[Havelock] Bitcoin Difficulty Derivative (BDD)

[twentyseventy]

You have different definitions for those terms than havelock does, and that's your problem not theirs.

Havelock was not designed for these types of things, it was designed for regular stocks, and it is designed for those. The last dividend/next dividend/annual yield don't really apply to b.mine and b.sell because the point of those wasn't to buy something at the ipo and own part of a company, they are something else that is completely different. B.Sell having no dividend last period does not change the fact that it had a yield previously. mine having a bigger payout than previously last period doesn't change how it performed in the past, and none of those facts have any real bearing on what the hell is going to happen next time.

I know and understand all that since January 25, 2014, and finance since 1982.
But I try to explain You something else. Basta. I stop here.

Korbman did a great analysis of how HL calculates this Yield but again, yes, these calculations are misleading when applied to B.SELL and B.MINE and, also, I have no control over them.

How is the Annual Yield on Havelock for these funds calculated?

That's a great question, I'm not sure actually. [...]

If I remember correctly, it's something like this:
A = Currently price per unit
B = Last Dividend per unit
C = How often after dividends paid. 12 = once per month, 365 = once per day, 52 = once per week, etc.

[(B * C) / A] * 100 = APY in %

For example, with B.MINE:
[(0.00041088 * 365) / 0.032] * 100 = 468.66%

With AM1:
[(0.000065 * 52) / 0.60] * 100 = 0.5633%

In reality, it sort of breaks based on how Havelock determines the timeframe. For me, paying every 2 weeks means 26 periods...an APY of about 43.3% at current prices...but for whatever reason Havelock calculates it as if it were only 12 periods per year. 

And for the Difficulty Derivative, it's even more skewed since the overall timeframe of the asset doesn't reach one year anyway.

Yes, I tried to show you exactly that !
[(B * C) / A] * 100 = APY in % is OK, for the short period between Dificulty changes.
So you can compare easily with other funds, knowing this is an approximation, for the short time frame (12 days).
And APY was computed using this formula since Jul 12 2014.
But WHY now APY is computed with other formula ?!?

I'm not sure, to be honest - that's really a HL question. I'm not overly concerned about this because, in any case, this calculation is going to be misleading for MINE and SELL - I'd prefer it not be there at all, but I've done all that I can for it.

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[twentyseventy]

Period 15, Day 2 Report - July 15, 2014

Balance Post Divs: BTC 341.29241060

Total Units: 12347

NAV/U: BTC 0.02764172

[Lohoris]

But WHY now APY for B.MINE is computed with another formula ?!?

You can't.
Just don't.

[jjdub7]

But WHY now APY for B.MINE is computed with another formula ?!?

You can't.
Just don't.

Even worse was the dead cat bounce on COG after it was announced that it was worthless and delisted.  That cat was really, really dead, Schrodinger be damned.

[ddalex]

But WHY now APY for B.MINE is computed with another formula ?!?

You can't.
Just don't.

Even worse was the dead cat bounce on COG after it was announced that it was worthless and delisted.  
That cat was really, really dead, Schrodinger be damned.

Yes, I can
I can sell You my last B.SELL, which I kept as souvenir 2014-07-12
And the Black Swan is not yet really, really dead, Taleb be damned

[twentyseventy]

Period 15, Day 3 Report - July 16, 2014

Balance Post Divs: BTC 339.85017667

Total Units: 12353

NAV/U: BTC 0.02751155

[twentyseventy]

I wanted to bring up, again, the matter of how/when the SELL Dividend will/won't be paid. At the base level, a SELL dividend is paid when there is excess capital in the fund (over 200 Days of Dividends at current rate).

A while ago, I calculated that the Difficulty needs to increase about 6.5% for a SELL Dividend to be paid - this is because, at any lower Difficulty increase, capital would be paid out faster as MINE dividends than the Difficulty is increasing.

This is still correct - but it assumes that the Reserve in the previous Period is not deficient. Simply, it assumes that the Period started with a sufficient Reserve (at least 200 Days of Dividends on hand).

