-

[BKM]

Now that Bitfury is shipping in the US is that promised hashing from Dave being added or is it already on from last week? Did we get in on any august orders or is it all for October?

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[Ashitank]

LRM needs to start delivering 100 Mh/S per bond as advertised in the IPO as soon as possible,  we have had progress but we need to meet the advertised minimum hashrate per bond target soon

[mufa23]

LRM needs to start delivering 100 Mh/S per bond as advertised in the IPO as soon as possible,  we have had progress but we need to meet the advertised minimum hashrate per bond target soon

I don't think it has been ~8+ weeks yet. Are we in the 5th week or something now? I think we'll see the guarantied 100 MH/s in the next few weeks. Then hopefully the 600 MH/s a month or so after.

Can you confirm this Labrat?

[Bargraphics]

LRM needs to start delivering 100 Mh/S per bond as advertised in the IPO as soon as possible,  we have had progress but we need to meet the advertised minimum hashrate per bond target soon

I don't think it has been ~8+ weeks yet. Are we in the 5th week or something now? I think we'll see the guarantied 100 MH/s in the next few weeks. Then hopefully the 600 MH/s a month or so after.

Can you confirm this Labrat?

Well how much hashrate does he need for 100MH/Bond at current bonds sold? 4.2TH?

The Bulk of his order from Dave (Bitfury) well be coming near the end of this month I believe and he's going to continue acquiring hashrate from other sources till then.

If I remember correctly he has something like 30+ TH on order so 4.2 Shouldn't be that hard to obtain.

[||bit]

Update on the site: http://www.labratmining.com/index.html

As per the cut in dividends, it will be 3 weeks ~5 a week to recover half of the ~30 double paid.

Just a quick query on the hash rate per bond listed on the website:

You list 34.27MH/s/bond, but using the numbers 1.3TH/s, 41,414 bonds and 75% payout that only gives 23.55MH/s by my calculations. Which one of these needs changing?

Also, even taking the value of 23.55MH/s/bond and multiplying by the number of bonds I'm holding, and accounting for the 5 BTC held back for recouping the dividend mistake, I still seem to be coming up considerably short. Any idea why that might be?

He stated that the 1.3TH was only mining for around 1 Day of last week because of the 120 Confirmations per block, they also had some bad luck involved as well.

The calculations add up.

Now that we have a full week of that 1.3TH at the same difficulty we'll see a decent payout this coming week.

At the same time he just announced we would be at ~2TH by the end of this week/beginning of next week.

The overpay day dividends was suppose to be ฿0.00083112. That same amount was overpaid.

The following week dividends dividends came out to ฿0.00066604 after some deduction to recoup the overpay. But he said the new hashing added no value for bad luck and not enough time hashing in the pool. So, what seems to have been taken out is  ฿0.00083112 - ฿0.00066604 = BTC0.00016508. That is almost exactly 1/5 the overpay amount. So, it looks like he is maybe planning to deduct 1/5th of the overpay each week for five weeks. Though, I thought it was going to be two weeks. Not sure.

Coming up, LRM will have had a full week at double that prior hash rate this week. So, that next week should come out to about roughly twice that dividend.
That is ฿0.00083112 x 2 = BTC0.00166224. Not accounting for one bump in difficulty perhaps.*

Deduct another 1/5th of the overpay amount, and you get an anticipated dividend next weekend of BTC0.00166224 - BTC0.00016508 = BTC.00149716.

I didn't look up what the difficulty was in the week the overpay value happened. If it made a 30% jump after that week, then maybe anticipate something closer to BTC0.00115166 (and this would mean deductions are not being made over five weeks, but maybe something sooner - which is what I thought it was going to be).

* Speculative bond price using a price-to-dividend ratio of x120 and x190 give a bond price in the range of: .199 to .315; if difficulty is a factor: .153 to .242
However, this should change sharply up once hardware starts flowing in. Some calculations done w/ reasonable assumed hardware delivery times gives a price that is multiples higher.
But you never know.

[||bit]

Lab Rat Mining bond price. Based on various info, deductions and price to dividend ratios...

