Novello Technologies Limited would like to present our project proposal for design and development of a family of Bitcoin mining rigs. We hope you’ll be excited by our proposal and will want to contribute towards its success and help guarantee the future of Bitcoin and Independent mining. We’re assuming that you already know a fair bit about Bitcoin mining, but if you don’t we’d suggest that you do some research before reading our proposal;  it will give you a better understanding of what it’s about and whether it’s right for you. You can find lots of explanations and other resources about Bitcoin on the internet. Good resources to start with are the Bitoin wiki  http://en.wikipedia.org/wiki/Bitcoin and the bitcointalk forum http://bitcointalk.org. If you have any questions that are not answer in our proposal, you can email us on:

tech@novellotech.com for technical queries or
sales@novellotech.com for purchases/perks or anything else

Indiegogo is our primary portal for our project, so at this time our website is still relatively underdeveloped. Our web address is http://novellotech.com

First things first though – here’s what you really need to know about the project:

                              Our Mission:

The goal of our project is to design a custom silicon chip and use it to build a family of ultra efficient and affordable Bitcoin mining systems. Our mission objectives as a Company are:

• To make Bitcoin mining much more accessible to those on a low budget

• To create a core group of customers that will come back to us again for their Bitcoin mining requirements and use innovative programs to help them achieve their financial goals.

• To fund independent academic research to enable continuous development of our mining device technology, which will keep our customers competitive no matter how high difficulty becomes.

• To develop our company into a full service, full custom silicon design bureau that will offer small business startups a low cost gateway to prototype chips, costing typically less than US$50k in total.

                           The Headlines:

-  Systems priced from $59 (128GH/s) to $30,000 (120TH/sec)
-  Systems financial metrics : $0.25 to $0.5/(GH/sec)
-  System power averages 0.30 Joules/Gigahash, at the wall socket.
-  Full custom asic chip built in 40nm LP process
-  Inbuilt Raspberry Pi with WiFi (except in basic $59 system – needs a host             
    laptop/PC or NOVA - HH)
-  All systems come with fully regulated, high efficiency (> 87%) power supplies
-  Future Proof Modular system infrastructure, reusable, easy to upgrade
-  Deliveries will start Dec 2014
-  Innovative programs to keep our early Contributors competitive!   

           Be first to contribute and get the BEST deals!

                            The Timescales:

The Gantt chart below shows the critical paths of the project versus time - if you're not a technologist it might seem confusing, but it's here to sketch out what happens when. We plan to tape out our design sometime mid August 2014 and get our first packaged prototypes at the end of October.
Pre production of system hardware will commence in September to minimise back end production delays.

We want to make it clear from the start that we have a different business model to our competitors; we want to be a volume supplier, but want most of  that volume to come from our initial customers in the form of repeat purchases. In return, they will get the best possible deals that we can give them, and access to exclusive mining power development programs.

                            The Financials:

We need to secure funding of approximately $4.2 million to achieve our goal, in return for contributions, our Perks are a range of mining solutions to suit all budgets ranging from only $59 (128 GigaHash/sec) to $2,799 (8 Terrahashes/sec) and even $30,000 for a fabulous 120 Terrahashes/sec! Target funding will enable us to ship all system pledges by the end of March 2015.

Why do we need so much? Well, building a custom silicon chip is very expensive – well over $1 million – and that only gets you a handful of prototypes, We, of course need tens of thousands of devices to build our contributors systems! To simply things, the pie chart below shows where all the money goes:

In terms of what our products might mean for Contributors interested in mining we have a separate section later in the project proposal which specifically covers this.

If we get overfunded to approximately $11 million or more, we will implement our design in 28nm technology. This will give our contributors an extra 50% of hashing power in their systems!!

Make no mistake, this isn't an amateur project, and to deliver it will take a company with experienced, passionate and confident electronic professionals. That's where we come in:

                        About Novello:

Let’s tell you a bit about our company. Novello Technologies Limited is a UK Limited Company incorporated in Scotland. Our Company Registration Number is SC464008, and our VAT Registration Number is UK 186 6980 46. The driving force behind Novello Technologies is a group of professional engineers based in the UK with over 120 years combined experience in the design and manufacture of complex, highly reliable electronic systems and devices. We think that profitable Bitcoin mining should be accessible to anyone, no matter what their budget, and by ‘profitable’ we mean a device that will pay back its purchase price in less than 4 months. More accessibility means more users which will help strengthen the Bitcoin network and promote wider use of Bitcoins.

Our systems will be built using a modular approach and while most will have the capability to add more internal hashing capacity, all can be easily upgraded without having to buy a completely new system, preserving much of the value of your purchase. With our group experience in design, manufacturing, logistics and quality we know we can make truly consumer-grade products with unrivaled performance, cost effectiveness, reliability and after sales support, all within realistic timescales and budgets.

