[Havelock] Bitcoin Difficulty Derivative (BDD)

[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?

Did you read OP?

yes I did. And what is your point exactly?

A. No mention of Panama?
B. Is the daily % return too high for you? Too low for you? Don't give a rip?
C. Did 20's give out his name there? Didn't see it...

Spreadsheets should be done to get a clearer picture of what exactly you are getting into. But garbage in, garbage out. And these percentage returns will fluctuate every month substantially.

What did your spreadsheet tell you about the returns for the last 30 days?

[1714652334]

1714652334

[1714652334]

1714652334

[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.

There is no fixed ROI you will get. BDD is a zero sum game (minus the fees). That fact that you started calculating a ROI means you will have to re-read the OP.

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?

yes I did. And what is your point exactly?

A. No mention of Panama?
B. Is the daily % return too high for you? Too low for you? Don't give a rip?
C. Did 20's give out his name there? Didn't see it...?

Spreadsheets should be done to get a clearer picture of what exactly you are getting into. Of course, garbage in, garbage out...

Havelock is listed in Canade afaik. I don't know where 2070 is located, not it mattered. If you don't trust Havelock - don't invest in this!
2070 stated that he has no access to the funds, only Havelock. Still, since 2070 controls the dividends and issues B.EXCH there are several ways for him to cheat shareholders (a.k.a. "do the Deprived") so if you don't trust him - don't invest.
If you see no way how 2070 doing his thing right will make more money than running - don't invest.

TL;DR: Don't invest

[sillywhim]

There is no fixed ROI you will get. BDD is a zero sum game (minus the fees). That fact that you started calculating a ROI means you will have to re-read the OP.

All this reaction from you over my stating what B.EXCH returned over the past 30 days. Must be completely utter news to you as you've never done spreadsheets on anything before. HINT: Openoffice plus high school math skills.

If B.EXCH lost 50% of your btc over a month, would you "play the game?" Course not.
If B.EXCH returned 8% profit over the last month as I've calculated, would you "play the game?" Maybe yes.

Just settle down. Sounds like 20's is your guru or bosom buddy of yours.

So what.

There is no fixed ROI you will get.

But you do get a ROI, else why play? Again, this deluge from you is because I did some work and showed that B.EXCH returned 8% for the last 30 days. What is so wrong with my stating that?

BDD is a zero sum game (minus the fees).

The NYSE is a zero sum game too. Again, what exactly is your point? That no one is really making money off B.EXCH ? I doubt that...

[sillywhim]

Hmmm. Re-reading this exchange (pun intended), I think what set off you know who is the word:

PANAMA


Well, scraped from the havelockinvestments.com webstite, on the About Us page:
 
The Panama Fund
Owner and Operator of HavelockInvestments.com

The Panama Fund is a Private Investment Company, licensed with the S.M.V, Superintendencia del Mercado de Valores (Superintendency of Securities Market). The Panama Fund has been licensed since October, 2008. The Fund is administered by a practicing Legal License Company that specializes in International Business Law in the Republic of Panama.


Truth hurts, huh.

Panama is a banana republic. It's dictator, Manuel Noriega is rotting in a US jail cell captured and placed there by a non-OBAMA i.e. non-apologetic administration namely US President Ronald Reagan and President George Bush the Elder. Google that.

[jimmothy]

There is no fixed ROI you will get. BDD is a zero sum game (minus the fees). That fact that you started calculating a ROI means you will have to re-read the OP.

All this reaction from you over my stating what B.EXCH returned over the past 30 days. Must be completely utter news to you as you've never done spreadsheets on anything before. HINT: Openoffice plus high school math skills.

If B.EXCH lost 50% of your btc over a month, would you "play the game?" Course not.
If B.EXCH returned 8% profit over the last month, would you "play the game?" Maybe yes.

Just settle down. Sounds like 20's is your guru or bosom buddy of yours.

So what.

There is no fixed ROI you will get.

But you do get a ROI, else why play? Again, this deluge from you is because I did some work and showed that B.EXCH returned 8% for the last 30 days. What is so wrong with my stating that?

BDD is a zero sum game (minus the fees).

The NYSE is a zero sum game too. Again, what exactly is your point? That no one is really making money off B.EXCH ? I doubt that...

I don't think you understand the game.

1BTC goes in, and exactly (almost) 0.98btc is given as dividends.

If you hold on to b.exch (b.sell+b.mine) you are guaranteed a 2% loss (or whatever the fees are)

To put it simply, B.exch = b.mine daily div x 200. B.sell dividends = excess btc when difficulty increases lowering the amount of btc required to pay 200 days worth of b.mine divs.

