I've no intention of wasting time reading it.  I find it impossible to take seriously anyone who claims to be developing ASICs but will happily post a contract as creative (putting it politely) as the original one he had up.  If someone is so confident they'll post a contract and start selling shares without any public discussion first then they'd better get it right first time.

Doesn't look good - was about to post on this myself.  Noticed someone had dumped a bunch so immediately checked to see if it was Ian (he'd been selling his own ones before).

Looks very much like he's borrowing (stealing) from the company.  Hopefully it's to repay his loans not to do a runner - though it's still theft of course.  It can't really be to expand - as even if he sold the lot into what orders are left there wouldn't be enough cash to buy an Avalon.

Anyone want some Bakewell shares that just got sold to me cheap?  Lol.

Silly thing is if the company keeps going the shares are actually very cheap considering they have a Batch 2 Avalon order.  So I'm not too fussed about just getting dumped a bunch of them - as the significant risk he was going to scam/steal was always factored in when I placed the bid.  Though wasn't expecting him to dump Growth shares - was more expecting him to dump rest of his personal (if he has any left) or some panicky investor to sell cheap.

Think Ukyo probably froze it.

The first contract was so bad he was actually claiming he'd have over 100% of total hashpower - and would mine more bitcoins than would be mined in total during the year by all miners.  After that it's hard to take it at all seriously.

You need to look at this in the context of what was being discussed - which was assessing whether or not a potential investment is a worthwhile one.

To take the example you raised of failed marriages, the difference between "2 good and one bad" or "33% chance of failure" is only useful when considered in the siutation of a prospective 4th marriage.  IF you are able to identify significant differences between the two which failed and the one that succeeded in advance of them failing or succeeding then you have a basis on which to usefully assess future situations.  If you can't differentiate between them, other than with hindsight, then yes - the best conclusion tou can make is that there's a 66% chance of failure for your next marriage.

Similarly with investments.  If you can't distinguish between a bunch of opportunites in advance even with information on the past results of a similar set of businesses then there's no useful basis in trying to seperate the old ones into 'good' and 'bad' ones.  Sure - the results are real and have to be accounted for as they landed - but you're no nearer reaching any basis on which to seperate simialr such future opportunities before parting with your cash.

Yes - there's a perfectly valid intellectual basis for your position being correct.  But it's not a useful one when trying to apply it to decision-making.

You're referring here to CRYPTO-TRADE.  First let me be plain that personally I would NOT have approved it.

But there's a few massive differences between it and AMC:

1.  Neotrix (who issued the CRYPTO-TRADE IPO) has been around in the community for a long time and already runs assets that have performed as promised for a significant amount of time.
2.  Neotrix' existing company clearly exists, trades, is registered and is run by him.
3.  Neotrix posted his a thread for discussion of his IPO - you'll see that I posted in it and was less than flattering.
4.  To the extent that either of them has provided proof of anything, neotrix has provided more.  It would take a few minutes to edit Avalon receipts as provided by AMC.  It would take at least hours to produce the evidence neotrix has provided.
5.  Neotrix' intention to build the exchange site was public knowledge and discussed for a fair while before the IPO.

I think CRYPTO-TRADE mainly got approval because of his existing securities.  I don't view that as a good reason myself - but 5 people did (4 if we assume one of the 5 yes votes was neotrix himself).

As I said, I wouldn't have approved EITHER of them at their current stage of development.  But AMC's is just so shockingly horrible that I'm amazed ANYONE would approve it.  Even if you accept most of the assumptions built into their model, it's not even consistent INTERNALLY.  There's basic errors like assuming they can add hash-power without increasing the network's hash-power.  All the math looks as though it was done in 5 minutes by someone who couldn't do math at all.  And the only proof offered of anything is something that's fakable in a few minutes (a screenshot of some text).

My first reaction to it was that it was April Fool's joke that got released a week early by mistake: and that he'd left an apostrophe out of his name.  Ken Slaughter = Ken's Laughter - laughter at anyone stupid enough to fall for it.

I agree Dutch auction would be better.

The problem (in my view) with the recent wave of tiered prices isn't so much the principle of tiered prices but the extent to which it's being done (the difference in pricing between the tiers).  Having small increases (as with Satoshi Dice) is perfectly sensible - having prices that double (or multiply by ten or more in the case of the scammy ones) is rarely going to work out well : as one or other (or both) of the prices MUST be massively adrift of any reasonable valuation.

