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Author Topic: [BTCT][BFMINES] - Mining Contracts Now Available - Bonus Divs First Months  (Read 25471 times)
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Deprived
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July 02, 2013, 08:08:57 PM
 #101

I may very well be misunderstanding the offering or maybe I am just daft. Is this mining bond really just selling shares of a 120 Gh/S Bitfury for initial market value of 400 BTC?

No, this is a mining contract for 1mhs per contract initially sold at BTC0.004. There's more to it than just shares of hardware, but technically, these contracts can be backed by anything.

I've addressed this to some extent in my latest article (which should be mandatory reading for anyone considering purchasing contracts):

http://coin.furuknap.net/bfmines-bitcoin-mining-contracts-ready-for-listing-heres-how-you-should-evaluate-investing/

.b

DO NOT BUY!! RIPOFF!!

For those that don't know, furknap sold all his ASICMINER shares for 1.7btc and apparently used the proceeds to purchase this miner. He must, by now, realize his folly, and that there is an almost 100% likelihood that buying this miner is a losing trade and will never earn back what he paid.

He is trying to pass on this loss to bitcoin investors like you by launching this offering.

Although the asset has been approved, I strongly encourage people to stay away as it is a guaranteed money loser. IE: You will NEVER earn back in divs what you will pay for it. Furknap knows and is basically offering a way overpriced PMB.

-helixone

You can of course believe what you want, but there is no reason to be a douchebag about it. What does the fact that he sold ASICMINER at 1.70 have to do with anything? I sold a bunch at 2.20 and sure, while it in hindsight was a bad sell I also purchased them under 0.50 so why cry over making 5x your money?

Heh I sold mine (my fund's) at about 0.75 (the first time - have bought and sold many times since) - everyone gets it wrong occasionally (they were bought for ~0.1 around IPO).

Furuknap's article does describe most of the factors to weigh up when considering his contract - though it misses out one of the largest ones (the BTC/USD exchange-rate - in general if that rises ALL mining investments become worse, if it falls they become better).  It also doesn't much address comparing his contract to alternatives.  It would have been more useful had it provided formulae to work out return for standard scenarios (e.g. difficulty rises steadily to X until end of year then stays constant - what is return by end of 2014, so people could plug in different X).  But noone else provides that so no reason why he should.
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furuknap
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July 03, 2013, 12:09:46 AM
 #102

It also doesn't much address comparing his contract to alternatives.  It would have been more useful had it provided formulae to work out return for standard scenarios (e.g. difficulty rises steadily to X until end of year then stays constant - what is return by end of 2014, so people could plug in different X).  But noone else provides that so no reason why he should.

I've been hesitant to compare this to alternatives for a number of reasons, but maybe I should.

I'll see if I can get an article up later tonight or tomorrow.

.b

eltopo
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July 03, 2013, 12:24:09 PM
 #103

Please show me where I made mistakes in my calculation!

I will, later today :-)

.b

Seems you won't  Roll Eyes
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July 03, 2013, 03:42:21 PM
 #104

Please show me where I made mistakes in my calculation!

I will, later today :-)

.b

Seems you won't  Roll Eyes

Actually, I started on an article like Deprived suggested instead. Seemed more appropriate as it also will answer your questions. I'm trying to get that up before trading starts tonight.

.b

twentyseventy
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July 03, 2013, 06:13:07 PM
 #105

Are we not at 6PM UTC?
furuknap
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July 03, 2013, 06:16:11 PM
 #106

Are we not at 6PM UTC?

We are, just a few moments :-)

.b

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July 03, 2013, 06:23:40 PM
 #107

Trading Begins on BFMines

As of now, and I'm sorry about the delay for a few minutes, trading is open on the BFMines mining contracts on BTCT.

https://btct.co/security/BFMINES

100'000 shares have been placed on the market at BTC0.004 each. The ASK order will be kept on the market until sold.

The latest update on delivery is that Metabank is on schedule to deliver between August and October, with the latest estimate from them being that shipping begins in early September (as per information given to our hosting provider).

