[BTC-TC] Deprived Mining Speculation (DMS)

[Deprived]

As far as I am concerned (for MINING), I'm ok with direct shares / direct dividends, Google Docs or whatever (friedcat style...)

The fees for MINING dividends would be prohibitively high. The same is true for SELLING dividends in a couple more diff. changes.

MINING dividends are already too small to send daily manually.  They're below the dust limit - meaning they'd be ignored.

Dividends are working again on BTC-TC, so I'm processing the overdue ones now and also have scheduled today's dividends.

I'm still unable to transfer BTC or shares - so there's one redemption payment still due.  The person in question sent back 1252 each of MINING + SELLING but trading was halted before I processed it.  He (or she) is owed:

4.652156337 BTC
200 CIPHERMINE.B1

If whoever it was would like to contact me I can send the BTC direct to a wallet of their choice.  Nothing I can do about the CIPHERMINE.B1 right now.

It's mine.I would E-mail you later.

So everyone knows what's happening with this, I've received an email from Keven claiming those transfers.  I just emailed him back asking for copies of the transactions - if he can provide the transaction IDs and time-stamps then I can be confident he has access to the sending account and will transfer him the BTC (the Ciphermine.B1 will have to wait until that's relisted).

I have not receive any email from you.I can provide the transaction time-stamps and will email you later, but where're the transaction IDs? I can not find these。

Have sent your BTC to the address you provided (saying it here - as seems your email provider is still blocking hotmail emails).  Let me know if you haven't received it in a few hours - I did a withdrawal from BTC-TC which said it went through (it was just below the daily limit so didn't have to wait for manual approval).

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[Keven]

As far as I am concerned (for MINING), I'm ok with direct shares / direct dividends, Google Docs or whatever (friedcat style...)

The fees for MINING dividends would be prohibitively high. The same is true for SELLING dividends in a couple more diff. changes.

MINING dividends are already too small to send daily manually.  They're below the dust limit - meaning they'd be ignored.

Dividends are working again on BTC-TC, so I'm processing the overdue ones now and also have scheduled today's dividends.

I'm still unable to transfer BTC or shares - so there's one redemption payment still due.  The person in question sent back 1252 each of MINING + SELLING but trading was halted before I processed it.  He (or she) is owed:

4.652156337 BTC
200 CIPHERMINE.B1

If whoever it was would like to contact me I can send the BTC direct to a wallet of their choice.  Nothing I can do about the CIPHERMINE.B1 right now.

It's mine.I would E-mail you later.

So everyone knows what's happening with this, I've received an email from Keven claiming those transfers.  I just emailed him back asking for copies of the transactions - if he can provide the transaction IDs and time-stamps then I can be confident he has access to the sending account and will transfer him the BTC (the Ciphermine.B1 will have to wait until that's relisted).

I have not receive any email from you.I can provide the transaction time-stamps and will email you later, but where're the transaction IDs? I can not find these。

Have sent your BTC to the address you provided (saying it here - as seems your email provider is still blocking hotmail emails).  Let me know if you haven't received it in a few hours - I did a withdrawal from BTC-TC which said it went through (it was just below the daily limit so didn't have to wait for manual approval).

I've received 4.65215634 BTC. Thank you !
Still haven't received your email, I thougt it's my email service issue.

[Deprived]

BTC Balance (BTC-TC)   149.9844462
9071 LTC-ATF.B1    90.71000000
CIPHERMINE Bonds    260.56000000
Coinlenders CD 27/9    203.64459670
Just-Dice Balance    153.86136722
TOTAL ASSETS    858.76041014
   
Outstanding MINING   152575
Outstanding SELLING   152575
Outstanding PURCHASE   10479
Effective Units   163054
   
Block reward   25
Difficulty   189,281,249
Hashes per MINING   5000000
   
Daily Dividend    0.00001328
50 days (Min Liquid)    0.00066423
100 days (Forced Close)    0.00132846
365 days (Buyback)    0.00484889
405 days (IPO)    0.00538028
400 days (Post SELLING div)    0.00531385
410 days (Pre SELLING div)    0.00544670
   
NAV Post MINING Div    856.59429703
NAV/U Post MINING Div    0.00525344
Days Dividend Post Div   395.45
SELLING Dividend    -         
NAV Post SELLING Div    856.59429703
NAV/U Post Selling Div    0.00525344

[psychogilgamesh]

It would be nice to find out why Burnside decided to throw in the towel before considering this.  If it's because he doesn't have a broker/dealer license, that is something that can't be fixed overnight.

