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Topic: Gigamining / Teramining - page 125. (Read 216459 times)

donator
Activity: 1218
Merit: 1079
Gerald Davis
April 13, 2012, 12:22:16 PM
Giga,

I have been following this thread with a lot of interest.  I am curious what you hope to accomplish with the bond?  

If you are paying out 100% of the PPS earnings on your 50 GH/s, aren't you eating the power cost?  How about inevitable replacement needs?  The time you spend keeping everything running smoothly?  Is this a one time cash-out by you in order to monetize your (extensive) effort?

Perhaps you are just a benevolent benefactor for the entire community??  

The price of the bond is higher than his hardware cost and his anticipated electrical cost over the effective lifespan of the bond. If he is right he comes out ahead.  If he is wrong he comes out behind.

Hypothetically if you buy a 1 MH/s contract from you for 100 BTC upfront would you?  
Would you consider it losing money even if you needed to pay ~$0.01 per month in electricity?
If 100 BTC if profitable and 0 BTC is unprofitable obviously there is an equilibrium somewhere in the middle right?
legendary
Activity: 2044
Merit: 1000
April 13, 2012, 12:18:17 PM
Giga,

I have been following this thread with a lot of interest.  I am curious what you hope to accomplish with the bond? 

If you are paying out 100% of the PPS earnings on your 50 GH/s, aren't you eating the power cost?  How about inevitable replacement needs?  The time you spend keeping everything running smoothly?  Is this a one time cash-out by you in order to monetize your (extensive) effort?

Perhaps you are just a benevolent benefactor for the entire community?? 

hero member
Activity: 756
Merit: 522
April 13, 2012, 06:08:16 AM
Quote
BTC / Bond : 0.02202454

Sounds pretty good, about 10 cents per, close to 2% for some people.
vip
Activity: 1358
Merit: 1000
AKA: gigavps
April 12, 2012, 01:25:06 PM
To all gigaminers,

I have updated the gigamining home page with the amount of the first coupon payment. There is an extra bonus that will be paid out every time the difficulty changes. Since I don't want to spend too much time on calculating coupon payments every week, the day of the difficulty change will go to the lowest difficulty.

You can see the first coupon payment amount here -> http://gigamining.com/

You will also notice that there are only 5k bonds being paid coupons. I have struck a deal with a large bond holder to hold back receipt of the bonds for a couple weeks which will help with coupon payments until the mini rigs arrive in 4-6 weeks (yes, that is both a joke and the actual time frame).

I have also bought back the remainder of a mining contract I sold for 10Gh to make sure enough bitcoins are being produced to make coupon payments. On top of this, my glbse.com account will always hold, at a minimum, two weeks of coupon payments.

Why am I telling you all this? I want to be as transparent as possible so that you can have confidence in me and this bond.

Best,
gigavps
legendary
Activity: 1666
Merit: 1000
April 12, 2012, 06:19:23 AM
For those not knowing what a CDO is...

http://en.wikipedia.org/wiki/Collateralized_debt_obligation
hero member
Activity: 756
Merit: 522
April 12, 2012, 05:43:11 AM
Just you wait for the CDOs hehehe.
vip
Activity: 1358
Merit: 1000
AKA: gigavps
April 11, 2012, 07:22:47 PM
Well this is quite interesting, it would seem one of the bond holders has decided to make an ETF out of the gigamining bonds he holds.

http://polimedia.us/bitcoin/mpex.php?mpsic=F.GIGA.ETF

This has to be a first! Cheesy
hero member
Activity: 560
Merit: 500
Ad astra.
April 11, 2012, 07:13:23 PM
Gigavps - are you planning to offer any more of these anytime soon?

Hi BinaryMage,

I think I am going to get some coupon payments out, and get the mini-rigs tested and running before I decide on a next move with the bond. I also want to let the glbse.com market settle down a little and for investors to start seeing a return.

So in the short term (4-6 weeks) there will not be another bond issuing. In the medium term (6-12 weeks) my my magic 8-ball says "cannot predict now".  Wink

Best,
gigavps

Thanks for the prompt response; that tells me what I need to know.
vip
Activity: 1358
Merit: 1000
AKA: gigavps
April 11, 2012, 05:37:24 PM
Gigavps - are you planning to offer any more of these anytime soon?

Hi BinaryMage,

I think I am going to get some coupon payments out, and get the mini-rigs tested and running before I decide on a next move with the bond. I also want to let the glbse.com market settle down a little and for investors to start seeing a return.

So in the short term (4-6 weeks) there will not be another bond issuing. In the medium term (6-12 weeks) my my magic 8-ball says "cannot predict now".  Wink

Best,
gigavps
hero member
Activity: 560
Merit: 500
Ad astra.
April 11, 2012, 05:26:36 PM
Gigavps - are you planning to offer any more of these anytime soon?
hero member
Activity: 560
Merit: 500
Ad astra.
April 11, 2012, 09:58:04 AM
Financially speaking, from a non-Bitcoin perspective, the ROI for a perpetual holding like this is just ridiculous - over 100% annually at the current difficulty. I suspect that draws some with less technical ability or inclination.

