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Author Topic: 2013-12-26 WSJ.com - Alydian Proposes Deadline for Bitcoin-Mining Rig Offers  (Read 1364 times)
Athom
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December 27, 2013, 02:21:17 AM
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Company Asks Bankruptcy Judge to Set Jan. 8 Deadline for Offers

Officials at Alydian want to begin taking offers for their new 36 bitcoin-mining rigs, which rapidly fell behind the technological power of competitors who are also trying to make money by unlocking the virtual currency.

In papers filed in U.S. Bankruptcy Court in Seattle, Alydian officials asked a judge to set a Jan. 8 deadline for offers on the company's bitcoin-mining rigs, which calculate algorithms for users trying to find the 3,600 bitcoins that are released into the currency's system each day.

The Bainbridge Island, Wash., startup said it has spent roughly $4 million on developing the mining technology. Alydian's mining rigs are occupying space within three Washington data centers, which have access to the electricity and powerful cooling systems that prevent the equipment from overheating.

Alydian officials didn't directly state a price for the mining rigs but said that the technology "may be sold for a minimum bid" of $2,000 per terahash, which is a measurement of a system's speed. Alydian said it has about 200 terahashes for sale, according to court papers.

Managing director Peter Vessenes said in court papers that the price of mining is falling, likely because of the recent drop in price for bitcoin itself.

"Market prices have dropped from $70,000-80,000 per [terahash] to $40,000 per [terahash] in the last few weeks," he told the court.

Under the proposed sale rules, buyers would be able to pay for their purchases using cash or bitcoins. Officials asked Bankruptcy Judge Karen Overstreet to look over the proposal to make sure that the deadlines are fair enough to promote competition.

Bitcoin miners check the time stamp of bitcoin transactions to make sure people aren't using the coins more than once or are spending bitcoins they don't have. The miners are rewarded with bitcoins that they come across in the process.

Last year, Alydian officials began building a large bitcoin-mining operation and found customers who offered to buy the bitcoins that would eventually be mined.

Yet, its fresh technology quickly became outdated. Alydian officials were surprised as competitors' speedier mining systems outpaced their technology, according to court papers.

Alydian also had to face more competition from bitcoin miners who cropped up as the currency grew in both value and acceptance. Some merchants now take bitcoin as payment.

In a November court document, Alydian said it had only mined about 3,041 bitcoins—not enough to fill customer orders. Officials told a judge they couldn't afford to buy bitcoins outright to give to customers because the price has risen so dramatically.

Bitcoins traded above $800 apiece on one index on Thursday morning, while Alydian had promised one customer that it could buy 5,000 bitcoins for about $7.36 each, according to court papers. Another signed up for 13,468 bitcoins at $7.42 per coin.

Alydian filed for Chapter 11 protection on Nov. 1 to try to get out of its customer contracts. Bankruptcy protection allows companies to break legally binding contracts with a judge's permission.

The bankruptcy filing caught the attention of the bitcoin community for its ties to CoinLab, which owns 65% of Alydian. CoinLab has won credibility with some venture capitalists who decided to invest in it.

CoinLab leader Peter Vessenes, who signed Alydian's bankruptcy petition, is also chairman of the Bitcoin Foundation. The foundation is a nonprofit trade group that has gained attention in recent months for promoting bitcoin and supporting new rules aimed at making it more widely accepted.

Write to Katy Stech at katherine.stech@wsj.com

http://online.wsj.com/news/articles/SB10001424052702303345104579282600553585842
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nairb131
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December 31, 2013, 01:41:05 AM
 #2

$40,000 per TH? That isn't right at all. More like $10,000 since you probably won't even make that much.

solex
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December 31, 2013, 03:31:03 AM
 #3

Surely the BF could have some general rules of conduct and status which means that anyone publicly under investigation by a government agency should temporarily suspend their active membership and executive position (if applicable).

Once such investigations are closed, then they can resume their BF status - assuming no conviction resulted.

This is common in professional bodies, and the BF wants to present a professional front.

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December 31, 2013, 05:58:36 PM
 #4

Let me summarize this.
We have a guy who believes bitcoin is worth less than $7 per coin on the board of the bitcoin foundation?

You cannot argue that he does not believe bitcoin is not even worth $7 as he SOLD future deliveries of coin at that price (shorted it).   Either is a the stupidest person alive or no one explained to him what the "upside" of a $7 short is compared to the infinite downside.

What a complete fuck up.   Anyone who is a member of this "foundation" should be demanding he get the eff out of their club.


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December 31, 2013, 06:34:47 PM
 #5

I think I will just call him Peter SEVEN from now on as I have a hard time pronouncing his last name.   Seven dollars....
What kind of moron would build a 200TH mine believing $7 was a good selling price for bitcoin?   This may be the dumbest person I have ever read about...
So I guess staying as far away from anything he touches is a good idea?
What are his "claims to fame" in the bitcoin world?   Anything that turned to gold?


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papamoi
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February 13, 2014, 01:19:41 PM
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hi

i ve read the judge have refused to allow them to sell their rigs

anyone knows what s happened to it?

what about their chips?the mask? etc?


if anyone knows about it


thanks
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February 13, 2014, 03:56:34 PM
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hi

i ve read the judge have refused to allow them to sell their rigs

anyone knows what s happened to it?

what about their chips?the mask? etc?


if anyone knows about it


thanks


as funny as it might be i was drinking not only with the person making the bid but the person who blocked the sale.

it seems they have hardware but it is outdated stuff.

can you get more info on this?
speca of the chips?who is their foundry?how much gh/chip? consumption etc?
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February 13, 2014, 05:45:18 PM
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hi

i ve read the judge have refused to allow them to sell their rigs

anyone knows what s happened to it?

what about their chips?the mask? etc?


if anyone knows about it


thanks


as funny as it might be i was drinking not only with the person making the bid but the person who blocked the sale.

it seems they have hardware but it is outdated stuff.

can you get more info on this?
speca of the chips?who is their foundry?how much gh/chip? consumption etc?


i dont have that info, and even if i did i doubt i would share. i doubt you want it anyway, the price asked is like 1000 times what it is worth.
if this is what they are really asking for it,i doubt they will be able to sell anything...
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