[CLOSED][Hosted-Mining] Overview & Speculation Thread

[KCBitcoin]

UPDATE: 8.29 02:18 EST

Trading is closed and the buyback is complete.

Thank you everyone for your support. We are sorry we were not able to make this happen.

HOSTED-MINING

*Background Information:
Alydian is offering 10TH/s selling and hosting service available on 8/29/2013: Alydian Targets Big Ticket Miners with Terahash Hosting

*Who is Alydian? Why do we trust them?
Alydian is a portfolio company of Coinlab, which is operated by Peter Vessenes who is the Chairman of Bitcoin Foundation.
Bitcoin Foundation is a organization that is committed to protect and promote Bitcoin. Their board members involves the CEO of Mt. Gox, Mark Karpeles, CEO of BitInstant, Charlie Shrem, and etc.

*Who are you? What is Hosted-Mining?
Hosted-Mining is a revenue sharing company listed on BTCT.co.
We help you get your share of hashpower without the worry of pre-buys, maintenance, or energy cost.
We are also committed to bring you immediately available large group buy offers to avoid a long wait time on mining equipment and give you a cheaper-than-market price/GH.
More information about our company can be found on http://hostedmining.com.

*Why buy the hashpower through Hosted-Mining? Not directly from Alydian's website?
Cheap. We have negotiated a contract with Alydian/Coinlab that offers a price a lot lower than their launching price on their website.

According to the contract, with the current Bitcoin price @ BitStamp, which is the exchange we are following, the number of coins needed is around 3,700-3,800 Bitcoins for the whole 10TH hashpower. (Figures will be available in a spreadsheet to public once the contract is signed.)

This means we can get the deal @ around 0.37btc/GH, which could be further negotiable once fully funded.

If the current price trend of Bitcoin persists, which should be expected as the difficulty skyrockets, by the time we get fully funded, we are expecting an even better price @ 0.30-0.35btc/GH for 10TH available immediately.

*Why? 0.30btc/GH is still too high, comparing to $17.5/GH from KnC or $7.8/GH from BFL.
As we can see, there has been another 30% difficulty increase for Bitcoin mining this Saturday.
i.e. You now mine 30% less coins with your rigs comparing to Friday.

For those of you who might not be following the difficulty of mining, the difficulty doubles at a rate of every 30-35 days(Source).
i.e. you can only mine half of the coins you can mine now at the end of September or 1/4 at the end of October.

A rough calculation can be the following,
If we discount the price of $17.5/GH from KnC delivering end of October back to 8/29/2013, it will be @17.5*2*2=$70/GH. i.e. 0.62btc/GH.
If we discount the price of $7.8/GH from BFL delivering end of December back to 8/29/2013, it will be @7.8*2*2*2*2=$124.8/GH. i.e. 1.13btc/GH.

A detailed return on investment calculation can be found here: https://docs.google.com/spreadsheet/ccc?key=0AgREYO5JZYrQdGxhenBBaGdEcl9vS3dha0RUYmprZHc&usp=sharing

*Note that we did not include any electric cost calculation in the spreadsheet, because it is already included in the price.
i.e. the initial investment is for the ownership of the rigs plus the fees for one-year hosting and energy cost.

*How much is your share?
Our share is priced at 0.0028btc/share.

*How do we buy your shares?
Our shares are listed on BTCT.
You can go to BTCT.co and buy our shares using your Bitcoins directly.

*But what happens if you cannot collect enough money for the group buy by 29th?
1. If the deal does not happen by August 29th, and the contract has not sold.
-We will ahead and negotiate for a lower price from the vendor according to our ROI spreadsheet. We will also do a motion on whether to keep gathering coins for the deal @ the new price or refund all coins to our investors.

2. If the deal does not happen by August 29th, and the vendor has sold the contract to someone else.
-We will do a motion on whether to keep looking for further in-hand group-buy deal, e.g. BTCGarden or refund all coins to our investors.

*You are selling 2,000,000 shares, which is equivalent to 5,600btc. What happens to the extra coins collected?
Yes, we only need around 1,350,000 shares to be sold to complete the purchase as of the current Bitcoin price.
One major reason to have 2,000,000 shares listed for sell is to hedge the risk of sudden Bitcoin price drop.
However, once the purchase is completed, we will raise a motion on whether to give the extra coins as dividend through first-week dividend payout or keep them as growth fund to bid for future group-buy deals.

