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Author Topic: [CLOSED] S.DICE - SatoshiDICE 100% Dividend-Paying Asset on MPEx  (Read 315725 times)
evoorhees
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June 12, 2013, 08:31:53 PM
 #1741

Alright. This isn't worth the drama.

- June dividends will go out as normal.
- Ill withdraw my 6100 btc loan at the end of the month
- My own June dividend will be retained and that will be used as the betting pool

In effect, this won't change things much from the current situation. I'll bear the whole cost of the betting pool, it'll just be smaller now.

Nowhere was it ever mentioned by me that SD owned a big pile of bitcoins. I guess people just assumed this. My mistake for letting the site use my coins since the beginning.

Enjoy your dividends this month.
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Pale Phoenix
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June 12, 2013, 08:41:42 PM
Last edit: June 12, 2013, 08:55:40 PM by Pale Phoenix
 #1742

I understand some shareholders are disappointed as they will not have a dividend this month. And if you wanted to sell out soon than this is bad news. But if you are in it for a longer term I think a 10% drag on earnings for 6 months will likely have a bigger negative impact on the value of the shares than just doing it in one month.

Speaking for myself, I'm not nearly as concerned about the loss of another month's worth of dividends as I am with the incredibly unprofessional, and nonchalant, lack of disclosure to shareholders. Many of us have embraced Bitcoin because of the promise of freedom from onerous regulations, etc. but no one should be allowed freedom from fair dealing.

I don't know evoorhees personally, but from his posts, it's clear that he is not an unintelligent person, so I cannot believe the unfairness of this situation eludes him.

I don't think anyone would be questioning the repayment had this loan been documented and disclosed in the regular financial statements, which after all, are produced so that shareholders are aware of the entirety of the company's financial condition.

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June 12, 2013, 08:49:42 PM
 #1743

Nowhere was it ever mentioned by me that SD owned a big pile of bitcoins. I guess people just assumed this. My mistake for letting the site use my coins since the beginning.

Enjoy your dividends this month.


Come on Erik. Nowhere did you mention a liability either. Frankly, I'm stunned by your attitude here.

The proper way to handle this is for the company to sign a note for the funds in the pool, and commit to a reasonable repayment schedule. This note should be carried as a liability on the books, and payed back regularly in a transparent manner that keeps outside shareholders informed.

What is so hard about that? Why are you making this seem like you are put out when it was your lack of disclosure that got us here?

Rather than getting our backs up, perhaps we can spend some time discussing the repayment plan and put this to bed in a professional manner?

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June 12, 2013, 09:06:18 PM
 #1744

Erik,

if you still have a loan of 6K BTC to Sdice, I really really don't get the purpose of the IPO where SDice raised approx 35K btc.

The dividends are not your asset, it belongs to all stakeholders now.

Actually, it was  2mn * 0.0032 BTC each + 5 mn * 0.0034 BTC each + 3 mn * 0.0037 BTC each = 34.5 k BTC at ipo + ~3 mn * .005 or so each = roughly speaking 50k BTC. For comparison's sake, all of Asicminer was built out of a 20k BTC original investment, more or less at the same time.

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June 12, 2013, 09:33:24 PM
 #1745


Rather than getting our backs up, perhaps we can spend some time discussing the repayment plan and put this to bed in a professional manner?

Agree, lets repay the loan over the next 10 months or so.
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June 12, 2013, 09:36:26 PM
 #1746


Rather than getting our backs up, perhaps we can spend some time discussing the repayment plan and put this to bed in a professional manner?

Agree, lets repay the loan over the next 10 months or so.

I think the point here is that there is no loan at all. Erik has been compensated fairly via IPO and the shares he holds, and never noted any desire to loan funds to SDICE in the past.

I wonder if there are any other surprise liabilities SDICE has...
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June 12, 2013, 09:42:07 PM
 #1747


Rather than getting our backs up, perhaps we can spend some time discussing the repayment plan and put this to bed in a professional manner?

Agree, lets repay the loan over the next 10 months or so.

I think the point here is that there is no loan at all. Erik has been compensated fairly via IPO and the shares he holds, and never noted any desire to loan funds to SDICE in the past.

I wonder if there are any other surprise liabilities SDICE has...

