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

[Tafelpoot]

Running 30 TH/s assuming a difficulty increase of 15% every 2 weeks will yield 108 BTC in 6 weeks, 203 BTC in 16 weeks and so on. And we'd

We have 10 CT boxes at the moment, from which Garrett manages to run only 2 - 5 at once...
Do you really believe Garrett will be able to run 30 TH/s for more than 1 hour by Friday? Let alone 6 weeks...
Mining returns of the first 6 weeks will be 20 - 60 btc.
At about 13k usd hosting cost (for 6 weeks) = 25 btc, we are not even sure to make a profit the first month.

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[dunchy]

My vote : NO

[robitnik]

My vote : NO

You'll have to reply to the email he sent out to vote.

Also, we have movement on Eligius.
New machines seem to be running at 1.6 TH/s. Our 256 second average is 10 TH/s.

[bigdude]

Has Garr posted anywhere an analysis of the two scenarios?

Like expected incomes per share if we continue to mine vs expected return if we liquidate?

Thanks

[Findus]

I did not follow the whole story, but there's something that does not compute from my point of view.
I bought 12 COG.F2 for 5 BTC each in August. My 60 BTC investment was used to buy CT hardware. Then each COG.F2 was converted to 20 COG in March.
Selling the hardware now would make the final dividend around 0.025 by robitnik's estimation below. So if we liquidate, my 60 BTC become 6 BTC?

What I don't understand is, how did the hardware loose 90% of its value without yielding significant hashing dividends for COG.F2 investors?

Liquidating Cog means selling the hardware with the proceeds being distributed to shareholders.

TerraMiners are going for roughly $8,000 at the moment. 30 TH/s is ~25 units at 1.2 TH/s (19 at 1.6 TH/s). This gives us between $152,000 and $200,000 assuming all units are sold. At current prices, that is between 287 and 377 BTC or between 0.020 and 0.026 BTC per share.

Running 30 TH/s assuming a difficulty increase of 15% every 2 weeks will yield 108 BTC in 6 weeks, 203 BTC in 16 weeks and so on. And we'd still have the hardware although it's value will be greatly depreciated.

Note that the above doesn't include Ebay fees for selling or electricity costs for running the hardware.

[jimmothy]

I did not follow the whole story, but there's something that does not compute from my point of view.
I bought 12 COG.F2 for 5 BTC each in August. My 60 BTC investment was used to buy CT hardware. Then each COG.F2 was converted to 20 COG in March.
Selling the hardware now would make the final dividend around 0.025 by robitnik's estimation below. So if we liquidate, my 60 BTC become 6 BTC?

What I don't understand is, how did the hardware loose 90% of its value without yielding significant hashing dividends for COG.F2 investors?

Liquidating Cog means selling the hardware with the proceeds being distributed to shareholders.

TerraMiners are going for roughly $8,000 at the moment. 30 TH/s is ~25 units at 1.2 TH/s (19 at 1.6 TH/s). This gives us between $152,000 and $200,000 assuming all units are sold. At current prices, that is between 287 and 377 BTC or between 0.020 and 0.026 BTC per share.

Running 30 TH/s assuming a difficulty increase of 15% every 2 weeks will yield 108 BTC in 6 weeks, 203 BTC in 16 weeks and so on. And we'd still have the hardware although it's value will be greatly depreciated.

Note that the above doesn't include Ebay fees for selling or electricity costs for running the hardware.

Wait you only got 20 shares for 60btc?

[elasticband]

no each of his cog2 sahres, which he bought 12 of were converted into 20 cog shares.

[jimmothy]

no each of his cog2 sahres, which he bought 12 of were converted into 20 cog shares.

So he only got 240 shares?

Shouldn't he have something like 25% of shares because he paid for 25% of the hardware?

[Findus]

So he only got 240 shares?

Shouldn't he have something like 25% of shares because he paid for 25% of the hardware?

Yes, I got 240 shares from my 12 COG.F2.
I don't know about 25%.

[robitnik]

I did not follow the whole story, but there's something that does not compute from my point of view.
I bought 12 COG.F2 for 5 BTC each in August. My 60 BTC investment was used to buy CT hardware. Then each COG.F2 was converted to 20 COG in March.
Selling the hardware now would make the final dividend around 0.025 by robitnik's estimation below. So if we liquidate, my 60 BTC become 6 BTC?

What I don't understand is, how did the hardware loose 90% of its value without yielding significant hashing dividends for COG.F2 investors?

The problem is that the CT hardware was priced in dollars. At the time 1 BTC was worth ~$120. IIRC, ~650 BTC were needed to raise the required dollar amount. If BTC was still worth $120 and we sold 19 units at $8,000 each, that's 1,266 BTC. Now BTC is worth 4+ times as much. If we sell the hardware for dollars now, we get ~300 BTC.

