What are we talking about?
For those who don't know, Bitcoins are a new form of currency. Bitcoins can be used online to buy all sorts of goods and services (computer parts, shoes, pizza delivery, etc). They can also be bought and sold on exchanges (just like the stock exchange) for US Dollars. The price of one Bitcoin at the time of this writing is $94.
The neat thing about Bitcoins is that they are completely digital, secured by powerful computers that constantly churn away at mathematical algorithms to encrypt transactions and mint new coins. This process is known as “Bitcoin Mining” and the computers are called “Mining Rigs.”
In the famous gold rushes of the 1800s, lots of people who wanted a piece of the action but didn't have the time or the knowhow to do it on their own would invest in prospectors who went out and did the hard work finding and mining the gold. Some went broke, some died of dysentery, but some got rich...REALLY rich.
The current climate in the Bitcoin world is much like the days of the Wild West, and we are in a perfect position to take advantage. Let's get some equipment and get mining!
Why does this project exist?
Excitement, plain and simple. This is an exciting time, it's a time that could be written about in the history books as an era when people took risks and created new technologies. We are in the midst of a potentially world changing economic engine, and we're here at the beginning.
Who is running this project anyway?
I am CTO of a Software Development firm responsible for new product development. I came up through the ranks as a software developer and know my way around code. I've brought to life many interesting and exciting projects from little more than a vague idea, it's my passion and my greatest ability. This project is right up my alley. It's new, fun, and could even make us all some money.
I've put together a small, expert team of programmers and network administrators to help make ensure things go smoothly
Details
We're looking to purchase the newest mining rigs on the market. They are many times faster than previous mining machines and are due to start shipping in the beginning of October. With these machines we will be ahead of the curve for a while, churning out more math and creating more Bitcoins than other miners. For those who know about bitcoin mining, these rigs are capable of about 400 gh/s (that's approx 200,000 times faster than your home PC, literally).
In laymans’ terms, these machines will be run and monitored day and night, sifting through numbers to find combinations that will irreversibly secure transactions. Finding a new combination earns the prospector 25 freshly minted BitCoins!
What’s the bottom line? How does this actually shake out?
Bitcoins are currently trading at $94.
The mining rigs we intend to purchase (KnCMiner Jupiter) work at 400 gh/s at 1,000 watts.
The current difficulty is 31,256,961.
Electricity costs approx $0.15/kWh.
At these conditions, each rig running 24 hours per the average generation time for a single block is 3 days, 21 hours(depending on luck can be slower or faster). Which is a rate of about 6.4 Bitcoins per day.
6.4BTC * $94 = $601/day
That works out to about $18,000/month.
Each rig costs about $8,000 (shipping, powersupply, etc)
Electricity can be rounded to about $100/month (1000 watts running 24/7)
After one month of mining the rig would be paid off and have profited just under $10,000.
Now, these conditions are likely to change. The price of Bitcoins could rise or fall. The difficulty is very likely to go up (as it naturally does over time). But even if the price halves and the difficulty doubles, we’re still looking at hitting a profit point at around week 10.
We have reached the time for a bit of disclaimer. Although these conditions are fairly constant in their change over the long haul, the market is very volatile and can take unforseen turns at any time. Additionally, there is a level of difficulty in just acquiring the rigs. They are being shipped from overseas and made in limited production runs so the time before they arrive could also vary. All this said, there is no guarentee that this project will be successful. This is all very speculative and, as with everything in life, the huge potential upsides are balanced with risk.
Profit Shares
Profit in this scenario is defined as the number of Bitcoins mined minus the cost of the electricity and repairs. Each rig we secure will be broken down into 500 profit shares. Each contributor to this project will receive a number of shares for their rig depending on their level of contribution. The shares that remain after funding will be held by myself in return for doing all the actual work.
At the end of each period (3 months), profits will be split up and paid out amongst all shareholders. Under the conditions stated above (BTC Price, mining difficulty, electricity costs, etc), each share would receive a dividend of just over $100. Payouts will preferably be in the form of Bitcoins, but we will also be able to exchange them for you and send dividends via Paypal and other similar methods (this does incur some transaction fees from the different agencies involved).
What happens if we go over the $8000 goal?
$8000 is the cutoff for shares of one rig, but we don't have to stop there. Each $8000 mark starts us towards another rig and a new set of shares. The sky is the limit.
