Hashking's 50% insured deposit vs other methods. Compounding using (1+interest rate)^x

-We assume a starting capital of 100 BTC. This is marked as the black line.

-The pink line is putting everything into Hashking's 6.75% and compounding it.

-The green lines are: 50 BTC in 6.75% and 50 BTC in cold storage

---The top green line is total capital, the bottom green line is what you'd have if pirate defaulted

-The orange lines are: 50 BTC in 6.75%, 50 BTC in 1.019% (hashking offers this) fully insured

---The top orange line is total capital, the bottom orange line is what you'd have if pirate defaulted.

-The brown line is 100 BTC in hashking's 3.30% weekly 50% insured deposit

---Again, the top line is total capital; the bottom what you'd have on a pirate default.

This shows something interesting for an investor: after 22 weeks, your principal is 100% guaranteed.

Now, let's keep the 3.30% weekly 50% insured lines compounding, and start paying out interest with other methods.

-With the pink lines, we put all 100 BTC into Hashking's 6.75% uninsured deposit and take out our interest weekly.

-With the orange lines, we put 50 into Hashking's 1.9% weekly for compounding, and take weekly payouts on 50 BTC in 6.75%.

Now, as an investor, we look at the intersections. For the short term (< 4 months), we know that the best total capital is obviously to put everything into uninsured pirate, compounding or taking payouts. The best guarantee of capital is the 50/50 scheme in the short term.

At 19 weeks, hashking's insured deposit finally becomes a higher return than the 50/50 scheme (though the risk has always been higher since day 2)

The final scheme, which will have both a higher return and a higher guaranteed capital, goes like this:

50 into hashking's pirate operation, payouts weekly

50 into someone's insured operation, compounding

I say someone because hashking uses lock-in times, and it would be better for this scheme to get someone like PatrickHarnett who can take more every week.

Whenever you get a payout from pirate, add it to the compounding principle. I'm slightly confused on how to make this into an non-recursive equation right now

The compounding part would look like:

50

53.875

57.7888

Each week you have 1.01 * lastweek + 3.375

more formally:

f(x) = 1.01 * f(x-1) + 3.375

f(0) = 50

If anyone here can graph recursive functions I'd appreciate it. Or turn the recursive function above into an exponential one.