[BTC-TC] BMF -- ALERT: BTC-TC SHUTDOWN

[strideynet]

Okay that makes sense. Thanks for updating me. Might buy another set of shares later. Just read about the kidney, nasty man nasty. But you are off meds now right?

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[strideynet]

To post a statistic for interested investors.
roughly 10 shares generates 1 cent a day. Doesnt sound like much but it is steady and i think a good idea.

[usagi]

Quick update; news posted to BTC-TC.

Leopards be Leopards. MPOE-PR has accused Burnside (i.e. BTC-TC) of being a fraud and a scammer. We find the comments as ludicrous as when they were lobbied against us. Don't you, as well? It's okay, hindsight is 20/20. No offense taken.

On the note of leopards and their spots. Deprived's comments against us on reddit and bitcointalk.org. Why? Again, competition. Deprived calls his investors idiots and retards, so he needs to make us look like total frauds in order to get people to invest with him. Remember, Deprived based his entire reputation on taking me down last year. He failed and was shown to have lied. So that leaves him on very shaky ground. But leaving that aside for the moment let's play a game to see if he's right and you are a retard. You do the math on what % you lost investing in DMS.PURCHASE and/or SELLING. DMS.PURCHASE went from 0.03353( (August 1st) to 0.01588 (September 1st). SELLING fell from 0.022 to 0.0128175. Personally I don't think you are a retard. I think you can do the math. For the interested reader, compare and contrast Deprived's performance as a fund manager with Usagi's.

There's not much to say, I've been told my quite a few people that no one listens to Deprived's crock anymore and I'm a bit too busy making money for the fund to get involved with it these days. Once again thanks to all and let's make some money this month!

[Progressive]

I (as a random DMS investor) didn't lost a satoshi with DMS.PURCHASE, DMS.MINING and DMS.SELLING.
The value of PURCHASE and SELLING is falling because they pay the difference (and more) as a dividend, read through the DMS contract for more details.

[usagi]

I (as a random DMS investor) didn't lost a satoshi with DMS.PURCHASE, DMS.MINING and DMS.SELLING.
The value of PURCHASE and SELLING is falling because they pay the difference (and more) as a dividend, read through the DMS contract for more details.

Aye, but as I said, do the math and compare. For example, PURCHASE went from 0.03353 to 0.03408678 (in current price + paid). That's a gain of just 1.66% -- less than half of what BMF achieved this month. It's pretty straightforward. I'm not calling Deprived a scammer or a fraud. That's what he said about me. The problem is that facts and reality are not Deprived's strong point. Maybe if he stopped trolling the forums and started actually working for his investors instead of calling them retarded idiots, he would be a competent fund manager. As it stands now he's second rate. If you want to be invested with a guy like that, well, enjoy your 1.66% a month. He's a crackpot. He claims to make over 10,000% a month that he apparently keeps for himself. You might want to ask him about that sometime.

[ScarletRhapsody]

Why aren't dividends being paid?
Just curious as to what happened to dividends, i'm not sure if I missed something.

[usagi]

Why aren't dividends being paid?
Just curious as to what happened to dividends, i'm not sure if I missed something.

If you're a holder, it doesn't matter if dividends are paid today or tomorrow from the standpoint of how much you will get when they are paid, and from the standpoint of capital gains considering the book value. However the market value may fluctuate significantly. My suggestion is to watch the market fluctuations and "buy low sell high" considering our published financial information, which is accurate. The market OTOH does not know what it is doing, clearly, considering BMF.

I can see how you might have gotten used to dividends "today". We were one of the first companies to run daily dividends as a promotional event way back when GLBSE was still around. We still frequently run month-long events where we pay daily dividends. August was a great example of that. But we remain a strongly focused towards monthly statements. Monthly reports make more sense from an accounting perspective. Our contract states, "2. Payments are due on or before the 7th of every month for the previous month’s trading and investment activity." So you can expect payment in full for September's income on or before the 7th of October. You'll actually receive payments long before that date, the extra time is just breathing room.

Was there a reason you liked "daily dividends"? If you bought enough shares to reinvest a share a day I can see how going back to our contract after the promotion would feel kind of slow and pokey.

p.s. thanks for the concern stridey. Yes I'm fine now, I just need to start exercising again! My job allows me freedom in the mornings so I have plenty of time for that now. I'll also be practsing my piano now. My daughter is finally in school so it's a great time for me to explore freedoms I didn't have before. I'm having lunch much more often with my wife right now. We went out to a nice cheese steak place yesterday for example. The food was so great I ordered a second sandwich. Getting back to that exercise comment above...... Oh well, at least my appetite has improved.

