imsaguy's Enormously Interesting Extended Investment Opportunity

[imsaguy]

Hello,

Over the last 9 months or so, I have strived to provide the best possible return on EIEIO possible while still keeping it profitable, but in the last 2 months, I’ve made a series of bad decisions and/or had bad luck which has disrupted my plans.

• I made an investment in some new hardware which should have added an additional ~25G of fpgas to the existing GPU cluster.  I ordered shortly before BFL announced their ASIC plans. The ~25G would have been pure profit and most likely used to purchase asics.  Through a series of problems with the distributor, only just shy of 1/3 of the original order shipped and it currently doesn’t perform to spec. I received half of that 1/3 in the last week or so. The rest was refunded to me, but due to the btc to usd price appreciation, there was actually a net btc loss of about 1100 btc. Had I waited a few days longer, I could have used those coins to purchase a MR SC or two and been better prepared. Unfortunately, the contract was already executed.
• I had roughly 1500 btc in btcst that I had slowly grown via purchasing btc, tips from escrowing for people, market making and the like. I had personally set it aside to purchase asic hardware.  At this point, I consider that lost as a going concern unless more information should develop.
• I had privately discussed with several individuals the possibility of their making an investment towards the end of this year which would effectively wrap up EIEIO.B and make it a 2 or 3 party affair.  As it turns out, the btc they had planned on using for that were invested in pirate, which effectively removes that option with them at this time. It is still possible someone else decides to partner with me, but that is to be determined.
• Difficulty has been growing by about 10% every 2 weeks and it doesn’t seem likely to stop any time soon.  This has slowly squeezed the profitability of EIEIO.  I’ve been covering the cost of electricity for the last few months out of pocket ($700-800/month) so as to keep up the EIEIO dividend. I failed to adequately plan for and save for the difficulty rises.  I certainly didn't expect the large rise as early as it has been.

Effective today, I am suspending dividend payments.

The way forward has several options:

Wind Down
I can wind EIEIO down now and sell the gear.  I estimate the value of the gear to be about $13,000 which would yield about 1200 btc at today’s prices, but that is subject to market conditions.  I have about 1200 btc in glbse holdings, but due to the lack of bid depth on glbse, it’d take some time to unwind that.  It would take me approximately 3 years to buy out the remaining shares of EIEIO at today’s prices.  To use a floating btc price and/or pay interest would only drive the payoff longer and would make me seriously consider BK.

Push Forward

• I currently have 11250 shares of ASICMiner (and a board seat).  That will be a source of income once they start mining and shipping gear.  There is some risk as they could do something drastically wrong, potentially making those shares worthless.  There are rough numbers now being tossed around on the forums about potentially making 100% ROI on ASICMiner on the first hardware sale, ignoring the self mining or ongoing sales. How that income is used I will leave open to discussion.  It could be paid out as a div, rolled over to secure further asic gear, or perhaps some combination of the two.
• Take current mining income and put it into a fund towards future asic purchases. This will help EIEIO remain competitive going forward as asics and advanced forms of fpgas will be the only way to successfully mine.  The currently owned BFL singles could either be set aside for SC trade-in or sold to a 3rd party for their SC trade-in and the funds used for other asic gear.  EIEIO currently has ~450 btc on hand, some of which would be used for dividends if they were to happen on Sunday. Dividends would resume as soon as asic gear arrives, with a certain % set aside to continue expansion and process requested buyouts.
• EIEIO is currently mining at CoinLab to help preserve future gpu earnings. It functions right now as a 97% pps pool with a guaranteed payout for a few months once difficulty prices out most gpus.  In addition, they have gpu leased work (non-bitcoin) coming down the pipes in the next 2 months or so which should be on par with bitcoin profitability (or possibly even better). Dividends would resume once the leased worked becomes a regular affair.  I'd be inclined to set aside a certain % to continue expansion and process requested buyouts.

If it turns out that the asic plans and CoinLabs both don't pan out, the set aside funds could then be issued to EIEIO holders and the rest of EIEIO wound down.

TL;DR  We have two options.  The first gets you paid in full on your principal in today's USD equivalent in about 3 years time. The second keeps the business going by taking a short term haircut in exchange for dividends and/or a return of capital in what should be a much shorter span of time than the first option.

Most of the people who have ever invested in EIEIO have actually been very low maintenance and all seem to be in bitcoin for the 'long haul'.
I've stewed on this trying to come up with the best resolution for everyone while standing behind everything I've said and done and I think this is the best way forward. I await your questions, comments, concerns.  [/list]

[zapeta]

For what it's worth, I think the best option is to continue on, even if that means that dividends will have to be suspended for some time. 

I'd rather lose out on dividends for a bit than be paid a small portion of my principal if EIEIO is forced to wind down now.

[der_meister]

The second option seems more reasonable to me, but we are dependent from unspecified factors - ASICs shipping times and specs, BTC price, difficulty (which increases fast and last few days there are spikes over 3 millions). Hope things going to be smoother in next months.

[imsaguy]

The poll at the top has nothing to do with my post.  It had results from my last poll months ago and I changed it a few weeks ago to blank it out.  People were just randomly voting on it.  If someone knows how to delete it all together from the post, please let me know.

