[TAT.VIRTUALMINE]

[🏰 TradeFortress 🏰]

But that's all moot if the value of your share drops. In addition, increasing per day is compound, and the network difficulty has being growing by more than 3% a day recently. The difference is huge:

1.03^365 = 48482x
1.013^365 = 111x

PMBs CAN only give a certain amount of output. The higher the difficulty is, the more the output is permanently reduced. The difficulty is not going to go back to pre-ASIC eras, unless Bitcoins become worthless, then well.

20% APR is horrible if after a year the shares are worth 75% of what they are before.

[hak8or]

I think I am misunderstanding something. Each share is worth 1 Mhash/s but costs 0.007 BTC, which is about 84 cents, giving 0.84$/1Mhash.s
A 7950 costs around $300 but gives 500Mhash/s, giving 0.60$/1Mhash.s

Why would anyone purchase this share over just getting a GPU, ignoring the need for maintenance and whatnot.

[🏰 TradeFortress 🏰]

Electricity, space, and yes maintenance has a value.

[Deprived]

Them some sweet sweet divs. This first month will be the best, but it'll still be worth keeping it in here for ~8 months. After 8 months it'll prob be at 5% APY which is OK if stable.

You have not done research on the network difficulty.

Perhaps not enough, but anything is a guess without knowing how ASIC shipments will play out.

I guestimated based on coinish.com's calculator (rather than $2.66, it was at $62.6 with 0 months as time to delivery) with an increase in difficulty of 1.3% per day that it will be 23x now in 8 months (so around 300 mil). If the APY is around 120% now, it could be 5% in 8 months.

Whatever, if it's 5 months or it's 2%, the point is it'll be good holding onto it up to 5% APY anyway. Before we hit even 15% I don't expect people to be dropping out, YABMC is still going good.

You won't have the option of holding onto it at 5% APY.

What you and lots of others have missed is the detail of the buyback clause.

"The issuer reserves the right to buy back bonds at a price equal to 110% of the highest price the asset was traded for over the prior 7 days or 200 times the value of the most recent dividend."

200 times last dividend means under 29 weeks dividend.  If APY falls to 5% of sales price then that means he can buy back for ~3% of sales price.  I'd expect forced buy back to be WELL before that point.

Right now the buy-back price is about 20% over trading price.  In about 3 difficulty changes' time it'll become profitable for him to buy back (even counting the dividends paid in the interim).  I'd expect him to wait longer than that - as there's more profit to be made letting difficulty rise a bit more first.

I've nothing at all against this sort of offering - I'm working on one myself.  But the buyback at under 30 weeks payout makes this a losing proposition for anyone other than TAT or people who flip shares fast - until their price falls a lot when some opportunities for profit WILL arise.

I've flipped all mine (for my fund) for a profit now - which is why I'm only explaining this now rather than earlier.  As an approximation, to stand a reasonable chance of making a profit on this you need to be buying at around half the current buy-back price (at 200 days' dividend).  I'm not going to explain all the math behind that - but try modelling with any reasonable prediction of network difficulty and you'll end up around that ball-park.

The devil is ALWAYS in the detail - in this case the detail of buy-back rights.

[nar9000]

TAT.hot_potato

One question I have:  Is the issuer restricted in their ability to restructure the contract?  (I have seen in the past where a bond very much like this one recalculated the 'share' value from 1mh/s to something like 7mh/s)?  ....options trading

For that matter why not just get right down to the heart of it and setup a futures market trading in projected network hashrate, just sayin...


and as 'Deprived'  pointed out above me.. how does buyback fit into options trading? how is this normally calculated?

[Deprived]

TAT.hot_potato

One question I have:  Is the issuer restricted in their ability to restructure the contract?  (I have seen in the past where a bond very much like this one recalculated the 'share' value from 1mh/s to something like 7mh/s)?  ....options trading

For that matter why not just get right down to the heart of it and setup a futures market trading in projected network hashrate, just sayin...


and as 'Deprived'  pointed out above me.. how does buyback fit into options trading? how is this normally calculated?

Buy-back for a bond would normally be at face value.  This (and just about ALL 'fixed-rate mining bonds') aren't actually bonds.  This is just a way for people who don't understand the math of mining to donate BTC to TAT - which isn't as bad as it sounds as you may donate less than on many other mining offerings based on actual hardware.

