[BTC-TC] Deprived Mining Speculation (DMS)

[Deprived]

does anyone  understand the calculation for the SELLING dividend?

Days Dividend Post Div   391.47                                how to do math  to get 391.47  as the result?

Here's the math.

NAV Post MINING Div    697.51179543

That's the total value of the fund after the dividend was paid.

If we divide that by the effective units (NUMBER of PURCHASE that have been given out in total) which is

Effective Units   11058

we get the value per PURCHASE (or NAV/U) :

NAV/U Post MINING Div    0.06307757

That's the amount we have in assets for every PURCHASE (or pair of MINING + SELLING) that exists.

If we now divide that by the amount MINING received in dividend which is :

Daily Dividend    0.00016113

we get the number you asked about.  Which is the number of days we could keep paying MINING the dividend it got today even if we didn't make any profit.

EDIT: If you do the math you'll get a VERY slightly different number - that's due to rounding errors (specifically the dividend paid is only accurate to 8 decimal places - as that's all BTC supports - whilst the dividend used in calculations is more precise).  If you want to work it out anad get an exact match then you'll need to calculate the owed dividend to more than 8 decimal places (the last digit is rounded to nearest value for actual payment).

[Deprived]

Holding DMS.Selling only now, let's see how it does in the next days with the incoming difficulty increase.

Somewhere there's one or more people holding more DMS.MINING to balance that.  For every share being bet in one direction - there'll be one being bet in the opposite direction.

I can't give away details about specific investors but I can say the following:

• Both MINING and SELLING each have a few people holding a large chunk (1000+) then a lot of people with much smaller holdings.
• There are a lot more people holding MINING than SELLING (over double the number).

I'd guess there's quite a few MINING holders who haven't acually calculated a value for them - they've just (correctly) realised that if they hold a more expensive (per hash) PMB they can sell it, buy shares of MINING, keep the change and be better off.  They aren't guaranteed to make profit - but if they end up making a loss they'll have lost less than if they hadn't changed (they'll have got back the same in dividends but kept the difference in prices).

Not everyone is trying to hold just one or the other either - there's also people buying PURCHASE, splitting it and selling (or trying to sell) both for a small profit.

[carnitastaco]

The mechanism is this (and you'll see it in practice on Monday by the looks of it):

We might get there sunday if you sleep in   It's gonna be interesting!

[Deprived]

The mechanism is this (and you'll see it in practice on Monday by the looks of it):

We might get there sunday if you sleep in   It's gonna be interesting!

I'm expecting next difficulty change to be on Sunday - but it won't change dividends until Monday.  Last time I looked it was going to change very near the end of Sunday - if it changes after midnight GMT then MINING would get an extra day at the old rate and Tuesday would be first day MINING got the new rate (and SELLING got its first dividend).

In theory a bunch of new hashing could be added and the change happen earlier but that seems very unlikely.  For that matter, in theory a bunch of hashing could leave the network and the difficulty change not happen until later in the week - even so late that SELLING don't get a dividend at all.

[joele]

The mechanism is this (and you'll see it in practice on Monday by the looks of it):

If capital rises above 410 days of (MINING) dividends at current difficulty then a dividend is paid to SELLING so as to reduce capital down to 400 days of dividends.

Imagine mining was paying 0.1 dividend per day and there was 40 BTC per mining share of capital.  That means there's 400 days of dividends for MINING put aside so they can continue to be paid.

Now imagine difficulty rose so that the daily dividend to MINING fell to 0.095.  We still have the same capital but there's now a bit over 421 days of dividends at the new rate.  We only need 38 BTC to provide MINING with 400 days cover - so each SELLING share would get a 2 BTC dividend.

MINING gets its dividends every day. SELLING only gets one when difficulty rises so that there's enough capital to pay them a dividend and still keep 400 days to cover MINING's payments.  If difficulty falls, stays the same or only rises below a certain amount then SELLING will receive no dividend at all.  If difficulty rises fast then SELLING will receive a large dividend.

And it's more complicated in the long-term - as SELLING could receive huge dividends a few times, then difficulty stabilises and it never receives another.  Or SELLING could receive nothing for a while - then suddenly difficulty surges and it gets dividended a lot whilst MINING dividends drop to being tiny.

As with ALL mining investments, results depend almost entirely on future difficulty changes.  Payouts for MINING will mirror those from identical MH/S in PMBs and also those of shares in fixed mining capacity (those with no reinvestment).  Payouts for SELLING (assuming there are some) represent the return of capital once it becomes obvious that the capital isn't needed to continue paying out to MINING.

Simple wording with example,  I fully understand just now.

[alexius89]

I guess the whole security is really interesting but the maths behind is not that easy..

But anyway something tell me that 60% the of Deprived Mining Investors doesn't understand the SELLING Fund  especially the maths.

[joele]

I guess the whole security is really interesting but the maths behind is not that easy..