All I will say on that topic is we'll see given time
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June 12, 2013, 09:51:00 PM
 #1748

I think the point here is that there is no loan at all. Erik has been compensated fairly via IPO and the shares he holds, and never noted any desire to loan funds to SDICE in the past.

I wonder if there are any other surprise liabilities SDICE has...

Moreover, management can't really pass responsibility for its own actions to the shareholders, because the shareholders have no control whatsoever. If three months down the road Erik comes and says "hey, we had a break-in, the funds are gone" then how exactly can Random Q Investor verify this claim, make sure it's not something like Vircurex pulled recently? And if Erik never comes and says thus, what's the point of the entire maneuver? In all circumstances they with the ability to prevent losses are they who must be responsible for the losses.

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Pale Phoenix
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June 12, 2013, 09:52:18 PM
 #1749

I think the point here is that there is no loan at all. Erik has been compensated fairly via IPO and the shares he holds, and never noted any desire to loan funds to SDICE in the past.

I wonder if there are any other surprise liabilities SDICE has...

Yes, after reading Deprived's post and re-reading the contract, I agree that there is no loan.

As for other liabilities, Erik mentioned earlier in the thread that he would have a balance sheet prepared at the end of this month, but I would urge him to have one done up as soon as possible to reassure investors. The stock has recently started to show signs of life (however small) and it would be a shame for the uncertainty introduced today to go unanswered.

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June 12, 2013, 09:54:23 PM
 #1750

I think the point here is that there is no loan at all. Erik has been compensated fairly via IPO and the shares he holds, and never noted any desire to loan funds to SDICE in the past.

I wonder if there are any other surprise liabilities SDICE has...

Yes, after reading Deprived's post and re-reading the contract, I agree that there is no loan.

As for other liabilities, Erik mentioned earlier in the thread that he would have a balance sheet prepared at the end of this month, but I would urge him to have one done up as soon as possible to reassure investors. The stock has recently started to show signs of life (however small) and it would be a shame for the uncertainty introduced today to go unanswered.

Maybe A third party audit request initiated by shareholders if that seems plausible that way all finances can be taken into account
Of course not sure on the practical value of measuring it in BTC or if it would work but a third party would be able to figure out these type of details best
If shareholders don't mind paying for that type of cost
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June 12, 2013, 09:57:56 PM
 #1751

A single person can win up to ~6400 BTC with one bet, how would the situation be handled if there weren't enough Bitcoins for the winner? How would that person be contacted, or that person receive the rest of the BTC within a few days (or more) that would be needed to acquire them or move from a cold wallet.
Of course, it's also possible that few very lucky people deplete the pool within a few days; I am wondering if satoshidice is in any way prepared for this?

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June 12, 2013, 10:02:13 PM
 #1752

A single person can win up to ~6400 BTC with one bet, how would the situation be handled if there weren't enough Bitcoins for the winner? How would that person be contacted, or that person receive the rest of the BTC within a few days (or more) that would be needed to acquire them or move from a cold wallet.
Of course, it's also possible that few very lucky people deplete the pool within a few days; I am wondering if satoshidice is in any way prepared for this?

Apparently not, but according to the prospectus SD has a limited balance of reserves

Quote
Min and Max Bets
Because there is a limited pool of funds to back bets, there is a max bet for each bet option. The max
changes periodically as bets are processed, adjusting for the current wallet balance. Min bets are
established at .001 per bet because anything lower makes the bet foolish for the player (as the small
miners’ fees would eat up any winnings).

As per the prospectus.... http://polimedia.us/bitcoin/assets/S.DICE_Prospectus_Full.pdf

Is this the loan Erik is talking about, or is there a limited pool of funds in SD that the shareholders de facto own?
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June 12, 2013, 10:15:10 PM
 #1753

Is this the loan Erik is talking about, or is there a limited pool of funds in SD that the shareholders de facto own?

This is what he is talking about.
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June 12, 2013, 10:24:43 PM
 #1754

I think the point here is that there is no loan at all. Erik has been compensated fairly via IPO and the shares he holds, and never noted any desire to loan funds to SDICE in the past.

I wonder if there are any other surprise liabilities SDICE has...

Yes, after reading Deprived's post and re-reading the contract, I agree that there is no loan.

