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Cyber Bitcoin

In July 3, 2014, SilverFish mining machine Manufacture announced the operation and financial situation bulletin. This is a rare financial report announcements with the miner machine maker. In general, we are very difficult to get a similar report, because these makers are unlikely to reveal their business secret. However, SilverFish mining situation has some different, it is a IPO project, need to open the operation status to the shareholders.

At present, Scrypt machine industry is faced with hitherto unknown crisis, my previous article "Scrypt machine industry dilemma" has done a detailed analysis. Perhaps by shareholder pressure, SilverFish have to has so detailed financial report to the public shareholders.

As a machine industry study, I think this report is very valuable. Via report  data, by simple analysis, we can roughly calculate ASIC chip cost and the manufacturing cost of each machine. Some reasonable assumptions plus, we even can speculate SilverFish mining future's rate which will occupy in the whole Litecoin net.

SilverFish chip cost

(1) according to a report in Schedule 4, from 2014 January to June, they paied  totaly of $3,950,000 to Shixin electronic and TSMC.
2) according to a report in Schedule 5, they  also owe Shixin electronic and TSMC 225,000 and $120,000.
(3)according to the report, they already got total 320,000 chips.
(4) according to the chip performance which SilverFish mining open, single chip has 720K Computing ability.

That is to say, SilverFish mining cost $4,295,000, get 320,000 chips which at 720K power. That is, each chip is $13.42, about 84 RMB yuan. If the unit is converted into computing ability of , it is $18.64 in each /MHS, about 116 yuan.

If the results are not intuitive,  we can calculate the cost of the miner. Its  low-frequency mute version blade (dual group) is at the street price of 11888 yuan, which has a total of 40 single chip, the chip cost about 3350 yuan. Its box (5 modules) has the street price of 35888 yuan, which has a total of 100 single chip, the chip cost about 8400 yuan.

The manufacturing cost of SilverFish mining

The chip cost is only part of the cost of a mining machine. Manufacturing costs, to calculate all, also need to consider the cost of materials and The processing fee.

(1) reported in Schedule 4 did not mention the cost of materials and The processing fee, the SilverFish mining does not have to pay to these factory who manufactur the miner for them. So it should be on behalf of the factory paid as a loan.
(2) according to the report in Schedule 5, SilverFish mining owes factory 3250000 yuan.
(3) according to the text of the report, by of June 30th, the SilverFish mining has been deployed the 50G computing ability field.
(4) according to a report in Schedule 4, the total income of SilverFish mining pre-sale machine is 5856000 yuan
According to the pre-sale income SilverFish mining , we conclude that the 20G computing ability has being sold. Add to its own deployment of 50G, there are  namely 70G computing ability totaly, which cost of 3,250,000 yuan, the factory OEM fee is around 46 yuan  /MHS.

So as the manufacturing cost can we calculate the feeder, SilverFish low-frequency mute version blade (dual group) is at the price around 11888 yuan / each, the manufacturing cost is about 4700 yuan. SilverFish box (5 modules) is priced at 35888 yuan / each, the manufacturing cost is around about 11700 yuan.

The above is the manufacturing cost calculation, no labor and other costs. However, SilverFish  mining almost has no stauff cost, in 6 months they only has the wages of 105000 yuan. I guess all employees hold stockshare so that  is why they do not take salary.

SilverFish's compute ability's strategy

Manufacturing cost which SilverFish has, should say, is still relatively low. But why they do not sale of mine in lower price ? The reason is very simple, a low price will mean a loss. SilverFish mining IPO won a total of 5600 BTC, accounting for 40% of the total shares. That is to say, if the SilverFish mining get the ultimate benefit of not more than 14000 BTC, then in IPO investors will lose money. Namely, SilverFish dual-mode group miner has a manufacturing cost at 4700 yuan, it must be sold to 11750 yuan, just to break even, and now the price is only 11888 yuan.