Chat soon~

[ScarletRhapsody]

Was there a reason you liked "daily dividends"? If you bought enough shares to reinvest a share a day I can see how going back to our contract after the promotion would feel kind of slow and pokey.

Realistically, it doesn't make a difference whether the dividend pays daily or monthly. I honestly simply liked the feel of it being a daily payment more than a monthly one because I can simply see the progress of dividends 'now' as opposed to 'later'. But thank you for the response! It really helped clear up that bit of the contract for me as well.

[usagi]

News Flash: LTC-ATF buys controlling stake in BMF
September 17th, 2013

TOKYO (bitcointalk.org) -- In a suprising all-cash deal which stunned investors sources reveal that LTC-ATF has obtained controlling interest in BMF. Deprived now holds more units than any other investor in the fund. "I have no intention of interfering in how it's run," said Deprived earlier today, "[unless usagi does something stupid]". He continues, "I'm in it to make a profit not just to screw [usagi] around."

As a vote of confidence, Deprived has committed not sell his shares back to BMF for a minimum of two months.

Commenting privately on the deal to investors, usagi quoted famed investor Seth Klarman, who once said "Risk is not inherent in an investment; it is always relative to the price paid. Uncertainty is not the same as risk. Indeed, when great uncertainty – such as in the fall of 2008 – drives securities prices to especially low levels, they often become less risky investments." Continuing, "I'd speculate BMF is a lot less risky as an investment today than it was a year ago." "I think the deal is great for existing investors. In fact, I think you will be pleasantly surprised where I take the fund with this money. Keep an eye on it even if you don't decide to invest right now, [...] it [BMF] may be something you are interested in later."

Under the terms of the private placement, each share was granted an additional assignable purchase warrant for one share at 0.032. These warrants expire one year from the date of purchase (they will expire as at September 17th, 2014 -- however the repurchase clause expires as at March 17th, 2014). These warrants imply that the bid price of BMF will not rise far above 0.032 since warrant holders can immediately exercise their warrants and take the price difference. For example, if the bid for BMF rose to 0.035, each warrant could be exercised for 0.032 and the share sold for 0.035, netting a profit of 0.003. In response to accusations of giving money away and ruining the future prospects of existing shareholders, usagi commented "There are a limited number of warrants. If the price is going to rise to 0.035 or 0.04, even if all the warrants are exercised the price will still be higher than 0.032. Investors will still make money." usagi then placed his fat-cat cigar into the ashtray and took another sip of whiskey. "I mean, come on. Volume was almost non-existant," he mused, munching on some mixed nuts. "The fund was always tightly held. Now, instead of 3 shareholders owning 75% of the stock, four shareholders own 75% of the stock. Big deal. The NAV didn't change. We were able to position ourselves more strongly. This deal is great for the fund and I think investors will agree." Deprived was quick to respond to this sentiment. "I'm still not convinced it's good for existing investors - but as I'm not one that doesn't bother me." In regards to what his investors might think, he speculated "Expect I'll take some serious flak for it ... but I've never really cared what people say..."

When asked to comment on BMF's current valuation and future prospects usagi was quick to point out that he hasn't lost much money this time around (yet). He then said "Now, you're going to love this. Look." He then pulled out a small black box, about the size of a FPGA miner. "This is our magic box," he said. He set it down on the coffee table and dramatically pressed one of the colored buttons on the top of the box. The box spit out a single white ribbon of paper with the number 0.031 printed on it. "What the heck?" we asked usagi. "Didn't you just publish a report containing the number 0.032? What happened?" In response, usagi picked up another handful of mixed nuts, mused for a moment, put them back and took another sip of the good stuff. He said, "Oh that. Due to investor concerns, we started valuing our face value bonds at face value instead of bid price. We'll make a full announcement at the end of the month. Look, see, if we value them at the 7-day average as reported by the exchange, it goes up again". usagi fiddled with some knobs on the side of the box and pressed some colored buttons in a deliberately drawn out "shave-and-a-haircut" knock-knock pattern. After a few seconds of silence we heard some whirring noises and started to smell something burning. Then suddnely a loud BANG. "I think it's blown a capacitor," he said. "Hold on, let me fix something." Usagi took some chopsticks and started fiddling with the paper tray. After a few moments he was able to draw out a small, fortune-cookie-like peice of paper upon which was revealed the number 0.03206137. "See! See! I told you it was ok. It's like what Warren Buffet said. 'Price is what you pay, but value is what you get.'"

