[ActiveMining] Official Shareholder Discussion Thread [Moderated]

[drawingthesun]

if all of us are here for the long term and believe in ken,we will choose option 1,but not all of us ,i think a lot of people want to out.

If they want out they need to be allowed to trade their shares and leave.

Option 2 will spell quick doom for the company, even myself who leans towards wanting out would never choose option 2 because it just kills the company. The company needs to be able to maintain a warchest.

Option 2 just means we mine for a few months until we die and we all get back a few satoshi per share. Option 1 is long term thinking.

[minerpart]

We have two options for reinvestment:

1 - Mine with hardware using 100% of funds until it ROI (This should also be tax free up until ROI because we are recovering a deduction in funds) and then after split earnings in two, first half for reinvestment and the other half for dividends (At this point tax applies)

2 - Split in two right away.

I prefer option 1 because it means that the company will always keep it's bank up before money flows outside to us.

If we start getting money back straight away we could end up where Ken is thousands of Bitcoin short when we need the money for our own chip.

Please discuss.

This is really interesting and we have discussed it before.
Is  there a mathematical formula that could be used? Let's have the numbers decide this.

So for example:

1) If over the next 6months we reinvest 100% of profits into the business then revert to the 50/50 split what will we earn in dividends in year 1?
2) If we have 50/50 split (reinvest and dividends) permanently over the next 12months what will we earn in dividends in year 1?

By working this out we can decide what hodlers will make over the next 12months and if 100% or 50/50 is the way to go.

My view is that CEO's are supposed to look after Hodlers. That's what dividends are all about. Whatever maximizes our dividends in year one is the best course of action for the shareholders. Especially in this very competitive market.

In terms of share price, a higher total dividend payout in year 1 will actually lead to a higher share price. That's because Long term hodlers will be more inclined to hold for the full year (so fewer sellers to meet buying demand). Also people will see the shares as a good invest and will buy them knowing that a very good dividend is on it's way.

[drawingthesun]

Minerpart. I'm really drunk at the moment so I can't be too detailed. But I made a simulator in MATLAB ages ago for activemining and shareholders were always better off when money was reinvested as soon as possible.

The more coin that leaves the operation back to shareholders sooner always made the shareholders worse off in the long run.

[thefunkybits]

Minerpart. I'm really drunk at the moment so I can't be too detailed. But I made a simulator in MATLAB ages ago for activemining and shareholders were always better off when money was reinvested as soon as possible.

The more coin that leaves the operation back to shareholders sooner always made the shareholders worse off in the long run.

In Ken's original post in one of the old ACTM threads he states that reinvestment/dividends will be 50/50


edit: We're supposed to have 60-100 TH/s online right now, whats going on Ken?? (I'm sure you're working hard and fast, but we've been waiting on 100TH for a few weeks now)

[minerpart]

Sure we knew that (50/50 split) last time we talked this  over too but that was when we were expecting to start hashing in Q4 of last year I think.

Ken is always open to our ideas,  let's talk more about it.

D t s  you done OK for being drunk - but don't go  buying any Neo bee shares, remember what happened last time you got drunk and spent all your cash on stocks (he bought ActM!)  

[klondike_bar]

Minerpart. I'm really drunk at the moment so I can't be too detailed. But I made a simulator in MATLAB ages ago for activemining and shareholders were always better off when money was reinvested as soon as possible.

The more coin that leaves the operation back to shareholders sooner always made the shareholders worse off in the long run.

In Ken's original post in one of the old ACTM threads he states that reinvestment/dividends will be 50/50

edit: We're supposed to have 60-100 TH/s online right now, whats going on Ken??

50/50 makes sense. That hopefully is enough that the re-investment is sufficient to maintain a constant bitcoin income by increasing the hashpower at roughly the same rate as difficulty rises.

it took a few days to get to 10TH. I cant see 100TH being deployed in any less than another 5-10 business days (it probably takes a full day to load up a rack, and get 20 boards wired and cooled properly for another 10TH - this estimate would be for 2-3 people working together) In order to actually have 100TH by the ned of next week would likely require 4-5 people working together 8hrs/day

[drawingthesun]

In Ken's original post in one of the old ACTM threads he states that reinvestment/dividends will be 50/50

I fear this is the case, I really think that the split should happen after Ken has made ROI on the chips from hashfast. This gives the company better chance to acquire new hardware sooner and speed up R&D.

edit: We're supposed to have 60-100 TH/s online right now, whats going on Ken??

