[CLOSED] S.DICE - SatoshiDICE 100% Dividend-Paying Asset on MPEx

[k]

I'm not saying nothing can be worth more than 21 million bitcoins. I'm saying S.DICE can't be worth more than 21 million bitcoins on an intrinsic value basis. S.DICE earns bitcoins and is denominated in bitcoins. If it earned dollars maybe it could be worth more than 21 million bitcoins but I think that should have the effect to increase the value of bitcoin relative to the dollar to balance the system out again as buying pressure from S.DICE to convert dollars to bitcoins to pay the dividend would increase bitcoin demand.

To me the intrinsic value is equal to the sum of the future income discounted to the present value. Can an asset that only earns bitcoins be intrisiclly worth more than all the bitcoins that will ever be in existence? (Intrinsic value now, not market cap based on what someone is paying for a share which of course could value the company higher than 21 million bitcoins).

I don't see how you believe 21 million bitcoins is a limit on its value.

If it made 1 million BTC profit per month that would give it an intrinsic value well over 21 million BTC by any reasonable means of calculation and be entirely possible with only 21 million BTC in circulation.

If it earned 1 million BTC profit/month then yes it would have an intrinsic value more than 21 million but I don't think it is realistically possible to earn 1 million BTC profit/month or anything near that.

Are you really saying that if it accepted USD rather than BTC it could be worth more than 21 million - but can't even if it were to make exactly the same profits but denominated in BTC?

How about if it accepted USD for bets - but converted profits to BTC - could it then be worth more than 21 million?

If it earned USD then the profits are not limited by the number of bitcoins so can be worth more but the shares are denominated in bitcoins  so then I think the effect would be to increase the demand for bitcoins to buy the shares to get the share of the dollar profits thus increasing the price of bitcoins bring the system back into eqilibrium. Similarly if profits are converted to bitcoins then all other things being equal (i.e. no increase in betting activity) that would increase the value of bitcoins relative to the dollar but share value would go down (i.e. USD profits stay the same, but that is less when denominated in bitcoin)  .

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[ThickAsThieves]

If anywhere near the amount of money needed to do these things were being converted from USD to BTC, the value of coins would rise to meet value of the purchase.

A huge conversion like that would also cause a big fat bubble most likely.

[Deprived]

Let me try another approach to explain why this 21 million BTC value cap makes no sense.

Is it possible to have 2 companies worth 11 million BTC each?
If so, what is the new company worth if they merge?

How about 4 worth 6 million each?

Or 22 worth 1 million each?

Do you see how, logically, if you say a single company can't theoretically be worth 21 million BTC then you also say that the sum of ALL BTC companies can't exceed 21 million BTC - as in theory they could all merge and would have an identical combined intrinsic value to the total they had when they were seperate companies.

It's a bit like claiming the "value" of all companies in the USA combined can't exceed 1.1 trillion USD (or whatever it is they have printed now) as that's all the USD that exists.

[k]

Let me try another approach to explain why this 21 million BTC value cap makes no sense.

Is it possible to have 2 companies worth 11 million BTC each?
If so, what is the new company worth if they merge?

How about 4 worth 6 million each?

Or 22 worth 1 million each?

Do you see how, logically, if you say a single company can't theoretically be worth 21 million BTC then you also say that the sum of ALL BTC companies can't exceed 21 million BTC - as in theory they could all merge and would have an identical combined intrinsic value to the total they had when they were seperate companies.

It's a bit like claiming the "value" of all companies in the USA combined can't exceed 1.1 trillion USD (or whatever it is they have printed now) as that's all the USD that exists.

I have to to think about it some more. I admit I'm not an expert and could be wrong in my thinking.
I'm confident though that in practice S.Dice couldn't earn enough profits to justify a market cap more than the total number of bitcoins there will ever be.

Some relevant points in this article
http://mises.org/daily/4654

[Fizzgig]

That mises article is about the US fiat monetary system. A system by which individuals determine the size of the monetary base. In this system it is true that the size of the monetary base is a very important and often overlooked factor, but we're in Bitcoinland now.

In Bitcoinland we know exactly what the monetary base is at all times. This "measuring stick" of the money supply must be constant in order to have sound economic activity. Bitcoin provides this, fiat money does not. You are comparing two different monetary systems to each other and are thus drawing false conclusions.

The market cap of SDICE can be any number of bitcoin, 1 million, 1 billion, 1 trillion, at some point it gets absurd but you get my point.

[Peter Lambert]

I have to to think about it some more. I admit I'm not an expert and could be wrong in my thinking.
I'm confident though that in practice S.Dice couldn't earn enough profits to justify a market cap more than the total number of bitcoins there will ever be.

Some relevant points in this article
http://mises.org/daily/4654

Let us consider the unlikely but possible scenario where the only thing bitcoins are useful for is to play satoshidice. Let us further suppose that the bitcoin market price drops by a couple orders of magnitude, but people want to play satoshidice even more than they do today. Could you see how these factors might push the total profit of satoshidice closer to or above the amount of bitcoins?

[k]

The market cap of S.DICE (or even the aggregate market cap of all bitcoin denominated shares) can be greater than 21 million but it is not unlimited. There is some limit based on the 21 million bitcoin limit and the velocity of money (how many times the total bitcoin supply is recycled through the economy).

[ThickAsThieves]

Here's an alternative scenario, hopefully we're not going too off topic...

Okay, it's November 2013, and ASICs have taken over the BTC mining scene. GPU miners have largely migrated to Litecoin, where a healthy but smaller community is thriving. BTC market cap has reached $1billion+.

