Bitcoin Forum

I'm not quite sure how you arrive at 1000%.  Should be higher if you count a full 5.5% at "face value," or "only" about 600% if you count it at the sell price (that seems like the more accurate figure to me).

So it's really more like 60% insured--you take a haircut if default is soon (as I think it may be). But it seems like a relatively attractive product. I don't know why anyone would get YARR if this was available.

What advantage has this offer over DeadTerra's GIPPT (https://glbse.com/asset/view/GIPPT (https://glbse.com/asset/view/GIPPT))?

 - Both are 100% insured
 - He pays 2.5%, you pay 1.5% a week,
 - His IPO price is 1 BTC, yours is 1.5 BTC
 - He puts 100% in escrow, you put 75%

I can't seem to find any reason to go for this proposal instead.

My mistake, so it's 0.025 vs 0.055 BTC. And because you can buy about 1.5 Terra bonds for the price of 1 Goat bond, the actual comparison should be 0.0375 vs 0.055 BTC. Seems like Goat is indeed offering a better deal.

I'm not so sure I agree with the pricing plan.

YARR pays 1% per day, or 7.214% compounded per week.
This proposed asset would pay 5.5% per week, or a bit over 30% less than YARR.

I suspect both asset issuers are trusted by most of the general population, or at least trusted enough not to hinder purchase of these bonds. Given that, I think the trust difference, if one exists, would have a negligible effect.

YARR's current market price is around ~1.7 BTC. Given that one share of YARR pays the equivalent of 1.31164 shares of this bond, one would conclude that this bond should be priced at around ~1.3 BTC, not ~1.5 to 1.6 BTC.

You get .055BTC per bond. At 1.6BTC per bond, that .055BTC buys you .034375 bonds. So if you start a week with one bond in value, you end a week with the value of 1.034375 bonds. There are 52 weeks in a year, and 1.034375^52 = 5.8. So in a year, you go from 1 units to 5.8 units, an increase of 4.8 units. That means the interest rate is 4,800%.

Goat, selling at 1.6 and buying back at 1 would also be a great option if you know that pirate will default in the next few days.
How do you address this?

You're betting that there won't be a default before the interest you've accumulated equals the premium that you paid. Depending on how you calculate it, that's between 12 and 20 weeks.

...and goat is betting that there will be a pirate default before the accumulated interest equals the premium that you paid. Caveat emptor.

edit: OK, I take that back. It's not quite that simple. Goat can structure this to make a profit with or without a pirate default.

Pirate has said he thinks this will last 6 more months and as a Trust account I will not be at risk to have funds pushed out.

I mean at least 6 more months. He said he can see into the market about 6 months at a time. Also he told me the same about 7 months ago he was sure for 6 months but not sure after that. I'm not saying this will end in 6 months. I'm saying it will at least last for 6 months. I should have picked better words, sorry for that.

This is wrong, YARR doesn't pay on Sunday.  Its 6.15% (1.01^6) compounded per week.

1 to 5.8 is a 480% increase, not a 4800% increase.

Some corrections as I see them,

YARR only pays 6% (not 7%) a week and I would pay 5.5%

I do not know that Pirate will default in the next few days. I will be placing 1 BTC per bond into Pirate so if he does default it is a massive loss for me. I would not only lose the 1 BTC pirate has but I would also lose the .5 BTC premium and the .5BTC of my own funds to cover. I'm clearly betting pirate will not default.

I will convert TyGrr.Bond-P to this if people have a decent amount. 3 or 4 shares, just sell and rebuy.

Pirate has said he thinks this will last 6 more months and as a Trust account I will not be at risk to have funds pushed out.

I am doing this because I do not like the other insurance options. YARR is backed by bonds and stocks and that is pretty safe but not like solid safe. We do not fully know how much the GLBSE assets will be worth if there is a pirate fail. Other people might know but how many of the bonds and loans and what not are indirectly pirate backed? Seeing the coins in the block chain is really safe IMO.

Now what DeadT is trying to market is just fail and I have talked to him about this. I do not know if he is still going to do it or not. Let us think about what is going on. He will take 100% of the coin you send him and then he will place it in escrow. That means he has 0 BTC left to send to Pirate. Also he needs to make 2.5% somehow so that escrow coins will be invested. How? Well what is the only way right now to make more than 2.5% ?  Send the coins to pirate...


That is the problem here.. When you loan out the insurance money to people who then send it to pirate you get massive defaults.

The point of insurance is that you are sure it is there to pay out when you need it.

With this you will be sure 75% is there. You will just have to trust me to get the other 25%  With the other bonds you will have questions. With DeadT he is only insuring 5% of it himself the rest is being sent to people who loan Pirate money.

It is just sillyness and honestly is why I am doing this. I'm trying to help out the BTC securities market and make it safer and more sound.

Thanks.

Slander?? What is Imsaguy going to do with the borrowed funds to pay off the 2%? We all know he is well known for borrowing coins and sending them to Pirate.

My guess is, and yes its is a guess not a fact, that your insurance money will end up with Pirate.

I'm doing this because people now have an option to know where the insurance money is.

I was going to buy your bonds when I thought the insurance money was going to be stored offline or in the hands of someone I trusted.

I'm not trying to attack you and do with you the best of luck. It might end well for you anyway as I don't think Pirate will default.

Peace

My feedback on this would be that I like it, but if you're selling them at 50% above the insured price then they're 66.6% insured, not 100%
Also, I take it your insurance amount will not change with bond prices?

The face value is 1 BTC and that is 100% insured. If you pay .5 BTC for it, it is not 200% insured, you just got a good deal.

:)

Think of it as a nonrefundable fee to buy insurance. Insurance is not free, never has been.

The Bond will trade a different rates on the open market but the 100% insurance of the face value will not change.

I know these semi technical terms might be tripping you up but they do have meaning. I have expressed what this is correctly.

It is refundable, however. I can sell the bonds to someone else later on. In fact, I expect a certain amount of liquidity.

News! I am selling bonds for 1 BTC with a face value of 0.001 BTC each. They pay 200% weekly interest and are 100% insured. A buyback can be placed at any time for the face value.

In what universe is a bond selling at 1.55 "100% insured"  ???

No offense, but this is how things are done in the real world. The difference is, that in the real world the insurance company leaves "face value" out of the contract.

That's right, for every $100 you pay for car insurance, only $70-80 of it will ever actually see a repair shop. The rest is eaten by the insurance company. I know you might not like it, but that's the reality of it.

When insurance is issued, a credit default swap (what the hell are you talking about car insurance for?), then the insurer agrees to pay the principal in the event the issuer fails or, in other words, defaults.

Therefore, the price of the bond is 1.5ish indicating a .5 premium over the face value. The premium implies the market's valuation of the insurance, risk profile and general interest rate for bitcoins among other factors.

No offense, but this is how things are done in the real world. The difference is, that in the real world the insurance company leaves "face value" out of the contract.

That's right, for every $100 you pay for car insurance, only $70-80 of it will ever actually see a repair shop. The rest is eaten by the insurance company. I know you might not like it, but that's the reality of it.

Yes, plenty of people think this way. But in the real world, of those extra $20-30, some go to profit and some go to the unlikely, high-damage cases. I pay my insurance $100, and some of that goes to help out the poor guy who got his car totaled. However, if it's not my fault in an accident, I can get the whole car back. If you want to make the analogy, this bond has a 35% deductible. That's ridiculous. Not to reveal personal information, but I don't have a deductible. Just weekly payments. GIPPT works that way; no deductible, just a reduced rate.

Now, find me a few real-world companies who claim "100% insured" and see what their terms say.