Yeah I have been excited to see the increase over the past few days, but was hoping for a quicker deployment than 5TH/s per day. However I'm glad this progress has been made.

Ken is always open to our ideas,  let's talk more about it.

Certainly. I might make a newer more up to date model in Matlab or something over the next few days if I get a lot of my assignment out the way with.

D t s  you done OK for being drunk - but don't go  buying any Neo bee shares, remember what happened last time you got drunk and spent all your cash on stocks (he bought ActM!) 

Haha no drunk shares from me! I have my remaining coin in JustDice for the time being. :p

[Flashman]

50/50 makes sense. That hopefully is enough that the re-investment is sufficient to maintain a constant bitcoin income by increasing the hashpower at roughly the same rate as difficulty rises.

it took a few days to get to 10TH. I cant see 100TH being deployed in any less than another 5-10 business days (it probably takes a full day to load up a rack, and get 20 boards wired and cooled properly for another 10TH - this estimate would be for 2-3 people working together) In order to actually have 100TH by the ned of next week would likely require 4-5 people working together 8hrs/day

That's what I'd like to see, an endeavor to maintain a roughly constant BTC amount per share, even though it will be a bit "sawtoothy" due to add hardware, lose to diff etc on a week to week basis. So by the time BTC is in multiple figures I get enough to maintain my champagne and caviar beer and chips lifestyle.

Yeah I have been excited to see the increase over the past few days, but was hoping for a quicker deployment than 5TH/s per day. However I'm glad this progress has been made

I think it's a reasonable pace and will probably speed up a bit with experience. Sure you can throw 5TH online in an evening if everything all goes well, but you'll probably have wires everywhere and tinker with it for a week afterwards, maybe take it down and redo something a couple of weeks later, etc etc, hobby tinkerer style.. BUT that ain't the game here, it's double check everything, dot the i's cross the t's manage the cables neatly, label everything, document everything, make the whole setup scalable... a bit more effort in the beginning to ensure trouble free long term operation. Then there's stuff like cgminer being a bitch and USB cables glitching out etc, random annoyances that tend to slow you down... I take my machines down for whatever and I'm DELIGHTED if I get them back up and running properly inside half an hour.

[klondike_bar]

Weekly Update 3/26/2014

AMC Mining:

We have completed the signing of our lease for our ~3,700 sq feet datacenter.  The datacenter has 2 480 Volt 250 amp 3 phase power supplies, plus a backup generator which supplies the same amount, the air conditioning has it own power supply.  we are in the process of bringing this datacenter online with ~100 TH of mining equipment.  We also expect to increase to 200 TH within 4 weeks after bringing up the first 100 TH.  The datacenters power and air conditioning can easily support up to 800 TH of mining equipment.  We are planning on adding 100 TH per month until we reach the maximum above.

Shares:
We want to get share trading up and running on Colored Coins as soon as it is safe and legal to do so.

Weekly Update 4/2/2014

Datacenter:

The datacenter should be coming on line this week, barring any unforeseen problems.  We will be bring up 1 rack at a time.  We will have 4 racks in this phase with ~60 TH/s coming on line.  We will be adding additional step-down transformers to bring the total up to 100 TH/s after we get the first phase running.  The next phase will be to bring the datacenter up to 200 TH/s after the first month of running the first phase.

Shares:
Next week I will start transferring shares to CT so our investors can start trading.

it sounds like it is expected to take a few weeks to reach 100TH, and another month to reach 200TH. That means about 5TH is to be added per business day if all goes smoothly

[JimmyJazz]

Its really going to need to be much faster if we stand a chance of keeping up with difficulty.

[VinceSamios]

Seems like we're gaining hashrate again... 11.5TH +

[minerpart]

I agree Jimmy.  We need to put everything we have into getting more machines and more machines and more machines hashing. We can't do that by taking profits out of the company this early.  

