[closed] Bitcoind Pooled Mining Association

[Anonymous]

What kind of ROI can one expect from this? Or is this purely a way to stabilize the network by throwing yet another cluster at it? If it's the latter I'd say let's create multiple small ones instead of a central one that increases vulnerability.

At 350btc investment from 100 people we should have our investment back in three to four months in btc and then it's all profit less running costs from there. That is my guess anyway.

Yes.
or

50 people 700btc


 


or differing levels of investment in which case profits would be divided depending on percentage of investment compared to the entire investment.

[Anonymous]

This club could benefit from further assistance with preparing a website to outline/detail the ideas and efforts of this community.  Would anyone like to volunteer?

http://humanstxt.org/

I quite like the way they set that page up.

Im working on a basic prospectus for the project at the moment.

[Vinnie]

Noagenda contacted me about financial advise for this startup.

From an accounting standpoint, my intial thoughts are to have a minimum of three officers/employees:

1. Hardware operator - physically controls rig and, with prior approval of other officers, spends money on assets and expenses. Also makes regular "deposits" to the Treasurer.
2. Treasure - controls the dispersal of funds for expenses, investment in assets (hardware) and payments to shareholders. Dispenses funds only upon approval of other officers. Approves funds dispersals with a public key signature.
3. Accountant - maintains the entity's books, produces monthly, quarterly, and annual financial statements. Reviews back up documentation for expenses and fund dispersals. Approves funds dispersals with a public key signature.

This division of authority and responsibility makes it more difficult for fraud to occur, and will give potential investors ease of mind. My understanding is that blockchainexplorer allows for verification of where funds are located. This can be used by the officers and shareholders to verify the existence of the BTC. The weaknesses in the control of funds are: the Treasurer making off with the money or the operator submitting fake expenses that then go into his pocket. The accountant does not control the funds or the spending of money, so is less likely to commit fraud unless he is involved with one of the other two in covering it up.

Initially I think what is needed is:

• A Capital Budget - expected cash outflows (when and how much and for what) and expected cash inflows (when and from where and how much, most likely will be mining revenue and investment capital.) The capital budget tells us when we will need to have cash to pay our bills
• Budgeted Financial Statements - What will the balance sheet likely look like on day one? Expected revenue over the year? Etc.
• Charter laying out directors, officers to be hired, etc. Where incorporation is occurring (if at all?)

I'd love to fulfill the role of the Accountant. To get a better idea of what I would do this work for, I'd like to know the expected number of transactions per month. In other words, paying the electric bill will happen at least once a month. Revenue will be "swept" into the account controlled by the Treasurer on a regular basis. Hardware will be purchased on a less regular basis. Etc. etc. Off the top of my head I don't imagine a $10,000 net worth operation taking up too much of my time. Oh yeah.... I work for bitcoins

[Vinnie]

OK, I just saw the thing about the miner being a client and the server on a "vps." I take this to mean that the bitcoin software is not being run off the rigs that are doing the computing? This makes it easier for internal controls on the cash. The treasurer could have the money go directly to the account under his control and others could monitor.

[ColdHardMetal]

After about a month of running my GPU for mining I got my new power bill today. As a result I'm even more interested in this project than I was before as it just doesn't make sense for me to continue mining personally at the current BTC spot rate.

I would like to volunteer for the Treasurer role as that's an area I've worked in before. I do appreciate that I haven't been around this community for long, and if it makes some participants uncomfortable placing me in that position no offense will be taken.

I can also help with drafting any Charter style documents or working up spreadsheet projections for the financial end. Again those are both areas I've worked in before and are also pretty much what my Uni background is built around.

[Nefario]

Just pricing a mining rig with 4x ATI 5970 cards comes in at around $3000(prices are from newegg, and I checked my own hardware market where I am and the prices work out about the same). This is not that much, thats 730btc per person for 10 people at mtgox current rates of exchange.

We need to get started ASAP to take advantage before the block difficulty increases.

[ColdHardMetal]

Okay, I'm working on a Charter/bylaws type document right now. In addition to the positions outlined by Vinnie I think there needs to be a fourth one, that being a Secretary type position which is responsible for keeping track of the Share registry, what resolutions have been made and voted on and the results, and other stuff like that.

That being said I am withdrawing my name from consideration as Treasurer and putting myself out there for the Secretary position.

