[Havelock] Bitcoin Difficulty Derivative (BDD)

[lottoking]

Hey everyone,
The new contract is in the OP and will be published on Havelock after the end of Round 1.

I've broken out the major changes for you here:

This Round, Round 2 of BDD, differs from Round 1 in the following ways:

• MINE units pay out dividends at a theoretical hash rate of 100 GH/s, compared to 5GH/s previously
• Purchases of EXCH are subject to a 3.4% premium, of which 3% will go to the Manager and .4% will go to paying the exchange fee. Previously, 2% went to the Manager, .4% to the exchange, and .6% back to the capital on hand.
• Redemptions of MINE/SELL pairs will still be bought back for 98% of NAV/U, but the 2% difference will go to the Manager instead of the capital on hand.
• There will be a target of 180 days of dividends, as opposed to the 200 days previously.
• The End-Game Via Decrease will be triggered by a NAV/U of 0.02BTC instead of 0.0002 BTC

Please see the OP for a detailed explanation of the set of contracts. This overview is subject to change indefinitely.

Happy Speculating!

-2070

Very glad to see this is starting up again, well done!

[1715320098]

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[1715320098]

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[1715320098]

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[1715320098]

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[Icon]

lol looks like the noobs are buying it up  12 btc in trade today, not bothering reading the OP  or doing any research.  They just see the low prices and the daily payouts.

Someone is going to have a bad day ~ 8 days from now

Icon

[junkonator]

lol looks like the noobs are buying it up  12 btc in trade today, not bothering reading the OP  or doing any research.  They just see the low prices and the daily payouts.

Someone is going to have a bad day ~ 8 days from now

As long as there are buy orders up for B.SELL and it is possible to stretch the B.MINE period for a day or two it might be possible to gain a little. Too lazy to calc it though

[junkonator]

• MINE units pay out dividends at a theoretical hash rate of 100 GH/s, compared to 5GH/s previously
• Purchases of EXCH are subject to a 3.4% premium, of which 3% will go to the Manager and .4% will go to paying the exchange fee. Previously, 2% went to the Manager, .4% to the exchange, and .6% back to the capital on hand.
• Redemptions of MINE/SELL pairs will still be bought back for 98% of NAV/U, but the 2% difference will go to the Manager instead of the capital on hand.
• There will be a target of 180 days of dividends, as opposed to the 200 days previously.
• The End-Game Via Decrease will be triggered by a NAV/U of 0.02BTC instead of 0.0002 BTC

Sad to see the .6% and the 2% of buyback going to fund capital go. This makes the game less tricky - if I haven't overlooked something that is
Care to explain why they had to go? This will be a fast round ^^

[Icon]

Mainly because the difficulty didn't go up that much, the whole reason for this bdd is to guess on how high the diff will go up, but past month plus its just been sitting there going up 2% then down 2% and back up 2%.. The gains need to be higher to trigger the b.sell .. i think there was a total of only 18 b.sells out of over 550 days of dividends this entire round.

Its kinda like betting on a boxing match and the two fighters just standing there doing nothing.. Yawn!

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[cryptonaut420]

Hey twentyseventy, have you ever considered re-launching the BDD using something like Counterparty, rather than these shitty sites which always seem to have problems, like havelock, cryptostocks.com, etc... ? I have invested a pretty good chunk into BDD, and it is really great that you have been so reliable with payments.. but the main point of failure always seems to be the host website/service. Is it not enough that there is already a huge risk in buying in to these sorts of projects, let alone the added (and sometimes worse) risk of havelock or whoever else being hacked, shut down, turning out to be a scam etc....

