[CLOSED] Hosted-Mining (revenue shares) / BTCT.co

[zif33rs]

It seems you all want me to just acquire the 10 TH and that it. The reasoning is sound..the plan has long term goals, the price per GH is cheaper than anyone else is offering for a guaranteed date.

What is the problem?  The total amount I would like to raise? Why is that an issue for you? I have explained the need and what I would like to do with it. Seems to make sense right?

Avalon Batch 2's are 0.1829 BTC/Gh.
BFL Singles are 0.2165 BTC/Gh.

Your price per GH is absurdly high.

How long are you willing to wait? When and if you get any of those, that price point will be higher due to increased difficulty.

This is incorrect. Price/Gh goes DOWN with difficulty increases, not up. You'd do well to learn more about how mining actually works before trying to raise $4,200,000 by reselling a mining contract.  

 You paid for something in May...it dosent show until September or October... or ever in BFL's case. Your telling me that the price per GH you paid is the same at that point?

[creativex]

It seems you all want me to just acquire the 10 TH and that it. The reasoning is sound..the plan has long term goals, the price per GH is cheaper than anyone else is offering for a guaranteed date.

What is the problem?  The total amount I would like to raise? Why is that an issue for you? I have explained the need and what I would like to do with it. Seems to make sense right?

Avalon Batch 2's are 0.1829 BTC/Gh.
BFL Singles are 0.2165 BTC/Gh.

Your price per GH is absurdly high.

How long are you willing to wait? When and if you get any of those, that price point will be higher due to increased difficulty.

This is incorrect. Price/Gh goes DOWN with difficulty increases, not up. You'd do well to learn more about how mining actually works before trying to raise $4,200,000 by reselling a mining contract.

 You paid for something in May...it dosent show until September or October... or ever in BFL's case. Your telling me that the price per GH you paid is the same at that point?

I'm telling you that difficulty increases cause the cost/Gh of mining gear to drop not increase. My last purchase of Avalon gear was priced at 59.3BTC/3 module unit including express delivery. As these units are currently hashing at 82Gh/s the cost per Gh/s was .706BTC. These units were paid for on 8/16 and received on 8/19. I don't know why you're talking about May, September, and October...unless you mistakenly believe that the only source for mining gear is direct from a vendor?

You do of course realize that the value of the proposed contract that your IPO is based upon will also decline with rising difficulty, correct? That the only way to maintain a set share of the global hashrate will be to perpetually increase your own hashrate.

[zif33rs]

It seems you all want me to just acquire the 10 TH and that it. The reasoning is sound..the plan has long term goals, the price per GH is cheaper than anyone else is offering for a guaranteed date.

What is the problem?  The total amount I would like to raise? Why is that an issue for you? I have explained the need and what I would like to do with it. Seems to make sense right?

Avalon Batch 2's are 0.1829 BTC/Gh.
BFL Singles are 0.2165 BTC/Gh.

Your price per GH is absurdly high.

How long are you willing to wait? When and if you get any of those, that price point will be higher due to increased difficulty.

This is incorrect. Price/Gh goes DOWN with difficulty increases, not up. You'd do well to learn more about how mining actually works before trying to raise $4,200,000 by reselling a mining contract.

 You paid for something in May...it dosent show until September or October... or ever in BFL's case. Your telling me that the price per GH you paid is the same at that point?

I'm telling you that difficulty increases cause the cost/Gh of mining gear to drop not increase. My last purchase of Avalon gear was priced at 59.3BTC/3 module unit including express delivery. As these units are currently hashing at 82Gh/s the cost per Gh/s was .706BTC. These units were paid for on 8/16 and received on 8/19. I don't know why you're talking about May, September, and October...unless you mistakenly believe that the only source for mining gear is direct from a vendor?

You do of course realize that the value of the proposed contract that your IPO is based upon will also decline with rising difficulty, correct? That the only way to maintain a set share of the global hashrate will be to perpetually increase your own hashrate.

I do not think you are factoring the increased value of bitcoin. As we ramp up to the terahash scale and within a few years at most, the petahash scale for mining operations, there will have to be an intrinsic rise in the value of coin to maintain profitability for miners.

Part of the contract deals with how much we would like to acquire and how much we should hold long term.

[creativex]

Ah, the exchange rate myth. This is an old tired argument routinely offered by those that do not fully understand bitcoin mining.

