SkepsiDyne Integrated Node - The Bitcoin Mining Company

[Tawsix]

SKEPSIDYNE INVESTORS ARE CURRENTLY VOTING ON LIQUIDATING THE COMPANY

Due to the low prices BTC has fallen to, it has become unprofitable to operate the machines, so a motion has been put up to liquidate the company and pay out proceeds back to investors.  This vote will be up until midnight Tuesday, November 22nd.  If you are investor and have any questions regarding the liquidation, please post them here, PM me, or email me at tawsix@skepsidyne.com.

-Tawsix

[Nefario]

GLBSE is UP, sorry about that, something I was doing had choked the server (it actually was up but had frozen).

Everything is working, go ahead and go crazy with it.

Here is the asset details for those interested in having a look.

http://dev.glbse.com/cgi-bin/asset?id=4813709653f9d4b4060d045fb1ebef1ef1a1895cb585d076c9553955e1005399.xml

View source if you can't see normal xml.

Also folks, don't forget to check out the trustworthyness of the issuer, and whether the gpg public key in the asset contract is able to verify the asset clearsignature.

These are up for sale.

[N12]

I’ve noticed your calculation for 50 shares is wrong, it should be 14.8 BTC.

An 15% investment in growth per month seems low to me, as the difficulty is rising much faster. Could you provide an update of those numbers with current exchange rate and difficulty?

Also, a projection of 1) difficulty and return of Bitcoins and 2) more details on future competitiveness (others have advantages such as free electricity or power-efficient custom hardware) would be interesting. Perhaps upgrading to a location with lower electricity costs, more efficient hardware etc.

Thanks for doing this, I’m definitely interested in investing in such a venture. My only real issue here is trust, as you aren’t very reputable on this forum yet.

[Tawsix]

I’ve noticed your calculation for 50 shares is wrong, it should be 14.8 BTC.

Whoops, thanks for catching that error!

An 15% investment in growth per month seems low to me, as the difficulty is rising much faster.

Yes, this was just a number I pulled out of thin air, and I haven't really decided on an exact number as of yet.  It would really depend on the changes in difficulty, so that the business would continue competitively mining.  That would probably be something that would be discussed and decided by investors.

Could you provide an update of those numbers with current exchange rate and difficulty?

Sure (@ $7.42/BTC, 157426.20629 difficulty):
Proposed rig ~$710
Theoretical power: ~710 Mhash/se
4,999 shares issued @ .75 BTC/share
~$27,819 or ~ 39 rigs
30*710 = 27690 Mhash/sec
Generate 50 BTC in ~6h 45m
~177 BTC/day, ~1244 BTC/week, ~4976 BTC/month (or ~$36,921 USD/month)

**Something I didn't take into account when calculating power costs: I have a variable rate where 10am-7pm is charged at ~15 cents / kWh and 7pm-10am is charged at ~8 cents / kWh, so that drastically lowers operating costs**

Rigs operate ~700 watts
504 kWh/day = ~$54/day operating cost
~$1500/month
Profit = ~$35421/month
45% growth = $15,939
Net Profit = $19,481 / month

10 shares = .001 stake
2625 BTC ($19,481) * .001 = 2.63 BTC ($19)
50 shares = .005 stake
2625 BTC ($19,481) * .005 = 13.13 BTC ($97)
100 shares = .01 stake
2625 BTC ($19,481) * .01 = 26.25 BTC ($195)

Once again, I think it is important to stress that I will be striving to have investments pay for themselves in 4-8 months.

Also, a projection of 1) difficulty and return of Bitcoins and 2) more details on future competitiveness (others have advantages such as free electricity or power-efficient custom hardware) would be interesting. Perhaps upgrading to a location with lower electricity costs, more efficient hardware etc.

As far as projecting difficulty increases, I'm no expert on the subject, but from studying several graphs as well as the effects of difficulty jumps on network power and the exchange rate for BTC, I think that even if the total number of Bitcoins generated falls (which is to be expected), the actual worth will be more than enough to compensate for the difficulty increase.  In the future (very long term here, thinking decades), mining will switch from Bitcoin generation and be about fee collection.  Less Bitcoins will be generated, that is a given, but more people will use fees and the worth of individual Bitcoins will increase to offset this.

