[BTCT][BFMINES] - Mining Contracts Now Available - Bonus Divs First Months

[furuknap]

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.

So, you think that it is five months until October.

I'm sure you trust the numbers you come up with, so you should just avoid buying these contracts. If those are your expectations, as I said, there's no point in you gambling against those expectations.

.b

[RHA]

Furuknap, you asked for discussing it here.
Most people think your offer is just a ripoff.
It's an offer for those who can't count.

It is 0.004 BTC for 1 MH/s, so it is 4 BTC for 1 GH/s.

For 4 BTC one can buy, for instance, one BFL 5 GH/s miner - shipping end of August.
Or one can buy something from the second table here: http://decentralizedhashing.com/bitcoin-mining-equipment-table/, getting up to 10 GH/s - shipping planned in August.

Better: the KnCMiner Jupiter model has a ratio 0.25 BTC for 1 GH/s - sixteen times better than yours.
There are many group buys or bonds for this device, for instance: https://bitcointalk.org/index.php?topic=226319.0.

For the 120 GH/s device (the same as yours) there are such initiatives too: https://bitcointalk.org/index.php?topic=224332.0
And new ones are starting...

[furuknap]

Furuknap, you asked for discussing it here.
Most people think your offer is just a ripoff.
It's an offer for those who can't count.

It is 0.004 BTC for 1 MH/s, so it is 4 BTC for 1 GH/s.

For 4 BTC one can buy, for instance, one BFL 5 GH/s miner - shipping end of August.
Or one can buy something from the second table here: http://decentralizedhashing.com/bitcoin-mining-equipment-table/, getting up to 10 GH/s - shipping planned in August.

Better: the KnCMiner Jupiter model has a ratio 0.25 BTC for 1 GH/s - sixteen times better than yours.
There are many group buys or bonds for this device, for instance: https://bitcointalk.org/index.php?topic=226319.0.

For the 120 GH/s device (the same as yours) there are such initiatives too: https://bitcointalk.org/index.php?topic=224332.0
And new ones are starting...

The running your own hardware versus investing in a mining operation has been discussed to death already so I'm not going to go over it again. I'm sure you and other investors are perfectly capable of reading through a thread before you or they make up your mind.

However, if you're comfortable with that, I don't understand why you bought into 100th, which is essentially exactly the same investment as BFMines.

BTW, I'm sure those who have been waiting for Avalons and BFLs for months will be thrilled you are now able to announce they will get their equipment in August. The likelihood of this, however, has also been discussed to death, so really, your post is just a repeat of old arguments and contains nothing new.

.b

[helixone]

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.

So, you think that it is five months until October.

I'm sure you trust the numbers you come up with, so you should just avoid buying these contracts. If those are your expectations, as I said, there's no point in you gambling against those expectations.

.b

Your prospectus states "The scheduled release is September 2013. This could be any time between Sept 1st and Sept 30th) At the time you launched your IPO and started selling shares that was ~60-90 days out. We have been seeing difficulties getting recalculated every 10-12 days for the last 4+ difficulty periods. So let's give you the benefit of the doubt and call it 12 days. That leaves us 5-7.5 difficulty increases between now and your guaranteed HW ship date. (I initially used 10 days, to come up with the estimated 6-9 difficulty increases. ("~" means approximately.)

As an aside it looks like the next difficulty increase is going to be around 20%, and it is widely expected that the following 5+ changes will also be difficulty increases of 10-20% http://bitcoindifficulty.com/.

-helixone

P.S. - If you honestly think this isn't a bad investment for buyers of your security, and aren't trying to rip people off, you *really*, *really* need to do your homework. (They ARE going to lose money.)

[furuknap]

P.S. - If you honestly think this isn't a bad investment for buyers of your security, and aren't trying to rip people off, you *really*, *really* need to do your homework. (They ARE going to lose money.)

Of course difficulty will go up. Of course prices will go down as difficulty rises. This is even explicitly written in the contract. Nobody doubts this. What you are saying is essentially that "the Sun will rise again and at that time the time you have left in your life is less". You're stating the very, very obvious. Again and again.

