[BTC-TC] Deprived Mining Speculation (DMS)

[Lohoris]

I definitely understand. If you'd like to pull the CDs right now I'm happy to oblige, just let me know. Don't read the changes the wrong way through.

Is this offer open for everyone?

[FloatesMcgoates]

Just some calculations to keep people informed on the viability or lack there of regarding DMS.Mining

Lifetime payouts assuming:
30% Difficulty increase every 12 days - (7*0.00003824)+(((0.00003824/1.3)*12)/.3) = 0.00144429538461
25% Difficulty increase every 12 days - (7*0.00003824)+(((0.00003824/1.25)*12)/.25) = 0.001736096
20% Difficulty increase every 12 days - (7*0.00003824)+(((0.00003824/1.2)*12)/.2) = 0.00217968
15% Difficulty increase every 12 days - (7*0.00003824)+(((0.00003824/1.15)*12)/.15) = 0.00292785
10% Difficulty increase every 13 days - (8*0.00003824)+(((0.00003824/1.1)*13)/.1) = 0.0048251927

Invest accordingly

[odolvlobo]

Just some calculations to keep people informed on the viability or lack there of regarding DMS.Mining

Lifetime payouts assuming:
30% Difficulty increase every 12 days - (7*0.00003824)+(((0.00003824/1.3)*12)/.3) = 0.00144429538461
25% Difficulty increase every 12 days - (7*0.00003824)+(((0.00003824/1.25)*12)/.25) = 0.001736096
20% Difficulty increase every 12 days - (7*0.00003824)+(((0.00003824/1.2)*12)/.2) = 0.00217968
15% Difficulty increase every 12 days - (7*0.00003824)+(((0.00003824/1.15)*12)/.15) = 0.00292785
10% Difficulty increase every 13 days - (8*0.00003824)+(((0.00003824/1.1)*13)/.1) = 0.0048251927

Invest accordingly

While the concept is correct, there are two problems in your formula. Assuming the difficulty increases X% each period,

First: You are computing the sum of the power series, S = 1/(1-r), letting r = 1-X, but I believe the correct value for r is 1/(1+X). This simplifies to S = (1+X)/X.

Second: The length of the period will average 14/(1+X) dividends. The actual number will vary, so I believe the average can be used for a more accurate result (you use a fixed integral number).

Also note that ...*14/(1+X)*(1+X)/X simplifies to ...*14/X.

With your numbers, the result after these corrections are:

30% Difficulty increase every 10.77 days - (5*0.00003824)+(((0.00003824/1.3)*14)/.3) = 0.00156392
25% Difficulty increase every 11.20 days - (6*0.00003824)+(((0.00003824/1.25)*14)/.25) = 0.00190435
20% Difficulty increase every 11.67 days - (6*0.00003824)+(((0.00003824/1.2)*14)/.2) = 0.00242187
15% Difficulty increase every 12.17 days - (7*0.00003824)+(((0.00003824/1.15)*14)/.15) = 0.00329474
10% Difficulty increase every 12.73 days - (7*0.00003824)+(((0.00003824/1.1)*14)/.1) = 0.00505811

Let me know if I overlooked something.

[BitThink]

If every one calculates like this, no one will buy any mining chips/machine ever. Most buyers don't believe the exponential difficulty growth will last forever. So the point is not what's the percentage increase every 12 days, but when the growth becomes linear.

[Franktank]

If every one calculates like this, no one will buy any mining chips/machine ever. Most buyers don't believe the exponential difficulty growth will last forever. So the point is not what's the percentage increase every 12 days, but when the growth becomes linear.

Yea, come on. Someone needs to buy my DMS.Mining shares when I swap DMS.Purchase for a pair of Mining/Selling shares. Don't ruin it for the rest of us.

Also, the next difficulty change is going to be 40-45% increase.

