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Author Topic: [ANN] A public company will build a huge Bitcoin Mining Operation (ASIC).  (Read 17633 times)
Vladimir
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April 04, 2012, 09:49:29 AM
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I am forming a new company that will engage into large scale Bitcoin mining. We have concluded a deal with subcontractors to produce for us a significant amount of ASIC based mining hardware (up to 2-3 orders of magnitude more power efficient and dense comparing to GPU based Bitcoin Miners). Our target is to build multi Thps (X 000 000 Mhps) bitcoin mining operation and therefore we will have significant bargaining power and will be able to get preferential treatment and pricing from our suppliers. To ensure optimal security we will most likely be housing the mining hardware in one of the most secure datacentres in Europe and eventually even certify all our operations to ISO 27001 standard.

We, however, have no plans to engage into manufacturing and sales of bitcoin mining hardware.

Once we get some paperwork done we will be able to start accepting investments from public directly. This means that soon we will be publishing investment prospectus and enable public to invest either into management company or into mining operations themselves. Until then we can discuss this in details only with high net worth individuals, sophisticated investors and investment professionals after we sign a NDA.

There will be various classes of shares, some of which will be effectively proxies to "perpetual mining contracts" with monthly dividend payable in fiat and potentially a class of shares paying dividend in bitcoins (pending legal and tax advise).

We are in process of re-registering as a PLC. PLC stands for Public Limited Company, this is a legal structure that enables companies to sell shares to public and become listed on stock exchanges. It is our long term goal to eventually get listed on a public exchange and even to become qualify for REIT eventually, if possible. Public companies also by law (England) are required to be fairly transparent, employ a professional "company secretary", provide financial reporting, and must be audited.

It is my strategic vision at some point in the future to enable option trading on Bitcoin Mining Contract simply by virtue of being a listed company and having optionable shares. There is a long road ahead, but we can get there and this is the start.

Meanwhile, I invite interested parties to contact me. email: vladimir@marchenko.co.uk skype: vladimir.marchenko.co.uk.

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Vladimir
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April 04, 2012, 09:53:00 AM
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FAQ:

Q1. Are you designing and building ASIC chip yourself?
A1. We have a long term strategic partnership with a private subcontractor that is building mining hardware for us.
The leverage we have is of a contractual nature and it grants us a number of advantages as compared to what general
public or our competitors may or may not get access to eventually.

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April 04, 2012, 11:10:41 AM
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We, however, have no plans to engage into manufacturing and sales of bitcoin mining hardware.
this could be bad.
you could force minor(GPU) miners out and take control of the network, if you do not give them a chance to upgrade to better hardware(ASIC).

but except that, GO! GO! GO!, secure the network.

"The whole problem with the world is that fools and fanatics are always so certain of themselves and wiser people so full of doubts." -Bertrand Russell
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April 04, 2012, 11:16:57 AM
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We, however, have no plans to engage into manufacturing and sales of bitcoin mining hardware.
this could be bad.
you could force minor(GPU) miners out and take control of the network, if you do not give them a chance to upgrade to better hardware(ASIC).

but except that, GO! GO! GO!, secure the network.
It is a dog eat dog world out there. I don't see why this is an issue. If Vladimir decides to invest hundreds of thousands of dollars into mining equipment, he should be able to reap the full rewards and not have to feel guilty about stepping on some toes.
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April 04, 2012, 11:21:29 AM
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We, however, have no plans to engage into manufacturing and sales of bitcoin mining hardware.
this could be bad.
you could force minor(GPU) miners out and take control of the network, if you do not give them a chance to upgrade to better hardware(ASIC).

but except that, GO! GO! GO!, secure the network.
It is a dog eat dog world out there. I don't see why this is an issue. If Vladimir decides to invest hundreds of thousands of dollars into mining equipment, he should be able to reap the full rewards and not have to feel guilty about stepping on some toes.
no he should, if he wants for bitcoin to succeed. this could be what kills bitcoin. it would also not be good for Vladimir, if he crashed bitcoin after pumping alot of money in to it.

would you be worried if NSA build a big cluster of ASICs?

"The whole problem with the world is that fools and fanatics are always so certain of themselves and wiser people so full of doubts." -Bertrand Russell
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April 04, 2012, 11:31:48 AM
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no he should, if he wants for bitcoin to succeed. this could be what kills bitcoin. it would also not be good for Vladimir, if he crashed bitcoin after pumping alot of money in to it.

would you be worried if NSA build a big cluster of ASICs?

