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[tmfp143]

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[puffn]

You may want to reconsider Puremining also. It currently yields about .003 per week. With a discount rate of 1% available from multiple banks, Puremining will have to go something like 40 weeks to break even without considering that Puremining does not have an ASIC plan which in the even of a 20 fold difficulty increase will cut the bonds value ~95%.

A viable ASIC will come. There are 3 separate companies with intentions to manufacture for public sales. There will be a product out before 30 weeks have passed.

Compounding your investment in fixed mhash bonds with the intention of dollar cost averaging down will only compound your losses as 1,000 times zero is still zero.

[Bitcoin Oz]

You may want to reconsider Puremining also. It currently yields about .003 per week. With a discount rate of 1% available from multiple banks, Puremining will have to go something like 40 weeks to break even without considering that Puremining does not have an ASIC plan which in the even of a 20 fold difficulty increase will cut the bonds value ~95%.

A viable ASIC will come. There are 3 separate companies with intentions to manufacture for public sales. There will be a product out before 30 weeks have passed.

Compounding your investment in fixed mhash bonds with the intention of dollar cost averaging down will only compound your losses as 1,000 times zero is still zero.

I dont think they are listening as Ive mentioned this ages ago but it seems they doubled down on fixed mh/s bonds

[Bitcoin Oz]

If you pay .7 bitcoin for  a bond and it falls in price to .1 and the maximum return you will ever get on the bond is .32 btc you have made a massive capital loss unless the price ever returns above .7 btc.
You have just lost 40-60% of your principal!!!!

(Thats if you can even sell the pile of crap in the end.)

Is that clearer ?

[Bitcoin Oz]

You may want to reconsider Puremining also. It currently yields about .003 per week. With a discount rate of 1% available from multiple banks, Puremining will have to go something like 40 weeks to break even without considering that Puremining does not have an ASIC plan which in the even of a 20 fold difficulty increase will cut the bonds value ~95%.

A viable ASIC will come. There are 3 separate companies with intentions to manufacture for public sales. There will be a product out before 30 weeks have passed.

Compounding your investment in fixed mhash bonds with the intention of dollar cost averaging down will only compound your losses as 1,000 times zero is still zero.

The more that I learn about investing in Bitcoin mining businesses the less rational it seems. A stock or bond should pay a dividend and hold it price relatively well, or it should pay no dividends and rise in price accordingly so the investor can sell it at a profit. Why is what should be so simple so complicated when it comes to Bitcoin-related investments?

Because bitcoin mining was only ever intended to be marginally profitable at best. A mining company that pays dividends means it is taking money from expansion which needs to happen to keep up with bitcoin difficulty.

[puffn]

Well, Gigamining alone is not worth investing in because after the .25 payment and adjusting to the same unit of mhash per second, hydro.bonds is the better deal. I also think the fair value for it is closer to .4, maybe lower, as I stopped calculating before I bothered doing discounted cash flows on it.

My current estimate is ASICs in November. If any bond is priced higher than .0025(probable average earnings)*11(weeks)*mhash, it is probably not going to break even before discounting. Post-asic, 1/20 seems to be the guestimate as to mining profitability. Consider all of this part to be the profit margin.

I honestly believe you have put yourself into a pretty rough spot. Only having verified securities leaves you little option to make real gains. I believe Namworld also does KRAKEN. You may be able to invest in that as even I believe Patrick is one of the safest operators in bitcoin.

Buying gold/platinum would not be my pick as those assets are basically pegged to the exchange rate. So this would not actually generate revenue in fiat in my mind.

Look up discounted cash flows. It is used to determine value and is heavily mentioned in Ben Graham's books/value investing.

[Bitcoin Oz]

puffin is correct you are a bit restricted because of your reliance on fully verified.

https://glbse.com/asset/view/BITCOINTORRENTZ and https://glbse.com/asset/view/IBB  arent verified at all but they shouldnt lose value and they pay regular dividends and they have room for growth.

[Bitcoin Oz]

Okay gentlemen, I think that it finally clicked for me a moment ago: the only way to make a profit on a mining bond like Gigamining would would buy and sell it repeatedly like a day trader: buy low, sell high, repeat ad infinitum.

 I would just have to plan out my buy and sell prices carefully. One should see a price spike right before dividends are paid, and a dip right after. Though the long term trend in price is downward, one end up accumulating a lot of shares. This is why Gigamining and Tygrr Bond have so such high market caps: people have been short selling and buying the stocks for months, and using the gains to accumulate an incredible number of shares. The problem for the operator is that he now has to pay dividends on an incredibly high number of shares when he only received capital from the original sale not from the subsequent reselling. He has to keep enough liquid capital on hand to allow people to sell the security. So the operator has relatively low incoming cash flow, but veyr high outgoing cash flow. Is my analysis basically correct?

