[BitFunder] Mining difficulty futures now available: CoinBr.iDiff-*

[rini17]

CoinBr.iDiff-* futures are suitable for hedging mining operations/securities (for example, against new technology) and other kinds of short-term insurance/speculation against hashrate/mining difficulty. The share value is directly determined by current difficulty - as difficulty in satoshis. So, if CoinBr.iDiff-* expired today with difficulty 2968775 , every share would be worth 0,02968775 BTC.

This asset is available for shorting to anyone who provides collateral. Please inquiry on info@coinbr.com about doing so. Escrow at trusted third party is possible.

Sample scenario 1: Joe Miner fears his GPU becoming obsolete, so he buys 1000 CoinBr.iDiff-O at 0.07 for 70 BTC. The difficulty indeed rises to 10 million by March 20, so his shares will now liquidate at 0.1BTC, yielding him 100 BTC, with 30 BTC profit.

Sample scenario 2: B.Mixon's research unveils that no significant amount of ASICs will be delivered in February and decides to cash on it. Provides 100BTC collateral and gets 1250 shares of CoinBr.iDiff-E. Decides to sell them for 0.045, yielding 56,25 BTC. On 20th February the difficulty indeed stagnates and it is 3.5 million. He has to cover 0.035 per share. His net profit is 56.25-1250*0.035 = 12.5 BTC.

They are inspired by X.IDIFF futures on MPEx with improvements:

• Maximal coverage is clearly known in advance. In case of MPEx futures, they are covered somewhere more than 2.9x last quarter difficulty, it's not publicly known how much exactly.
• More short-term and will be renewed every month with expiration date of two months instead of quarters away. I believe that in current quickly changing landscape longer time speculation is not feasible.

Update July 2013: Both iDiff-O and iDiff-E are now split by a factor of 100 to make the prices more accessible. This means all prices and payout per share were divided by 100, otherwise the assets keep working as before.

[🏰 TradeFortress 🏰]

The summary of the O and E assets are messed up. CoinBr.iDiff-O says Feb too.

[rini17]

The summery of the O and E assets are messed up. CoinBr.iDiff-O says Feb too.

Thanks for observation, funny how we checked for everything and this escaped. Now I see the problem, it's inconsistent with MPBPT, and -O/-E should refer to closing month, not starting one.
Since there were no orders/transactions so far, we decided to switch them. It will be thus:

CoinBr.iDiff-E expires on 20th February

CoinBr.iDiff-O expires on 20th March

After iDiff-E expires, it will be reintroduced with third wednesday of April expiration, and so on, to keep up with MPEx IDIFF dates.

[MPOE-PR]

The summery of the O and E assets are messed up. CoinBr.iDiff-O says Feb too.

Thanks for observation, funny how we checked for everything and this escaped. Now I see the problem, it's inconsistent with MPBPT, and -O/-E should refer to closing month, not starting one.
Since there were no orders/transactions so far, we decided to switch them. It will be thus:

CoinBr.iDiff-E expires on 20th February

CoinBr.iDiff-O expires on 20th March

After iDiff-E expires, it will be reintroduced with third wednesday of April expiration, and so on, to keep up with MPEx IDIFF dates.

How did you pick O and E?

[🏰 TradeFortress 🏰]

The summery of the O and E assets are messed up. CoinBr.iDiff-O says Feb too.

Thanks for observation, funny how we checked for everything and this escaped. Now I see the problem, it's inconsistent with MPBPT, and -O/-E should refer to closing month, not starting one.
Since there were no orders/transactions so far, we decided to switch them. It will be thus:

CoinBr.iDiff-E expires on 20th February

CoinBr.iDiff-O expires on 20th March

After iDiff-E expires, it will be reintroduced with third wednesday of April expiration, and so on, to keep up with MPEx IDIFF dates.

How did you pick O and E?

E = even
O = odd

[MPOE-PR]

E = even
O = odd

Ah, okay. Cool.

[rini17]

E = even
O = odd

Ah, okay. Cool.

Ukyo's idea, to give due credit. As well as to put CoinBr right in the names of the assets

[molecular]

Is CoinBr (or jurav) affiliated with bitfunder somehow?