I'll have a document done later today outlining a possible structure for this group, the roles of each position etc. I've written things like this before so it shouldn't take me to long, then I'll post it for discussion and we can decide if its suitable for what people have in mind.

[ColdHardMetal]

I've completed a draft version of some potential bylaws for this organization. It's in MS Word because that's what I use. I tried to attach it to this message but the forum said the attachment folder is full, so you can download it here: http://www.mediafire.com/?l9xv43rca3jtdng


I'll try and paste a copy into the next post but I don't know how the formatting will hold up. ****** = Highlighting found in the word doc.

Please feel free to comment, suggest changes, modifications, additions, or just reject it outright lol.

This might seem overly complicated at first, but when you start involving money something like this really is the best approach to getting organized. This way everyone is clear on what each participants responsibilities, rights, and obligations are right from the start and it can save a lot of headaches down the road.

I would ask that if you do suggest a change that you please reference the Part and Section #s as it makes the development process way easier when everyone knows what everyone else is talking about. Having been through this before, it gets messy quick otherwise.

Anything highlighted in Green needs discussion.

[ColdHardMetal]

Format is kind of messed up. I'd recommend the Word doc from the last post.


Bitcoind Pooled Mining Investment Club Bylaws

January 24, 2011
Draft version 1.0

Part 1 - Interpretation

1.   In these Bylaws;

Bitcoin(s)   *******needs something here but tough to sum up in a sentence;    

Bylaw(s)   refers to this document and appropriate sections therein;

Club    refers to the Bitcoind Pooled Mining Investment Club governed by these Bylaws;

Officer(s)   refers the individual(s) voted into positions in accordance with  Section 5;

Forum   refers to the online forum located at bitcoind.org/forum; ********(this is included as I'm assuming we will have some central place for our discussions to happen)

Shareholder(s)   all persons satisfying the conditions of Section 3.a;



Part 2 - Purpose

1.   The purpose of this document is to codify the governing bylaws of an organization established for the purposes of gathering funds for investment in the generation of Bitcoins.



Part 3 - Shareholders

1.   A person shall be considered to be a Shareholder if they contribute *******XXX BTC or equivalent in other currencies for each share the desire to purchase;

2.   A Shareholder is accorded the following rights and privileges;
a.   An equal vote in the Club's decision making process for each share owned as outlined in Part 4, and
b.   The right to put forth motions requiring Shareholder votes.


Part 4 - Voting

1.   A vote on a motion put forth by a Shareholder shall be required to determine the Club's activities;

2.   A Shareholder vote shall be required to modify these bylaws;

3.   A Shareholder may allow another Shareholder to cast their vote by proxy;
a.   *********Proxy votes shall be verified by some kind of crypto signature thingy
4.   A minimum total of 50% + 1 vote, of votes cast within predetermined timeframes for each motion, is needed for the Club to be required to abide by any decision arising from the motion being voted on;
5.   ******Votes shall be tallied by process X over timeframe Y
a.   *******Maybe just a FORUM poll is enough to satisfy this process requirement


Part 5 - Officers

1.   The following Officer positions shall be established;

a.   Hardware Operator(s);
i.   Duties to include;
1.   Physical maintenance of the Club's hardware, including but not limited to;
a.   Purchasing,
b.   Installation, and
c.   Payment of ongoing expenses.
2.   Transfer to the Treasurer;
a.   Copies of all receipts related to expenditures made on behalf of the Club;
b.   BTC generated by the Club's hardware;
3.   Transfer to the Accountant;
a.   Copies of all receipts related to expenditures made on behalf of the Club;

ii.   Treasurer;
1.   Duties to include;
a.   Control of funds to be collected and/or dispersed as determined by motions voted on by the Club, including but not limited to;
i.   Share purchases;
ii.   Expenses for purchase and maintenance of the Club's hardware;
iii.   Payments to Shareholders
b.   Approval of fund dispersals via Public Key Signature
c.   Transfer to the Accountant;
i.   All records related to collection and disbursement of funds;


iii.   Accountant;
1.   Duties to include;
a.   Maintenance of the Club's financial records,
b.   Approval of fund dispersals via Public Key Signature,
c.   Preparation of monthly, quarterly, and annual financial statements, and
d.   Review of all records related to collection and disbursement of funds.

iv.   Secretary;
1.   Duties to include;
a.   Maintenance of the Club's Shareholders registry and Shareholder contact information,
b.   Advise Shareholders of upcoming votes and deadlines,
c.   Maintenance of these Bylaws,
d.   Maintain a record of all motions made and voted on, and results of those votes,
e.   Preparation of monthly reports related to the Club's progress on passed motions, and
f.   Administration of the voting process as outlined in Part 4.

d.   Officers shall be appointed and removed via a resolution voted on as per the process outlined in Part 4;

[mizerydearia]

I've completed a draft version of some potential bylaws for this organization...

