[BitFunder] IceDrill.ASIC IPO (235 Thash Mining Operation powered by HashFast)

[kingcrimson]

I'm suffering from "Mining IPO Fatigue" = MIPOF

I don't see how the market can possibly support a new IPO every week. The cake isn't growing, its unsustainable.

I'm not saying this IPO is any stronger or weaker than any other recent IPOs. All I do know is the later you are to the party, the lesser the chance of success.

If you launch this year, you've still got a good chance. So good luck with a speedy and successful launch. But as they say on Dragon's Den, I'm out.

Anyone thinking of IPOing a mining company 2014, forget it. The appetite will have long gone due to the ever increasing market place competition and inevitable bankruptcies that will start happening at turn of the year.

Ditto

At this point, any start ups would be better off trying to get a bank loan using these same projections

I've got  "Mining IPO Fatigue Fatigue" = MIPOFF.

People whining about 'too many' IPOs is the cause.    

The market decides a sector needs more firms when profits are excessive (cough, AM/Avalon, cough).

The more the merrier because consumers (of ASICs and IPOs) benefit from competition, as does BTC security.

If a plethora of options hurts your wee noggin, go play outside.  Or, suck it up and try harder.

Competition is healthy.
Quick and slapped together IPOs like this, made solely to profit off suckers, is wrong.

Not saying it is a scam necessarily but it was clearly rushed to the scene and the numbers make no sense.

[Ukyo]

Not saying it is a scam necessarily but it was clearly rushed to the scene and the numbers make no sense.

Hmm.. this story.. sounds.. familiar.. .. .. somehow...

[Eisenhower34]

The IceDrill mine, at launch, will be running with 500 Terahashes (500,000 Gigahashes) of power. This asset comprises 60% of the mine’s ongoing profits (meaning roughly 100% of 300 TH power). However, this asset is NOT tied to a specific hashrate. Rather, it is tied to a specific percentage of IceDrill profits, meaning that as the mine grows in hash power, so too do the profits earned by the shares. While one share will be worth roughly 10 Mhash of mining power upon launch, it will be worth more hash power over time as the mine grows.

In order to grow, 75% of the profit from each shares share will be paid out to the investor, and the remaining 25% will be reinvested in additional mining capacity on a continual basis. Thus, the mine will grow substantially over time to maintain the most efficient market share.

So how much money did you / the other party put into this biz? You are selling 30 mio shares @ ~0.0015 BTC with a price of ~$100/btc, that are $4.500,000 while the shareholders only get 45% (75% of 60%) of the profits and finance all the "hashrate grow" with  15% (25% of 60%) of the profit... So you and the other partys finance 3mio ?

also, how much if ANY coins are the "shareholders/owners" putting up of their own money. or are they saying that their work/expertise is worth 40% management fee?

If you finance nothing, then please let me "manage" something too. I'd love to get 40% of a $4,500,000 company for making some phone calls and writing some emails...

[Plazma]

The IceDrill mine, at launch, will be running with 500 Terahashes (500,000 Gigahashes) of power. This asset comprises 60% of the mine’s ongoing profits (meaning roughly 100% of 300 TH power). However, this asset is NOT tied to a specific hashrate. Rather, it is tied to a specific percentage of IceDrill profits, meaning that as the mine grows in hash power, so too do the profits earned by the shares. While one share will be worth roughly 10 Mhash of mining power upon launch, it will be worth more hash power over time as the mine grows.

In order to grow, 75% of the profit from each shares share will be paid out to the investor, and the remaining 25% will be reinvested in additional mining capacity on a continual basis. Thus, the mine will grow substantially over time to maintain the most efficient market share.

So how much money did you / the other party put into this biz? You are selling 30 mio shares @ ~0.0015 BTC with a price of ~$100/btc, that are $4.500,000 while the shareholders only get 45% (75% of 60%) of the profits and finance all the "hashrate grow" with  15% (25% of 60%) of the profit... So you and the other partys finance 3mio ?

also, how much if ANY coins are the "shareholders/owners" putting up of their own money. or are they saying that their work/expertise is worth 40% management fee?