Because if he sells the functioning exchange itself he has significantly more legal liability.

Apologies, I understand why he is selling just the code etc...  My question, as someone who is interested in buying the code, is what prompted Burnside to close in the first place.  Was it SEC or FINCEN stuff, or the LABCOIN IPO, or some other personal reason?  I am guessing it was the first item, as I just received a notice from Dwolla that they are severing all times with the Bitcoin community.

Oh, it's getting more "interesting" by the moment!

In another post I authored, someone mentioned Ripple could be used for a distributed stock exchange.  Sorry not familiar with it.  Worth considering?  I am sure Deprived would like to keep this thread strictly for DMS.  So the other thread is: https://bitcointalk.org/index.php?topic=308012.msg3315889#msg3315889

I'd also guess on it being the SEC. Can't imagine anyone seeing trading as money laundering.

I'm just wondering what's going to happen to my 230 shares of DMS.MINING. Mostly because I used a loan to get them and I really should sell off some shares.

[Deprived]

BTC Balance (BTC-TC)   147.8190891
9071 LTC-ATF.B1    90.71000000
CIPHERMINE Bonds    260.56000000
Coinlenders CD 27/9    203.64459670
Just-Dice Balance    153.86136722
TOTAL ASSETS    856.59505302
   
Outstanding MINING   152575
Outstanding SELLING   152575
Outstanding PURCHASE   10479
Effective Units   163054
   
Block reward   25
Difficulty   189,281,249
Hashes per MINING   5000000
   
Daily Dividend    0.00001328
50 days (Min Liquid)    0.00066423
100 days (Forced Close)    0.00132846
365 days (Buyback)    0.00484889
405 days (IPO)    0.00538028
400 days (Post SELLING div)    0.00531385
410 days (Pre SELLING div)    0.00544670
   
NAV Post MINING Div    854.42893991
NAV/U Post MINING Div    0.00524016
Days Dividend Post Div   394.45
SELLING Dividend    -         
NAV Post SELLING Div    854.42893991
NAV/U Post Selling Div    0.00524016

[Deprived]

BTC Balance (BTC-TC)   146.6196902
9071 LTC-ATF.B1    90.71000000
CIPHERMINE Bonds    260.56000000
Coinlenders CD 27/9    203.64459670
Just-Dice Balance    153.86136722
TOTAL ASSETS    855.39565414
   
Outstanding MINING   152575
Outstanding SELLING   152575
Outstanding PURCHASE   10479
Effective Units   163054
   
Block reward   25
Difficulty   189,281,249
Hashes per MINING   5000000
   
Daily Dividend    0.00001328
50 days (Min Liquid)    0.00066423
100 days (Forced Close)    0.00132846
365 days (Buyback)    0.00484889
405 days (IPO)    0.00538028
400 days (Post SELLING div)    0.00531385
410 days (Pre SELLING div)    0.00544670
   
NAV Post MINING Div    853.22954103
NAV/U Post MINING Div    0.00523280
Days Dividend Post Div   393.90
SELLING Dividend    -         
NAV Post SELLING Div    853.22954103

Ciphermine.B1 dividend for this week came through (a bit under 1 BTC) so NAV/U has dropped by less than the MINING dividend today.

My expectation at present is that DMS will be relisted and trading at some point late this month or very early next month - with ALL investors able to trade without providing personally-identifying information.  That's not absolutely certain yet - but I'd say there's a 90%+ chance of it being the case.  I also expect full liqiuidity to return within weeks of that (i.e. the CIPHERMINE.B1 to be liquid and so fully BTC redemptions being possible).

