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Author Topic: [PHM] - Power Hash Mining Announcement  (Read 5440 times)
TradeFortress
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July 13, 2013, 07:24:42 AM
 #21

Also,

Quote
During times when no alt-coins are more profitable than Bitcoin, the mining power can easily be moved to mine Bitcoin instead.

Yes, because GPU mining Bitcoin is the way to go.

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July 13, 2013, 11:17:05 AM
 #22

2400 KH/s   and 300,000 Share's....

that is nothing per Share...

and the BFL Stuff needs so much time to deliver..

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July 13, 2013, 06:16:50 PM
 #23

Can the Havelock admins look at lowering the maximum allocation of shares per user for this one?
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July 13, 2013, 06:35:28 PM
 #24

Can the Havelock admins look at lowering the maximum allocation of shares per user for this one?

Why?  You think there's more than 3 people who will buy it if the operator doesn't clarify things?
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July 13, 2013, 08:19:20 PM
 #25

This will be a major flop. The IPO issuer is not willing to clarify squat!

Resistance is futile. Embrace cryptocurrencies.
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July 13, 2013, 08:36:49 PM
 #26

This will be a major flop. The IPO issuer is not willing to clarify squat!

In fairness, if I was trying to sell 2 BFL preorders + a few GPUs for $60k I wouldn't be too keen on clarifying either.  Which is what we have to assume to be the case given the total lack of clarity on the very key point of whether the funds raised by IPO go into the fund or into the issuer's pocket.
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July 13, 2013, 08:41:14 PM
 #27

I think perhaps havelock may wish to put this ipo out farther, suddenly this stuff is all showing up on their board, and indeed, their board is like a coin itself.  Having fewer issues, retains credibility.  But so far so good, so thanks to lightbox.

But yes, clearly there needs to be time to write this up like a government grant.  There are huge chapters missing, from the prospectus which is not going to be required.

If exchanges want to survive as such, they will have to toe a certain line, this is like acting as if there is no line.  I mean mining altcoin??  DUH.  It is not a stroke of genius.  But whomever succeeds in this lofty goal as stated in the issuer's few words, will be the ipo that has lots more detail.  Sure, push this one out a week and give five times more data, and I bet it will soar.  

There is a lot of room for something like this.  Even if it doesn't go well, or my advice is ignored, I'll be using this thread henceforth to discuss issues like this as they crop up, which they surely will.  But sure, mining altcoins and passing daily dividends on?  Frikkin duh.  If I had the time I might do it myself, maybe my own ipo will be forthcoming by the Fall.

But thanks to those persons who are reliable and run these fine exchanges, day trading bitcoin stocks makes more coin than mining does.  So thanks to lightbox and his peergroup, because their service is appreciated.

More info on this, and it might be the first real horse out of this gate.  Of course like Facebook, the IPO could just be designed to completely screw investors, but if you just have ipos that are designed to pop then fizzle, you're basically pissing in your own soup bowl.  So this is a very important ipo and thread, I say it came onto the radar too fast at this point, but for speculation, well, ipo is spelled p-o-p in the old days of equities.  But equity means, as explained by others, that you are mining and have substantive operations.  This is not like a loan office where they give you a business loan, pics and more demonstration of nitty gritty knowledge and previous follow through on that would help.

Check out my prescient ATS thread from 2008: "Windows XP: End the Cyberwar, Open the Code Now!" http://www.abovetopsecret.com/forum/thread411978/pg1
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July 13, 2013, 08:46:17 PM
 #28

This will be a major flop. The IPO issuer is not willing to clarify squat!

In fairness, if I was trying to sell 2 BFL preorders + a few GPUs for $60k I wouldn't be too keen on clarifying either.  Which is what we have to assume to be the case given the total lack of clarity on the very key point of whether the funds raised by IPO go into the fund or into the issuer's pocket.

I had a conversation with PHM before this announcement. It looks like some of the details discussed were not included in the final version here. While I cannot speak for PHM, it was my understanding that the funds for the IPO will be owned by the shareholders under PHM, but that the current market value of the BFL orders and the GPUs will be deducted in order for the fund to buy the equipment and own it. He quoted the BFL value as what they paid for them in cash, but we did not discuss how they would determine the value of the GPUs.

PHM, please update the details to clarify that the fund owns money raised via the sale of shares, and what exact cost will be deducted to purchased the existing equipment/orders.
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July 13, 2013, 08:53:53 PM
 #29

This will be a major flop. The IPO issuer is not willing to clarify squat!

In fairness, if I was trying to sell 2 BFL preorders + a few GPUs for $60k I wouldn't be too keen on clarifying either.  Which is what we have to assume to be the case given the total lack of clarity on the very key point of whether the funds raised by IPO go into the fund or into the issuer's pocket.