That's NOT an issue specific to Bitfunder - we've seen it on LTC-Global a fair bit too.  It nearly always happens on securities where the issuer is unable to work out a proper valuation for the shares.  If they can't work out a proper valuation then, honestly, they aren't ready to IPO.

It's not an attack, it's an attempt to steal your hashing power.

If someone wants to bloat the block-chain they DON'T need mining power to do it - they just need LTC to pay all the transaction fees.  Look at how many transactions S.DICE sends to fill the BTC block-chain : do THEY mine?

Ignore it - it's just another pathetic little scammer.

That's why he only puts a small batch up - in case the exchange-rate suddenly moves.  Issuers have to do that if they sell shares valued in a currency other than the one listed in - or they risk not raising the desired funds if the exchange-rate moves unfavourably and someone buys up before they can update the order.

WEEKLY REPORT




Proft was a bit slimmer this week than it has been recently - 9.86% actual growth with an estimated 5.53% from trading and the rest resulting from LTC losing some ground vs BTC.  There's a few reasons why trading profit is significantly down:

• As mentioned in last week's report, the higher value of LTC drives down the value of BTC profits meaning the same BTC profit (as an amount) results in a much lower percentage growth.
• S.MPOE and S.DICE (mainly this) fell in price - hitting the value of the surplus we hold of them to back the pass-throughs.
• I had to mark down some securities I'd bought as a hedge against LTC crashing.  LTC didn't crash so we made a small loss on the books (they may still sell at a profit - but it's less likely unless LTC falls a lot.

Still perfectly respectable results which I'd happily take every week if they were offered.


OP UPDATED

I've updated the OP with a current set of all results to date.  I've also added in a summary section showing the overall performance of the fund to date - we've now been running for almost exactly 6 months.

This new table was prompted in part by the accusation (responded to slightly earlier in this thread) that I was out-pirating Pirate.  The existing detailed results don't actually measure the real profit to date (there's no figures or averages in it showing post-fee returns) so I was interested to see just how close we were to matching the 7%/week Pirate offered.  To date the fund has actually grown by MORE than 7% per week (in LTC) and if you were to consider how BTC invested at the start would measure up now, they'd have been making just under 11.5% per week.

Don't take the projected APR in that table seriously - whilst it IS the growth that would be delivered if historical growth rates continued that is NOT going to be the case.  I don't pretend to be able to predict what growth we'll achieve in the future but I don't see ANY way it could continue at the current speed.


REPURCHASE UNITS / RESALE OF SAME

This week a further 134 units were sold back to the fund.  I would guess these were sold back because the seller(s) wanted to cash out whilst LTC was high - a sensible move if they believed it likely to fall heavily vs BTC and/or USD.  I think it's likely badly timed if so - the previous seller last week had much better timing in my view.

Where does that leave us in terms of capital?

Well, right now our bonds are equal to 62.5% of our NAV - so we're in great shape.  And I don't see any likely need to issue a significant amount more bonds in the immediate future (we could maybe use another 10-15 BTC on BTC-E to maintain flexibility and ease currency balancing when the exchange-rate moves).  The problem is that it's hard to tell which way LTC will move next - it's been making a half-hearted attempt to rise (on pretty low volume) but could equally easily fall back to .005 or lower (it dipped there briefly once in last few days).

We certainly don't need to reissue all those 134 units - but my view is that reselling some would be prudent to avoid any risk of needing to sell more or forcibly recall bonds in the event of a mini-collapse of LTC.

I will therefore be listing 50 of them on the market at a markup of around 25% above NAV/U.  As we have no urgency to sell them there's no reason to sell them cheap.  If LTC does fall sharply then I can always lower the price.  If they don't sell and LTC doesn't fall much (or at all) then I can take them down once we've grown enough more that there's no longer a useful function served by selling them.

Even if they sell, we'll still have less units outstanding than BEFORE I sold the 100 a few weeks back : our growth since then has meant we no longer need the entirety of that expansion, so it's all working out rather well for us.

To be crystal clear, the units sold back to the fund were NOT mine.  I've never sold units back to the fund (only small numbers of units at high markups via Asks).  At present I own over 50% of the fund.  I do NOT intend to buy the 50 units being reissued myself - with LTC's big rise I don't really want to reduce my BTC position to increase my LTC position (if anything I'd prefer to balance in the opposite direction).  That said, if LTC falls and I have to reduce the price of the units then I WILL buy them if noone else does.