If the miner arrived right now, BFMines returns almost 200% per year. If the difficulty rises 1000% and we pass 2PHs, the return is still 20% per year (or, using the numbers I published in the comparison, 16.4%). At that time, growing the network another 10% will require the same investment per month as the entire world's Bitcoin mining investments up to now, every month. If you believe that is a likely scenario, you should not invest. 

Your error in your previous statement is this; even if you 'just' get 15% return on your investment, you still get return on your investment. There's no reason to assume that prices will drop at that point. Any investment that can produce 15% return over time will keep its value.

The market has already priced in the expected rise in difficulty, otherwise this would have sold out in seconds. Same thing with AM; the market has already priced in the expected growth, which is why the market is paying 10x more for AM hash power than for BFMines.

You've made your position and bet known. I'm still not sure what your continued reiteration of the same statements are adding, but like I said, just don't buy the contracts if you think they will lose money.

.b

[Deprived]

I think you've made a trap for yourself furuknap - and risk losing all credibility for the sake of making some profit on effectively reselling your hardware.  The following quote from your news post on BTC-TC pretty much sums it up :

"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."

I can see no rational basis for assuming a 15% rise per month in the next 2 months for difficulty.  Even a quick look at current trends shows that in recent months the rise is consistently around double that.  That's with only 3 companies providing ASICs - and one of them (BFL) only just really getting going.

By the time your hardware arrives there MUST be a 4th company shipping hardware - as yours comes from them.  Yet somehow you believe the rate of increase is going to halve?

Claiming the rate of increase whilst other bonds mine and yours doesn't is somehow not important in comparisons is just ludicrous.  It's the second most important factor when calculating the relative competitiveness your offering to PMBs already mining (the most important, of course being price per MH/s).  The faster difficulty rises, the harder it is for your offering to ever make up for the dividends it missed before your hardware arrived (perhaps, more accurately, the greater the margin yours has to be cheaper by to represent equal value).  That's true regardless of how you model difficulty AFTER your hardware arrives.

And, of course, if you're blatantly underestimating short-term difficulty rises then it has to be considered likely you're doing the same on long-term ones when you confidently predict profitability for investors.

For your 15% per month prediction to be correct just for this month (without ANY KNC deliveries) would mean zero new ASICs added to the network for the remainder of the month.  It smells very much like you pulled out a figure that matched the results you wanted rather than looking at what's actually been happening.  And that's where you've gone wrong.  If you'd just acted like most other PMB issuers - and kept your mouth shut about what your bond would do - then if (more likely when tbh) it became apparent that investors would never make their money back at least you wouldn't have misled them.  But now you have a thread and various posts in which you attempt to argue the indefensible - that current rate of difficulty increase will drop in the short-term (next few months) despite a new manufacturer HAVING to enter the fray (for you bond to even come to life) with no apparent reason beyond the fact that you'd like it to be true because it makes your bond look better value were it the case.

The argument you've made a few times about difficulty having to stop rising because of the cost of hardware ignores three things:

1.  The price of hardware WILL fall - and massively so.  Current prices are a massive markup on cost (after NRE has been recovered) and will inevitably drop through competition once supply becomes reliable and demand becomes somewhat satiated.
2.  If the price of Bitcoin rises then that immediately allows more hardware to be added without problem.  Long-term the price of Bitcoin has to rise or it will stagnate and die (the cause/effect is actually the other way round).
3.  All the time people can sell unprofitable bonds/shares to the public they'll continue buying hardware and selling shares in it.  That it isn't rational for investors to buy their crap doesn't make it irrational for them to sell it - and it will continue even if mining is unprofitable before the issuers have taken their own (risk-free) cut.

You've put your credibility on the line for a very small sum - I hope that works out well for you.

[furuknap]

"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."

I can see no rational basis for assuming a 15% rise per month in the next 2 months for difficulty.  Even a quick look at current trends shows that in recent months the rise is consistently around double that.  That's with only 3 companies providing ASICs - and one of them (BFL) only just really getting going.

