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Question: Should I start Diablo Mining Company, a 1M BTC startup?  (Voting closed: May 02, 2012, 06:23:32 PM)
Yes - 49 (43.4%)
No - 64 (56.6%)
Total Voters: 113

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Author Topic: Should I start Diablo Mining Company, a 1M BTC startup?  (Read 10010 times)
DiabloD3
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April 27, 2012, 06:47:36 PM
 #41


Have you considered utilizing the heat output for something useful? I realize we're talking about FPGAs, but there still must be some useable heat by-product, especially if you have complete control over your building designs. We're not talking more than a concrete pad (maybe, concrete loses a lot of heat...) and a metal building with specially designed ductwork.

I have been brainstorming phase-change subterranean heating systems for greenhouse, poultry-house and barns using excess heat output from bitcoin mining. For half the cost of one of your proposed buildings, you should be able to incorporate a more sustainable business by raising local food products. Maine is a hotbed of such activity with Eliot Coleman being based there. You may find someone local willing to take over the growing and marketing operations.

You might consider the trifecta that integrated Poultry Aquaponics can bring: Fish, garden produce and chicken products and fertilizer.

Food prices, especially for healthy, locally produced items are only going up correspondingly with demand. Food feeds humans, and good food helps people. With an operation of the size you're talking about, you should have a leg up on everyone.

I want to do exactly this here as I already have the property but no capital, buildings, mining gear, etc. :-)

-p


Thats the funny thing. A geothermal heat pump array is going to lose heat into the field, the more the closer it is to the surface. If I pumped enough heat into it I could theoretically put a green house on top and capture the heat.

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April 27, 2012, 06:54:37 PM
 #42


Phase-change subterranean heating works by forcing warm air inside the greenhouse under the ground during the day with fans. At night the process is reversed with warm air stored inside the ground keeping the air in the greenhouse a moderate temperature.

You'd only need to pipe fan-blown air from the mining house to the greenhouse floor and let the subterranean Heating Cooling system fans take care of moving it underground. You use drainage tubing buried 4-5 feet in the ground to disperse the air in the soil.

Fans don't use much electricity, are relatively cheap to purchase/replace, and people are already using the non-heated version of this system effectively in cold climates. If you add a "free" heat source on top of it you will be growing year round at full output, guaranteed. It's a market producer's wet dream. ;-)

-p


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April 27, 2012, 10:31:39 PM
 #43

After the block reward decrease in early December, you will produce 413910 coins a year assuming 1/3 of all GPU miners quit and no other new production than yours come online.  This is 0.4139 BTC per share, assuming 1M shares and full set of 4200 FPGAs.  Half of it will cover operating costs, leaving 0.2 coins for dividend.  At best, if you get this up really quick before block reward decreases, investors will have back what they paid for their shares after five years.  Then block reward halves again and profit, if any, will come really slowly.

And all this changes for the worse if less than 1/3 of current miners quit or other new production comes online.

I can't see how this could possibly be profitable.  The only factor which make your calculations work out to the positive is your assumption of doubling exchange rate.  To take advantage of that it would be safer to just buy coins.

I didn't vote.  It is up to you to decide what you want to do.  I'm just not going to invest in it unless I did the math wrong.

Sjå http://bitmynt.no for veksling av bitcoin mot norske kroner.  Trygt, billig, raskt og enkelt sidan 2010.
I buy with EUR and other currencies at a fair market price when you want to sell.  See http://bitmynt.no/eurprice.pl
I support the roadmap.  If a majority of miners ever try to forcefully take control of Bitcoin through a hard fork without 100% consensus, I will immediately split out and dump all my forkcoins, and buy more real Bitcoin.
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April 27, 2012, 10:49:42 PM
 #44

After the block reward decrease in early December, you will produce 413910 coins a year assuming 1/3 of all GPU miners quit and no other new production than yours come online.  This is 0.4139 BTC per share, assuming 1M shares and full set of 4200 FPGAs.  Half of it will cover operating costs, leaving 0.2 coins for dividend.  At best, if you get this up really quick before block reward decreases, investors will have back what they paid for their shares after five years.  Then block reward halves again and profit, if any, will come really slowly.

