[CentiMine] Anonymous mini-mining contracts on GLBSE (CM400) - Final payout!

[CentiMine]

I'm proud to announce the start of CentiMine, the mini-mining contract.

What is it all about?
In a nutshell, you can buy 1 share at the price of 1 bitcent of 40,000 shares of a 3 months 400MH/s contract at bitcoinrigs.com.

This also explains the name of this business - even with the free 5 Bitcents from the faucet, you can start investing in a mining contract and buy 5 shares.

The asset name on GLBSE for this contract is "CM400" - short for "CentiMine 400 MH/s".
You can get an overview over all assets on GLBSE at http://dev.glbse.com/cgi-bin/list

How will the contract be fulfilled?
There will be 2 types of payouts, 1 big one at the end of the contract to keep rounding issues low and a weekly smaller payout.
The smaller payout will be the BTC generated on the previous Saturday and Sunday and be paid out on friday night to enable you to enjoy a bit-beer or so. This is also to reward people jumping on and buying shares early, as opposed to getting in late to get the big share (5/7th of the total income).

Tracking will be done at the moment manually by me via a google docs spreadsheet (so it is also nice to visualize via charts etc.), feel free to access it at:
https://spreadsheets.google.com/spreadsheet/ccc?key=tPbfdCrHmt_YDG3wo1c_92A&authkey=CN3s45YH

As this is done via GLBSE and everything is done/paid (on your side) in BTC, this is also a completely anonymous way to obtain a mining contract. You do not have to give your address or any other information to any mining contractor and I too cannot track who buys and trades these shares. Should this first try be a success, I might also offer additional contracts depending on demand in the future.

I plan to hand out 100% of the shares in this contract, in 2 waves:
Wave 1: This week as soon as the first payment of the contract arrived, limited to 5,000 shares to be able to check if everything works out on GLBSE
Wave 2: If everything works as expected, the rest of the shares until latest in one week from now: Tuesday 24th of May 2011.

As an "early bird bonus" (and to test the payout system on GLBSE) I will hand out 5 of my own bitcoins on Friday, 20th of May 2011 to the holder(s) of these 5,000 shares. [cancelled, as the "shipping" time of the contract took longer than expected - first coins came in on Saturday, 21st of May 2011]

Should there be any questions, or should you need assistance with GLBSE (command line clients are not for everyone, I know), feel free to ask.

There is now by the way also a nice online client available, check it out on GLBSE.com!

Links:
GLBSE: http://glbse.com/
GLBSE client installation instructions (Windows): https://gitorious.org/black-market/pages/Windows
GLBSE how-to (how to use the client): https://gitorious.org/black-market/pages/Tutorial
GLBSE vmware appliance: http://bitcointalk.org/index.php?topic=7912.0

GLBSE asset list: http://dev.glbse.com/cgi-bin/list
Link to this asset (CM400): http://dev.glbse.com/cgi-bin/asset?id=a3418fd35b48dbb9d366018537917dbc6481878fbfec8486751f1c411f210d7d.xml

Charts (not complete dataset yet, as it seems): http://charts.glbse.com/markets/CM400.html
List of recent trades: http://charts.glbse.com/markets/CM400/trades.html

Payouts so far:

Date	|	BTC	|	Comment
Fri. May 27th	|	0.0	|	Payout function on GLBSE not yet tested
Fri. June 3rd	|	5.16	|	3.3 from 1 week before + 1.86 from this week
Mon. June 13th	|	1.86	|	Bug in payout code fixed by nefario
Fri. June 17th	|	1.42	|	-
Fri. June 24th	|	0.92	|	-
Fri. July 1st	|	0.58	|	-
Fri. July 29th	|	2.10	|	Bulk payout from the past 4 weekends
Fri. August 26th	|	282.38	|	Final payout of weekend AND weekday balance

Upcoming payouts:

Date	|	BTC	|	Comment
never	|	0	|	No more payouts, as specified in the contract

Please note that payouts will be split amongst all 40000 shares, not just the shares sold.

[CentiMine]

Ok, it seems this thread got moved from "Marketplace" here. Sorry to have caused any confusion or trouble.

The original reasoning to put it there was that dishwara + SIN also have their threads regarding their mining contract sales in that other area.

[CentiMine]

The good, the bad and the not-so-good:

Good news: The order finally got set on "delivered", so I expect the first payment(s) to roll in very soon

Bad news: It took a bit longer than anticipated to get this whole project started, sorry for that - however as there were no shares handed out for buying yet (for exactly that reason and to ensure everything is properly done BEFORE people start investing), no damage other than maybe to my image has been done.

