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Author Topic: [closed] Zeta Bitcoin Mining  (Read 12066 times)
zefir
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August 26, 2012, 03:34:24 PM
 #41

Update: exchange offer for physical hashing power or ASIC securities


Dear Investors,

With the latest difficulty increase of more than 11%, the earnings per week came down to 0.98% of IPO price. Including the compound earnings of ~22% since the IPO, the time frame to recover the investment got fairly long. If ASICs show up by the end of this year or early 2013, we might even end up with not being able to earn back at all.

This would be the first time that I fail to recover my investment in mining rig, and it makes me really sad that it happened with investors' money. Contractually wise I am not obligated to guarantee a ROI at all - I basically passed a portion of my risk from acquiring mining rig to you, hoping for a quick recovery and a long term profitability. We took a joined risk, and it did not turned out as expected. Please note that my personal involvement in this venture is more than 75%, i.e. I collected less than 10k$ through the IPO, but paid 40k$+ for the mining rig that operates ZETA-MINING. So, while I could refer to the contract, let the bond price deplete continuously, and remain perfectly compliant to the contract, I feel a moral commitment to not let those down that are supporting me.

Last week I already stated that I will pay at least the break-even price denominated in fiat (which for this week is 0.108BTC) for outstanding shares. I plan to keep this offer as long as possible, at the same time I admit that currently I have not enough liquidity to buy back all outstanding shares at once. I considered a variety of different options I could offer to investors and ended up with the following two that address the core criticism towards mining bonds in general and the main mid-term risk existing mining ventures have in common:

1) Bond holders are offered a trade option for physical hashing power. Each share qualifies for the break-even ratio of 1MH/s. Example: after dividend payments for week 34.2012, the break-even price of the bonds issued is 0.23BTC, which is 78% of the IPO price. Therefore, each outstanding share can be traded for 780kH/s of physical hashing power. A CM1 Quad-FPGA currently delivers 840MH/s, which during this week allows you to trade 1077 shares for one CM1 board. Bond holder is paying shipping and taxes. This offer will be always valid, the exchange ratio will be updated each week in the related spreadsheet.

2) At any time before October 2012, each ZETA-MINING share can be exchanged for 1.5 ASICMINER shares. If you believe that ASICs will kill GPU and FPGA-mining and have some confidence in friedcat's venture, this is your chance to participate. If the plan succeeds, each ASICMINER share will represent 30MH/s, allowing you to upgrade 1MH/s physical FPGA-based hashing power to 45MH/s assumed ASIC-based hashing power. I am in no way promoting ASICMINER or claiming the venture will be successful at all. The bond holder willing to swap needs to do so based on his own risk analyses and is fully responsible for the outcome.

If you are interested in one of these options, please contact me via PM. As said above, contractually I am not obligated to offer such an exchange program. I do it solely as a goodwill to thank you for the support I received so far. This implies that I reserve the right to cancel the offer on extreme and / or unforeseen developments.



Thanks for your continuous support and have a nice week,
Zefir

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August 28, 2012, 06:34:09 PM
 #42

Update: exchange offer for physical hashing power or ASIC securities

Thanks for the offer, I really appreciate it. Issuers of other securities should take heed.

I definitely don't want physical hashing power (hey, I buy mining bonds to avoid the noise, heat and hassle) but I will probably take you up on the ASICMINER offer. First need to read through that mother of all threads, though. And collect at least two more dividends. :-) I'll PM you in September.
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August 28, 2012, 07:06:11 PM
 #43

Update: exchange offer for physical hashing power or ASIC securities

Thanks for the offer, I really appreciate it. Issuers of other securities should take heed.

I definitely don't want physical hashing power (hey, I buy mining bonds to avoid the noise, heat and hassle) but I will probably take you up on the ASICMINER offer. First need to read through that mother of all threads, though. And collect at least two more dividends. :-) I'll PM you in September.

Hi Elraffa,

thanks for your support. Most other mining bonds already provide some sort of 'ASIC ubgrade path' based on BFL's product upgrade offer. My intention is not to offer such a path (hence the limited offer for ASICMINER exchange), but to allow those who see FPGA mining threatened by ASICs an exit opportunity. It still might turn out to be an exchange of the one bird in the hand for the two in the bush, but at least you have a choice.

