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

[furuknap]

when is Metabank supposed to deliver again? I lose track

The latest I've heard is September (specifically 'before October', which technically can mean September 31 at 11:59 pm) which is why I've used that consistently. When they sold units on their site, they said deliveries start in August, but the contract states October at the latest.

The chips are done but because they had less performance than anticipated per chip, Metabank wanted to do additional work to ensure the devices work optimally. That also means that the total hash power released on the network is less, which is good news for BFMines since we still get our 120GH regardless.

.b

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[burnside]

I forgot to post when I did it, I apologize.  But I updated the contract per the motion a couple of days ago. 

Cheers.

[furuknap]

I forgot to post when I did it, I apologize.  But I updated the contract per the motion a couple of days ago. 

Cheers.

Thanks, burnside!

I've been somewhat busy myself so I didn't pick up the change. I'll post an update on the pending changes shortly (probably over the weekend) and ask for comments or objections before making them part of the contract.

.b

[furuknap]

Update on Upcoming Changes in BFMines Contract

As announced, the BFMines contract is undergoing changes to clarify terms of the asset and actual operational details. The outline of the changes have been announced ealier, so this update serves to keep investors and the market up-to-date on the progress of these changes.

1. Clarification on Minimum Revenue Guaranteee
The contract updates on the minimum revenue guarantee (equivalent to 1 mhs PMB-style returns) are ready. The contract will be updated with the following clause:

Minimum Revenue Guarantee
BFMines is backed by real mining hardware and is thus subject to miner's luck. To preserve the stability of dividends, however, BFMines guarantees a minimum dividend equal to that of the current hash rate with a PMB style dividend. This cancels miners' bad luck while retains miners' good luck.

This minimum dividend will be scheduled at each difficulty change and paid on a daily basis. In addition, any positive dividends from miner's luck will be paid out at each difficulty change for the previous difficulty period. Any negative dividends from miner's luck will not affect current or future dividends and will be covered by the surplus mining capacity funds.

This change will, in my opinion, only benefit contract holders and will thus be added to the contract without vote or an offer for buy-back.

2. Use of Surplus Mining Capacity
The contract currently states

The excess mining power will be held in reserve to account for operational cost, hardware failure, or other problems. Revenue from the excess mining power will not be paid out to contract holders.

As previously announced, the intent of this sentence is not that surplus mining capacity will be paid to the operator but that the revenue from the surplus capacity will not be paid out as dividends. The surplus capacity will be used to the benefit of the asset and thus the contract holders.

In the previous discussions in the BFMines forum, I explained that I am hesitant to include specifics about how those excess funds will be used due to the uncertainty of the stability of hardware and thus the need for a risk buffer.

However, I will be posting a separate post in the BFMines forum to outline and discuss various options for use of any excess funds to start the debate. A final determination and numbers will likely not be possible for several months.

I will, however, update the contract to clarify that the surplus mining capacity will be to the benefit of contract holders. See item #3.

3. Clarification on Transaction Fees
Although the contract doesn't explicitly mention this, BFMines is based on real mining and any revenue from that operation is paid out. This includes transaction fees and positive miner's luck (as described in item 1).

To clarify this, the contract will be updated as such:

Removed:

Each contract pays exactly 100% of 1mh/s of BTC mining power. All expenses related to the operation will be carried by the operator.

Added:

Each contract is entitled to all output of the mining operation divided by the number of outstanding contracts. This output includes transaction fees and miner's good luck, but not miner's bad luck, according to the minimum revenue guarantee.

All expenses related to the operation will be paid for from the surplus mining capacity. The surplus mining capacity will be no less than 20% more than the capacity required for dividend payments. Excess funds from this surplus capacity will go to the benefit of the contract holders in the form of securing the long-term operation and stability of the mining operation, but will not be paid out as dividends.

In case funds from the surplus mining capacity is not sufficient to cover expenses, the operator will cover additional cost until such a time as the surplus mining capacity is again sufficient or the mining operation closes as per the terms of this contract.

This clause is a somewhat complex change, so let me briefly comment on what I think will be questions about it.

Please note that the omission of 1mh/s from the clarified terms is not an oversight. The exact output is defined earlier in the contract.

Previously, the only clause was a somewhat ambigious "100% of 1mh/s of BTC mining power". Due to the initial use of the term 'mining bond' it was easy and maybe reasonable to assume this meant the standard formula of a PMB. The clarify, I have specifically stated that the dividends per contract is the total output of the mining operation divided by outstanding shares.

