Bitcoin Forum
September 22, 2018, 07:54:58 PM *
News: ♦♦ New info! Bitcoin Core users absolutely must upgrade to previously-announced 0.16.3 [Torrent]. All Bitcoin users should temporarily trust confirmations slightly less. More info.
 
   Home   Help Search Donate Login Register  

Warning: Moderators do not remove likely scams. You must use your own brain: caveat emptor. Watch out for Ponzi schemes. Do not invest more than you can afford to lose.

Pages: « 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 [30] 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 »
  Print  
Author Topic: Diablo Mining Company  (Read 95727 times)
DiabloD3
Legendary
*
Offline Offline

Activity: 1162
Merit: 1000


DiabloMiner author


View Profile WWW
September 14, 2012, 10:46:26 PM
 #581

That is Apple's solar farm powered data center facility. They have one, so why can't Bitcoin?
The problem is you don't even seem to understand the term "costs".
You cannot eliminate operating costs, with solar power, you can only substitute them with other costs.
(power with mainatanence-costs, capital-costs (interest or opportunity costs), insurance etc.)

Thats not true. Even here in Maine, (at today's power prices) solar panels will last around 30 years and hit ROI in 15 through resale at retail electricity prices alone; commercial and industrial power prices are still higher than retail, so if we consume most of are electricity that way the ROI is higher.

Now, see where I said "at today's power prices"? Prices will only go up. We can pay an upfront price now in a large lump sum, or we can pay several times that over the next 30 years. You call it substitution of cost, I call it massive reduction in cost. The largest cost of a data center is power, which I've dealt with in two ways.

The first is obviously the green power, the second is the fact that we are so north and that are summers are so mild that we won't need 24/7/365 HVAC. I've done preliminary cost analysis on a water chilled in row cooling system using a larger than needed water tower for external heat exchange plus large scale air economization, we'll use a lot less power than, say, building it in MD/DC/VA or SoCA/AZ/NM/TX like a lot of DCs are being built, even if you account for better solar coverage than Maine.

1537646098
Hero Member
*
Offline Offline

Posts: 1537646098

View Profile Personal Message (Offline)

Ignore
1537646098
Reply with quote  #2

1537646098
Report to moderator
1537646098
Hero Member
*
Offline Offline

Posts: 1537646098

View Profile Personal Message (Offline)

Ignore
1537646098
Reply with quote  #2

1537646098
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
DiabloD3
Legendary
*
Offline Offline

Activity: 1162
Merit: 1000


DiabloMiner author


View Profile WWW
September 14, 2012, 11:03:14 PM
 #582

Even in the op, the closest you could have come was buying a small building and getting solar covering the roof
You potentially would have been able to run a rack or two for mining, then rent space.

There would be at least as much space for two or three dozen racks, and we'd be aiming at high density computing.

Not all racks are created equal, many data centers are equipped to handle only 2 to 4 kw of gear in a rack, we'd be at 25-30kw of gear per rack. People are paying $20-30k/mo per rack space for high density computing, were as a sparsely populated rack 2kw would only go for $1k/mo, sometimes less if you find a really good deal.

Now, if I can get a suitable building cheaply and can be renovated for our needs? That could be a lot more than just three dozen racks.

DiabloD3
Legendary
*
Offline Offline

Activity: 1162
Merit: 1000


DiabloMiner author


View Profile WWW
September 14, 2012, 11:05:32 PM
 #583

(...) went against the original contract (...)

Where?

DiabloD3
Legendary
*
Offline Offline

Activity: 1162
Merit: 1000


DiabloMiner author


View Profile WWW
September 14, 2012, 11:10:24 PM
 #584

Now, see where I said "at today's power prices"? Prices will only go up. We can pay an upfront price now in a large lump sum, or we can pay several times that over the next 30 years. You call it substitution of cost, I call it massive reduction in cost. The largest cost of a data center is power, which I've dealt with in two ways.
Why should the prices go up if even you can provide power for less.
Wouldn't the market regulate itself with new suppliers?

Ask your parents what they used to pay for electricity before you were born. It was much lower than what they pay now.

The prices are only going to continue going up, and there is no indication this will stop. The market is already heavily regulated and power companies are operated as state sponsored legal monopolies.

