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DI.BFLSC.Fail (https://glbse.com/asset/view/DI.BFLSC.FAIL)
DI.BFLSC.Succeed (https://glbse.com/asset/view/DI.BFLSC.SUCCEED)

Butterfly Labs has recently advertised three new products in their BitForce SC line, a 3.5 gigahash/sec USB powered unit named "Jalapeño", a 40 gigahash/sec unit named "SC Single", and a 1 terahash/sec unit named "SC Mini Rig", all to be delivered in October 2012.

In the event that Butterfly Labs fails to deliver at least a sum total of twenty-five (25) units composed of all three products offered described exactly as above to customers by the end of October 31st 2012, shares of DI.BFLSC.Fail will be repurchased at combined value of DI.BFLSC.Fail and DI.BFLSC.Succeed divided by the number of DI.BFLSC.Fail shares sold minus a 1% fee. Shares of DI.BFLSC.Succeed will be repurchased at a price of 0.00 BTC.

In the event that Butterfly Labs does succeed to deliver a sum total of twenty-five (25) units composed of all three products offered described exactly as above to customers by the end of October 31st 2012, shares of DI.BFLSC.Succeed will be repurchased at a combined value of DI.BFLSC.Fail and DI.BFLSC.Succeed divided by the number of DI.BFLSC.Succeed shares sold minus a 1% fee. Shares of DI.BFLSC.Fail will be repurchased at a price of 0.00 BTC.

The final repurchase price in either outcome depends on the number of shares sold of both DI.BFLSC.Succeed and DI.BFLSC.Fail combined by October 1st. Shares will be issued at a price of one thousandth (1/1000) of one BTC.

ButterFly Labs will never meet their requirement, look at the past!
The Single was advertised as a >1 GH/s @ 20w, they adjusted the ad after complains.
And that they would be shipped within 6 weeks is a fairytale.

We will see how this will end, I think its going to be a FAIL.

Greetz

Cheaper than a bet on betsofbitco.in (they have a quite high operator cut)! :)

I doubt however that there will be more than 1600 BTC in bets to even cover the ticker symbols...

Question: How sill you verify shipment of these 25 orders? The only way I know how is:

1) BFL posts shipping information at the end of October with # of shipped units, which I find unlikely, and I doubt you would believe them anyways.

2) You go by this thread: https://bitcointalk.org/index.php?topic=89685.0 , which is entirely inaccurate. They have a little over 60 orders listed in that thread, out of a potential 1300 order numbers. Not exactly a complete representation...

Photos of units and photos of UPS/Fedex/USPS labels uncensored provided by forum goers will be more than enough to prove this. If they ship before October 31st, I imagine there will be more than enough evidence for DI.BFLSC.Success to win.

I'm not sure D, what about the big money spenders who don't want to advertise their purchase?

Also, your terms for success are dubious.

does this mean 23 Jalapenos, 1 Single, and 1 MiniRig (or whatever they call it) shipped by the end of October will be considered a success?

My advice is to give it up... You're welcome to proceed (obviously), but I'm not sure you've thought this through.

I mean, what if BFL manufactures shipping labels on dummy accounts to keep the long con going? This seems equally as likely as them being a long con in the first place.

For the record, I don't think they're a long con, but I'm willing to change my mind given evidence to the contrary.

Yes, 23, 1, and 1 would be considered successful. It would also be like 1/8th of the network all by itself.

BFL can manufacture shipping labels, but they'd have to be valid ones that have working tracking numbers and have actually been delivered somewhere. Plus, they still need to produce the 25 units to go with the labels.

If there is any doubt about the validity of any individual pieces of evidence, they simply won't be used. If BFL has actually shipped units for real, I really doubt there will be a lack of evidence.

For example: if Giga or Yochdog say "Hey Diablo, we got our units", then any evidence they pony up will most likely be the real thing. If some random person with a brand new forum account and is clearly a sockpuppet says they got 25 units, well, we're going to need more evidence.