The clarification of payment of expenses is also necessary because the clause 'All expenses related to the operation will be carried by the operator' might seem to conflict with the previous paragraph that states 'The excess mining power will be held in reserve to account for operational cost, hardware failure, or other problems.'

This change adds clarification only (and cannot, in my opinion, be in any way not beneficial to contract holders) so I will include this change in the contract without vote or buy-back offer.

4. Cleaning Up
Although I had intended for the previous contract update to not include the omissions that are now stricken out in the BTCT contract, burnside included them in the update. That is fine and has no real impact on the contract, so to avoid confusion, I am removing the stricken out out content and the note about the rebranding. This, again, does not affect the contract in any way, so they will be included in the contract update.


I encourage your input and questions on these changes. If there are formulations and phrases that are unclear, I would be happy to update them.

The complete contract after the changes will look like this, pending any public discussion and feedback:

Contract


Overview
 
BFMines is a mining contract backed by physical hardware. The contract pays a dividend equivalent to 1 megahashes per second (mh/s) of mining power.
 
Please read the following article to understand what mining contracts are:
 
http://coin.furuknap.net/understanding-mining-bonds/
 
In summary, however, please note the following:
1. This is a mining contract, not a share in a company. You receive no voting rights and no other income than the stated dividend.
2. The mining contract is perpetual, which means it will continue to generate dividend until terminated following one of the below conditions. There is no defined termination date of the contract.
3. The mining contract pays the equivalent of income from 1 mh/s. Any excess payments not explicitly stated in this contract is solely at the discretion of the operator and should not be expected.
 
A total of 100,000 contracts will be issued backed by no less than 120 GH/s of mining power. The excess mining power will be held in reserve to account for operational cost, hardware failure, or other problems. Revenue from the excess mining power will not be paid out to contract holders.

Each contract is entitled to all output of the mining operation divided by the number of outstanding contracts. This output includes transaction fees and miner's good luck, but not miner's bad luck, according to the minimum revenue guarantee.

All expenses related to the operation will be paid for from the surplus mining capacity. The surplus mining capacity will be no less than 20% more than the capacity required for dividend payments. Excess funds from this surplus capacity will go to the benefit of the contract holders in the form of securing the long-term operation and stability of the mining operation, but will not be paid out as dividends.

In case funds from the surplus mining capacity is not sufficient to cover expenses, the operator will cover additional cost until such a time as the surplus mining capacity is again sufficient or the mining operation closes as per the terms of this contract.
 
Minimum Revenue Guarantee
BFMines is backed by real mining hardware and is thus subject to miner's luck. To preserve the stability of dividends, however, BFMines guarantees a minimum dividend equal to that of the current hash rate with a PMB style dividend. This cancels miners' bad luck while retains miners' good luck.

This minimum dividend will be scheduled at each difficulty change and paid on a daily basis. In addition, any positive dividends from miner's luck will be paid out at each difficulty change for the previous difficulty period. Any negative dividends from miner's luck will not affect current or future dividends and will be covered by the surplus mining capacity funds.
 
Changes to Contract
 
This contract may be updated at any time by the operator if it is to the reasonably undeniable benefit or of no consequence to contract holders. Changes that do not work in favor of existing contracts may be implemented only if the changes are accompanied by an offer to buy back contracts at the terms specified in this contract.
 
Operation and Buyback
 
The mine will operate perpetually and pay daily dividends, to be scheduled at or around the time of difficulty changes.
 
The term perpetual is unlikely for practical reasons, and as such, there exists provisions to close the contracts for one of the following reasons:
 1.The operator becomes incapable of operating the contracts over an extended period
 2.The overhead of operating the contracts becomes greater than its profits
 3.Permanent and irreparable damage to hardware
 4.The operator must close the contract for other reasons
 
If the contract must close for any of the above reasons, the operator or a duly appointed representative, in case the operator is permanently unavailable, can buy back contracts at no less than 110% of the average trading price at BTCT over the previous 7 (seven) days.
 
Please note that this buy-back is a right of the operator, not a duty. Any buy-back is solely at the discretion of the operator.
 
In any case of permanent and irreparable damage to hardware, the operator will pursue any means available to replace hardware as quickly as possible at no cost to contract holders. However, if replacement hardware cannot be obtained at reasonable costs, the operator may choose to suspend operation and dividends and start liquidation of the contract as explained above.
 
