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Author Topic: MOORE: Mining Bond Beating the Moore's Law (Collecting Shareholder Data)  (Read 17264 times)
friedcat
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May 18, 2012, 12:19:57 PM
 #1

Believe me, there has not been anything like this in the Bitcoin world yet.

I'm relatively active between 1:00AM to 3:00PM of forum time each day. Contacting me within this time interval could get quicker responses.

Announcement

In case of the possibility we could not receive the shareholders data, we begin collecting the claims ourselves.

Please send to (fnnirvana@gmail.com) your number of shares and your Bitcoin address for receiving dividends. Please annotate that they are MOORE shares to avoid confusion with ASICMINER or MU shares. You could accompany them with any evidence you think is OK to provide. It is highly recommended that you use an address that you have its private key. By that, you may enjoy more facilities provided by our future automatic migrating platform.

The Liquid Helium Plan

If a catastrophe comes, we can save ourselves by soaking our body with liquid helium, and wake up in a brighter future.

To cope with the panic of mining bonds, I've decided to freeze the entire earth. Now it's already 17 weeks later. You don't feel anything, but it's indeed 17 weeks later. I can feel the soft and cool breeze of the late autumn, can't you? Cheesy

Anyway our contract has to be accurately executed. So I have no choice but to re-calculate our hashrate from 1.03608 to 1.19388.

The similar plan will be launched in the future if similar disaster happens.

First launch: 17 weeks, 1.03608MH/s to 1.19388MH/s.

IPO and Bulk Purchase

You could buy shares of MOORE from GLBSE's open market: https://glbse.com/asset/view/MOORE, or you could do a bulk purchase directly from me.

Shares Left for Bulk Purchase: 0/9000

The price of IPO is set at 0.50 BTC/s.

The price of bulk purchase is set at 0.45 BTC/s(10.00% discount), but each trade has to involve larger than 500 shares(225 BTC). Please PM me for trades, and find witnesses/make records on replies if necessary.

Thanks to everyone who's interested. Smiley

Rolling display of the hashrate in next 5 weeks, updated each week
Payment date                   Hashrate(MH/s)
November 20                       1.43805
November 27                       1.45085
December 4                        1.46376
December 11                       1.47679
December 18                       1.48993


Brief Introduction
Moore is a perpetual mining bond. Each bond represents 1MH/s of hashrate from the start. What makes our bond different, is that the hashrate grows by 0.89% each week, which means that your hashrate will be doubled every 18 months. If you take the current other perpetual mining bonds as financial derivatives of the pro-payment model of normal mining stocks, then our bond is closest to the pro-reinvestment model of normal mining stocks.

Advantages
1. Compared to other mining bonds, the future price of Moore is less likely to drop.
2. We are essentially doing reinvestment job for you, saving you from the hassle of low liquidity, choice of new hardware, identifying good mining securities, etc.

Disadvantages
1. The initial price will be determined at a somehow high level.
2. Normal perpetual mining bonds will likely to become fungible, so you can easily figure out if a bond is mispriced by comparing it to others. But for Moore, it is not that easy to do a reasonable accurate valuation.

Risk Control
1. Initially, Moore will be backed by the bond issuer's current hardware and other mining equities.
2. More real hardware will gradually dominate the portfolio which backs Moore.
3. The bond issuer has the right to degenerate Moore into a normal mining bond by multiplying its hashrate at that time and 1.6. For example, after three years, each bond represents 4MH/s, if the issuer decides to degenerate it, it turns to a normal mining bond, which loses the power to grow 0.89% per week, but instantly becomes 6.4MH/s and doesn't change anymore.
4. The bond issuer has the right to buy Moore back at 105% of the weighted average market price of the last 5 days.
5. The bond issuer has the right to determine the price when he releases new bonds to the market.

Coupon Calculation
Definitions
Financial Week: Starting from 16:00:00(GMT Time) each Tuesday, ending at 16:00:00(GMT Time) the succeeding Tuesday.

Coupon Unit: The quantity of Bitcoins paid each share each financial week.

