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Author Topic: [closed] Zeta Bitcoin Mining  (Read 12061 times)
zefir
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May 05, 2012, 03:28:22 PM
 #1

Zeta Bitcoin Mining: Perpetual mining bond, previously traded at GLBSE, ticker ZETA-MINING


News

2013-01-37: Done.
2012-12-04: All claimed shares bought-back; Operation closed
2012-11-25: Investors' list received from GLBSE, Payments restarting
2012-11-12: Claim Process closing, Buy Back Offer
2012-10-20: GLBSE recovery: Claim Process open
2012-10-14: recovery plans after GLBSE closing
2012-10-07: GLBSE closing down
2012-09-08: swaps for ASICMINER shares executed, bonds recalled => 4000 left outstanding
2012-08-24: voluntary offer to investors to exchange shares for physical hashing power or ASIC securities
2012-07-10: FPGA boards delivery
2012-05-28: dividend payments & upcoming expansion
2012-05-19: bail-out period ending & dividend calculation
2012-05-17: GPU deactivation & external FPGA mining contract
2012-05-14: what's next?
2012-05-13: successful IPO
2012-05-13: finalized IPO details & added projected ROI figures
2012-05-05: initial announcement

GLBSE recovery: Claim Process open
Please send me an e-mail to the address given in my forum profile specifying
  • your GLBSE account name
  • number of ZETA-MINING bonds you hold
  • address where dividends should be paid to (paper wallet address or at least one you have the private key of)
  • optional: e-mail address to be used to contact you for confirmation / updates (if not reply-to address)
  • optional: anything you have available to prove your claims (screnshots, trade information, etc.)


FPGA Boards Delivery
The 50 Cairnsmore1 Quad-FPGA boards pre-ordered at Enterpoint have been delivered. The FW and bitstreams are still in development status and as a result the boards are currently rather used for testing than for mining.

When projected final performance is reached, a total of up to 30GHps will be offered to the public.


Dividend Payments & upcoming Expansion
Since GLBSE has no support for automated pre-scheduled dividend payments, I will process the manual payment early when I am away from keyboard at the defined payment time (Sundays at 13:00 UTC).

Expansion is on the horizon with the Quad boards' anticipated shipment within 2 weeks. 75% of the added hashing power will be offered to the public by issuance of new bonds. The bonds will be priced at market value. Investors interested in buying blocks of 50 bonds please contact me via PM.


Bail-out Period ending & Dividend Calculation
Dividends will be paid Sundays at 13:00 UTC, with the first payment scheduled for tomorrow May 20th. I set up a Google Docs spreadsheet for weekly dividend calculations here.

Right before the dividends are paid tomorrow, I will remove the bid wall I set up for the first post-IPO week to allow investors a bail-out at no cost. I'll be glad if you stay invested with me, but if you feel unsure, do not miss to place your sell order in time.


Replaced GPUs with external Mining Power
Most GPU rig that turned to operate inappropriate in my setup has been deactivated, leaving ~6GH/s (mainly in BFLS) active.

Until the FPGA Quads are delivered, the issued bonds are additionally backed by external mining power. Find it mining with 6.5+GH/s at Ozcoin's Top20 or round-share stats.


Coins Collected - What's next?
With the IPO capital collected, the next obvious challenge is how to re-invest in mining power extension quickly. Besides GPUs that would be available immediately but already had their times and will not be considered for expansion, today any FPGA based mining rig has a lead time of 8+ weeks. Since second hand availability is either zero or only at rip-off prices, there is no practical way for instant expansion.

I have 50 Cairnsmore1 Quad boards ordered from the first batch. Enterpoint promises to have them ready for delivery within June. If they keep up with that (or with even small delays) that is the earliest most occasion to extend FPGA based mining power. The available IPO capital will be invested fully into this order.

