Topic: [GLBSE] Introducing: Bitcoin Syndicate, a new mining op trading publicly! - page 13. (Read 23337 times)

Just another quick update, I've made 2 minor alterations in wording to the bylaws purely to clarify the intent as discussed earlier on this thread.

Those alterations are:

Under section 4.1:
"This mining power will be assigned a value in BTC at a rate of 0.18BTC per MHash (this rate is calculated based on the average "street price" of building a mining rig at the time of the initial share release to the founding members)" (was changed from "at the time of the formation of the syndicate" to better reflect the pricing model that was ACTUALLY used rather than the planning phase info)

Under section 3.5:
"all liquid assets that the Syndicate holds (all Bitcoin Values) will be used to clear any debts/expenses outstanding for the Syndicate (note currently there are no debts/expenses, but in the future with growth and addition of operating expenses this may come into play)" (was changed to show that currently there are no debts, and no need for "expenses" right now, but over time as the operation grows, there may be needs for this, which is why this clause was put in place).

Hope that helps clear up the legal mumbo-jumbo a bit

Because these changes do not effect anything, and are purely clarifications, I did not hold a motion to make the adjustment. If any shareholders dispute this, I will gladly hold a motion.

Thanks!

First of all, Thanks BinaryMage! (I know you said no need to thank, but I do appreciate it, and I also want to thank you for your (future) Investment/Support of the Bitcoin Syndicate!)

Mila, Also Thank You for your investment!

To respond to your points in order:

- I understand the point you are making, that 1GHash of mining power in somewhere with 50% electricity costs will profit that much more. However in this case, the electricity to run the GPU gear is "free" to the syndicate (provided as part of the loan service by the founding members). But this will eventually come into play with the FPGAs once we have enough of them to justify moving it into a datacenter for higher quality hosting. However I have a plan in place (and an existing relationship) with a very good Datacenter which I suspect we can get a fantastic deal on hosting (well below market price). Or possibly even free hosting in exchange for some shares. We'll explore those options (and vote appropriately) once the time comes to justify that move.

- Also consider, the dual 7970 mining cards that red star is talking about, that rig likely consumes approximately (this is a rough educated guess) 700 - 800W (and that's not counting extra wattage to keep the GPUs cool which on larger operations can easily get up to 50% of the power consumed by the Rig itself)? Let's assume I pay 10cents per KWh (the going rate roughly) and he pays 5cents per KWh (just to illustrate a major difference in electricity costs). If we use the lower of the two (700W) that's roughly 504Kwh in a month. At 5cents thats $25 in electricity. Now those do about 1200MHash for the whole rig (with 2 cards, tweaked well). So to match that we need 3 FPGA boards, which each draw around 18W. Now if we take that (lets round up to 55W). That's 39 Kwh per month. So at my 10cents that's $3.90 in electricity costs. Though I agree, if someone is using those same FPGAs to mine in a low electricity area, it makes a difference. But since electricity is such a small percentage of the total with FPGAs it reduces that advantage to a tiny percentage. (enough that operational efficiency and so on makes the difference). Hopefully that helps with figuring out the economics of FPGA mining versus GPU mining

- the 6Ghash of FPGA power I write about are based on the successful IPO. If/When we sell all shares, we WILL buy 6GHash of mining power immediately. That mining power is guaranteed provided we sell out our shares. Even if we don't the IPO period will result in SOME profits, which will be used fully to buy FPGAs right away. So that mining power can be counted in the share value. (because if the shares do not sell, they also aren't diluting the value of the other shares, though I need to figure out the mechanics of this with GLBSE). Either way I fully expect/hope that the shares will sell out within the IPO period. And we will be able to buy our target 6GHash of FPGA mining power. THEN after that initial wave of buys, we will grow from there. So basically much like the other operations that started from zero, got investors, and used that investment to buy mining gear. We are doing the same. Except in addition to that we also have 6GHash of loaned gear to start with. Giving us an "edge".

- For lending your own hardware. Normally in the spirit of co-operation I would LOVE to do this. It would allow others to pitch in, and grow the pool even faster. The idea I love, and I tried to come up with a way to make it work. The challenge is by opening that up, it becomes a management nightmare. People all over the world either contributing hardware (or shipping hardware to us) and figuring out how to host it, manage it, and the legal liabilities involved. It opens up a lot of legal and financial risk, which is unwise. In addition to creating much more management overhead. The only reason this works at all with the founders, is we are all physically in one location, we see each other every day, and we know and trust each other. So the management overhead is nullified, and the liability is minimal because each controls their own gear, and we can co-operate physically to help one another when needed. So I'm sorry to say, for now we can't offer that option for aquiring shares to the general public. Though I do have an idea which is not completely formed yet on how we could offer a similar service under the syndicate umbrella, but I won't discuss it in full until I've finished hashing out the details (and got the basic IPO phase of the syndicate done and things running smoothly)

Thanks again everyone for your interest! We already have several sales, I hope we see several more rolling in to buy up those shares! The faster we sell the shares out, the faster we can order our first batch of FPGAs and increase all our profits!