Feel free to PM me if you decide to.


Cheers, Zefir

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September 08, 2012, 10:33:04 AM
 #44

Update: successful ASICMINER swaps & recall of bonds


Dear Investors,

I had an enormous feedback on the exchange offers for ZETA-MINING bods, with interests concentrated to swap for ASICMINER shares.

Several investors exercised the offer and I ended up with lots of ZETA-MINING bonds that I currently can not sell for a reasonable price. Now that Pirate went bust and caused most of the high-yield investment opportunities at GLBSE to cease operation, investors might soon realize that 1-1.5% weekly ROI is not too bad - and mining bonds are far from being 'turds'. At current difficulty 1% weekly would match a 1MH/bond price of 0.26BTC, which is around twice as high as mining-bonds are currently rated.

When the market is willing to correct the valuation of mining-bonds, I am open to sell more of mine to finance expansion. For now, I decided to do the opposite and recalled 5000 bonds. With the 1000 I left unsold in the asset account to provide some liquidity, there are 4000 bonds left outstanding. This matches exactly 10% of the physical hashing power I currently have to back them.


As stated in the exchange offer, I am accepting swaps for ASICMINER shares at a 1/1.5 ratio until end of September. Also I need to point to potential takers again that, while it seems a profitable move right now, remember that you are swapping a low-risk low-income investment for a high-risk high-income venture. You might multiply your coins within some weeks, but other ASIC manufacturers popping up might void ASICMINER's plans and profitability forecasts (that's nothing new, friedcat is openly pointing to those risks). Though it should be pretty obvious, I state it here for completeness: the offered swap is a one-way process, i.e. I will not swap back at no time.


Have a nice and successful week,
Zefir

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September 08, 2012, 11:21:54 AM
 #45

If you got in at IPO, so far you have lost 9% (if you sold today, 4 shares @ 0.206206).
You will keep losing until the direction of difficulty is reversed and diff. gets adjusted dramatically.
Code:
ZETA-MINING [1@0.295BTC]
Div paid: 0.06224921 BTC.
Last price: 0.206206 BTC. (4 shares!)
Capital gain: -0.088794 BTC.
Total: -0.02654479 BTC. (-9%)
Right. If you plan to sell, you have to look at the bid wall (or lack of it) and calculate, what the market can take before dropping to laughable price level. Yes, Mh/s has a fair price too Smiley  As of today, your minimum loss will be:
Quote
1   0.12700001
2   0.127
3   0.126
31   0.1252

(for 34 shares)
(0.1252-0.295)+0.06224921= -0,10755079 per share. If you paid 0.295 for the share, you have lost close to 36.4% of your investment.

I have no idea what do yo mean by:
... investors might soon realize that 1-1.5% weekly ROI is not too bad - and mining bonds are far from being 'turds'.

If you still do not understand, why perpetual Mh/s mining bonds BBN's (Bitcoin Burning Notes) are bad investment in current market conditions, go and read: Weekly loss of N% guaranteed - Enjoy perpetual loss with fixed Mh/s mining turds

Cheers.

PS! ASIC upgrade is just a temporary fix if difficulty keeps going up and block reward is halved.

While reading what I wrote, use the most friendliest and relaxing voice in your head.
BTW, Things in BTC bubble universes are getting ugly....
zefir
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September 08, 2012, 01:15:09 PM
 #46

Hi EskimoBob,

I cared not to mention you personally as the inventor of the 'turd' naming for mining-bonds and one of the few very enthusiastic detractor of those, but now since you step ahead and repeated your claims here (like you already did in almost any mining related GLBSE thread), let me please answer shortly.

Yes, I follow your argumentation and also admitted somewhere in this thread that the initial idea to make back the investment within 6-8 months is not achievable any more - it will maybe take 2-3 years. The result is a direct outcome of the broader availability of FPGA based mining rig and the anticipated arrival of ASICs that increased the difficulty in that short time, and put a pressure at existing mining securities, respectively. Now that's the inherent risk for investing in mining in general and in buying mining equipment in particular.