Thanks for reading this far, but you’ve still got a lot of information to read and digest; our proposal contains a lot of information which we think vital for potential Contributors to get the full picture about our plans and the financial/technological aspects of the project. We’ve included an FAQ section to address the most commonly asked questions, although specific queries can be emailed to us at: admin@novellotech.com. Please read on even if you’re not planning to contribute – we think you’ll find it interesting, and remember to tell your friends, family and co-workers about this great opportunity!

                 Delivery and Courier Charges:

Just one last word on the highlights, the prices of Perks do not include delivery. It's simply too difficult to try to set a 'standard' delivery for anywhere in the world so it has to be done on a country by country basis. We've given some indication below of what the MAXIMUM prices will be for selected locations and we hope to be able to offer even better deals before the delivery dates. If your destination isn't on the list then please contact us for a quotation.

We plan to start deliveries around the end of December 2014 and complete by the end of March 2015. Perks will be delivered in the order they have been bought, regardless of type. Naturally, we will keep all our contributors updated on the project progression and delivery dates of their system. Please note that prices do not include import or local taxes – these will very much depend on where you live and you should check with your local tax authority. UK customer will have to pay VAT on prices of Perks, We will only use major International Courier companies with ‘Signed For’ and tracking services and will  get you the lowest possible costs. Here are some sample costs for major countries:

These rates are provisional, and we fully hope to be able to reduce them substantially before deliveries are due, especially for the NOVA-S units.

Please note that EEC customers will be charged UK VAT @ 20% unless they provide evidence of their VAT number and are genuine commercial entities.


But now onto the Technical Section. We hope you enjoy it!
To jump to any of the main and sub-sections, just click on their bold text name, you can navigate back easily using 'Top' or 'Back to Index'

INDEX

  1.  The Bitcoin Arms Race
  2.  Our Systems Lineup
  3.  Our Core ASIC chip

         -   Full Custom versus Gate Based &Standard Cell
         -   Fault Tolerance and Reliability
          -  Small is Beautiful – sometimes
          -  Heat Kills
          -  Power Play

  4.  Modular Methodology and Value Retention

          -  Past Lessons and Future Plans
          -  Module Mania

  5.  How Big is your Rig?
  6.  So what can my Rig do for Me?
  7.  Guaranteed Supply Program and Financial Projections


FAQ's - Frequently Asked Questions - is after Section 7

1. The Bitcoin Arms Race - You MUST read this

Before we get into the project's technical details in depth, we want to address the subjects that all Bitcoin Miners dread – the Network Hashing Rate and Difficulty. From now on we’ll refer to this as the NTR - Network Terrahash Rate and DIF respectively. Despite what you might have been told, the two measures essentially track one another. You’ll never see mining rig vendors talking about these – if you sell pricey rigs it’s not good for sales.  We want to tackle this subject head on to give our potential contributors all the facts and figures they need – both good and bad - so they can make truly informed decisions about whether our project is right for them.

Since Bitcoin mining ASICs appeared, the NTR and DIF has risen over 500 fold and there is more to come. Growth is likely to continue due to the huge rise in Bitcoin’s value at the end of 2013, the amount of interest in the currency this has caused and increasingly the increase in the number of dedicated mining companies building huge facilities to mine. This has implications for any current or potential miners – how fast will the DIF rise, and will they ever be able to afford a rig powerful enough to be profitable? It’s a question made even more important by the prospect of a technological arms race with mining companies competing with each other to gain share of the NTR.

Individual miners will be the losers here, unless they can compete on equal terms, they can never make a profit. We aim to redress the balance, so it’s essential to have some idea of where the NTR/DIF might be for the next 18 months. That’s not an easy task as there are many variables including the Bitcoin/Dollar exchange rate and the pricing/availability of new mining rigs. Because it’s so important, we’ve spent a lot of time and effort trying to make estimates of what might happen, but they are estimates and are obviously not guaranteed! There are also braking factors that will slow growth if it’s too rapid and mining becomes uneconomical, and that point is reached when your rig can never make enough to pay for itself. So, here’s our estimate showing how we think the NTR might develop until the end of 2016:

Is there a simple way for a Miner to calculate if their rig is going to be profitable or not?  Well, we think there is. It’s based on how much you should pay for your rig in dollars per Gigahash:

-   on the date it’s delivered
-   an exchange rate of 1 BTC = $500
-   power usage of 0.85 /0.55 Joules/GH (or our worst case 0.3 Joules/GH             in red) at the AC wall socket
-   power cost of US$ 0.1125 per kilowatt hour : US Domestic average according -   to EIA http://www.eia.gov/electricity/monthly/update/
    end_use.cfm#tabs_prices-3
-   assumes that you want your rig to break even in a six month period after 
    delivery – if it can’t do this, then there’s a very good chance that it may never
    be viable. Try it out:

We've also shown what happens if Bitcoin falls back to $450:

You can clearly see the effect of the increasing NTR and energy usage on profitability. You can also see that for deliveries in Dec 14, our systems' $/ Gh/sec are substantially below the benchmark ones (@500 =  $0.82/GH  @450 = $0.73/GH)

If the exchange rate varies you will have to correct these figures by the appropriate ratio, and please remember that the Bitcoin’s value might go down as well as up! We are presenting this information not to scare people, but in the interests of full disclosure. Mining Bitcoins is very competitive and we don’t want our customers to imagine what ‘might be’ instead of accepting reality. But, it is possible to get an excellent return from mining if you have the right tools and the right supplier – and that’s where we come in.

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2. Our Systems Lineup

We have designed a family of mining devices targeted towards best possible performance per dollar. We recognise that not everyone can afford to spend thousands of dollars to gain entry to the Bitcoin mining club, so our flagship product isn’t a huge multi terrahash/sec miner (although we’ve got one of those too), it’s a little USB device costing $59 we call the NOVA – S that can be used with its’ supplied AC adapter and a host computer, preferably a laptop, to mine at 128GigaHash/sec. And it’s very well priced :
$0.46 per Gigahash/second!

This is a basic drawing of the USB Miner - NOT an actual product!

You can clearly see the main elements of the miner - two 35mm fans blow onto a Pin Fin heatsink, the body of the miner contains the mini hashing module and a power/control board. The back of the ASIC chip die is in direct contact with the underside of the heatsink.

The next product in our line is the NOVA - HH which builds on the NOVA – S concept. It isn’t a miner as such, it’s basically a powered 16 port USB hub which can accommodate up to 16 NOVA-S devices. It’s USB ports are very high power – up to 35 watts each. It includes a wifi enabled Raspberry Pi microcomputer which runs the mining software and acts as a bridge to the network, so no host system is needed. You do need a TV or monitor, keyboard and mouse to set it up initially, it’s an easy starter route for those who can’t afford to spend a lot of money in one go to buy one of the bigger rigs, but who can easily add capacity as they earn it!

Our system rigs offer hashing power from 1TH/sec up to 8 TH/sec and are based on a common enclosure platform with a form factor of 210W x 300L x 175H; pricing performance runs from $0.25 to $0.50 per GH/sec and if you order early you can get them even cheaper! The system rigs are all modular, so it’s very easy to add or change hashing modules whilst keeping your existing infrastructure. All our systems except the NOVA S USB miner have integrated wifi enabled Raspberry Pi micro computers, so do not need host systems to mine. If you look at our pricing structure and factor in the delivery date as December - February 2014, it is clear that we are offering our Contributors – especially those willing to commit early – a very considerable performance advantage in terms of how quickly they might achieve profitability on their new rig. Furthermore, our modular approach means that they can add or replace the hashing modules as newer ones become available and keep their rig competitive without having to buy a new one. Let’s talk about what makes our products tick:

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3. Our Core Mining Chip

Onto the good stuff now!Our ASIC has been designed to satisfy 3 key requirements:

-  High reliability and fault tolerance
-  Maximum Hashing performance per $
-  Minimum power consumption

The key to satisfying the second two requirements lies in our use of a Full Custom design. Why is this important?

Full Custom versus Gate Based & Standard Cell

If you want to make a silicon chip, there are several routes you can follow to do this. For speed, using a gate-based design is like digital Lego: it uses simple pre-designed blocks of transistors that can be joined together to quickly build your system. The blocks have known, tested performance and have been designed to work in most likely applications. They are used with complex EDA (Electronic Design Automation) software which makes the chip designers’ job a lot easier, especially when it comes to simulating the final chip’s performance and functionality, or so the theory goes. On the downside, gate based designs can be ‘top heavy’ in that they use far more or far bigger transistors in each gate than might be needed for a specific application, and that usually means higher power and more silicon real estate. However, the design path is fast, predictable (usually) and rugged. It’s a very good solution for most small to medium sized designs.

Next in line is Standard Cell. It’s broadly similar to gate based design except that larger pre-designed functions are available, such as counters and adders up to floating point units and complete processors, and a designer can use them in a similar ‘Lego like’ fashion to build their circuit, but with less flexible rules. It makes more efficient use of silicon real estate as the functions have been heavily optimised at the transistor level, but again they have to be generic enough to cover a wide range of applications in the real world. The design route is usually easier than gate based as the cells have more functionality and complex functions can be built more easily, though there may be issues with routing signals and timing. For the same function standard cells take up less silicon area than using gates. Usually EDA tools can accommodate both gate and cell based designs, or more usually mixtures of the two. Standard cell is very good for large, complex designs.

