-

[rangerbob21]

The only reality I see here is the promise of a proportional hash rate per bond is now out the window. The few bonds I now have (original x3?) are worth a fixed 300MH/s. Is this correct?

As for the business misunderstanding... This is not a misunderstanding. I agree on the risk of the market, but this is not a market issue. This is a change in the terms from the original terms.
According to what has been presented here thus far, LRM can change the terms to state that "all bonds are worthless, no more payouts and LRM keeps everything", apparently. Is this a misunderstanding as well?  

EDIT: I am NOT trying to be a dickhead here, I simply do not agree with the new terms where my bonds are now at a fixed hash rate and will no longer grow in proportion to the total LRM hash rate.

EDIT 2: The few bonds I now have (original x3?) are worth a fixed 100MH/s

[rustyh17]

This is way too true.  The only issue is that if I paid out all of Z, I would be in a lot of red....

The Z amount would, of course,  be less the agreed percentage that LRM would have kept
per the terms of the original contract.

[Endlessa]

also from the LRM website "An official statement is being released at Bitcoin Talk and at Butterfly Labs forums. "
this designates these forums and the BFL forums are the official source for the terms, please demonstrate where on these forums or BFL's you indicated the contracts are malleable at your discretion


edit: changed "BFL" to "BFL forums"

[countduckula]

The more i read, the more crap we get, the more angry he gets, the more dissapointed i'm of how he handled everything. I can take the risk and btc price and external issues, not the irresponsability, lack of and/or bad management of the legal issues and hiding information to us, coming this miracle solutions that screw everyone over its not a solution at all.

If solutions dont come and are decent to all of us, and anyone its up to sue, count me in. I dont want my btc, my contracts, i'm happy with a long time behind bars for the responsable one.

Thats it for me until a serious reply comes from the head of this proyect.

[Lab_Rat]

"this were tradable assets, so the payments are not relevant to the value of the asset but instead are a benefit of holding them." makes no legal sense whatsoever.

"Also please point me to the place where it's been stated since the beginning that these contracts are malleable." would have been up on bitfunder the entire time the "asset" was listed.

It made no sense that we could buy and sell these contracts and that value is separate from the dividends you paid? I buy a contract for .15 btc . . . receive payments for the duration then sell it to someone else for .15 (or whatever valuation is).  claiming that the dividends were paying off the value of the contract is not even remotely close to how this works.  There is no termination point of the contract and you have a lot of outstanding "bonds" that still haven't met fruition.


Everything you sold since bitfunder's demise is not under those terms, but under the ones on these forums.  It could be argued that these forums are the actual publicly identified terms, since they are were you perform your business and that sneaking things in other places is a deceptive practice.

What you just stated contradicts your point.  If the value of the contract is not associated with the payouts then you shouldn't have ever expected to get the amount of BTC in payouts as the contract cost you.

[Komodorpudel]

As long as LRM issues the correct multiple of 100MH/s contracts for the 58,792 original variable rate
contracts based on the total purchased hash rate to date, I see no problem with him. He would be
acting in good faith.

We all took one main risk when purchasing these contracts. We all fundamentally believed that LRM
could mine more BTC than it cost for us to purchase the mining hardware. This belief was dynamic
and transient in nature. That is, there was a time value associated with each piece of hardware LRM
purchased. If LRM could purchase in bulk or get preferential delivery or get lucky with BTC pricing at
the moment, it could provide more BTC returned per BTC invested. That was the key to this whole
agreement.

The facts are that LRM (and just about every other mining company on earth), got steam rolled by
hardware manufacturers. This occurred because of late deliveries and prices that were too high per
gh/s. As unfortunate as that is, LRM cannot be blamed for that.

All we can really do is make sure that LRM took in X amount of BTC, converted it to Y amount of $,
and purchased Z amount of hash rate. We are entitled to Z amount of hash rate divided up 58,792
ways. That is it. If that "conversion engine" does not yield > 100% BTC out for each BTC in, then we
are S.O.L. If LRM does not give us X-->Y-->Z conversion fairly, then LRM needs to be held accountable
for that.

Please enlighten me if you feel this is overly simplistic.

Yes; there is a problem, LabRat promised several times that the hashrate of this "bonds"(although i was said once, that this is not garantueed-->) will increase together with the absolut Hashrate of LabRat.
Outgoing statements from LabRat made in the last few weeks/months, each bond should have ca. 2,6 Gh/s or at least 600MH/s right now; non of that actually is true at the moment.
These statments were made while LabRat already knew about the "legal issues" and the possible fixing of the hashrate at 100MH/s to solve this "legal issue"

This is misrepresentation and almost fraud

Everything you need to know:
http://www.justia.com/consumer/securities-fraud/

[electerium]

The more i read, the more crap we get, the more angry he gets, the more dissapointed i'm of how he handled everything. I can take the risk and btc price and external issues, not the irresponsability, lack of and/or bad management of the legal issues and hiding information to us, coming this miracle solutions that screw everyone over its not a solution at all.

