That's a lot of waffle to totally miss the point.

Either the changes DO alter what investors get or they don't.

If you're saying they get extra but it doesn't come from you then where is it coming from?  Or was there some cash that would be sent to a null address in the old contract?  The surplus is used to cover costs that YOU have responsibility for - so anything coming from that IS coming from you indirectly (as YOU have to cover the costs - so if less gos to that from the surplus then more has to go to it from you).

And it isn't legitimate to have a motion where the content of the motion is hosted elsewhere and so able to be amended during or even after the vote.  The contract to be voted on should be posted in the motion OR cryptographically signed and the hash posted in the motion.

There's nothing wrong with the concept of "reasonable" - nor did I claim there was.  What was missing (and remains so) is the second part necessary - the definition of who determines whether it is reasonable.

Publishing well in advance still doesn't define who determines whether something is reasonable - nor do the examples you presented.  Specific examples are of no use when trying to define a general process.

You'd probably agree with me that 1+1=2 is true.
You'd likely also agree that 1+1=3 is NOT true.

That, however, gets us nowhere nearer to defining how resolution of whether any statement in general were true would be achieved.  If there's some logcially robust system for determining whether a change  could be reasonably considered in the interest of investors then please reference it as being the basis on which that will be determined.

What you're maybe missing here is the fundamental difference in nature between stocks and bonds/contracts.  With stocks it is usually the case that the interests of managers and investors are generally in agreement - tha the company do well and is profitable.  Bonds and contracts are a very different beast - being an exchange of commitments - where any change in the interest of one party will frequently be to the detriment of the other.  With stocks the shared intent is, in general, to increase the size of a pool of assets/revenue streams  to which all parties have some entitlement or interest.  With bonds/contracts there's no such common interest - rather all changes will increase or decrease one party's obligation the other which is almost inevitably favourable for one party and unfavourable for the other.

More specifically, your hardware will generate some number of coins over its lifetime.  Some portion of those will go to your investors - and the rest to you.  It's therefore the case that any change in what investors will receive is going to have an opposite impact on what you receive (this is obviously a simplification).  It's thus impossible for you make decisions on their behalf - as you have an explicit conflict of interest.  That's why contracts for bonds/contracts should (in general) never be allowed to be changed other than unanimously as there's no shared interest between the issuer and the counter-parties.

Now there ARE exceptions to the above - areas where the amount to be shared out can potentially be increased for example.  The contract shouldn't be covering those areas in the first place - so, for example, your contract (rightly) doesn't define which pools you'll mine on as there IS a shared interest there for you pick whichever gives the most income.  In general anything which changes the basis on which payments to investors is calculated will have a conflict of interest - where it would be entirely inappropriate for unilateral changes to be allowed.

FWIW your clarification of how you intended to change from a PMB to a contract (where you guaranteed PMB minimum payments) definitely IS a change in favour of investors.  But why are you having the vote before you've finalised the new contract?  Get it all done at once THEN have the vote.

Part of the problem - which you detailed above - is that historically contracts on BTC-TC and Bitfunder have always tended to include a lot of operational stuff that really shouldn't be in the contract at all.  So in practice what ends up in the "contract" section tends to include things that are a contract (and thus totally unchangable) and other things which are operational issues - that should be able to be modified either following a vote OR unilaterally.  The problem then, of course, is determining which is which.

I messed up on that score myself with LTC-ATF (though not too badly) and included in the contract things which shouldn't have been there (at that time when issuing securities there weren't all the other sections that now exist).  As a result whenever I make changes to that contract now I don't vote myself until others have voted - and will vote against if any significant opposition (10% or more).  I also offer a buy-back at MORE than would be paid were the closure clause to be executed (with the surplus over NAV/U paid by myself).

That's on a fund - which should have more room for manouver than a bond or contract.  Bonds and contracts should be got right first time - there's no real scope for changing them once started as they're by nature individual rather than collective and debt/obligation rather than equity.

First to address the last setence.  BFAssets is NOT the majority share-holder.  The majority of shares are still treasury ones and unsold.

The changes are NOT clearly in the interests of investors - some parts are NOT in the investors' interests and other parts are open to debate.

First there's the weasel words of "the reasonably perceived benefit of contract holders".  Reasonably perceived by whom?  If by contract holders then why are you trying to allow it unilaterally - when there's voting system that allows factual determination of what the perception of contract holders is.  If you mean "reasonably perceived" by yourself then it's meaningless - as it gives you free reign to do anything you want so long as you claim it's "reasonably perceived" by yourself.

In any event, any change that tries to make the bonds/contracts into some kind of communal ownership asset - where some holders can vote to change the rights of others - should NOT be allowed for anything claimed to be a bond.  It removes the certainty of expectation that holding a bond should deliver.