Finally there’s full custom. This is how chip design started off, manual designs with individual transistors and it’s still very much alive today. Why? Simple answer – efficiency, just like a custom kitchen or suit, you get exactly what you want and need, there’s no waste or extra unused functions. If you have a part in your circuit that has to drive only 2 standard loads, why put in one that’s twice as large that can drive 8? Or use a data register designed for 2 GHz operation that’s three times the size of one for 500MHz? Designing in only what you need can save a lot of transistors so the overall design is much more efficient. Trouble is, it takes a lot more manual involvement from the designer and there are few EDA tools to help, so it costs a lot more. But take heart from the fact that big companies like Intel and AMD have hundreds of engineers designing and building full custom designs every day - just like we'll hopefully be doing soon!

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Fault Tolerance and Reliability

Our device will be built around an array of 256 dual-SHA256 pipelines (2 x 65 stages in each) which operate as a group. An additional 16 pipelines are also present, but are not mapped into the address space of the main array. Chip performance is 128 Gigahashes/second (GH/s) at rated clock speed of 500Mhz, rated core voltage of 0.8V, die core temperature of 75 degrees Celcius and power consumption of 25 Watts. It is possible to run at a lower core voltage of 0.6V, however until we have working silicon we cannot confirm exact performance at this voltage.

Please note that power consumption figures in the paragraph above are for the chip only, and do not include power supply and auxiliary circuit losses. Comprehensive test structures built into the fabric of the device allow for production testing and ‘manufacturability’ analysis. It also enables the HM’s 32 bit microcontroller to carry out automatic full function tests on all pipelines, including the spares. This means that full hashing power is always available as pipelines are constantly ‘rotated’ for testing. Testing takes only takes  a few seconds and  allows the controller to identify any that are faulty;  if one is found, it is temporarily disabled and a ‘spare’ mapped into its address space. A failure may be a temporary fault due to a hotspot, but regular testing will identify if the fault is a genuine failure or intermittent. The pipeline can then be permanently disabled and ‘remembered’ by the system controller as faulty, with a spare taking its place. This all takes place without any user intervention, although test results and pipeline swaps are recorded and can be reviewed at any time.

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Small is beautiful – sometimes

When designing a mining ASIC, one of the most important questions is how to implement the physical design: do you have a massive single chip that can do 1TH/sec, or 128 smaller ones at 8GH/sec? Larger chips produce more heat, smaller ones only produce a little but there’s more of them. A larger chip uses a smaller PCB than lots of smaller ones, and there’s fewer connections to the board to go faulty. But a larger chip has a much lower production yield than a much smaller one due to the increased chances of encountering a defect in the silicon wafer used to build it, which means it’s more expensive per GH/sec.

What we’re pointing out here is that there’s a balancing act between functionality and cost and it’s interesting to see how other companies have done their designs: some are very small, others very large. We’ve taken the decision to optimise and go right down the middle, so our chip comes in at about 100mm2. This is a manageable size, and still yields reasonably well, its packaged in a Moulded Flip Chip Ball Grid Array package (a bit of a mouthful that so it’s more commonly called MFCBGA) to make the thermal design of our systems efficient, but we’ll come to that later. With a single chip rated at 128GH/sec, Terrahash capability can be easily obtained by using 8 of them. Our design actually use 4 chips in a module, but this will be covered in the section 4.

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Heat Kills (chips)

We plan to build the ASIC in a 40nm LP medium Vt process, this is a stable and reliable process, very cost effective and relatively low power; you’ll see below that our systems give excellent Watt/GH performance. SHA256 is very power hungry, virtually every transistor in a pipeline switches every clock cycle, so the key to performance is reducing the number of transistors that switch and minimising the power consumption of those that do.  We've implemented the pipeline stages within the SHA256 engine at full custom level as we discussed earlier, it means we can save a huge number of transistors and control the size and hence power consumption of those that remain. We’re also making extensive use of analogue design techniques to minimise noise and reduce supply voltage – again saving power. Every transistor we save, shrink or optimise saves power, and overall this results in greater power efficiency.
It’s all very well having high-tech chips that can mine fast, but they also produce a lot of heat. If the chips can’t get rid of the heat they generate quickly enough, their core temperature rockets and this destroys their transistors, so it’s essential to have good thermal management to make sure this doesn’t happen. Rig suppliers have adopted several different ways to accomplish this, usually by a classic fan/heatsink arrangement or water cooling. We looked at both these and other methods, and decided that for maximum reliability we’d go down a fairly conservative route and so use ducted forged pin fin heatsinks with high capacity fans blowing them.