We already have a competing ASIC builder. Combine that with the various FPGA offerings and Butterfly Labs, Vladimir isn't posing a threat. I don't think the OP will get very far with this, anyway.

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Vladimir
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April 04, 2012, 11:42:50 AM
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We are talking about a public company. The board of directors has a very important goal which is maximizing value and long term return on investment for the shareholders.

It does not seem feasible that we will have a monopoly on Bitcoin Mining. However, we do aim to become a major player maybe even the biggest player in this market.

Two things have changed, ASIC's have much higher density and much higher power efficiency. Therefore, unlike GPUs and FPGA's, ASIC mining has significant economies of scale and we are going to use it to our advantage.

We plan to continuously buy ASIC hardware from leading manufacturers over time, long term, and will employ our scale and bargaining power to secure the best possible deal for our shareholders. The keyword here is "public company" we will be accountable to our shareholders and a significant degree of transparency is demanded by law.

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April 04, 2012, 11:46:47 AM
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We are talking about a public company. The board of directors has a very important goal which is maximizing value and long term return on investment for the shareholders.

It does not seem feasible that we will have a monopoly on Bitcoin Mining. However, we do aim to become a major player maybe even the biggest player in this market.

Two things has changed, ASIC's have much higher density and much higher power efficiency. Therefore, unlike GPUs and FPGA's, ASIC mining has significant economies of scale and we are going to use it to our advantage.

We will be simply buying ASIC hardware from leading manufacturers and employ our scale and bargaining power to secure the best possible deal for our shareholders. It is highly unlikely (due to design of Bitcoin) that it would be beneficial for us to do any dirty tricks. The keyword here is "public company" we will be accountable to our shareholders and a significant degree of transparency is demanded by law. Fate of this company and Bitcoin will be very much intertwined.

There are discussions about placing it into "articles" (constitution of the company) that "controversial policy decisions" like which BIP to support etc. shall be brought to shareholder vote. If we do this we would effectively pass "voting power" to shareholders (those how paid for mining hardware). This is how we expect to address "51% fears". This is in a discussion stage for now and I am open for suggestions.

Of course, we will not be using any third party pools (this must be a good thing for Bitcoin).

Again, I am open for your questions and suggestions.


So you are not designing this ASIC yourself ?

I don't think there is any REAL ASIC out there anyway ...

You are buying from LargeCoin guys or from where Huh
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April 04, 2012, 11:50:05 AM
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Have you (or your partners/suppliers) designed the chip?
kokjo
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April 04, 2012, 11:50:19 AM
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We are talking about a public company. The board of directors has a very important goal which is maximizing value and long term return on investment for the shareholders.

It does not seem feasible that we will have a monopoly on Bitcoin Mining. However, we do aim to become a major player maybe even the biggest player in this market.

Two things has changed, ASIC's have much higher density and much higher power efficiency. Therefore, unlike GPUs and FPGA's, ASIC mining has significant economies of scale and we are going to use it to our advantage.

We will be simply buying ASIC hardware from leading manufacturers and employ our scale and bargaining power to secure the best possible deal for our shareholders. It is highly unlikely (due to design of Bitcoin) that it would be beneficial for us to do any dirty tricks. The keyword here is "public company" we will be accountable to our shareholders and a significant degree of transparency is demanded by law. Fate of this company and Bitcoin will be very much intertwined.

There are discussions about placing it into "articles" (constitution of the company) that "controversial policy decisions" like which BIP to support etc. shall be brought to shareholder vote. If we do this we would effectively pass "voting power" to shareholders (those how paid for mining hardware). This is how we expect to address "51% fears". This is in a discussion stage for now and I am open for suggestions.

Of course, we will not be using any third party pools (this must be a good thing for Bitcoin).

Again, I am open for your questions and suggestions.

it is not a 51% fear. its a 30% cheap mining power fear, will become a 70% cheap and impossible to have any competition with.
small miners will quit, if its not profitable for them.

i would be more comfortable with you selling mining hardware, and thereby distribute the cheap mining power.