I had a conversation with PHM before this announcement. It looks like some of the details discussed were not included in the final version here. While I cannot speak for PHM, it was my understanding that the funds for the IPO will be owned by the shareholders under PHM, but that the current market value of the BFL orders and the GPUs will be deducted in order for the fund to buy the equipment and own it. He quoted the BFL value as what they paid for them in cash, but we did not discuss how they would determine the value of the GPUs.

PHM, please updated the details to clarify that the fund owns money raised via the sale of shares, and what exact cost will be deducted to purchased the existing equipment/orders.

Thanks TAT for this.

One of the difficult things to do, is to explain moral hazard in relation to trust at the IPO level.  You have put your rep out there and delivered, thanks.  It's the case that they may pick and choose what portions of your advice, to accept?

Thanks for all you do.

Check out my prescient ATS thread from 2008: "Windows XP: End the Cyberwar, Open the Code Now!" http://www.abovetopsecret.com/forum/thread411978/pg1
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July 13, 2013, 09:25:05 PM
 #30

This will be a major flop. The IPO issuer is not willing to clarify squat!

In fairness, if I was trying to sell 2 BFL preorders + a few GPUs for $60k I wouldn't be too keen on clarifying either.  Which is what we have to assume to be the case given the total lack of clarity on the very key point of whether the funds raised by IPO go into the fund or into the issuer's pocket.

I had a conversation with PHM before this announcement. It looks like some of the details discussed were not included in the final version here. While I cannot speak for PHM, it was my understanding that the funds for the IPO will be owned by the shareholders under PHM, but that the current market value of the BFL orders and the GPUs will be deducted in order for the fund to buy the equipment and own it. He quoted the BFL value as what they paid for them in cash, but we did not discuss how they would determine the value of the GPUs.

PHM, please update the details to clarify that the fund owns money raised via the sale of shares, and what exact cost will be deducted to purchased the existing equipment/orders.

That changes the whole complexion of things obviously - it's rather important information to have forgotten to include.  It's actually one of the worst errors made commonly on IPOs here - not identifying current assets and obligations.

Anf of course there's a big difference between buying the BFLs for what they cost in BTC (ridiculous) and buying them for what they cost in USD (reasonable).
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July 13, 2013, 10:05:12 PM
 #31

This will be a major flop. The IPO issuer is not willing to clarify squat!

In fairness, if I was trying to sell 2 BFL preorders + a few GPUs for $60k I wouldn't be too keen on clarifying either.  Which is what we have to assume to be the case given the total lack of clarity on the very key point of whether the funds raised by IPO go into the fund or into the issuer's pocket.

I agree with this sentiment until we get a reply from the official issuer I am uncertain.

I would like a reply to the questions raised here before the IPO launch, according to the ISP data the domain is only a week and two days old.
The IPO launch was announced only 3 days in advance and the issuer is a brand new account on the forums.
A proper reply from the issuer or lightbox/havelock would go a long way here to clear some suspicions and give us a bit of information on the holder of this asset.

Creation date: 04 Jul 2013 21:44:00
Expiration date: 04 Jul 2014 21:44:00
http://whois.net/whois/powerhashmining.com

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July 13, 2013, 11:33:19 PM
 #32

This will be a major flop. The IPO issuer is not willing to clarify squat!

In fairness, if I was trying to sell 2 BFL preorders + a few GPUs for $60k I wouldn't be too keen on clarifying either.  Which is what we have to assume to be the case given the total lack of clarity on the very key point of whether the funds raised by IPO go into the fund or into the issuer's pocket.

I agree with this sentiment until we get a reply from the official issuer I am uncertain.

I would like a reply to the questions raised here before the IPO launch, according to the ISP data the domain is only a week and two days old.
The IPO launch was announced only 3 days in advance and the issuer is a brand new account on the forums.
A proper reply from the issuer or lightbox/havelock would go a long way here to clear some suspicions and give us a bit of information on the holder of this asset.

Creation date: 04 Jul 2013 21:44:00
Expiration date: 04 Jul 2014 21:44:00
http://whois.net/whois/powerhashmining.com

Looks like not much thought has gone into this ipo still surprised havelock are running with this
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July 14, 2013, 06:27:03 AM
 #33

Hey everybody, sorry for the late responses on all this. I have not been around for the day, and I will try to clarify all your questions now.

Korbman had the majority of, and the best questions. The answers to these should benefit the community.

To start, before answering any questions I will like to go over a few quick points.

For one, this was not the initial IPO writeup. I had a previous one which was more detailed and filled out. Havelock had scraped it and provided their own, asking to be "as to the point and precise as possible." And yes, I will admit it may be a bit bare and missing some details.

Secondly, due to the major raise of questions I am going to cancel mondays release of the shares until a later date. We do not want to come across as those who are looking to raise the money and run, and that is one of the main reasons for this cancelation. James at Havelock; who I have dealt with over the last few weeks is unaware of this decision yet, and I will be discussing it with him shortly. I want to have everything answered and clarified and be on good standing before the IPO starts. This should help ease everybody into being more comfortable, as well as give time for any more questions to be answered.