Payment Time
We assume T(0) is the IPO starting time, T(i) is the time of i-th coupon payment, and it should satisfy:

16:00:00(GMT Time) Tuesday of the i-th financial week <= T(i) < 16:00:00(GMT Time) Wednesday of the i-th financial week

The substraction on T(i) is defined in seconds, which means that (T(i)-T(i-1)) represents "how many seconds elapse between T(i) and T(i-1)".

Amount of Payments
The coupon unit of the i-th financial week is:

10^6 * (1.0089)^(i-1) * f(i) / 2^32

in which f(i) is calculated as follows:
  f(i) = (t(1)-t(0))*B(0)/D(0) + ... + (t(n)-t(n-1))*B(n-1)/D(n-1)
     where:
        the number of the changes of difficulty and block reward between T(i-1) and T(i) is (n-1).
        t(0) equals to T(i-1).
        t(j) (when 0<j<n and n>1) means the time of the j-th change of either the difficulty or the block reward during T(i-1) and T(i).
        t(n) equals to T(i).
        B(j) means the last block reward before t(j+1).
        D(j) means the last difficulty number before t(j+1).
        The substraction on t(j) is also defined in seconds.

Estimated Returns vs Normal Mining Bonds

Normal Mining Bonds are assumed to have a price of 0.3BTC/share, plotted in blue.
Moore Bonds are assumed to have a price of 0.48BTC/share, plotted in red.

X-axis is the number of weeks, Y-axis is the expected total return rate from coupons.

The difficulty is set at 1,733,208.
The date when block reward reduces to 25 is set at 30 weeks later.

The first picture assumes that the difficulty does not change:



The second picture assumes that when the block rewards turns to 25, the difficulty also turns to a half, as some miners will close their operations:



The third picture assumes that the difficulty also always smoothly increases by 0.89% according to the Moore's Law:



The forth picture assumes the same as the third one, except that when the block rewards turns to 25, the difficulty also turns to a half, as some miners will close their operations:


(reserved)

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May 18, 2012, 04:14:14 PM
 #2

When will you start offering them? I don't see them on GLBSE yet.
Quote
Dividend Calculation
The formula of the dividends per share per week is:

R*(86400*7*B*10^6)/(D*2^32)

in which:
  R is the hashrate of that week, which starts with 1, and grows by 0.89% each week.
  B is the block reward, which is 50 now, and will become 25 in the next 4 years.
  D is the difficulty of that week.

Which is the difficulty of that week? The difficulty at the start of that week, or at the end? Same goes for B.

Wouldn't it be better to calculate the dividend the way Puremining does, so that neither difficulty nor B can affect it? I like the look of these bonds, but would prefer dividends based on numbers of blocks solved rather than weeks.

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May 18, 2012, 06:22:56 PM
 #3

If it doesn't follow Moore's law, shouldn't it be called NOT-MOORE? Grin

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May 18, 2012, 06:26:49 PM
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If it doesn't follow Moore's law, shouldn't it be called NOT-MOORE? Grin
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May 18, 2012, 06:32:20 PM
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interesting... what's the timeline for ipo?

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May 18, 2012, 07:44:33 PM
 #6

If it doesn't follow Moore's law, shouldn't it be called NOT-MOORE? Grin

NO.MOORE Smiley

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May 18, 2012, 09:07:40 PM
 #7

If it doesn't follow Moore's law, shouldn't it be called NOT-MOORE? Grin

NO.MOORE Smiley

Yes.

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May 19, 2012, 03:05:04 AM
 #8

Quite interested, depending on initial sale price.

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May 19, 2012, 07:41:33 AM
 #9

When will you start offering them? I don't see them on GLBSE yet.

I've already created the asset with the date set as "3 days from now", but it doesn't show on the IPO page. Don't know if it's a feature of GLBSE or there's something I didn't do it right.

Which is the difficulty of that week? The difficulty at the start of that week, or at the end? Same goes for B.

It means the start of that (financial) week. That is, each payment on Wednesday will be calculated using the difficulty and block reward of last Wednesday.

Wouldn't it be better to calculate the dividend the way Puremining does, so that neither difficulty nor B can affect it? I like the look of these bonds, but would prefer dividends based on numbers of blocks solved rather than weeks.