"The whole problem with the world is that fools and fanatics are always so certain of themselves and wiser people so full of doubts." -Bertrand Russell
Vladimir
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April 04, 2012, 11:53:04 AM
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it is not a 51% fear. its a 30% cheap mining power fear, will become a 70% cheap and impossible to have any competition with.
small miners will quit, if its not profitable for them.

i would be more comfortable with you selling mining hardware, and thereby distribute the cheap mining power.

One cannot stop progress. GPU and FPGA's are already doomed. I am sure there will be plenty of ASIC gear on the market given time, with or without us.

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April 04, 2012, 11:53:43 AM
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Have you (or your partners/suppliers) designed the chip?

Yes, we have. We are in advanced stages of design testing and manufacturing process. Our tech is far superior to all other reported to date Bitcoin mining technologies. This is now simply a question of how much capital we can raise and how quickly we bring it all online.

Read more details on this in upcoming issue #1 of Bitcoin Magazine.


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bulanula
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April 04, 2012, 12:05:04 PM
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it is not a 51% fear. its a 30% cheap mining power fear, will become a 70% cheap and impossible to have any competition with.
small miners will quit, if its not profitable for them.

i would be more comfortable with you selling mining hardware, and thereby distribute the cheap mining power.

One cannot stop progress. GPU and FPGA's are already doomed. I am sure there will be plenty of ASIC gear on the market given time, with or without us.


What needs to happen ( I think ) is we switch the algorithm as soon as the guy has paid millions for his ASICs.

I think this needs to be done before he gets them operational, otherwise BTC is doomed and no algo change is possible thereafter without the ASIC miner denying the change.

GPUs will be able to adapt. FPGA should be able to adapt to new algo. The only one that is screwed is the ASIC guy.

If this ASIC mambo jumbo goes forward then I think BTC is as "good" as PayPal or the Bank of England.

The community now has to ask itself this : "Do we really want a company effectively owning Bitcoin ?"

Good luck Vladimir but I don't like where this is going and I bet I am not the only one.

This centralized mining is far away from what Satoshi envisioned ( everybody with a CPU can mine ); GPUs are fine and so are FPGA but ASIC which only a millionaire can develop is too far.

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April 04, 2012, 12:12:45 PM
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This centralized mining is far away from what Satoshi envisioned ( everybody with a CPU can mine ); GPUs are fine and so are FPGA but ASIC which only a millionaire can develop is too far.
Satoshi, was for pools, and centralized mining. i think he wanted thousand midsized companies in the end, mine the blocks. it will not be profitable for small people, in 100 years. but it should be now, because thats what bitcoin is made of right now, alot of small people.

im only saying it should be done slowly and peacefully, so bitcoin dont fall apart in the progress.
please be careful Vladimir.

"The whole problem with the world is that fools and fanatics are always so certain of themselves and wiser people so full of doubts." -Bertrand Russell
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April 04, 2012, 12:33:28 PM
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I wonder if a large datacenter operation like this will end up being the most economical model for bitcoin mining.  A large data center won't have access to free or subsidized electricity.  The power hungry nature of bitcoin mining will require substantial overhead in terms of power infrastructure, cooling, etc.  It will also require professional administrative staff.  By contrast, a small operation might be able to find free or subsidized electricity and the administration can be a part time (nights and weekends) affair.  Hardware manufacturers will sell increasingly power efficient mining hardware to the general public…will it be enough to keep their power efficiency on par with anything a large data center operation can do?  Nonetheless, I think it's great that someone is attempting to do this.

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April 04, 2012, 12:37:14 PM
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I wonder if a large datacenter operation like this will end up being the most economical model for bitcoin mining.  A large data center won't have access to free or subsidized electricity.  The power hungry nature of bitcoin mining will require substantial overhead in terms of power infrastructure, cooling, etc.  It will also require professional administrative staff.  By contrast, a small operation might be able to find free or subsidized electricity and the administration can be a part time (nights and weekends) affair.  Hardware manufacturers will sell increasingly power efficient mining hardware to the general public…will it be enough to keep their power efficiency on par with anything a large data center operation can do?  Nonetheless, I think it's great that someone is attempting to do this.

Ultimately it boils down to how much of an edge they can achieve relative to the general public.  If they are talking about specs similar to LargeCoin then they are already not competitive with medium sized farms in low energy price areas.  If they are talking about specs which are 5x LargeCoin in MH/$ and 2x LargeCoin in MH/W then the overhead of datacenter is immaterial.

