
I'm going to be selling mining contracts (not based in my mom's basement, sadly) on dedicated mining rigs. These rigs are built using high quality branded products, and will be GPU mining via the pool of your choice directly to your wallet (if you don't have any account details, I can set them up to mine for you on Eligius, my pool of choice, as it only needs your receiving ID).

The main reason I'm doing this is to fund an expansion in my own long-term mining capabilities, not to make a huge wad of profit from you. Because of this, I'm not going to be charging the high fees that are currently ongoing in the contracts market. This does not mean you will have to wait for your mining operation to come online, I have rigs already mining and assuming I have the capability online right now, they will be shifted to your account upon purchase of services to give you an instant startup. Obviously, if you order more than I have in place, I'll let you know what the delays should be.

A lot of mining contracts out there don't seem to be profitable, but these (the MH-800 and MH-1200) are going to kick that trend and offer decent outcomes for you even if you're just looking for pure $ profit (obviously, this depends on a decent GH/sec to dollar ratio).


Advantages of Contracts
Advantages over buying Bitcoin on the market are:

  • No risk of getting stolen bitcoins, all BTC are newly generated
  • No risk of getting your money stolen by a scammer
  • No commission fees, market depth issues or exchange delays
  • Output based purely on difficulty, not exchange rates

There are also advantages over buying your own mining rig, mostly boiling down to:
  • No chance of downtime issues or damaging your components
  • No need to deal with electricity costs, noise, heat etc. just pay $ and get Bitcoins
  • Don't need any technical knowledge to get the best out of it

Purchase Information
These contracts are going to run for a minimum of 13 weeks, but I'll allow you to extend your contract for an extra four weeks at the same price per week as the first 13 at any time before it expires. Payment will be in advance 100% (for 13 weeks) via bank transfer, Liberty Reserve or Bitcoin.

If you want to pay in Bitcoin, we will discuss the price at the time of purchase, but it will probably be done at or around Mt Gox last price.


Pricing & Profitability
$ Output is calculated at today's (15th June 2011) difficulty of 877,227 and today's Bitcoin price of ~$20. At this rate, you would get 0.00114 BTC per MH per day, or $0.0228 per MH per day. As difficulty and Bitcoin price are linked, the best we can do to calculate profitability is assume that a MH keeps around the same profitability (although the profitability of 1MH has definitely risen over the past month, which would work in your favour if it continues).


Contract TypeMH/secBTC/dayPrice (1wk)Price (13wk)$ Output (13wk)Exp. Profit (13wk)Available
MH-400 I3700.42$52$676$767.67$91.67Now
MH-800 I7400.84$84$1092$1535.35$443.351 Week
MH-1200 I11101.26$115$1495$2303.02$808.021 Week

Obviously, none of these profit margins are guaranteed, they are simply a model at today's value per MH which could rise, fall or stagnate. BTC/day is based on today's difficulty, and is subject to change during the contract period.

Price Comparison
I don't like comparing this service to Vladimir's or Bitcoin Rigs', because we are all serving different markets for different purposes. Having said that, I feel compelled to compare simple 1GH/sec prices across the market for an easy glance. Check out all of the services and see what you want. This table is correct TO THE BEST OF MY KNOWLEDGE. If you spot an error, let me know.


ServiceVladimirBitcoin Rigsalexdrans' 400alexdrans' 800MH-400 IMH-800 IMH-1200 I
Per 1GH/s/wk (US$)$158.41*$192.31$144*$135.50*$159.46$113.51$103.60
Min Size1GH/s1GH/s0.4GH/s0.8GH/s0.37GH/s0.74GH/s1.11GH/s
Min Length4 months3 months1 month1 month3 months3 months3 months
Zero VarianceYesYesNoNoNoNoNo

As you can see, I can offer some very flexible contracts in terms of GH/sec (three sizes to choose from) and also the lowest prices, alexdrans offers 1 month contracts, which seem to be attractive. Vladimir offers zero-variance and is a Limited company (I assume this means he can give you a VAT receipt if you're in the EU). We are all different services aimed at different customer bases.

* For Vladimir's and alexdrans' service, I have used the xe.com GBP to USD conversion rate of 1.62.

I have assumed Vladimir's month is 4.5 weeks or 31.5 days, and that Bitcoin Rigs' 3 months is 13 weeks.


