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Author Topic: Diablo Mining Company  (Read 87095 times)
DiabloD3
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May 25, 2012, 03:12:35 AM
 #141

Wow, I screwed up my earlier math. Where I said we're at 0.41 mh/$? I forgot to count Bitbond as 2mh bonds, I counted them as 1mh. We're currently at 2799 mhash @ 0.46 mhash/$.

That means we're already in the upper 0.40s, and should pass into the lower 0.50s within 3 months.

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May 25, 2012, 08:22:06 PM
 #142

at 0.1$/kWh you can buy 2 500 000 kWh at 250 000$ or enough for running those BFL mini rigs 50 years. I bet the solar panels is dead way before 2062.

If you promise use wall power instead of solar your project actually looks good.

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May 25, 2012, 08:25:20 PM
 #143

at 0.1$/kWh you can buy 2 500 000 kWh at 250 000$ or enough for running those BFL mini rigs 50 years. I bet the solar panels is dead way before 2062.

If you promise use wall power instead of solar your project actually looks good.
Solar sucks, but I think he is looking at wind power, not solar. And, an additional revenue stream from selling the wind power to the grid.

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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May 25, 2012, 09:01:20 PM
 #144

at 0.1$/kWh you can buy 2 500 000 kWh at 250 000$ or enough for running those BFL mini rigs 50 years. I bet the solar panels is dead way before 2062.

If you promise use wall power instead of solar your project actually looks good.

I think you missed something rather important. Buying power from the power company does not involve the power company paying me for generating power. Notice the large discrepancy between what you want and how the plan was written.

In addition, difficulty will only go up, electricity prices will go up, and those two in combination with prices going down we can end up in a situation where it is no longer profitable to mine. If I remove the only constant operation cost (electricity), then we can mine when everyone else can't.

Green power generation is both a second revenue stream and an insurance policy.

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May 25, 2012, 09:16:03 PM
 #145

at 0.1$/kWh you can buy 2 500 000 kWh at 250 000$ or enough for running those BFL mini rigs 50 years. I bet the solar panels is dead way before 2062.

If you promise use wall power instead of solar your project actually looks good.
Solar sucks, but I think he is looking at wind power, not solar. And, an additional revenue stream from selling the wind power to the grid.

I am still looking at both equally. Large scale wind requires permits and licenses, and even if I had all the paperwork done right now it would take about 2 years start to finish to get the first turbine up.

Solar is fine in Maine, we generate about 1200kwh/yr per 1kw of panel measured on real panels installed in Maine. There are better places in the US for the solar (areas in AZ, NM and TX can do 1600), but there are also worse areas in the continental USA and moving to AZ, NM or TX for superior solar means we're also wasting money on air conditioning and the electricity to run the air conditioning.

Basically, even though I'd generate about 31% more electricity, the cost and overhead of needing air conditioning would cost much more than the 31% I'd be gaining. TINSTAAFL.

http://www.ecotechnousa.com/Portals/0/Media/News/SolarMap-US.gif

That map is overly optimistic and lists Maine as ~1500 kwh/yr and those areas in AZ, NM and TX as 2100, but it illustrates the point well.

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May 25, 2012, 09:20:35 PM
 #146

I'm not sure that I would touch solar until its cost efficiency goes way up. Current panel designs are expensive and inefficient, and that doesn't look like it is changing a lot any time soon.

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May 26, 2012, 02:05:13 AM
 #147

I'm not sure that I would touch solar until its cost efficiency goes way up. Current panel designs are expensive and inefficient, and that doesn't look like it is changing a lot any time soon.

I agree.  Solar is too expensive.

Edit:  The upfront cost of solar is very expensive.  Also you can only run your miners at day-time. Making the initial cost of the miners effectivly 50% more expensive.  Unless you decide to use both solar and paid electricity.  (maybe buy off-peak power, that is cheaper).

One off NP-Hard.
DiabloD3
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May 26, 2012, 03:45:46 AM
 #148

I'm not sure that I would touch solar until its cost efficiency goes way up. Current panel designs are expensive and inefficient, and that doesn't look like it is changing a lot any time soon.

Cost efficiency isn't the issue. It already is efficient enough that it only takes 10-15 years to pay for itself in Maine. The problem is we have no fall back if mining becomes unprofitable: that insurance policy is a very important part of DMC, it is something we offer that no one else does; additionally, having that second revenue stream is also a very important part of DMC.

If wind turbines are not feasible for first gen power gen hardware, then we do solar. Its not like we have a choice, I can't go to Walmart and buy a fridge sized fusion reactor, there isn't many choices.