Why not post it to http://bitcoind.org/wiki or http://bitcoind.org/mediawiki ?

[ColdHardMetal]

I've completed a draft version of some potential bylaws for this organization...

Why not post it to http://bitcoind.org/wiki or http://bitcoind.org/mediawiki ?

I'd prefer to just keep discussion in one place. I also don't want people making changes on their own to the wiki version so I can keep the master updated properly.

[Cdecker]

Would be nice to create a basic framework for people to adopt, so we can create many groups distributed all over the world.

[grondilu]

Would be nice to create a basic framework for people to adopt, so we can create many groups distributed all over the world.

I'm adding a feature that will allow anyone to add its own asset in my bitcoin asset exchange plateform.  I'm too lazy to finish it today, but I promess it will be done for tomorrow.

http://grondilu.freeshell.org/brokerage.cgi

[Cdecker]

I'm adding a feature that will allow anyone to add its own asset in my bitcoin asset exchange plateform.  I'm too lazy to finish it today, but I promess it will be done for tomorrow.

http://grondilu.freeshell.org/brokerage.cgi

Not my point, I'd like to see the setup being disclosed publicly and the legal framework to be open so that other groups can start and create their own pools, and not create just one additional huge pool. I'd love to create a local pool in Zurich actually, if someone's interested in joining

[Nefario]

Would be nice to create a basic framework for people to adopt, so we can create many groups distributed all over the world.

Copy and Paste will do.

Recommend change to Part 5, a, i ;hardware operator duties should include the installation and maintainence of a hosts intrusion detection system, and to provide regular, updated copies of it's database to the members.

A HIDS is a system that has a database of checksums for all files in the system, easily allowing us to know if there have been any changes.

This is to allow members to examine which files have been changed by the operator, making software audits easier.

Also that the operator must, at the request of the club conduct an audit or allow the members (or chosen members, or a chosen professional) to audit the machine.

I also recommend the requirement that each member has an email for contact made available, and that all members get gpg and a gpg key pair, must share their public keys, sign each others public keys.

Voting can be done by forum, but each vote must be signed by the members key.

And that this document be signed, and any document of the future(that this document may become) also needs to be signed by all members. This will prevent any changes being made without the others permission.

I also want more restrictions place on the machine operator. There is the increased risk that once he has the money for the server he will just keep the money or keep the server. He must forfeit something to the other users that is of high value (maybe more bitcoins) as a kind of deposit that he may get back over time (for example after everyone has earned back their investment,I also have no problem with the operator being paid an extra btc bonus, once off after a certain time if they prove to be trustworthy).

These bitcoins can be kept in escrow or maybe a bitcoin wallet that is encrypted where the key is again encrypted and using secret sharing cryptography each member gets a piece of the key, and it would take all keys from all members to decrypt the wallet.

[mizerydearia]

Maybe http://www.ossec.net/ ? #ossec on freenode

[Nefario]

Maybe http://www.ossec.net/ ? #ossec on freenode

Exactly, although this is more of a technical requirement it does help with auditing especially for remote systems.

But I can't think of any way to prevent our machine operator running away with it. Maybe trust is the only option.

[ColdHardMetal]

Recommend change to Part 5, a, i ;hardware operator duties should include the installation and maintainence of a hosts intrusion detection system, and to provide regular, updated copies of it's database to the members.

I'll add some language to that effect.

This is to allow members to examine which files have been changed by the operator, making software audits easier.

Also that the operator must, at the request of the club conduct an audit or allow the members (or chosen members, or a chosen professional) to audit the machine.

This as well.

I also recommend the requirement that each member has an email for contact made available, and that all members get gpg and a gpg key pair, must share their public keys, sign each others public keys.

