Thank you for those of you who provided constructive feedback.  I was hoping for a calm discussion of how we can get BITBOND back on its feet and ensure that bondholders are receiving payouts.  Unfortunately a majority of the posts were not helpful - a combination of rants, demands, threats.  Despite this, I continue to be committed to providing options for bondholders to receive payouts.

I will contact current BITBOND bondholders directly via email with procedures for upgrading, payback/buyback options and related timelines.

Shipments for batch 2 are supposed to start March 5th.  If our orders shipped then, it would take about 5-7 business days to get here.  I'm guessing during the week of the 11th.  If that's the case, the first payout would at the end of the following week, assuming everything works as expected.

I explained the logic and believe the math is sound.  Buying ASICs will produce the highest return for bondholders over the remainder of the bond term.

However, as I am soliciting feedback on the plan forward, let me ask a question.  There are simply not enough money to repay the back payments plus future payments.  In fact there is not enough for all back payments, but it is close.   Through Feb 2, 2012 total back payments to the minority bondholders is 772.79 btc.  At $20.14 that is $15,563.99.  Would you, the minority shareholders, rather have the back payments and no future payments - essentially be bought out for the price of your back payments, or have the mining income I have outlined through 2014?  I know that there are people who wanted an Avalon ASIC in batch 2 and would be willing to buy my orders.

Let me try to answer the questions.

Camolist
From my spreadsheet you have 112 bonds, which translates to about 3 btc in unpaid payments.  If you have something constructive to add, please do so.  The majority owners are free to release their information if they choose.

usagi
I am terribly sorry about any consequences that suspension of payment has had.  What we hoped would be exceptional returns on our investment has been a loss for many people, myself included (far more than $6,000).  I know it is probably too late, but if there is anything I can do at this point to help (within my abilities) I will do so.

PsychoticBoy
As with Camolist, please let me know if you have anything constructive to add.  If I can provide back payments I will try to do so, but as there isn't a means to do that right now I cannot commit to that. 

The logic of buying Avalons for BITBOND is quite simple.  Having operated BTIBOND at a loss with very little cash left over and no one lining up to buy the hardware, I have had the option of paying back some of the payouts with no prospect of any payments in the future or buy hardware that could be used to provide payouts for the next almost two years.  The latter will result in far more being paid to bondholders as well as a restoration of some of the security's value.

If you have some constructive ideas about how we can liquidate equipment at reasonable price or otherwise gather funds to payback past payments, I am certainly open to hearing it.

Sukrim
There are 13,476 bonds held by minority bondholders.  55% have 10 or fewer bonds

I have been in ongoing discussions with the majority bondholders.  Unless there is some unavoidable legal rationale, they will receive payouts at the same time as any other bondholder.

I don't think I can release detailed financials at this point, but I can provide some general numbers.  Until the recent run-up in btc prices, we were earning about $9,000 a month from mining.  From that our monthly power bill for ~320A of 208v is $4,000.  We have been paying $2130 in rent.  Internet and other expenses is about $350 a month.  We have had no salary per se, but instead been paying the bare minimum (or less) bills of my brother and me.  We both have been working >40 hours/week to keep things running, save what we can, and liquidate surplus equipment.  Thus, in January we had about $2500 in net before paying for any food, housing, or bills for the two of us.  My personal bills for one month exceed that amount.  With the recent rise in bitcoin prices we have been able to finally pay bills and have a bit left over for buying ASICs.  Most of the ASICs money has come from selling hardware we are no longer using.

As I mention above, if the majority shareholders wish to release their information that is up to them.  Two wealthy investors own about 80,000 bonds.  The remainder is owned by a few other investors in their cohort.

You are absolutely right that I should have provided more information, more regularly.  I was reluctant to share information that I could not commit to.  The forums, and bitcoin in general, have a deep history of announcing things that they cannot deliver or later have to change, etc.  Knowing that I wasn't able to keep my commitment with BITBOND I did not want to give any details until I was sure.

I thought many times about buying back bonds.  The problem was the cost to do so.  Having virtually no cash or coins on hand, we could not afford it.  All I could do was keep running mining rigs to pay my fixed expenses and hope to get a small surplus to use to revitalize BITBOND.