Pre-Release Terms:
 
Please note that these terms apply only until the mining hardware has been delivered. Upon delivery, these terms will be removed from the contract.

The contracts are backed by miners that have yet to be released. The scheduled release is September 2013.
 
All funds received as part of the IPO process at BTC Trading Corporation (BTCT) will be held in escrow until said mining hardware is delivered and made operational (the release date). In case the mining hardware fails completely, all funds will be repaid fully at the listing price of 0.004BTC/bond.
 
No dividends will be paid until delivery. On the release date, the IPO funds will be released from escrow.
 
Upon delivery, any excess capacity from the mining hardware will be used to pay contract holders additional dividends for six months. The additional dividends is intended to compensate contract holders for not receiving dividends until the mining hardware has been delivered.
 
Expansion of Operation
 
This contract will always be backed by real mining hardware or equivalent mining assets. In case of expansion of the contracts, those contracts will be offered at a rate not lower than the lowest trading price at BTCT over the previous 30 days. Any expansion will be backed by mining hardware or mining assets.
 
Caveats
 
Please be aware of the following before investing:
 
A mining contract decreases in value as Bitcoin mining difficulty climbs. The biggest return on investment will happen early in the contract’s existence and gradually decline as the Bitcoin mining climbs.
 
Mining contracts are not shares, they are effectively contracts where the mining operator mines bitcoin on your behalf, to be rewarded in dividends based on mining power. The price paid for a mining contract will under normal circumstances not be repaid so your sole income will be from the dividend paid daily.
 
Due to the buy-back clause of this contract, please be careful of paying too much for this mining contract, especially when there are sudden price spikes. The operator may choose to buy back contracts at 110% of trading price so if you pay more than this, you may theoretically lose anything you pay above that.
 
Pre-release only (will be removed once mining hardware is operational): This contract does not pay dividends until the release date. To compensate for this, the first six months of operation will give approximately 20% higher dividends depending on the final performance of the miner. In case the hardware fails completely, the contracts will be repaid for 0.004BTC per bond.

.b

[redmetal]

Mainly just after one clarification


Is it this;

Pre-release only (will be removed once mining hardware is operational): This contract does not pay dividends until the release date. To compensate for this, the first six months of operation will give approximately 20% higher dividends depending on the final performance of the miner. In case the hardware fails completely, the contracts will be repaid for 0.004BTC per bond.

Or this;

All expenses related to the operation will be paid for from the surplus mining capacity. The surplus mining capacity will be no less than 20% more than the capacity required for dividend payments. Excess funds from this surplus capacity will go to the benefit of the contract holders in the form of securing the long-term operation and stability of the mining operation, but will not be paid out as dividends.

Or is it a mix of both, option one for 6 months then option two?
If it is the first option and let say you sell a total of 40,000 units in your IPO, will the bonus dividends equate to an extra 2mh/s per share for 6 months?

Also I do like your fourth option for closing the fund
 

4.The operator must close the contract for other reasons

and then adding this in

Please note that this buy-back is a right of the operator, not a duty. Any buy-back is solely at the discretion of the operator.

Pretty much means you can Cancel BFmines on the first day of operation for any reason you see fit, and not pay back any funds to anyone.

[furuknap]

Mainly just after one clarification

Is it this;

Pre-release only (will be removed once mining hardware is operational): This contract does not pay dividends until the release date. To compensate for this, the first six months of operation will give approximately 20% higher dividends depending on the final performance of the miner. In case the hardware fails completely, the contracts will be repaid for 0.004BTC per bond.

Or this;

All expenses related to the operation will be paid for from the surplus mining capacity. The surplus mining capacity will be no less than 20% more than the capacity required for dividend payments. Excess funds from this surplus capacity will go to the benefit of the contract holders in the form of securing the long-term operation and stability of the mining operation, but will not be paid out as dividends.

Or is it a mix of both, option one for 6 months then option two?

Both; initially, BFMines pays out the dividends from the excess capacity and I bear the risk of hardware failure (which is mitigated by hardware warranty) or any other interruption.

If it is the first option and let say you sell a total of 40,000 units in your IPO, will the bonus dividends equate to an extra 2mh/s per share for 6 months?