When you purchase bitcoin mining gear it produces bitcoin...not fiat. The exchange rate to and from fiat is irrelevant, save in the case of paying electricity costs/hosting fees. A batch 3 Avalon with 4 modules and no PSU cost 101BTC to purchase from Avalon. It doesn't make any difference whether 1BTC = $100 or 1BTC = $1000 the unit must produce 101BTCs to break even for it's purchaser. Fair value for the very same hardware purchased today would be much lower precisely because difficulty increases have rendered the same hardware less effective at producing bitcoins.

[zif33rs]

Ah, the exchange rate myth. This is an old tired argument routinely offered by those that do not fully understand bitcoin mining.

When you purchase bitcoin mining gear it produces bitcoin...not fiat. The exchange rate to and from fiat is irrelevant, save in the case of paying electricity costs/hosting fees. A batch 3 Avalon with 4 modules and no PSU cost 101BTC to purchase from Avalon. It doesn't make any difference whether 1BTC = $100 or 1BTC = $1000 the unit must produce 101BTCs to break even for it's purchaser. Fair value for the very same hardware purchased today would be much lower precisely because difficulty increases have rendered the same hardware less effective at producing bitcoins.

"save in the case of paying electricity costs/hosting fees." And when is this never relevant?

[creativex]

"save in the case of paying electricity costs/hosting fees." And when is this never relevant?

Safe to say never = ever in the query above?

It's relevant only when it's paid from the revenue generated by said gear. I host my own gear so there are no hosting fees and power costs are insignificant at this time. As expenses vary depending on situation there's no set in stone cost of operating this gear.

[Deprived]

I do not think you are factoring the increased value of bitcoin. As we ramp up to the terahash scale and within a few years at most, the petahash scale for mining operations, there will have to be an intrinsic rise in the value of coin to maintain profitability for miners.

Part of the contract deals with how much we would like to acquire and how much we should hold long term.

You're putting the cart before the horse.

There's no reason whatsoever why  Bitcoin mining MUST be profitable - nothing breaks if it makes a loss.

Increase in difficulty does NOT cause the value of Bitcoins to rise - rather an increase in the value of Bitcoins causes difficulty to rise (by making mining more profitable and thus encouraging more expansion of mining).  At present that's largely irrelevant due to the shortage of (immediately available) supply being the limiting factor on difficulty increase.

The cause for the rise in value of Bitcoin has little to do directly with mining (mining indirectly DOES have impact on it).

I broadly agree with your view that the price of Bitcoin will likely rise - and also that that has an impact on the profitability (measured in BTC) of mining.  But in no way is such a rise "to maintain profitability for miners" and in fact it doesn't do that.  A rise in the price of BTC REDUCES profitability for existing miners (measured in BTC) by making it more profitable for NEW miners (as they can buy same hardware for less BTC than existing ones paid) and so encouraging an increase in difficulty beyond that which would otherwise occur.  Such a rise does, of course, increase profitability in USD for existing miners as well - but at the same time tends towards making their USD profits less than would have occurred had they just sat on BTC (i.e. a loss in BTC terms).

There's no rule saying "mining must make a profit" and any arguments using that as an assumption are fatally flawed.

[zif33rs]

I do not think you are factoring the increased value of bitcoin. As we ramp up to the terahash scale and within a few years at most, the petahash scale for mining operations, there will have to be an intrinsic rise in the value of coin to maintain profitability for miners.

Part of the contract deals with how much we would like to acquire and how much we should hold long term.

You're putting the cart before the horse.

There's no reason whatsoever why  Bitcoin mining MUST be profitable - nothing breaks if it makes a loss.

Increase in difficulty does NOT cause the value of Bitcoins to rise - rather an increase in the value of Bitcoins causes difficulty to rise (by making mining more profitable and thus encouraging more expansion of mining).  At present that's largely irrelevant due to the shortage of (immediately available) supply being the limiting factor on difficulty increase.

The cause for the rise in value of Bitcoin has little to do directly with mining (mining indirectly DOES have impact on it).

I broadly agree with your view that the price of Bitcoin will likely rise - and also that that has an impact on the profitability (measured in BTC) of mining.  But in no way is such a rise "to maintain profitability for miners" and in fact it doesn't do that.  A rise in the price of BTC REDUCES profitability for existing miners (measured in BTC) by making it more profitable for NEW miners (as they can buy same hardware for less BTC than existing ones paid) and so encouraging an increase in difficulty beyond that which would otherwise occur.  Such a rise does, of course, increase profitability in USD for existing miners as well - but at the same time tends towards making their USD profits less than would have occurred had they just sat on BTC (i.e. a loss in BTC terms).