So the question really comes down to:
* how much better than other offerings can they get?
* how long can they keep that edge over the general public?

My first thought was "not enough" and "not long enough" but I guess we will see.

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April 04, 2012, 12:39:59 PM
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I wonder if a large datacenter operation like this will end up being the most economical model for bitcoin mining.  A large data center won't have access to free or subsidized electricity.  The power hungry nature of bitcoin mining will require substantial overhead in terms of power infrastructure, cooling, etc.  It will also require professional administrative staff.  By contrast, a small operation might be able to find free or subsidized electricity and the administration can be a part time (nights and weekends) affair.  Hardware manufacturers will sell increasingly power efficient mining hardware to the general public…will it be enough to keep their power efficiency on par with anything a large data center operation can do?  Nonetheless, I think it's great that someone is attempting to do this.

Data centers charge premiums for floor space, cooling, electrical rates, data pipelines, redundancy, etc. It is their business to maximize revenues anyway possible.

GPU mining is uneconomical in a data center. ASIC might be able to fit the bill.
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April 04, 2012, 12:42:57 PM
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it is not a 51% fear. its a 30% cheap mining power fear, will become a 70% cheap and impossible to have any competition with.
small miners will quit, if its not profitable for them.

i would be more comfortable with you selling mining hardware, and thereby distribute the cheap mining power.

One cannot stop progress. GPU and FPGA's are already doomed. I am sure there will be plenty of ASIC gear on the market given time, with or without us.


What needs to happen ( I think ) is we switch the algorithm as soon as the guy has paid millions for his ASICs.

I think this needs to be done before he gets them operational, otherwise BTC is doomed and no algo change is possible thereafter without the ASIC miner denying the change.

GPUs will be able to adapt. FPGA should be able to adapt to new algo. The only one that is screwed is the ASIC guy.

If this ASIC mambo jumbo goes forward then I think BTC is as "good" as PayPal or the Bank of England.

The community now has to ask itself this : "Do we really want a company effectively owning Bitcoin ?"

Good luck Vladimir but I don't like where this is going and I bet I am not the only one.

This centralized mining is far away from what Satoshi envisioned ( everybody with a CPU can mine ); GPUs are fine and so are FPGA but ASIC which only a millionaire can develop is too far.



GPUs pushing out CPU miners is fine, FPGA pushing out GPU miners is fine, but ASIC is where we're supposed to draw a line?

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April 04, 2012, 01:07:47 PM
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Steve. Consider also cost of capital and bargaining power. Do you know how much cheaper, for instance,  Coca-Cola can buy hardware from Dell right now comparing to what you would need to pay?


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April 04, 2012, 01:19:08 PM
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it is not a 51% fear. its a 30% cheap mining power fear, will become a 70% cheap and impossible to have any competition with.
small miners will quit, if its not profitable for them.

i would be more comfortable with you selling mining hardware, and thereby distribute the cheap mining power.

One cannot stop progress. GPU and FPGA's are already doomed. I am sure there will be plenty of ASIC gear on the market given time, with or without us.


What needs to happen ( I think ) is we switch the algorithm as soon as the guy has paid millions for his ASICs.

I think this needs to be done before he gets them operational, otherwise BTC is doomed and no algo change is possible thereafter without the ASIC miner denying the change.

GPUs will be able to adapt. FPGA should be able to adapt to new algo. The only one that is screwed is the ASIC guy.

If this ASIC mambo jumbo goes forward then I think BTC is as "good" as PayPal or the Bank of England.

The community now has to ask itself this : "Do we really want a company effectively owning Bitcoin ?"

Good luck Vladimir but I don't like where this is going and I bet I am not the only one.

This centralized mining is far away from what Satoshi envisioned ( everybody with a CPU can mine ); GPUs are fine and so are FPGA but ASIC which only a millionaire can develop is too far.



GPUs pushing out CPU miners is fine, FPGA pushing out GPU miners is fine, but ASIC is where we're supposed to draw a line?
I know right? He is just scared for his bottom line, and his soon-to-become useless GPUs Wink

Mining Rig Extraordinaire - the Trenton BPX6806 18-slot PCIe backplane [PICS] Dead project is dead, all hail the coming of the mighty ASIC!
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