BTW as anyone who has been mining for more than a week knows spreadsheets and calculations are just about as accurate as palm readings and fortune cookies.

But if you don't believe me then I'd encourage you to read/fully understand the rules and play the game as there is huge money to be made by anyone who can predict the future.

[sillywhim]

I don't think you understand the game.

1BTC goes in, and exactly (almost) 0.98btc is given as dividends.

If you hold on to b.exch (b.sell+b.mine) you are guaranteed a 2% loss (or whatever the fees are)

To put it simply, B.exch = b.mine daily div x 200. B.sell dividends = excess btc when difficulty increases lowering the amount of btc required to pay 200 days worth of b.mine divs.

BTW as anyone who has been mining for more than a week knows spreadsheets and calculations are just about as accurate as palm readings and fortune cookies.

But if you don't believe me then I'd encourage you to read/fully understand the rules and play the game as there is huge money to be made by anyone who can predict the future.

So my 30-day analysis spreadsheet of B.EXCH is in error then? Is this FINALLY your point?

...and why would anyone buy and hold (for dear life) B.EXCH? (B.MINE+B.SELL) That's stupid. Do it for short terms at a profit. WATCH B.SELL's dividends (esp. lack thereof) like a hawk... it's a HOLD or EXIT signal.

With the buy back (even @ 2% less and especially so), you can't miss.

FYI what you dismiss as "predicting the future" I subsume as statistical analysis.

I just have a problem with Panamanian dictators. Wildcard.

[junkonator]

...and why would anyone buy and hold (for dear life) B.EXCH? (B.MINE+B.SELL) That's stupid. Do it for short terms at a profit. WATCH B.SELL's dividends (esp. lack thereof) like a hawk... it's a HOLD or EXIT signal.

With the buy back (even @ 2% less and especially so), you can't miss.

FYI what you dismiss as "predicting the future" I subsume as statistical analysis.

Hmmm ... OK maybe you're right. So when will the next B.SELL dividend be?

[sillywhim]

Hmmm ... OK maybe you're right. So when will the next B.SELL dividend be?

Why bother predicting? OBSERVE INSTEAD.

If B.SELL misses more dividends in a row, that's the signal to exit all positions while there are still weak hands in the game.

[twentyseventy]

Period 15, Day 8 Report - July 21, 2014

Balance Post Divs: BTC 330.94826618

Total Units: 12353

NAV/U: BTC 0.02679092

[twentyseventy]

Hmmm. Re-reading this exchange (pun intended), I think what set off you know who is the word:

PANAMA


Well, scraped from the havelockinvestments.com webstite, on the About Us page:
 
The Panama Fund
Owner and Operator of HavelockInvestments.com

The Panama Fund is a Private Investment Company, licensed with the S.M.V, Superintendencia del Mercado de Valores (Superintendency of Securities Market). The Panama Fund has been licensed since October, 2008. The Fund is administered by a practicing Legal License Company that specializes in International Business Law in the Republic of Panama.


Truth hurts, huh.

Panama is a banana republic. It's dictator, Manuel Noriega is rotting in a US jail cell captured and placed there by a non-OBAMA i.e. non-apologetic administration namely US President Ronald Reagan. Google that.

Everyone here is familiar with the fact that Havelock was purchased a while ago by The Panama Fund; I work closely with Havelock and see no issue with this. Please take any political discussions elsewhere.

Also, people should watch the Difficulty, not B.SELL - if you know where the Difficulty is going, then you know where SELL is going as well.

[jimmothy]

So my 30-day analysis spreadsheet of B.EXCH is in error then? Is this FINALLY your point?

I haven't seen your spreadsheet but if "You will get a Monthly ROI of 8.155% " is your result then yes, you have probably made an error. Unless there was a dividend calculation error on twentyseventys part (which I don't think there has and I've been following it pretty closely) then the ROI on b.exch should be very close to 2%.

...and why would anyone buy and hold (for dear life) B.EXCH? (B.MINE+B.SELL) That's stupid. Do it for short terms at a profit. WATCH B.SELL's dividends (esp. lack thereof) like a hawk... it's a HOLD or EXIT signal.

Nobody would buy and hold b.exch. That is not how you play the game. You buy b.exch and sell either b.mine or b.sell depending on which one you think is overpriced.

There were no dividends for b.sell because the last difficulty increase was less than 6% meaning no leftover change when adjusting the b.mine "daily dividend fund" back to 200 days.

FYI what you dismiss as "predicting the future" I subsume as statistical analysis.