[FloatesMcgoates]

Just some calculations to keep people informed on the viability or lack there of regarding DMS.Mining

Lifetime payouts assuming:
30% Difficulty increase every 12 days - (7*0.00003824)+(((0.00003824/1.3)*12)/.3) = 0.00144429538461
25% Difficulty increase every 12 days - (7*0.00003824)+(((0.00003824/1.25)*12)/.25) = 0.001736096
20% Difficulty increase every 12 days - (7*0.00003824)+(((0.00003824/1.2)*12)/.2) = 0.00217968
15% Difficulty increase every 12 days - (7*0.00003824)+(((0.00003824/1.15)*12)/.15) = 0.00292785
10% Difficulty increase every 13 days - (8*0.00003824)+(((0.00003824/1.1)*13)/.1) = 0.0048251927

Invest accordingly

While the concept is correct, there are two problems in your formula. Assuming the difficulty increases X% each period,

First: You are computing the sum of the power series, S = 1/(1-r), letting r = 1-X, but I believe the correct value for r is 1/(1+X). This simplifies to S = 1 + 1/X.

Second: The length of the period will average 14/(1+X) dividends. The actual number will vary, so I believe the average can be used for a more accurate result (you use a fixed integral number).

Also note that ...*14/(1+X)*(1+X)/X simplifies to 14/X.

With your numbers, the result after these corrections are:

30% Difficulty increase every 10.77 days - (5*0.00003824)+(((0.00003824/1.3)*14)/.3) = 0.00156392
25% Difficulty increase every 11.20 days - (6*0.00003824)+(((0.00003824/1.25)*14)/.25) = 0.00190435
20% Difficulty increase every 11.67 days - (6*0.00003824)+(((0.00003824/1.2)*14/.2) = 0.00242187
15% Difficulty increase every 12.17 days - (7*0.00003824)+(((0.00003824/1.15)*14/.15) = 0.00329474
10% Difficulty increase every 12.73 days - (7*0.00003824)+(((0.00003824/1.1)*14/.1) = 0.00505811

Let me know if I overlooked something.

Deprived only pays out dividends once per day, so a fractional value like 12.17 would not be used. Rather, only whole numbers will be utilized. This is why I simplified it to nearly 12's across the board.

[odolvlobo]

If every one calculates like this, no one will buy any mining chips/machine ever. Most buyers don't believe the exponential difficulty growth will last forever. So the point is not what's the percentage increase every 12 days, but when the growth becomes linear.

Nobody believes that exponential growth will continue forever (even Moore's Law can't last forever), but it will predict the difficulty accurately for the immediate future. Most importantly, because the difficulty is growing so quickly (and exponentially), it will make very little difference to the total mining revenue after 6 months of growth even if the difficulty completely stops rising.

In my view, difficulty will rise at a very steep exponential rate until power cost becomes a significant factor, at which point the rate will slow significantly. That point is at least 6 months away, so its effect on the value of a fixed hash rate is not yet significant.

[odolvlobo]

Deprived only pays out dividends once per day, so a fractional value like 12.17 would not be used. Rather, only whole numbers will be utilized. This is why I simplified it to nearly 12's across the board.

But sometimes it will be 12 days and sometimes it will be 13 days. A fractional value accounts for that.

[BitThink]

If every one calculates like this, no one will buy any mining chips/machine ever. Most buyers don't believe the exponential difficulty growth will last forever. So the point is not what's the percentage increase every 12 days, but when the growth becomes linear.

Nobody believes that exponential growth will continue forever (even Moore's Law can't last forever), but it will predict the difficulty accurately for the immediate future. Most importantly, because the difficulty is growing so quickly (and exponentially), it will make very little difference to the total mining revenue after 6 months of growth even if the difficulty completely stops rising.

In my view, difficulty will rise at a very steep exponential rate until power cost becomes a significant factor, at which point the rate will slow significantly. That point is at least 6 months away, so its effect on the value of a fixed hash rate is not yet significant.

The supply of chips can be a bottleneck. Exponential hash rate growth means exponential chip production rate. That's a large pressure on current chip market. That also explains why there are so many delayed/canceled chip/machine orders.

[BitThink]

Usually demands generates new suppliers. In mining chip market, however, situation may differ. No one could take risk to setup new product lines just for mining chips, cause chips could lose value exponentially. Besides, the whole BTC market itself is not reliable enough to support a fast growing chip fabrication industry. This is a very special and interesting case. Let's see what will happen.

[thy]

Deprived, why has there been no report/valuation made of LTC-ATF in the thread https://bitcointalk.org/index.php?topic=112876.0 for the past 18 days ?
The contract stipulates that it should be made at least every fortnight! :

"... At least once per fortnight (with the goal being to do it weekly) a report will
be prepared and posted in the forum thread linked above. This will include a
current valuation of the NAV and NAV/U for the fund. This valuation will be in
LTC (a BTC valuation will also be posted). ..."