As far as staying competitive, I believe that this is a relatively unique idea at this point, simply because of the scale proposed.  It's one thing to have a few computers running in your apartment where you aren't paying for utilities, but when the landlord realizes that you're using a whole lot more power than was calculated into rent, that will quickly end.  As far as power-efficient custom hardware, that would definitely be something worth looking into, and part of the growth fund taken from profits may be invested into R&D for something along those lines.  Once again, that might end up being something to be discussed among investors.  Eventually, as the business grows, the power consumption will overcome the current supply and will need to be upgraded, at which time the costs will drop (this is how my power company works, with larger consumers getting better prices.)  Once again, I think that discussion between the shareholders about new and more efficient rigs to use would be an excellent way to keep the business from going stale.

Thanks for doing this, I'm definitely interested in investing in such a venture. My only real issue here is trust, as you aren't very reputable on this forum yet.

This is by far my biggest road block: I've lurked for far too long.  I am open to suggestions on how to help alleviate the trust issue, I think that it is very important and that this won't pick up off the ground until we can get past it.  A logical argument would be that I have much more to gain from following through with the deal than fleecing a bunch of people, because the money to be made is better than the money to be invested.

[bcpokey]

An idea that I'd been tinkering with myself in the past (although I was planning to personally fund it all from start to finish, but a distributed investment idea is very clever), that seems pretty feasible really.

One thing I'm not sure if you've factored in though aside from the raw power costs, which will actually probably be much lower than you anticipate (3x 5850s can generate 750 - 900MHash/sec and use about 500W for the whole system for example depending on overclock), is physical presence.

The 30 rigs you propose will need to be housed, that will require the physical space for 30 rigs. They will need to be powered as discussed as above, and in a typical household a circuit breaker can handle a maximum of 20A (in US, 120V*20A = 2400W), as well as having a main circuit which can handle between 100A and 200A for the whole house depending on how it was built (12,000 - 24,000W total for house), 30 * 500W = 15,000Watts (21000 if you really use 700W), or in otherwords even if you managed to split the rigs across every breaker, it's possible the house would then not be able to run anything else, like lights, refrigerator, dishwasher, microwave, etc. Speaking of other things that take power, cooling is one of them, 15,000 Watts is actually nothing to sneeze at, 15,000W-hours equals 54,594BTU. An average 3 bedroom 1440 Sq-Ft house would only utilize about a 41,000 BTU heater for the whole house (and you'd be running your 54.5kBTU heater 24/7), meaning you'd need to utilize a lot of airconditioning, adding both to the cost and power load (which you might be squeezing already).

Not trying to shoot down the idea, I of course like it, but just trying to throw out some other possible stumbling blocks you might hit upon as you aim for the future of the project.

[Tawsix]

An idea that I'd been tinkering with myself in the past (although I was planning to personally fund it all from start to finish, but a distributed investment idea is very clever), that seems pretty feasible really.

One thing I'm not sure if you've factored in though aside from the raw power costs, which will actually probably be much lower than you anticipate (3x 5850s can generate 750 - 900MHash/sec and use about 500W for the whole system for example depending on overclock), is physical presence.

The 30 rigs you propose will need to be housed, that will require the physical space for 30 rigs. They will need to be powered as discussed as above, and in a typical household a circuit breaker can handle a maximum of 20A (in US, 120V*20A = 2400W), as well as having a main circuit which can handle between 100A and 200A for the whole house depending on how it was built (12,000 - 24,000W total for house), 30 * 500W = 15,000Watts (21000 if you really use 700W), or in otherwords even if you managed to split the rigs across every breaker, it's possible the house would then not be able to run anything else, like lights, refrigerator, dishwasher, microwave, etc. Speaking of other things that take power, cooling is one of them, 15,000 Watts is actually nothing to sneeze at, 15,000W-hours equals 54,594BTU. An average 3 bedroom 1440 Sq-Ft house would only utilize about a 41,000 BTU heater for the whole house (and you'd be running your 54.5kBTU heater 24/7), meaning you'd need to utilize a lot of airconditioning, adding both to the cost and power load (which you might be squeezing already).