This is a good combination and means we can get rid of sufficient heat to keep the chips well within their operating temperature range. It’s also very reliable – it’s easy for the fan controller to determine if a fan has stuck or fused and so close the system down until it’s fixed. We are using continuous duty fans with fluid or ball bearings with expected lifetimes (called MTBF’s – Mean Time Before Failure) of over 100,000 hours. Also, pin fin technology means the sinks are fairly compact, enabling us to pack a lot of hashing capacity into a compact enclosure. A blown pin fin heatsink is also used for the NOVA-S USB miner with very small fans mounted on top of the heatsink, this gives excellent cooling results, even in a hot room.

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Power Play

Mining Bitcoins consumes large amounts of energy, and will eventually reach a point where the cost of power takes away more than 50% of a miners’ earnings. If you’re an ‘average’ US customer with a current 0.85J/GH rig paying the average rate for your electricity, then this will happen when the NTR hits about 320,000. If you manage to get your hands on a 0.55J/GH rig then the 50/50 point is delayed until 475,000. With a 0.3J/GH rig such as ours it’s nearer 1,050,0000! We’ve designed our systems to consume as little power as possible whilst remaining competitive at hashing; the benefit of using full custom design is that you only use what you need – no wasted resources. Below are our estimates for MAXIMUM power consumption for our systems with all devices running at rated speed, measured at the AC wall socket so including all power supply switching losses and auxiliary circuit power:

NOVA-S                 38 watts, 0.30 Joules/GH  (not including host)
NOVA-HH              50 watts, 0.40 Joules/GH  With 1 x NOVA - S   
                                 580 watts, 0.29 Joules/GH  With 16 x NOVA - S
NOVA-1 (1 TH/s)  300 watts, 0.30 Joules/GH
NOVA-2 (2 TH/s)  580 watts, 0.29 Joules/GH
NOVA-4 (4 TH/s)  1100 watts,  0.28 Joules/GH
NOVA-8 (8 TH/s)  2150 watts  0.27 Joules/GH

You can see these are very competitive figures, despite us using 40nm technology. And they’ll get even better with our generation 2 40nm chip – some 36% less, we estimate.

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4. Modular Methodology and Value Retention

Past Lessons and Future Plans

Bitcoin mining is a very dynamic industry by nature, things keep changing and the ever rising difficulty means that today’s top of the line mining rig is very soon obsolete, it’s a bit like what happens in the PC industry, except that an old Pentium 4 computer can still perform very useful work, whereas an old mining rig just consumes electricity! The PC industry taught us that a modular approach to systems means that they can be upgraded simply by swapping outdated or inefficient parts, such as DRAM or graphics cards. Yes, you can only do this so often but a lot of the original value of your system can be preserved, and that’s why we’ve chosen a similar route with our miners.

It’s a common misconception that most of the cost of a mining rig is in the asic chips. Certainly to engineer, tool and build an ASIC takes millions of dollars, but the actual parts don’t costs that much, in our systems the chips typically account for about 50% of the overall production cost. The rest of the system isn’t necessarily dependent on what’s inside the chips, so careful design can mean that it can be used and reused, much in the same way as a PC chassis. As mining difficulty increases, so miners need more power, either in the form of additions to their rig, or more usually a new setup.

We have structured our system design such that it uses multiple modules which can be easily replaced, and our overall design aim is to preserve the value of the system infrastructure for as long as possible. In particular, the system internal power supplies are oversized and the DC-DC converters for chip power have a wide voltage and current operating range meaning they can cope with newer chip technologies. This will help keep our customer competitive – rather than having to buy a whole new rig, they can extend their current one or change the hashing modules for newer technology ones. We’d like to think that other manufacturers might mimic our scheme and produce third party products to fit in our infrastructure.

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Module Mania

In this section we’ll explore the modules we’ll use, and how they fit into the system. We have five main modules:

A Hashing Module (HM) that contains 4 mining chips, a 32 bit microcontroller, USB interface and some support circuitry; very easy to install and/or replace. Self – testing without system controller intervention.

A Micro Hashing Module (MHM) that is essentially a smaller HM with only 1 mining chip, it has the same 32 bit microcontroller, USB interface and support circuits and is used in the NOVA – S USB miner.

A Controller Board (CB) that consists of multiple USB hubs, fan control circuitry and auxiliary power regulators. It’s also used in the NOVA HH powered hub.

A High Current Power Supply (HCPS) – 1 for each HM – that incorporates a 200 amp capable variable voltage regulator used to supply power to the HM chips. HCPS modules take in regulated 12V DC power supplied from an internal PSU – there is no need to buy a separate power supply - and sit ‘piggyback’ on top of an HM, a low resistance plug and socket arrangement is used to connect the two together. The HCPS automatically senses the HM type and adjusts its’ output to suit. This means it can be used with future HM’s which will most likely require lower voltage, but more current.

HM’s and HCPS’s are both based on a 60 x 96 mm pcb platform.

