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Author Topic: Gigamining / Teramining  (Read 201430 times)
jamesg
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September 12, 2012, 03:03:16 PM
 #861

The new contract for Teramining is going to be a bit more robust than the current Gigamining contract and will also include:
  • A maximum profit potential.

This inclusion stood out to me, as I am sure it does to many others. I do not see this as a justified inclusion and I think the issue would be much more better suited without it.


You are correct. I will remove it.

EDIT:

To be clear, I was not thinking properly this morning when I wrote that. It is my fault, and I have retracted it. Sorry for the confusion.
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September 12, 2012, 04:36:09 PM
 #862

Hi,

So gigavps, are those the final terms or do you think they are the final terms of the upgrade? It would be nice to get something solid.

I have to say these announcements and changes could have been handled a lot better. Yes, I realize you are actually going beyond what is required from you, as per the contract, but wouldn't it have been a wiser move to just keep quiet about the ASIC upgrade until you had the terms finalized?

I'm sorry to say this but right now it just feels like you are trying to find the sweet spot between your own maximum profits and what the community/bondholders will find acceptable after investing based on your first announcement. I honestly think you should stick with the terms in your initial announcement, since a lot of people have invested with those numbers in mind, and you keep reiterating how you only want the best for your investors.

Basically, I feel a bit deceived at this point, and if I feel that way, chances are others will feel that way too.

At this point, I will still hold on to my investment in Gigamining though, and most likely upgrade too, but I just wanted to let you know how I felt about it. Good luck with the ASIC shipments btw, lets hope you get yours up and mining as soon as possible. Maybe there is still a chance this won't end up as a failed investment for me and many others.

-Holo
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September 12, 2012, 04:39:57 PM
 #863

What is the trigger for the timing of the bond exchange?

I'm trying to figure that out as well - no specifics were made in your original post, and I didn't see any added in your recent updates.

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September 12, 2012, 04:58:56 PM
 #864

I don't know why smoothie and eskimobob seem so angry all the time. Maybe if they would calm down they would realize that the price for the gigamining upgrade is lower than other bonds, such as bitbond.

Why aren't they ranting and raving in the bitbond thread? I think this is personal. They must have some sort of grudge against gigavps, or maybe they are just nuts. I hope they don't own any guns.

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September 12, 2012, 09:23:23 PM
 #865

I don't know why smoothie and eskimobob seem so angry all the time. Maybe if they would calm down they would realize that the price for the gigamining upgrade is lower than other bonds, such as bitbond.

Why aren't they ranting and raving in the bitbond thread? I think this is personal. They must have some sort of grudge against gigavps, or maybe they are just nuts. I hope they don't own any guns.

They're both nuts.  Just ignore them.

Just for the defense of those two.

Correct me if I don’t remember well, but not Smoothie was the one who kept screaming pirate is a scammer and it turned out to be true, or not Eskimobob who keeps saying perpetual mining bonds will loose more in value then the dividends they pay out which also seems very true to me.

I did not look it up so my memory could cheat me.
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September 12, 2012, 09:50:55 PM
 #866

I don't know why smoothie and eskimobob seem so angry all the time. Maybe if they would calm down they would realize that the price for the gigamining upgrade is lower than other bonds, such as bitbond.

Why aren't they ranting and raving in the bitbond thread? I think this is personal. They must have some sort of grudge against gigavps, or maybe they are just nuts. I hope they don't own any guns.

Because while the upgrade is not THAT BAD, gigavps goes around making false statements embellishing the price upgrade and what he gives.

Also, your calculation of 10k BTC taken in for the upgrade is unrealistic given that there is a FREE upgrade path. I have been able to collect some stats on this and the response so far is around 70% of the bonds reported in will upgrade.

Because it's an upgrade on the old equipment investors purchased (FPGA rigs) being traded in. We should pay the difference to upgrade them to ASIC rigs (+ cut for gigavps), not pay the full ASICs + a cut. It may look like it's a lot offered and it may look like the free upgrade option costs gigavps more but actually the free upgrade path is strongly in favor of gigavps

You look at my previous numbers published and tell me they're off.

The FPGA to ASIC trade in offers 20x the hashing free on the free half of the ASIC rig it pays and gigavps offers 5x the hashing on the free upgrade. Costs him less to do the free upgrade path. Also the cut he takes is around 60% - 70% in most scenarios. It's by far one of the largest cut taken by an operator.

