[BTC-TC] Deprived Mining Speculation (DMS)

[joele]

Correct me if I'm wrong.

DMS.MINING can only be profitable
 - if you sell it before the next difficulty adjustment with same or higher price you bought it.

DMS.SELLING can only be profitable
 - if you sell it after the difficulty adjustment with NAV/U post/dividend >= 410
 - or before difficulty adjustment with same or higher price you bought it.

or if you sell DMS.MINING and your DMS.SELLING higher than DMS.PURCHASE price

Sorry - that's nowhere near right.  There's a whole bunch of scenarios in which you can make a profit from one or both of them.

Most obviously you can make a profit from DMS.MINING if you buy it then hold it and receive more in dividends than you paid.  And that can be the case regardless of what happens at the next difficulty change - as future changes can make up any temporary loss of value you suffer.

In summary you make a profit if the price you sell for + dividends you receive is greater than what you paid.  That applies to any single share or combination of shares.

DMS.MINING will receive more in dividends, yeah if the difficulty only adjusting 5%, you can accumulate same price until December, with  the new upcoming faster Asic mining HW, I rather sell it early.

You said no where near right, your last paragraph you just summarized what I post.

[Deprived]

Correct me if I'm wrong.

DMS.MINING can only be profitable
 - if you sell it before the next difficulty adjustment with same or higher price you bought it.

DMS.SELLING can only be profitable
 - if you sell it after the difficulty adjustment with NAV/U post/dividend >= 410
 - or before difficulty adjustment with same or higher price you bought it.

or if you sell DMS.MINING and your DMS.SELLING higher than DMS.PURCHASE price

Sorry - that's nowhere near right.  There's a whole bunch of scenarios in which you can make a profit from one or both of them.

Most obviously you can make a profit from DMS.MINING if you buy it then hold it and receive more in dividends than you paid.  And that can be the case regardless of what happens at the next difficulty change - as future changes can make up any temporary loss of value you suffer.

In summary you make a profit if the price you sell for + dividends you receive is greater than what you paid.  That applies to any single share or combination of shares.

DMS.MINING will receive more in dividends, yeah if the difficulty only adjusting 5%, you can accumulate same price until December, with  the new upcoming faster Asic mining HW, I rather sell it early.

You said no where near right, your last paragraph you just summarized what I post.

The reason it's nowhere near right is you said MINING was only profitable if you sell it before the next difficulty change.  It can be profitable without you ever selling it.  There's broadly two ways to make a profit on it:

1.  Speculation/Trading - here its value is irrelevant and the key is to sell it for more than you bought it for (allowing for dividends received).
2.  Investment - here you need to buy it for a price where you'll get back more than the price without EVER having to sell it.

Your description only dealt with a sub-set of #1 (that sub-set where you buy before a difficulty rise and sell after - there's also potential profit buying and selling without a difficulty change or over multiple difficulty changes where you actually take a paper loss temporarily).  Is the price low enough yet for #2 to work?  That's for investors to decide themselves - there's no right or wrong answer as it depends on what assumptions you make about short/mediun term difficulty trends.

[joele]

Correct me if I'm wrong.

DMS.MINING can only be profitable
 - if you sell it before the next difficulty adjustment with same or higher price you bought it.

DMS.SELLING can only be profitable
 - if you sell it after the difficulty adjustment with NAV/U post/dividend >= 410
 - or before difficulty adjustment with same or higher price you bought it.

or if you sell DMS.MINING and your DMS.SELLING higher than DMS.PURCHASE price

Sorry - that's nowhere near right.  There's a whole bunch of scenarios in which you can make a profit from one or both of them.

Most obviously you can make a profit from DMS.MINING if you buy it then hold it and receive more in dividends than you paid.  And that can be the case regardless of what happens at the next difficulty change - as future changes can make up any temporary loss of value you suffer.

In summary you make a profit if the price you sell for + dividends you receive is greater than what you paid.  That applies to any single share or combination of shares.

DMS.MINING will receive more in dividends, yeah if the difficulty only adjusting 5%, you can accumulate same price until December, with  the new upcoming faster Asic mining HW, I rather sell it early.

You said no where near right, your last paragraph you just summarized what I post.

The reason it's nowhere near right is you said MINING was only profitable if you sell it before the next difficulty change.  It can be profitable without you ever selling it.  There's broadly two ways to make a profit on it:

1.  Speculation/Trading - here its value is irrelevant and the key is to sell it for more than you bought it for (allowing for dividends received).
2.  Investment - here you need to buy it for a price where you'll get back more than the price without EVER having to sell it.

Your description only dealt with a sub-set of #1 (that sub-set where you buy before a difficulty rise and sell after - there's also potential profit buying and selling without a difficulty change or over multiple difficulty changes where you actually take a paper loss temporarily).  Is the price low enough yet for #2 to work?  That's for investors to decide themselves - there's no right or wrong answer as it depends on what assumptions you make about short/mediun term difficulty trends.

Thanks for more detail information.
However, with this type of bond, I only believe in #1, well it's just me. Cheers!

[Deprived]

Correct me if I'm wrong.

