Without the hardware all you're selling is a commitment to pay out future dividends.  So you'd need to pay whoever took over - not the other way round.  His offer represents what he's willing to pay for the single LESS what he believes the cost of paying future dividends is.

I'm only going to address this one - as you KIND OF answered my question, without actually really answering it.  I didn't ask you to justify the trade I asked whether the trade was for assets worth under a quarter of the value of the DMC shares you obtained.

You traded 500 shares of ASIC for 4200 shares of DMC.

500 shares of ASIC was worth approximately 50 BTC (that's the value you said you paid for the DMC in your letter to shareholders).

So you gave DIablo the equivalent of 50/4200 BTC per share = approx 0.012 BTC per share.

In Diablo's last report here (AFTER the dilution of NAV by those 4.2k shares AND all the others) nav for DMC was still over 0.05 per share.

So I'm really not seeing how yo ucan claim the answer is "No" to whether or not you obtained those DMC shares at well under nav/share.  You can obfuscate that by talking about mHash/share - but that was not the question I asked.

Not surprising you didn't even bother answering #2 - as even you'd struggle to keep a straight face and say "No" to it.  Instead you gave your stock response of "you don't understand" - but then backed it up with absolutely zero facts about what it is I "don't understand".

5 BTC was a cheap price for you to reverse your opinion from "Diablo is totally incompetent" (paraphrase - not gonna look up exact quote) to him being competent.  Don't suppose you got a promise from him to buy insurance as part of the deal?

I'm done in this thread now btw - so don't feel any need to reply to me: if the shareholders aren't interested in an explanation then I agree there's no point me flogging a dead horse.

I'm far more disappointed in the way the shareholders allow you to pull wool over their eyes than I am that you exploited DMC's incompetence/ignorance/desperation to get ASIC shares for the benefit of yourself and/or your shareholders in other companies you run.  And yes - the other 14k DMC shares handed out (or whatever happened with them) are probably even worse (for DMC shareholders) than the trade you did.  Shame you now appear to have no interest in finding out what happened and (possibly) reversing it and would rather sweep it all under the carpet.

I believe answering my earlier questions would add value for shareholders in assessing your proposal.

To repeat:

1.  Did you obtain a significant number of DMC shares (4200 from memory - could be slightly more/less) in return for assets with under a qurter of their value (both from GLBSE valuation of DMC sahres AND valuing DMC shares at nav/share)?
2.  Do you agree that Diablo trading you those shares lowered the current value (nav/share) for all existing shareholders in DMC?
3.  Do you believe you SHOULD be allowed to keep those shares?
4.  Would you end up keeping those shares if what you propose happens?

Four yes/no answers is all that's needed.  If the answer to #1 is "No" then no need to answer the others.

I think by this point it has become obvious you were intending to spin your way around any questions asked, rather than address the actual issues.  Not everyone wants things to be resolved behind closed doors, on irc or in PMs between people whose motives may not fully align with those of the other share-holders.

I did then focus on DMC - but you failed to quote or address my points about your proposed contract paying his salary even if a loss was made.  Yes - that's what a salary IS - but rewarding someone for massive failure by then giving them 20% of future revenue irrespective of whether any proft is made?

And yes - I've misunderstood some aspects of how your companies operate in the past.  So whenever you've responded to me you've only addressed the bits I was wrong on then pointed to my post count and laughed: totally ignoring the other issues raised.  True to form you've done the same here.

Still no response to me asking:

"You may only be getting paid 5 BTC to represent Diablo, but you also received a large chunk of shares (far more than you already held) at a huge discount to nav.  Am I correct that in your proposal you'd get to keep those?"

I'll rephrase it as simple yes/no questions that you can (hopefully) answer without needing to discuss my post-count:

1.  Did you obtain a significant number of DMC shares (4200 from memory - could be slightly more/less) in return for assets with under a qurter of their value (both from GLBSE valuation of DMC sahres AND valuing DMC shares at nav/share)?
2.  Do you agree that Diablo trading you those shares lowered the current value (nav/share) for all existing shareholders in DMC?
3.  Do you believe you SHOULD be allowed to keep those shares?
4.  Would you end up keeping those shares if what you propose happens?