I placed my orders before IPO to see if it crashes the BTCSYN code was advertised, so I created a test buy with real btc
I hoped it would execute as first thing after the IPO would launch at glbse (wanted to see if glbse sorts orders by timestamp of creation)
My observation was it executed quite early, probably triggered by the ipo start and it was probably the first public trade after founding members swapped their gpu mining commitments for shares and the rest went public.
as soon as it was possible I acquired 10+2 shares but forgot to note order in which they were created and this test result is not available.
it's still visible in the trade history

Glasswalker: can I lend you FPGA as you borrow gpu rigs? read: I get it back in 1 year, in the meantime you collect the mining reward and develop the company. I keep stock and get the board in 1 year back? similar to current gpu loan, shares for mining capacity borrowed
smiley

edit: FAQ on homepage answer this question ^^

Edited. I don't generally do that, because I think it likely that any potential investor would read the whole thread, and edits can make it hard to follow a conversation, but I'm willing to comply with your request in this case.

You don't need to thank me, but gesture appreciated nonetheless. Thank you for reading and honestly answering those questions. I can say that I do now recommend investing in this company. (Not that I'm an expert by any means)

Glad to see the IPO went alright! I do plan to invest, but it's late here and I'm exhausted. It'll have to wait until morning.

Thanks nefario!

The IPO is now live, the shares are trading in the wild!

Some trades have gone through already!

Thanks everyone, and I look forward to seeing how it turns out!

Also, as always, please don't hesitate to ask me any questions, or bring up your concerns.

Happy buying!

It turns out there was no transaction error. Everything is fine and I approve the launch of this IPO.

I have verified Glasswalker's real life identity, passport, and online profile for facebook, google+ as well as his home address and place of work, and his whois details.

I called him to verify his phone number.

Glasswalker is indeed a real person, and is relatively well known in his field.

I am keeping a record of this information.

Nefario.

Just an update, the IPO is delayed slightly, we are sorting out a minor transaction error on GLBSE, I'm working with Nefario on it now. I'm hoping to release in another 15min or so.

Sorry for any delay.

Thanks!

BinaryMage: I'm not at my computer right now but I will make your suggested alterations later tonight when I do the IPO. Would you by any chance be willing to add an "edit" to the end of your earlier post where you reccomended against investing? If not, I understand. But if you would I would be grateful, as I think seeing that post early may discourage some who may not read the thread from investing. I'm not asking you to edit the post content itself simply append a note.

Thanks again for your questions and suggestions.

(In reply to Glasswalker's earlier post in reply to mine)

Sorry for the delay, I also have had a busy schedule.

Length is not an issue, there's nothing wrong with being verbose. It's much more important that you convey your points clearly, which you have.

I did include an estimated $50 for shipping for the hardware, but you would certainly know the shipping situation better than I, living in Canada as you do. Just do consider the fact that you're competing with US-based businesses, in many cases. Again, it's not what I'd price the hardware at, but it's your call.

I think it's perfectly reasonable to use the USD/BTC conversion rate at the time of the IPO; that's just not what's stated in your bylaws. ("this rate is calculated based on the average "street price" of building a mining rig at the time of the formation of the syndicate")
If you change that, I think the price would be much more reasonable to investors.

"Best effort" is understandable. As long as you have at least considered the legal issues, I understand guarantees are tough, and I certainly wouldn't want you making promises you couldn't keep.

I'm afraid I still don't understand the reason to run multiple unrelated ventures under one banner; you aren't (I assume) being taxed. But as long as you would require a majority vote on each one, I can acquiesce.

A future debt clause is fine. Just wasn't sure what you were referring to there. (wanted to make sure I wasn't misinterpreting anything)

Thanks (again) for answering all of my questions completely and professionally. I look forward to (hopefully) seeing this business prosper.

Hey! thanks for the post, and the clarification. By no means did I want faulty info posted. I was simply repeating the raw data posted by mila, combined with what I could see with about 30seconds (literally) of research lol...