[Deprived]

Deprived, why has there been no report/valuation made of LTC-ATF in the thread https://bitcointalk.org/index.php?topic=112876.0 for the past 18 days ?
The contract stipulates that it should be made at least every fortnight! :

"... At least once per fortnight (with the goal being to do it weekly) a report will
be prepared and posted in the forum thread linked above. This will include a
current valuation of the NAV and NAV/U for the fund. This valuation will be in
LTC (a BTC valuation will also be posted). ..."

Going to catch up today.

[vandinn]

I'm not certain Coinlenders even meets our investment criteria any more.

It most definitely does not. Correct me if I am wrong, but Coinlenders lends most of their loans to people who invest in mining - with the latest trends in that area and with the new ToS, I feel it became way too much of a risk for DMS to take. It's likely some if not most of Coinlenders' debtors who are invested in mining will fail to pay in time. If there is no guarantee anymore, it became something low-risk fund should never invest into. Pull out all the funds while you can.

On the other hand, I suggest raising our stake in Just-Dice. Dooglus proved to manage the site well in the past months; there are rarely any whales anymore driving the variance high. The earnings are much lower but steady and with minimal risk (compared to other investments in the Bitcoinland).

[Deprived]

I'm not certain Coinlenders even meets our investment criteria any more.

It most definitely does not. Correct me if I am wrong, but Coinlenders lends most of their loans to people who invest in mining - with the latest trends in that area and with the new ToS, I feel it became way too much of a risk for DMS to take. It's likely some if not most of Coinlenders' debtors who are invested in mining will fail to pay in time. If there is no guarantee anymore, it became something low-risk fund should never invest into. Pull out all the funds while you can.

On the other hand, I suggest raising our stake in Just-Dice. Dooglus proved to manage the site well in the past months; there are rarely any whales anymore driving the variance high. The earnings are much lower but steady and with minimal risk (compared to other investments in the Bitcoinland).

Default on loans isn't that much of a concern with CoinLenders - most loans he does are secured by 100-150% collateral so he really doesn't care what they borrow for or whether it works out.  What concerned me more was the combination of two things:

1.  Before the last change (where it went to being a demo) it had changed from money being used for loans to money being used for loans, margin-trading, investment in securities etc (not his exact words).
2.  There was no personal guarantee any more and no accounting for what assets/funds actually back the investment.

Put those together and there's no way to know the extent to which capital is secure if some speculative move/investment gos south.

The problem he faces is that even if he fully intends to personally guarantee the deposits he can't say so - as to do so would undermine the whole point behind the change in his terms.  But without him saying it I can't really invest more DMS funds - as I'd be doing so based on a guess about what his intention was.  Whilst I may be fine making that guess with my own funds I can't in good conscience do it with other people's - as anything based on a guess fails to meet our criteria for investment.  So I'll be pulling our CDs as they mature.

It's unfortunate that there are few bonds around (the ones out there are all sold out).  It pretty much shows how full of shit all these new mining/ASIC companies are - although they'll happily predict huge profits for investors they won't put their money where their mouth is and raise their capital via loan/bond paying a fixed-rate.  Despite the fact that if they're right about the profits they'd make a lot more doing it that way.

There's a reason people who can actually make a decent profit offer bonds/loans rather than equity.  And there's a reason those who can't make a decent profit always sell shares.  At present there's not enough of the former and too many of the latter.

[ThickAsThieves]

I'm not certain Coinlenders even meets our investment criteria any more.

It most definitely does not. Correct me if I am wrong, but Coinlenders lends most of their loans to people who invest in mining - with the latest trends in that area and with the new ToS, I feel it became way too much of a risk for DMS to take. It's likely some if not most of Coinlenders' debtors who are invested in mining will fail to pay in time. If there is no guarantee anymore, it became something low-risk fund should never invest into. Pull out all the funds while you can.

On the other hand, I suggest raising our stake in Just-Dice. Dooglus proved to manage the site well in the past months; there are rarely any whales anymore driving the variance high. The earnings are much lower but steady and with minimal risk (compared to other investments in the Bitcoinland).