And all this changes for the worse if less than 1/3 of current miners quit or other new production comes online.

I can't see how this could possibly be profitable.  The only factor which make your calculations work out to the positive is your assumption of doubling exchange rate.  To take advantage of that it would be safer to just buy coins.

I didn't vote.  It is up to you to decide what you want to do.  I'm just not going to invest in it unless I did the math wrong.

Its not that you did the math wrong, its that your valuation of coins has remained constant. Investing looks much more attractive in inflating fiat currencies, but Bitcoin isn't a fiat currency. What people are investing in here is a very large scale mining farm whos sole purpose is to drive the cost of mining down in a way that benefits everyone going forwards.

Lets say it takes them 5 years to get the investment back counting in BTC (not including any profit made from large scale green power generation exceeding overall power usage), BTC valuation might have doubled or tripled by then, partly driven by DMC. Not only that, they are guaranteeing themselves future profits which they may be unable to get themselves by mining by themselves due to residential power costs and the high cost of FPGA.

In addition, the DMC shares themselves might go up greatly in value if I can swing power generation profits far enough in our favor to make it an important part of the company and not just a way to stave off ever rising power costs (but thats a very long term outlook). Dividends don't solely have to be generated by mining alone if we're already investing heavily in green power.

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April 27, 2012, 11:09:54 PM
 #45

After the block reward decrease in early December, you will produce 413910 coins a year assuming 1/3 of all GPU miners quit and no other new production than yours come online.  This is 0.4139 BTC per share, assuming 1M shares and full set of 4200 FPGAs.  Half of it will cover operating costs, leaving 0.2 coins for dividend.  At best, if you get this up really quick before block reward decreases, investors will have back what they paid for their shares after five years.  Then block reward halves again and profit, if any, will come really slowly.

And all this changes for the worse if less than 1/3 of current miners quit or other new production comes online.

I can't see how this could possibly be profitable.  The only factor which make your calculations work out to the positive is your assumption of doubling exchange rate.  To take advantage of that it would be safer to just buy coins.

I didn't vote.  It is up to you to decide what you want to do.  I'm just not going to invest in it unless I did the math wrong.

Its not that you did the math wrong, its that your valuation of coins has remained constant. Investing looks much more attractive in inflating fiat currencies, but Bitcoin isn't a fiat currency. What people are investing in here is a very large scale mining farm whos sole purpose is to drive the cost of mining down in a way that benefits everyone going forwards.

Lets say it takes them 5 years to get the investment back counting in BTC (not including any profit made from large scale green power generation exceeding overall power usage), BTC valuation might have doubled or tripled by then, partly driven by DMC. Not only that, they are guaranteeing themselves future profits which they may be unable to get themselves by mining by themselves due to residential power costs and the high cost of FPGA.

In addition, the DMC shares themselves might go up greatly in value if I can swing power generation profits far enough in our favor to make it an important part of the company and not just a way to stave off ever rising power costs (but thats a very long term outlook). Dividends don't solely have to be generated by mining alone if we're already investing heavily in green power.
If the value of the coins go up, then the investors should have just held on to the coins instead of invest in the company.

Also, why would BTC valuation be driven in part by DMC?
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April 27, 2012, 11:36:10 PM
 #46

After the block reward decrease in early December, you will produce 413910 coins a year assuming 1/3 of all GPU miners quit and no other new production than yours come online.  This is 0.4139 BTC per share, assuming 1M shares and full set of 4200 FPGAs.  Half of it will cover operating costs, leaving 0.2 coins for dividend.  At best, if you get this up really quick before block reward decreases, investors will have back what they paid for their shares after five years.  Then block reward halves again and profit, if any, will come really slowly.

And all this changes for the worse if less than 1/3 of current miners quit or other new production comes online.

I can't see how this could possibly be profitable.  The only factor which make your calculations work out to the positive is your assumption of doubling exchange rate.  To take advantage of that it would be safer to just buy coins.

I didn't vote.  It is up to you to decide what you want to do.  I'm just not going to invest in it unless I did the math wrong.