What I do not like in your argumentation are two factors: a) you are calling everyone who is invested in mining more or less idiots for not being able to predict the development that led to the current situation, and b) you are implying that mining is non economical in general. While the former is just impolite towards the folks around that are engaged and believe in Bitcoin (maybe even more than you do), the later is plain wrong and contradicted by the pure existence of Bitcoin.

I claim that investing in mining-bonds is an equivalent of investing in mining rig. When I did my IPO, the price for 1MH/s was about 1.5 times the cost for the mining boards alone. Now take that your boards are not running at 100%PPS (in retrospect, mine are at around 85%) and additional infrastructural investment required, let's assume for a moment the factor is a fair one. If you claim mining-bonds are a guaranteed loss, you equivalently state that buying mining equipment also is. Now, if that was the case, who do you think would buy mining rig to keep Bitcoin alive? Those generous people that have enough spare money to throw it away for just being nice and support the idea? Or those that believe difficulty / price ratio will develop in a way that mining remains profitable in the long run?

I believe in the second. If you personally don't, then you maybe even do not believe in the long term success of Bitcoin as a whole. Do you?


Cheers,
Zefir

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September 08, 2012, 04:19:52 PM
 #47

Hi EskimoBob,

I cared not to mention you personally as the inventor of the 'turd' naming for mining-bonds and one of the few very enthusiastic detractor of those, but now since you step ahead and repeated your claims here (like you already did in almost any mining related GLBSE thread), let me please answer shortly.

Yes, I follow your argumentation and also admitted somewhere in this thread that the initial idea to make back the investment within 6-8 months is not achievable any more - it will maybe take 2-3 years. The result is a direct outcome of the broader availability of FPGA based mining rig and the anticipated arrival of ASICs that increased the difficulty in that short time, and put a pressure at existing mining securities, respectively. Now that's the inherent risk for investing in mining in general and in buying mining equipment in particular.

What I do not like in your argumentation are two factors: a) you are calling everyone who is invested in mining more or less idiots for not being able to predict the development that led to the current situation, and b) you are implying that mining is non economical in general. While the former is just impolite towards the folks around that are engaged and believe in Bitcoin (maybe even more than you do), the later is plain wrong and contradicted by the pure existence of Bitcoin.

I claim that investing in mining-bonds is an equivalent of investing in mining rig. When I did my IPO, the price for 1MH/s was about 1.5 times the cost for the mining boards alone. Now take that your boards are not running at 100%PPS (in retrospect, mine are at around 85%) and additional infrastructural investment required, let's assume for a moment the factor is a fair one. If you claim mining-bonds are a guaranteed loss, you equivalently state that buying mining equipment also is. Now, if that was the case, who do you think would buy mining rig to keep Bitcoin alive? Those generous people that have enough spare money to throw it away for just being nice and support the idea? Or those that believe difficulty / price ratio will develop in a way that mining remains profitable in the long run?

I believe in the second. If you personally don't, then you maybe even do not believe in the long term success of Bitcoin as a whole. Do you?

Cheers,
Zefir

Hi Zefir. At least you are honest about it and not like some other "respected" (Respected for what? Taking your BTC?) characters.

Quote
a) you are calling everyone who is invested in mining more or less idiots

No, I am not.

Quote
b) you are implying that mining is non economical in general.

I agree, that good ROI days are over because of the absurdly high difficulty. Is mining economically viable has nothing to do with what we think.
If simple math show you that it makes a financial sense, please go for it. Mining is like buying coin but paying for it via equipment and cost of power, while taking a technology and "difficulty" risk. If you think that BTC price will rise in the future, you are probably better off buying the coin from the market and holding it.

Buyer of perpetual BBN bets that difficulty will drop or stays at the current level so he can not only earn the income form coupon payments but also preserve the principal. Reality is that at the moment investors loose the principal faster than income from coupons can cover it.

If you like to make a bet, that difficulty drops, buy perpetual fixed Mh/s thingis Wink
If you think this bet is stupid, hold on to your coin.

Cheers.

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, 06:17:49 PM
 #48

[...]

