Has any action been taken to resolve the Alberto case (Nefario announced to take legal action)?
To the best of my knowledge Neafrio hasn't yet moved forward with a concrete action. Can BDT bondholders expect any future action by Nefario or Meni?
Yes, but I can't say you can expect the action to be effective. I will talk to a lawyer (hopefully within 1-2 weeks) to see what can be done. I'm open to suggestions. So since you are the only remaining non-submerged person involved in this - what's the state of affairs, Meni?
I will make an effort to get it resolved but can't promise more than that. The situation was difficult enough even with GLBSE in the picture. |
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For the same reason you pay for anything else - that you are given a service worth paying for. If BitMinter leaves you wanting for nothing that's great - but pools vary on a wide range of aspects (reward method, website interface, stability, monitoring, customer support, merged mining, cashout...) , and for some people 3% is a small price to pay for the features they need. But, since they changed it so later shares are worth more, I make almost nothing.
The score system didn't harm your long-term earnings (in fact it improved them since you suffer less from hopping). Either you were seeing the effects of the rapidly rising difficulty at the time, or you had some bad luck. |
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My point is that not all MH/s are created equal. A MH/s from a BFL FPGA has a higher value of trade in for a BFL ASIC than a MH/s from a GPU.
My point is that "A MH/s from a BFL FPGA" is not a MH/s. A perpetual determinstic MH/s has a specific definition and is worth what it's worth (and its worth takes into account the various ways to obtain physical hashrate, and the uncertainties in them). A BFL FPGA doing X MH/s is worth more than X MH/s. Every single security I see for straight MHps with no upgrade offer are horribly overpriced by two orders of magnitude. They don't even seem to consider reward halving, which is less than 2 months away.
I hope you understand that "they" is the market, not the issuers. |
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I feel that mining bonds are not the means to the end, aka, just buy the bond and hold it. Although, if you bought at the original IPO, you would still be ahead of the game by the 4%.
This thread claims that mining bonds are the turds. Could it be that "investors" strategies in owning mining bonds are the real problem?
Bitcoin mining should be considered to be a depleting asset and as such, one must understand depleting assets in order to understand how to invest in them. It is becoming common place knowledge now that reinvestment is an essential part of any mining strategy, whether you are buying mining equipment or you are buying mining bonds. Otherwise, you lose on both ends because of technology advances eroding value in your mining equipment and difficulty increases eroding your dividend payments.
If you are not willing to reinvest, mining and mining bonds are probably not for you.
This is basically false. To a first order approximation your investment decisions are linearly superposed together. In month 1 you invest X1 in mining equipment/bonds and that investment will generate a NPV of Y1 over its lifetime. In month 2 you invest X2 in mining equipment/bonds and that investment will generate a NPV of Y2 over its lifetime. Y2 is independent of X1 and Y1 is independent of X2; any one of the investment decisions will either be profitable or not, and your total profit is the sum of the individual profits. If E[Y1]>X1 then investing in month 1 was a good decision, no matter what you do next. If E[Y2]>X2 then investing in month 2 was a good decision, no matter what you did before. This is truer for buying bonds than for equipment, since economies of scale with the latter may make it more lucrative to keep a consistent stake (which means reinvesting in more MH/s). I don't think this effect is large though, and for bonds it doesn't apply at all. To a second order approximation you need to correct for your risks, and this supports having a consistent stake; but in the same way that martingale strategies can't gain you expected profit when gambling, "investment strategies" can't get you expected profit unless there is expected profit in the individual decisions. If there is ever expected profit to be made, it can be obtained by buying and holding forever. Otherwise, you lose on both ends because of technology advances eroding value in your mining equipment and difficulty increases eroding your dividend payments.
You're double-counting the loss. Either you compare against selling now, in which case you only care about the current traded price; or you compare against keeping forever, in which case you only care about the future dividends. In a reasonably efficient market, the two are commensurable; pick one to focus on. If the dividends you have obtained in a unit of time are greater than the depreciation of your holdings, the original investment was good whether you reinvest or not. If the dividends you have obtained in a unit of time are less than the depreciation of your holdings, the original investment was bad whether you reinvest or not. Basically, the argument is that what miners do is use real money (bitcoins) at a present day to purchase equipment with a fixed MH/s, thus a bond holder is really performing the same action that miner is now. However, just look at that statement. If you wanted to get into mining, would you buy equipment now? With ASIC difficulties coming along with the reward halving, I certainly wouldn't buy a GPU. I wouldn't even consider a non-BFL FPGA. So my option is a BFL FPGA.