If BTC keeps rising, it's better to keep mining. The COG.F holders effectively locked in a share price of 0.25 BTC (5 BTC for 20 shares). The dividends from current hardware (assuming all 30 TH/s gets running) could support a share price of between 0.12 and 0.38 BTC based on 50% dividends alone. If the reinvestment fund is used well, it could be higher.

I expect mining difficulty increases to continue to slow down except for a spike when ASICMiner's gen 3 stuff comes online. This means that our current hardware and whatever we buy next will perform for a long time. I'm sure it is possible to salvage this operation. The question is do we all agree and if so, what plan can we come up with. YoYa's board suggestion is a good one and worth following up on.

[Findus]

The problem is that the CT hardware was priced in dollars. At the time 1 BTC was worth ~$120.

Thank you, that makes perfect sense now.
I think I'm going to vote "YES" for the reserve fund to cover hosting expenses. However, I'd like to know roughly how much percentage of mining revenues these hosting expenses would be.

Edit: I answered before thinking. Actually that does not make perfect sense. If ~650 BTC were needed to raise the required dollar amount, and if we sold the hardware for ~300 BTC now, that accounts for a 50% loss, not a 90% loss.

[superresistant]

The problem is that the CT hardware was priced in dollars. At the time 1 BTC was worth ~$120.

Thank you, that makes perfect sense now.
I think I'm going to vote "YES" for the reserve fund to cover hosting expenses. However, I'd like to know roughly how much percentage of mining revenues these hosting expenses would be.
Edit: I answered before thinking. Actually that does not make perfect sense. If ~650 BTC were needed to raise the required dollar amount, and if we sold the hardware for ~300 BTC now, that accounts for a 50% loss, not a 90% loss.

I rather have my 50-70% investment right now than 80-100% in 8 months...

There is so many opportunities around, it makes me sick to know that I wasted 9 months for 90% loss and promises.

[arctos]

I rather have my 50-70% investment right now than 80-100% in 8 months...

There is so many opportunities around, it makes me sick to know that I wasted 9 months for 90% loss and promises.

+1

Sell everything and end this catastrophe already

[robitnik]

...
However, I'd like to know roughly how much percentage of mining revenues these hosting expenses would be.
...

I'd like to see those numbers too.

Edit: I answered before thinking. Actually that does not make perfect sense. If ~650 BTC were needed to raise the required dollar amount, and if we sold the hardware for ~300 BTC now, that accounts for a 50% loss, not a 90% loss.

The best I can describe it is as follows (bear in mind, I'm working from memory here so the numbers might be a little off).

In dollar terms:
We bought 14 units for ~$78,000 which is $5,500 each (discounted from $6,000).
We will receive a total of ~22 units currently valued at ~$8,000 each for a total of ~$176,000
This is a 225% profit in dollar terms.

In bitcoin terms:
We bought 14 units for ~650 BTC which is 46 BTC each. [ 1 BTC = $120 ]
We will receive a total of ~22 units currently valued at ~15 BTC ($8,000) each for a total of 330 BTC. [ 1 BTC = $520 ]
This is a ~50% loss in BTC terms purely from the increase in the $/BTC rate.

If COG.F/2 shares were instantly converted to ordinary shares at the time of purchase (i.e. when we made the deal for the hardware), the value of the hardware per share would have been 650/14420 = 0.045 BTC per share. Now it is 330/14420 = 0.023 BTC per share. Which is a roughly 50% drop in terms of BTC.

The profit in bitcoin terms here is clearly not in selling hardware but in mining with it if we have it in hand. You can see those calculations in previous posts.

[Findus]

Robitnik, I'm really greatful for your summarizing the history.

I think that the crux of what I don't understand is here:

If COG.F/2 shares were instantly converted to ordinary shares at the time of purchase (i.e. when we made the deal for the hardware), the value of the hardware per share would have been 650/14420 = 0.045 BTC per share.

that means that when we made the deal for the hardware, each 5 BTC COG.F2 share immediately became 20 x 0.045 = 0.9 BTC worth of COG shares?
Because the investment of COG.F2 investors was dissolved with previous COG owners? Is that fair?

[robitnik]

Robitnik, I'm really greatful for your summarizing the history.

I think that the crux of what I don't understand is here:

If COG.F/2 shares were instantly converted to ordinary shares at the time of purchase (i.e. when we made the deal for the hardware), the value of the hardware per share would have been 650/14420 = 0.045 BTC per share.

that means that when we made the deal for the hardware, each 5 BTC COG.F2 share immediately became 20 x 0.045 = 0.9 BTC worth of COG shares?
Because the investment of COG.F2 investors was dissolved with previous COG owners? Is that fair?

No problem. It's a complicated situation.