DMS.MINING can only be profitable
 - if you sell it before the next difficulty adjustment with same or higher price you bought it.

DMS.SELLING can only be profitable
 - if you sell it after the difficulty adjustment with NAV/U post/dividend >= 410
 - or before difficulty adjustment with same or higher price you bought it.

or if you sell DMS.MINING and your DMS.SELLING higher than DMS.PURCHASE price

Sorry - that's nowhere near right.  There's a whole bunch of scenarios in which you can make a profit from one or both of them.

Most obviously you can make a profit from DMS.MINING if you buy it then hold it and receive more in dividends than you paid.  And that can be the case regardless of what happens at the next difficulty change - as future changes can make up any temporary loss of value you suffer.

In summary you make a profit if the price you sell for + dividends you receive is greater than what you paid.  That applies to any single share or combination of shares.

DMS.MINING will receive more in dividends, yeah if the difficulty only adjusting 5%, you can accumulate same price until December, with  the new upcoming faster Asic mining HW, I rather sell it early.

You said no where near right, your last paragraph you just summarized what I post.

The reason it's nowhere near right is you said MINING was only profitable if you sell it before the next difficulty change.  It can be profitable without you ever selling it.  There's broadly two ways to make a profit on it:

1.  Speculation/Trading - here its value is irrelevant and the key is to sell it for more than you bought it for (allowing for dividends received).
2.  Investment - here you need to buy it for a price where you'll get back more than the price without EVER having to sell it.

Your description only dealt with a sub-set of #1 (that sub-set where you buy before a difficulty rise and sell after - there's also potential profit buying and selling without a difficulty change or over multiple difficulty changes where you actually take a paper loss temporarily).  Is the price low enough yet for #2 to work?  That's for investors to decide themselves - there's no right or wrong answer as it depends on what assumptions you make about short/mediun term difficulty trends.

Thanks for more detail information.
However, with this type of bond, I only believe in #1, well it's just me. Cheers!

Well that's plainly wrong - it just depends on price.

If you bought a MINING for .000001 then you'd be in profit after tomorrow's dividend - without having to sell.  It's ALWAYS about the price - scams aside pretty much ANY investment can make a profit, so long as it's bought cheaply enough.

[🏰 TradeFortress 🏰]

There's also opportunity cost. While something that'll make you profit is not bad, it won't be best if there are better investments (not just pure yield, but also considering the risks).

[KizunaAikawa]

mining is dropping so fast.. 

[dexX7]

mining is dropping so fast.. 

Some may call it huge opportunity. Buy low, sell high and not the other way around, right?

[Deprived]

There's also opportunity cost. While something that'll make you profit is not bad, it won't be best if there are better investments (not just pure yield, but also considering the risks).

Yeah definitely the case.

If we consider someone who planned to invest (NOT speculate) in MINING or SELLING then what they should be doing roughly is :

1.  Work out a range within which they believe the correct valuation for each lies.  That means taking best and worse-scenarios that you believe likely for difficulty and from those calculating a range.  How wide that range is depends on the extent to which you prefer EV to variance - if you're risk-averse then the range will be wide.  If you don't mind risk at all - provided the EV is good - then a very narrow range can be generated.
2.  You then need to consider what alternative investments exist that offer returns you can rely on - as even if it's profitable to invest in MINING or SELLING there may be more profitable alternatives.
3.  You can then work out the zones above and below which investment makes sense.  The entire range of possible prices for MINING (0 to PURCHASE) would then be split into 5 zones :

1 : 2 : 3 : 4 : 5

Where:

1.  Means investing in MINING is your best bet (of the options you considered).
2.  Is where investing in MINING is likely profitable - but you have better alternative options.
3.  Is where the market is at what you believe is a fair value - meaning no profit or loss and no point holding either of MINING/SELLING as an investment.
4.  Is where investing in SELLING is likely profitable (you don't want to touch MINING) - but you have alternative better options.
5.  Is where investing in SELLING is your best bet.

TF's point is that a lot of people forget zones 2 and 4 exist.  It MAY still be worth investing if the price falls in them - if you already have exposure to the more profitable alternatives and need to diversify.

If you calculate zones 2 and 4 you need to be calculating the return on MINING/SELLING - which isn't quite as simple, unfortunately, as dividing expected profit by amount paid.  You need to factor in that a lot of that capital will be returned early on in the investment - so effective capital tied up is a lot less than the nominal initial capital.  The precise math depends on your own prediction of future difficulties - as those determine which (of SELLING/MINING) get back what capital and how quickly.

The above only really applies to investment.  Speculation/trading is different - and comparisons are generally NOT worth making with investments as speculating, when profitable, generates profit orders of magnitude higher (over time).  

In investment you (mainly) make profit from the performance of the securities.
In speculation/trading you (mainly) make profit from the other people in the market.

So when you have idiots investing in crap it's pretty obvious that speculating is the way to go - and that's the bulk of the BTC 'securities' market.  I like to think that DMS supports both speculation AND investing - unless the market gets the price exactly right ONE of MINING/SELLING will be a profitable investment.

