I was looking into buying a S9, my calculation told me that it would never earn a profit due to rising difficulty and my electricity cost. i know some one who "mined" before using the b.mine half of this product. Since owning b.mine requires no electricity I was comparing their hash rates per btc and found that it is cheaper to buy hashrate from the purchase of b.exch than it is to buy from antminer(they are almost the same price per hashrate only antminers need electricity). I understand how the fund works and was just pointing out that it is cheaper to buy b.exch and "mine" with the b.mine side than it is to buy an antminer and would probably yield more btc by the time the fund runs out vs when the electricity cost exceeds profits from the S9. However you are right since both will probably result in a loss of overall btc maybe i should buy b.exch and just keep the b.sell side. But now this will require more calculations and thought as to the true value of a b.sell contract. Thanks for taking the time to respond and keep me thinking.

Oh and what happens to the cost of the b.exch after the halving? will it still continue to lose value equal to the last dividend payout of of b.mine per day or will there be a sudden drop in price?

When I run a Bitcoin mining profitability calculator on the s9 at my electricity cost with a conservative 6.5% difficulty increase it tells me that it will never earn a roi. It looks as though with the current volume on b.exch, holding b.mine should earn a roi before the fund depletes. Since one share of b.exch cost about the same as buying a comparable h/s from antminer and comes with a built in hedge incase the difficulty skyrockets, it looks to be a better option. I'm not proposing that somehow buying b.exch will make you rich with a risk free investment, I'm just saying it looks like a better option than buying a antminer s9 at their current cost and at a lower cost of entry. I could invest over 3 btc for an antminer that will never earn a roi or I can put up .06 btc and hope for a return from the fund.

I don't think you are viewing my question as I mean it. I understand that it"s a derivative fund and that's it's different from mining. I'm not touting a fund; I'm looking at the pros and cons of buying a s9 or a b.exch contract. If you can buy something that pays out more btc then the equivalent costing s9 why would I buy the hardware? Why is the s9 so much? When I run a mining calculator with the s9 stats at my electricity cost it tells me I will never earn a profit. I am only projecting adjustments of 6.5%, which is conservative. Also to get started with a s9 I need to risk over 3 btc, b.exch is less than .06 btc. Why can't I buy b.exch and hold it till the fund is depleted, it looks as though by doing that I'm more likely to earn a roi, with a lower cost of entry, than I am buying a s9. I also understand that I run a risk of the fund running out of money before I get a roi but it looks to me with the current volume on that asset that it would only happen if the difficulty skyrockets, but that too would make the s9 even less profitable and at least pay me back some from the b.sell half. 

I'm serious. Why do you say it like that am I missing something obvious? Any help would be appreciated.

https://www.havelockinvestments.com/fund.php?symbol=B.EXCH
https://bitcointalk.org/index.php?topic=430137

Just crunching some numbers let me know what you guys think.

Mining with an antminer S9 vs buying B.Exch on havelock:

Antminer hashrate is 12.93 Th/s, one B.mine contract is equal to .25Th/s, so one B.mine contract is equal to 1/51.72. The S9 cost 3.05 Btc; if you divide that by 51.72 you get .05897. So that would be the bitmain equivalent cost of .25Th/s, only you don't need to buy a psu, pay pool fees, or pay the electricity cost to run the miner.
   Currently you can buy the B.exch contract for .05945 which gives you one B.mine contract and one B.sell contract meaning you are paying .00048 premium for the B.sell contract and getting the B.mine contract for a discount to bitmain when you consider the cost of electricity and set up.
    It looks as though when the block reward halving comes the fund will have just about 180 days of mining dividend in it (the threshold for the sell dividend payout). So any new purchases of the B.exch should result in a payout for the B.sell holders. Each purchase of B.exch will add .05945 to the fund if you divide that by 358 (contracts outstanding) you get a .000166 divided payout for each share of B.sell you own if difficulty stays the same. If this raises then the payout will be higher.
    In closing it looks to me that if you want to earn BTC from mining then you are better off buying B.exch then buying an antminer S9, it's cheaper when you consider pool fees and electricity, and comes with a built in hedge in case the difficulty rises.

Just crunching some numbers let me know what you guys think.

Mining with an antminer S9 vs buying B.Exch:

Antminer hashrate is 12.93 Th/s, one B.mine contract is equal to .25Th/s, so one B.mine contract is equal to 1/51.72. The S9 cost 3.05 Btc; if you divide that by 51.72 you get .05897. So that would be the bitmain equivalent cost of .25Th/s, only you don't need to buy a psu, pay pool fees, or pay the electricity cost to run the miner.
   Currently you can buy the B.exch contract for .05945 which gives you one B.mine contract and one B.sell contract meaning you are paying .00048  premium for the B.sell contract and getting the B.mine contract for a discount to bitmain when you consider the cost of electricity and set up.
    It looks as though when the block reward halving comes the fund will have just about 180 days of mining dividend in it (the threshold for the sell dividend payout). So any new purchases of the B.exch should result in a payout for the B.sell holders. Each purchase of B.exch will add .05945 to the fund if you divide that by 358 (contracts outstanding) you get a .000166 divided payout for each share of B.sell you own if difficulty stays the same. If this raises then the payout will be higher.
    In closing it looks to me that if you want to earn BTC from mining then you are better off buying B.exch then buying an antminer S9, it's cheaper when you consider pool fees and electricity, and comes with a built in hedge in case the difficulty rises.