If you finance nothing, then please let me "manage" something too. I'd love to get 40% of a $4,500,000 company for making some phone calls and writing some emails...

[Vbs]

If the chips are fully operational on the 1st of November without any delays (and they keep their promise of a max of 40W/chip, 10GH/s/W), the investors that are paying a total of BTC44,750 for 300TH (60%), will probably have an estimated max profit of ~16.8% until it tops out in October 2014.

Data: http://mining.thegenesisblock.com/

Now, from the issuer's point of view... Notice the "Cumulative Return" column.

Data: http://mining.thegenesisblock.com/

[LordMeowMeow]

I'm out unless we get more of the pie. If those numbers are correct this is just a get rich quick scheme.

[weaknesswaran]

Only 75% are paid out the rest gets reinvested.

1Th is 9000$, friedcat once said his cost are well under 10000$/Th.

[sayaz]

Only 75% are paid out the rest gets reinvested.

1Th is 9000$, friedcat once said his cost are well under 10000$/Th.

For anyone investing in the IPO its 60% of 75%

or,

45%

[onecent]

More info is needed, please

[will]

More info is needed, please

Hi All.

Just an update. We've been working hard with Ludvig on addressing all the above uncertainties and questions into a single, comprehensive Q&A-formatted response. The response will be available here within the next 2-3 hours.


.

[ThickAsThieves]

For reference

IceDrill.ASIC
Mining Profit asset
August 5, 2013

Introduction:

DigiMex, a British Virgin Islands company (BVI Company Number: 1784369), is deploying a large-scale Bitcoin mine named IceDrill. The company is hereby releasing a asset (symbol: IceDrill.ASIC) for shares in the profits of the IceDrill mine.

To build the IceDrill mine, DigiMex has a special relationship with HashFast to acquire significant volumes of its new 400 Gh.s-1 ASIC chips on a continual basis.

The IceDrill mine, at launch, will be running with 500 Terahashes (500,000 Gigahashes) of power. This asset comprises 60% of the mine’s ongoing profits (meaning roughly 100% of 300 TH power). However, this asset is NOT tied to a specific hashrate. Rather, it is tied to a specific percentage of IceDrill profits, meaning that as the mine grows in hash power, so too do the profits earned by the shares. While one share will be worth roughly 10 Mhash of mining power upon launch, it will be worth more hash power over time as the mine grows.

In order to grow, 75% of the profit from each shares share will be paid out to the investor, and the remaining 25% will be reinvested in additional mining capacity on a continual basis. Thus, the mine will grow substantially over time to maintain the most efficient market share.

The IceDrill mine will launch with its initial 500 Th.s-1 capacity in the last quarter of 2013, likely in November.

Purpose of the asset
Money raised through this offering will be combined with privately-raised capital (already secured) for the purpose of purchasing specialized ASIC mining equipment and establishing a secure, climate-controlled mine facility in Europe (the exact location is already selected but is confidential for security reasons).

Mining start date:
The estimated time of delivery is Q4 of 2013.

The physical mine location will be prepared for chip delivery in September.
Chips will arrive in early November
The IceDrill mine will be operational in Q4 2013, likely in November.

Why should you believe in this timeframe? Because we are working with HashFast. We invite you to consider their ability to deliver chips on time and to spec for yourselves.
IPO details:
30,000,000 (30 Million) IceDrill.ASIC shares will be created at the IPO. 30,000,000 of these shares will be sold. Each share represents 1/50,000,000 of the profit of the IceDrill mine. Since the mine will open with 500 Th.s-1. of capacity, 1,000,000 shares will equal profit derived from roughly ten terahashes (10 Th.s-1) of capacity (and this will grow over time as 25% of profits are continually reinvested).

The shares will be sold in three batches:

The first batch is a initial sale of 14,500,000 (14.5 million) shares, which will be sold on BitFunder for 0.0014 BTC per share. The first batch will raise money to partially pay for chips and mining equipment from the manufacturer (HashFast, see thread https://bitcointalk.org/index.php?topic=262052.0) This money needs to be raised before the 12th of August (00:00:00 UTC, 12 August 2013) for this IPO to be deemed successful.