Quote
I wold not object to solar panels as a political project, but that should not be part of DMC, and even than it would only work if the calculations are founded on solid data.

Its been part of the plan since the beginning. If you don't like it, then don't invest.

DiabloD3
Legendary
*
Offline Offline

Activity: 1162
Merit: 1000


DiabloMiner author


View Profile WWW
September 15, 2012, 12:59:06 AM
 #585

Now, see where I said "at today's power prices"? Prices will only go up. We can pay an upfront price now in a large lump sum, or we can pay several times that over the next 30 years. You call it substitution of cost, I call it massive reduction in cost. The largest cost of a data center is power, which I've dealt with in two ways.
Why should the prices go up if even you can provide power for less.
Wouldn't the market regulate itself with new suppliers?
Ask your parents what they used to pay for electricity before you were born. It was much lower than what they pay now.
The prices are only going to continue going up, and there is no indication this will stop. The market is already heavily regulated and power companies are operated as state sponsored legal monopolies.
That was a rhetorical question.
Income and inflation outweigh the price increase - so in fact it has become cheaper.
Panel prices will also drop.
Wind powered energy is still technologically advancing, also.
Don't confuse USD inflation with bitcoin inflation.

I wold not object to solar panels as a political project, but that should not be part of DMC, and even than it would only work if the calculations are founded on solid data.

Its been part of the plan since the beginning. If you don't like it, then don't invest.
If you are able to do the calculations, I won't object.


Here in Maine, since I moved here 23 years ago, power prices per kwh have doubled while my kwh monthly usage has decreased. My entire bill is not kwh, so my overall bill hasn't doubled; but compared to USD inflation, USD has not inflated that quickly (only 85%).

I've done some of the calculations for solar earlier in the thread and in the op: it costs about $700 per 1kw of panel installed which produces 1200kwh actual per year in Maine. According to the EPA's Electric Power Monthly report*, commercial electricity is 10.76 cents a kwh, industrial 7.49 cents a kwh; these are retail prices include distribution/transmission overhead (for example, I pay 0.071 per kwh from the supplier, 0.068 per kwh for the distribution, 0.023 for the transmission, for a total of 0.162 cents per kwh for residential, which is actually a tad higher than the EPA's report). Maine pays net energy billing for facilities 660kw or less with a rolling 12 month window, plus I can resell power back to them at wholesale rates (a little less than than the 0.071 cents/kwh from the supplier in my above example) for anything over that.

Now, that cap is 660kw not 660kwh. As in, I could install 660kw panels of panels and generate 792Mwh a year of power and pay effectively $0** to Bangor Hydro, our local power company, for the first 792Mwh of usage of the year.

792Mwh would cost me (assuming a commercial rate instead of industrial, I'm not sure what the minimum is to get into industrial) $85,219. 660kw of panels would cost $462,000 to install, or only a little under 6 years at current rates. These panels will last about 30 years give or take, so at today's rates that is $2.556 million dollars of electricity for an up front cost of $462,000, or about 5.5 times cheaper power. The same numbers for industrial are $1.779 million, or 3.8x cheaper.

To further run the numbers, 792Mwh a year, 22kw per rack maximum usage including cooling, that is 4 racks fully loaded at 24/7 max power usage, or about 8-16 loaded more conventionally.

Edit: $700 per 1kw does not include single/multi-axis tracking systems. Here in Maine they tend to not be worth it, although because panels are getting smaller/energy densities are getting higher, they may be worth it in the future.

* http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_06_a
** not sure how the taxes work here, but thats around 4% of the bill

DiabloD3
Legendary
*
Offline Offline

Activity: 1162
Merit: 1000


DiabloMiner author


View Profile WWW
September 15, 2012, 01:28:31 AM
 #586

Nefario just got done explaining on IRC that the audit is already in process. [\\\] is imsaguy.

