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Author Topic: Mining contract: raw RPC mining, or zero-variance delivery  (Read 3895 times)
mrb
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March 27, 2011, 02:21:41 AM
 #1

I operate a mining cluster, and offer selling mining capacity at a price of: 2.48 BTC per Ghash/s per day (valid from May 27 00:01 UTC). The price changes frequently, so check with me frequently. Email me at m.bevand@gmail.com

Rent this mining capacity for any number of days, from 1 to 365 days. Yes, you can rent 10 Ghash/s for just 1 day, if you want so.

The minimum purchase quantity is 1 Ghash/s. I currently have over 20 Ghash/s available.

You decide to receive the Bitcoins in 1 of 2 ways:
  • Zero-variance contract. Either you provide a Bitcoin address to which an amount of Bitcoins is delivered on a daily basis. This amount is calculated statistically from the purchased mining power and the current difficulty. This is known as a "zero-variance" contract.
  • JSON-RPC mining service. Or you provide a Bitcoin JSON-RPC endpoint of your choice (eg. http://host:8332, authenticated with a user/password) to which I connect my miners.

FAQ:

Q: Buying Bitcoins from the market is cheaper! Why do you offer this service?
A: I will be the first mining contractor to admit openly that, yes, it is cheaper to buy from the market. However, some users value freshly mined coins more than "used" coins on the market. I do this cheaper than any existing mining contractor such as BitcoinRigs, or vladimir. Also, a raw RPC mining service is particularly useful in certain cases, see jgarzik's venture below.

Q: Are you guaranteeing truly minted coins?
A: Yes. You may check the coins origin using blockexplorer.com when you receive them. They will originate from blocks of freshly mined Bitcoins, then travel through at most 1 or 2 wallets/keypairs throughout my infrastructure, before they are sent to you.

Q: What is the point in converting Bitcoins into Bitcoins?
A: There is demand for it. Users have asked the existing mining contractors (BitcoinRigs, vladimir) if they could purchase mining power in Bitcoins, but they do not do it. My service fills this demand!
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Syke
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March 27, 2011, 05:25:08 AM
 #2

  • BitcoinRigs sells 1 Ghash/s/month for 610 BTC ($500/mo, current MtGox rate is 1 BTC = 0.82 USD)
  • vladimir sells 1 Ghash/s/month for 755 BTC (1160 GBP for 3 months, 1 GBP = 1.6015 USD, 1 BTC = 0.82 USD)

Where are you seeing .82? I'm seeing .88 and up on MtGox.

Are you guaranteeing truly minted coins, or are you just sending the same coins back to the buyer?

And what is the point in converting Bitcoins into Bitcoins? I can see the point in leasing hardware to convert Dollars to Bitcoins.

Buy & Hold
BitLex
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March 27, 2011, 05:48:50 AM
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Are you guaranteeing truly minted coins, or are you just sending the same coins back to the buyer?
maybe he's buying coins daily from the market, no need for him to "truly mine" them.

Quote
And what is the point in converting Bitcoins into Bitcoins? I can see the point in leasing hardware to convert Dollars to Bitcoins.
we should be glad that here's one more service-offer for bitcoins, instead of dollars, isn't that exactly what the bitcoin-economy needs?

and what's the point in converting dollars to bitcoins by leasing hardware and wait for months,
if you can buy them cheaper within a few days (if it takes that long to transfer your dollars to LR- , or MTG-dollars)?
 

Syke
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March 27, 2011, 06:43:50 AM
 #4

maybe he's buying coins daily from the market, no need for him to "truly mine" them.
He's selling "mining capacity", implying that they are new coins like BitcoinRigs and vladimir. If he's doing something else, I want to know.

we should be glad that here's one more service-offer for bitcoins, instead of dollars, isn't that exactly what the bitcoin-economy needs?
A typical service converts bitcoins to something else, or something else to bitcoins. A service that converts bitcoins to bitcoins? That sounds like a laundering service. Is that what's being offered?

and what's the point in converting dollars to bitcoins by leasing hardware and wait for months,
if you can buy them cheaper within a few days (if it takes that long to transfer your dollars to LR- , or MTG-dollars)?
Mined coins are anonymous and untraceable. Buying on the open market is risky and complicated.

Buy & Hold
Raulo
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March 27, 2011, 07:52:07 AM
 #5

A typical service converts bitcoins to something else, or something else to bitcoins. A service that converts bitcoins to bitcoins? That sounds like a laundering service. Is that what's being offered?

No, this service converts bitcoins for almost certainly less bitcoins. But as added bonus, it is doing it significantly cheaper than competition.