What you "subsume" as statistical analysis I call astrology. Please buy a usb miner or something and get a better idea of how the whole mining process works because you seem pretty ignorant on the subject.

Why bother predicting? OBSERVE INSTEAD.

Can you make money observing?

The entire point of the derivative is predicting the future and getting paid for it.

If B.SELL misses more dividends in a row, that's the signal to exit all positions while there are still weak hands in the game.

It doesn't matter if b.sell receives a dividend the next jump or not (highly unlikely it doesn't as bitcoinwisdom is estimating 12% in 4 days).

98% of the money put in to the derivative will be given back as dividends regardless of the difficulty.

[twentyseventy]

Math Time!

I've been putting this off for a while, but the two of you bring up an interesting point regarding holding B.EXCH.

Ideally, it should not be profitable for people to hold B.EXCH (1 MINE and 1 SELL) long-term. The reason for this is that people could simply buy EXCH and sit on it, contributing nothing to the Derivative - it's modeled after a zero-sum game, after all.

However, if you bought B.EXCH on the first day and held it until today, you would actually show a 4.69% profit on paper.

B.EXCH Starting Price: 0.24310363

MINE Dividends Paid 1/31 - 7/21: 0.07526082
SELL Dividends Paid 1/31 - 7/21: 0.15300023
Current Buyback Value: 0.02625510

Total Divs Paid + Buyback Value = 0.25451615

There have been few, if any people, that have bought and held both MINE and SELL from the beginning, so this applies to a very select few. However, the theoretical issue remains.

The reason for this is that there are two ways to add to the NAV/U - by new shares of EXCH being sold (remember that .6% goes to the Fund) and buybacks (which are issued at 98% of the NAV/U, resulting in a 2% premium going to the fund as well).

The addition to the NAV/U, in absolute terms, was also bolstered by the large (~180 BTC) sale that was made a few months ago and then mostly bought-back, resulting in somewhere around 3.5BTC added to the fund from the new sales premium and buyback premium.

I can't change anything about the formula now, but it's something I'll consider for the next Round (whenever that is) - possibly eliminating the premium on new sales of EXCH and/or figuring out how to disincentivize buy-backs without adding to the NAV/U.

Cheers-

[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? 

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

Thank you I have seen the light now. I did not realize this was a child's game; I thought this was investing to see a return. Well I have had some good returns on B-Sell in the past so I'm most definitely not complaining; I just thought it would be continuous. I did not know it was all just a game. So I sold some of my shares and invested into other funds on Havelock Investments that are for real investments and not a child's game. I got in a different game. 

[twentyseventy]

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

Thank you I have seen the light now. I did not realize this was a child's game; I thought this was investing to see a return. Well I have had some good returns on B-Sell in the past so I'm most definitely not complaining; I just thought it would be continuous. I did not know it was all just a game. So I sold some of my shares and invested into other funds on Havelock Investments that are for real investments and not a child's game. I got in a different game. 

Adults are welcome as well 

[sillywhim]

Math Time!

I've been putting this off for a while, but the two of you bring up an interesting point regarding holding B.EXCH.

Ideally, it should not be profitable for people to hold B.EXCH (1 MINE and 1 SELL) long-term. The reason for this is that people could simply buy EXCH and sit on it, contributing nothing to the Derivative - it's modeled after a zero-sum game, after all.

Right, don't hold B.EXCH long time. Buy/Sell short term. Someone who did just this would have gained 8% ROI over the past 30-days buying and selling.

SIMPLE MATH.

[twentyseventy]

Math Time!

I've been putting this off for a while, but the two of you bring up an interesting point regarding holding B.EXCH.

Ideally, it should not be profitable for people to hold B.EXCH (1 MINE and 1 SELL) long-term. The reason for this is that people could simply buy EXCH and sit on it, contributing nothing to the Derivative - it's modeled after a zero-sum game, after all.

Right, don't hold B.EXCH long time. Buy/Sell short term. Someone who did just this would have gained 8% ROI over the past 30-days buying and selling.

SIMPLE MATH.

My point was that holding B.EXCH long term actually is profitable, though in theory I would not want it to be.

Also, 30 Days is still short-term for a speculation of this type.

[sillywhim]

Also, people should watch the Difficulty, not B.SELL - if you know where the Difficulty is going, then you know where SELL is going as well.

Who knows where difficulty is going? And why worry about it anyhow? We are trading your fantasy stocks after all. There are advantages in your game not applicable to playing the bitcoin market or the miner market.

One has to pay attention to B.SELL as this is part of your game and we are playing it.