Hi Zefir. At least you are honest about it and not like some other "respected" (Respected for what? Taking your BTC?) characters.
This implies that others were just taking coins without delivering -- and that's really an unfair and false claim. I do not know of any single issuer of mining bonds that took money and ran - all of them are still paying coupons regularly. In contrast to them, look at all those shiny constructs that tried to squeeze out more than is essentially doable (which in fact is the current inflation rate of 50.4k fresh coins per week / 9.89M coins total = 0.5% weekly) - bust, illiquid or in the process of ceasing down.
Quote
Quote
a) you are calling everyone who is invested in mining more or less idiots

No, I am not.
Seriously, you do not see how insulting your posts are to people involved? Please, do read them again and look at it from a bond-issuer or holder perspective. I lost tons of fiat money and countless time to set everything up and keep it running to keep my promises. And then you come along and call what I am working so hard for (as others do) 'turd'? This is where I am putting every single minute of my time into, and reading your posts everywhere calling this a 'pile of shit' is, well, more than disrespectful.

Quote
Quote
b) you are implying that mining is non economical in general.

I agree, that good ROI days are over because of the absurdly high difficulty. Is mining economically viable has nothing to do with what we think.
If simple math show you that it makes a financial sense, please go for it. Mining is like buying coin but paying for it via equipment and cost of power, while taking a technology and "difficulty" risk. If you think that BTC price will rise in the future, you are probably better off buying the coin from the market and holding it.

Buyer of perpetual BBN bets that difficulty will drop or stays at the current level so he can not only earn the income form coupon payments but also preserve the principal. Reality is that at the moment investors loose the principal faster than income from coupons can cover it.

If you like to make a bet, that difficulty drops, buy perpetual fixed Mh/s thingis Wink
If you think this bet is stupid, hold on to your coin.

Cheers.

You did not address the essence of my claim, which is: do you believe that mining in general is economically profitable? If it is, mining bonds can't be your 'guaranteed loss turds', if it is not, then: Goodbye Bitcoin.


Cheers,
Zefir

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September 09, 2012, 02:06:55 PM
 #49

Can anyone tell in VERY SIMPLE ENGLISH what is going on?
Also what options is given to bond holders?

Please use simple English.
All in this Bitcoin world are not professional CA's to understand every word & everything which is in too much technological terms.
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September 09, 2012, 05:24:02 PM
 #50

Can anyone tell in VERY SIMPLE ENGLISH what is going on?
Also what options is given to bond holders?

Please use simple English.
All in this Bitcoin world are not professional CA's to understand every word & everything which is in too much technological terms.

Hi dishwara,

could you specifically ask what you do not understand? If it is about mining and bonds in general, you'll need to study the forums by yourself.

If it is related to ZETA-MINING, please ask what you need better explained. You might prefer to do it via PM initially and post it after we clarified the issues interactively.

The bond is still a perpetual mining bond with each share paying you weekly the equivalent mining income of 1MH/s 100%PPS. I recently posted offers to my investors to disprove some common accusations towards fixed MH/s mining bonds recently flowing through the forum:

1) claim: mining bonds are bad, mining companies are good, since you hold a portion of the mining rig
If you prefer mining by yourself, I'm fine: you transfer 800 bonds back to me, and I send you a CM1 board hashing at 800MH/s.

2) claim: ASICs will make existing mining bonds worthless
If you believe in ASICs, transfer me X ZETA-MINING bonds, and I'll send you 1.5X ASICMINER shares back. Offer valid until end of September 2012.

3) claim: mining bond issuers pass the risk to the holders completely and keep the rewards for themselves
At any time I will buy back ZETA-MINING bonds for the break-even price denominated in fiat (see post above). For this week 37.2012 this is at 0.102, a bid wall for 1k bonds is placed. If that wall is ever cleared, do not sell below that price at any time. Instead PM me and I'll buy the bonds for this price within 72h.


That is basically what I am adding as voluntary offer on top of the contract. If you want to use any of those, just PM me.


Does this help to clarify?


