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The chances of the difficulty staying still or dropping when a new generation of mining hardware is being rolled out is about zero.


Every single PMB on the market > 0.0026 BTC / MH (as of posting) is overpriced. Kthnxbye.

You can check the mining profit per difficulty adjustment here

http://btc.re/?t=miningcalc

what is PMB anyway?

Perpetual Mining Bonds

Yeah I feel like I cashed out just in time. The hashrate drop had a lot of people gambling.

Does this mean that DMS.SELLING is a very attractive security at the moment?

I just bought >200 DMS.MINING because I thought it was undervalued at 0.004 per MH/s but it seems now that the future profitability of all bitcoin mining operations seems very dull

Just way too risky for this ASIC climate. I'm sure this was well known during the IPO's  ::)

from: https://bitcointalk.org/index.php?topic=223442.msg2555766#msg2555766

...Who ever invented those nasty perpetual mining turds, was either a clueless fuck, who did not understand how bad it is for the investors or, he knew exactly! what it is and abused the nonexisting investing experience of BTC enthusiasts. PMB are dressed up nice indeed. ;)

Let me break it down for ya'll so you can understand wtf you get yourself into.

Lets say we have 2 guys. A and B. A wants to buy a bike so he can deliver newspapers. He ask you (B) for a loan. Once more, bond is a loan and principal investment must be returned.
 
He tells you:
1) Give me a loan but I have no obligation to pay you back what you gave me or in other words - I will stretch this loan out forever and will not guarantee you get back you money. I'll try to do my best so it won't happen.

2) I will make weekly (or what ever) payments but those payments are not fixed and can float up or down, depending how many papers I managed to deliver riding this bike. Bike I bought with your money. BTW. if I say home and sleep, you get nothing.

3) The road is one way and endless.  It's mostly up the hill pedaling. Higher I get, slower I move and less papers deliver. BTW, there will be fewer and fewer houses too. One more thing... I'll deduct the cost of sandwiches and water from the earnings and keep some of the earned coin for my self.

Now, do you lend me the money to buy that bike?

PS! There will be other bikes on that road. Some have motors and "paper cannons".

I think most people understand what they're getting into - it's just that BTCT's dividend yield estimates are misleading because they're basing the yields on current prices - not at IPO.

Taking into account the falling price, I think most PMB's probably have a yield of 30-40% max in contrast to securities such as B.YABMC where BTCT estimates 172% yield, based on current prices

I actually thought DMS.MINING would return at least 100%, and I think that most people think that PMBs would return at least 100%.

OK, I guess my example was still too complicated to comprehend.

* you lucky man. You have 1 share of "A"
* "A" pay you money. Good money! 10 money every Saturday! You so happy!
* "A" price drop 12 money every Saturday too. You sad! Got 10 but lost 12.
* You still happy!? You stupid!

Or do we need to use crayons and paint you a fkn picture? :)

If you can buy a PMBT at deep discount so your next predicted "div payments - loss form price drop" gives you a positive number, go for it.

At this moment DMS.MINING sells for 0.013417. If future average difficulty rise will be lower than 15%, DMS.MINING will return 100% or more. The lower the average difficulty rise will be, the earlier you'll be profitable. If average rise will be > 15%, you lose. (This is only an example for buying price 0.013417)

I followed that link Eskimo Bob and am very surprised that you don't mind exposing your arrogant and offensive nature.

If I had posted such obscenities and arrogant scrawlings, I'd be ashamed and very unlikely to offer a link to said thread.

Yeah i feel sorry for anyone that has any kind of faith in PMB's. But, i guess the warnings were there for would be investors.

In my opinion if you lost coins on them it's your own fault. If you made coins, then you bet the system good on you!

I think it's kind of strange designing something that is certain to fail. Anyway!

Yea I understand but it seems that nobody ever sees a return of more than 50% on PMBs unless the issuer happens to be very generous and increases hash rate (e.g. PAJKA.BOND) or a percentage of the dividends are reinvested into more hardware and the security holder sees returns on this as well (turns into more of a share or a fund than a "PMB")

I'd like to know, why you choose the 1 % return per day threshold.

It was when it was at the same price as DMS.Mining, probabably even double the price.
But now the difficulty has to increase a lot to make it profitable, even though we know it will increase it's impossible to tell if it will be 10% or 25% on average.
It's gambling now.

DMS.SELLING price is attractive if you think that DMS.MINING price is too high.

BWAHAHAHAHA!  Oh good christ! +100

CAN'T...STOP...LAUGHING!

If i could get my hands on the unicorn blood that makes PMBs sell, i'd be soooo happy.

I like what you put ,end the world or never....

This perfectly describing to the some PMBs in the market...

I think that honor would go to CentiMine, of the CentiMine400 stock on the GLBSE.

https://bitcointalk.org/index.php?topic=8642.0 (https://bitcointalk.org/index.php?topic=8642.0)

What happening by that time ? ? I read over the thread ,but still can not understand what the story about it.

