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Author Topic: [GLBSE] BFLS - Bitcoin Mining & Sales  (Read 15930 times)
rdponticelli
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April 12, 2012, 05:50:27 PM
 #121

Let me see if I understand. So BFLS.FUTURES will work almost as a bond to raise capital, but without any interest payment. So, you get the credit to buy equipment for free, and the buyer of the share/bond/asset/whatever has to wait on a line for the hardware to arrive and become functional. And he'll begin to be compensated for the invested capital only if he's granted it's place on the line for exchanging this asset one on one for another supposedly more valuable...

It's that it? Am I missing something? What if the minirigs won't ever arrive? What if it take forever? We all will be stuck with an useless electronic asset without any compensation for the waiting?

Doesn't sound like a good deal to me... Maybe if you include some dividend payments as a form of interest and some guarantee to buy back or exchange the assets at least partially if something goes wrong it could work, but otherwise I'm not seeing it...
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April 12, 2012, 07:08:00 PM
 #122

Let me see if I understand. So BFLS.FUTURES will work almost as a bond to raise capital, but without any interest payment. So, you get the credit to buy equipment for free, and the buyer of the share/bond/asset/whatever has to wait on a line for the hardware to arrive and become functional. And he'll begin to be compensated for the invested capital only if he's granted it's place on the line for exchanging this asset one on one for another supposedly more valuable...

It's that it? Am I missing something? What if the minirigs won't ever arrive? What if it take forever? We all will be stuck with an useless electronic asset without any compensation for the waiting?

Doesn't sound like a good deal to me... Maybe if you include some dividend payments as a form of interest and some guarantee to buy back or exchange the assets at least partially if something goes wrong it could work, but otherwise I'm not seeing it...
Those who do see it are probably the ones who would rather have a partial stake in a unit or rather, risk a partial stake in a unit.  You could pay BFL for a unit and you would be in the exact same boat, waiting for hardware to arrive and out the money if it doesn't.  As such, why should Inaba take on extra risk to satiate you when he is essentially doing the same thing for you in a fractional manner?
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April 12, 2012, 07:19:17 PM
 #123

Let me see if I understand. So BFLS.FUTURES will work almost as a bond to raise capital, but without any interest payment. So, you get the credit to buy equipment for free, and the buyer of the share/bond/asset/whatever has to wait on a line for the hardware to arrive and become functional. And he'll begin to be compensated for the invested capital only if he's granted it's place on the line for exchanging this asset one on one for another supposedly more valuable...

It's that it? Am I missing something? What if the minirigs won't ever arrive? What if it take forever? We all will be stuck with an useless electronic asset without any compensation for the waiting?

Doesn't sound like a good deal to me... Maybe if you include some dividend payments as a form of interest and some guarantee to buy back or exchange the assets at least partially if something goes wrong it could work, but otherwise I'm not seeing it...

It is basically an interest free loan given to the mining company for the agreement to exchange the bonds for shares in the company in the future.  The only profit would be if there is some kind of difference between the price of the bond now and the future price of the BFLS shares when they are converted or the dividend payments when having the BFLS shares.

Maybe the market will have a spread between how much the bonds cost and how much the shares cost.  It will be fun to watch, but for current shareholders it may be more economical to just get a 0% interest loan with a credit card to purchase more boards.

Introducing constraints to the economy only serves to limit what can be economical.
rdponticelli
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April 12, 2012, 09:59:21 PM
 #124

Let me see if I understand. So BFLS.FUTURES will work almost as a bond to raise capital, but without any interest payment. So, you get the credit to buy equipment for free, and the buyer of the share/bond/asset/whatever has to wait on a line for the hardware to arrive and become functional. And he'll begin to be compensated for the invested capital only if he's granted it's place on the line for exchanging this asset one on one for another supposedly more valuable...

It's that it? Am I missing something? What if the minirigs won't ever arrive? What if it take forever? We all will be stuck with an useless electronic asset without any compensation for the waiting?