As for other liabilities, Erik mentioned earlier in the thread that he would have a balance sheet prepared at the end of this month, but I would urge him to have one done up as soon as possible to reassure investors. The stock has recently started to show signs of life (however small) and it would be a shame for the uncertainty introduced today to go unanswered.

Maybe A third party audit request initiated by shareholders if that seems plausible that way all finances can be taken into account
Of course not sure on the practical value of measuring it in BTC or if it would work but a third party would be able to figure out these type of details best
If shareholders don't mind paying for that type of cost



An audit can do only so much with respect to completeness of reported liabilities, especially in the realm of BTC-listed securities. It would have caught the 6K (whatever it is), but if management really wanted to keep something from the shareholders (not saying that is the case here) it is going to remain hidden most likely. Where an audit (or even just compiling financial statements) will help is in catching mistakes/oversights and hidden transactions which have a cash (BTC) component.
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June 12, 2013, 10:30:05 PM
 #1755

I think the point here is that there is no loan at all. Erik has been compensated fairly via IPO and the shares he holds, and never noted any desire to loan funds to SDICE in the past.

I wonder if there are any other surprise liabilities SDICE has...

Moreover, management can't really pass responsibility for its own actions to the shareholders, because the shareholders have no control whatsoever. If three months down the road Erik comes and says "hey, we had a break-in, the funds are gone" then how exactly can Random Q Investor verify this claim, make sure it's not something like Vircurex pulled recently? And if Erik never comes and says thus, what's the point of the entire maneuver? In all circumstances they with the ability to prevent losses are they who must be responsible for the losses.

That such losses are not passed to shareholders was (near enough) explicitly clarified by Erik during the IPO:

b) Actually, the financial statements are better than "audited."  All the information is mathematically verifiable using the blockchain, which is public. You don't have to trust any auditor, you can audit yourself any time of day to see exactly what SatoshiDICE is making (and some have done that in other threads on this forum).

If it can't be verified by the block-chain then it can't be in the financial statements - and so can't be passed to investors (by deductions when calculating net profit).

If your claimed reason for no auditing is that it can already be done then:

1.  You don't need to have audits.
2.  You can't charge anything which investors can't verify themselves via the block-chain.

Those two points go hand-in-hand : if you want #1 you have to provide #2 (and lose the ability to pass many costs on).

A burglary (and for that matter a theft from a BTC wallet) wouldn't be allowed to be deducted anyway - as they aren't marketing or development costs: the only two categories of deduction allowed when calculating net profits.
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June 12, 2013, 10:33:43 PM
 #1756

I think the point here is that there is no loan at all. Erik has been compensated fairly via IPO and the shares he holds, and never noted any desire to loan funds to SDICE in the past.

I wonder if there are any other surprise liabilities SDICE has...

Moreover, management can't really pass responsibility for its own actions to the shareholders, because the shareholders have no control whatsoever. If three months down the road Erik comes and says "hey, we had a break-in, the funds are gone" then how exactly can Random Q Investor verify this claim, make sure it's not something like Vircurex pulled recently? And if Erik never comes and says thus, what's the point of the entire maneuver? In all circumstances they with the ability to prevent losses are they who must be responsible for the losses.

That such losses are not passed to shareholders was (near enough) explicitly clarified by Erik during the IPO:

b) Actually, the financial statements are better than "audited."  All the information is mathematically verifiable using the blockchain, which is public. You don't have to trust any auditor, you can audit yourself any time of day to see exactly what SatoshiDICE is making (and some have done that in other threads on this forum).

If it can't be verified by the block-chain then it can't be in the financial statements - and so can't be passed to investors (by deductions when calculating net profit).

If your claimed reason for no auditing is that it can already be done then:

1.  You don't need to have audits.
2.  You can't charge anything which investors can't verify themselves via the block-chain.

Those two points go hand-in-hand : if you want #1 you have to provide #2 (and lose the ability to pass many costs on).

A burglary (and for that matter a theft from a BTC wallet) wouldn't be allowed to be deducted anyway - as they aren't marketing or development costs: the only two categories of deduction allowed when calculating net profits.