If they were converted immediately (they weren't) they would have been worth that much in hardware. The share price is usually worth more than just the price of the hardware though. COG.F and COG.F2 were essentially a bet that the share price would be greater than 0.25 BTC when they converted which seemed very plausible at the time. There are a few factors that run the price up.

That hardware (if it was running) produces bitcoins, so the dividend yield increases the price of a share.
Acting as a group allows us to make better deals (i.e. the $500 discount per unit) than if we were buying alone, this increases the share price.
Because we have many machines running rather than say just 1 each, a single machine's failure is not catastrophic & the risk is spread.
We have an economy of scale when it comes to other things like hosting, power and management which all add to the value.

As I said in a previous post, historical data for BTC mining securities suggest that people typically value an asset like this at between 3 and 10 times its annual yield (an "interest rate" of 10-30% in BTC terms).
i.e. if the dividend changes, the share price will change to ensure the following is true: 0.3 > ((weekly div)*52/(share price)) < 0.1
This has generally been the case with some exceptions resulting in spikes up and down depending on the disaster of the week.

At the current difficulty, 20 TH/s (if running) will produce ~14 BTC per week which (after reinvestment) yields 0.5 mBTC per week. If there was faith in Cognitive going forward, that would traditionally have supported a share price of between 0.078 and 0.26 BTC per share. We also have another 10 TH/s to be delivered.

Where it went wrong was Garrett waiting too long for the Washington data center. The second Cointerra started delivering, we should have been deploying. There should have been an intermediary datacenter in place beforehand. That's what is being done now. If we decide to keep this show going, we'll have to take measures to ensure something like that doesn't happen again. As I said elsewhere, I expect the difficulty growth rate to slow, which means our current hardware will be running (and paying off) for quite a while. If we can manage even one more good deal and deploy it quickly, Cognitive will be set for a long time.

But all that depends on whether shareholders decide to liquidate now for ~0.02 BTC per share or not. If cog keeps going, it will also depend on us figuring out a better way to manage it. YoYa suggested setting up a board consisting of Finance, Mining and PR which seems like a good idea to me.

[Findus]

Thank you so much robitnik, all that makes sense to me now.

I'll be voting to keep the operation going.
I hope that in a few months there will be a COG.F3 to keep us going forward.

[dunchy]

My vote : NO

You'll have to reply to the email he sent out to vote.

Also, we have movement on Eligius.
New machines seem to be running at 1.6 TH/s. Our 256 second average is 10 TH/s.

Oh really ? Don't say ?

I'll bite here although I'm obviously speaking to a shill account. All your calculations are essentially flawed because of the following ruthless facts that are in front of your nose:

- The OP of this operation is performing a theft, which became obvious as of moment when Havelock stopped the trading.
- There never was a bug in the hardware we purchased.
- We will not start mining. Ever.
- When Goat's cavalry kicks in only dust will be left.

So people, be reasonable, take your 10% that's left of your investment, learn your lesson and leave the rest to Garr to enjoy it in hell.

EDIT:

The only other way out of this mess would be to:
-  Find a reliable person who's integrity and actions can revive the share price
- Make Garr IMMEDIATELY transfer all Cognitive's assets to this person.

But I don't see anyone crying to take his place. Therefore: END THIS.

[YoYa]

I'll be voting to keep the operation going.
I hope that in a few months there will be a COG.F3 to keep us going forward.

Problem is Garr will keep stealing (unless he either is jailed or runs) and no one will invest into this operation. You are more or less wanting a Ponzi type operation but the problem is, no more fools will join.

Take what you can now.

Question Goat, but why aren't you looking to remove Garr and possibly put yourself forward to manage COG? I don't want to be stirring here, but have you zero interest in a constructive outcome that involves restructuring the entire operation?

Anyway....almost there, but not counting my chickens yet till we have 24+ hours of operation at +17:
128 seconds   17.43 Th/s   519374

Garr, we'll need an update on how many miners are operating and where they are at. Also, your last motion didn't have a start and end time, so some discussion on how to progress electricity costs would be in order.

[killerstorm]

Question Goat, but why aren't you looking to remove Garr and possibly put yourself forward to manage COG? I don't want to be stirring here, but have you zero interest in a constructive outcome that involves restructuring the entire operation?

Ehm, managing it requires:

 * renting space
 * paying for cooling and heating
 * hiring somebody to manage devices
 * doing currency conversions
 * logistics

That's a lot of work, and it's not clear if it can be profitable at this point...

You see, when Garr was managing it as a hobby of sorts we had many of these things more-or-less for free, but it clearly doesn't work now. You need more professional approach to get good results, and that requires money. While, on the other hand, difficulty is pretty high now and gets higher and higher.

Talking specifically about Goat, he has a lot of bitcoins... Do you think it makes sense to waste a lot of time to get a tiny profit out of a mining operation when you're in such a position?

Nope. It makes a lot more sense to liquidate it ASAP and forget about it.