Doesn't sound like a good deal to me... Maybe if you include some dividend payments as a form of interest and some guarantee to buy back or exchange the assets at least partially if something goes wrong it could work, but otherwise I'm not seeing it...
Those who do see it are probably the ones who would rather have a partial stake in a unit or rather, risk a partial stake in a unit.  You could pay BFL for a unit and you would be in the exact same boat, waiting for hardware to arrive and out the money if it doesn't.  As such, why should Inaba take on extra risk to satiate you when he is essentially doing the same thing for you in a fractional manner?

Inaba isn't taking any real risk if he's not backing the bonds nor paying interest. He's buying stuff for free, with the money of the shareholders. If everything goes well, he's making his living by reserving for himself 15% of the shares of each unit, which is the same as taking 15% of the purchasing value as well as 15% of the operational revenue. His operating costs will be covered by that 15%.

Lets add that the share is slightly overpriced at current rates (should be 0.625 with BTC @4.8, 0.6 with BTC @5, I really can't understand those who are trading it for more than 1.4), and we have a great business, almost risk free... from the operator's pov...

I understand the advantages of the fractional purchase for the buyer and that was what appealed me when the proposal appeared. But it only works if you have your capital immediately working after you buy the shares. If you have it in limbo for who knows how long, all the possible advantages are lost. You are just buying a piece of overpriced used hardware, and you doesn't even have a clue if this piece is ever arriving or working...

It is basically an interest free loan given to the mining company for the agreement to exchange the bonds for shares in the company in the future.  The only profit would be if there is some kind of difference between the price of the bond now and the future price of the BFLS shares when they are converted or the dividend payments when having the BFLS shares.

Maybe the market will have a spread between how much the bonds cost and how much the shares cost.  It will be fun to watch, but for current shareholders it may be more economical to just get a 0% interest loan with a credit card to purchase more boards.

Yes, that's how I saw it. Too risky for the buyer. Great business for the operator. There's a big (and inexplicable) spread now, but I guess it won't last long. And if this mechanism really is implemented this way, it's guaranteed that the BFLS shares won't ever going to go too high, because the continuing issuing and selling of new shares at nominal price (the exchange of bonds for shares is effectively doing this) is going to dilute the value of the existing shares.
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April 12, 2012, 10:34:27 PM
 #125

Inaba isn't taking any real risk if he's not backing the bonds nor paying interest.
True, I shouldn't have said extra, but my point was that there's no reason for him to take on your risk (ordering a single [or fraction])
He's buying stuff for free, with the money of the shareholders.
I disagree, I say the shareholders are buying stuff and paying him 15% to manage the purchase and operation of said stuff
Lets add that the share is slightly overpriced at current rates
That would be a reason not to buy now, unless you are bullish on the value of BTC
I understand the advantages of the fractional purchase for the buyer and that was what appealed me when the proposal appeared. But it only works if you have your capital immediately working after you buy the shares. If you have it in limbo for who knows how long, all the possible advantages are lost.
Buy the main shares at the market-set premium if you want instant gratification; buy the futures if you want to order part of a single that you don't have to operate at much closer to the proportional market rate of said single; buy the single directly from BFL if you don't want to pay a premium
You are just buying a piece of overpriced used hardware, and you doesn't even have a clue if this piece is ever arriving or working...
If this is true, it is still true if you order it directly from BFL, only you have to set it up and operate.  I don't understand why you think Inaba should take on your risk in order to offer you a service.
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April 12, 2012, 10:54:48 PM
 #126

When the concept of this venture was presented I was really excited.  I thought it sounded like an amazing idea and that it gave something unique to the approach.  I loved that one could trade in their shares for a single given there was another one there to replace it and have more shares issued.  The concept was clear and presented well.

Now I think this whole thing has turned into a mess.  The 45 day rule is lame.  If you just stick to not exchanging the single till you have another to replace it with, you would be fine.  Only issuing 900 shares at first blew it for me as I was only in the top 1600 according to price offering, but figured that was all I needed as there would be 2000 shares.  I also think this whole BFLS.futures thing wont sell as people will just have to sit on their investment to even get into the real investment.

