BitTontine is a new investment plan open to all members of BitCoinTalk. It follows the same mechanics as historical tontines, but updates them to the modern age.
An introductionHow a tontine works is best described by this short summary taken from Wikipedia:
A tontine is an investment plan for raising capital, devised in the 17th century and relatively widespread in the 18th and 19th. It combines features of a group annuity and a lottery. Each subscriber pays an agreed sum into the fund, and thereafter receives an annuity. As members die, their shares devolve to the other participants, and so the value of each annuity increases. On the death of the last member, the scheme is wound up. In a variant, which has provided the plot device for most fictional versions, on the death of the penultimate member the capital passes to the last survivor.BitTontine differs from traditional tontines in a number of ways.
* Most notably, instead of running for the duration of a lifetime, it only runs for a set duration. (On the scale of weeks/months).
* Rather than waiting for members in a pool to die, there are a set number of weekly 'payment deadlines'. Such a deadline is a date and timeframe (example: 2nd march, 10:00 - 10:05 PM). All members of the pool must contact BitTontine via personal message within this set timeframe, otherwise they forfeit their continued participation. Anyone who responds within the timeframe is given a weekly 'annuity'.
* Unlike traditional tontines, except for a pre-determined minimum buy-in, the initial investment can be any amount of BTC. The weekly pay-out depends in part on the amount of BTC initially invested.
* Instead of the funds going to a 'final survivor', there can be multiple winners. Because a tontine runs for a set period of time, several people may remain who all win.
An exampleAlice, Bob, Caroline and Dennis all enter a 1000 BTC tontine. These are their initial investments:
| Alice | 200 BTC |
| Bob | 250 BTC |
| Caroline | 300 BTC |
| Dennis | 250 BTC |
The first payment deadline draws near, and everyone manages to send in their notification at the right time. The interest on the pool is 1%, and as a result, every person gets their fair share of the 10 BTC profit. Alice gets 2, Bob gets 2.5, Caroline gets 3, and Dennis 2.5.
Another week goes by and everyone sends in their notification again. Except Alice, who forgets to do so.Only Bob, Caroline and Dennis get a payout on the 1% interest. (Bob: (250/800)*10 BTC, Caroline: (300/800)*10 BTC, Dennis: (250/800)*10 BTC).
This process repeats itself several weeks, and the final deadline draws near. Only Bob and Caroline send in the notification in time, and the entire pool of 1000 BTC is split amongst them according to their stake in active shares. Bob gets (250/550)*1000 BTC, and Caroline gets (300/550)*1000 BTC.
QuestionsQ. When will the deadlines be determined? How long is a typical timeframe?
A. Deadlines are determined when a single pool has reached its funding goal. Timeframes are five minutes long.
Q. What happens if, at the final deadline, nobody manages to send out a notification in time?
A. In that case, the pool is split amongst the last surviving group. For example, if only Bob and Caroline remain and both fail to send out a notification for the next deadline, the pool is still split amongst them.
Q. Can I sell off my shares in a tontine to someone else?
A. Yes. When you enroll in the tontine, you will be given a certificate that notes the number of shares you have, a 15 character public key, and a 35 character private key. If you have a potential buyer, you can send him the public key. Your buyer can then contact BitTontine to verify that the certificate is indeed legitimate. When you complete the sale, both the seller and buyer should contact BitTontine. The seller's data is removed from the tontine records and the buyer is issued a new certificate, with a new private key.
BitTontine is not responsible for any transactions between shareholders and potential buyers.
Q. Can I partially sell of shares?
A. Yes. For example, if you have a share of 200 BTC and wish to sell 10 BTC, your buyer will get a certificate worth 10 BTC and you will get a new certificate for 190 BTC.
Q. What does the private key do?
A. It is used for security and verification purposes. If you wish to change the address to which payments should be made, you need to provide the private key. It goes without saying that the private key should never be shared with anyone.
Q. How can you guarantee a weekly 1% interest rate?
A. BitTontine invests its assets in a variety of ways, most notably through ForEx and speculation in precious metals. If more than 1% of interest is made, that money is added to the pool.
Q. So, what's in it for you?
A. BitTontine takes a 5% fee from the final pay-out. So the final pool isn't completely 1000 BTC, but 950 BTC.
Available poolsThe following pools are currently open for enrollment. A pool will not run until it has reached its funding goal, at which time the pool's deadlines will also be determined. If you want to enroll, send me a PM stating the name of the pool and the number of shares you wish to buy and send the appropriate amount of BitCoins to the following address:
1GDTDgfqqc5YRj3VXaB6Gr1HG83UFALKaC
Once you sign up, your name and the number of shares you have in a pool are listed on this page. If you prefer to remain anonymous, please say so in your PM.
Pool A| Current funding | 0/100 BTC |
| Current number of participants | 0 |
| Minimum buy-in | 1 BTC |
| Current run-time | 6 weeks |
| Current deadline | - |
-
List of enrolled people:
<none yet>
Pool B| Current funding | 0/1000 BTC |
| Current number of participants | 0 |
| Minimum buy-in | 5 BTC |
| Current run-time | 18 weeks |
| Current deadline | - |
-
List of enrolled people:
<none yet>
In case you have any questions, feel free to post them in this thread or send a PM. They will be answered in a timely manner.
