AMBIT MINING Rating Review

Stable+

Investment Rating

Expire date: 2018-08-30


We have rated the Ambit Mining project as “Stable+”.

Ambit Mining is a currently-operating mining farm located in mining-friendly Georgia. Their 1 MW farm was launched in October 2017. Ambit Mining also currently has 5MW of hosting for around 2000 miners.

The project has the following advantages:

  • An operating mining farm and a team of professionals with relevant experience.

  • The farm employs a variety of mining hardware, enabling mining different types of coins depending on the market situation.

  • Diversification of risk by providing additional income from hosting operations.

  • The cost of renewable energy is $0.05 and the NWT zone is tax-free due to the favorable location of the farm, which is especially advantageous for the procurement of mining equipment.

  • The Ambit Mining project is open and transparent. People can visit the farm and take a tour.  

The project has the following shortcomings:

  • As a rule, security tokens perform less well during fundraising. They also face problems with exchange listings as well as some regulatory issues.

  • Investments in mining farms are associated with high risk due to multiple parameters that cannot be foreseen. They can vary from cryptocurrency volatility to the advent of more advanced equipment.

  • There are factors that can negatively affect the attractiveness of the AMBT token depending on the ICO results.

Ambit Mining is a mining company founded in 2017. It is a part of BFGroup Holdings, and registered in the free economic zone in Tbilisi, Georgia.
The company is running an ICO to increase its mining farm’s capacity from 1 MW to 20 MW. Ambit Mining offers private investors the opportunity of a share in the company’s net operating profits in the form of dividends.

Website
Whitepaper
Smart contract platform:
Blockchain Ethereum
Contract type: ERC20
Token: Ambit (AMBT)
Accepted currencies: ETH, BTC, fiat
Soft cap: $3 mln
Hard cap: $40 mln
The total supply of issued tokens is 104,000,000 AMBT. The total amount to be sold is 88,000,000 AMBT. Additional emissions are not envisaged. The tokens issued will be distributed as follows:



The tokens allocated for the team will have a six-month lock-up period.
All unsold tokens will be burned.

Pre-Sale
Start date: 10.04.2018
End date: 27.04.2018
Token price: 1 AMBT= $0.40
Minimum transaction: equivalent of $100 in BTC or ETH
Maximum transaction: no limitations
Tokens allocated for pre-sale: 17 mln AMBT.

Main Sale
Start date: 01.05.2018
End date: 30.05.2018

Stage 1:
Token price: 1AMBT=$0.45
Minimum transaction:  equivalent of $100 in BTC or ETH
Maximum transaction: no limitation
Tokens allocated for stage 1: 20 mln AMBT.

Stage 2:
Token price: 1AMBT=$0,475
Minimum transaction: equivalent of $100 in BTC or ETH
Maximum transaction: no limitation
Tokens allocated for stage 2: 20 mln AMBT.

Stage 3:
Token price: 1AMBT=$0,5
Minimum transaction: equivalent of $100 in BTC or ETH
Maximum transaction: no limitation
Tokens allocated for stage 3: 31 mln AMBT.

If the Soft Cap is not reached during the ICO, all funds will be returned to investors.
At the time of writing, the project has sold 4,034,857 AMBT.
Tokens raised during the sale will be allocated as follows:

The Ambit Mining team own an operating 1 MW mining farm. They plan to increase its capacity to 20 MW. The farm is powered by renewable hydro energy.

Ambit Mining employs various mining hardware, i.e. both video cards and ASIC miners. At the moment the farm utilizes Bitmain Asics, Nvidia 1080TI 11GB and Radeon 580 GPUs. The team are planning to buy  Bitfury hardware in the near future . The founders are currently in advanced talks with the company; results will be officially announced shortly.
The farm is mining all top currencies such as BTC, ETC, Dash and LTC. Since the farm’s establishment, the farm has mined 14 BTC, 301 ETC, 32 Dash and 860 LTC. The number of currencies will eventually grow as the team is planning to mine the most profitable coins depending on the market situation at the time.

Ambit Mining is also looking to offer hosting services for hardware with capacity of no more than five MW. It will ensure an additional source of income for the project and token holders.

Part of the project’s profits from both activities will be distributed to token holders twice a month. At all other times the funds will be stored in a hardware wallet.