The second batch of 3,500,000 (3.5 million) shares and will be sold at 0.0015 BTC per share. Proceeds raised from this sale will help pay for more hardware and build out of the compute center/mine location. This batch needs to be sold by the 25th of August (00:00:00 UTC, 25 August 2013) for the IPO to be deemed a success. If this does not occur then any money collected will be reimbursed to the investors. At the opening of the mine, this equates to a price of 0.15 BTC per Gh.s.

The third batch is of 12,000,000 (12 million) shares and will be sold at the price of 0.0016 BTC per share. These shares have to be sold by the 4th of November (00:00:00 UTC, 4 November 2013) for the IPO to be deemed a success. At the opening of the mine, this equates to a price of 0.16 BTC per Gh.s.

Keep in mind that the Gigahashes represented per share will grow over time as the reinvested Bitcoins are used to purchase more hardware.

Introduction of parties involved and responsibilities
The ASIC manufacturer is HashFast, which recently made its announcement here https://bitcointalk.org/index.php?topic=262052.0, you can also check out their website for more information hashfast.com

As announced by HashFast, it is working together with Uniquify Inc to create the best mining equipment possible. Uniquify has been in the ASIC business since 2004 and has produced numerous ASIC and SoC designs. For more info about the team check out their website http://www.uniquify.com/.

The builder and operator of the IceDrill mining farm, and the administrator of the IceDrill. ASIC asset is DigiMex. DigiMex is in turn owned by PetaMex Limited (BVI Company registration number 1784386). PetaMex has four owners (details below).

Ludvig Öberg (aka DeaDTerra) is the point of contact for the IceDrill.ASIC asset and any inquiries should be sent to him.
IceDrill.ASIC Manager:
Ludvig Öberg:
LinkedIN: se.linkedin.com/in/ludvigoberg/
Forums: https://bitcointalk.org/index.php?action=profile;u=40976
Email: terragubben@gmail.com
Skype: terragubben
Title: Asset manager (Not a shareholder/Owner, nor the issuer of the asset)
Mobile Number: +46735691370 (Please only call during the hours 10-20 CET)

HashFast:
John Skrodenis:
Role: Vice President of Marketing
LinkedIn: www.linkedin.com/in/johnskrodenis

PetaMex (holding company), DigiMex (mining operator):
David Shin:
Role: Shareholder/Owner
LinkedIn: http://www.linkedin.com/pub/dave-shin/2/62b/355

Willem van Rooyen:
Role: Shareholder/Owner
Task: Mining logistics, location setup, technical team/consultant director.
LinkedIn: http://www.linkedin.com/pub/willem-van-rooyen/1/9b9/7b0
BitcoinTalk: https://bitcointalk.org/index.php?action=profile;u=8890

Lourens Vorster:
Title: Shareholder/Owner, Director
LinkedIN: http://www.linkedin.com/pub/lourens-vorster/1/a2b/8

Felix Ng:
Title: Shareholder/Owner
LinkedIN: hk.linkedin.com/pub/felix-ng/48/466/bb/

Estimates:
Estimates or speculation of potential return can be found here:

https://docs.google.com/spreadsheet/ccc?key=0AqOET6CrjiUodFIxN1Q0Q2FVT0VsalhOcVhfTmhJRmc&usp=sharing

Please note that the scenarios that have been set up are just examples and do not represent the future or actual profits. Please do you own due diligence before deciding to invest. If you want to setup your own scenarios please copy paste and plug in your own numbers. Please note that these figures do not include the electricity and rent costs. Please see other estimates of mining facilities for a cost budget.

Please note that any risks that DigiMex assumes is also a risk for the investor, as an investor owns a share of the profit and not the hardware. This may include but is not limited to risk such as failure of delivery of hardware (due to chip design flaw, malfunction in production, delays etc), theft of hardware, damage to hardware etc. Please consider this before investing,

This Bitcoin-related investment is a high risk investment and you should only invest as much as you can afford to lose. No guarantee is made of any return or profit whatsoever.

