So what would you propose happened to someone who had 1 of the current mining shares?  Would they get 0 (and lose their investment) or 1 (and have it worth 10 times the value) of the new ones?  There's no practical way to do it without either rounding down (where people lose money) or rounding up (where different people lose money).

I hope to be able to give a proper explanation on that by Monday.

Here's the current status of DMS finances:

BTC Balance (BTC-TC)   0
CIPHERMINE Bonds    260.56000000
BTC Balance (Wallet)    150.79576392
Dividends (Wallet)    3.27310018
TOTAL ASSETS    414.62886410
   
Outstanding MINING   152575
Outstanding SELLING   152575
Outstanding PURCHASE   10479
Effective Units   163054
   
Dividends/Mining Owed   0.00006849
Total Dividends Owed   11.16756846
   
Block reward   25
Difficulty   510,929,738
Hashes per MINING   5000000
   
Daily Dividend    0.00000492
50 days (Min Liquid)    0.00024607
100 days (Forced Close)    0.00049215
365 days (Buyback)    0.00179634
405 days (IPO)    0.00199320
400 days (Post SELLING div)    0.00196859
410 days (Pre SELLING div)    0.00201781

NAV/U    0.00087640    BTC +    0.1598    CIPHERMINE.B1   
NAV/U (if CM.B1 at face)    0.00247440             

All funds were received back from BTC-TC (including a final tiny payment for the bit that couldn't manually be withdrawn).

Dividends have been received for CIPHERMINE.B1 for the weels up to and including last week - they're received in a seperate address and listed seperately above.

You'll see above the owed dividends per share (and total) for MINING up to and including tomorrow's dividend.  Here's the breakdown of how that was calculated:

Date   Dividend
04-Nov    0.00000643
05-Nov    0.00000643
06-Nov    0.00000643
07-Nov    0.00000492
08-Nov    0.00000492
09-Nov    0.00000492
10-Nov    0.00000492
11-Nov    0.00000492
12-Nov    0.00000492
13-Nov    0.00000492
14-Nov    0.00000492
15-Nov    0.00000492
16-Nov    0.00000492
   
Total    0.00006849

The figures above aren't completely accurate for two reasons:

1.  The value for the dividend wallet actually includes a tiny amount of personal funds (I had my personal BTC-TC address and the DMS one in same multi-bit wallet and it's added them together).  I'll probably just leave that in DMS as it's only a fraction of a BTC.
2.  I believe I owed the fund a small amount for the Nov 6th dividend (pretty sure it changed after 16:00 but before midnight - where, by terms of an earlier promise by me, MINING get the old dividend and I personally pay the difference between old and new dividends).  The usual site I use to check exact times of difficulty changes seems to have stopped updating - will updated accounts once I've verified the precise time for that.

We have somewhere around 150 days of MINING dividends in cash - which is likely to be more than will ever be needed for it (as difficulty isn't likely to stop rising just yet).  If CIPHERMINE.B1 were liquid then SELLING would be getting a dividend of around .0005 BTC each.

As soon as we relist then redemptions for MINING+SELLING pairs (and PURCHASE) will be available - per the contract at 98% of NAV/U.  With NAV/U being X BTC + Y CIPHERMINE.B1.  As soon as we sell enough to get it back below 25% of NAV/U I'd revert to buying back in cash (and paying SELLING dividends).  Realistically I can't expect to sell any/many PURCHASE whilst we're too illiquid to pay SELLING dividends.

I'm working on an updated format for reports right now - but basically DMS has assets worth around 412 BTC (valuing Ciphermine.B1 at face value) of which nearly 2/3 (260 BTC) are the ciphermine bonds.  All other assets were liquidated (there was nothing else listed on exchanges).  Do remember that since BTC-TC closure was announced well over half the total assets have been paid out just in SELLING dividends.

There's plenty of cash to pay MINING dividends for the forseeable future.

The reasons MINING dividends can't be paid are in a nutshell this:

1.  The moment some shares of MINING get dividends but others don't the shares cease to be fungible and can't be relisted easily on an exchange (dividends would have to be caught up with on all of them first).
2.  No dividends could be paid anyway until the payment per share was at least 5000 satoshis (the limit for transactions to be spendable at all).
3,  Some accounts don't have BTC addresses listed - those can't have dividends paid to direct.
4.  Some accounts used inputs.io addresses (I've been emailed/PMed by a a few people with that problem).  Those need to be changed first - which can't be done in a rush as if they can't sign with the address I have to wait a reasonable period to make sure noone else shows up saying "my email address was hacked, it wasn't an inputs.io address and here's me signing with the address to prove that".