The second part appears to be attempting to remove your obligation to pay the equivalent of 1 MH/s of mining output and instead replace it with the actual output of your hardware.  That removes all guarantee of payment - and changes the entire nature of payouts from being PMB-like to be equivalent to owning shares : just with a much larger management cut than things openly admitting to be shares charge.

A 1.1% transaction fee bonus in no way compensates for stales, orphans, loss of net connection, equipment breakdown etc.

Even in your article you appear confused over this yourself - on the one hand saying invnestors get what's mined and on the other saying (in big type) :

"Note: During the first six months, while the hardware is still under warranty, the surplus mining power  in BFMines is paid out as a bonus to contract holders, meaning that for half a year, contract holders get more dividends than guaranteed."

What's guaranteed if it becomes a contract?  What is the absolute minimum investors will get paid per dividend?  There isn't one.

The third change is the worst of the lot - it would be fine with one change.

As your proposal stands, if the original hardware doesn't show up you could then order from someone else - and evenn if it didn't arrive for another year investors would be locked in at the same price and receive minimal return when hardware finally arrived.  If you want the flexibility to use other hardware then a fair change would be to allow other hardware to back the bonds/contracts so long as it was operational by the end of September (the originally defined target time-scale).  That removes the loophole in your proposed change where you can keep changing proposed hardware sources until either hardware prices are tiny OR market price is so low you can just buy back per the contract and pocket a fat profit without ever having mined anything.

When you enter a contract with someone NEITHER party has the right to unilaterally change the contract.  These aren't shares in a company - where there's shared ownership - they're contracts/bonds.  Removal of voting rights only means investors have no say in actions you're allowed to do WITHIN the contract - it in no way, shape or form, allows you alter the contract itself.

If you genuninely believe you have a RIGHT to change the contract terms however you see fit then you really badly need to be removed from any participation in issuing securities.  Totally removed.

Theoretically the only way you could change the contract AT ALL would be if every single bond-holder agreed - that's because the nature of them is that each is a seperate contract between you and the holder.  In practice, so long as the change is clearly in the favour of investors, I'd expect burnside to allow it if a vote passes (though any investor who objects should be refunded the full price they paid - as noone should EVER be forced to accept a change in a contract).

Don't start going all usagi on us and claiming contracts can be unilaterally amended or that a controlling interest can act against the interests of minority investors by virtue of having more shares.

Sorry - I don't/can't give estimates until I know for sure what the difficulty will change to.  If I get it wrong and people make decisions based on my estimate then I'd likely get complaints.

The size of the dividend depends a LOT on the new difficulty value (and the new dividend amount).  A change of .0000001 in the new dividend would make a change of .00004 in the dividend paid - 400 times the amount.

Once the difficulty has actually changed then I'll give an estimate as soon as I'm around - as at that point it won't really change a lot.  Until then you have to work it out yourself : ANYONE can work it out just as easily and accurately as me (other than any major gains from investment - which there haven't been since today's report).

If the increase occurs before midnight (GMT) then you receive it the next day.
If it occurs on or after midnight (GMT) then you don't get it for another day.

In practice this time that means if it occurs at or before 23:59:59 GMT 10th July then the SELLING dividend would be on the 11th.
If it occurs after 23:59:59 GMT 10th July then the SELLING dividend would be on the 12th.

At present it's very hard to tell whether it will occur before or after that midnight - that depends mainly on netwrok luck between now and then (and whether new hashing power is added or existing power ceases to run).

Sold   308
Swapped   0
Total   308
Price   0.048997
Total   15.091076
Less Fee   15.06089385
Man Fee   0.451826815

BTC Balance (BTC-TC)   1263.773183
12600 LTC-ATF.B1    126.00000000
Coinlenders CD    201.37222714
Just-Dice Balance    107.94373293
TOTAL ASSETS    1,699.08914276
   
Outstanding MINING   35743
Outstanding SELLING   35743
Outstanding PURCHASE   639
Effective Units   36382
   
Block reward   25
Difficulty   21,335,329
Hashes per MINING   5000000
   
Daily Dividend    0.00011786
50 days (Min Liquid)    0.00589288
100 days (Forced Close)    0.01178577
365 days (Buyback)    0.04301806
405 days (IPO)    0.04773236
400 days (Post SELLING div)    0.04714308
410 days (Pre SELLING div)    0.04832165
   
NAV Post MINING Div    1,694.80124430
NAV/U Post MINING Div    0.04658351
Days Dividend Post Div   395.25
SELLING Dividend    -         
NAV Post SELLING Div    1,694.80124430
NAV/U Post Selling Div    0.04658351
PURCHASE selling price    0.04891269
PURCHASE buy-back price    0.04565184

Yeah fixed that before you posted.

The bid for 2000 at 0.0099 is the fund's own - that's the guaranteed buy-back offered, so it'll be available as soon as any are sold.

