Topic: [BitFunder] IceDrill.ASIC IPO (235 Thash Mining Operation powered by HashFast) - page 90. (Read 378647 times)

This force is strong with this one. ^^^

In your reasoning you assume that mining will remain profitable for a long enough time that 0.0016 btc will actually be paid as dividends. It is absolutely not clear whether any of the companies starting now will ever be profitable. And in that case the only way to make a profit is to sell your shares cheaper than you bought them.

I don't think it's a scam either.

But your explanation is incorrect.  We aren't talking about private shares (the ones that don't receive dividends unless .0016 is ever reached) but about public shares that were sold off-market at below the official price.  It's debatable whether that was allowed by the contract (contract allowed changing price of batches but nowhere allows undocumented sales at below the stated price) but it's not something worth making a huge fuss over.

I fail to see how this would count as a scam. First of all, the fact that there were private investors was known and not hidden at the start of this offer. Secondly, the private shares are not the same as the public ones - the private shareholders don't receive any profit until the public shareholders will have received 0.0016 BTC per share. In other words, the public investors will get much more hash power than they have paid for, until they will have received full ROI. After that period, they will still get the hashing power they paid for. The situation couldn't be much better for public investors.

Disclaimer - I own (public) shares

yeah pre ipo sale is scam

just sell shares at 50% value to a friend, open an ipo
tell friend right moment to sell them and get 50% profit (or more)

Sorry - but the math just doesn't add up.  Let me explain why in more detail.

At the minimum (current level) you say:

20k BTC raised from public sales is being paid to Hashfast (on top of that there's 4400 BTC being used for infrastructure).

If it reaches the next tier your table says:

27.5K BTC raised from public sales is being paid to Hashfast (presumably the infrastructure costs are at least as much given there's now more hardware to be deployed).

So 7.5K more BTC from public sales is being paid to Hashfast.

But your table shows only 4 million more public shares having been sold.  4 million shares at .0016 is only 6400 BTC.  So even if all shares are sold on the market with zero fee you just aren't actually 7.5k more BTC from public sales.

The same problem exists but even worse for the last batch of shares.

I can think of various explanations for this and the NICEST one is that there's an error in the table (either in the numbers or in the labelling of the columns).  One such explanation would be that private investors are only putting cash in if the extra batches sell - and that their cash is listed as being as "Raised from Public" which is clearly wrong (and which would explain why your explanation of the numbers appears to include $0 from private investors if there are no future sales).  So the answer could simply be that the column titled "Raised from Public" should be titled "Paid to Hashfast" and includes payments from private investors that depend on the extent of future sales.

Think you misunderstood my point here.

I wasn't talking about later shares being more expensive - I understand why you did that (though I don't necessarily agree with the reasoning).

I was talking about you getting less hash/USD from Hashfast.

You get more hashes (over 10% more) per BTC (and in absolute terms) according to the table for the next 7500 BTC you raise than for the final 7500 BTC after that.

We've collected 24400 BTC from public share sales in total. The 1150 BTC difference between the 25550 and 24400 represents the discounts for the block sales we did (sold at less than 0.0014). Those shares have been transferred to their respective owners on bitfunder. 4400BTC is in our possession (hasn't vanished) and will be used for deployment.


The IPO share price point for reference is 0.0016 (represented by the public share payback clause). The 0.0014 and 0.0015 BTC tranches represent the early and immediate requirements for payments to Hashfast as well as setup costs. A discount was applied to the 1st two tranches to acknowledge the risk taken by those early (pre-tapeout news) investors.


The examples in the table are for illustrative purposes and the numbers are correct. The public/private share ratio scales down/up such that a public share represents 10MH/s at the outset of the farm. The "BTC raised" in the table represents the capital expenditure for hashing power only and not the setup/logistics costs involved in deployment of the ~6 metric tons of actual mining equipment, which is covered by the 4400 BTC mentioned above.
See: http://i.imgur.com/Usl84Ah.png (as used in the BTC-TC listing), it includes the public/private share split.


Definitely an error, thank you for pointing it out. DeadTerra has changed the "25th of October (00:00:00 UTC, 4 November 2013)" to 30th of September (00:00:00 UTC, 30 September 2013). This was my mistake, the BTC-TC listing required a reformatting/re-organisation of the IPO wording, I somehow managed to screw up that important date quite badly in the process. My most sincere apologies for this, it's a big fat glaring mistake and should have been picked up and fixed in the proof reads.

Although the BTC-TC submission was resubmitted for approval after we made the requested updates, the votes on it remain unchanged. Other than the mistake above we've had no further feedback from the voters.  The listing, for reference, is here: https://btct.co/security/ICEDRILL.ASIC (see details tab) Apologies to everyone who asked for the listing to be made there, it doesn't look like it will happen anytime soon (or at all). The forces at work there are well beyond our control.

Thanks for dragging that up. 

There's some seriously strange maths going on here.

