Topic: Should I start Diablo Mining Company, a 1M BTC startup? - page 3. (Read 11013 times)

The bitcoin trading price is not influenced by mining - mining is influenced by the bitcoin trading price!

If you hope for later investors to invest 10 USD per share for the same output that you invested 5 USD in earlier, this is not far from one of these pyramid games that were popular on the forums half a year ago. It can by the way even turn upside down - see old GLBSE 1.0 threads, where early investors bought shares @ 1 BTC (@20 USD), the operator didn't sell right away and suddenly had to take loans or dilute shares to even buy another GPU.

Bottom line for my argumentation: The company will spend mostly USD and generate BTC - so it makes sense imho to fund it with USD and get your profits in BTC.

People arguing that it would be screwed if bitcoins went up a lot in vas you had bought gear priced in dollars do not seem to have thought of how many shares might have been sold by that time. If there are only ever 1 million shares, and they all sell for only one bitcoin each regardless of how much fiat one bitcoin happens to be selling for on markets at that time, then people who buy shares while bitcoins are cheap should be gaining if bitcoins skyrocket due to having gotten shares cheap compared to people who have to buy bitcoins at much higher fiat prices to buy shares with.

Sure the existing hardware would only be worth as much, or less, in fiat than the early buyers paid for their shares, but they are getting one millionth of whatever the end total will end up being come some hypothetical date when the initial one bitcoin each shares have finally, eventually managed to get sold.

So I do not think it is quite as simple as look how much hardware their initial fiat bought; rather, one would look at how impressive the resulting operation is compared to how much bitcoins themselves are worth.

Admittedly one could consider simply buying and holding bitcoins if one expects them to go up in value, but how much does one expect them to go up in value if no efficiencies-of-scale sized mining operations manage to get started? Might this operation itself enhance the value of coins, resulting in their now appreciating as much if this thing is not done?

-MarkM-

You could raise 1K, 2K or 5K BTC first to get your hands on real mining first. Then if you are doing well, it could naturally expand magnitudes by magnitudes. The possibility of its finally growth to the 1M BTC scale is also not deniable.

But why do you have to throw out frightening numbers like 1M BTC on the start? Is the idea of "get big immediately or go home" so attractive? Why are incremental plans so bad for you? For successful businesses like Apple, their yearly income's errors are larger than the current whole Bitcoin economy. They did not start with as much as (1MBTC*5$/BTC=5M$) anyway.

By starting small, you will be:

1. More adaptable to technology change.
2. Having more immediate returns to attract larger investments.
3. proving yourself really qualified for managing more and more funds.

And if you insist your current plan, you will not be taken very seriously by some of the potential investors.

By insisting on BTC for funding, it could very well pump the market up a lot, because then investors would have to invest in BTC in order to invest in this company. The eventual result would be a lot more than $5m, because of the projected market rise. There isn't any reason to cash out right away and build something, it could all be done gradually. Starting with an enclosure (building) and other infrastructure (power, cooling) would take a relatively small portion of the proceeds that needs to be paid in cash, but many other parts could even be bought for BTC instead of converting to USD.

So as the funding comes in, the buildout could continue. If DiabloD3 doesn't raise all 1m BTC right away, that's fine too, the farm would just be smaller.

If you are serious about this why would you build it on the East coast? Build it in Washington state or Oregon where you have access to cheap hydro power. Just because you are located in Maine doesn't mean Maine is the ideal location for your startup.

Thinking about a 1M BTC funded startup is a fun thought exercise but I don't think the market could fund such a thing at this point. I hate to tell you to aim lower but, without sourcing traditional VC capital AND having a solid business plan, $5M USD is a SERIOUS sum of cash. You might have better luck in the $100k USD to $500k USD, prove the concept works and go for a second round of funding. This isn't like you are pitching a web startup in a VC environment with a proven track record of successful exits. Here, any VCs interested in funding a mining operation has a year or two of experience and no previous examples to judge future performance on..