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Sukrim
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May 22, 2012, 02:42:48 PM
 #21

i will issue more and sell them at a much higher price than before.
I thought the plan was to fill any offer down to 1 BTC each week?

(emphasis mine)
I'd like to invest with Bitcoin Savings & Trust, but it's apparently pretty difficult to get an account and you can't get the best interest rate without risking tons of BTC. PPT is alright, but, as Meni Rosenfeld pointed out, the "insurance" is mostly meaningless and only makes figuring out the risk/reward more difficult.

I'd like to see a GLBSE asset like this:
- Each share represents 1 BTC invested in BS&T and gets weekly dividend payments equal to whatever BS&T pays minus a small fee for the owner of the asset.
- Every week at some predetermined time, the asset owner creates enough new shares to fill all bids of 1 BTC or more.

Anyone with a BS&T account want to do this?

Okay, I will adjust TYGRR-P or TYGRR.P to this.

100% uninsured bonds at 6.5% weekly. (as requested by theymos)

Let me change the contracts. IPO will be Tuesday.

Thanks.

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Sukrim
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May 22, 2012, 03:09:37 PM
 #22

"the fee" is 0.5% - which is your profit margin of exactly 1 week's income. As soon as someone holds that bond longer than 1 week, you are on the plus side. I don't really see where you'd loose money on that.

I understand your frustration, but if 0.005 BTC per share are really an issue, just don't sell down to 1 BTC but 1.01 BTC instead for example, so you get reimbursed on these fees. Pushing prices to 1.2 or so and making them scarce however is not what theymos suggested + what you agreed to...

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unclescrooge
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May 22, 2012, 03:29:55 PM
 #23

So what would the new interest rate be? If you sell your bond at 1.02 without changing the dividend, that means about 4,41% per week...

EDIt: Wrong calculation, need to revise my math: the interest would be 6.37% instead of 6.5%

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May 22, 2012, 03:51:49 PM
 #24

Ok great thank you Smiley

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May 22, 2012, 04:02:07 PM
 #25

for that first week for anyone who buys it. but all the other weeks they get the 6.5%

once the btc is in the system and in with pirate there are no more fees so I'm fine paying 6.5%

Are you sure on that? If it does go to 1.02, I would need to spend 102BTC to buy 100 shares. From those 100 shares I would get 6.5BTC weekly dividends, which is (6.5/102)*100% = 6.37%. That number wouldn't change week by week though, you'd still be getting 6.37% weekly returns since your dividend is always 6.5BTC and your investment doesn't change at 102BTC.
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May 22, 2012, 04:24:24 PM
 #26

once you hold the bond it will last forever!

you get 6.5% each week, there is no buy back silliness.

yes this will kill all the other PPT stuff...

If you pay more than 1BTC, you won't get 6.5% per week. You'll earn 0.065 BTC per week per share, so if you pay more than 1BTC per share you will make less than 6.5% dividends per week.
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May 22, 2012, 04:38:25 PM
 #27

once you hold the bond it will last forever!

you get 6.5% each week, there is no buy back silliness.

yes this will kill all the other PPT stuff...

If you pay more than 1BTC, you won't get 6.5% per week. You'll earn 0.065 BTC per week per share, so if you pay more than 1BTC per share you will make less than 6.5% dividends per week.

the first week will be lower, but after that it will be 6.5%  if you do the math, the furth you go out in time the closer you get to 6.5%   

No offense, but I don't see what you're saying. There might be some aspect of this I'm not seeing. Are you paying a fixed return per share, or will you return 6.5% of the actual value of share (average of bid + ask or something). Let's pick a big number to make the differences obvious.

Scenario:
The shares sell for 2BTC each. I have 200 BTC, and purchase 100 shares. The first week I receive 6.5BTC dividend, a 3.75% return on my 200BTC. The second week, I get a 6.5BTC dividend, again a 3.75% return on my 200BTC investment. The numbers don't converge, I'll always be receiving a 6.5BTC return on my 200BTC investment.

Is that not how this is going to run?

Thanks for clarifying it.
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May 22, 2012, 04:46:01 PM
 #28

he is paying 6.5% of initial offering at 1 BTC
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May 22, 2012, 06:17:08 PM
 #29

once you hold the bond it will last forever!

you get 6.5% each week, there is no buy back silliness.

yes this will kill all the other PPT stuff...

If you pay more than 1BTC, you won't get 6.5% per week. You'll earn 0.065 BTC per week per share, so if you pay more than 1BTC per share you will make less than 6.5% dividends per week.

the first week will be lower, but after that it will be 6.5%  if you do the math, the furth you go out in time the closer you get to 6.5%    

No offense, but I don't see what you're saying. There might be some aspect of this I'm not seeing. Are you paying a fixed return per share, or will you return 6.5% of the actual value of share (average of bid + ask or something). Let's pick a big number to make the differences obvious.

