Member Info for Hexam

Thanks Jeremy, that's what I was saying but what is he then?

So the CEO or MD is not a director position of PLT? It must be surely and therefore CH has to be updated?

That's more like it NASA but getting it on 100,000 rigs across multiple manufacturers (unless it's Bitmain) seems a big challenge and would mean more than $2,000 being added to the cost of each rig (assuming the manufacturers want to get some of the action - and cover their higher costs). If you think that is possible then fair enough but then as you said we'll just have to agree to disagree then. Good discussion though (but probably a bit dry and boring for most)!

PS as I keep saying though the more machines that have it the lower the 30% becomes until it reaches zero if they all have it.

The reason I ask is that there is nothing I can see on Companies House (unless I'm missing something) which suggests he hasn't been appointed yet to any kind of director role.

But he's not CEO yet so what is his role currently?

PS I'm not on X.

Does anybody know what Umar's job title/role actually is at PLT for what he's getting paid (however much that is)?

"Nothing is doubling, if QBT are able to create efficiencies of $300m then its a share of that efficiency."

Yes it is. If a combined $100m is going to the chip manufacturer and QBT that means the price of the machines must be $100m higher for them - and it's a one off (not per annum). There is no annual payment going from the miner to the chip manufacturer that's simply not how rigs are sold. $100m extra for the machines to generate the $300m pa savings in total would be mean much more than doubling the price of the machines.

QBT's deal with the manufacturers may be a % of machine revenue but NOT of bitcoin revenue to the miner. The machines will be sold by the chip manufacturer to the miners at $X each so there won't be an arrangement of $Y each + % revenue for them either. They are just selling a better machine as far as the miner is concerned so they will be prepared to pay more for it but it is inconceivable they would give up revenue stream as well or instead of.

If it was method B then it could work as you suggest. But it's not.

AWL - yes, it would

"If we're working with $300m to begin with. 10% to QBT = $30m so why not $70m to the chip manufacturer. Still leaves a cool $200m for the miner."

OK - but that means the cost of the machine are more than doubling. Also unlikely I think.

Awl - 3% (though this doesn't look like a buy)

NASA - Using your example then 10% goes to QBT then how much goes to the others? 80% to miners and 10% to chip manufacturers? That means QBT signing a deal with chip manufacturers that shares the benefit 50:50 with them - I can't see that happening personally.

The other thing is that if it is widely adopted then the miners don't benefit at all (because the difficulty will increase to offset the benefits). This is why Method B is much better (on top of the much bigger % benefit) because QBT could sell exclusively to a one or two miners whereas I can't see a chip manufacturer signing exclusivity deals with miners.

NASA - First - the 30% doesn't boost any miner's revenue by $500m per year.

Even the largest miner (MARA) only mines around 900 BTC per month so just over $1bn a year revenue so 30% would be $300m and actually less as there is the 1-4% hit and the fact that difficulty would increase to reduce the impact. So even 10% royalties would be less than $30m pa for the biggest miner and less for others. If they all adopted it then there would be zero benefit as the difficulty would simply adjust to cancel out all the benefit.

The contract is with the manufacturer though so how would this (less than) $300m for MARA be reflected in the cost of chips for QBT to get there share? If MARA keep the lion's share of the benefit then the chips would not go up in price that much so the share QBT get would be much less. It is only if the manufacturer got all $300m that a 10% share for QBT would be $30m but then the chips would be prohibitively expensive and MARA would simply not but them (especially as they were getting no benefit either).

In short Method C is more likely and might get them to 10p a share whereas Method B is much trickier but might get then to over £1 per share.

That was almost rampy for me :-)

"Hexham - why would it be linked to a single machine and not the overall saving the end users going to make in increased major revenue. It makes more sense that way to me."

I don't think you have quite understood me. I'm not saying a single machine. I'm saying the miner benefits so the manufacturer will be able to push up the price of the machines they sell to it but by only a fraction of how much the miner will benefit (as the miner will not want to see their margins reduce much if at all). Your calculations effectively assume ALL the benefit the miners get is reflected in what the manufacturer gets and then QBT get a share of this. If that happened the miner would be no better off as their costs would simply go up as much as their revenue.

*too high

"My research tells me any licencing deal with the manufacturer could be linked to the revenue increase and energy savings to the end-users (the miners)."

They may be linked in some way but the numbers you post are at least 10 times to high - unless you think cost of the machines are going to up by at least 10 times from say $5k per rig to $50k. Really? Even being very generous the rigs might double in price but that is still far less than by how much the miners will benefit and which is basis of your calculation.

Perhaps if you reworked your calculations using the actual basis of how it might work with the cut QBT may take from each machine sold with the price of those machines increased by the whatever you feel is reasonable given the end user benefit to miners then you might convince yourself (or me).

Historic Gross Margins:

HY25 - 50.7%

FY24 - 51.8%

FY23 - 50.6%

FY22 - 52.5%

Pre-Covid

FY21 - 54.2%

FY20 - 54.0%

NASA - why would they be so linked? They aren't now with chips that are better then other chips. Even if they were the numbers would be much less than the ones you quote as the annual revenue for miners is around 10 times higher than the annual costs (i.e. revenue to the chip manufacturers) of the hardware generating that revenue. So all your numbers come down by a factor of 10 and they are overstated in the first place and you've missed out two things that mean the actual increase is lower than 30%.

In short your calculations and results are nonsense but you are getting a lot of recommends simply because the answers are so big and are what people want to see. Hopefully they won't be swayed by your misleading workings and also that Mikey will be reporting you (he's hot on that sort of thing).

NASA - you've now agreed with the fact that they will be negotiating with chip manufacturers but are still pushing calculations (which by the way are wrong anyway) made as if they are doing deals with miners.

Any deal with chip manufacturers will be made based on chip sales (or fixed rate) and so your calculations should be based on that. Say $5k or whatever for a new rig how much do QBT get for each rig? Your calculations are appropriate if they were selling something to enhance the machines that miners have already bought (and if your numbers were correct), like method B is, but they are selling Method C to chip manufacturers so it is all about what income would chip manufactures get for their rigs (or chips supplied to rigs), how many they sell and how much would be prepared to give to QBT for each sale.

NASA - They may well meet with also miners but FG has made it clear that the negotiations will be with the chip manufacturers and this makes perfect sense. Your talk of exclusive deals with miners etc. is highly misleading.