I also run a couple (much smaller) investment schemes using Counterparty, and they are working out pretty well. We even have private forums over at Let's Talk Bitcoin which you can only access if you can prove you own some shares/tokens (a feature of LTB that we are calling Token Controlled Access). See here: http://blockscan.com/assetInfo/SPECULATE  and here http://blockscan.com/assetInfo/EARNFREEBTC

Here is how the scheme could work on Counterparty:

Issue 2 tokens called something like BTCMINE and BTCSELL (equivalent of B.MINE and B.SELL). Set up an automated address which accepts X amount of BTC, and vends out 1 BTCMINE and 1 BTCSELL to whichever address sent the transaction. I have a automated token vending system built here https://github.com/tokenly/xcp-gateway, just needs to be modified to vend out more than 1 type of token at a time (also, my company Tokenly is working on a dedicated service for auto-selling tokens, called SwapBot, which you can use our hosted version or set it up on your own machines... coming very soon).

All the rest of the BDD details and calculations would be the same.

When it comes to dividends, you can simply use the "pay dividend" feature in counterparty to do it all in one transaction, and every holder of BTCMINE or BTCSELL tokens would receive a payment. It does cost a small amount of XCP to create a dividend, but that is pretty cheap actually (hell, I would even donate a bunch to you if you went with this). Also, one thing to note is that if paying in pure BTC, any payment that would be below the standard BTC dust limit is simply ignored, which can make things tricky sometimes. With my own little investment tokens, I get around this by paying dividends in a "proxy" token called BITCOINEX, which is exchangeable at any time at a 1:1 rate for regular BTC, and it allows people to receive payments as low as 1 satoshi (disclaimer: I also control the BITCOINEX token, so using it means trusting me personally. you can always create your own proxy token though). Paying with a proxy token also has an added advantage of having the dividend actually recorded as a dividend on the blockchain.

As for trading, the Counterparty DEX (decentralized asset exchange) can be used. Although I admit it can be a bit clunky to use directly. There is also multiple exchanges (such as poloniex) which already accept multiple tokens built on Counterparty, so you could totally expand trading operations across multiple exchanges instead of just Havelock, and all tied to the same cryptographic token.

So, to sum up

Pros of using Counterparty:

• Eliminates the risk of Havelock shutting down, getting hacked, or going rouge or w/e
• Much  more anonymous. Tokens would be tied only to addresses, not accounts w/ emails etc. like on Havelock
• More transparent - anyone would be able to see on the blockchain exactly how much has been invested, dividend history etc.
• Potential to expand trading across several exchanges instead of just 1, and the decentralized asset exchange option always being available

Cons:

• Requires a bit more technical work to set up (I can help with this, if you are interested at all)
• A little bit more expensive to run due to the fact that it costs a small amount of XCP to send out any dividends. This can be mitigated by making payments less often (e.g once a week). also note that only you as a token issuer need any amount of XCP, customers/investors and such do not.
• You might need to use a proxy token such as BITCOINEX or XBTC to pay out dividends, which isnt a big deal IMO but it is another factor, and might confuse some people. Can also pay out with something like just XCP, but I like using the "bitcoin proxy" tokens just for the fact that you don't need to deal with yet another fluctuating exchange rate.
• Until you get listed on some asset/token/altcoin exchanges such as Poloniex, trading might be pretty clunky. Hey, maybe you can convince the guys at Havelock to get with the program and start accepting Counterparty tokens?

Anyways, just thought I would throw those ideas out there, you can take it or leave it. I just feel strongly that all "crypto stocks/assets" very much need to be decoupled from the traditional exchanges and be using a token based approach instead (weather that is with Counterparty, or some other protocol - doesn't matter). Crypto asset exchange websites should require as little trust and have as little control as possible.

[twentyseventy]

• MINE units pay out dividends at a theoretical hash rate of 100 GH/s, compared to 5GH/s previously
• Purchases of EXCH are subject to a 3.4% premium, of which 3% will go to the Manager and .4% will go to paying the exchange fee. Previously, 2% went to the Manager, .4% to the exchange, and .6% back to the capital on hand.
• Redemptions of MINE/SELL pairs will still be bought back for 98% of NAV/U, but the 2% difference will go to the Manager instead of the capital on hand.
• There will be a target of 180 days of dividends, as opposed to the 200 days previously.
• The End-Game Via Decrease will be triggered by a NAV/U of 0.02BTC instead of 0.0002 BTC