Where are you getting 100% ROI?  Even if difficulty remains flat block reward will be halved in 8 months.  My first thought was great concept but it will never fly due to low ROI%.  I have to hand it to giga though executed awesomely on his end and a very impressive offering.  Kinda bizzare it is trading up to 0.3 BTC per MH/s post IPO.  All the risk vs reward concerns are magnified is someone is paying 50% higher price.   I guess that also points out giga could have gotten away with even higher price (which just blows my mind).


5 MH/s is ~0.1 BTC for month for the first 8 months, then ~0.05 for the next four, unless I screwed up something. .8 + .2 = 1.

(Not that I think difficulty is likely to remain constant, but I have no real way of effectively predicting what it will do.)
legendary
Activity: 924
Merit: 1000
Think. Positive. Thoughts.
April 11, 2012, 09:08:33 AM
I am curious......

There seems to be huge demand for this offering, which by my math works out to paying approximately $1 per MH (or .2 BTC per MH for you real die-hards).  It is very easy to build rigs that offer nearly 2 MH per $1, so why the rush to buy this? 

I am assuming people don't want the hassle of maintaining a farm?  Don't want the electric bill? 

I understand paying a premium for simplicity, but paying twice as much seems a bit steep. 

Just curious. 

Financially speaking, from a non-Bitcoin perspective, the ROI for a perpetual holding like this is just ridiculous - over 100% annually at the current difficulty. I suspect that draws some with less technical ability or inclination.

Speaking as someone who is technically inclined and does run a mining farm, this is still appealing. I have (a) mediocre facility access, (b) frequent travel and (c) electricity that's not ludicrous but not cheap either. My mining farm is certainly profitable, but diversifying my holdings with a good ROI and an extremely trustworthy operator seems a good call.

Also, I think speculation is a significant factor.  Wink
donator
Activity: 1218
Merit: 1079
Gerald Davis
April 11, 2012, 08:59:21 AM
Financially speaking, from a non-Bitcoin perspective, the ROI for a perpetual holding like this is just ridiculous - over 100% annually at the current difficulty. I suspect that draws some with less technical ability or inclination.

Where are you getting 100% ROI?  Even if difficulty remains flat block reward will be halved in 8 months.  My first thought was great concept but it will never fly due to low ROI%.  I have to hand it to giga though executed awesomely on his end and a very impressive offering.  Kinda bizzare it is trading up to 0.3 BTC per MH/s post IPO.  All the risk vs reward concerns are magnified is someone is paying 50% higher price.   I guess that also points out giga could have gotten away with even higher price (which just blows my mind).
vip
Activity: 1358
Merit: 1000
AKA: gigavps
April 11, 2012, 08:37:41 AM
Ok thought this through once more and I am sorry, because I'm completely wrong up there - if you did it as suggested by me, this would no longer be PPS but a different payout system that would take the hash rate calculated from the difficulty and just pay out the proportional part that 1 MH/s (or anything else) would have created. This might make it much easier (as you could issue dividends as soon as the new difficulty is fixed) but is a different concept.

Everything that's missing in your current payout system imho is a certain point in time where you say that each week begins (I'd recommend something in UTC) and you could (for convenience/transparency) offer a link to every 2016th block where the new difficulty is included, so people can see the exact timestamp on that, which you used. Also the 2**32 thigie might be fixable... Wink

I will offer a 3 BTC bounty for a google doc that does the calculations to the exact specification. Payment windows are Sunday 00:00 to Sunday 23:59 and are paid the following Monday.

Otherwise, we'll call this good enough.
legendary
Activity: 2618
Merit: 1007
April 11, 2012, 08:25:23 AM
It's not 100% clear at which block your "seconds" start. Also you are paying as if blocks were mined at exactly the rate that die difficulty suggests. Depending on if the difficulty grows or goes down, this benefits either you or your bond holders. If you only pay per real blocks mined on the network, this might be closer to the real hash rate. I haven't thought this 100% through though, I might be wrong on that.

Your calculation currently goes like this:
There are 100800 (with 50 BTC reward blocks atm.) Bitcoins emitted in 1 difficulty.
You assume that they are "handed out" uniformly (at a rate of X coins per second).
You don't know the real rate though, as it takes longer than 1 week until all 100800 BTC of 1 difficulty have been mined, so you estimate that it would take 2 weeks on average, resulting in a rate of 0.08333... BTC/second generated for the whole network.

The problem I see in this is that it can take longer or shorter than 2 weeks (and never really does take exactly that much time) but you don't seem to account for that. So as long as the hash rate is rising, it seems to me as if people are not being paid for the time that is left to fill up the theoretical 2 weeks. On the other hand, should hash rates of the network drop down, you would end up paying longer than expected your average PPS payout (in extreme cases for up to 8 weeks instead of 2) even though only few blocks are being solved.


