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

[TheSwammi]

Is anyone alive in Cryptomex? I've requested withdrawal over a week ago and nothing....

I will check with CMX and check what the status of the payouts are and with Will to see if we can give you guys another update.

//DT

http://cardinalwebsolutions.com/cws/wp-content/uploads/2013/08/what-would-you-say-you-do-here1.png

https://www.youtube.com/watch?v=2SoWNMNKNeM

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[29750f0e1c2fbb3bb]

Dear IceDrill shareholders.

This is an attempt at a comprehensive update on the state of affairs surrounding the IceDrill project (owned and maintained by Digimex). To achieve a minimal amount of privacy I created a dedicated user account to facilitate communication for this project. As the geeks may have noticed my user ID forms the initial part of a funding transaction for the IceDrill project and the people involved in this project know my real world identity. (https://blockchain.info/tx/29750f0e1c2fbb3bb11f1355a2770b306ff2e15596dd0f1aa3fd93c4a5293d16)

Update:
xxxxxxx

The project is currently undergoing financial consolidation. The most significant change is that four self selected main backers (public shareholders) have agreed to participate in a 4o7 multisignature wallet solution to maintain the current funds (https://blockchain.info/address/3N9MiKtPiAShS8tJMTpYocXTXRBSkQ2rpg). 2 keys are held by Willem van Rooyen, 2 keys are held by me, and each of the remaining 3 keys are held by the other 3 public shareholders, respectively. The current solution is that spending of funds is facilitated by the cooperation of Willem and me, while any dispute requires a majority of the 3 remaining shareholders to agree.

Additional to financial consolidation, the project will also undergo an internal audit. This goes beyond the book keeping efforts started in January/2014 and will investigate the good faith portion of maintaining the funds in the best interest of the shareholders. The current conclusion is that while some inefficiencies have occurred, the funds were maintained appropriately. The current timeline is that the audit will start now and should conclude within the next 2 months. A sanitized version will be available to all shareholders and will detail which funds have been used on which aspects of the project.

Digimex forms part of the committee of unsecured creditors in the HashFast bankruptcy case and as such is involved in finding an optimal solution for creditor restitution. This is a slow process which mainly caused by 2 facts: HashFast is and has been uncooperative and the mining market has turned into a negative cash flow environment for most mining companies. The good news is that this gives the current officers more time to find a business solution to monetizing the bankruptcy estate, the bad news is that it doesn't provide any immediate relief for creditors, including Digimex.

Some funds were used as part of a refocusing effort to fund the development of pool software. In due time Willem should be able to provide a status update on that.

Out of the 5 founders of the project (private shareholders: Willem van Rooyen, Ludvig Öberg, David Shin, Lourens Vorster, Felix Ng), effectively only Willem is left working in the interest of IceDrill shareholders. Lourens Vorster has exited the project early in its lifetime in October 2013, while David Shin and Felix Ng were involved through their focused effort on establishing a trading platform (cryptomex) until Feburary 2014, but have stopped contributing since then. This mass exodus was likely caused by the funding layout of the project, where public shareholders carried all capital expenditures and the founders understood their role as a service to customers (IceDrill investors). Once it became apparent that the project would suffer a catastrophic collapse of mining revenue for the known reasons, the prospect of easy money vanished, which put additional strain on the relationship between private and public shareholders.

The attempt to migrate the project towards the new trading platform cryptomex has led to some divide in the shareholder landscape, which more or less resulted in an overwhelming set of data to process shareholder payouts. This problem needs to be remedied by a unified solution. It is currently investigated which path to take and whether a final claims process needs to be initiated. The current consensus is to establish a schedule and release payouts out of the existing funds to full fill the original agreement to the best of our current capacity.

The private shareholders were repeatedly encouraged to communicate the current efforts transparently to all shareholders. The failure to do so and the inaction and action on some of the business issues may be construed as bad faith in the eye of individual beholders. That said, I’d like to inform everyone that the business situation Digimex found itself in was NOT easy. Digimex virtually went all in with its purchase of HashFast equipment and received no tangible securities in return. One can only assume that there were promises exchanged which never came to fruition due to the catastrophic collapse of HashFast itself. Additional to that, early efforts to secure a low-cost mining facility failed and Digimex decided to enter a 210USD/kWmonth hosting contract for a minimum commitment of 150 kW/month, a minimum length of 1 year and a downpayment of ~2000 BTC. When HashFast failed to deliver, Digimex found itself with huge monthly liabilities, no cash flow and no reserves. When public shareholders started looking at the company in January all the fatal decisions have already been made and Willem was struggling to get a cash flow established by picking up machines one by one from CIARA.