Its not that you did the math wrong, its that your valuation of coins has remained constant. Investing looks much more attractive in inflating fiat currencies, but Bitcoin isn't a fiat currency. What people are investing in here is a very large scale mining farm whos sole purpose is to drive the cost of mining down in a way that benefits everyone going forwards.

Lets say it takes them 5 years to get the investment back counting in BTC (not including any profit made from large scale green power generation exceeding overall power usage), BTC valuation might have doubled or tripled by then, partly driven by DMC. Not only that, they are guaranteeing themselves future profits which they may be unable to get themselves by mining by themselves due to residential power costs and the high cost of FPGA.

In addition, the DMC shares themselves might go up greatly in value if I can swing power generation profits far enough in our favor to make it an important part of the company and not just a way to stave off ever rising power costs (but thats a very long term outlook). Dividends don't solely have to be generated by mining alone if we're already investing heavily in green power.
If the value of the coins go up, then the investors should have just held on to the coins instead of invest in the company.

Also, why would BTC valuation be driven in part by DMC?

One, the news of a $5m Bitcoin startup gracing the front page of every tech and financial news site would be worth its weight in gold; two, for those months that power generation profits exceed total operating cost I have to buy BTC to send them back out as dividends and at least some of that money is going to stay as BTC and not be converted back out; three, the aforementioned news of a $5m Bitcoin startup is going to bring a certain level of legitimacy to Bitcoin and is also going to attract more companies to bring their business here and start supporting it.

I honestly do think that someone investing into DMC is going to end up with a higher profit margin than if someone just bought and held 1m BTC alone. If I didn't think that, I wouldn't have bothered placing the plan in front of the community for their input to begin with.

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April 28, 2012, 12:15:06 AM
 #47

After the block reward decrease in early December, you will produce 413910 coins a year assuming 1/3 of all GPU miners quit and no other new production than yours come online.  This is 0.4139 BTC per share, assuming 1M shares and full set of 4200 FPGAs.  Half of it will cover operating costs, leaving 0.2 coins for dividend.  At best, if you get this up really quick before block reward decreases, investors will have back what they paid for their shares after five years.  Then block reward halves again and profit, if any, will come really slowly.

And all this changes for the worse if less than 1/3 of current miners quit or other new production comes online.

I can't see how this could possibly be profitable.  The only factor which make your calculations work out to the positive is your assumption of doubling exchange rate.  To take advantage of that it would be safer to just buy coins.

I didn't vote.  It is up to you to decide what you want to do.  I'm just not going to invest in it unless I did the math wrong.

Its not that you did the math wrong, its that your valuation of coins has remained constant. Investing looks much more attractive in inflating fiat currencies, but Bitcoin isn't a fiat currency. What people are investing in here is a very large scale mining farm whos sole purpose is to drive the cost of mining down in a way that benefits everyone going forwards.

Lets say it takes them 5 years to get the investment back counting in BTC (not including any profit made from large scale green power generation exceeding overall power usage), BTC valuation might have doubled or tripled by then, partly driven by DMC. Not only that, they are guaranteeing themselves future profits which they may be unable to get themselves by mining by themselves due to residential power costs and the high cost of FPGA.

In addition, the DMC shares themselves might go up greatly in value if I can swing power generation profits far enough in our favor to make it an important part of the company and not just a way to stave off ever rising power costs (but thats a very long term outlook). Dividends don't solely have to be generated by mining alone if we're already investing heavily in green power.
If the value of the coins go up, then the investors should have just held on to the coins instead of invest in the company.

Also, why would BTC valuation be driven in part by DMC?

One, the news of a $5m Bitcoin startup gracing the front page of every tech and financial news site would be worth its weight in gold; two, for those months that power generation profits exceed total operating cost I have to buy BTC to send them back out as dividends and at least some of that money is going to stay as BTC and not be converted back out; three, the aforementioned news of a $5m Bitcoin startup is going to bring a certain level of legitimacy to Bitcoin and is also going to attract more companies to bring their business here and start supporting it.