    

    So then my dream for ASICMINER can't come true   Thank sucks. There's no way to develop a chip that would share it's hash power with the operator and ASICMINER? If someone could figure out away to do this it would not only be good for the producer of them but it would be great for the network as a whole.
     Anyway thanks for the critique guys guess i gotta put more thought into it, i just don't get how else you franchise mining? How do you think he plans on keeping his franchisees honest and paying him for running the hardware?  

     Well i dont know much about designing chips or programming software but couldn't they just make chips that only worked with a ASICMINER mining program that they wrote. That way the miner program could dedicate 95% of the hash work to one pool that paid out to ASICMINER and the other 5% would go to the person running it.

  A few days ago Friedcat gave us an update. He made a vague reference to franchising, he said he has began doing it in China and plans to expand in the near future. I'm not sure what he means by franchising but I know what I hope he means. I hope he means he will be offering hardware at a price that will undercut the competitors but will share some of the hashing power with ASICMINER. For example, if they sold hardware that was cheaper than their competitors but shared say 15% of its hashing power with ASICMINER, then they could ensure that anyone buying new hardware was buying from them. They wouldn't even need to undercut in fact,  they'd just need real products ready to ship, not vaporware/pre-orders that waste your ROI waiting in line. I also think they should release new USB block eruptors (2nd generation) for free. YES FOR FREE. Sounds crazy, I know! But not if 95% of their hashing power is going to ASICMINER.

     ASICMINER is a mining company first and foremost. They only sell hardware so they don't gain too much of the total network hashing rate. If they followed a franchising program similar to this, then they could continue selling hardware while not diluting their portion of the total network hash rate. We all know the hardest part of running a large scale mining operation is powering it, and Friedcat doesn't exactly have the cheapest electricity. Franchising in such a manor can allow ASICMINER to expand without needing to worry about powering its farm, as the operators with presumably cheaper electrical rates would be running it for him.

     I truly believe that if ASICMINER followed through with a franchising plan like the one I'm presenting then they could continue to sell hardware while maintaining 20-30% of the total network power. If their compitions fails to ship and they begin to get close to 51% they could always raise the price of their hardware, and decrease the amount it shares with ASICMINER.

     So what do you guys think? What did i miss? What do you think his franchising will entail?

Thanks for the answers guys

How many post do it need before im not a noob? my account is over 2 yrs old.

     So this sucks that I'm forced to post in the newbie section even though I've been a member over two years. Guess I should have made some posts in that time instead of just lurking. I truly hope this post is seen by Friedcat himself.

     Anyway a few days ago Friedcat gave us an update. He made a vague reference to franchising, he said he has began doing it in China and plans to expand in the near future. I'm not sure what he means by franchising but I know what I hope he means. I hope he means he will be offering hardware at a price that will undercut the competitors but will share some of the hashing power with ASICMINER. For example, if they sold hardware that was cheaper than their competitors but shared say 15% of its hashing power with ASICMINER, then they could ensure that anyone buying new hardware was buying from them. They wouldn't even need to undercut in fact,  they'd just need real products ready to ship, not vaporware/pre-orders that waste your ROI waiting in line. I also think they should release new USB block eruptors (2nd generation) for free. YES FOR FREE. Sounds crazy, I know! But not if 95% of their hashing power is going to ASICMINER.

     ASICMINER is a mining company first and foremost. They only sell hardware so they don't gain too much of the total network hashing rate. If they followed a franchising program similar to this, then they could continue selling hardware while not diluting their portion of the total network hash rate. We all know the hardest part of running a large scale mining operation is powering it, and Friedcat doesn't exactly have the cheapest electricity. Franchising in such a manor can allow ASICMINER to expand without needing to worry about powering its farm, as the operators with presumably cheaper electrical rates would be running it for him.

     I truly believe that if ASICMINER followed through with a franchising plan like the one I'm presenting then they could continue to sell hardware while maintaining 20-30% of the total network power. If their compitions fails to ship and they begin to get close to 51% they could always raise the price of their hardware, and decrease the amount it shares with ASICMINER.

    In closing I really hope this reaches Friedcat, and someone who isn't a noob can repost this to help the chances of him seeing this. Any feedback (positive or negative) on my proposal is appreciated. (If you really like what I had to say then 1LwBR7Pve9KhARQFGnHxztxSd6WutoZXh3)