This short guide is for newbies to Bitcoin mining that are interested in participating in a Group Buy on this forum. I'll go over the logic of a Group Buy and how escrow *can* protect you if it's set up well.
Logic of a Group Buy: By leveraging the buying power of multiple miners you're able to practice economies of scale...on a smaller scale! Companies like Costco & Walmart are able to offer the prices they can because they have such huge economies of scale and order at such volumes that it affords them a much stronger position when negotiating with suppliers (sometimes to the detriment of the supplier in Walmart's case). This allows them special considerations, lower pricing, exclusives, etc., etc.. and the lower costs get passed on to you.
What you're seeing here is the same type of purchasing power that is afforded to larger entities. Group Buys are a logical conclusion for those miners that see the benefit in banding together their purchasing power to allow them access to either higher quantities (think: volume discounts) or plain access to a high priced product that couldn't be easily purchased by the Group individually. For a Group Buyer, access to a small, ready pool of equity to secure better hosting contracts by paying up front - and thus improve everyone's ROI - is another bonus.
* Risk is shared by everyone in the buy. Shipping & operational costs are also shared by everyone. For this risk,
BTC is shared by everyone. Most importantly:
higher hashrates and bitcoin payouts are a given, then if you had tried to buy and run a lower end miner on your own.You can search the entire web & then some. I know. I did. There's no better pre-order + hosting deals then the ones you'll find on this particular forum. There's no other way smaller miners like us can afford the high end miners except through a Group Buy and at the high end is where the best value (
BTC per GH) always exists.
Escrow: Since there's no chargebacks with
BTC payments, escrow is recommended for most forum transactions unless the seller has a successful track record [
EDIT: Hmm, I'm told even then, that accounts can be sold and IDs taken over]. It protects you when you're not sure if the other party has lawful intentions. By having a 3rd party hold all funds, they force both sides to behave, and if necessary, they serve as a non-biased arbiter in any disputes. Many, many people have been scammed by pre-orders and scammers. As long as the limits of the escrow protections are understood they can protect you. Contracts or transactions need to be set up in such a way that escrow CAN protect you. By having a trusted 3rd party such as John K. objectively acting as a referee, a level playing field can emerge and risk can be reduced tremendously in many cases for both buyers and sellers.
Miner payouts: The usual schedule for GBs is that every two weeks you'll receive your share of the
BTC mined minus any Hosting and/or Management fees.
Hope that helps! Please let me know if you have questions. I really don't think there's such a thing as a stupid question when it comes to
BTC and Group Buys, so ask away! It's good karma to help others anyway.
Cheers!
