[LABCOIN] IPO [BTCT.CO] - Details/FAQ and Discussion (ASIC dev/sales/mining)

[Luckybit]

You may be giving Active Mining too little credit, there is the argument Labcoin is working with old technology that is already being phased out, and in a couple months obsolete... while ActM is at the very forefront and poised to be first company to the market with 28nm technology. We will see how it plays out, but there will be a time that Labcoin can fall into a deep disadvantage

That is why I am saying the race isn't to smaller and more efficient chips. The race is actually to mass produce as many chips as possible and for as cheap as possible. The more chips you have the more TH you can mine with. The more chips you have the more you can sell and if the chips are cheaper to produce you can profit more.

The winner will be the company that can produce the most chips for cheapest price regardless of the efficiency of the chip. Eventually all the chips will meet the physical limits of efficiency anyway and then the only way to make money will be mass production of chips for the low cost.

[JohnyBigs]

Okay, you keep thinking you hold ownership buddy.  If you keep fightin with everything that everybody says, you're never going to learn anything..
Look it up and read into it.  Listen more, talk less..

Ok you keep telling me you don't can you show me where this has been discussed that you hold no ownership? if you hold no ownership the company could just say thanks for the money fuck off, have a nice day.

[Luckybit]

Using 30% of initial income to accelerate sale, development, production and mining capability is a growth strategy and what sets Labcoin apart from a set-hash rate mining bond. If you want to make a comparison you can compare the business model of asicminer and a set-hash rate bond without reinvestment strategy.

The long term plan and intention is to use the reinvestment fund to over time increase dividend payments (profits) to surpass what shareholders would earn if 100% dividends would be paid out from day-1 as the team of course believes that Labcoin can invest at far greater profit in development, production, sales and mining power then individual investors.

Why only 30%?  I'm sure that people would be worried if you didn't pay out anything, they'd think it might be a big scam or something - but you can also prove your hashrate.

What I'd like to see is is the opportunity for people to have their dividends reinvested directly into the company if they want: Dividends payed in new stock rather then BTC.

That way, you'd be able to have more money to spend on growth, and more quickly increase your hashrate and thus the profits.

The 30% achieves the same thing as reinvesting dividends. The people who usually reinvest dividends are companies that pay a very small portion not 70% that's just crazy lol. You can't also get paid in new stock that would dilute shareholders.

Secondly, there's not enough shares and volume to allow everyone to reinvest safely as prices will go up from all the buys, and as mentioned before the company can't make new shares as it will dilute ownership.

Imagine you own stock in a company that has $1000 and does nothing with it.  There are 1,000 shares and they are each worth $1.  Then, the company issues 500 new shares and charges one dollar a share. They do nothing with the money.

Now the company is worth $1500, there are 1500 shares, and each share is now still worth $1.

If the company gave shareholders the option of taking dividends in new stock, the value of the stock wouldn't change - the company would increase by however much they didn't pay out in dividends.

However, if that money was re-invested in more hashpower the value of the company would increase at a faster rate, and the % of the company owned by the shareholder would increase as well.

The problem is, if the hashpower of the company doesn't keep up with difficulty growth, then the value of the company actually goes down, because their revenues decrease.

Short answer as best as I can:

Allowing share-holders to reinvest 'as they see fit' by issuing bonds or more shares just seems like a more complicated way of achieving the same thing - continuous growth. Labcoin feels that 70% direct dividend is more than a fair share of earnings while allowing for long term development and a 'treasury' to enable the project to maximize earnings over time.

To be crass: If an investor feels like they could invest an extra 30% better themselves then Labcoin can being able to buy/develop/sell and mine at wholesale rates maybe investing in the project is not the right choice. To me at least, its not all about short term profit, but also about long term viability and trust. Something that I believe Labcoin will prove over time. I personally think this goes for any investment that is not simply an interest bearing bond or finite mining operation delivering a set hash rate.

Again, this is to a large part personal opinion and I do not mean to insult anyone or step on any toes.

Here is a long term problem though, at some point we will reach the physical limits of ASIC chip technology. When those limits are reached then the only way to maintain a 10% of the network hashrate and outpace the continuous difficulty increase will be to make massive amounts of chips. A company with a lot more money will be able to make a lot more chips, so that would mean Nvidia, AMD or Intel could come in at the last minute and start mining themselves and because they have billions to spend on chips they could easily do a 51% attack by having the money to spend on it.

Right now we assume Bitcoin wont be big enough for them to spend that kind of money and that is correct. If Labcoin is to exist beyond the race to 20nm (because eventually there will not be any more efficiency left in chip design), then how will Labcoin compete with the company who can spend a few hundred million on chips?