*Any future plan after this purchase is done?
Yes. We are planning to become our own supplier with a 28nm or smaller design developed in collaboration with http://www.brioconcept.com/. We will be doing bulk mining, instead of physically shipping to customers, so that you get your revenue share without the hassle of monitoring, heat issues or technical issues.

*Thank you. But who are you, KCBitcoin?
I am the CFO of Hosted-Mining and posting this thread on behave of our CEO, zif33r.
I will be maintaining this thread and answering any question you might have.

Cheers,
Hosted-Mining

[redbeans2012]

I'm in, waiting for others to join the show. 

[TMAN]

Is 0.37 Btc/GH your physical cost? Are contracts available for investors to see?

You say you are CFO what experience do you have dealing with $1m plus of other people's money?

[KCBitcoin]

Is 0.37 Btc/GH your physical cost? Are contracts available for investors to see?

You say you are CFO what experience do you have dealing with $1m plus of other people's money?

0.37btc/GH is calculated based on the current bitcoin price @ Bitstamp.
The deal is priced in USD, therefore, if the prices rises, this figure goes down, and vise versa.

Regarding the disclosure of the contracts, they currently are under NDA.

However, one way to verify the existence of the contract is for you guys to come up with someone you trust.
Let him/her sign the NDA, and we will send him the contract.
At last, he/she can come here and verify that the contract does exist.

One potential candidate for this can be John. K.

[cw92]

You don't anticipate problems converting the BTC to USD in a timely manner? 

[KCBitcoin]

You don't anticipate problems converting the BTC to USD in a timely manner? 

Hi cw92,

We can pay this deal using Bitcoins.

KC

[Street Jammer]

im in lets do this

[TMAN]

So you miss my important question, not 10 days ago you were putting questions about this company. Now suddenly you are the CFO. What experience do you have?  

It seems to me you have just been picked as the CEO installs no faith and struggles with numbers.

I need prof, IE linked in or references proving that you are qualified as CFO of a multimillion company. If you have no experiences. What are your qualifications? Why should we trust you with the money.

What is the USD rate on the contract? I want the figure per GH in USD please

[TMAN]

No experience then. Just that you are confident.

This whole ipo is a joke. You kids are just jumping on board the gravy train. You have been on this forum a month, and you suddenly think through a few PM's with the CEO you are qualified to be the CFO of a proposed multi million dollar company, don't make me laugh

Members please be aware these guys are jokers. You will lose your coins through incompetence. This is a couple of kids trying to fudge a clusterfuck of an ipo back together.

[N_S]

No experience then. Just that you are confident.

This whole ipo is a joke. You kids are just jumping on board the gravy train. You have been on this forum a month, and you suddenly think through a few PM's with the CEO you are qualified to be the CFO of a proposed multi million dollar company, don't make me laugh

Members please be aware these guys are jokers. You will lose your coins through incompetence. This is a couple of kids trying to fudge a clusterfuck of an ipo back together.

Why are you upset?

[TMAN]

Because all these unqualified charlatans will bring bad publicity to the bitcoin ipo space. So we need more scams in the news? Pirate caused enough issues. We need to be doing due diligence on these people who are asking for millions. This guy hasn't stood up to a few questions and the CEO admitted he didn't know what he was doing.

I advised the CFO to reach out to established forum members, I mentioned creativex who is an astounding manager. All the CEO tried to do was argue back about how it was such a great deal. But it's all secret squirrel. Now this joker is here saying he is the CFO. I want to know what makes him qualified.

If I am wrong and they can answer my questions and convince me the company is sound I will invest. But they won't as these are a couple of kids who want to jump on the gravy train with no experience.

[lklk1986fa]

Because all these unqualified charlatans will bring bad publicity to the bitcoin ipo space. So we need more scams in the news? Pirate caused enough issues. We need to be doing due diligence on these people who are asking for millions. This guy hasn't stood up to a few questions and the CEO admitted he didn't know what he was doing.

I advised the CFO to reach out to established forum members, I mentioned creativex who is an astounding manager. All the CEO tried to do was argue back about how it was such a great deal. But it's all secret squirrel. Now this joker is here saying he is the CFO. I want to know what makes him qualified.