I "offered" such a service (as a proof that it is not worth it) in this thread:
http://bitcointalk.org/index.php?topic=4922.msg72471#msg72471

To be fair, such a service is not completely useless. It can be used for hedging difficulty changes (a bet what the future difficulty is going to be) but priced above 440 BTC a month, you are almost guaranteed to lose money because at current difficulty it pays 439 BTC a month and the average difficulty going down is very unlikely and going down by more than 10% is almost impossible. If there were a liquid market for such contracts, the price of such a contract would be about 410-420 BTC for the next month and likely about 350 BTC/month if bought upfront for the next 3 months.
 

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mrb
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March 27, 2011, 11:48:12 AM
 #6

Where are you seeing .82? I'm seeing .88 and up on MtGox.

The "last" price on MtGox at the time of my post (7:21pm PDT) was 0.823 USD/BTC.
mrb
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March 27, 2011, 12:07:52 PM
 #7

Edit: FAQ moved to the original post.
jgarzik
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March 27, 2011, 04:55:25 PM
 #8

A typical service converts bitcoins to something else, or something else to bitcoins. A service that converts bitcoins to bitcoins? That sounds like a laundering service. Is that what's being offered?

No, this service converts bitcoins for almost certainly less bitcoins. But as added bonus, it is doing it significantly cheaper than competition.

I "offered" such a service (as a proof that it is not worth it) in this thread:
http://bitcointalk.org/index.php?topic=4922.msg72471#msg72471

To be fair, such a service is not completely useless. It can be used for hedging difficulty changes (a bet what the future difficulty is going to be) but priced above 440 BTC a month, you are almost guaranteed to lose money because at current difficulty it pays 439 BTC a month and the average difficulty going down is very unlikely and going down by more than 10% is almost impossible. If there were a liquid market for such contracts, the price of such a contract would be about 410-420 BTC for the next month and likely about 350 BTC/month if bought upfront for the next 3 months.

Well, my weekend project for last month or two has been building a useful bitcoin P2P backbone, on top of which I hope to provide services such as smart payment processing, transaction services, private wallets (private bitcoind nodes), private pool servers and other gadgets.  Buying mining capacity makes sense for this microbiz, even if the generation comes at a slight loss.

This is of course assuming that it is even possible to negotiate with the provider to obtain RPC mining to my own servers, rather than simply a zero-variance payout (some providers are zero-variance only, which is not useful to me).

Anybody with reliable > 1 Gh/s to sell, with stable power and not in mom's basement or next to the cat's litter box, feel free to post on Marketplace forum...  If Raulo is right, surely there will be offers under 500 BTC/month...


Jeff Garzik, bitcoin core dev team and BitPay engineer; opinions are my own, not my employer.
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mrb
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March 28, 2011, 06:34:25 AM
 #9

Pure JSON-RPC mining service is an option I do offer.
As Austin Powers would say: Smashing, baby!  Kiss
mrb
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April 23, 2011, 10:39:35 PM
 #10

I have lowered the price to 331 BTC per Ghash/s per month.
Syke
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April 23, 2011, 11:40:23 PM
 #11

Edit: the trial was a success. I will continue this offer.

I operate a 15 Ghash/s mining cluster, and offer selling mining capacity at a price of 331 BTC per Ghash/s per month.

  • BitcoinRigs who sells 1 Ghash/s/month for 278 BTC (1337 USD for 1 Ghash/s for 3 months, 1.60 USD/BTC)
  • vladimir who sells 1 Ghash/s/month for 286 BTC (4444 GBP for 4 Ghash/s for 4 months, 1.65 USD/GBP, 1.60 USD/BTC)


I think you need to look at your calculations again. Your prices for your competitors USD/BTC are incorrect.

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mrb
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April 24, 2011, 03:07:23 AM
 #12

I am correct:

* BitcoinRigs: 1337 (USD for 3 months for 1 Gh/s) / 3 (months) / 1.60 (USD/BTC) = 278 BTC
* vladimir: 4444 (GBP for 4 months for 4 Gh/s) / 4 (months) / 4 (Gh/s) * 1.65 (USD/GBP) / 1.60 (USD/BTC) = 286 BTC

(1.60 USD per BTC was the average these last few days - the run up to 1.90 USD is unlikely to last.)
Syke
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April 24, 2011, 04:28:40 AM
 #13

I am correct:

* BitcoinRigs: 1337 (USD for 3 months for 1 Gh/s) / 3 (months) / 1.60 (USD/BTC) = 278 BTC
* vladimir: 4444 (GBP for 4 months for 4 Gh/s) / 4 (months) / 4 (Gh/s) * 1.65 (USD/GBP) / 1.60 (USD/BTC) = 286 BTC

(1.60 USD per BTC was the average these last few days - the run up to 1.90 USD is unlikely to last.)
Ah, I misunderstood.