[08:43:47] <nefario> I've hired an outside party with qualifications
[08:44:01] <nefario> they will work out a profit and loss
[08:44:14] <nefario> then I'm getting someone else to write a report (another auditor)
[08:44:17] <nefario> and finally
[08:44:33] <nefario> a third person to verify the profit and loss, and report are correct
[08:46:36] <Diablo-D3> I dont trust you to chose auditors.
[08:47:07] <nefario> I've only gotten one so far
[08:47:09] <mircea_popescu> why not ? he could "hire" usagi, an anonymous "3rd party" with "qualifications". he knows ito integral calculus!
[08:47:12] <[\\\]> <nefario> I've hired an outside party with qualifications << whom?
[08:47:18] <[\\\]> the auditor should be well known
[08:47:24] <[\\\]> in fact, its announced BEFORE the audit
[08:47:26] <Diablo-D3> I agree with imsaguy
[08:47:29] <[\\\]> at least on a real stock exchange
[08:47:35] <Diablo-D3> this whole thing is extremely shady
[08:47:49] <Diablo-D3> not only that, the shareholders should have to agree to the chosen auditors as well
[08:47:54] <[\\\]> aye
[08:48:03] <[\\\]> I think Diablo-D3 is a douchebag
[08:48:04] <[\\\]> don't get me wrong
[08:48:07] <[\\\]> but this stinks of shady

(nefario goes on to talk about the london Bitcoin conference)

[08:48:43] <[\\\]> notice how my questions go unanswered?
[08:48:47] <[\\\]> Who is doing the audit?

(nefario continues to ignore the question)

[08:50:02] <[\\\]> Who is doing the audit of DMC?
[08:51:06] <nefario> [\\\]: I'll announce it later

So, shareholders. Not only do you not get to vote on who the auditors will be, nefario will not even say who they are. The report may not even be released until AFTER the vote. He also refused to answer the question if smickles would be allowed to be one of the auditors (one of the few people I trust to fairly look at corporate financials).

What gives, nefario? You claim I haven't been transparent enough, and you turn around and do worse?

Deprived
Hero Member
*****
Offline Offline

Activity: 532
Merit: 500


View Profile
September 15, 2012, 01:40:21 AM
 #587


792Mwh would cost me (assuming a commercial rate instead of industrial, I'm not sure what the minimum is to get into industrial) $85,219. 660kw of panels would cost $462,000 to install, or only a little under 6 years at current rates.


That's assuming no maintenance costs.

If the investment is in BTC then that's also assuming the BTC/US$ rate remains unchanged.  If, for example, BTC doubles in value aginst the $ in those 6 years then after the 6 years (assuming zero maintenance costs) you'd still only have made back half your initial investment in BTC.

Where what you propose really starts to fall down is if you compare it to any other investments on here - or even directly to mining.  Compare s[pending that money on power-generation to spending it on more mining power (and just buying the power) and using part of mined income to expand.  You'll find the mining makes way more profit (or less loss) whether BTC gos up. down or stays unchanged vs the us$ (only possible exception is if it devalues far less quickly AND bitcoin crashes in price).  All the solar-power does is suck away loads of the cash for a possible tiny return a long way down the line.

I don't dispute your claim that long-term investing US$ in solar power could generate some profit.  But we're talking baout investing BTC not US$ - and you need to compare it to other investment available.  Just because something could make a profit doesn't mean it's a good idea to it - if there's other options equally (or more) accessible that could make more.  Unless, of course, the decision to do it is entirely politically rather than economically driven.

Without ongoing maintenance costs your estimate of 6 years is totally unrealistic. For one thing you'd need insurance - or if someone vandalises it are the shareholders just supposed to kiss goodbye to their investment?
DiabloD3
Legendary
*
Offline Offline

Activity: 1162
Merit: 1000


DiabloMiner author


View Profile WWW
September 15, 2012, 02:53:21 AM
 #588


792Mwh would cost me (assuming a commercial rate instead of industrial, I'm not sure what the minimum is to get into industrial) $85,219. 660kw of panels would cost $462,000 to install, or only a little under 6 years at current rates.


That's assuming no maintenance costs.

If the investment is in BTC then that's also assuming the BTC/US$ rate remains unchanged.  If, for example, BTC doubles in value aginst the $ in those 6 years then after the 6 years (assuming zero maintenance costs) you'd still only have made back half your initial investment in BTC.

Where what you propose really starts to fall down is if you compare it to any other investments on here - or even directly to mining.  Compare s[pending that money on power-generation to spending it on more mining power (and just buying the power) and using part of mined income to expand.  You'll find the mining makes way more profit (or less loss) whether BTC gos up. down or stays unchanged vs the us$ (only possible exception is if it devalues far less quickly AND bitcoin crashes in price).  All the solar-power does is suck away loads of the cash for a possible tiny return a long way down the line.