Current week's average ~0.22btc

Speculation: ~December 1, 2013. Range, Low ~1.1btc, High ~1.76btc

Disclaimer: Even though I feel the numbers were fairly treated... this could, obviously, be very wrong.

[Epoch]

Lab Rat Mining bond price. Based on various info, deductions and price to dividend ratios...
Current week's average ~0.22btc
Speculation: ~December 1, 2013. Range, Low ~1.1btc, High ~1.76btc
Disclaimer: Even though I feel the numbers were fairly treated... this could, obviously, be very wrong.

Nice disclaimer, but why are you bothering with such ridiculous speculations? Your 'speculations' stretch credulity beyond reason.

If one 'bond' ends up representing 600MH (or is that 400MH ... so many numbers floating around here these days), that would mean that people would have to believe 600GH will be worth ~$143,000 (1.1btc/share, $130/btc, 1000 shares) to $228,800 (1.76btc/share). Is that really what you think based on your "various info, deductions and price to dividend ratios"?

Um, newsflash, but anyone can buy 600GH worth of October BitFury hardware for $12,000 right now. So if one can buy 600GH worth of hardware for $12,000, why would anyone buy a bond that is 15x-20x more expensive even at 600MH/bond (which it isn't even going to reach any time soon)? The answer is: they wouldn't.

Even at the current 0.22btc/share, LRM is already approaching 'overpriced' territory. Again, assuming 600MH/bond, 0.22btc/bond equates to $28,600 for 600GH ... more than 2x more expensive than the equivalent in BitFury hardware. And it can be argued that BitFury hardware is already overpriced compared to its competition.

I think you need a reality check. 0.22/share is already at the high end even assuming it had the full 600MH/share right now (which it won't for months) ... the continual rise in difficulty will continue to put downwards pressure on the value of these bonds.

You seem to have a vested interest in seeing these bonds go higher (pump and dump?), but I think we would all appreciate it if you play your games elsewhere and stop spreading FUD. People here trying to make informed decisions about buying, selling, and holding LRM bonds deserve better.

[bittymitty]

I agree that +1 btc per bond is a stretch however as per Lab_Rats comments we should see the hash rate per bond increase with bond sales and BTC increases.

"The current estimate for the hashrate per bond to be paid out is over 600MH/s per bond based on current bond sales (after all hardware is received.) Subject to change with bitcoin price and further sales of bonds. (Updated: 08/28/2013)"

Lets hope lab_rat can push this past 1gh/bond with the latest price spike

[Bargraphics]

Lab Rat Mining bond price. Based on various info, deductions and price to dividend ratios...
Current week's average ~0.22btc
Speculation: ~December 1, 2013. Range, Low ~1.1btc, High ~1.76btc
Disclaimer: Even though I feel the numbers were fairly treated... this could, obviously, be very wrong.

Nice disclaimer, but why are you bothering with such ridiculous speculations? Your 'speculations' stretch credulity beyond reason.

If one 'bond' ends up representing 600MH (or is that 400MH ... so many numbers floating around here these days), that would mean that people would have to believe 600GH will be worth ~$143,000 (1.1btc/share, $130/btc, 1000 shares) to $228,800 (1.76btc/share). Is that really what you think based on your "various info, deductions and price to dividend ratios"?

Um, newsflash, but anyone can buy 600GH worth of October BitFury hardware for $12,000 right now. So if one can buy 600GH worth of hardware for $12,000, why would anyone buy a bond that is 15x-20x more expensive even at 600MH/bond (which it isn't even going to reach any time soon)? The answer is: they wouldn't.

Even at the current 0.22btc/share, LRM is already approaching 'overpriced' territory. Again, assuming 600MH/bond, 0.22btc/bond equates to $28,600 for 600GH ... more than 2x more expensive than the equivalent in BitFury hardware. And it can be argued that BitFury hardware is already overpriced compared to its competition.

I think you need a reality check. 0.22/share is already at the high end even assuming it had the full 600MH/share right now (which it won't for months) ... the continual rise in difficulty will continue to put downwards pressure on the value of these bonds.