I see either short term gain for us, say six months before difficulty over takes us and we die a slow death unable to hold our ground.  OR I see  serious reinvesting taking us  to a level where we can comfortably hold our ground AND pay superb dividends - not just for six months but literally for years.

Think about this guys: if we can first get to 2% of network (a BIG task) then hold that for the next 2 years what would we be making in mining revenue each month if BTC is then at 10k.

I think EVERYONE holding shares should do this calculation for themselves and realise this is POSSIBLE for us if we put everything into reinvesting for now.

72x10,000x30

I make that 21.6 Million dollars a month.

And what happens if we hold 4% of network and BTC is at 25k in two years??

[MilkyWayMasta]

And what happens if we hold 4% of network and BTC is at 25k in two years??

Let's say dividends are 0.0002 BTC per share per month, how would that compare to the share price?

[JoTheKhan]

And what happens if we hold 4% of network and BTC is at 25k in two years??

Let's say dividends are 0.0002 BTC per share per month, how would that compare to the share price?

I would be more than content with that div/share price. That's a really high div/share IMHO.

[BitSwe]

And what happens if we hold 4% of network and BTC is at 25k in two years??

Let's say dividends are 0.0002 BTC per share per month, how would that compare to the share price?

For that to come true, ActM would need at least 4% of total hashrate. Assuming 50% is payed out in divs and that all mining expenses are covered by ActM's sales.
Once .0025 per share is payed out and Ken recieve divs on his 15'000'000 shares we need 9% to keep that div up.

I would not bet my pension on that to happen.

If we can even keep 1% we will get .000054 (for 10 million shares) or .0000216 (for 25 million shares) per month assuming 50% payout and no mining expenses.

EDIT: 1% hashrate = 1080 mined BTC / month.
1080 / 10,000,000 x 50% = .000054
1080 / 25,000,000 x 50% = .0000216

[MilkyWayMasta]

And what happens if we hold 4% of network and BTC is at 25k in two years??

Let's say dividends are 0.0002 BTC per share per month, how would that compare to the share price?

For that to come true, ActM would need at least 4% of total hashrate. Assuming 50% is payed out in divs and that all mining expenses are covered by ActM's sales.
Once .0025 per share is payed out and Ken recieve divs on his 15'000'000 shares we need 9% to keep that div up.

I would not bet my pension on that to happen.

If we can even keep 1% we will get .000054 (for 10 million shares) or .0000216 (for 25 million shares) per month assuming 50% payout and no mining expenses.

EDIT: 1% hashrate = 1080 mined BTC / month.
1080 / 10,000,000 x 50% = .000054
1080 / 25,000,000 x 50% = .0000216

What happens to the share price when the 0.0025 divs are almost paid out and the other 15 mil shares start getting divs?

[BitSwe]

What happens to the share price when the 0.0025 divs are almost paid out and the other 15 mil shares start getting divs?

I would imagine the share price will slowly go down to 40% of its previous value over time. Beginning around when half of the divs (0.0012 ish) are payed out.
Pure speculation though, but mathematically our divs will be cut to 40%, so I'd imagine that would apply on share price as well.

[Simon Templar]

Let's also consider hardware sales if we want to speculate on divs.  One of the main challenges is how quickly ActiveMining can get the farm up to 1% of the network.  If only 100TH can be added every month, it would take 10 months to get up to 1PH.  How high will the difficulty have grown in ten months?  JimmyJazz is correct, Ken needs to find a way of accelerating the process for getting up to the desired hash rate.  The farm needs to grow at 100TH+ per week.

[JimmyJazz]

It really is just the first hurdle of getting to a decent hashrate. It shouldn't be hard to maintain with the 50/50 reinvestment in place (could initially go even higher)

[thefunkybits]

The farm needs to grow at 100TH+ per week.

With access to 3 PH in the coming month or two, I think it would be a bad business decision not to put up at least 1 PH by that point. especially if the plan is to solo mine ASAP like Ken has stated. Once all of our pre-order customers have been dealt with there will no longer be a conflict of interest to mine with everything we've got and put more focus on the shareholders.