However, in such a price, miner machin is not likely to sell out. So, SilverFish mining only has to the second choice, deploy their own field.
(1) According to the report, in June a total of 50G SilverFish mining computing ability will be set. And in the next  three months, every month will have of 50G ability been set. July will reach 100G, August to 150G, September to 200G. So far, their this batch of 320000 chip will run out.

(2) According to bitcoinwisdom data, from June 3rd to July 2nd, Litecoin all net computing force increases from 260G to 430G.
That is to say, the Litecoin net computing force  increased to 170G, including 50G from SilverFish mining. In July 2nd, the SilverFish has mining ability totaly  at 11% of whole net. They will produce 30000 LTC daily, SilverFish mining weekly earnings at about 23000 LTC, the date, is suit to its stock dividends, which share distribution is consistent with the 0.78 LTC a week.

If we assume that the trend remains unchanged, then to the end of Augest, SilverFish will reach computing ability of 200G, and the whole Litecoin net capacity will reach 940G, namely the SilverFish will reach the net force  21%. At the appointed time, SilverFish mining will have a week return at about 44000 LTC, the distribution of 1.4 LTC per week per stockshare. At present, the exchange rate for LTC/BTC is 0.0111, even after the SilverFish mining in September, to maintain the net force 20%, they will need at least 32 weeks to back their invest, which is about duration of 8 months.

Where is the problem?

From the SilverFish mining public financial information, basically we can be sure that the IPO is not a scam. At the end of last year, when the IPO began, BTC price is about 5000 yuan, the price of LTC is about 140 yuan, the exchange rate as high as 0.028 LTC/BTC. Now if the LTC/BTC exchange rate is still 0.028, then return the whole investe should only requires 13 weeks. But who knows that in the next 5 months before the Litecoin currency will fall like this? If we can predict, just short of the Litecoin currency can be profitable much.

Even if the situation is so bad, SilverFish mining is not entirely out of the hope. The good news is, if you use of SilverFish miner to dig LTC, the cost of electricity at each LTC (according to the charge of electricity 0.6 yuan / degree calculation) is only 3.60 yuan, which means that the SilverFish machine can be run for a long long time.

The bad news is, SilverFish mining has only 300000 yuan cash in hand. Although they has nearly 60000 LTC and 1700 BTC, and in the coming days, it holds the LTC also to every day for at least 3000 (including dividends) sustained growth rate, but they has the debt which is as high as 10,000,000 yuan, so that they do not have enough to pay with now. Considering its creditors is not receiving LTC,, in order to repay debts, SilverFish mining may still continue to sell LTC for cash. Even though every day hundreds of LTC go to the market, they does not affect the LTC market.


The purpose of this paper is to a new operational and financial announced by SilverFish  industry, present situation and future of Scrypt machine industry. Points represent only individual, analysis and prediction of inevitable limitations and uncertainties, should not be anyone investment basis. In this paper, the calculation of financial data mining have been based on publicly SilverFish, in view of some confidential data did not open, therefore, this paper can give a rough calculation results, for reference only.

Award: 16wBsQrN4j6qhueBr5UDdibrukJzUJYXjn, Thanks Much.


DreamColor note: The God fish seen this article made the following statement: "This is 999 (name) pure academic discussion, all accurate information should be accoding to SilverFish mining public announcement"

"The ending of this artic maybe highly misleading, SilverFish, currently has some payment, please note that they have BTC 1700+ , LTC nearly 60,000. They sell it at the right price. They sale  BTC and miner machine to pay urgent payables. Moreover SilverFish now has at 3000+ LTC output per day. Even they sale all of it every day, the number is not worth mention in the market. But its 80% is not sell but give to its stuff. For confidentiality not publicly detailed chip and PCB production, coating amount, with only a few data to calculate the cost of chips are relatively rough, the disclosure of which in important matters, the second batch of third batches of chip and has been commissioned by TSMC in production。 So the chip cost maybe wrong, and the the calculation  for addition of PCB production and for the patch, is very rough."

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