You seem to have a vested interest in seeing these bonds go higher (pump and dump?), but I think we would all appreciate it if you play your games elsewhere and stop spreading FUD. People here trying to make informed decisions about buying, selling, and holding LRM bonds deserve better.

While I agree that 1BTC/Bond is a stretch, you can't compare Pre-ordering hardware to a PMB. The whole point of these PMBs is that you are buying them, getting PAID, and then hopefully selling them at the same price or more than you bought them.

You can't buy a machine, mine with it for X months, sell it back at the value you purchased it at or more.

That's the main difference, the price will price itself out based on dividends being paid and the risk of no one coming after you to rebuy that same bond for what you paid for it. Anyone purchasing at 0.22BTC obviously thinks that someone in the future will buy it for at least that.

[BKM]

Lab Rat Mining bond price. Based on various info, deductions and price to dividend ratios...
Current week's average ~0.22btc
Speculation: ~December 1, 2013. Range, Low ~1.1btc, High ~1.76btc
Disclaimer: Even though I feel the numbers were fairly treated... this could, obviously, be very wrong.

Nice disclaimer, but why are you bothering with such ridiculous speculations? Your 'speculations' stretch credulity beyond reason.

If one 'bond' ends up representing 600MH (or is that 400MH ... so many numbers floating around here these days), that would mean that people would have to believe 600GH will be worth ~$143,000 (1.1btc/share, $130/btc, 1000 shares) to $228,800 (1.76btc/share). Is that really what you think based on your "various info, deductions and price to dividend ratios"?

Um, newsflash, but anyone can buy 600GH worth of October BitFury hardware for $12,000 right now. So if one can buy 600GH worth of hardware for $12,000, why would anyone buy a bond that is 15x-20x more expensive even at 600MH/bond (which it isn't even going to reach any time soon)? The answer is: they wouldn't.

Even at the current 0.22btc/share, LRM is already approaching 'overpriced' territory. Again, assuming 600MH/bond, 0.22btc/bond equates to $28,600 for 600GH ... more than 2x more expensive than the equivalent in BitFury hardware. And it can be argued that BitFury hardware is already overpriced compared to its competition.

I think you need a reality check. 0.22/share is already at the high end even assuming it had the full 600MH/share right now (which it won't for months) ... the continual rise in difficulty will continue to put downwards pressure on the value of these bonds.

You seem to have a vested interest in seeing these bonds go higher (pump and dump?), but I think we would all appreciate it if you play your games elsewhere and stop spreading FUD. People here trying to make informed decisions about buying, selling, and holding LRM bonds deserve better.

|| Bit's approach to 'valuation', opaque as it may be, is made with what I assume to be good intention. That said, intention may make a better paving stone on a road to some other place than profits if the facts are not clear.

I remember oh so well the dot com bubble where everyone said that regular business norms did not apply to the internet.... another altogether too well traveled road that we do not want to go down.

In a later, mature state of these investments we will see the standard metrics of 'regular' investments applied. To try and invent some new metric now is foolhardy. Better to make relative comparisons between the offerings and know, to the greatest extent possible, the track record of those involved. Owning several good companies in the cloud mining sector is the wisest move if you believe in this model IMO.

Disclosure: I own LRM shares (and others).

[mmmerlin]

Lab Rat Mining bond price. Based on various info, deductions and price to dividend ratios...
Current week's average ~0.22btc
Speculation: ~December 1, 2013. Range, Low ~1.1btc, High ~1.76btc
Disclaimer: Even though I feel the numbers were fairly treated... this could, obviously, be very wrong.

Nice disclaimer, but why are you bothering with such ridiculous speculations? Your 'speculations' stretch credulity beyond reason.

If one 'bond' ends up representing 600MH (or is that 400MH ... so many numbers floating around here these days), that would mean that people would have to believe 600GH will be worth ~$143,000 (1.1btc/share, $130/btc, 1000 shares) to $228,800 (1.76btc/share). Is that really what you think based on your "various info, deductions and price to dividend ratios"?

Um, newsflash, but anyone can buy 600GH worth of October BitFury hardware for $12,000 right now. So if one can buy 600GH worth of hardware for $12,000, why would anyone buy a bond that is 15x-20x more expensive even at 600MH/bond (which it isn't even going to reach any time soon)? The answer is: they wouldn't.