Default on loans isn't that much of a concern with CoinLenders - most loans he does are secured by 100-150% collateral so he really doesn't care what they borrow for or whether it works out.  What concerned me more was the combination of two things:

1.  Before the last change (where it went to being a demo) it had changed from money being used for loans to money being used for loans, margin-trading, investment in securities etc (not his exact words).
2.  There was no personal guarantee any more and no accounting for what assets/funds actually back the investment.

Put those together and there's no way to know the extent to which capital is secure if some speculative move/investment gos south.

The problem he faces is that even if he fully intends to personally guarantee the deposits he can't say so - as to do so would undermine the whole point behind the change in his terms.  But without him saying it I can't really invest more DMS funds - as I'd be doing so based on a guess about what his intention was.  Whilst I may be fine making that guess with my own funds I can't in good conscience do it with other people's - as anything based on a guess fails to meet our criteria for investment.  So I'll be pulling our CDs as they mature.

It's unfortunate that there are few bonds around (the ones out there are all sold out).  It pretty much shows how full of shit all these new mining/ASIC companies are - although they'll happily predict huge profits for investors they won't put their money where their mouth is and raise their capital via loan/bond paying a fixed-rate.  Despite the fact that if they're right about the profits they'd make a lot more doing it that way.

There's a reason people who can actually make a decent profit offer bonds/loans rather than equity.  And there's a reason those who can't make a decent profit always sell shares.  At present there's not enough of the former and too many of the latter.

Indeed, it also shows we are offering way too high of an interest rate on these bonds.

[Deprived]

I'm not certain Coinlenders even meets our investment criteria any more.

It most definitely does not. Correct me if I am wrong, but Coinlenders lends most of their loans to people who invest in mining - with the latest trends in that area and with the new ToS, I feel it became way too much of a risk for DMS to take. It's likely some if not most of Coinlenders' debtors who are invested in mining will fail to pay in time. If there is no guarantee anymore, it became something low-risk fund should never invest into. Pull out all the funds while you can.

On the other hand, I suggest raising our stake in Just-Dice. Dooglus proved to manage the site well in the past months; there are rarely any whales anymore driving the variance high. The earnings are much lower but steady and with minimal risk (compared to other investments in the Bitcoinland).

Default on loans isn't that much of a concern with CoinLenders - most loans he does are secured by 100-150% collateral so he really doesn't care what they borrow for or whether it works out.  What concerned me more was the combination of two things:

1.  Before the last change (where it went to being a demo) it had changed from money being used for loans to money being used for loans, margin-trading, investment in securities etc (not his exact words).
2.  There was no personal guarantee any more and no accounting for what assets/funds actually back the investment.

Put those together and there's no way to know the extent to which capital is secure if some speculative move/investment gos south.

The problem he faces is that even if he fully intends to personally guarantee the deposits he can't say so - as to do so would undermine the whole point behind the change in his terms.  But without him saying it I can't really invest more DMS funds - as I'd be doing so based on a guess about what his intention was.  Whilst I may be fine making that guess with my own funds I can't in good conscience do it with other people's - as anything based on a guess fails to meet our criteria for investment.  So I'll be pulling our CDs as they mature.

It's unfortunate that there are few bonds around (the ones out there are all sold out).  It pretty much shows how full of shit all these new mining/ASIC companies are - although they'll happily predict huge profits for investors they won't put their money where their mouth is and raise their capital via loan/bond paying a fixed-rate.  Despite the fact that if they're right about the profits they'd make a lot more doing it that way.

There's a reason people who can actually make a decent profit offer bonds/loans rather than equity.  And there's a reason those who can't make a decent profit always sell shares.  At present there's not enough of the former and too many of the latter.

Indeed, it also shows we are offering way too high of an interest rate on these bonds.

Yeah, when I lowered the rate for B2 down to .35% per week from .6% on B1 I was half expecting to have to raise it to sell as many as I wanted.  Looks very much like I could have offered less without any problems - as there's very little sign of many people being willing to offer ANY almost-guaranteed returns.

Which leaves a serious lack of investments for those who don't want to gamble on the three main types of securities offered:

"I have a website, have done some mining and want to build ASICs so send me $X million"
"Send me $X million and I'll buy loads of ASIC pre-orders, keep a large chunk for myself if they actually show up and give you whatever's left"
"I held ASICMINER for a few weeks and they went up in price so I'd like to run an investment fund"

That's 90% of all IPOs.