I was responding to you saying:

"This simple 3-step plan shows that Diablo-D3 is competent enough to manage DMC and is the best person for the job."

It does NOT show anything about his competence.  His basic ability to competently trade securities and manage investors funds has not changed as a result of you making that post.  IF he explained what he'd done wrong/badly in the past -and how he'd avoid making the same mistakes - then that MAY be evidence that he's now more competent than he was.

Why would we believe your claim that "If he does not keep his contract then he will be removed."?  Are you saying you believe he hasn't already broken his contract?

Cool - so don't pay him the $200k until he HAS the million dollar data centre.  That way he has incentive to actually get it - rather than to draw 20% of turnover whislt losing share-holder's capital.

Totally agree accountability and transparency go a long way - so where are they in your plan?  Your plan removes accountability (by rewarding him irrespective of results) and says nothing about transparency.

Let's start with your conclusion first:

Your plan says absolutely NOTHING about Diablo's competence.  It's a forum post by you - and hasn't magically transformed him into an investment genius.  If you want to demonstrate Diablo's competence then the way to do it is to explain the previous decisions he made - not in general terms, but in specifics.

Rewarding loss of 95% of nav/share by adding a salary in to the contract?  Would you be proposing a 30% salary if he'd managed to lose 98%?  

I have a fundamental disagreement with you on dividends (not just here, but in your own companies).  You seem to believe dividends are paid based on revenue, I believe they should be paid based on profit (there are exceptions to this - but not ones applicable here).  The amount to be split between remuneration to Diablo (if any at all), dividends and growth should come from profits - which should include gain/loss on the value of holdings.  Dividending out income whilst your capital drops is great for the business owner (if they take their cut based on dividends issued) but is terrible for investors.

Not just that but even if I accepted the princple, in your proposal it's all horribly wrong.  You're giving him his 20% cut BEFORE expenses (which come out of the other 80%).  So if there's 100 BTC revenue he gets 20 - and tough luck shareholders if expenses are 80 or more.  Double tough luck investors if the value of investments also dropped (which is pretty inevitable long-term on mining shares/bonds).

You may only be getting paid 5 BTC to represent Diablo, but you also received a large chunk of shares (far more than you already held) at a huge discount to nav.  Am I correct that in your proposal you'd get to keep those?

Share-holders shouldn't be voting anyway until the audit has been done - and Diablo has responded to whatever questions arise from it.  Not only does that protect shareholders, it also ensures that if he DOES remain in charge there's no cloud hanging over his head where people can claim it was all covered up.

Explaining what he did in the past is what's important - not your spin.

My commiserations to shareholders - as it's likely usagi's legitimate holdings + the ones she was given dirt cheap may well be enough to get a majority in motions (unless whoever else was gifted the other 10k shares vote the other way).

Oh - and if you're REALLY confident in DIablo's competence usagi then how about you make an offer which includes buying out any existing shareholders who want out at NAV (or close to it)?  That's assuming the audit doesn't show up stuff so totally incompetent (or worse) that even you can't try to spin your way out it.

You'd then have to revisit your time-scales.

What would defaulting on day 10 of a contract mean - would it:

a) mean that the 30 days was the 30 days ending on day 10 of the contract period?  If so then noone would take out contracts unless the previous 20 days were favourable to their desired outcome.
b) mean that the 30 days was the 30 days commencing on day 10 of the contract period?  If so then the outcome of the contract could potentially not even be know, let  alone settled, until 30 days after the contract had ended.
c) something else?

I frankly dont believe the obsi securities are a good target for what you're trying to offer - as they don't have any clear point at which a default would become apparent (other than him saying he had defaulted or vanishing).  Betting on how much interest he'll pay would be hazardous - as he can set that at will and not disclose any verifable information to justify the decision.  That would allow him (or proxies) to bet on the side of the contarcts which he knew in advance was going to win - the prospect of which is sufficient in itself to totally deter me from gambling on that.

Yep - I've looked in detail at a lot of the companies in this section over the last week or so.  There's very few that are at all attractive to invest in - and everywhere you look there's companies that don't follow their own contracts.

