-

[Bargraphics]

O_o

Butterfly labs release a "Mining by GH/s"

==> https://products.butterflylabs.com/homepage-new-products/1-gh-cloud-hosted-bitcoin-hashing-power.html

1 GH/s for $10.83 ( ~ 0.08BTC)
January-February 2014 release.

Cointerra is $3/GH in January

Vs

BFL $10.83/GH in February (Josh said February is likely the earliest for those not in the "bullet run")

Doesn't effect anything.

[1713966375]

1713966375

[1713966375]

1713966375

[1713966375]

1713966375

[1713966375]

1713966375

[mmmerlin]

O_o

Butterfly labs release a "Mining by GH/s"

==> https://products.butterflylabs.com/homepage-new-products/1-gh-cloud-hosted-bitcoin-hashing-power.html

1 GH/s for $10.83 ( ~ 0.08BTC)
January-February 2014 release.

Cointerra is $3/GH in January

Vs

BFL $10.83/GH in February (Josh said February is likely the earliest for those not in the "bullet run")

Doesn't effect anything.

It's harder to compare than that, though if you do it more thoroughly the BFL offering is probably even worse. Theirs is $10.83/GH/year - you don't own the hardware after a year, but on the other hand, there are no hosting costs like there are with the Cointerra equipment.

Also, when running the sums, don't forget that a lot of people have the 25% discount vouchers for BFL, which seem to be applicable to this offer as well. I still wouldn't touch it myself, but there more factors in the sums than at first glance...

[Ashitank]

O_o

Butterfly labs release a "Mining by GH/s"

==> https://products.butterflylabs.com/homepage-new-products/1-gh-cloud-hosted-bitcoin-hashing-power.html

1 GH/s for $10.83 ( ~ 0.08BTC)
January-February 2014 release.

I would stay far away from any thing BFL

[Dropthebass]

O_o

Butterfly labs release a "Mining by GH/s"

==> https://products.butterflylabs.com/homepage-new-products/1-gh-cloud-hosted-bitcoin-hashing-power.html

1 GH/s for $10.83 ( ~ 0.08BTC)
January-February 2014 release.

I would stay far away from any thing BFL

Indeed, so far they honnored more or less nothing of their promises. BFL is evil 

[fractal02]

Ding Ding !!!

Nice Dividends !

Shares     50,000   
Price per  ฿0.00191274   
Total        ฿95.63700000

Now LabRat, give us some news

[M31]

A great dividend!

Can't wait to see what's coming!

[||bit]

Ding Ding !!!

Nice Dividends !

Shares     50,000   
Price per  ฿0.00191274   
Total        ฿95.63700000

Now LabRat, give us some news

News would be nice.

[||bit]

I did some simpler math relating to how likely an ROI would be for even the lowest purchase price of bonds at BTC0.15
Anyone want to refute this, please try:

The assumed variables are 70% difficulty increase per month, and a constant btc value ($140 by MtGox).
With an assumed perfect re-investment plan of 25%. Let's reduce the difficulty to a very generous 52.5% per month.

Sure, difficulty will taper off, but don't expect that to happen within the first months that 28nm's are starting to ship. So, seeing this kind of consistent difficulty gain into the middle of 2014 is very possible if not probable. Remember, BFL probably won't ship in bulk until February.

Based on that, with a zero cost for Bitfury hardware, we see (here: http://mining.thegenesisblock.com/a/9dbdb5cf20 ) that at the end of May 2014 you have $13,100.
Subtract the first two weeks of October 2013 when you don't have equipment, and you have: $13,100 - $2390 = $10,710. Which is BTC76.5 in revenue per rig. So, that is the best case scenario for revenues from a Bitfury October rig received in mid-October up to the end of May. Any revenue after that is negligible because of difficulty.

There are about 50,000 bonds receiving dividends. That means each Bitfury rig received in mid-October (an optimal outlook) will have generated BTC76.5/50,000bonds = BTC0.00153/bond by end of May 2014. Take out the 25% for Labrat's fee and any re-investment, and you have BTC0.00153/bond x 75% = BTC0.0011475/bond PER Bitfury rig purchased.