If I am wrong and they can answer my questions and convince me the company is sound I will invest. But they won't as these are a couple of kids who want to jump on the gravy train with no experience.

Again creativex and basic mining....could you stop being a troll here, there are a lot of young people can do create stuff,  think about friedcat and Yifu Guo, if you don't believe it just don't buy, your intention is too obvious.

[iCEBREAKER]

What ASIC hardware is Alydian running?

Is this where the stolen Avalon chips went?

[KCBitcoin]

Because all these unqualified charlatans will bring bad publicity to the bitcoin ipo space. So we need more scams in the news? Pirate caused enough issues. We need to be doing due diligence on these people who are asking for millions. This guy hasn't stood up to a few questions and the CEO admitted he didn't know what he was doing.

I advised the CFO to reach out to established forum members, I mentioned creativex who is an astounding manager. All the CEO tried to do was argue back about how it was such a great deal. But it's all secret squirrel. Now this joker is here saying he is the CFO. I want to know what makes him qualified.

If I am wrong and they can answer my questions and convince me the company is sound I will invest. But they won't as these are a couple of kids who want to jump on the gravy train with no experience.

Hi TMAN,

Our CEO has been mining since late 2012, and has a well established customer base on our website: https://www.hostedmining.com
He is well experienced in maintaining mining hardware, overclocking, building custom mining equipment, dealing with heat issues and etc.

One thing he is not good at is financing.
He had a time-limited offer but lacked necessary financial/marketing knowledge to raise enough money in a short time frame.
Thats why I decided to help.

My title can either be CFO or executive assistant, whichever he names me. I don't think that really matters.
The real thing that matters is our company is looking forward and acquired the necessary employees to meet our growth.

Our team has sorted out this new thread for you to have a better understanding of our company and business.

BR.
KC

[KCBitcoin]

What ASIC hardware is Alydian running?

Is this where the stolen Avalon chips went?

The manufacture information is not provided to us on the contract.

But we highly doubt this is from the stolen Avalon chips, since Alydian is run by the Chairman of Bitcoin Foundation, which also involves the CEO of Mt. Gox and CEO of BitInstant.

We have trust in them.

[TMAN]

Because all these unqualified charlatans will bring bad publicity to the bitcoin ipo space. So we need more scams in the news? Pirate caused enough issues. We need to be doing due diligence on these people who are asking for millions. This guy hasn't stood up to a few questions and the CEO admitted he didn't know what he was doing.

I advised the CFO to reach out to established forum members, I mentioned creativex who is an astounding manager. All the CEO tried to do was argue back about how it was such a great deal. But it's all secret squirrel. Now this joker is here saying he is the CFO. I want to know what makes him qualified.

If I am wrong and they can answer my questions and convince me the company is sound I will invest. But they won't as these are a couple of kids who want to jump on the gravy train with no experience.

Again creativex and basic mining....could you stop being a troll here, there are a lot of young people can do create stuff,  think about friedcat and Yifu Guo, if you don't believe it just don't buy, your intention is too obvious.

Do you think it's ok for bad investments to take funds out of the economy? I don't I'm not trolling. This is going to fail, due to poor staff and massive numbers. It's insulting to intelligent people who read this ipo.

[yuansuyi]

Because all these unqualified charlatans will bring bad publicity to the bitcoin ipo space. So we need more scams in the news? Pirate caused enough issues. We need to be doing due diligence on these people who are asking for millions. This guy hasn't stood up to a few questions and the CEO admitted he didn't know what he was doing.

I advised the CFO to reach out to established forum members, I mentioned creativex who is an astounding manager. All the CEO tried to do was argue back about how it was such a great deal. But it's all secret squirrel. Now this joker is here saying he is the CFO. I want to know what makes him qualified.

If I am wrong and they can answer my questions and convince me the company is sound I will invest. But they won't as these are a couple of kids who want to jump on the gravy train with no experience.

Again creativex and basic mining....could you stop being a troll here, there are a lot of young people can do create stuff,  think about friedcat and Yifu Guo, if you don't believe it just don't buy, your intention is too obvious.

Do you think it's ok for bad investments to take funds out of the economy? I don't I'm not trolling. This is going to fail, due to poor staff and massive numbers. It's insulting to intelligent people who read this ipo.