Some of the equipment has been exchanged for IceDrill shares and is reflected as a reduction in shareholder liability on the financial statement already in January/2014. The 210USD/kWmonth contract has been terminated to the earliest date possible since it’s continuation would have resulted in a negative cash-flow situation. It was discussed whether it is best to offer an additional round of equipment/shares exchange, but due to serendipitous circumstances we were able to find a location to run the equipment at the best possible rate in the current market, starting as soon as possible. Thus, the equipment is currently migrated towards a low-cost mining environment and is expected to yield a positive cash flow for the remainder of it’s existing lifetime.

I ask IceDrill shareholders to evaluate the situation and the information presented here with a grain of salt as it is still developing, especially with the HashFast bankruptcy proceedings being publicly traceable and it having a major impact on the fate of Digimex. I wished the private shareholders would be more forthcoming with communicating their effort themselves. Instead I offer voice and ear for public shareholders and remain available from now on to answer questions to the best of my knowledge and listen and act upon concerns.

[_mr_e]

Thank you for the update. Unbelievable that it took this long to get some real information. So... what are the chances of the public shareholders seeing any of their initial investment again?

[29750f0e1c2fbb3bb]

Thank you for the update. Unbelievable that it took this long to get some real information. So... what are the chances of the public shareholders seeing any of their initial investment again?

Given the current layout of the company, it is unlikely that the advertised IPO BTC ROI rate of 0.0016 BTC/share will ever be achieved. A more realistic goal is 0.0004 BTC/share, provided that the HashFast bankruptcy proceedings work in the favor of creditors. Anything else would require a significant effort on part of the founders to add additional cash flow items onto the balance sheet of the company. However, empirical evidence suggests that the opposite is the case. Unless there is a sudden emergence of moral awareness the situation won't change.

[molecular]

Is anyone alive in Cryptomex? I've requested withdrawal over a week ago and nothing....

I will check with CMX and check what the status of the payouts are and with Will to see if we can give you guys another update.

//DT

This is getting a bit ridiculous, don't you think.

Why are mining rewards not being distributed?

[iCEBREAKER]

Dear IceDrill shareholders.

This is an attempt at a comprehensive update on the state of affairs surrounding the IceDrill project

Thank you good sir, for the expansive iD status report.  I have three questions.

1.  Can ID use its hashpower and CKpool expertise to start a competitor to ghash.io, or does Con's refusal to support Namecoin merged mining prevent us from offering comparative returns?

2.  Who paid for the Cryptomex trading platform fiasco?

3.  What happened to our $400k investment in Cointerra stock?  Despite dropt's whining this

DT, can we order some Cointerra chips too, as a hedge in case Hashfast is delayed or misses spec?

turned out to be a good idea, as they are going to launch a sub-28nm chip, have a spiffy Dell colo, haven't declared bankruptcy, etc.   

[WillMilk4Coin]

The project is currently undergoing financial consolidation.

Talk about poor decisions mating with bad luck and having an ugly baby. To argue now that putting all your btc in one HF basket was a bad idea, or exactly when shareholders agreed to funding the development of a pool, or the feeling of being mislead in that a reasonably priced hosting contract had already been secured at IPO launch -or at least why a query for a facility wasn't put out to invested parties when failure was realized is all now moot, however disgustingly frustrating it is. As somewhat concerning our point of contact shifting to some surprise anon may be, the update you've provided is very appreciated. So thank you for that.

maintain the current funds (https://blockchain.info/address/3N9MiKtPiAShS8tJMTpYocXTXRBSkQ2rpg)

~In July we were told ID had accumulated 720 bitcoin. Now, we've got a brand new address with a balance down nearly 200 bitcoin from just over 2 months ago. Not to intentionally sound like an a**hole, but appropriately maintained funds? The machines were still on, yes? I guess this isn't so much of a question, but I expect this sanitized audit will shed some light on who we've been paying and why our balances are going down?

Thus, the equipment is currently migrated towards a low-cost mining environment and is expected to yield a positive cash flow for the remainder of it’s existing lifetime.

~Are the machines currently in this new facility -or in the process of being moved? What is the anticipated remaining lifetime?

~Will distributions be withheld until the audit is complete and the HF bankruptcy comes to a resolution?