Like I said, that number isn't really relevant in terms of comparing mining assets which was the point of that article. The number is relevant in terms of evaluating mining investments as a whole only.

I continue to avoid speculating on when or how much the increase will be, but I've said several times that it is likely we reach 1-1.5PH more than we have now before mining again becomes too marginal to make huge investments interesting. At 2PHs, BFMines, TAT.VM, and your own DMS.Mining still yield a return that beats NASDAQ composite by at least 200%, so how you can say that it is a horrible investment is beyond me.

And to answer your question about the fourth mining company; Metabank must ship, of course. They put a cap on sales at less than 400 units. That's a whooping 50THs, or roughly one AM's worth of mining.

KnC? No idea about how many units they will manage to sell, but they're now competing with the next batch of Bitfury based machines.

The argument you've made a few times about difficulty having to stop rising because of the cost of hardware ignores three things:

1.  The price of hardware WILL fall - and massively so.  Current prices are a massive markup on cost (after NRE has been recovered) and will inevitably drop through competition once supply becomes reliable and demand becomes somewhat satiated.

Of course it will. The prices of securities will also drop. This is explicitly stated in the contract. It is not ignored anywhere.

However, this isn't going to be a revolution one day, where KnC or Metabank announces they're cutting their prices by 95%. The market needs to buy first to create the income to make larger orders and smaller chips possible.

We're already preparing for 28nm. At 20nm, we have to start competing with the development resources of Intel to get smaller. KnC still hasn't shown a single working chip. Bitfury's chips (at 55nm) were massively underperforming (but are on time so far at least). BFL has struggled for a year to get their 65nm chips out. 100th is over a month late and needs to get more funds from investors. Even Avalon at 110nm are having major issues and as of a couple of hours from now are joining the ranks of those officially late on their estimates.

AM seems to be virtually the only company to get stuff out more or less on time, and even they have yet not fulfilled their estimates of having 62TH online (they're right now at roughly half of that) by late March 2013.

And yet you're confident we'll just keep having prices drop like rocks. I don't share your confidence. I think prices will fall, just not now and just not yet.

2.  If the price of Bitcoin rises then that immediately allows more hardware to be added without problem.  Long-term the price of Bitcoin has to rise or it will stagnate and die (the cause/effect is actually the other way round).

And if all Bitcoin mining investments are unprofitable, do you then think that Bitcoin will survive?

For a rise in BTC/USD to counter just holding coins as opposed to mining, mining returns must be massive. For mining returns to be massive, we need a high difference between mining difficulty and BTC/USD. However, if your stated assumption of a higher and higher difficulty comes true, mining investments of any kind will be a loss, so mining will either cease, or leave investors with vastly lower yield. For any investor to accept lower yield, the risk must be reduced, and that in turn requires better confidence in the profitability of development of new technology.

3.  All the time people can sell unprofitable bonds/shares to the public they'll continue buying hardware and selling shares in it.  That it isn't rational for investors to buy their crap doesn't make it irrational for them to sell it - and it will continue even if mining is unprofitable before the issuers have taken their own (risk-free) cut.

You're begging the question here by assuming the answer you want as an assumption for your argument. Mining contracts are unprofitable because they are unprofitable.

You've put your credibility on the line for a very small sum - I hope that works out well for you.

I don't see it that way. I do believe in the asset I have created, and I believe it will be profitable for investors. It will not rise in price, it will not yield 500% returns, but with a reasonable risk it is likely to return a reasonable reward. You may evaluate that risk differently, which is fine. I'm not bashing DMS.Selling for never being able to return 100% ROI or predict that mining will stop after 800ths leading DMS.Selling investors to lose money. They are simply different bets; you and your investors place your bets, I and my investors place mine.

I have also, to hopefully put an end to that discussion, never claimed that mining contracts are more profitable than investing in and operating your own hardware, just like no sane person would claim that investing in Exxon is more profitable than buying and operating your own oil field, or that buying shares in Ford is more profitable than building and operating your own car company.