Diablo Insurance is now for sale! nefario finally pressed the on button.

2813 shares sold of DI.BFLSC.Fail
2500 shares sold of DI.BFLSC.Success

3036 shares sold of DI.BFLSC.Fail
2500 shares sold of DI.BFLSC.Success

16881 shares sold of DI.BFLSC.Fail
2501 shares sold of DI.BFLSC.Success

How long will shares be sold and how many of them in total?
It seems to me like you will sell unlimited shares to each side until October 1st, right?

Yes.

Explain what the word - "nefario"

The guy who owns GLBSE

16881 shares sold of DI.BFLSC.Fail
2718 shares sold of DI.BFLSC.Success

16881 shares sold of DI.BFLSC.Fail
3718 shares sold of DI.BFLSC.Success

20,831 shares sold of DI.BFLSC.Fail
3,833 shares sold of DI.BFLSC.Success

Hey cool, I might finally be motivated enough to set up a GLBSE account.



What exactly is the "combined value"?  Is there some sort of "face value" for each share -- the price at which newly-issued shares are sold to the public -- and "combined value" is num_shares_outstanding*face_value?  It can't be market capitalization since you can't actually liquidate a company at its market cap (market cap is based on the order book or last trade price, both of which are altered by attempts to liquidate).  Will you stop issuing new shares at face_value, or change it, in the future?  If not, it would seem to put a floor on the value of the security and defeat the market pricing mechanism.

Or, instead, do you act as a market-maker -- if you see a buy order for one of the pair and a sell for the other at a lower price, you execute a pair of matching orders, destroy one share of one security, and synthesize one share of the other?  Unfortunately unless GLBSE allows short-selling (do they?) there's no way to kick off the whole process, but this would be the closest thing to Intrade I can imagine.

Forgive me if I don't understand how GLBSE works.  But I'm trying to compare this to Intrade and it doesn't quite line up.  I also couldn't find any additional details on the GLBSE page, which was a bit disconcerting.  I'm mostly trying to figure out exactly what the counterparty risk is here.

Lastly, where is "shares outstanding" on the GLBSE page?  I can only seem to find the order book.

GLBSE is both the exchange and the broker. "Companies" are issued the original stock, and then we sell it. DI.BFLSC will stop issuing shares October 1st or when BFL ships, whichever comes first.

Combined value is both Fail and Succeed added together. Right now we're at around 4000:21000 Succeed/Fail, so if Succeed to pay out right now, not only would Succeed get what they paid for the almost 4000 shares back, they'd get around 21000/4000 for each share on top of that.

Share value is fixed at 1/1000th of a BTC (although nothing stops people from reselling their shares at a lesser value to others).

Shares outstanding is not listed on GLBSE anywhere, its inside the API unfortunately.

https://glbse.com/api/quantity_trading/DI.BFLSC.SUCCEED
https://glbse.com/api/quantity_trading/DI.BFLSC.FAIL

This statement needs to be included in the prospectus.



… except the fact that you can issue new shares at that price (I presume -- the prospectus as it stands is seriously under-defined).

I think you missed something, its right there at the end: "Shares will be issued at a price of one thousandth (1/1000) of one BTC."

21,975 shares sold of DI.BFLSC.Fail
3,837 shares sold of DI.BFLSC.Success

22,510 shares sold of DI.BFLSC.Fail
3,837 shares sold of DI.BFLSC.Success

Tipped the scales a little :)

FYI, Inaba joins BFL as COO. Anyone wager this increases the chance that BFL will meet its target?

No way of knowing, really.

24,680 shares sold of DI.BFLSC.Fail
6,390 shares sold of DI.BFLSC.Success

I bought stocks in fail, this is why lol

Butterfly Labs Inc office@butterflylabs.com
   
Aug 6 (3 days ago)
      
to me
Hi Daniel,

It is too early to know how long it will take. Several people are working on them, but we don't know how quickly they will be going out.