Another part of the profit will be allocated for hardware improvement and development.  Token holders will have access to all information regarding hardware improvement, mining statistics and other data related to the farm’s operation. The farm will be connected to a user interface dashboard via an API. The farm will submit real time data to the portal, which will collect and display it for token holders. Videos demonstrating the farm’s operation, hardware, sizes and location are available on YouTube. The team regularly update their channel and invite anyone to take a virtual tour of the farm. Ambit Mining’s operating profits are available at the btc and nanopool addresses provided on the company’s site. The project founders provide detailed instructions on how to use these addresses on their YouTube channel.

Market Analysis

Mining is the process of extraction (creation) of new coins via mathematical calculations aimed at finding the right hash. When this hash has been found, the miner gets a coin and the hash forms a block that includes pending transactions.

The most popular, and most expensive, mining cryptocurrency is Bitcoin. The second one is Ethereum. Some coins have limited emission, for example Bitcoin (BTC), Bitcoin Cash (BCH), Ripple (XRP) and Litecoin (LTC). Other coins do not have such limits, including Ethereum (ETH), Monero (XMR), NEM (XEM). The table below provides information on the number of mined coins and emission limits for the cryptocurrencies with the largest cap.


The table above depicts the cryptocurrency market in 2017. At the time of writing, the 17 millionth Bitcoin has already been mined. There are various estimates regarding the year when the last Bitcoin will be mined. Some analysts say this will happen in 2040, others believe that 99.2% of all Bitcoins will have been mined by 2036. There are also those who think that 1% of the remaining BTC will continue to be mined over the next 100 years.

Mining is popular worldwide. One of its main parameters is electricity costs, as mining equipment consumes a tremendous amount of power. For instance, one Bitcoin transaction requires 215 kWh. Taking into account the range of electricity tariffs (from 3 cents per 1 kWh in Algeria to 62 cents per the same unit in South Korea), the price of one Bitcoin transaction can vary up to 20.5 times. Below is a list of countries with both the most expensive and the cheapest electricity :


Research undertaken by the International Business Times  has provided mining cost calculations for 115 countries.  Venezuela tops the list with $531 per one Bitcoin; Trinidad and Tobago is in second place with $1190 per Bitcoin, twice the cost within Venezuela. In the third place is Uzbekistan with $1790 per Bitcoin.

The list of the 20 cheapest countries also includes some Asian countries such as Myanmar ($1983), China ($3172) and India ($3274) and some Eastern European countries: Ukraine ($1852) and Belarus ($2177). Mining one Bitcoin will cost $4760 in the USA, $4675 in Russia and $3316 in Georgia.

The most expensive Bitcoin mining regions encompass almost all of Western Europe, as well as Pacific Island countries, Sri Lanka and Bahrain. The most expensive country for mining Bitcoins is South Korea, where one Bitcoin will cost $26,170, which is clearly unviable.

Up to 60% of all Bitcoins are mined in China, which is home to companies such as F2Pool, AntPool, BTCC and BW . 15% are mined in Georgia, Sweden mines 7.5% of all Bitcoins and approximately 3% are mined in the USA. Less than 20% are distributed among other countries.

It became increasingly difficult to mine Bitcoins by the end of 2017 and this trend will persist. In 2018 mining the most popular coins requires higher capacities. It is unprofitable to mine Bitcoin or Ethereum using obsolete hardware. That is why only large farms who can renew their hardware and capacities are able to mine Bitcoin. Smaller companies who cannot afford it are better off mining various altcoins.

Competitor analysis

There are plenty of companies who mine Bitcoin, Ethereum and altcoins at an industrial scale around the world. The industry has some renowned leaders, mentioned above.

The Ambit Mining project is not among the largest farms. It is quite a young project, so we will look at competitors with similar parameters running ICOs to set up and develop their mining businesses.  

Ice Rock Mining  is an operating BTC mining farm located in Kazakhstan, in a former military bunker near a hydroelectric station. The country chosen for the farm location offers cheap electricity ($0.03 per 1 kWh). The facility will be set up inside a snow mountain with a stable temperature of 12C, which will eliminate the need for cooling equipment. The project is raising funds right now and, as the team states, the sum of $13.5 million has successfully been reached. Token holders will receive 50% of cryptocurrency mining profits. The first payments are scheduled at the end of summer 2018. At the time of writing, the Ice Rock Mining team foresees a 322% ROI based on current BTC market value. The envisaged payback period is 5 months.

The farm faces regulatory risks associated with a possible ban on cryptocurrency mining in Kazakhstan.

Miner one is a company located in Luleå, Sweden, and registered in ras al-Khaimah, UAE. It is envisaged that the farm will be powered by 100% green energy (a hydroelectric generating station and wind farms). The electricity cost is $0.077 per kWh. The mean annual temperature is 2C, which reduces cooling expenses. The ICO is at its final stage now; information on funds raised has not been made available. Token holders will receive 77% of BTC mining profits; no other cryptocurrencies are envisaged. The project’s foreseen ROI is 188% p.a.

