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Author Topic: Gigamining / Teramining  (Read 215418 times)
tmfp143
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September 08, 2012, 04:20:41 PM
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DeaDTerra
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September 08, 2012, 04:30:59 PM
 #762

Hello!
I manage the BLUECHIP mutual fund on GLBSE. The fund owns 40 shares of GIGAMINING. What is the plan to stem the drastic loss that the share price is taking? I recommend buying back shares. I pray that the plan is not to let the share price keep dropping until it reaches 0. Are there any updates on the ASIC upgrade?

If the price of my stock were dropping this fast, I would be more proactive. I would give my investors more frequent updates to build confidence. I am kind of stuck at the moment. I don't want to dump the shares at a loss, but the lack of information makes it hard to make a decision. I recommend addressing this issue, and doing something to restore investor confidence, if possible. I read the earlier comments about not being willing to discuss personal finances. In my opinion, the bottom line is this: if your company is on the verge of failing, there can be no items that are not up for discussion unless you want the enterprise to fail. If GIGAMINING truly is a venerable enterprise (which I thought it was, that's why I invested in it) then DO SOMETHING. SAY SOMETHING. Don't just sit there and let it drop to zero. Angry
It seems like you have not done your reading home work.
Gigamining is not a company it's a bond Smiley
GigaVPS has no obligation to control the price nor do anything about the price falling, this is natural due to the increase in difficulty.
//DeaDTerra
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September 08, 2012, 05:12:39 PM
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Hello!
I manage the BLUECHIP mutual fund on GLBSE. The fund owns 40 shares of GIGAMINING. What is the plan to stem the drastic loss that the share price is taking? I recommend buying back shares. I pray that the plan is not to let the share price keep dropping until it reaches 0. Are there any updates on the ASIC upgrade?

If the price of my stock were dropping this fast, I would be more proactive. I would give my investors more frequent updates to build confidence. I am kind of stuck at the moment. I don't want to dump the shares at a loss, but the lack of information makes it hard to make a decision. I recommend addressing this issue, and doing something to restore investor confidence, if possible. I read the earlier comments about not being willing to discuss personal finances. In my opinion, the bottom line is this: if your company is on the verge of failing, there can be no items that are not up for discussion unless you want the enterprise to fail. If GIGAMINING truly is a venerable enterprise (which I thought it was, that's why I invested in it) then DO SOMETHING. SAY SOMETHING. Don't just sit there and let it drop to zero. Angry

Did you miss https://bitcointalk.org/index.php?topic=98517.0 ?
If you like to make a bet, that difficulty is going to drop and stay down, buy fixed Mh/s BBN's (Bitcoin Burning Notes aka mining "bonds").
If you think this bet is stupid, do not buy BBN's

While reading what I wrote, use the most friendliest and relaxing voice in your head.
BTW, Things in BTC bubble universes are getting ugly....
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September 08, 2012, 05:38:43 PM
 #764

The bond was always expected to drop in value and eventually approach zero at difficulty rose - just not this fast.  The expectation when I bought the bonds was that the combination of BTC appreciation plus the dividends would outpace the drop in value = profit.  However, with everything that has happened the actual devaluation has been more and faster than I predicted/expected.  Sucks to be me.

Our family was terrorized by Homeland Security.  Read all about it here:  http://www.jmwagner.com/ and http://www.burtw.com/  Any donations to help us recover from the $300,000 in legal fees and forced donations to the Federal Asset Forfeiture slush fund are greatly appreciated!
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September 08, 2012, 05:41:15 PM
 #765

Hello!
I manage the BLUECHIP mutual fund on GLBSE. The fund owns 40 shares of GIGAMINING. What is the plan to stem the drastic loss that the share price is taking? I recommend buying back shares. I pray that the plan is not to let the share price keep dropping until it reaches 0. Are there any updates on the ASIC upgrade?

If the price of my stock were dropping this fast, I would be more proactive. I would give my investors more frequent updates to build confidence. I am kind of stuck at the moment. I don't want to dump the shares at a loss, but the lack of information makes it hard to make a decision. I recommend addressing this issue, and doing something to restore investor confidence, if possible. I read the earlier comments about not being willing to discuss personal finances. In my opinion, the bottom line is this: if your company is on the verge of failing, there can be no items that are not up for discussion unless you want the enterprise to fail. If GIGAMINING truly is a venerable enterprise (which I thought it was, that's why I invested in it) then DO SOMETHING. SAY SOMETHING. Don't just sit there and let it drop to zero. Angry
It seems like you have not done your reading home work.
Gigamining is not a company it's a bond Smiley
GigaVPS has no obligation to control the price nor do anything about the price falling, this is natural due to the increase in difficulty.
//DeaDTerra

Hi tmfp143,

DeaDTerra is correct that gigamining is a bond and not a share in a company. EskimoBob is also correct in his assessment that mining bonds are long difficulty and short on BTC price appreciation.