Even at the current 0.22btc/share, LRM is already approaching 'overpriced' territory. Again, assuming 600MH/bond, 0.22btc/bond equates to $28,600 for 600GH ... more than 2x more expensive than the equivalent in BitFury hardware. And it can be argued that BitFury hardware is already overpriced compared to its competition.

I think you need a reality check. 0.22/share is already at the high end even assuming it had the full 600MH/share right now (which it won't for months) ... the continual rise in difficulty will continue to put downwards pressure on the value of these bonds.

You seem to have a vested interest in seeing these bonds go higher (pump and dump?), but I think we would all appreciate it if you play your games elsewhere and stop spreading FUD. People here trying to make informed decisions about buying, selling, and holding LRM bonds deserve better.

This is quite a fair analysis of a wildly over-optimistic post by ||bit in my opinion, though it probably (for good reason) errs on the negative side (as it's trying to contrast with a very over-optimistic post).

There are good reasons why the bonds would be a bit more expensive to buy than the BitFury hardware, like having no ongoing power/HVAC costs, and no need for large quanitities of hot & noisy hardware in your house to name a few, which add a lot of value, but I agree obviously don't account for the crazy valuation that ||bit is putting on it.

I agree that his valuation is pretty silly, but I don't think that shares are overvalued at the moment, and the price means that the market agrees with this by definition (though this doesn't make it correct (c.f. ASICMiner shares recently) it does mean that there is at least consensus).

But yes, if people are buying now expecting to see x5 capital growth in a few months on top of decent dividend payments then they might be disappointed. But don't let me stop them, I'm a bond holder after all! 

[||bit]

Lab Rat Mining bond price. Based on various info, deductions and price to dividend ratios...
Current week's average ~0.22btc
Speculation: ~December 1, 2013. Range, Low ~1.1btc, High ~1.76btc
Disclaimer: Even though I feel the numbers were fairly treated... this could, obviously, be very wrong.

Nice disclaimer, but why are you bothering with such ridiculous speculations? Your 'speculations' stretch credulity beyond reason.

If one 'bond' ends up representing 600MH (or is that 400MH ... so many numbers floating around here these days), that would mean that people would have to believe 600GH will be worth ~$143,000 (1.1btc/share, $130/btc, 1000 shares) to $228,800 (1.76btc/share). Is that really what you think based on your "various info, deductions and price to dividend ratios"?

Um, newsflash, but anyone can buy 600GH worth of October BitFury hardware for $12,000 right now. So if one can buy 600GH worth of hardware for $12,000, why would anyone buy a bond that is 15x-20x more expensive even at 600MH/bond (which it isn't even going to reach any time soon)? The answer is: they wouldn't.

Even at the current 0.22btc/share, LRM is already approaching 'overpriced' territory. Again, assuming 600MH/bond, 0.22btc/bond equates to $28,600 for 600GH ... more than 2x more expensive than the equivalent in BitFury hardware. And it can be argued that BitFury hardware is already overpriced compared to its competition.

I think you need a reality check. 0.22/share is already at the high end even assuming it had the full 600MH/share right now (which it won't for months) ... the continual rise in difficulty will continue to put downwards pressure on the value of these bonds.

You seem to have a vested interest in seeing these bonds go higher (pump and dump?), but I think we would all appreciate it if you play your games elsewhere and stop spreading FUD. People here trying to make informed decisions about buying, selling, and holding LRM bonds deserve better.

News flash? I realize owning hardware has more economical leverage. But unlike you, I'm accounting for the fact that people interested in investing in these mining operations are not seeing it with your rationale, and they have different interests than running hardware. They also know they can sell their bonds or shares and recoup some or more of their principal depending on performance of the company. Perhaps, for some it's just a place to "store" their otherwise static bitcoins for a year. So, my speculation isn't based on what you would do, or optimal investment values. Regardless, let's look quickly at actual relevant numbers.