As for the fee, in the beginning when ASIC arrives, the fee will probably pay out more but I am also expecting that the network will quickly move past 200Th 6-8 months after ASIC is initially released. Since the costs to run the equipment will be fixed, any supposed profits from the fee in the beginning must be saved for when the network surpasses 200Th and the fee will no longer cover the costs.

In closing, a 50% fee is more likely "barely enough" to run the bond through the entire 4 years of 25 BTC blocks. Again, I would not have proposed these changes if I thought Teramining would stand the test of time without them. I have done a lot of thinking about this and proposing this change was not something I was looking forward to. The backlash has been swift and intense. My choice is to either makes these changes now or potentially watch Teramining default on it's obligations. I have committed to making Teramining a reality and I plan to stick by my word.

It's statements like this which makes me say to gigavps: Take a fixed profit cuts, deduct the expenses and distribute the rest. Let the investors get as much as possible and stop worrying risks with your guaranteed management fee.

Because he says 50% will barely go through (if it does) the next 4 years (we could expect decreasing revenue over time). And he wants a profit. But does planning the risks justifies the 60%-70% cut, just in case? It MIGHT eventually be needed, but in the beginning and foreseeable future, he will not need such a large cut. It's excessive. It would be better to reduce payment rates when required, not take today the cut that will be needed 2 years downward or whenever it happens.

And yes while Smoothie and Eskimobob are not false, they're not entirely true. The large cut gigavps wants to take will certainly become justified later on as mining value decreases. It just doesn't fit now. To be sure to be able to honor the fixed rate years downward, he'll take a massive profit cut in the beginning with a cut tailored for a hypothetical future scenario?

Dropping the fixed mhash would be the way to go in my opinion.

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September 12, 2012, 10:01:02 PM
 #867

Hi Namworld,

I have stated above that the fee will be .29 BTC per bond and that each Teramining bond will be fixed at 22.5Mh/s. I am also going to guarantee a minimum buy back amount per bond.

If you would like to create a competing offering and think you can do better, by all means please do.

Best,
gigavps
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September 12, 2012, 11:46:53 PM
 #868

Dropping the fixed mhash would be the way to go in my opinion.

There is the possibility of splitting the debt into multiple bond offerings.  As some of the differences in opinion appear irreconcilable, it would seem that a lower-payout, higher consistency "high grade" bond and a higher-payout, speculative grade bond would help people find an acceptable investment.

If the direction were to head to non-fixed, I want to own more than just the hashes. While it would be great to have a share that represents a growing number of mhash/s, I'd much rather have a stake in the hardware.
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September 17, 2012, 10:20:39 AM
 #869

To all Gigaminers:

Coupon payments for the week have been paid.

Enjoy,
gigavps
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September 18, 2012, 01:12:40 AM
 #870

Any comment on the general downward trend?
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September 18, 2012, 01:27:03 AM
 #871

Any comment on the general downward trend?
- It's to be expected
- Re-investing is essential with bitcoin mining
- https://bitcointalk.org/index.php?topic=98517.msg1199068#msg1199068

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September 18, 2012, 01:33:01 AM
 #872

Any comment on the general downward trend?
- It's to be expected
- Re-investing is essential with bitcoin mining
- https://bitcointalk.org/index.php?topic=98517.msg1199068#msg1199068

Essentially that. When you buy fixed mhash/s bonds, just as with mining yourself, you have to reinvest. Not necessarily in the same bond, you could even buy your own hardware with dividends.

Bitcoin mining should be considered to be a depleting asset and as such, one must understand depleting assets in order to understand how to invest in them. It is becoming common place knowledge now that reinvestment is an essential part of any mining strategy, whether you are buying mining equipment or you are buying mining bonds. Otherwise, you lose on both ends because of technology advances eroding value in your mining equipment and difficulty increases eroding your dividend payments.

If you are not willing to reinvest, mining and mining bonds are probably not for you.
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September 18, 2012, 01:41:08 AM
 #873

Essentially that. When you buy fixed mhash/s bonds, just as with mining yourself, you have to reinvest. Not necessarily in the same bond, you could even buy your own hardware with dividends.

Some have asked in this thread that I change Teramining from a mining bond to a "company" that you own a share of. This would mean that I decide the reinvestment strategy and ultimately less bitcoins would flow back to share holders as there would be perceived value in the "company".

I am keeping the mining bond paradigm because it's up to each individual to decide their investment or reinvestment strategy they want to pursue.
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September 18, 2012, 01:47:58 AM
 #874

To all Gigaminers:

Below is the Teramining contract. Please have a once over and leave any constructive comments in the thread.