As for you request for me to intervene in the free market setting the price of Gigamining, there is not much I would be able to do.

I will faithfully continue to fulfill the terms of the contract.

Best,
gigavps
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September 08, 2012, 06:00:51 PM
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September 08, 2012, 06:02:42 PM
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September 08, 2012, 06:24:20 PM
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September 08, 2012, 06:25:23 PM
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September 08, 2012, 06:50:46 PM
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September 08, 2012, 06:53:53 PM
 #771

Okay, I found this and it helped me to better understand the change in difficulty over time. I understand that difficulty is a function of how many people are mining at a given time, if Bitcoin prices go up, more people want to make a profit, so more people mine. The curve here looks like it started out linearly but has started increasing at a great than linear rate starting around June of 2012.
http://bitcoindifficulty.com/

However, here is the thing that I don't understand, Bitcoin prices have also increased more than linearly during that time, so in theory, a mining operation should become MORE profitable. Wouldn't that make it a more desirable investment? Shouldn't the share pirce go up? Okay, I undertand that difficulty has gone up a lot since June 12, so there is a lot more competition, but I still can't see asny mathematical reason for the share price of any security to go down exponentially when BTC price is going up. If this were the true reason, why hasn't every Mining bond gone down exponentially in price?

I know that I may not get any responses to this. I am not trying to peeve any body off, I would just like honest answers so that I can make informed decisions.
Thanks again!
BLUECHIP

Hi tmfp143,

You are purchasing a fixed amount of Mh/s with each gigamining bond. Mining equipment is priced and purchased in USD. So when the value of bitcoin goes up, a single bitcoin can purchase more mining power in USD. This means mining bonds are effectively short BTC price appreciation.

Best,
gigavps
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September 08, 2012, 07:03:51 PM
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September 08, 2012, 07:05:52 PM
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Dear Gigavpis,
Thank you so much for answering my questions so patiently. You have DEFINITELY earned a lot of my respect. Also, thank you for the info. I have to go do some research on "shorting BTC price appreciation". When I invested in traditonal stocks, I always avoiding the whole shorting stocks concept because it seemed far too risky. But thank you for taking the time to answer my questions so carefully. I'm going to do some research. I probably won't have any more question. When I understand the answer in your last response, I think that I'll have the whole thing. Cheers! Smiley
BLUECHIP

You are quite welcome. I personally like asking questions and usually ask a lot of them when I am learning, so if you have more and can't find an answer, don't hesitate to ask.
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September 08, 2012, 07:15:58 PM
 #774

Okay, I understand that difficulty has gone up a lot since June 12, so there is a lot more competition, but I still can't see any mathematical reason for the share price of any security to go down exponentially when BTC price is going up.

Because you bought a fixed MH bond, aka a turd. As others pointed out, your "dividend" is linked only to difficulty and block reward. Difficulty was always expected to go up, perhaps  in the past months it went up faster than most expected, but with ASICs approaching, you havent seen anything yet. I fully expect difficulty to go up >10x in the next 6 months and possibly as much as 100x in the next year.  On top of that, blockreward will halve in december, and thus so will your dividends. Well, it will be half whatever is left by then, because by december ASICs will have started mining. Gigamining offers you a free upgrade when they get their asics, but a 4x increase (IIRC?)  will do precious little to offset the difficulty explosion you are about to see.

TL'DR, these mining bonds have been overbought since day one by people who didnt understand what they were buying. Im pretty sure they are still grossly overpriced today, so anyone who believes otherwise, lend me your bond, so I can short it. I will give you a nice bonus on your dividends if you let me borrow it for 3-6 months. PM me for details.

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September 08, 2012, 07:22:11 PM
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September 08, 2012, 07:29:46 PM
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September 08, 2012, 07:30:03 PM
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So when the value of bitcoin goes up, a single bitcoin can purchase more mining power in USD. This means mining bonds are effectively short BTC price appreciation.