Someone pointed out an interesting observation in another forum that might be helpful for you. Simply the commenter noted that he/she saw that people were buying shares in other mining operations for roughly 190 times the [weekly] dividend. I didn't do a wide survey and find that as a rough value, but I did find high numbers.
Some fairly random examples:

TAT.ASICMINE (see on bitfunder.com)
Share price: ~.0225
Dividends: ~.0002
Price:Dividend ratio = ~112

G.ASICMINER-P
Share price: ~ 2.3
Dividends: ~ .02
Price:Dividend ratio:  ~115

BTCINVEST
Share price: ~.22
Dividends: ~.003
Price:Dividend ratio:  ~73

You can go through the list of them if you like: https://bitfunder.com/market

Argue till your red in the face all you care to, but the numbers don't lie. And knowing or observing that these ratio's are [or appear] common or "normal", how could someone intending to speculate not account for that? .... Why would Lab Rat Mining be any different? Afterall, it's paying dividends... Well actually, it isn't that different, the price is already 250 times weekly dividends. Granted, it's new and anticipation is higher as it grows into it's pants, but the others aren't. I'd expect LRM to drop to a ratio closer to the others over time as dividend size increases.

[mmmerlin]

Lab Rat Mining bond price. Based on various info, deductions and price to dividend ratios...
Current week's average ~0.22btc
Speculation: ~December 1, 2013. Range, Low ~1.1btc, High ~1.76btc
Disclaimer: Even though I feel the numbers were fairly treated... this could, obviously, be very wrong.

Nice disclaimer, but why are you bothering with such ridiculous speculations? Your 'speculations' stretch credulity beyond reason.

If one 'bond' ends up representing 600MH (or is that 400MH ... so many numbers floating around here these days), that would mean that people would have to believe 600GH will be worth ~$143,000 (1.1btc/share, $130/btc, 1000 shares) to $228,800 (1.76btc/share). Is that really what you think based on your "various info, deductions and price to dividend ratios"?

Um, newsflash, but anyone can buy 600GH worth of October BitFury hardware for $12,000 right now. So if one can buy 600GH worth of hardware for $12,000, why would anyone buy a bond that is 15x-20x more expensive even at 600MH/bond (which it isn't even going to reach any time soon)? The answer is: they wouldn't.

Even at the current 0.22btc/share, LRM is already approaching 'overpriced' territory. Again, assuming 600MH/bond, 0.22btc/bond equates to $28,600 for 600GH ... more than 2x more expensive than the equivalent in BitFury hardware. And it can be argued that BitFury hardware is already overpriced compared to its competition.

I think you need a reality check. 0.22/share is already at the high end even assuming it had the full 600MH/share right now (which it won't for months) ... the continual rise in difficulty will continue to put downwards pressure on the value of these bonds.

You seem to have a vested interest in seeing these bonds go higher (pump and dump?), but I think we would all appreciate it if you play your games elsewhere and stop spreading FUD. People here trying to make informed decisions about buying, selling, and holding LRM bonds deserve better.

News flash? I realize owning hardware is more economical. But unlike you, I'm accounting for the fact that people interested in investing in these mining operations are not seeing it with your rationale, and they have different interests than running hardware. They also know they can sell their bonds and recoup some or more of their principal depending on performance of the company. Perhaps, for some it's just a place to "store" their otherwise static bitcoins for a year. So, my speculation isn't based on what you would do, or optimal investment values. Regardless, let's look quickly at actual relevant numbers.

Someone pointed out an interesting observation in another forum that might be helpful for you. Simply put, the commenteed noted that he saw that people were buying shares in other mining operations for roughly 190 times the [weekly] dividend. I didn't do a wide survey, but I did find high numbers.
Some fairly random examples:

TAT.ASICMINE (see on bitfunder.com)
Share price: ~.0225
Dividends: ~.0002
Price:Dividend ratio = ~112

G.ASICMINER-P
Share price: ~ 2.3
Dividends: ~ .02
Price:Dividend ratio:  ~115

BTCINVEST
Share price: ~.22
Dividends: ~.003
Price:Dividend ratio:  ~73

You can go through the list of them if you like: https://bitfunder.com/market

Argue till your red in the face all you care to, but the numbers don't lie. And knowing these ratio's are common or "normal", how could someone intending to speculate not account for that? .... Why would Lab Rat Mining be any different? Afterall, it's paying dividends... Oh wait! It isn't that different, the price is already is 250 times weekly dividends. Granted, it's new and anticipation is higher as it grows into it's pants, but the others aren't. I'd expect LRM to drop to a ratio closer to the others over time as dividend size increases.