.b

[twentyseventy]

What happens if the mining equipment is never delivered?

Or if it is significantly later to be delivered (like BFL)? At what point will you return the IPO money to investors, if at all?

[Deprived]

And if all Bitcoin mining investments are unprofitable, do you then think that Bitcoin will survive?

Vast majority of bitcoin mining investments to date have made a loss for investors.  Bitcoin is still around.

It's a bit like asking if gold-mining was unprofitable would gold survive?  

When you think about the answer to that you should realise that mining being being unprofitable has absolutely no detrimental effect on Bitcoin - one of four things happen (or a mix):

The price rises so it becomes profitable.
Some miners stop mining and it becomes profitable for the rest.
Miners are too stupid to realise they're making a loss.
Miners sell shares to idiots - passing the losses on - and carry on mining making a profit themselves anyway.

Numbers 3/4 happen all the time anyway.

[furuknap]

What happens if the mining equipment is never delivered?

Or if it is significantly later to be delivered (like BFL)? At what point will you return the IPO money to investors, if at all?

This is written in the contract. The funds are in an escrow account and will be returned (sans the exchange trading fee) if the miner fails immediately and/or is not delivered.

As for when the IPO funds will be returned, I haven't set a fixed date in that yet. However, to mitigate the risk of this happening, I'm working on alternative sources of hash power so if Metabank announced that they are significantly delayed, we can still start mining.

The risk of that is carried by yours truly.

This actually reminds me that I'm going to post a motion to make an ammendment to the contract. This motion will not technically be required, as the contract clearly states no voting rights, but I'd like to improve the terms in favor of investors. I'll post more information next week.

.b

[Deprived]

"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."

I can see no rational basis for assuming a 15% rise per month in the next 2 months for difficulty.  Even a quick look at current trends shows that in recent months the rise is consistently around double that.  That's with only 3 companies providing ASICs - and one of them (BFL) only just really getting going.

Like I said, that number isn't really relevant in terms of comparing mining assets which was the point of that article. The number is relevant in terms of evaluating mining investments as a whole only.

I know you said that - and you were wrong the first time you said it.

That number is VERY important when comparing a security not mining yet (yours) to ones already mining (the ones you compared it to).  Saying it a second time doesn't make it true.

Easiest way to explain why it's relevant is to consider an extreme example - a ridiculously extreme example.   Imagine that difficulty rose by 1 million % at every difficulty change from now until delivery of your hardware.  You say that doesn't matter for comparison purposes - yet it rather obviously does.  As the income mined before the next difficulty change for things already mining would exceed what yours would mine from now until you died peacefully of old age.

When comparing yours to ones already mining the key to consider (as you can't compare them purely on price) is how much extra will they mine compared to you in the period before your hardware arrives.  Rather than considering it in terms of difficulty it's easier to explain when considered in terms of earnngs (those are inversely proportional to difficulty so conclusions drawn are valid).

If earnings/day now are X
Earnings per day at delivery now are Y
days to delivery are Z

Then we can approximate earnings (by assumign a steady change in difficulty or earnings) extra from a competitor before yours arrive as being  Z*(X-Y)/2 - i.e. the number of days times the total change/2.  Rather obviously as Y gets smaller (difficulty increases more so earnings reduce more) that number increases.  But not only does increasing difficulty make Y smaller (and the difference in earnings greater), it also makes the starting difficulty for YOUR mining higher - meaning your bonus is smaller AND is competing against a larger deficit.

I'm not seeing how you could possibly reach the conclusion that difficulty change BEFORE your hardware arrives doesn't matter for comparisons.  It's CRITICAL when comparing.  Difficulty changes AFTER your hardware arrives are, indeed, not all that relevant for comparisons - but that's NOT what you were asserting as you were specifically referring to difficulty changes BEFORE your hardware arrives.  And those are the ones that are obviously wrong - and in a direction which unjustly favours your own security in comparison to ones whose hardware (or virtual hardware) is already mining.