Mining securities, in general, make a profit for the issuers NOT for investors.  That's why they don't buy back at face value - as that would keep the risk with the issuer.

On options there is no buy-back : the transfer of value there occurs either at purchase or at execution of the option (depending on how you value it).  Here it'll primarily occur at buy-back as - until then - people will be exchanging them via the market at prices which ignore the reality of an impending buyback at below the traded price.

[nar9000]

Thanks for clearing that up with me on the options.  Basically if I understand correctly: in summary if the option is never covered before the buyback the shares are gone so option can never be covered?

Some interesting math for the issuer to determine how soon he does the buy back.
current they can buy back@0.008276

40 hours from now they can buy back@0.006656

+2 weeks they can buy back at under 0.005? 0.004?

Assuming my math is correct this is an explosively hot potato..  The math for the issuer is how long will he wait to buy it back vs. paying the divs....

I hope my numbers are wrong....

TAT.hot_potato

One question I have:  Is the issuer restricted in their ability to restructure the contract?  (I have seen in the past where a bond very much like this one recalculated the 'share' value from 1mh/s to something like 7mh/s)?  ....options trading

For that matter why not just get right down to the heart of it and setup a futures market trading in projected network hashrate, just sayin...


and as 'Deprived'  pointed out above me.. how does buyback fit into options trading? how is this normally calculated?

Buy-back for a bond would normally be at face value.  This (and just about ALL 'fixed-rate mining bonds') aren't actually bonds.  This is just a way for people who don't understand the math of mining to donate BTC to TAT - which isn't as bad as it sounds as you may donate less than on many other mining offerings based on actual hardware.

Mining securities, in general, make a profit for the issuers NOT for investors.  That's why they don't buy back at face value - as that would keep the risk with the issuer.

On options there is no buy-back : the transfer of value there occurs either at purchase or at execution of the option (depending on how you value it).  Here it'll primarily occur at buy-back as - until then - people will be exchanging them via the market at prices which ignore the reality of an impending buyback at below the traded price.

[Deprived]

Thanks for clearing that up with me on the options.  Basically if I understand correctly: in summary if the option is never covered before the buyback the shares are gone so option can never be covered?

Some interesting math for the issuer to determine how soon he does the buy back.
current they can buy back@0.008276

40 hours from now they can buy back@0.006656

+2 weeks they can buy back at under 0.005? 0.004?

Assuming my math is correct this is an explosively hot potato..  The math for the issuer is how long will he wait to buy it back vs. paying the divs....

I hope my numbers are wrong....

The first few numbers are correct.  Predicting difficulty after the next change is guess-work.  But yes - you don't want to be holding them (if bought at initial price) after the next 3 difficulty changes for sure, possibly after next 2.  I would NOT expect him to buy back that quickly - the longer he waits the more profit he makes.  But at some point that crosses over with the opportunity cost of not using the ASIC-MINER shares to secure some other revenue stream (or ASIC-MINER share price starts to fall and he wants to sell so has to recall these to free up the shares).

[ssbtoday]

buying them for 0.004 btc each

[btcash]

Why are BTCT mods so lazy? So far only 4 votes.

[Eric Muyser]

20% APR is horrible if after a year the shares are worth 75% of what they are before.

I agree, but as I said, I don't expect people to drop out before 15% APR, thus the shares would be worth 100% of what they were before until that breaking point. B.YABMC is doing just fine at 55% APR - it's actually going up.

I don't expect the difficulty to go down. I didn't expect it to go up that much though. If you're right, this bond won't last my proposed 8 months, but it's still fine for 2-3 months at least. We'll see.

I'm not disagreeing, I'm just a bit more optimistic.

[Eric Muyser]

The first few numbers are correct.  Predicting difficulty after the next change is guess-work.  But yes - you don't want to be holding them (if bought at initial price) after the next 3 difficulty changes for sure, possibly after next 2.  I would NOT expect him to buy back that quickly - the longer he waits the more profit he makes.  But at some point that crosses over with the opportunity cost of not using the ASIC-MINER shares to secure some other revenue stream (or ASIC-MINER share price starts to fall and he wants to sell so has to recall these to free up the shares).

Yah, Deprived is right, and I don't expect TAT wants to give his new capital back so soon. Maybe at 0.004 or less. That'll be a while.

But this 200x buyback is kind of bull. You should have to buy back at the IPO value IMO.