I don't dispute your claim that long-term investing US$ in solar power could generate some profit.  But we're talking baout investing BTC not US$ - and you need to compare it to other investment available.  Just because something could make a profit doesn't mean it's a good idea to it - if there's other options equally (or more) accessible that could make more.  Unless, of course, the decision to do it is entirely politically rather than economically driven.

Without ongoing maintenance costs your estimate of 6 years is totally unrealistic. For one thing you'd need insurance - or if someone vandalises it are the shareholders just supposed to kiss goodbye to their investment?

Yes, that does not include maintenance costs.

Dragging BTC/USD exchange prices into this is a red herring. It doesn't matter what the price of BTC is because the power company charges us in USD. Power usage is the largest operating cost of a data center, more so than anything else by a huge margin, and this operating cost can only be measured in USD.

Solar power, as I demonstrated, can reduce this operational cost by up to 1/5th. Let me repeat what I just said: our largest operational cost, a smart investment early on can reduce this to 1/5th. This is an economically driven decision, and it is not a tiny return on investment whatsoever.

Insurance cannot be applied solely to the solar panels, such insurance would apply to everything, and would be a separate operational cost, thus obviously not included here in these calculations.

Additionally, small scale solar panel installations are surprisingly low maintenance if they don't have sun trackers (no moving parts). Maintenance will obviously only cost a fraction of what we paid for the panels no matter how difficult the maintenance is.

Deprived
Hero Member
*****
Offline Offline

Activity: 532
Merit: 500


View Profile
September 15, 2012, 03:03:53 AM
 #589

So, shareholders. Not only do you not get to vote on who the auditors will be, nefario will not even say who they are. The report may not even be released until AFTER the vote. He also refused to answer the question if smickles would be allowed to be one of the auditors (one of the few people I trust to fairly look at corporate financials).

What gives, nefario? You claim I haven't been transparent enough, and you turn around and do worse?

I'd agree with you this extent:

If you aren't able to get a .csv file of your transactions yourself (due to being locked out of your account), nefario should generate one and send it to you.  Then you can get whoever you want to examine it and compare it to whatever nefario's auditor(s) produce.

If you're genuinely concerned about transparency then all you have to do is authorise nefario to release the .csv to all.  Your strawman about protecting the identity of others you traded with has already been blown away.
Deprived
Hero Member
*****
Offline Offline

Activity: 532
Merit: 500


View Profile
September 15, 2012, 03:15:37 AM
 #590


Yes, that does not include maintenance costs.

Dragging BTC/USD exchange prices into this is a red herring. It doesn't matter what the price of BTC is because the power company charges us in USD. Power usage is the largest operating cost of a data center, more so than anything else by a huge margin, and this operating cost can only be measured in USD.

Solar power, as I demonstrated, can reduce this operational cost by up to 1/5th. Let me repeat what I just said: our largest operational cost, a smart investment early on can reduce this to 1/5th. This is an economically driven decision, and it is not a tiny return on investment whatsoever.

Insurance cannot be applied solely to the solar panels, such insurance would apply to everything, and would be a separate operational cost, thus obviously not included here in these calculations.

Additionally, small scale solar panel installations are surprisingly low maintenance if they don't have sun trackers (no moving parts). Maintenance will obviously only cost a fraction of what we paid for the panels no matter how difficult the maintenance is.

The more you post, the more obvious it becomes you really don't have any clue whatsoever.

If investors invest BTC then profit/loss needs to be measured primarily in BTC.  VERY simple example using small round numbers.  These figures ONLY demonstrate the effect exchange rate has  and have NOTHING to do with how long it would take to break even.

We'll say current exchange rate is $10=1 BTC
WEll say equipment costs $1000 (10 BTC)
We'll say your electric costs/week are $5 and your equipment reduces that to $1
So your equipment is saving you $4 = 0.4 BTC per week and is worth $1000 (10 BTC)

Now let's say at some point later the exchange rate is now $20=1 BTC
Your equipment is still worth $1000 - but that's now only 5 BTC
And you're still saving $4 per week in electic costs - but that's now only 0.2 BTC

Electricty being sold in US$ does NOT cancel out the impact of exchange-rate fluctuations on the value of the actual equipment.  It actually ADDS to the impact of exchange-rate fluctuations.

