[GLBSE] BFLS - Bitcoin Mining & Sales

[Vbs]

I think the number of shares required to exchange for hardware should be kept constant (e.g., 200 for each single, 6000 for a mini-rig, etc), so that you always know how much "hardware" you have. What would vary is the price of each share, based on BTC/$, equipment cost, etc. at the time they are issued.

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[Inaba]

I tend to agree, Vbs.  But how would I account for adding in the MiniRig since the hardware hasn't arrived as of yet?  If I issue, lets just say 6000 shares additional for hardware that isn't online, how does that sit with people? 

[Epoch]

I tend to agree, Vbs.  But how would I account for adding in the MiniRig since the hardware hasn't arrived as of yet?  If I issue, lets just say 6000 shares additional for hardware that isn't online, how does that sit with people? 

Doesn't sit well. It would be tying up investor $ for 4+ months without getting any significant return. It essentially dilutes the return of the 2000 'working' shares for a long (and unknown) period of time. There is also the risk that a MiniRig will not show up at all (or, if you prefer a less extreme scenario, be months delayed).

I don't mind buying some shares for non-existent hardware (the 10 Singles you have on order) because there is the understanding that they will be delivered very soon. But issuing/buying shares for hardware that is 3-4-5 months away doesn't sit well at all.

Does GLBSE not allow you to issue more shares under the same ticker symbol as more hardware shows up? That would be the ideal case. If not, an alternative would be to issue a separate IPO for the mini-rig (if and when it shows up) under a separate ticker.

[Vbs]

I tend to agree, Vbs.  But how would I account for adding in the MiniRig since the hardware hasn't arrived as of yet?  If I issue, lets just say 6000 shares additional for hardware that isn't online, how does that sit with people?  

I think GBLSE has support for sub-assets, you can release them as BFLS.SEPTEMBER2012 or BFLS.MINIRIG. There are already some entries like that on the shares list for BTCBOND, https://glbse.com/assets

@fees for issuing new shares for existing assets, that would be free of charge

That'd be nice, but probably Nefario's call.

No, mila is correct, there won't be any fees for issuing more shares.

What I will also do, specifically for bonds is allow new sub assets to be created for free (or very little).

So for example, an asset named BOND would be able to create a BOND.12.JAN, then BOND.12.FEB etc.
I'll probably even put a special interface just for bonds.

[Sukrim]

To make management even more clear/easy you could either:

* use subtickers per mining entity (BFLS.BFLsingle1, BFLS.BFLsingle2, BFLS.BFLsingle3...) and hand out 200 (or how many ever) shares there individually
* release new shares as you buy new hardware in your main ticker (start with 1000 shares, buy a new machine and release 200 more shares, bringing them to a total of 1200)

The first method might be more tedious to pay out (I don't know the new interface to GLBSE in detail), the second one might be a bit less obvious to shareholders.
With the first method you could even pre-release shares (or raise money) for hardware you don't yet own on a case by case way ("I'll buy machine X as soon as 80% of these shares are sold"), with the second method you won't have so much micromanagement on GLBSE side and could focus more on mining + making your shareholders some more coins.

[tgmarks]

Inaba, are you thinking of changing things before tomorrow's ipo? If so speak up so I and other can decide if we still want our open orders out there.

[Inaba]

tgmarks - that's what I'm trying to figure out right now. 

Doesn't sit well. It would be tying up investor $ for 4+ months without getting any significant return. It essentially dilutes the return of the 2000 'working' shares for a long (and unknown) period of time. There is also the risk that a MiniRig will not show up at all (or, if you prefer a less extreme scenario, be months delayed).

I don't mind buying some shares for non-existent hardware (the 10 Singles you have on order) because there is the understanding that they will be delivered very soon. But issuing/buying shares for hardware that is 3-4-5 months away doesn't sit well at all.

Does GLBSE not allow you to issue more shares under the same ticker symbol as more hardware shows up? That would be the ideal case. If not, an alternative would be to issue a separate IPO for the mini-rig (if and when it shows up) under a separate ticker.

This was my thoughts as well.  I don't think there's any way to issue sub-assets, or if there is, it's non-obvious on how to do it. 

I think for now, I will run the IPO as is and see how it works out.  I will create another offering for the MiniRigs that will come with the understanding that the hardware is not in operation yet.

There will be one change to the IPO: There is a 45 day moratorium to exchanging shares after the IPO to prevent people from just buying shares and immediately exchanging them for Singles.  This both gives people a chance to get shares and/or trade them, as well as giving me time to get a rolling rotation of singles going.  If I can get a cycle going faster than 45 days, I'll allow exchanges before that.

With the shares being released tomorrow, please understand that I do not have possession of the hardware yet. I expected it to be in by now and I am expecting it any day now, so no dividends will be paid until the hardware is in my possession, and barring any unforeseen circumstances getting it running (thought I can't think what that would be). 