3/4 are the issue now - I can sort the existing ones of type 4 within a week or so, type 3 I can in theory group together manually and account for them seperately (i.e. hold them all with a BTC address I control and manually transfer them/funds when the owners show up).  But as I expect us to be listed on an exchange within a week it's just not worth it.

Anyway, time for a break for some food then I'll finish off the updated report (dealing with owed dividends, reporting NAV/U as X BTC + Y CIPHERMINE.B1).

I'm back.

Sorry for the lack of communication recently - I only intended to be away for a few days but it ended up being a fortnight.  As I hadn't intended to be away long I didn't have my laptop etc with me (and 3G coverage was terrible for the android).

Got a bunch of things to catch up on (including DMS) - will make a longer post later tonight or tomorrow.  Here's the main points:

All funds remain intact and untouched (the BTC address holding the main funds was listed earlier in the thread and hasn't changed)

No dividends will be paid yet for a few reasons:

DMS.SELLING can't have dividends paid until Ciphermine.B1 is liquid - at present those have an effective value well below face value.
I have a few mails from people whose BTC addresses were inputs.io addresses.  If I want to pay dividends direct then those would need to be fixed first (haven't even read up on the news yet but one of my mails says TF was either hacked or pretending to be hacked and stole the funds).
Some people haven't got BTC addresses listed from BTC-TC (only a few).  As soon as I make a dividend payment to some but not all investors it makes it a nightmare to relist - as the shares are no longer fungible until all have received same dividends.

I've skimmed though my emails (which includes copies of all PMs to this board) and will now start answering the ones that need a speedy response.

Am also making a payment now for the next 7 days of MINING dividend - should it turn out that difficulty rises within next 7 days then I'll refund any overpayment myself.  This earlier payment allows those who only hold DMS to withdraw their funds from BTC-TC now - as there'll be no further payments made by DMS on BTC-TC.

0.00000643 * 7 = 0.00004501 which will now be divdended to MINING/PURCHASE and is advance payments for

Oct 28,29,30,31
Nov 1,2,3

Withdrew my last 40 BTC from there on 14th October - had withdrawn a larger amount a week or so earlier.  Both went through smoothly at both stages (I'm not verified).

Forgot clocks moved back in UK last night - so dividends are now due an hour earlier (in my local time - which is now GMT rather than GMT+1).

A transfer is on its way to BTC-TC to pay the SELLING dividend and should hopefully be there in time to pay the dividend on time (would need very slow block finding for it to be late).  Will send the dividends as soon as it arrives.

BTC Balance (BTC-TC)   210.0069356
CIPHERMINE Bonds    260.56000000
BTC Balance (Wallet)    128.21576392
Dividends (Wallet)    0.81393600
TOTAL ASSETS    599.59663548
   
Outstanding MINING   152575
Outstanding SELLING   152575
Outstanding PURCHASE   10479
Effective Units   163054
   
Block reward   25
Difficulty   390,928,788
Hashes per MINING   5000000
   
Daily Dividend    0.00000643
50 days (Min Liquid)    0.00032161
100 days (Forced Close)    0.00064322
365 days (Buyback)    0.00234775
405 days (IPO)    0.00260504
400 days (Post SELLING div)    0.00257288
410 days (Pre SELLING div)    0.00263720
   
NAV Post MINING Div    598.54783936
NAV/U Post MINING Div    0.00367086
Days Dividend Post Div   570.70
SELLING Dividend    0.00109798
NAV Post SELLING Div    419.51844802
NAV/U Post Selling Div    0.00257288

Will post a calculation for the SELLING dividend a bit later (going out shortly for a few hours).  Need to add in last week's CIPHERMINE.B1 dividend (which was paid directly rather than on exchange and is in a different BTC address - the one set as public address for the DMS issuer account).