I honestly do think that someone investing into DMC is going to end up with a higher profit margin than if someone just bought and held 1m BTC alone. If I didn't think that, I wouldn't have bothered placing the plan in front of the community for their input to begin with.
Ok, those are fair answers to my questions.
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April 28, 2012, 12:20:39 AM
 #48

One, the news of a $5m Bitcoin startup gracing the front page of every tech and financial news site would be worth its weight in gold; two, for those months that power generation profits exceed total operating cost I have to buy BTC to send them back out as dividends and at least some of that money is going to stay as BTC and not be converted back out; three, the aforementioned news of a $5m Bitcoin startup is going to bring a certain level of legitimacy to Bitcoin and is also going to attract more companies to bring their business here and start supporting it.

I honestly do think that someone investing into DMC is going to end up with a higher profit margin than if someone just bought and held 1m BTC alone. If I didn't think that, I wouldn't have bothered placing the plan in front of the community for their input to begin with.

Unfortunately there's a big difference between a $5M startup and a startup that's asking for $5M.
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April 28, 2012, 12:35:55 AM
 #49

One, the news of a $5m Bitcoin startup gracing the front page of every tech and financial news site would be worth its weight in gold; two, for those months that power generation profits exceed total operating cost I have to buy BTC to send them back out as dividends and at least some of that money is going to stay as BTC and not be converted back out; three, the aforementioned news of a $5m Bitcoin startup is going to bring a certain level of legitimacy to Bitcoin and is also going to attract more companies to bring their business here and start supporting it.

I honestly do think that someone investing into DMC is going to end up with a higher profit margin than if someone just bought and held 1m BTC alone. If I didn't think that, I wouldn't have bothered placing the plan in front of the community for their input to begin with.

Unfortunately there's a big difference between a $5M startup and a startup that's asking for $5M.

Yes, I will not deny this. I am hoping that the entire Bitcoin community will support me in my venture. We're all going to have to band together to get this one done, I think.

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April 28, 2012, 02:23:42 AM
 #50

After a discussion on #bitcoin-assets I would like to make something clear.

Mining bonds and shares that have a fixed output value DO NOT WORK.

I have seen bonds that pay 1mhash forever. When the hardware fails, the owner has to, essentially, go out and sell more bonds and use that to replace the failed hardware, which ends up leading to a situation that you have zero mining company growth because essentially 100% of the profits are being paid out to bond holders and the only way to grow at all is triggered by hardware failure and new bonds are greatly diluted by old bonds. This is a pyramid scheme.

I've also seen companies that pay 100% company profits out as dividends. I'm going to say the same exact thing, hardware fails, zero company growth, sells new shares for more hardware, but this time, old shares don't dilute new shares, its the opposite, it screws old investors in favor of new ones and thats STILL a pyramid scheme.

These models are unsustainable, and I wish people would quit requesting that I change the contract to fit these models. This is why the contract makes shares have a non-binding voting mechanism, because this is probably the first thing that would be attempted to be voted on.

In addition, due to the perpetual growth model of my plan, dividend output can go up. Yes, thats right, it can go UP. Those figures in the plan? That is calculated for the original generation of hardware only. 0.21 BTC (post December) per share dividend annually means 0.21 BTC also goes to the growth fund. After two or three years, the size of the mining hardware installation can be doubled. And two or three years after that? Doubled again. If after five or six years I've managed to greatly out pace the growth of the network, then we could very easily be looking at 0.42 BTC (post December) per share (which also means people might be buying shares from the first generation of investors for twice what they were originally purchased for).

There is no other company on GLBSE that has a model that can sustain continued growth, every single company will be dead in the water within two or three years.

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April 28, 2012, 02:29:37 AM
 #51

After a discussion on #bitcoin-assets I would like to make something clear.

Mining bonds and shares that have a fixed output value DO NOT WORK.

I have seen bonds that pay 1mhash forever. When the hardware fails, the owner has to, essentially, go out and sell more bonds and use that to replace the failed hardware, which ends up leading to a situation that you have zero mining company growth because essentially 100% of the profits are being paid out to bond holders and the only way to grow at all is triggered by hardware failure and new bonds are greatly diluted by old bonds. This is a pyramid scheme.

I've also seen companies that pay 100% company profits out as dividends. I'm going to say the same exact thing, hardware fails, zero company growth, sells new shares for more hardware, but this time, old shares don't dilute new shares, its the opposite, it screws old investors in favor of new ones and thats STILL a pyramid scheme.

