Well we don't know how he's doing it.  For all we know he's testing machines one by one, then taking them back offline - with the plan to put them all back online when difficulty rises.  I haven't (and can't be bothered to) done  the math to figure out if that actually makes sense (giving up earnings now for lower difficulty later) but would assume he has if it's relevant.

You're missing a whole bunch of things.  Here's the most obvious:

People aren't investing for the 12 TH/s they have now.  That would be like me claiming people investing in your mining company are investing for the ZERO TH/s you have now.

The investment is for the long-term value.  Where I disagree with you (and I KNOW we disagree - as you wouldn't have started your company if you agreed) is that I believe in the medium to long-term only companies with a significant edge of some kind will be able to make a profit from BTC mining.   That's because the barrier to entry to mining is so low that all the time it's profitable to do, more people will keep getting in.  And even when it becomes unprofitable more will STILL come in - those doing it for fun, those with an inability to do math and those running mining companies who take a cut of revenue and pass the losses on to investors.

Manufacturing your own ASICs is about the biggest such edge possible - when hardware costs 10% of what it costs competitors you have a massive advantage.  Add to that Chinese power/labour costs and you have a company that there's just no way the likes of you can compete against - they can mine profitably long after you're making a loss.

Not only do investors get that mining - but also a share of profits from sales to the mathematically challenged who mine or who run mining companies selling investment to those with even less ability in math.

That's what's being sold.

Oh - and if you DO want to look at just the first 12 GH/s, do remember that the 200k BitFountain get nothing until the other shares (the type being sold here) have got back their initial 0.1 BTC.  That adds just over .05 BTC to the value alone.

Problem with that is that shares are fungible.  So you can't give back based on what people put in.  In your example all three of the guys would get 5.667 lollipops meaning the one who put in 10 lost out to the ones who put in 5 and 2.

Everyone's meant to pay the same amount of lollipops - that's where you made a basic mistake.  Some adjustment of the price is unavoidable - but to go from putting in 10 lollipops to putting in 0.2 is just silly.

I haven't suffered any personal loss - the bunch of DMC I now hold were bought at just over 0.02 each on average.  But my profit when I convert those to ASIC-MINER and sell them hasn't come (as it should have) from great management of the fund.  It's come from massive dilution of share value, coupled with investors totally losing confidence - meaning my profit is really coming from other investors who invested earlier.  And that's not a success for DMC, no matter how you spin it.

I bought those shares when they were heavily undervalued.  I'm puzzled why all these people you think want to invest in DMC 2 weren't snapping them up - just the ASICMINER were plainly worth more than the price I managed to buy at.  Actually I lie - I'm not puzzled at all : you should figure out the reason for it and what it tells you.

A listing for a pass-through to S.MPOE has now been created.  The contract is essentially the same as the previous ones other than changes made to reflect this specific security and bulk spelling correction of "underlieing" to "underlying".

Sorry - didn't notice this until now.

Reason is simple - I have no bot that can keep the price updated all the time.  When I place orders I set them based on the lowest ask (of any significant volume) and the highest bid for LTC (of any significant volume).  The exchange-rate is often what makes the price inflated - the highest bids on BTC-E are often for tiny amounts that are irrelevant for converting hundreds/thousands of LTC.  I can't offer based on an exchange-rate which has 0.1 LTC available for example.  Similarly with Asks on MPEx - if there's a wall at .005 and then a small ask at .0045 then my price will reflect the wall : as there's no way I can have confidence that the small ask at .0045 will still be there when next shares sell on LTC-GLOBAL.

If you want to get the best price on any of my pass-throughs then work out what price you should be paying for me to be able to convert that total to BTC on BTC-E and then buy on MPEx and put up a bid at that price (including the 2.5% markup).  If there's a bid up then I can execute the whole trade no problem.

WEEKLY REPORT




Another week of good results has passed.  BTC gained significantly vs USD this week, causinf LTC to fall fairly heavily vs BTC.  We ended with growth of 17.33% before adjustement for exchange-rate movement and 12.68% once exchange-rate movement was factored out.

There's been little of great significance happened all week - just steady growth from trading.  The most important news for us was that ASIC-MINER got its first units hashing.  As a result of that, and with ASIC-MINER shares trading off-market for over 0.4 BTC each I have revalued our 10 shares from 0.1 to 0.25 - which is still very conservative.

In related news, DMC (who you may recall we have a stake in - due to their ASIC-MINER holdings) have now decided to allow trading of 11 DMC shares for one ASIC-MINER once ASIC-MINER becomes tradable on an exchange.  My intention is to take this offer up (in fact I was the one who suggested/requested it).  Whilst it means we'd be taking slightly less value than the DMC shares are worth we'd be gaining liquidity.  Our DMC shares are still listed in the spreadsheet at a value of .02247 each but will almost certainly be worth significantly more than that (in fact they could be sold right now for a 50% profit).  Once these are converted to ASIC-MINER and sold I expect a resulting jump in our NAV of somewhere in the 10%-25% range : so there should be a bumper week for us in the not too distant future.