The Fund began this period deficient - there was only capital enough for ~193 days of MINE dividends, not 200 or more, and that's why there was no SELL dividend. For this reason, the Difficulty needs to increase more than 6.5% this Period for a SELL dividend to be paid due to the fact that the fund was already deficient from the get-go.

It looks to be about 11.5% is the needed Difficulty increase for this period for a SELL dividend to be issued. For any period that begins deficient (with less than 200 Days of capital on hand), this will vary depending on how much of a deficit there is.

I just wanted to clarify this, as I told jjdub7 that the 6.5% was a constant for each period - it still is, but only if the Period doesn't begin with a deficit.

So that I'm totally clear here - I have not changed anything; this is BDD functioning exactly as it should. This is what is considered Difficulty stagnation - the Difficulty is literally increasing, but not enough to outpace the MINE dividends being paid (at the moment).

This a great time to bring up jjdub7's comment from this past week - there is a minimum increase required in the Difficulty for a SELL dividend to be paid. Right now, the Difficulty increase percentage for this period has been hovering around 5% - 6%, below the ~6.5% required for any SELL dividend to be paid.

Difficulty looks like it will change Saturday afternoon, so the report would be issued on Sunday.

For those of you that don't have one yet, my favorite site for tacking the Difficulty is https://bitcoinwisdom.com/bitcoin/difficulty

2070 - if I remember correctly, there was a minimum difficulty bump in order for SELL to be paid.  It was around 6.5% the last time the topic was covered.  Is this a constant minimum percentage inherent to your model or does it change as we move between rounds?  Thanks as always, man.

No problem - yes, this is a constant figure for any Period, not any specific one. It just has to do with the number of daily dividend payments made versus the number of days in the period.

Each day pays out 1 out of 200 Days worth of the dividend Reserve. 1 / 200 = .005 (or .5%).

13 Days of dividends = 13 * .5% = 6.5%. This seems to be the mathematical 'sweet spot' - just shy of 14 days, which is of course the 'Standard' Difficulty period time period (no increase/no decrease).

So, if you're paying out .5% per day, the difficulty needs to increase by at least .5% per day, otherwise the Reserve is decreasing faster than difficulty is increasing. Hope this helps-

[junkonator]

Thanks or the heads-up 2070.

[twentyseventy]

Period 15, Day 4 Report - July 17, 2014

Balance Post Divs: BTC 338.11462369

Total Units: 12355

NAV/U: BTC 0.02736662

Thanks or the heads-up 2070.

You're welcome - this is the challenging, but oftentimes entertaining, part of the Derivative - trying to anticipate all possible outcomes 

[twentyseventy]

Period 15, Day 5 Report - July 18, 2014

Balance Post Divs: BTC 335.89974673

Total Units: 12338

NAV/U: BTC 0.02722481

[twentyseventy]

Period 15, Day 6 Report - July 19, 2014

Balance Post Divs: BTC 334.47506316

Total Units: 12351

NAV/U: BTC 0.02708080

[sillywhim]

I did a spreadsheet for B.EXCH buying 30 days ago and selling today:

You will get a Monthly ROI of 8.155% (nearly 100% APY.) This includes the dividends and the less 2% buy back fee. I don't know what the risks are i.e. Havelock up and disappearing, the Manager getting hit by a bus or otherwise incapacitated, etc.

Not knowing 20's real name is not a big issue for me. Who knows the name/team of the specialist or market makers in the stock market? Probably all just some computer clacking incessantly in the corner of an office somewhere...

But really, Panama?

[junkonator]

I did a spreadsheet for B.EXCH buying 30 days ago and selling today:

You will get a Monthly ROI of 8.155% (nearly 100% APY.) This includes the dividends and the less 2% buy back fee. I don't know what the risks are i.e. Havelock up and disappearing, the Manager getting hit by a bus or otherwise incapacitated, etc.

Not knowing 20's real name is not a big issue for me. Who knows the name/team of the specialist or market makers in the stock market? Probably all just some computer clacking incessantly in the corner of an office somewhere...

