Wrong. You forget that hosting fees do not drop with difficulty and therefore dividends will drop a lot faster than difficulty grows (and reach zero in just a few months).

I would assume so, even though Im not seeing much happening here:

http://pool.petamine.co:9332/static/

At least not yet.

Lets assume he does. Lets say he cuts his fees to 50 BTC per week for some reason. Then what? After the next adjustment due in less than 2 days, you would mine  240 BTC per week  - 50 BTC fee / 2 =  95  BTC
95 / 77492 = 0,001225 BTC/ share and that will still be the highest dividend you'll ever see again. Even assuming my hopelessly optimistic <7% per week network growth, the sum of all divs would not exceed 0.015 BTC and if you include naively optimistic reinvestment, ~0.017.

If you assume the fee constant, and apply slightly less idiotic low difficulty growth assumptions, this is what it reality looks more like:



Difficulty assumptions used for the above:



Whoever is still buying this at > 0.02 BTC/share is plain delusional and whoever is buying this above 0.01 at the very least extremely optimistic.

And who would pay for that? Santa ?Even if he does, it will do nothing more than compensate for one single difficulty adjustment or stretch dividends by ~10 days.  It changes nothing fundamentally and of course, its not gonna happen.

Like what.. Cryptx announce it will hardfork bitcoin and ignore difficulty from now on so investors can be made whole in crytpxcoins?

But hey, not all is lost, next difficulty adjustment estimate is sliding again. Right now its "only" 16,840,874,267 (+25.09%). At that difficulty you will mine 240 BTC per week, good for (240-73) /2 = 83.5 BTC per week or 0,001077 per share. Thats way up from my previous 0,001000 estimate (even if still way below what I used in my simulations)

Incoming? Lol, it hasnt even properly burst yet.

Cryptx investor checks latest dividend:

Looks like 110.7 BTC for dividends or 0,00141 per share.  

https://blockchain.info/address/1PETAmNrgdzx3FwzJPNuhx18JVKdGtwWt6

Next week looks like ~80-90BTC or ~0,0011 per share. Free fall speed would be too mild a term.

I consider Bitcoin itself a risky but potentially very lucrative investment that makes sense.

Im not aware of any bitcoin investments that Id call good. And that should surprise no one, there are millions of bitcoins in wallets with owners looking to grow their stash and willing to invest in anything that moves, and there is precious little available for the public to invest in. That alone drives up prices, creates bubbles, with no way to short sell them to deflate the bubbles and should make you think twice.

Here  is the kicker though, no matter how wise everyone would invest, the bitcoin economy does not create more bitcoins, other than the ones that are mined, and those are mined anyhow. So it should be clear that on average, no one wins. The overall gain is in the increase of the value of the bitcoins themselves.  Add to that the fact that a large portion of these "investment opportunities" are plain scams, and therefore profitable for the scammer, and its mathematical certainty that the average investor will make a BTC denominated loss. This is very different from the fiat economy, where new money is actually created through good investments, and the loss is the  devaluation of the currency for everyone who keeps theirs under their mattress.

TL:DR: invest your fiat in whatever fiat denominated asset you think makes sense or invest in bitcoins that you keep in cold storage. Trying to do both by investing in bitcoin securities, generally is stupid. Just ask yourself: where would your BTC denominated profit come from? Who is paying for it? Unlike fiat, bitcoins can not be created from thin air and your profit is not gonna come from my cold wallet either.

I am getting lots of questions about scryptx. The simple reality is that I am not following the alt coin scene at all, so I do not have an informed opinion.  
In general the same principles will apply, but given how new scrypt asic market is, I cant say there wont be opportunities at some point, and saving coins to wait for such an opportunity makes sense, even if I doubt there will be one or that cryptx will find it. The value of those alt coins themselves is another topic I wont get in to here, other than saying Id think twice to spend BTC to buy an altcoin revenue source.

Anyway, scryptx may be a bad investment, but at least its not a mathematically certain disaster like petamine is.

Not hosted. That price doesnt include the skyhigh hosting fees (70+ BTC per week) . It doesnt include the ~540BTC  loan which means  this security only pays out half of its mining revenue, the other half goes to pay off the loan, quite possibly forever.  So its more like $3.2 per GH and that price excludes mandatory and excessive hosting fees. One hell of deal  

I can not take credit for that. No more than I can take credit for Pirate's ponzi collapse or usagi's implosion. Difficulty and delusion is all thats "destroying" peta. Most I can take credit for is opening some eyes. But judging by a share price that still hovers at least 3-5x above any reasonable return expectation, Im not even very successful  in that regard. But where I fail, have no doubt the network itself will succeed. Cant imagine panic not setting in once the upcoming difficulty adjustment hits the dividends in  ~2 weeks

Sure Jimmy, whatever you say. In your world even cryptx achieved 100% ROI.