SOFTWARE DEVELOPMENT

This week I'm going to make a serious start on developing a bot/user-interface to make the trading I do easier - as well as allow some options that at present aren't practical.  I had a part-finished application for this on GLBSE.  Here's some of the main objectives of it:

• Allow trading on multiple exchanges in a single window - so securities on LTC-Global, BTC.CO and later, hopefully, Bitfunder as well would all be in the same list.
• Only show securities I'm interested in - at present on ALL exchanges there's a bunch of dead/dieing/inactive/worthless junk that clutters my screen up needlessly.
• Integrate with BTC-E so I can see prices in all of LTC/BTC/USD for securities.
• Maintain bids/asks based on a currency other than the one the security is listed in.  This would allow, for example, me to maintain a bid-wall on our LTC-ATF.B1 bond at just under face-value of 0.01 BTC with the bot repricing it in LTC as/when the LTC/BTC exchange-rate moved.
• Bot-maintained top Bid / Lowest Ask.  Automatic order updating to outbid others - with multiple defined ranges (priced in any currency), exposure per range, minimum size to outbid etc.
• Automatic currency balancing on execution.  If we buy back LTC-ATF.B1 then the bot should immediately convert some BTC to LTC to cover it and keep exposure the same.
• Automated cash-stripping from badly designed bots.  There's already at least 1 bot running on BTC.CO - at present just doing tiny bids/asks.  If bots start trading decent sums then taking cash off them becomes attractive.  That needs multiple orders placed (and removed) fast - which is something best done by software rather than manually.
• Some other nice stuff.  There's some other functionality needed to allow my next intended expansion of operations.  More info on that if/when we reach the point of implementing it.

Initially I'll be programming just for BTC.CO/LTC--Global (in part because we need the functionaility more there and also becasue Bitfunder hasn't published their API yet afaik).  But the intention is definitely to integrate Bitfunder as well - and the design will be such as to allow exchanges (both of securities AND of currency) to be added in fairly easily.

Don't expect this software to be finished in a week or two - it'll take a while for a few reasons:

• I'm fairly rusty at programming.  Whilst I have a LOT of experience (it was my job for a fairly long time) I haven't coded much in anger recently.
• I have zero experience of OAUth.  I'll be programming in C++ so it'll take a fair bit of effort to get that sorted quite likely.  If it proves impractical to do it in C++ then I'll have to spend a few days learning like something like Python to do it.
• BTC.CO and LTC-Global heavily cache shit.  It's entirely likely that to get decent responsiveness I'll have to scrape current data from web-pages rather than retrieve it via the API.  This is going to especially be a pain with transactions - as it's nigh on impossible to get immediate info on when an order has filled.  If not properly handled this could lead to a bot placing multiple orders as it had no way to find out that one had filled.  If you've ever seen your balance go up/down then struggled to work out what happened you'll see the problem.
• I don't always have a lot of spare time to devote a decent period to development.  I can check and update market orders in a spare 5 minutes - I can't do ANYTHING of use in software development in 5 minutes.

I'll try to post updates here each week on how it's going - with screen-shots once some decent functionaility gets added.  Some parts of it I won't be able to show of course.

ODDS AND ENDS

Management fee this week is 4 units (rounded down from 4.17) and will be transferred shortly.
Bid currently at 61

Have there been 6 confirmations?  Does it show up as processing?

My deposits have always been available promptly after 6 confirms - the only slow one was when it took a long time to get 6 confirmations.

No - just because something there was a risk of didn't happen does NOT equate to the risk having been zero.

If you bet on a coin-flip being tails, I flip the coin and it comes up tails that does NOT mean that the risk of heads coming was 0%.  Same for any other risk - it failing to occur doesn't mean it never existed.

Similarly consider if you invest in 1000 absolutely identical (as far as all available information indicates) securities believing it likely there is a 10% risk of failure for each of them then 200 fail.  That does NOT mean there was a 0% risk on 800 of them and a 100% risk on 200.  It tends to suggest there was a 20% risk of failure on ALL of them.

Now it COULD be argued that everything is predetermined and so the ones that failed were always going to fail etc.  But whilst an interesting philosophical point it's entirely useless for practical purposes.  We have to deal with risk that we can quantify/measure/estimate in advance - and collapsing that to either 0 or 1 based on results is only useful if there's some measurable (in advance) factor that can be used in future such assessments.  If the real risk is only definable at all in hind-sight then we have to group together securities/whatever with a similar visible profile anyway.