But really, Panama?

Did you read OP?

[JasherEnoch]

I have a new question concerning as to why we have not received any dividend from B-Sell since June 29, 2014. So I added up the days and if BDD started on January 24, 2014, then we are only 158 days into the 200 day period. Does that mean that we are all going to have to wait until sometime in August to start a whole new 200 day period just to get a dividend payout for B-Sell?

[twentyseventy]

Period 15, Day 7 Report - July 20, 2014

Balance Post Divs: BTC 332.71173719

Total Units: 12352

NAV/U: BTC 0.02693585

[twentyseventy]

I have a new question concerning as to why we have not received any dividend from B-Sell since June 29, 2014. So I added up the days and if BDD started on January 24, 2014, then we are only 158 days into the 200 day period. Does that mean that we are all going to have to wait until sometime in August to start a whole new 200 day period just to get a dividend payout for B-Sell?

Check my previous post above (#468) - whether or not SELL receives a dividend depends on how much the Difficulty Increases (or stagnates, or decreases)-

[JasherEnoch]

Thanks for trying to answer, but it still only leaves me with more questions. My original question (rephrased): Are we going to have to wait until a new 200 days begins (brand new) then to get paid dividends from B-Sell? I understand from what I read of the difficulty scenario that there needs to be an 11.5% increase....but that does not provide an answer as to what is needed to get there. Yes there needs to be an increase, I think everyone can see that....BUT HOW? What is needed? What can be done? Are you not mining bitcoin 24/7...so why is there no 11.5% increase? 

[Draino]

Thanks for trying to answer, but it still only leaves me with more questions. My original question (rephrased): Are we going to have to wait until a new 200 days begins (brand new) then to get paid dividends from B-Sell? I understand from what I read of the difficulty scenario that there needs to be an 11.5% increase....but that does not provide an answer as to what is needed to get there. Yes there needs to be an increase, I think everyone can see that....BUT HOW? What is needed? What can be done? Are you not mining bitcoin 24/7...so why is there no 11.5% increase?  

roughly speaking, at the difficulty increase (determined by bitcoin protocol, http://bitcoinclock.com when the minute hand reaches 12), if there are more than 200 days worth of mining payouts at 5Gh/s per mine share, then the extra is paid out to sell.  for the current difficulty, it would take a ~11.5% difficulty increase to cause mining payouts to be small enough for the reserve to exceed 200 days.

no mining is actually being done by the fund, and the fund has no effect on the hashrate of the network.

(unless i'm doing it wrong)

[ddalex]

Thanks for trying to answer, but it still only leaves me with more questions. My original question (rephrased): Are we going to have to wait until a new 200 days begins (brand new) then to get paid dividends from B-Sell? I understand from what I read of the difficulty scenario that there needs to be an 11.5% increase....but that does not provide an answer as to what is needed to get there. Yes there needs to be an increase, I think everyone can see that....BUT HOW? What is needed? What can be done? Are you not mining bitcoin 24/7...so why is there no 11.5% increase? 

Dear JasherEnoch,

If you want to play the game "Bitcoin Difficulty Derivative (BDD)" discussed here, you MUST read and understand all explained in the first message in this thread:
https://bitcointalk.org/index.php?topic=430137.0
If you don't understand all that without other explanations, it's better for you to stop immediately playng, sell all and find another game

[twentyseventy]

Dear JasherEnoch,

If you want to play the game "Bitcoin Difficulty Derivative (BDD)" discussed here, you MUST read and understand all explained in the first message in this thread:
https://bitcointalk.org/index.php?topic=430137.0
If you don't understand all that without other explanations, it's better for you to stop immediately playng, sell all and find another game

Alex is correct here, the minimum needed to understand this Derivative is reading the OP/Contract. The fact that you referenced mining, which is not done here at all, tells me that you either breezed through it or did not read it at all.

In order for SELL to be issued a dividend, the Difficulty must increase faster than daily dividends are being paid out to B.MINE, at least 6.5% per period (more, as evidenced by this Period, if there was no SELL dividend the prior Period).