Note: This story may contain inaccuracies. For more in-depth and accurate coverage of this story, please see the upcoming LTC-ATF announcement by Deprived.

[usagi]

I would like to get shareholder opinion for this:

MOTION TO LIST BMF.B1

Should you vote NO, the motion will expire and nothing will happen.

Should you vote YES on this motion:

1. BMF will fund the listing of a new issue on an exchange, called (BMF.B1--to be discussed). I.E. the listing fee will be paid by BMF.

If the issue is not approved by the exchange, we may lose the listing application fees.
If the issue is approved and does not sell 50% before the end of the year, a full refund will be provided to investors.
Should this bond be approved by the exchange(s) and the listing successful (at least 50% of bonds are sold);

2. A payment of 100 BTC will be made to BMF as minimum* payments of 0.5 BTC per week, starting January 2014. BMF will have no other connection with the bond. (*payments may be made early.)

3. The bond will pay a minimum* payment of 0.0001 BTC per week per bond, tied to MTGOXUSD, starting January 2014, until such time as the bond has repaid 0.02 BTC to investors. Should the price of BTC remain stable, this will take approximately four years. (*payments may be made early.)

4. The bond will be backed by the redevelopment and/or sale of a property which was bought out of a distressed mortgage for 50% off. To finance the purchase and redevelopment of this property, the bond will sell 150,000 bonds at 0.01 BTC per bond. No further bonds will be issued.

5. No interest or ownership of the underlying property is granted by ownership of the bonds.

6. Force-Buyback
- The bond may force repurchase of bonds with a 10% penalty on what is remaining to be paid to investors.
- The formula used will be (IPO - (payments/2)) + 10%.
   - ex. If we sell all 1500 worth of bonds and repaid 500 BTC in weekly payments, we would calculate (1500 - (500/2)) * 10% as a penalty.
     The total repurchase for the 150,000 bonds would be for 1250 + 125 BTC, or 1375 BTC.
     This would only be done if we were forced to sell the property early for some reason.
     It's the most important clause which protects investors.
NOTE: The 10% penalty would easily covered by what we have put into the land already, we have already paid approx. 240 BTC into the land mortgage.

7. RISKS
--> the immediate risk that BitFunder (or whomever) will say no and we lose the listing application fees. This risk will be slightly mitigated if the discussion is positive on bitcointalk.org. If the community likes it, we are far more likely (but again, not guaranteed) to get approved.
--> The major risk to bondholders is that we get forced to sell the property and repay the bond immediately (see formula for early repayment above).
--> Fine print states, "There are or may be other risks undisclosed at this time." We can discuss it.

8. Why am I doing this (sharing) instead of keeping all the profit for myself?
--> There are businesses which have guaranteed their interest in renting out space in the building, and we have guaranteed rental income from students who live at nearby schools. Short answer, the faster I build this the more money I get from rental income waiting in the wings.
--> Second answer, doing it this way allows me to buy a small neighboring property and join it with this one, which I desperately want to do but cannot do until I finish paying off the current mortgage (which has about 600 BTC left to be repaid on it). Buying that property for cash all out would increase the value of what I have significantly. Short answer, TIME. I'd love to get this done by next year and not over the next ten years. I'm willing to give up around half of the profits for saving me that time. Time is money, that about sums it up.
--> If we can pay the development deposit and start development before the end of the year we will get a 500 BTC development bonus from a certain prominent paternal party (and pair) pandering for this purveyance..
--> Other major benefits (we own the street up to the intersection, our family owns the house across the street as well which means we own the entire block of property at the end of the street)

Final Note:
Please give me your thoughts on whether or not I should launch this motion, any ideas regarding it. For the moment I would like to put discussion of the property aside and discuss whether or not this is a good deal for BMF. I am of course suggesting that we pass this motion, but I'd like to discuss it before I put it to vote.

Edit: I just spoke with the designer and after a few thoughts I have cut the bond issue in half. The original was for 300,000 shares but I doubt we will "really" need all that much all at once. I could do 300,000 but there seems to be no point; 100 or 150k is enough to get property A and extend the house, and we can worry about the interior and clean up the lot on our own steam.

[Deprived]

I'm commenting here purely from the perspective of a BMF shareholder - not evaluating the bond itself.

First, though, you need to fix the math here:

  - ex. If we sell all 1500 worth of bonds and repaid 500 BTC in weekly payments, we would calculate (1500 - (500/2)) * 10% as a penalty.
     The total repurchase for the 150,000 bonds would be for 1750 + 175 BTC, or 1925 BTC.

Repurchase there should be 1250+125=1375 unless I've totally misunderstood something.