I'll provide more information on this as soon as I can - hopefully in a week or so's time a more detailed explanation can be provided.  I'm not certain yet whether modifications to the contract will be needed - most likely there'd have to be short-term limits on exchanges of PURCHASE for MINING+SELLING due to transfers being manually processed but that doesn't require a change in contract as the existing contract already provides that "If activity on these security reaches a level which warrants it then this procedure may be amended or automated at Manager's discretion."  Any such restriction would not, of course, be such as to prevent existing holders of PURCHASE from converting all their holdings into SELLING+MINING in one go.

[Rannasha]

Very interested to learn where DMS is going next. Also glad to hear (or have implied) that it's not going to be BitFunder. Even before the recent mess it was, for me, the least favourite of the 3 regular BTC exchanges (BTCT, HL, BF).

Manual PURCHASE transfers makes my arbitrage-bot sad, but I guess it can cope. I will give it a counselling session.

[Deprived]

Very interested to learn where DMS is going next. Also glad to hear (or have implied) that it's not going to be BitFunder. Even before the recent mess it was, for me, the least favourite of the 3 regular BTC exchanges (BTCT, HL, BF).

Manual PURCHASE transfers makes my arbitrage-bot sad, but I guess it can cope. I will give it a counselling session.

Yeah it isn't Bitfunder - which seems to be dieing right now with withdrawals impossible for last few days (one or both of Bitfunder and/or Weexchange seem to always be down).  It's not an exchange which exists at all at present (in the sense of being open to public use).  Whilst I'd have preferred to move to an existing exchange of the two credible & feasible ones one (Bitfunder) ceased to be credible (issuer defaulting on his own loans security - but refusing redemptions in line with its contract) and the other (Havelock) isn't taking new listings nor is it clarifying its position on US investors.

MPEx is credible (though allows some dodgy practices - such as the issuer issuing warrants to himself but not disclosing their expiry date making valuation impossible for everyone else) but not feasible due to the burden imposed on existing investors of either paying a subscription fee there or committing to regular monthly fees to use a third-party broker.

As soon as I can provide more information I will - but I'd prefer not to give anything detailed until it's finally agreed : better to say nothing than say something which later has to be retracted.  I can confirm all investors would be able to trade without providing ID as that's a precondition on me moving DMS to ANY exchange.  So if it doesn't allow that then we wouldn't list there.

[Rannasha]

Hah, now that you've mentioned it's not Havelock either, I'm even more curious

[junkonator]

Maybe Kates/CIPHERMINEs creation? 21st we will know more.

[HowlingMad]

As soon as I can provide more information I will - but I'd prefer not to give anything detailed until it's finally agreed : better to say nothing than say something which later has to be retracted.  I can confirm all investors would be able to trade without providing ID as that's a precondition on me moving DMS to ANY exchange.  So if it doesn't allow that then we wouldn't list there.

Deprived, I am just happy we are going somewhere!  Don't really care about the verified ID stuff, you know sooner or later ALL countries will be requiring it.  Bankers/politicians need their pound of flesh. 

Just one question though.  What happens when MINING = zero?  Do you shutdown this fund and start with a new one?

You have really been conscientious and certainly someone we can trust through this whole mess. 
 

[stripykitteh]

As soon as I can provide more information I will - but I'd prefer not to give anything detailed until it's finally agreed : better to say nothing than say something which later has to be retracted.  I can confirm all investors would be able to trade without providing ID as that's a precondition on me moving DMS to ANY exchange.  So if it doesn't allow that then we wouldn't list there.

Deprived, I am just happy we are going somewhere!  Don't really care about the verified ID stuff, you know sooner or later ALL countries will be requiring it.  Bankers/politicians need their pound of flesh. 

Just one question though.  What happens when MINING = zero?  Do you shutdown this fund and start with a new one?

You have really been conscientious and certainly someone we can trust through this whole mess. 
 

Good question. I think some form of bundling might be required. E.g., instead of 5mhash PMBs, MINING becomes 50mhash PMBs. Though you'd have to pay out people holding odd lots of MINING.

[Deprived]

As soon as I can provide more information I will - but I'd prefer not to give anything detailed until it's finally agreed : better to say nothing than say something which later has to be retracted.  I can confirm all investors would be able to trade without providing ID as that's a precondition on me moving DMS to ANY exchange.  So if it doesn't allow that then we wouldn't list there.