For this reason it is worth considering releasing a long term growth bond that people can buy into which gives Labcoin a loan for the long term future. This would guarantee that as long as there are enough people who support Labcoin within the community by buying the bond that Labcoin could maintain 10% of the network. It would remove the risks I outline above.

Ciphermine is considering this approach. I wouldn't be surprised if Asicminer eventually does something similar. I see it as one of the few ways to leverage the advantages of being first. I don't think Labcoin will be able to rely on chip efficiency increases for longer than a few years and then the race will be to see who can make the most chips the fastest and sell the most chips for the chapest (and mine). Labcoin will have stiff competition in making and selling chips and the profit margins could shrink.

Again, this can be accomplished simply by voting on suspending dividends, or lowering them, to raise the needed capital to continue to maintain 10% hashrate.

Adding bonds, dividend reimbursement plans, or anything else just complicates the issue. 

No, why should you vote to lower dividends when you can keep paying dividends and use the bond? Do shares even have voting rights? Voting to cut dividends will make people go into Asicminer or whatever competition is willing to use the bond or complicated method. People aren't going to like losing dividends collectively but I think if some people want to invest their dividends into a loan via a bond then they can just buy the bond and as individuals make that choice.

At some point its going to become so competitive that Labcoin will not maintain 10% of the network and that will probably happen within 3 years. How much more efficient can chips get?

[physalis]

Here is a long term problem though, at some point we will reach the physical limits of ASIC chip technology. When those limits are reached then the only way to maintain a 10% of the network hashrate and outpace the continuous difficulty increase will be to make massive amounts of chips. A company with a lot more money will be able to make a lot more chips, so that would mean Nvidia, AMD or Intel could come in at the last minute and start mining themselves and because they have billions to spend on chips they could easily do a 51% attack by having the money to spend on it.

Right now we assume Bitcoin wont be big enough for them to spend that kind of money and that is correct. If Labcoin is to exist beyond the race to 20nm (because eventually there will not be any more efficiency left in chip design), then how will Labcoin compete with the company who can spend a few hundred million on chips?

For this reason it is worth considering releasing a long term growth bond that people can buy into which gives Labcoin a loan for the long term future. This would guarantee that as long as there are enough people who support Labcoin within the community by buying the bond that Labcoin could maintain 10% of the network. It would remove the risks I outline above.

Ciphermine is considering this approach. I wouldn't be surprised if Asicminer eventually does something similar. I see it as one of the few ways to leverage the advantages of being first. I don't think Labcoin will be able to rely on chip efficiency increases for longer than a few years and then the race will be to see who can make the most chips the fastest and sell the most chips for the chapest (and mine). Labcoin will have stiff competition in making and selling chips and the profit margins could shrink.

You have a point, but I think you're overlooking that growth is not only determined by how much money you can throw at it. LC has way more money than they need right now, they have said so multiple times. The chips currently on its way were already payed before all of us even knew LC existed, and the IPO money goes to development of the next generation (65nm) ASIC.
When they use 30% of their mining income to fund further growth, I believe it will be enough by far.
If we pool our resources together to give them, say, another million dollars, that won't necessarily speed up anything. These things not only take money, they take time and skill.
The speed can be increased by increasing infrasctructure, hiring more personel etc., but still only at a limited rate. If they calculate that the income from 30% of the mining&hardware sales is enough to sustain their growth, then that's fine. And I see no reason why it shouldn't be.
Speculating that Intel and AMD might jump into this and kill all the current ASIC companies in bitcoin is really a bit far-fetched IMHO.

[VolanicEruptor]

Okay, you keep thinking you hold ownership buddy.  If you keep fightin with everything that everybody says, you're never going to learn anything..
Look it up and read into it.  Listen more, talk less..

Ok you keep telling me you don't can you show me where this has been discussed that you hold no ownership? if you hold no ownership the company could just say thanks for the money fuck off, have a nice day.

That's exactly why this game is so risky, kid.  Sell your shares and go do something useful with it if you don't understand what you're doing here.
If I owned a company, I could sell shares, telling everybody they will get X amount of profit.  There is no legal obligations on my part, as it is a virtual security exchange.  I could easily run off with the money, and that is why this place isn't safe.  There is no legal protection behind the shares you have purchased because there is no regulation.  There are no authorities to enforce any kind of trust.  

This is not a real stock exchange.  You don't have any legal ownership of any company here.

Go confirm this with burnside, he will be in complete agreement.

[physalis]

At some point its going to become so competitive that Labcoin will not maintain 10% of the network and that will probably happen within 3 years.