This has now been approved on BTC-TC.

I'll be aiming to release the initial batch of 5,000 at 14:00 tomorrow (just over 24 hours from now).  That MAY be delayed as I made a minor error and only created the bond with 1k shares (I must have not saved the change after I increased it).  Will need to get burnside to change that (issuers can't increase shares) - but hopefully that'll be done by tomorrow.

Face value is 0.01.  I strongly recommend NOT bidding any significant amount over that.

He most definitely IS gaining something by not investing it - a lack of CP risk and a lack of risk of loss through bad investments.  Perhaps more importantly he's gaining the trust of investors that the cash isn't going to vanish due to some cause allegedly (or actually) beyond his control.

Even depositing that cash in some exchange or online wallet is a risk that, as an investor, I wouldn't want to accept without some extra financial benefit.

I honestly wasn't going to bother as initially there'll only be 50 BTC worth sold.  But as you asked, and as we don't need the cash urgently, I'll give 24 hours notice for the first batch.  Thereafter I'll try to give notice where it can be scheduled - but when bonds are sold for a short-term need (typically some new opportunity where I don't want to pull cash away from existing ones) then they'll just be sold/placed without announcement.

It just seems unlikely to me that with such a low rate of return people are going to outbid one another on it.

The yes was to the second point - that it would be included in the coming dividend.  Once it's certain a dividend will be paid even without any profits then the profits DO effectively go into the dividend (i.e. the dividend is larger by the amount of profits than it would have been had there been no profit).

But in principle you're certainly correct - if difficulty hasn't risen by enough to generate a dividend even with profits added then profits WON'T be dividended out to SELLING (and could end up going to MINING if difficulty continued not to rise by much).

And yes - when calculating the dividend no distinction is made between pre-existing capital and that generated from investments/markup on PURCHASE.  It's all part and parcel of NAV - with whether SELLING dividends are paid (and the size of them if so) determined purely on how NAV compares to the daily dividend for MINING.

Has he actually ever said that 6100 BTC was ALL of the pool?  I'd assumed (maybe incorrectly) that was only part of it based on my recollection of some long-distant post in which he discussed their BR management.

Interestingly (to me at least) by the most normal definition DMS.Mining actually looks LESS volatile than real PMBs (or TAT.VM) - the price tends to be more stable and have a tighter spread.  Initially there was some volatility - from where i'm sat it looked like someone was trying to do a King Canute and pump the price but lacked the funds to do so when opposed by everyone else thinking it was too high.  They then had to sell off at a loss - which is what SHOULD happen to people who try to pump something above its value.

The betting against point is the other interesting one.  Attempting to criticise DMS.Mining because people can bet against it totally misses the point.  In any other PMB (where the hardware is already paid for) the issuer is betting against it - they believe they're better off selling the shares than not selling them.  DMS.Mining just removes the monopoly (and thus artificial price constraint) on betting against - it doesn't introduce some new factor that would otherwise not exist.

Main argument I've seen from him is that it has more price volatility - by which I assume he means its price is more likely to drop to realistic levels because people who don't already hold shares can push it down.  But that's irrelevant to actual investors - who buy for the dividends (which are unaffected by its price) - and in fact is beneficial for them as if they believe the price is already good then if it gets pushed lower they get to buy more at an absolute bargain price.

Where MINING isn't so good is for those who want to rely on the price not dropping as dividends pay out (logically with difficulty increasing the price of MINING should fall - slower than dividends pay if it's profitable, faster if it's unprofitable).  But those are speculators not investors - they're gambling on market behaviour rather than relying on the underlying value of the asset.

And logically if the price of MINING falls and that of other PMBS doesn't then there's no actual extra value being retained in the other PMBs - just a longer window in which the current holders can pass on the over-priced element (be it less profit or more loss) to new ones.  Eventually some poor sod is going to lose out by the amount by which the PMB was over-priced compared to MINING - it just changes who from the current owner to the next.  The investment remains equally as bad (compared to a cheaper MINING) for ALL owners of it added to together - it just distributes the loss (or reduced profit) from overpaying less equitably.

I was actually thinking of that when I made my own post at the same time.  The people who stole CPA's funds are exactly the sort of people who would likely have been chosen as trustees back then.

And it turned out they were all loaning one another money and cooperating/colluding in covering up their mutual exposure to Pirate.  You can pretty safely assume that if it were possible without being detected they'd have sent J-Ds money to Pirate as well.

I'm not at all clear what it is you think secret-sharers would be signing/decoding.  There's no function that I'm aware of in Bitcoin for a wallet to have n of m signing (transactions can - but that's not relevant).  So what is it you think they control?  The whole process becomes very unwieldy rapidly with new secrets having to be generated after EVERY movement of funds (because there's no way to apply an ongoing n of m signature requirement to a wallet).

