[GLBSE] Diablo Insurance - Butterfly Labs BitForce SC Insurance (7,829:30,903)

[DiabloD3]

DI.BFLSC.Fail
DI.BFLSC.Succeed

Butterfly Labs has recently advertised three new products in their BitForce SC line, a 3.5 gigahash/sec USB powered unit named "Jalapeño", a 40 gigahash/sec unit named "SC Single", and a 1 terahash/sec unit named "SC Mini Rig", all to be delivered in October 2012.

In the event that Butterfly Labs fails to deliver at least a sum total of twenty-five (25) units composed of all three products offered described exactly as above to customers by the end of October 31st 2012, shares of DI.BFLSC.Fail will be repurchased at combined value of DI.BFLSC.Fail and DI.BFLSC.Succeed divided by the number of DI.BFLSC.Fail shares sold minus a 1% fee. Shares of DI.BFLSC.Succeed will be repurchased at a price of 0.00 BTC.

In the event that Butterfly Labs does succeed to deliver a sum total of twenty-five (25) units composed of all three products offered described exactly as above to customers by the end of October 31st 2012, shares of DI.BFLSC.Succeed will be repurchased at a combined value of DI.BFLSC.Fail and DI.BFLSC.Succeed divided by the number of DI.BFLSC.Succeed shares sold minus a 1% fee. Shares of DI.BFLSC.Fail will be repurchased at a price of 0.00 BTC.

The final repurchase price in either outcome depends on the number of shares sold of both DI.BFLSC.Succeed and DI.BFLSC.Fail combined by October 1st. Shares will be issued at a price of one thousandth (1/1000) of one BTC.

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[PsychoticBoy]

ButterFly Labs will never meet their requirement, look at the past!
The Single was advertised as a >1 GH/s @ 20w, they adjusted the ad after complains.
And that they would be shipped within 6 weeks is a fairytale.

We will see how this will end, I think its going to be a FAIL.

Greetz

[Sukrim]

Cheaper than a bet on betsofbitco.in (they have a quite high operator cut)!

I doubt however that there will be more than 1600 BTC in bets to even cover the ticker symbols...

[crazyates]

Question: How sill you verify shipment of these 25 orders? The only way I know how is:

1) BFL posts shipping information at the end of October with # of shipped units, which I find unlikely, and I doubt you would believe them anyways.

2) You go by this thread: https://bitcointalk.org/index.php?topic=89685.0 , which is entirely inaccurate. They have a little over 60 orders listed in that thread, out of a potential 1300 order numbers. Not exactly a complete representation...

[DiabloD3]

Question: How sill you verify shipment of these 25 orders? The only way I know how is:

1) BFL posts shipping information at the end of October with # of shipped units, which I find unlikely, and I doubt you would believe them anyways.

2) You go by this thread: https://bitcointalk.org/index.php?topic=89685.0 , which is entirely inaccurate. They have a little over 60 orders listed in that thread, out of a potential 1300 order numbers. Not exactly a complete representation...

Photos of units and photos of UPS/Fedex/USPS labels uncensored provided by forum goers will be more than enough to prove this. If they ship before October 31st, I imagine there will be more than enough evidence for DI.BFLSC.Success to win.

[SysRun]

I'm not sure D, what about the big money spenders who don't want to advertise their purchase?

Also, your terms for success are dubious.

does this mean 23 Jalapenos, 1 Single, and 1 MiniRig (or whatever they call it) shipped by the end of October will be considered a success?

My advice is to give it up... You're welcome to proceed (obviously), but I'm not sure you've thought this through.

I mean, what if BFL manufactures shipping labels on dummy accounts to keep the long con going? This seems equally as likely as them being a long con in the first place.

For the record, I don't think they're a long con, but I'm willing to change my mind given evidence to the contrary.

[DiabloD3]

I'm not sure D, what about the big money spenders who don't want to advertise their purchase?

Also, your terms for success are dubious.

does this mean 23 Jalapenos, 1 Single, and 1 MiniRig (or whatever they call it) shipped by the end of October will be considered a success?

My advice is to give it up... You're welcome to proceed (obviously), but I'm not sure you've thought this through.

I mean, what if BFL manufactures shipping labels on dummy accounts to keep the long con going? This seems equally as likely as them being a long con in the first place.

For the record, I don't think they're a long con, but I'm willing to change my mind given evidence to the contrary.

Yes, 23, 1, and 1 would be considered successful. It would also be like 1/8th of the network all by itself.

BFL can manufacture shipping labels, but they'd have to be valid ones that have working tracking numbers and have actually been delivered somewhere. Plus, they still need to produce the 25 units to go with the labels.

If there is any doubt about the validity of any individual pieces of evidence, they simply won't be used. If BFL has actually shipped units for real, I really doubt there will be a lack of evidence.

For example: if Giga or Yochdog say "Hey Diablo, we got our units", then any evidence they pony up will most likely be the real thing. If some random person with a brand new forum account and is clearly a sockpuppet says they got 25 units, well, we're going to need more evidence.

[DiabloD3]

Diablo Insurance is now for sale! nefario finally pressed the on button.