To be honest, I think it's highly optimistic that they will ever at any point in time have 10% of the network. I'd like them to surprise me in that regard, but I'm also totally happy if they just get 5%.

Just for comparison... ASICMINER is at about 8% now.

[JohnyBigs]

Okay, you keep thinking you hold ownership buddy.  If you keep fightin with everything that everybody says, you're never going to learn anything..
Look it up and read into it.  Listen more, talk less..

Ok you keep telling me you don't can you show me where this has been discussed that you hold no ownership? if you hold no ownership the company could just say thanks for the money fuck off, have a nice day.

That's exactly why this game is so risky, kid.  Sell your shares and go do something useful with it if you don't understand what you're doing here.
If I owned a company, I could sell shares, telling everybody they will get X amount of profit.  There is no legal obligations on my part, as it is a virtual security exchange.  I could easily run off with the money, and that is why this place isn't safe.  There is no legal protection behind the shares you have purchased because there is no regulation.  There are no authorities to enforce any kind of trust.  

This is not a real stock exchange.  You don't have any legal ownership of any company here.

Go confirm this with burnside, he will be in complete agreement.

You miss the point that you think it's virtual.

"In announcing the Ponzi allegations the SEC also took the opportunity to remind the public that all securities investments within the US fall under its jurisdiction, regardless of whether these are made using US dollars or virtual currency. "

“The SEC asserts that Shavers made a number of misrepresentations to investors regarding the nature of the investments and that he defrauded investors. However, the question currently before the Court is whether the BTCST investments in this case are securities as defined by Federal Securities Laws,”

“Shavers argues that the BTCST investments are not securities because Bitcoin is not money, and is not part of anything regulated by the United States. Shavers also contends that his transactions were all Bitcoin transactions and that no money ever exchanged hands. The SEC argues that the BTCST investments are both investment contracts and notes, and, thus, are securities.”

Bitcoin investments "meet the definition of investment contract, and as such, are securities,” the judge added.

In the US you have legal regulations, maybe not in Hong Kong, but clearly they are considered securities virtual or otherwise.

[Luckybit]

You have a point, but I think you're overlooking that growth is not only determined by how much money you can throw at it. LC has way more money than they need right now, they have said so multiple times. The chips currently on its way were already payed before all of us even knew LC existed, and the IPO money goes to development of the next generation (65nm) ASIC.

For right now they have plenty of money which means they can sell their chips for cheaper if necessary and that is all good. It also means they can produce more chips if difficulty goes up and that is also good. Right now they are on target and there are no complaints about that right now but 2014 is a new year with new competition and much higher difficulty.  

When they use 30% of their mining income to fund further growth, I believe it will be enough by far.  

For a couple years maybe. It wont be enough for as long as people think. They wont be able to make more efficient chips after physical limits are reached and nothing stops a big player from deciding a few years from now to get in on ASICs. If that happens everything can change overnight. What if a video game company like Nintendo decided to release a successor to the Wii which mines Bitcoins and lets the user download free games? What if Sony gets in on it? There are a lot of chip companies with a lot of money who could decide to mine Bitcoins.

If we pool our resources together to give them, say, another million dollars, that won't necessarily speed up anything. These things not only take money, they take time and skill.

I'm not talking about speeding anything up. I'm talking about security in knowing that Labcoin will survive the next 5-6 years. Right now I can only see it maintaining its position for 2-3 years and that is if everything this year goes how they plan.

The speed can be increased by increasing infrasctructure, hiring more personel etc., but still only at a limited rate.

I was not talking about that. I'm talking about cheaper chips, not just smaller.

If they calculate that the income from 30% of the mining&hardware sales is enough to sustain their growth, then that's fine. And I see no reason why it shouldn't be.
Speculating that Intel and AMD might jump into this and kill all the current ASIC companies in bitcoin is really a bit far-fetched IMHO.

It's far fetched in 2013, it's not far fetched in 2016. ASICs were far fetched in 2012 back when everyone was GPU mining. Intel, AMD or anyone could flood the market with chips and hashrate. Any chip company can make an ASIC and lower the price down to a level so everyone has to buy theirs. I don't think that will happen for the next 3 years but after that it's anyones guess.

[VolanicEruptor]

From BTCT FAQ
•No assets on the site are to be considered real.
•The use of this site is for educational and entertainment purposes only.
•If an asset issuer on this site defaults, you have ZERO RECOURSE. (not like you have any recourse in most international BTC situations anyway.)


That pretty much sums it up right there.  Listen and learn.
the SEC won't help you just because you're a US citizen.  Give your head a big shake.  US is not the world.