Scenario:
The shares sell for 2BTC each. I have 200 BTC, and purchase 100 shares. The first week I receive 6.5BTC dividend, a 3.75% return on my 200BTC. The second week, I get a 6.5BTC dividend, again a 3.75% return on my 200BTC investment. The numbers don't converge, I'll always be receiving a 6.5BTC return on my 200BTC investment.

Is that not how this is going to run?

Thanks for clarifying it.

those numbers are true but put it this way. The bond is only (and always) worth 1BTC. Say you buy 50bonds at 100BTC well you can try to sell them higher but you can always sell them back to goat at 1BTC. No matter what you pay for the bond your always getting 6.5% of their true value, not 6.5% of what you pay to acquire the bond.

In your scenario your paying 200BTC for 100 bonds which are valued at 100BTC. (each bond = 1 BTC)
MrTeal
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May 22, 2012, 06:29:50 PM
 #30

those numbers are true but put it this way. The bond is only (and always) worth 1BTC. Say you buy 50bonds at 100BTC well you can try to sell them higher but you can always sell them back to goat at 1BTC. No matter what you pay for the bond your always getting 6.5% of their true value, not 6.5% of what you pay to acquire the bond.

In your scenario your paying 200BTC for 100 bonds which are valued at 100BTC. (each bond = 1 BTC)

That's what I was getting at. The returns if you buy at 1.02 aren't 4.4% for the first week as Raphy said since it's not like Goat is buying back the bond at 1.065. The return also doesn't change or approach 6.5% over time. It's always going to be (0.065/X) weekly, where X is what you pay for the share. If shares sell for 1.02, you'll get 6.37% return weekly on your investment.
rdponticelli
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May 22, 2012, 08:24:21 PM
 #31

those numbers are true but put it this way. The bond is only (and always) worth 1BTC. Say you buy 50bonds at 100BTC well you can try to sell them higher but you can always sell them back to goat at 1BTC. No matter what you pay for the bond your always getting 6.5% of their true value, not 6.5% of what you pay to acquire the bond.

In your scenario your paying 200BTC for 100 bonds which are valued at 100BTC. (each bond = 1 BTC)

That's what I was getting at. The returns if you buy at 1.02 aren't 4.4% for the first week as Raphy said since it's not like Goat is buying back the bond at 1.065. The return also doesn't change or approach 6.5% over time. It's always going to be (0.065/X) weekly, where X is what you pay for the share. If shares sell for 1.02, you'll get 6.37% return weekly on your investment.

You'll receive 6.5% of the NOMINAL VALUE of the bond, which is 1BTC. Independently of how much you pay for it.
Sukrim
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May 22, 2012, 09:57:26 PM
 #32

Scenario:
The shares sell for 2BTC each. I have 200 BTC, and purchase 100 shares. The first week I receive 6.5BTC dividend, a 3.75% return on my 200BTC. The second week, I get a 6.5BTC dividend, again a 3.75% return on my 200BTC investment. The numbers don't converge, I'll always be receiving a 6.5BTC return on my 200BTC investment.

In the end it depends on your reinvestment strategy. As shares will _always_ be available at ~1.02 (I still would prefer 1.01 by the way, I don't really see where 2% fees come into play!) you can buy 6 additional shares from the first dividend, 6 more shares from the 2nd dividend etc.

If you buy 100 shares for 102 BTC, after 1 single dividend all you need to do is to buy the remaining 2 shares and donate the rest to charity/GLBSE/... and act as if you started 1 week later.

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publio
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May 22, 2012, 10:15:29 PM
 #33

Scenario:
The shares sell for 2BTC each. I have 200 BTC, and purchase 100 shares. The first week I receive 6.5BTC dividend, a 3.75% return on my 200BTC. The second week, I get a 6.5BTC dividend, again a 3.75% return on my 200BTC investment. The numbers don't converge, I'll always be receiving a 6.5BTC return on my 200BTC investment.

In the end it depends on your reinvestment strategy. As shares will _always_ be available at ~1.02 (I still would prefer 1.01 by the way, I don't really see where 2% fees come into play!) you can buy 6 additional shares from the first dividend, 6 more shares from the 2nd dividend etc.

If you buy 100 shares for 102 BTC, after 1 single dividend all you need to do is to buy the remaining 2 shares and donate the rest to charity/GLBSE/... and act as if you started 1 week later.