Cheers,
Zefir

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September 09, 2012, 06:07:43 PM
 #51


You did not address the essence of my claim, which is: do you believe that mining in general is economically profitable? If it is, mining bonds can't be your 'guaranteed loss turds', if it is not, then: Goodbye Bitcoin.
Cheers,
Zefir

I think this has been hashed to death in other forums (see Mining etc). It all depends what you pay for electricity, what equipment you have etc.
In US probably, in some or most parts of EU probably not. There is no one definitive answer to your question. YOU have to to the math and find out.

Read up on bonds in general and you will understand, why I do not like perpetual debt where issuer has 0 obligation to buy it back and no fixed coupon to guarantee fixed income (yes, you as a issuer have to eat this risk).

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 09, 2012, 07:12:25 PM
 #52


1) claim: mining bonds are bad, mining companies are good, since you hold a portion of the mining rig
If you prefer mining by yourself, I'm fine: you transfer 800 bonds back to me, and I send you a CM1 board hashing at 800MH/s.

2) claim: ASICs will make existing mining bonds worthless
If you believe in ASICs, transfer me X ZETA-MINING bonds, and I'll send you 1.5X ASICMINER shares back. Offer valid until end of September 2012.

3) claim: mining bond issuers pass the risk to the holders completely and keep the rewards for themselves
At any time I will buy back ZETA-MINING bonds for the break-even price denominated in fiat (see post above). For this week 37.2012 this is at 0.102, a bid wall for 1k bonds is placed. If that wall is ever cleared, do not sell below that price at any time. Instead PM me and I'll buy the bonds for this price within 72h.

Cheers,
Zefir

claim 2
If i transfer my 10 zeta-mining bonds today to 15 asicminer bonds(its bond or share?), from when i will get dividend?
& how much btc i will get as dividend for 1 asicminer bond?
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September 09, 2012, 07:39:01 PM
 #53

claim 2
If i transfer my 10 zeta-mining bonds today to 15 asicminer bonds(its bond or share?), from when i will get dividend?
& how much btc i will get as dividend for 1 asicminer bond?

Hi dishwara,

well, you'll need to read the ASICMINER (they are shares, btw.) contract to decide if it is the way you want to go. They are not paying dividends right now, they will do if they succeed to realize their plans and provide ASIC miners in the early phase (i.e. before BFL, bASICs, etc. boost difficulty to new levels). If they succeed, you'll multiply your investment within months - if they fail you'll most probably loose your investment.

It all depends on what risk you are willing to take - and this is something you need to decide by yourself, do not expect (or accept) external advices.


HTH,
Zefir

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September 09, 2012, 08:26:15 PM
 #54


You did not address the essence of my claim, which is: do you believe that mining in general is economically profitable? If it is, mining bonds can't be your 'guaranteed loss turds', if it is not, then: Goodbye Bitcoin.
Cheers,
Zefir

I think this has been hashed to death in other forums (see Mining etc). It all depends what you pay for electricity, what equipment you have etc.
In US probably, in some or most parts of EU probably not. There is no one definitive answer to your question. YOU have to to the math and find out.

Read up on bonds in general and you will understand, why I do not like perpetual debt where issuer has 0 obligation to buy it back and no fixed coupon to guarantee fixed income (yes, you as a issuer have to eat this risk).


Hi EskimoBob,

let's leave it at that. We obviously do not agree on some points - but we do not even have to.

The market will decide who is right. And with the latest development of even 'guaranteed' investments at 1.8%/week defaulting, I personally do not see alternatives for zero-risk investments other than in mining. Soon the dust Pirate raised will settle and unveil how substantial those fancy non-mining related investing constructs really are. Most probably the GLBSE-top10 by the end of this year will consist of mining securities - call them 'turds' or not. Let's just wait and see. Deal?


Cheers,
Zefir

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September 16, 2012, 09:38:52 AM
 #55

Update: dividends for week 37.2012 paid, guaranteed buy-back price for week 38.2012 set to 0.093


Dear Investors,

with the payments of dividends for the past week, the break-even price per bond reached 0.2196BTC. With the current 24h US$/BTC rate of 11.8 the guaranteed buy-back price for this week is set to 0.093 - bid and ask walls are accordingly set.