From a BMF shareholder's perspective BMF would lend you 5 BTC then receive back at least 0.5 BTC/week from Jan next year until total payment of 100 BTC had been received.  With the risk that if listing were denied or the offer was less than 50% subscribed the 5 BTC would be lost.

The problem then is that we CAN'T put the property aside and just discuss whether it's good for BMF - as how good/bad it is for BMF depends very much on how likely it is to be listed and sell out.  And that depends very much on the detail of the property.

As a BMF shareholder I'd vote to approve the motion if you can convince me there's better than about a 20% chance that it would sell out.  Which pretty much, ignoring detail, means convincing me that the property deal is real and profitable.  More accurately, it means convincing me that you've convinced the forum in general that the property deal is real and profitable.

[usagi]

Q&A ROUND 1


1.

I'm commenting here purely from the perspective of a BMF shareholder - not evaluating the bond itself.

That is what I am looking for. I'd like this to pass as a BMF motion, I.E. for it to make sense to my shareholders, and for my shareholders to trust that this is a sane plan. With community backing, I feel I can succeed.


2.

First, though, you need to fix the math here: [...] Repurchase there should be 1250+125=1375 unless I've totally misunderstood something.

Fixed! Thank you. I was working from 200,000 bonds when I wrote that then decided to cut the issue lower.


3.

From a BMF shareholder's perspective BMF would lend you 5 BTC then receive back at least 0.5 BTC/week from Jan next year until total payment of 100 BTC had been received.  With the risk that if listing were denied or the offer was less than 50% subscribed the 5 BTC would be lost.

The problem then is that we CAN'T put the property aside and just discuss whether it's good for BMF - as how good/bad it is for BMF depends very much on how likely it is to be listed and sell out.  And that depends very much on the detail of the property.

Sure, but all of that detail comes from me (I can explain the details but the conclusion won't change). The problem is, obviously, the more information I reveal the more it becomes apparent I'm revealing personal details to people who are not qualified to evaluate real estate. So what I am willing to do beyond just explaining details and throwing out numbers is to contact people like Rentalstarter (or yourself -- for example) and explain details and offer a sort of "information escrow" -- information escrow with someone who understands what the information represents. Then that person can act as a reference and say "Ok, usagi is telling the truth, it's real" and we can go from there. But until that can be done, when I say it's a good property, please take that on faith.


4.

As a BMF shareholder I'd vote to approve the motion if you can convince me there's better than about a 20% chance that it would sell out.  Which pretty much, ignoring detail, means convincing me that the property deal is real and profitable.  More accurately, it means convincing me that you've convinced the forum in general that the property deal is real and profitable.

I think the best way to illustrate this point is to discuss the bond issue as if we were going to bond the entire property @ 300,000 bonds (instead of 150,000). I still may want to do it this way, just for the sake of accounting. After all, we have already put a significant amount of money into the property, which can be documented to the information or identity escrow. So, for the money we have already placed onto the property, I will immediately receive 25,000 of 300,000 bonds. Further, we have approximately 11,000 bonds worth of capital sitting in the mortgage account which represents another 1 year of mortgage payments on the property. That raises the total interest I already own to 36,000 of 300,000 bonds. Now, in 2014, interested parties will donate (as in bestow) 50,000 bonds worth of capital to us towards the construction of the new structure. Why are they doing this? Because they have a vested interest in seeing this project come to fruition. Again, this can be documented to the identity escrow. This will bring the total number of bonds I own to 86,000 by mid 2014. During 2014 I will be buying approximately 1000 bonds per month out of my own personal paycheque -- which does in fact turn this into some sort of personal loan -- but one which I would have no trouble paying in any case given the strength of our bank account and projected 2014 cashflow.

Again, this property has already been bought. We've already paid 1/3rd of it and will likely end up paying off the land before summer 2014. But that means we can't build the house until next year, and that causes "problems". Then there is the issue of neighboring property "A" which I want to acquire and which may easily be acquired by someone else if we have to wait a year or so before we can buy it.