The DMC situation is a good example of why I don't in general disclose our holdings.  Whilst I was accumulating out stock of them cheaply it would have been a very bad move for me to show that we were holding them and gradually accumulating more cheaply (and an absolutely terrible move for me to reveal why).  Once we had as many as we needed (based on restricting our exposure) then I disclosed them - as at that point the market moving up didn't matter any longer (and potentially even helped - as in addition to the long-term ones I still trade it).  Hopefully some LTC-ATF investors managed to grab cheap ones after I explained what was happening.

Trade has been fairly sluggish on both pass-throughs.

S.BBET has seen only buys occurring on MPEx this week - I'd guess these were mainly the two new pass-throughs to it (one on BTC.CO and one on Bitfunder) stocking up.  Noone on LTC-GLobal seems interested in buying from the Asks at 0.002 (and I don't fault them on that) and in fact we've actually repurchased a few (I sold via an Ask at the top on MPEx and bought back some from Asks on our own pass-through).

S.DICE has seen a fair amount of profit-taking on our pass-through.  The price of the underlying has risen which, coupled with the fall of LTC vs BTC, has meant a significant rise in the price of these in LTC.  The fund has sold AND bought back these this week - ending with about the same amount outstanding as we started the week at.  The majority of trading of these on the pass-through this week haven't involved the fund at all - they've just been new investors buying from old ones with the trading occurring within the spread on MPEx.

This week I'll be opening a new pass-through run by our fund - to S.MPOE.  That's the asset which gets the profit from trading on MPEx as well as (sometimes) overflow profit on MPOE.  It has a pretty stable price and pays regular dividends so is a good candidate for inclusion in the portfolio of investors who want some BTC exposure.  I'd been holding off on this until activity on the existing pass-thoughs had slowed down - as our ability to supply to pass-throughs is limited by the speed of converting/moving funds from LTC-Global via BTC-E to CoinBR.

Management fee for this week is 7 units (rounded down from 7.
Bid at 44.6

If Dave wants to explain what stats it is he saw that convinced him they had ASICs hashing away then he can.  That would be far more credible than having apologists make excuses and weak arguments on his behalf.

Can moderators even vote on your assets anyway?  Thought locked ones couldn't be voted on at all - and the only changes to votes on yours were vote vanishing when people who had voted no longer held 10 shares of LTC-Global.  My understanding was your deal with burnside was that you'd list for the purposes of liquidation with no trading possible - hence him not takiny any action to help faciliatate trading as that's not what he'd agreed to.

Most of them there's zero point reopening anyway.

YARR - has first claim on whatever assets CPA got (it should take priority over nyan.a), should just have a forced buyback at 1.0.  No point opening trading.

Nyan.b - will have zero value should have forced buyback at 1 satoshi.  No point opening trading - it has no assets and no value.

Nyan - will have zero value (if it had anyway it would go to nyan.a/b) should have forced buyback at 1 satoshi. No point opening trading - it has no assets and no value.

CPA - will have zero value (anything left after YARR should go to nyan.a) should have forced buyback at 1 satoshi. No point opening trading - it has no assets and no value.  Can't be closed until after BMF is in theory - but in practice makes no odds as you're personally guaranteeing nyan.a.

Nyan.a - if you're personally going to guarantee paying back 1 BTC per share then I can conceivably see a purpose in this opening for trading.  It would be a personal debt of yours - with it trading at a discount based on how confident people are you that you'll repay, the degree of their desperation for some cash now rather than more later, and different people's estimates of how long it will take you to repay.  As such it DOES have potential to find a market value - and the contract for it should define it as a personal debt, detail what has been paid so far and give your best estimate for the likely time-scale of full payout.

BMF - thought you'd sold all the assets of this, in which case a forced buyback should be done with the last funds received.  But not until AFTER you've posted a list of liquidated assets to allow any issues to be raised (e.g. making sure all the mining hardware listed prior to GLBSE closure has been accounted for).  Unless there's assets with some reason why they can't be liquidated swiftly there's no gain to listing - as market value is just the proceeds of liquidation divided by number of outstanding shares.  In liquidation realisable value IS market value.

What you did wrong BTW was to do a forced buyback without having the courtesy to issue a notification on nyan.c explaining what you were doing and why.

CPA, nyan and nyan.b should all have a forced buyback done at 1 satoshi anyway - provided you explain why they're worth zero (which isn't hard) I don't see what people can complain about.  If they want to complain that the value fell to zero fine - but there isn't really any disputing that the value of them IS zero.

The listings on BTC.CO were done to liquidate the companies.  If the result of that is there's no cash left after debts are settled then that's the reuslt of liquidation.  I'm totally baffled how EskimoBob had never noticed Nyan.c had a value of 0 - it had a value of 0 well before GLBSE closed and that was always a likely result of being at the risk end in a tranched security that invested in obvious ponzis.