If you have more accurate data for me to put in there I'll gladly edit that post to reflect the actual data.

For example, what ratio of reinvestment do you do? Versus your percentage payout to dividends?
Also I didn't mean to imply by "no growth plan" that there is no growth. (for example FPGA.contract is doing additional share releases to fund waves of hardware). But their growth in value per-share is not planned for. They issue new shares which are fully allocated to new hardware. I'm assuming by your response that you have a more complex growth plan, based on re-using some of your internal profits from mining to re-invest and expand the value of existing shares.

Please let me know and I'll update it, as I said I definitely don't want to be posting false data about the other mining ventures. We can keep this to a friendly competition right? lol

Just wanted to address this to avoid spreading misinformation.  I believe the BTC discount that was referred to is the current displayed company holdings of close to $100, 1,000 NMC & 60 BTC.  You also say we have no growth plan, that is untrue.  The company was started with no rig, no money & no mining power of any kind.  We continue to grow by leaps and bounds and are currently raising funds for our next leg of expansion.  I would say our entire plan is a growth plan...  You also assume a 100% dividend payout.  This is most certainly not true.  We use profits for share buybacks, expansion, reserves and upgrading existing equipment.

That's not too shabby, that's a good return. Though are you considering that if you extend the IPO to cover additional Radeon's you will still have a similar ratio? (if you add more shares it divides further, or if you increase the value of a share it balances the average out).

So if you get 2 Radeons for 200BTC (random numbers for easy math) and each radeon does 1GHash, that's 100BTC per GHash, or 1BTC for 10MHash. But if you alter it to buy a 3rd radeon that's 3 radeons for 300BTC which still only works out to 10MHash per BTC. (does that make sense). There is potential for bulk savings, but it's my experience that there is little in the way of bulk savings to be had on GPU tech (unless you're buying at least $20K or more worth of hardware at a time, and even then it's more like 5% - 10% savings, maybe 20% on a damn good day with your sales rep in a good mood).

Also consider your GPUs will be consuming AT LEAST 10 times more power than my FPGA rigs will in the long run, if not closer to 15-20x

But either way 4MHash/s per BTC invested is a great return, I wish you the best of luck with your venture!

Hey, I'm loving the discussion going on here lol

So to answer these last 2 posts.

Mila:
I think the best way to compare apples to apples, is the value of the share itself. If you ignore dividends, and look at raw MHash/BTC you get for your investment.
That's what you are "Buying" for that money. The dividends end up being part of the business model (the means of making profit).

So a breakdown comparison using this method of the ones you gave examples of (using the numbers in your post) is:

Bitcoin Syndicate:
After 100% successful IPO, the syndicate (and so the shareholders) will own 6GHash/s of FPGA mining power.
We have 12,000 shares total.
This means 0.5MHash/s per Share
That means that at a price of 0.25BTC per share (our IPO price) you get 2MHash/s per BTC invested.
Features:
- We have 6GHash/s of "Additional" mining power for the first year (doubling the effective MHash/s per BTC to 4MHash/s per BTC invested during that first year)
- If our forecasts hold (which I admit they may or may not) at the end of the first year, when the 6GHash of GPU power ends. We will have added enough FPGAs through the growth fund to make it still worth 4MHash/s per BTC invested at that stage, and going forward indefinitely beyond that (and continuing to grow).
- We will grow in value rapidly due to 80% of mining power being re-invested
- We pay out 20% of all mining power to dividends monthly

BMMO:
Currently owns 4GHash/s of mining power.
4,000 shares total.
This means 1MHash/s per Share
Current share price: 0.357BTC per share
Current mining power per BTC: 2.80Mhash/BTC
Features:
- 100% dividend payout? (don't see this on their site at first glance)
- No growth plan that I can see

MergedMining:
Currently owns 1.62GHash/s of mining power.
5,500 shares total.
This means 0.3MHash/s per Share (rounded up slightly)
Current share price: 0.133BTC per share
Current mining power per BTC: 2.25Mhash/BTC
Features:
- BTC discount (I'm not following how that works just yet)
- No growth plan that I can see
- 100% dividend payout? (again not seeing this clearly defined, but assuming it's the case)

TyGrr:
Currently owns 12GHash/s of mining power.
1,500 shares total.
This means 8MHash/s per Share
Current share price: 3 BTC per share
Current mining power per BTC: 2.66Mhash/BTC
Features:
- 95% dividend payout
- No growth plan that I can see
- Nice warranties
- SLA on the uptime (though I'd love to see the backing contracts for this, and/or penalties they offer if it's breached).