BTC Balance (BTC-TC)   11.53801262
CIPHERMINE Bonds    260.56000000
BTC Balance (Wallet)    328.21586392
TOTAL ASSETS    600.31387654
   
Outstanding MINING   152575
Outstanding SELLING   152575
Outstanding PURCHASE   10479
Effective Units   163054
   
Block reward   25
Difficulty   267,731,250
Hashes per MINING   5000000
   
Daily Dividend    0.00000939
50 days (Min Liquid)    0.00046960
100 days (Forced Close)    0.00093920
365 days (Buyback)    0.00342808
405 days (IPO)    0.00380376
400 days (Post SELLING div)    0.00375680
410 days (Pre SELLING div)    0.00385072
   
NAV Post MINING Div    598.78247295
NAV/U Post MINING Div    0.00367230
Days Dividend Post Div   391.00
SELLING Dividend    -         
NAV Post SELLING Div    598.78247295
NAV/U Post Selling Div    0.00367230

That sounds the right sort of size - I haven't calculated it myself yet as it won't happen until tomorrow (the difficulty rise was after midnight).  Will work it out exactly after I do today's MINING dividends shortly.  Then tomorrow I'll pay the SELLING dividend and also MINING divdends for the rest of the month (pretty sure difficulty won't rise again in October) so everyone has a decent amount of time to get their last DMS dividends off of BTC-TC (and so I can also get DMS' own funds off BTC-TC with time to spare).

BTC Balance (BTC-TC)   13.06908968
CIPHERMINE Bonds    260.56000000
BTC Balance (Wallet)    328.21586392
TOTAL ASSETS    601.84495360
   
Outstanding MINING   152575
Outstanding SELLING   152575
Outstanding PURCHASE   10479
Effective Units   163054
   
Block reward   25
Difficulty   267,731,250
Hashes per MINING   5000000
   
Daily Dividend    0.00000939
50 days (Min Liquid)    0.00046960
100 days (Forced Close)    0.00093920
365 days (Buyback)    0.00342808
405 days (IPO)    0.00380376
400 days (Post SELLING div)    0.00375680
410 days (Pre SELLING div)    0.00385072
   
NAV Post MINING Div    600.31355001
NAV/U Post MINING Div    0.00368169
Days Dividend Post Div   392.00
SELLING Dividend    -         
NAV Post SELLING Div    600.31355001
NAV/U Post Selling Div    0.00368169

If anyone arranges a private sale I'd facilitate it.

I can turn transfers on - but if I do so, they'll only work to and from the issuer.  So if person X sells to person Y you'd have to:

1.  Do the transfer of BTC for payment off-site (no way to transfer BTC).
2.  X send the shares back to me and PM me to send them on to user name Y.

I'm fine with doing #2 - but don't want to end up dragged into arguments over trades that didn't go smoothly.  Reason I haven't turned transfers on is really simple : I KNOW that if I do I'll end up getting sent unsolicited shares then receiving mails/PMs asking where their BTC for them is.  Some people just don't read the forums at all.

Your last paragraph is true.  But there's a problem with it - specifically this:

If you raise BTC from investors then you need MORE fiat to actually use those invested BTC withut exposing investors to fiat-risk.  If you had those extra fiat then you wouldn't need to be raising funds from investors in the first place.

Put simply: if you have enough fiat to be able to shield investors from fiat-exposure (i.e. keep their investment always denominated in BTC) then you don't need their investment at all.

My view on investments like this is that if they want to be denominated primarily in one currency then they need fiat-denominated investment not BTC-denominated  - because you can minimise BTC exposure easily (due to it being liquid) but can't do the same with fiat exposure (due to a lack of ability to move it rapidly between exchanges).  Don't interpret my comments as me being opposed to fiat-exposure - I'm not, and maintain significant fiat-exposure with my BTC myself intentionally.  What I'm opposed to is attempts to sell 'BTC' investments where the investment can make a 'profit' but still end up worse than just holding BTC (which, incidentally, includes nearly all mining 'investments').

Something like this works nicely if (and ONLY if) investors WANT significant fiat exposure and are happy to accept that they'll do worse than holding BTC if BTC rises vs fiat.  Specifically they need to understand, accept and even WANT that if BTC rises fairly sharply vs fiat then they'll get back less BTC than they put in.  In return they do, of course, do a LOT better than just holding BTC if BTC falls even slightly vs fiat.