And there's practical difficulties unrealted to technical aspects :

Who are the trustees?  If you looked back a year or so and picked the most trusted individuals you'd fund a lot have now scammed/defaulted.

How do they determine a withdrawal request from dooglus is legitimate?  Do they have contact details for all account holders?  Do they have to publish a request for anyone else claiming the amount and wait a few days before allowing large withdrawals (in case it's a dooglus sock-puppet pretending to own someone else's large deposit)?  After how much of the BR has been paid out do they stop authorising withdrawals without a full audit?  

If the house takes large losses does J-D have to close down for a while whilst the trustees collectively check it isn't dooglus manipulating results to syphon off cash?

The moment you appoint people specifically to prevent him stealing they MUST then always assume he's acting in bad faith until proof of good faith is provided - or they become toothless watchdogs and he can still steal most of the funds by jumping through a few hoops making the whole exercise pointless other than for PR.

Who pays for their time and effort - it in no way benefits dooglus (if he intends to steal obviously it doesn't, if he doesn't intend to steal then he's accepting a non-zero risk for no benefit).

In theory dooglus COULD act to satisfy your concerns without risk to him.  Way to do it would be simply to allow maximum risk to be up to 100%.  Then you could all micro-manage your exposure via API or via some third-party you decided to trust.

So if you accepted that with trustees dooglus should only have immediate access to 10% of funds you could approximate that by only depositing 10% of your own funds with a 10% risk on them - you'd then be risking and gaining the same as if he held all your funds at 1% (assuming all bets were spread evenly across all risked capital).

And if you didn't want to micro-manage it yourself you could indulge your own personal level of paranoia to any extent you chose right through to:

Forming an investment group with other like-minded individuals
Hiring a lawyer who employed staff on your behalf to manage the funds
Instructing them only to send topups if N of M of your group provided crytographic proof along with a photo of them holding the current day's newspaper plus their passport and with a shoe on their head.

Then he could only steal 10% of your money.  But no doubt the complaints would still continue that he could steal other people's and that those not bothering with these precautions were making more profit.  And there's the root of it - I believe the current risk (and the reduction of risk if a solution was put in place) doesn't justify the cost (and the new risk).  You and some others apparently do.  So come up with a proposal where you bear the cost and get the benefits you believe exist (and the risks I believe exist) and we have something to discuss.

An alternative to the above would be for dooglus to allow accounts that had a notional balance higher than their actual balance - with the account-holder having to top up before they got more action if their actual sent funds were exhausted.  In practice that works very much like allowing increased risk - it just accounts for it differently.  It does fulfil the same (to me) major objective - that the effort and cost of maintaining partial exposure is placed firmly on those demanding it.

More amusing is that people still buy other PMBs/similar for even more than MINING.

Remember that there's no increase in difficulty that makes MINING (or any PMB) worthless - people just have to find the right price to buy at.  Is the current price a fair one?  That's for people to decide themselves - in general those buying think it is and those selling think it isn't (and some in both categories probably don't think at all - they just click buttons effectively at random and hope they end up with profit).

There's problems with that sort of approach.

Assume there's X keys and Y are needed to unlock.

As Y gets closer to X it becomes increasingly difficult to get enough people to gain access when funds need moving.
As Y becomes further away from X the likelihood of theft increases.

It's additionally made risky because, depending on implementation, it could be impossible to determine who had conducted a theft - i.e. you'd know at least Y of the X holders were involved but not which ones (as any Y of X could unlock).  Any solution which involves the possibility of anonymous theft MUST be discounted - as it removes one of the (maybe THE) prime disincentives to stealing in the first place.

Where you run into a problem with that is that in order to remove anonymity, all signings/signatures have to be public - which then begins to add an entirely different set of problems/risks.  For a one-time use scenario it could be fine - it doesn't work so well when withdrawals could occur frequently.

Now imagine that somehow it's all set up and working.  Then someone posts a message saying "I'm a key-holder - please contact XXX@YYY.COM if you're also one so we can cooperate."

What do you do?  Is it real?  Is it a hoax?  Is it a prank?  Has that increased your perception of risk?  What if they then post saying "we only need 1 more keyholder to get rich?"  Would you feel more comfortable?  Or would you feel as though you were in far more danger than if dooglus had just looked after it all in the first place?  I mean you'd know that logically it was probably a hoax - but would you not be tempted to withdraw funds just in case?  Theoretically it could be a keyholder who was NOT intending to steal - but was either (stupidly) trying to place a trap for dishonest ones OR was also an investor and was trying to drive other investors out to increase their profits.  There's a whole raft of reason why people would WANT to spread FUD - and the nature of things is that they'd be likely to succeed because of the way in which such a scheme HAS to work.

Honestly it's a nightmare - both in terms of logistics and in terms of actually delivering improved security and confidence.