[Epoch]

* use subtickers per mining entity (BFLS.BFLsingle1, BFLS.BFLsingle2, BFLS.BFLsingle3...) and hand out 200 (or how many ever) shares there individually

Why go through the hassle of all this complexity? Do you really care that you own 3 shares in BFLS.BFLsingle1, 5 shares in BFLS.BFLsingle3, and 2 shares in BFLS.BFLsingle7? Or if you want to trade a share, do you really want to be forced to choose under which subticker to place an ask/bid? I'm not sure how GLBSE works, but I'm assuming there would be 10x more liquidity in an offering with 2000 outstanding shares rather than a subticker with only 200.

Isn't it much simpler to aggregate all like-resources (i.e. 10 Singles) into a single ticker of 2000 shares? Each share is identical. There is no concept of 'what Single this share belongs to', and investors don't care. They just care that they own X number of shares yielding Y income. A simple aggregate of 2000 shares for 10 Singles is simpler to buy, sell, understand, and manage.

[Sukrim]

Yes, there could be also some middle ground to the 2 extremes I presented, something like "BFLS.Singles" with X*200 shares and "BFLS.SomeotherFPGA/ASIC" with Y*? shares later. This might make it easier to sell shares with a different "hash rate" in the future.

[tgmarks]

Inaba, I appreciate your direct response and clarity. I hope and expect that this venture will do quite well.

[Vbs]

Yes, there could be also some middle ground to the 2 extremes I presented, something like "BFLS.Singles" with X*200 shares and "BFLS.SomeotherFPGA/ASIC" with Y*? shares later. This might make it easier to sell shares with a different "hash rate" in the future.

No need to complicate stuff, all shares should be under the one main "BFLS" asset.

GLBSE knows base asset names. E.g. I have GLBSE, then only I'm allowed to create GLBSE.SUB

When there is motivation for the acquisition of new equipment, a new sub-asset can be created if needed (as in the case of Mini-rigs, where the ETA is unknown), for example, "BFLS.MINIRIG", on which the shares will convert into the main asset "BFLS" when it arrives. This works similarly to making 2 different IPO's and merging them after, but in an easier way to implement.

[Nefario]

To create a sub asset you just create the asset as normal, the only difference is the assets name.

So lets say your base asset is GLBSE and you want to create a sub asset called BOND
you would name the new asset GLBSE.BOND

Only the owner of GLBSE could create GLBSE.BOND

[Inaba]

Can those assets be folded back into the main one at some point or are they a totally separate entity and they just happen to share a common portion of a name?  And is there a $40 fee per subasset as well?

[Vbs]

Could you plz explain further how sub-assets are implemented? Can the owner merge them with the main asset when he chooses to?

[rdponticelli]

I think that the easiest and cleaner way would be managing everything under the same asset. When you need to get new hardware, you just release new shares at market price, setting the price per share of the hardware accordingly. That way you don't dissolve the existing shares and you get the capital you need for the hardware. Other companies manage this kind of things in this way. Maybe you also can use motions to know what existing shareholders think about the proposals...

[Vbs]

When you need to get new hardware, you just release new shares at market price, setting the price per share of the hardware accordingly. That way you don't dissolve the existing shares and you get the capital you need for the hardware.

You can't do that, because you are diluting the worth of the previous investors' shares until the new hardware arrives. That's why you need a self-contained entity (a "sub-asset") until the new hardware arrives. Then you can merge everything together.

[jamesg]

Inaba,

At what time is this thing being released?

Thanks,
gigavps

[rdponticelli]

When you need to get new hardware, you just release new shares at market price, setting the price per share of the hardware accordingly. That way you don't dissolve the existing shares and you get the capital you need for the hardware.

You can't do that, because you are diluting the worth of the previous investors' shares until the new hardware arrives. That's why you need a self-contained entity (a "sub-asset") until the new hardware arrives. Then you can merge everything together.

You're right. As a long term investor I wouldn't care too much about a few dividend payments a little diluted. I know it would be compensated in the long term. But I understand that it would be an issue for some people. Yes, a "sub-asset" which can be merged would be the ideal solution, but I don't think glbse can do that by now. Maybe Nefario can implement something like that...

[Nefario]

Can those assets be folded back into the main one at some point or are they a totally separate entity and they just happen to share a common portion of a name?  And is there a $40 fee per subasset as well?

Sub assets are totally separate entities and share only part of the name.

They cannot be rolled back into the main asset.

Creation fees are still the same.

[BinaryMage]

You're right. As a long term investor I wouldn't care too much about a few dividend payments a little diluted. I know it would be compensated in the long term. But I understand that it would be an issue for some people. Yes, a "sub-asset" which can be merged would be the ideal solution, but I don't think glbse can do that by now. Maybe Nefario can implement something like that...

Since, as Nefario stated, GLBSE does not support that function, seems we need another approach.

I can think of two options off the top of my head:
(1) Inaba pre-sells shares before they are released to interested parties (larger volumes only). This gives him sufficient capital to buy the hardware and he then issues the shares once the hardware arrives, transferring shares to those who pre-bought accordingly.
(2) Inaba issues a seperate, temporary stock each time he wishes to order more hardware. A share of this asset "guarantees" the buyer a share of BFLS upon receipt of the hardware by Inaba. He raises enough money, purchases the hardware, issues new BFLS shares, transfers shares to those who bought the temporary stock, and finally deletes the temporary stock. Crude, and I don't know what Nefario would think of this, but AFAIK it should work.