Additionally, I think the first raise will be reduced greatly. Attempting to pack in 50mhash all in one go could be very problematic. What if our power cant handle it, and it takes a few weeks to have things restructured to support it? What if the heat is unbearable...remember, we are talking 100 GPUS between 20 systems!
The specifics will be discussed between those involved in this fund. Instead of the huge 50mhash add at the start, 10mhash intervals may make the most sense. This will allow us to ramp up, while correcting any issues that may arise in-between.

My responses below in the quote from Korbman will be in red.

Ok!
If you are indeed a new account (not an alt of someone else), then let me start by saying welcome to the forums! It’s not often you see a legitimate account pop up who starts off their tenure on the forums by launching an IPO.

For those of you that read my other post, this will sound familiar (but still rings true). I respect the decisions made by Havelock administrators, even though I don’t necessarily agree with their decisions. I’m quite surprised by the recent changes, particularly by the astonishing lack of information recently perpetuated by Havelock administration and individuals looking to host their funds.

That said, this isn’t about Havelock, this is about PowerHashMining [PHM], so I’ll keep on topic.

As a forewarning, my responses may sound rude and/or condescending, but I assure you I don’t intend for them to come across that way! I imagine it as if you and I are sitting at a table and I’m asking these questions with more of an upbeat attitude. My goal here is to try and pry as much information as I can about what you’re trying to do. I am not alone in my skepticism, so this will be an opportunity to clear the air.

Generally speaking, the willingness of the OP to thoroughly answer any and all questions can be indicative of the effort they’re willing to put into their business.


Thats fine, come across however needed. I understand and respect you taking your time to pick out all the specifics out of this and point out any underlying issues.

Here we go…

Hello!
We are proud to announce the upcoming IPO of Power Hash Mining. On Monday, July 15th, we will release 300,000 shares to the public. [1]

PHM is dedicated to mining the latest crypto currencies while maximizing profits through choosing the best coins to mine and sell.

After our initial raise, we are hoping to add up to 50 mhash to our network [2] and further expand from there. Below is the official release information.

Official Asset Page: https://www.havelockinvestments.com/fund.php?symbol=PHM
Mining stats and news will be listed on http://PowerHashMining.com when available.

Let this be the official thread for discussion and questions!

[1] – This is impressively short notice when we no really nothing about what you’re trying to do or who you are. Why Monday, July 15th, and why 300,000 shares?

Our initial IPO writeup stated we wanted to release 1 million total shares at a low pricepoint each. The reason for this was to provide opportunity for anybody to have the ability to buy in. Whether its 1 share or 10,000 a person, we wanted to appeal to everybody. We were later told to leave the "1 million" part out of it, and just release as needed. We were working with Havelock all week and this seemed to be a good date to release it. This would allow the announcement on the 12th and the weekend for people to review.

[2]Hoping to add, or will add? In monetary terms, how much will it take to get up to 50MH/s? What equipment will you purchase?

The word hoping to was used because 50mhash was our plan. We didnt want to necessarily say we WILL add 50mhash only to fall a little short due to major issues arising. In that case, the whole 50 couldnt be added in that time frame and action would be taken. Whether this is a dividend reissue to re-imburse for what couldnt happen, or things may be a little delayed while the technicalities got worked out. Our plans were to run 20 servers, each sporting 4 7950 GPUS. We priced out everything through WTCR and BitcoinStore. It worked out to (at the time btc was around $100) 17 btc each. This would provide about 2.5mhash each build.

PHM - Power Hash Mining

Power Hash Mining (herein referred to as PHM) is a unique, specialized alt-coin mining company that dynamically mines various alt-coins for maximum profit.

PHM will mine alt-coins, including, but not limited to, Litecoin, Terracoin, Freicoin and any currently profitable crypto-currency available. Our hashing power will be aimed at different coins depending on each coin’s potential profitability. These coins will be sold at market to maximize their value and convert them into Bitcoin for dividend payment. Funds raised will go towards the expansion of our mining operation.

Shares
Each 1 share of PHM represents an equal share of the any net profits from mining and trading alt-coins.

Dividends
Shareholders will receive dividends weekly on each Wednesday. Dividends will be paid as 85% of the net profits earned after expenses. Mining expenses are Rent, Electricity, Replacement Parts, and Repair. Labour fees or time-consuming work will not be expensed and are covered by the 15% of profits being retained by the operators.

Coins will be converted to Bitcoin for dividend payments. Conversions will be done in a strategic fashion, to best maximize profits and minimally impact conversion rates.

Just to make sure I’m reading this correctly, whatever is generated within a week (Wednesday to Wednesday) is the revenue. From that amount, you will deduct all expenses for that week (rent, electricity, any replacement parts, and cover any repairs). [1]
From what’s left over, you will keep 15% as a “management fee”, distributing the rest as a dividend.

