A Comprehensive Comparative Look at GLBSE Mining Companies

[JL421]

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[PatrickHarnett]

Interesting and good summaries.  There has been some interesting "cross business" discussion on the forum that I've seen, so having some key metrics extracted is nice.

[brendio]

Overall well done. It's a mammoth task to attempt. I have thought of doing a similar analysis in the past, but never got around to it.

Let me preface this by saying that I am not a completely unbiased party. I own one of the companies listed in the outlook below; however, I have tried, and, I believe, succeeded at presenting an unbiased viewpoint.

Good on you for declaring your conflict of interest up front! I thought it remiss of the OP in the other thread not to state his interest in his thread.

FPGA.contract

[...]

Worrying - While dividends have grown, the yearly estimated ROI is somewhat lower compared to other companies, but not by a significant margin.

I think this lower ROI reflects similar considerations one would have in investing directly in his own mining set up. FPGA technology involves greater upfront capital costs, but lower operating costs. Thus, ROI is likely to be lower initially, but mining is still profitable at lower BTC price or higher difficulty levels than GPU technology.

How this difference pans out and which makes the better investment depends on what the future of bitcoin price and difficulty holds and so makes a simple comparison difficult without also accounting for ongoing costs and making certain assumptions.

[matthewh3]

Overall well done. It's a mammoth task to attempt. I have thought of doing a similar analysis in the past, but never got around to it.

Let me preface this by saying that I am not a completely unbiased party. I own one of the companies listed in the outlook below; however, I have tried, and, I believe, succeeded at presenting an unbiased viewpoint.

Good on you for declaring your conflict of interest up front! I thought it remiss of the OP in the other thread not to state his interest in his thread.

FPGA.contract

[...]

Worrying - While dividends have grown, the yearly estimated ROI is somewhat lower compared to other companies, but not by a significant margin.

I think this lower ROI reflects similar considerations one would have in investing directly in his own mining set up. FPGA technology involves greater upfront capital costs, but lower operating costs. Thus, ROI is likely to be lower initially, but mining is still profitable at lower BTC price or higher difficulty levels than GPU technology.

How this difference pans out and which makes the better investment depends on what the future of bitcoin price and difficulty holds and so makes a simple comparison difficult without also accounting for ongoing costs and making certain assumptions.

I've edited the first post of the other thread to include that I am the CEO of RSM

[brendio]

I've edited the first post of the other thread to include that I am the CEO of RSM

Good to see.

[brendio]

You'd think so, but fizzisist has said that FPGA.contract dividends will be 100% of all revenue. There is no power bill to pay, no repayment of initial capital.

The problem here, which I'll have to readdress with everyone, because I just realized it, is that the company is over valued.

The 7 FGPAs it owns are worth 840 BTC, but the company is worth 2191.2 BTC. It's significantly overvalued compared to its assets. The value per share is inflated 260% above actual value of the company...most people would call that a bubble, but I digress. I'm going to finish this first before I start actually giving recommendations about any company, or for any investment style.

There is no power bill, so it will never be unprofitable. I'm not sure what you mean by no repayment of initial capital.

I agree it's possibly overvalued. However, many companies regularly trade on multiple of their asset backing. This can still make since if there is expectation of above average return on assets. Also, since fizzisist is paying the power bill, you can pay slightly more for the assets and still be better off than buying a rig yourself. Also, what value do you place on the time put in by the manager of the rig? In the case of FPGA.contract, however, the liquidation clause is a risk to consider when buying for prices far above net asset backing.

[Nefario]

great thread.

[DeathAndTaxes]

You'd think so, but fizzisist has said that FPGA.contract dividends will be 100% of all revenue. There is no power bill to pay, no repayment of initial capital.

The capital doesn't need to be repaid.  They didn't incur any debt to acquire the cards.  The cards were purchased by selling shares.  You don't repay equity, only debt.

However does anyone see a problem with no power?

I mean FPGA are efficient but not free.  7 * 20W = 140W that's 1200 kWh annually.  Not sure the power costs where FPGA are located but lets say it is $0.10.  That's $120.  Sure not a huge sum but what if someday they expand from 7 boards to 30 boards.  Now you are talking $600 per year.  Say they have an effective life of 3 years = $1800.  The owner/operator is going to eat $1800 for the privelidge of making other people money?

Sorry things like that create a redflag for me.  Paying 100% of revenue as a dividend AFTER COST (electricity, repairs, reasonable compensation for time) is reasonable.  Paying >100% net revenue doesn't quite seem sustainable.

[kronosvl]

The no repayment of initial capital doesn't make sense to me now that I'm fully awake again, so disregard that.

The power bill is payed by 500 out of 6000 shares held by the company for this purpose

[kronosvl]

The no repayment of initial capital doesn't make sense to me now that I'm fully awake again, so disregard that.

