[BTC-TC] 2-month mining difficulty futures now unlocked

[rini17]

After successfully running mining difficulty futures on Bitfunder since February, we decided to offer the same mining futures on BTC-TC as well. It starts with CB.IDIFF-O September, which is now open for voting. CB.IDIFF-E October will be introduced later. They are completely equivalent to our CoinBr.iDiff-* assets on BitFunder and roughly comparable to X.IDIFF.* assets on MPEx.

EDIT August 5: CB.IDIFF.O is now trading, bids/asks up. I made a mistake in news announcement on BTC-TC,  please disregard the first version (hopefully burnside will remove it quickly).

CB.IDIFF-* futures are suitable for hedging mining operations/securities (for example, against new technology) and other kinds of short-term insurance/speculation against hashrate/mining difficulty. The share value at expiration is directly determined by current difficulty - as difficulty in satoshis/100.  In the asset details there is an example with concrete numbers.

This asset is available for shorting to anyone who provides collateral (example in asset details). Please inquiry on info@coinbr.com about doing so. Escrow at trusted third party is possible.

[Pompobit]

I don't get it. The share value proportionally rises with difficulty?

How is it possible? How do you invest the funds?

[rini17]

I don't get it. The share value proportionally rises with difficulty?

How is it possible? How do you invest the funds?

If you look on existing equivalent Bitfunder asset: https://bitfunder.com/asset/CoinBr.iDiff-O you see it's priced at 0.075, this means if you buy it you will profit only if difficulty will be higher than 75 million. All shares will be then destroyed, and for next cycle(November) there will be again higher prices offered.

The funds are used mostly as CoinBr operational capital and for conservative investment.

Will lenders be able to transfer their shares to the corresponding assets listed on BTC-TC also, or is your intention to limit them to Bitfunder only?

Thank you.

No corresponding BTC-TC assets exist, I'm not sure what do you mean. Only corresponding asset at the moment is https://bitfunder.com/asset/CoinBr.iDiff-O because it has same functionality and parameters, so only exchanging to and from it will be possible.

[Birdy]

So there is already someone who want to short against difficulty for the shares that are gonna be issued?
aka the necessary colleteral for those has already been covered?

[rini17]

So there is already someone who want to short against difficulty for the shares that are gonna be issued?
aka the necessary colleteral for those has already been covered?

CoinBr will do the marketmaking itself up to our own reserves. The ask (at 0.006) and bid (at 0.0079) has been just placed Still, everyone is welcome to provide collateral and bid lower.

[Birdy]

Did I get this right?

If difficulty is >79 mio on September 18th, 2013 buyers of CB.IDIFF-O will profit, otherwise short sellers will profit.
Payout is capped at 0.01

That's less than 2 month then.
Going from 37 mio to 79 mio difficulty in about a 1 1/2 months is quite a stretch, even with difficulty skyrocketing.

[Rannasha]

Did I get this right?

If difficulty is >79 mio on September 18th, 2013 buyers of CB.IDIFF-O will profit, otherwise short sellers will profit.
Payout is capped at 0.01

The future is publicly traded, so if there are many short sellers, it'll push the price down and it will become more interesting for buyers.

[maco]

Interesting features, and unique I must say. Good luck with everything.

[rini17]

Did I get this right?

If difficulty is >79 mio on September 18th, 2013 buyers of CB.IDIFF-O will profit, otherwise short sellers will profit.
Payout is capped at 0.01

That's less than 2 month then.
Going from 37 mio to 79 mio difficulty in about a 1 1/2 months is quite a stretch, even with difficulty skyrocketing.

Yes you're right. But estimate for next week says around 46 million, so it's not such a stretch from then on if various asic vendors keep shipping at current rate.  In fact, until today our sell price on Bitfunder was 0.0075 (and previously 0.0069), and we increased it there as well.

[eltopo]

Will you put up the ask wall at 0.0079 again? Otherwise it won't be long until some idiots buy at 0.01 or higher...  

[ThickAsThieves]

Will you put up the ask wall at 0.0079 again? Otherwise it won't be long until some idiots buy at 0.01 or higher...  

Looks like all the futures at 79 are sold. With the nethash going up 10% overnight, I don't think you'll see anymore at that price.

[rini17]

And.. 89 offer sold as well. We are not willing to risk more, so unless situation improves (difficulty stalls) there will be no more offers from us.  However, to prevent the asset trading way above maximal payout, we erected ask wall at 0.00999, which is obviously not meant to be bought into.

[rini17]

https://bitfunder.com/asset/CoinBr.iDiff-E August just paid out 0.00508103 BTC per share and October issue will be introduced both on BF and BTC-TC. We have to think at least twice about the parameters, with current ~2% daily hashrate growth

Please vote for https://btct.co/security/CB.IDIFF-E .

Update Aug 24: CB.IDIFF-E was successfully approved and is offered at 0.029 at the moment(pricing equivalent to future difficulty of 290 million).
It will expire at 16th October and difficulty limit is 400million, means max payout is 0.04 BTC per share. Thanks for all the votes!

[nycgoat]

Is there a reason that the order history looks like this for the -E security:



There have not been close to 1990 purchases of the security yet.  How is it possible that there was a "buy" order for securities at this price then?  

Edit: at the .022 price.

I may be missing something, but I thought that the starting price was .029?

[rini17]

Is there a reason that the order history looks like this for the -E security:

There have not been close to 1990 purchases of the security yet.  How is it possible that there was a "buy" order for securities at this price then?  

Edit: at the .022 price.

I may be missing something, but I thought that the starting price was .029?

Certain party provided 80BTC collateral to CoinBr and obtained 2000 shares of CB.IDIFF-E in return . They then offered and sold shares for 0.022 (expecting the difficulty will end up lower than that). This week it happened again, but this time they are selling at 0.025 .

[Rannasha]

Quick question on the expiration time of the futures. The contract mentioned midnight on the third wednesday of the month. Does this mean the midnight at the start of said wednesday (so in the night from tuesday to wednesday) or the midnight at the end of the wednesday (so in the night from wednesday to thursday)?

[nycgoat]

Is there a reason that the order history looks like this for the -E security:

There have not been close to 1990 purchases of the security yet.  How is it possible that there was a "buy" order for securities at this price then?  

Edit: at the .022 price.

I may be missing something, but I thought that the starting price was .029?

Certain party provided 80BTC collateral to CoinBr and obtained 2000 shares of CB.IDIFF-E in return . They then offered and sold shares for 0.022 (expecting the difficulty will end up lower than that). This week it happened again, but this time they are selling at 0.025 .

Thank you for the explanation. I apologize of I came off as accusatory.  I just wanted to understand

Keep up the great work. 

[rini17]

Quick question on the expiration time of the futures. The contract mentioned midnight on the third wednesday of the month. Does this mean the midnight at the start of said wednesday (so in the night from tuesday to wednesday) or the midnight at the end of the wednesday (so in the night from wednesday to thursday)?

It's midnight in the end of day -  from Wednesday to Thursday. As to why it was chosen, it's inspired by MPEx IDIFF futures that expire in same time (and they were in past actually used as backing). Having it in middle of workweek and not near beginning/end of month is convenient, too.

Thank you for the explanation. I apologize of I came off as accusatory.  I just wanted to understand

Keep up the great work. 

No offense taken

[rini17]

CB.IDIFF-O expired prematurely after difficulty hit 100M limit and paid out 0.01BTC/share. Currently it is locked and November issue is under preparation.

Have a nice Sunday!

[nycgoat]

I know the news has only been out for a short period of time, but do you have plans for shareholders on BTCT now that they are shutting down?