Until then, 750 coins are reserved to provide the bail-out bid walls in the post-IPO week and for market liquidity thereafter. The remainder of ~1500 BTC has been converted to fiat and is reserved to fund the expansion.


Sucessful IPO
The IPO was successful, all bonds were sold at IPO-price. Due to high demand from large scale investors 2500 additional bonds has been issued within an hour after IPO.

Thank you all for your trust and your will to invest in a long-term Bitcoin future.

I grant all investors a free bail-out period to get back your invested coins without any loss for one week after the IPO, i.e. I will keep an according bid wall active until 2012-05-20.12:00 GLBSE time.


IPO Details Finalization
  • IPO price: 0.295 BTC
  • availability: 650 bought by pre-IPO investors, available to the public at IPO: 4350

ROI projections
This is basically a do-the-math-for-you of the formula defined by Meni here, based on the IPO price of 0.295BTC and current difficulty of 1.733M:
  • weekly income per bond: 86400 * 7 * 50 * 10^6 / (1733207 * 2^32) = 0.00406 BTC
  • weekly ROI: 0.00406 / 0.295 = 1.38%


Initial Announcement

Folks,

I've been with Bitcoins for almost a year now. While finding that agglomeration of brilliant people in this community and learning so many new things is exciting, I reached a point where I am investing too much (in terms of money and time) to continue it as a hobby project. With the ups and downs (including the past numerous incidents) we had so far, I gained enough confidence that Bitcoin will survive in the long run and got motivated to extend my leisure-time involvement to a serious business.

As one core component of that business I am going to significantly increase my mining capabilities from currently 7.5GH/s to a target of at least 1% of the global hashing power by the end of 2012. Right now I am negotiating with an established FPGA-board manufacturer for a license program to be able to gradually add FPGA based hashing power at prices competitive to the current best ROI-efficient devices.

The upfront investment to produce 50+ Quad boards and add ~40GH/s with that approach is quite huge and I therefore want to spread the risk and collect some coins for investing with issuing ZETA-MINING bonds  at GLBSE. The contract is basically equivalent to existing ones (sorry gigavps and amazingrando for copy-pasting), i.e. you buy 1MH/s at 100% PPS and get paid with your portion of mined coins once a week. I'm not adding further details here, assuming all potential investors already know. Feel free to ask for additional info you would like to see as part of the contract.


Since my Zeta Bitcoin Mining business is explicitly planned for growth, I add the following statements:

1) Issued hashing power
At any time I will issue no more than 75% of the available hashing power. The remaining portion will be used to
  a) cover operational costs
  b) provide liquidity to the secondary market
  c) fund expansion
  d) cover operation risks (e.g. downtime)

2) Growth
All coins collected by issuing bonds are invested 100% in growth, i.e. used to buy more mining equipment.

3) Sustainability
Long term competitive operation is assured by minimizing operating costs. ROI calculations for new equipment are performed for an operating time of 18 months and assure  to remain competitive with latest generation devices.

4) Operational costs
Initially the operational costs are limited to the electricity that I am going to pay out of my pocket and from my portion of the coins mined. As soon as upon growth infrastructural investments become required, bond holders will have to vote whether to accept fees to be deducted from their dividends.

5) Liquidity provision
I will provide liquidity to the secondary market to some extent by placing ask and bid walls at each side of the averaged trading price. This is not to drive the market but to increase investors' confidence in the bond by assuring they can bail out for a reasonable price.


IPO details
  • date: May 13th 2012
  • bonds to be issued: 5000 representing 5GH/s
  • price: cut-off will be set at IPO day at (5-day 1MH/s average of other mining bonds) - 10% discount


That's for the details. Apologize if I forgot some important points, but I'm learning (how often do you sell your securities outside the Bitcoin world Wink) and will add them incrementally.