Does that make sense for a nice apples to apples comparison of the other alternatives available out there?

And according to this, over the short term, and the long term, you are looking at a minimum of a 30% improvement in ROI from the Syndicate than you will get from any of the above mentioned options (only factoring in the asset value of a share).

Glasswalker: Yello


I did some mistakes (wrong premises) at the start of the math so the model is not applicable to each glbse asset
but one can say that existing operations provide a total mining capacity (in GHash/s) value estimated nr. shares x price
this estimated value of an operation is then divided by the capacity. thus a comparison of gpu mining assets

BMMO 4000 x 0.357 = 1428 btc / 4 ghs (357 btc / ghs)
MergedMining 5500 x 0.133 = 731 btc / 1.62 ghs (456 btc / ghs; 420 btc / ghs discount for bitcoin reserve held per share)
TyGrr 1500 x 3 = 4500 btc (375 btc / ghs)

once dividends are added to the above data, P/E can be calculated.
this are roughly the initial costs per mining capacity per selected glbse asset.

but again, those social contracts are not limited in time. while btcsyn is a 1 year mining contract that might not pay itself off (some fringe configurations of exchange rate and difficulty may render this activity a non profit venture). especially since this is the last year before the mining reward halving. the relation to mining hardware in the above assets is a kind of ownership or exclusive use rights that do not expire.
btcsyn is a 12+ month hardware loan and the gpu capacity will cease to exist.

I wanted to know what's my hashing power since I do not mine myself but want to mine bitcoins badly, this is a nice match.
btw it's 216 MHash/s

those figures need to be correlated with electricity prices at the hosting location but as an initial rough guide they're what's easily available.
who would like to enter fpga mining at the quoted price, would need roughly 770 btc to have 1 GHash/s up & running. for rough estimates what's doable with ipo btc it's better than wild guessing. thinking in terms of assets, their prices, mining capacity their represent it does not require an arm and a leg for monitoring, maintenance, utility bills and ad hoc effort to keep it mining. they all are optimized for dividends but that can be easily abstracted as equal to the growth budget contributions from mining.

now it boils down to keep it profitable to raise funds for the fpga boards.
i've found my initial mistakes (as why the initial formula is not applicable for this ipo)
hope this helped to give you an insight what the numbers should represent
some of the numbers should be even comparable with the wiki mining hw comparison

plus I keep in mind the rumor that gpu's have two years to live in average
thus a 1 year mining contract should not cost 100 % of the hw but more or less 60-70 % (that's my opinion on pricing of such goods & services).

Indeed a growth oriented stock has not manifested itself. It makes the reinvesting easier

Hey Mark, sorry I should have addressed you directly earlier. Since you were the most directly "negative" of the comments, I'll take the time now to respond to your comments.

For one, I don't appreciate the reference to "Piracy" but you are of course open to your opinion, and I'm not going to take direct offense, as it was pointed out my initial release may have been lacking some of the clarification needed.

Ultimately what this boils down to is:
- The hardware is loaned in, for one year as a kickstart to get things off the ground (because we had the gear already). The plan is to transition fully to FPGA, so longer term doesn't make sense anyway (and since most GPU rigs are designed to pay off within a year anyway, that's the useful lifespan of the investment anyway.) This is explained in more detail in my previous couple posts.
- The FPGAs are being bought based on shareholder vote and approval from known retail sources. And we are operating them in a central location. Anyone else is welcome to do the same thing. We have chosen to do this, and to offer shareholders a way to buy in. If you disaggree, and feel you can do it better, I suggest you either do this yourself, and do it better, and prove us wrong in our methods. In which case hey we may even decide to buy some shares in your operation! Or, give us suggestions on specific methods/ideas how we can do it more efficiently or "better".
- IF it came down to the syndicate coming crashing down, sure we could liquidate the gear, and we would have the OPTION of buying it ourselves (provided we had the assets to pull that off). But if you read in full the method of liquidation, it requires a fairly open process in deciding on the value of the gear. The lack of shipping for us is a bit of a silly point, as this would apply to ANYONE who happened to be local to where the gear was hosted. (if you hosted the gear at your location, you could buy it out without paying shipping if that opportunity presented itself). And as I point out in my previous posts, this clause is STANDARD in all mining ops trading publicly, it's a "cover our ass" clause for the founders (who have the responsibility of physically managing, operating, and maintaining the equipment, infrastructure, website, and so on, as well as managing the syndicate). A service for which we are not directly PAID. (aside from some initial shares for the hardware loan we kicked in). If things go south, we need a way out without major financial or legal liability. While doing our best to make sure our shareholders get some form of payout as well so nobody gets completely screwed.