Not trying to shoot down the idea, I of course like it, but just trying to throw out some other possible stumbling blocks you might hit upon as you aim for the future of the project.

I'm glad you mentioned this, I forgot to discuss the lodgings of the operation.  They will be housed in a large pole-barn with a 200 A breaker, and I will be utilizing the wonders of geothermal cooling to keep heat down (the ambient temperature in the hottest parts of the summer in the building is around 65 degrees F, so it stays naturally cool in addition to the cooling I will be providing.)  In the winter cooling will be a non-issue.  When the time comes, the breaker will need to be upgraded, both in the building and at the telephone pole, but I think that is a way into the future and will not cause too many problems in the short run.  I intentionally overestimated the consumption of each rig, as well as the price, in order to account for factors that I may not have thought of, such as the things you have mentioned.  The rig probably won't actually operate over 550 watts, but I think it's better to overestimate costs than underestimate them!

[zapeta]

Interesting idea. 

If you estimate that 750 shares need to be sold to start the operation, what happens if someone invests and the initial 750 shares aren't sold?  Will the investor receive a refund?  Secondly, is there a timeframe to wait for the initial 750 shares to be purchased or start the project with whatever investment has been gathered?  I don't want to tie up a bunch of bitcoins waiting for 750 shares to be bought if it ends up taking months. 

Thanks!

[Tawsix]

Interesting idea. 

If you estimate that 750 shares need to be sold to start the operation, what happens if someone invests and the initial 750 shares aren't sold?  Will the investor receive a refund?  Secondly, is there a timeframe to wait for the initial 750 shares to be purchased or start the project with whatever investment has been gathered?  I don't want to tie up a bunch of bitcoins waiting for 750 shares to be bought if it ends up taking months. 

Thanks!

I would say that if the 750 shares didn't sell by the end of the month, I would purchase them all back and close up shop.  That being said, the minimum number of shares that I would require to sell before starting will probably drop as the exchange rate for BTC increases.

[MoonShadow]

Alternative future revenue stream for major miners with persistant peer connections to other major miners....

Small peering fees for direct connections to vendors who desire that their transactions hit the bitcoin 'backbone' in very few hops.

[MoonShadow]

I am too old to learn these new tricks.  I can't make heads or tails of the stock trading site, and I don't think that I could use it at work anyway.

Anyone willing to be a broker?

[Nefario]

I am too old to learn these new tricks.  I can't make heads or tails of the stock trading site, and I don't think that I could use it at work anyway.

Anyone willing to be a broker?

The command line app for this is just to get started and let anyone who really wants to trade do so, we're working on a web interface that needs no install.

[zapeta]

I am too old to learn these new tricks.  I can't make heads or tails of the stock trading site, and I don't think that I could use it at work anyway.

Anyone willing to be a broker?

The command line app for this is just to get started and let anyone who really wants to trade do so, we're working on a web interface that needs no install.

A web interface would be great.  The command line method is workable but somewhat difficult to get set up.

[Nefario]

Tawsix,

You are very anonymous. What is your name, address, and phone number? Do you have a website, an email address that isn't a gmail, hotmail or similar? Have you participated in other online communities? If so where can we find contributions that you are especially proud of having contributed or people that have worked with you before?

I don't suppose you would mind putting up a video of yourself where you show us the building and talk a bit about how you were planning to arrange the rigs? Serious entrepreneurs wouldn't mind giving out such information. If I asked people I didn't know for $60,000, I know I would be overloading them with every kind of information that would make my pitch more credible and reduce their objections.

Best regards,
Casper

Being anonymous isn't exactly a problem in itself as long as the persona he's using has a reputation attached to it.