Can you please elaborate on this thought about denominating in USD?  The bond was denominated in btc and any back payments are also in btc.  Unfortunately pricing for ASICs and paying for operating costs is all in USD.  As for paying power, the power costs are comparatively minute compared to today.  I will reserve some ASIC capacity to help pay for power, however the power costs should only be about $200 per month.  I am quite confident I can find that much each month.

BITBOND ASIC call for feedback

Hello BITBONDers

I am sorry for the limited updates recently.  There have been a number of things going on behind the scenes to figure out a path forward.  With a high degree of confidence I can now share with you a plan for BITBOND.

First, let me apologize deeply for the suspension of payouts.  I had very high hopes of earning good returns for everyone involved and setting the stage for future work in GPGPU computing.  I feel strongly enough about what we were doing to quit a very good job to focus on this full time and worked 12 hour days throughout the summer and fall.  We developed several proprietary technologies to do more with less including 5850’s I had manufactured in China, PCB’s and wiring systems made here in the US, and software to manage and control over 200 netbooted rigs in a custom rack system.  While we tried our best, we simply could not do everything we needed to do in the timeframe we had.  Too much had never been done before by me (sometimes by anyone) and required far more resources than we had.  We desperately tried our best to make BITBOND successful.  I apologize for our failure.

Second, I would like to clear up some confusion.  Whether it’s Avalon ASICs, GLBSE, or BITBOND there is a shocking amount of misinformation, misunderstanding, defamation, and truly bizarre ideas on the forums.  Luckily there are quite a few cool heads, though perhaps not enough to keep the tinfoil hat crowd at bay.  Here is a list of facts to help fill in the gaps.

• BITBOND started in April, 2012 and paid all payouts through the closing of GLBSE on October 5th, 2012.
• BITBOND lost about 230 btc in the GLBSE closing.
• October 5th through block reward halving on November 28, 2012, BITBOND paid out all payouts to the majority bondholders (the “85%”).
• The majority bondholders bought their BITBONDs in May, July, and August and received their bonds via GLBSE like all other bondholders.
• The majority bondholders received the same 2mh/s per bond and 105% PPS.  Everyone has the same bonds/bond terms
• To give added protection to their large investment, the majority bondholders requested detailed contracts signed and notarized.
• Due to the detailed contract terms, I was obliged to mine for them as long as possible, even when losing money
• We had been working on a plan to move to Wenatchee, WA from Tacoma, WA.  This would have cut our power bill in half and given us room to expand considerably.  We learned that the cost of installing power from Douglas County PUD would be $40,000 to $60,000.  We simply could not afford the move.  Consequently, we were limited by the power we have at our current facility.
• Meanwhile the GPUs we had custom manufactured in China had power routing issues (http://imgur.com/a/Jf3ME) that were burning out cards under heavy load.  This required rework from a PCB assembly and rework facility north of Seattle, which spanned almost two months, keeping 600 cards offline
• We had significant delays in manufacturing and producing our custom power supply system (comprised of two PCBs and wiring harnesses assembled by hand) that, combined with card power issues limited our mining output to just under 200Gh/s
• When the block reward halving occurred, BITBOND was producing just under 200Gh/s but paying out about 180Gh/s worth of payments each week.  The surplus was not enough to pay for the $4,000 per month power bills, facility rents, Internet access, or any salaries.
• We had about $3500 in reserves (IIRC) at that time.  Therefore, BITBOND could not continue to operate.  I made the decision to stop payouts to the majority bondholders until ASICs arrived
• I placed order #3431 with BFL for one mini-rig SC last year.  The majority bondholders and I determined that given BFL’s history it was too risky to pay for the order until there was evidence that BFL could produce a working ASIC at the performance levels they advertised.
• In recent discussions with BFL Josh, BFL has decided not to honor our order because it was not paid.  He has given me a timeframe of April or May for an ASIC if paid for today.  I would guess it will be at last June.
• Since block reward halving, most of our current mining revenue has gone towards fixed expenses, with a small amount left over saved for ASIC purchases
• We have explored many avenues of liquidating our GPU equipment to buy coins to pay back bondholders and/or to buy ASICs to resume BITBOND payouts.  We have not yet found a firm that is willing to buy used custom hardware.  Most of our GPUs are old enough and used enough that they are not of interest to buyers (note that we have almost 100% 58xx cards)

The plan going forward

Through several sleepless nights, we have managed to pull together enough funds and to purchase 10 x Avalon ASIC units in batch 2.  This will provide about 660 GH/s.  It is far from the 1.5 TH/s we hoped to have with the BFL mini rig, but the Avalon ASICs have been proven to exist and work.  We should also receive them much sooner than putting in a BFL order now.

