8 votes

Daily Paul Bitcoin Mining Venture

Update:
Submitted by allten on Tue, 03/26/2013 - 14:54. Permalink

There are still two things I'm waiting for before pulling the trigger:

1)A response from Michael N. for his support. It doesn't mean he has to endorse Bitcoins, but simply work with me to make sure the operation is carried out as described. (Note: The 10% in operation costs will go to www.dailypaul.com). If there is never a response then the venture name and details will need to be changed.

2) www.Butterflylabs.com is the company working on the latest and greatest mining equipment. They have created 65nm ASICs (You can google that for more info) just for calculating Sha-256 Hash Function which can be used for Bitcoin mining. Releasing new technology is not the easiest of task and is always met with setbacks and delays. Until they show a working prototype and are confirmed to be shipping to customers then the operation is a go.
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This post is subject to change

Introducing Daily Paul's Bitcoin Mining Venture exclusively for its members. I have not discussed this with Michael N yet (don't know his contact info'), but if he agrees with the idea, I would like him to be the escrow holder for the funds for anyone that would like to get involved and have part ownership of Bitcoin mining equipment. Also, if Mike's interested, I would like him to have the equipment and manage it.

Here is the mining equipment to be acquired:
http://products.butterflylabs.com/homepage/60gh-bitcoin-mine...
This product is not shipping yet, but should start shipping soon.

Total cost of mining unit is $1,299.00 + $34.00 Shipping = $1,333.00

There will be a total of 27 Shares per unit.
Price for each share: $50.00

This is how I envision it being run (subject to change):
At the end of each month, sufficient bitcoins are withheld to cover energy costs, repair costs if any, etc. The amount will be calculated with the 30 day bitcoin price average.

After that, there's a 10% fee for managing the miners that could go into the Daily Paul.

The remainder of the bitcoins are split up between the share holders and sent out to their Bitcoin addresses.

The equipment will stay in operation until it can no longer pay for its month to month operating expenses.

So, other than setting this operation up and helping out, I will also purchase the remaining shares so that we get full units no matter what (up to $1,200 dollars).

When I first started sharing Bitcoin with my friends and family, the first thing I did was get them into Bitcoin Mining. I believe it is essential to understanding the economics of Bitcoin mining before ever considering buying/selling bitcoins. The recent parabolic rise in Bitcoin has certainly fattened up my wallet a bit (going to buy some silver and fund this operation), but its not something I'm proud of on behalf of Bitcoin.

I present this opportunity to you, not just as an investment, but as an opportunity to learn more about this new technology. I'm hoping everyone one will get at least one share. I even encourage the most ardent opponent to get a share and learn more.

Bitcoin mining takes a considerable investment to do it alone and that cuts the majority of the people out because they wisely choose not to risk very much money in something so new and difficult to understand. That is another reason why I've been forming these mining operations. I've wanted to give anyone the opportunity to participate in Bitcoin mining with the best equipment on the market for a small reasonable price.

Please consider getting ONE share and please don't make biased posts in this thread. There are plenty others for that.

I hope someday you will see that Bitcoin has the potential to make Gold and Silver used as money once again. There are efforts underway to be able to transfer silver or gold certificates the same way you would transfer Bitcoins (using Bitcoin's P2P highly Secure and distributed Block chain database) that will be 100% backed and 100% redeemable.

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I hear you on that one.

It's one reason i don't want to order on behalf of DP members until they start delivering and their product has been reviewed by its users. If they deliver then their product will be the best on the market.

“I’m fully diversified. I’ve got some under the mattress, some under the floor boards, some in the backyard.”

Lets Get this going!!!!!

Y'all know more about mining than I do. I got a bunch of friends that are doing it. Some are even building their own computers specifically for mining and they are starting ASAP.

I'll help in any way I can.

For Now. Let me Offer all fellow Austrians the following text to read:

dev.economicsofbitcoin.com/mastersthesis/mastersthesis-surda-2012-11-19b.pdf

DON'T MISS THE BOAT...

"We’ve moved beyond the Mises textbook. We’re running in the open market." - Erik Voorhees

lemme know if yall need rack space

I got a couple U left and an unmetered connection (not that a bitcoin server will require much bandwidth).

Also have some older nvidia cards (gtx260 x2) that can be used.Will have to get creative with chassis though....

fyi we can build something that can slam out way more hashes then that thing from butterfly labs for probably a lot cheaper as well. The cpu is not really all that important. We want more gpu.

I had almost a qtr rack of dell r210s mining and a single core2duo server with a decent graphics card outperformed them.

I also

hope everyone realizes that mining bitcoins is NOT necessary to get started with or use bitcoins.

It's exactly like mining gold. Obviously many on the DP believe in owning gold and even being able to trade it as currency, but how many mine it? Exactly, not many. It's easier to get it by other means like buying it and leave mining to the enthusiasts and pros.