[29750f0e1c2fbb3bb]

1.  Can ID use its hashpower and CKpool expertise to start a competitor to ghash.io, or does Con's refusal to support Namecoin merged mining prevent us from offering comparative returns?

I expect Willem to address this aspect when he comes around to provide updates on the pool development. So far I have not seen any development which would offer a comparative offer to ghash.io.

2.  Who paid for the Cryptomex trading platform fiasco?

The question whether IceDrill funds were used will be covered by the internal audit.

3.  What happened to our $400k investment in Cointerra stock?  Despite dropt's whining this

To my knowledge Digimex still owns its share of Cointerra stock.

DT, can we order some Cointerra chips too, as a hedge in case Hashfast is delayed or misses spec?

turned out to be a good idea, as they are going to launch a sub-28nm chip, have a spiffy Dell colo, haven't declared bankruptcy, etc.   

In terms of BTC, Cointerra was not a good decision. Cointerra was acquired at peak level BTC valuation.

Talk about poor decisions mating with bad luck and having an ugly baby. To argue now that putting all your btc in one HF basket was a bad idea, or exactly when shareholders agreed to funding the development of a pool, or the feeling of being mislead in that a reasonably priced hosting contract had already been secured at IPO launch -or at least why a query for a facility wasn't put out to invested parties when failure was realized is all now moot, however disgustingly frustrating it is. As somewhat concerning our point of contact shifting to some surprise anon may be, the update you've provided is very appreciated. So thank you for that.

Breaking the silence is part of a deescalation strategy I've recommended for a while now. So far no plausible reason was offered for not communicating transparently. Note that it requires some character to come out in January and tell your own investors that you've screwed up a 20,000 BTC deal. Between January and June, Willem still hoped that HashFast would turn around and help them achieving a ROI for investors, but you know the end of that story. The other issues which became apparent with Willem and Ludvig is that self-imposed deadlines are not being observed, which leads to assumptions of bad faith where none should exist.

maintain the current funds (https://blockchain.info/address/3N9MiKtPiAShS8tJMTpYocXTXRBSkQ2rpg)

~In July we were told ID had accumulated 720 bitcoin. Now, we've got a brand new address with a balance down nearly 200 bitcoin from just over 2 months ago. Not to intentionally sound like an a**hole, but appropriately maintained funds? The machines were still on, yes? I guess this isn't so much of a question, but I expect this sanitized audit will shed some light on who we've been paying and why our balances are going down?

Note that Willem was drawing two salaries from the funds and that some billing items had to be covered. This likely resulted in a short term negative cash flow of maybe 100 BTC between the time of your post and now. On Oct 9, there were still some funds (~75 BTC) allocated for upcoming expenses (25), a reward reserve (25) and as a pool buffer (25).
The internal audit will shine light on this issues. The term "appropriately" simply means that the funds were not used on non-business related items - it doesn't necessarily imply "good use" of funds. Digimex and its officers are still liable for code of conduct.

Thus, the equipment is currently migrated towards a low-cost mining environment and is expected to yield a positive cash flow for the remainder of it’s existing lifetime.

~Are the machines currently in this new facility -or in the process of being moved? What is the anticipated remaining lifetime?

25% of the machines are currently in transit to the new location. 75% of the machines will reside at the location in Montreal until Dec.7, when the contract expires, after which they will also be shipped.

~Will distributions be withheld until the audit is complete and the HF bankruptcy comes to a resolution?

The current proposal is to pay out on a fixed schedule (e.g. 50BTC/month) once the audit is sufficiently completed and the shareholder information is consolidated.

[iCEBREAKER]

In terms of BTC, Cointerra was not a good decision. Cointerra was acquired at peak level BTC valuation.

Unless we've already sold the CT, the loss is only theoretical, not actualized.  CT is still in the running to be the Intel of BTC, so there's a decent chance our stock will outperform just hloding the BTC.

Thanks for the update!

[WillMilk4Coin]

Unless we've already sold the CT, the loss is only theoretical, not actualized.  CT is still in the running to be the Intel of BTC, so there's a decent chance our stock will outperform just hloding the BTC.

Not even sure how to feel about that happening honestly, but I find it more likely that I go outside tomorrow to survive a lightning strike only to be killed by a micrometeoroid as I leave the hospital.

Outperforming holding btc; over what timescale? Any considerable appreciation of our assets in Cointerra are most likely to follow a relative price path with bitcoin. And even if didn't, Cointerra, while showing the effort to remain relevant, won't find the opportunity at obtaining an Intel-like status in as polarized of a market. The cost and complexity of designing for a mining purposed chip is nowhere near as inhibiting to engineers, allowing a markedly wider potential pool of qualified entrants/competitors ...on top of which you're dealing with a market whose quantified potential for profits and opportunities for competition to join the market are already heavily reliant upon bitcoin's price.