[Mosrite]

Hello,

Over the last 9 months or so, I have strived to provide the best possible return on EIEIO possible while still keeping it profitable, but in the last 2 months, I’ve made a series of bad decisions and/or had bad luck which has disrupted my plans.

• I made an investment in some new hardware which should have added an additional ~25G of fpgas to the existing GPU cluster.  I ordered shortly before BFL announced their ASIC plans. The ~25G would have been pure profit and most likely used to purchase asics.  Through a series of problems with the distributor, only just shy of 1/3 of the original order shipped and it currently doesn’t perform to spec. I received half of that 1/3 in the last week or so. The rest was refunded to me, but due to the btc to usd price appreciation, there was actually a net btc loss of about 1100 btc. Had I waited a few days longer, I could have used those coins to purchase a MR SC or two and been better prepared. Unfortunately, the contract was already executed.
• I had roughly 1500 btc in btcst that I had slowly grown via purchasing btc, tips from escrowing for people, market making and the like. I had personally set it aside to purchase asic hardware.  At this point, I consider that lost as a going concern unless more information should develop.
• I had privately discussed with several individuals the possibility of their making an investment towards the end of this year which would effectively wrap up EIEIO.B and make it a 2 or 3 party affair.  As it turns out, the btc they had planned on using for that were invested in pirate, which effectively removes that option with them at this time. It is still possible someone else decides to partner with me, but that is to be determined.
• Difficulty has been growing by about 10% every 2 weeks and it doesn’t seem likely to stop any time soon.  This has slowly squeezed the profitability of EIEIO.  I’ve been covering the cost of electricity for the last few months out of pocket ($700-800/month) so as to keep up the EIEIO dividend. I failed to adequately plan for and save for the difficulty rises.  I certainly didn't expect the large rise as early as it has been.

Effective today, I am suspending dividend payments.

The way forward has several options:

Wind Down
I can wind EIEIO down now and sell the gear.  I estimate the value of the gear to be about $13,000 which would yield about 1200 btc at today’s prices, but that is subject to market conditions.  I have about 1200 btc in glbse holdings, but due to the lack of bid depth on glbse, it’d take some time to unwind that.  It would take me approximately 3 years to buy out the remaining shares of EIEIO at today’s prices.  To use a floating btc price and/or pay interest would only drive the payoff longer and would make me seriously consider BK.

Push Forward

• I currently have 11250 shares of ASICMiner (and a board seat).  That will be a source of income once they start mining and shipping gear.  There is some risk as they could do something drastically wrong, potentially making those shares worthless.  There are rough numbers now being tossed around on the forums about potentially making 100% ROI on ASICMiner on the first hardware sale, ignoring the self mining or ongoing sales. How that income is used I will leave open to discussion.  It could be paid out as a div, rolled over to secure further asic gear, or perhaps some combination of the two.
• Take current mining income and put it into a fund towards future asic purchases. This will help EIEIO remain competitive going forward as asics and advanced forms of fpgas will be the only way to successfully mine.  The currently owned BFL singles could either be set aside for SC trade-in or sold to a 3rd party for their SC trade-in and the funds used for other asic gear.  EIEIO currently has ~450 btc on hand, some of which would be used for dividends if they were to happen on Sunday. Dividends would resume as soon as asic gear arrives, with a certain % set aside to continue expansion and process requested buyouts.
• EIEIO is currently mining at CoinLab to help preserve future gpu earnings. It functions right now as a 97% pps pool with a guaranteed payout for a few months once difficulty prices out most gpus.  In addition, they have gpu leased work (non-bitcoin) coming down the pipes in the next 2 months or so which should be on par with bitcoin profitability (or possibly even better). Dividends would resume once the leased worked becomes a regular affair.  I'd be inclined to set aside a certain % to continue expansion and process requested buyouts.

If it turns out that the asic plans and CoinLabs both don't pan out, the set aside funds could then be issued to EIEIO holders and the rest of EIEIO wound down.

TL;DR  We have two options.  The first gets you paid in full on your principal in today's USD equivalent in about 3 years time. The second keeps the business going by taking a short term haircut in exchange for dividends and/or a return of capital in what should be a much shorter span of time than the first option.

Most of the people who have ever invested in EIEIO have actually been very low maintenance and all seem to be in bitcoin for the 'long haul'.
I've stewed on this trying to come up with the best resolution for everyone while standing behind everything I've said and done and I think this is the best way forward. I await your questions, comments, concerns.  [/list]

Bad luck? This horrendous scheme came to its inevitable, sad conclusion.

[dust]

I had roughly 1500 btc in btcst that I had slowly grown via purchasing btc, tips from escrowing for people, market making and the like. I had personally set it aside to purchase asic hardware...
...I can wind EIEIO down now and sell the gear.  I estimate the value of the gear to be about $13,000 which would yield about 1200 btc at today’s prices

1500btc with pirate
1200btc of mining hardware
 

[smoothie]

I had roughly 1500 btc in btcst that I had slowly grown via purchasing btc, tips from escrowing for people, market making and the like. I had personally set it aside to purchase asic hardware...
...I can wind EIEIO down now and sell the gear.  I estimate the value of the gear to be about $13,000 which would yield about 1200 btc at today’s prices

1500btc with pirate
1200btc of mining hardware
 

Short version: He fucked up by investing in pirate's BS.