For those saying the main risk is MtGox - just no.  Historically the main risk in ANY security is the issuer.  Even when GLBSE closed, the exchange itself only stole a very small percentage of invested funds (under 10% of deposited cash and next to nothing from value tied up in securities) - which is nothing compared to what issuers steal.  That's not a comment about this particular (potential) issuer - I'm just pointing out that issuer counter-party risk can never be treated as something negligible.

BTC Balance (BTC-TC)   14.60016674
CIPHERMINE Bonds    260.56000000
BTC Balance (Wallet)    328.21586392
TOTAL ASSETS    603.37603066
   
Outstanding MINING   152575
Outstanding SELLING   152575
Outstanding PURCHASE   10479
Effective Units   163054
   
Block reward   25
Difficulty   267,731,250
Hashes per MINING   5000000
   
Daily Dividend    0.00000939
50 days (Min Liquid)    0.00046960
100 days (Forced Close)    0.00093920
365 days (Buyback)    0.00342808
405 days (IPO)    0.00380376
400 days (Post SELLING div)    0.00375680
410 days (Pre SELLING div)    0.00385072
   
NAV Post MINING Div    601.84462707
NAV/U Post MINING Div    0.00369108
Days Dividend Post Div   393.00
SELLING Dividend    -         
NAV Post SELLING Div    601.84462707
NAV/U Post Selling Div    0.00369108

Face value on CIPHERMINE.B1 is .01 BTC each - they can be redeemed for that with 3 months' notice (and you sacrifice all dividends for those 3 months).  After 1 year they can be redeemed at face without any notice needing to be given.

Kate's on her honeymoon - looks like she forgot to pay last week's dividend before going (which is bad form - but not a cause to fear default).

Problem at my end is that at a certain point I have to mark them down on the books (thus stopping SELLING dividends) to avoid running out of cash to pay MINING dividends.  That's because where it reaches a point where I MUST sell them I either have to sell them at a massive discount or mark them down so as to remove the immediate need to sell them.  That may sound silly - after all, surely their value doesn't change?  But in fact their value DOES change - if I need to sell them right now then their value is only what I can get for them right now : whilst if I can delay selling them for a few months then I can value them at what they'll sell for then (IF I'm sure I can get it then).

It's a shame as they were doing nicely for us up until BTC-TC going down - we were slowly selling them off at a profit to what we paid for them AND getting dividends.  And we were selling at the rate we needed to (to keep the percentage in target range) without any difficulty.

Guess you aren't familiar with what actually happened there.

1.  Nothing like 'every last cent' was seized.
2.  The seizures weren't because of the business they ran (online poker) but because of offences related to the banking system.
3.  For the 2 largest sites (Stars and Tilt) all player funds of non-US players have already been returned.  In Stars' case they never went missing - and US players there got their funds back very quickly.  In Tilt's case that only happened after Stars bought them out early this year.  With Tilt/Cereus the problem was that the seizures triggered collapse because both were running a fractional-deposit scheme on players' funds - so collapsed when a bank-run occurred post-seizure (Cereus was already in problems even before that).

What got those companies screwed was the way in which they acted to try to circumvent banking restrictions - where similar laws apply across all involved countries.  Also a lot of the offences DID occur in the US - where transactions originating and ending in the US were mislabelled to try to get past US restrictions on bank transfers related to gambling.

Which isn't to say it's necessarily safe to sell BTC-denominated shares to someone in the US from anywhere - just that the example quoted isn't a good one to use as the action taken wasn't because of the "selling" but because of the (irrelevant to BTC) offences committing trying to trick US banks into processing transactions.

To make a BTC-denominated profit, the TOTAL value of your holdings (in BTC) has to rise.

Yes - you make a 'profit' on the trade.  But if you look at the TOTAL value of your capital then whether you actually made an overall profit or not depends far more on the how the exchange-rate moved than on the difference between the exchange-rates at different exchanges.

What you're proposing only makes sense for people who want some of their BTC to be converted to fiat and held as fiat.  i.e. those who believe BTC won't move much or will fall vs fiat over whatever period they intend to be invested for.  And because the BTC exchange-rate tends to move a lot, the end result they achieve will have more to do with how the rate moves than with the 'profit' from the arbitrage.