Our shares in CT also remain denominated in USD, so whatever theoretical profits can be taken from the sale of shares (assuming they're not paying dividends lol) at some arbitrary point in the future, will likely only be able to buy us back roughly the equivalent amount of bitcoin as it would get us today (best case scenario). In a sense, a USD valuation of our shares in a company like Cointerra and any appreciation thereof is practically irrelevant when the shareholder's ..err ID profit-unit-holders are to be paid in BTC.

Note that Willem was drawing two salaries from the funds and that some billing items had to be covered. This likely resulted in a short term negative cash flow of maybe 100 BTC between the time of your post and now. On Oct 9, there were still some funds (~75 BTC) allocated for upcoming expenses (25), a reward reserve (25) and as a pool buffer (25).
The internal audit will shine light on this issues. The term "appropriately" simply means that the funds were not used on non-business related items - it doesn't necessarily imply "good use" of funds. Digimex and its officers are still liable for code of conduct.

So that would seem to account for the deficit between current balance and July, however, that doesn't take into consideration anything that would have been mined in that same time frame.

I'm not expecting further figures from you, 297. I realize our cry for answers has reached the 'beating a dead horse' phase, but that audit has certainly made it to the top of my 2015 must reads list. Thank you very much for the explanations you've provided.

My final questions; Can you provide us the mining addresses? And what is our cumulative hashrate now?

[iCEBREAKER]

Unless we've already sold the CT, the loss is only theoretical, not actualized.  CT is still in the running to be the Intel of BTC, so there's a decent chance our stock will outperform just hloding the BTC.

Outperforming holding btc; over what timescale? Any considerable appreciation of our assets in Cointerra are most likely to follow a relative price path with bitcoin. And even if didn't, Cointerra, while showing the effort to remain relevant, won't find the opportunity at obtaining an Intel-like status in as polarized of a market. The cost and complexity of designing for a mining purposed chip is nowhere near as inhibiting to engineers, allowing a markedly wider potential pool of qualified entrants/competitors ...on top of which you're dealing with a market whose quantified potential for profits and opportunities for competition to join the market are already heavily reliant upon bitcoin's price.

Our shares in CT also remain denominated in USD, so whatever theoretical profits can be taken from the sale of shares (assuming they're not paying dividends lol) at some arbitrary point in the future, will likely only be able to buy us back roughly the equivalent amount of bitcoin as it would get us today (best case scenario). In a sense, a USD valuation of our shares in a company like Cointerra and any appreciation thereof is practically irrelevant when the shareholder's ..err ID profit-unit-holders are to be paid in BTC.

Over the timescale between the date of purchase and date of sale.  Since we're hloding plenty of BTC, the CT stock makes a good hedge.

Of course investing in ASICs and their manufacturers is risky.  We already knew that.  No risk, no reward.

[WillMilk4Coin]

Over the timescale between the date of purchase and date of sale.

But how would an opportune time to sell shares to the most benefit of the investors be determined? Without knowledge of the specific details of the investment or the agreement between ID and CT, and judging upon 297's comment, I believe it's safe to assume we're in the red in regard to CT share value. So what you proposed was to wait and hope for Cointerra to assume a mining market dominance.

My argument was that I didn't see the risk worth the reward in waiting as I believed any potential appreciation in the value of the CT shares would largely be as a result of an increase in btc price as opposed to an advancement of Cointerra itself. Even if the USD value of the shares increase, the quantity of BTC those USD can purchase once those shares are finally sold are likely to remain roughly the same.

Since we're hloding plenty of BTC, the CT stock makes a good hedge.

I'm not saying it was necessarily a bad hedge, but I wouldn't call it a good one either.

[iCEBREAKER]

Over the timescale between the date of purchase and date of sale.

But how would an opportune time to sell shares to the most benefit of the investors be determined? Without knowledge of the specific details of the investment or the agreement between ID and CT, and judging upon 297's comment, I believe it's safe to assume we're in the red in regard to CT share value. So what you proposed was to wait and hope for Cointerra to assume a mining market dominance.

My argument was that I didn't see the risk worth the reward in waiting as I believed any potential appreciation in the value of the CT shares would largely be as a result of an increase in btc price as opposed to an advancement of Cointerra itself. Even if the USD value of the shares increase, the quantity of BTC those USD can purchase once those shares are finally sold are likely to remain roughly the same.