Can't really see rates THAT low being attractive.  Risk sets a lower-bound on the acceptable rate.  So for even a rate of 1% per year to be acceptable you have to be confident there's a less than 1%/year chance of default/failure for it to be better to invest than keep coins in cold storage.  At that rate you're already into the area where lack of a deadman's switch would be sufficient to make investment in something unattractive (average life-expectancy being under 100 years).

Heh, nothing wrong with what he's doing.

I assume people are just giving BTC-E NVC deposit addresses, then selling them and buying LTC

Problem with waiting is that if you place your order later then it definitely WON'T arrive earlier than an order placed now and it definitely won't cost less in BTC than an order placed now (BFL may not increase prices but they surely won't lower them).

So if you think BFL will deliver (even without any idea of when it will be) there's no real gain in delaying placing an order - and a definite risk of a big downside to it.  If you think there's a chance BFL won't deliver in any sort of reasonable time-period then, provided you can assign a percentage to that chance, you can actually calculate whether waiting is better or not.  If you believe there's a high chance they'll raise the price as soon as they prove they can ship then waiting ceases to be a feasible option - and the choice is between spending all on Avalons or ordering some BFL now (as if they'll raise the price once they prove they can ship then waiting gets you the biggest delay without the cost saving - and so only makes any sense if you're confident BTC will rise vs USD).

Assign percentages to the various uncertainties then do the math - then play with the percentage to see where the boundaries are.  Doing it quickly in my head I think you need to have in the order of 75% confidence BFL won't increase prices significantly once they've proved they can ship to make waiting worthwhile.  I don't see how you could be that confident - given a price rise would make sense for them AND for their very pissed-off customers with pre-orders in.

More worrying is that nowhere in that skill-set/experience list is "managed a business" or "can do basic math".

Personally I'm pretty sick of all the IPOs that claim to have experienced teams but never identify them.  If IPOs can be that vague then why not cut them right down to the minimum - and have them just give a share price and send back whatever they feel like.  At least that would be honest and cut down the reading time for us.

The market CAN'T "find a price" when you don't define what it is that they're supposedly paying for.  Nowhere do you say what value of assets you have backing each unit. And unless the funds raised match the value of assets then the act of selling CHANGES the assets backing each unit (increasing it if you sell for more than your NAV/U and decreasing it if you sell for less).

Riddle me this:

If exchange-rate is $10/BTC and you sell shares for 1 BTC and use that 1 BTC to buy $10 worth of shares.
Then exchange-rate changes to $20/BTC and your shares pay $1 in dividends to you.
How much profit have you made?

You're acting as though you made ANY profit.  But if you leave the share price the same in BTC then you MUST measure profit/loss in BTC - and you actually made 0.45 BTC loss (Value of investments dropped from 1 BTC to 0.5 BTC and you got back 0.05 BTC in dividends).

I just hope this is a scam - that way at least you'll probably give back 1/3 of what you raise as dividends to attract more 'investment'.  If it's not a scam then investors are likely going to be much worse off: as all new investment is not only subsidising earlier investment but doing so at a less favourable exchange-rate meaning they likely lose 3/4 of investment the instant they click the buy button.  And thats at your discount rates - god help anyone dumb enough to pay 1 BTC for shares when earlier investors paid a fraction of that at a worse exchange-rate.

Sounds like a good theory but is horribly flawed in the detail.

BTC/LTC, BTC/USD and LTC/USD are all linked - if one changes then the other two will be arbitraged to reflect that change.  So the argument that LTC falls when BTC rises (vs USD) is not consistent with arguing that LTC varies vs USD based on emotions/faith.  LTC/USD CAN'T change without at least one of the other two changing - and it's the most illiquid of the three pairs.

It's also not strictly true to say that LTC falls when BTC rises.  When BTC rises it puts downwards pressure on LTC - but a fall isn't actually inevitable: as we saw recently when LTC rose vs BTC whilst BTC was rising against USD.

And your argument that LTC can't determine its own value is silly.  Make a reasonable definition of how to measure LTC's value.  Now compare it to that measurement a few weeks back.  Is it the same?  No - it's not.  Has it changed in a way consistent with it being pushed around by BTC?  No it hasn't.

