Bitcoin Forum

I have a 5 Gh/s BFL order from the 10th of April which I just upgraded to 7 Gh/s.

I will be issuing 50 bonds at 0.21 BTC each. The bond holder is entitled to 100% of the PPS value for 100 Mh/s, as specified by the pool I mine at, once the 5 Gh/s BFL device is operational.

As soon as I acquire enough funds, I will purchase a 25 GH/s BFL and once it arrives, I will increase the hash rate of each bond to 300 Mh/s.

As soon as I acquire enough funds to purchase a 50 GH/s BFL, I will do so. Once it arrives, I will again increase the hash rate of each bond to 750 Mh/s.

At 100 Mh/s, it's 0.0021 BTC per Mh/s.
At 300 Mh/s, it's 0.0007 BTC per Mh/s.
At 750 Mh/s, it's 0.00028 BTC per Mh/s.

The bond holder is entitled to weekly payments from 100% of the PPS value, as specified by the pool I mine at, at the specified hash rate above. After the 50 Gh/s BFL has been paid for, all proceeds from my BFL mining will be placed into a repayment fund until the repayment fund contains 21 BTC. Starting with the final weekly payment, bonds will be redeemed by the issuer for 0.42 BTC using the funds allocated by the repayment fund. If there isn't enough funds to redeem all bonds at that time, then bonds will be redeemed on a first-in-first-out basis, using all funds from my BFL mining, until all bonds have been redeemed. Weekly payments will start 1 week after the 5 Gh/s device is operational and end 1 year later.

Just gauging interest at the moment.

Too expensive, not worth the risk... for me at least.

If Josh says BFL is shipping it in 90 days.. make it 900.. They wont be delivering any time soon.. plus this is very expensive..

The initial offering works out to be 0.0021 BTC per Mh/s. Once the 60 Gh/s device is acquired, it works out at 0.00028 BTC per Mh/s.

What would you consider a fair price?

What's currently cheaper?

Also, stop spreading idiotic bullshit about BFL. Granted, it might not be 90 days but I doubt it will be more than 120 days. It doesn't matter how long it's taken them to get to the point they're at, once production is ramped up, units will be flying out the doors, and production is about to ramp up.

Just so I have this straight (and correct me if I'm wrong of course):
You purchased and will be receiving a 7GH/s device. Out of those 7GH/s, you're proposing to sell 5GH/s worth in shares (50 shares,100MH/s @ BTC0.21) equating to BTC10.5.

With these BTC10.5, you'll be purchasing a 25GH/s device (formally a 30GH/s Mini Single). At that point, you'll be controlling 32GH/s total.

Now here's where it gets a bit fuzzy for me:

For the sake of math, let's stick with the original 37GH/s for now. How did you come up with the 15GH/s / 20GH/s split between shareholders and yourself? Put simply, shareholders just fully funded a 30GH/s device...why do they only get 15GH/s worth?
As I see it, shareholders not only own the 5GH/s you subsidized out, but also the equipment you purchased with the funds (the "30" GH/s device)...so more of a 35GH/s / 2GH/s split.

Yes, that's correct. (And I'll fix the numbers).


I'd be selling the proceeds from a specific hash rate. At 100 Mh/s for 0.21 BTC, or 0.0021 BTC per Mh/s, that's cheaper than any of the shares or bonds that I know of at the moment. I'd then upgrade that hash rate by 3x to 300 Mh/s. At that point, it works out to 0.0007 BTC per Mh/s, which is 1/10 the current cost of TAT.VIRTUALMINE. The next upgrade would increase the hash rate by 2.5x to 750 Mh/s, bringing the cost to 0.00028 BTC per Mh/s.

I'm also thinking of whether or not to buy back the shares after a year for 2x the purchase cost, so 0.42  BTC per share. I guess that would make it a loan for 1 year which pays back 100% interest guaranteed, plus a years worth of profits from mining.

Right, I understand that part. Let me try rephrasing:
As it is right now, investors are buying 5GH/s @ 100MH/s each...the proceeds of which are used to purchase 25GH/s. So suddenly those 50 shares are a part of a 30GH/s setup (5GHs from the Jally + 25GHs from the Mini they financed), making the share value 600MH/s apiece instead of 100MH/s.

Yet you're only granting them an increase to 300MH/s instead of the full 600MH/s. Why?

This is a bond I'm offering, not a stock. I think what I'm offering is extremely generous looking at what's available at the moment.

I've updated the initial post, if you want to have a reread and let me know what you think.

Extremely generous...

Hmm...

Maybe if your BFL arrives before the close date, 2014/06/01, lol.

Although I do like a guaranteed 100% ROI. (Neglecting risk with you, BTC and the stock market).

I figure I'll have the 5 Gh/s BFL by August. Josh stated that it would probably take around 90 days to ship if an order was placed now. I'd guess that I'd have the 25 Gh/s by November and the 50 Gh/s by January.

Josh says a lot of things.

I'd figure in 2 weeks I'll be flying a unicorn over a rainbow into a mosh of naked girls. Two weeks.

If it's a bond you're offering, not a stock then what have the BFLs got to do with anything?

You're asking for cash now and promising to pay back a certain amount at a later date.

"Bonds will be redeemed by the issuer for 0.42 BTC each on 2014/06/01."

Looks like you're offering a straight 100% interest for a 1 year loan.  What happens if BFL ship late and/or difficulty rises sharply and you don't generate the mined income to pay that back?  Are you offering to pay that fixed amount OR are you offering to pay what you actually mine?  Those are two VERY different propositions and it's not clear which you're offering (and, if the former, how you can be sure of honouring it).