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May 26, 2012, 03:57:34 AM
 #149

Since that you have only got 1/1000 of your original IPO.  How are you planning to scale up the investment.

Most of the shares bought on GLBSE are being offered for prices less-than the IPO price.

Only once all of those shares are bought, then you will get more IPO investment.

One off NP-Hard.
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May 26, 2012, 03:58:33 AM
 #150

I'm not sure that I would touch solar until its cost efficiency goes way up. Current panel designs are expensive and inefficient, and that doesn't look like it is changing a lot any time soon.

I agree.  Solar is too expensive.

Edit:  The upfront cost of solar is very expensive.  Also you can only run your miners at day-time. Making the initial cost of the miners effectivly 50% more expensive.  Unless you decide to use both solar and paid electricity.  (maybe buy off-peak power, that is cheaper).

I'm not sure where people are getting confused here. At no point have I said I'm going off-grid. I will purchase power at night at off-peak commercial/industrial rates just because I have to for obvious reasons. This doesn't mean there is not a net profit. The Plan includes example numbers for a break even installation, which means selling excess power to the grid at daytime and effectively buying back only what I need cheaper at night.

EVERYTHING has a large upfront cost. I can't think of anything in the world in any industry that doesn't.

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May 26, 2012, 04:02:25 AM
 #151

Since that you have only got 1/1000 of your original IPO.  How are you planning to scale up the investment.

Most of the shares bought on GLBSE are being offered for prices less-than the IPO price.

Only once all of those shares are bought, then you will get more IPO investment.

Most? Your math has much to be desired. Its about 200 shares being sold by people who think they're flipping shares by trading me bonds and selling their shares at a slight premium. They cannot effectively do this without raising bond prices (although, for now, there IS a profit to be made). Existing investors, both those who bond traded and those who bought straight out, have been buying them as fast as possible because they see it as a good deal and want to take advantage of the flippers.

Currently, DMC is using the existing funds to hold hash power at existing mining companies using the bonds issued by those companies.

First dividend day is on the first (or approximately half a month into operation).

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May 26, 2012, 04:09:15 AM
 #152

Currently, DMC is using the existing funds to hold hash power at existing mining companies using the bonds issued by those companies.

First dividend day is on the first (or approximately half a month into operation).

Wow! That is really smart!  DMC is holds a position in other mining companies until it is ready to go ahead with it's main project.  DMC is a very good investment even before the IPO has been completed.

One off NP-Hard.
jav
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May 26, 2012, 07:50:51 AM
 #153

The market isn't very efficient here, sadly. The market is not factoring in the fact that I only pay out 50% of the bond dividends, the other 50% is going into the growth fund (which is now just buying more bonds).

The market isn't very efficient regarding what? The price of DMC? or the price of other mining bonds?

It still doesn't change the fact, that you are giving a rebate to people who do a share swap. It's kind of a early adopter discount, which is fine I guess, except that it didn't apply to the very first buyers, who got in at 1 BTC.

All those differences between DMC and other mining bonds are really not relevant, if you simply compare two situations with the exact same starting position: Namely starting out with 3 BTC and do either:

a) buy 10x YABMC, then swap for 5x DMC
b) buy 3x DMC at IPO price

In both cases I had 3 BTC and afterwards I either have 5x DMC or 3x DMC, showing that the share swap gives a discount. (And since I started out and ended up with no other mining bonds, it's really not relevant what benefits they have or how they compare to DMC.)

Its about 200 shares being sold by people who think they're flipping shares by trading me bonds and selling their shares at a slight premium. They cannot effectively do this without raising bond prices (although, for now, there IS a profit to be made). Existing investors, both those who bond traded and those who bought straight out, have been buying them as fast as possible because they see it as a good deal and want to take advantage of the flippers.

No, it's not a good deal to buy a share from a flipper. Only if you don't want to put in the effort to get the share swap discount yourself makes it sense to buy a share from someone who already did that, but then of course adds a premium for his 'work'.

Cost efficiency isn't the issue. It already is efficient enough that it only takes 10-15 years to pay for itself in Maine. The problem is we have no fall back if mining becomes unprofitable: that insurance policy is a very important part of DMC, it is something we offer that no one else does; additionally, having that second revenue stream is also a very important part of DMC.

I have to disagree here as well. So much disagreeing today, sorry. ;-) But yes, I think cost efficiency is the issue. Solar isn't some magical way to make cheap energy - and you have pointed out as much, quoting a payback time of 10-15 years. So there is a guesstimated price to your own solar electricity and it's a rate which does not greatly differ from the rate you get from the electricity grid. So if mining becomes unprofitable, then you will also reach the point where it falls below your "internal" solar electricity rate at which point it is better to the sell the electricity back to the grid than waste it in an unprofitable mining process.