Ultimately we want this to succeed, we're starting a business around bitcoin. We are running that business one way or another, regardless of what happens with the IPO. We would like to let others in to get involved, and in doing so it increases the overall pool of our resources. The increased resources allow us to pursue larger opportunities (such as larger bulk orders of FPGA gear) which we couldn't do otherwise.

All I can offer is all the information I've posted here, and on our website, and my personal assurances we have no intent of this being a scam to get free/cheap FPGAs. This is a legitimate business venture which we want to succeed.

As for the price of our shares, if you check GLBSE, there are other mining operations trading at similar pricing to ours with lower or equal returns. So I think we're inline with the "going rate".

Hopefully with the clarification from earlier posts, and the answers above, this puts your concerns to rest. But as I said if you have ideas about ways to do it better, I suggest you either go ahead and do it yourself, or let us know what you suggest, and we'll look into doing it ourselves (So you can feel better about investing, and improve the outcome for everyone else at the same time).

Thanks (and in the future, probably best to reserve final judgement, allowing the opportunity for people to respond to things, before throwing accusing, or negative terms like "Piracy" out there in a public forum, while you're entitled to your opinion, such things can reflect negatively on both yourself, and the person you're talking about, if taken the wrong way. Especially if they later redeem themselves through a response). As I said, not taking offence, just offering advice which helps keep discussion mediums like this forum a little bit more civil

Hey, thanks for the response again BinaryMage!

Yeah sorry I felt the need to apologize because we had an unexpected visit from my Sister-in-law this weekend, and I was busy being a host most of the weekend when I had intended on focusing on the launch of the Syndicate. Anyway, I was able to reasonably well balance the two... lol

Also sorry again for the length, I tend to be a bit... Verbose... Sometimes lol...

I appreciate you going to the trouble to quote a rig. I hadn't actually done a full build myself. Are you counting shipping to Canada for those parts? Many sources in the USA charge a LOT more to ship to Canada. (and many won't ship to canada at all).

We've checked the local ebay scene, and our local classifieds as well (kijiji). And local sources (computer stores and so on). For example the cheapest "In canada" for a new, or certified (warrantied) refurbished card on ebay I can find is over $200 per card.

I wasn't able to find any "used" that list that they ship to Canada for the prices you quote, except ones listed as "as-is" with confirmed damage.
Also from newegg, I'd likely end up paying $50 in shipping for the hardware (excluding the GPUs).

Not trying to argue with your math, obviously from where you're standing my price is "higher than market" and I appreciate your openness in accepting that we each have our opinion on the price we set for our goods/services

That said another thing to consider, is that the shares have not been issued to the founders yet. The Syndicate still holds 100% of shares. And the current BTC price is about $4.30. At that price, $0.75/BTC as you suggest is actually 0.1744BTC/MHash which is very close to the 0.18 we set as the value. (Also we all paid a fair bit more than that for our rigs, we were considering that our own loss since the prices fell on BTC and hardware somewhat.)

In light of the above, I still feel 0.18 is justified. But that is of course our opinion Though as I said, I really do appreciate the level of thought you're putting into this. It helps draw out information and ideas that may not have been thought of during our closed process with only our founders. I really sincerely want to be as open and transparent about everything as possible. But I knew I wouldn't be able to achieve that 100% with the website at launch, that's why these forum discussions are so valuable.

For the decisions on the hardware loan, we discussed it, but because we are all co-workers and/or close friends. We overlooked some of the legal items you mention (for what-if? scenarios). But ultimately because the GHash during the loan is intended as a kickstarter, and we're each running it on our own (and have families and lives as you suggested earlier). We didn't want to be bound legally (creating significant liability) to a fixed timeline to replace hardware. For example, as I mentioned, aquiring replacement GPU rigs is not cheap, or easy right now, so doing it in a very short timeline (with a hard legal deadline) puts a significant amount of stress, and potential cost on us in the event that happens. As I mention in the FAQ, we're in it for the long term, and longterm, a loss of 1GHash of mining power for a few weeks even (at the longest I would expect) would not translate to a significant overall loss to the profitability of the syndicate as a whole. But I definitely see where you are coming from. As investors you want assurances. Well I guess what I'm saying is that the "guarantee" would be "best effort". The same as uptime. For example if their home internet provider goes out for a 24h period, that's outside their control. They will get it back up as fast as they can within reason. And I can't hold them accountable legally to hit a full SLA. I spent the past 10-15 years working in senior IT Management of some complex (and critical) infrastructure. I know ALL about SLAs... But an SLA is only as good as it's supporting contracts. If the services backing your service fail, and you have no good SLA to support them, you can't offer your own SLA that's higher than that. It's an impossibility. So if/when the time comes we've grown to a scale that justifies a datacenter to host our gear (which I had planned for and expect to happen). Then we can begin offering full SLAs on things. Until then, it's all "best effort". And while I agree, as a large scale business investment that's a bit shaky, but comparing against the other alternatives in the bitcoin community, I would be surprised if you find a much better alternative for the same price.