Yeah like all Bitmine customers, all Hashfast customers, all BFL customers, all AMT customers, all BlackArrow customers, all Cointerra customers,.. VMC, ... etc.  even KnC customers seem to forget their batch 1 preorder costed like 70 BTC. There may have been some miners, like bitmain customers  maybe some Bitfury's, but those are exceptions and they made tiny profits (if they have cheap electricity). The *vast* majority of asic miners paying retail prices have made a BTC denominated loss throughout all of bitcoin asic history. If you're going to argue that point, dont bother, enjoy your fantasy world.

ITs real simple. If you have an investment that yields less than 100%, even 99%, and you reinvest your earnings over and over in the same vehicle,  your ROI will eventually approach zero. The math isnt that hard really

There is no historic data to refute this claim, its pure and simple logic. And it does generally apply to all of bitcoin asic history. The one thing that prevents some people from seening that is the fact bitcoin appreciated >1000x in a few years. So even someone who preordered a BFL miner for 100BTC and ended up mining 20 BTC will often think he won, because he made a dollar denominated profit. And many have reinvested those 20 BTC in Monarchs and will end up mining 5 or less BTC. Reinvestment for the win.

No contradiction whatsoever. For the next ~3 months or potentially forever, here wont be a spare satoshi available for (re)investments from the current mining revenue at the current dividend split ratio.  That cryptx may "re"-invest with new funds from investors or by taking what little dividend potential is left to investors, is no contradiction, its just further proof that the concept does not and can not work.   If it did work, dividends would grow and/or there would be plenty room for reinvestment. Instead you have neither;  you have rapidly evaporating dividends that will amount to  barely ~20% of the total investment and still no reinvestments without fresh capital (or eating the remaining capital).


Ah yes, the magical white rabbit that will turn 8 BTC/TH hardware profitable somehow. Im holding my breath. Most people here are totally deluded about how "good" his previous idea's were and blind to their results. Werent you all cheering when he "offered" that loan? What good is that doing now? Its eating half your dividends and leaving even less on the table than there would have been otherwise.  Its only helping cryptx reap in more fees.


I already did a bazillion times. Like here:
https://bitcointalk.org/index.php?topic=310783.msg7347749#msg7347749

and here:

https://bitcointalk.org/index.php?topic=310783.msg7411291#msg7411291

So it looks increasingly likely the loan will in fact, never get paid off.  Cryptx isnt going to like that, he doesnt want to lose money on this himself, so here is a prediction: friday he will suggest further witholding dividends to accelerate paying off the loan  "speed up "reinvestments". That way he gets his money back, he gets to pocket another round of hardware purchase kickbacks and increases his exuberant hosting fees.  Clueless shareholders will rejoice even though the final result of this is that they  will not even come close to  the best case return I projected.

Alternatively, although it ammounts to pretty much the same: cryptx will announce a new security and offer existing shareholders a paid "upgrade". Just another way to get more BTC from the suckers since his mining gear is rapidly running out of steam.

All mining operations that pay market price for their hardware, yes. Mining operations that pay marginal production cost, or very close to it, thats quite a different story. Their overall costs per TH are at least 5x lower. Most of those would be quite profitable. But they are not sharing their profits, they are only sharing their costs by selling (overpriced) hardware.



I shared some initial thoughts here:
https://bitcointalk.org/index.php?topic=310783.msg7376002#msg7376002

Havent looked more closely than that yet.

Dont expect ppl here to check math.



peta will go to the moon even if it requires reinventing arithmetic.

BTW, you how do you get to 337 BTC for this friday? At current difficulty, which has been in effect since last week, 1150TH would yield 300.7 BTC, and some crumbs from namecoins.

No its full reality for the next ~3 months. If the current network growth keeps up, its gonna be reality for longer, potentially for forever.

But if/when the loan gets paid back and the reinvestment fund starts building up, the light blue line is the reinvestment fund. The best thing that could happen is that it gets paid out as dividend, then it would yield 100%, which I added to get the orange curve.

If it actually gets reinvested, it will fare like ALL previous mining securities throughout all of bitcoin history, including PETA so far,  and yield somewhere between 20 and 50% at a later date. If you want to believe it will yield 200%, be my guest, double the reinvestment fund from 0.004 per share and you get an additional 0.004 btc NAV per share. THat dramatically changes the outlook, doesnt it?  No, it doesnt, its noise. And a fantasy. If something comes along that would yield >100%, there will be opportunities to invest directly in to that, without the petamine debt boatanker attached to it.

BTW, when looking at that particular chart, try not to forget the absurdity of the network gwroth assumption its based on . Its a ridiculous best case scenario and already completely out of date by now:
Estimated Next Difficulty:   17,358,835,633 (+28.94%)

The difficulty after that will be far more than +7% even if not a single new miner gets deployed.