Best,
gigavps

Quote
The holder of this bond (“THE BONDHOLDER”) will receive as coupons a number of bitcoins equivalent to 100% PPS output of TWENTY TWO AND ONE HALF MILLION HASHES PER SECOND (22.5Mh/s) for as long as they hold the bond. Coupons are to be paid every Monday for the previous 7 days by THE ISSUER or an assigned agent of THE ISSUER. Coupons are not pro-rated; you must hold the bond at the time the coupon is paid.

GUARANTEED MINIMUM VALUE

THE ISSUER will guarantee a minimum value of 0.02 BTC per bond.

BUYBACK

THE ISSUER has the right to buy back any bond at any time at a price equivalent to 105% of the highest price the bond was traded on GLBSE over the previous 15 days (360 hours).

INITIAL RELEASE

The only way to initially own the bond is through the upgrade from GIGAMINING. There are two ways to upgrade GIGAMINING bonds:

  • FREE UPGRADE: This is a one for one swap of GIGAMINING for the bond.
  • PAID UPGRADE: This is a one to four swap of GIGAMINING for the bond. A payment of .29 BTC per GIGAMINING bond is also required.

By THE BONDHOLDER upgrading their GIGAMINING bonds they are giving up all rights to the GIGAMINING contract at (https://glbse.com/asset/view/GIGAMINING) and are returning the GIGAMINING bonds to THE ISSUER.

The right to the upgrade is proportional to the number of GIGAMINING bonds held. The PAID UPGRADE is not transferrable.

TRANSFERABILITY

The bond may only be transferred through direct sale on the GLBSE platform. The transfer functionality for this bond has been disabled.

BUYER BEWARE

Though THE ISSUER will use all reasonable efforts to ensure value for the holders of the bond, they are provided on a best effort basis and as with any investment there is risk involved. Please do not invest what you cannot afford to lose. This bond does not represent ownership of any company.
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September 18, 2012, 07:52:19 PM
 #875

Hello giga,

Can you try to justify the increased upgrade price to us? As it stands, a BFL Single gives $0.75 per mhash, a gigamining bond gives $1.44 per mhash. That's effectively 100% markup over the very base model (which offers lower $/mhash than the rigs you use). With the coming of ASICs, an upgraded TERAMINING bond will be $0.13/mhash (giga market price price + upgrade), while a BFL Jalapeño is $0.04/mhash. As you can no doubt see, it has moved from under 100% markup to over 200% markup. That's quite a difference in value.

With the BFL Jalapeño being significantly cheaper and more powerful than the BFL Single, the investment (as well as risk) is lower, which makes buying your own ASICs a much more attractive option compared to TERAMINING. It's certainly much more attractive than a BFL Single was to GIGAMINING.

Just tossing my 2 bits in -- I'm still unsure of what I am going to do with my own bonds.

Thanks,
Gary13579
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September 18, 2012, 09:43:24 PM
 #876

Hello giga,

Can you try to justify the increased upgrade price to us? As it stands, a BFL Single gives $0.75 per mhash, a gigamining bond gives $1.44 per mhash. That's effectively 100% markup over the very base model (which offers lower $/mhash than the rigs you use). With the coming of ASICs, an upgraded TERAMINING bond will be $0.13/mhash (giga market price price + upgrade), while a BFL Jalapeño is $0.04/mhash. As you can no doubt see, it has moved from under 100% markup to over 200% markup. That's quite a difference in value.

With the BFL Jalapeño being significantly cheaper and more powerful than the BFL Single, the investment (as well as risk) is lower, which makes buying your own ASICs a much more attractive option compared to TERAMINING. It's certainly much more attractive than a BFL Single was to GIGAMINING.

Just tossing my 2 bits in -- I'm still unsure of what I am going to do with my own bonds.

Thanks,
Gary13579

CAPEX vs CAPEX + OPEX?

OPEX isn't that much, especially when you consider 90% PPS. It's obviously impossible to determine difficulty when ASICs hit the public, but lets assume giga were getting 10% of current mining. 200ghash means he gets 20ghash. My estimates put him at 20-25kw at the moment. I'll round it up to 30kw at $0.05/kwh (of course, this is all pure speculation, it could be higher). That's about $1k per month in electricity, netting him a cool $1.5k per month to cover other OPEX. When you then consider that TERA's CAPEX cost for investors is 50% higher than what bonds are currently going for (compared to BFL prices), it just seems iffy. Of course, electricity/storage/air condition costs all go down with ASICs, which means OPEX will be significantly lower than what I have listed here. It just seems that giga would make a considerable amount from the initial upgrade fees, and have the 10% to cover all of his expenses (while probably pocketing a decent amount)

Also, I did my original estimates based on the 0.40 BTC upgrade price. 0.29 BTC should be a bit better. I'm still not sure if it is worth it with the 90% PPS.
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September 18, 2012, 10:11:05 PM
 #877

Did you factor in his time?