These models are unsustainable, and I wish people would quit requesting that I change the contract to fit these models. This is why the contract makes shares have a non-binding voting mechanism, because this is probably the first thing that would be attempted to be voted on.

In addition, due to the perpetual growth model of my plan, dividend output can go up. Yes, thats right, it can go UP. Those figures in the plan? That is calculated for the original generation of hardware only. 0.21 BTC (post December) per share dividend annually means 0.21 BTC also goes to the growth fund. After two or three years, the size of the mining hardware installation can be doubled. And two or three years after that? Doubled again. If after five or six years I've managed to greatly out pace the growth of the network, then we could very easily be looking at 0.42 BTC (post December) per share (which also means people might be buying shares from the first generation of investors for twice what they were originally purchased for).

There is no other company on GLBSE that has a model that can sustain continued growth, every single company will be dead in the water within two or three years.

I think you've ignored the buyback clauses in the existing mining bonds. There's also the whole time value of money business that explains why it can be profitable to sell perpetuities.

Calling these things pyramid schemes and saying they're doomed to fail is not going to make you any friends. And I hate to say it, but if you want to raise money, you need to try to avoid pissing people off.
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April 28, 2012, 02:43:32 AM
 #52

After a discussion on #bitcoin-assets I would like to make something clear.

Mining bonds and shares that have a fixed output value DO NOT WORK.

I have seen bonds that pay 1mhash forever. When the hardware fails, the owner has to, essentially, go out and sell more bonds and use that to replace the failed hardware, which ends up leading to a situation that you have zero mining company growth because essentially 100% of the profits are being paid out to bond holders and the only way to grow at all is triggered by hardware failure and new bonds are greatly diluted by old bonds. This is a pyramid scheme.

I've also seen companies that pay 100% company profits out as dividends. I'm going to say the same exact thing, hardware fails, zero company growth, sells new shares for more hardware, but this time, old shares don't dilute new shares, its the opposite, it screws old investors in favor of new ones and thats STILL a pyramid scheme.

These models are unsustainable, and I wish people would quit requesting that I change the contract to fit these models. This is why the contract makes shares have a non-binding voting mechanism, because this is probably the first thing that would be attempted to be voted on.

In addition, due to the perpetual growth model of my plan, dividend output can go up. Yes, thats right, it can go UP. Those figures in the plan? That is calculated for the original generation of hardware only. 0.21 BTC (post December) per share dividend annually means 0.21 BTC also goes to the growth fund. After two or three years, the size of the mining hardware installation can be doubled. And two or three years after that? Doubled again. If after five or six years I've managed to greatly out pace the growth of the network, then we could very easily be looking at 0.42 BTC (post December) per share (which also means people might be buying shares from the first generation of investors for twice what they were originally purchased for).

There is no other company on GLBSE that has a model that can sustain continued growth, every single company will be dead in the water within two or three years.

I think you've ignored the buyback clauses in the existing mining bonds. There's also the whole time value of money business that explains why it can be profitable to sell perpetuities.

Calling these things pyramid schemes and saying they're doomed to fail is not going to make you any friends. And I hate to say it, but if you want to raise money, you need to try to avoid pissing people off.

Oh, don't get me wrong, telling the truth has NEVER made friends in the history of the world. But people have repeatedly attacked my plan without any logical reasons, pointing at the rest of the GLBSE companies and say that they're better structured, and I think I have a right to defend my plan and rationally explain why those companies can never succeed over the long term.

If I'm going be asking for a million BTC, I better be damned sure I have the best possible plan available, and it has to be geared for long term survival.

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April 28, 2012, 02:53:59 AM
 #53

I'm afraid GLBSE just won't be able to handle doubling or tripling its daily volume, and I know the GLBSE owner is subscribed to this thread, so it'd be nice if he chimed in on this Wink

I don't think I agree with this, the only time GLBSE starts to groan is when there is an IPO selloff, and everyone starts hitting the server trying to snipe each other.

I think volume on GLBSE would have to increase by 50-60x to start having an effect on speed.

Even with things as they currently are without any changes at all we could handle 30x the current volume.

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April 28, 2012, 02:54:34 AM
 #54

Start small. Get a better idea of maintenance and other costs.  

