McAfee’s MGT Goes Into Bitcoin Mining, With Massive Amount of Hardware

gentlemand

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Quote from: talkbitcoin on October 11, 2016, 09:55:25 AM

miners who are mining for money, don't care about this stuff. all the drama about altcoins being bad, scam, pump and dump,.... are for traders and drama lovers around here.

That's fine if you have a shed full of GPUs. You're not going to get much enthusiasm from backers if you're buying miners by the square kilometre and leasing warehouses. These guys are either hoarding or cutting deals with OTC buyers.

I'm not so sure there are many OTC buyers for Potcoin.

pereira4

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McAfee is a great businessman and knows how to stay relevant by supporting up and coming technology like Bitcoin. Sure he is a flamboyant douchebag like Kim Dotcom but that is a part of the product they sell, and at the end of the day they can deliver good services so let's hope this is the start of the end of the asian based mining monopoly.

talkbitcoin

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Quote from: Wind_FURY on October 11, 2016, 02:13:30 AM

Quote from: springgers on October 10, 2016, 08:59:40 PM

Quote from: Wind_FURY on October 10, 2016, 08:47:59 PM

Quote from: franky1 on October 10, 2016, 12:35:06 AM

Quote from: Yakamoto on October 10, 2016, 12:29:05 AM

That's an ok beginning for a larger company interested in Bitcoin mining, but I am curious as to whether or not they're actually going to be able to make money off of their investment rather than just break even. Having been mining for about 6 months and netting ~90BTC isn't bad, but it likely could be better. Chances are they're using this as a trial run.

spending the coins as soon as they get it = possible to break even after a year.
hoarding the coins waiting for deflation = possible profit when the fiat value of bitcoin rises

That brings me to a question. What would be the price they had in mind to release their coins to make it worth it for them and how long are they willing to wait for Bitcoin to get there? The costs of mining today are very high now and unless they are risking their own money which is unlikely, they loaned money to start their operations.

This brings me to another question, why not mining other altcoin more profitable? So they can use the alt to buy some btc if they want to invest in especulation?
Competition is hard nowadays...

To answer your silly question, McAfee probably thinks that altcoins are not worth mining. You already know the answer why that is. There are already a lot of debates in the altcoin world and most of them are mentioning that most or even all of the altcoins are nothing but scams. Any serious business man who wants to enter and willing to compete in Bitcoin mining will not give 99% of all altcoins a second look.

miners who are mining for money, don't care about this stuff. all the drama about altcoins being bad, scam, pump and dump,.... are for traders and drama lovers around here.

what miners look for is profit and how much money they can make, and as we can see a lot of miners are mining altcoins. and any new miner like McAfee may not be doing it in the start but they will surely do it to maximize their profit.

yayayo

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It's funny that such a relatively small small operation is traded at the NYSE. From what I understand, the size of their mining operation will be gradually increased. Apart from getting cheap electricity another problem might be getting their hands on efficient mining hardware at all. All in all it's at least a bit of diversification in the mining landscape, that is dominated by the Chinese.

Mining is not the only activity of MGT. They've recently acquired an anti-spyware company and a file sharing provider. It will be interesting to watch how this company turns out. However it's not an investment case for me. The risk/reward ratio by just holding Bitcoin seems to be much better in my opinion.

ya.ya.yo!

Wind_FURY

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Quote from: springgers on October 10, 2016, 08:59:40 PM

Quote from: Wind_FURY on October 10, 2016, 08:47:59 PM

Quote from: franky1 on October 10, 2016, 12:35:06 AM

Quote from: Yakamoto on October 10, 2016, 12:29:05 AM

That's an ok beginning for a larger company interested in Bitcoin mining, but I am curious as to whether or not they're actually going to be able to make money off of their investment rather than just break even. Having been mining for about 6 months and netting ~90BTC isn't bad, but it likely could be better. Chances are they're using this as a trial run.

spending the coins as soon as they get it = possible to break even after a year.
hoarding the coins waiting for deflation = possible profit when the fiat value of bitcoin rises

That brings me to a question. What would be the price they had in mind to release their coins to make it worth it for them and how long are they willing to wait for Bitcoin to get there? The costs of mining today are very high now and unless they are risking their own money which is unlikely, they loaned money to start their operations.

This brings me to another question, why not mining other altcoin more profitable? So they can use the alt to buy some btc if they want to invest in especulation?
Competition is hard nowadays...

