Yeah, a 5x increase and afaik, thats only for gigamining.
But if you trade in the BFL hardware, you get a 20x increase in GH/$.

Op mijn laptop duurde het bijna 24u vooraleer bitcoin client up to date was na deze een maand of zo niet gebruikt te hebben. Zorg ook dat je ruim voldoende vrije schijfruimte hebt

BFL offers 100% refund on their fpgas if you "upgrade" to asics. Does your bond?
And mind, I think its bonkers to buy an FPGA today even if you want to trade it in. You can guess what that makes me think of buying perpetual mining bonds that cost even more.

Then you should speculate on btc value instead of betting the wrong way on mining difficulty.


Here is the thing though: no one in their right minds would order a BFL single today if he didnt intend to trade it in for ASICs.
No one.

A bank has a claim on your house. You have zero claim on (say) GigaVPS' mining equipment. You might want to think twice about buying bonds on GLBSE from people that are not verified (in so far thats any help), but whether they own a large farm or not does nothing to protect your investment. If you fear he is going to scam you, he can do just as well with or without owning x TH. In fact, you might be better served buying bonds from someone who has no farm, but puts up bitcoins in escrow than someone owning a large farm that might break, get stolen or whatever.

As for synthetic bonds lowering the price; it shouldnt. If it does, then you paid too much for yours. The price should reflect expected future mining earnings, nothing else. I might offer 1 trillion terrahash in mining bonds, but unless Im crazy,  I wont sell them at a price I dont expect to make a profit; nor should you buy them at any other price. More "supply" (or demand for that matter),  in this case would only serve price discovery.

You could even go a step further and claim buying "real" mining bonds will lower your bond value, because that would result in more hashing power and therefore, higher difficulty. Synthetic bonds dont have this side effect .

Why is it a scam as long as he sticks to his contractual obligations? What do you care how much, if any, mining power the issuer of the bond has? It has no impact on your yields or bond value.

You call it scam, but in essence, you just described  a perpetual mining bond (even if its one thats not backed by any mining power, but thats largely irrelevant. I think Meni does it like this? ).  As long as you meet your obligations, its not a scam, its just making an almost certain profit off clueless investors that dont understand mining market dynamics.

Who,  besides GigaVPS himself,  has shares in Gigamining?

They are NOT SHARES. Creating extra bonds should have virtually zero  impact on their price.  The only reason these bonds lose value is diminishing coupon payments caused by increasing difficulty. Well, that, and perhaps some people waking up and smelling the coffee, and selling to cut  their losses.


And a better "investment" it is. Ill take a ~1% per year loss over a >30% per year loss any day .


Yes, I agree, they are currently still way overpriced. Now gigamining is a special cause  because it has an ASIC upgrade path. Its something giga didnt have to do, and he is offering one deal for free, which would boost the price, even though the upgrade will only add insult to injury IMO.

So lets look at a bond without freebee upgrade path, and keep in mind Ive warned for this months ago, but my stand is that they are still overpriced today, so even if they had made a profit so far, that wouldnt disprove my point, the bubble is still firmly inflated. You can call me out in 6 or 12 month if was wrong.

Bitbond. IPOd at 0.6 BTC,  currently valued at 0.36 after earning 0.15 in coupons. Close, but no cigar
YAMBC. IPO'd at 0.35 BTC, currently valued at 0.126 after earning 0.067 in coupons. Ouch.
Puremining, not sure what IPO price was, but seems like 0.5. Currently valued at 0.1501 after earning 0.084. Double ouch.
DMC. IPO at 1BTC, currently valued at 0.31 after yielding 0.026. Triple ouch.

Admittedly the latter doesnt really belong in the list as its supposedly a share, not a bond, even though DMC  only owns bonds and pays coupons as if its a bond.


Just copy paste the dividend payout table in oo calc and sum it.


I intended to:
https://bitcointalk.org/index.php?topic=88496.0

But Benitio and someone else promised me an easier solution, I havent seen it yet tho :/.


Meh. I dont see what the difference is between a mining ponzi and a miner just running off with your coins. Wether or not he has the hashrate to back up his bonds is of little importance.

So what? You dont own shares in a mining company, you own bonds. Does it matter what gigavps pays for electricity or his hardware?  Does it matter whether he mines on GPUs, FPGAs, or a solar powered desktop calculator? Does it even matter how many GH he has? Not a damn thing.  Anyone could issue such bonds, even without any mining hardware backing it.  You seem to confuse owning shares in a mining company with owning fixed MH bonds.  All the bond issuer owes you is a perpetually diminishing coupon payment thats function of difficulty. Nothing else.

Now, lets do the math. Gigamining bonds currently sell for 1.11 BTC for 5MH (down from 1.5BTC IIRC).  Im not picking on gigavps btw,, its just the biggest one out there. Coupon payments on that would currently be 0.075 BTC per month. Even at constant difficulty, that means ~0.3 BTC until December when block reward halves .  From then on  it would be 0.038 BTC per month, or another 24 months or so before coupon payments would exceed the cost of the bond.  That is, if somehow difficulty wouldnt go up one tiny bit.  

Even if difficulty just followed Moore's law it would outpace your coupon payments with ease. In reality asics  will cause a  10 fold increase at the very least and your 24 months will become 240 months.  Small problem, in 24 months block reward will halve again. And again and again. Not in a 1000 years will these bond earn more in coupons than they costs.