Not-so-good news: The function to pay out dividends on GLBSE is not yet implemented (the "btc.py pay" function) - so currently it's not possible to pay out the weekly income. However this is expected to change within ~the next two weeks and I'll see how it goes from there. I also requested to have it possible to specify a time in advance for dividend payouts, so I can already during the week issue the payout command and it will be processed exactly in time on Friday then. Nefario liked the idea and said he will look into implementing it, when he starts with the payout stuff.

As soon as the first payout from the contract is received (probably tomorrow), I will start with handing out the first batch of shares as planned.

Thanks for waiting and have a nice weekend!

[CentiMine]

Alright, the first income rolled in on the account - so I spread out the first 5000 shares as planned.

I hope until next friday the payout function in GLBSE gets implemented - otherwise the weekend payout will be added to the next weekend payout (and so on, until the function or a viable substitute is provided).

Thanks to the holder(s) of the first 197 shares that were sold already for your trust and patience.

May the trading begin!

[kseistrup]

It would be useful for potential investors if you published the name of your asset…

Cheers,

[CentiMine]

Well, yes...

I just linked it, but realized now I didn't write the asset name in the start post (until now) - Thanks!

[kseistrup]

But that's not the asset name on GLBSE, is it?

[CentiMine]

Well, the asset ID on GLBSE is "CM400" - so if you want to buy 100 shares at 1 Bitcent (not Bitcoin!) each, you would type:

Code:

python bmc.py buy 100 CM400 1000000

[kseistrup]

Exactly.  The asset ID is used by the black market client, therefore it would have been useful to mention the asset ID in the original announcement.

Cheers,

[Nefario]

I will be introducing sub asset-id's, so if you have the asset id CM400, you can then have the asset id CM400.q1 at (what will be) no extra cost.

So the format will be
ASSETID.*

So you can have
CM400.2011.Q1 and that will be ok.

Not implemented but working on it, also will implement some payment features during the next few days.

[CentiMine]

Oh, great! Then I should also get/reserve a more "general" ticker symbol for the future...

Thanks for the heads-up!

Just a short question.
Will it then work like this, assuming I own the ticker symbol "CentiMine" already?:

Code:

python bmc.py new-asset the-unique-CentiMine-400-05-2011-share-contract.xml
python bmc.py ticker [long asset id of the above new asset] CentiMine.400.05-2011
python bmc.py issue 40000 CentiMine.400.05-2011

[Nefario]

Oh, great! Then I should also get/reserve a more "general" ticker symbol for the future...

Thanks for the heads-up!

Just a short question.
Will it then work like this, assuming I own the ticker symbol "CentiMine" already?:

Code:

python bmc.py new-asset the-unique-CentiMine-400-05-2011-share-contract.xml
python bmc.py ticker [long asset id of the above new asset] CentiMine.400.05-2011
python bmc.py issue 40000 CentiMine.400.05-2011

Exactly, that's the plan.

[eturnerx]

I have questions:

What exactly are we buying? 40K bitcents is 400 bitcoins. At today's exchange rates that's over $2,800USD. That should buy about 1400 MHash/s worth of 3 month rentals from BitCoinRigs.com and still leave you plenty for you trouble. (By comparison the 400MHash/s rental contract is $840USD leaving you a tidy profit of about $2000USD. That margin is just too great!)

Is there something I'm missing here? I might invest if I knew what margin you're taking because it's fair you take a profit but it can't be exorbitant.

Otherwise - what a great idea!

[CentiMine]

On the one hand it's an anonymity service, which usually come with higher margins - on the other hand there is by far no guarantee how price and difficulty of Bitcoin might turn out (the two biggest factors for mining).

As I intend to sell 100% of the contract, I had to settle with a value that I would be comfortable with. Also when I initially planned this, BTC were worth quite a bit less than now and the recent difficulty increases also were a bit higher than expected, so I see that currently it does not look that attractive to (in the end) bet that 10 Kilohashes/s will generate more than 1 Bitcent within 3 months.

I'm still thinking how to solve these issues in the future (probably even also with this contract) and how to be able to give a price reduction to make it a bit more fair also on the payout side without me risking to loose money.

I initially calculated that a contract like this would cost ~200-300 BTC and would generate ~500 BTC, so I decided to set my price in the middle (also I liked the simplicity of having 1 MH/s for 3 months = 1 BTC). The recent growth in hash rate makes the current pricing look less attractive though.


A possible solution to reduce the margin to a more sane level would be to keep 50% of the shares for "myself" but pay out twice the dividend all the time - so in the end this simulates having 20 000 shares@20KH/s but keeps the initial price in the system.