Not sure I understand your question completely, but if you're asking about unsold shares and bonus from those, the excess capacity is there regardless (ie I have a 120 GHs miner; not a 33.3333GHs+20% miner). The excess capacity is based on a fully sold IPO but dividends from unsold shares won't be paid out to contract holders, no.

Effectively, this shouldn't matter; the excess capacity is the same per share regardless of whether 1 or 100,000 shares are sold and the overhead requirement to manage risk is also the same.

I may misunderstand your question, though, so please rephrase if I haven't answered what you asked.

Also I do like your fourth option for closing the fund
 

4.The operator must close the contract for other reasons

and then adding this in

Please note that this buy-back is a right of the operator, not a duty. Any buy-back is solely at the discretion of the operator.

Pretty much means you can Cancel BFmines on the first day of operation for any reason you see fit, and not pay back any funds to anyone.

Ah, not quite; if I were to close the BFMines, I would still have to pay out BTCT 7-day average plus 10% so as long as the price keeps as stable as it has been, I would effectively have to pay ~40BTC from my own pocket to close it on day 1, assuming a fully diluted IPO.

The 'right of the operator' clause is there to prevent misuse. It does not void the clauses of the buy-back, but states that nobody can demand a buy-back with those terms at their leisure. In other words, you can't come and say "I don't think mining is profitable anymore, please buy back my shares for 10% more than I paid for them earlier today".

.b

[redmetal]

Perfectly understandable 

The 'right of the operator' clause is there to prevent misuse. It does not void the clauses of the buy-back, but states that nobody can demand a buy-back with those terms at their leisure. In other words, you can't come and say "I don't think mining is profitable anymore, please buy back my shares for 10% more than I paid for them earlier today".

Once you are up and running and say the price is lower, you could once again close and come out ontop paying 110% of the average trading price over the last seven days. given that already the average of the last 7 days trading is 0.00396 (granted right now you would be out of pocket)
Its still all about trust, and in your terms you could withdraw at any point that you see fit.


You have answered my question above, ie 120gh on offer but only 40,000 shares sold gives a usage of 40gh, therfor you have 80gh/s free which in turn may equate to an extra 2mh per share if the answer was "yes", but since you are not offering this my question is irrevelant.

[furuknap]

Perfectly understandable 

The 'right of the operator' clause is there to prevent misuse. It does not void the clauses of the buy-back, but states that nobody can demand a buy-back with those terms at their leisure. In other words, you can't come and say "I don't think mining is profitable anymore, please buy back my shares for 10% more than I paid for them earlier today".

Once you are up and running and say the price is lower, you could once again close and come out ontop paying 110% of the average trading price over the last seven days. given that already the average of the last 7 days trading is 0.00396 (granted right now you would be out of pocket)
Its still all about trust, and in your terms you could withdraw at any point that you see fit.

Indeed, but keep in mind, this also works the other way. On closing, the market can easily bid up the price and make a guaranteed 10% profit on whatever they put in. Someone could buy out every BFMines contract for 100BTC and get 110BTC a week later.

Also, the price is completely out of my control, at least as long as I post my trading publicly (which I do and intend to keep doing).

You have answered my question above, ie 120gh on offer but only 40,000 shares sold gives a usage of 40gh, therfor you have 80gh/s free which in turn may equate to an extra 2mh per share if the answer was "yes", but since you are not offering this my question is irrevelant.

Hm... No, that wouldn't make sense directly because it would hurt early adopters if IPO completes. Ie someone buying now would buy expecting 3mhs but as more people buy IPO shares, that rate would drop every time someone bought IPO shares.

.b

[furuknap]

Statement Regarding BTCT Trading

Recently there has been growing fear of imminent and negative changes to crypto stock exchanges after the US SEC charged the person behind a Ponzi scheme. Due to the added attention from regulatory bodies, people seem afraid that the US may shortly see a close in crypto stock trading. burnside, the operator of two major exchanges, among which is the exchange where BFMines is listed, has stated that a possible scenario is that US IP addresses will be banned from the exchange.

To address these concerns, I would like to outline the plan in case of closing of the trading at one or more exchanges in the future. I would like to point out that these are emergency plans only; I do not see it as likely that there will be a prolonged period where no exchanges remain online at all.

In case of shutdown of BTCT for US clients or for everyone, BFMines will continue to operate as normal. Twice each day, BTCT send out lists of contract holders to BFMines (and all other assets). If the exchange is no longer a viable trading platform, these contracts will still be honored according to the contract.