When you're talking about a mining operation that is cancelled out to some extent by the increased value of mined coins.  If you're talking about a data-centre which sells its services in US$ then the exchange rate also has huge impact on profitability (expressed in BTC).

Put very simply, even if everything else works out as good about your plan, your plan is doomed to utter and complete failure (when expressed in BTC) if BTC continues to gain strength vs the dollar.

At best your plan could be considered as shorting BTC (or at least betting that it wont rise against the dollar) - until, of course, we consider the utterly pathetic rate of return it would give even if all your optimistic expectations proved true.
dishwara
Legendary
*
Offline Offline

Activity: 1806
Merit: 1013



View Profile
September 15, 2012, 03:46:29 AM
 #591


Yes, that does not include maintenance costs.

Dragging BTC/USD exchange prices into this is a red herring. It doesn't matter what the price of BTC is because the power company charges us in USD. Power usage is the largest operating cost of a data center, more so than anything else by a huge margin, and this operating cost can only be measured in USD.

Solar power, as I demonstrated, can reduce this operational cost by up to 1/5th. Let me repeat what I just said: our largest operational cost, a smart investment early on can reduce this to 1/5th. This is an economically driven decision, and it is not a tiny return on investment whatsoever.

Insurance cannot be applied solely to the solar panels, such insurance would apply to everything, and would be a separate operational cost, thus obviously not included here in these calculations.

Additionally, small scale solar panel installations are surprisingly low maintenance if they don't have sun trackers (no moving parts). Maintenance will obviously only cost a fraction of what we paid for the panels no matter how difficult the maintenance is.

The more you post, the more obvious it becomes you really don't have any clue whatsoever.

If investors invest BTC then profit/loss needs to be measured primarily in BTC.  VERY simple example using small round numbers.  These figures ONLY demonstrate the effect exchange rate has  and have NOTHING to do with how long it would take to break even.

We'll say current exchange rate is $10=1 BTC
WEll say equipment costs $1000 (10 0 u missed a zero BTC)
We'll say your electric costs/week are $5 and your equipment reduces that to $1
So your equipment is saving you $4 = 0.4 BTC per week and is worth $1000 (10 0 u missed a zero BTC)

Now let's say at some point later the exchange rate is now $20=1 BTC
Your equipment is still worth $1000 - but that's now only 5 0 u missed a zero BTC
And you're still saving $4 per week in electic costs - but that's now only 0.2 BTC

Electricty being sold in US$ does NOT cancel out the impact of exchange-rate fluctuations on the value of the actual equipment.  It actually ADDS to the impact of exchange-rate fluctuations.

When you're talking about a mining operation that is cancelled out to some extent by the increased value of mined coins.  If you're talking about a data-centre which sells its services in US$ then the exchange rate also has huge impact on profitability (expressed in BTC).

Put very simply, even if everything else works out as good about your plan, your plan is doomed to utter and complete failure (when expressed in BTC) if BTC continues to gain strength vs the dollar.

At best your plan could be considered as shorting BTC (or at least betting that it wont rise against the dollar) - until, of course, we consider the utterly pathetic rate of return it would give even if all your optimistic expectations proved true.

missed zeros, even though missed, still has value.

Open Altcoin Github
Limxtec Telegram












Bitsend BSD
The ultimate longterm rollout!
The first Masternodecoin with Segwit

Web: www.bitsend.info












Bitcore BTX
Are you ready for the future?!
The first hybrid fork from BTC

Web: www.bitcore.cc












Github.com/Limxtec
classic bitcoin core
electrum core
insight core
 












Developers
Plattform with
over 19 people!

 












Diamond DMD
Bitcloud BTDX
Megacoin MEC
Europecoin ERC

████
 ████
  ████
   ████
    ████
     ████
      ████
       ████
        ████
       ████
      ████
     ████
    ████
   ████
  ████
 ████
████

████
 ████
  ████
   ████
    ████
     ████
      ████
       ████
        ████
       ████
      ████
     ████
    ████
   ████
  ████
 ████
████
[/center]
Deprived
Hero Member
*****
Offline Offline

Activity: 532
Merit: 500


View Profile
September 15, 2012, 04:17:29 AM
 #592


missed zeros, even though missed, still has value.