Ok thought this through once more and I am sorry, because I'm completely wrong up there - if you did it as suggested by me, this would no longer be PPS but a different payout system that would take the hash rate calculated from the difficulty and just pay out the proportional part that 1 MH/s (or anything else) would have created. This might make it much easier (as you could issue dividends as soon as the new difficulty is fixed) but is a different concept.

Everything that's missing in your current payout system imho is a certain point in time where you say that each week begins (I'd recommend something in UTC) and you could (for convenience/transparency) offer a link to every 2016th block where the new difficulty is included, so people can see the exact timestamp on that, which you used. Also the 2**32 thigie might be fixable... Wink
vip
Activity: 1358
Merit: 1000
AKA: gigavps
April 11, 2012, 07:57:13 AM
I'd recommend you to just pick a block on a certain date + time and calculate from this block to the next one. You could even set a certain time (e.g. "the last block before 10 AM UTC on Saturday until the last block before 10 AM UTC on the next saturday") to make it more transparent.

Something like:
Week #123:
Blocks #123456 - 123800: Difficulty 1234, 50 BTC/block --> 0.0001 BTC/block per MH/s = 100% PPS, 344 blocks: 0.0001*344 = 0.0344 for this difficulty
Blocks #123801 - 125000: Difficulty 2345, 50 BTC/block --> 0.00001 BTC/block per MH/s = 100% PPS, 1199 blocks: 0.00001*1199 = 0.01199 for this difficulty so far

Week #124:
Blocks #125001 - ...

and so on. (Numbers completely made up)

Also: "The expected number of hashes we need to calculate to find a block with difficulty D is therefore D * 2**48 / 0xffff", meaning your 2^32 estimate is wrong (but only by 0.00something percent... Wink ), see https://en.bitcoin.it/wiki/Difficulty

Hi Sukrim,

Thanks for your reply. I appreciate your input.

What exactly is the difference from saying i'm going to pay for the last 604,800 seconds (aka a week) and your suggestion? How is one "more transparent" than the other?

Thanks,
gigavps
legendary
Activity: 2044
Merit: 1000
April 11, 2012, 07:49:35 AM
#99
I am curious......

There seems to be huge demand for this offering, which by my math works out to paying approximately $1 per MH (or .2 BTC per MH for you real die-hards).  It is very easy to build rigs that offer nearly 2 MH per $1, so why the rush to buy this? 

I am assuming people don't want the hassle of maintaining a farm?  Don't want the electric bill? 

I understand paying a premium for simplicity, but paying twice as much seems a bit steep. 

Just curious. 

Financially speaking, from a non-Bitcoin perspective, the ROI for a perpetual holding like this is just ridiculous - over 100% annually at the current difficulty. I suspect that draws some with less technical ability or inclination.

Speaking as someone who is technically inclined and does run a mining farm, this is still appealing. I have (a) mediocre facility access, (b) frequent travel and (c) electricity that's not ludicrous but not cheap either. My mining farm is certainly profitable, but diversifying my holdings with a good ROI and an extremely trustworthy operator seems a good call.

Makes sense.  Thanks for taking the time to respond!
legendary
Activity: 2618
Merit: 1007
April 11, 2012, 07:45:46 AM
#98
I'd recommend you to just pick a block on a certain date + time and calculate from this block to the next one. You could even set a certain time (e.g. "the last block before 10 AM UTC on Saturday until the last block before 10 AM UTC on the next saturday") to make it more transparent.

Something like:
Week #123:
Blocks #123456 - 123800: Difficulty 1234, 50 BTC/block --> 0.0001 BTC/block per MH/s = 100% PPS, 344 blocks: 0.0001*344 = 0.0344 for this difficulty
Blocks #123801 - 125000: Difficulty 2345, 50 BTC/block --> 0.00001 BTC/block per MH/s = 100% PPS, 1199 blocks: 0.00001*1199 = 0.01199 for this difficulty so far

Week #124:
Blocks #125001 - ...

and so on. (Numbers completely made up)

Also: "The expected number of hashes we need to calculate to find a block with difficulty D is therefore D * 2**48 / 0xffff", meaning your 2^32 estimate is wrong (but only by 0.00something percent... Wink ), see https://en.bitcoin.it/wiki/Difficulty

vip
Activity: 1358
Merit: 1000
AKA: gigavps
April 11, 2012, 07:27:22 AM
#97
I have put up the calculation for computing individual coupon payments at the bottom of the page -> http://gigamining.com

If you find a flaw in my calculation, please let me know.
vip
Activity: 1358
Merit: 1000
AKA: gigavps
April 11, 2012, 06:50:09 AM
#96
My mining farm is certainly profitable, but diversifying my holdings with a good ROI and an extremely trustworthy operator seems a good call.

Thanks for the vote of confidence BinaryMage. I appreciate your kind words.
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