What about if Erik just uses the secret key to win himself 200btc per day for a month, how do we audit that?
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June 12, 2013, 10:41:56 PM
 #1757

I think the point here is that there is no loan at all. Erik has been compensated fairly via IPO and the shares he holds, and never noted any desire to loan funds to SDICE in the past.

I wonder if there are any other surprise liabilities SDICE has...

Moreover, management can't really pass responsibility for its own actions to the shareholders, because the shareholders have no control whatsoever. If three months down the road Erik comes and says "hey, we had a break-in, the funds are gone" then how exactly can Random Q Investor verify this claim, make sure it's not something like Vircurex pulled recently? And if Erik never comes and says thus, what's the point of the entire maneuver? In all circumstances they with the ability to prevent losses are they who must be responsible for the losses.

That such losses are not passed to shareholders was (near enough) explicitly clarified by Erik during the IPO:

b) Actually, the financial statements are better than "audited."  All the information is mathematically verifiable using the blockchain, which is public. You don't have to trust any auditor, you can audit yourself any time of day to see exactly what SatoshiDICE is making (and some have done that in other threads on this forum).

If it can't be verified by the block-chain then it can't be in the financial statements - and so can't be passed to investors (by deductions when calculating net profit).

If your claimed reason for no auditing is that it can already be done then:

1.  You don't need to have audits.
2.  You can't charge anything which investors can't verify themselves via the block-chain.

Those two points go hand-in-hand : if you want #1 you have to provide #2 (and lose the ability to pass many costs on).

A burglary (and for that matter a theft from a BTC wallet) wouldn't be allowed to be deducted anyway - as they aren't marketing or development costs: the only two categories of deduction allowed when calculating net profits.

What about if Erik just uses the secret key to win himself 200btc per day for a month, how do we audit that?

Some things can't be audited - and just have to be taken on trust.
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June 12, 2013, 10:44:04 PM
 #1758

What about if Erik just uses the secret key to win himself 200btc per day for a month, how do we audit that?

Well, BTC finance is still predicated on the operator being honest. That's the fundamental block of the entire edifice.

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June 13, 2013, 03:28:06 AM
 #1759

Let me step back a bit here.

My last few posts were unprofessional. I apologize for the tone. Having a bad day dealing with government bureaucracy =/

I absolutely should have disclosed that there was a betting pool, and that this pool consisted of the loan from me. The reason I did not was because I figured since there was a liability (the loan) and an asset (the 6100 btc in the wallet) the two cancelled out and needn't be mentioned. Obviously this was retarded of me. Again, I apologize. And I understand why such disclosure is so important even if the asset remains there - for situations like this!

I understand also that as a shareholder, being asked to forgo a month of dividends in order to replenish a fund which you didn't know existed is upsetting. I should have recognized this before I posted.

I'll continue with the last plan I mentioned. My dividends for June will be retained by the site for the betting pool. S.Dice holders will receive dividends as normal. I'm sorry for the drama today, I can see it was largely because of me and how I approached the issue and responded to you guys.

Back to work.
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June 13, 2013, 03:42:16 AM
 #1760

Let me step back a bit here.

My last few posts were unprofessional. I apologize for the tone. Having a bad day dealing with government bureaucracy =/

I absolutely should have disclosed that there was a betting pool, and that this pool consisted of the loan from me. The reason I did not was because I figured since there was a liability (the loan) and an asset (the 6100 btc in the wallet) the two cancelled out and needn't be mentioned. Obviously this was retarded of me. Again, I apologize. And I understand why such disclosure is so important even if the asset remains there - for situations like this!

I understand also that as a shareholder, being asked to forgo a month of dividends in order to replenish a fund which you didn't know existed is upsetting. I should have recognized this before I posted.

I'll continue with the last plan I mentioned. My dividends for June will be retained by the site for the betting pool. S.Dice holders will receive dividends as normal. I'm sorry for the drama today, I can see it was largely because of me and how I approached the issue and responded to you guys.

Back to work.

If s.dice goes into the red more than collected in the pool will you let it die or will you make a new loan? if you let it die people will come after you with pitched forks.

Also your new plan seems to be in violation of the contract. 100% has to be paid out.

Of course I wouldn't let it die.

The new plan is not in violation of anything. I can pay myself my dividend, and then send that amount to the SD wallet pool. Everyone else will get their dividends like normal, I'm just sending mine back in.

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