Oops - though it doesn't change anything about the principle involved.  Originally had the costs 1/10th the size but then increased them just in case Diablo started talking about how my figures proved what a huge return the equipment gave.  Of course forgot to also amend the BTC values up by a factor of 10.
SebastianJu
Legendary
*
Offline Offline

Activity: 2198
Merit: 1013


Legendary Escrow Service - Tip Jar in Profile


View Profile WWW
September 15, 2012, 11:40:21 AM
 #593

@MoinCoin... youre right that the energy in germany does cost more now. But one reason is because the high energy companies doesnt need to pay the fee for the new energies. Made by the government. That means all normal people have to pay their share of this cost.
But thats not the only one. In fact the power price is way too high. The much solarpower made the price of energy at the energy exchange drop. But the companies take this win in their own pocket. So they can pretend that the new energies are bad and that their own atomic power is best.

Here some infos. Unfortunately only in german.
Der zweite Link ist eine Grafik wo aus einer Studie heraus die echten Kosten des Stroms gezeigt werden. Weil Atomstrom usw immer auch staatliche Zuschüsse bedeutet:

"Der preissenkende Effekt (der „Merit-Order-Regelung*) wird mit zunehmender Einspeisung erneuerbarer Energien größer als der preiserhöhende Umlage-Effekt (durch die Einspeisevergütungen) , wird aber von den Versorgern nicht an die Verbraucher weitergegeben, sondern in die eigene Tasche gesteckt. Seit Jahren wird lediglich der preiserhöhende Effekt auf den Stromrechnungen als „EEG-Differenzkosten“ für erneuerbare Energien ausgewiesen. Die Stromkunden glauben dann, Strom aus erneuerbaren Energien würde sie um diesen Betrag finanziell stärker belasten als Strom aus fossiler Energie und Atomenergie. Doch das ist ein Irrtum, der durch das Bundeswirtschaftsministerium und die Stromwirtschaft zu Lasten der erneuerbaren Energien gerne gepflegt wird."
Von: http://www.nachdenkseiten.de/?p=14101

Na und den "billigen Strom" kann man sich ja hier mal anschauen: http://www.greenpeace-energy.de/uploads/pics/Stromkostenstudie_Pressegrafik_1.jpg
Von: http://www.greenpeace-energy.de/presse/pressedetails/article/verbraucher-zahlen-versteckte-konventionelle-energien-umlage-fuer-kohle-und-atomstrom.html

http://www.handelsblatt.com/politik/deutschland/studie-zu-strompreisen-kohle-und-atom-teurer-als-oekostrom/7059298.html

Please ALWAYS contact me through bitcointalk pm before sending someone coins.
DiabloD3
Legendary
*
Offline Offline

Activity: 1162
Merit: 1000


DiabloMiner author


View Profile WWW
September 15, 2012, 01:26:50 PM
 #594


Yes, that does not include maintenance costs.

Dragging BTC/USD exchange prices into this is a red herring. It doesn't matter what the price of BTC is because the power company charges us in USD. Power usage is the largest operating cost of a data center, more so than anything else by a huge margin, and this operating cost can only be measured in USD.

Solar power, as I demonstrated, can reduce this operational cost by up to 1/5th. Let me repeat what I just said: our largest operational cost, a smart investment early on can reduce this to 1/5th. This is an economically driven decision, and it is not a tiny return on investment whatsoever.

Insurance cannot be applied solely to the solar panels, such insurance would apply to everything, and would be a separate operational cost, thus obviously not included here in these calculations.

Additionally, small scale solar panel installations are surprisingly low maintenance if they don't have sun trackers (no moving parts). Maintenance will obviously only cost a fraction of what we paid for the panels no matter how difficult the maintenance is.

The more you post, the more obvious it becomes you really don't have any clue whatsoever.

If investors invest BTC then profit/loss needs to be measured primarily in BTC.  VERY simple example using small round numbers.  These figures ONLY demonstrate the effect exchange rate has  and have NOTHING to do with how long it would take to break even.