We have tabulated information on Ambit Mining and the projects above to conveniently compare them:

 

 

Ambit Mining

Ice Rock Mining

Miner one

Country

Tbilisi, Georgia

Kazakhstan

Sweden

Operating farm

yes

yes

no

(to be launched in July 2018)

Electricity cost

$0.05 kWh

$0.03 kWh Unconfirmed

$0.077 kWh

Proposed  ROI

109%

(at 1BTC=$9000)

321%

188%

Token holders payouts

85%

50%

77%

Coins to be mined

BTC, ETC, Dash, LTC,etc

BTC

BTC

Hosting services

yes

no

no

Having analyzed the main parameters, we can point out the following competitive advantages for Ambit Mining:

 

  • An operating 1 MW farm (Ice Rock Mining have also allocated funds raised to increasing their farm capacity, however, there is no information on existing farm parameters).

  • Cloud mining services (Platform Build) to be launched in July 2018.

  • Unlike competitors who focus on BTC, Ambit Mining enables mining various cryptocurrencies.

  • Ambit Mining’s hosting services produce additional income. 85% of this profit will be distributed among token holders.

  • Ambit Mining farm is located in the Free Economic Zone of Georgia. This means that Ambit Mining is exempt from taxation. This applies to both dividend payments and VAT when purchasing mining equipment.

  • Anticipated ROI. Despite being smaller than that of its competitors, Ambit Mining’s value is the most realistic one and takes into account BTC prices.  Ice Rock Mining’s ROI is unreasonably high. It is worth bearing in mind that all projects have estimated ROIs and these shouldn’t be relied upon. When estimating ROI, it is impossible to foresee cryptocurrency volatility, mining increasing complexity and other varying parameters.  


When analyzing the competitors, we have also looked at how transparent and open projects are and whether they are mentioned as scams on social networks. For this reason, we have not included projects such as Thorentium, HashGains or Phi Gold.

The Ambit team includes 17 specialists with varied backgrounds. In addition to those mentioned below, the team also features the following specialists: Marketing strategist, development lead, graphic designer, digital strategist, system administrator, project managers, and visual specialist.

Beka Vashakidze. Founder & CEO

Beka is the co-founder and CEO of the Bitcoin Fund Group (BFG). This company is engaged in various industries such as oil and gas, fintech, media, ICO consulting, cryptocurrency and fiat exchange and hosting services. Beka has also launched and managed a СryptoCurrency Network (CCN) YouTube channel. CCN’s daily vlogs are dedicated to cryptocurrency, mining and ICOs. The channel became popular due to its vlog on setting up the 1 MW mining farm.
Beka is the CEO of Eko GAS and Managing Shareholder at Poultry Georgia Ltd (Koda), involved in chicken husbandry. At the moment, Beka is an Advisory Board Member at Gama ltd, a gas station network in Georgia.

George Khmaladze. Chief Financial Officer

George Khmaladze has been a Managing Partner, Director and Head of Auditing and Consultancy Services at MGI Georgia since 2005. He is currently a chairman of the board of directors of the Georgian Association of Independent Accountants and Auditors. George is also a Director of Certification at the Expertise Institute for Valuation of Assets of Georgia.

Giorgi Inashvil. Chief Operational Officer

Giorgi has six years of experience working at British American Tobacco, a famous British tobacco company. Over this period, he held various positions, including: Brand Manager, Supply Manager, Brand Executive, Regional Manager, and Marketing Manager in different Caucasian regions, inter alia Georgia and Tbilisi.  

Levan Nadiradze. Chief Project Manager

Levan has been an Independent Consultant at Kingston Technology since 2016. The company develops, produces, sells and supports memory products and other computer accessories & components. He worked for the Intel Corporation as a Caucasus Channel Representative for more than four years. Levan was a Business Development Manager for LiloMoll for nine years. He worked as a Product Manager at Alta Electronics for ten years, and has extensive experience in business development and consulting.

Tato Tsintsadze. Chief Energy Officer

Tato has been the COO of the Hydro Energy Corporation since 2015. He is also a Business Development Manager for Stucky Ltd, an independent design and construction office specializing in dams, hydroelectric stations, power generation and supply. Tato is also a member of the International Commission on Large Dams, a nongovernmental international organization. He is the Founder and General Manager of the Tbilisi Property Development Group, and formerly worked as a Financial Director of Georgian Investment Group Energy (GIG Energy).