Deprived, I am just happy we are going somewhere!  Don't really care about the verified ID stuff, you know sooner or later ALL countries will be requiring it.  Bankers/politicians need their pound of flesh. 

Just one question though.  What happens when MINING = zero?  Do you shutdown this fund and start with a new one?

You have really been conscientious and certainly someone we can trust through this whole mess. 
 

Good question. I think some form of bundling might be required. E.g., instead of 5mhash PMBs, MINING becomes 50mhash PMBs. Though you'd have to pay out people holding odd lots of MINING.

I've had a few (i.e. a lot of) beers so apologies if I'm not as clear as I could be.  MINING can't ever reach 0 or near to it (relative to the price of PURCHASE).  That's because if there's a massive rise then immediately there's a large dividend to SELLING reducing the NVA/U of PURCHASE.

After EVERY increase i ndifficulty greater than a few % MINING is always going to be paying dividends equal to 1/400th of NAV/U per day.  That sets an absolute minimum on the value/price of MINING (depending on what you believe the minimum to be between dfficulty changes).

Where the contract is currently silent is on the situation where MINING's dividends/value end up being effectively rounding errors (which requires a few orders of magnitude increase in difficulty).  Whilst I believe that unlikely (prices were, in part, set based on what I believed to be best/worst cases in the short-mid term) it obviously isn't theoretically impossible (note that if it occurs then nearly all ASICs produced to date would mine less coins than the power cost of running them let alone any recovery of sunk costs).

My expectation was (and remains) that at some point in the not too distant future MINING will end up being the majority of PURCHASE value - and SELLING will then vote to close the fund (obtainin 10% of NAV/U rather than the 0% they'd receive back if they waited).  I don't want to poison the pool by giving by prediction of when that will occur but rather obviously it would have to occur between difficulty increasing by 1 order of magnitude (which is almost certain) and it increasing by 2 orders of magnitude (which I believe to be highly unlikely with current technology).

If it actually happens that MINING dividends drop below 10 satoshis per day then we DO have a problem that isn't covered by the contract.  I believe it exceedingly unlikely that will happen without a period of stagnation previously (where SELLING should rationally vote to close) as the break-even point for those obtaining free hardware and $0.01/KWh electricity falls before that with current technology (and that's the edge case I used when setting hashes/share initially to avoid this problem).

It may not be the most satisfcatory answer ever - but my response is that:

a) It isn't likely to happen.
b) If it does happen then I'll sort something out.

In retrospect there's a few changes I should have made when designing DMS - one of which definitely IS provision for reverse splits to keep the price of MINING in a sensible range.

Do bear in mind when considering this that you'd only be discussing dividends per month of under 1% of current market value of MINING - whatever else is the case it's entirely trivial when currently assessing the value of MINING.

On a last note let me give a (probably irresponsible - but I've had few beers so who cares) teaser.  The biggest profits to be made trading DMS are yet to come - predicting the cross-over point where difficulty ceases rising and the price of MINING gos through the roof (SELLING has no exit route other than paying 90% of NAV/U to MINING).  I don't pretend to know exactly when that occurs but when it does it's going to catch a lot of people by surprise.

From a management perspective it's been a fun (and profitable) security to run - right up until recently.  Hopefully we can get back to that : it offers a legitimate method for people to bet on their judgment vs others KNOWING in advance the odds they get - which is very rare in BTC land (most betting services either don't give fixed odds, have no market depth or are just random in outcome).

[baloo_kiev]

The only factor you haven't accounted for is BTC/USD ratio. If BTC goes to 1k$, it will subtract another order of magnitude from electricity and hardware prices (in BTC).

[stripykitteh]

On a last note let me give a (probably irresponsible - but I've had few beers so who cares) teaser.  The biggest profits to be made trading DMS are yet to come - predicting the cross-over point where difficulty ceases rising and the price of MINING gos through the roof (SELLING has no exit route other than paying 90% of NAV/U to MINING).  I don't pretend to know exactly when that occurs but when it does it's going to catch a lot of people by surprise.