The cheapest new issued bonds were purchased with bitcoins was BTC0.15
To make back the bond cost, you would need BTC0.15/BTC0.0011475 = 130 Bitfury rigs all operating from mid-October.
130 rigs is 52TH of equipment. But LR's current estimate for hardware is over 30TH. But how much over 30TH will it be?
Some of that is in Monarchs. Monarchs won't bulk ship until January or February of 2014.

Does anyone else see this as a problem besides me? Keep in mind, I was being conservative with the re-investment plan being perfectly 25% (part of the 25% would be an unknown LR fee).

Banking on reselling bonds? What would your bonds be generating in May 2014: ($210/mo/rig * 130 rigs)/50,000bonds = 55 cent/month per bond. What would you pay for such a bond?

By the way, I'm not trying to bash. I actually think LR is trying to make it work. I simply don't see how it's going to work now - unless LR has some insane deals on hardware and is being ultra-conservative on the hash power by at least 40% to 50%.

Before, I was thinking the bond prices would go up based on dividends, but I'm not so sure anymore based on the above longer term outlook. So, I was probably wrong with my high ratio speculations. Sorry to anyone that might have considered that speculation, which now seems to me as too optimistic.

[Bargraphics]

Speculating any kind of the same percentage increase after 10PH is likely going to be wrong
That's why it's hard to use those mining calculators accurately.

We will likely hit 8-10PH come beginning of January, from that point on you won't see but a 3-4PH/Month increase Max. Each month the % increase will go down.

[||bit]

Speculating any kind of the same percentage increase after 10PH is likely going to be wrong
That's why it's hard to use those mining calculators accurately.

We will likely hit 8-10PH come beginning of January, from that point on you won't see but a 3-4PH/Month increase Max. Each month the % increase will go down.

I guess we'll have to wait and see how far difficulty will go up. We're pretty much stuck on the LR train.

BTW: In the scenario I painted, I was assuming 70% increase in difficulty per month. By the beginning of January, after 3 months, that would be 1.70^3 = 4.91x increase in difficulty. Factor in a full two weeks of September that is another 30% or 4.91*1.30 = 6.38x increase in difficulty by my calculations. Current hashrate is 1PH, so that comes out to about 6.3PH at the beginning of January. That is a more conservative difficulty than a 8PH to 10PH. So, if I used your numbers, it might make the outlook worse.

[bittymitty]

If you follow the return for this:http://mining.thegenesisblock.com/a/9dbdb5cf20 labrat mining will be bankrupt by May 2014.

May monthly profit for 1 Bitfury rig is $256 * .25 management fee = $64 to pay for power and hosting and management fee(power alone is $40).

[||bit]

If you follow the return for this:http://mining.thegenesisblock.com/a/9dbdb5cf20 labrat mining will be bankrupt by May 2014.

May monthly profit for 1 Bitfury rig is $256 * .25 management fee = $64 to pay for power and hosting and management fee(power alone is $40).

I don't think your numbers are exact, but you seem to be correct to suspect that there is a problem related to that. By the way, 'bankrupt' might not be the right term to use. LR isn't in debt, and won't need to pay anyone if LRM becomes unprofitable. He doesn't guarantee bond holders any return on investment. He only provided a minimal hash power guarantee (100MH/bond).

Theoretically, using the right column which shows an aggregate of profit, that chart means one Bitfury rig will generate about $13,100 if you had it mining from beginning of October until it was low profit. But best case is middle of October, which means you subtract half of October profits ($4780/2=$2390) which comes out to $13,100 - $2,390 = $10,700. Minus 25% = $8032.50

That sounds good as it stands, since the Bitfury October hardware is on sale at $8000 per rig. So, you are looking at breaking even! But left with unprofitable bonds. Should never bought if that ends up as the case. Simply holding bitcoins would have been less headache.