But anyway something tell me that 60% the of Deprived Mining Investors doesn't understand the SELLING Fund  especially the maths.

For me is not the math, is the long english explanation that make me lose.

[Rannasha]

Yeah, the math is actually rather straightforward once you know what's going on.

[alexius89]

I guess the whole security is really interesting but the maths behind is not that easy..

But anyway something tell me that 60% the of Deprived Mining Investors doesn't understand the SELLING Fund  especially the maths.

For me is not the math, is the long english explanation that make me lose.

yea correct..the english is sometimes  pretty hard to understand...if english isnt the first language its even harder..

[Deprived]

Sold   572
Price   0.066231
Total   37.884132
Less Fee   37.80836374
Man Fee   1.134250912

Management fee of 1.134 BTC transferred.

BTC Balance (BTC-TC)    634.18617511
10000 LTC-ATF.B1    100.00000000
TOTAL ASSETS    734.18617511
   
Outstanding MINING   11411
Outstanding SELLING   11411
Outstanding PURCHASE   219
Effective Units   11630
   
Block reward   25
Difficulty   15605633
Hashes per MINING   5000000
   
Daily Dividend    0.00016113
50 days (Min Liquid)    0.00805649
100 days (Forced Close)    0.01611298
365 days (Buyback)    0.05881238
405 days (IPO)    0.06525757
400 days (Post SELLING div)    0.06445192
410 days (Pre SELLING div)    0.06606322
   
NAV Post MINING Div    732.31223549
NAV/U Post MINING Div    0.06296752
Days Dividend Post Div   390.79
SELLING Dividend    -         
NAV Post SELLING Div    732.31223549
NAV/U Post Selling Div    0.06296752
PURCHASE selling price    0.06611589
PURCHASE buy-back price    0.06170817

[Deprived]

We just received our first investment income - 29 LTC dividend payment for this week on our 10K LTC-ATF.B1 (it's a round number as when paying LTC-ATF.B1 dividends I always round up to a tidy number for the convenience of investors when they do any math).

That, converted at the exchange-rate used when calculating the dividend (.02093) is 0.60697 BTC.  The LTC have been returned to LTC-ATF and the BTC transferred to this fund on BTC.CO.

This isn't a large enough payment to warrant me cancelling PURCHASE ask, doing a management fee calculation/payment, reporting new values and putting up a fresh Ask.  So until tomorrow's dividend, PURCHASE will have a slightly smaller markup on current NAV/U than usual (it's actually been less all week - due to valuing LTC-ATF.B1 at face and not counting in accrued interest).  The 2% markup on sales allows me to simplify reporting and accounting like this - without existing investors being penalised.  That's a large part of why it exists.

Unless anyone sees the need I won't bother reporting dividends like this in future - I can always produce the transactions if required (the amount of the dividends and the exchange-rate used are always reported on LTC-Global already).  I'd happily expose the read-only API for transactions on this account - were it not for the fact that it would reveal who traded in what shares when (which obviously can't be made public).

[odolvlobo]

But anyway something tell me that 60% the of Deprived Mining Investors doesn't understand the SELLING Fund  especially the maths.

What leads you to believe that 60% don't understand?

I think I am part of the 40% that understand what is going on. At least, I hope so. Are you sure you are not part of the 60%?

[helixone]

We just received our first investment income - 29 LTC dividend payment for this week on our 10K LTC-ATF.B1 (it's a round number as when paying LTC-ATF.B1 dividends I always round up to a tidy number for the convenience of investors when they do any math).

That, converted at the exchange-rate used when calculating the dividend (.02093) is 0.60697 BTC.  The LTC have been returned to LTC-ATF and the BTC transferred to this fund on BTC.CO.

This isn't a large enough payment to warrant me cancelling PURCHASE ask, doing a management fee calculation/payment, reporting new values and putting up a fresh Ask.  So until tomorrow's dividend, PURCHASE will have a slightly smaller markup on current NAV/U than usual (it's actually been less all week - due to valuing LTC-ATF.B1 at face and not counting in accrued interest).  The 2% markup on sales allows me to simplify reporting and accounting like this - without existing investors being penalised.  That's a large part of why it exists.

Unless anyone sees the need I won't bother reporting dividends like this in future - I can always produce the transactions if required (the amount of the dividends and the exchange-rate used are always reported on LTC-Global already).  I'd happily expose the read-only API for transactions on this account - were it not for the fact that it would reveal who traded in what shares when (which obviously can't be made public).

I'd suggest regular updates, at least pointing to this post.

-helixone

[Deprived]

We just received our first investment income - 29 LTC dividend payment for this week on our 10K LTC-ATF.B1 (it's a round number as when paying LTC-ATF.B1 dividends I always round up to a tidy number for the convenience of investors when they do any math).