Gigamining has liquidity at least. A lot of glbse securities you cant get in and out at all because the depth is lacking.

I would suggest not reinvesting dividends in the same companies but using them in different market sectors instead.

[puffn]

You may want to delete your strategy from above. Day trading can be risky. Hopefully he will delete some of your quote.

[bitcoinbear]

The more that I learn about investing in Bitcoin mining businesses the less rational it seems. A stock or bond should pay a dividend and hold it price relatively well, or it should pay no dividends and rise in price accordingly so the investor can sell it at a profit. Why is what should be so simple so complicated when it comes to Bitcoin-related investments?

The thing is, it seems to me many of these "mining companies" were just set up as a way for the "CEO/operator" to get a bunch of mining hardware by using other peoples money and thus have no risk, thus the assets were not set up with the investor's best interest in mind. Investing in these is high risk/low return. In the end, a fixed hash rate will go down in value until the difficulty stops growing, which will not be any time soon.

That is not to say they are all bad. Some are set up as companies that will grow to stay competitive.

https://glbse.com/asset/view/BITCOINTORRENTZ and https://glbse.com/asset/view/IBB  arent verified at all but they shouldnt lose value and they pay regular dividends and they have room for growth.

I second this sentiment. These are possibly the two oldest companies on the GLBSE. They will not give a great return (when compared with other bitcoin investments) but I would say they are low risk (relatively). Plus, they are not involved in mining so it is a way to diversify your holdings.

BitcoinTorrentz in particular was a great innovation, a way to utilize the properties of Bitcoin to solve a particular problem.

Buying gold/platinum would not be my pick as those assets are basically pegged to the exchange rate. So this would not actually generate revenue in fiat in my mind.

Buying physical gold/platinum would expose you to exchange rate. If I understand correctly, buying any of the GLBSE assets GOLD, SILVER, PLATINUM, or RAREEARTH does not expose you to such, these are essentially bonds secured by a holding of the named metal. If you believe the operator that he does in fact have such an amount of metal in his vault, then this would be less risky than an unsecured bond. See this thread for an explaination https://bitcointalk.org/index.php?topic=79993.msg1160562#msg1160562

[Bitcoin Oz]

bitcoinbear is essentially correct in that most mining "companies" are simply a way for people to gather mining gear using other peoples money. Its not like buying fixed interest securities at all.

BDK.BND pays 1% for example each week and you dont face losing the principal. Kluge usually places ask walls so its relatively liquid.

The difference between a Kluge bond and a Giga bond is massive  

Good call with CBGB which seems to be stable and rising. Similar to MOORE in many ways.

[odolvlobo]

It is not clear to me why anyone should invest in a fund run by a manager that has admitted to not understanding the fundamentals of bitcoin and the securities in the fund. The statement that the manager is still learning is not comforting. Why should investors suffer from the manager's newbie errors?

[P4man]

Frankly, I dont think there is anything on GLBSE worth buying. With a few exceptions (*), all you find are ponzi or ponzi derivatives, empty boxes pretending to do business but in reality ponzi passthroughs, and mining shares and bond which could be interesting but are way overpriced.

I think there is a reason for this too; people are dying to increase their BTC holdings and investing it in anything that just gives a glimmer of hope of increasing their wallet size. Bitcoins stream in to GLSBE and are spent on whatever is offered, people wrongly assuming there have to be some good deals, and its just a matter if picking the right one. But there just is not enough economic activity and growth in bitcoin to make profitable use of all those BTCs, and as a result, just about everything is way overpriced.

 If you believe in bitcoin, the best investment right now IMO is an offline wallet. Bitcoin is often compared to gold, well, most people holding gold hold it, and dont try to invest it or lend it out at 100+% APR to try and double their amount of gold each year, because it just wont happen. Compared to fiat, gold (or btc) might double in value , but if thats what you are betting on, then keep it safe, dont lend it out.

(*) there are exceptions, for instance asicminer is a real company with real potential, but its also very high risk IMO.

[Factory]

Frankly, I dont think there is anything on GLBSE worth buying. With a few exceptions (*), all you find are ponzi or ponzi derivatives, empty boxes pretending to do business but in reality ponzi passthroughs, and mining shares and bond which could be interesting but are way overpriced.