My original post was not meant to claim gigavps is ripping us off or that he is charging too much. I merely wanted to give my input as an investor, and why I am still iffy about the upgrade, especially with the .29 and 90% PPS. With ASICs being cheaper than the BFL Single, and using less power and outputting less heat, it's a lot more attractive to buy the ASICs themselves rather than pay 300%+ markup. Besides, BFL isn't the only company working on ASICs, and there will be cheaper options available (hopefully by the end of the year).

But sure, let's look at it from giga's perspective. He has 4 mini rigs, which BFL says they'll honor at market price, credited towards the purchase of ASICs. That's $60k, rounded down. 4 mini rig SCs cost ~$120k. So he essentially can cover half the cost of the upgrade merely from the IPO, even assuming he has 0 BTC left from the IPO (which as we all know, isn't true). Given the price he wants for the upgrade, I can't imagine many (if ANYONE) would not take the upgrade path. Assuming everyone paid upgrades, that's  11.6k bitcoins -- $139,200 at current market values. The cost of the upgrade is worth more than the ASICs themselves, giga can pocket all of the original IPO. $79k (plus whatever money is left over from IPO, which I imagine is quite a bit) is a ton of money. It's almost half a year of full time work at $100/hr.

Has giga really put in 40+ hours of week, every week, for the past 6 months, solely into GIGAMINING? No one can really say but him. I don't believe he has.
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September 18, 2012, 11:09:00 PM
 #878

My original post was not meant to claim gigavps is ripping us off or that he is charging too much. I merely wanted to give my input as an investor, and why I am still iffy about the upgrade, especially with the .29 and 90% PPS. With ASICs being cheaper than the BFL Single, and using less power and outputting less heat, it's a lot more attractive to buy the ASICs themselves rather than pay 300%+ markup. Besides, BFL isn't the only company working on ASICs, and there will be cheaper options available (hopefully by the end of the year).

But sure, let's look at it from giga's perspective. He has 4 mini rigs, which BFL says they'll honor at market price, credited towards the purchase of ASICs. That's $60k, rounded down. 4 mini rig SCs cost ~$120k. So he essentially can cover half the cost of the upgrade merely from the IPO, even assuming he has 0 BTC left from the IPO (which as we all know, isn't true). Given the price he wants for the upgrade, I can't imagine many (if ANYONE) would not take the upgrade path. Assuming everyone paid upgrades, that's  11.6k bitcoins -- $139,200 at current market values. The cost of the upgrade is worth more than the ASICs themselves, giga can pocket all of the original IPO. $79k (plus whatever money is left over from IPO, which I imagine is quite a bit) is a ton of money. It's almost half a year of full time work at $100/hr.

Has giga really put in 40+ hours of week, every week, for the past 6 months, solely into GIGAMINING? No one can really say but him. I don't believe he has.

The bottom line is that Giga is offering gigamining/teramining to make money and is trying to maximize his profit while appeasing/attracting as many investors as possible. Just like any other GLBSE offering. And there is nothing wrong with that.

Of course it will always be less expensive to buy hardware yourself and manage it yourself. It is up to the individual whether they feel it is more advantageous to purchase a lower-hassle, lower return-on-investment, mining bond such as gigamining ... or whether to purchase hardware directly, enjoy a higher return-on-investment, but deal with maintaining it themselves.

There is also the issue of risk: Nefario/GLBSE may disappear or get hacked; Gigavps may default on his obligations/promises as other 'trustworthy' individuals here have recently done. There is no way to know. But if you buy/own your own hardware it isn't going to disappear. Again, it is up to the individual to assess this risk and what it is worth to them.

From your analysis and comments I suspect your money will go towards purchasing hardware directly.  Wink

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September 19, 2012, 12:12:12 PM
 #879

I lost some BTC in Giga, the downward trend continues.  Now you wanna "upgrade" me to a new and improved security?  I think I'll be looking for an exit ASAP.

 Cry
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September 19, 2012, 03:12:36 PM
 #880

I lost some BTC in Giga, the downward trend continues.  Now you wanna "upgrade" me to a new and improved security?  I think I'll be looking for an exit ASAP.

 Cry

I'm sorry you don't understand how fixed mhash/s bonds work.
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