So we’re essentially purchasing the hardware for you…and giving you 15% (after expenses) just because “labor”? I can understand the expenses part, but 85% (after all expenses) is quite shallow given you’re asking for our coin.

What price point would you see fit? Our initial plan was to withhold 100k / 1,000,000 shares for our personal hold. To collect the dividends off this. We were later then told to simply hold 10% of all issued shares. This was then changed to us not being allowed to do this, and to hold a percentage of profits.

[1]Bunch of questions here:
How much is rent per month?
How much is electricity per kWh?
How much power does your rig currently consume?
How much power will the fully developed rig consume?
How often do the GPUs break, and when they do what fails first?
How much do replacement parts cost?

Rent is $1000 a month. Electricity averages out to $0.09/kWh. (Different costs depending on the time of day/day of week. But the overall overage consistently is at 9 cents)
Each rig consumed 1200 Watts of power. For a total of 24k watts.
As for GPU failures, I have run cards for 1-2 years solid back for Bitcoin mining without issue. In the event that cards do fail quickly in this scenario, warranty does cover this.
As for replacement parts, It would really depend on what fails on the card. The usual result is getting a new card, as there isnt much that could be directly replaced.


IPO & Share Issuance
The initial public announcement will be on 7/12/13. This announcement will outline the plans and release dates for PHM. On 7/15/13 the initial public offering will be released at the Bitcoin equivalent value of $0.20 per share at the time of release.

Additional shares will be released in the future, for further expansion and growth. No set dates for these releases are planned at this time. After the initial IPO shares are sold and mining has started, we will assess when to announce and release additional shares. The price of newly issued shares will beset to the 7-day average price of the week prior. New shares will not be issued until any hardware purchased previously has been implemented and is mining.

So you will, without a doubt, dilute our shares in the future?

If they are newly released shares for the sole purpose of adding more power, it does end up balancing out does it not? If we added new shares and did not add new mining power then yes, that would be a horrible dilution as it would reduce dividends. This will not be the case, and after the initial setup newly issued shares for expansion will only increase your dividend payments.

Mining
Shareholders own all PHM mining equipment. Currently, PHM is GPU-mining Litecoins at approximately 2.4Mh/s. We have an established dedicated mining room, which is properly temperature-controlled and secured. PHM also has plans of purchasing 2 ASICS from BFL. These include one Jalapeno and one 30Gh/s miner. These will provide about 35Gh/s toward mining Bitcoin directly.

The primary coin being mined will be Litecoin, but we may switch to other promising alt coins at will. Provisioning of hashing power can be spread to multiple currencies. During times when no alt-coins are more profitable than Bitcoin, the mining power can easily be moved to mine Bitcoin instead.

Just so I understand, should you sell the full 300,000 shares (valued at $0.20 each), you’re plan with the $60,000 is to purchase $1,600-ish worth in BFL gear, and push the remaining $58,400 in GPUs for alt-coin mining?

I don’t think I have a problem with that plan, I’d just like more detail on the GPUs. And why BFL? Why not splurge the extra $400 for a 100GH/s Mercury from KnC?

Well, you also need to take into account the other startup expenses within that raise. As for KnC, I am currently reading up on them. I did not follow their cycle much, but seems very promising.

Buyback Rights
The issuer has the right to buy back shares at any time at a price equal to 105% of the highest price seen during trading of the previous 7 days.

Voting Rights
Shareholders will be asked to vote upon decisions that affect shareholders as a whole or changes to this agreement. It is up to the discretion of PHM to determine the most profitable currency to mine.

Not sure I see any real problem here, though I could be overlooking something other forum members will point out. If anything, I suppose dilution will be a problem with voting rights, but that’s far down the line (supposedly).

Reserved Rights
The issuer reserves the following rights:
1. Make changes to this agreement, as long as it has the best interest of its shareholders in mind.
2. Create motions for changes to the business, contract, or strategy of the company.

Uhh…but you just said there’s voting rights? So shareholders get to vote “upon decisions that affect shareholders as a whole or changes to this agreement” ..but then you reserve the right to change it regardless?
Or are you saying that we can vote on the changes, but only you have the ability to implement the change?

Votes would be for things that hurt the shareholders. For example, we withhold 15%. Would everybody have a issue and demand a vote if one day we decide for whatever reason to reduce that to 12%? Critical changes that potentially hurt any prices, dividends or anything that is not what the shareholder initially bought in and it negatively effects them, will have a vote.

Dissolution
In the event that mining becomes only marginally profitable or a losing effort, or an act of god causes such, PHM reserves the right to close the business. Existing hardware will be sold, and remaining funds will be distributed back to all shareholders as a special dividend. The owners of PHM cannot be held personally liable for any losses incurred due to investments.

This is guaranteed to happen. You haven’t specified how you plan to expand your operation, so I can only assume you’ll mine on 50MH/s until your hashing power is drowned out by larger or more efficient operations.