Luck has nothing to do with being smart with your investment choices especially with 7% weekly returns dangling in front of your face.

[dust]

This OEIO isn't a FPS&T arb.  I do retain some holdings at FPS&T but its only for idle coins I don't have in play for other things.  THIS OEIO has been used to expand my mining operation (just yesterday purchased another 5GH of gpus), to take advantage of various market arbs, as well as some short term loans to various parties.  My exposure to PPT is currently 100 BTC and will always be a measured risk shared with the other 5 parties.

Quoting to save this.

[Matthew N. Wright]

This OEIO isn't a FPS&T arb.  I do retain some holdings at FPS&T but its only for idle coins I don't have in play for other things.  THIS OEIO has been used to expand my mining operation (just yesterday purchased another 5GH of gpus), to take advantage of various market arbs, as well as some short term loans to various parties.  My exposure to PPT is currently 100 BTC and will always be a measured risk shared with the other 5 parties.

Quoting to save this.

Ooh! ooh! Quote me too!

[ldrgn]

I’ve been covering the cost of electricity for the last few months out of pocket ($700-800/month) so as to keep up the EIEIO dividend.

Dude, come on.  You had first-hand experience about how hard it is to pay out ~1.5% interest a week and you still defended Pirate on the forums and IRC?  Get a spine.

[Turbor]

Dude, come on.  You had first-hand experience about how hard it is to pay out ~1.5% interest a week and you still defended Pirate on the forums and IRC?  Get a spine.

This. Just play your boss games on IRC. Pirate pisses down your back. Everyone backing him at this point is an idiot. Trendon is a miserable coward.

I was blind but now I see !

[imsaguy]

1500btc with pirate
1200btc of mining hardware
 

When I was buying much of the mining gear, gpu prices were higher and bitcoin prices were lower.  A 5830 for example was fetching anywhere from $75-100,  5850s for $150, etc.  Now, I don't expect to get $50 for a 5830.

If you take a 5830 priced at $75 in $5 bitcoins when it was bought, it would have a btc value of 15 coins.

If you take that same 5830 and price it at $50 in $11 bitcoins as they are today, it has a btc value of 4.54 coins.

Any hardware purchase is essentially a short on bitcoin price, while the gear itself while it continues to have a productive hash is a long.

[chungenhung]

coincidence? or planned together?
Both imsaguy and hashking say it will take 3 years to repay.

[imsaguy]

coincidence? or planned together?
Both imsaguy and hashking say it will take 3 years to repay.

We've talked about this in private, but since you are afraid of using your delete button or edit your post where you are see things where there's nothing to be seen.. I'll explain it.  I said 3 years was a worst case scenario if people panicked and wanted me to liquidate ASAP.  A mining farm is worth much more mining than it is as used, 2 year old hardware.  The action plan is to build out the ASIC gear and continue dividends and process withdrawals.

[bitlane]

So, is THIS a new form of ZERO INTEREST Loans that you are setting the precedent for ?

....I like it. What was I thinking, paying interest this whole time I borrowed money or BTC from people.

You gentlemen are all Pioneers in the Wild, Wild West that is...BITCOIN.

[bitcoinBull]

Hello,

Over the last 9 months or so, I have strived to provide the best possible return on EIEIO possible while still keeping it profitable, but in the last 2 months, I’ve made a series of bad decisions and/or had bad luck which has disrupted my plans.

• I had roughly 1500 btc in btcst that I had slowly grown via purchasing btc, tips from escrowing for people, market making and the like. I had personally set it aside to purchase asic hardware.  At this point, I consider that lost as a going concern unless more information should develop.
• I had privately discussed with several individuals the possibility of their making an investment towards the end of this year which would effectively wrap up EIEIO.B and make it a 2 or 3 party affair.  As it turns out, the btc they had planned on using for that were invested in pirate, which effectively removes that option with them at this time. It is still possible someone else decides to partner with me, but that is to be determined.

[imsaguy]

So, is THIS a new form of ZERO INTEREST Loans that you are setting the precedent for ?

....I like it. What was I thinking, paying interest this whole time I borrowed money or BTC from people.

You gentlemen are all Pioneers in the Wild, Wild West that is...BITCOIN.

Dividends, not interest.  They'll pick up again when asic starts.  Everyone that actually has a vested interest has been pretty supportive of this.

[bitlane]

Everyone that actually has a vested interest has been pretty supportive of this.

No. It's LACK OF CHOICE.

[imsaguy]

Everyone that actually has a vested interest has been pretty supportive of this.

No. It's LACK OF CHOICE.

You're right.  They could have acted like you and raised a stink on this forum.  That clearly got you your money back.

[bitlane]

You're right.  They could have acted like you and raised a stink on this forum.  That clearly got you your money back.

...and what has defending Trendon Shavers done for you and the people that you represent, again ?