I worry that the difficulty level will increase to such a point BEFORE this project even gets started that it will make the whole venture uneconomical. Remember that you're chasing a MOVING target - the difficulty level. At some point the amount of money the investor will be making from his share of the rigs won't be enough to cover the cost of the administrative fees or whatever he will be charging.
This is the same scenario with minim on our own (non cluster) except if we do this on our own eventually down the road when the difficulty level is too high to keep our rigs mining we can just SELL our rigs and get some cash back. I don't know how we'd have that option in a mining cluster. I suppose we can sell our shares on the newly proposed stock market, but umm what if nobody wants to buy your shares - and you can bet they will not if they know that it will cost them more in electricity/administrative fees then they get back in BTC.
Please don't misunderstand me as trying to throw a "money wrench" in this venture. It's just that there are a few unanswered questions that need to be addressed.
Hello,
It's an interesting idea but how would you create your ownership structure?
Questions:
Would you form a private corporation to own the hardware, do GAAP accounting and provide that to shareholders?
Would an investment in the project result in a purchase of shares in said corporation? If not or if the rights are nonvoting, how do you propose to protect investors against fraud.
When the hardware is sold for whatever reason, would that capital be returned to investors. This is not an issue if your investors have voting rights in a corporation because they could force it at that point.
I ask about all this as your post said it was seeking investors rather than purchasers of mining contracts. So, if I invest, I want a slice of the hardware, say over management, fees etc, and how the system is run in proportion to the BTC I invest.
I'll answer you both because your questions are kind of alike.
I'm seeking investors, that mean I dont own the hardware more than any other investor (who has invested the same amount) and if bitcoin mining will become too poorly paid, the servers will be sold and the money goes to the owning investors. And for GAAP, every single penny which goes from the investor account will of course be written down and shown to all participating investors. You can this of this as buying shares in a company, where you get the right to vote for strategic decisions and right to get dividends based on your invested amount.
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