The power bill is payed by 500 out of 6000 shares held by the company for this purpose

Where was that stated? I must have missed it somewhere.

http://contract.fpgamining.com/about-us/

We operate a small mining cluster built entirely out of custom FPGA boards (available for sale on cablesaurus.com). 100% of all revenue is distributed to shareholders as weekly dividends. Operating costs (electricity, maintenance, etc.) are covered by the dividends paid to the 500 shares held by the company (amounts to 8.3% of the 6000 total shares). No revenue is held for future expansion.

[matthewh3]

Yeah I've thought about an investment fund based on BTC mining companies but don't have the funds to set it up 

[notme]

Hmm...After this guide is completed, would anyone be interested my offering of an asset that trades all the mining companies?
It would be based on the findings of this guide so not every company would get an even investment. They would be traded based on risk and reward, vs a blanket buy of everything.

Basically a publicly traded portfolio.

Yes.

[Nefario]

Heh, the first mining index.

[marked]

It is FINISHED. For the moment. Should more mining companies come into the arena, or if information about a company changes, the list will change. For now, I'm going to stick to updating this weekly, and see where this takes us.

Good stuff.

You've got BTCSYN listed as BTCSY*S* in places. EDIT: in the 3rd message

Is it worth having a 90/30/14/7 day low/high share price as this can give an indication of the volatility of the share, particularly as they tend to change somewhat radically after a div payment. Or are the shares in this scenario too low to matter for anything other than 1-10 share traders?


marked

[mila]

minor corrections:

MergedMining publicly trades ca 5500 shares out of the 10000
that might be important for anybody making calculations with hashes per stock ...
you can find out the exact number by dividends paid. the rest was issued but not sold and is for sale / not for sale depending if OgNasty collects capital for expansion or not. Last time I checked he had 60 btc reserves ready

BTCSYN founding members hold ca 5300 vs 6700 shares in IPO

[MPOE-PR]

BTCSYS

It's SYN right?

[teek]

BMMO -

In an earlier day, I would have rated BMMO much higher. Its CEO was, and still is active. It had great returns. It actually increased the rate at which it paid dividends out. Then performance started to wane. The reported hash rate started to drop. The thread became less active. Then the dividend dropped, hard. Since December BMMO's average dividend had dropped 34.9%, in a time where the value of the Bitcoin has risen 66% in the same time, and the all other mining companies have paid 69% higher dividends. Something doesn't seem right here, and the CEO doesn't seem to be saying anything is wrong. If anything changes, BMMO may get upgrade, but now, it's starting to look like it might stop paying a dividend all together, sooner rather than later.

Man - What is up with the FUD here?  We are pretty much the oldest real asset on the GLBSE at this point, and pay one of if not _the_ most stable dividend on the whole damn GLBSE and you rate us dead last?  I try to hang back and not get too involved in all the banter I have a lot of things on my mind in a day and don't have the mental capacity to spare to constantly engage here, but I do constantly monitor the forums and respond when there is something worth responding too.    I said from the beginning we will be a no bullshit operation just going to run our mhash's and pay our dividends, nothing has changed, at all. Suggesting we are going to stop paying dividends??  If you took time time to actually understand the data you are presenting, you would see that BMMO dividend is tied DIRECTLY to difficulty at the moment, and both numbers which you are basing your analysis on are almost irrelevant. 

"Bitcoin value has risen 66%."   Against what?  I am sorry, but we mine bitcoins, pay in bitcoins, do not care about any other currency, our operation has a mandate to provide a good return per mhash IN BITCOINS.  What it's worth in greenback toilet paper?

"Since December BMMO's average dividend has dropped by 34.9%"    You know, looking at the data your right.. it has dropped 35%.   Wonder why that is?  That awful BMMO CEO must be out to scam everyone, something doesn't add up!!   

BREAKING NEWS - Bitcoin Difficulty Went Up - mhash worth less - Read all about it!!




   difficulty went up about 35% in the same period   An mhash now produces less    Well, that scammer CEO must be behind this!


The number I am interested in seeing your data on is other mining companies paying 69% higher dividends, have a link to some data on that?  I own a big chunk of the other mining assets too, I see the dividends in my account.  They make me wonder why I bother holding the stock at all in some cases.  I want to see your numbers on this.


You pissed me off a little this morning, but i'm already over it.  Your analysis doesn't even make any sense, and BMMO is on track big time contrary to the FUD you are distributing on the forums.  I'm going to be doing some "analysis" of my own.    Thanks for coming out.

teek

[matthewh3]

It is FINISHED. For the moment. Should more mining companies come into the arena, or if information about a company changes, the list will change. For now, I'm going to stick to updating this weekly, and see where this takes us.

The CEO fee of 1BTC a month to buy back the company shares for the company doesn't come into affect until after the IPO has finished and we are operating at 2.5GH/s profits minus an estimated £35 for electricity.

[MPOE-PR]

FWIW, this sort of debate is very useful & productive if nobody loses their temper.

[MPOE-PR]

Your idea to make a sort of mining ETF is still pretty good.