Point being it /is/ selling out, one way or another, before 3 or 4 years is up -- because I can and will buy it out all myself given enough time.
The question is, how much interest can I raise from others? Well, let's hope others chime in and give their thoughts



5. Anonymous via PM (letters added to questions for reference)
a) This is a bond denominated in USD (or we could say tied to initial BTC/USD rate) with interest 52% per year (in fiat, paid in BTC).
b) It will end after paying 200% of initial value or by the formula: (IPO - (payments/2)) + 10%.
c) This is backed by actual house - what is the probability for investor that the backing will be lost/without (fiat) value?
d) Will there be any option for redemption any time?
e) I would prefer listing at BTC-TC because of much lower fees - 0.4% vs. 1%, also at BF there already competition for you: Ukyo.Loan and Graet.Loan.
[/quote]

5a) No, it is not denominated in USD. It is denominated in bitcoins. However because I am buying bitcoins to pay the coupon, the bonds will tend to float against a basket of various currencies. To be absolutely clear the US Dollar, Canadian Dollar, or Australian Dollar will never be in this basket. I did say it would be tied to mtgoxusd, but now that I think of it, that is actually impossible. It may be close to mtgoxusd but it won't be mtgoxusd. Maybe mtgoxjpy?

5b) Yes.  The point is, you will get roughly the same purchasing power sent to you per bond per week until the bond returns 100% in terms of bitcoins. However, I will probably include a clause that caps the payout should bitcoins rise more than, say, 100%. I think that's more than fair considering what the investment represents. As you see, it wouldn't be possible to build a bitcoin economy with a highly volatile price without such a clause.

5c) Well, we already own the land. The great thing about this property is we bought it at 50% off (considering what people are asking for neighboring properties). If we have to sell it, we can pay off the bond. Keep in mind we have already placed a substantial amount of money into the property which we will get back when we sell. And we will likely be able to sell for at least 50% more than what we paid if we have to sell in a rush (100% more if we wait). I don't see any way for someone to steal a title in this day and age, so unless I stop making mortgage payments we should be fine. But there won't be a mortgage if we float any significant portion of this bond, so barring an act of god I don't think it is possible to lose all your money. There is a chance of loss but I feel it's really remote. I mean, the house could burn down. But we would still own the land, and we will be getting house insurance obviously so... the chances of losing the principal investment into the house are exceedingly remote in my opinion.

5d) Yes and no, because once we sink the money into the house the only way to redeem bonds would be to sell the house. The "yes" is if I launch with 300k bonds instead of 150k and don't pay a coupon (but instead, sell at under-face-value). For example, if I state that the bond is guaranteed to be repurchased in full after 1,200 days, and 120 days pass, the bond would be worth 0.011, After 240 days, 0.012. I could just repurchase any bonds listed below that price. What I would do is just add bids to the market instead of paying the mortgage (which wouldn't exist if we floated as much as 50,000 bonds). There are other issues. As I've alluded to, we will be receiving a large payment towards the development in early 2014. In theory I could use that to repurchase bonds. I am not sure how I will structure it but I will review what you have said deeply and come up with something that I am comfortable handling. I just don't want to get into a situation where I have to default on a clause. I definitely will not sell this house at the whims of bondholders, so the terms have to be clear in expressing that. This bond is not the kind of vehicle where you are going to be able to sell it back to me personally before the house is done. On the market, sure, at what price I don't know, but I can not afford to repay that much money until 3 or 4 years.

5e) I understand the desire to list on BTC-TC, however, I would like to consider myself closer to Ukyo because of our shared interest in Anime. Burnside is a really cool guy and I guess in terms of look and feel BTC-TC is better, but BitFunder has a lot of money going through it, and I wouldn't mind being on the same exchange as RentalStarter, too. Time will tell. Maybe we'll end up on Havelock or Crypto::Stocks? C::S is severely under-rated.

Thanks for the comments and questions.

Right now I am going to work on a re-hash of this with the following in mind:

1. Who wants to be the information escrow wrt. the title to the property, etc? (I am planning to provide a video walkthru of the property as well, for public consumption).
2. Issue of the full 300,000 bonds, with myself holding up to 1/3rd based on documents showing I've invested that much worth into the house already.
3. Some kind of repurchase clause.
4. Possibly issuing the bonds without a coupon (i.e. traditional bond) whereby the bond has a face value of (say) 0.02 but it is sold at 0.01 This would require guaranteeing a date upon which the bonds would be bought back. (This might be the most convenient thing. Actually, Deprived suggested it in PM).
5. Some kind of clause which limits my liability should BTC go to $5000. The fact is, you're not investing in BTC here, you're investing in a property and merely transacting in BTC. I may decide to tie it to gold, I may decide to tie it to case/schiller. Something realistic. If I do it that way it would be coupon (payment) based.
6. I wanted to make this into a super-duper bond but it may turn out to be another BTC-BOND copy with a high rate simply because I think it's more popular.

[Progressive]

Q: This is a bond denominated in USD (or we could say tied to initial BTC/USD rate) with interest 52% per year (in fiat, paid in BTC).