Remember Profit isn't some binary thing which either exists or doesn't - it has a wide range of potential values, some of which aren't worth touching even when in theory you end up with more than you started with.

[Birdy]

Correct me if I'm wrong.

DMS.MINING can only be profitable
 - if you sell it before the next difficulty adjustment with same or higher price you bought it.

DMS.SELLING can only be profitable
 - if you sell it after the difficulty adjustment with NAV/U post/dividend >= 410
 - or before difficulty adjustment with same or higher price you bought it.

or if you sell DMS.MINING and your DMS.SELLING higher than DMS.PURCHASE price

Both can also be profitable if the market price was lower than the real value and you hold them until everything is paid off.

[eltopo]

Any progress on investment opportunities? I'd suggest coinlenders, either CDs or just a deposit with 25% APR.

[bitcoinplay]

Agreed we should really be doing something with the coins. Buy a cd on coinlenders.

[eltopo]

Agreed we should really be doing something with the coins. Buy a cd on coinlenders.

You should not invest in DMS assets. As you don't seem to understand how a simple asset like TAT.VM works, you are far away from understanding DMS.

Better try BTC Invest, because TF is the one who makes the investment decisions in this fund....

[Deprived]

BTC-TC is currently inaccessible.

If the server is still running (but DDOSed) then the dividends will go through on time.  If the server itself is down then I may have to rescehdule dividends as soon as it comes up.

I'll sort out todays accounts once it's up and I can do the math necessary to prepare them.

[FloatesMcgoates]

Hey Deprived I sent 48 shares of mining and selling back to the DeprivedMining account a little over midnight Pacific time today and have yet to receive any purchase. This is probably because you arnt used to it going the other way but heh just a heads up

[Deprived]

Hey Deprived I sent 48 shares of mining and selling back to the DeprivedMining account a little over midnight Pacific time today and have yet to receive any purchase. This is probably because you arnt used to it going the other way but heh just a heads up

When I got up today BTC-TC was down - and it stayed down until I went out for the evening.

It's now back up and I'll be catching up on the admin now.  Because of BTC-TC being down that means crap like manually sending dividends to those who sent me shares to swap in.

I do NOT do swaps back in the other direction (MINING + SELLING for PURCHASE) but I DO buy back MINING + SELLING for the PURCHASE buy-back price (98% of NAV/U).

No way I'm going to put myself in the situation of doing swaps both directions - and having to manually process exchanges back so people can sell just under the official selling price to lock in a 0.1% profit margin.  Or worse end up swapping the same shares back and forth as people change their minds.

Let me know (here or by PM) whether you want the shares returned or for them to be refunded.  You'll get the dividend for the MINING sent manually shortly.

[Deprived]

Just processed the LTC-ATF.B1 dividend first - so it'll be included in the report for this.

0.7623 BTC received by DMS as its weekly interest.  That's slightly over the 0.75 BTC defined in LTC-ATF.B1's contract as the dividend on the bond is always rounded up to a neat number (in LTC).

[Deprived]

Sold   175
Swapped   0
Total   175
Price   0.054282
Total   9.49935
Less Fee   9.4803513
Man Fee   0.284410539

Management fee paid.  Am going to do calculation for rest as though dividend were paid on all shares - the tiny difference because of 50 shares sold after dividend time won't make any noticable difference to NAV/U (and will be back to exactly accurate again tomorrow).  It means NAV/U will be under-reported by about 0.01% today then corrected again tomorrow.

[Deprived]

BTC Balance (BTC-TC)    968.47114028
12500 LTC-ATF.B1    125.00000000
TOTAL ASSETS    1,093.47114028
   
Outstanding MINING   20756
Outstanding SELLING   20756
Outstanding PURCHASE   378
Effective Units   21134
   
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    1,090.72325142
NAV/U Post MINING Div    0.05160988
Days Dividend Post Div   396.93
SELLING Dividend    -         
NAV Post SELLING Div    1,090.72325142
NAV/U Post Selling Div    0.05160988
PURCHASE selling price    0.05419038
PURCHASE buy-back price    0.05057768


NAV/U is actually exactly accurate - it turned out easiest to just recalculate what balance would have been had all shares been paid dividend at the same time.

Any PURCHASE sent to me for trade will have received a manual payment for the missed dividend (as has Floates for his 48 MINING).  Swaps are all done (other than Floates where I need to know if he wants his MINING/SELLING returned or cashed out - but those HAVE been included in totals correctly).

[eltopo]

Just processed the LTC-ATF.B1 dividend first - so it'll be included in the report for this.

0.7623 BTC received by DMS as its weekly interest.  That's slightly over the 0.75 BTC defined in LTC-ATF.B1's contract as the dividend on the bond is always rounded up to a neat number (in LTC).

Any progress on additional investment opportunities?

[Deprived]

Just processed the LTC-ATF.B1 dividend first - so it'll be included in the report for this.

0.7623 BTC received by DMS as its weekly interest.  That's slightly over the 0.75 BTC defined in LTC-ATF.B1's contract as the dividend on the bond is always rounded up to a neat number (in LTC).

Any progress on additional investment opportunities?

Sorry - I'll try to get back to that today.