The NOVA – S USB miner also has an HCPS device UPCU – USB Power Control Unit, but it’s integrated with a fan controller and is designed to take power from an external AC adapter which comes with the miner. Please note that full performance at 128GH/sec is only available when using the supplied AC adapter due to the current limitation of standard USB ports; using maximum available USB 2.0 current alone will give limit performance to around 8 - 10GH/sec, USB 3.0 will allow approximately 20GH/sec.

A fifth module, a Raspberry Pi single board computer with  Wi-Fi capability is used as a 'bridge' between the miner and the Bitcoin Network, it also allows system monitoring and configuration when connected to an external TV (or monitor), keyboard and mouse. The Pi will run a customised version of the excellent Minepeon software. With all of our systems except the NOVA-S, you don't need an external host computer to mine.

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5. How big is your Rig?

Now we’ve got all this technology, we need to put it in a box to keep everything tidy. We’ve designed a ‘standard’ enclosure which measures 210mm W x 175mm H x 300mm L, and it can accommodate up to 8 HM’s, ie 4TH.  The NOVA 8 miner uses two standard modules coupled together. A standard enclosure can accommodate 2 800W High Efficiency power supplies, 1 for each 2TH of capacity. We’ve done this to maximise system reliability and to aid those of you unfortunate enough to have to rely on 110V AC supplies! The power supplies sit in the lower portion of the rig, the Raspberry Pi and the USB hubs are contained in the mid portion and the actual HM’s and HCPS’s in the top, together with the pin fin heatsink.

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6. So what can my Rig do for Me?

Have you ever seen a mining rig supplier exploring this subject in their sale pitch? No? Ever wondered why? It’s really simple – too much information given to buyers might put them off purchasing. Rig manufacturers know that most Bitcoin miners dream of making millions of dollars from their mining activities, and it’s much better to let them hold onto that dream; a dose of reality might stop them buying. Well, we’re engineers and don’t believe in fantasy, just facts, so please read the following three points very carefully:

Fact 1:  Bitcoin mining isn’t an investment – it’s a gamble, albeit one with semi predictable odds

Fact 2: Even an 8TH rig isn’t going to make you a fortune, unless there’s a dramatic rise in BTC value

Fact 3: You can get a very reasonable return from mining – potentially better than most conventional investment vehicles – if you have the right information, right equipment and the right supplier.

So now that we’ve made you aware of the pitfalls, let’s look at what you might be able to achieve:

From Jan 2014 to Jan 2015 (365 days), based on our NTR / DIF prediction and 1BTC = $500, we estimate a NOVA-1 1 TH/sec rig, taking into account costs of electricity and mining pool fees could earn you:

$1322 based on average current US residential power costs (estimated at 12cents per kWh in 2015) or

$1037 based on corresponding UK figures (estimated at 23 cents per kWh in 2015)

On a purchase price of $499 and shipping/tax charges of $110, then a US rig will provide net earnings of ($1322 - $499 - $110) = $713, or ROI (Return On Investment) of 143%, less taxes you may have to pay on your income, but you still have the value of the hardware and it will continue to earn money. We don’t have detailed figures up to the end of 2016, but predict the net earnings would be $602 for the US, $350 for the UK (with power costs rising by an estimated  5%).

At the other end of the scale, a US based NOVA-8 systems’ 2015 figure is $10,576 deducting initial costs, shipping and taxes gives net earnings of (10,576- $2799 - $160) = $7,617, or ROI of 272%. (For the UK the figures are $8,296 - $2799 - $600, ie $4897 or ROI of 175%). Both figures are again less any payable personal or corporate taxes. Why the large difference? It’s all down mainly to those power costs (and UK VAT). Of course this analysis is only looking at payment over a long period of time, mining rewards are paid out regularly if you’re using a pool as most miners are, this then gives you the opportunity to buy more hashing power as you get more funds. In case you missed it, that was a sneaky introduction for our Guaranteed Supply Program or GSP, it’s another part of our product offering which will continue to give our customers a financial advantage once they have started mining with our products

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7. Guaranteed Supply Program and 'Jane'

OK, you’ve got your new mining rig and it’s happily earning its keep. You’ve got some Bitcoins (or cash), and would like more Hashing power NOW. Trouble is, all the competitive products have waiting lists of months. Sound familiar? We are offering some of our early Indiegogo contributors a unique program where we will guarantee them almost immediate delivery on up to an additional 3 times the original hashing power they purchased, PLUS discounted rates on the upgrade hardware! This applies only if they are Fortune 500 customers or the first 500 who purchased a 49’er in each of the main rig categories, it doesn’t include the NOVA-S or NOVA HH product.