I had another small exchanges for ASICMINER shares and people asking if this offer is still valid. For clarification: yes, the offer is still valid. I'll stick to it and swap any 2 ZETA-MINING bonds for 3 ASICMINER shares until end of September 2012, no matter where the prices go. This is my way to provide my investors some way of ASIC upgrade.


Have a nice and prosper week,
Zefir

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September 23, 2012, 09:27:46 PM
 #56

Update: dividends for week 38.2012 paid, trade walls for this week set at 0.09 and 0.2164


Dear Investors,

after the payment for past week, I updated the trading walls accordingly.


With the latest updates from the ASIC developments from multiple parties it gets quite evident that the remaining operational time for existing GPU and FPGA mining rig - and consequently for existing mining bonds - will end in Q2/2013. ngzhang alone sold 18TH (300 Avalons with 60GH each) within 24h as pre-series run to ship early 2013. Network will probably have reached 100TH by then, and with the ASIC manufacturers entering mass production the Petahash magnitude is not far away.

On one hand I realize that mining with my FPGA farm will become less profitable, on the other it becomes clear that from a practical standpoint the time is right for ASICs: I only need to go down to my mining room in the basement to see how insane Bitcoin mining currently is. My farm burns 3.5kW 24/7 and as a result my basement is (although the rig operates in front of an open window) at 32+°C. I am and always have been very conscious about my 'ecological footprint' and not long ago I replaced light bulbs in my flat with energy saving lamps to save another 10W here and there. But now for mining I am wasting 350 times that savings and I begin to wonder if Satoshi's major mistake was to overlook the continuous growing need for energy waste. Sure, that's how things work today, and sure other projects and/or companies pollute the environment on a different scale (check out Google's energy footprint), but for me as someone who thinks twice whether to take the car or the bike, mining maneuvered me into a serious conscience dilemma.

The coming six months are safe - it is getting cold and I can at least pretend to use my farm as heating device that waste dumps some valid shares Smiley  Thereafter, it is time for ASICs to save some energy (and yes, I am fully aware that by Q4/2013 everyone will scale up their ASIC mining farm to the same wasting levels we have today, that's why I call it conceptually flawed blasphemy Sad)


Have a nice and prosper week,
Zefir

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October 07, 2012, 09:31:02 AM
 #57

Update: GLBSE closing doors


Dear Investors,

after paying the dividends for week 39.2012, GLBSE closed shop this week.

Like most of other investors and issuers, I was caught with my pants down: not only I most probably lost all what was left from Pirate (due to my BTC being diversified in different assets becoming less worth - or worthless - now), but also was left without information required to pay back my investors.


Personal Feelings (please skip this section if you only care to know about your money)
I am following the various developments in the Bitcoin world with great interest and I sadly realize that its potential to establish a better world just failed.

So far, I regarded Bitcoin not only as yet another crypto-currency, but more as an instrument to form a better community. Better in a sense that we learned from the past mistakes our real world is suffering from and take our chance to prevent them. Getting in touch with Bitcoin initially as a miner, I felt I found the community I wanted to participate in - no wonder, most of us are geeks, and who would refuse to live in a geek's world? Wink

Later, when I discovered the other Bitcoin sectors (lending and investing) I felt confirmed in my beliefs as I saw anonymous people trusting each other solely by their word of honor. At some point in time, an established lender asked me to help him out with some coins and I did: I gave some anonymous Internet guy coins with an equivalent fiat value enough to buy a new car, and got that coins back some days later. Only stupid would do this in the real world - for me this was the price to see if I found the community I was looking for. I want to believe that there is some world where people keep their word - and I prematurely thought I found it here.

I was wrong. Pirate broke his word of honor he gave to me. Folks I trusted before turned out to have lied and betrayed their investors (guaranteed deposits - my ass). Any non-mining related assets on GLBSE turned out to be directly or indirectly affected by BTCS&T. People start to establish exactly those toxic financial instruments that almost killed our real world economy just recently (CDOs anyone?). No, this is in no way better than the real world - contrary, it gives the dishonest one a better playground with maximized capabilities to rip off others.

GLBSE closing down is the last coffin nail for my Bitcoin engagement. I now lost everything and it somehow feels relieving to have a clear cut to say good bye. Alas, I am not going to leave without paying back my obligations.