To answer your silly question, McAfee probably thinks that altcoins are not worth mining. You already know the answer why that is. There are already a lot of debates in the altcoin world and most of them are mentioning that most or even all of the altcoins are nothing but scams. Any serious business man who wants to enter and willing to compete in Bitcoin mining will not give 99% of all altcoins a second look.

gentlemand

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Quote from: springgers on October 10, 2016, 08:59:40 PM

This brings me to another question, why not mining other altcoin more profitable? So they can use the alt to buy some btc if they want to invest in especulation?
Competition is hard nowadays...

You'd need totally different machinery. I don't think there are many other alts that can be mined with a Bitcoin ASIC's architecture.

And considering how wobbly even the biggest alts can be in terms of demand and liquidity, let alone whether any of them have a future, I don't think serious investors would go for it. There probably is more money to be made but there's also a lot more risk.

springgers

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Quote from: Wind_FURY on October 10, 2016, 08:47:59 PM

Quote from: franky1 on October 10, 2016, 12:35:06 AM

Quote from: Yakamoto on October 10, 2016, 12:29:05 AM

That's an ok beginning for a larger company interested in Bitcoin mining, but I am curious as to whether or not they're actually going to be able to make money off of their investment rather than just break even. Having been mining for about 6 months and netting ~90BTC isn't bad, but it likely could be better. Chances are they're using this as a trial run.

spending the coins as soon as they get it = possible to break even after a year.
hoarding the coins waiting for deflation = possible profit when the fiat value of bitcoin rises

That brings me to a question. What would be the price they had in mind to release their coins to make it worth it for them and how long are they willing to wait for Bitcoin to get there? The costs of mining today are very high now and unless they are risking their own money which is unlikely, they loaned money to start their operations.

This brings me to another question, why not mining other altcoin more profitable? So they can use the alt to buy some btc if they want to invest in especulation?
Competition is hard nowadays...

Wind_FURY

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Quote from: franky1 on October 10, 2016, 12:35:06 AM

Quote from: Yakamoto on October 10, 2016, 12:29:05 AM

That's an ok beginning for a larger company interested in Bitcoin mining, but I am curious as to whether or not they're actually going to be able to make money off of their investment rather than just break even. Having been mining for about 6 months and netting ~90BTC isn't bad, but it likely could be better. Chances are they're using this as a trial run.

spending the coins as soon as they get it = possible to break even after a year.
hoarding the coins waiting for deflation = possible profit when the fiat value of bitcoin rises

That brings me to a question. What would be the price they had in mind to release their coins to make it worth it for them and how long are they willing to wait for Bitcoin to get there? The costs of mining today are very high now and unless they are risking their own money which is unlikely, they loaned money to start their operations.

lumeire

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Quote from: Dassi on October 10, 2016, 05:18:03 AM

McAfee had better be using really cheap electricity if it hopes to compete with the Chinese miners because that is one reason they are the leading miners.

They probably already have, they won't get their feet wet into this business without knowing this as well as the risks IMO. Anyway it's nice to know there's another player in the block.

MingLee

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Quote from: Milkduds on October 10, 2016, 02:25:26 PM

Find he is a hard man to understand which way he is looking to go when it comes to creation/investment. Like he considers himself a chess master and leading the public one way well pulling a defeat on the other side of the table.
Would think this issue between him and DOTcom will help promote both parties when the day comes for them to turn a large profit. Whatever is being planned would have to have a smaller window than 2 years I would think,just based on his age alone.

Funny how China is always brought up when it comes to the electricity,really has become a factor that is overriding bitcoin. Be interesting if we could alter that aspect and free bitcoin a tad.

A lot of it comes down to the rate of energy production to be honest. With expensive electricity in America and so due to a lack of excessive production (more than partially brought forwards by a care for the environment and thus limits on production daily) it is far easier for miners in China to succeed because they keep a lot more of their money and can put it towards new mining hardware and so when required.

Milkduds

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Find he is a hard man to understand which way he is looking to go when it comes to creation/investment. Like he considers himself a chess master and leading the public one way well pulling a defeat on the other side of the table.
Would think this issue between him and DOTcom will help promote both parties when the day comes for them to turn a large profit. Whatever is being planned would have to have a smaller window than 2 years I would think,just based on his age alone.