IceDrill.ASIC offering:
Each share represents 1/50,000,000 of the profit of DigiMex (The Issuer) and gives the holder right to 100% of the profit (Of the 1/50,000,000 profit). Profit is defined as income from mined bitcoin minus electricity cost,rent and maintenance. 75% (of this profit) will be paid in interest every week (every Sunday) and 25% of the profit will be reinvested in additional mining capacity. The holder of the share has the right to the full profit of any hardware purchased with these reinvestments (the 75%/25% distribution rule will again apply to hardware acquired through reinvestment).

The shares have no voting power. Shares of IceDrill.ASIC on BitFunder do not represent real world shares of DigiMex. The shares are solely a distribution mechanism for rights to profits of DigiMex. Profit distribution will not be dependent on BitFunder’s existence, in the case of where BitFunder is closed down the asset will be moved to another platform, if no adequate platform exists then payouts will happen manually to the shareholders bitcoin address.

The Issuer has the right to terminate the asset in the event of insolvency by liquidating any company savings to pay out a final dividend. The Issuer has the right to buy back, at any time, all shares issued, for 1.2x the price of the previous 7 day average market price (determined by the data provided by bitfunder.com).

The issuer has the right to release more shares at any time and for any price (the 20,000,000 shares not sold at the IPO). Because each new share holds the same proportion of the company even after more issuance, there will be no dilution to the previously sold shares.

The issuer has the right to change the price and/or amount of any scheduled batches of shares.

Please note that DigiMex will be operated by PetaMex in the foreseeable future. However, the operators (PetaMex in this case) retains the right to stop Digimex operations if it becomes operationally unprofitable. At that point, this agreement will automatically be terminated. In addition, we would not preclude the possibility that DigiMex may be sold to another operator.

[DeaDTerra]

Q:
What is the 40% “management fee” all about?

A:
The remaining 40% is not a management fee. The 40% has been pre-allocated to the founders and private investors the amount or exact details, for confidentiality reasons, cannot be disclosed.  If these private investors choose to resell their 40% stake into the market, DigiMex retains the full right to help facilitate this secondary placement into the public market.


Q:
What does it mean that you are reinvesting 25%. Does that mean that we only get 75 % out of the 60% of the profit of the company?

A:
“The holder of the asset has the right to the full profit of any hardware purchased with these reinvestments”
100% of the farm belongs to investors (total capacity of 500 Tera Hash). 60% of profit is being offered by IPO but the other 40% will be sold as well (either IPO or private sale). You can think of this as a hosted service. DigiMex mostly acts as a pass-through by collecting bitcoin by mining and then pass them to investors. However, just like other mines, we need to keep upgrading our hardware. So, for every 100 BitCoin that we mine (with the ENTIRE mine capacity going forward, not only 300Th), minus cost (say 10), we would distribute 67.5 to shareholders and keep 22.5 to expand the mining capacity of the mine. All new equipment will belong to the investors.

Further, to clarify: phrasing like "equates to X BTC/Gh/s" in the IPO is simply for reference purposes to investors as the comparative market standard is to quote bitcoin mining equipment prices in $/Gh/s or BTC/Gh/s.

The reason why we opted for this solution is that we realize that the mining market evolves and changes and we need to have a business plan which takes that into account. Reinvesting mining profit will allow us to purchase new equipment and technology as ASIC bitcoin mining technology improves over time.


Q:
When is the next date at which valuation will deviate from 0.0014 / be out of IPO?
In other words how much time does everyone in the world have to get in on the IPO?

A:
This will happen once the initial batch has sold. The deadlines that needs to be meet are 12 August, 25 August and 4 November for the respective batches.


Q:
buyback clause of 1.2x is risky for investors... they can make a lot of coin (off the INITIAL investment of OTHERS) then just buy all the shares back at a small premium before announcing huge investments that they will only keep to themselves. this should be taken out- the forced buyback clause.
A:
Agreed. We are changing the IPO to say  
“in the event of a sale of the farm, the profit made will be split proportionally amongst the asset owners”

For reference: The original IPO document stated “The Issuer has the right to buy back, at any time, all shares issued, for 1.2x the price of the previous 7 day average market price (determined by the data provided by bitfunder.com).”