Next Steps
At time of writing, the situation with GLBSE is fully unclear. There are plans to install some reclaim-codes based system to allow issuers direct dealings with the holders. This might require all of us to provide full ID documents and forgo our anonymity (I did already for the verification process). There might be a fully regulated GLBSE successor, where the assets can be traded, as well as a transition to some alternative trading platform.

Not sure how to deal with investors that do not want to sacrifice their anonymity, as there is currently no way to find out who owns what.

Until the dust settles, I am going to continue accounting the weekly dividends in the spreadsheet and pay them out as soon as I have the required information.



Good luck to us all,
Zefir

Meni Rosenfeld
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October 07, 2012, 10:28:02 AM
 #58

Personal Feelings
As someone who has also been burned both financially and emotionally by some recent events, and is struggling to make sense of it all, I have the following advice:

1. Now that you're depressed about what happened is not the right time to figure out overreaching insights about life, the universe and everything. Make decisions when you're level-headed, neither euphoric nor depressed. Take some time to cool off to think about things.

2. Things are bad but they're not all that bad. For every person who scammed me I can name someone who despite all difficulties, and despite me having no real recourse, successfully struggled to uphold his sizable commitments.

A month ago, I would say that among the borrowers who pass a sniff test, the proportion of legitimate ones is around 100%. Most people said that it's essentially 0%. Turned out the proportion is closer to 50%. I think this is a very impressive achievement.

If you look at it from a Bayesian perspective you'll see how scammers are overrepresented. There are many good people (for some definition of "good") in the world and a few con artists, but it is the con artists who will approach you to take your money (and to that end appear to be nice and likeable). So it isn't that surprising when someone who wants your money turns out to be a scammer. We thought spotting these scammers would be easier; we were wrong.

It's easy to establish some rules of thumb to avoid this kind of problems (and with the power of hindsight it's also easy to get oneself to apply them). Making a trade with someone where the value of the single trade is much smaller then that person's future profits from his activity = good. Giving a short-term loan to someone reputable to help with a temporary lack of liquidity = good. Giving a long-term loan to someone anonymous, to use in an unspecified risky way, with total liabilities many times his net worth or the value of any reputation he has = bad.

I still think it's possible to do business in a nontraditional way, and to use Bitcoin to power it. We just need to figure out how.

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zefir
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October 07, 2012, 01:03:16 PM
 #59

Thanks for the kind and supportive words, Meni.

Frankly speaking, I was not expecting that someone is reading the updates that I basically post here as proof that Zeta mining is still operational. To add some authenticity, I intentionally include references to some current developments. Sadly, right now there is little positive sentiment around I could refer to and my disappointment might just reflect the current feelings of so many of us who invested time and money and seeing their efforts vanishing in vain.

I wish I could stay as rational and calm as you most of the time are (alas I felt how you got strained with the BDT fiasco), but right now most of us involved need to fight the impression that Bitcoin is attracting mostly the bad and the ugly (let alone the image shaping up for externals / newcomers).

After all, Bitcoin will for sure not only survive the GLBSE downfall, but also profit from it by shaping out the future of Bitcoin based business. We might realize that anonymous investments are not feasible without an immanent fraud risk (anonymity and enforcement don't jar together). Even worse: we might find out that established regulatory and laws we have in our real world (that we want to bypass with Bitcoins) are not bad altogether but a tribute to human nature :/


While it remains interesting, it is time to follow your advice and cool down.


PS: I am holding around 1k PUREMINING bonds, and since we both are verified issuers at GLBSE we should already comply to the AML requirements. Therefore me getting access to the bonds can serve as measure for the best-case delay while resolving this chaos.

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October 07, 2012, 02:27:18 PM
 #60

Well said Meni.

I too have had times when the thoughts have been negative and desire to continue has waned.
Then I have found some of the good people pop out of nowhere and show me why I persist.
There are good people in this community and Bitcoin I feel does have a future - a future I would like to be a part of.

You are one of the good guys zefir, take some deep breaths, a little time out and lets see what actually happens with GLBSE - hopefully a sane way to sort out this ugly situation emerges.

Best wishes
Graet

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