Sad to see the .6% and the 2% of buyback going to fund capital go. This makes the game less tricky - if I haven't overlooked something that is
Care to explain why they had to go? This will be a fast round ^^

Sure. Overall, it's a way for me to bring in a bit more revenue without substantially changing the model. I won't lie and say that this isn't the primary reason for the change. BDD ended up being a higher time commitment overall than it was planned to be. At first, I was just going to publish bi-weekly updates (which sounds laughable now). It also provides more steady revenue in times of lesser interest of BDD or in times when redemptions are more frequent than new sales (times of stability).

Secondarily, I do believe that it provides a more 'pure' version of the game - the NAV/U is much less flexible, as it's not affected by sales and redemptions. Basically, the NAV/U is going to get split between MINE and SELL somehow, but no more or no less.

The Round is made to be about six months; this last one came out to 16 months, which is a very long time in the BTC world - back then, BTC was $800 and Mt Gox was still around! I'd like to be able to have faster rounds to accommodate for possible changes in the market or ecosystem - I'd prefer not to hang on to money for over a year, really.

So, if the difficulty hangs around the same amount, yes, it will be a 'boring' round. But don't forget that only six months ago we had the first decrease in years. 12 months ago, the difficulty was clipping along at double digit increases. A lot can happen in six months.

Will post new contract and previous daily updates tonight; currently enjoying Memorial Day! Cheers, hope that this will be a good coming Round.

[twentyseventy]

Period 38, Day 5 Report - May 22, 2015

Balance Post Divs: BTC 57.37600301

Total Units: 155565

NAV/U: BTC 0.00036882


Period 38, Day 6 Report - May 23, 2015

Balance Post Divs: BTC 55.30417695

Total Units: 173678

NAV/U: BTC 0.00031842


Period 38, Day 7 Report - May 24, 2015

Balance Post Divs: BTC 51.70063880

Total Units: 193271

NAV/U: BTC 0.00026750

Period 38, Day 8 Report - May 25, 2015

Balance Post Divs: BTC 44.11386781

Total Units: 204209

NAV/U: BTC 0.00021602


Period 38, Day 9 Report - May 26, 2015

Balance Post Divs: BTC 39.34247932

Total Units: 236028

NAV/U: BTC 0.00016668


DAYS OF FULL DIVIDENDS LEFT: 3

[twentyseventy]

Here's the update that will be published to Havelock today:

To all holders of B.MINE and B.SELL:

This is an update to the announcement from May 3, 2015:

As of today, May 26th, 2015, there are three days of full B.MINE dividends remaining. There is a partial dividend after that as well.

On this Friday May 29th, the BDD End Game will happen, in which BDD will not have enough funds on hand to pay out a full MINE dividend.

Trading on B.MINE, B.SELL, and B.EXCH will be halted at or around Noon on this Friday, May 29th. The last full dividend will be paid out to holder of MINE at or around Noon on this date.

After that, the total remaining funds on hand (less than a full daily dividend per unit) will be paid out to holders of B.MINE.

All units of B.MINE and B.SELL will then be bought back for 0 (ZERO).

In very explicit terms, the real value of B.SELL is 0. The value of B.MINE is approximately the last daily NAV/U published in the Bitcointalk thread (currently 0.00016668 BTC per unit).

Purchasing SELL at any value whatsoever, or purchasing MINE above this rate (until tomorrow’s dividends), and holding it until Friday, will result in an overall loss of value (you will lose money).

As I’ve said in the previous update – this is exactly how BDD was designed to work – the End Game, and all of the information here, is totally public and available to anyone.