Fair enough, and your analysis wasn't without merit, it was just a bit optimistic, and extended other people's questionable reasoning.

The analysis technique is quite an interesting one, as it's both obviously a bad idea and also completely valid. What I mean by this is that you can say it "shouldn't" be predictive, but probably will be, as it's the same reasoning people are currently applying and will likely will continue to apply. However, when people all do this all the time and then someone spots that the emperor actually isn't wearing any clothes, that is when the bottom falls out of markets (which has happened many times before).

As BKM pointed out earlier, once bitcoin is more mature, the same valuations strategies will apply to its assets as all others, and at that point these valuations will no longer be the way to assess things. However, you are quite right in that if everyone's doing it this way at the moment, then at least in the short term this is probably a reasonably predictive model, even if it shouldn't be!

[||bit]

Fair enough, and your analysis wasn't without merit, it was just a bit optimistic, and extended other people's questionable reasoning.

The analysis technique is quite an interesting one, as it's both obviously a bad idea and also completely valid. What I mean by this is that you can say it "shouldn't" be predictive, but probably will be, as it's the same reasoning people are currently applying and will likely will continue to apply. However, when people all do this all the time and then someone spots that the emperor actually isn't wearing any clothes, that is when the bottom falls out of markets (which has happened many times before).

As BKM pointed out earlier, once bitcoin is more mature, the same valuations strategies will apply to its assets as all others, and at that point these valuations will no longer be the way to assess things. However, you are quite right in that if everyone's doing it this way at the moment, then at least in the short term this is probably a reasonably predictive model, even if it shouldn't be!

In some sense, it isn't actually crazy. You have to consider the dividend periods closely. First, consider any stock that isn't a growth stock, but pays dividends. For example, this company....

NYSE Ticker:
NAT (Nordic American Tankers Limited )

It pays an annualized dividend close to about 10%. And it's not really a growth stock. Just higher than average dividends than many stocks. So, people buying into NAT may not be after share price gains...but moreso a consistent and somewhat modest return. Better than letting money sit and allow inflation make it worth less.

Now, consider these cloud miners (or other entities paying dividends) where you can buy bonds or shares or whatever you call them...  And take a "worse case" and assume the 190 price:dividend ratio. The dividends factored here are weekly! So, 1/190 * 52 weeks = 52/190th's return on share price per year... or roughly 27% annualized. Sure, a pure miner could see a lot greater gains. But 27% isn't bad in the grand scheme of things, and not having to worry about monitoring hardware 24/7... Granted, there's also more risk than mining and the lasting power of any one of these operations is questionable, but this kind of return & effort profile might be what people with this kind of investing interest might be seeing and quite comfortable with.

[mmmerlin]

Fair enough, and your analysis wasn't without merit, it was just a bit optimistic, and extended other people's questionable reasoning.

The analysis technique is quite an interesting one, as it's both obviously a bad idea and also completely valid. What I mean by this is that you can say it "shouldn't" be predictive, but probably will be, as it's the same reasoning people are currently applying and will likely will continue to apply. However, when people all do this all the time and then someone spots that the emperor actually isn't wearing any clothes, that is when the bottom falls out of markets (which has happened many times before).

As BKM pointed out earlier, once bitcoin is more mature, the same valuations strategies will apply to its assets as all others, and at that point these valuations will no longer be the way to assess things. However, you are quite right in that if everyone's doing it this way at the moment, then at least in the short term this is probably a reasonably predictive model, even if it shouldn't be!

In some sense, it isn't actually crazy. You have to consider the dividend periods closely. First, consider any stock that isn't a growth stock, but pays dividends. For example, this company....

NYSE Ticker:
NAT (Nordic American Tankers Limited )

It pays an annualized dividend close to about 10%. And it's not really a growth stock. Just higher than average dividends than many stocks. So, people buying into NAT may not be after share price gains...but moreso a consistent and somewhat modest return. Better than letting money sit and allow inflation make it worth less.