There will be a 3 month period after their delivery date where this kicks in, after that they can order up to 3 times their original hashing power as hashing modules or full systems at the rate of one upgrade of 1 x per month up to one year from their original delivery date. Of course, they can order as much hashing power as they like at any time, but delivery will depend on order backlog and available capacity; they would still get a discount but not as much as they would get buying via GSP. Here’s an example of how the GSP might work in the real world.

The spreadsheet below shows a running mining earnings balance for Jane, who lives in Colorado. She’s one of the first to order a NOVA-1 1TH system and it’s delivered on January 4 2015. As time goes on her rig earns Bitcoins which she converts to cash. When she has enough money, she uses her GSP status and buys 1TH upgrades at $249 each – she’s already paid for the electricity to run her rig costing 12 cents per kWh, the US average in 2015. She gets her modules within 10 days of ordering, and soon she’s hashing with more power, making more money for the rest of the month. And so this process repeats until Jane has used up her GSP credits.

By Jan 4 2016 Jane’s now 4 TH rig has generated her net $2,721, and that’s including paying for upgrades and the electricity to run it. That’s not bad for a $499 initial purchase! Over the following 12 months it will make her a further net $2,408 even allowing for energy bills going up by 5%. She’s not getting rich by any stretch of the imagination, but we imagine she’d be more than happy that she signed up early to buy her rig. Now, if Jane lived in California or other areas with high energy costs, she might be paying twice (or more) the US average electricity costs; this will have a significant effect on her earnings, but what can a miner situated in a high energy cost region do? Well, we may have a solution to that problem for our early customers, but it depends on to what level we get funded as it relies on a lot of investment in infrastructure.



We again have to point out that the financial predictions shown above depend on a lot of factors, most of which cannot be predicted to any degree of precision and they are given for illustration purposes ONLY. They are not guaranteed or warranted in any way, and we would advise any potential buyer to undertake their own research and solicit opinion from a variety of sources.

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Frequently Asked Questions:

Q. This all sounds far too good to be true. How can you possibly build systems at this price when others are charging 3 or more times as much for the same hashing power?

A. We expect that this a question most people will ask. There are 3 separate parts to the answer:

Firstly, we have a lot of experience in the design and manufacture of consumer electronic systems, so we know how to design and build at the lowest possible cost. We’re using well-established methods to source competitive, competent suppliers and subcontractors who will manufacture the component parts of the systems so all we’re doing is final assembly and test.

Secondly, by using full custom 40nm technology we save over $1.3M in development costs versus 28nm- that’s $130 a unit for 10k units in engineering charges alone. Device gate density doesn’t count in SHA256 – it’s the number of transistors switching per clock, their power consumption and power dissipation capability of the die that limits performance, so our full custom design approach means our 40nm device can easily outperform a gate or standard cell based 28nm design.

Don’t believe us? Read the excellent book by David Chinnery & Kurt Keuzer:

"Closing the Power Gap between ASIC and Custom; Tools and Techniques for Low Power Design" (Springer); ISBN-13: 978-0387257631

Lastly, and most importantly, our whole business ethos is built upon maintaining a level playing field for our customers in mining and that means we have to be a volume supplier. Volume means savings in parts cost, (aided by modularity) and lower cost to the customer. It also means we’re content to make a modest margin, not what we think the market will ‘bear’. If we can build and sell an 8TH system for $2799 - including its share of the development and tooling costs – and make a decent profit then so can every other supplier. Ask yourself why their prices are so high.
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Q. You mention mining companies a few times – why do you see them as such a problem?

A. Bitcoin was always meant to be free of any centralised control, that means that everyone can participate, and this should apply to mining also. If you have too much power concentrated in the hands of a few individuals or organisations it can severely disadvantage others. As newer, more expensive technologies come on - line, mining will end up being the sole preserve of the wealthy or dedicated companies, especially those who can afford to develop their own ASICs – and some have clearly already done so. Then what happens to ordinary miners? They can never get hold of hardware at the same $/GH figures the mining companies enjoy– unless they come to us.
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Q. You’re a UK company, so why do you want to be paid in US dollars?

A. Over 90% of our costs are in dollars, so it makes more sense for us to get paid in them.
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Q. Why don't you take Paypal?
A. It's simply not a suitable solution for this type of program. We can't plan development of complex systems when some contributors - or malevolent competitors - may decide to cancel their contribution within 90 days. That potentially messes up the project for everyone else that's contributed.
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Q. Is there a limit as to how many systems I can buy?

A. Within reason, no. Indiegogo has limits on how much you can contribute in one transaction, please go to http://support.indiegogo.com/entries/20494567-how-to-contribute-to-a-campaign for more information on this. Essentially you pay on purchase so if you try to buy 10k$ worth you’ll need that on your card.
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Q. Can’t you deliver the systems quicker? The longer delivery takes, the less I make!