You can pre-order BFL ASICs. And if you issue new bonds you can price them according to ASIC prices. Currently signal-to-noise ratio is too low so issuing new deterministic bonds doesn't make much sense. But any known future development and upgrade path can be trivially priced in, giving a price which is fair for both issuer and investor. The point with deterministic bonds is that the concept of "issuer" is fundamentally meaningless. A MH/s is a MH/s, it will generate Y BTC over its lifetime and traders should be able to place bids and asks according to their estimation of Y (or its correlation with their underlying operations), with leverage of course. The traded price for a deterministic perpetual MH/s will converge to an equilibrium reflecting the opinions and needs of everyone on the market. It just happens that the best way to sell MH/s currently is as an issuer on GLBSE, leveraging personal trust rather than collateral. Because of the way difficulty retargeting works, a large discrepancy between the total cost of physically obtaining MH/s and its lifetime earnings (hence its traded price) can't be sustained for long periods of time. |
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Coupon payment summary for September 2012 (total 0.011225321 BTC per bond): Block number Timestamp Timestamp (Unix) Elapsed time Difficulty Block reward Coupon Bonds Total Status
201263 Sep 30 2012 17:17:37 1349025457 182212 2864140.50781 50 0.0007406155 16000 11.8498480 Paid
200927 Sep 28 2012 14:40:45 1348843245 187715 2864140.50781 50 0.0007629829 16000 12.2077264 Paid
200591 Sep 26 2012 10:32:10 1348655530 194988 2864140.50781 50 0.0007925446 16000 12.6807136 Paid
200255 Sep 24 2012 04:22:22 1348460542 187875 2864140.50781 50 0.0007636332 16000 12.2181312 Paid
199919 Sep 22 2012 00:11:07 1348272667 179862 2864140.50781 50 0.0007310637 16000 11.6970192 Paid
199583 Sep 19 2012 22:13:25 1348092805 189228 2694047.95296 50 0.0008176929 16000 13.0830864 Paid
199247 Sep 17 2012 17:39:37 1347903577 178699 2694047.95296 50 0.0007721949 16000 12.3551184 Paid
198911 Sep 15 2012 16:01:18 1347724878 190737 2694047.95296 50 0.0008242136 16000 13.1874176 Paid
198575 Sep 13 2012 11:02:21 1347534141 202877 2694047.95296 50 0.0008766730 16000 14.0267680 Paid
198239 Sep 11 2012 02:41:04 1347331264 191343 2694047.95296 50 0.0008268322 16000 13.2293152 Paid
197903 Sep 08 2012 21:32:01 1347139921 184897 2694047.95296 50 0.0007989778 16000 12.7836448 Paid
197567 Sep 06 2012 18:10:24 1346955024 158365 2440642.60692 50 0.0007553794 16000 12.0860704 Paid
197231 Sep 04 2012 22:10:59 1346796659 186709 2440642.60692 50 0.0008905765 16000 14.2492240 Paid
196895 Sep 02 2012 18:19:10 1346609950 182802 2440642.60692 50 0.0008719406 16000 13.9510496 Paid
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You don't need a globally recorded block chain transaction to buy things in your supermarket. If the supermarket screws you over, you go to a different one. Until then, you just trust them they don't steal a bag of food's worth from you.
The failure mode isn't the supermarket stealing from you; it's that to stop you from stealing from the supermarket with instant payment, you need to have something else than locally stored bitcoins. We don't yet have an easy-to-use "something else" which doesn't require trust, but we will. Such things can be handled by cheap payment processors, and if you're paranoid some block chain escrow to keep it from running with its user accounts. It's a complete waste of bandwidth and storage to do the single transactions on the block chain.
The aggregate marginal cost of handling a transaction will likely be on the order of magnitude of a cent; this is not a good argument against having a supermarket purchase as a transaction on the blockchain. (Confirmation time arguably is.) Is there any way to get much faster confirmations? I'm developing BitVendor and really need to be able to receive at least 4 confirmations fairly quickly (like before the customer walks away with the vendors merchandise). Would upping the transaction fee accomplish this? How quickly can confirmations come? add more nodes, or/and pay a little more in your mining fee This only helps to prevent the first confirmation from being more than 10 minutes on average. It's completely useless for making it less than that. |
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If this is what I must endure if Bitcoin becomes global, then sorry, Bitcoin will be doomed to fail.
No, this is not what you will have to endure. Bitcoin enables layers for facilitating instant transaction on top of the raw blockchain. Instant on the risk that there will be no double spend. No, without such a risk. (If you want this risk you can do it right now with unconfirmed tx, no need for layers.) See this for one example of how this could work. |
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If this is what I must endure if Bitcoin becomes global, then sorry, Bitcoin will be doomed to fail.
No, this is not what you will have to endure. Bitcoin enables layers for facilitating instant transaction on top of the raw blockchain. |
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No, there is practically nothing you can do to get 4 confirmations faster than 40 minutes on average.
You need to check your assumptions. Why do you need 4 confirms? Double-spending is very unlikely to be a problem for physical PoS. In the future there will be ways to get instant confirmation for payments.
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uhhhh, skin effect?
