Indeed...there are many workable solutions. So, again, this is become a non issue. Which brings me back to my prior questions for Labrat:

What is up with the 150TH order?

What is the current status of the resources Labrat has been working on? Were any bridges closed or burned?

Is Labrat committed to success?

You might ask why I ask about his commitment. But it stems from seeing how few answers Labrat provides, and how unsatisfying many answers are to the important questions. So, indeed, asking if he is committed to success and not just dragging it around is important to know. Just answering 'yes' may not be that satisfying, but it will at least be something in the right direction.

When Labrat answers these satisfactorily, I think he will do a lot to calm this situation down. These questions are very obvious one's that need to be addressed. And they shoudl be addressable by Labrat unless he lost the bitcoins. That's why I called them the elephant in the room above.

Yes. That is interesting (thanks Flashman). The only concern that pops out to me is what to do if/when hardware is sold to liquidate assets. Or how about the idea I proposed before with LRM acting more as a hosting service? Both have similar attributes, however, acting as a host where LRM manages the farm at least allows for liquidated assets to be returned to actual investors.

Don't forget to answer the most obvious question, the elephant in the room: What's up with the 150TH+ of hardware that was on order?
Also, is there any change in your relationship with the hardware sources you were working on? And finally, are you committed to LRM succeeding?

My guess is that Labrat is trying to avoid defining anything as actual bonds or shares. Doing so may require certain requirements be fulfilled. From the beginning, the term "bond" was only used for lack of better term. Even in some of my oldest posts I would put bonds in quotes. And there's probably a reason LR didn't call these shares. Anyway, if you noticed, LR isn't saying bonds anymore, he's calling them 'contracts'. There could easily be a good reason behind this... I simply don't think this is all that serious anymore, or at least if it is serious, I do think that a solution is probably somewhere to be found.

For example, why not rewrite the "contract" or simply redefine LRM as a hosting company of our hardware with Labrat acting as manager. Or find an asset protection specialist and see if moving everything into a trust could free up more options.

So, because I think a solution is achievable and I'm going to assume Labrat actually wants LRM to be successful, I now think the status of new hardware (and future hardware) is more important than this restructuring of the btc distribution schema.

Labrat.

See this post and reply please.

https://bitcointalk.org/index.php?topic=251423.msg5600207#msg5600207

I'm not sure how you did the math. But the basis of how much Labrat bought GH for is not as important as how much it can be sold for.
Current examples:

CEX.IO market shows 1 GH selling for ~BTC0.02
https://cex.io

Dave is leasing 1 GH for BTC0.04
https://megabigpower.com/shop/index.php?route=product/product&product_id=68

Thanks for addressing this, even if it was minimal. Because even that little kinda makes sense already, but I will wait for you to clarify. By the way, one other way this can be configured is to revamp and call yourself a hosting service. That way, ALL problems of dealing with contracts, bonds or shares are solved.

So, I think the most important thing going on here isn't what is a share or bond or a contract. Because something can be figured out to keep the dividends fair as expected.
The tripling of "bonds" or if you want to call them "contracts" resolves it, for now.

But what really seems the most important issue, is what is up with the 156TH you had planned to put online this month. You haven't said that that is any different, so, I expect it will go live sometime this month...That is what really seems to matters right now, and also the potential in view for new hardware purchases.

And then, when the 156TH goes live, what will you do with the payout schema? Send out 7 bonds/contracts for each of the 3 bonds/contracts that were given for original single bond/contracts?

Also, is the 1PH by year end still an easy target?

Labrat.

I apologize if I was ever coming off as too intense. Maybe, I'm not. But please clarify & update soon... let us know you are committed to succeeding with LRM and to being fair according to the spirit of the original agreement. Being fair to the spirit of the agreement means that it doesn't matter how you structure the percentage people invested, or if you call that percentage invested as bonds or chicken salad, as long as people are fairly compensated in dividends, that their overall dividends grow proportionately with the company, and that the bonds (or chicken salad) can be bought and sold in whatever units they exist.

I think it would be a workable solution too. But it would be clumsy when a fixed percentage (based on all issued bonds) should be just as good. I fail to see what legal issues could come from this.

If Labrat liquidated, and I'm not saying he should, then ~180TH/60,000bonds = approx. 3+GH/bond; +  most of the other 25% of mined coins in the mean time; + the BFL hardware funds.

He can sell the in-hand hardware for $400 (~BTC0.67) per 25GH - based on this: https://megabigpower.com/shop/index.php?route=product/category&path=68
Being slightly used shouldn't matter, since he can ship immediately.

So, let's round down a bit and say each bond could be compensated with BTC.06 ... That would be a ~60% loss. Maybe a ~50% loss if you count the dividends paid since inception.

But I don't want to get ahead of myself. I'd still rather see LRM succeed, and in a fair way!

Bondholders getting stuffed is out of the question. A lawsuit would be a near certainty.

Labrat.

Here is a very simple solution:

Step 1. Write up a new "agreement" that is more clear, so that investors are fairly and proportionately compensated with LRM growth. Bonds should represent a percentage based on all bonds.

Step 2. Allow for people to confirm that they want the new agreement. Anyone silent on the issue, you can leave in the old structure, whatever that means. Just be prepared for legal recourse of people sticking with the old agreement and feeling screwed if you withhold dividends that would come from LRM growth.

...or some reasonable variation of this.