For wind turbines you need to research the power capacity factor.   Wind power is proportional to the speed cubed, so it is far harder for the typical property owner to use it efficiently than solar is.

The NREL did a survey of most of the United States regarding where the best locations for turbines are.   In Maine they are probably off-shore or on mountain ridges.  Unfortunately I couldn't find it when I looked, but this is a mapping site that I made that uses the data set (that does not include off-shore): http://www.energyjustice.net/t=ora340


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April 28, 2012, 02:56:05 AM
 #55

redirect the heat to a water heater, or maybe a snow-melt system for the sidewalk/driveway...

hot air popcorn popper? sell the popcorn?

-- Smoov
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April 28, 2012, 03:01:47 AM
 #56

Start small. Get a better idea of maintenance and other costs.  

For wind turbines you need to research the power capacity factor.   Wind power is proportional to the speed cubed, so it is far harder for the typical property owner to use it efficiently than solar is.

The NREL did a survey of most of the United States regarding where the best locations for turbines are.   In Maine they are probably off-shore or on mountain ridges.  Unfortunately I couldn't find it when I looked, but this is a mapping site that I made that uses the data set (that does not include off-shore): http://www.energyjustice.net/t=ora340



Yes, I'm aware of how wind power works. However, it is not only off shore, it also includes near shore areas. There is no way you're getting a 10MW on shore turbine, but as I've said, its not like we NEED 10MW. As long as we're tall enough, we're avoiding most of the efficiency problem.

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April 28, 2012, 06:45:31 AM
 #57

Its not that you did the math wrong, its that your valuation of coins has remained constant.
And we are straight into another problem with your calculations.  You keep mixing USD and BTC at rates picked out of thin air.  Everything kan be made looking profitable with enough invented numbers.

To compare buying 1 share at 1 BTC to just keeping the BTC, you need to do all those calculations in BTC.  The price development of BTC will decide if both are profitable.  If you can deliver more BTC back than I pay for the share, your model will be more profitable than just keeping the money.

Continuing investment in new mining technology is a valid point, but it makes the constant difficulty assumption even less valid.  Even the valuation of BTC if you grow to much, because you could pull off a 51% attack.  Even if growth beyond your initial 1/3 of the hashrate would only be stupid unless difficulty increases, because at that point you mainly compete with yourself.  Your share of the blocks will increase slower and slower the higher percentage of the total hashrate you get, and you will push difficulty higher.  Many GPU miners, like me, don't need to mine for profit.  It is enough to get about 2/3 of my power costs back, and it is still the cheapest heating system around.  If price per block and difficulty remains constant, as you assume, GPU mining will never become unprofitable.

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In addition, the DMC shares themselves might go up greatly in value if I can swing power generation profits far enough in our favor to make it an important part of the company and not just a way to stave off ever rising power costs (but thats a very long term outlook). Dividends don't solely have to be generated by mining alone if we're already investing heavily in green power.
Green power isn't always profitable.  Especially in the US where coal is heavily subsidised.

Sjå http://bitmynt.no for veksling av bitcoin mot norske kroner.  Trygt, billig, raskt og enkelt sidan 2010.
I buy with EUR and other currencies at a fair market price when you want to sell.  See http://bitmynt.no/eurprice.pl
I support the roadmap.  If a majority of miners ever try to forcefully take control of Bitcoin through a hard fork without 100% consensus, I will immediately split out and dump all my forkcoins, and buy more real Bitcoin.
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April 28, 2012, 06:54:05 AM
 #58

Is this a plan for organizing a 51% attack for profit? If so, sign me up.

Or is there no business model here? If so, why invest in this?

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Sukrim
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April 28, 2012, 07:37:30 AM
 #59

Oh, and some "companies" on GLBSE already put 40-50% of earnings aside to be used for expansion, it's not like they all pay out everything.

Anyways: sturle seems to have gotten my point: I don't care about profits in USD, as long as this company is not profitable in BTC it is NOT profitable at all! Think of a company in Zimbabwe Dollars instead of US Dollars: Even if you started it with 1 million dollars and it now makes Billions per day, the conversion rate eats it all. As you said yourself: You are hoping for press coverage of a 5 million USD Bitcoin startup, not a 1 million BTC Bitcoin startup.