Thanks for your interest,
zefir

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zefir
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May 05, 2012, 03:30:07 PM
 #2

FAQ & user requested information

References, Reputation and Trust
I am not social in the virtual world. That is due to the rule I am strictly following to not disclose personal information into a network that never forgets. As a consequence, there are no Facebook, G+, LinkedIn, Tweets, Blogs or whatsoever profiles I can refer to.

The trust I am going to provide to investors is based on two core aspects: first, I've got a real life that is highly dependent on my reputation and second, I am not seeking for anonymity. In fact, my nick is my real name and if you visit my research track where I worked before here, you'll find my full name. Google me, I'm unique worldwide. You'll find most entries either referring to some research papers I wrote or to Linux kernel development, for both I had to build up reputation based on a long and steady track record. That is what allows me to earn my and my family's living and even 21M+1 BTC won't tempt me to risk my real life's fundament.

In the Bitcoin community there are
  • some developers who can prove I'm real (ckolivas, kano)
  • some lenders who currently hold four digit amounts of my BTC liquidity (pirateat40, ineededausername, hashking)
  • Matthew who took my payment for 12 issues of Bitcoin Magazine without delivering any so far
  • Cablez who manufactured cables to connect my BFL Singles to a gold PSU
  • Clipse whose BonusPool most of my rig is mining for (check my stats with my forum nick here)
  • GLBSE that verified my ID and my email address

As stated above, GLBSE is not going to verify my non-existing FaceBook an LinkedIn profiles. They also won't verify my phone number (it is a VoIP based one) and my home address (Switzerland does not belong to the list of countries that are verified).

If you feel you need more information for your due-diligence, please PM me or post your request in this thread.



IPO price calculation
With the existence of already established mining bonds the initial price will be set to match the averaged ROI of those minus an IPO discount of 10%.

It will be calculated as follows (based on the 5Day averaged price at GLBSE):
ZETA-MINING = (BITBOND/2.1 + GIGAMINING/5 + PUREMINING + YABMC + JAH) / 5 * 0.9

As of time of writing (2012-05-07, 14:00): (0.625/2.1 + 1.53/5 + 0.493 + 0.336 + 0.323) / 5 * 0.9 = 0.35 * 0.9 = 0.316


pre-IPO sales
Investors interested in buying one or more blocks of 50 bonds before IPO please PM me.

There are no additional discounts for pre-IPO sales, the price per bond is calculated with above formula at day of sale.



Changelog
2012-05-06: added 'References, Reputation and Trust' as requested by BinaryMage
2012-05-07: added 'IPO price calculation' and 'pre-IPO sales'
2012-05-09: updated GLBSE email and home address verification

zefir
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May 05, 2012, 03:31:03 PM
 #3

--reserved--

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May 05, 2012, 10:04:57 PM
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Subscribed. Any references you care to provide?

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May 06, 2012, 03:14:21 AM
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Subscribed. Any references you care to provide?
Thanks. Added an initial section to second post. Please feel free to ask for further information.

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May 06, 2012, 03:16:13 AM
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Subscribed. Any references you care to provide?
Thanks. Added an initial section to second post. Please feel free to ask for further information.
Thank you, those are quite helpful. I also eschew most social networking services, no hard feelings there.

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May 07, 2012, 11:32:33 AM
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What's supposed to be the starting price of every share?

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May 07, 2012, 12:27:46 PM
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What's supposed to be the starting price of every share?

See OP:

Quote
price: cut-off will be set at IPO day at (5-day 1MH/s average of other mining bonds) - 10% discount

Current average should be something about 0.35 BTC per MH/s, I'd expect the IPO to be around 0.3 BTC, like nearly every other 1 MH/s bond out there (except for Puremining, their prices are crazy! Shocked )

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zefir
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May 07, 2012, 06:30:53 PM
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What's supposed to be the starting price of every share?

See OP:

Quote
price: cut-off will be set at IPO day at (5-day 1MH/s average of other mining bonds) - 10% discount

Current average should be something about 0.35 BTC per MH/s, I'd expect the IPO to be around 0.3 BTC, like nearly every other 1 MH/s bond out there (except for Puremining, their prices are crazy! Shocked )

Yes, thanks for the clarification.

