[BTC-TC] Deprived Mining Speculation (DMS)

[alexius89]

In the night of the 25th to 26th  of June  there was a increase of the Hashrate  by 60 TH. Now its back to the normal level.

Did anybody notice that?

Is Asicminer testing their new Mining Hardware?

Does it have an effect on the SELLING  Share price?

[Deprived]

In the night of the 25th to 26th  of June  there was a increase of the Hashrate  by 60 TH. Now its back to the normal level.

Did anybody notice that?

Is Asicminer testing their new Mining Hardware?

Does it have an effect on the SELLING  Share price?

A lot of the time big spikes and dips don't actuallly reflect a change in Hashrate at all - but rather a change in network luck.

All the figures we see for Hashrate are only a guess based on how long it's been taking to solve blocks.  A period of high luck looks like a surge in Hashpower and a period of bad luck like a drop in Hashpower.

Don't expect every change to have an associated actual change in deployed hardware.

[Lohoris]

Does it have an effect on the SELLING  Share price?

Only actual difficulty adjustments can have an effect, so yes if that hashrate spike will cause the difficulty to increase slightly more, if there is a dividend it will be slightly higher.

[odolvlobo]

In the night of the 25th to 26th  of June  there was a increase of the Hashrate  by 60 TH. Now its back to the normal level.

Did anybody notice that?

Is Asicminer testing their new Mining Hardware?

Does it have an effect on the SELLING  Share price?

Since the hash rate is not measured directly, it is not possible to know if the changing value is the result of more/less hashing power or more/less luck.

A change in the hash rate can change predictions of future difficulty, so it can affect the price of MINING and SELLING because their prices depend on the predicted difficulty,  

[vandinn]

Having considered my response above (and the post to which I replied) let me clarify the following:

No more than 20% of capital will be invested into Coinlenders without a new vote.
No more than 10% of capital will be invested into Just-Dice without a new vote.

All future proposals will have a stated maximum percentage which will require a new motion to be increased.

Where such maximums become exceeded due to unexpectedly large dividend payouts they will be promptly reduced back to within the approved maximums.

Great, I guess that's what I wanted to hear. (You possess a surprising skill to achieve just that; every single time)

LTC-ATF.B1 as close as possible to 25%, Coinlenders maximum 20% and Just-Dice maximum 10% sounds reasonable.

I have recast my votes in favour of the motions.

Keep up the brilliant job.))

[Deprived]

Having considered my response above (and the post to which I replied) let me clarify the following:

No more than 20% of capital will be invested into Coinlenders without a new vote.
No more than 10% of capital will be invested into Just-Dice without a new vote.

All future proposals will have a stated maximum percentage which will require a new motion to be increased.

Where such maximums become exceeded due to unexpectedly large dividend payouts they will be promptly reduced back to within the approved maximums.

Great, I guess that's what I wanted to hear. (You possess a surprising skill to achieve just that; every single time)

LTC-ATF.B1 as close as possible to 25%, Coinlenders maximum 20% and Just-Dice maximum 10% sounds reasonable.

I have recast my votes in favour of the motions.

Keep up the brilliant job.))

Well I tried to ensure the contract was such that there was no conflict of interest between me in my role as manager and me in my role as an investor.

My Management fee isn't impacted by whether we invest or not (or which investments we do/don't use) - so my basis for assessing investments SHOULD be the same as everyone else's.  The only tiny bias I have is that it hurts me far more than investors if we invest and make a loss - as then the whole of DMS could become very unattractive.  But with it designed as it is, erring on the side of being cautious isn't in my view a bad thing.

[Deprived]

Sold   1425
Swapped   0
Total   1425
Price   0.053794
Total   76.65645
Less Fee   76.5031371
Man Fee   2.295094113

BTC Balance (BTC-TC)    1,235.06725040
12500 LTC-ATF.B1    125.00000000
TOTAL ASSETS    1,360.06725040
   
Outstanding MINING   26183
Outstanding SELLING   26183
Outstanding PURCHASE   341
Effective Units   26524
   
Block reward   25
Difficulty   19,339,258
Hashes per MINING   5000000
   
Daily Dividend    0.00013002
50 days (Min Liquid)    0.00650111
100 days (Forced Close)    0.01300222
365 days (Buyback)    0.04745810
405 days (IPO)    0.05265898
400 days (Post SELLING div)    0.05200887
410 days (Pre SELLING div)    0.05330910
   
NAV Post MINING Div    1,356.61854196
NAV/U Post MINING Div    0.05114683
Days Dividend Post Div   393.37
SELLING Dividend    -         
NAV Post SELLING Div    1,356.61854196
NAV/U Post Selling Div    0.05114683
PURCHASE selling price    0.05370417
PURCHASE buy-back price    0.05012389

[twentyseventy]

You're welcome, I'm glad I could help someone, since it took a bit to figure it out myself

Here's a spreadsheet version : )

Dang, I had just made one! Yours is nicer though, thanks! 