Were I invested in usagi's companies i'd have a ton of questions - but I'm not and none of her investors seem to care, so why should I?  The main reason I asked usagi more questions than most other operators is because she actually provides enough information to actually formulate questions - unlike the black-boxes many companies are.

So if you want to lend capital from nyan to cpa in return for holding 0-income yarr bonds you can.
If you want to further reduce nav in your mining investment company by selling new shares below NAV you can.
If you don't want to bother putting up your contractually obligated bid-wall for nyan.a you can.
If you want to claim you outperformed your sector by comparing an investment company to the performance of the worst-performing mining companies rather than to other investment companies you can.
If you want to claim that losing 40% of your nav is "protecting your investors money" as it's still worth more US$ than it was at the start (due to the exchange rate change) then you can.
etc etc etc

I'm not going to be asking any more questions or making further comment in usagi's company threads unless there's some direct benefit to me (e.g. I pick up some nyan.a below 1.0 and want the bid-wall up so I can cash out my profit) or I actually seriously consdier investing in one.

Think part of the problem is what your existing contract is covering.

Here's what it says:

"Event: In case Obsi or the company/individual he invested in doesn't pay back the invested capital this insurance will pay out. Smaller delays of the interest payments, decreases in interest payments and the fate of an individual are excluded from this deal, same as any problem with third partys. The date of the default, is the date of the first missed payment."

The problem is that Obsi' share isn't a bond - and neither he nor the company/individual (if they exist) he invests in have undertaken to ever repay the invested capital.

The most likely scenario for it going wrong is that it's a ponzi all along.  In that case Obsi would be unlikely to say "I'm keeping all your money".  Rather he'd claim that whoever he was passing through to had suffered heavy losses and that dividends would be at zero for a while.  That way he could continue to get more funds in through his other companies (none of them allow share/bondholders to ever withdraw funds) - without being labelled a scammer. (That's IF it's a ponzi).

Your contract doesn't protect against this - yet the above is exactly the scenario I (and I'm sure many others) would want protection against (or more accurately, in my case, to bet on it happening - I wouldn't actually be investing in the HRPT).

IF it's a ponzi/scam then short of him essentially saying "I'm a scammer" there's basically no way to win - and IF he's a scammer then admitting it would reduce the amount he could run with so wouldn't happen.  Your contarct would have worked for pirate - where withdrawlas of pincipal were offered.  It doesn't where there's no way provided for you to ever get your capital back anyway - and hence failure to return capital is something you've essentially agreed to anyway.

The point is that for a bit-coin mining operation (what Diablo claims to be) your revenues are produced in BTC not US$.  Each block mined produces the same number of coins irrespective of the exchange rate.

When the exchange rate changes, the cost of mining (the electricity element) also changes.

If, at the current exchange rate, the cost in electricity to generate 1 BTC is X BTC (X would be less than 1) then were the exchange rate to double (twice as many US$ per BTC) then the new cost in electricty to generate 1 BTC would be X/2 BTC.  This is a simplfication - ignoring the impact rising difficulty has.

YES - you still DO save money by having cheaper electricity.  But it's less of a saving.  If you're saving less per unit mined the time needed to reach break-even obviously also increases.

Further unless mining is inherently unprofitable (i.e. even with free electricty you couldn't make a profit) then there MUST be an elecricity price (expressed in BTC) where it's more profitable to invest in more mining gear than to invest in cheaper electricty costs. 

This is indisputable - just consider the extreme where electricty were free (or as near free as made no difference).  Hopefully you can see that at point there'd be zero value investing in cheaper power.  Now there's also the other extreme - if the electrical cost of generating 1 BTC WAS 1 BTC then there'd be no way to make a profit UNLESS you invested in (or otherwise obtained) cheaper power.

Somewhere in between is the point at which investing in cheaper electricty makes more sense than investing in additional hardware and buying the higher electricty rate. 

Now here's where you're going wrong:

1.  Nowhere in this thread have you made any effort to calculate where that cross-over point is - yet the only possible financial justification for investing in generating power rather than using the same cash to invest in more mining gear is that there's some non-trivial chance that it's actually more profitable to do.
2.  You don't seem able to grasp that the exchange-rate has a huge impact on where that crossover point is.

Let me explain point 2 for you.