Plus you can't fairly compare your price to TAT's.  If you want to compare you need to be comparing the price of his shares at the date you actually receive your BFLs - until then you're charging an infinite amount per hash (or his price now LESS all the dividends he'd have paid by then).  And if you aren't paying out at all for a year then you have to also take into account possible compounding/opportunity cost on competitors compared to yours where no compounding is possible (as you have the funds not them for the next year).

That's why I'm guessing November and not actually 90 days. And by the end of the year, they should be shipping off the shelf. Let's not kid ourselves, that's a pretty fair estimate, probably even a conservative one.

The hash rate from the BFLs provide weekly interest payments.


I've update the proposal to hopefully clarify it. As for it being a straight up 100% interest loan, it's 100+, as it includes weekly interest payments as well.

You still haven't answered my question. I'll reiterate it just in case you missed it before ;)

So? There's no need for me offer 600 Mh/s, I can offer what I want. So far, I haven't seen anything better than that and if you have, I'd like you to show me.

In other words: "I can do whatever the hell I want because ... Bitcoin!"

*shrugs shoulders* All I'm trying to do is to get you to admit that investor funds will be used to purchase [a portion of] equipment for yourself with no added benefit for the investor.
I don't have a problem with gathering funds for the purchase of equipment (heck, that's what I've done), but I do have a problem when you end up screwing the investor. If the equipment was purchased with investor funds, you shouldn't see a damn dime until you've paid them back. Of course, that's just my take on it ..consider it a '101' in Bitcoin Ethics (which at times seems like an oxymoron, I know).

But I wouldn't worry that much as I'm sure you'll do just fine. There are plenty of people around here more than willing to throw money your way regardless of dozens of considerations with this kind of security :D

As for 'anything better', I did a bit of math and it seems my fund would offer (if I went the mining bond route) 529MH/s per Note (BTC1.0 each) ..or 111MH/s at your rate of BTC0.21. Close, but I'm a better investment :P

I am really glad he pointed out that you are just doing whatever the hell you want, your math didn't even add up at first, and you have no product in hand.  The people that ordered over a year ago might get their units by November, but by then the difficulty will be a whole different story, and you don't even address that.

Are you factoring in his buy-back at 200% of face as WELL as the dividends when you compare?

Or the fact that you already changed the terms of your paper twice - the second time with a (barely veiled) threat to default if investors didn't agree to the change.

Both of you are asking investors to trust BFL as well as the issuer.  That's not all that tempting to many people.  BFL have managed to combine incompetence and dishonesty into one tidy package.  ASICs from them - received after difficulty has sky-rocketed - just aren't worth the risk of lending them BTC (repaid pegged to USD if you ever get bored of waiting) interest-free in the hope that they eventually accidentally make a promise that they stumble into delivering upon.

Why would I deny that? That precisely what the bonds are for.


That's what I am doing.

The proceeds from the sales of the bonds pay for the 25 Gh/s unit. The bond holders get the weekly proceeds from 100% PPS with 5 Gh/s and the proceeds from the other 2 Gh/s go towards purchasing the 50 Gh/s unit.

When the 25 GH/s unit arrives, the bond holders get the proceeds from 100% PPS with 15 GH/s, the proceeds from the other 17 Gh/s go towards the purchase of the 50 GH/s unit.

When the 50 Gh/s unit has been purchased, the proceeds from my 17 Gh/s go into the repayment fund. If the repayment fund contains enough to redeem all bonds, then the proceeds of my 17 Gh/s are mine to use as I see fit.

When the 50 Gh/s unit is operational, the bond holders get the weekly proceeds from 100% PPS with 37.5 Gh/s and the proceeds from the other 44.5 Gh/s go into the repayment fund unless it already contains enough to redeem all bonds. In which case, the proceeds go to me to use how I see fit. Once the repayment fund contains enough to redeem all bonds, the proceeds from the 44.5 Gh/s are mine to use how I see fit.

If the bond holders would like to redeem their bonds at that point, I'd have no problem with that.

I haven't factored anything in past face value, since technically speaking neither one of us has any data to go on other than that. Granted I've done my due diligence on difficulty predictions, repurchasing timeframes and general feasibility..but I suppose that sort of effort isn't really required anymore.

Consider my changes a weaker form of Business Agility, given I've been adapting to the changing market and currency fluctuations, albeit a bit sloppier than I'd have hoped. In hindsight, perhaps a form of Fixed Price contract with an EPA would have been a better option...but I'd say it's about 7 months too late for that. And I wouldn't consider it "barely veiled" ..rather, "strongly advised" based on everything that changed since January.

But I digress..this isn't about me, this is about a "1 Year Mining Bond".



See, that's a lot better! When you add detail to the mix, there's a hell of a lot less confusion as to how the operation will be run. What you've written above is substantially better (from a third party perspective) than "I'm using investor funds to cover 30GH/s of equipment, but only paying them for 15GH/s".
Phew..why did it take so long to get to this point..

Alrighty..one last question and I swear I'm done:
What's your difficulty prediction 90 days and 180 days out (from today)?

Do you have any assets that would ensure your ability to pay back bondholders at face value, other than a plan to use mining proceeds? I ask as I would like to understand who is taking the risk of your models being off. (IE: If difficulty keeps shooting up as it has been, after paying ongoing divs, no model I have come up with leaves you with enough earnings to pay back the bondholders full face value.)

IE: wondering what Guaranteed payback really means.

-helixone