Yeah, I had forgotten exactly who was doing what. Dishwara was more of a mining company, I think, SIN was a "perpetual" mining bond, and CM400 was a mining bond with a limited lifetime. CM400 payed much less back than was originally invested. SIN the operator took off with everybodies money, Dishwara ran into trouble of some sort with the mining, but he bought back the outstanding shares eventually.

Fascinating.  I wonder what percentage of mining security issuers have taken a runner?  There's amazingrando, Ian Bakewell, SIN,...  Who else completely defaulted on these securities?

This is part of the fundamental reason I don't think it's possible to have a fairly priced mining bond.  By the time you discount the security for the risk of default, the price would be under the intrinsic value of the mining hardware.

No, the price should be LOWER for the security risk, not higher. EDIT: Wait, the first time I read it I thought you were saying that the risk of default makes the high price OK. Nevermind.

Take a look back through the securities section of the forum and you will find plenty of other examples. It was not just mining bonds either. Remember UBX raised something like 1250 btc. And bitcointorrents was paying regular monthly dividends but I think they disappeared when the GLBSE went down. And then there is FZB, I am not sure whether to call that a scam?

Heh, don't forget your own ones when you're discussing securities that vanished without giving back funds or producing accounts.

That is what discount means.  A lower price to account for the default risk.

Net, I don't think you can come up with a pricing model that justifies fair value of a mining bond greater than the cost of hashing hardware available at present.  And since it wouldn't be rational to sell a bond at that price, it isn't possible to offer mining bonds at fair value.

Sorry, misread what you were saying, I edited my previous post.

If you really like to issue a security that can be called a bond, you need to get few things right.

1) Understand, that bond is a loan. Issuer (you) borrows X coins from investors and promises to pay it all back by predetermined date XYZ -  maturity date + interest payments.
2) Bonds are called (bought back by issuer) at predetermined price. Usually at par value (face value).
3) If you like to make weekly payments, your bonds have a weekly coupon.
4) Coupon payment (interest payment) is calculated from par value. Coupon is fixed (there are partially floating coupons but those are notes and are called Floating rate notes (FRNs))
5) If you fuck up and you have to close down, bond holders must be paid out before anyone else (because bond is dept).

All this information is nicely available in the net. Read and ask questions.

Pleas, stop issuing and buying this perpetual junk disguised as bonds.

Right. Do we really need to reinvent a bunch of terms for things?


Notice that there are no "mining companies" or "mining bonds" listed on the MPEx.

Correct, there is no need to invent new terminology at all. People need to understand how stuff actually works and then start improving it.

LOL at MPEx joke. Mr Dipshit (aka egomaniac Mircea Popescu) bazaar has listed few pathetic inventions by MP himself and S.DICE, that is starting to lose its shine.

I was not using it as a joke, I was giving an example of an exchange which has managed to keep the mining crap out. I don't know why you have such hatred towards MP, he seems to be making decent money without your approval. Now, if only we could get him to embrace the balance sheet to go with the profit/loss statements we could all be happy.

If that's the case for all bonds in the "real world", then please tell me what the predetermined date XYZ is for e.g. this General Electric bond:
http://www.sec.gov/Archives/edgar/data/40554/000093041312003482/c69940_fwp.htm

Fixed-To-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A

stock is equity
bond is debt

 

Oops, my fault. What about XS0546096800 ?

You realize MPOE/MPEx does not have a balance sheet, at all, as it owns nothing. S.DICE was doing its own reporting, but in general it's an advantage to have asset-free BTC corps as they cut out a major risk (review tawsix' thing for exactly why that is).


Bitcoin guts some concepts from classical (ie, fiat) finance and accounting and turns some others on their head. For this reason some terms will be discarded, some redefined and some new ones introduced. It is often dangerous to be calling different things the same, especially if people proceed on their presumptuous knowledge of fiat stuff and imagine the name identity means they're qualified to handle the Bitcoin counterparts (we're not discussing idiots proceeding on the notion that their recognizing of the terminology qualifies them a la Kludge & the rest of the "forum bankers" crowd, but actual professionals who historically bit a steel girder).

Our agitated clay oven scammer friend is not on the list of people who get to decide which is which, how the definitions sound etc. In fact, very few people are on that list, as butthurty as this may be. The list is pretty much dominated by MPEx mostly for the steel girder point above.

Thank you for proving again, how limited your understanding of finances are. Pure comedy indeed.

PS! Enjoy your delusions, Popescu.

Will S.MG include a balance sheet along with the profit/loss statement?

Regardless of the love affair between you and EskimoBob, it does not really matter what you call these "Bonds", they are generally a bad investment.

I guess we'll have to wait and see on that point.


It's not a love affair in any sense, immaterial idiots just latch on like barnacles to the ship. Before him there was some ciuciu wannabe miner scammer guy butthurt that his scam didn't go anywhere. There were others before, there were and will be others after.