[Deprived]

You're welcome, I'm glad I could help someone, since it took a bit to figure it out myself

Here's a spreadsheet version : )

Dang, I had just made one! Yours is nicer though, thanks! 

Heh, his is nicer than mine as well - though it seems to have a rather higher next difficulty than is likely.  I'm also not sure the arbitrage calculation is taking into account losing 0.2% to transaction fees on every buy of PURCHASE and sale of MINING.

[odolvlobo]

I am concerned that risk is being overlooked in the enthusiasm to invest DMS capital. Investment of DMS capital increases the risk of loss for both SELLING and MINING.

People investing in DMS (whether MINING or SELLING) are investing in the future difficulty value. There is no need to complicate the investment further and increase its risk of loss by investing the fund's capital.

All that money sitting around doing nothing is a itch that people (and Deprived) need to scratch, but this may be a case where the reward is less than the risk. I hope that going forward the majority of the capital remains in cash, and that investing only a small amount is enough to mollify investor greed.

[Deprived]

I am concerned that risk is being overlooked in the enthusiasm to invest DMS capital. Investment of DMS capital increases the risk of loss for both SELLING and MINING.

People investing in DMS (whether MINING or SELLING) are investing in the future difficulty value. There is no need to complicate the investment further and increase its risk of loss by investing the fund's capital.

All that money sitting around doing nothing is a itch that people (and Deprived) need to scratch, but this may be a case where the reward is less than the risk. I hope that going forward the majority of the capital remains in cash, and that investing only a small amount is enough to mollify investor greed.

From my perspective as manager I'd love nothing better than if all proposals to invest got voted no - means less work for me with no change in my management fee.

As a MINING investor (I hold MINING shares) I don't really care so long as there's no risk of more than about 1/3 of capital being lost (there's no way in short-term MINING can end up entitled to more than 2/3 of capital).

As a SELLING investor I'm fine with any investment that I'd be happy with risking my money in normally.  I stand to get the profits or losses - exactly as though it were a straight investment directly into them.  In fact I'll invest in things I otherwise wouldn't - as I CAN'T invest in the things I'd usually invest in, due to them being much higher risk AND reward.

I have no problem at all if the consensus of SELLING holders is not to invest.  With current variability of difficulty I'll have to keep at least 30-40% of capital totally liquid anyway - but I'm fine with investing the rest.

There's one last point about investment that hasn't been mentioned but should.  Investing elsewhere DOES bring new CP risk - but in theory also reduces the CP risk in respect of myself and BTC-TC.  At present all capital has direct exposure to myself and burnside/BTC-TC/LTC-Global.  Investment elsewhere reduces one or both of those risks - e.g. If we had 2 CDs with TF for 200 BTC each (won't be the case immediately) then in theory there's less cash I (or burnside) could steal.  Obviously CP exposure to ME isn't something I personally have a problem with - but everyone else should at least be considering it (as you should with ALL investments you make).

[Deprived]

People investing in DMS (whether MINING or SELLING) are investing in the future difficulty value. There is no need to complicate the investment further and increase its risk of loss by investing the fund's capital.

+1

I agree that investing some money in fairly save things like BTCBond or coinlenders won't hurt. However, the focus of DMS should be be on not losing any money.

BTC Bond I haven't proposed yet.  It offers very low return (about 11% per year) and I haven't been able to find namworld's spreadsheet that lists the assets he has backing it.  Last time I saw it was about a month ago (and it was a month out of date then) and from memory bulk of investments were in 3 shares on Bitfunder - one of which (Ziggap) was a scam and has vanished.  If you have the link to it then I'd be grateful for it - thought it was in the details for BTCBOND but it doesn't appear to be there any more.

Without any list of assets (and with the last list I saw having 1/3 of them something which turned out to be a scam and the rest mainly 2 shares I believe to have high USD exposure) I can't see 11% return justifying the CP risk.

I'll make a seperate post about GRAET.LOAN later - that offers a much higher rate but in my view has way to much risk for reasons that may not be immediately evident when reading the IPO details.