[rini17]

Is CoinBr (or jurav) affiliated with bitfunder somehow?

I'm just one of issuers there.

[rini17]

CoinBr.iDiff-E February expired as planned, paid everyone 0.03651011 per share (current difficulty) and also returned remaining collateral 0.08-0.03651011 = 0.04348989 per share to people who were short selling. In few days it will be reintroduced as CoinBr.iDiff-E April.

[molecular]

CoinBr.iDiff-E February expired as planned, paid everyone 0.03651011 per share (current difficulty) and also returned remaining collateral 0.08-0.03651011 = 0.04348989 per share to people who were short selling. In few days it will be reintroduced as CoinBr.iDiff-E April.

what happens to existing shares? can you "decommission" them?

[rini17]

CoinBr.iDiff-E February expired as planned, paid everyone 0.03651011 per share (current difficulty) and also returned remaining collateral 0.08-0.03651011 = 0.04348989 per share to people who were short selling. In few days it will be reintroduced as CoinBr.iDiff-E April.

what happens to existing shares? can you "decommission" them?

Yes, we'll start with clean slate. MPBPT works this way, too. Both iDiff and MPBPT are investments where you can either profit or lose part of your investment, so keeping the shares would require some kind of "negative dividends". It's simpler just to remove all shares and pay everyone out at expiration date. Another possibility would be mutual fund with fixed pricing based on underlying assets, maybe that will happen in future.

[molecular]

CoinBr.iDiff-E February expired as planned, paid everyone 0.03651011 per share (current difficulty) and also returned remaining collateral 0.08-0.03651011 = 0.04348989 per share to people who were short selling. In few days it will be reintroduced as CoinBr.iDiff-E April.

what happens to existing shares? can you "decommission" them?

Yes, we'll start with clean slate. MPBPT works this way, too. Both iDiff and MPBPT are investments where you can either profit or lose part of your investment, so keeping the shares would require some kind of "negative dividends". It's simpler just to remove all shares and pay everyone out at expiration date. Another possibility would be mutual fund with fixed pricing based on underlying assets, maybe that will happen in future.

totally acceptable. Just wasn't sure how it would go down technically (I don't know bitfunder from issuer perspective at all)

[rini17]

CoinBr.iDiff-E April now open. Ask set accordingly to our assessment of difficulty to stay < 9.5m We'll see... Bids were left as is, you may want to update them.

[rini17]

CoinBr.iDiff-O paid 0.04847647 BTC/share as per current difficulty, liquidated and reissued with 15th May expiration.

Also,CoinBr.iDiff-E now sells again at 0.095!

[rini17]

<jurov> ;;bc,stats
<gribble> Current Blocks: 231122 | Current Difficulty: 7672999.920164138 | Next Difficulty At Block: 231839 | Next Difficulty In: 717 blocks | Next Difficulty In About: 4 days, 4 hours, 37 minutes, and 53 seconds | Next Difficulty Estimate: 9033281.16731 | Estimated Percent Change: 17.72815

As CoinBr.iDiff-E expires in 4 days (on Wednesday midnight UTC), seems it will be interesting till last moment. If you don't want to get only 0.07672999 paid per share, mine hard! 

[rini17]

CoinBr.iDiff-E April future liquidated with 0.08974296 paid per share. Jun issue under preparation.

There were few chaotic trades ysterday jsut before closing, I can understand some wanted to liquidate prematurely, but there were some new shares bought at a loss too.... if you don't understand how this work, don't be shy to ask!

[rini17]

CoinBr.iDiff-E price at its lowest ... now only at 0.17 BTC.

Thinking we now have silence before ASIC storm in June and difficulty will be over 17 million on June 19? BUY!

[gog1]

Is there forced buy-back for the short if difficulty spikes?

The shares do get liquidated on expiration?

[rini17]

Is there forced buy-back for the short if difficulty spikes?

Yes, if difficulty spikes to 35 million(EDIT: this limit is different for every month, check the description), they expire and pay off prematurely.

The shares do get liquidated on expiration?

Yes.