This is something I can't figure out.

BMF/CPA have zero assets (BMF may have some that hasn't been paid out yet - but CPA can't have any or it would have gone to YARR/nyan.a).  So how can they have a non-zero market value?  And with what can they can continue operating?

If you want them approved first thing you'd need to do is put up proper contracts for them - along with some statement of assets.  I can't see any chance of approval for a security that claims to have zero assets but wants to trade regardless: in the case of CPA it's already insolvent (it can't pay its guarantee on Nyan.a) so not in a position to list anywhere.

So bottomline is that people who bought DMC shares with cash at IPO have lost the bulk of their investment, but those who got them from trading with you have broken even or made a profit?

IF the people who bought at 1.0 BTC agreed for you sell/trade more at far lower prices then they only have themselves to blame for having the value of their shares diluted down by over 90%.  Agreeing to that was sheer lunacy on their part(if they did - I wasn't watching at the time so never checked for votes on GLBSE).

Here's what he actually said:

"as I've already posted, there are chips hashing away in the engineering lab - I can see the stats for it."

He stated as FACT that there were chips hashing away.  He didn't say "Tom tells me there's chips hashing away" or "I can see some stats which I guess are chips hashing away".

His statement also says that the stats he could see were for chips hashing away - not that he guessed that they were for chips hashing away.

His statement unambiguously claims as fact that chips were hashing away - a statement he could only truthfully make if he had actual knowledge that was the case.  At best he was passing on second-hand information as though it were first-hand - which is misleading and deceptive (even if not intentionally so).

They were worth zero - and had been even before GLBSE closed down.  Nyan.c would only get anything AFTER both nyan.a and nyan.b were paid in full.  That was never going to be the case once OBSI defaulted - so nyan.c was always going to be worth zero.

Shares in nyan (the parent company) will also be worth exactly 0 (if they had any assets they'd have to go to cover nyan.a/nyan.b per contract).

Nyan.c had no funds left even BEFORE GLBSE went down.

The way the nyan structure worked was that assets went first to Nyan.a, then to nyan.b then to nyan.c.  Nyan.c got the bulk of dividends in return - so it took most of the risk in return for most of the reward.

When OBSI defaulted that totally wiped out any chance of Nyan.c getting anything back - and pretty much took out nyan.b as well (other defaults had already taken nyan.c down to 0 previously).

I'm not even sure why usagi bothered listing nyan.c - as unless OBSI showed up with a truck-load of cash it was always getting zero.

Much as I disagree with a lot of what usagi did, Nyan.c is/was legitimately worth absolutely zero - the remaining assets won't even cover giving nyan.a back their funds, let alone nyan.b or nyan.c.

Confirming that I'll be doing this trade with whatever DMC shares I hold (for my fund) when ASICMINER becomes tradable.  It seems a fair trade - I take slightly less value than the DMC shares are worth (including giving up my portion of the 15 BTC received already from BTCMC) in return for the higher liquidity of ASICMINER shares.

Can't say for sure how many DMC shares I'll have then - but would expect it to be in the 300-500 range unless someone buys a LONG way up the DMC Ask list.

I already tried a few times to get rights to a batch to operate a pass-through to LTC-Global.  But I was always too late or overbid.  Unless there's some barrier to entry preventing buying direct on friedcat's site there's very little benefit another BTC-denominated pass-through can offer.  Buying on the main site where most liquidity is has to make sense for nearly everyone.

Think you misunderstood me there - I wasn't criticising you.

Rather I was pointing out to the previous poster than you (and I) believe ASICMINER is worth more than .36 - hence you buying more yourself and also you not selling the DMC ones that cheaply.

Diablo believes (and I agree) that ASICMINER shares are worth significantly more than 0.36 - which is why he's buying them up.

I recently BOUGHT a bunch of DMC because of the ASICMINER it holds.  I'd definitely be very pissed off if he sold those to himself at 0.36.  As far as I knw his plan is to sell them at what he believes a fair price once proper trading on them is possible.

What I don't understand is why he's only paying half of dividends out and intending to use rest to buy back shares.  I thought DMC was in liquidation - where all proceeds should jsut be dividended out (and assets sold off) until there's no assets left.  That's only way to ensure all shareholders get the same (other than the ones than already got bought out at 0.1 leaving little for everyone else of course).

Note as well that I've offered to trade in my DMC shares for JUST the asicminer shares they own - which means I'd actually take less than the value of my shares and leave more for the others (the BTCMC have some value - there's 15 BTC from them received already).

I honestly don't know what Diablo's doing - he seems to want to shut down the company but in a non-transparent way where noone can work out who is going to get what.  I'm just hoping he doesn't do any more dumb trades and give away 95% of the 2-5% of value still left.  I took a calculated risk buying in (the assets are worth more than I paid but Diablo could do something dumb at any time) - just hope I did my math right.