But since fixed Mhs/s mining bonds tend to lose value even against USD (due to difficulty increase etc.), there is nothing they can appreciate against, so they are just a waste of money. (This said from someone who owns several mining bonds from last year and just realized that is better to keep your BTC in a cold wallet and be happy).
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September 08, 2012, 07:33:23 PM
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Gigamining offers you a free upgrade when they get their asics, but a 4x increase (IIRC?)  will do precious little to offset the difficulty explosion you are about to see.

Hi P4man,

Are you recommending that I shouldn't even offer an upgrade?

Thanks,
gigavps
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September 08, 2012, 07:36:09 PM
 #779

Okay Gigavps, I know that you are probably very busy, but feel free to respond to this if you have time anytime in the next few days. i am trying to wrap my head around your response. The first thing that I did was to read the Wikipedia article on short selling. Please let me know if I am off base in any of my understand.

Quote
This means mining bonds are effectively short BTC price appreciation.

Quote
From Wikipedia: In finance, short selling (also known as shorting or going short) is the practice of selling borrowed securities or other financial instruments, with the intention of subsequently repurchasing them ("covering") at a lower price.

So if my understanding of the two quotes above is correct, this what you are saying: My goal with Gigamining should be to make a short term profit by betting that I yield more dividends than the price drop in a fixed (short) period of time. I could choose to repeast the process over and over again. So I buy 100 shares at 1BTC /share, make the dividend, sell the 100 shares at 0.95, buy them back again at 0.9, repeat the procces over and over again. Is this basically correct?

It seems to me that the other possibility is to look for a perpetually income by reinvesting all dividends in Gigamining without ever selling hoping that the continued accumulation of shares eventually means a rapid accumulation of a lot of shares that are worth very little, but I will then be receiving a very large weekly dividend payout because the dividend yield will have gone done much more slowly than the share price. Is this a correct analysis?

Hi tmfp143,

Basically, when the BTC/USD price increases, it would be mean you have more buying power in USD things like mining equipment. If your BTC have more purchasing power, it should take less of them to buy 5Mh/s.

Best,
gigavps
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September 08, 2012, 07:37:09 PM
 #780

Hello!
I manage the BLUECHIP mutual fund on GLBSE. The fund owns 40 shares of GIGAMINING. What is the plan to stem the drastic loss that the share price is taking? I recommend buying back shares. I pray that the plan is not to let the share price keep dropping until it reaches 0. Are there any updates on the ASIC upgrade?

If the price of my stock were dropping this fast, I would be more proactive. I would give my investors more frequent updates to build confidence. I am kind of stuck at the moment. I don't want to dump the shares at a loss, but the lack of information makes it hard to make a decision. I recommend addressing this issue, and doing something to restore investor confidence, if possible. I read the earlier comments about not being willing to discuss personal finances. In my opinion, the bottom line is this: if your company is on the verge of failing, there can be no items that are not up for discussion unless you want the enterprise to fail. If GIGAMINING truly is a venerable enterprise (which I thought it was, that's why I invested in it) then DO SOMETHING. SAY SOMETHING. Don't just sit there and let it drop to zero. Angry

A lot of the responses already cover most of your concerns. When I read your post I sensed a level of panic, and I would like to add two things to be mindful of:

1. A sudden drop in share price is not definitively caused by disruptions to the business process. If a share price falls, the underlying backing will not just shrivel up and die. However, if an underlying backing hits trouble, it is quite likely that the share price will act accordingly.

2. With #1 said; If you subscribe to the ideas of value investing - think of a sudden drop in share price as an 'on sale' opportunity. If you bought a security @ .9 and it falls to .45 and the fundamentals are approximately the same, then the security should appear much more appealing. Many savvy investors will wait for such market occurrences and will gobble up as many cheap shares as they can.

Consider this quote: "Price is what you pay, value is what you get." -Warren Buffett

If you appreciate what I have said, I encourage you and anyone looking to gain an immense amount of knowledge about investing to acquire a copy of "Security Analysis." It was written by Ben Graham in 1934 and the book is still entirely applicable to the markets of today's modern society. The most recent version has a forward by Warren Buffett (one of Ben Grahams students) and commentary by some well respected minds within the economics community. I also recommend "The Intelligent Investor" which was written by Mr. Graham and covers much of the same material but in a less detailed and more easily understandable fashion. Even without any formal schooling in economics, the writings of Ben Graham can take someone a very long way.

*It should be noted, as gigavps said, that GIGAMINING is a bond for a fixed rate of hashing power. With a likely continual increase in difficulty, the ROI will likely decay accordingly. There is a long list of variables to consider before being able to determine what kind of value a share represents. Much of Graham's focus in his writings was on commons stocks and not bonds, as they are two different animals entirely.
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