Anyway, moving on... The thinking is that the syndicate is STARTING as a pure mining op. And mining will always be our "bread and butter". But we are a bitcoin business, not a mining business. We will undertake initiatives and ventures which span the full gamut of what bitcoin is, and in any way we feel benefits the bitcoin economy. That's why I list that everywhere on the site and in the initial post. It's not a "Mining company" (though I agree the choice of those words in the subject is questionable lol, but that was to reflect it's CURRENT state). For example, long term (beyond 2-3 years) mining is not a guaranteed income. I suspect it will be, but the economics of mining may begin to shift drastically as the block payout changes. Because of this we need to look at other means to diversify ourselves.

I understand what you're saying about people investing in the syndicate and not me. And I intended that to be the case. That's why I pointed out that all shares are voting shares, and every new venture requires a passed motion (voted on by ALL shareholders that choose to vote). If the shareholders view the venture as not a sound investment, they will vote against, and the syndicate won't be involved (at which time I can choose to personally pursue the venture, or abandon it). If the vote is positive, then the new venture would be a Syndicate initiative (and it would be branded as such). And would be fully owned by the syndicate (meaning that investment in the syndicate would include that venture as well).

For the dissolution vote, we force the vote because that keeps people who choose not to participate (or who are absent, or ignorant to the vote). Our thinking is, every one of the shareholders have known each other a while, work together every day (or at least talk nearly every day). Chances are in the next year, short of death or major illness, this will continue to be the case. So the chances of someone "not being able to cast their vote" tend to fall into those extreme cases. Because the dissolution is a safety net, and the case in which it would be called on would be a critical one (we wouldn't do it unless it was critical), we need to be able to act fast. And if people are unavailable due to vacation, illness, or other major issue, we need to move ahead regardless (even if the remaining members may be against the vote for whatever reason.). We stuck that in there intentionally to allow for this kind of circumstance. Though if you can suggest any wording changes I'd love to hear them.

The debt/expenses clause is intended as a future proof clause. Right now there will be NO DEBT. We are buying hardware for cash (bitcoin) up front. We owe nobody anything. And this will be the case for some time. Any business decision to change that would require a shareholder vote. There are valid future cases where expenses or debt would be incurred. If we move to a datacenter, datacenter hosting costs would be incurred. Or if there is a significant business opportunity requiring more investment than we have in liquid capital, we may vote on taking that opportunity (the vote would likely be to issue more shares to raise capital, but if the shareholders decide credit is the way to go, we will go that way). It's all open to shareholder vote. But you're right, right now, under our immediate situation, there will be no debt. Any expenditure requiring "creating" a debt would need to be approved by the CEO and Treasurer, and passed by a vote of the shareholders. So it's not like we would arbitrarily say "oh the syndicate owes me $10,000 so I'm paying out all assets to myself MUAH HAA HAAA HAAA!" lol... because the bylaws regulate that behavior. If that wording is unclear, by all means I again request any suggestions that might help clarify it.

lol, as per my twitter link haven't updated it in a while. Samuraipotato was a random blog I shared with a close friend. He hosts it, and it's likely broken right now (haven't posted to it in ages lol). I should get it back up and running though, as there were some amusing posts on there. I'll talk to him about it.

As for your questions and "friendliness" lol, no worries at all I take it as that, you're being extremely concise and clear in your intent, and wording your questions courteously and professionally. I hope that I am doing the same. I see this as a professional and helpful discussion to clear the air and make sure everyone is on the same page. As I have said several times. Openness and transparency are important to me. I want to ensure the right info is out there so people can make informed decisions. I don't want to screw anyone, I don't want anyone to get screwed. I sincerely want the Syndicate to be a booming success and make us all (founders AND public investors) a fortune... And that won't happen without the full understanding, and support of all our investors. (and a little passion from all those involved lol).

