Topic: Gigamining / Teramining - page 103. (Read 216450 times)

He spent none of his money so had no risk.

I made those assumptions because 1) they're more conservative and 2) they're easier. You're right that he would likely have more BTC available and will be in a much better position come October (or December, or February). Either way, Giga is in a great position here. He's likely to be first in line for MiniRig SC, so he'll make a killing when difficulty only doubles before it really explodes. If he doesn't offer the upgrade he was talking about, he has a huge farm that will probably stay current for a very long time in BTC terms for nothing out of pocket. If he does offer the upgrade path for a fee, he'll collect all the fees to his own pocket. Either way, win for him. He took the risk back in February to preorder the Minirigs out of pocket and then issued the bonds even though BFL Singles deliveries and specs were a clusterfuck, and he was rewarded for it.

I think your assumptions are pretty off.

1)  he only issued 10K of the bonds at 1 BTC.  I am sure the other 30K were issued near market price.
2)  the exchange rate has been demonstrabley higher than $5 on average since GIGA floated the bond in April.
3)  he has only paid out a total of 4,057 BTC in coupons thusfar (I have no clue where you came up with 15K), some of which is covered by his current farm


Here is a more realistic look at the situation:

1)  Giga floats a total of 40,000 bonds at an average price of 1.1 BTC
2)  Giga converts 21,818 BTC @ an average of $5.5 to purchase the 8 mini rigs
3)  Cancels 4 of them and gets a refund of 60K

So this is where we are at the moment.....put yourself if Giga's shoes.  What would you do?

You now have 18,125 BTC left from the bond issuance (44,000 - 21,818 - 5,057), as well as the $60,000 in cash from the refund.  With the coming ASICs, you KNOW difficulty is going to massively increase, hugely depressing the coupon payments.  

Assuming NO increase in difficulty (which is silly), you only has to pay out around 450 BTC a week (remember you have over 100 GH/s producing).  That means you can pay coupons for 40 weeks before exhausting your BTC taken in on the issuance, and STILL be left with $60,000 in your pocket.  

I think we all know what you would do.......

There are many things to be said, but I won't. I hope everything goes well and he makes bond holders happy, otherwise the Bitcoin economy will go in the toilet for a long time.

Only assuming that he's invested with Pirate.

Let's play the assumption game. This isn't exactly how it happened since he did multiple issues, but it simplifies things.
1. Giga issued 40k shares, and didn't withhold any for himself.
2. Giga got 1BTC for each share
3. Giga cashed out 25k of that @$5/BTC

That would have netted him USD$125,000 and 15k BTC. Giga orders 8 MiniRigs to get up to 200GH/s for $120k in February, and pays dividends out of the 15kBTC while he's waiting. The SC announcement comes, and Giga cancels 4 minirigs and gets refunded $60k. He continues to pay the half the dividends he's not getting from his canceled minirigs out of the 15kBTC. October comes, and Giga buys 2 Minirig SC with the USD$60k e has laying around and trades in 4 Minirigs for 2 more Minirig SC.

At this point, the probably still has a little of the 15k BTC kicking around, and 4TH/s of hashing power. If he sticks with the terms of his bond, he can pay out 200GH/s out of his 4TH/s mining farm and pocket the rest, with no out of pocket expenses. Even if he's feeling generous, he can increase each bond from 5MH/s to 50MH/s, and still have 2TH/s for himself.

I guess we can call it fractional reserve mining. So if the pirate goes down he takes GIGAMINING with him!

He is obviously paying the extra from the proceeds of the bond sale.  Pretty shrewd if difficulty continues to skyrocket and ASICS become reality. 

As long as the coupon is paid, he is living up to the contract and no one should really care how he meets his obligation. 

I have a question.
You sold bonds for 200Gh/s, but from what I see your mining capacity is lower than that. Am I missing something?

I've been thinking about the value of these bonds quite a bit, what with the upcoming ASICs and all. I own quite a bunch. I wonder, Gigavps, if you would be willing to commit to a plan to reassure your current bondholders regarding the ASIC upgrade? Here's what I'm thinking:

If/when ASICs arrive, the best business plan from your perspective would be to let the bonds devalue to next-to-nothing and then exercise the buyback clause. But, if you were kind-hearted, generous, etc. (hint, hint) maybe something like this would work (using today's basic prices as an example):

Let's say each bond has been selling for 1 BTC which is worth $6. GIGAMINING is currently 200 GH/s and has four minirigs at 100 GH/s. Those four minirigs could be upgrade to four BitForce SC Mini Rigs, but it will cost ~$60,000 or 10,000 BTC in trade-in. The end result would be 4 TH/s.

Say you start TERAMINING, same number of shares as GIGAMINING (40000) but each share is worth 100 MH/s. You could offer a trade-in for GIGA-->TERA such that it costs something like 0.5 BTC to upgrade. The end result? 20,000 BTC, which should be enough to buy the new SC Mini Rigs and give a hefty profit to spare. Any competitors offering the same bond (100 MH/s) would have to sell bonds for at least 0.5 BTC to cover their costs (5000 BTC for 1 TH/s), but they would likely go for more like 1 BTC to make a profit. In that case, the value of the GIGA bonds would be roughly Competitor's price - 0.5 BTC each.

What's in it for you versus the buyback option? Now that's the question... You'd make your bondholders very happy, and we would all cheer in your honor. Actually, my guess is that the bondholders would be happy to get ANY value from their old bonds and you might be able to beat your competitors by offering a lower price point.

It's a bonus:

In http://gigamining.com/ , I see 5.5 instead of 5 for 25/6/12 & 2/7/12 in Mhs /bond

hehe, true true. Atleast he did add 20GH(.5MH each to 40k) to the bonds to help compensate a bit. As noted at the gigmining.com link. The other small advantage is now there may be more bonds available if an investor wanted to increase their holdings.

Well, I recently had to school Eldentyrrel on something he ought to know 100x more about than me. Everyone is entitled a brainfart now and then

I think you dont understand the difference between a bond and a share.
The only thing affecting your bond value is difficulty (and, to some extend, price/difficulty). Any additional increase in hashrate at a given bitcoin price will result in increased difficulty, which will decrease your bonds returns and therefore value.  Whatever savings giga or anyone else may obtain from more efficient hardware is not passed to bondholders, its in fact the opposite, its detrimental to existing bond holders.

There has been a lot of screaming and foaming about how those new and less power hungry FPGA's will not help bond holders at all.
If those waste only a fraction of power, the cost per Mh is lower and income must improve per Mh.

Hi mb300sd,

I have to use a special reporting agent in BAMT which currently does not show what pool each FPGA is using. They are however running on GPUMAX.

Best,
gigavps

Just wondering if theres a reason the minirigs aren't mining on gpumax like the ones here, http://wa.gigamining.com:81/mgpumon/

Wouldn't it make sense to get paid more? or do they have a limit?

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Added to Watchlist: https://bitcointalksearch.org/topic/watchlist-90136

Wow!!!! Those look amazing!

To all gigaminers:

The 110% celebration has started. You can check out http://gigamining.com to see what the known pending coupon payments will be.

You can see the mini rigs hashing away at http://gigamining.com/mgpumon/

Took a little while to get everything up and running the way I wanted, and I have relearned a valuable lesson. Never trust a USB hub!

I have one last thing to say. These mini rigs are the REAL DEAL! Dead simple to setup, get going and keep running. Thanks BFL for making the mini rigs.

Best,
gigavps

P.S. Here's a little mining p0rn until I can get a proper post up in the FPGA section.