Well, hoping between new coins and dumping at the right time is always a great way to make profit. This is one of the big things PHM will be doing to try and maximize profits for everybody. New shares will be released to further expand that 50mhash as well.

Disclaimer
It is our intention to try and provide our shareholders the most profitable return as possible. As with all investments, there is always a risk, so do not invest more than you can afford to lose in the worst-case scenario. The owners and representatives, either directly or via passthroughs are in no way liable for any losses incurred.

Pretty standard stuff.


Final thoughts:

With all honesty, I like the idea. Building up a large scrypt mining operation can certainly generate an income, but this investment is still quite risky.

After going over everything, here are my final questions to you:

-- Who are you? You joined today and yet you’re already asking for $60,000 worth of Bitcoins. In my experience, rarely has any offering fitting this pattern NOT been a scam. I’m not saying you fall in this category, I’m just saying it’s a bit odd, that’s all. Trust is a HUGE factor here..or at least to established members (newbies throw money at everything and anything).

-- Proof of Mining? Where are you currently mining now where we can see the 2.4MH/s in action? What GPUs are you currently using?

-- Financials? Do you have any financial and network models where you show where you think the network is going to go (for Litecoin or the other alt-coins)? As a potential investor, I want to see you do your due diligence on hashing speeds and how our hardware will ultimately benefit us in the end.

-- Your Investment? What are you putting into the fund? Anything other than the already established 2.4MH/s?

Bottom line here is TRANSPARENCY. Give us detail..so much detail that if we printed out each word we could literally swim in pages. Investors want to see what you're doing with their money down to the smallest detail. If you can do that, while providing a reasonable investment opportunity and managing your fund correctly, then I can assure you money won't be a problem in the future.

Currently mining at WeMineLTC. I will provide pictures of the current setups when my partner is around to take them. As of this moment, the servers are down as we are experimenting different builds of operating systems. Our plans for the big setup are to essentially have everything setup on bootable usb drives, clone them and then can mass deploy them with ease. We are currently using Saphire 7950s in the main setup, and 6950s in a second rig we are experimenting with as well.

Honestly? No. Its really hard to predict where we think the network is going. We will be working with many networks. Whether its the most profitable ones to mine today, be it Feathercoin, BBQcoin, Litecoin etc or something new released in the future. We will have the power to jump onto new currencies and essentially have a nice dominating head to start. We cant really give a guideline as to exactly where we will be going with this and what we will be working on. What if we are mining coin X and suddenly coin Y becomes the most profitable thing? This is not something we can predict.
Our investment, both me and my partner are putting in a minimum 10BTC each, most likely more. That way we can secure some shares and hold in the company itself.  

I hope all this clarified alot of the questions, issues and concerns.


Seeing as it is 2:30am and I am exhausted, I will leave it at this for the night. I will go ahead and talk to Havelock tomorrow about delays and changes to both help us ease into things, and make the community feel more comfortable with this offering.

Thanks!
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July 14, 2013, 06:36:51 AM
 #34

Thanks for the reply was going to suggest an IPO delay as well as previously posted but you replied as I was about to post since it gives people time to propose good questions and for investors to digest the new information

On the BFL details glad your looking at the alternatives and will look forward to seeing your units

I would prefer Korbman's reply to the questions so withholds further comment

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July 14, 2013, 05:07:15 PM
 #35

Good reply, so http://wemineltc.com/news would be the good place to catch up with your work up to now.  But yes pictures in electronic form, uploaded to the internet, are pretty high tech too.  running off USB drives seems bleeding edge, I bet IT dork-ness could become a black hole in some cases, in respect to BOTH how you run the mining servers and also defend against DDOS, which is as sure as winter.

So you need IT defense (network uptime), and IT offense (mining)  ...Havelock as well, deals with the same DDOS firehoses.  Hopefully cryptowars do not perform charred earth tactics on cryptocoin as a whole.

Its interesting to observe these coinravaging processes.  Also interesting that LTC seems to cling to BTC's belly like a 2.50 cent remora fish.  I bet BTC wishes it could shed the weight of LTC, but I think LTC will more likely rise to the double digits range, which will shock everyone, but its obvious when BTC has support at these levels, and LTC will therefore become buoyant upward.

Daily dividends are nice, because they allow one to shave profits off, because technical issues in cryptocoin will surely result in some flatlining moments, buying opportunities, etc.  This is a 20-30+ year market, so I expect it to be a rough but potentially wealthmaking ride.

Glad to see the response, thanks for those who are trying to bring real money back to the people.  Crypto is like gold, as to wealth preservation during hard times, but not just for the rich as with gold, but for everyone who can get a wallet and some coin.

Some smart people need to do some math on how these LTC/scrypt coins are going to perhaps rise to BTC levels, when the banks seize assets as they did during the Cyprus seizure and BTC spike.

Let us hope the deadmans switch at Havelock works so that the CAD BTC can provide a safety net against total money collapse, for people all around the world.  Thanks eh.  Canada is such awesome place and people.