That said, I don't necessarily think that it's a bad idea. Bitcoin mining is an ideal electricity consumer in the sense, that it can quickly scale down and back up to match supply. So it's a good fit for any fluctuating renewable energy source. And of course consuming your own electricity will usually be preferable to selling it back to the grid where you are paying middlemen and possibly other fees/overhead. So combining a solar farm with Bitcoin mining might give a unique advantage compared to other solar farms which just feed back into the grid and pay this overhead. I just want the economics of this clearly spelled out.

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DiabloD3
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May 26, 2012, 08:21:51 AM
 #154

The market isn't very efficient here, sadly. The market is not factoring in the fact that I only pay out 50% of the bond dividends, the other 50% is going into the growth fund (which is now just buying more bonds).

The market isn't very efficient regarding what? The price of DMC? or the price of other mining bonds?

It still doesn't change the fact, that you are giving a rebate to people who do a share swap. It's kind of a early adopter discount, which is fine I guess, except that it didn't apply to the very first buyers, who got in at 1 BTC.

All those differences between DMC and other mining bonds are really not relevant, if you simply compare two situations with the exact same starting position: Namely starting out with 3 BTC and do either:

a) buy 10x YABMC, then swap for 5x DMC
b) buy 3x DMC at IPO price

In both cases I had 3 BTC and afterwards I either have 5x DMC or 3x DMC, showing that the share swap gives a discount. (And since I started out and ended up with no other mining bonds, it's really not relevant what benefits they have or how they compare to DMC.)


You misunderstood what I said. By trading bonds with me, you are cutting your dividend yield in half. Over the short term, you're losing money, approximately 1/3rd of your total value. Over the long term, you're profiting. The people who are flipping cannot continually flip because it will drive bond prices up to unrealistic levels. It'd only take about 500 BTC to drive all the bonds up to 1 BTC of bonds == 1 DMC share.

If they want to flip a small number of shares, thats their choice, but its no way to seriously invest in DMC.

Quote

Its about 200 shares being sold by people who think they're flipping shares by trading me bonds and selling their shares at a slight premium. They cannot effectively do this without raising bond prices (although, for now, there IS a profit to be made). Existing investors, both those who bond traded and those who bought straight out, have been buying them as fast as possible because they see it as a good deal and want to take advantage of the flippers.

No, it's not a good deal to buy a share from a flipper. Only if you don't want to put in the effort to get the share swap discount yourself makes it sense to buy a share from someone who already did that, but then of course adds a premium for his 'work'.


There are shares sometimes for sale in the 0.60s and it just encourages the flippers to flip more. In the long term, it actually is a profitable move if you're a big DMC investor.

Just figure out what your best deal is with bond prices vs shares in trade, and put a bid up for a bitcent lower than that and catch all the falling shares.

Now, at the moment? I'd flip tygrr.tech, seems to be the best deal.

Quote
Cost efficiency isn't the issue. It already is efficient enough that it only takes 10-15 years to pay for itself in Maine. The problem is we have no fall back if mining becomes unprofitable: that insurance policy is a very important part of DMC, it is something we offer that no one else does; additionally, having that second revenue stream is also a very important part of DMC.

I have to disagree here as well. So much disagreeing today, sorry. ;-) But yes, I think cost efficiency is the issue. Solar isn't some magical way to make cheap energy - and you have pointed out as much, quoting a payback time of 10-15 years. So there is a guesstimated price to your own solar electricity and it's a rate which does not greatly differ from the rate you get from the electricity grid. So if mining becomes unprofitable, then you will also reach the point where it falls below your "internal" solar electricity rate at which point it is better to the sell the electricity back to the grid than waste it in an unprofitable mining process.

That said, I don't necessarily think that it's a bad idea. Bitcoin mining is an ideal electricity consumer in the sense, that it can quickly scale down and back up to match supply. So it's a good fit for any fluctuating renewable energy source. And of course consuming your own electricity will usually be preferable to selling it back to the grid where you are paying middlemen and possibly other fees/overhead. So combining a solar farm with Bitcoin mining might give a unique advantage compared to other solar farms which just feed back into the grid and pay this overhead. I just want the economics of this clearly spelled out.

Its funny how you disagreed, then agreed in the second paragraph.

Once I own the panels, there is no continued cost of operation. Electricity is paid in dollars not bitcoins. If the dollars produced by the mining operation is less than the cost of electricity, we're sunk. Solar/wind is an insurance policy in which if I consume 100% of it... it costs me nothing to mine in adverse conditions.