That's only for AC of sufficiently high frequency, DC measurement should be fine. I guess you are right...but good grief, how much current are we talking to saturate a bar? IANAE but you don't "saturate" a bar. You apply a known voltage V and measure the current I, the resistance is R=V/I, you compare this against the resistance of a good gold bar (measured or calculated). You can do it with low current if you can measure things accurately enough. |
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0-value output should be considered already spent for the purposes of pruning. Then how zero-valued input will be connected to zero-valued output? Or am I missing something and there are no zero-valued inputs? Pruning isn't immediate, some cooldown period will be given after an output is spent before it can be pruned. So a 0 output can be used as a 0 input before it is pruned. I don't know how well this fits with the contemporary implementation. |
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There is also a theoretic reason to ban zero-valued outputs on protocol level: If all outputs are at least 1 satoshi, we have a theoretic limit on number of unspent transaction outputs, thus pruned blockchain representation has finite size. But if zero-valued outputs are allowed blockchain is potentially infinite. It's easier to work with object of a finite size, I think. We'll have less worries about blockchain centuries from now  0-value output should be considered already spent for the purposes of pruning. A more general framework for controlling the blockchain size is output upkeep costs. But still, we have to support them in coloring algorithm, right?
I don't see much point. I'm just calling nValue==0 invalid and moving on. Right, we're defining the rules for what makes a colored transaction valid. We can decide that a tx with 0-value outputs is invalid; whether some Bitcoin node will accept it is a valid Bitcoin transaction (uncoloring the coins) is not your concern. |
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well, you have to see it from different angles - for example, my average purchase volume per customer is below $10 per month. My Orders are filled instantly. If I started to scam/screw people, I'd gain like 10 bucks, but people would also start warning others about me, which would mean that I'd lose most of my business because I wanted to make a $10 profit... So despite me being anonymous, it's against my interest to screw people over. I'd lose way more in the mid/longterm, than I could gain in a short term.So yes, anonymity and reliability can go hand in hand - and if people dont trust us,(which we encourage btw, because no one should trust someone else he doesnt know or cannot get a hand on) we always allow for escrowed transactions using bitmit.net.
This is a very important point which more people need to understand. The level of accountability required to be reliable for a business sitting on loads of people's money (long-term borrowers, exchanges, ...) is leaps and bounds above what is required for a business that settles transactions quickly. |
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uhhhh, skin effect?
That's only for AC of sufficiently high frequency, DC measurement should be fine. |
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If you pay attention, people sometimes denominate small values in cents, nobody has a problem converting that to dollars.
Some do. But yeah, people will get used to mBTC. |
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Bitcoil is a registered business, but not a company. A business because trying to do this under the radar isn't scalable; not a company because at this point it's too much overhead for too little benefit.
While formally the business is about a Bitcoin exchange service, all my other activities are indirectly encompassed under its umbrella.
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Hopefully, people reading this thread will learn two very important lessons:
1) High yield with low risk basically doesn't exist. As the E*TRADE baby says, the probability that any such scheme will actually work out is about the same as the chances of you getting mauled by a polar bear and a regular bear on the same day.
2) Most likely, you are not nearly as good a judge of character as you think. You are used to being in a world where most people you encounter are not out to scam you and where there are very real consequences for dishonesty. But you acting in a world that is fully of scammers and where there don't seem to be consequences for dishonesty. Con men know how to exploit this and are very, very good at it. (Watch a few episodes of The Real Hustle sometime.)
Also, for what it's worth, I think Meni was very careful to try not to vouch for the repayment of the bonds. His involvement did add a credibility, and I think he came through with what that credibility promised. He acted, and continues to act, as an advocate for the bond holders. I think he made some very bad decisions, trusted some people he shouldn't, and suffered as a result of people who took advantage of him. The list of good people who have done that is pretty long. I made a mistake like that myself not too long ago. Hopefully, each person will only only need this lesson once. (Actually, now that I think about it, I actually made this mistake twice, and both times over five figure dollar amounts. So I know how easily people can be made into suckers. *sigh*)
This seems like a good opportunity to mention that you have been by far the most reasonable outspoken critic of the recent state of the Bitcoin lending landscape, and I wish I had paid more attention to your warnings. |
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Didn't MNW originally have a picture of himself as his avatar when he first joined? It was of some guy sitting at a desk, in a shirt & tie. /tangent
He originally had a pickaxe-wielding mole as his avatar, with the username "BitMole". This was followed by a picture of himself, followed by an upside-down picture, followed by... other things. |
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I think it will be useful if "unread posts" etc. show the time the thread was started in addition to the time of last post (some forums do that). It's a bit more information-dense but it can help you know if you're walking into a graveyard. A slightly different color for old threads as helloworld could also be useful.
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No payment or other communication has arrived from Alberto, and thus Nefario will go forward pursuing legal action. Are there already plans on how the repayment is going to take place? By means of "dividents" on GLBSE, or something else? Btw I can't seem to find the asset on the market anymore, and when I click the link in my portfolio nothing happens.
It will be GLBSE dividends. Nefario will have to see about why the asset page is inactive. In any case you should be able to see any dividends in your account's dividend history. |
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