A Bitcoin Mining Company - SkepsiDyne Integrated Node

[Tawsix]

The main thread is located here.  For the most up-to-date information on SIN, and to get your questions answered the quickest, post there.

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[mroth7684]

Well since no one else is replying...

It's an interesting idea... I know Amazon already offers a cloud GPU computing service for $2.10 an hour each rig comes with 2x Tesla Fermi GPUs but I'm not sure of the hashing power on those. Tests showed it was unprofitable or very little profit, however the tests were done when the exchange rate was far below $5 though.

So question #1: How profitable will this be if the exchange rates fall to say $1.50/btc?

question #2: I'm not sure why you need to start out on a large scale with $28k worth of mining rigs. Why not start the idea by yourself with your own investment capital at 1-2 rigs, then dump the profit from those into buying more rigs each month or however long it would take to mine enough BTC for a new rig (cba to do the math)

I don't know enough about bitcoin and the system and how the market works but in my opinion I wouldn't invest money for a future gain in bitcoins. It may be profitable this month or even 2 months from now. But I get the feeling it won't be profitable in the long run that would make it worth spending money on a mining rig. I prefer to just mine with what I got and take the 100% profit instead of spending $2,000 and hoping that 6 months later the bitcoin system will still be the same and the investment pays for itself.

[AjaxOfSalamis]

Why not just call it Cyberdyne Systems?

[Sukrim]

This is a crosspost from http://bitcointalk.org/index.php?topic=8208.0 btw.

[BioMike]

This is a crosspost from http://bitcointalk.org/index.php?topic=8208.0 btw.

Which is a cross post of http://bitcointalk.org/index.php?topic=8167.0

[Enky1974]

.....an hour each rig comes with 2x Tesla Fermi GPUs but I'm not sure of the hashing power on those.

it's not good nvidia, forget tesla and its 80 mh/Sec.

[Tawsix]

It's an interesting idea... I know Amazon already offers a cloud GPU computing service for $2.10 an hour each rig comes with 2x Tesla Fermi GPUs but I'm not sure of the hashing power on those. Tests showed it was unprofitable or very little profit, however the tests were done when the exchange rate was far below $5 though.

Thanks for your interest!  I messed around on Amazon EC2 for about a week and spent about $30 only to find out that the whole thing was a lost cause (Telsa GPUs, as mentioned earlier, are garbage for mining BTC.)

So question #1: How profitable will this be if the exchange rates fall to say $1.50/btc?

question #2: I'm not sure why you need to start out on a large scale with $28k worth of mining rigs. Why not start the idea by yourself with your own investment capital at 1-2 rigs, then dump the profit from those into buying more rigs each month or however long it would take to mine enough BTC for a new rig (cba to do the math)

#1. If the exchange rate falls, the difficulty will probably fall, and make it easier to mine the coins.  But even if the difficulty stays the same, then mining at 1.5USD/1BTC with 39 rigs will be in the black almost $6000 at the end of each month, after electricity is paid for.  I think there would be a crisis mode at that point, and some serious discussion on the future of the business, but I don't think that that kind of drop in price is in the future, especially without a drop in difficulty to accompany it.

#2. The problem I see with this is that it takes a certain amount to beat the difficulty increases and make enough money before them to reinvest and grow.  I don't think that having only one or two rigs is enough to do that in the current climate, which is why I'm trying to get enough funds to make a lot of money and not only beat but lead the difficulty increases.  I will not be starting with $28k worth of rigs, I don't think anyone expects me to raise all the funds in a few short days.  As of this moment, 405 shares have sold, which is enough to buy 3 rigs, so I am going to be withdrawing those funds in the next few days and purchasing the first wave of rigs (which I'm hoping will help my legitimacy) and hopefully more people will buy into this once this occurs.

I don't know enough about bitcoin and the system and how the market works but in my opinion I wouldn't invest money for a future gain in bitcoins. It may be profitable this month or even 2 months from now. But I get the feeling it won't be profitable in the long run that would make it worth spending money on a mining rig. I prefer to just mine with what I got and take the 100% profit instead of spending $2,000 and hoping that 6 months later the bitcoin system will still be the same and the investment pays for itself.