Let's say we'd bought our hardware and were mining.  We'd worked out that the point at which investing in  cheaper power was better than buying more mining hardware was X BTC (X<1) to mine 1 BTC.  Your power currently costs X*1.5 BTC to mine 1 BTC - so all looks rosy.  But now the exchange rate doubles.  Suddenly the cost to mine 1 BTC has dropped to X*0.75 BTC - and we're in territory where we're now making less profit (or more loss) than if we'd just spent all the capital on mining gear.

And if the exchange rate rises further then each rise just makes even worse the loss of value gained.

All I'm trying to prove to you here is that IF you denominate the investment in BTC then exchange-rate fluctuations can have a huge impact on profitability.  I can't see why anyone would invest when you've produced no calculations or figures that address this at all.

There's even the theoretical possibility that exchange-rate fluctuation could make investing in solar-power completely unprofitable (expreseed in BTC) even if it ran for the whole 30 years life-span and all power was sold off at market rate.

 You're selling shares denominated in BTC - so the base-point for calculation of profit is "how well would investing do, compared to leaving the BTC sitting in my wallet".  Whenever you invest in something that generates product valued in US$ then the answer will ALWAYS be "that depends very much on how the exchange-rate fluctuates." 

And when you're considering investing in two different things (mining and generating power) it's not a bad idea to work out how profitable each of them is - then you may well see you could make way more money (and have less complication) just doing twice as much of one of them with the same capital.

I've only referred to mining here - not to running a data-centre.  That's because this apaprently is (or was supposed to be) a mining company.

Oops - though it doesn't change anything about the principle involved.  Originally had the costs 1/10th the size but then increased them just in case Diablo started talking about how my figures proved what a huge return the equipment gave.  Of course forgot to also amend the BTC values up by a factor of 10.

The more you post, the more obvious it becomes you really don't have any clue whatsoever.

If investors invest BTC then profit/loss needs to be measured primarily in BTC.  VERY simple example using small round numbers.  These figures ONLY demonstrate the effect exchange rate has  and have NOTHING to do with how long it would take to break even.

We'll say current exchange rate is $10=1 BTC
WEll say equipment costs $1000 (10 BTC)
We'll say your electric costs/week are $5 and your equipment reduces that to $1
So your equipment is saving you $4 = 0.4 BTC per week and is worth $1000 (10 BTC)

Now let's say at some point later the exchange rate is now $20=1 BTC
Your equipment is still worth $1000 - but that's now only 5 BTC
And you're still saving $4 per week in electic costs - but that's now only 0.2 BTC

Electricty being sold in US$ does NOT cancel out the impact of exchange-rate fluctuations on the value of the actual equipment.  It actually ADDS to the impact of exchange-rate fluctuations.

When you're talking about a mining operation that is cancelled out to some extent by the increased value of mined coins.  If you're talking about a data-centre which sells its services in US$ then the exchange rate also has huge impact on profitability (expressed in BTC).

Put very simply, even if everything else works out as good about your plan, your plan is doomed to utter and complete failure (when expressed in BTC) if BTC continues to gain strength vs the dollar.

At best your plan could be considered as shorting BTC (or at least betting that it wont rise against the dollar) - until, of course, we consider the utterly pathetic rate of return it would give even if all your optimistic expectations proved true.

I'd agree with you this extent:

If you aren't able to get a .csv file of your transactions yourself (due to being locked out of your account), nefario should generate one and send it to you.  Then you can get whoever you want to examine it and compare it to whatever nefario's auditor(s) produce.

If you're genuinely concerned about transparency then all you have to do is authorise nefario to release the .csv to all.  Your strawman about protecting the identity of others you traded with has already been blown away.

That's assuming no maintenance costs.

If the investment is in BTC then that's also assuming the BTC/US$ rate remains unchanged.  If, for example, BTC doubles in value aginst the $ in those 6 years then after the 6 years (assuming zero maintenance costs) you'd still only have made back half your initial investment in BTC.