[redbeans2012]

Okay, you keep thinking you hold ownership buddy.  If you keep fightin with everything that everybody says, you're never going to learn anything..
Look it up and read into it.  Listen more, talk less..

Ok you keep telling me you don't can you show me where this has been discussed that you hold no ownership? if you hold no ownership the company could just say thanks for the money fuck off, have a nice day.

That's exactly why this game is so risky, kid.  Sell your shares and go do something useful with it if you don't understand what you're doing here.
If I owned a company, I could sell shares, telling everybody they will get X amount of profit.  There is no legal obligations on my part, as it is a virtual security exchange.  I could easily run off with the money, and that is why this place isn't safe.  There is no legal protection behind the shares you have purchased because there is no regulation.  There are no authorities to enforce any kind of trust.  

This is not a real stock exchange.  You don't have any legal ownership of any company here.

Go confirm this with burnside, he will be in complete agreement.

Nothing like Bitcoin Stock Trading.  I love it.

[Luckybit]

At some point its going to become so competitive that Labcoin will not maintain 10% of the network and that will probably happen within 3 years.

To be honest, I think it's highly optimistic that they will ever at any point in time have 10% of the network. I'd like them to surprise me in that regard, but I'm also totally happy if they just get 5%.

Just for comparison... ASICMINER is at about 8% now.

Asicminer was at almost 20% at one point. You're right it is highly optimistic but not impossible. They could secure 10% of the network with a bond offering and if whenever they fall below 10% we buy the bond to give them a loan so they can push it up. This feedback mechanism would not require voting rights and would allow the community to push the hashrate up to maintain 10% or higher. The loaned money would simply be used to buy more chips until they do have 10%.

They could use the reinvestment mechanism, that probably will work for the next few years and they might get 10% of the network just on that if sales are good. Asicminer didn't keep above 10% of the network because they don't want to, they have 1000TH in reserve. If Labcoin can build up a similar reserve then they'll have some level of security.

It's not about cash though, it's about chips.

[JohnyBigs]

From BTCT FAQ
•No assets on the site are to be considered real.
•The use of this site is for educational and entertainment purposes only.
•If an asset issuer on this site defaults, you have ZERO RECOURSE. (not like you have any recourse in most international BTC situations anyway.)


That pretty much sums it up right there.  Listen and learn.

That's great nobody gives a shit what BTCT says on their website. End of the day you are purchasing shares of LabCoin and those shares are transferred under your ownership.

Again: “Shavers argues that the BTCST investments are not securities because Bitcoin is not money, and is not part of anything regulated by the United States. Shavers also contends that his transactions were all Bitcoin transactions and that no money ever exchanged hands. The SEC argues that the BTCST investments are both investment contracts and notes, and, thus, are securities.”

He argues what BTCT is arguing just because they say so doesn't mean shit when the government says otherwise lol.

I can say selling drugs is not a crime, doesn't mean I'm right.

Nobody said the SEC will help me, but other countries might take similar regulations. Secondly, the US can indict you and extradite your and freeze all your assets, and bring them into this country, in-case you haven't figured that out by now.

The US is the world, but keep denying that fact if it gives you warm fuzzies inside.

[Luckybit]

From BTCT FAQ
•No assets on the site are to be considered real.
•The use of this site is for educational and entertainment purposes only.
•If an asset issuer on this site defaults, you have ZERO RECOURSE. (not like you have any recourse in most international BTC situations anyway.)


That pretty much sums it up right there.  Listen and learn.
the SEC won't help you just because you're a US citizen.  Give your head a big shake.  US is not the world.

It's about as fake as Max Keiser's virtual hollywood stock exchange.

But this is why people want to get their ROI as soon as possible so that they don't lose anything if Labcoin or anything else turns into a scam.

[VolanicEruptor]

This kid isn't going to make it far..
I tried.

[Luckybit]

From BTCT FAQ
•No assets on the site are to be considered real.
•The use of this site is for educational and entertainment purposes only.
•If an asset issuer on this site defaults, you have ZERO RECOURSE. (not like you have any recourse in most international BTC situations anyway.)


That pretty much sums it up right there.  Listen and learn.

That's great nobody gives a shit what BTCT says on their website. End of the day you are purchasing shares of LabCoin and those shares are transferred under your ownership.

Again: “Shavers argues that the BTCST investments are not securities because Bitcoin is not money, and is not part of anything regulated by the United States. Shavers also contends that his transactions were all Bitcoin transactions and that no money ever exchanged hands. The SEC argues that the BTCST investments are both investment contracts and notes, and, thus, are securities.”

He argues what BTCT is arguing just because they say so doesn't mean shit when the government says otherwise lol.

I can say selling drugs is not a crime, doesn't mean I'm right.