The number of rigs will not remain static, and portions of the profits of the company will be dedicated to growth in order to continue to produce a significant amount of BTC.  Investors are paying for the initial equipment, which will produce enough profit to expand and keep the business competitive.

Thanks again for your interest, I hope I answered your questions adequately.

[BioMike]

Personally I think at a point these type of companies will take over the hashing power of pools (call it the next step in mining evolution). If such company manages to get ~6 blocks an hour (or maybe all) it will become very unprofitable for "home"-miners and pools (who mostly depend on the "home"-miners) and they will drop out of mining (unless they do it for the bitcoins themselves, but I doubt that). The question is if such company can get enough leverage to pull such trick.

[Tawsix]

Personally I think at a point these type of companies will take over the hashing power of pools (call it the next step in mining evolution). If such company manages to get ~6 blocks an hour (or maybe all) it will become very unprofitable for "home"-miners and pools (who mostly depend on the "home"-miners) and they will drop out of mining (unless they do it for the bitcoins themselves, but I doubt that). The question is if such company can get enough leverage to pull such trick.

That's a possibility, the main reasons that I think mining companies will make for a faster, more efficient system is because a company can get bulk discounts on capital and energy, can afford R&D, and can expand rapidly.

Stock update: 496 shares have been sold so far, which means that only ~250 more are needed before operations begin.  I project that this will be met by the end of the week, especially if the current rate of selling continues.

[REF]

where do you plan on putting 30 rigs and how do you plan on keeping them cool

[Tawsix]

where do you plan on putting 39 rigs and how do you plan on keeping them cool

The rigs will be housed in a pole-barn that I own, and will be cooled using geothermal technology (already existing infrastructure.)

[SgtSpike]

where do you plan on putting 39 rigs and how do you plan on keeping them cool

The rigs will be housed in a pole-barn that I own, and will be cooled using geothermal technology (already existing infrastructure.)

Do you have the capabilities to provide 21000 watts of power throughout said pole-barn.  If not, do you plan to have electricians bid on how much it would cost to upgrade the existing electrical infrastructure to support that many rigs?

[jrmithdobbs]

Yes, I too would like to know how you expect to be able to provide proper power and cooling to these machines.

You seem to have left both out of all of your equations. In () are my expected answers. Please surprise me. I don't think you've thought this out as well as you think you have.

Do you have dedicated staff that will be monitoring these? (No?)
Do you have anyone familiar with datacenter design laying out your space? (No?)
Do you have commitment from electricians to properly wire your space? (No?)
What kind of network connection are you planning on providing for these machines? (None/Home DSL?)
How are you planning on attaching them to said network connection? (No plans.)
Do you actually understand what is necessary to cool the amount of jules you're talking about here? (No.)

Seriously, you are not going to cool something like this with any infrastructure already in place unless you were previously using it to host a nuclear reactor or something equally ridiculous.

[Tawsix]

where do you plan on putting 39 rigs and how do you plan on keeping them cool

The rigs will be housed in a pole-barn that I own, and will be cooled using geothermal technology (already existing infrastructure.)

Do you have the capabilities to provide 21000 watts of power throughout said pole-barn.  If not, do you plan to have electricians bid on how much it would cost to upgrade the existing electrical infrastructure to support that many rigs?

I don't expect to be putting all 39 rigs in at once.  As it is, the 200A breaker box currently installed will provide sufficient power until the business grows enough to warrant upgrading it.  With the higher capacity box will come lower energy prices, but this is all well into the future and after the business is well established.

Yes, I too would like to know how you expect to be able to provide proper power and cooling to these machines.

You seem to have left both out of all of your equations. In () are my expected answers. Please surprise me. I don't think you've thought this out as well as you think you have.

Do you have dedicated staff that will be monitoring these? (No?)
Do you have anyone familiar with datacenter design laying out your space? (No?)
Do you have commitment from electricians to properly wire your space? (No?)
What kind of network connection are you planning on providing for these machines? (None/Home DSL?)
How are you planning on attaching them to said network connection? (No plans.)
Do you actually understand what is necessary to cool the amount of jules you're talking about here? (No.)