I think there is a reason for this too; people are dying to increase their BTC holdings and investing it in anything that just gives a glimmer of hope of increasing their wallet size. Bitcoins stream in to GLSBE and are spent on whatever is offered, people wrongly assuming there have to be some good deals, and its just a matter if picking the right one. But there just is not enough economic activity and growth in bitcoin to make profitable use of all those BTCs, and as a result, just about everything is way overpriced.

 If you believe in bitcoin, the best investment right now IMO is an offline wallet. Bitcoin is often compared to gold, well, most people holding gold hold it, and dont try to invest it or lend it out at 100+% APR to try and double their amount of gold each year, because it just wont happen. Compared to fiat, gold (or btc) might double in value , but if thats what you are betting on, then keep it safe, dont lend it out.

(*) there are exceptions, for instance asicminer is a real company with real potential, but its also very high risk IMO.

I for the most part agree with your sentiment. However, price is persuasive: any asset it worth considering if price < relative value. Most security issues on GLBSE provide no real value, but some provide some level of limited value. If I can snag a small lot of shares where at the price I pay it will yield me 10-15% weekly, taking such positions can be warranted. Such opportunities have arrived in the past- mostly with fluctuating prices of small-scale mining listings. Even with fixed mh/s value decaying over time as the total network hashing rate increases, I have found such positions to be worth the effort of finding.

[P4man]

I for the most part agree with your sentiment. However, price is persuasive: any asset it worth considering if price < relative value. Most security issues on GLBSE provide no real value, but some provide some level of limited value. If I can snag a small lot of shares where at the price I pay it will yield me 10-15% weekly, taking such positions can be warranted. Such opportunities have arrived in the past- mostly with fluctuating prices of small-scale mining listings. Even with fixed mh/s value decaying over time as the total network hashing rate increases, I have found such positions to be worth the effort of finding.

Sure you can buy an overpriced asset in the hope it will rise even further, and you might even make some money off it (if you can overcome the trade fees). Overall you would be much better off holding short positions though.

[Factory]

I for the most part agree with your sentiment. However, price is persuasive: any asset it worth considering if price < relative value. Most security issues on GLBSE provide no real value, but some provide some level of limited value. If I can snag a small lot of shares where at the price I pay it will yield me 10-15% weekly, taking such positions can be warranted. Such opportunities have arrived in the past- mostly with fluctuating prices of small-scale mining listings. Even with fixed mh/s value decaying over time as the total network hashing rate increases, I have found such positions to be worth the effort of finding.

Sure you can buy an overpriced asset in the hope it will rise even further, and you might even make some money off it (if you can overcome the trade fees). Overall you would be much better off holding short positions though.

"Overpriced" is always going to be a relative determination though.

Look at this example:

Issuance (XXXX) is normally .1 btc/share and pays a weekly dividends of .002 btc/share.

Bid- .095, Ask- .1

The current bids/buying interest disappears (which does on occasion with  low-volume securities), and the higher Bid becomes .01.

An investor can observe this, and put a bid order in for .015.

If the order never fills, the potential buyer never has to pay any fees, and can simply cancel the order. If the order fills, however, the individual just picked up shares yielding 13.33% at the price they paid. Of course, if this is a mining bond, those payouts will decay overtime -so long as the total network hashrate increases. But if we look at history, we see that the decay level will likely be at a level in which this individual can still stand to profit; even without selling the shares. Opportunities like this are few and far between, but they can often be very rewarding.

Of course, ASICs are coming soon, but the premise is still the same: price is persuasive.

[MPOE-PR]

Well, Gigamining alone is not worth investing in because after the .25 payment and adjusting to the same unit of mhash per second, hydro.bonds is the better deal. I also think the fair value for it is closer to .4, maybe lower, as I stopped calculating before I bothered doing discounted cash flows on it.

My current estimate is ASICs in November. If any bond is priced higher than .0025(probable average earnings)*11(weeks)*mhash, it is probably not going to break even before discounting. Post-asic, 1/20 seems to be the guestimate as to mining profitability. Consider all of this part to be the profit margin.

I honestly believe you have put yourself into a pretty rough spot. Only having verified securities leaves you little option to make real gains. I believe Namworld also does KRAKEN. You may be able to invest in that as even I believe Patrick is one of the safest operators in bitcoin.

Buying gold/platinum would not be my pick as those assets are basically pegged to the exchange rate. So this would not actually generate revenue in fiat in my mind.

Look up discounted cash flows. It is used to determine value and is heavily mentioned in Ben Graham's books/value investing.

This is remarkable, given that MPEx values it ~.4