[Deprived]

I only checked the most obvious sources (like btct and the thread here) and couldnt find the backing list. (but you've probably checked there as well)

The difficulty seems to rise now, lets see maybe we will see a high dividend for selling after all

Hadn't noticed that - it really seems to have shot up suddenly in last few hours.  Either a bunch of machines have been turned on or there's been goof network luck and blocks have been found faster than standard.  There's only a few days until next difficulty change - and it's still possible for SELLING to get a very good dividend or no dividend at all.  Which is why any decent model predicts a range NOT a fixed value.

Even if some participants in DMS lose money (and it's a certainty some will - just unknown which ones) they'll hopefully learn enough from it that the loss doesn't sting too badly and saved them more on future trades in other securities.

[Mabsark]

I only checked the most obvious sources (like btct and the thread here) and couldnt find the backing list. (but you've probably checked there as well)

The difficulty seems to rise now, lets see maybe we will see a high dividend for selling after all

Hadn't noticed that - it really seems to have shot up suddenly in last few hours.  Either a bunch of machines have been turned on or there's been goof network luck and blocks have been found faster than standard.  There's only a few days until next difficulty change - and it's still possible for SELLING to get a very good dividend or no dividend at all.  Which is why any decent model predicts a range NOT a fixed value.

Even if some participants in DMS lose money (and it's a certainty some will - just unknown which ones) they'll hopefully learn enough from it that the loss doesn't sting too badly and saved them more on future trades in other securities.

At least a 10% increase makes sense. It was around 5% half way through the round and about 7.3% 3/4 of the way through. Next round will see a higher increase due to the Minirigs coming online. Just one a day leads to an increase in difficulty of 1 million. Assembling 10 a day would pose no problems if the components were on hand.

[Deprived]

At least a 10% increase makes sense. It was around 5% half way through the round and about 7.3% 3/4 of the way through. Next round will see a higher increase due to the Minirigs coming online. Just one a day leads to an increase in difficulty of 1 million. Assembling 10 a day would pose no problems if the components were on hand.

It's BFL making them - EVERYTHING poses a problem (other than taking cash for pre-orders).

[Lohoris]

Dang, I had just made one! Yours is nicer though, thanks!  

Heh, his is nicer than mine as well

wow, thanks! : )

though it seems to have a rather higher next difficulty than is likely.

I used this as a source, apparently it is lower now.

I'm also not sure the arbitrage calculation is taking into account losing 0.2% to transaction fees on every buy of PURCHASE and sale of MINING.

True I forgot about that!
I'll fix it tomorrow if I can...

[FloatesMcgoates]

If the difficulty adjustment occurs on June 29th, SELLING will get dividends on the 30th, correct?

[eltopo]

Correct.

[Deprived]

Both motions passed, so I'll be transferring 200 BTC to CoinLenders and buying a 30-day CD and depositing 100 BTC into Just-Dice.

For today's report (in about an hour) that 300 BTC will be shown as on BTC-TC - if the actual balance drops then it means burnside has approved the manual withdrawals.  As I can't predict when that will happen I'll just leave it as though it was in BTC-TC for now.

In future reports those investments will be individually reported.  Coinlenders will have the interest calculated and applied daily (we get it all at the end of 30 days but it would be wrong not to add it until then - as we'd be selling new PURCHASE too cheaply).  With Just-Dice I'll be reporting the actual balance at (or around) each report - it may be some minutes out of date.

Withdrawal to Coinlenders has already been initiated - and is waiting on manual processing.

Here's confirmation of the address being sent to - so if the BTC-TC balance drops you should see 200 BTC on its way to this address.

Message   CoinLenders User Deprived Deposit Address: 1JmP3seEPDvajmpYchJhAQeigsLWqSMzxK Server 1
Signature   IDP2437qPrH86nPQ9nRwV5gBN62teNVX8MuU3ePWVyPuI+CWQ/j3OOxYHgHpY74EWq7SoaW3OK5WE7frkA433Gk=
Signing Addr   See here https://bitcointalk.org/index.php?topic=159359.msg2250828#msg2250828

My accounts with Coinlenders and Just-Dice will, of course, have 2FA (it's already switched on for Coinlenders).

[Deprived]

A 100 BTC withdrawal has been initiated to Just-Dice.

Destination BTC address is : 1DyF66SU2B4oYUyFKHFdXaq3VTranjz8k2

So when it leaves BTC-TC you should see a transaction show up headed to there.