Q:
Will you list the asset on other exchanges such as X,Y,Z

A:
We will be looking to setup PTs or similar services on other exchanges so that you may use the service of your choice. Due to the due-diligence work required to get this up & running and time constraints, please do not expect for it to happen for this 1st batch (due date 12 August).


Q:
Didn't DeadTerra just step down as a passthrough because it was too much effort for him to be a middle man (and press a few buttons)... now he is fronting a $15 million IPO?  

A:
What did you think kept me busy ^^
This project has taken up a lot of my time in the last couple of months but because I really believe in it, I have stepped down on my other responsibilities to focus on this project.


Q:
The IPO was clearly rushed to the scene and the numbers make no sense.

A:
The reason why this IPO seems a bit rushed is because of financial and deadline terms that we have agreed with different parties involved. We are happy to take feedback from the community and improve on the IPO information as we are doing with this Q&A.


Q:
Have HashFast said they will only sell chips to IceDrill ?

A:
We have a deal with HashFast that guarantees that we will get the chips from the first batch produced.
Once the chips are off from the fab they will be sent straight to us for assembly.


Q:
Spreadsheet scenarios aren’t realistic.

A:
We have amended our scenario analysis with new parameters. Again, you are free to do your own modelling. Our spreadsheet is meant to be a tool for reference and for you to try your own assumptions.

The scenario starts at 110m difficulty in early November 2013 and grows at ~17% with spot @ $100. Please note these numbers do not take into account operating costs and reinvestment into capacity expansion. Please also note that the default input parameters will become stale over time. We will not be updating the defaults on every difficulty change. The information provided in the tool is provided as-is with no guarantees.

New Link:
IceDrill.ASIC Profit Scenario v0.2
https://docs.google.com/spreadsheet/ccc?key=0ApavGWiMvgTXdFdPQmtCaTctZ1ctYVFkUEtIVXNTV0E&usp=sharing

We’ve left the old link up, unedited for reference, and we’ll point the IPO information to the new document to avoid further confusion.
Old Link:
https://docs.google.com/spreadsheet/ccc?key=0AqOET6CrjiUodFIxN1Q0Q2FVT0VsalhOcVhfTmhJRmc&usp=sharing

The original document stated “Estimates or speculation of potential return can be found here:”, we’ll change the wording to “Basic spreadsheet/tool for general bitcoin mining profitability calculations”.


Q:
Is Fasthash the same as Hashfast?

A:
No, please see Hashfast’s website here:

http://hashfast.com/

FAQ # 2

Q1:

Any plans to move to btct?

A:
Asked and answered @ https://bitcointalk.org/index.php?topic=269216.msg2884487#msg2884487
see question 5
“We will be looking to setup PTs or similar services on other exchanges so that you may use the service of your choice. Due to the due-diligence work required to get this up & running and time constraints, please do not expect for it to happen for this 1st batch (due date 12 August).”

That said, we may be able to start listing PTs at other funding platforms for this round. We’ll announce it when it happens.

Q2:

What will happen if the 500TH mine can't hold up with difficulty and the electricity costs become higher than 10% of the revenue of the mine?

A:
See the Last Paragraph of IPO documentation:
“However, the operators (PetaMex in this case) retains the right to stop Digimex operations if it becomes operationally unprofitable. At that point, this agreement will automatically be terminated.”




Q3:

What kind of pricing agreement do you have with HashFast? I'm wondering how you will be able to compete with other miners who are getting their chips directly from the factories at cost.

A:
We have a very attractive and flexible agreement that we have signed with HF. This would allow us to purchase chips for upgrades in the most cost effective manner.

Q4:

Well its early in a "sold shares" stage, usually you want to wait till you see that it is actually going to sell and that there is interest. Otherwise you risk wasting a lot on fees.

A:
We received confirmation from Ukyo (bitfunder founder) that buyers pay zero fees @ IPO:
These were his words:
“Buyers (currently) don't pay any fees to buy shares, only sellers pay a fee (standard on BitFunder)”.

