If you understand it, this thread is pointless.
Always factor risk into FV calculations.
[
src] A statistically average bitcoin exchange lasts just over a year before closing up. Around 61% of those refund
anything.
Unfortunately, we don't have a good trend in determining expectancy of an exchange to continue operating without theft after the first year, and it may be a bad trend since the source suggests Intersango and Gox were statistically safer.
Anyway -- I don't want to complicate things and put too much speculation in an example formula, so let's say there's just a 10% chance of total default per year.
I don't think anyone's published data on averages for USD lending rates (and please God don't keep BTC there, as much as I love BFX). I'll pull a number out of my ass and say the annual average is .04%/day after insurance fees, which comes out to ~15.72% annually, which - hey, is a Hell of a lot better than .2% at a bank!
Let's say you plan on keeping your USD in BFX for ten years.
The "nominal FV" would look like ((1+.0004)^3650), or 430.47%.
"Chance of return" is 4/5 per year for ten years, or (.9^10), or ~34.87%
Letting me "gut feeling math" is never a good idea, but I'll guess the formula here is 430.47*.3487=~150.10% (your EV after ten years)
-So let's say you spend one hour per week managing your BFX portfolio - 52 hours per year, times ten... 520 hours. If you put $500 USD in, you should expect (keeping in mind it's most likely you'll lose everything or almost everything) a $250.50 profit, which gives you around $4.82 profit per hour of labor if you averaged the pay/hr (without factoring cost opportunity in, of course!). Fwiw, you make more toward minimum wage at the end of those two years, almost like a promotion from hobo to illegal farm hand!
Let's say you put $1k in, all else the same. You'd expect to make $9.63/hr averaged out.
Let's say you put $10k in, all else the same. You'd expect to make $96.35/hr averaged out. That sounds good, so let's go with that and factor inflation in. I kid, I kid.
(I did actually calculate it, though -- you'd end up making ~$23.67/hr averaged out)
-But no, seriously, it's a bad idea unless you have a special reason to trust BFX. There's not good data established to calculate the risk. I believe BFX and Raphael are especially trustworthy and dramatically less likely to run off, but that doesn't change the data available for an uninterested party.