5a) No, it is not denominated in USD. It is denominated in bitcoins. However because I am buying bitcoins to pay the coupon, the bonds will tend to float against a basket of various currencies. To be absolutely clear the US Dollar, Canadian Dollar, or Australian Dollar will never be in this basket. I did say it would be tied to mtgoxusd, but now that I think of it, that is actually impossible. It may be close to mtgoxusd but it won't be mtgoxusd. Maybe mtgoxjpy?

5. Some kind of clause which limits my liability should BTC go to $5000. The fact is, you're not investing in BTC here, you're investing in a property and merely transacting in BTC. I may decide to tie it to gold, I may decide to tie it to case/schiller. Something realistic. If I do it that way it would be coupon (payment) based.
6. I wanted to make this into a super-duper bond but it may turn out to be another BTC-BOND copy with a high rate simply because I think it's more popular.

It seems to me that BTC-BOND is quite different from what you drafted here. BTC-BOND is also sold for BTC, but the most important question is if the underlying asset has value tied to BTC or to fiat.
In case of BTC-BOND the underlying assets are BTC securities (if I remember correctly). In your case the underlying asset is real house, which has predictable value in fiat, but totally unpredictable in BTC.

How would you repay the bitcoins if the price of BTC will raise e.g. to $500 or $1000? Do you expect profit from the house in fiat being big enough to cover this?


On the other hand you could denomitate the bond in fiat (and use BTC only as transaction medium) - both face value and interest. If you explain the backing and offer high enough interest the investors won't mind it's not BTC denominated (similar to CIPHERMINE.B1's interest).


Other question: I'm not sure which country are you from - the house is in Japan?

[usagi]

It seems to me that BTC-BOND is quite different from what you drafted here. BTC-BOND is also sold for BTC, but the most important question is if the underlying asset has value tied to BTC or to fiat.
In case of BTC-BOND the underlying assets are BTC securities (if I remember correctly). In your case the underlying asset is real house, which has predictable value in fiat, but totally unpredictable in BTC.

How would you repay the bitcoins if the price of BTC will raise e.g. to $500 or $1000? Do you expect profit from the house in fiat being big enough to cover this?

On the other hand you could denomitate the bond in fiat (and use BTC only as transaction medium) - both face value and interest. If you explain the backing and offer high enough interest the investors won't mind it's not BTC denominated (similar to CIPHERMINE.B1's interest).

Thanks for the tip re: Ciphermine. As an artistic concern, I would prefer not to have to mention fiat currency at all in the contract. Unfortunately, the property is not just denominated in fiat, but is massively denominated in fiat. This isn't a situation where if BTC goes to the moon my paycheque can cover the interest. I'm not willing to take a significant hit on the exchange rate. Looking at Ciphermine's contract for their bond, they seem to have created a perpetual bond. That is really more of a loan than a bond. I wanted to create an issue which was not perpetual.

A CIPHERMINE.B1-style idea:
1. 300,000 bonds are to be created priced at 0.01 BTC each.
2. 0.3%/week is 15.6% annually. Based on mtgoxjpy, 0.01 BTC = 131 yen. 0.3% of this is 0.393. Let's say 0.4 to keep it simple. So I could say, 0.4 yen into bitcoins per bond per week, that would give it an interest rate, to start, of 0.305%/week. If I paid 0.5% a week that would be 0.382% (closer to what ciphermine pays).

Ciphermine.B1 has some other clauses;
  - After 12 months, each bond may be redeemed at any time by bondholder for 0.01 BTC.
  - If before 12 months, three months notice is required to redeem bonds and rights to interest waived during that period.

I actually think these terms are fair, however I would extend the period from 12 months to 24 due to the nature of what we're buying. By the time 2 years is up I will have paid off 90% of the property and will be in a much better position to start redeeming bonds. But the issue is probably moot since you can likely sell these on the market.

"CipherMine has the right to redeem any bond in full with one month's notice to the bond holder at face value plus 12% less the number of months since issue." Actually, ciphermine's clauses sound very similar to what I had in mind.

"For example, after three months the redemption value would be 0.0109 BTC/bond, and after 12 months the redemption value would be 0.010 BTC/bond." This is a lot like the face value - (payments/2) * 10% penalty payment I came up with. I'll keep my version of the clause.

"The redemption value will always be at least 0.010 BTC/bond"
(that just determines face value.)

"The bonds shall ultimately be secured against the assets purchased with the funds, but this security would only be needed in dire circumstances where CipherMine had completely run out of cash."
Sounds similar to my idea.