I thought BFLS was great in its creation, but feel that it has majorly failed in execution.

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April 12, 2012, 11:34:07 PM
 #127

Ok, I think I've responded to all the PMs, if not, I apologize, please contact me again.

I am offering BFLS.FUTURES shares as per these conditions:

Quote
BLFS.FUTURES is a non-dividend stock that will be used to allocate BFLS parent shares as hardware comes online. BFLS.FUTURES shares may be traded for BFLS shares on a 1:1 basis when BFLS shares become available. BFLS shares will be increased as new hardware is available, and BFLS shares will be reduced as hardware is taken offline. This is to prevent share dilution of BFLS shares. If more hardware is put into service than BFLS.FUTURES shares covers, BFLS shares will be given to public sale. Purchasing BFLS.FUTURES shares will grant the bearer priority allocation of BFLS shares when they are available, before any public sales. Share allocation will be on a first come, first served basis. When you purchase BFLS.FUTURES shares, you must contact the issuer with the date of purchase and amount of shares if you wish to be allocated BFLS shares in a priority manner. Your SHARES hold the place in line for BFLS shares, not any individual. If you later sell your shares prior to allocation of BFLS shares, the new owner will then be in place for BFLS shares. You must notify the issuer of the sale and to whom the shares are being transferred.

If you wish to purchase shares prior to the IPO, please contact me with the number of shares of BFLS.FUTURES you want and at what price.  I will allocate out shares so they are as equitably distributed as possible.  Once that is done, I will offer additional shares for public sale.

This seems a very good method. My only question is if you'll be able to verify how many shares are sold to each person in the public sale, so that when someone says to you "I just bought 100 shares, add me up to the list for conversion" you can really verify that, otherwise the BFLS<=>BFLS.FUTURES ranking list for can be easily cheated. Tongue
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April 12, 2012, 11:45:13 PM
 #128

Well, I'm open to suggestions.  The 45 day thing is just for the first "round" as it were, it's not going to be an ongoing thing.  Once the mining is settled down and going and I have a rotation of Singles coming (and going, I'm sure), exchanges for physical hardware will be immediate, no waiting required.  My intention with the 45 days it to prevent people from just buying up the shares and then getting an instant single.  I want a mining operation going that is paying dividends to all the share holders first and foremost, with hardware sales as the secondary bonus given to everyone.  

So, in essense I am "sticking with exchanging the single when I have one to replace it" -  since I don't have a rotation going yet, I don't have anything to replace the exchanges.  Now that I have the IPO, I have more units on order and I'll have units to exchange - with BFLS.FUTURES, it will enable me to have a constant rotation of hardware, instead of a stuttered order of every 6 weeks.  The BFLS.FUTURES shares will then guarantee you the BFLS shares.

As far as dilution goes, I am structuring it so as to avoid dilution specifically.  200 shares will roughly give you 800 MH/s hashrate, always.  Even if I were to issue 10,000 more shares, it would all be backed by hardware, and your 200 shares would still be worth ~800 MH/s.  So if the total shares outstanding is 2000, or 20,000, 1 share = 4 MH/s dividend... that's really the whole point of this venture.  I want to provide the ability for people to own a fraction of a unit that always maintains it's value in MH/s, no dilution or changes regardless of what happens with the stock.  You'll always know 1 share = 4 MH/s.  

The original concept was a "rent-to-own" that kind of grew into this, and I think it's a great idea.  It will allow people to purchase parts of a single and slowly buy more of the single until they own the whole thing.  This applies to MiniRigs as well - you can/will be able to trade in ~5200 shares fro a MiniRig - you can acquire the shares over time and have your "fractional" Single or MiniRig working for you the whole time, instead of being stuck with all or nothing.

You can ignore BFLS.FUTURES and concentrate on BFLS if that's what you want. FUTURES won't take anything away from BFLS, it works in addition to BFLS.  Once the initial 45 day waiting period is over, it will operate exactly as you describe.