Q5:

What is the amount of Hashing power I will get from each bond at the initial startup.

A:
Please note that you are buying a share of profit of the farm. So, the operational costs need to be deducted before any dividends are distributed or reserves are taken out. The farm will have 500 Tera Hash and there would be a total of 50 million bonds (30 million float and 20 million private).

We are aware that not all of the current outstanding questions have been answered. The answers to these will be forthcoming in the next Q&A installment as they are being finalized. We implore you to please keep your questions clear, concise and to the point as it will ensure a quicker turnaround. Direct links to these Q&As will be included in the initial post to ease navigation for newcomers and act as an FAQ reference.

[ThickAsThieves]

I think we can expect a difficulty of 175-225 in November, 110 is still too low of an estimate most likely.

[will]

I think we can expect a difficulty of 175-225 in November, 110 is still too low of an estimate most likely.

Just to clarify the 110m amount in the spreadsheet. We used the average of the last 10 difficulty change percentages (16.82%), applied it to the current difficulty of 37392766 (starting on 3 August), and compounded it every 13 days to arrive at a difficulty of 111,288,109 on 2 November. Apologies if this seems a bit simplistic, but we have to work with the numbers that are available.

Also, if you have more (confirmed) information on planned ASIC deployment in the next 3 months we would be happy to receive it and adjust our default parameters yet again.

As always, please feel free to input your own estimates.

[Pale Phoenix]

If the third tranche of the IPO (November 4 deadline) fails, do you guarantee a return of all proceeds collected in the first two tranches or will this money already have been spent?

[Rannasha]

I think we can expect a difficulty of 175-225 in November, 110 is still too low of an estimate most likely.

Just to clarify the 110m amount in the spreadsheet. We used the average of the last 10 difficulty change percentages (16.82%), applied it to the current difficulty of 37392766 (starting on 3 August), and compounded it every 13 days to arrive at a difficulty of 111,288,109 on 2 November. Apologies if this seems a bit simplistic, but we have to work with the numbers that are available.

If you assume an increase of 16.82%, then each difficulty-period is only 12 days, since a 16.82% diff increase means that the last 2016 blocks were mined 16.82% too rapidly, so in 14 / 1.1682 = 11.98 days (14 being the target-time for 2016 blocks). In this case, it doesn't make a difference for your 2 November estimate though (since the number of difficulty-periods is increased by less than 1).

[ThickAsThieves]

I think we can expect a difficulty of 175-225 in November, 110 is still too low of an estimate most likely.

Just to clarify the 110m amount in the spreadsheet. We used the average of the last 10 difficulty change percentages (16.82%), applied it to the current difficulty of 37392766 (starting on 3 August), and compounded it every 13 days to arrive at a difficulty of 111,288,109 on 2 November. Apologies if this seems a bit simplistic, but we have to work with the numbers that are available.

Also, if you have more (confirmed) information on planned ASIC deployment in the next 3 months we would be happy to receive it and adjust our default parameters yet again.

As always, please feel free to input your own estimates.

I do have a suggestion. Use the previous 3 difficulties instead, along with the estimate for the next one (25%+), and that's a more presently accurate estimate.

Or, provide 3 estimates of varying diffs.

1. Estimate as you've done it
2. Estimate as I've suggested
3. Estimate assuming 25% diff increase from now til Nov release

That will give a nice spectrum.

[Mabsark]

The contract say that chips will be delivered early November. How long do you think it will take to turn those chips into fully functional mining devices?

[canth]

What makes this less appealing to me is that nature of the shares. Personally, I don't want a bond with a company that may or may not have the same objectives as the investor.

As a comparison, when I buy a share of ASICMiner, I know that with the possible exception of ASICMiner's employee compensation costs, my goals are directly aligned with the owners of the firm. With this bond, I feel that I do not have anywhere near this level of surety that there's not a possible misalignment of interests.

[Tafelpoot]

DeadTerra messed up the final payment of his Satoshi PT on BTCT: he didn't halt trading & didn't use the forced buyback mechanism as Burnside told him to do.
I was not amused.