[twentyseventy]

Also, people should watch the Difficulty, not B.SELL - if you know where the Difficulty is going, then you know where SELL is going as well.

Who knows where difficulty is going? And why worry about it anyhow? We are trading your fantasy stocks after all. There are advantages in your game not applicable to playing the bitcoin market or the miner market.

One has to pay attention to B.SELL as this is part of your game and we are playing it.

8% return, last 30-days on B.EXCH.

Simple math.

Are you denying this, 20s?

Math Time

I'm using 6/21 - 7/21.

B.EXCH Starting Price 6/21: 0.03847462

MINE Dividends Paid 6/21 - 7/21: 0.00522894
SELL Dividends Paid 6/21 - 7/21: 0.00854093
Current Buyback Value: 0.02625510

Total Divs Paid + Buyback Value - Starting Price = 0.00155035

0.00155035 / 0.03847462 = 0.040295436 = 4.0295436%

So, yes, I take issue with your math.

You keep saying 'hold short term, not long term' and I'm not sure if you're being sarcastic / facetious or not. Because, as evidenced by the earlier math, both have been profitable (inception to now, or 30 days to now).

Who knows where difficulty is going? And why worry about it anyhow?

That's the whole point here. 'Worrying' about the Difficulty is the basis of the whole Derivative here - no one knows exactly where it is going, of course, but certain tools are awfully helpful at giving clues in the short term.

EDIT: I see that you deleted part of your post - don't worry, I quoted it

[sillywhim]

Shoots, I made a mistake.

I assumed the buy-back period NAV/U -2% for the buy-back price instead of the daily NAV/U -2%. So now I understand period NAV/U is just for the period's ask/sell price, not the buy-back basis.

So period's NAV/U+3% for SELL and daily's NAV/U-2% for BUY-BACK.

Well that changes EVERYTHING in my spreadsheet.

Okay a test then. If the daily NAV/U rises substantially above the period NAV/U, would you change the price of the B.EXCH to the higher NAV/U + 3%? Why wouldn't the sell price be based on the daily and not the period's as it is now?

[jjdub7]

Math Time!

I've been putting this off for a while, but the two of you bring up an interesting point regarding holding B.EXCH.

Ideally, it should not be profitable for people to hold B.EXCH (1 MINE and 1 SELL) long-term. The reason for this is that people could simply buy EXCH and sit on it, contributing nothing to the Derivative - it's modeled after a zero-sum game, after all.

However, if you bought B.EXCH on the first day and held it until today, you would actually show a 4.69% profit on paper.

B.EXCH Starting Price: 0.24310363

MINE Dividends Paid 1/31 - 7/21: 0.07526082
SELL Dividends Paid 1/31 - 7/21: 0.15300023
Current Buyback Value: 0.02625510

Total Divs Paid + Buyback Value = 0.25451615

There have been few, if any people, that have bought and held both MINE and SELL from the beginning, so this applies to a very select few. However, the theoretical issue remains.

The reason for this is that there are two ways to add to the NAV/U - by new shares of EXCH being sold (remember that .6% goes to the Fund) and buybacks (which are issued at 98% of the NAV/U, resulting in a 2% premium going to the fund as well).

The addition to the NAV/U, in absolute terms, was also bolstered by the large (~180 BTC) sale that was made a few months ago and then mostly bought-back, resulting in somewhere around 3.5BTC added to the fund from the new sales premium and buyback premium.

I can't change anything about the formula now, but it's something I'll consider for the next Round (whenever that is) - possibly eliminating the premium on new sales of EXCH and/or figuring out how to disincentivize buy-backs without adding to the NAV/U.

Cheers-

TS,

I've noticed the aforementioned situation too regarding the additive effect on the NAV/U caused by the volatility in outstanding shares.  With all due respect, the model works quite well as-is because the potential to earn simply by holding both B.Mine and B.SELL is a third type of bet in the system.  You should keep this mechanism within the game because it gives incentive to earlier entrants, adding an additional factor of time back into the game.  

To illustrate the example - in effect, the fund pays interest to early entrants who hold B.EXCH in the same way as an unfunded social security system pays returns to successive generations of entrants in the workforce.  To continue to drive the buyback/exchange mechanism, its essential to have successive "generations" of entrants which mimic new entrants into the mining space (analogous to an expanding labor force or analogous market i.e. corporation issuing additional equity post-IPO or buying equity back).

The number of participants in the market isn't static - in order to continue to expand the number of participants (or simply the number by proxy of outstanding shares), you should continue to provide this type of incentive (its not a certain return, either...in essence its a bet in and of itself that people will over- or under-value B.MINE or B.SELL).