I like what I am reading here so I will be moving the contract in the direction of what Ciphermine did.

The final question is what to do with investor's need to have a repurchase clause. If I use a lower interest rate, say 0.4 yen/bond/week, I would be much more comfortable guaranteeing a bid. I think that is better than forcing investors to wait 3 months to redeem shares. As an investor, what would you prefer; a slightly lower interest rate and the ability to sell shares back at 99% of face value, or a higher interest rate and the inability to redeem shares until a certain date (1-2 years into the future)?

[Progressive]

I would prefer higher interest rate. I wouldn't mind no redemption (prior to the scheduled end date) if other conditions (mainly interest) will be compensating that.


I understand that you don't want to expose yourself to BTC/USD volatility, that's why I suggested both face falue and interest fixed in fiat.
Example:
1)start selling the bonds for BTC0.01, note the BTC/USD price (converted to whatever currency).
2)pay interest based on the initial price, each week different amount of BTC depending on current BTC/fiat price.
3)buyback and everything else is also based on the initial fiat price.

I think that could be better for your need, because unlike CIPHERMINE you are unable to generate bitcoins.

[usagi]

Note: BMF investors please be aware that a large number (more than 2000) shares of BMF may hit the market soon, and the intent is to sell them below NAV (0.032) to move the shares as fast as possible. Please see https://btct.co/security/NYAN.A for more information.

The motion will be considered passed if 50.1% of total shareholders vote YES, since at that even if everyone else votes NO the motion will pass.

If you're interested in getting at these shares, my suggestion is to place your bid now. BMF will not place bids until after the shares are on the market, so there is plenty of time for public holders to get in on this.

happy investing~

[ldrgn]

You might want to Options->Wrap lines.

http://www.mergely.com/nSpOy3ho/

[usagi]

You might want to Options->Wrap lines.

http://www.mergely.com/nSpOy3ho/

Thanks, but there's no option to edit a motion in progress. That being said, the motion will probably have to be redone or NYAN/A shareholders will receive significantly less for a couple of reasons. Those reasons are also relevant to BMF (and NYAN/A shareholders will likely read this) so a few comments.

1. The major loss here is that we bought 25 shares of BTC-TRADING-PT a while ago and those are now worth zero. This has reduced the value of BMF shares to around 0.29.

2. The secondary loss is that face value bonds were sold out at an average of only 100% and not 106%. We were LUCKY here. I was online and trading throughout this whole thing and was able to dump a significant amount of shares in the 20 minutes between when I read burnside's post and when he stopped trading. That (and other minor losses associated with a depressed market) reduced the value of BMF shares to around 0.025 (assuming I get a reasonable price for the very few remaining unsold assets).

3. If Deprived chooses to exercise his bonds around the middle of November, the value of BMF is expected to fall to about 0.02. However, I hope to interest him in a deal. The deal involves the new bond issue I've been mentioning on this thread, which is slated to take center stage in this thread because it represents salvation for BMF investors.

[usagi]

So here's the plan:

1. confusing mix of explanations and apologetics
3. BMF is worth 0.033 per share.

Yes, I know, this doesn't make sense. But I've learned the hard way from GLBSE closure how to handle this situation. So there it is, BMF is now worth 0.033 per share, and I will prove it by buying back every share on the market at that price.

If you don't believe me, then you're crazy. But go ahead. If Deprived executes his warrants, or not, every share will be bought back at 0.033 or above.

But, if you need me to force buyback your shares off-market, you will get 95% of 0.033 (which is in the contract) or 0.03135. So basically, if you have to send me a PM or e-mail because you can't sell your shares on the market, you are guaranteed to get a minimum of 0.03135. That's the long and short of it. It makes no sense to involve BMF in any other company or bond issue. This way things are kept exceedingly simple.

But!

There is a new way forward. BMF isn't closing. We are still here, and we have a special plan for those who choose not to redeem their shares.

I will now discuss that plan.

[usagi]

Well over the long weekend (it's moon festival in China) I met with a few key figures over a property I am buying. I met with the designers and contractors for the project and we now have a very clear financial estimate of what this is going to cost. It's going to cost 130 bitcoins for the development deposit, and it will cost 500 bitcoins to finish extending the house.

We are going to be able to come up with 90 of the 130 bitcoins needed for the development deposit, and if we can come up with the remaining 40 bitcoins, certain parties with a vested interest in seeing this go thru have guaranteed that we will get the other 500 bitcoins free and clear. Did I mention we already bought the property for 50% off? Yeah, the people who sold it were desperate for money. It's a long story but that's the gist of it.

