Starting a new FPGA mining farm/contract! Cognitive Resurrected on[Havelock]

[davecoin]

If bitcoin doubles in value compared to the usd how can any legal investment do better than bitcoin? If you want companies to straight outperform bitcoin that may never happen for more than a few months at the very least we will need to see 500+ per coin.

Where did you come to the 500+ per coin figure?

[Carnth]

Currently Cognitive has an order paid in full for seven BFL SC Singles.

Are these the 60GH/s singles?

Just double checking.

[Garr255]

Currently Cognitive has an order paid in full for seven BFL SC Singles.

Are these the 60GH/s singles?

Just double checking.

Yes.

[stochastic]

I'd also like to point out that the value of BTC has gone up substantially in the last few weeks. Even though Cognitive shares are worth less BTC now than when I bought in, they actually have a higher USD value.

Although that is true and worth considering, we need to get to a point where btc denominated investments do (at least slightly) better than just holding bitcoin.  We're not there yet by my rough estimations.  

I agree with your statement but one thing that a pure bitcoin investment cannot do is pay dividends every week to the owners of bitcoins.  If bitcoins continue is appreciation other people might buy into bitcoin at increasingly higher prices but a mining fund would consistently get more bitcoins from their initial investment.  This fund was hit when more shares were used to purchase the BFL ASIC.  It cut the dividend per share because their were extra shares but no extra incoming revenue.  At that point the dividend being paid out could not be the only metric for the book value of the fund.  There is also the value of those ordered ASIC that need to be taken into consideration when pricing the fund.  There is also the bitcoins held in reserve that the fund has.  It may use those bitcoins to purchase more ASIC but it could also just pay a large dividend as well if that is more beneficial.  Another important thing is how the fund is well managed.  Just look at some other funds (ex. BITBOND) and see how much risk a bad manager can add to your investment.

I would not be surprised in the future that as the ASIC are delivered and as the fund grows less of the fund's bitcoin revenue will need to be held in reserve for future growth.  Once the fund becomes a growth fund then investors will not have to worry about share dilution and their initial investment may outperform bitcoin's rate of appreciation.

[silverfuture]

I'd also like to point out that the value of BTC has gone up substantially in the last few weeks. Even though Cognitive shares are worth less BTC now than when I bought in, they actually have a higher USD value.

Although that is true and worth considering, we need to get to a point where btc denominated investments do (at least slightly) better than just holding bitcoin.  We're not there yet by my rough estimations.  

I agree with your statement but one thing that a pure bitcoin investment cannot do is pay dividends every week to the owners of bitcoins.  If bitcoins continue is appreciation other people might buy into bitcoin at increasingly higher prices but a mining fund would consistently get more bitcoins from their initial investment.  This fund was hit when more shares were used to purchase the BFL ASIC.  It cut the dividend per share because their were extra shares but no extra incoming revenue.  At that point the dividend being paid out could not be the only metric for the book value of the fund.  There is also the value of those ordered ASIC that need to be taken into consideration when pricing the fund.  There is also the bitcoins held in reserve that the fund has.  It may use those bitcoins to purchase more ASIC but it could also just pay a large dividend as well if that is more beneficial.  Another important thing is how the fund is well managed.  Just look at some other funds (ex. BITBOND) and see how much risk a bad manager can add to your investment.

I would not be surprised in the future that as the ASIC are delivered and as the fund grows less of the fund's bitcoin revenue will need to be held in reserve for future growth.  Once the fund becomes a growth fund then investors will not have to worry about share dilution and their initial investment may outperform bitcoin's rate of appreciation.

 

Agree completely. I'm not being critical of anyone's management as I think Garrett has done as good a job as could be expected with all of the variables and unknowns to consider.  Some of the current policy changes will take a little time to have an effect and if those bfl asic come soon enough we'll be in a great position to do very well both short and long term.  I'm really looking at investing more into cognitive but that uncertainty over bfl shipping is a real kicker considering i'm already in relatively deep. It's still probably one of our best chances at getting asic profits within a reasonable time considering the price and shipping dates of asics these days.

[intel-core-i7]

@silver - update yesterday from Josh from BFL

https://forums.butterflylabs.com/announcements/692-bfl-asic-status-2.html

post #20

He promises 1. to post a vid in 3 days and 2. to ship the hiigher wattage asics if client so desires... 3. even these would presumably outperform anything on the market Josh says...

no way of telling how much is truth...

[intel-core-i7]

and still....
isnt that bullish to COGNITIVE and COG.F ?

[davecoin]

Garrett, congrats on selling that Jally.  I'm assuming they paid for the SC upgrade too.  That'll cover a year of school if you cash out now

[silverfuture]

and still....
isnt that bullish to COGNITIVE and COG.F ?

If true, yes it is. I think it is but maybe that's just false hope.