FAQs
Admittedly some of these questions aren't really 'frequently asked', they're just ones which I think you might ask. If a question is frequently asked, or I just think it's a great question, I'll add it here.

Do you do shorter contracts/can I pay monthly or weekly?
Sorry, I'm not able to offer credit agreements. The only way you will be able to pay monthly or weekly is if you use a credit card to buy LR or Bitcoin and pay your credit card off monthly or weekly. I am also unable to offer shorter contracts, as the idea of these contracts is to forego the profitable short term mining to fund a long-term expansion in my mining capability.

What uptime do you guarantee?
I will guarantee zero downtime via the following mechanism:
- For each of the first 24 hours of downtime, I will add another hour to the end of your contract.
- For any hours beyond 24 of downtime, I will add two hours to the end of your contract instead.

Can I have shell access to my rented rig?
No. I can't offer uptime guarantees and shell access, and I can't risk one of the cards being overclocked to the wrong specifications. If you want me to run a specific miner or a specific set of options, or something other than Bitcoin (Namecoin, F@H, whatever), then I am willing to do so upon request (assuming it's not malware or illegal).

Can you offer zero-variance?
I could probably do this upon request for an extra fee of around 10%, but it's not a part of my mainstream plans.

Where is your flashy website?
I haven't made one yet, but it will come soon™.

What hardware equipment are you using?
My rigs run on AMD Sempron 140, AMD Sempron 145 and Intel Celeron E3400 processors, DDR2 & DDR3 RAM, 7200RPM SATA hard drives (USB flash drives fail often), XFX / Corsair Power Supply Units (650W/750W for MH-400 I and MH-800 I, 1000W for MH-1200 I) and XFX / Sapphire Radeon 5770, 5830, 5850, 5870, 5970 and 6970 GPUs. Most run open-case and no GPU cores run above 80C.

Can you guarantee hash rates?
Mostly your hash rates will be a little bit lower or higher than what has been specified (no more than 5% variance), but if I can only get 5830s due to the market, they could be a little lower. I will let you know before you pay if this is the case, and will discount your prices accordingly.

If you do get a very low hash rate (more than 5% below quoted, as there will always be variance) then you will be compensated in Bitcoins for the expected value. Please don't think this means that if you end up with 1102 on a 1110MH rig, that you're going to be compensated. Hash rate will be judged by the mining applications, not by any pool stats which are often inaccurate.

What software are you using?
My machines run regularly updated builds of Arch Linux, AMD Stream SDK 2.4, latest Catalyst drivers. I prefer the phoenix/phatk miner, but can use phoenix/poclbm or diablo if requested.

What customer support can you offer?
I can offer support via IRC (FreeNode), by e-mail or by the forums. I'm working on a web-based interface to monitor downtime, but for now we can use the mining pools' stats pages to monitor that (I use eligius by default, which has no registration and just pays directly to your wallet).

Who are your customers?
My customers have a right to privacy, and I will not be sharing their identities. Should they wish to comment on the quality of the service, that's their right, but they have no requirement to do so.

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pippipcheerio
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June 24, 2011, 07:17:21 AM
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So your making $52 per week, but you have to pay $52 per week? I'm pretty much paying for my bitcoins then.
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June 24, 2011, 07:50:54 AM
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At the current rate of $15/day, $52 is not what you'd make in a week. $52 is what you make after 3 and 1/3 days.

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June 24, 2011, 07:52:16 AM
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At the current rate of $15/day, $52 is not what you'd make in a week. $52 is what you make after 3 and 1/3 days.

Oh... That's really good money.
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June 24, 2011, 08:24:29 AM
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I'm willing to make you a fully function website for 2 weeks of your service.
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June 24, 2011, 01:26:38 PM
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Difficulty is doubled now , and the value of BTC has lowered , so the profit will be negative if you keep these prices.
Reikoku
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June 24, 2011, 05:58:37 PM
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Difficulty is doubled now , and the value of BTC has lowered , so the profit will be negative if you keep these prices.

If difficulty continues to rise and BTC prices do not rise with it, of course mining will be less profitable. However, this is unlikely to be the case for very long.

If Bitcoin price and difficulty collide so that mining is no longer profitable, people will start to switch off their miners. This will cause difficulty to drop such that mining is profitable again.

Obviously any time you make a business decision, you are expecting certain outcomes. In the instance of renting mining contracts, you are betting on the price of Bitcoin (long term) rising around the same amount as difficulty. Recently it has risen far more than mining difficulty.