+1. this IPO is a joke.

[creativex]

Hi KCBitcoin. You seem to be better equipped to answer specific questions than zif33rs. While this may come off as a slam to your CEO, I consider this to be a positive for the company's potential as no one person can be effective at everything and the ability to overcome one's ego and delegate responsibility to those that are more effective at a specific task is a vital trait for an effective leader to possess.

While I'm not going to go over your spreadsheet and check your maths and whatnot as I don't have the time & likely wouldn't spend it on this if I did, I do have a couple of questions.

First, are you aware that difficulty re-targets are NOT set to 12days or any other fixed number of days? That instead this occurs more frequently as network expansion accelerates and less frequently as expansion slows or contracts? Currently re-targets are occurring less than every 11days and the trend is quickening...not slowing.

Secondly, how did you arrive at your estimates of +30%/12 days in 2013 and +15%/12 days in 2014? Given that the same company you're intending to contract to provide this hashrate has said they'd make available 1Ph/s(1000Th/s) contracts in October of this year, what makes you think that a 2.5%/day estimate is high enough? This is obviously far more important than your estimates for 2014 as you MUST make back the bulk of your investment in late 2013. This seems unlikely if even one of these 1000Th's contracts is sold as this would constitute a nearly 200% increase in network expansion as it stands right now. Is there any reason to believe that Alydian is not negotiating with many other potential clients even now to devalue the contract you've not yet signed?

Cheers.

[redbeans2012]

How long will this IPO go before throwing in the towel? Doesn't seem to be much interest. 

[KCBitcoin]

Hi KCBitcoin. You seem to be better equipped to answer specific questions than zif33rs. While this may come off as a slam to your CEO, I consider this to be a positive for the company's potential as no one person can be effective at everything and the ability to overcome one's ego and delegate responsibility to those that are more effective at a specific task is a vital trait for an effective leader to possess.

While I'm not going to go over your spreadsheet and check your maths and whatnot as I don't have the time & likely wouldn't spend it on this if I did, I do have a couple of questions.

First, are you aware that difficulty re-targets are NOT set to 12days or any other fixed number of days? That instead this occurs more frequently as network expansion accelerates and less frequently as expansion slows or contracts? Currently re-targets are occurring less than every 11days and the trend is quickening...not slowing.

Secondly, how did you arrive at your estimates of +30%/12 days in 2013 and +15%/12 days in 2014? Given that the same company you're intending to contract to provide this hashrate has said they'd make available 1Ph/s(1000Th/s) contracts in October of this year, what makes you think that a 2.5%/day estimate is high enough? This is obviously far more important than your estimates for 2014 as you MUST make back the bulk of your investment in late 2013. This seems unlikely if even one of these 1000Th's contracts is sold as this would constitute a nearly 200% increase in network expansion as it stands right now. Is there any reason to believe that Alydian is not negotiating with many other potential clients even now to devalue the contract you've not yet signed?

Cheers.

Hi creativex,

Thanks for your kind words towards our CEO and me. I greatly appreciated.

The 12 day retarget date is an assumption I made for my mathematical model(as stated in the first few rows of the spreadsheet). Actually, the retarget date has been floating between 11 to 12 days.
If the calculation really goes with 11 days, we will ask for a lower price from the vendor.
If a deal cannot be profitable based on a moderate estimation, we will not going to sign any contract.

With regard to your statement on the difficulty increase, I wouldn't be surprised if Alydian actually roll out another 1PT in October.
According to http://blockchain.info/charts/hash-rate, the network hashrate has been approximately doubling every month.
We now have 550-600T in late August, I wouldn't be surprised, if in late October, it becomes 2.2-2.4PT.
If Alydian really rolls out 1PT in October, we still need ~1PT from other suppliers to keep up with this increasing rate.
Let's just HOPE all other suppliers will meet their delivery date and roll out this 1PT by October.

Not to mention that, Alydian actually list a range from 100 to 1000TH by October, which means even they are not sure about the market.
I think talking about a more precise prediction without a better mathematical model wouldn't make too much sense now.
But I think I've made my point.

WRT the pricing, our CEO has lived a life on contract negotiating and selling. I'm confident that he will be able to further negotiate a lower price once we get fully funded.

BR
KC