Check out my prescient ATS thread from 2008: "Windows XP: End the Cyberwar, Open the Code Now!" http://www.abovetopsecret.com/forum/thread411978/pg1
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July 15, 2013, 07:10:20 AM
 #36

It would be good to have a Google spreadsheet showing the expected costs (upfront and running costs) and the expected revenue from mining. For example, you could assume you will solely be mining LTC, make some estimates of future difficulty, assumptions about future BTCLTC rate and when your mining capacity will come on line. Then you'd be able to show the expected dividends. This would really make it a lot clearer what you intend to do.

By the way mega hash is abbreviated to MHash. Small m is short for milli, big m is short for mega.

This looks like it could be a good asset to invest in.

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July 16, 2013, 02:36:56 AM
 #37

PowerHash – Good replies, and thanks for clearing up a number of points. I’ll see if I can tidy the post up a bit so we don’t end up with a massive wall of text Cheesy

Secondly, due to the major raise of questions I am going to cancel Mondays release of the shares until a later date. We do not want to come across as those who are looking to raise the money and run, and that is one of the main reasons for this cancelation. James at Havelock; who I have dealt with over the last few weeks is unaware of this decision yet, and I will be discussing it with him shortly. I want to have everything answered and clarified and be on good standing before the IPO starts. This should help ease everybody into being more comfortable, as well as give time for any more questions to be answered.

Excellent news, and thank you for taking time to consider our questions Smiley

[1] – This is impressively short notice when we no really nothing about what you’re trying to do or who you are. Why Monday, July 15th, and why 300,000 shares?

Our initial IPO writeup stated we wanted to release 1 million total shares at a low pricepoint each. The reason for this was to provide opportunity for anybody to have the ability to buy in. Whether its 1 share or 10,000 a person, we wanted to appeal to everybody. We were later told to leave the "1 million" part out of it, and just release as needed. We were working with Havelock all week and this seemed to be a good date to release it. This would allow the announcement on the 12th and the weekend for people to review.

That’s good advice, and I was in the same situation months ago. I’ve discovered that, overall, it’s better to release slowly than to toss out the word “million” to investors. Staying low will help you get a feel for how the public reacts to your investment opportunity…knowledge I wish I had when I started off.

Also, are you planning on maintaining the $0.20 per share for the IPO as well as later releases (if there are any)? Just curious, especially given the recent vast price fluctuations.

[2]Hoping to add, or will add? In monetary terms, how much will it take to get up to 50MH/s? What equipment will you purchase?

 The word hoping to was used because 50mhash was our plan. We didnt want to necessarily say we WILL add 50mhash only to fall a little short due to major issues arising. In that case, the whole 50 couldnt be added in that time frame and action would be taken. Whether this is a dividend reissue to re-imburse for what couldnt happen, or things may be a little delayed while the technicalities got worked out. Our plans were to run 20 servers, each sporting 4 7950 GPUS. We priced out everything through WTCR and BitcoinStore. It worked out to (at the time btc was around $100) 17 btc each. This would provide about 2.5mhash each build.

Makes sense, and thanks for clearing that up. Given the hardware quantities you’re ordering, is there any way to get all the parts / cards wholesale? Maybe you’d be able to work something out with BitcoinStore? I’m not sure anyone has these capabilities, but it still may be something to consider checking out.

Dividends
Shareholders will receive dividends weekly on each Wednesday. Dividends will be paid as 85% of the net profits earned after expenses. Mining expenses are Rent, Electricity, Replacement Parts, and Repair. Labour fees or time-consuming work will not be expensed and are covered by the 15% of profits being retained by the operators.

Coins will be converted to Bitcoin for dividend payments. Conversions will be done in a strategic fashion, to best maximize profits and minimally impact conversion rates.

Just to make sure I’m reading this correctly, whatever is generated within a week (Wednesday to Wednesday) is the revenue. From that amount, you will deduct all expenses for that week (rent, electricity, any replacement parts, and cover any repairs). [1]
From what’s left over, you will keep 15% as a “management fee”, distributing the rest as a dividend.

So we’re essentially purchasing the hardware for you…and giving you 15% (after expenses) just because “labor”? I can understand the expenses part, but 85% (after all expenses) is quite shallow given you’re asking for our coin.

What price point would you see fit? Our initial plan was to withhold 100k / 1,000,000 shares for our personal hold. To collect the dividends off this. We were later then told to simply hold 10% of all issued shares. This was then changed to us not being allowed to do this, and to hold a percentage of profits.

It’s hard to say without looking over the numbers, but most managers take 5% off the top. Given all expenses are already taken out of any generated revenue prior to dividends, a smaller managers fee seems more reasonable.

Are you planning on purchasing up a percentage of shares in the fund? [EDIT: Found the answer to this at the end, but that’s ok]. If so, then you’d be paying yourself dividends on top of the manager’s fee, which may make up the difference (depending how much you buy in).