There's no rule saying "mining must make a profit" and any arguments using that as an assumption are fatally flawed.

"There's no reason whatsoever why  Bitcoin mining MUST be profitable - nothing breaks if it makes a loss."

I disagree. If there is no reward for mining.. i.e. you cant pay your electric bill. What is the point? To support people who already have coins so they can do transactions? No, there must be cause and effect..it is all symbiotic. You must have miners and it must make sense to mine. The price spike we have seen over the last week is only the beginning...


"A rise in the price of BTC REDUCES profitability for existing miners (measured in BTC) by making it more profitable for NEW miners (as they can buy same hardware for less BTC than existing ones paid) and so encouraging an increase in difficulty beyond that which would otherwise occur."

I like this. But some of does not quite ring true for the very reasons you mentioned above. BTC equaling BTC value..the coins they mined earlier have increased in value while the people looking for new hardware are waiting for it to arrive and have generating nothing. The person who starts the soonest will always have the highest profit.

[Deprived]

I do not think you are factoring the increased value of bitcoin. As we ramp up to the terahash scale and within a few years at most, the petahash scale for mining operations, there will have to be an intrinsic rise in the value of coin to maintain profitability for miners.

Part of the contract deals with how much we would like to acquire and how much we should hold long term.

You're putting the cart before the horse.

There's no reason whatsoever why  Bitcoin mining MUST be profitable - nothing breaks if it makes a loss.

Increase in difficulty does NOT cause the value of Bitcoins to rise - rather an increase in the value of Bitcoins causes difficulty to rise (by making mining more profitable and thus encouraging more expansion of mining).  At present that's largely irrelevant due to the shortage of (immediately available) supply being the limiting factor on difficulty increase.

The cause for the rise in value of Bitcoin has little to do directly with mining (mining indirectly DOES have impact on it).

I broadly agree with your view that the price of Bitcoin will likely rise - and also that that has an impact on the profitability (measured in BTC) of mining.  But in no way is such a rise "to maintain profitability for miners" and in fact it doesn't do that.  A rise in the price of BTC REDUCES profitability for existing miners (measured in BTC) by making it more profitable for NEW miners (as they can buy same hardware for less BTC than existing ones paid) and so encouraging an increase in difficulty beyond that which would otherwise occur.  Such a rise does, of course, increase profitability in USD for existing miners as well - but at the same time tends towards making their USD profits less than would have occurred had they just sat on BTC (i.e. a loss in BTC terms).

There's no rule saying "mining must make a profit" and any arguments using that as an assumption are fatally flawed.

"There's no reason whatsoever why  Bitcoin mining MUST be profitable - nothing breaks if it makes a loss."

I disagree. If there is no reward for mining.. i.e. you cant pay your electric bill. What is the point? To support people who already have coins so they can do transactions? No, there must be cause and effect..it is all symbiotic. You must have miners and it must make sense to mine. The price spike we have seen over the last week is only the beginning...


"A rise in the price of BTC REDUCES profitability for existing miners (measured in BTC) by making it more profitable for NEW miners (as they can buy same hardware for less BTC than existing ones paid) and so encouraging an increase in difficulty beyond that which would otherwise occur."

I like this. But some of does not quite ring true for the very reasons you mentioned above. BTC equaling BTC value..the coins they mined earlier have increased in value while the people looking for new hardware are waiting for it to arrive and have generating nothing. The person who starts the soonest will always have the highest profit.

On the first point you're confusing two things being linked with cause and effect.  Sales of ice-cream rise on sunny days.  That doesn't mean selling ice-cream makes it more likely to be sunny.  Similarly, more people mining doesn't make BTC rise (though, as mentioned earlier, it indirectly DOES put small pressure on it to rise - though not because of the mining itself) even though more people DO mine when BTC rises.  If two things tend to occur together you need to make sure you understand which one is the cause and which the effect.

On the second point you're missing it entirely.  I was talking about value "(measured in BTC)".  The value of earlier mined coins does NOT rise when measured in BTC : 1 BTC still is worth exactly 1 BTC.

If I spend 100 BTC on mining gear then, no matter what happens with the exchange-rate, I've only made a profit (in BTC) if I end up with more than 100 BTC when the gear finally dies or is sold off.  BTC rising vs USD makes it less likely that will be the case (because difficulty will rise faster so I'll end up with less BTC than if BTC and difficulty had not risen).  I may well end up with more USD - but that's neither here nor there if I'm measuring in BTC (and so, in effect, comparing to if I'd just kept the 100 BTC in my wallet in the first place).