I have no doubt! At current prices I will gladly sell you perpetual mining bonds too.  The investor risk is not in the mining company going bust, its in the mining revenue per MH collapsing, and that is pretty much a given. Miners who sold you those bonds are not idiots, most of them saw precisely what was coming. Even without the looming shadow of ASICs,  moore's law applied to GPU and FPGAs alone made these things very risky investments from day 1.  And it didnt take a lot of genius to anticipate ASICs at some point in the future.

You really have to keep bitcoin price out of it. Bonds are denominated in btc and pay out in btc. What btc does compared to fiat is irrelevant.  Otherwise I can offer you a negative interest rate on your BTC and you could still  "make money".
Difficulty is what matters:


People still buying bonds at current prices either have no clue, or they must expect the above trend to reverse pretty dramatically somehow, assume ASICs will never materialise and pretend reward halving will not happen.

Ahm. No.
Bitcoin price has very little to do with it. Mining difficulty has everything to do with it at its been going up by almost 10% per month, and thats before the ASICs and before reward halving.  It doesnt take a lot of genius to predict what will happen with those bond yields, and therefore, their value.

I can see the OP's point; however, the issue is not that mining bonds are fundamentally flawed. There is nothing wrong with offloading the mining difficulty risk to investors. Its just that whoever is buying doesnt seem to understand the mining market and are bidding these up to ridiculously high prices.

Part of the reason why they do that may be due to not understanding the instrument and confusing it with a more traditional bonds, staring themselves blind on the high yields. Ive seen investors ask questions like "why did coupon payments go down this month" while difficulty is skyrocketing. Part of it may be ignorance about the impact reward halving and ASICs will have. An ignorance thats still shared even by many miners Im afraid.

Anyway, I dont think it hurts to point out these issues like the OP does because clearly, investors didnt and dont really understand what they are buying. But I also dont think it makes sense to blame the issuers or the instrument itself for such investor myopy. If these bonds are "turds" right now, its only because they cost far too much.

Ive said this months ago, and Im saying it now. I wish I could easily short these bonds.

May I suggest switching to proportional ?
 

No your percentage would just be the percentage of your hashrate to the pool. The profit lays in the fact you on average spend more shares in short (profitable) rounds than long rounds. So you win more on the short rounds than you lose on the long rounds. for non stop miners, assuming the pool isnt hopped, that would even out.

No, you want to hop to pools (with a flawed payout system like proportional) when they are early in their round. Think of it like this; if you would switch to a proportional pool that is on a 10M share round, the best you can hope for at that point is ~20% PPS if they hit a block shortly after. It could be a lot worse even if that block takes even longer. So youd have to be nuts to hop there. What poolhoppers do is avoid these pools and instead try to mine  when the pool just started a new round. Now you could get unlucky and the round might last 10M shares, not that you would mine there that long, but you could hit the jackpot as well on short rounds.  Overall you spend relatively more shares on short than long rounds and its nicely profitable. Or so I hear .

If you want details, here is a good read:
https://bitcoil.co.il/pool_analysis.pdf

Bitminter uses PPLNS payout system which can not be hopped profitably. Well, you can always get lucky, but it would just be that, luck. Payout is determined by future luck, not past luck like proportional pools. If you cant predict the future, then in the long run there is nothing to gain or lose from hopping it.

Anyone with the right skills can create a .deb package that would make installing bitcoin a single (well, double) click affair via ubuntu software center. I dont really understand why that isnt done yet, I guess someone just has to do it. Thiago, dont you know how to do this?

But to get it in to the repositories, so that is doesnt need a download (and would be updated via update-manager with 3rd party repo)  is something else entirely, Im not sure what the process is to get software in there, but for sure it would need some active maintainers at the very least.

I agree that a single click .deb for ubuntu would be highly desirable. The fact that there isnt one, isnt ubuntu's fault, its just that no one has made a bitcoin package for ubuntu.

That said, it cant have been that hard to find out how to install from PPA.
If you go to bitcoin.org official website, in the download section click "ubuntu" you go straight to Matt's PPA page. If you dont know how to use a PPA (which is certainly understandable for a new ubuntu user) there is the "read about installing" right in front of you which guides you through the steps.

Is it a bit intimidating? Yeah, at least for someone new to linux, Im sure it is. But its not exactly mission impossible either.

Anyway, Id still like to see a .deb.

Im saying you cant build a datacenter and profit from it (nor me if it makes you feel better),  because you lack the funds, the expertise and even basic common sense. Its hard enough for people who have all three.


Which market? Mining market? Mining is a zero sum game. Of course you can enter it, but very few people, if any, will be able to profit from it in the asic era, even with asics. And anyone entering it with (non upgradable) FPGAs at this hour is pretty much guaranteed to be throwing his money away. I also dont see why it would need more competition, chances are there will be way too many miners for not enough mining revenue.


Im saying its not free power.


Like I said, you lack basic common sense. Do you really not comprehend that their payout is less than their value depreciation ? And that this will get infinitely worse if asics arrive?

Solar energy is about as free as electricity from a diesel generator with a full fuel tank. If you really think its cheaper, invest in solar energy instead of bitcoins.


Difficulty has more than doubled this year. Thats (mostly) pre mini rigs and pre ASICs. You are probably looking at one order of magnitude difficulty increase in the next 12 months and perhaps as much as two orders  in the next 24. And yes, that is a monumental concern when you havent earned back either your FPGA farm, "datacenter" or your "free" electricity investments, as your break even point just shifted from, say very optimistically,  24 months, to never ever.


Thank you cpt obvious.