Simply put : for a BTC-denominated investment to make a profit it must end up with more BTC than it started with.  And you have to value ALL capital (even the part held in euros) in BTC to measure that.  I'm not saying it's necessarily a bad thing to do - just that it doesn't make sense to do it IF you want to hold BTC.  If investors intended to hold a mix of BTC and fiat anyway then it starts to make sense - as they DO end up making a profit compared to just passively holding the mix of currencies.

In fact it makes most sense as an investment for those who want to try to profit from BTC without committing to holding any long-term (as the BTC part is always liquid so can be exchanged out if the rate starts to move unfavourably).

The mistake you made is in portraying it as a means by which a profit in BTC could be made - when whether any such profit is made or not depends far more on how the exchange-rate moves (and hence the value of the part locked up in fiat) than on the difference between the rates on different exchanges.

Problem is that +7% in a month turns into a loss (expressed in BTC) if BTC rises by more than 7% whilst your withdrawal is stuck in limbo.

Add to that two layers of counter-party risk (you and Mtgox) and it suddenly doesn't look very attractive.

Arbitrage opportunities where you're stuck on one (the worst) side of the deal for any length of time cease to actually be arbitrage - as the end result depends far more on how the exchange-rate moves during that period that on the relatively small difference in exchange-rates at the point at which you initiated the trade.

Just consider if you'd done such an arbitrage a week ago and were now waiting for euros to arrive.  Would you REALLY think you were better off than if you'd just held BTC throughout?

The options to reduce the CIPHERMINE bonds are very limited:

1.  I could give 3 months notice to sell some - I discounted this idea simply because it wouldn't help anything much.  Any crunch hits well before then.
2.  Sell privately.  I prefer this route - but, if at all possible, want to wait for it to be relisted first so we get a much better price.

I also have to be very careful not to run into a situation where we run out of cash to pay MINING dividends.  Potentially that could mean suspending SELLING dividends until the CIPHERMINE become liquid (at which stage there'd immediately be a catch-up dividend).  MINING have never received benefits for the various dividends etc we've received from investment and so shouldnt suffer any loss from investment.  My personal holdings remain somewhere around 15k SELLING and a handful (under 100) MINING - so taking that route would obviously not be something I'd be doing for my personal benefit.

Next SELLING dividend will go out same as usual - after that I'll have to reconsider the situation depending on how various things develop (in particular the plans for the CIPHERMINE bond to relist - I'm confident it will but not sure exactly when).

I haven't updated on relisting recently - we're still very likely to be relisted somewhere before very long (I can't say where - not least because there's still 3 live possibilities that I haven't ruled out or reached agreement with).  The CIPHERMINE.B1 situation makes relisting less of a priority than it otherwise would have been - as until those are liquid we can't realistically expect to sell more PURCHASE (as I can't value the bonds below face value when selling) and everyone who wanted cash urgently already should have sold.

On a further small point, whenever next SELLING dividend gos out I intend right afterwards to pay a lump dividend for the rest of the month's MINING dividends - so no MINING investors get stuck with tiny dividends received on the last day or two of BTC-TC being open.  Obviously I'll only do that to the extent that I can do it whilst being sure I'm not paying for a period after which difficulty would have changed (i.e. OVER-paying in advance) - if I do happen to overpay because of that then I'd personally refund the extra into capital.

BTC Balance (BTC-TC)   16.1312438
CIPHERMINE Bonds    260.56000000
BTC Balance (Wallet)    328.21586392
TOTAL ASSETS    604.90710772
   
Outstanding MINING   152575
Outstanding SELLING   152575
Outstanding PURCHASE   10479
Effective Units   163054
   
Block reward   25
Difficulty   267,731,250
Hashes per MINING   5000000
   
Daily Dividend    0.00000939
50 days (Min Liquid)    0.00046960
100 days (Forced Close)    0.00093920
365 days (Buyback)    0.00342808
405 days (IPO)    0.00380376
400 days (Post SELLING div)    0.00375680
410 days (Pre SELLING div)    0.00385072
   
NAV Post MINING Div    603.37570413
NAV/U Post MINING Div    0.00370047
Days Dividend Post Div   394.00
SELLING Dividend    -         
NAV Post SELLING Div    603.37570413
NAV/U Post Selling Div    0.00370047