Another thing you neglect to mention is that the price of Bitcoin is falsely deflated because Mt Gox, Virwox and Tradehill have stopped trading for about a week.

I'm willing to make you a fully function website for 2 weeks of your service.

Thanks for the offer but I need to decline, I need more capital to expand my mining operation.

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Reikoku
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June 27, 2011, 09:49:05 AM
 #8

Implemented my latest build of Autominer (see sig) and the +3% mod on all Phoenix builds.

Always looking for more customers.

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July 01, 2011, 12:03:32 AM
 #9

I like this idea of low cost,effective mining.Can you offer like CTO (Customise to order services) if need be?

I can't go more than a Radeon HD 6950 GPU on my own (due to PSU overload risk and budget cutbacks) so maybe this service can supplement my mining as well as help other people.

Since I like your idea a lot,I'll share my system specs (of PC) as my way of saying thank you (do remember that this is also used for professional filmmaking/advanced research as well as mining):
Core i7 920 CPU stock 2.67ghz (OC's 3ghz,power save 1.35ghz)
6GB RAM DDR3
3 HDDs
GPU will be upgraded to Radeon HD 6950 very soon once it arrives
Win 7 64bit OS
Enermax 620W PSU
DVD burner

1.Can payment be accepted by Moneybookers?
2.Can your services also be used in a 'supporting role' for any mining I do myself? as in give my total mining an extra boost or help mine when my systems need to cool down and recover



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Reikoku
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July 01, 2011, 12:33:58 AM
 #10

I can't take Moneybookers for payment, I don't like to take anything with chargebacks because they offer no protection to sellers with huge upfront costs, and tend to look badly on Bitcoin in general.

As for a 'supporting role', these contracts run 24/7 over 13 weeks on the pool and username/password of your choice, so they can support your existing mining capabilities. They can't work only part-time, however, they are full-time miners.

Your PC looks like a nice spec, I've got something similar on my gaming machine but with a bit more RAM and a bit less Windows. Wink

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July 01, 2011, 05:34:23 PM
 #11

do you realize ur customer will take a lost on ur mining service?
I think it is time for you to update the OP.
Difficulty is now over 1 mil, and exchange is more like $16-17

Trading MtGox USD for Dwolla/ACH deposit/Chase cash deposit
https://bitcointalk.org/index.php?topic=90115.0
Buy/Sell Call/Put Bitcoin options https://bitcointalk.org/index.php?topic=99853.0
Reikoku
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July 01, 2011, 10:37:42 PM
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do you realize ur customer will take a lost on ur mining service?
I think it is time for you to update the OP.
Difficulty is now over 1 mil, and exchange is more like $16-17

If price and difficulty stay as they are right now, I believe the MH-1200 still profits but the other two make a loss. Any mining contract is a bet on price rising at a rate compared to difficulty, you cannot calculate Bitcoin profits over 13 weeks based on today's rates, as you can see with what I did a little over a week ago.

Unfortunately, I have to base my prices on the cost of running the service, which includes setting up more hardware, energy bills, time to build systems, monitor them, overclock them and fine-tune OS's and the risk of hardware failure. This cost doesn't change much whether Bitcoin is $15 or $150.

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July 04, 2011, 04:07:21 PM
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so there no chance you might go down in price? or over a low-price contract that is still profitable?

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July 26, 2011, 04:25:54 AM
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Your pricing was a bit hard to read, so I kind of colored it up a bit.
http://pastehtml.com/view/b1p78ao0u.html

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July 26, 2011, 07:10:49 AM
 #15

Your pricing was a bit hard to read, so I kind of colored it up a bit.
http://pastehtml.com/view/b1p78ao0u.html
Pretty colors, but, the numbers are way off.

Buy & Hold
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July 26, 2011, 09:44:17 AM
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Your pricing was a bit hard to read, so I kind of colored it up a bit.
http://pastehtml.com/view/b1p78ao0u.html
Pretty colors, but, the numbers are way off.
Just used the numbers from the first post. Smiley

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August 24, 2011, 01:07:05 AM
 #17

Are you still offering the contracts?

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August 24, 2011, 09:49:32 PM
 #18

Are you still offering the contracts?

You should try Shades Minoco. We offer rates far more competitive than our competition. Check our Ad in the link in my signature.

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