FFTY

I'm all about profit sharing, so if things work out better than expected my goal isn't to just pay at the contractual rates. Up to 75% of all profit will be going back to investors in the form of increased interest payments and higher buyback rates. The reason I say "Up to" is because I can't guarantee paying back investors more than the minimum I've established in my contracts. And of course I won't know for sure until ASICs are in my hand and mining away
The remainder of any profits is put back into my company for use in future investment opportunities. As bitcoin grows, the idea is that these opportunities will begin to flourish as well.

Anyway, yes the idea was to be "non-gamblely". Mining has been a pretty stable (and decently low risk if it's executed correctly) investment for a while, so I figured I'd take it a step further by providing company transparency and legal agreements binding myself to my investors.

No worries, always happy to help!


Could be bought back at 1.005, equivalent to 0.5% over the initial purchase value. If things go sour, my goal is to ensure that investors still have confidence that they will see their money back by paying them back out of my own pocket.

The only other time I would be forced to purchase back Notes at 1.005 would be in the case of contractual Amendments, where investors have a choice of whether or not they would like to accept the changes to the agreement. In the event that they reject the changes and describe why, the fund will purchase back their Notes at the 0.5% increase above Par.

Other than that, you can't just choose to sell your Notes back to me on a whim at 1.005. There always has to be a valid reason for me to purchase the Notes back..not only is it costing the Fund money, but it's costing me money as well. That's usually why people put their Notes up on the open market...it's a trade-off between liquidity and profit.



At this point I'd say no, only because there are over 9000 [no pun intended] Notes on the open market being sold at the normal IPO price, 1.0 BTC. These Notes are still owned by the fund, thus purchasing them is equivalent to helping the business grow as if it still had the IPO open.

In reality, I should have followed Lightbox's advice (the owner / operator of Havelock) and started off with an offering of 500 Notes (with more than one IPO as the Notes were sold) instead of the max 10,000 that I was shooting for.
Ah well, live and learn!



The absolutely worst-case scenario for an investor would be continual scheduling readjustments as a result of ASIC manufacturer fabrication and shipping delays, compounded later when the hardware doesn't perform as advertised. I will pay back all investors. I'm 100% contractually obligated to do so. It's just a matter of the timeframe.

That said, there is still the other scenario: Difficulty and Hash Rate absolutely skyrocket past all of our wildest expectations once ASICs are out.

I've created my buyback schedule based on a difficulty of around 50 million, or about 400TH/s for a network rate...nearly double what I predicted in my October Analysis which took into account all the preorder data I had on hand and some basic statistics of the pools (though I'm due for another analysis of the mining pools). The more likely scenario is that the rate will start off around 200TH/s and increase to 500TH/s over the course of 12 months or so. From what I've noticed over the past 6 months or so is that it usually averages about 7-10 months to break even (for both high end GPUs and FPGAs) at the various difficulties we had (before the reward half...after the split it doubled proportionately). I've been planning around such a timeframe.

Let's see if I can help in the scenario


The initial IPO ended at the end of December, leading to people purchasing off the market (at market price) instead. The remaining shares from the IPO that were not purchased were also switched over to the market, which is why you'll see some 9000 shares at 1.0BTC each.  

EDIT: The price "0.92" is just the last purchased price..meaning someone wanted some quick cash, so they sold off a few of their Notes at .92 BTC apiece, which gathers attention faster than if you were to offer it at 1.0 or 1.005.


If I wasn't able to sell enough to make any proper purchases, then I was contractually obligated to purchase back any Notes at a rate 1.005x the Par Value (the IPO price of 1.0 BTC per Note). We have, however, raised more than enough bitcoins for a number Singles, which is good news.

Units within my fund are more or less 18 month Notes...meaning investors making purchases from November 1st during the initial offering have accepted an 18 month holding (November 1st, 2012 to April 30th, 2014), which is a pretty typical time span for a Note (compared to a Bond or Bill).

Interest payments are paid each month per Note at 1% until June 2013, where it increases to 2%. During the next 11 months after that, it increases to 4% and then to 6% in the final month (April).

Principal purchases start June 1st, 2013 at a rate of 1.10 BTC per Note. I'm currently scheduled to purchase back 25% of Notes per month, which means if you hold 50 Notes by June, I purchase back 13 in June (leaving you 37 left), then 10 in July (leaving 27), so on and so forth. It will reach the point where I'll be purchasing back 1 Note per month until April when I purchase back everyone's Notes at the final purchase price of 1.20 BTC per Note.