We'll say current exchange rate is $10=1 BTC
WEll say equipment costs $1000 (10 BTC)
We'll say your electric costs/week are $5 and your equipment reduces that to $1
So your equipment is saving you $4 = 0.4 BTC per week and is worth $1000 (10 BTC)

Now let's say at some point later the exchange rate is now $20=1 BTC
Your equipment is still worth $1000 - but that's now only 5 BTC
And you're still saving $4 per week in electic costs - but that's now only 0.2 BTC

Electricty being sold in US$ does NOT cancel out the impact of exchange-rate fluctuations on the value of the actual equipment.  It actually ADDS to the impact of exchange-rate fluctuations.

When you're talking about a mining operation that is cancelled out to some extent by the increased value of mined coins.  If you're talking about a data-centre which sells its services in US$ then the exchange rate also has huge impact on profitability (expressed in BTC).

Put very simply, even if everything else works out as good about your plan, your plan is doomed to utter and complete failure (when expressed in BTC) if BTC continues to gain strength vs the dollar.

At best your plan could be considered as shorting BTC (or at least betting that it wont rise against the dollar) - until, of course, we consider the utterly pathetic rate of return it would give even if all your optimistic expectations proved true.

See, I said it was a red herring, and you just demonstrated why. Don't worry, I fell for this early on too.

Let me repeat something, the electricity costs USD no matter what. If electricity is our largest operating cost, it doesn't matter if it costs thousands of dollars or dozens of Bitcoins... if I can cut that the whole way down to 1/5th of it, we save thousands, or we save dozens. That operating cost doesn't go away because we calculated the math in a different currency.

BTC prices since its inception have been rather random. Without an actual economy to back Bitcoin, it will continue to be unstable. Your example of BTC doubling is just as possible as BTC halving. We pay electricity in dollars, hell, we pay every cost in dollars, it simply doesn't matter what the price of BTC is now or what it will be in the future, we must pay those costs.

bitcoinbear
Hero Member
*****
Offline Offline

Activity: 518
Merit: 500


View Profile
September 15, 2012, 02:11:22 PM
 #595

After reading through this thread, I think Diablo deserves a "SCAMMER" tag. Anybody want to start a thread over in scam accusations?

CryptoNote needs you! Join the elite merged mining forces right now here in Fantomcoin topic: https://bitcointalk.org/index.php?topic=598823.0
Deprived
Hero Member
*****
Offline Offline

Activity: 532
Merit: 500


View Profile
September 15, 2012, 03:05:34 PM
 #596


Let me repeat something, the electricity costs USD no matter what. If electricity is our largest operating cost, it doesn't matter if it costs thousands of dollars or dozens of Bitcoins... if I can cut that the whole way down to 1/5th of it, we save thousands, or we save dozens. That operating cost doesn't go away because we calculated the math in a different currency.

BTC prices since its inception have been rather random. Without an actual economy to back Bitcoin, it will continue to be unstable. Your example of BTC doubling is just as possible as BTC halving. We pay electricity in dollars, hell, we pay every cost in dollars, it simply doesn't matter what the price of BTC is now or what it will be in the future, we must pay those costs.

The point is that for a bit-coin mining operation (what Diablo claims to be) your revenues are produced in BTC not US$.  Each block mined produces the same number of coins irrespective of the exchange rate.

When the exchange rate changes, the cost of mining (the electricity element) also changes.

If, at the current exchange rate, the cost in electricity to generate 1 BTC is X BTC (X would be less than 1) then were the exchange rate to double (twice as many US$ per BTC) then the new cost in electricty to generate 1 BTC would be X/2 BTC.  This is a simplfication - ignoring the impact rising difficulty has.

YES - you still DO save money by having cheaper electricity.  But it's less of a saving.  If you're saving less per unit mined the time needed to reach break-even obviously also increases.

Further unless mining is inherently unprofitable (i.e. even with free electricty you couldn't make a profit) then there MUST be an elecricity price (expressed in BTC) where it's more profitable to invest in more mining gear than to invest in cheaper electricty costs. 

This is indisputable - just consider the extreme where electricty were free (or as near free as made no difference).  Hopefully you can see that at point there'd be zero value investing in cheaper power.  Now there's also the other extreme - if the electrical cost of generating 1 BTC WAS 1 BTC then there'd be no way to make a profit UNLESS you invested in (or otherwise obtained) cheaper power.

Somewhere in between is the point at which investing in cheaper electricty makes more sense than investing in additional hardware and buying the higher electricty rate. 