I've got a few obligations to add to the Shareholders section and I'll include this.

Voting can be done by forum, but each vote must be signed by the members key.

That changes what I was envisioning a bit but shouldn't be a problem. It also makes a lot of sense. Verifying keys will become part of the voting process and Secretary duties as well.

And that this document be signed, and any document of the future(that this document may become) also needs to be signed by all members. This will prevent any changes being made without the others permission.

Again makes sense.

I also want more restrictions place on the machine operator. There is the increased risk that once he has the money for the server he will just keep the money or keep the server. He must forfeit something to the other users that is of high value (maybe more bitcoins) as a kind of deposit that he may get back over time (for example after everyone has earned back their investment,I also have no problem with the operator being paid an extra btc bonus, once off after a certain time if they prove to be trustworthy).

This needs discussion.

These bitcoins can be kept in escrow or maybe a bitcoin wallet that is encrypted where the key is again encrypted and using secret sharing cryptography each member gets a piece of the key, and it would take all keys from all members to decrypt the wallet.

Maybe not all members, but a certain quorum percentage if that's feasible. That way if someone disappears the whole thing doesn't become deadlocked.

Or maybe each person has 3 pieces of the puzzle, their own and 2 other members so more people would need to disappear for enough of the key to be gone. A touch less secure but also a bit more robust. I'm pretty out of my depth as far as the technical side of that goes so please ignore me if that's just nonsense.

[Cdecker]

Copy and Paste will do.

Recommend change to Part 5, a, i ;hardware operator duties should include the installation and maintainence of a hosts intrusion detection system, and to provide regular, updated copies of it's database to the members.

A HIDS is a system that has a database of checksums for all files in the system, easily allowing us to know if there have been any changes.

This is to allow members to examine which files have been changed by the operator, making software audits easier.

Also that the operator must, at the request of the club conduct an audit or allow the members (or chosen members, or a chosen professional) to audit the machine.

I also recommend the requirement that each member has an email for contact made available, and that all members get gpg and a gpg key pair, must share their public keys, sign each others public keys.

Voting can be done by forum, but each vote must be signed by the members key.

And that this document be signed, and any document of the future(that this document may become) also needs to be signed by all members. This will prevent any changes being made without the others permission.

I also want more restrictions place on the machine operator. There is the increased risk that once he has the money for the server he will just keep the money or keep the server. He must forfeit something to the other users that is of high value (maybe more bitcoins) as a kind of deposit that he may get back over time (for example after everyone has earned back their investment,I also have no problem with the operator being paid an extra btc bonus, once off after a certain time if they prove to be trustworthy).

These bitcoins can be kept in escrow or maybe a bitcoin wallet that is encrypted where the key is again encrypted and using secret sharing cryptography each member gets a piece of the key, and it would take all keys from all members to decrypt the wallet.

All the more reasons to create pools by meeting the people in real life and verifying them personally. Also the only machine that needs to be audited is the one holding the bitcoin client administering the pool, the miners themselfs can be torn down and reset up in a matter of minutes, no point in securing them too much. Using a PXE setup we can even go further and just plug the miners in and they'll install and run everything from a RAM drive (machine fails => reboots and registers at the master) making administration a breeze. Also regular payouts to the members decrease the temptation to take over the master. Monitoring hashing performance and adding statistical tools to make the system verifiable should suffice for the members, only a judge board has to know the technical details.

[Nefario]

All the more reasons to create pools by meeting the people in real life and verifying them personally. Also the only machine that needs to be audited is the one holding the bitcoin client administering the pool, the miners themselfs can be torn down and reset up in a matter of minutes, no point in securing them too much. Using a PXE setup we can even go further and just plug the miners in and they'll install and run everything from a RAM drive (machine fails => reboots and registers at the master) making administration a breeze. Also regular payouts to the members decrease the temptation to take over the master. Monitoring hashing performance and adding statistical tools to make the system verifiable should suffice for the members, only a judge board has to know the technical details.

I understand about not needing too much security on the client, meeting face to face wont work for this club, we are too distributed across the globe.

My only worry is the operator taking the mining machine for himself. But I think we should continue forward with this ASAP.

Who want's to be the machine operator? I will pay a bonus from my mined bitcoins to the person for this role.

ColdHardMetal why not go for the accountant role? Specialisation of labour.