[Deprived]

I'm not bashing DMS.Selling for never being able to return 100% ROI

That one's an interesting strawman - as you appear to be saying that there's something automatically bad about an investment that will never return 100% ROI.

Side-note: For those who don't understand what ROI is (furknap DOES know what it is - and is using the term correctly) it refers to Return ON investment (profit) not (as often misused here) Return OF investment (getting your initial investment back).

SELLING can never (or almost never) return a 100% ROI at current prices - that is correct.  But got no idea why you'd believe that is any way a bad thing.

I regularly buy shares and sell them for a 10% -20% profit.  I NEVER feel bad when I make 10-20% in a few days because it's less than 100%.

If someone offered a bond paying 30% dividends/year and ending in a year then it could NEVER give a 100% ROI.  But would that make it bad?  Of course not.

So it's not actually very generous of you to refrain from bashing SELLING for something which isn't of itself a fault anyway.  An investment can be great whilst never being able to achieve a 100% ROI and can be horrible whilst theoretically being able to deliver well over 100% ROI.  ROI without a time-scale is meaningless - and bashing something because of its max ROI without an associated time-scale would be stupid.

I didn't quote rest of the sentence - but if you DO want to bash SELLING investors or those selling SELLING to them they feel free : the whole point of DMS was, however, to let people do the bashing with BTC rather than with words.

[Deprived]

My last post on this - just want to be clear what I AM saying and what I'm NOT saying.

I'm NOT saying it's certain BFMINES will make a loss.  It IS possible that the manufacturers are stupid enough to sell hardware that will mine more than 20 times the price they sell it for (or couldn't get funding for less than 1950% interest from a source other than pre-orders).

I AM saying that the rate of difficulty change from now until the hardware arrive is CRITICAL when comparing to assets laready mining.

I AM saying that furknap's figure for those short-term difficulty changes is wrong - and unduly favours his own asset.

I AM saying that by actually claiming BFMINES will be profitable for investors furknap is putting his reputation on the line where most others avoid doing so.  It's highly likely some people WILL buy because he said it would (or was very likely to) be profitable who wouldn't have otherwise bought.

I have no interest (in fact a definite disincentive) in trying to actually define a likely range of returns for this security (or ANY mining 'bond').

[furuknap]

"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."

I can see no rational basis for assuming a 15% rise per month in the next 2 months for difficulty.  Even a quick look at current trends shows that in recent months the rise is consistently around double that.  That's with only 3 companies providing ASICs - and one of them (BFL) only just really getting going.

Like I said, that number isn't really relevant in terms of comparing mining assets which was the point of that article. The number is relevant in terms of evaluating mining investments as a whole only.

I know you said that - and you were wrong the first time you said it.

That number is VERY important when comparing a security not mining yet (yours) to ones already mining (the ones you compared it to).  Saying it a second time doesn't make it true.

Easiest way to explain why it's relevant is to consider an extreme example - a ridiculously extreme example.   Imagine that difficulty rose by 1 million % at every difficulty change from now until delivery of your hardware.  You say that doesn't matter for comparison purposes - yet it rather obviously does.  As the income mined before the next difficulty change for things already mining would exceed what yours would mine from now until you died peacefully of old age.

When comparing yours to ones already mining the key to consider (as you can't compare them purely on price) is how much extra will they mine compared to you in the period before your hardware arrives.  Rather than considering it in terms of difficulty it's easier to explain when considered in terms of earnngs (those are inversely proportional to difficulty so conclusions drawn are valid).

If earnings/day now are X
Earnings per day at delivery now are Y
days to delivery are Z

Then we can approximate earnings (by assumign a steady change in difficulty or earnings) extra from a competitor before yours arrive as being  Z*(X-Y)/2 - i.e. the number of days times the total change/2.  Rather obviously as Y gets smaller (difficulty increases more so earnings reduce more) that number increases.  But not only does increasing difficulty make Y smaller (and the difference in earnings greater), it also makes the starting difficulty for YOUR mining higher - meaning your bonus is smaller AND is competing against a larger deficit.

