Posted by Kate Craig-Wood on July 12th, 2013
CipherMine is a virtual company founded by Kate Craig-Wood in partnership with Giles, a hardware specialist, Ross and Simon from Memset Ltd, and Jan, a DevOps specialist. This is an excerpt from the full, latest version of the business plan which is available at docs.ciphermine.com.
CipherMine is listed on the LTC Global virtual cryptocurrencies stock exchange. You can view the CIPHERMINE security here. If you’re interested in buying shares, first please read the business plan in full, including the warning! Then, you’ll need some LiteCoins, which this post explains and a LTC Global account.
1. Executive summary
CipherMine is a virtual cryptocoin mining business. All shares are listed on on the LTC Global exchange.
- To provide a vehicle through which Litecoin (ŁTC) can be invested in mining cryptocoins.
- To give shareholders a high, reliable, long-term return on investment via regular dividends and equity growth.
- To aggressively invest in ASIC mining hardware to maximise early-mover advantage.
- To promote ŁTC and the LTC Global exchange as a good alternate to Bitcoin (฿TC) and associated crypto-exchanges by being successful, and in doing so encourage a growth in value of ŁTC similar to ฿TC’s.
- To operate in a sustainable and environmentally-friendly manner.
1.2 Strategy summary
CipherMine is already in operation, at present mining scrypt cryptocoins with a combination of heavily discounted CPU resources and GPU rigs, and SHA256 cryptocoins with FPGAs. Although our models and discussion herein focus on ฿TC and ŁTC, we apply mining clusters to whichever coins are most profitable (see 5.1.8). We have an aggressive strategy of hardware re-investment and have recently issued new shares to fund the purchase of BitFury ASIC hardware.
We have chosen LTC- Global since there is currently a dearth of mining companies on that exchange and because we believe that by being successful we can encourage ŁTC and LTC Global to become a main stream cryptocurrency and exchange with similar value explosions to that witnessed with ฿TC and shares on the ฿TC Trading Co exchange.
We shall invest 50% of profits back into hardware, as well as a 3-year straight-line amortisation / depreciation of existing hardware, and pay our 50% of profits as dividends. We have a detailed business model and forecast (available on request), the dividend forecast from which is shown in the figure 1.
Most importantly, we assume that ฿TC mining productivity will decrease significantly due to difficulty increasing, and have based our difficulty forecast on the last three months trend. We also assume a fixed price for both ฿TC (€60) and ŁTC (€2). Should they appreciate, as we hope, then our profitability will rise significantly. We shall be accounting in Euros, not cryptocoins, though dividends will be in ŁTC.
EDIT: Since launch, difficulty has gone up faster than expected, but cryptocoin values have increased by an order of magnitude, more than compensating. We are a little behind these original forecasts due to late shipments, but that too plays to our advantage thanks to our purchase of HashFast’s Miner Protection Programme.
1.3 Key strengths / differentiators and assets
- An outstanding, publicly visible principal with a wealth of technical and business expertise, backed up by a superb team of professionals with demonstrable experience.
- A carefully considered, detailed and realistic business plan and model showing the growth potential.
- 3,250 Avalon SHA256/฿TC-mining ASICs on order (~900 GH/sec, delivery late July – mid August).
- 4, soon to be 6 or 7, 400 GH/s SHA256 BitFury mining rigs (delivery October)
- 100 SHA256/฿TC-mining FPGAs deployed (~20 GH/sec)
- 3 quintuple-AMD 7950 GPU scrypt/ŁTC mining rigs deployed (~9 MH/sec), 3 on order (~18 MH/s total).
- Cluster of 60 VMs ŁTC mining with Memset’s spare compute (expandable).
- We have the following arrangements with Memset Ltd:
- Use of their ultra-efficient, high-security (to British government standards) data centre for which CipherMine will only be charged power at cost (and there is a lot of spare space).
- Use of the spare compute in their virtual machine estate with a minimal at-cost charge.
- The expectation that they will purchase end of life GPU rigs from CipherMine for use in their GPU cloud.
- A proprietary, scalable software suite for the automation of mining workers as well as auto-selection of best value cryptocoin to mine and automatic conversion of alternate cryptocoins into ŁTC (CipherMiner).
EDIT: We now have 4 TH/s of BitFuries hashing away, 2 KNC’s at 0.8 TH/s, and two Avalons at ~0.15 TH/s complimenting the above. We have another ~10 TH/s on order from HashFast and CoinTerra.