[DiabloD3]

2813 shares sold of DI.BFLSC.Fail
2500 shares sold of DI.BFLSC.Success

[DiabloD3]

3036 shares sold of DI.BFLSC.Fail
2500 shares sold of DI.BFLSC.Success

[DiabloD3]

16881 shares sold of DI.BFLSC.Fail
2501 shares sold of DI.BFLSC.Success

[Sukrim]

How long will shares be sold and how many of them in total?
It seems to me like you will sell unlimited shares to each side until October 1st, right?

[DiabloD3]

How long will shares be sold and how many of them in total?
It seems to me like you will sell unlimited shares to each side until October 1st, right?

Yes.

[kimmeriets]

Diablo Insurance is now for sale! nefario finally pressed the on button.

Explain what the word - "nefario"

[DiabloD3]

Diablo Insurance is now for sale! nefario finally pressed the on button.

Explain what the word - "nefario"

The guy who owns GLBSE

[DiabloD3]

16881 shares sold of DI.BFLSC.Fail
2718 shares sold of DI.BFLSC.Success

[DiabloD3]

16881 shares sold of DI.BFLSC.Fail
3718 shares sold of DI.BFLSC.Success

[DiabloD3]

20,831 shares sold of DI.BFLSC.Fail
3,833 shares sold of DI.BFLSC.Success

[eldentyrell]

DI.BFLSC.Fail
DI.BFLSC.Succeed

Hey cool, I might finally be motivated enough to set up a GLBSE account.

... shares of DI.BFLSC.Fail will be repurchased at combined value of DI.BFLSC.Fail and DI.BFLSC.Succeed divided by ...

What exactly is the "combined value"?  Is there some sort of "face value" for each share -- the price at which newly-issued shares are sold to the public -- and "combined value" is num_shares_outstanding*face_value?  It can't be market capitalization since you can't actually liquidate a company at its market cap (market cap is based on the order book or last trade price, both of which are altered by attempts to liquidate).  Will you stop issuing new shares at face_value, or change it, in the future?  If not, it would seem to put a floor on the value of the security and defeat the market pricing mechanism.

Or, instead, do you act as a market-maker -- if you see a buy order for one of the pair and a sell for the other at a lower price, you execute a pair of matching orders, destroy one share of one security, and synthesize one share of the other?  Unfortunately unless GLBSE allows short-selling (do they?) there's no way to kick off the whole process, but this would be the closest thing to Intrade I can imagine.

Forgive me if I don't understand how GLBSE works.  But I'm trying to compare this to Intrade and it doesn't quite line up.  I also couldn't find any additional details on the GLBSE page, which was a bit disconcerting.  I'm mostly trying to figure out exactly what the counterparty risk is here.

Lastly, where is "shares outstanding" on the GLBSE page?  I can only seem to find the order book.

[DiabloD3]

DI.BFLSC.Fail
DI.BFLSC.Succeed

Hey cool, I might finally be motivated enough to set up a GLBSE account.

... shares of DI.BFLSC.Fail will be repurchased at combined value of DI.BFLSC.Fail and DI.BFLSC.Succeed divided by ...

What exactly is the "combined value"?  Is there some sort of "face value" for each share -- the price at which newly-issued shares are sold to the public -- and "combined value" is num_shares_outstanding*face_value?  It can't be market capitalization since you can't actually liquidate a company at its market cap (market cap is based on the order book or last trade price, both of which are altered by attempts to liquidate).  Will you stop issuing new shares at face_value, or change it, in the future?  If not, it would seem to put a floor on the value of the security and defeat the market pricing mechanism.

Or, instead, do you act as a market-maker -- if you see a buy order for one of the pair and a sell for the other at a lower price, you execute a pair of matching orders, destroy one share of one security, and synthesize one share of the other?  Unfortunately unless GLBSE allows short-selling (do they?) there's no way to kick off the whole process, but this would be the closest thing to Intrade I can imagine.

Forgive me if I don't understand how GLBSE works.  But I'm trying to compare this to Intrade and it doesn't quite line up.  I also couldn't find any additional details on the GLBSE page, which was a bit disconcerting.  I'm mostly trying to figure out exactly what the counterparty risk is here.

Lastly, where is "shares outstanding" on the GLBSE page?  I can only seem to find the order book.

GLBSE is both the exchange and the broker. "Companies" are issued the original stock, and then we sell it. DI.BFLSC will stop issuing shares October 1st or when BFL ships, whichever comes first.

Combined value is both Fail and Succeed added together. Right now we're at around 4000:21000 Succeed/Fail, so if Succeed to pay out right now, not only would Succeed get what they paid for the almost 4000 shares back, they'd get around 21000/4000 for each share on top of that.

Share value is fixed at 1/1000th of a BTC (although nothing stops people from reselling their shares at a lesser value to others).

Shares outstanding is not listed on GLBSE anywhere, its inside the API unfortunately.

https://glbse.com/api/quantity_trading/DI.BFLSC.SUCCEED
https://glbse.com/api/quantity_trading/DI.BFLSC.FAIL