But the situation is worse because you have to distribute that to 50,000 bonds. And not all proceeds from bonds went towards buying hardware. If it did, then 50,000 bonds times the minimal of BTC0.15 is BTC7500. With BTC at $120 to $140, that is from $900,000 to $1,050,000. Don't you think you should be able to buy FAR more than 30TH with that? Even if you subtract out electrical and space costs, you should still have left a LOT of the people's money that was invested. Say you are left with $800,000. You could buy 100 Bitfury rigs, resulting in 40TH. But as figured above in my prior comment, you would need much more than that to break even by end of May. Assume you could get a 30% discount on hardware, you could buy 142 rigs resulting in 56.8TH.

In a nutshell, it seems to me, Labrat will have to buy over 52TH of hardware just for the lowest priced bonds to break even by May. The only other hope is difficulty slowing down a lot (or bitcoins skyrocketing in value). And difficulty does slow sometimes, but it historically always ends up higher and higher. So, buying the bonds ends up, unwittingly or otherwise, as a bet that difficulty will slow down when you need it to slow down.

[mmmerlin]

If you follow the return for this:http://mining.thegenesisblock.com/a/9dbdb5cf20 labrat mining will be bankrupt by May 2014.

May monthly profit for 1 Bitfury rig is $256 * .25 management fee = $64 to pay for power and hosting and management fee(power alone is $40).

I don't think your numbers are exact, but you seem to be correct to suspect that there is a problem related to that. Also, bankrupt might not be the right term to use. LR isn't in debt, and won't need to pay anyone if LRM becomes unprofitable. He doesn't guarantee bond holders any return on investment. He only provided a minimal hash power guarantee (100MH/bond).

Theoretically, using the right column which shows an aggregate of profit, that chart means one Bitfury rig will generate about $13,100 if you had it mining from beginning of October until it was low profit. But best case is middle of October, which means you subtract half of October profits ($4780/2=$2390) which comes out to $13,100 - $2,390 = $10,700. Minus 25% = $8032.50

That sounds good as it stands, since the Bitfury October hardware is on sale at $8000 per rig. So, you are looking at breaking even! But left with unprofitable bonds. Should never bought if that ends up as the case. Simply holding bitcoins would have been less headache.

But the situation is worse because you have to distribute that to 50,000 bonds. And not all proceeds from bonds went towards buying hardware. If it did, then 50,000 bonds times the minimal of BTC0.15 is BTC7500. With BTC at $120 to $140, that is from $900,000 to $1,050,000. Don't you think you should be able to buy FAR more than 30TH with that? Even if you subtract out electrical and space costs, you should still have left a LOT of the people's money that was invested. Say you are left with $800,000. You could buy 100 Bitfury rigs, resulting in 40TH. But as you saw above, you would need much more than that to break even by end of May. Assume you could get a 30% discount on hardware, you could buy 142 rigs resulting in 56.8TH.

In a nutshell, it seems to me, Labrat will have to buy over 52TH of hardware just for the lowest priced bonds to break even by May. The only other hope is difficulty slowing down a lot (or bitcoins skyrocketing in value). And difficulty does slow sometimes, but it historically always ends up higher and higher. So, buying the bonds ends up, unwittingly or otherwise, as a bet that difficulty will slow down when you need it to slow down.

I'm sorry, but I've finally got to chip in here from a mathematical point of view.

All the calculations that have been made so far are naive and simplistic. Simply assuming a constant monthly percentage network growth is foolish. The results you get are then from integrating under an exponential curve, resulting in extreme sensitivity to a time constant that is both known with very poor precision and is also manifestly not a constant, making all of the conclusions extremely tenuous to say the least.

By your calculations, a CoinTerra IV miner will be losing money by July next year. Does that sound right to anyone here?

I'm not saying LRM is a sure-fire winner, nor am I making any assertions to the contrary, I am simply talking about maths, and am saying that all of these sums that just plug numbers into the calculator on thegenesisblock.com are naive, and lead to obviously dodgy conclusions.

In order to forecast that far in the future you need to make proper models of the network dynamics and the macroeconomic factors which determine the profitability of mining, so please can everyone just calm down with making these calculations using that bloody calculator!

[||bit]

I'm sorry, but I've finally got to chip in here from a mathematical point of view.