Ioseb Kistauri. Chief Technology Officer

Ioseb has extensive experience as an IT Manager. He is currently working for Marniskari Ltd City Group - Le Gateau. He is the CTO of the BF Group, and has been working as a Field Service Engineer for Advenced Medical Technology and Services for more than 13 years. Ioseb was the Head of the IT Department at the Georgian Oil and Gas Corporation from 2014 to 2015.

David Kochiashvili. Solidity Developer

David has been working as a Senior Software Developer at the TBC Bank for more than three years. He was Head of the Software Development Division at Constanta bank between 2012 and 2015. David worked as a Software Developer at Geocell, a telecoms operator, for more than 14 years; he was the Head of Development Support Unit for four years. He also has two years of experience in cryptography development.

Aleksey Kuksin. Software Architect

Aleksey is currently working as an Architect and Software Developer at Sears Holdings Corporation. He worked as a Software Developer and Big Data Engineer at Nomis Solutions, Motorola, Nokia Siemens Networks, Ericsson. Aleksey has more than 20 years of experience in software development, and has mastered more than 15 programming languages.

Mikheil Todua. Head of Marketing

Mikheil has been working as the Head of Marketing at CryptoCurrency Network (CNN) since 2017. He was a Senior Strategic Account Manager at ABK COMMUNICATION from 2014 to 2017.
The Ambit team also includes 9 advisors. The key advisors are listed below.

Karan (Kay) Khemani. Chief Executive Officer at Neuchatel Ltd-SPECTRE

Karan has been the Chief Executive Officer for Neuchatel Ltd-SPECTRE since 2012, an innovative decentralized blockchain-based trading platform. He has also worked as an Executive Director at Goldman Sachs.

Miguel Palencia. Chief Information Officer at Qtum Foundation

Miguel is the Chief Information Officer and Project Architect of the Qtum Foundation, a blockchain platform for development of decentralized applications. He was also the CTO at VeChain, a blockchain-based smart contract platform.

Andrii M. CTO and co-founder at Hacken

Andrii is the CTO and Co-Founder of Hacken, a community-driven business aimed at supporting interaction between blockchain communities and propelling cybersecurity. He was also the CTO of Compliance Control Ltd.

Daniel Espaillat. Founder & CEO at Artemis Mining Corporation Inc.

Daniel is the Founder and CEO at Artemis Mining Corporation Inc. Daniel provides consultancy services for SPECTRE, self-employed.
The Ambit team are negotiating possible partnership with Altcoin ASIC provider and Leonardo Render, an application for GPU miners.

Ambit’s strategic partners: Hacken, SPECTRE, Zencash, BDO, Forbes, Jumio, Crex24.

Ambit’s technical partners: AMD, Cisco, Kingston, Nvidia, Schneider Electric.
The Ambit team consists of professionals with relevant experience. There are many members who have worked together for different companies. It is important that the team includes specialists who have previously set up mining farms. Another bonus is that there are experienced software developers who have mastered the Solidity language. This programming language is required for smart contract development. The team runs its own media blog dedicated to their farm, which ensures the project is transparent to potential investors. There are technical specialists who control the farm’s performance as well. It is worth mentioning that the Chief Energy Officer is highly experienced and skilled, which is vital as mining farms consume a lot of power, thus affecting future income of the company.

The smart contract repository is available on GitHub:

Token name: Ambit
Symbol: AMBT
Decimals: 18

We have audited the smart contract and have drawn the following conclusions:

Technical conclusion

Serious vulnerabilities were not detected. However this contract has minor issues that may affect certain functions or cause inconvenience when deploying the contract. However, they will not prevent the contract from functioning as intended.

Conclusion for users

The Owner can lock “transfer”, “approve” and “transferFrom” functions. Contract has no “mint” functions and total supply of tokens cannot increase. The contract has “burnTokens” and “finishICO” functions, so the total supply of tokens could decrease under certain conditions. Contracts are not deployed on the Ethereum mainnet and could change before deployment. Total supply is correct, token sale volume is correct. The owner can start or finish the ICO at any time and can also change the token price at any time. The contract has a buyback token function, but only the Owner can change the buy back token price. The contract has a refund function if the ICO is not successful, but the Owner can withdraw funds during the token sale phase. Minimum token purchase is not correct and changes from $80 to $100 (internal smart contract rate is 1 ETH = $400). Soft cap is $2,400,000 and Hardcap is $41,000,000, thus the softcap and hardcap are not correct. The bonus structure is correct; the contract has functionality for dividends, but only the Owner may set the dividends.