Now, consider these cloud miners (or other entities paying dividends) where you can buy bonds or shares or whatever you call them...  And take a "worse case" and assume the 190 price:dividend ratio. The dividends factored here are weekly! So, 1/190 * 52 weeks = 52/190th's return on share price per year... or roughly 27% annualized. Sure, a pure miner could see a lot greater gains. But 27% isn't bad in the grand scheme of things. Granted, there's risk and the lasting power of any one of these operations is questionable, but this is what people with this kind of investing interest might be seeing and quite comfortable with.

Sure, it does make sense, and it is indeed the (huge) increase in the risk that necessitates the increase in dividend ratio.

[BKM]

Fair enough, and your analysis wasn't without merit, it was just a bit optimistic, and extended other people's questionable reasoning.

The analysis technique is quite an interesting one, as it's both obviously a bad idea and also completely valid. What I mean by this is that you can say it "shouldn't" be predictive, but probably will be, as it's the same reasoning people are currently applying and will likely will continue to apply. However, when people all do this all the time and then someone spots that the emperor actually isn't wearing any clothes, that is when the bottom falls out of markets (which has happened many times before).

As BKM pointed out earlier, once bitcoin is more mature, the same valuations strategies will apply to its assets as all others, and at that point these valuations will no longer be the way to assess things. However, you are quite right in that if everyone's doing it this way at the moment, then at least in the short term this is probably a reasonably predictive model, even if it shouldn't be!

In some sense, it isn't actually crazy. You have to consider the dividend periods closely. First, consider any stock that isn't a growth stock, but pays dividends. For example, this company....

NYSE Ticker:
NAT (Nordic American Tankers Limited )

It pays an annualized dividend close to about 10%. And it's not really a growth stock. Just higher than average dividends than many stocks. So, people buying into NAT may not be after share price gains...but moreso a consistent and somewhat modest return. Better than letting money sit and allow inflation make it worth less.

Now, consider these cloud miners (or other entities paying dividends) where you can buy bonds or shares or whatever you call them...  And take a "worse case" and assume the 190 price:dividend ratio. The dividends factored here are weekly! So, 1/190 * 52 weeks = 52/190th's return on share price per year... or roughly 27% annualized. Sure, a pure miner could see a lot greater gains. But 27% isn't bad in the grand scheme of things. Granted, there's risk and the lasting power of any one of these operations is questionable, but this is what people with this kind of investing interest might be seeing and quite comfortable with.

Sure, it does make sense, and it is indeed the (huge) increase in the risk that necessitates the increase in dividend ratio.

Certainly risk is one component - the other is the factor of returns that miners are realizing now and that these cashflows are diminishing without capex. A further issue is that the capex requirement to maintain the effective rate of hashing in the network going forward is not well established. It will not be until we reach the end state of 14nm. Any miner that is presently in a high cost environment will need to be looking at moving to a low cost jurisdiction likely within the next 12 - 18 months. Lean corporate structures in low tax  AND power cost environments will be have the competitive advantage. While the first movers may have some advantage in regard to upfront cashflow and perhaps earnings, is remains to be seen if this will provide a sustainable advantage given their cost base and the need for gen 5 or 6 reinvestment.

Its a hockey stick model right now and it will be very interesting to see what the plateau will be - it may be sooner than we expect

[grnbrg]

I just got a tidbit from @Lab_Rat....    Presenting what may well be the first BitFury gear hashing in North America....



Arrived this morning, and was purchased second hand from someone who ordered it within 15 minutes of them being available.

More (hopefully more pictures as well as details) to follow shortly.  



grnbrg.

[grnbrg]

18 H boards and 2 M boards.  Anyone speak BitFury want to translate?



grnbrg.

[twmz]

16 H cards is 400 GH/s, as I recall, so 18 will probably end up at around 450 GH/s.  The M boards are just what the H boards plug into.  Each can hold up to 16, I believe.

[BKM]

apparently they do not like much airflow so Zach might want to try them without the fans first