If you're searching these lines for a point, you've probably missed it.  There was never anything there in the first place.
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April 12, 2012, 11:50:07 PM
 #129

Quote
This seems a very good method. My only question is if you'll be able to verify how many shares are sold to each person in the public sale, so that when someone says to you "I just bought 100 shares, add me up to the list for conversion" you can really verify that, otherwise the BFLS<=>BFLS.FUTURES ranking list for can be easily cheated.

I have been trying to figure that out... I need to talk to Nefario about that.  Right now, I'm selling them privately and transferring them manually, so I know who they are going to and how many shares there are.  Should I make the list public in the first post in this thread, or keep it private?

If you're searching these lines for a point, you've probably missed it.  There was never anything there in the first place.
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April 13, 2012, 12:02:17 AM
 #130

I guess to keep track of them the shares must be numbered? They should be in the GBLSE DB, so maybe Nefario can expose that?

As for public or private, dunno. Needs more thought. Tongue
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April 13, 2012, 12:02:36 AM
 #131

Quote
This seems a very good method. My only question is if you'll be able to verify how many shares are sold to each person in the public sale, so that when someone says to you "I just bought 100 shares, add me up to the list for conversion" you can really verify that, otherwise the BFLS<=>BFLS.FUTURES ranking list for can be easily cheated.

I have been trying to figure that out... I need to talk to Nefario about that.  Right now, I'm selling them privately and transferring them manually, so I know who they are going to and how many shares there are.  Should I make the list public in the first post in this thread, or keep it private?

I (as an investor) don't have an issue with it being public; it would likely stop many "When am I getting my BFLS/Where in this list am I/This is unfair" type questions.

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April 13, 2012, 12:40:22 AM
 #132

I (as an investor) don't have an issue with it being public; it would likely stop many "When am I getting my BFLS/Where in this list am I/This is unfair" type questions.
True, but it will also create a secondary market for "selling your position" on the list (you will attract investors wanting to play that market).

Needs more thought. Tongue
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April 13, 2012, 01:43:45 AM
 #133

I thought BFLS was great in its creation, but feel that it has majorly failed in execution.

I think that because of the way this IPO was structured, there are several 'layers' to it which had appeal to different people for different reasons. One (perhaps obvious) benefit seemed to be that it would be a great way to get one's hands on a Single much quicker than ordering from BFL directly. Many people here have been trying to bypass the legendary/infamous "4-6 week" waiting line from BFL by buying up other's people's places in line, and this IPO seemingly opened a door for just that.

I don't presume to speak for Inaba, but I don't believe his original intent was to provide a 'move to the front of the Single line' service. The IPO's intent was to offer hashrate backed by physical hardware, with the added bonus/twist of allowing investors to trade in shares for that hardware. This was something not seen before on GLBSE.

My own attraction to BFLS shares was simply the ROI and the hassle-free nature of offsite mining. I wasn't interested in trading shares for a Single. I have no (or rather, very little) available infrastructure or desire to support significant mining hardware. Running a PC and Single(s) is not noise-free and generates heat. Neither of which is very appealing to me. What *is* appealing is the potential to purchase the equivalent of a Single and earn mining income, without any of the associated hassles.

My original, and simplistic, calculation went something like this:
(1) Order 1 Single from BFL:
Single cost: $600
Shipping: $30
Annual power cost: $50
TOTAL: $680 (first year)

(2) Purchase 200 shares of BFLS:
Share cost: 200 * 0.7 = 140BTC = $680 (assuming 1BTC = $4.85)
Shipping: $0
Annual power cost: $0
TOTAL: $680 (first year)

It seemed a no-brainer to purchase some BFLS shares instead of ordering a Single from BFL. Not to mention the "4-6 week" delivery delay from BFL. Now, we know it wasn't possible to purchase 200 shares at the IPO price of 0.7BTC/share. The price was bid up significantly higher. But even at 0.8 (or whatever the top few hundred shares were going for), it was a good deal.