A. That’s not possible. We don’t give over-optimistic, unachievable timescales. But if you’re willing to wait, you’ll get the best possible return per dollar, your system will remain competitive for some time to come and you can easily upgrade it with newer technology without having to replace it completely.
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Q. Why aren’t you using 28nm technology like everyone else?

A. For this project, 40nm is very cost efficient. Our design is very compact and efficient and so can compete with current 28nm (and even 20nm) offerings. We want to keep costs low for our customers and that’s exactly what’s been achieved – unbeatable $/GH values. What’s the gain for our customers if we using a more advanced and costly technology?

However, if we get significantly overfunded to a minimum of $11.5 million then we’ll consider using the extra profit we’ll make to fund development of a 28nm chip instead of our original 40nm design, (although we’re pretty confident that the rev 2 40nm chip will give just as good financial results). A 28nm design would contain twice as many pipelines on the same die size, but run at a lower clock frequency of 366 MHz, giving a hashing speed per chip of  192GH/sec, ie a speed increase of 50%, meaning that a NOVA-1 miner would run at 1.5TH/sec at the same power consumption as the 40nm solution!
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Q. Will you be making other Bitcoin related products in the future?

A. Definitely. For a start, we plan to introduce the Generation 2 HMs in early 2015 to give our existing customers an upgrade path which will prolong their competitive advantage. We will be implementing some alternative low power structures in the initial chips, and the results from these will shape the exact design of the next generation chips.
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Q. I like the modular approach and upgrade path, but at this time I’m one of the people you mentioned that has limited funds, so can only afford the basic system. Can I upgrade it before the delivery date, and how much would it cost?

A. The short answer is a qualified ‘yes’, but please bear in mind that we have to be fair to everyone in the queue. If systems were available you would have to go to the back of the delivery queue, otherwise we would have lots of people ordering the 1 TH system then asking to upgrade it to a 8TH one before delivery, and that’s unfair.
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Q. Will Novello be mining Bitcoins as well as making Rigs?

A. That’s clearly a case of conflict of interest, so no. Who on earth would want to buy from a company that’s a direct competitor? Worse still, how could any normal company with any ethics expect their customers to accept such behaviour?
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Q. What’s in it for you by offering GSP?

A. We have a different business model in that we want to keep our customers profitable and buying more TH from us and will give them major incentives to do so – they can keep competitive no matter what happens to the NTR and DIF. In GSP we give them availability of new hashing capacity when it’s most needed – there’s no catch, just a new way of looking at the supplier/miner partnership.
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Q. Are you going to sell the chips separately?

A. Yes, we’d very much like to do this and to encourage people within the Bitcoin community to experiment with our ASIC and make their own rigs. The ASICs are able to run at higher clock speeds and we are keen to gather data from users on how far they can be pushed. But first we have to be satisfied that we can supply a device with the same standards of support and documentation as a commercial one. This won’t be possible until about January 2015, by which time we hope to have appointed a distributor – ideally from within the Bitcoin community – to coordinate sale and support. As for third party system builders, we can’t really see how they could compete against our product pricing as they have to buy chips from us, but that’s not saying that we wouldn’t do it if there is enough interest.
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Q. How accurate are the power estimates?

A. We have extensive experience with this technology, and our figures are based on existing structures that are already in production, so our figures are accurate to about +/-10%.
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Q. I like the self-repair function, but I’d rather have the extra pipelines to use for hashing. Is this possible and can the ASIC devices be overclocked?

A. The short answer to the first part is no. As regards the second part, the ASICs are capable of running at higher speeds, but then the power dissipation goes up and so does the die junction temperature. At this stage we’d rather that customers accept the system specifications as they are; once we complete system integration and testing, it may be that the power consumption is lower than our worst case predictions and so clock speeds can be increased. We’ll keep all customers advised on this as testing progresses.
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Q. Are you sure your NTR/DIF figures are accurate? Some people on the web say they’ll be a lot higher!

A. Realistically, the NTR and DIF can only rise so fast due to a number of reasons, mainly that as they rise, earnings fall, and that deters purchases of new hashing capacity. The mining companies are mostly banked by Venture Capital investors, and they’ll not put money into ventures that can’t give them a set return in a reasonably short period. We don’t have a crystal ball, but we do have our own modelling program that simulates what we think happens in the real life Bitcoin market. Of course, it’s not 100% accurate, but it can track rig buying behaviour reasonably well, so we’re sure the figures will stand up to scrutiny.
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Q. What’s the system’s warranty?

A. As standard, a 2 year Return to Base. We’ll be operating an RMA (Return Material Authorisation) process so that if a customer encounters a problem, they go through a ‘diagnostic’ procedure to make sure the fault is real. This saves time and money. Return postage costs will be paid by Novello, providing that the system warranty has not been voided in any way, and that the fault is genuine.
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