[Tawsix]

Tawsix,

You are very anonymous. What is your name, address, and phone number? Do you have a website, an email address that isn't a gmail, hotmail or similar? Have you participated in other online communities? If so where can we find contributions that you are especially proud of having contributed or people that have worked with you before?

I don't suppose you would mind putting up a video of yourself where you show us the building and talk a bit about how you were planning to arrange the rigs? Serious entrepreneurs wouldn't mind giving out such information. If I asked people I didn't know for $60,000, I know I would be overloading them with every kind of information that would make my pitch more credible and reduce their objections.

Best regards,
Casper

Casper: I am attempting to be very anonymous, I realize that this is a huge problem for raising the funds that I have requested.  I think that once we reach our start goal and I purchase the computers and show myself to be trustworthy, more people will be willing to invest, and that will start a wave.  I do not feel comfortable divulging the information you have requested, mostly because I plan on working with many thousands of dollars of computers that someone could simply come take from me if they knew exactly where I lived as well as the layout and location of the building, not because I am trying to hide so no one can find me if I screw everyone out of their money.

For those interested: so far 199 shares have been sold!  We're slowly approaching the starting line!  Thanks to all who have chosen to invest so far!

[BioMike]

I am too old to learn these new tricks.  I can't make heads or tails of the stock trading site, and I don't think that I could use it at work anyway.

Anyone willing to be a broker?

Sure, PM me.

[soossii]

Sounds interesting, one thing I didn't see in your calculations was what your plans for the network hardware and internet connection are and what the costs will be.

[Anonymous]

I suggest you redo the figures on 40% difficulty increases.

It will take a long long time to get back the btc you invest in such a scenario.

[BioMike]

Big risk due to lack of trust => big rewards. Bought some shares. I invested in DISHWARA, which is IMHO more risky then this and to be honest I expect more of this. Plus I don't need my bitcoins at this moment, even at 50% return of investment after 8 months would be worth it.

[BioMike]

Plus I don't need my bitcoins at this moment, even at 50% return of investment after 8 months would be worth it.

I’ll preserve all your Bitcoins and give you back 80% in 6 months. You don’t need them atm after all. Deal?

That would be 180% for you. My point is that the shares themselves don't loose their value, especially when they pay out (the 50% or 80% will only make the initial investment worth more because of the dividends).

<edit>
Hey, where did your post go?
</edit>

[oillio]

Interesting idea.
I would like to see much more information, however.

Being anonymous can be fine.  However, I would like to know more about your qualifications.
Have you worked on clusters or data centers at this level before?
How much experience do you have in IT?
Do you have any programming experience?
Are you currently mining?  For how long?

I would also recommend signing at least one post to this forum so that we can be sure you are the same person that is issuing the SIN stock.

Your powerpoint presentation was good, but I would also like to see a complete business plan posted.  If nothing else, to prove that you are serious about putting the time into this project.
Off the top of my head, some other information I would like to know:
More details on the rigs you plan to buy
Cost estimates on support equipment: UPS, racks, cabling, monitors, kvms, etc.
Projections on profits based on changes to the exchange rate and difficulty rate.
At what USD/BTC rate does it stop being profitable?
At what difficulty rate?
You mention increasing capacity to compensate for difficulty increases.  How will you determine the required capacity increases?  Will it be a static 15% of revenue?  Will you attempt to keep a constant BTC generated per day?
Any pictures you are willing to provide of the physical space where the cluster will reside.
How exposed is the space, do you anticipate any issues with humidity or dust?
Do you own the location, or rent?
How do you plan on securing the location?  Who else will have access to it?
Will you be paying yourself a salary for managing the cluster?
Will you pay yourself rent for the location?
Will the cluster be sharing power with your residence?  If so, how do you plan on determining the power usage of the cluster vs personal consumption?
When do you plan on paying dividends?  Monthly, quarterly?
Will you be providing financial reports?  When, and what will they contain?

Good luck, I love to see people actually implementing their ideas instead of just talking about them.