I'm not seeing how you could possibly reach the conclusion that difficulty change BEFORE your hardware arrives doesn't matter for comparisons.  It's CRITICAL when comparing.  Difficulty changes AFTER your hardware arrives are, indeed, not all that relevant for comparisons - but that's NOT what you were asserting as you were specifically referring to difficulty changes BEFORE your hardware arrives.  And those are the ones that are obviously wrong - and in a direction which unjustly favours your own security in comparison to ones whose hardware (or virtual hardware) is already mining.

Hm, I'll need to recheck this when I get back. You may be right and if so I'll update the article.

.b

[furuknap]

Hm, I'll need to recheck this when I get back. You may be right and if so I'll update the article.

*¤&%&%&!!!

I just spent three hours writing a full response, and the browser crashed. *sigh*

OK, here we go again, luckily most of the work was in validating the numbers...

I checked again, and you are wrong. However, by forcing me to recheck everything, you pointed me to a mistake I had made in my first model. I'll explain that and post the updated numbers, but let me first explain why you're wrong, and let me do so with the extreme example you had.

In my model, I am deducting the dividends earned by the competing contracts from the prices of contracts currently mining. This means that in the analysis, any dividend earned works in favor of the competitor. I believe you mentioned this wasn't fair and that one couldn't compare minig with a non-mining asset, but you may have misunderstood the model as it already accounts for this.

However, If difficulty goes up 1 million percent then no dividends will be earned at all, so no price deduction takes place.

Of course, this also means that everyone loses everything, so the question really becomes who pays more for their shares because that determines how much an investor will lose. Because BFMines is priced lower than competitors per mhs, that means investors lose less with BFMines (they would lose 0.00468 with TAT.VM and 0.00400 with BFMines).

To be accurate, this depends on when the difficulty goes up by a million percent. If that happens next week, then dividends earned until next week will reduce the loss.

To err on the site of caution, for my model, I have actually assumed that no difficulty changes happen in July at all. This favors competitors, due to the balance between the BFMines bonus being lower and the decrease in reduction from the competitors, the effect isn't too great (a percentage point or two). If I include the changes during July, it favors BFMines.

Now to my error.

In my first model, I had wrongly reduced the dividends by the same rate as the hashrate increase. In other words, if hashrate increased 15% then dividends would decrease 15%.

This is obviously wrong, because if the difficult went up 100%, the dividends would then be zero, when they should be 50%.

In the fixed model, I now correctly use the growth in difficulty to calculate the returns. Although not entirely correct for a physical mining operation, I have used the formula from DMS.Mining, as I'm sure you'll approve of that being correct (or at least equal for all).

I should mention that when designing the contracts, I used the correct method.

So, the results...

My statement from the article is that the chosen difficulty shouldn't affect comparing the assets 'too much' (only mining investments in general). The 'too much' is of course a relative term, so let me show you what it means in practice.

Here are the results from the updated model using 15% as the monthly change:



Here are the results from the updated results using 30% as the monthly change:



As you can see, the change from 15% to 30% affects TAT.VM competitiveness by 1% point only. This is due to the reduced price reduction countered by the reduced bonus. I'm thinking this is within the limits of what you can call 'not too much'.

The overall effect on mining profitability, however, is reduced by just over 14% for all assets.

I had spent a long time describing the formulas before my browser crashed, and I can't be bothered to rewrite it all again, so I've uploaded the Excel sheet to Google Drive so you can verify the formulas yourself.

https://docs.google.com/spreadsheet/ccc?key=0Am7kSNaxKrIMdGg1WnI1ZFp2RTh1ZXp2NVpCNkxIVGc&usp=drive_web#gid=0

I should point out that if updated with today's prices and the reduced dividend payout time for competitors until September 1 (still not accounting for price drops), BFMines is again the cheapest mining investment per mhs on BTCT:



This does not include any transaction fees, however, which would further favor BFMines by a percent or two, depending on what the transaction fees are. Of course, if the transaction fees goes through the roof, that further increases the benefit to BFMines contract holders, as unlike TAT.VM at least, the dividend is based on real mining rather than a return formula.