If you buy 100 shares for 200 BTC, all you have to do is act like you started 15 weeks later.  Roll Eyes

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May 22, 2012, 10:37:15 PM
 #34

Looking on GLBSE it shows the asking price at 1.06 plus a fee of 8 btc the first time you purchase a type of share. Why is everyone talking 1.02?
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May 22, 2012, 10:39:26 PM
 #35

Looking on GLBSE it shows the asking price at 1.06 plus a fee of 8 btc the first time you purchase a type of share. Why is everyone talking 1.02?
if/when goat releases more shares he said they would be at 1.02BTC/share
Sukrim
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May 22, 2012, 10:42:40 PM
 #36

As dividends are only paid once a week, goat can also only issue shares once a week - if somebody buys them right now at 1.05 he's probably quite in need, so to say... Roll Eyes

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Gladamas
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May 22, 2012, 10:52:23 PM
 #37

Looking on GLBSE it shows the asking price at 1.06 plus a fee of 8 btc the first time you purchase a type of share. Why is everyone talking 1.02?

8 BTC? I thought that fee was for listing an asset?

If it really does cost that much to purchase a share, I'm out.

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MrTeal
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May 22, 2012, 11:02:09 PM
 #38

Scenario:
The shares sell for 2BTC each. I have 200 BTC, and purchase 100 shares. The first week I receive 6.5BTC dividend, a 3.75% return on my 200BTC. The second week, I get a 6.5BTC dividend, again a 3.75% return on my 200BTC investment. The numbers don't converge, I'll always be receiving a 6.5BTC return on my 200BTC investment.

In the end it depends on your reinvestment strategy. As shares will _always_ be available at ~1.02 (I still would prefer 1.01 by the way, I don't really see where 2% fees come into play!) you can buy 6 additional shares from the first dividend, 6 more shares from the 2nd dividend etc.

If you buy 100 shares for 102 BTC, after 1 single dividend all you need to do is to buy the remaining 2 shares and donate the rest to charity/GLBSE/... and act as if you started 1 week later.

That still doesn't change the fact that the rate of return is constant. Let's for a moment assume you can buy fractions of a share, to make the numbers easier. If you followed the strategy you propose of buying more bonds with the dividends, this is what you'd see. Numbers were rounded for ease of reading but full precision was kept. Purchase price was assumed to be 1.02, so the initial investment was 102BTC.
Code:
Week Shares Dividend at end of week
0 100.00 6.50
1 106.37 6.91
2 113.15 7.35
3 120.36 7.82
4 128.03 8.32
5 136.19 8.85
6 144.87 9.42
7 154.10 10.02
8 163.92 10.65
9 174.37 11.33
10 185.48 12.06
11 197.30 12.82
12 209.87 13.64
13 223.25 14.51
14 237.47 15.44
15 252.61 16.42
16 268.70 17.47
17 285.83 18.58
18 304.04 19.76
19 323.42 21.02
20 344.03 22.36

At the end of the 20 weeks, you have 344.03 shares and are earning 22.36 BTC per week. If you had a Pirate account that earned 6.5% interest and reinvested the proceeds, after 20 months the same 102BTC initial investment would produce 359.41BTC. It never converges toward being equal to 6.5% interest.

If you reinvested everything into shares at 1.02, at the end of the year you'd have 2483.9 shares and be getting 161.45BTC dividends. If you sold those shares at 1.02, you'd have 2533.6BTC. Compare that to just investing in an account that pays 6.5% weekly interest you'd have 2643 in the bank.

Don't get me wrong, I bought some of these and I like the idea, I just don't want people to get the wrong idea
So what would the new interest rate be? If you sell your bond at 1.02 without changing the dividend, that means about 4,41% per week...
the first week will be lower, but after that it will be 6.5%  if you do the math, the furth you go out in time the closer you get to 6.5%   
It's not like your effective dividends will converge to 6.5% over time. If you buy 100@1.02, you earn 6.5BTC the first week which is a 6.37% return, and that doesn't change. It's not like it will start out lower and over time approach 6.5%.
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May 22, 2012, 11:42:24 PM
 #39

Your initial investment does get closer to 6.5% over time. There is just a 2% initial investment fee, and if you want to reinvest your dividends you will have to pay it. (simple version)
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May 22, 2012, 11:43:54 PM
 #40


It's not like your effective dividends will converge to 6.5% over time. If you buy 100@1.02, you earn 6.5BTC the first week which is a 6.37% return, and that doesn't change. It's not like it will start out lower and over time approach 6.5%.
Indeed...
In the scheme of things, to get 0.065BTC every week for 1 bitcoin or 1.02 doesn't really impact the profit loss much at least in my books.
2483;2533;2643 is massive and I will live with the difference happily.
You have a much higher chance of losing bitcoins for other reasons Smiley and Pareto would suggest to focus on those aspects with the biggest potential.
This is way way too minute in my opinion.

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