In an announced shutdown of the entire exchange, BFMines will stop trading no less than 24 hours in advance of the shutdown, provided sufficient notice is given by BTCT. This will prevent that any last-minute trades will not make it to the contract holder reports.

If there is an immediate shutdown, there is a risk to recently traded contracts that have not yet been recorded by BFMines. If this happens, we will work with burnside and BTCT to acquire details about these trades. We will also put up a solution to allow new or expanding contract holders to submit claims and a process to evaluate these claims.

If such an event happens prior to all IPO contracts being sold, BFMines will withdraw a sufficient number of contracts from the IPO ASK order to fill the claims submitted by contract holders. Pending resolution of these claims, these contracts will be held by BFMines in reserve.

If such an event happens after all IPO contracts are sold, BFMines will acquire contracts to the extent possible from the operator. These contracts will be granted to the BFMines reserve by the operator at no cost.  To this effect, the operator may acquire additional contracts from the IPO, depending on the evaluation of trade volume and the risk of imminent closure of BTCT.

Should it prove impossible to determine the seller of these claimed contracts, BFMines will assume the loss and issue contracts to successful claims from the reserved contracts.

As for future open market trades, BFMines will pursue options to list the contracts on other exchanges. If this proves impossible, BFMines will work to establish a trading platform on its own. We may also, at our discretion, offer a buy-back according to the terms of the contract. If the 7-day average trade price on BTCT is unavailable, we will fall back on a backup solution based on the dividends paid deducted from the IPO price. Details on this is forthcoming and will be expedited in case of imminent need.

TL;DR: In case BTCT shuts down, BFMines will continue to operate as normal and protect contract buyers by assuming loss due to lost trades.

.b

[furuknap]

Two Weeks - Mining Start on Schedule

Today, Metabank has received the chips from Bitfury to start building the first miners used to back BFMines. According to an update from one of their customers, there are some issues with getting power supply units, but Metabank still expects to ship miners within two weeks.

And yes, I realize the jinx of 'Two Weeks' statements.

Based on this, however, it is reasonable and ever more likely for BFMines to get our equipment as per the schedule. Even if Metabank is delayed, our schedule calls for mining start in September, and it seems ever more likely that we'll get up and running well before that deadline.

In the event that Metabank ships as fast as they are saying and mining begins within just over two weeks from now, I am expediting the updates to the contract. If you have not seen the pending changes to the contract, I encourage you to visit the forums to read about those updates as well as post questions or comments you may have.

The final version of the updated contract will be posted on August 5 to be added to the contracts page on BTCT effective immediately after that date.

[qukkM]

I own some of these assets and having done the math am not that convinced they are a good buy. At 0.004btc for 1 mhash/second you would need to purchase 333 shares for 1.332btc to get 333mhash per second, however that would also buy you 2 x Block Erupter (USB ASICMINER)  which would give you 666 mega hash per second.

Given mining will not start until September I do think see these ever being profitable to hold.

Have I calculated something incorrectly or could I start a bond/asset like this with block Erupter and essentially double my money?

[redmetal]

I own some of these assets and having done the math am not that convinced they are a good buy. At 0.004btc for 1 mhash/second you would need to purchase 333 shares for 1.332btc to get 333mhash per second, however that would also buy you 2 x Block Erupter (USB ASICMINER)  which would give you 666 mega hash per second.

Given mining will not start until September I do think see these ever being profitable to hold.

Have I calculated something incorrectly or could I start a bond/asset like this with block Erupter and essentially double my money?

Yep you could. That's exactly what furuknap is doing! Or buy a 400gh KNC miner for ~75BTC, and then sell it for 0.004 per mhs and make yourself an easy 1525btc! Or squash the market and offer it at a lower price.

[furuknap]

I own some of these assets and having done the math am not that convinced they are a good buy. At 0.004btc for 1 mhash/second you would need to purchase 333 shares for 1.332btc to get 333mhash per second, however that would also buy you 2 x Block Erupter (USB ASICMINER)  which would give you 666 mega hash per second.

Given mining will not start until September I do think see these ever being profitable to hold.

Have I calculated something incorrectly or could I start a bond/asset like this with block Erupter and essentially double my money?

Thanks for your question, I fully understand your concern and it's one I hear often.

