BITBOND ASIC call for feedback
Hello BITBONDers
I am sorry for the limited updates recently. There have been a number of things going on behind the scenes to figure out a path forward. With a high degree of confidence I can now share with you a plan for BITBOND.
First, let me apologize deeply for the suspension of payouts. I had very high hopes of earning good returns for everyone involved and setting the stage for future work in GPGPU computing. I feel strongly enough about what we were doing to quit a very good job to focus on this full time and worked 12 hour days throughout the summer and fall. We developed several proprietary technologies to do more with less including 5850’s I had manufactured in China, PCB’s and wiring systems made here in the US, and software to manage and control over 200 netbooted rigs in a custom rack system. While we tried our best, we simply could not do everything we needed to do in the timeframe we had. Too much had never been done before by me (sometimes by anyone) and required far more resources than we had. We desperately tried our best to make BITBOND successful. I apologize for our failure.
Second, I would like to clear up some confusion. Whether it’s Avalon ASICs, GLBSE, or BITBOND there is a shocking amount of misinformation, misunderstanding, defamation, and truly bizarre ideas on the forums. Luckily there are quite a few cool heads, though perhaps not enough to keep the tinfoil hat crowd at bay. Here is a list of facts to help fill in the gaps.
- BITBOND started in April, 2012 and paid all payouts through the closing of GLBSE on October 5th, 2012.
- BITBOND lost about 230 btc in the GLBSE closing.
- October 5th through block reward halving on November 28, 2012, BITBOND paid out all payouts to the majority bondholders (the “85%”).
- The majority bondholders bought their BITBONDs in May, July, and August and received their bonds via GLBSE like all other bondholders.
- The majority bondholders received the same 2mh/s per bond and 105% PPS. Everyone has the same bonds/bond terms
- To give added protection to their large investment, the majority bondholders requested detailed contracts signed and notarized.
- Due to the detailed contract terms, I was obliged to mine for them as long as possible, even when losing money
- We had been working on a plan to move to Wenatchee, WA from Tacoma, WA. This would have cut our power bill in half and given us room to expand considerably. We learned that the cost of installing power from Douglas County PUD would be $40,000 to $60,000. We simply could not afford the move. Consequently, we were limited by the power we have at our current facility.
- Meanwhile the GPUs we had custom manufactured in China had power routing issues (http://imgur.com/a/Jf3ME) that were burning out cards under heavy load. This required rework from a PCB assembly and rework facility north of Seattle, which spanned almost two months, keeping 600 cards offline
- We had significant delays in manufacturing and producing our custom power supply system (comprised of two PCBs and wiring harnesses assembled by hand) that, combined with card power issues limited our mining output to just under 200Gh/s
- When the block reward halving occurred, BITBOND was producing just under 200Gh/s but paying out about 180Gh/s worth of payments each week. The surplus was not enough to pay for the $4,000 per month power bills, facility rents, Internet access, or any salaries.
- We had about $3500 in reserves (IIRC) at that time. Therefore, BITBOND could not continue to operate. I made the decision to stop payouts to the majority bondholders until ASICs arrived
- I placed order #3431 with BFL for one mini-rig SC last year. The majority bondholders and I determined that given BFL’s history it was too risky to pay for the order until there was evidence that BFL could produce a working ASIC at the performance levels they advertised.
- In recent discussions with BFL Josh, BFL has decided not to honor our order because it was not paid. He has given me a timeframe of April or May for an ASIC if paid for today. I would guess it will be at last June.
- Since block reward halving, most of our current mining revenue has gone towards fixed expenses, with a small amount left over saved for ASIC purchases
- We have explored many avenues of liquidating our GPU equipment to buy coins to pay back bondholders and/or to buy ASICs to resume BITBOND payouts. We have not yet found a firm that is willing to buy used custom hardware. Most of our GPUs are old enough and used enough that they are not of interest to buyers (note that we have almost 100% 58xx cards)
The plan going forwardThrough several sleepless nights, we have managed to pull together enough funds and to purchase 10 x Avalon ASIC units in batch 2. This will provide about 660 GH/s. It is far from the 1.5 TH/s we hoped to have with the BFL mini rig, but the Avalon ASICs have been proven to exist and work. We should also receive them much sooner than putting in a BFL order now.
I am suggesting creating a new security on Cryptostocks called BITBOND ASIC. All current BITBOND bonds will be exchanged 1:2 for BITBOND ASIC. The new bonds will be 2.25 Mh/s each, payable at 100% PPS. Thus, if you have 10 BITBOND, which provides 20 Mh/s at 105% PPS, through the exchange you will receive 50 Mh/s at 100% PPS.
BITBOND will no longer be perpetual. Instead it will continue through 2014.
Avalon batch 2 is projected to start shipping March 5th. If that date were to hold, I would expect to receive the ASICs around March 11th. We will need a few days to get them into our facility, tested and configured for our environment. Payouts would begin the following week, on Saturdays as before.
I would appreciate any constructive feedback on this approach. If there are ways that I can improve the payouts I will try, but I would like to stick to what I feel confident I can commit to at this point.
Again, my deepest apologies.