So 1 Gh/s generates 326.7 BTC at today's difficulty. Those 2 are offering 326.7 BTC for the cost of about 280 BTC. Nice deals!

331 BTC on the other hand sounds way too high. You should update the FAQ in the first post. You no longer are offering a cheaper deal.

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mrb
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April 24, 2011, 05:19:15 AM
 #14

So 1 Gh/s generates 326.7 BTC at today's difficulty. Those 2 are offering 326.7 BTC for the cost of about 280 BTC. Nice deals!
331 BTC on the other hand sounds way too high. You should update the FAQ in the first post. You no longer are offering a cheaper deal.

Yes, I do offer the cheaper deal ("my price will be an average of 245 BTC per Ghash/s/month over the next 3 months" -- a conservative estimate.)
As I said, both BitcoinRigs and vladimir lock you in for 3-4 months (you will generate much fewer than 326.7 BTC/month by then.)

Edit: if you prefer their kind of flat pricing over 3-4 months, I can match that! 1 Ghash/s for 4 months at a price of 270 BTC/month. What do you think?
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April 24, 2011, 05:50:16 AM
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I'm confused.  You are selling 1 Ghash/s for 1 month for 331 btc?  1 Ghash/s at current difficulty nets ~10.1 btc/day, this gives ~300btc for a month.  So I'd be paying 331 btc for the creation of >300 btc (less than 300 because difficulty will increase).  Am I missing something or is this really that pointless?

Also, people value "new" coins over old ones? are you serious?

mrb
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April 24, 2011, 06:09:00 AM
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I'm confused.  You are selling 1 Ghash/s for 1 month for 331 btc?  1 Ghash/s at current difficulty nets ~10.1 btc/day, this gives ~300btc for a month.  So I'd be paying 331 btc for the creation of >300 btc (less than 300 because difficulty will increase).  Am I missing something or is this really that pointless?

Also, people value "new" coins over old ones? are you serious?

Your math is correct (more precisely you generate ~330 BTC/month at current difficulty). My offer is not pointless: see posts from Raulo and jgarzik in this thread who explain how it can be useful.

Yes some people value new coins more than old ones: here is someone asking to pay in Bitcoins to get Bitcoins.

You can also buy my services as a charitable act if only to make the Bitcoin network stronger, or to rank high in public mining pools statistics and impress your friends :-)

Whatever the customer demand is, I am here to satisfy it!
Syke
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April 24, 2011, 07:01:42 AM
 #17

So 1 Gh/s generates 326.7 BTC at today's difficulty. Those 2 are offering 326.7 BTC for the cost of about 280 BTC. Nice deals!
331 BTC on the other hand sounds way too high. You should update the FAQ in the first post. You no longer are offering a cheaper deal.

Yes, I do offer the cheaper deal ("my price will be an average of 245 BTC per Ghash/s/month over the next 3 months" -- a conservative estimate.)
That is your estimate of what may happen. That is not, today, a cheaper deal.

Quote
As I said, both BitcoinRigs and vladimir lock you in for 3-4 months (you will generate much fewer than 326.7 BTC/month by then.)

Edit: if you prefer their kind of flat pricing over 3-4 months, I can match that! 1 Ghash/s for 4 months at a price of 270 BTC/month. What do you think?
270? What happened to 245?

Buy & Hold
mrb
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April 24, 2011, 07:12:20 AM
 #18

270? What happened to 245?

It is an either/or choice I offer you:

1. Month-to-month contract: 331 BTC the first month, then (assuming a 40% difficulty increase every month) 236 BTC the 2nd month, 169 BTC the 3rd -> average 245 BTC/month
2. Or 4-month contract, fixed price of 270 BTC/month

Either way, I am less expensive than BitcoinRigs or vladimir (~280 BTC/month).

You pick #1 or #2 depending on your own prediction of the difficulty. Again I can't promise the exact price for option #1 as I modify the prices on a monthly basis, but you can cancel at the end of any month. And a 40% difficulty increase is really conservative: the average increase in the last 2 months was 60%, from 36k to 92k (36k*1.60*1.60 = 92k). That's why I am pretty certain I can say even option #1 will end up cheaper than my competitors.
Sukrim
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May 17, 2011, 11:53:01 AM
 #19

What's the current price for 1 GH/s?

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mrb
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May 18, 2011, 02:09:03 AM
 #20

Current price is 7.92 BTC per Ghash/s per day.

I have made my model more flexible so you can rent for any number of days, from 1 to 365 days. For example you can rent 10 Ghash/s for just 1 day, if you want so.
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