But Litecoin value has also gone up, to say $10 each. Now, if you think of BTC and LTC as $100 bills and $10 bills, you've just dramatically increased the amount of currency available. If things evolved this way, you could have even more altcoins over the years. This would allow endless expansion crypto-currency value.

Slightly off-topic, I could also see each country adopting it's own cryptocurrency as a method of battling bitcoin and keeping control of things in their respective countries.

[evoorhees]

Hey all,

S.DICE will be releasing another 5% stake starting now in five tranches of 1,000,000 shares each. Each tranche will be priced higher than the last. All tranches will be higher than the IPO price but lower than the current market price of around .0071 btc per share. Same rules apply to these shares (100% of net earnings from SD).

First tranche is 0.0044 btc per. Listing is live.

First come first serve

[ThickAsThieves]

Hey all,

S.DICE will be releasing another 5% stake starting now in five tranches of 1,000,000 shares each. Each tranche will be priced higher than the last. All tranches will be higher than the IPO price but lower than the current market price of around .0071 btc per share. Same rules apply to these shares (100% of net earnings from SD).

First tranche is 0.0044 btc per. Listing is live.

First come first serve

:/  I just bought in hard today... and DeadTerra is asleep for me to re-up

[Peter Lambert]

Hey all,

S.DICE will be releasing another 5% stake starting now in five tranches of 1,000,000 shares each. Each tranche will be priced higher than the last. All tranches will be higher than the IPO price but lower than the current market price of around .0071 btc per share. Same rules apply to these shares (100% of net earnings from SD).

First tranche is 0.0044 btc per. Listing is live.

First come first serve

Why are you listing so far below the current market price?

[🏰 TradeFortress 🏰]

Pricing is definitely a blow but the current shares are not being diluted nor dividends.

[evoorhees]

Hey all,

S.DICE will be releasing another 5% stake starting now in five tranches of 1,000,000 shares each. Each tranche will be priced higher than the last. All tranches will be higher than the IPO price but lower than the current market price of around .0071 btc per share. Same rules apply to these shares (100% of net earnings from SD).

First tranche is 0.0044 btc per. Listing is live.

First come first serve

Why are you listing so far below the current market price?

Two reasons:

1) Because 5m shares is a significant amount and I caught alot of flak during the IPO for pricing too high and having shares sit on the market too long.

2) Because I thought buyers might appreciate the opportunity to get shares cheaper, thus higher dividend yields for them. I'm selling for profit, don't get me wrong, but I like the buyers to feel they're getting a good deal also.

[evoorhees]

Hey all,

S.DICE will be releasing another 5% stake starting now in five tranches of 1,000,000 shares each. Each tranche will be priced higher than the last. All tranches will be higher than the IPO price but lower than the current market price of around .0071 btc per share. Same rules apply to these shares (100% of net earnings from SD).

First tranche is 0.0044 btc per. Listing is live.

First come first serve

Why are you listing so far below the current market price?

Two reasons:

1) Because 5m shares is a significant amount and I caught alot of flak during the IPO for pricing too high and having shares sit on the market too long.

2) Because I thought buyers might appreciate the opportunity to get shares cheaper, thus higher dividend yields for them. I'm selling for profit, don't get me wrong, but I like the buyers to feel they're getting a good deal also.

Perhaps, that's great for you. But you are screwing your shareholders. I just lost 40% of my investment in your crappy stock. It will probably take 2 years to break even from dividends.

And thus your .007 share price was legitimate? If so, then you won't be buying at .0044 and profiting 30% when it reverts back to proper market price in three days?  You are not thinking properly about this.

[ThickAsThieves]

As a long term investor, it doesn't bother me ... as long as I can get some of that .0044 action before it goes 

[Bowjob]

As a long term investor, it doesn't bother me ... as long as I can get some of that .0044 action before it goes 

^ This is how you make a fortune folks. Now if lightbox wakes up so I can get a private block.. :3

[totaleclipseofthebank]

Any of the fundamentals change... or is someone just willing to give us a deal in order to move some volume?

Far as I can tell, CHEAP SHARES !

I don't see why it would be in SD's interest to auction off shares this much below the market price. Is there any immediate need for a cash infusion? Is some kind of expansion being funded?

[ThickAsThieves]

Considering that he's pulled in  in like $350k a month, and owns 90% of the business, it's no skin off his back to sell a small % to shareholders.

I do hope he has expansion plans in mind though, marketing can go a long way for this business...


Water this plant and watch it grow.

[totaleclipseofthebank]

Considering that he's pulled in  in like $350k a month, and owns 90% of the business, it's no skin off his back to sell a small % to shareholders.

I do hope he has expansion plans in mind though, marketing can go a long way for this business...


Water this plant and watch it grow.

the question is WHY

what is the point of dumping shares 37% below market price, screwing over your shareholders, just to get 4400btc (chump change) when operating income is 5000btc per week

drop the share price by 38% in exchange for 7 days operating profit? WTF?

[Bowjob]

Considering that he's pulled in  in like $350k a month, and owns 90% of the business, it's no skin off his back to sell a small % to shareholders.

I do hope he has expansion plans in mind though, marketing can go a long way for this business...


Water this plant and watch it grow.

the question is WHY

what is the point of dumping shares 37% below market price, screwing over your shareholders, just to get 4400btc (chump change) when operating income is 5000btc per week

drop the share price by 38% in exchange for 7 days operating profit? WTF?

He wants to give people a good deal - a second chance to invest in S.Dice for cheap. Since he's getting so much flak for this, I expect him to sell the other blocks at a high price.