Yeah, clumsy, but a very simple solution. If you want to call the mining bonds a fixed hash rate, for now, make it 1,000,000 PH. Done! And yes, it is THAT easy.
...or...
But a better solution is to call it a fixed PERCENTAGE based on total issued bonds, where bonds issued may vary. That is how it should have been structured from day one.

It really shouldn't be that complicated.

I don't like the tone of how it sounds equivocal like when a boyfriend or girlfriend wants to break up. Instead, what I'd like to hear from Labrat is more confidence and that he's committed to going the distance with LRM... and with seeing a way through to solve this supposed "legal concern". There's really no clear reason what-so-ever that he can't solve this supposed problem.

Imagine if Microsoft said to shareholders. "Dear Investors, the dividends we are paying you is variable. Legal stuff - new state and federal laws we aren't too sure about - it's complicated. So, anyway, we have to cap your dividends to only a percentage of earnings generated from legacy software DOS and Windows 3.1.... Latest software resulting from company growth won't contribute to your dividends anymore, since that will cause your dividends to vary. Thanks for your money."

Sure, not an exact analogy. But the notion that a company would take investors money for a decaying return and decaying share value is ridiculous.

Why isn't the answer to that question this easy:
"I'll be putting that hardware online and continue to pay out the proportionate percentage of mining that that hardware can generate for bond holders...even if it means issuing out even more bonds to allow for this."?

Looking more carefully, it seems that the "legal concerns" and their current "solution" mean that LRM would have to issue out more bonds for every 100MH of future improvement in total hash rate. Again, that would still be a very clumsy solution, imo. And Zach did mention in his update that LRM is " seeking to maintain its current status as a leader in the Bitcoin community". He can't take from investors expected growth and make that claim, that much is clear. Besides, that would be a case for a major lawsuit. Bitcoin has established itself to have value and has much more widespread attention now. So, a legal recourse would seem much easier to follow through with now as compared to last year. But I'll try to hold back until we get some much needed clarity on this, and hopefully very soon.

Let me ask.

Is there any over reaction of emotions going on on my part or others?

Is this the end of LRM?

Talk to me goose... or geese.

Are you saying Labrat is going to cap investors return? We might need to know the name of Labrat's lawyer soon. No joke.

The timing of this news is VERY odd and suspect.

1.Zach said he knew about this for a couple months, BUT just a month ago he was talking about adding 156TH to LRM hashrate.
... That doesn't sound like a person that had legal concerns brewing. At least not a responsible person.
2. The legal issues stated are not cited, and are trivial at best - especially compared to how companies already pay dividends. Also, Zach admitted no certainty on the legal reference.
...Had Zach actually been contemplating this for two months, he should know the legal basis by heart and able to cite which specific new federal and state laws are an issue.
3. The proximity of the news to Zach's recent position as Coinseed CTO and the deals Coinseed leave reasons for one to be extremely suspect.
...Obvious question are: Was LRM becoming too much baggage for Coinseed? Was it a concern of Kauffman that LRM would grow under benefits of the umbrella of his own mining operation?

How things play out could cause things to turn very very ugly. If Zach is Coinseed, then it may turn out that Coinseed is a risky or toxic investment.

Why are you guys talking about liquidating hardware? Why can't this work out? It seems to me that Zach and his lawyer made a decision not based on any certainty of what to do.
As such, what he is proposing is not necessarily the way it will proceed. If it is, then he'll have to issue new bonds for each bond every time the total hashrate goes up 100MH per bond. Which seem ridiculous way of doing something that should be understood as a percentage of mining, and not a fixed hashrate. Labrat said from the start that bond hashrate equivalents would only increase - translation: 100MH was never a cap per bond - it was a minimal based on percentage of growth in mining.

If I'm not mistaken, the FINCEN report that we spoke of last indicated this is not an issue.

Here is why what you wrote is false. And why you need a new lawyer.

Any supposed issue about "variable payouts" based on company performance is refuted by the fact that most companies ALREADY pay dividend based on their varying performance/growth. And each unit of ownership that receives dividends is based on a percentage of that unit per all units issued. That is exactly what each bond represents. Is paying dividends based on performance against federal or state laws? Clearly not.

Nobody that paid a percentage into this expected a "bond" to stop at 100MH. That was NEVER the expectation, and if you claim it was then you need to read the original posts about LRM. We aren't that stupid. And if your lawyer wrote it up differently, then you need to ask him how you can avoid being sued for documenting on your website and these forums how hashrates would not stop at 100MH.

The spirit of the matter(i.e the understood agreement) is this: The TRUE value of a bond was a fixed percentage of mining yields (not hashrate!), based on all issued bonds at any one time, and a fixed percentage is NOT VARIABLE. What ends up being mined may vary, but that is true if you fixed a bond at 100MH/bond instead of fixing it at ~1/50,000th of the 75% allotted for investors.

Cutting people off from their due percentage is a setup for a lawsuit, and I'm pretty sure a majority here are willing to go all the way with a lawsuit. Especially, after all the anger built up from all the scamming going on.

Your lawyer (who advised you from the beginning!) should have known exactly how this was going to work. And nobody signed a statement saying it was only going to be 100MH. If he's changing his story now,  then all I can say is that this smells like a crap story that needs investigation. And you might need to seek better legal counsel, because this guy is going to get you sued big time.

I hate to say it, but it seems like this is the first phases of allowing LRM to fail. And ifso it would seem to have something to do with Coinseed and some new hardware opportunities.
percentage.