You can learn how to get bitcoins here:

http://bitcoinquickstart.com/how-can-i-get-bitcoins

If I read it right, that analogy does not work

unless you mean trying to go out in my front yard and mine for gold. When I mine for gold, I do my research and go to a place where, if I work hard enough, I WILL find gold. I just got to the part where you can "mine" bitcoins all month, then not earn anything because someone else solved the problem you were working on, and they use the term "lottery" for how they decide who gets them. I'm not trying to discourage anyone interested from participating if they want, I am just saying your analogy does not work.

Love or fear? Chose again with every breath.

Hi

fishy.

It's interesting because I know a good deal about both subjects. I'm near a place that has good gold mining opportunity, and I researched and actually did some (got my panning technique down and everything) with the gold price rise.

Both are about luck and statistical odds. There are pro gold miners today that go weeks without finding more than a couple cents worth, working full-time with great equipment (sluices etc.). But if they keep at it they can hit a good patch and make 10K in one day. You just have to stick with it, and it's random. You'll eventually get something if you do it long enough, but the resources put into it may not make it worth it.

Bitcoin mining works the same. Everyone works on the same mathematical problem, not different ones. The problem is structured such that there is no way to make a program that solves it straight away. All the computer can do is guess then see if the guess fits as the answer. Since computers have different processing ability some can take more guesses per hour or second, whatever, to try solutions. So statistically computers with most processing power have better chance to guess the answer first and win before less powerful computers. However, that doesn't mean even a rinky dink dinosaur computer can't guess right on a few tries and win, it's just unlikely (but it does happen). Just like with gold mining if a computer competes long enough it will eventually get lucky and win. However, it may have taken so much electricity while trying it's not worth it.

Who wants the problem solved?

If it is important to get the problems solved, then why not put people on different problems? You will NOT find 2 miners panning the same spot. One would shoot the other. It is called "claim jumping" and it is still a serious offense around here. And again, a bad weekend mining gold means I did not find what was there. A bad weekend bitcoin mining means someone came to my "claim" and took the gold that was there.
What does that box do? If the CIA is interested in bitcoin, there is some data mining going on, whatever else may or may not be mined. Is there someone who actually needs these problems solved, or is it a ruse to get everyone to open their hard drives for the CIA?

Love or fear? Chose again with every breath.

That's my question too!

Who needs the problems solved and why?

To mine Big Data

Spooks need a massively-multi-processor scheme going on, preferably something that they themselves aren't responsible for funding or maintaining.

Not that this is that, of course. Nudge nudge, wink wink.

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Edit:

Big Data like GPS information discussed in this post: http://www.dailypaul.com/279636

Fishy

I'm glad you're asking questions. That's what is a responsible route.

It's hard to explain Bitcoin mining, but solving the problem is a way to secure the Bitcoin network. To attack the network someone would need more processing power than all the Bitcoin miners combined, which means millions of dollars or more worth of expense. As the network of miners grows so does the cost of attacking the network until it's eventually infeasible by anyone, including governments.

No data is being gathered. Absolutely everything with Bitcoin is transparent; it all happens in the clear where everybody can see all the programming and transactions. The only thing people don't know is your private key, which allows you to spend/send the coins.

Good Question.

Fishy,

Like in any gold rush getting gold at the newly discovered mine is pretty easy... as time passes the mining gets harder and results for physical gold are not as easily to come by.

Bit coins are mathematically designed in a similar fashion for the same purpose. the more that is mined the harder the next bitcoins are to be acquired.

This Pod Cast explains the answer to your question much more clearly:

http://omegataupodcast.net/2011/03/59-bitcoin-a-digital-dece...

"We’ve moved beyond the Mises textbook. We’re running in the open market." - Erik Voorhees

For Anyone wanting to get started..

Here is a good rundown to start comprehending and using Bit Coins.

The Following 2 are great introductions:

This is a great forum:

www.bitcoinmoney.com/

This is a great pod cast:

www.omegataupodcast.net/2011/03/59-bitcoin-a-digital-decentr...

Services:

www.bitspend.net

www.bitpay.com

www.bitinstant.com

www.localbitcoins.com

Sites:

www.weusecoins.com

www.bitcoincharts.com

www.mtgox.com

www.elbitcoin.org

The software options:

www.multibit.org

www.bitcoinarmory.com

www.bitcoin.org

www.electrum.org

www.blockchain.info

www.strongcoin.com

"We’ve moved beyond the Mises textbook. We’re running in the open market." - Erik Voorhees

Way to go Allten!!!

Yeah man this proposal sounds awesome!!!

Right now would be a great time to capitalize on mining.

The new computers that are coming out for mining are being delivered in June. By then more people are going to be doing it. The sooner the better.

"We’ve moved beyond the Mises textbook. We’re running in the open market." - Erik Voorhees

I know its fun to watch the frenzy in the Bitcoin world right

I know its fun to watch the frenzy in the Bitcoin world right now, but what are your thoughts on this?

“I’m fully diversified. I’ve got some under the mattress, some under the floor boards, some in the backyard.”