Where what you propose really starts to fall down is if you compare it to any other investments on here - or even directly to mining.  Compare s[pending that money on power-generation to spending it on more mining power (and just buying the power) and using part of mined income to expand.  You'll find the mining makes way more profit (or less loss) whether BTC gos up. down or stays unchanged vs the us$ (only possible exception is if it devalues far less quickly AND bitcoin crashes in price).  All the solar-power does is suck away loads of the cash for a possible tiny return a long way down the line.

I don't dispute your claim that long-term investing US$ in solar power could generate some profit.  But we're talking baout investing BTC not US$ - and you need to compare it to other investment available.  Just because something could make a profit doesn't mean it's a good idea to it - if there's other options equally (or more) accessible that could make more.  Unless, of course, the decision to do it is entirely politically rather than economically driven.

Without ongoing maintenance costs your estimate of 6 years is totally unrealistic. For one thing you'd need insurance - or if someone vandalises it are the shareholders just supposed to kiss goodbye to their investment?

Yeah, misread it - the 22.5% I calculated is for 3 months not 1 week.  So your (BI's) profits in that example are whatever profit you can generate over about 7% per month (allowing for compounding) on funds available to you.

The problem then becomes making that 7% - essentially the vast majority of shares/bonds on here are either:

1.  Mining bonds/shares - good luck making 7% a month on those.
2.  Companies investing in shares - most of these invest in 1., meaning you pay them a fee.  Try finding some of these who have made ANY real profit over any significant period.
3.  The high-risk stuff that people want to insure.
4.  Comapnies with an undisclosed business plan (typically making unsecured loans that then get defaulted on or investing in type 3. shares and defaulting when the investment gos South).  The track record of these is far from good.

There's just not much else around to invest in - and pretty much nothing that you can safely rely on to make retuirns of over 7% per month.  There's some ASIC-based shares (mining or development) which may be good bets - but they all have risks of a serious downside, which you can't afford to take.

Try to list even half a dozen shares that will pretty reliably give you 7%+ per month AND have the liquidity you need.

Now look at it from an investor's point of view.  If these reliable investment vehicles are available to you paying out 7%+ per month then they're also available to us.  So for an investment in you to be worthwhile, you need to have potential to be paying US out more than that 7%+ per month (not initially, obviously, but longer-term).  SO we'd want to see figures from you showing what volume you needed (based on the capital requested) to deliver good returns.

I believe usagi is likely correct that there's no real market for it.  There's plenty of market of people who would want to "insure" against default - but those with the confidence to take the other side of the bet will just invest directly. 

The only real exception to that would be the actual issuer of P IF it was just a simple scam/ponzi - then they could reduce their payouts by "insuring" them right up until before they pulled the plug on it.  Maybe that's where your market is.

Well we'll have to agree to disagree here.  When 2 parties to an agreement have a dispute there's absolutely no way one of those parties can also be the judge.

It's fine talk about things being "handled amongst ourselves" - but when that fails someone else HAS to make the final decison.

Nefario's post above this makes exactly the same point (amongst others).  I'm not going to waste my time and clutter this thread any more by repeatedly saying the same thing which you either ignore, don't understand or just firmly disagree with.

You're missing the fundamental point.

WHO interprets and enforces the contract between yourself and your shareholders?  Whoever does that has to:

1) Decide what the contract means,
2) Determine which parts of it are actually valid/enforcable,
3) Decide whether the parties to the contract are acting in good faith and which (if any) of them have broken the contract or their other responsibilities to one another,
4) Enforce it.

Without someone in that role the contract is meaningless - not worth the virtual ink on which it's written.

Given that someone has to have that role you can't then have a contract which explicitly attempts to deny that role - as the whole contract becomes unenforcable sue to noone being entitled to enforce it (you'd in effect be saying that X arbitrates disputes over the contract - but only so long as they rule in your favour).

Your shareholders have to trust that you'll deal with them fairly and with some degree of competence: otherwise they shouldn't have invested with you.

But similarly, when using GLBSE, you have to trust that nefario will deal with YOU fairly and with some degree of competence when it comes to disgareements over the contract between you/your shareholders or other aspects of your dealings via his exchange: otherwise you shouldn't be using it.

You appear to have some view that everyone should trust you, but you should trust noone else - and that in any dispiute between you and your shareholders YOU should be judge, jury and executioner.  Frankly, as a potential investor, that scares me.  A lot.