You're right that buying hardware may yield a higher return on the hardware cost. If this wasn't the case, there would be no way to run shares mining operations at all; if I paid more for the hardware than I get in return, I would be giving money away. It does, of course, depend on which hardware you get, and the AM USB miners are even one of the worst in terms of performance available. You'll be better off getting the AM blades or get one of the larger mining machines from KnC or Bitfury, for example. There are even group buys that will give you a piece of one if you don't have the funds or are willing to risk a whole machine yourself.

In terms of buying and operating your own hardware, there are several factors that make this a very different proposition than getting a mining contract. You need to account for the risk (theft, hardware failure, other catastrophic events) than can cost you your entire investment in one fell swoop. You can get insurance to some extent, but at the very best it adds cost, and at worst, you won't be able to replace your hardware in the short term, costing you additional revenue and vital time.

Then there is the operational overhead. If you have USB miners, for example, you need a host machine that is online 24/7, which normally isn't that big of a deal, but still worth considering. However, you also need to be available 24/7; if your miner goes down just after you go to bed, it might be 8 hours lost. If your miner goes down just after you leave for a three-week vacation, well, you need to have some way of getting it back up or you're losing money.

You also need to account for the added electricity. For a couple of USB miners, this won't be much, but for a slightly larger installation, the cost can be significant, depending on your power cost. If you live in a warm country, you also need to expel the heat, which adds further electricity cost. You'll probably be better off going with a share in a group buy; just make sure you have a backup plan for when your hardware fails or that you account for that possibility in your profitability estimates.

If you plan on setting up your own asset, however, you're of course free to do so. There is significant time involved in doing so, I can tell you. The estimates from the BTCT asset issuer FAQ is 10-15 hours per week, and I'm not sure that is enough, at least initially. Also, you need to assume the responsibility for the hardware, the availabililty, the operation, internet connectivity, and so on.

If you're willing to do that for what would essentially be double the output of just mining with your two USB miners, then sure, you should definitely put up an asset and bring the prices down. Keep in mind, though, that you are committing to years of work and responsibility to contract holders. For a two-miner operation based on a price of $200, even if you have a 500% markup, you're looking at earning $800 for three years of working 10-15 hours per week.

.b

[furuknap]

Updated Contract

As previously announced, I have now posted the updated contract with the revised terms.

These terms are clarifications on intents of the initial contract and are solely to the benefit of contract holders. No negative comments have been received, neither directly nor in the public forum.

The major changes are as follows:

• 1.Surplus mining capacity will always go to the benefit of contract holders, also after the bonus period.
• Backing of the contracts will have no less than 20% additional mining power.
• Minimum revenue guarantee removes miner's bad luck.
• Added explicit mention of transaction fees, which are included in dividends

The contract has been posted on the BFMines public pages on http://bfmines.com/contract and should be updated on the BTCT page as soon as possible.

Pending the update on the BTCT pages and to avoid any speculation about modification of the contract, I have also created a screenshot of the contract page here:

https://i.imgur.com/OAOFeVX.jpg

Finally, by request, I have also set up a newsletter for the public. If you'd like to get information from BFAssets directly in your inbox, you can sign up here:

http://bfmines.com/newsletter/

The newsletter will be free, open to anyone, and get updates around the same time news is posted on BTCT and the web pages.

.b

[stslimited]

so will this security have more than 120 gigahashes before the metabank chips arrive or not.

Will it have more than 120 gigahashes after the metabank chips arrive or not.


does this security have enough funding to it any of it all since less than 1/2 of the offering has been sold so far on btct.co?


thanks

[furuknap]

so will this security have more than 120 gigahashes before the metabank chips arrive or not.

Will it have more than 120 gigahashes after the metabank chips arrive or not.

does this security have enough funding to it any of it all since less than 1/2 of the offering has been sold so far on btct.co?

thanks

Hi,

I'm not sure I get all your questions; there seems to be three of them.

The Metabank miner is scheduled to arrive in September; it has been paid for and whether the IPO of the contracts sell out is irrelevant to the mining operation (any unsold contracts just remain with me).

The metabank miner is guaranteed 120GH/s, but we still do not know the final numbers. We do know, however, that the Bitfury chips will overclock well and under ideal conditions have even surpassed 50% of stated rate. This shouldn't be taken as a guess at what the final numbers will be, though. Anything above 120GH/s is a bonus on top of the normal bonus, but we shouldn't expect it. If it does go over 120GH/s, great, we all get more dividends, if it doesn't, we still get what we have been promised.

.b

[stslimited]

so will this security have more than 120 gigahashes before the metabank chips arrive or not.