You can use this Google Docs sheet to help calculate your ROI: https://docs.google.com/spreadsheet/ccc?key=0AhnW49twNMNbdDZYUWpjNW93NVJVM0ZKQ3kxVDc2b2c



As Niko pointed out, purchasing IPO shares is what helps to grow the fund. This is because you're purchasing Notes from me, instead of from other investors on the open market (which is just trading between investors and not the fund).
If you're looking to grow the fund, then my recommendation would be to purchases the Notes at 1.0 BTC from the open market since (as I noted above) leftover shares were dumped to the market after the IPO closed.

Not quite overpriced. 0.0048 is the largest wall on MPEx with 335k shares being sold...anything under that is sub 5,000 shares. At 0.48BTC a share, we're purchasing essentially everything under the .0048 mark and some of the .0048 (which is why the offering price is now .48 BTC per 100 shares).

Ha! Politicians are classier than that...I always imagine them as the monocle dude meme as they deposit their exorbitant checks into their offshore accounts..just like you would do in their situation!

Exactly my thoughts as well given the ferocity of the 2006 law banning the online gambling. Though I'm sure Bitcoin will once again be cast in a negative light in this scenario, it will also have a chance to show how awesome it is to the public in other areas.

I suppose as long as it keeps getting out to the public that Bitcoin can be taken seriously...

Havelock has been around for a bit, but they've only started opening up their doors to hosting new funds in October 2012 or so. I was their first fund besides their own to be featured (and it's not easy to get hosted..you have to prove you're a good investment first).

You can probably message Lightbox here on the forums, he's the owner of Havelock and runs the exchange.


For now. We helped run up the price after switching the passthru to a public offering instead of private

Ha! Couldn't you just take the 1 mil, buy 35 pounds of gold with it and spend the rest on a top quality hooker..err "Escort"?

Hey guys, just came across this article on Ars Technica..
Bitcoin Based Gambling to Expand in 2013

I'm impartial to the expansion of gambling and the use of Bitcoin with it, but I do think this will ultimately lead to an increased USD/BTC price overall (obviously not immediately). Thoughts?

Precisely. Imagine what you [generic use of you, not directed toward creativex haha] would do in their shoes. You'd have all these good ideas and well intentions, and then someone tosses you a million bucks to help them pass a law to help, say, regulate the internet. Now think about what you would do with a million dollars...does any of it involve making the United States better for everyone, or are your ideas mainly focused on yourself, friends and family?

Naturally since this is the internet, you can pretend to be someone else and say you're going to donate every penny to some charity...but the reality is that you're probably focusing on your well-being first.

First off, you're pretty correct so far in your assumptions. Gornick's and Deprived's responses are generally pretty spot on as well. I'll see if I can add anything to the conversation..


It really depends on two things (from my perspective): 1) the type of company or fund, and 2) effective management.
As I'm sure you've seen, there are tons of different mining securities out there. Some have been going for a while, still generating revenue and paying investors proportionally...others may have overestimated their aspirations and ended up going under because they weren't able to pay their investors properly...or their idea was terrible to begin with because they didn't think it through.


Yes and No. Based on what I've seen, certain mining companies tend to favor the operator more so than the investors, specifically those where you purchase MH/s or GH/s per share. Mining companies that issue bonds are generally in the same boat, given investors money is being pooled to purchase equipment which will (in the end) still generate money for the operator after the bonds are paid back. Personally, I've never been quite comfortable with either model given it puts the operator above everyone else. That's why I've created a Note (essentially a smaller bond) fund to purchase equipment, which will then be rolled into stock for my investment company after the note holders are paid back. This way all investors benefit from a pooling of their bitcoins, instead of just the operator (me).

As for "Passthru" funds..I've got mixed feelings about them as well. Pooling everyone's money for one particular company amplifies risk since there isn't any diversification. However, with the right company being invested in, payouts can be quite nice.




Satoshi Dice has been a pretty decent investment in the past..as I consider most casino based games given the house always has the advantage (so statistically it always makes money).

As for why people make more companies that fail...I don't know. It's a mix of "I hope I can do this right this time around" from the owner's perspective, and "Gosh, they're back again so must know how to do things right this time" from the investors perspective. I'm all for the mantra "Try, try again", but only if you're working with your own money and not someone else's.

Could be, or maybe they all went through the same manufacturer in China. It is an interesting observation though, especially when all three companies started their marketing and designs at different times.

In other words, join the party known as "Become just like the United States"

Ha, I know right?

Though as drastic as it sounds, I wonder if it actually would make a difference in the grand scheme of things.

"I could end the deficit in 5 minutes. [...] You just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election." -Warren Buffett


I'm always impressed with the dumb people that are elected to office. But then I realize how many dumb people there are in the U.S. and things start to make sense again...

Unfortunately I don't think I've seen anyone's Ignore button get so dark so quickly...so I guess that's new record there Bonker


Anyway, yay for getting answers 

I noticed I'm only on the first list once...seems to be missing a bit of data