If solutions dont come and are decent to all of us, and anyone its up to sue, count me in. I dont want my btc, my contracts, i'm happy with a long time behind bars for the responsable one.

Thats it for me until a serious reply comes from the head of this proyect.

the good news is that he would not have made this decision wrt LRM unless the 150THs was incoming quickly. Otherwise he'd just liquidate and close his doors.


The other good news is that he obviously is thinking long term, but he's not thinking concurrently with his investors who've basically funded the operation to get to where it currently is.

[BKM]

"this were tradable assets, so the payments are not relevant to the value of the asset but instead are a benefit of holding them." makes no legal sense whatsoever.

"Also please point me to the place where it's been stated since the beginning that these contracts are malleable." would have been up on bitfunder the entire time the "asset" was listed.

It made no sense that we could buy and sell these contracts and that value is separate from the dividends you paid? I buy a contract for .15 btc . . . receive payments for the duration then sell it to someone else for .15 (or whatever valuation is).  claiming that the dividends were paying off the value of the contract is not even remotely close to how this works.  There is no termination point of the contract and you have a lot of outstanding "bonds" that still haven't met fruition.


Everything you sold since bitfunder's demise is not under those terms, but under the ones on these forums.  It could be argued that these forums are the actual publicly identified terms, since they are were you perform your business and that sneaking things in other places is a deceptive practice.

Careful Enlessa, your assertions of deception are completely unfounded. Kindly go back and read the materials. If anyone has a snapshot of the original LRM pages from Bitfunder it may be helpful to post it here again

[Endlessa]

"this were tradable assets, so the payments are not relevant to the value of the asset but instead are a benefit of holding them." makes no legal sense whatsoever.

"Also please point me to the place where it's been stated since the beginning that these contracts are malleable." would have been up on bitfunder the entire time the "asset" was listed.

It made no sense that we could buy and sell these contracts and that value is separate from the dividends you paid? I buy a contract for .15 btc . . . receive payments for the duration then sell it to someone else for .15 (or whatever valuation is).  claiming that the dividends were paying off the value of the contract is not even remotely close to how this works.  There is no termination point of the contract and you have a lot of outstanding "bonds" that still haven't met fruition.


Everything you sold since bitfunder's demise is not under those terms, but under the ones on these forums.  It could be argued that these forums are the actual publicly identified terms, since they are were you perform your business and that sneaking things in other places is a deceptive practice.

What you just stated contradicts your point.  If the value of the contract is not associated with the payouts then you shouldn't have ever expected to get the amount of BTC in payouts as the contract cost you.

I never said I expect it to pay for the bonds, you said the payout for the contracts legally cover the cost of buying them.

With the change to the original terms, If I do not agree, do I get my original 1 BTC investment back? Fair question, I think.

The very question implies a complete lack of understanding of the investment you have made. Your original 1 BTC investement, for accounting purposes, is converted to USD at the time it is was made. The tax system does not function under BTC - think of it as if you had bought Euros or Yen six months ago and then sold them today at a loss or a gain. Furthermore, the market is the place you go to sell your bonds (or whatever the hell they are actually supposed to be called) just like you would with any company where you wanted to sell your stake. There is no right of redemption in the "real world" of investments, nor should one be implied with any investment in the wild west of BTC land.  

I do not intend this reply as a defense of LRM or any other company in the world of BTC but rather as a comment on the seemingly basic and essential lack of understanding regarding accounting and business that seems to come through loud and clear when the shit hits the fan(s).

Also, while I took a pretty hard stance towards LRM in my initial reaction to this situation, I await further guidance from Zach, particularly in regards to the disposition of the incoming hardware, before a decision that this is bad or good. In fact, this may turn out very, very well not only for us but also for the entire space that this kind of business is working within. Its the bleeding edge people, get your red blood cell count up because you might bleed a little more before its done.

This is correct, your original investment could have been in the range of $80, so 0.12BTC in hand that LRM has paid you is equivalent in the eyes of the US.

edit: spelling of bonds from "bounds"

[Endlessa]

"this were tradable assets, so the payments are not relevant to the value of the asset but instead are a benefit of holding them." makes no legal sense whatsoever.

"Also please point me to the place where it's been stated since the beginning that these contracts are malleable." would have been up on bitfunder the entire time the "asset" was listed.

It made no sense that we could buy and sell these contracts and that value is separate from the dividends you paid? I buy a contract for .15 btc . . . receive payments for the duration then sell it to someone else for .15 (or whatever valuation is).  claiming that the dividends were paying off the value of the contract is not even remotely close to how this works.  There is no termination point of the contract and you have a lot of outstanding "bonds" that still haven't met fruition.