Mila: as to your post/questions:

I'm not quite sure I'm following your math clearly. The one example I used as a similar comparison (which I was able to glean enough info from directly) was FPGA.contract, which is run by a respected member on these forums, and is also one of the FPGA manufacturers currently available. Their setup was 6000 shares which were issued at 0.25BTC same as ours. That money was used to buy FPGAs, which currently mine around 3GHash/s if I'm not mistaken right now. (but they have ramped up to that over time, overall longterm averaging more like 2.5Ghash/s). That means that an initial investment of 0.25BTC earned you 0.5MHash worth of mining hardware (FPGA) that was owned fully by the organization (and shareholders). In their case their business model is different, they pay out 100% of all mining proceeds to dividends, and keep a small number of shares for the organization to pay for electricity and such. If they want to grow, they have no planned growth budget, so they must pass a motion to issue more shares (potentially devaluing existing shares, but in theory keeping them "the same" in value). This said, their shares have actually increased in value to 0.35BTC for some reason (which is fair, that's what the "market" decided they are worth).

In our setup, we have 12000 shares, of which about 5000 (rounding off for quick math) are issued to founders for the GPU gear loan. The remaining 7000 are sold publicly for 0.25BTC (same price as FPGA contract at their IPO). That money will (if the IPO is successful) raise a total of 1750BTC, which should be enough to buy 15FPGA boards, totalling 6GHash/s roughly. (all round numbers, will depend on BTC exchange at the time, and how successful the IPO is). That 6GHash is owned equally by each share. So that means that it's divided across all 12000 shares. Which works out to 0.5MHash per share. the EXACT SAME as the IPO value for FPGA.contract. BUT what this doesn't consider, is that those shares ALSO own a share of the 6GHash of GPU power, for the first year. Which means they actually control 1MHash of mining hardware for the first year, after which it drops to 0.5MHash. But... By the end of that first year, we'll have bought more than enough FPGA gear to replace that 0.5MHash lost from the conclusion of the GPU loan (if not a lot more). And beyond that point it will continue to grow at a rapid rate.

So overall 0.25BTC for our investment (the way I look at it, over a longer term) is a much better investment opportunity than the FPGA.contract. Both options have their merits (I'm by no means slamming them, Fizzicist is doing awesome work). But each has it's niche. Theirs is a smart short term investment. You spend BTC and get a dedicated hash rate to pay out to you. But it offers no growth opportunity to a given investor. The Syndicate method over a long term stands to be worth much more due to the growth potential, and it will pay out much more eventually (once it grows), but from day one, your initial dividend payout will be less than you would see from FPGA.contract. The risk with the syndicate is that things change, and potentially something negative could happen during that growth period while you're waiting for it to pay off. But that's why we'll be actively seeking out (And voting on) the best ways to optimize our growth and long term stability. So that over that timespan we're constantly adjusting, and rolling with the punches to take the best course of action as we go, and ensure a solid return on investment for our shareholders.



If you could explain the math you've done there, I'd love to understand your point of view so I can better discuss it.

And again, thanks for your feedback all of you! Keep it coming!

And I hope that I'm so far doing a good job of answering questions, and alleviating concerns/fears.

In the end I'm just a guy, who's passionate about bitcoins and their potential for our society. I've convinced my friends and co-workers to get involved as well, and some of that passion has rubbed off on them. We're now co-operating, so that we can pool our resources to achieve bigger and better things (and yes, make a buck of course). And we feel that by opening that up to the public, we not only allow more people to benefit from that, but it gives us a bigger pool of resources to do great things. And that's what we want. To seek out ways to do great and amazing things in the bitcoin community. This is (hopefully) our means to do that. (and your means to be part of it!)

Doh, I've done it again. Sorry for the wall of text. Hopefully these posts will get siginficanly shorter over time lol...

Hi, nice posts, interesting exchange of ideas. anyway I collected some math about present glbse stock

formula: nr of shares x 30d avg price / mining capacity = cost per Ghash / s (ghs)

oldest publicly traded gpu mining operations
BMMO 4000 x 0.357 = 1428 btc for 4 ghs (357 btc / ghs)
MergedMining 5500 x 0.133 = 731 btc for 1.62 ghs (456 btc / ghs; 420 btc / ghs corrected by btc reserves held)
TyGrr 1500 x 3 = 4500 btc (375 btc / ghs)

and the only comparable fpga operations
FPGA.contract 6000 x 0.359 = 2154 btc (770 btc / ghs)

without the fpga purchase would the syndicate model look sour
IPO 12000 x 0.25 = 3000 btc for existing mining gpu 6 ghs (500 btc / ghs) - way too much