If you have any questions, drop by the BDD Bitcointalk thread or email me at bitcoinderiv@gmail.com

https://bitcointalk.org/index.php?topic=430137.0

Happy speculating,
twentyseventy / 2070

[twentyseventy]

Period 38, Day 10 Report - May 27, 2015

Balance Post Divs: BTC 30.11821009

Total Units: 261413

NAV/U: BTC 0.00011521


DAYS OF FULL DIVIDENDS LEFT: 2

[twentyseventy]

Period 38, Day 11 Report - May 28, 2015

Balance Post Divs: BTC 19.16073100

Total Units: 301000

NAV/U: BTC 0.00006365


DAYS OF FULL DIVIDENDS LEFT: 1

Alright guys, this is nearly it! Second to last full dividend has been paid - Havelock will stop trade at Noon tomorrow; all units will be issued the full dividend plus the partial (final) dividend after that, or I will issue one combined dividend instead.

After all the funds are paid out, all MINE, SELL, and EXCH (shouldn't be any outstanding) will be bought back for 0 and the Round will be over!

[twentyseventy]

Round 1 End - May 29, 2015


Final dividend of 0.00006365 per unit has been paid out to MINE. Trade has been stopped on EXCH, MINE, and SELL and will be bought back for 0.

Round 2 will start Monday or Tuesday of next week, I'll be sure to post here and announce on Havelock.

Thanks to everyone for playing!

[twentyseventy]

Round 2 OPEN!

Round 2 of BDD is now open! Everything starts as a clean slate; there are currently 0 units of EXCH/MINE/SELL issued.

Each MINE will pay a daily dividend of the equivalent of 100GH/s, as opposed to last Round's 5GH/s.

Current MINE daily payout for this Difficulty Period: 0.00105675 BTC

EXCH will be sold, to start the Round, at 190 Days of Current Dividends plus 3.4%: 0.20760911 BTC

The Reserve (180 Days of Dividends), for reference, is 0.190215 BTC

Please BE SURE to see the main differences for this round below, and READ THE CONTRACT (on Havelock and in the OP) and be sure to fully understand it.

Please ask questions here if you have any!

I've broken out the major changes for you here:

This Round, Round 2 of BDD, differs from Round 1 in the following ways:

• MINE units pay out dividends at a theoretical hash rate of 100 GH/s, compared to 5GH/s previously
• Purchases of EXCH are subject to a 3.4% premium, of which 3% will go to the Manager and .4% will go to paying the exchange fee. Previously, 2% went to the Manager, .4% to the exchange, and .6% back to the capital on hand.
• Redemptions of MINE/SELL pairs will still be bought back for 98% of NAV/U, but the 2% difference will go to the Manager instead of the capital on hand.
• There will be a target of 180 days of dividends, as opposed to the 200 days previously.
• The End-Game Via Decrease will be triggered by a NAV/U of 0.02BTC instead of 0.0002 BTC

Please see the OP for a detailed explanation of the set of contracts. This overview is subject to change indefinitely.

Happy Speculating!

-2070

[twentyseventy]

Round 2, Period 0, Day 0 Report - June 3, 2015

Balance Post Divs: BTC 4.79276276

Total Units: 24

NAV/U: BTC 0.19969844

[twentyseventy]

Round 2, Period 0, Day 1 Report - June 4, 2015

Balance Post Divs: BTC 6.55493157

Total Units: 33

NAV/U: BTC 0.19863428

[galdur]

So it begins again. Was in the first round only towards the end so I need to follow this one a bit to see how the opening game develops before going in. Good luck, g

[twentyseventy]

So it begins again. Was in the first round only towards the end so I need to follow this one a bit to see how the opening game develops before going in. Good luck, g

Usually starts off slow, see some price discovery, and goes from there - It will be interesting!

[twentyseventy]

Round 2, Period 0, Day 2 Report - June 5, 2015

Balance Post Divs: BTC 226.79711046

Total Units: 1148

NAV/U: BTC 0.19755845

Big volume yesterday! Looking forward to some more action on the MINE/SELL orderbooks-

[galdur]

Yes, that´s a hefty turnover in the exch already. Congratulations twentyseventy, this is off to a promising start.

[twentyseventy]

Round 2, Period 0, Day 3 Report - June 6, 2015

Balance Post Divs: BTC 229.90633501

Total Units: 1170

NAV/U: BTC 0.19650114