[Garr255]

Thanks for the kind words, stochastic and silverfuture

Garrett, congrats on selling that Jally.  I'm assuming they paid for the SC upgrade too.  That'll cover a year of school if you cash out now

Yeah thanks, and that's exactly what it'll be going toward (although I'm very bullish so I won't be selling until the bill comes ).

Also just to avoid confusion: the preorders I am selling are mine personally, that I bought with my own funds and they have no association with Cognitive. I wouldn't undermine our company like that.

and still....
isnt that bullish to COGNITIVE and COG.F ?

I say yes, but I'm always bullish when it comes to bitcoin mining.

These are some fun times for bitcoin!

[Logik]

Re: First BFL ASIC! thread: is this where we all party? Share price for the main Cognitive fund is already back up to 0.29. Good news..

[stochastic]

Re: First BFL ASIC! thread: is this where we all party? Share price for the main Cognitive fund is already back up to 0.29. Good news..

Reading the comments does not look very good.

[gog1]

will COG.F be converted to cognitive shares upon delivery of the 7 BFL singles or is it some other conditions?

[davos]

will COG.F be converted to cognitive shares upon delivery of the 7 BFL singles or is it some other conditions?

My understanding (garrett can correct this) is that COG.F will remain a separate fund until the funds have been spent and until the equipment purchased with those funds is hashing.



Garrett - given that the current BTC2.5 share price of COG.F is >$500 per share, would it not make more sense to do a 10:1 or 20:1 split to put the COG.F shares into a more liquid price?

On that end, main-issue COGNITIVE shares have been trading below BTC0.125 which is the share price implied by the COG.F IPO price. Anything anyone MIGHT be putting into COG.F at the moment is likely being directed at main-issue shares or other securities entirely.

[Garr255]

will COG.F be converted to cognitive shares upon delivery of the 7 BFL singles or is it some other conditions?

My understanding (garrett can correct this) is that COG.F will remain a separate fund until the funds have been spent and until the equipment purchased with those funds is hashing.

That is correct. The 7 SC Singles are unrelated to COG.F.

Davos, the intent of COG.F was to provide investors incentive to make substantial investments, while maintaining a competitive price. A split would defeat those purposes (or at least one of them).

I believe when the Bitcoin exchange rate stabilizes a bit, the cognitive price will rise as well. Because after all we're generating roughly the same amount of btc regardless what the exchange rate is Also when BFL delivers I believe Cognitive price will rise.

Best,
Garrett

[davos]

will COG.F be converted to cognitive shares upon delivery of the 7 BFL singles or is it some other conditions?

My understanding (garrett can correct this) is that COG.F will remain a separate fund until the funds have been spent and until the equipment purchased with those funds is hashing.

That is correct. The 7 SC Singles are unrelated to COG.F.

Davos, the intent of COG.F was to provide investors incentive to make substantial investments, while maintaining a competitive price. A split would defeat those purposes (or at least one of them).

I believe when the Bitcoin exchange rate stabilizes a bit, the cognitive price will rise as well. Because after all we're generating roughly the same amount of btc regardless what the exchange rate is Also when BFL delivers I believe Cognitive price will rise.

Best,
Garrett

I think I'm glad to hear it Re: no-split. The only concern I have is that when the IPO was issued it was a very nice discount against the main-fund shares (even including the potential hit from the dilution), but at the moment there's almost zero liquidity in the fund shares and the discount doesn't really exist.

I hold a fair bit of COG.F (relative to the 31 shares sold so far) and balance future purchases against the main-issue price and ASICMINER. ASICMINER has a lot of future hashing power already priced in (although I think it's still cheap), whereas it seems to me that COGNITIVE is being discounted heavily, perhaps based on the lack of certainty in the BFL timeline.

[Deprived]

will COG.F be converted to cognitive shares upon delivery of the 7 BFL singles or is it some other conditions?

My understanding (garrett can correct this) is that COG.F will remain a separate fund until the funds have been spent and until the equipment purchased with those funds is hashing.

That is correct. The 7 SC Singles are unrelated to COG.F.

Davos, the intent of COG.F was to provide investors incentive to make substantial investments, while maintaining a competitive price. A split would defeat those purposes (or at least one of them).

I believe when the Bitcoin exchange rate stabilizes a bit, the cognitive price will rise as well. Because after all we're generating roughly the same amount of btc regardless what the exchange rate is Also when BFL delivers I believe Cognitive price will rise.

Best,
Garrett

I think I'm glad to hear it Re: no-split. The only concern I have is that when the IPO was issued it was a very nice discount against the main-fund shares (even including the potential hit from the dilution), but at the moment there's almost zero liquidity in the fund shares and the discount doesn't really exist.

I hold a fair bit of COG.F (relative to the 31 shares sold so far) and balance future purchases against the main-issue price and ASICMINER. ASICMINER has a lot of future hashing power already priced in (although I think it's still cheap), whereas it seems to me that COGNITIVE is being discounted heavily, perhaps based on the lack of certainty in the BFL timeline.