Funny how China is always brought up when it comes to the electricity,really has become a factor that is overriding bitcoin. Be interesting if we could alter that aspect and free bitcoin a tad.

franky1

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Quote from: Dassi on October 10, 2016, 05:18:03 AM

McAfee had better be using really cheap electricity if it hopes to compete with the Chinese miners because that is one reason they are the leading miners.

wrong
chinese miners are competing because they MAKE the asics.
EG
every $1600 asic sold to mcafee, bitmain can make ~$400 asics..
meaning they can hand one to mcafee and keep 3 for themselves.
meaning they can hand one to mcafee and keep 2 for themselves leaving $400 spare to pay electric
meaning they can hand one to mcafee and keep 1 for themselves leaving $800 spare to pay electric

electricity costs
at 10c/kwh= 13cents an hour, = $3.12 a day, = $1,138.80 a year
at 5c/kwh= 6.5cents an hour, = $1.56 a day, = $569.40 a year

meaning even if mcafee can get 5c electric. unless they make the rigs themselves, mcafee's upfront costs are $2169.40 ($1600 asic + $569.40 electric)
bitmain however
receives $1600, makes 2 rigs gives one to customer, keeps one. and still has $800+ to pay off in full their year of electric as well as spare for wages
meaning they start off with NO costs. and every block they solve is 100% profit

Dassi

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McAfee had better be using really cheap electricity if it hopes to compete with the Chinese miners because that is one reason they are the leading miners.

Kakmakr

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Quote from: gentlemand on October 09, 2016, 06:25:02 PM

Quote from: countryfree on October 09, 2016, 06:21:44 PM

When did they start?
If they're making more than 50 BTC per month, I say it's good.

The article says late June, but I'm not sure whether that was the actual turning on of the machines. And it's $50,000 to date, not per month.

If, they have been mining since June, they would have mined for more or less 4 months. This gives them a Gross income of +/- $ 12 500 per month. I would say, that is not bad for a experimental phase in their operation. If I was them, I would have done the same. Invest a little bit at the start, see if it is profitable and then expand.

You do not jump into something without testing the water. ^smile^

franky1

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Quote from: Yakamoto on October 10, 2016, 12:29:05 AM

That's an ok beginning for a larger company interested in Bitcoin mining, but I am curious as to whether or not they're actually going to be able to make money off of their investment rather than just break even. Having been mining for about 6 months and netting ~90BTC isn't bad, but it likely could be better. Chances are they're using this as a trial run.

spending the coins as soon as they get it = possible to break even after a year.
hoarding the coins waiting for deflation = possible profit when the fiat value of bitcoin rises

Yakamoto

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That's an ok beginning for a larger company interested in Bitcoin mining, but I am curious as to whether or not they're actually going to be able to make money off of their investment rather than just break even. Having been mining for about 6 months and netting ~90BTC isn't bad, but it likely could be better. Chances are they're using this as a trial run.

pooya87

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it is a bit disappointing when you compare their hashrate to others but it is good to see others are still entering bitcoin mining business, and it is not just a couple of Chinese mining farms centralizing mining business.

franky1

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and at a retail price of $1600 for a single 13terrahash asic. costing $124k to get 1peta
and knowing they only got (90btc)$50k return for 3 months
we can work out the potential income

after all due to difficulty changes of ~7%(7.5% average of last 2 months)
and saying they got 90btc total
it breaks down as "possibly" something like this (based on 2 weekly changes)
18.0x - mid july
16.7x - end july
15.5x - mid aug
14.4x - end aug
13.4x - mid sept
12.5x - end sept
=~90btc
and this next fortnight will be under 12btc for a fortnight. and decreasing.
which if you work out would take a year to break even.

so im presuming they are hoping to hoard the coin and have each coin at $1200 next year to 'double' their investment. rather than spend it as soon as they got it.(as that would make no sense)

franky1

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90 bitcoins is only 7 blocks.(12.5btc reward x 7)

if running since late june, knowing bitcoin averages 144 blocks a day and calculating all of july, august, september
its only 7 blocks out of ATLEAST 12096 potential blocks.(atbest, i could have added on a few more days for end of june and start of october)

which is only 0.057% ATMOST blocks are solved by mcafee.

also mcafee doesnt have 5peta. which my maths also works out to be rational assumption(of only having 1peta).
and also substantiated by

Quote

Now, MGT is beginning Phase Two of its mining plans and hopes to reach 5 PetaHash of mining power by the end of 2016’s fourth quarter.

(hopes for christmas, not actually have now)

in short. if mcafee had 5peta 3 months ago and measuring it against the stats of antpools 300peta..
if all was a fair utopia, mcafee "should" have got ~32blocks over 3 months if it had 5peta. not 7

in short id say mcafee has probably 1peta hash right now.

Wind_FURY

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These are baby steps taken by a possibly huge mining operation in the future. I see that the article in the OP did not mention that Erik Voorhees and Roger Ver are both part of MGT Capital as an advisor and the other as the company’s advisory board chairman respectively.

This might be a long term plan to get some control of Bitcoin's future to their hands. I believe both people mentioned are supporters of Bitcoin Unlimited. I also believe that the Chinese miners are a hard nut to crack in terms of getting support away from the core software.

Topic: McAfee’s MGT Goes Into Bitcoin Mining, With Massive Amount of Hardware (Read 1035 times)