As this might confuse people quite a bit (and be against the initial share contract) I'm still hesitant if I shouldn't instead "refund" 50% of the initial share cost via the payout function as soon as it's available (to not penalize current early investors) and then re-sell shares at half the price (0,5 Bitcent/share). This might however confuse/scare current investors, if they suddenly see that all their shares are only worth half the money and don't check their balance first.

A third option would be to just manually place 5/7 of the reduction into the "pot" and pay out 2/7 of it as soon as the first weekend payout is possible. Depending on how the payout function works out, it might currently be tough for me to have these 57,14... BTC on GLBSE (even though currently I would get back most of it anyways immediately) or if the system is smart enough to just consider shares other than mine to be paid.


In the end price adaptations are fortunately possible at nearly any point in time (especially with the second/third option) and I'll think of a more attractive price model that still allows me to have a certain margin, but is also more attractive to you guys.

[eturnerx]

Okay - I've setting notifications on for this thread. I'm hoping that eventually you'll work out your pitch (clear offer) and have margins that I'm okay with. At that point I'll reconsider investing.

If you're going to change things on present shareholders then consider making the options clear then using the voting feature on GLBSE. Good luck to you.

[CentiMine]

Well, actually there is nothing to vote upon - as no voting rights are specified anyways (and I am still the full owner + contact person of that contract).
I would use the vote just for input to take into consideration, but this can also be done here on the forums as you did. Additionally it is not possible for shareholders currently to give other opinions than "yes" or "no" and I want to deal with this issue as fast as possible, as it is an important point that very well could scare away customers.
[Edit: Also I'm giving away my own money in addition to what will be paid out from the contract, not the other way round - and I think I can decide myself how and where to spend it]

I recalculated everything, and since the contract did cost converted to Bitcoin ~100 BTC when bought, I personally think a margin of 50 BTC should be ok. This is given the unique product, time to be and already invested from my side and (especially!) the volatility of the BTC <--> USD prices plus my plans for expansion/resale in the future. I do not want to set a margin in USD and then convert that on the last day into BTC, as it seems a bit arbitrary to me and also would make this more of a gamble than contract-mining currently is. A system like that actually could even lead to me taking ALL BTC mined and the shareholders owing me money, should one BTC become worth much less than it currently is. Also this would then lead again away from using BTC as real currency in my opinion.

The way I'm going to handle this, is that I will keep the prices as they currently are, but deposit 250 BTC into the "pot" (= the 5/7 payout at the end of the contract) from my own money to reduce the effective prices of shares to a more sane level. This means each share has a guaranteed payout of additionally 0,00625 BTC, but also means that in the end I am "borrowing" from the shareholders up to 250 BTC (if all shares are sold) until the contract expires. I promise however to not use that money/ressources for any personal gains or speculative ventures (like buying shares/cashing out), as it belongs to the shareholders - not me. As I would have had that money on my GLBSE account anyways with the previous price too, there is nothing that current shareholders wouldn't have already agreed to.

Also I promise to calculate share values + margin again earlier next time I issue such a contract to prevent unpleasant discoveries like this one. I was even shocked myself, when I entered the current rates in my spreadsheet I used for calculations!

My apologies for any inconvenience caused - the spreadsheet has been updated accordingly and there is also a link to this post as an explanation.

[CentiMine]

Small update:

Everything is running smoothly, 361 shares have already been sold.

Unfortunately the payout function of GLBSE is still not in place, so the 3.3 BTC that would have been paid out today, will be paid out in one week from now (and so on, until the payout function is implemented).

Also nefario said he wants to implement a basic webinterface to GLBSE very soon. If you find the current interface too difficult to handle, just wait a little - help might be just around the corner!

[Nefario]

The payout functionality is there but not tested (I would seriously recommend not using it, do so at the peril of your own soul).

We've had a breakthrough on the web client so we'll have one to use in about 1-2 weeks.

Sorry for the lack of other updates, this is what has been keeping me busy.

[CentiMine]

Ok, I'll count "not yet tested" also as "not to be used".
I really don't want to risk loosing/destroying 3.3 BTC and will wait until I hear from you that it's safe to use.

Thanks for the heads-up and good luck for the web client!

[Nefario]

Now tested, you can pay shareholders with:
bmc.py pay CM400 AMOUNT

With AMOUNT being the total amount (full 64bit integer) that will be split over all shares issued.

Payment won't be made to shares that are in the account of the issuer, so only those who have been given or purchased shares will get the payment.

Any questions please let me know, Nefario.