That, converted at the exchange-rate used when calculating the dividend (.02093) is 0.60697 BTC.  The LTC have been returned to LTC-ATF and the BTC transferred to this fund on BTC.CO.

This isn't a large enough payment to warrant me cancelling PURCHASE ask, doing a management fee calculation/payment, reporting new values and putting up a fresh Ask.  So until tomorrow's dividend, PURCHASE will have a slightly smaller markup on current NAV/U than usual (it's actually been less all week - due to valuing LTC-ATF.B1 at face and not counting in accrued interest).  The 2% markup on sales allows me to simplify reporting and accounting like this - without existing investors being penalised.  That's a large part of why it exists.

Unless anyone sees the need I won't bother reporting dividends like this in future - I can always produce the transactions if required (the amount of the dividends and the exchange-rate used are always reported on LTC-Global already).  I'd happily expose the read-only API for transactions on this account - were it not for the fact that it would reveal who traded in what shares when (which obviously can't be made public).

I'd suggest regular updates, at least pointing to this post.

-helixone

My fault - I wasn't clear enough.

When I said "I won't bother reporting dividends like this in future" I didn't mean mean that I wouldn't report dividends - I meant that I wouldn't report them "like this" - i.e. the LTC paid, exchange-rate etc.  If anyone cares enough about those details they're available on LTC-GLobal.  I WILL report receipt of weekly dividends - but it'll just be brief.  So this week's report would be "Dividend of just over 0.6 BTC received for LTC-ATF.B1" - and I'd put it at the top of the next day's dividend report.

[alexius89]

But anyway something tell me that 60% the of Deprived Mining Investors doesn't understand the SELLING Fund  especially the maths.

What leads you to believe that 60% don't understand?

I think I am part of the 40% that understand what is going on. At least, I hope so. Are you sure you are not part of the 60%?

its just a so called  stomachFeeling?!  ;-)      2 days ago i was part of the 60% for sure...so i hope now to be part of the 40%

[eltopo]

But anyway something tell me that 60% the of Deprived Mining Investors doesn't understand the SELLING Fund  especially the maths.

What leads you to believe that 60% don't understand?

I think I am part of the 40% that understand what is going on. At least, I hope so. Are you sure you are not part of the 60%?

its just a so called  stomachFeeling?!  ;-)      2 days ago i was part of the 60% for sure...so i hope now to be part of the 40%

Then you wouldn't mind to tell us what the one-time dividend for SELLING will be after the difficulty has risen to e.g. 19,200,000 

[Rannasha]

But anyway something tell me that 60% the of Deprived Mining Investors doesn't understand the SELLING Fund  especially the maths.

What leads you to believe that 60% don't understand?

I think I am part of the 40% that understand what is going on. At least, I hope so. Are you sure you are not part of the 60%?

its just a so called  stomachFeeling?!  ;-)      2 days ago i was part of the 60% for sure...so i hope now to be part of the 40%

Then you wouldn't mind to tell us what the one-time dividend for SELLING will be after the difficulty has risen to e.g. 19,200,000  

Run the numbers and find out

Needless to say, I'm looking forward to see what happens at the first dividend-payment after the difficulty update and the effect it has on market prices of the 2 funds.

[Lohoris]

Then you wouldn't mind to tell us what the one-time dividend for SELLING will be after the difficulty has risen to e.g. 19,200,000 

I might easily have done something wrong:

Current MINING div 0.00016113
Difficulty change 19'402'467.47/15'605'632.68 = 1.24329899773
New MINING div 0.00016113/1.24329899773 = .000129599

Current assets 734.18617511
Current units 11630
Asset/unit 0.06312865

410 with new MINING div .000129599 * 410 = 0.05313559
400 with new MINING div .000129599 * 400 = 0.05183960
Excess asset/unit 0.06312865 - 0.05183960 = 0.01128905

[Rannasha]

Yeah, same numbers here except that I counted that there is still going to be a DMS.MINING dividend payment before the difficulty change (there might be 2 still). But this only has a small effect on the outcome.

[eltopo]

Then you wouldn't mind to tell us what the one-time dividend for SELLING will be after the difficulty has risen to e.g. 19,200,000 

I might easily have done something wrong:

Current MINING div 0.00016113
Difficulty change 19'402'467.47/15'605'632.68 = 1.24329899773
New MINING div 0.00016113/1.24329899773 = .000129599

Current assets 734.18617511
Current units 11630
Asset/unit 0.06312865

410 with new MINING div .000129599 * 410 = 0.05313559
400 with new MINING div .000129599 * 400 = 0.05183960
Excess asset/unit 0.06312865 - 0.05183960 = 0.01128905

Yup, same numbers here too. Your calculation is based on difficulty 19,400,00 right?

The dividend return on SELLING is more than 4x higher than the dividend return on MINING (compared to their current price per unit).

IMHO, the fair value of MINING would be < 0,01