I added the formula for IPO price calculation to post #2, along with some pre-IPO statement that was requested via PM.

As for PUREMINING, I also do not get why it is that much overpriced. From reading the contracts, it is just a mining bond for 1MH/s at 100%PPS (i.e. exactly what I am going to offer), yet it is traded at 60% premium. I like it as it pushes the average price up Wink, at the same time I'm unsure if there is something I have missed. If you know more or have an explanation, I'm okay with removing PUREMINING from the price calculation formula.

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May 09, 2012, 05:07:45 PM
 #10

Short update on GLBSE verification (also updated post #2 accordingly):
  • Smiley my email address has been verified meanwhile
  • Sad I won't get my home address verified. According to their verification policy, addresses in Switzerland can not be checked

If my home address is vital for your trust, PM me and I'll disclose for your personal verification.

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May 13, 2012, 11:29:52 AM
 #11

Update: IPO-details finalized

Meni contacted me personally and gave me some insights in his Puremining business that clarified why there is a significant premium on the price when just comparing the bare hashing values. Bottom line, the higher price is justified alone by the reputation he has as initiator of publicly traded mining power and the very complete contract he set up.

I am going to license that contract for ZETA-MINING soon, right now I have to accept that I first need to build up reputation and therefore can't include Puremining fully to the price building formula.

Considering this, I set the IPO price at 0.295BTC per 1MH/s 100%PPS bond and updated post #1 accordingly, including the number of 4350 bonds available to the public, after 13 blocks have been sold to pre-IPO investors.

Happy bidding / trading.
Zefir

PS: those having time to fool around and place satoshi bids, you won't get any Wink I am going to set up a bid wall at 0.28BTC during the first week for investors that change their mind, so you won't get them cheaper than that.

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May 13, 2012, 02:24:33 PM
 #12

I'm ready, start the sale Grin

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May 13, 2012, 08:22:44 PM
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Hot Bond!

zefir does serious business - i'am in too!

"Tonight's the night. And it's going to happen again, and again. It has to happen. Nice night."
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May 14, 2012, 12:01:25 AM
 #14

Update: IPO took off successfully

Thank you all for your confidence and your will to invest in a long-term Bitcoin future. I'm amazed how - after Bitcoin suffered from all the bad incidents and people trying to rip off others - you trust me with your hard-earned coins and give me a chance to prove that there is room to make money the honest way. I am not planing to disappoint you.

Well, for some reason it was even over-successful.

I over-sold, i.e. had two large scale last-minute investments coming in parallel that added to 6000 pre-IPO sales in total. To not send the coins back and have at least some bonds for the public, I had a last-second discussion with Nefario and decided to add another 2500 bonds right after IPO to a total of 7500.

A total of 7.5GH/s is still within the hashing power I have available (though I'll have to re-activate GPU rigs that I turned off for inefficiency), i.e. all issued bonds are backed by mining power.

Furthermore, with a bond and deterministic dividends, there is no negative implication to price with a higher number of total outstanding bonds.

Nevertheless, since there was not enough time to announce the increased issue, I will grant you all an option to bail out of your investment with zero looss: I've put a bid wall at 0.297BTC (IPO-price + 0.5% GLBSE fee + small compensation) to allow you all to give back the bonds if you feel uncomfortable with the decision. I will grant you that option for one week after the IPO.


Getting late here and I need to get some sleep for my (hopefully soon to be terminated Smiley) day job.

Good night,
Zefir

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May 14, 2012, 08:20:33 PM
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Hiya,

Good news with the IPO, and I guess even better news for your that it's so popular...
Any thoughts what those older (possibly inefficient) rigs would do to the returns?

And I guess now it means expanding for you Smiley
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May 14, 2012, 11:09:19 PM
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Update: added some words on what is next on the schedule to first post.