I am suggesting creating a new security on Cryptostocks called BITBOND ASIC.  All current BITBOND bonds will be exchanged 1:2 for BITBOND ASIC.  The new bonds will be 2.25 Mh/s each, payable at 100% PPS.  Thus, if you have 10 BITBOND, which provides 20 Mh/s at 105% PPS, through the exchange you will receive 50 Mh/s at 100% PPS.

BITBOND will no longer be perpetual.  Instead it will continue through 2014.

Avalon batch 2 is projected to start shipping March 5th.  If that date were to hold, I would expect to receive the ASICs around March 11th.  We will need a few days to get them into our facility, tested and configured for our environment.  Payouts would begin the following week, on Saturdays as before.

I would appreciate any constructive feedback on this approach.  If there are ways that I can improve the payouts I will try, but I would like to stick to what I feel confident I can commit to at this point.

Again, my deepest apologies.

A quick update that I have sent to Cryptostocks the final load of 42 accounts that were confirmed by the January 4th deadline.  If you confirmed your holdings then you should receive your bonds in the next day or so.

More to come...

Apologies for my absence during the holidays.  More updates for you:

I received the final list of bondholders from GLBSE.  The final list included another 45 accounts.  I have sent confirmation emails to all 45.

Here are the current stats:
* All 177 accounts totaling 100,000 bonds are now in my list
* All 177 accounts have been emailed to confirm their holdings and wallet addresses
* 118 accounts are confirmed / 59 accounts unconfirmed
* 90 confirmed accounts were submitted in the first batch to Cryptostocks when BITBOND launched there
* 28 accounts have been confirmed since then
* Those 28 and any further confirmed accounts will be in a final batch sent to Cryptostocks

In order to complete the transition to Cryptostocks, the final date to confirm your account will be January 4, 2013.  On the 5th I will send the final batch of confirmed accounts to Cryptostocks to be loaded.  If we need an interim batch, I am open to that if enough people are interested.

Regarding coupon payments since GLBSE closed, 85% has been paid to the largest investors (working from largest bondholder down).  I would like to be able to pay the remaining 15% immediately, but doing so would mean canceling our ASIC pre-order and losing the pre-order slot.

I'm hoping that BITBOND's ASICs will ship by the end of January, only 4 weeks from now.  Once I receive them and have them running, I would like to offer a free upgrade high enough to pay ongoing weekly coupons plus pay the gap between GLBSE and ASIC mining in relatively short order.

I am open to other suggestions that you may have.  Please let me know.

Update:  I received another updated bondholder list from Nefario with 15 more accounts.  I have emailed those on the list.

Update on the Cryptostocks listing:  The security BITBOND has been created on Crytostocks.  I have sent them the list of confirmed accounts.  I think they are in the UK, so I'm not sure if they will get to it today or if it will be tomorrow.  I believe you'll receive an email once the bonds have been issued to your account.  I will also update the thread once they confirm the load and issuing has been completed.

Regarding dividends for the period between GLBSE closure and now, the plan is still evolving.  The vast majority of bonds (85%) are held by a small group of investors.  Their buy-in of bonds came with additional requirements and legal contracts that have required that I pay their payouts before other parties.  They have been paid all coupon payments going back to the GLBSE closure.

For those of you who constitute the remaining 15%, the earnings from GLBSE closure is not lost.  I am working on a plan that will give you a few options including payouts, buyback, and ASIC upgrade.  I hope to share details of that this weekend.

Quick update that I received an updated list from Nefario just a bit ago which included 2 additional claims.

I have emailed both of those claimants to confirm their holdings.

By Friday of last week, I had hoped to get confirmations from everyone that I emailed.  So many hadn't confirmed by that point that I've been holding off a bit longer before moving forward with the relaunch.  Many more confirmations have trickled in during the last few days.  As of today 88 of 115 accounts have been confirmed.