I will publish an article later today regarding comparing BFMines to other assets on BTCT.

As always, run your own numbers, make up your own mind, listen to both sides of the arguments, and never invest anything you cannot afford to lose.

.b

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July 04, 2013, 02:10:46 AM
 #108

Comparison of Mining Assets
As per Deprived's request in the forum (although his was just the trigger; I get a lot of these) I've written an article that compares the various mining investments on BTCT to BFMines. Right now, BFMines is the second cheapest (TAT.VM is cheapest after today's drop).

The analysis focuses on price per mhs mostly. Be aware that mining companies and mining contracts behave differently when it comes to upgrading.

Please note that the reason I have been hesitant to write such an article so far is that these numbers change on a daily basis. TAT.VM, for example, fell considerably today, but was trading at over 0.005 just a few days ago.

Also, I don't speculate in difficulty changes as a policy, but I've chosen to account for 15% per month for the next two months when comparing the numbers. This may or may not be right but regardless, it shouldn't affect the comparison of assets too much, only mining investments in general.

http://coin.furuknap.net/comparing-bfmines-to-alternatives/

Enjoy,

.b

Anthony1985
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July 04, 2013, 05:39:25 AM
 #109

so spending 12 btc would be like having a miner of 3ghs?
furuknap
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July 04, 2013, 05:41:44 AM
 #110

so spending 12 btc would be like having a miner of 3ghs?

Pretty much, except you don't have to pay for electricity, maintain or configure it, risk it breaking, or suffer the noise or added heat.

.b

Anthony1985
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July 04, 2013, 05:46:40 AM
 #111

so spending 12 btc would be like having a miner of 3ghs?

Pretty much, except you don't have to pay for electricity, maintain or configure it, risk it breaking, or suffer the noise or added heat.

.b

for how long will I be having it?is there a deadline?

What if I want to sell the stocks I got?is there a risk I will be getting less then how much I paid for?
furuknap
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July 04, 2013, 05:48:50 AM
 #112

so spending 12 btc would be like having a miner of 3ghs?

Pretty much, except you don't have to pay for electricity, maintain or configure it, risk it breaking, or suffer the noise or added heat.

.b

for how long will I be having it?is there a deadline?

Nope, you keep it forever or until the asset closes for one of the reasons outlined in the contract. In short, as long as I'm alive (or I die and someone takes over) and as long as the contracts produce a positive cashflow (meaning mining minus expenses is positive), the contracts remain.

.b

Anthony1985
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July 04, 2013, 05:58:36 AM
 #113

so spending 12 btc would be like having a miner of 3ghs?

Pretty much, except you don't have to pay for electricity, maintain or configure it, risk it breaking, or suffer the noise or added heat.

.b

for how long will I be having it?is there a deadline?

Nope, you keep it forever or until the asset closes for one of the reasons outlined in the contract. In short, as long as I'm alive (or I die and someone takes over) and as long as the contracts produce a positive cashflow (meaning mining minus expenses is positive), the contracts remain.

.b

How will you deal with the difficulty?

If i get 12 btc of bonds so 3 ghs miner in one week I will produce 0.50 btc,that's ok for now but if the difficulty keep going up with my 3ghs miner I won't do much.So that means that  I should be getting more bonds if I want to keep producing a decent number of BTC.
FloatesMcgoates
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July 04, 2013, 05:58:59 AM
 #114

so spending 12 btc would be like having a miner of 3ghs?

Pretty much, except you don't have to pay for electricity, maintain or configure it, risk it breaking, or suffer the noise or added heat.

.b

And you don't get any transaction fee money either.
furuknap
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July 04, 2013, 06:01:09 AM
 #115

How will you deal with the difficulty?

If i get 12 btc of bonds so 3 ghs miner in one week I will produce 0.50 btc,that's ok for now but if the difficulty keep going up with my 3ghs miner I won't do much.So that means that  I should be getting more bonds if I want to keep producing a decent number of BTC.