Speaking of which, and slightly off-topic; does DMS.Mining pay out transaction fees?

The effect you mention with your extreme example slightly affects the analysis if the increases are within normal expectations only, but the effect is so small that I call it, with good conscience, 'not too much'. For a doubling from my chosen numbers, the effect is around 1%; for a quadrupling, the effect is another percent.

However, from there on, the effect is turning around and is eventually cancelled out, so if there's an increase of 240% per change, BFMines is faring better again, and with a change of 1 million percent, the effect is all but cancelled out. In other words, BFMines, with its lower price and bonus is effectively priced at the same level as TAT.VM was when I wrote the article.

With the price rise on TAT.VM today, BFMines is the cheapest mining contracts on BTCT, regardless of whether you include any of the factors that would further favor BFMines.

.b

[eltopo]

Where do I find the other price adjustments? I can see only one adjustment from 0.004 to 0.003582. Price adjustments have to be made for every future difficulty increase, for dividends and for the asset itself.

On thursday we'll likely have another diff increase by > 15%. To maintain the same yield to new investors, the price for your asset have to drop the same. So after a few days, you won't sell any more IPO shares at 0.004 and the IPO investors will already see the prices of their shares dropping. How do you think this will look for IPO investors in September, when you probably start mining? They will suffer from big losses in shareprice drop they will never recover through dividends.

I don't think comparing your asset to other "PMBs" is helping here. It's just a "my asset is not as shitty as your asset".

Question is, could investors profit or not.

[furuknap]

Where do I find the other price adjustments? I can see only one adjustment from 0.004 to 0.003582. Price adjustments have to be made for every future difficulty increase, for dividends and for the asset itself.

I don't think you understand the analysis. There is only supposed to be one adjustment. This is not an analysis about whether mining contracts are profitable, it is a comparison of the mining investments out there. To ensure a fair comparison, a price adejustment is required, but one is sufficient.

Whether you believe mining assets can give a reasonable return is up to you to predict.

.b

[RHA]

(...)
It's an offer for those who can't count.

It is 0.004 BTC for 1 MH/s, so it is 4 BTC for 1 GH/s.

For 4 BTC one can buy, for instance, one BFL 5 GH/s miner - shipping end of August.
Or one can buy something from the second table here: http://decentralizedhashing.com/bitcoin-mining-equipment-table/, getting up to 10 GH/s - shipping planned in August.

Better: the KnCMiner Jupiter model has a ratio 0.25 BTC for 1 GH/s - sixteen times better than yours.
There are many group buys or bonds for this device, for instance: https://bitcointalk.org/index.php?topic=226319.0.

For the 120 GH/s device (the same as yours) there are such initiatives too: https://bitcointalk.org/index.php?topic=224332.0
And new ones are starting...

The running your own hardware versus investing in a mining operation has been discussed to death already so I'm not going to go over it again. I'm sure you and other investors are perfectly capable of reading through a thread before you or they make up your mind.
(...)

You haven't even check the links provided by me.
The first one enlarged is a link to pure mining operation ("each 2.25 BTC share buys 11GH/s").
The second one is a link to two services - the first is a buying proxy, but the second is a mining operation ("The minimum price is 1,04 btc/5 GH").
As you see, there exist mining operations with honest prices.
Compare your operation to them.


I will stop for now, but don't repeat again your old arguments at 100TH thread.

[eltopo]

This is just to quote myself in a few months:

I bet that IPO investors will at no time be profitable (in this case profitability is defined as the sum of the current bid price and all collected dividends subtracted by the IPO price 0.004).

profitability = (current bid price + all collected dividends) - 0.004

We're not speaking of yield in the 15..30...100% range, we're speaking of ever receiving a single satoshi in profit for IPO investors...

[twentyseventy]

No matter what, 15% estimated difficult increase is far too low, probably by a factor of 2, like Deprived said. This next difficult increase is going to be around 15% just by itself!