Topic: Optimal Bitcoin Mining Corp. now offering remote GPU use contracts! - page 3. (Read 11188 times)

I should imagine Amazon offer a far superior service, and for $2.10 per hour.

Now I've realised what the problem is ...

You are assuming the only use people would put "remote GPU use contracts" to is mining Bitcoins ... there are numerous uses for GPU clusters - Bitcoin mining is just a tiny fraction of what people are doing with GPU clusters.

Take a look at the OpenCL and OpenGL projects.

If I only needed a GPU cluster for a couple of hours in total, I would definitely consider making use of something like this, at the right price.

Perhaps OptimalBitcoin would like to reply with how the machine specs available at $1.50/hour compare to the equivalent provided by Amazon in terms other than Bitcoin mining performance ...

"Cluster GPU Quadruple Extra Large 22 GB memory, 33.5 EC2 Compute Units, 2 x NVIDIA Tesla “Fermi” M2050 GPUs, 1690 GB of local instance storage, 64-bit platform, 10 Gigabit Ethernet"

You also have the benefit that you can pay for these in Bitcoin ... I could easily see a Bitcoin business formed around using these in a "on-demand" fashion for something like an online video encoding service for example.

OptimalBitcoin might also want to consider further time/money investment in promotion/advertising of these "remote GPU use contracts".

Yes indeed, but this relies on people being stupid enough to pay so much. You won't get many repeat customers once they realise they lose coins overall.

As previous posts seem to indicate that unrented GPUs are mining rather than switched off / idle - they are getting a return at all times ...

Let us be generous and assume 3 x 5830 GPU gives 1000 MHash/s ... that's ~0.6BTC / day (at current difficulty of 1805700.8361937), so ~$6.60/day (at $11 USD/BTC).

The current quote for the "remote GPU use contracts" is $1.50/hr for those 3 x 5830 GPU, so $36/day.

Whenever there is an offer for "remote GPU use contract" that is greater than ~$0.46/hr, it makes more sense to stop the mining and have them work on the "remote GPU use contract".

This business model is flawed. If the miners are at all profitable, it doesn't make sense to rent them out. It only makes sense if mining is not profitable.

For example:

If I rent a computer from you for 24 hours for 1BTC, and I manage to mine 2BTC, then you lose 1BTC. You would have made more BTC by not renting it to me and simply using it to mine and keep the 2 BTC for yourself.

If I pay you 1 BTC to rent the computer but I only manage to mine 0.5 BTC then you gain 0.5 BTC.

The correct business model is:

Float the company on GLBSE with an IPO to raise the investment you need to buy enough computers to fill all availble space, then the company mines using this equipment and pays out any profits after covering electricity costs to shareholders. You do not own the company in this setup, the shareholders do, but as long as you keep 25-50% of shares then you keep 25-50% of all profit made, and use none of your own money to buy the computers.

If the company needs to liquidate (eg mining is no longer profitable), then you sell everything you bought with share capital and buy all shares back from shareholders (including your own shares) at as close to the initial IPO as you can afford with the proceeds from what you earn in selling the equipment.

Update:

Our first customer received service and was happy with the service.  Their contract has ended.  I currently have 5 computers available for rental and am looking for new customers.  Please send me a PM if you are interested!

Don't be silly.  Obviously I can't tell you that, because if I did there is a good chance they wouldn't be available anymore.  But I can tell you that the new cloud computing company is going to be half AMD and half nVIDIA hardware and I have a deal to get 40% off all nVIDIA hardware!  I am still sticking with AMD for half because I want to build an OpenCL cluster and I prefer AMD hardware myself.


This is good to know for sure.  I wish you luck as well.


I just finished closing my first customer.  I am charging 0.107 BTC/hour/computer.  I am making 25.7 BTC revenue renting one machine for 10 days.  ($360 revenue - $27.46 electricity costs=$332.54 profit)

Using the machines I have now, I have mined 604.3 BTC since 4/5/11, from which I have made $7203.  I don't have the exact electricity costs right here, but they cannot be greater than $1700, they are probably around $900, so profit is about $6630.

I am always looking for new customers... if anyone needs this service, please let me know!  Don't be shy, I know you are out there!  I still have 4 computers available right now and more will be available in the near future!

Where are you getting 5870's, and how much are you paying for them?

No, no. Fully funded out of my cash flow. No intention to go GLBSE - first, here may be legal issues (we are a REAL company, registered with local laws)... I would have to make it a stock company (which Idont wnt) and hen GLBSE is not a real exchange for real stock at the moment, according to the law. There could be issues.

Second;) I just dont need investor funds at this stage.

Third, I am still in a phase where I can jsut call it off.

Fourth, seriously, GLBSE would not get me funds worth the effort. I like how someone here collected 15.000 USD equivalents, but I am investing about that amount every month.... GLBSE would have to pull ina a 100.000 USD value to make it worthwhile. I dont see that at the moment.

I may decide to change that, though.