Hiya,

Good news with the IPO, and I guess even better news for your that it's so popular...
Any thoughts what those older (possibly inefficient) rigs would do to the returns?

And I guess now it means expanding for you Smiley

Hi,

I have cold standby GPU rig worth ~3.7GH and gave it a try today - it did not work out well Sad - after several hours the location got that hot that my BFL Singles started to throttle and loose a cumulated average of 1.4GH (and summer is still to come).

So while the GPU rigs for sure are still operating profitably, they are unusable in my setup with burning that much energy. Sad thing is, I bought 4 of the HD7970 just two months ago Sad and won't get any reasonable resale price.

As written in the updated news, it is currently impossible to quickly add FPGA hashing power. To meet the maximum 75% sold to available hashing power in the contract without the GPUs, I am going to buy a 5GH/s FPGA based contract from an established miner until I expanded my own farm. I'll post details when the contract is signed.


Cheers, Zefir

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May 15, 2012, 10:08:09 PM
 #17

What brand are the 7970s ? How much have you paid ?

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May 16, 2012, 07:28:19 AM
 #18

What brand are the 7970s ? How much have you paid ?
Bought them when they were short here in Switzerland (end of March):
  • XFX HD7970 Black Edition: 580 CHF
  • Gigabyte HD7970 UD: 618 CHF

Their retail prices went down 10-20% within less than 2 months, way more than they have mined so far - bad luck this time Sad

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May 16, 2012, 05:25:22 PM
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What brand are the 7970s ? How much have you paid ?
Bought them when they were short here in Switzerland (end of March):
  • XFX HD7970 Black Edition: 580 CHF
  • Gigabyte HD7970 UD: 618 CHF

Their retail prices went down 10-20% within less than 2 months, way more than they have mined so far - bad luck this time Sad

Yes, they are expensive over here. I was thinking about them as a replacement for my 5850 but they are not paid off yet. Got them from Brack for 220 each. For the moment they still make a gain but at the end of the year things will change.

50 quads sound serious. Glad to see that other locals belive in Bitcoin. Smiley I don't have the funds for 50 boards but I support those who take the opportunity (with all the risks).

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May 16, 2012, 08:34:04 PM
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What brand are the 7970s ? How much have you paid ?
Bought them when they were short here in Switzerland (end of March):
  • XFX HD7970 Black Edition: 580 CHF
  • Gigabyte HD7970 UD: 618 CHF

Their retail prices went down 10-20% within less than 2 months, way more than they have mined so far - bad luck this time Sad

Yes, they are expensive over here. I was thinking about them as a replacement for my 5850 but they are not paid off yet. Got them from Brack for 220 each. For the moment they still make a gain but at the end of the year things will change.

50 quads sound serious. Glad to see that other locals belive in Bitcoin. Smiley I don't have the funds for 50 boards but I support those who take the opportunity (with all the risks).

They are still good mining cards and if FPGAs did not catch up cost-wise recently, I'd bought more (especially the Gigabyte that runs at stock 1200MHz and handles 720MH/s at 220W).

As for believing in Bitcoins, while I was just mining and earning money for the next GPU, I got often to disbelieve in the idea of Bitcoin - mostly when I saw BTC/fiat rate tanking with my hard earned coins becoming less worth. With moving from just hoarding coins to using them, my attitude changed in 'subtle shades' ((tm)1993 Nuance): I am thinking more and more in the Bitcoin world and care less and less to its fiat exchange rate Smiley You know, like those people that don't care about gas prises - since they always fill up for 50 bucks...

Bottom line: Yes, I want to believe - and I do.

As for the risk buying 50 Quads: yes it is not foolproof. But compared to folks ordering multiple MiniRigs or even those working on ASICs, it is not extraordinary speculative. Plus with you folks willing to share the risk and participate in the profits increased my confidence that this is the right way to go.

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