Consider that a BFLS share at 0.8BTC/4Mhash is the equivalent of 1BTC/5Mhash. Compare to a 5Mhash Gigamining share (gigavps's recent IPO) currently going for 1.2 to 1.25 BTC/share. So from solely an ROI point of view (the contract details of Gigamining and BFLS are very different), a BFLS share is arguably a significantly better value.

From all accounts I'd say the BFLS IPO has been very successful. Not only were all issued shares sold (and quickly), but the average selling price was significantly higher than the original 0.7 offering. If this were my IPO I'd be quite happy. My only regret would be that I didn't have more than 8Ghash (10 Singles) of hardware to back more than 2000 shares.

But Inaba is building up, so additional shares will come.

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April 13, 2012, 02:09:23 AM
 #134

Let me see if I understand. So BFLS.FUTURES will work almost as a bond to raise capital, but without any interest payment. So, you get the credit to buy equipment for free, and the buyer of the share/bond/asset/whatever has to wait on a line for the hardware to arrive and become functional. And he'll begin to be compensated for the invested capital only if he's granted it's place on the line for exchanging this asset one on one for another supposedly more valuable...

It's that it? Am I missing something? What if the minirigs won't ever arrive? What if it take forever? We all will be stuck with an useless electronic asset without any compensation for the waiting?

Doesn't sound like a good deal to me... Maybe if you include some dividend payments as a form of interest and some guarantee to buy back or exchange the assets at least partially if something goes wrong it could work, but otherwise I'm not seeing it...

It can be a good deal, but I think in the BFLS.FUTURES should have a definite date in the contract of when the BFLS.FUTURES contracts can be converted to BFLS shares.

Introducing constraints to the economy only serves to limit what can be economical.
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April 13, 2012, 02:35:26 AM
 #135

It can be a good deal, but I think in the BFLS.FUTURES should have a definite date in the contract of when the BFLS.FUTURES contracts can be converted to BFLS shares.

While that would be nice, asking Inaba to guarantee a date by which BFL will ship the products on order seems unfair; he has no control over that.

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April 13, 2012, 02:43:49 AM
 #136

It can be a good deal, but I think in the BFLS.FUTURES should have a definite date in the contract of when the BFLS.FUTURES contracts can be converted to BFLS shares.

While that would be nice, asking Inaba to guarantee a date by which BFL will ship the products on order seems unfair; he has no control over that.

Well he could say they are convertible upon arrival of the units ordered with that round of funding and in fact since he would know which shares went with what units then he could convert and notify the concerned parties once they do get there.
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April 13, 2012, 02:50:24 AM
 #137

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Well he could say they are convertible upon arrival of the units ordered with that round of funding and in fact since he would know which shares went with what units then he could convert and notify the concerned parties once they do get there.

This is my intent exactly, which is why I created the FUTURES shares, so the people who buy the FUTURES are automatically guaranteed the BFLS shares before any of the public get them.  I will be ordering hardware with all proceeds, I'm not keeping any funds back, it all gets "reinvested" into hardware almost immediately.

If you're searching these lines for a point, you've probably missed it.  There was never anything there in the first place.
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April 13, 2012, 02:56:36 AM
 #138

Quote
Well he could say they are convertible upon arrival of the units ordered with that round of funding and in fact since he would know which shares went with what units then he could convert and notify the concerned parties once they do get there.

This is my intent exactly, which is why I created the FUTURES shares, so the people who buy the FUTURES are automatically guaranteed the BFLS shares before any of the public get them.  I will be ordering hardware with all proceeds, I'm not keeping any funds back, it all gets "reinvested" into hardware almost immediately.


Yes I had thought that was your idea from the start good luck with the venture and hopefully them boys at BFL pick up the pace on their assembly/shipping.
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April 13, 2012, 03:00:13 AM
 #139

Yes I had thought that was your idea from the start good luck with the venture and hopefully them boys at BFL pick up the pace on their assembly/shipping.

So hope us all.

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April 13, 2012, 03:15:31 AM
 #140

What is the estimated delivery now?

Introducing constraints to the economy only serves to limit what can be economical.
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