Granted that this one is pretty funny with his notion that spending LTC to buy actual ovens rather than BTC to buy mining rigs makes him anything else than the WORST PMB op out there. "Just focus on making the waste heat, eschew hashing completely, what could possibly go wrong". I guess it'll pass, sadly, and he never got as good as Tortilla - in spite of trying for much longer. Ah well.

It's out now.  That wasn't always the case though.

Gigamining was on MPEx as a PT.  MP declared it of zero value and shut it down when GLBSE shutdown, leaving those holding PT shares in a lurch because he did not (AFAIK, been a while since I re-read the thread) lay claim to the associated Gigamining shares post-shutdown.

Not the case. Gigavps made a contract, PT was constructed as "will pass along all benefits, will not do any maintenance".

Gigavps unilaterally repudiated his contract, created new contract. PT shares were thus rendered worthless by gigavps. Arguably "not his fault" or "Nefario's fault" or what have you, but MP doesn't enter into it either way you unravel it.

Yeah, you laundered the shares with the help of your scammy IRC friends. Now go lose some more BTC with your MPOE shitty bonds.

Lets not forget that joke of a option bot Mr DipShit was running, that lost tens of thousands (17K?) of BTC.
I am 100% sure Popescu just ripped of his "clients" and pocketed the coin, blaming bots algorithm or what ever the excuse was at that time.
No wonder this scammer hides behind a skirt of his "PR" scank.

The key point was that MP has had his own PMB fun.  How he shut it down was of somewhat secondary importance.

I concede the point, I had forgotten that there used to be a PMB on the MPEx. Nevertheless, it is possible to have a bitcoin stock exchange without PMBs.

An apt example, and fantastically humorous to top it off. Nice ;)



I can assure you that many of them don't.

The best example of this comes from my own Note fund. And these are actual Notes (Bonds with a shorter maturity date) and follow the same rules (https://bitcointalk.org/index.php?topic=241101.msg2568490#msg2568490) as the securities you'd find in non-Bitcoin markets...though more floating rate than fixed rate for both coupons and maturity.
The Par value on each Note is BTC1.0.
The monthly coupon rate starts off at 1% and eventually increases.
If you invested during the initial public offering, by the end of the repurchasing period you'd have made about BTC1.26 (26%) per Note...assuming a 15 month holding.

Yet for a number of months, people were actively buying these Notes at BTC1.35-1.45 each. If I followed the contracts to the letter (as in, pay what I owe and that's it..no increased coupons, etc) ..then these buyers will have a guaranteed loss.

Since that's the case, I can only assume that either A) these buyers are crossing their fingers and hoping for the best or B) have no idea what they're actually investing in.

And I didn't say a word while any of this went on. If people want to be dumb, then I say go for it.

Dishwara was/is a indian guy who raised some funds to buy himself some GPUs to mine in his home, had problems because of heat and failing hardware and was killed off by the 30 USD price bubble back then when the few dozen BTC some people threw at him in the beginning suddenly were worth a lot more than any hardware he had.

SIN was (and ended up) very similar to the much later launched BITBOND, only with a bit less hash rate - hobbyist starting to raise funds, mines for some time and after some hardware failure moves on while claiming salaries, high expenses and whatnot. Might be even the same issuer, who knows?

CM400 was intended to be a crowdfunding of mining contracts, as at that time Vladimir was more or less one of the few people actually selling some time limited minig contracts. I bought up a mining contract myself and offered shares in it on GLBSE (back then a console-only application...). In current wordings it would NOT be a PMB and never was intended as such, rather something similar to what gigavps tries to pull off with his "TERAMINING" contracts only backed by a mining contract, not by actual hardware. As I was the main share holder (only few shares were actually sold), I also ate up the biggest loss, since that contract was bought in USD. Since then the BTC generated got quite some value back, so I'm happy - still it could have been handled better.

These kind of (time limited) contracts when priced in BTC are a bet against rising difficulty, when priced in USD are additionally also a bet against rising BTCUSD prices which is why I didn't offer a follow-up. Also as you can see when reading that thread GLBSE had quite a few issues back then plus the work for actually paying out that stuff manually (and making sure it would be always the correct amount) was quite high for the meager returns, so I decided to go back to the planning stage. I consider PMBs as dishonest, so I did never launch one, even when they were highly overpriced and could have been ponzi'd for ages, like for example BITBOND or most other PMBs out there. Usually the ones that do actual mining with actual hardware do worse than the ones that just (most likely) go down the ponzi road and just use them as cheap credit which I find ironic.

The first PMB to my knowledge would btw. be the still existing PUREMINING asset by Meni.

Edit:
CM400 payed out exactly as much as was originally promised. I know in hindsight it was a bad investment (as were all mining contracts when that bubble hit hard and difficulty skyrocketed), I dare to claim however that I have scammed nobody and also I did even give a partial refund when it got evident that this would be operating at a net loss to limit my share holder's losses.

Right, I did not mean to say you were scamming anybody, like many of the other mining bond/company operators, I am just saying that it was not a very good investment, and most mining type investments are not good investments.