It seems to me that the main problem is that they are following a fixed dividend system regardless of their costs, profits, or losses.

If they had, for example, not made a single trade - even if their cost overrun estimates are correct they would still have about 500-700 BTC of capital from investors left.

I don't say that this is what they are doing - I just mean that there is no information contained in their payment of dividends (which has scaled linearly with the amount of invested capital) to suggest their ROIC or any other business metric.

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Let me put it another way. The contract has two, contradictory explanations of how dividends will be paid out. It says:


and


It is obvious - to me at least - but hopefully to anyone observing the dividend payments which of these two obligations is being observed. And it would be, I dare to suggest, neigh-impossible for both of these statements to be so consistently true at the same time.

What really boggles my mind is that if they were going to follow a set plan for the distribution of funds - regardless of their actual trading income - they would set it at a level that would not cover even half of their claimed operating costs (which one assumes they had to know before they started).

So again, I would return to the call for a balance sheet and perhaps the real numbers related to trading.

The signs indicate to me that the "profits" they have reported at each dividend period have no relationship whatsoever to any trading that has been done and are being paid out strictly based on how much capital has actually been invested in this project.

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I would love to be wrong about what the numbers seem to be suggesting, and perhaps there is a good explanation.

The actual payment of dividends for this fund tracks this "estimation" with a nearly perfect linear correlation [0.98] with the amount of invested capital in the fund at the time of the dividend payment.

This suggests to me that the dividend payment has no necessary relationship with any profit/loss realized from trading activities.

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I'm not really interested in throwing stones - and my financial exposure to this is almost non-existant - but I think an accounting of the business balance sheet and the current disposition of invested capital may be in order here.

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(Y Axis represents the growth of each to the initial recorded amount, X Axis are dividend periods)

With C:S they can perform a "Trade In" which would enable them to perform this "upgrade" to a new project without needing to perform a buy-back. The primary issue here, I imagine, is the English proficiency of the team - doing a buyback is probably a little more straightforward and they might have a better sense  of what it is they're doing.

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This would be preferable to me as well. Frankly I'm not all that convinced that selling the software is a good idea in any case - certainly not for a fixed fee / lifetime license. If its true that the system AUTOTRADE is currently profiting from would be able to accommodate another 2000 participants at varying levels - then why not just release a new tranche of shares and do the work for them (and make 20% or 40% or whatever) on those profits? Adding those shares at 0.0012 or 0.0015 or 0.002 would probably, ultimately, sell them out as well (provided the thesis that the model scales to that level is true). Note: I've edited this post. I made a suggestion based on limited research and information. After taking a bit more time analyzing this project I find far too many unanswered questions. Until such questions are answered, the best way forward for this business (if a business it even is) remains unclear.

Just to clarify - I probably missed this.

What was the disposition of the 27,000,000 units specified as 'privately held' in the prospectus?

Is this new offering diluting of the original 30M issued units - or were some of those unsold 27M shares issued into the treasury - if so, how many?

Basically - is 1 unit sold in the current offering still equal to 1/30,000,000 of the profits of the company? If so, this would be additive so long as it produced any revenue at all... if not, why not and what is the new number of total issued units?

You would only connect to the network through people to whom you have extended some amount of credit (ie people you would trust with money - be it 0.005 BTC, $500 or 50 kilos of fresh fish... whatever currency and in whatever amount you trust them to pay you back if owed to you) - likewise they are only connected to people they would trust.

Imagine there are two books - one is the BTC order book and the other is the debt record. When you buy bitcoin on the order book, you are paying with the credit granted to you by people who trust you to pay them back - all along a chain until it gets to the BTC seller. If you are owed money by your friends, you can collect it - if you owe money to their friends - they can collect it. You deal with BTC more or less anonymously (address to address) and with fiat on a friend-to-friend basis - if I'm understanding correctly.

It is easier to price in the difficulty on hand-to-hand trades of equipment - you're not dealing with static pricing from vendors. As evidenced by the most recent acquisitions (not to mention the stock-only deal for the minirig) creativex is an expert at getting the best equipment at the best price.

Personally I'm somewhat opposed to any pre-order investments. I'd rather see bM put funds to work on altcoins than see us pay for anything that can't ship or be picked up immediately. It seems to me insane, at this point, to assume anything less than that difficulty continues to rise at an ever increasing rate. Obviously such things are impossible to maintain indefinitely - I only mean to say that it seems safer to assume that until the difficulty finally flattens out.

By that time I estimate that it will be impossible for hardware vendors to make a profit selling hardware. Even with extreme BTCUSD growth, if the machine cannot produce more coins in its life than the buyer could purchase with the same investment of fiat then the machine cannot be sold at that price - it must be sold cheaper... and given the flood of new manufacturing entrants and the hard limit on how much total BTC can be mined per difficulty period it seems to me inevitable that the mining manufacturing industry is getting ready for an epic crash.