All the calculations that have been made so far are naive and simplistic. Simply assuming a constant monthly percentage network growth is foolish. The results you get are then from integrating under an exponential curve, resulting in extreme sensitivity to a time constant that is both known with very poor precision and is also manifestly not a constant, making all of the conclusions extremely tenuous to say the least.

By your calculations, a CoinTerra IV miner will be losing money by July next year. Does that sound right to anyone here?

I'm not saying LRM is a sure-fire winner, nor am I making any assertions to the contrary, I am simply talking about maths, and am saying that all of these sums that just plug numbers into the calculator on thegenesisblock.com are naive, and lead to obviously dodgy conclusions.

In order to forecast that far in the future you need to make proper models of the network dynamics and the macroeconomic factors which determine the profitability of mining, so please can everyone just calm down with making these calculations using that bloody calculator!

I agree that we can't have difficulty go up forever. There is a difficulty wall out there based on current technology where you can't pass without hitting zero profitability. So, yes, that is a easily debated assumption. And very few people would tend towards mining at all in that case. An equilibrium would be established that was likely marginally profitable compared to the electric costs.

But seeing BFL is still shipping, ASIC miner is still shipping (dropping prices), BitFury is now shipping, and others with more powerful equipment are soon going to start shipping, with more manufacturers coming online each month it seems, it seems to me that difficulty will follow suit until near that point. As hardware is going to simply keep coming online, granted, not exponentially, but if they want to sell more hardware, they will have to lower prices. And what happens then? More people buy the hardware.

Regarding:

By your calculations, a CoinTerra IV miner will be losing money by July next year. Does that sound right to anyone here?

That misses the point. My calculations didn't go into the negative profitability on those charts. I don't think it will become less than zero. Few people would mine at break even with their electrical bills. I called this area of the curve non-profitable because I said it was negligible compared to the original investment. If you bought asic hardware at that time, you could still break even, because manufacturers at that time will sell the hardware at ridiculously low prices compared to what you see now, either that or they won't sell them at all. That would likely even be the case even if there was no 28nm competition.

[mmmerlin]

I'm sorry, but I've finally got to chip in here from a mathematical point of view.

All the calculations that have been made so far are naive and simplistic. Simply assuming a constant monthly percentage network growth is foolish. The results you get are then from integrating under an exponential curve, resulting in extreme sensitivity to a time constant that is both known with very poor precision and is also manifestly not a constant, making all of the conclusions extremely tenuous to say the least.

By your calculations, a CoinTerra IV miner will be losing money by July next year. Does that sound right to anyone here?

I'm not saying LRM is a sure-fire winner, nor am I making any assertions to the contrary, I am simply talking about maths, and am saying that all of these sums that just plug numbers into the calculator on thegenesisblock.com are naive, and lead to obviously dodgy conclusions.

In order to forecast that far in the future you need to make proper models of the network dynamics and the macroeconomic factors which determine the profitability of mining, so please can everyone just calm down with making these calculations using that bloody calculator!

I agree that we can't have difficulty go up forever. There is a difficulty wall out there based on current technology where you can't pass without hitting zero profitability. So, yes, that is a easily debated assumption. And very few people would tend towards mining at all in that case. An equilibrium would be established that was likely marginally profitable compared to the electric costs.

But seeing BFL is still shipping, ASIC miner is still shipping (dropping prices), BitFury is now shipping, and others with more powerful equipment are soon going to start shipping, with more manufacturers coming online each month it seems, it seems to me that difficulty will follow suit until near that point. As hardware is going to simply keep coming online, granted, not exponentially, but if they want to sell more hardware, they will have to lower prices. And what happens then? More people buy the hardware.

Regarding:

By your calculations, a CoinTerra IV miner will be losing money by July next year. Does that sound right to anyone here?

That misses the point. My calculations didn't go into the negative profitability on those charts. I don't think it will become less than zero. Few people would mine at break even with their electrical bills. I called this area of the curve non-profitable because I said it was negligible compared to the original investment. If you bought asic hardware at that time, you could still break even, because manufacturers at that time will sell the hardware at ridiculously low prices compared to what you see now, either that or they won't sell them at all. That would likely even be the case even if there was no 28nm competition.