but you do it differently
valuation of existing 6 Hhash/s @ 180 btc / ghs equals 1080 btc worth (shares worth 1080 btc distributed among founding members)
remaining shares valued ca at 2000 btc will go to the IPO offer

some mumbled numbers
at 500 btc / Ghash/s it would be 20 - 40 % more expensive than existing traded mining capacity
at 180 btc / Ghash/s it seems like an 40 - 60 % discount (DIY rigs vs assets at glbse)

using the FPGA.contract value as price guide, you could be able to start mining with 2.5 Ghash/s fpga
2000 btc / 770 btc/ghs =~ 2.5 ghs
this added to the 6 existing equals 8.5 ghs and 3000/8.5 = 352 btc / ghs
again very competitive price per Ghash/s as well the ratio gpu to fpga (70:30) making it an interesting mix with lower electricity bills

I'm going to read the bylaws again, check the "small print"
you published a lot of info and your model is not that straight forward as other assets (dividend oriented)

nevertheless, watching you and wishing you good luck raising 2000 btc in the IPO

... on the second look it makes more sense.

I'm not going to quote due to length; this is in response to the above post.

No worries about delays, we all (or I should say most of us) have lives apart from Bitcoin. Thank you for taking time to read, consider, and honestly answer questions; that is quite impressive.

The "Mining hardware comparison" page is not really accurate on prices. For example, here is a priced out rig:
HD 5830 x3 @ 109 ea. (off Ebay, refurbished with warranty) - $327
OCZ ZS 750W 80 Plus Bronze @ 100 ea. (new off Newegg) - $100
ASRock 970 EXTREME4 @ 110 ea. (new off Newegg) - $110
AMD Sempron 145 @ 40 ea. (new off Newegg) - $40
Kingston 2GB DDR3 @ 11 ea. (new off Newegg) - $11
Cooler Master HAF 912 @ 60 ea. (new off Newegg) - $60
Total cost: $648; adding in ~$50 for shipping comes to ~$700
MH/s: ~310 per card (can be achieved with minimal effort), ~930 total. $700/930MH = ~0.75 $/MH

That's with an unoptimized rig using all new component excepting the GPUs, including a case. It took me about 15 minutes to configure. Your price is your decision, not mine, but I think $1/MH is simply unrealistic.

Loan-wise, a one-year loan seems reasonable for the same price as to buy with hardware maintenance & electricity included. But I'm unclear on what exactly your method is for maintenance. "responsible for replacing those MHash" is not concrete. Are they required to replace it within a certain time period? What happens if they do not? Is the downtime paid back at the end of the loan? What happens if someone chooses to leave? I'm sure these people are trustworthy, but a year is longer than it seems, especially for an industry so volatile as Bitcoin. I would like it, as a potential investor, if you have a plan for what to do if someone departs the Syndicate.

Future opportunities-wise, you have some novel ideas and some already implemented. If you want more detailed feedback, PM me, but it isn't really relevant to this thread. What I do not understand is why any of these, possibly excepting the first, should be coupled with a mining operation. A competitive gaming league, for example, may be a good idea, but is entirely unrelated to a GPU/FPGA mining operation, and at least in my opinion should be run as a separate company. Investors are not investing in you. They're investing in your company.

Your forecasts seem reasonable enough, though I obviously cannot audit them more closely without numbers.

As for the dissolution, I understand such a clause is necessary, but I still have a few reservations. "Failure to participate in this timeframe results in your shares being counted as "pass" votes" is the first. I'm not sure what the intent is here, but it seems to leave a significant legal loophole. With no method of voting defined, one could simply call a vote, not give any way for anyone to vote, and close the syndicate. I'm not implying that I think it likely you would do this, but it seems something that could easily be changed, and would reassure me.

Secondly, "all liquid assets that the Syndicate holds (all Bitcoin Values) will be used to clear any debts/expenses outstanding for the Syndicate" also concerns me. Unless you are buying gear on borrowed money, since you stated that the electricity costs for the GPU miners are paid by the syndicate members, the only possible expense would be FPGA electricity cost. The chances of FPGA mining becoming unprofitable in the next year are virtually nil. What possible debts are you talking about?

Your identity seems perfectly legitimate. (Though the website listed on your Twitter account, http://www.samuraipotato.com/, gives a 403 error)

Again, thank you for answering my questions. I certainly will "fire back", in what I hope is a perfectly friendly way. Understand I wish the best for you and your operation; I just think investors would much appreciate some clarification. (And hopefully, it will help you too!)