Is your company floated / going to float on GLBSE ?

I can only wish you luck with that and once I havel ess stress we should see what you do marketing wise - I may be able to replicate this on our side of the globe (europe based) and we may be able to strike things in two markets... possibly with the same technical basis.

I am with luck (final negotiations with the power provider are happening while I speak this) signinf the lease on our data center. We got 350 square meters for a decent price (will be co-used by some import/export venture I am playing with) and a contractual guarantee to draw up to 500kw power from a trafo station that is 20 meters away Once we sign that, until end of August I plan to being 2 racks of 48 cards each online - then seeing how it goes on the AMD front either adding 48 per month, or waiting a month or two for the 7xxx series.

As a note: you can safely draw more than 80% of the amperage of a fuse.... if you prepare for that from the start. Most wiring is not prepared for that.

Together this should be a significant capacity either for mining or as OpenCl cluster - the later only needing actually customers.

I am potentially interested in buying more bonds, however, I need some financials from you ...

How many customers have you had so far, what is the total revenue from them and what is the total profit ?

Latest update:

Currently the difficulty is increasing by 8.5% per 10 days.  I measured the power draw from each computer to get a more accurate idea of power requirements.  I found the power draw to be much lower than expected.    With these new calculations I can mine profitably after cost of electricity for another 4 months, until approximately November 26th.  The profit made until then at current rates cannot justify the cost of purchasing new hardware therefore I am renting out these computers for GPGPU computing, which are remotely accessible.  Also, instead of building a cluster for Bitcoin Mining, I am building a cluster for distributed GPGPU CUDA and OpenCL computing.  The costs and profits detailed above are correct, except the electricity draw for each 4x HD 5870 machine would be about 900 W.  This now allows 42 computers in this space with a 400 A service utilizing 80% of capacity.
$0.14*0.9*7*24*42=$889.06/week electricity cost
$1.5*7*24*42=$10,584/week revenue
10584-889.06-180.63-39.51=$9474.80/week profit
$492,689.60/year profit

I have found several people who I will be working with to set up the cluster and I am teaming up with NetTecture to provide additional capacity in case either of us receive a larger order than we can handle.  If you are interested in a buying a contract send me a PM and I will be happy to set it up for you right away. 

Bond offerings via GLBSE.com have not been very effective thus far, so I am securing other sources of capital, however the bonds will still be available for purchase until September 1st. 

Can we get an update on this please ?

Bumping so we see both threads.

How would the online gambling work for US residents? Didn't they just do a huge crackdown on online gambling recently, and freeze a ton of accounts? Wouldn't using bitcoin for gambling just draw more negative attention?

I agree, I simply stated that as a realistic scenario. Plus if difficulty slows it means the BTC's value is staying too low for it to be profitable for most people, which doesn't bode well for someone starting a $50K mining operation. The OP, or any potential investor, has to take both price and difficulty into consideration. And since those two factors sort of feedback on each other it is pretty hard to do. His original calculations were far too optimistic. Mine as well is not as pessimistic as some fairly realistic scenarios (difficulty continues uppping, but at a slower rate, while price steadily falls to or below $7 / BTC).

The only people who might have a good case for jumping in big now are those who live where electricity is < $0.08/kwh, and who can cool a big setup cheaply. Other guys will dump their hardware cheap once the BTC price no longer pays back electricity required to produce. The people with cheap power will buy that hardware cheap and produce bitcoins cheap. So that is also a potential scenario where difficulty would still continue to increase (I still think it would increase slower in this scenario as well. After the next jump I think the increases might be lower than 30%).

My guess is the difficulty WILL continue to rise until the electrical cost to produce BTC about meets the value of BTC in meatspace currency. Luckily the OP is on the cheaper side of things in terms of global electric costs (but still higher than the US average of $0.10/kwh).

And he still hasn't addressed the ownership in case the venture fails. Do investors get paid back through the sale of the hardware? And why would he still choose risky mining over Plan B if Plan B is more profitable?

Captain, extrapolating difficulty increases without accounting for profitability is stupid. There is no way that difficulty will continue to increase at 30% every 10 days unless the price goes back up to 30 or more. Notice how many people are selling used 5830s now in the forum. This is a strong indication that people are reluctant to add to capacity now and that difficulty growth will almost certainly slow. I think the real threat (and reason that I wouldn't invest) is that price could stagnate or fall somewhat, leaving people with big new investments in the lurch.

I wish someone would come up with a better use for GLBSE than mining. If someone trustworthy listed a somewhat professional sexcam or gambling site there, I would be eager to invest my coin. Bitcoin users almost all young men -> porn/gambling are perfect target markets.

Also, in my city the actual electricity bill ends up being about 2x higher than the $/kwh rate that is advertised. This is because you pay for taxes, flat fees, and then "delivery fees". My electricity supply is only $0.11/kwh, but my overall bill is more than double that.

Have you taken that into account? What the overall monthly electricity bill would be after all fees, surcharges, taxes, etc?