My point was purely mathematical, and whilst your calculations don't go quite that far, they go very close, which means they are prone to the same invalidities.

Clearly you do understand the bigger picture in terms of equilibration, and as you say, many companies are shipping now and more are coming online soon. All I'm saying is that those calculations involve integrating under a very steep curve, and one for which the time constant is neither known, nor constant.

I'm not saying it's better, I'm not saying it's worse, all I'm saying is that the error bars on these calculations, especially those 3+ months down line, are enormous.

[bittymitty]

If you follow the return for this:http://mining.thegenesisblock.com/a/9dbdb5cf20 labrat mining will be bankrupt by May 2014.

May monthly profit for 1 Bitfury rig is $256 * .25 management fee = $64 to pay for power and hosting and management fee(power alone is $40).

I don't think your numbers are exact, but you seem to be correct to suspect that there is a problem related to that. By the way, 'bankrupt' might not be the right term to use. LR isn't in debt, and won't need to pay anyone if LRM becomes unprofitable. He doesn't guarantee bond holders any return on investment. He only provided a minimal hash power guarantee (100MH/bond).

Theoretically, using the right column which shows an aggregate of profit, that chart means one Bitfury rig will generate about $13,100 if you had it mining from beginning of October until it was low profit. But best case is middle of October, which means you subtract half of October profits ($4780/2=$2390) which comes out to $13,100 - $2,390 = $10,700. Minus 25% = $8032.50

That sounds good as it stands, since the Bitfury October hardware is on sale at $8000 per rig. So, you are looking at breaking even! But left with unprofitable bonds. Should never bought if that ends up as the case. Simply holding bitcoins would have been less headache.

But the situation is worse because you have to distribute that to 50,000 bonds. And not all proceeds from bonds went towards buying hardware. If it did, then 50,000 bonds times the minimal of BTC0.15 is BTC7500. With BTC at $120 to $140, that is from $900,000 to $1,050,000. Don't you think you should be able to buy FAR more than 30TH with that? Even if you subtract out electrical and space costs, you should still have left a LOT of the people's money that was invested. Say you are left with $800,000. You could buy 100 Bitfury rigs, resulting in 40TH. But as figured above in my prior comment, you would need much more than that to break even by end of May. Assume you could get a 30% discount on hardware, you could buy 142 rigs resulting in 56.8TH.

In a nutshell, it seems to me, Labrat will have to buy over 52TH of hardware just for the lowest priced bonds to break even by May. The only other hope is difficulty slowing down a lot (or bitcoins skyrocketing in value). And difficulty does slow sometimes, but it historically always ends up higher and higher. So, buying the bonds ends up, unwittingly or otherwise, as a bet that difficulty will slow down when you need it to slow down.

I think you are missing my point any mining hardware bought now will have a shelf life of x months.  It may or may not make a ROI and will be pre-order only.  Next year you will be able to buy miners off the shelf from multiple companies for a lot cheaper with delivery in a week or two.  The reason we bought Lab_Rat shares is because we can leverage the buying power and running efficiencies to compete with the other mining companies.  LabRat Mining needs a solid growth plan to still be viable into next year and beyond and I am sure he has one. 

[fractal02]

We need Weekly report...

LabRat, we know you are busy, but we ( i ) need more update.
For the moment i can't decide myself if i go for more bonds or panic sell...

I haven't any vision for the moment....except this range of 400-700MH/s per bonds...but when ?
We are still stuck at 58 mh/s per bonds...

Any hardware out there is still more competitive than LRM bonds...

If BFL deliver ( big IF ) their "Mining by GH/s in January/february 2014 at 1GH/s@10.83$ (0.08BTC@1GH/s), LRM bonds need (must) exceed the 1GH/s per bonds or we all going to see a big crash price.

It's pretty simple...why i'm going to buy a Bond at 0.16BTC or more in January 2014 when competitors can (i know...science-fiction...but BFL can surprise us...) deliver 1GH/s@0.08BTC ?

I know it's maybe all wrong....but without news...is where i am  

[Vedran Yoweri]

We need Weekly report...