From the contract:

"The first batch is a initial sale of 14,500,000  (14.5 million) shares, which will be sold on BitFunder for 0.0014 BTC per share. "

"The second batch of 3,500,000 (3.5 million) shares and will be sold at 0.0015 BTC per share."

That's 18 million shares in total - and adds up to 25550 BTC.  Call it 25400 BTC to allow for transaction fees.

Yet the table quoted in the post above claims that with 18.5 million shares sold (500k more) only 20k BTC has been raised.  Somewhere over 5K BTC ($0.5 million) has vanished.  Have some private unpaid shares somehow accidentally got into the public section?

There's further problems with the math in the table.  Look at the 3 different examples.  They're 20k BTC, 27.5K BTC and 35K BTC - so same gap of 7.5k BTC between each set.

Now look at the hashing-power.

When capital increases from 20K to 27.5K hashing power increases from 235.3 Th to 303.03 Th - an increase of just under 68 Th.
When capital increases from 27.5k to 35K hashing power increases from 303.03 to 363 Th -- an increase of just under 60 Th.

Somehow extra hashes get MORE expensive per hash the more you buy?  That's the opposite way round to how pricing usually works on bulk purchases.

I think there's just been a cockup on BTC raised in each line (and not anything dodgy going on) - as it appears from the table that 4 million shares at .0016 raise the first extra 7.5k public BTC then 3 million more public shares (at the same price) raise another 7.5k BTC.  When in fact neither of those sizes of public share sales raises anywhere near 7.5k.  It looks like the table was changed at some point and one of the columns (BTC raised) didn't get updated when the others did.

EDIT:  Was reviewing the BTC-TC listing as it claimed to be updated.  It also has silly things like "These assets have to be sold by the 25th of October (00:00:00 UTC, 4 November 2013) before the offer expires."  In the Financial Planning section.

I appreciate you're only asking for a few million dollars - so can't really justify someone proof-reading a few paragraphs of text - but noone even skim-read it for obvious howlers like that? (which also totally contradicts the contract which claims the IPO ends in September anyway).

Good question.  Also, I haven't been following this closely at all.  WTF is up with the decreased farm capacity.  Title states 500TH.  The IPO shares were released on the premise of 500TH, now it's been nearly cut in half.  What's going on with this?

Good call.

I don't understand the question?

We're keeping an eye on all the competing offers out there, but I don't feel that we should initiate knee-jerk reactions to phrases like "decided to" and "going to". I'm not saying our competitors won't deliver on their plans, they probably will I wish them all the best (for what it's worth).

We have to consider technology level, price and compatibility with our deployment plans. Drastically changing course/focus at our scale and <8 week deployment/readiness schedule would create brand new risk profiles for us, none of which are better than the one we're currently working to nullify/mitigate.

Difficulty increases seem to have increased to around ~30% and is obviously a major concern. Although beyond our control, there are some steps we could take to mitigate difficulty risk:

1. Move the infrastructure deployment closer to where the final manufacturing steps will take place, cutting logistics requirements down to the bone.
2. Leverage our buying contract(s), along with the 25% reinvestment to buy more for less on subsequent expansions. $/Gh of hardware (that is not immediately available) is currently eroding exponentially.
3. Explore other, non-degrading revenue streams which flow naturally from our current contractual base.
4. Plan for longevity. Although the cost of running these machines should not be an issue short-term, it does affect long term ROI. Part of the reinvestment money will go directly towards improving our bottom line for the long-term.
5. Overclocking based on cooling is still a hot-topic of debate. One I normally steer well clear of as the exact benefits are really all speculation at this early point. Whether or not we'll get more hashing power than we bought at relatively little extra capital expenditure (cooling infrastructure) is unknown at this stage. The research is very interesting though.

A mitigating factor beyond our control is that generation 1 ASICs (110nm+ tech) will start hitting cost/revenue equilibrium sometime around the end of the year. That's assuming spot remains at around ~$100-120. While it won't result in a difficulty decrease (I've only ever seen one of those) as the machines are shut down, we're hoping to see at least a short term slow-down in the difficulty rise as the old(er) production lines are discontinued. "hoping" is a bad word in that sentence, I used it because I can't use "planning"

The points mentioned above are not exhaustive, we're happy to take any serious suggestions on the topic on board.

In a sense, the shareholders are the contingency plan, no?

In that case it would have just filled the highest bid. I see people make this claim quite often. Do you guys seriously not understand how these exchanges work? That would be understandable for someone who has never used one before, but I'd expect that does not apply to people posting in this sub.

That or some idiot enjoys selling at a 75% loss. And showing options on charts is just retarded, no where in the world for any financial instrument are option trades shown in the main chart.

I think (may be wrong here) that Bitfunder (same on BTC-TC) reports the strike price on option trades not Strike+Premium.  So when an option is sold with a high premium it ends up leaving a very low price in the history if exercised.

Ah, I think that 24hr low was due to an options trade.