[Deprived]

Sold   1707
Swapped   0
Total   1707
Price   0.01594
Total   27.20958
Less Fee   27.15516084
Man Fee   0.814654825

BTC Balance (BTC-TC)   2030.836274
9071 LTC-ATF.B1    90.71000000
Coinlenders CD 27/9   200.3020176
Coinlenders CD 12/9   101.1298096
Coinlenders Cash   3.93267533
Just-Dice Balance    243.80000000
TOTAL ASSETS    2,670.71077675
   
Outstanding MINING   167342
Outstanding SELLING   167342
Outstanding PURCHASE   8477
Effective Units   175819
   
Block reward   25
Difficulty   65,750,060
Hashes per MINING   5000000
   
Daily Dividend    0.00003824
50 days (Min Liquid)    0.00191219
100 days (Forced Close)    0.00382438
365 days (Buyback)    0.01395899
405 days (IPO)    0.01548874
400 days (Post SELLING div)    0.01529752
410 days (Pre SELLING div)    0.01567996
   
NAV Post MINING Div    2,663.98678891
NAV/U Post MINING Div    0.01515187
Days Dividend Post Div   396.19
SELLING Dividend    -         
NAV Post SELLING Div    2,663.98678891
NAV/U Post Selling Div    0.01515187
PURCHASE selling price    0.01591
PURCHASE buy-back price    0.01485
   
J-D House profit at report   5444

[Deprived]

Notification of Testing

Over the coming weekend (31st August and 1st September) I will be testing a modified transfer bot that can automatically handle trades between BTC-TC and LTC-Global.  Testing may extend past that if necessary.

This testing will occur on the LTC-ATF.B1 and LTC-ATF.B2 securities.  Various accounts controlled by myself will be transferring these securities around - and extra of each security will be temporarily issued for the purpose of testing.

This testing will have no lasting impact (all extra sharcs issued will be returned prior to dividend payments) but will mean that at times the shares outstanding on LTC-ATF.B1 and LTC-ATF.B2 may significantly vary (testing isn't only of 1:1 exchanging but also of X:1 exchanging with fee deduction and return of shares not amounting to sufficient for a full trade to occur).

As well as shares outstanding varying in the securities themselves there will on occasions also be changes in shares held by the DMS accounts on both BTC-TC and LTC-Global.

All testing will be on accounts controlled by myself and manual transfers will be used to return all share counts to their correct values at the conclusion of testing (and before any dividend payments).

Posting this here as DMS' holdings are in public portfolios - the holdings of LTC-ATF.B1 may temporarily change during testing and holdings of LTC-ATF.B2 may appear at times.  There'll be no units of either actually trading for DMS so real holdings will remain completely unchanged.

Testing will not disrupt the existing bot - that'll continue running throughout unchanged.

[Deprived]

Sold   3991
Swapped   0
Total   3991
Price   0.01591
Total   63.49681
Less Fee   63.36981638
Man Fee   1.901094491

BTC Balance (BTC-TC)   2085.580572
9071 LTC-ATF.B1    90.71000000
Coinlenders CD 27/9   200.4216218
Coinlenders CD 12/9   101.1935666
Coinlenders Cash   3.93489073
Just-Dice Balance    245.05000000
TOTAL ASSETS    2,726.89065116
   
Outstanding MINING   170267
Outstanding SELLING   170267
Outstanding PURCHASE   9543
Effective Units   179810
   
Block reward   25
Difficulty   65,750,060
Hashes per MINING   5000000
   
Daily Dividend    0.00003824
50 days (Min Liquid)    0.00191219
100 days (Forced Close)    0.00382438
365 days (Buyback)    0.01395899
405 days (IPO)    0.01548874
400 days (Post SELLING div)    0.01529752
410 days (Pre SELLING div)    0.01567996
   
NAV Post MINING Div    2,720.01403229
NAV/U Post MINING Div    0.01512716
Days Dividend Post Div   395.55
SELLING Dividend    -         
NAV Post SELLING Div    2,720.01403229
NAV/U Post Selling Div    0.01512716
PURCHASE selling price    0.01588
PURCHASE buy-back price    0.01482
   
J-D House profit at report   5745

[lg15x]

Look at the hashpower now, 825T/s. If the mining's price is higher than 0.0018, investors must/will lose. And also, selling don't have much profit rate now.