Now here's where you're going wrong:

1.  Nowhere in this thread have you made any effort to calculate where that cross-over point is - yet the only possible financial justification for investing in generating power rather than using the same cash to invest in more mining gear is that there's some non-trivial chance that it's actually more profitable to do.
2.  You don't seem able to grasp that the exchange-rate has a huge impact on where that crossover point is.

Let me explain point 2 for you.

Let's say we'd bought our hardware and were mining.  We'd worked out that the point at which investing in  cheaper power was better than buying more mining hardware was X BTC (X<1) to mine 1 BTC.  Your power currently costs X*1.5 BTC to mine 1 BTC - so all looks rosy.  But now the exchange rate doubles.  Suddenly the cost to mine 1 BTC has dropped to X*0.75 BTC - and we're in territory where we're now making less profit (or more loss) than if we'd just spent all the capital on mining gear.

And if the exchange rate rises further then each rise just makes even worse the loss of value gained.

All I'm trying to prove to you here is that IF you denominate the investment in BTC then exchange-rate fluctuations can have a huge impact on profitability.  I can't see why anyone would invest when you've produced no calculations or figures that address this at all.

There's even the theoretical possibility that exchange-rate fluctuation could make investing in solar-power completely unprofitable (expreseed in BTC) even if it ran for the whole 30 years life-span and all power was sold off at market rate.

 You're selling shares denominated in BTC - so the base-point for calculation of profit is "how well would investing do, compared to leaving the BTC sitting in my wallet".  Whenever you invest in something that generates product valued in US$ then the answer will ALWAYS be "that depends very much on how the exchange-rate fluctuates." 

And when you're considering investing in two different things (mining and generating power) it's not a bad idea to work out how profitable each of them is - then you may well see you could make way more money (and have less complication) just doing twice as much of one of them with the same capital.

I've only referred to mining here - not to running a data-centre.  That's because this apaprently is (or was supposed to be) a mining company.
novusordo
Sr. Member
****
Offline Offline

Activity: 444
Merit: 250


View Profile
September 15, 2012, 05:56:27 PM
 #597

After reading through this thread, I think Diablo deserves a "SCAMMER" tag. Anybody want to start a thread over in scam accusations?

How in the world could you rationally accuse Diablo of scamming? Do you know what the word "scam" means?

"Scam: Noun. A confidence game or other fraudulent scheme, especially for making a quick profit; swindle."

Has he been fraudulent to make a quick profit? No. He's caused DMC to lose value. Nobody wins in that situation, so I can't imagine he'd ever do that on purpose.
Puppet
Legendary
*
Offline Offline

Activity: 980
Merit: 1007


View Profile
September 15, 2012, 06:41:35 PM
 #598

Has he been fraudulent to make a quick profit? No.

How do you know that? Until we get to see the full logs of what he did, you are left with the choice between unbelievably incompetent and corrupt. Possibly both. Since he has been caught lying and blatantly refuses to show the logs which should exonerate him if he didnt do anything wrong (only incredibly stupid) , Im going to have assume there is at least some corruption involved.
Atlas
Newbie
*
Offline Offline

Activity: 56
Merit: 0


View Profile
September 15, 2012, 06:43:50 PM
 #599

Diablo is just an idiot and highly incompetent. I wouldn't give him the prestige of a scammer.
SebastianJu
Legendary
*
Offline Offline

Activity: 2198
Merit: 1013


Legendary Escrow Service - Tip Jar in Profile


View Profile WWW
September 15, 2012, 06:50:03 PM
 #600

After reading through this thread, I think Diablo deserves a "SCAMMER" tag. Anybody want to start a thread over in scam accusations?

How in the world could you rationally accuse Diablo of scamming? Do you know what the word "scam" means?

"Scam: Noun. A confidence game or other fraudulent scheme, especially for making a quick profit; swindle."

Has he been fraudulent to make a quick profit? No. He's caused DMC to lose value. Nobody wins in that situation, so I can't imagine he'd ever do that on purpose.

I dont believe he made it on purpose too. But getting warnings over and over and still doing wrong things is hard on the edge.

Please ALWAYS contact me through bitcointalk pm before sending someone coins.
Pages: « 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 [30] 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 »
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!