Since we're hloding plenty of BTC, the CT stock makes a good hedge.

I'm not saying it was necessarily a bad hedge, but I wouldn't call it a good one either.

Isn't the point of a hedge to neutralize the vagaries of volatility, rather than be good or bad per se?   

The opportune time to sell CT shares is when we have an opportunity to realize a profit, whether in BTC or fiat.

I also suspect we are in the red with regard to CT, as is par for this course, notwithstanding a pleasant surprise from Will and Ravi.   

So yes, 'wait and hope' is the available alternative to realizing a massive loss due to BTC depreciation combined with CT's early missteps and unfortunate circumstances.

I disagree that the risk is necessarily less than proportional reward, because CT stock has a reasonable chance of providing leverage to BTC appreciation.

YMMV depending on risk tolerance, but in the event of BTC resuming its moonward trajectory, the rising tide should lift all boats.

[WillMilk4Coin]

YMMV depending on risk tolerance, but in the event of BTC resuming its moonward trajectory, the rising tide should lift all boats.

+1 can't argue with this, and I'd certainly welcome your outlook coming to fruition.

Patience is a virtue; time a commodity, but here's hoping the s.s. cointerra has patched those holes.

[dropt]

Hey Wil, Ludvig, and others,

  Have you seen this?

https://www.cryptocoinsnews.com/sec-sends-inquiry-letters-hundreds-bitcoin-companies-unregistered-securities/

Were you contacted by the SEC?  If not, let me know so I can be sure to point them in your direction.

[iCEBREAKER]

Hey Wil, Ludvig, and others,

  Have you seen this?

https://www.cryptocoinsnews.com/sec-sends-inquiry-letters-hundreds-bitcoin-companies-unregistered-securities/

Were you contacted by the SEC?  If not, let me know so I can be sure to point them in your direction.

Hey dropt,

Did you fill out your form correctly?

[will]

Hi All

I'm back from a bit of required leave and just getting back into the thick of things.

First off, welcome to 297, and thank you for the comprehensive update. We've been in direct and constant communication with 297 from the start and throughout this year. They have been a great source of advice and guidance over the last few months.

Audit
As there has been some accusation of improper handling of company funds I have invited a detailed audit of all internal operations of DigiMex. As 297 stated, the audit will go beyond the normal accounting submissions as was required for the financial reports (Jan/July) and cover everything that the auditor deems fit to investigate, including (but not limited to) mining reporting, payout endpoints, wallet transparency and expenditures. My only request to the auditor was that the privacy of any involved parties (other than my own) remain intact, unless relevant.

Communication
Public communication from my side has been very few and far between. There really is no excuse for this and is a major shortcoming of myself. I have been in constant and direct communication with the group of people who represent a majority of the public shares, but I've not always been as vocal as I would have liked to have been on this forum (publicly). That said, while I've had to execute on some NDAs, I've never initiated any, so if you've had a conversation with me on any topic please consider the information in the public domain and feel free to share it here.

Creditors Committee
Committee work is ongoing. Apart from the information which is publicly available I'd prefer not to divulge any other information or my opinion of the process here, lest it jeopardise our position on the creditors committee. Much to my chagrin, the Debtor renewed their NDA to committee members, and legal counsel gave the go-ahead to execute on it. What I can say is that I don't serve solely as representative of DigiMex on the committee, US bankruptcy law allows for a alternate DigiMex representative on the committee and I felt it prudent to solicit that representation. The appointed person was also instrumental in the structuring of our filed proof of claim, which is backed by contractual guarantees.

Pool Development
There is much to say regarding the ongoing bitcoin mining development work that we're involved in. I agree with 297 that an update on the status of developments and the reasons for the pool undertaking is due. After a full year of what can only really be described as "damage control" it made sense to leverage the lessons we've learnt from the problems we (and others) faced and use them to build something which has the potential for long-term relevance.

[Dexter770221]

What about my withdrawal? I've requested 0,1BTC withdrawal from cryptomex almost one month ago (2nd Oct) and nothing.

[Dexter770221]

And what about return on investment for shareholders?

Lets start with ANY return...

[runam0k]

Cryptomex is so bad.  Seriously, get these "profit units" (or whatever legal wants to call them) on counterparty or swap them for coloured coins already.  Let people out if they want out.

Not letting people trade these ALREADY ISSUED securities is retarded.