Why is this super duper news? Because BMF is going to invest in the property too! That's right, BMF will invest the other 40 bitcoins (and then some) in seeing this through. No problem right? I can still do that even if Deprived exercises his warrants. And in reward, I will personally guarantee that BMF will be worth 0.033 per share. I think you can see that the 80 bitcoins I need to come up with to make BMF worth 0.033 is vastly less than what we are going to get to do this property. I am more than happy sinking another four or five months of my income into BMF to make it worth 0.033, and I will do so. You have my word.

But,

A vital part of this entire project is that we acquire a neighboring property and merge it with what we have now, squaring the lot. This will allow us to extend the house to the north and place on the nexus of the development, with garden paths leading directly to two different highschools. We will use the extra space to build student housing and rent it out. We can do this because the schools frequently have students from out of town living at the school and we will be able to offer a competitive rate. It's guaranteed we will be able to make a profit from that development. Secondly it will allow us to build 2 floors instead of three, with a massive walk-out roof garden and laundry facilities. I can't express to you how important the acquisition of that property is, it is worth far more than what it will take to acquire. The magic number here is 300 bitcoins. I need 300 bitcoins to get that property. That is where a new bond issue comes in. We will need to sell more shares of BMF. We need to sell 10,000 more. Theoretically they would be sold at less than face value (0.032) so that there would be some kind of profit allowed for new investors.

Finally, I would pay a fair and reasonable interest rate during the approximately 1 year it will take to repurchase all of BMF at 0.033 (I could repurchase much sooner, if I didn't invest into this house). Given the amount of money I expect to make on this I do not mind paying 24% (at 2%/month). This would of course be tied to mtgoxjpy (yen). This places BMF along the same lines as FIMB, CIPHERMINE.B1 or RentalStarter.

The great thing is, BMF can continue operating exactly as before, selling shares at exactly the same price, and so on. See, all this is just a back explanation for why BMF is peachy keen and you have nothing to worry about. We will want to list on another exchange. We will use almost exactly the same contract, too. But as a confidence booster we will place a minimum guaranteed interest rate on BMF so that you know we are serious and not screwing around.

The long and short of it is this; (--edit: this will be put to vote before it is implemented.)

1. BMF is now a bond with a face value of 0.033.
(intended but not guaranteed to get Deprived to drop the redeem clause on his warrants).

2. BMF pays 15.6% per year as weekly payments of 0.3% tied to yen at 13,000/BTC.
(intended to get investors to be happy about holding their shares until I can buy them back with my paycheque).

3. BMF will sell an additional 10,000 (and no more) bonds at 0.032 in order to finance the acquisition of the neighboring property. Should this sale be completed the face value of BMF will rise to 0.035, granting an instant 0.03 profit per unit to the investors.
(intended to allow us to acquire and develop the neighboring property).

4. BMF will become redeemable at face value after December 31st, 2014.
(At this point you will be able to redeem for 0.033 or 0.035/bond).

5. BMF will seek to relist on a different exchange or if invited to do so.
(to facilitate coupon payments and repurchase).

The important thing to understand is that the bond will be tied to yen (I think mtgoxjpy is 13,000 now). So if BTC doubles vs. yen, you will not be repaid 0.033 but less. This should be obvious since we are investing in real estate and merely transacting in BTC.

So right now I advise every investor to do one of the following:

1. Sell out now for 95% of NAV by sending me a PM.
You are advised to do this before the exchange closes. When the exchange closes this offer will be suspended for several months because I will sink all of BMF's capital into the property.
Of course, if you have warrants, you can sell for 0.032.

2. Buy more shares of BMF at less than face value
If we sell out 10,000 more at below face value (0.032 --edit: assuming the vote for this plan passes) we will increase the face value from 0.033 to 0.035 and everybody wins.
The 15.6% will be based on the new face value as well, so you will get even more money out of your existing shares.
This offer will expire in early December. We need the money before then for the development deposit.
After December the house plan will be set in stone and will be difficult to change, so we need the money to buy the neighboring property before then.

3. Do nothing.
You will begin receiving payments of 15.6% once the development deposit has been paid (--edit: assuming the vote for this plan passes)
You will get more if other people buy more shares and the face value rises to 0.035 because of them.
You will have the opportunity to sell your shares back to me at 0.033 or 0.035 before the end of 2014.

How do you buy more shares of BMF? Send me a PM. We can run much like the old GBF and hold it manually for you. Hopefully we can relist on another exchange, but where, I do not know. I'd like to list on BitFunder but have been told we can't get an answer until after October. We shall see.