[zif33rs]

I do not think you are factoring the increased value of bitcoin. As we ramp up to the terahash scale and within a few years at most, the petahash scale for mining operations, there will have to be an intrinsic rise in the value of coin to maintain profitability for miners.

Part of the contract deals with how much we would like to acquire and how much we should hold long term.

You're putting the cart before the horse.

There's no reason whatsoever why  Bitcoin mining MUST be profitable - nothing breaks if it makes a loss.

Increase in difficulty does NOT cause the value of Bitcoins to rise - rather an increase in the value of Bitcoins causes difficulty to rise (by making mining more profitable and thus encouraging more expansion of mining).  At present that's largely irrelevant due to the shortage of (immediately available) supply being the limiting factor on difficulty increase.

The cause for the rise in value of Bitcoin has little to do directly with mining (mining indirectly DOES have impact on it).

I broadly agree with your view that the price of Bitcoin will likely rise - and also that that has an impact on the profitability (measured in BTC) of mining.  But in no way is such a rise "to maintain profitability for miners" and in fact it doesn't do that.  A rise in the price of BTC REDUCES profitability for existing miners (measured in BTC) by making it more profitable for NEW miners (as they can buy same hardware for less BTC than existing ones paid) and so encouraging an increase in difficulty beyond that which would otherwise occur.  Such a rise does, of course, increase profitability in USD for existing miners as well - but at the same time tends towards making their USD profits less than would have occurred had they just sat on BTC (i.e. a loss in BTC terms).

There's no rule saying "mining must make a profit" and any arguments using that as an assumption are fatally flawed.

"There's no reason whatsoever why  Bitcoin mining MUST be profitable - nothing breaks if it makes a loss."

I disagree. If there is no reward for mining.. i.e. you cant pay your electric bill. What is the point? To support people who already have coins so they can do transactions? No, there must be cause and effect..it is all symbiotic. You must have miners and it must make sense to mine. The price spike we have seen over the last week is only the beginning...


"A rise in the price of BTC REDUCES profitability for existing miners (measured in BTC) by making it more profitable for NEW miners (as they can buy same hardware for less BTC than existing ones paid) and so encouraging an increase in difficulty beyond that which would otherwise occur."

I like this. But some of does not quite ring true for the very reasons you mentioned above. BTC equaling BTC value..the coins they mined earlier have increased in value while the people looking for new hardware are waiting for it to arrive and have generating nothing. The person who starts the soonest will always have the highest profit.

On the first point you're confusing two things being linked with cause and effect.  Sales of ice-cream rise on sunny days.  That doesn't mean selling ice-cream makes it more likely to be sunny.  Similarly, more people mining doesn't make BTC rise (though, as mentioned earlier, it indirectly DOES put small pressure on it to rise - though not because of the mining itself) even though more people DO mine when BTC rises.  If two things tend to occur together you need to make sure you understand which one is the cause and which the effect.

On the second point you're missing it entirely.  I was talking about value "(measured in BTC)".  The value of earlier mined coins does NOT rise when measured in BTC : 1 BTC still is worth exactly 1 BTC.

If I spend 100 BTC on mining gear then, no matter what happens with the exchange-rate, I've only made a profit (in BTC) if I end up with more than 100 BTC when the gear finally dies or is sold off.  BTC rising vs USD makes it less likely that will be the case (because difficulty will rise faster so I'll end up with less BTC than if BTC and difficulty had not risen).  I may well end up with more USD - but that's neither here nor there if I'm measuring in BTC (and so, in effect, comparing to if I'd just kept the 100 BTC in my wallet in the first place).

"That doesn't mean selling ice-cream makes it more likely to be sunny."

damn it..I like ice cream.

"1 BTC still is worth exactly 1 BTC."

Again this is true. But what I trying to express is that the person who mines first mines more, so there for earns a higher ROI.

[creativex]

Again this is true. But what I trying to express is that the person who mines first mines more, so there for earns a higher ROI.

...and that's why mining gear loses value over time.

Why did it take us so long to get here?

[redbeans2012]

Again this is true. But what I trying to express is that the person who mines first mines more, so there for earns a higher ROI.

...and that's why mining gear loses value over time.

Why did it take us so long to get here?

My head hurts. Can I have my btc back? Lol

[zif33rs]

  no comment



Look...we can be hashing in a little over a week. With 10 TH...a nice chuck of the network strength. With plans to expand and do good things. I dont know what is so difficult for you guys.