I think we're at a point where I can start the relaunch process.  As others confirm their holdings and if/when I get an updated investor list from nefario that I can confirm, remaining accounts will be added.  For confirmed accounts, the process will be as follows:

• Today, I'll send the list of confirmed accounts with bond holdings to Cryptostocks
• They will load the list and issue the bonds
• If you already have a Cryptostocks account with the email you used for BITBOND on GLBSE, then your bonds will be automatically added to your account
• If you do not have a Cryptostocks account, one will automatically be created for you and you will be sent an email to the one I contacted you at with further instructions

Please note that I have sent emails to all 115 accounts in the bondholder list given to me by Nefario.  Please confirm the email's information no later than Friday, 11/30.

If you did not receive an email from me, please submit your claim to GLBSE

I know everyone has been itching for more information.  A lot of things have been going on behind the curtains, and I have been hesitant to share information that was not fact.  Now that I have some factual information (and I'm back from the holiday) I can share with you where we're at.

• Nefario sent me a partial list of bondholders.  I have been waiting for an updated list, but so far I have not received it.  The initial list was about 69,000 of the 100,000 bonds sold across 115 accounts.  I have since identified about another 26k of bonds that was held by a large shareholder.  Thus the list is close to 95k of the 100k bonds.  That's good enough for me to start to move forward.
• I will contact each of you in the coming week to confirm the information I have received and your payout address.  If you do not receive an email from my by Friday, then you were not in the bondholder list I received (also be sure to check your spam folder).
• Nefario has double paid some accounts and did not receive claims for all accounts, thus the discrepancy.  To ensure that all claims are valid, please make sure your claim has been filed.  If you received a payout for more than you were owed, you'll also have to work that out with Nefario.  I will rely exclusively on Nefario's list.
• I have started the process to relist BITBOND on cryptostocks.  I hope to have that done in the next week or so.
• I have not yet finalized a plan for the payouts since GLBSE closed.  I am exploring several options including a buyback and a free upgrade with higher payouts.  Unfortunately, because of the block reward change and my GPU mining costs, regular payouts will not be able to be resumed until I receive my ASIC.

I will post more information as I know it.  Thank you for your patience.

I've been trying to get an investor list with positions for bondholders, but I have still not received anything.  A few of you have contacted me with claims for his/her bonds.  However, without a way to confirm who owns what I do not feel comfortable buying back shares or issuing new shares on a new exchange.

I will update the thread with progress if/when Nefario releases the investor information.  Meanwhile, please PM me (if you haven't already) with your outstanding bonds and I'll start a spreadsheet on Google Docs to track it.

Cryptostocks is a leading option right now.  It's relatively easy to use and could be a quick way for us to get back up and running.  I don't want to make a knee-jerk reaction, however, just to get BITBOND listed "somehwere."  Also, before I even transition to another market I need to get the investor list from Nefario (and hopefully get back coins).

Hi everyone-

GLBSE closing is unfortunate and frustrating to all of us.  That being said, I truly believe the Bitcoin community deserves a better marketplace than what Nefario was providing.  This could be an opportunity to create a far better exchange that will help to catalyze adoption and growth of Bitcoin.

That being said, I am evaluating alternatives that we can use in the interim. Even if we need to transact directly in the interim I am open to that.  As far as I am concerned, there is no change to BITBOND.  Once I can get bond ownership info, I'll proceed with weekly payouts. Until then, the payouts will be banked.  As bondholders you will receive the payouts you are entitled to.

Regarding the ASIC upgrade.  I have revised the upgrade path quite extensively (e.g. there is only a free and paid upgrade - no small, medium, mega, etc.).  I intended to release the upgrade info today (bad timing!).  If current or prospective bondholders are chomping at the bit to know the upgrade plan, I can share it.  Otherwise, I'll focus on where to take BITBOND after GLBSE.

Yes, I am in the process of revising the upgrade path based on recent information.  Once I feel comfortable with a revised plan I will circulate it for comments with investors.

Weekly payout paid.  Have a great week! 

This is a good point.  Bitbond was the second bond to go into operation and has been running consistently for almost 7 months now.  There's a lot that be said about out solvency by way of significant extra capacity, that we never had any investment with Pirate and thus had no losses from him, and that we have an exciting ASIC upgrade path.

I'll redo the original post to highlight these points.

The next few months will be quite interesting. The reward halving is only one of the major changes coming.  Given that there are three variables at work (reward, difficulty, value in fiat), it is quite difficult to have a clear sense of where things will end up.  The introduction of ASICs and upgrades to bonds will further muddy the waters.  We may only be able to determine if investors are behaving irrationally post hoc.