LabRat, we know you are busy, but we ( i ) need more update.
For the moment i can't decide myself if i go for more bonds or panic sell...

I haven't any vision for the moment....except this range of 400-700MH/s per bonds...but when ?
We are still stuck at 58 mh/s per bonds...

Any hardware out there is still more competitive than LRM bonds...

If BFL deliver ( big IF ) their "Mining by GH/s in January/february 2014 at 1GH/s@10.83$ (0.08BTC@1GH/s), LRM bonds need (must) exceed the 1GH/s per bonds or we all going to see a big crash price.

It's pretty simple...why i'm going to buy a Bond at 0.16BTC or more in January 2014 when competitors can (i know...science-fiction...but BFL can surprise us...) deliver 1GH/s@0.08BTC ?

I know it's maybe all wrong....but without news...is where i am  

Yes, I second this. This asset needs weekly reporting, urgently.

[sparky999]

I would be happy with a bi-weekly news update on bitfunder - only people with lab rat shares read this thread for the most part.

[Lab_Rat]

Hey everyone,

NEWS/INFORMATION
----------------------------------------------------------------------------

My apologies for it being so long since the last update.  Yes, Dave is now mining for us.

With the news Dave gave me as to a time frame on receiving hardware, I realized I needed to hurry up on getting the second hosting location up and going.  I'm almost ready and by mid Oct it should have a virtual boatload of BitFury gear hashing away in it.

There were two minor hiccups in the last week.  One was a small networking issue that I fixed within 30 minutes, but the other was out of my control.  For the first time in the many months I've been mining in James' pool, it went down.  It wasn't that the pool went completely down, but James was doing upgrades/updates to the pool and it kept flashing off and back on at random when he restarted it.  This made it appear that the hashrate went down due to the moving average on the pool.  In a few occasions the pool went down for a split second too long and some miners switched to another pool.  It appears he is done with the updates/upgrades, but to be sure I split the hardware between BTCGuild (I didn't want to do that) and James' pool.

BTCGuild is far overpowered at almost 43% of the network and the 100TH mine is going up pointed at them which doesn't help.  I don't want to help throw them over the edge by pointing more TH at them, so this solution isn't permanent.

I have learned a lot about mining at scale in the last couple weeks and Dave (BitFury) and I have discussed our issues to make sure the other one doesn't run into the same issues.

PROPOSITION
----------------------------------------------------------------------------

Dave has given me information that could gain LRM a far greater amount of hardware than originally intended as long as everything goes to plan.  There are a few individuals who hold a very large amount of LRM bonds who have all given me the same idea.  Although my contract gives no one voting rights, I'm not the type of individual to veto the masses vote. (This is me showing I'm not looking to screw over the public for a few bucks  )

This idea states that (and my contract allows for) LRM to mine for 2 full weeks with new hardware without paying dividends from it.  What I would do if the public will generally agree to this is use this hardware to mine and scoop up a large sum of BTC.  ~5% would be necessary for power consumption and ~5% would be requested as a management fee for setting up hundreds and hundreds of h-cards and getting everything mining in a very speedy manner.  The other 90% would go straight into the hardware that Dave can give me a killer deal on.

If you would consider this, it could mean wonders for the company in the long run getting a better head-start.

NEWS REGARDING OTHER MANUFACTURERS
---------------------------------------------------------------------------

CoinTerra -- VP of sales with CoinTerra and I have been in contact and will remain in contact.  We will be trying to work out a deal to maybe get some Dec and Jan equipment.  Things looked good when I spoke to him.

If people want my opinion on which 28nm company will deliver on time (or even at all) it will likely be CoinTerra, which is why I'm interested in remaining in contact with them.

BFL -- Their recent announcement to host by the GH is exactly the opposite of my beliefs when it comes to PMBs.  If you purchase a defined hashrate, your payout will only continue to go down.  My intention is to keep up with the difficulty (to an extent) until it begins to level off.



I hope everyone can understand how much time and effort it takes to put together an operation of this size and can forgive me for not being as public as I used to be.

-Lab_Rat