Lets say, for example, tomorrow, difficulty suddenly changes to 10 million. Most of the existing large scale farms will shut down, and if this 10 million becomes the norm, they will shut down FOREVER.

Lets say BTC prices plummet to 50 cents, and this becomes the norm. Farms shutdown forever.

Electricity prices double. Farms shutdown. Forever.

DMC, however? We're still up and running as if nothing happened.

This is an insurance policy that is well worth its cost. The fact it can also generate revalue is also a useful aspect.

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May 26, 2012, 08:59:59 AM
 #155

You can get ASIC designed for $1 million and then sell the resulting hardware which distributes the hashing power more evenly.

Edit: I see you already took that into account.

With the price of solar panels and their efficiency continually improving it makes a lot of sense to go that route.



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May 26, 2012, 09:20:34 AM
 #156

You can get ASIC designed for $1 million and then sell the resulting hardware which distributes the hashing power more evenly.

Nope. $1 million would effectively get me a SASIC solution on 65nm or a very badly designed non-SASIC solution that would perform worse. You need $10 million minimum to do ASIC right and still have to sell them with a high markup.

I doubt you'd break 5mh/$, not an efficient use of the $10m.

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May 26, 2012, 09:22:56 AM
 #157

You misunderstood what I said. By trading bonds with me, you are cutting your dividend yield in half.

If I am only buying the bonds to trade them with you then no, I'm not really cutting my dividend yield in half. In the same way that when I buy an mp3 player to swap for a laptop, it's irrelevant what features the mp3 player has (and I subsequently "lost" access to). I only bought it because it was cheaper than buying the laptop outright.

The people who are flipping cannot continually flip because it will drive bond prices up to unrealistic levels.

That's true. But just because this rebate can't go on forever, doesn't mean it's not a rebate.

Once I own the panels, there is no continued cost of operation.

Only if by "own" you mean completely payed off. (Is that what you meant?) So in 10-15 years you have no continued cost of operation.

By your logic a miner that becomes unprofitable could just go out and buy a solar panel and then say: Hey look, no continued cost of operation anymore, I can fire up my miners again.

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May 26, 2012, 09:40:29 AM
 #158

You misunderstood what I said. By trading bonds with me, you are cutting your dividend yield in half.

If I am only buying the bonds to trade them with you then no, I'm not really cutting my dividend yield in half. In the same way that when I buy an mp3 player to swap for a laptop, it's irrelevant what features the mp3 player has (and I subsequently "lost" access to). I only bought it because it was cheaper than buying the laptop outright.

The people who are flipping cannot continually flip because it will drive bond prices up to unrealistic levels.

That's true. But just because this rebate can't go on forever, doesn't mean it's not a rebate.

Quote

Yes, but if your goal is short term profit... that doesn't work here. DMC does not have a high enough volume to flip quickly.

There is a difference between flippers and investors. If an investor buys bonds just to trade with me and intends on holding DMC long term, fine, you can call it a rebate of sorts, just a very thin one. Problem is, most of the bonds traded to me were not purchased originally for that purpose.

Out of the 1200 shares sold, around 200 were purchases straight out, around 200 are up for sale by the flippers, and the other 1000 were traded with existing bonds not purchased for the purpose of trading with me.

Once I own the panels, there is no continued cost of operation.

Only if by "own" you mean completely payed off. (Is that what you meant?) So in 10-15 years you have no continued cost of operation.

By your logic a miner that becomes unprofitable could just go out and buy a solar panel and then say: Hey look, no continued cost of operation anymore, I can fire up my miners again.

No, not "completely played off". This isn't a bank loan. I own the panels in full on day one. There is no money further removed from the DMC bank account after day one. I exchange money I have now for money I don't have to pay in the future. I cannot predict the future: I know I have the money now and I do not know if I will still have sufficient money in the future.

And yes, by my logic, if cost of electricity is your largest problem... then lower the cost of electricity until its no longer a problem.

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May 26, 2012, 09:57:53 AM
 #159

If you have excess land you could run alpacas on it, they are pretty much self sufficient lol.




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May 26, 2012, 10:12:53 AM
 #160

You need $10 million minimum to do ASIC right and still have to sell them with a high markup.

$10M might be the ballpark if you go for a leading edge process like 32nm, but if you settle for an older process you are between one and two orders of magnitude wrong. Let me put it this way: write me a check for $1M and Ill provide you with 5TH worth of bitcoin asics within the next 12 months.

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