I think there is a lot of confusion going on about the latest developments. Let me try to elaborate on this.
First we want to clear some misunderstandings:“You bought 14,500 units and now you sell them at a higher price in the IPO to make a profit for yourself”.The money that is raised at the IPO will go to the purchase of 1000 TH/s of mining equipment, which costs about 3,760 BTC. Financial breakdown to deploy 1PH/s:
* 33,794 shares at IPO: 3,313 BTC
* Current reinvestment funds: 150 BTC
* Mining revenue (16-31 May): 300 BTC
“do you think you could tell us what that 1000BTC will be spent on cryptx? Shares or what?”We will pre-finance the 1000 BTC to be able to purchase up to 1000 TH/s after the IPO. This means it is a loan from us to the PetaMine. The more shares are sold in the IPO, the less has to be pre-financed and paid back in dividends.
“Why are dividends withheld for a few weeks?”This is a joint effort of current investors, new investors and CryptX. Investing in new hardware now will have a much better impact in the long run on both unit value and dividends.
“But they are misleading people so they can maximize their own profits. The first few months will be the most profitable, but instead of pumping out dividends then are going to use it to reinvest so they can have more machines, which makes them more money. “We can tell all of you that we have already invested over 1,000,000$ of our own private money into this project. This money has been spent on:
• Datacenter: Electric installation, cooling, infrastructure, alarms, network, etc
• Shipping costs: We have paid all the express shipping from US (Cointerra), from Switzerland (Bitmine), from China (Dragon miners, custom miners).
• PSU: we have bought about 200 psu’s so the Coincraft desk could be delivered faster.
• Custom miners: Apart from the chips, we have paid the full production of 250 miners.
• Custom designs
• Labor costs
• Etc
We have a margin on hosting costs, so it is in our interest that PetaMine grows. We have cut hosting from 0.45$/kwh to 0.25$/kwh because we believe in the project for the long term and want it to have every chance to succeed.
Old situation:We were hashing at about 500 TH/s with 80,760 units. What would have happened if we did not make some drastic changes?
First we would pay the last part of the Bitmine contract and we would be in the same situation like before. We would have to wait on the RIG’s to be delivered. In best case, all RIG’s would be deployed in a couple of weeks and we would hash at 700 TH/s with 80,760 units outstanding. This would have meant 8.67 GH/share.
Second every week the dividend payments would have gone down and the hosting fees would have gone up.
The overall result would have been that the PetaMine would produce less and less dividend until costs became higher than revenue. The consequences would have been a dropping unit price and a dropping dividend.
New situation:
We have cut the hosting fee from 0.45$/kwh to 0.25$/kwh. In other words we gave up a large portion of our income to the PetaMine project. We could have left it at 0.45$ and receive a lot more hosting for the coming months. Instead we want the project to thrive and become one of the larger players in the Bitcoin mining place.
We bought back about 14,500 shares with the money we otherwise had to spend on Bitmine for our second part of the contract. We did this because we are convinced that we could use these shares to take the PetaMine to another level.
What will be the overall result?Plain and simple, if the IPO is successful PetaMine will be much larger and the unit holders will be owner of 15 GH/s per share instead of 8.68 GH/s per share. On top of this the costs of the mine are almost halved.
We are convinced that we all have to look at this project with our long term glasses on. Big dividends in the short run will result in a dead project in the long run. PetaMine cannot simultaneously grow exponentially and pay large dividends at the same time. We want to become and stay one of the large players in Bitcoin mining.
Wait so PETA has been charging $0.45/kwh and investors are not outraged by this? $0.25/kwh is approaching reasonable costs yet still incredibly overpriced. How will peta compete with operations like megabigpower at less than $0.05/kwh?
Also how has PETA invested "over $1,000,000" of their own money in to this project? And where is the extra 1,000 btc loan coming from? Has this ~3,000btc been taken out of dividends or is this just a massive expense that will be ignored until bankruptcy?
Looks like PETA confirmed they bought the 14k shares to sell in a new IPO at twice the price they are worth for an easy profit.
So in the end PETA is just a scheme to build as big of a farm as possible while charging outrageous hosting fees payed to themselves of course.
As difficulty increases exponentially investors profits will dry up. But PETA will be happily sucking in money at a fixed rate of $0.25/kwh.
Has PETA considered offering a stock to give investors the chance to get in on this huge profit PETA will be sucking out of PETAMINE?
At 2MW PETA will be charging PETAMINE $84,000/week while increasing with every PETAMINE reinvestment and PETAMINE will earn 10% of $220,000 (decreasing with every difficulty increase (also assuming they start mining during next difficulty)).