Seriously, you are not going to cool something like this with any infrastructure already in place unless you were previously using it to host a nuclear reactor or something equally ridiculous.

At first, no, mostly because there are only going to be around 5 rigs to start, but as the business grows, this will be something looked into.  That's not to say they won't be attended to when the business starts up, but there won't be a dedicated staff.
Yes.
Yes.
I'm not sure if you're asking for how I'm going to connect them within the LAN or the quality of my internet connection.  The former will be accomplished using switches and CAT5 cables, the second is a DSL connection.
Switches, CAT5 cables, and a wireless router.
Yes I do.  The existing infrastructure I spoke of is the open-loop geothermal cooling system in place, which can easily be upgraded as the business expands.

edit: 567 shares have been sold, less than 200 more needed to begin!

[jrmithdobbs]

Ok, now I have to bite. What WERE you doing in there previously?

[Tawsix]

Ok, now I have to bite. What WERE you doing in there previously?

The people who owned it before went bankrupt, so I was able to pick it up really cheap at an auction.  They were using it for climate controlled storage I believe... but they took all of the fancy climate control equipment.  They left the geothermal well though.  It's been sitting empty since, property taxes on it are pretty cheap so I just considered it an investment.  I am happy that I am able to finally put it to good use.

[SgtSpike]

200A measured in 120v, right?  Well that's 24000w right there (technically, 19200w usable using the 80% rule).  Regardless, sounds like it'll be a fine setup.

I'll buy a couple of shares if I can figure out how to use the silly stock exchange system.

[Tawsix]

200A measured in 120v, right?  Well that's 24000w right there (technically, 19200w usable using the 80% rule).  Regardless, sounds like it'll be a fine setup.

I'll buy a couple of shares if I can figure out how to use the silly stock exchange system.

That is correct, however I will also be experimenting with rigs with PSUs on 240V.  Like I said, this is going to be starting small, so upgrading the box will be something of a landmark point in the company's timeline.

Once the web interface comes into effect for GLBSE, I think there will be many more people involved who were turned off by the command line setup.  Nefario is very good about helping figure it out for those who are interested until that time though.

edit: Only 60 or so more shares are needed until the first rigs will be bought.  I am confident this will occur before the end of the week.

[cypherf0x]

I have a feeling that inexperience is going to come around and bite you.

I'm going to bet that the geothermal climate control wasn't designed with that amount of internal heat generation in mind.  If it's like most then it's designed to keep the temperature constant vs outdoor temperatures if it was designed for storage.  It'll work for a bit but once the geothermal sink gets saturated with heat you'll loose most of your cooling capacity.  I'd have an engineer experienced with that system run the numbers you're looking at to see if it's even capable of handling that amount of heat on a constant basis.

[SgtSpike]

I have a feeling that inexperience is going to come around and bite you.

I'm going to bet that the geothermal climate control wasn't designed with that amount of internal heat generation in mind.  If it's like most then it's designed to keep the temperature constant vs outdoor temperatures if it was designed for storage.  It'll work for a bit but once the geothermal sink gets saturated with heat you'll loose most of your cooling capacity.  I'd have an engineer experienced with that system run the numbers you're looking at to see if it's even capable of handling that amount of heat on a constant basis.

Meh.  Open the windows = problem solved. 

No, but seriously, I'd get going with mining, THEN worry about adding additional cooling as necessary when the geothermal isn't able to keep up.  It'd be a waste of money to worry about the cooling system first.  Sure, it might not keep up.  Worst case scenario?  Some of the miners are shut down for a few days while a better cooling system is put in place.  Worst case scenario by worrying about it right now?  Fewer rigs to mine with, since funds would be used towards getting professional opinions.  And a later startup date, since he would be delaying the purchase of equipment until said professionals came back to him with info.

As a shareholder, I vote for getting mining rigs up and running ASAP, then deal with any issues that crop up as they arise.