Actually I think you'll find part of the reason for the discount on Cognitive shares IS the existence of COG.F.  Cognitive shares will tend to fall until they're slightly above COG.F.  They've likely fallen too far - but in the recent bull market for BTC nearly all share prices have been taking a kicking (ASICMINER being the notable exception).  Certainly, at a MINIMUM, Cognitive should be trading at .125 + the expected dividends to be paid out until COG.F hardware arrives.

That's unless someone has done the math and determined that even with the COG.F hardware it's still overpriced at .125.  I haven't actually done the math for Cognitive on that - but it's not impossible.  The approximate value of Cognitive ignoring COG.F is the cost of 7 Singles equivalent at the new prices + the 2nd-hand value of the existing mining gear converted into BTC and divided by the outstanding shares.  As that's what it would cost to order that hardware now.  That would then need to be marked up because it's an already running company with infrastructure in place and a solid reputation.  And further marked up because pre-orders already in place are worth more than new orders.  But that's how I value mining companies - haven't actually done it for Cognitive yet though (I've been lazy and been trading it based on a floor price of around .12).

[stochastic]

Actually I think you'll find part of the reason for the discount on Cognitive shares IS the existence of COG.F.  Cognitive shares will tend to fall until they're slightly above COG.F.  They've likely fallen too far - but in the recent bull market for BTC nearly all share prices have been taking a kicking (ASICMINER being the notable exception).  Certainly, at a MINIMUM, Cognitive should be trading at .125 + the expected dividends to be paid out until COG.F hardware arrives.

That's unless someone has done the math and determined that even with the COG.F hardware it's still overpriced at .125.  I haven't actually done the math for Cognitive on that - but it's not impossible.  The approximate value of Cognitive ignoring COG.F is the cost of 7 Singles equivalent at the new prices + the 2nd-hand value of the existing mining gear converted into BTC and divided by the outstanding shares.  As that's what it would cost to order that hardware now.  That would then need to be marked up because it's an already running company with infrastructure in place and a solid reputation.  And further marked up because pre-orders already in place are worth more than new orders.  But that's how I value mining companies - haven't actually done it for Cognitive yet though (I've been lazy and been trading it based on a floor price of around .12).

Until the BFL's ASIC are confirmed being shipped and not some April Fool's prank, those 7 BFLs are vaporware and should not be priced in Cognitive.  Also, to only price Cognitive in BTC is a mistake.  I have been pricing everything in my local currency as can be seen in my earlier posts.  As an article today better explains than I could ever:

To put things simply: every good in Bitcoinia is an import and every job must be offshored. In that kind of economy, exchange-rate volatility matters a very great deal indeed.

Any new person just getting into bitcoin and then using their bitcoins to purchase shares of Cognitive would be paying a price of the BTCUSD * COGNITIVE.  For example, at the peak, if someone wanted to purchase Cognitive they would have paid $260 * 0.1 = $26.00/share.  This is in contrast to the IPO in which Cognitive was about $2.50/share.

Is that overpriced?  I am not sure as the BFLs are a mystery.  At some point after all the missed deadlines by BFL they should be written off.

[miTgiB]

Im a significant holder now due to what i think is undervalued stock. So im looking forward to bfl shipping.

How are you valuing COGNITIVE?  If I do very quick back of the napkin math, and divide the 7d avg of ASICMINER-PT by the 7d avg of COGNITIVE and multiply by COGNITIVE's most recent dividend, it comes up short almost 40%

[Deprived]

Also, to only price Cognitive in BTC is a mistake.  I have been pricing everything in my local currency as can be seen in my earlier posts.  As an article today better explains than I could ever:

You maybe misunderstand how I value it.  As with all mining securities I'm effectively valuing them in USD then converting it into BTC at the current exchange-rate.

Put simply I value them at the answer to the question:

"If I were to purchase hardware with hashing power equal to what the company has, then split that across the number of outstanding shares they have, what would the result be?"

Then adjust it up (or down) if there's factors that tend to make the company a better (or worse) investment than most - which, in my view, would be upwards for Cognitive.

The answer to that question varies massively with the exchange-rate - i.e. it falls a ton when BTC rises a lot vs USD.   Which is, of course, a large part of the reason why historically few mining companies have ended up making a profit (for investors).

With pre-orders then the base for valuation is what it would cost now to pre-order the same (or equivalent).  Adjusted upward to compensate for the earlier delivery existing pre-orders can expect and adjusted down in line with whatever your view is of the likelihood of delivery never happening (or happening so late as make them near worthless).

Pretty sure most "investors" don't so anything like that - their means of valuing a company is to see what range it's trading in and (if they're smarter than average - which doesn't actually mean a lot) buy towards the bottom of that range.