[1]Bunch of questions here:
How much is rent per month?
How much is electricity per kWh?
How much power does your rig currently consume?
How much power will the fully developed rig consume?
How often do the GPUs break, and when they do what fails first?
How much do replacement parts cost?

Rent is $1000 a month. Electricity averages out to $0.09/kWh. (Different costs depending on the time of day/day of week. But the overall overage consistently is at 9 cents)
Each rig consumed 1200 Watts of power. For a total of 24k watts.
As for GPU failures, I have run cards for 1-2 years solid back for Bitcoin mining without issue. In the event that cards do fail quickly in this scenario, warranty does cover this.
As for replacement parts, It would really depend on what fails on the card. The usual result is getting a new card, as there isnt much that could be directly replaced.


Thanks for clearing that up. With this data in mind, do you have any profit (revenue – expenses) projections for a week/month (just an example)? I can’t say I follow Litecoin all that much, so I’m not terribly versed in its past network hashing speed and average difficulty increases (more on all this momentarily).

IPO & Share Issuance
The initial public announcement will be on 7/12/13. This announcement will outline the plans and release dates for PHM. On 7/15/13 the initial public offering will be released at the Bitcoin equivalent value of $0.20 per share at the time of release.

Additional shares will be released in the future, for further expansion and growth. No set dates for these releases are planned at this time. After the initial IPO shares are sold and mining has started, we will assess when to announce and release additional shares. The price of newly issued shares will beset to the 7-day average price of the week prior. New shares will not be issued until any hardware purchased previously has been implemented and is mining.

So you will, without a doubt, dilute our shares in the future?

If they are newly released shares for the sole purpose of adding more power, it does end up balancing out does it not? If we added new shares and did not add new mining power then yes, that would be a horrible dilution as it would reduce dividends. This will not be the case, and after the initial setup newly issued shares for expansion will only increase your dividend payments.

Ah ok, I see what you’re saying. I feel like there could be complications down the line for this, but for whatever reason I can’t put my finger on ‘what’ or ‘why’. I’ve spent the last 10 minutes thinking through scenarios where good and bad things can happen, but they seem to work themselves out.

Anyway, it’s probably just me. I prefer the “set limit” method to issuing shares (what ASICMiner, HIM, and others have done), where there’s only so many shares issued and will never increase or decrease. It makes predicting dividends a lot easier and no need to worry about more shares popping up later on Cheesy

Mining
Shareholders own all PHM mining equipment. Currently, PHM is GPU-mining Litecoins at approximately 2.4Mh/s. We have an established dedicated mining room, which is properly temperature-controlled and secured. PHM also has plans of purchasing 2 ASICS from BFL. These include one Jalapeno and one 30Gh/s miner. These will provide about 35Gh/s toward mining Bitcoin directly.

The primary coin being mined will be Litecoin, but we may switch to other promising alt coins at will. Provisioning of hashing power can be spread to multiple currencies. During times when no alt-coins are more profitable than Bitcoin, the mining power can easily be moved to mine Bitcoin instead.

Just so I understand, should you sell the full 300,000 shares (valued at $0.20 each), you’re plan with the $60,000 is to purchase $1,600-ish worth in BFL gear, and push the remaining $58,400 in GPUs for alt-coin mining?

I don’t think I have a problem with that plan, I’d just like more detail on the GPUs. And why BFL? Why not splurge the extra $400 for a 100GH/s Mercury from KnC?

Well, you also need to take into account the other startup expenses within that raise. As for KnC, I am currently reading up on them. I did not follow their cycle much, but seems very promising.

I presume the startup expenses you’re referring to (aside from GPUs) are the cases, racks, cooling, power, etc? Or does it also include the fixed costs (labor, rent, etc)?

Reserved Rights
The issuer reserves the following rights:
1. Make changes to this agreement, as long as it has the best interest of its shareholders in mind.
2. Create motions for changes to the business, contract, or strategy of the company.

Uhh…but you just said there’s voting rights? So shareholders get to vote “upon decisions that affect shareholders as a whole or changes to this agreement”...but then you reserve the right to change it regardless?
Or are you saying that we can vote on the changes, but only you have the ability to implement the change?

Votes would be for things that hurt the shareholders. For example, we withhold 15%. Would everybody have an issue and demand a vote if one day we decide for whatever reason to reduce that to 12%? Critical changes that potentially hurt any prices, dividends or anything that is not what the shareholder initially bought in and it negatively effects them, will have a vote.

Got it, thanks for the clarification.

Dissolution
In the event that mining becomes only marginally profitable or a losing effort, or an act of god causes such, PHM reserves the right to close the business. Existing hardware will be sold, and remaining funds will be distributed back to all shareholders as a special dividend. The owners of PHM cannot be held personally liable for any losses incurred due to investments.

This is guaranteed to happen. You haven’t specified how you plan to expand your operation, so I can only assume you’ll mine on 50MH/s until your hashing power is drowned out by larger or more efficient operations.