We will surely consider, thanks for your advice.

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May 19, 2012, 08:00:46 AM
 #10

Are growth percentages (the 0.89%) compounded or not? Meaning: after 100 weeks, is the hash rate per bond 1.89 or higher?

Also 100 (percent) / 2 * 52 (weeks) != 0.89%... How did you come up with that number should you not plan to compound interest?


Disadvantage 2 is easy, just think how long you want to hold a bond and then calculate how many hashes it would solve in that timeframe. I could try to put up a calculator/spreadsheet for that... Something along the lines of "I want to hold bond A or MOORE for X weeks - how long do I need to hold MOORE to be chaper per hashes solved than bond A?"

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May 19, 2012, 10:02:22 AM
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I guess on week x it will be 1.0089^x (or 1.0089^(x-1)) something like that
as for the 0.89% I think is 2^(1/(365*1.5))-1 for 1 day or (2^(1/(365*1.5)))^7-1 for 1 week

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May 19, 2012, 10:03:38 AM
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Are growth percentages (the 0.89%) compounded or not? Meaning: after 100 weeks, is the hash rate per bond 1.89 or higher?

Also 100 (percent) / 2 * 52 (weeks) != 0.89%... How did you come up with that number should you not plan to compound interest?

It is compounded. Or it would have a chance to beat the Moore's Law, which itself implies exponential growth.

After 18 months, that is 1.5 year:
(1+0.89%)^(1.5*365/7)=1.99976, which is very close to 2.

After 100 weeks:
(1+0.89%)^100=2.43556.

Disadvantage 2 is easy, just think how long you want to hold a bond and then calculate how many hashes it would solve in that timeframe. I could try to put up a calculator/spreadsheet for that... Something along the lines of "I want to hold bond A or MOORE for X weeks - how long do I need to hold MOORE to be chaper per hashes solved than bond A?"

This is the easy part. The hard part is "how long you want to hold a bond", which is not pre-determined, but deeply affected by tons of other conditions, including the pricing of bonds themselves.

Thanks very much.

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May 19, 2012, 02:06:15 PM
 #13

Well, as I said, you can also calculate how long it would take to be more profitable if you buy 1 MH/s MOORE right now at 0.50 BTC compared to 1 MH/s stable for 0.30 BTC...

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May 20, 2012, 11:34:24 AM
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Well, as I said, you can also calculate how long it would take to be more profitable if you buy 1 MH/s MOORE right now at 0.50 BTC compared to 1 MH/s stable for 0.30 BTC...

What I was suggesting is that the pros and cons of our bonds, compared to normal ones, are multi-dimensional. Some will prefer growth, and some will prefer more immediate returns so they could use it elsewhere. The difficulty/price uncertainty of the future further complicates the choice.

But you are right. We could make the calculation to give buyers more indication. "How much time it would take to be more profitable" would make a good indicator, and I believe so as "How long it will break even" and "How long the total dividends will exceed 10x of normal mining bonds", etc.

Thank you very much.

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May 20, 2012, 11:35:44 AM
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Update

The asset is in verification. I made the contract more detailed and submitted again. I hope it will be listed on the IPO page soon.

Thanks for your patience.

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May 20, 2012, 12:19:54 PM
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But you are right. We could make the calculation to give buyers more indication. "How much time it would take to be more profitable" would make a good indicator, and I believe so as "How long it will break even" and "How long the total dividends will exceed 10x of normal mining bonds", etc.

"How long until it will have solved more virtual hashes per BTC invested than a cheaper static 1 MH/s contract" is calculable. Not perfectly, as you have a weird payout scheme/calculation, but it should be close.
"How long until your investment is gained as dividends" not, as it depends on difficulty
"How long until you will have gained 10x the dividends of a static bond" is not calculable as well, as this also depends on difficulty.

An ideal case for buying this bond here would be a strong difficulty increase in the beginning and then, after you passed the hashes per BTC invested of 1 MH/s bonds, a decline or at least slow increase in difficulty again. Also you should take into account when buying this on which weekdays difficulty increases can be expected, unless the payout calculation gets closer to the real expected values.