Will it have more than 120 gigahashes after the metabank chips arrive or not.

does this security have enough funding to it any of it all since less than 1/2 of the offering has been sold so far on btct.co?

thanks

Hi,

I'm not sure I get all your questions; there seems to be three of them.

The Metabank miner is scheduled to arrive in September; it has been paid for and whether the IPO of the contracts sell out is irrelevant to the mining operation (any unsold contracts just remain with me).

The metabank miner is guaranteed 120GH/s, but we still do not know the final numbers. We do know, however, that the Bitfury chips will overclock well and under ideal conditions have even surpassed 50% of stated rate. This shouldn't be taken as a guess at what the final numbers will be, though. Anything above 120GH/s is a bonus on top of the normal bonus, but we shouldn't expect it. If it does go over 120GH/s, great, we all get more dividends, if it doesn't, we still get what we have been promised.

.b

okay.

I have only been following the contract updates very loosely.


So the only thing this PMB will ever have is the machine rated for 120 GH/s which will arrive in September

This PMB will never have additional hardware using funds raised?

[furuknap]

okay.

I have only been following the contract updates very loosely.


So the only thing this PMB will ever have is the machine rated for 120 GH/s which will arrive in September

This PMB will never have additional hardware using funds raised?

This is not a PMB. It was originally called that to make it easier to understand, but apparently, the contract wasn't clear enough about the additional benefits so one of the earlier contract changes were to remove the PMB moniker.

This is a mining contract in which 1 mhs per contract is guaranteed. However, there are significant benefits beyond that. Depending on how the hardware performs, how much the final hashing power will be, the stability of the hardware, and the operational costs, more power can be added.

The contracts are backed by a minimum of 20% more than required. That additional hash power (and it may be more than 20%, depending on the hardware performace) goes to cover operational costs (estimated at around 5%), to ensure a steady operation, and further to the benefit of the contracts. That benefit may very well be in additional hash power, but it is way too early to say how much that will be or even if there iwll be anything left over.

.b

[furuknap]

Sadly, it's become apparent that some people insist on using lies and deception to try to paint others as scammers.

As such, I'm having to implement a policy on deleting any posts from user Redmetal in this thread. That user has had a long and passionate obsession with throwing dirt around regarding BFMines. The claims made are false and have been shown to be false many times. When exposed, Redmetal simply tries to divert attention by making another ridiculous claim.

Redmetal asked one question before I deleted his posts, and that is why I cannot quantify the additional backing that BFMines has (and thus benefits contract holders).

The answer should be apparent for anyone who bothers (and is capable of) reading a couple of posts. I do not know the performance of the hardware backing BFMines. I can only guarantee 20% more backing than required.

Like I have stated many times, including in articles that Redmetal has quoted so I know that he knows this, ASIC mining hardware has traditionally delivered more than the rated performance. The rated performance is 20% above what is required to run BFMines. It is likely, but in no way guaranteed, that the hardware from Metabank will also overperform, especially because we know that Bitfury's chips (which Metabank uses) overclock well.

This excess capacity will go to the benefit of contract holders but will not be paid out as part of the regular dividends. Instead, this excess power will go to secure long-term operation, cover operational costs, pay for short-term outages, and ensure that if or rather when the initial hardware fails, there will be funds available to replace that hardware.

Unlike Redmetal, I do not want to induce or encourage speculation so I will not reveal any plans for how this additional capacity will be used. I do not know the stability of the hardware, the final power consumption (and thus the expenses), nor the final output of the hardware. I have estimated that I will need a buffer of 20% to provide that safety for contract holders and to keep BFMines running for years to come.

However, it is not unlikely that some of this excess capacity can be used to increase the hashrate for contracts, either temporarily or permanently. If hardware prices fall, like many suspect, to counter the rise in difficulty, then it is safe to assume that less funds will be needed in the future to replace the existing hardware. In fact, if difficulty rises enough and thus hardware prices fall considerably, the excess funds may easily be enough to double, tripple, or quadruple the output per contract. Heck, if difficulty rises to 10 times what is is today and hardware prices drop to a 10th of what they are today, we could increase the output 10 times.

I would explicitly discourage such speculation, though, as there is absolutely no guarantee that we'll ever have funds to increase as much as a hash per second.

.b

[twentyseventy]

Yes, you wouldn't want to encourage speculation as to how poor of an investment this would be.