Well, hoping between new coins and dumping at the right time is always a great way to make profit. This is one of the big things PHM will be doing to try and maximize profits for everybody. New shares will be released to further expand that 50mhash as well.

How do you decide which coin to mine, or how to split between the various coins? Would it be something you’d decide on daily, weekly, or sporadically based on market conditions?

And yes, these are hard questions to answer since there are quite a few factors at play! Smiley

Final thoughts:

With all honesty, I like the idea. Building up a large scrypt mining operation can certainly generate an income, but this investment is still quite risky.

After going over everything, here are my final questions to you:

-- Who are you? You joined today and yet you’re already asking for $60,000 worth of Bitcoins. In my experience, rarely has any offering fitting this pattern NOT been a scam. I’m not saying you fall in this category, I’m just saying it’s a bit odd, that’s all. Trust is a HUGE factor here..or at least to established members (newbies throw money at everything and anything).

-- Proof of Mining? Where are you currently mining now where we can see the 2.4MH/s in action? What GPUs are you currently using?

-- Financials? Do you have any financial and network models where you show where you think the network is going to go (for Litecoin or the other alt-coins)? As a potential investor, I want to see you do your due diligence on hashing speeds and how our hardware will ultimately benefit us in the end.

-- Your Investment? What are you putting into the fund? Anything other than the already established 2.4MH/s?

Bottom line here is TRANSPARENCY. Give us detail..so much detail that if we printed out each word we could literally swim in pages. Investors want to see what you're doing with their money down to the smallest detail. If you can do that, while providing a reasonable investment opportunity and managing your fund correctly, then I can assure you money won't be a problem in the future.

Currently mining at WeMineLTC. I will provide pictures of the current setups when my partner is around to take them. As of this moment, the servers are down as we are experimenting different builds of operating systems. Our plans for the big setup are to essentially have everything setup on bootable usb drives, clone them and then can mass deploy them with ease. We are currently using Saphire 7950s in the main setup, and 6950s in a second rig we are experimenting with as well.

Honestly? No. Its really hard to predict where we think the network is going. We will be working with many networks. Whether its the most profitable ones to mine today, be it Feathercoin, BBQcoin, Litecoin etc or something new released in the future. We will have the power to jump onto new currencies and essentially have a nice dominating head to start. We cant really give a guideline as to exactly where we will be going with this and what we will be working on. What if we are mining coin X and suddenly coin Y becomes the most profitable thing? This is not something we can predict.
Our investment, both me and my partner are putting in a minimum 10BTC each, most likely more. That way we can secure some shares and hold in the company itself. 

I hope all this clarified alot of the questions, issues and concerns.


Very cool, thanks for the information and I’m glad we could hash through quite a bit of this!

On network difficulty, I certainly agree with you there. It’s one thing to pull together data and averages to try and predict where the Bitcoin network will go…but that becomes quite a bit more convoluted as you jump between Litecoin, Bitcoin, Feathercoin, etc, etc.

My advice on this would be to grab as much data on how Litecoin has been growing over the past 2 (maybe 3) months, take an average, and try to extrapolate that over the next 3 months. Add in the data on your operation and how you see yourself growing, and with that you’ll have an idea regarding revenue. It’s not perfect of course, but seeing sensible numbers on paper will certainly put minds at ease.

If there’s one thing I’ve learned, it’s to under promise and over deliver. I look forward to seeing how this project develops. Smiley

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July 16, 2013, 03:49:34 PM
 #38

..."In mid-2013, the idea came online to build the first coinraping machine and sell shares.  Many people had this same idea, but it was a race to the idea, as are many good ideas."

Check out my prescient ATS thread from 2008: "Windows XP: End the Cyberwar, Open the Code Now!" http://www.abovetopsecret.com/forum/thread411978/pg1
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July 16, 2013, 07:42:01 PM
 #39

Hi everyone, just wanted to make an official post here, to thank everyone in the community for their questions and concerns regarding the PHM IPO.  We are working with PHM now to refine the details and will re-announce soon.

Just so everyone is clear -- We do perform very extensive due diligence on our end before listing an asset. We still turn down/reject many, many more asset requests than we approve.  For any that we do decide to list, you can be assured we have worked with the fund manager for at minimum several weeks (sometimes much longer) before launching.  We never rush into any asset listings.  That said, everyone should still perform their own due diligence before making any investment (this applies to bitcoin-world, and real-world), so it is very encouraging to see this type of constructive discussion occurring.

Stay tuned, a more refined and detailed PHM IPO announcement is in the works.

Cheers
 James


https://www.canadianbitcoins.com for quick & easy buy/sell with $CAD
Canada's Oldest Bitcoin Brokerage.  Serving Canadian Bitcoiners since 2011!
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July 18, 2013, 03:23:25 AM
 #40

Please sent PM's to those who are interested when this become online. Wink
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