EDIT: I know what I am saying above is abrupt. But its really the only point that means anything in this whole discussion.

[hasher87]

if the previous 1 shares equivalent to = 5-10 ghash, this would've been a great deal

but alas...

[creativex]

Look...we can be hashing in a little over a week. With 10 TH...a nice chuck of the network strength. With plans to expand and do good things. I dont know what is so difficult for you guys.

EDIT: I know what I am saying above is abrupt. But its really the only point that means anything in this whole discussion.

It isn't the only point that means anything though. You're trying to persuade folks that don't know you to invest 42,000BTC with you. I believe your knowledge of bitcoin mining is relevant. Surely you'd agree?

[Deprived]

Again this is true. But what I trying to express is that the person who mines first mines more, so there for earns a higher ROI.

That's just not true - and that you believe it so is disturbing.

If you start mining today with X hashes (doesn't matter what X is) bought for 10 BTC
And I start mining next month with 2X hashes bought for  10 BTC

Then unless you mine at least ~5 BTC in the next month, you have NOT made a higher ROI than me (exception to that being when both make a loss).  The actual amount extra you need to mine to make a better ROI depends on future earnings as well - as long-term profits increase the amount extra you need to mine to achieve same ROI increases above 5 (though can be reduced by reinvestment).

Which of two mining investments gives the better ROI is NOT solely determined by when they start mining - the price paid per hash is also a critical thing which has to be included in the calculation.  Your assertion is only correct if the same price per hash is paid - when a different price is paid then to estimate which gives the better ROI you also need to be able to predict long-term income.

[zif33rs]

Again this is true. But what I trying to express is that the person who mines first mines more, so there for earns a higher ROI.

That's just not true - and that you believe it so is disturbing.

If you start mining today with X hashes (doesn't matter what X is) bought for 10 BTC
And I start mining next month with 2X hashes bought for  10 BTC

Then unless you mine at least ~5 BTC in the next month, you have NOT made a higher ROI than me (exception to that being when both make a loss).  The actual amount extra you need to mine to make a better ROI depends on future earnings as well - as long-term profits increase the amount extra you need to mine to achieve same ROI increases above 5 (though can be reduced by reinvestment).

Which of two mining investments gives the better ROI is NOT solely determined by when they start mining - the price paid per hash is also a critical thing which has to be included in the calculation.  Your assertion is only correct if the same price per hash is paid - when a different price is paid then to estimate which gives the better ROI you also need to be able to predict long-term income.

What about halvings? What about difficultly? You saying that the person who mine first does not get more is not true.

"depends on future earnings"

Yes. This is what I feel its boils down to.

We have a opportunity to get into a good rate right now, at a level high enough and fast enough to make it profitable.

[zif33rs]

UPDATE:

Great news! The 100 to 1 split will occur once the motion passes and expires. It will be completed 20:00 (8PM EST) August 22, 2013. The shares at 0.0028 BTC will be available immediately after completion.
Let's lock in all the Tera Hash we can as soon as possible. There is going to be a good deal of profit to be had for all, if we come together and purchase shares. Once we release the 2nd batch of shares
at .0056, a nice return on investment awaits our earliest investors.

[yuansuyi]

UPDATE:

Great news! The 100 to 1 split will occur once the motion passes and expires. It will be completed 20:00 (8PM EST) August 22, 2013. The shares at 0.0028 BTC will be available immediately after completion.
Let's lock in all the Tera Hash we can as soon as possible. There is going to be a good deal of profit to be had for all, if we come together and purchase shares. Once we release the 2nd batch of shares
at .0056, a nice return on investment awaits our earliest investors.

2x profit  is not good enough to me due to it's high risk. How about to release 2 batch shares at 1BTC per share?

[zif33rs]

UPDATE:

Great news! The 100 to 1 split will occur once the motion passes and expires. It will be completed 20:00 (8PM EST) August 22, 2013. The shares at 0.0028 BTC will be available immediately after completion.
Let's lock in all the Tera Hash we can as soon as possible. There is going to be a good deal of profit to be had for all, if we come together and purchase shares. Once we release the 2nd batch of shares
at .0056, a nice return on investment awaits our earliest investors.

2x profit  is not good enough to me due to it's high risk. How about to release 2 batch shares at 1BTC per share?

I would be willing to discuss a higher price offering for the 2nd batch. I would like to keep the price point low enough to attract new BTC users.