The contracts don't work differently from buying a miner in that respect. If difficulty goes up, the revenue from mining per mhs goes down, regardless of whether that miner is a phyiscal device you buy or a contract.

.b

furuknap
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July 04, 2013, 06:06:08 AM
 #116

And you don't get any transaction fee money either.

Why wouldn't he get that? This is a physical miner that does real mining work; any income from the miner will be distributed, regardless of whether it is block rewards or transaction fees.

You bring up a good point, though. I'm not sure how TAT.VM handles this as a virtual mine; his contracts only states the block reward as basis for reward. I'll ask him.

BFMines, however, pays out what is actually mined.

.b

FloatesMcgoates
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July 04, 2013, 06:13:13 AM
 #117

And you don't get any transaction fee money either.

Why wouldn't he get that? This is a physical miner that does real mining work; any income from the miner will be distributed, regardless of whether it is block rewards or transaction fees.

You bring up a good point, though. I'm not sure how TAT.VM handles this as a virtual mine; his contracts only states the block reward as basis for reward. I'll ask him.

BFMines, however, pays out what is actually mined.

.b

I stand corrected then, if you do pay out transaction fees then I think your security is the only PMB that does so.
furuknap
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July 04, 2013, 06:16:58 AM
 #118

I stand corrected then, if you do pay out transaction fees then I think your security is the only PMB that does so.

Like I said, I will pay out what the miner produces. I don't have a forumla based on a fixed mining reward. It will never be less than the block reward, but it can be higher.

I asked TAT wbout it and he confirmed that he does not pay out transaction fees, so I guess that gives BFMines a slight advantage over TAT.VM and possibly other mining contracts. Of course, at the moment, it's a percent or something, so it's not really making a huge impact.

Now, let's cheer for Bitcoin adoption and hope everyone starts using it massively!

.b

furuknap
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July 05, 2013, 02:08:37 AM
 #119

Is it me or there is almost no information about the hardware ordered?

What is is, who is making it? What reasons do we have to believe they will deliver (and deliver hardware that work)?

edit: is it https://bitcointalk.org/index.php?topic=226846.0 ?

Yes, I'm basing the IPO of BFMines on the Metabank miner. What comes later is not defined yet, but I'm working on a few alternatives. I don't want to put all my eggs in one basket, despite what mr. Buffett says.

.b

helixone
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July 06, 2013, 03:47:15 AM
 #120

I may very well be misunderstanding the offering or maybe I am just daft. Is this mining bond really just selling shares of a 120 Gh/S Bitfury for initial market value of 400 BTC?

No, this is a mining contract for 1mhs per contract initially sold at BTC0.004. There's more to it than just shares of hardware, but technically, these contracts can be backed by anything.

I've addressed this to some extent in my latest article (which should be mandatory reading for anyone considering purchasing contracts):

http://coin.furuknap.net/bfmines-bitcoin-mining-contracts-ready-for-listing-heres-how-you-should-evaluate-investing/

.b

DO NOT BUY!! RIPOFF!!

For those that don't know, furknap sold all his ASICMINER shares for 1.7btc and apparently used the proceeds to purchase this miner. He must, by now, realize his folly, and that there is an almost 100% likelihood that buying this miner is a losing trade and will never earn back what he paid.

He is trying to pass on this loss to bitcoin investors like you by launching this offering.

Although the asset has been approved, I strongly encourage people to stay away as it is a guaranteed money loser. IE: You will NEVER earn back in divs what you will pay for it. Furknap knows and is basically offering a way overpriced PMB.

-helixone

You can of course believe what you want, but there is no reason to be a douchebag about it. What does the fact that he sold ASICMINER at 1.70 have to do with anything? I sold a bunch at 2.20 and sure, while it in hindsight was a bad sell I also purchased them under 0.50 so why cry over making 5x your money?

The point is that a fixed hash PMB has to be bought below a certain point to have any chance of even breaking even. With ~6-9 difficulty rises expected between now and the promised start of mining, it's highly unlikely investors will make much more than HALF their money back if they pay the IPO price.

-helixone
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