Start a small mining company?

[smickles]

Hello everybody,

I am trying to find out whether or not there is interest in investing in a small mining company.

I live in a community where I do not have to pay for electricity. It will stay this way for at least 6 months, after which, there will only be a charge for going over the 'quota'. Based on my estimates I would be able to run at least one rig under this cap.

new details are under consideration, however, here is the original proposal:

The basic (and currently flexible) idea:

1. Setup the company on GLBSE with 1600 shares.
    Issue 750 shares at ~.227 BTC each and retain the remainder.

2. Start out with a 2 GPU setup (5830's)
    My rough estimate for the cost of the entire rig is $750.

3. Begin mining at a merged mining pool with the lowest fees.

4. Pay weekly dividend of 90% BTC mined. Keeping the rest to supply a fund for upgrade of hardware in the future (or replacement of broken HW)

This is just a preliminary plan. I want to know if any of your are interested.

[1713882688]

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[smickles]

Oh, I forgot to mention,

Questions, comments, concerns <-- all welcome

[shakaru]

Ok, so I want you to just think about this. You are going to make a mining rig with about 600mhs of power, or <0.24 btc a day ($1) and thats with no cost or future repair. So it will take about 2 years to repay the hardware cost, and if you start having to pay for power, you will lose money.

I would want and see if BFL bitforce turns out to be legit and that would produce more btc for less.

Come on #bitcoin-otc and we can talk. Ive been dealing with mining at a commercial level for a while, so I dont mind talking shop.

[the joint]

Ok, so I want you to just think about this. You are going to make a mining rig with about 600mhs of power, or <0.24 btc a day ($1) and thats with no cost or future repair. So it will take about 2 years to repay the hardware cost, and if you start having to pay for power, you will lose money.

I would want and see if BFL bitforce turns out to be legit and that would produce more btc for less.

Come on #bitcoin-otc and we can talk. Ive been dealing with mining at a commercial level for a while, so I dont mind talking shop.

600 mhs is more than .24 btc a day.  I'm doing around 330-360 m/hashes and I pull in more than that regularly (.33 BTC yesterday, though a bit lucky).

[shakaru]

Ok, that was an off the top of my head number. I get .48 btc for 600mhs bassed on share output.

[the joint]

Ok, that was an off the top of my head number. I get .48 btc for 600mhs bassed on share output.

.48 seems about right

[smickles]

Ok, so I want you to just think about this. You are going to make a mining rig with about 600mhs of power, or <0.24 btc a day ($1) and thats with no cost or future repair. So it will take about 2 years to repay the hardware cost, and if you start having to pay for power, you will lose money.

I would want and see if BFL bitforce turns out to be legit and that would produce more btc for less.

Come on #bitcoin-otc and we can talk. Ive been dealing with mining at a commercial level for a while, so I dont mind talking shop.

I don't have a good opportunity to get on irc right now, however

I live on an airforce base. I am expected to stay here for 4 more years. It is highly unlikely that the electricity from one rig will put me over the expected future quota because it is based on a household size larger than my family.

If we want to pay off the HW costs earlier, we could switch to a plan such as:
Company purchases a used equipment from myself (everything except the Graphics cards). Buys the graphics cards new, making HW costs ~$340
This, making the HW payoff estimate at ~ 6 months.

We could also look into a futures contract to ensure a minimum dollar value per btc if deemed necessary.

[smickles]

I edited the OP to reflect the possible change in the plan.

[DeathAndTaxes]

I don't see the point in the complexity of running a single rig as a "business".  Still IF (and you likely shouldn't) you want to build out some new rigs don't build no inefficient small rig.

1) You should be looking for 2 to 3 GH per rig. 3x5970 can be done w/ no extenders.  5x 5870 is another option.
2) You want to have a low $ per MH and a high MH/W.  Building a tiny rig servers no purpose.
3) Stop right now unless you have cheap electrical rates (<$0.10 per kWh delivered w/ all taxes & fees).

[smickles]

I don't see the point in the complexity of running a single rig as a "business".  Still IF (and you likely shouldn't) you want to build out some new rigs don't build no inefficient small rig.

1) You should be looking for 2 to 3 GH per rig. 3x5970 can be done w/ no extenders.  5x 5870 is another option.
2) You want to have a low $ per MH and a high MH/W.  Building a tiny rig servers no purpose.
3) Stop right now unless you have cheap electrical rates (<$0.10 per kWh delivered w/ all taxes & fees).

I have free electricity

[DeathAndTaxes]

What is the max wattage you can use and still be free?

[smickles]

What is the max wattage you can use and still be free?

based on the quota, I wouldn't want to run anything over 1000w

[smickles]

What is the max wattage you can use and still be free?

taking all seasons into account and adding in a buffer, I have a spare 800kw/h s per month, that's a 1000w system, right?

[DeathAndTaxes]

What is the max wattage you can use and still be free?

based on the quota, I wouldn't want to run anything over 1000w

3x5970 @ 820/190 is ~870W at the wall (using linux on usb key, sempron, 80Plus-GOLD PSU).  IF you do this you want your rigs as efficient as possible.  Mining is a commodity business. The lowest cost producers set the price.  Everyone else gets squeezed out as a marginal miner.    When prices decline or difficulty rises it hurts the "fat bloated" miners first.  They drop out when they can't take the pain anymore and in doing so cushion the other miners.  When they drop out difficulty falls and profits for more efficient miners go up.   

BE EFFICIENT or GO BROKE!

A lot less stress knowing you have done everything possible to make yourself as efficient as possible.  Now you don't have to pay for power which is unusual but higher efficiency means higher MH/s on the same "free" power budget.

You can get 2200 MH/s on 870W thats 2.5MH/s.  Not only will it fit in your free power but if you move as long as your power rates are competitive you can still compete as an efficient miner.

Don't buy new cards.  Pick up some 5970s on ebay for $300 a pop.  Lower your capital costs and get to break even quicker.  If you are married it is a lot less stressful for your significant other once you are solidly in the black and printing money each month.  An alternative to 5970 would be a 4x or 5x 5870 rig.  You might want to check what 5870 miners are pulling at the wall.  Pretty sure you can get 5 on less than 1KW.  You are going to need extenders if you want more than 3 cards per rig though which is why I like 3x 5970.

[DeathAndTaxes]

What is the max wattage you can use and still be free?

taking all seasons into account and adding in a buffer, I have a spare 800kw/h s per month, that's a 1000w system, right?

A little over.  720 hours per month (30 days)

800 kWh / 720 = 1.11 KW = 1110W

[smickles]

Ok, I'm off to come up with a more efficient plan.