[🏰 TradeFortress 🏰]

It doesn't matter if people drop out before "15% APR", the price will go down because mining itself only produces a fixed amount of BTC. Every single BTC paid out is one less BTC that could be mined.

It is not like a company that can grow in the future. It's like a company making products for a market that always shrinks in numbers. In addition, as the difficulty increases the price will drop.

[Eric Muyser]

It doesn't matter if people drop out before "15% APR", the price will go down because mining itself only produces a fixed amount of BTC. Every single BTC paid out is one less BTC that could be mined.

It is not like a company that can grow in the future. It's like a company making products for a market that always shrinks in numbers. In addition, as the difficulty increases the price will drop.

Your theory doesn't really hold up in the real world. Yes, obviously, it's perpetual mining, *the BTC mined* is going to go down. Yet people still buy and hold onto it.



Initially rocky, but look since March, it's become more stable and gone up on average. Yet look at the dividends slowly dwindling.

[🏰 TradeFortress 🏰]

Are you aware of the price that YAMBC initially was traded at?

It also has tiny volume, and yes sometimes markets are illogical.

[Deprived]

It doesn't matter if people drop out before "15% APR", the price will go down because mining itself only produces a fixed amount of BTC. Every single BTC paid out is one less BTC that could be mined.

It is not like a company that can grow in the future. It's like a company making products for a market that always shrinks in numbers. In addition, as the difficulty increases the price will drop.

Your theory doesn't really hold up in the real world. Yes, obviously, it's perpetual mining, *the BTC mined* is going to go down. Yet people still buy and hold onto it.



Initially rocky, but look since March, it's become more stable and gone up on average. Yet look at the dividends slowly dwindling.

The difference is that this one has a buy-back allowed at a low multiple of daily dividend.

If the price stays high then not only can he buy back the shares for far less - but immediately before doing so he can fill the markt bids so as to make an immediate profit on purchases that never receive a single dividend.

It's already hard for people who haven't managed to flip yet - as when they sell they're competing against the issuer who's steadily selling more into Bids.

[Eric Muyser]

Are you aware of the price that YAMBC initially traded at?

Irrelevant.

The difference is that this one has a buy-back allowed at a low multiple of daily dividend.

If the price stays high then not only can he buy back the shares for far less - but immediately before doing so he can fill the markt bids so as to make an immediate profit on purchases that never receive a single dividend.

It's already hard for people who haven't managed to flip yet - as when they sell they're competing against the issuer who's steadily selling more into Bids.

I agree that buyback clause sucks. I still don't think it applies for the next few difficulties. I'm also not sure TAT is in the business of screwing people over. Would be good to amend it that he won't fill bids after he does a buyback, or it must be a complete buyback, or buy back at the IPO price. Shouldn't be allowed to IPO and buyback immediately either, because next difficulty if he IPO's at 0.007 he could immediate buyback at 0.0066, technically, even though I doubt he will, the agreement allows for it.

Paint it as sketchy as you want, but it's all about trust in the end. I have enough trust that TAT is aiming for a win/win situation. Which results in a few good months of divs if ya'll don't freak out with insecurity and theorycrafting.

[🏰 TradeFortress 🏰]

FYI, the asset issuer will be able to buyback bonds for around 0.006 BTC when the next difficulty hits. It's going to be around 16 million.

So, yes it applies to the next difficulty in fact. I highly doubt the asset issuer will buy back through, this is simply pure profit for TAT.

[ThickAsThieves]

Just as an FYI, my intent is for this asset to last as long as possible. The buyback terms are there as a way to exit the asset if necessary (something I hope to avoid as long as possible) not as a design to "pull a fast one" the moment it appears profitable to do so. I can't predict the future, and I definitely needed a way to stop the train if that's what's called for.

Keep in mind that if/when this asset depreciates, new bonds could still be issued at market prices, which could keep this asset afloat longer than most. The inspiration for this offering was indeed to find the bottom price for mining hashes, and provide that price, thus correcting the entire PMB (and some regular hardware mining) asset market.

I'm not saying this asset will last forever, or be perpetually profitable, or will never depreciate, or will never close down. I'm simply saying it was built to be used an instrument to anyone that understands how to use it, as well as any that don't.

[🏰 TradeFortress 🏰]

Also, here is exactly why you cannot use YAMBC as an example:



ASICs changes the game, just like the effect GPUs and FPGAs had on the mining difficulty.