AMBT token transfers are available at Etherscan.

At the time of writing, there were 759 transfers to 567 addresses. There were no large investments among the transfers. The biggest transaction amounted to 582,247, which is 0.5599% of all tokens to be sold.

The AMBT token is a security token that complies with the ERC20 Ethereum blockchain standard. Investors purchase it to generate profit, namely:

  • All AMBT token holders will receive dividends from Ambit Mining’s net mining profit.  The amount paid out in dividends will be determined in a pro-rata share of the tokens held by token holders during a full dividend cycle.

  • All AMBT token holders will receive dividends from Ambit Mining’s net hosting profit. Payouts will be calculated following the same procedure.
    In addition to the payouts mentioned above, AMBT token holders will be entitled to the following:

  • A 10% discount on hosting services provided by Ambit Mining.

  • Voting rights. Token holders will be able to vote on the dividend payout period, new mining coins, etc.  

We think that the Ambit Mining team have made a reasonable and sensible decision to employ the AMBT token. Token holders will receive their own profit from Ambit Mining operations. They will participate in the running of the mining farm and vote on important issues related to Ambit Mining’s activities.

As we have mentioned, the AMBT token is a security token. It entitles holders to a share in the company’s mining profit. The bigger Ambit Mining’s profit, the bigger token holders’ dividends will be. Thus, the project’s success will directly affect the token’s attractiveness.

Ambit Mining’s and token holders’ profits include money flows from two activities: mining and hosting services. As per the roadmap, token holders will receive their first dividend payout from Ambit hosting income in August 2018. The first full dividend payout from the Ambit hosting and mining farm is scheduled for October 2018. Thus, AMBT token holders will benefit from the token only in the medium-term perspective.

The fact that the project team have AMBT tokens is another factor that positively affects the token’s attractiveness. The team will have 9% of the tokens; their lock-up period is 6 months. The team’s tokens will have been unlocked by the time of the first mining dividend payout. Despite the fact that the lock-up period is relatively short, the team are very unlikely to place AMBT tokens in the market as they are profitable.

We think the company’s reserve pool will be a negative factor. 3% (3.12 million) of the total token supply has been allocated for the reserve fund that has no lock-up period. The reserve is envisaged for any possible contingencies after the ICO. At the time of writing, the ICO’s success is considered to be moderately low. Less than 4% of the total emission has been sold over a month. Taking this into account, the reserve seems to be too large. If reserve tokens are sold on the market, AMBT’s price will drop.

Apart from that, the ICO’s success directly affects the project’s scalability. The farm’s capacity can be increased to the proposed 20 MW only in the event that the hard cap is reached. At the moment, even the soft cap has not been reached. If the team manage to raise the soft cap after all, the farm’s capacity will be increased only to 3 MW. As such, the operating profit will be several times smaller.  As we have said before, this factor directly affects AMBT token attractiveness in the market.

The main risks for the project are associated with the token’s nature and the type of business activity.

Risks imposed by the token nature:   

  • AMBT tokens are security tokens, meaning they will be controlled and monitored by regulators.

  • US citizens can neither take part in the ICO nor own AMBT tokens. This means the KYC procedure should be stricter so that US citizens cannot purchase tokens.

  • The token might have problems with exchange listings. Many exchanges do not support security tokens because of regulatory difficulties.
    Risks imposed by the nature of the business:

  • Volatility of the coins to be mined.

  • The equipment becomes obsolete relatively fast. To ensure the company is profitable, constant reinvestment in new hardware that meets the network’s complicacy parameters is required. It is hard to predict if Ambit Mining will have enough funds to regularly update and increase its capacity because of constant market fluctuations and unstable pricing in the mining hardware industry. There is a risk that the company’s incomes will not be sufficient to cover its hardware expenses.

  • The network is constantly becoming more and more complex. At the same time, the incentives for solved blocks are reducing on a regular basis. Mining is becoming more difficult, especially when it comes to the most popular coins.  

  • Mining farms are prone to hacker attacks; such an attack would affect not only Ambit Mining but all its token holders as well.

  • There is a high risk associated with possible changes in Georgia’s mining regulations or electricity costs.

 

 

The information contained in the document is for informational purposes only. The views expressed in this document are solely personal stance of the ICOrating Team, based on data from open access and information that developers provided to the team through Skype, email or other means of communication.

Our goal is to increase the transparency and reliability of the young ICO market and to minimize the risk of fraud.

We appreciate feedback with constructive comments, suggestions and ideas on how to make the analysis more comprehensive and informative.