Kind regards,
Alicia\BF Labs Inc.

Then need DOZENS not several lol.

Who is buying the success ones?  ???

Either people who think BFL will succeed, or people who need to insure their non-BFL assets.

I really like the general idea, but, with a constant price and an enormous supply of shares on both sides -
I see no rational reason to buy this until shortly before "judgement day".

-rph

25,185 shares sold of DI.BFLSC.Fail
7,428 shares sold of DI.BFLSC.Success

Please note: nefario has locked my GLBSE account and most likely stolen the backing money of the insurance fund. Until this is resolved, do not buy any more shares of DI.BFLSC.

Yeah this is why this is horribly organised.  As it stands BFL coul announce they won't be able to ship until November (guaranteeing the .fail stock wins) and people could still continue buying more .fail stocks right up until all were sold - meaning no real profit for anyone who actually invested at the start.

I'd suggest if/when nefario unlocks the account, no further shares are sold - so at least those who have bought shares so far get a fair bet.

The correct way to do this would have been to issue a relatively small number of each share (identical for both) then sell them into bid-walls at a predefined date/time (with a minimum value of 0.001 or whatever per share).  All cash raised would then be dividended (less fee) to the winning share at end of october.

Shares in both sides of the bet could then be actively traded all the way up to settlement as new information emerged - with one zeroing and the other reaching a value equal to (total capital raised - fees)/total shares of both issues once information emerged settling it conclusively one way or the other.  That would have encouraged early speculation, ongoing speculation and also removed the possibility of shares being issued to self/friends by Diablo once the result was known.  It would also have added liquidity for speculators.

Nice idea - terrible execution.

Shares were to be stop being sold the second it becomes October 1st. If BFL were to announce they failed before then, sales would have been halted as well.

Because of nefario, if BFL were to announce their failure, I cannot halt sales.

First we had zhou tong, then we had pirate, now we have nefario. Does this shit ever end?

Your OP doesn't allow you stop selling shares before october 1st - and your model doesn't allow people to react to new information becoming available.

Say BFL announced today "it's looking unlikely we'll be able to ship on time."   That's not enough to settle the bet - but definitely adds a lot of weight to one side of it.

Would you then want to lock shares?  If so then where do you draw the line? If not, then buying shares at any time before significant new information becoems available is a mug's game - with no benefit for early adopters (just an opportunity cost of tied up funds + the certainty they'll be gamed by others once more information becomes available).

Your model fails because it gives no benefit for early adoption - just massive penalties.  You should have used a model like the one I described previously - where initial prices for each side of the bet are determined on current knowledge then the market allows adjustment of position as new information is revealed.

I would not pay out until October 31st, I would only halt share sales. The same goes for if BFL shipped today, share sales also halt.

My GLBSE account has finally been unlocked.

DI.BFLSC sales end October 1st, so if you're going to buy in, buy in now.

27,403 shares sold of DI.BFLSC.Fail
7,829 shares sold of DI.BFLSC.Success

Why was your account locked?

Probably something to do with the enormous clusterfuck that was diablo mining company...

Nefario was trolled into believing I was stealing from DMC instead of actually looking at my account and noticing Ive never withdrawn BTC from my DMC subaccount.

Thank you for this update.   

Sales are now closed.

Final tally:
30,903 shares sold of DI.BFLSC.Fail
7,829 shares sold of DI.BFLSC.Success

We will know in one month if BFL succeeds or not.

Its already been decided. BFL has failed to produce any SC units at all, and still claim they're coming; they have clearly failed and are in default of their obligations to their investors. As the contract/policy for this insurance stated they must produce these units by the end of Oct 31st and they did not: the fail insurance will pay out.

The problem is nefario (owner of GLBSE) refuses to release the shareholder lists to asset issuers, so I can't payout until he does.

The entire pool was 38.732 BTC, so the final payout will be 0.00125 BTC per share of fail.