Everything you sold since bitfunder's demise is not under those terms, but under the ones on these forums.  It could be argued that these forums are the actual publicly identified terms, since they are were you perform your business and that sneaking things in other places is a deceptive practice.

Careful Enlessa, your assertions of deception are completely unfounded. Kindly go back and read the materials. If anyone has a snapshot of the original LRM pages from Bitfunder it may be helpful to post it here again

I said "could be argued" not "is being argued".

Edit: I'm just saying it can be construed/perceived as such. not trying to say it actually is.

[Lab_Rat]

This is way too true.  The only issue is that if I paid out all of Z, I would be in a lot of red....

The Z amount would, of course,  be less the agreed percentage that LRM would have kept
per the terms of the original contract.

The original contract did not specify an amount that LRM is using to operate the company.  I decided a 75/25 split sounded appropriate at the time, but that number can't last forever as LRM's costs are fixed and income is exponentially decreasing.  At some point even with the previous payout plans it would have had to eventually change.

Despite this fact, as I've stated countless times.  This is an immediate fix with benefits going out to contract-holders undetermined at this time.

[rangerbob21]

LR, I do think you are trying your best to do right by the bond holders but if the bond value in hashrate will no longer increase as LRM increases, then these bonds are dead.

[electerium]

This is way too true.  The only issue is that if I paid out all of Z, I would be in a lot of red....

The Z amount would, of course,  be less the agreed percentage that LRM would have kept
per the terms of the original contract.

The original contract did not specify an amount that LRM is using to operate the company.  I decided a 75/25 split sounded appropriate at the time, but that number can't last forever as LRM's costs are fixed and income is exponentially decreasing.  At some point even with the previous payout plans it would have had to eventually change.

Despite this fact, as I've stated countless times.  This is an immediate fix with benefits going out to contract-holders undetermined at this time.

So which is it? LRM is unsustainable at 75/25 or that "US laws" made your LLC change its terms?

[Endlessa]

Still don't get why you don't just restructure this into a legal corp and issue non voting shares so we can continue on without getting boned.  take the cost out of the btc expenses and move on.

[rangerbob21]

What needed to change in the terms to comply with laws that were (not?) in effect when the original terms were produced? Were the original terms illegal? Now they are not?

[Lab_Rat]

This is way too true.  The only issue is that if I paid out all of Z, I would be in a lot of red....

The Z amount would, of course,  be less the agreed percentage that LRM would have kept
per the terms of the original contract.

The original contract did not specify an amount that LRM is using to operate the company.  I decided a 75/25 split sounded appropriate at the time, but that number can't last forever as LRM's costs are fixed and income is exponentially decreasing.  At some point even with the previous payout plans it would have had to eventually change.

Despite this fact, as I've stated countless times.  This is an immediate fix with benefits going out to contract-holders undetermined at this time.

So which is it? LRM is unsustainable at 75/25 or that "US laws" made your LLC change its terms?

The 75/25 split would have been fine most of the way through 2014, not an immediate issue by any means.  The legal issues requiring changes and clarification on the other hand is.  More is coming on this....

[electerium]

This is way too true.  The only issue is that if I paid out all of Z, I would be in a lot of red....

The Z amount would, of course,  be less the agreed percentage that LRM would have kept
per the terms of the original contract.

The original contract did not specify an amount that LRM is using to operate the company.  I decided a 75/25 split sounded appropriate at the time, but that number can't last forever as LRM's costs are fixed and income is exponentially decreasing.  At some point even with the previous payout plans it would have had to eventually change.

Despite this fact, as I've stated countless times.  This is an immediate fix with benefits going out to contract-holders undetermined at this time.

So which is it? LRM is unsustainable at 75/25 or that "US laws" made your LLC change its terms?

The 75/25 split would have been fine most of the way through 2014, not an immediate issue by any means.  The legal issues requiring changes and clarification on the other hand is.  More is coming on this....

with or without the incoming 150THs?


I actually support you for doing this. When I started browsing these forums I quickly realized that there were two kinds of bitcoin entrepeneurs and ceos.

the ones who thought long term

and the ones who just wanted a quick infusion to get by the next 12 months.



My advice is to just shut up until you have everything nailed down with your lawyers. Stop posting and giving information in piecemeal. When you come back, post those terms and let people digest it.

[DemocraticRepublicOfDave]

Hi LabRat,

Can you give us a rough three month projection of incoming hashrate for LabRatMining?

Cheers

Dave

[Flashman]

if the bond value in hashrate will no longer increase as LRM increases, then these bonds are dead.

Exactly, I deliberately did NOT buy into any mining concern with a fixed hashrate and no reinvestment and growth plan.

[rangerbob21]

if the bond value in hashrate will no longer increase as LRM increases, then these bonds are dead.

Exactly, I deliberately did NOT buy into any mining concern with a fixed hashrate and no reinvestment and growth plan.

...and exactly the reason why I invested in LRM, sadly.