Also: anyone who hasn't yet received their BFL and paid for it via paypal should start the refund process. Bitcoin-buyers are SOL but they'll be better off if the fiat buyers get out of line. Fiat buyers shouldn't be getting out as a favor to BTC buyers of course, but because unless they ordered last summer they're never going to get the machine delivered within the window of profitability. BTC buyers have already lost so much to the exchange rate that they're screwed no matter what.

The goal of bM, again in my opinion, needs to be to keep a growth rate of our on-hand hashing power equal to or superior to the growth rate of network difficulty - and the only reasonable way to do that is through the purchase of in-hand units that can be shipped or picked up immediately and for which creativex can negotiate on price.

As long as we can somewhat keep pace with difficulty we'll stay in a strong position as the market continues to develop.

Can you go into a bit more detail on the 'secondary location' where you're housing the new Avalons?

PMBs are absolutely not the way to go. We will always get better price performance from owned hardware. PMBs are for people who don't have their own hardware manager - which we do.

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I think it might be worth considering hedging our current hardware and any future orders with Difficulty Futures and/or DMS.SELLING shares - which I'd be happy to discuss with you (creativex) if you're interested at all.

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I'd suggest bM be nimble enough to act with purpose if, for example, the 1st and 2nd Gen ASICMiner blades are priced competitively - having actual hardware hashing is more valuable than any pre-order.

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Disclosure: I've recently liquidated the balance of my bM position that isn't currently leveraged. I consider myself likely to re-establish the position in the near future.

The real question is how long basic can maintain a growth rate in excess of difficulty growth - and if difficulty growth will allow the investments past and future to reach lifetime positive yield. I think there's real risk in mining that just one or two new entrants could do serious damage to the profitability of already hashing hardware (let alone their now hardware).

Dcx is interesting. I've been tracking similar information privately for a while. For an index to be useful some information on the criteria need to be known. Failing to include MPOE, for example, strikes me as seriously suspect. It has multiples of the market cap of most of the others in your index.

Just for fun (as mining profitability calculators are not by any means the word of god, as it were)


The most expensive mining.thegenesisblock.com thinks you should be able to sell BFL minirig for is:  BTC429.941

This would yield, they surmise, a lifetime profit of BTC0.000616

The "O" futures are for Odd months, not even ones.

If you own mining units / orders for mining units / shares in mining bonds / shares in mining farms then the higher the future difficulty, the less you will earn from your units/shares/bonds/etc - so you hedge this investment by purchasing mining futures - this will only protect you, however, if the difficulty rises higher than the price you paid for the futures contract. You can also purchase a futures contract simply as a speculator - if you feel the difficulty reflected in the price of the contract is lower than what will be reached by the settlement date.

You sell a futures contract when you believe that mining difficulty will not rise above the current price of the futures contract, or above the price you can get for a futures contract.

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Take the September contract (the current -O issue).

If you believe that
Then this is akin to saying that there will be approximately 5.47 difficulty adjustments between now and 18 September 2013 (25% growth per period = 7.5 days per period = 41 days (til 9/18) / 7.5days and that difficulty on 9/18/2013 will be approximately 114,113,665 as of the fifth of those adjustments (do I have you right? difficulty will increase by 25% each cycle?).

Based on this model, you should definitely buy the futures contracts at any price up to BTC0.01, as they will automatically settle at BTC0.01 per contract early (on or around 14 September 2013) - if I have your model correct - both to hedge your mining investment and also because your model says there's a solid 10-20% ROI available on the market price of these futures (currently in the 0.008 - 0.009 range)

When does this auction end?

Do I take that to mean you'd wait for the October deliveries? How do the various delivery periods/costs fit into your difficulty projections?

I personally value mining companies on two points, primarily...

• Dividend growth / difficulty growth
• Management

Over the last 30 days...

• Difficulty has gone up ~75.8%
• bASIC-MINING dividend has gone up 262.25%

The stock performance and dividend growth, all while maintaining a significantly strong cash position... speaks volumes about the management's commitment to shareholder return. I like that creativex didn't just spend the cash on chips or more pre-orders. Investments in in-hand machines only have proven to be an excellent avenue for growth.

Quantifying our excellent asset manager:

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TAT.VIRTUALMINE prices 1MH/s @ BTC0.002986


This yields approximately BTC44.79 in additional asset value from creativex's optimizations

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This is an improvement of 1.62% from the pre-optimized hashrate.

Estimated daily generation prior to optimization: BTC14.436413 (BTC0.00028872 / share)
Estimated daily generation with optimization: BTC14.670571 (BTC0.00029341 / share)


These are just rough estimates for fun to distract me momentarily from monumentally boring work-task.

Seeing as you're not a CFA or at least have made no claim to being an otherwise qualified investment manager or securities analyst... I'm not entirely sure what this information is meant to elucidate. I'm not saying that fiat qualifications can or should be required to manage investments in cryptomarkets. If your profession is at all pertinent to this asset, I'd be curious to know how.

Based on current bids, everyone who has bid BTC0.001 or greater will receive 71.14% of their order.