Anyone who invests in this with Bitcoins is (in my opinion) at least not thinking it through. The press you'd get for this (if any) would be probably also in this direction, I doubt many would buy shares if you cannot explain this (other than "Price for BTC in USD will double!!!111"). It might be fine just to get publicity though.

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DiabloD3
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April 28, 2012, 07:56:51 AM
 #60

Its not that you did the math wrong, its that your valuation of coins has remained constant.
And we are straight into another problem with your calculations.  You keep mixing USD and BTC at rates picked out of thin air.  Everything kan be made looking profitable with enough invented numbers.

To compare buying 1 share at 1 BTC to just keeping the BTC, you need to do all those calculations in BTC.  The price development of BTC will decide if both are profitable.  If you can deliver more BTC back than I pay for the share, your model will be more profitable than just keeping the money.

Doing the calculations in BTC is impossible because BTC prices change too quickly. Yes, I'm well aware that collecting 1m BTC may end up with a $3 or $7 million dollar IPO instead because of this, the plan is flexible enough to deal with that. However, until I can buy property and FPGAs in Bitcoins and pay taxes in Bitcoins and go to the corner store and pay with Bitcoins, what you're saying is wishful thinking... I look forward to the day that I can, but Bitcoin isn't there yet.

USD is a factor and we can't ignore that; otherwise we end up with another 10k BTC delivery pizza.

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Continuing investment in new mining technology is a valid point, but it makes the constant difficulty assumption even less valid.  Even the valuation of BTC if you grow to much, because you could pull off a 51% attack.  Even if growth beyond your initial 1/3 of the hashrate would only be stupid unless difficulty increases, because at that point you mainly compete with yourself.  Your share of the blocks will increase slower and slower the higher percentage of the total hashrate you get, and you will push difficulty higher.  Many GPU miners, like me, don't need to mine for profit.  It is enough to get about 2/3 of my power costs back, and it is still the cheapest heating system around.  If price per block and difficulty remains constant, as you assume, GPU mining will never become unprofitable.

If the global hash rate is 10 thash, that doesn't mean that a 51% attack is 5... it means its ANOTHER 10. And even then, its not guaranteed (ask gmaxwell sometime on the exact numbers, its pretty difficult to reliably perform the attack even with that 10 thash).

That said, yes, I will purposely back off if we get close to 50% because, frankly, its insane and its bad for investors. However, increasing diff to price out most GPU users IS good for investors. Nvidia and Radeon 4xxx have already crossed the points of no return, it is only time for even the most efficient GPU setups to fall behind, even without DMC. Being aggressive for a large scale mining operation isn't a bad thing.

As for GPU mining becoming unprofitable, all you're doing is calculating cost of heating into your total operating cost math. Which, don't get me wrong, thats pretty smart... for the 2-5 months your part of the world calls Winter. The other months you're turning the A/C and/or shutting mining off. That is not something a large scale mining operation should do.

Diff and BTC price are not constant. Given the entire history of Bitcoin, on average, diff is going up quickly and BTC price is not significantly increasing. For DMC, or any mining operation, worst case scenarios must be planned for. Even paying for electricity at industrial rates (2 cents kwh) is a liability.

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In addition, the DMC shares themselves might go up greatly in value if I can swing power generation profits far enough in our favor to make it an important part of the company and not just a way to stave off ever rising power costs (but thats a very long term outlook). Dividends don't solely have to be generated by mining alone if we're already investing heavily in green power.
Green power isn't always profitable.  Especially in the US where coal is heavily subsidized.

Its not unprofitable either. For us, we would have two income streams. Green power would be reducing our total operating costs, whatever is left is then sold to the grid: we can't keep it, the overhead of operating a battery array would just be too expensive. The other income stream would be the mining operation itself.

Coal is heavily subsidized because it is expensive to operate. We're in orbit around a gravity fed highly efficient fusion reactor that outputs more power in a second than Humanity has used in its time on Earth. Solar and Wind are the only power generation techniques that are cheap to deploy, cheap to run, and will never run dry.

It would be insane not to take advantage of this any way we can.

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