Yeah, my crystal ball isn't perfect either but it's bound to happen at some stage. We've gone from 130nm to 28nm in less than a year. The closer we get to ASICs on process sizes rivaling current-spec commercial CPUs, the slower the increase in adoption of smaller sizes as the cost of doing so climbs exponentially. I expect that the highest-ever difficulty increase (in % terms) in the ASIC era is likely to happen in the next 3 months. Of course a complicating factor could be a surge in the price of BTC triggers a future surge in ASIC production before the point is reached when SELLING votes to close the fund.

[Deprived]

The only factor you haven't accounted for is BTC/USD ratio. If BTC goes to 1k$, it will subtract another order of magnitude from electricity and hardware prices (in BTC).

Yep - a massive spike in BTC prices WOULD break prices.  But my prediction was (and remains) that isn't going to happen until AFTER difficulty has stagnated.  But, obviously, something could arise to make that wrong.

I'm fairly confident in a medium to long-term rise in BTC price (vs fiat) but short-term I don't see any prospect of a sustained significant rise.  Certainly not of one likely to matter on the scale necessary to have impact here.

As mentioned earlier - in retrospect I should have built provision for this into the contract (though it's actually very hard to do - as any reverse-split is either unnecessarily beneficial to those holding small quantities of shares or unfairly prejudicial towards them).  In theory the current contract could operate right down until MINING dividends fell below half a satoshi (i.e. were rounded down to zero) - in practice I'd want to close the situation out an order of magnitude higher.  I'd also need to correct my spreadsheets to round to what was actually paid at some stage (at present the discrepancy is tiny enough not to make any difference at all).

[Deprived]

On a last note let me give a (probably irresponsible - but I've had few beers so who cares) teaser.  The biggest profits to be made trading DMS are yet to come - predicting the cross-over point where difficulty ceases rising and the price of MINING gos through the roof (SELLING has no exit route other than paying 90% of NAV/U to MINING).  I don't pretend to know exactly when that occurs but when it does it's going to catch a lot of people by surprise.

Yeah, my crystal ball isn't perfect either but it's bound to happen at some stage. We've gone from 130nm to 28nm in less than a year. The closer we get to ASICs on process sizes rivaling current-spec commercial CPUs, the slower the increase in adoption of smaller sizes as the cost of doing so climbs exponentially. I expect that the highest-ever difficulty increase (in % terms) in the ASIC era is likely to happen in the next 3 months. Of course a complicating factor could be a surge in the price of BTC triggers a future surge in ASIC production before the point is reached when SELLING votes to close the fund.

On ASIC purchases I'm fairly torn in opinion.

A) One part of me says "Surely they;'re going to notice at some point that for the last 6 months next to nothing purchased will ever mine the BTC it cost to buy".
B)  The other part says "Heh - they're just idiots and will continue throwing away BTC in the misguided belief that mining has some divine right to be profitable".

The practical part of me just says "fuck it - I'll continue printing money : if fools insist on throwing away their BTC then I'm at least as deserving to collect some as everyone else".  If only I was willing to lie and/or mislead to make BTC I could do a lot better.

[HowlingMad]

On a last note let me give a (probably irresponsible - but I've had few beers so who cares) teaser.  

You handle your beer quite well!   
Now I get the point.  Technically, Mining can never reach zero but at some point it will make sense to cancel it all and start from scratch.

With the ridiculous difficulty increases lately (30%+ 3 times a month), I have scrapped any plans to buy mining hardware.  I don't have $100K to make it economically profitable, and then have it drop dead quickly.

[stripykitteh]

The practical part of me just says "fuck it - I'll continue printing money : if fools insist on throwing away their BTC then I'm at least as deserving to collect some as everyone else".  If only I was willing to lie and/or mislead to make BTC I could do a lot better.

That's pretty much how I see it. While nothing is guaranteed of course, on occasions I've felt like my position in DMS is the nearest thing there is to taking candy from a baby.

[HowlingMad]

That's pretty much how I see it. While nothing is guaranteed of course, on occasions I've felt like my position in DMS is the nearest thing there is to taking candy from a baby.

You said it Kitteh!!  My sweet tooth has been killing me lately.