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May 21, 2012, 02:46:56 AM
 #17

Update

MOORE is already listed on the IPO page of GLBSE.

The number of shares for selling, the IPO price, and the price for bulk purchase are to be determined.

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May 21, 2012, 03:34:10 AM
 #18

"How long until your investment is gained as dividends" not, as it depends on difficulty
"How long until you will have gained 10x the dividends of a static bond" is not calculable as well, as this also depends on difficulty.

Yes, they only make sense when we pre-make an assumption on future difficulty evolution.

unless the payout calculation gets closer to the real expected values.

It seems you are concerned with my dividends calculation formula, and some other people too.
Would it be better to change it to:
R*(N*600*B*10^6)/(D*2^32)
in which R, B and D keep the original meaning, and N means the number of actual blocks between the time of two payments?

Thank you very much.

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May 21, 2012, 08:42:59 AM
 #19

Not at all, as this means you pay out more on rounds where difficulty is on the rise (average time between blocks is less than 600 seconds) and less if it is going down (slower than 1 block every 10 minutes).

Just pay the expected 100% PPS rate:

Sum of ( (Hash rate * Time in seconds of difficulty 1 * block reward 1) / (difficulty 1 * 2^32) + (Hash rate * Time in seconds of difficulty 2 * block reward 2) / (difficulty 2 * 2^32) + ... )

The time in seconds either starts at the beginning of the week or at the last block of the old difficulty and ends at the last second of the week or at the last block of the current difficulty.

Example:

Hashrate of the network explodes, difficulties are 1, 4 and 16, 2 difficulty changes after 3 days, 0:00 (timestamp of last block with difficulty 1) and 2 days later 0:00 (timestamp of last block with difficulty 4)and another time on the last second of the week, hashrate of the bond = 1 MH/s:

( ( 1*10^6 H/s * 259200 s * 50 BTC) / (1 * 2^32) ) + ( ( 1*10^6 H/s * 172800 s * 50 BTC) / (4 * 2^32) ) + ( ( 1*10^6 H/s * 172800 s * 50 BTC) / (16 * 2^32) ) = 3 646.12788 BTC (1 MH/s was a lot in the beginning of a bitcoin block chain!)

With your old calculation (R*(86400*7*B*10^6)/(D*2^32)):
( 1 * 86400 * 7 * 50 * 10^6 ) / ( 1 * 2^32 ) = 7 040.79866 BTC

or the updated one (R*(N*600*B*10^6)/(D*2^32)):
( 1 * 6048 (= 3 times 2016 blocks) * 600 * 50 * 10^6 ) / ( 1 * 2^32 ) = 42 244.792 BTC

Yes, the examples are highly exaggerated, but you still see that you clearly will pay out too much (in extreme cases far too much!) if difficulty rises. As you increase your hash rate per your calculations as well, you'll increase that effect too. On the other hand, if difficulty goes down, you underpay or get closer to the real PPS values.

Feel free to pay out on your flawed simplified model, but if a little bit of math is already too difficult to do, it makes me wonder if you're up to the task of handling a mining operation that has to double it's size consistently every 1.5 years...

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May 21, 2012, 10:31:44 AM
 #20

Just pay the expected 100% PPS rate:

Sum of ( (Hash rate * Time in seconds of difficulty 1 * block reward 1) / (difficulty 1 * 2^32) + (Hash rate * Time in seconds of difficulty 2 * block reward 2) / (difficulty 2 * 2^32) + ... )

The time in seconds either starts at the beginning of the week or at the last block of the old difficulty and ends at the last second of the week or at the last block of the current difficulty.

This matches real mining process most accurately. Thanks for figuring out for me. I think I fell into the pitfall of assuming that the difficulty change will always be mild so that I chose the over-simplified model. You are right. Extreme cases should be taken into account.

Feel free to pay out on your flawed simplified model, but if a little bit of math is already too difficult to do, it makes me wonder if you're up to the task of handling a mining operation that has to double it's size consistently every 1.5 years...

Thanks for your criticism. I won't "feel free". I will do my best to revise my plan. I'm sorry for the informality and flaws of the OP, and will make a more detailed appendix to it.

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