Short-term, lo-volume intra-day movements ARE usually caused by arbitrage vs a move in BTC/USD - but right now LTC is doing its own thing and has been pretty much ignoring the pressure from that arbitrage for the last week or two.  And it's not the first time that's happened.

AMC's an obvious scam - no reason to waste time discussing it.  I had a quick glance and their supposed calculations were totally laughable - not even a token effort to make them credible.  And the plan has absolutely nothing abut what happens if they dont sell all shares - which is highly likely given they're selling some at 0.01 then the rest at 1.  Of course all they're after is the 250 BTC they can scam if enough suckers buy the 0.01 ones hoping to resell them under the 1.0 ones.

I'd be tempted to hedge your bet and order some Avalon batch 3 and also order some BFL NOW.

Much as I dislike the way BFL operates, if you're going to order from them you need to do it BEFORE they start clearing their back-log.  If they start shipping and getting production running them I'd expect them to also hike their prices up - to somewhere a bit below Avalon.  That would raise them extra revenue and also act as a sort of reward for those who pre-ordered - by removing the current situation where those who wait until they're shipping to order have done massively better than those who paid in BTC at a much worse rate.

Noone else looks like being close to market with ASICs for sale yet - so no reason for BFL to continue selling at a massive discount to Avalon once they've proven they can ship.  The price war won't start until either ASICMINER starts to sell (not likely for a long while yet) or one of the other dubious-looking claimed manufacturers turns out to actually be real.

With BTC looking (to me) a bit shaky at its current value (it may go higher but it may fall back) this is probably not a bad time to be spending it.

It's a shame that all 3 ASIC manufacturers turned out to be a bit dodgy.  Does anyone believe the delay between Avalon shipping batches 1 and 2 is to give time off to workers?  Or does everyone else believe, like me, that it's to allow batch 3 orders to be made raising the funds to finish paying to get batch 2 made (in the same way no batch 1 shipped in any quantity until after batch 2 had been paid for).

EDIT: To be clear, when I say all 3 ASIC manufacturers being a bit dodgy I mean the companies who took pre-orders to sell ASICs.  I do NOT mean ASICMINER.

I assume you're writing PUTs rather than CALLs your contract says you'd write because you've finally worked out the 2 glaring flaws with your original plan.

As for putting my money where my mouth is, well let's look at what your PUTs actually are.

The price you sell your shares at bears no real relationship to the price of silver - other than always being somewhere above it.  So even if I could exactly predict the price of silver I'd have to guess what price springs out of your imagination.

Plus when the price of silver falls such that executing those PUTs would make sense - what happens?  Oh yes - you stop selling shares totally as you've pretty much abandoned all pretence of being a silver shop.

So I couldn't execute the PUTs by buying from your Asks as a) They'd stay high,  and b) They wouldn't even exist.

That leaves buying from your investors.  But your investors (the ones who actually wanted silver) have already shown they massively over-value you and/or silver and fail at basic math so are unlikely to suddenly start selling at realistic prices.  The investors who believe msot of teh share value is in the non-silver element have no reason to change their mind on the share valuation - as they either know silver is only a small part of it or are entirely oblivious to what they've bought.  And if, by some misfortune, someone with any sense has one of your shares then they aren't gonna sell below your PUT price when they could buy a PUT and execute it themselves.

I'll happily buy and trade options on Silver.  But that's not what you offer (despite your contract saying you write options on Silver you don't)- you offer options on your shares which have very little to do with silver any more (it's a minor part of their price).  So nope - I'll decline betting on what random prices you assign to your shares as you'll just set them to whatever means noone profits from your options - regardless of whether or not those prices have any relevance to reality.  But thanks for the offer.

Options offer a range of ways for the less than honest to make a profit - especially if they're an issuer.  One is to price-fix so noone can execute.  Another is to artificially raise the price whilst selling CALLs - so they look better value than they are.  But the jackpot one is to sell more PUTs than there are available shares which can/will be sold on the market - you can then sell PUTs knowing it'll be impossible for anyone to execute them.  I do hope you aren't doing any underhand things like that - and that the unfortunate coincidence of stopping selling and issuing PUTs at the same time is JUST an unfortunate coincidence.

EDIT:  Just to be clear what buying a PUT option from you is.  It's playing a game of "guess the number I'm thinking of" - with you not having to think of a number until I've told you what my guess is.  And if you still can't win then, you have the choice of not thinking of a number at all in which case I automatically lose.