It's not a stock in the traditional sense of the word. It's a completely new definition of a new kind of contract which does not currently exist in the legal lexicon. It is based around a sort of smart contract in the context of a virtual reality game.

Now, if you lose your virtual currency in Second Life it's not exactly the same thing as real stock. As for what it is, we don't really know yet because it has not yet been defined yet. That is the risk and until it is defined legally it exists as a game with real world benefits. It should be considered an alternate reality game with real world benefits.

An alternate reality game is what it is according to the technological definition. The legal definition? Ask a lawyer.

[JohnyBigs]

This kid isn't going to make it far..
I tried.

Nah your just fucking completely dumb. When your virtual fake money goes and gets used for real business, and real assets, it leaves the realm of "virtual keiser stock exchange".

There are legalities no matter what your half retarded brain says, the only problem is there is probably no regulation in Hong Kong.

[physalis]

The speed can be increased by increasing infrasctructure, hiring more personel etc., but still only at a limited rate.

I was not talking about that. I'm talking about cheaper chips, not just smaller.

Just to clarify, when I was talking about "speed" in my post, i meant speed of growth.
Growth is basically what you're arguing about. That they as a company need to grow fast enough to be able to keep up with the competition.
And yes, that is true, but that is something for them to evaluate. And for the foreseeable future, growth will not be hindered by lack of money.
And should the need for money arise, there are ways for them to get it. Issue new shares, make a loan...
But again, that is for them to decide and evaluate and it depends on how well they'll be able to lead this company. It's really not something you should be worrying about now.

[ajk]

This kid isn't going to make it far..
I tried.

What has JB said that was incorrect because most of what I read was pretty dead on,

this also coming from the same person who said that Asicminer was done? it seems you are arguing for the sake of arguing and you are only embarrassing yourself by replying regardless of whether it is called a "game" 70% of the company was sold to the public hence that is what we own of the company,

it is extremely disheartening to read your posts considering that all you seem to do is talk down to people who are probably better off than you,

[JohnyBigs]

From BTCT FAQ
•No assets on the site are to be considered real.
•The use of this site is for educational and entertainment purposes only.
•If an asset issuer on this site defaults, you have ZERO RECOURSE. (not like you have any recourse in most international BTC situations anyway.)


That pretty much sums it up right there.  Listen and learn.

That's great nobody gives a shit what BTCT says on their website. End of the day you are purchasing shares of LabCoin and those shares are transferred under your ownership.

Again: “Shavers argues that the BTCST investments are not securities because Bitcoin is not money, and is not part of anything regulated by the United States. Shavers also contends that his transactions were all Bitcoin transactions and that no money ever exchanged hands. The SEC argues that the BTCST investments are both investment contracts and notes, and, thus, are securities.”

He argues what BTCT is arguing just because they say so doesn't mean shit when the government says otherwise lol.

I can say selling drugs is not a crime, doesn't mean I'm right.

It's not a stock in the traditional sense of the word. It's a completely new definition of a new kind of contract which does not currently exist in the legal lexicon. It is based around a sort of smart contract in the context of a virtual reality game.

Now, if you lose your virtual currency in Second Life it's not exactly the same thing as real stock. As for what it is, we don't really know yet because it has not yet been defined yet. That is the risk and until it is defined legally it exists as a game with real world benefits. It should be considered an alternate reality game with real world benefits.

An alternate reality game is what it is according to the technological definition. The legal definition? Ask a lawyer.

“Shavers argues that the BTCST investments are not securities because Bitcoin is not money, and is not part of anything regulated by the United States. Shavers also contends that his transactions were all Bitcoin transactions and that no money ever exchanged hands. The SEC argues that the BTCST investments are both investment contracts and notes, and, thus, are securities.”

“It is clear that Bitcoin can be used as money,” Mazzant wrote. “It can be used to purchase goods or services, and as Shavers stated, used to pay for individual living expenses. The only limitation of Bitcoin is that it is limited to those places that accept it as currency. However, it can also be exchanged for conventional currencies, such as the US dollar, Euro, Yen and Yuan. Therefore, Bitcoin is a currency or form of money, and investors wishing to invest in BTCST provided an investment of money.”

Bitcoin investments "meet the definition of investment contract, and as such, are securities,” the judge added.

See above if you still think it's "virtual", Germany also classified it as a real currency.

[physalis]

This kid isn't going to make it far..
I tried.

It's just absolutely hopeless.

Nah your just fucking completely dumb. blahblahblah I'm a fucking retard.

You should really stop talking here, and just fucking lurk moar.
If you listen enough to the adults, maybe you'll figure a few things out.