Weekly loss of N% guaranteed - Enjoy perpetual loss with fixed Mh/s mining turds

[cuz0882]

Cuz, I understand that very well. Im not saying bonds are per definition a bad idea, they are not.
But Im a miner. And unlike you,  and unlike most investors apparently,  I can see *why* miners are so keen to sell you bonds at those prices. It seems investors dont understand the mining market and dont understand the impact reward halving,  Moore's law, fpgas and in particular, asics will have. Thats why these bonds were ridiculously overpriced, and most still are today.
Ive been saying this for months, and I just showed you DMC as an example, I could have pointed to YABMC as well:
https://glbse.com/asset/view/YABMC

Or puremining, or other bonds that are not propped up by freebee asic upgrades.

If you want to hedge against a BTC price collapse, all you have to do is buy less BTC. But holding BTC at this point makes infinitely more sense than buying overpriced bonds.

Anyway, Ill repeat my offer: lend me your bonds for 6 months, and Ill pay you all dividends plus a negotiable bonus. If you feel so strongly about holding bonds, how could you possibly lose?

I'm done explaining this to you. I never said no bonds are overpriced. Some charge just above cost. Some people would rather pay a small fee and not bother with equipment. If you want to mine yourself, go for it.

[1714952665]

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[Sp0tter]

Just release a script that parses the GLBSE CSV file and calculates if one has actually made a loss or is still in the win-zone atm. with mining "bonds".

The GLBSE Chrome extension will do that for you.

I created a little script to help with this as well:
https://bitcointalk.org/index.php?topic=89970.0


Note:  Script is not currently being improved or updated since I pulled everything out of GLBSE last month.

[conspirosphere.tk]

I pulled everything out of GLBSE last month.

Would you mind to tell us why?

[Sp0tter]

I pulled everything out of GLBSE last month.

Would you mind to tell us why?

I set sail on the pirate ship.  And I fully agree with EskimoBob about the validity of mining "bonds" at a fixed mh/s with no buyback....

[Bitcoin Oz]

Bonds are usually good for preserving your capital and earning you a fixed income from dividends. If you think about it, mining turds offer you none of the previously mentioned benefits. At the moment, dividends do not cover the depreciation of your invested capital. Sorry, but this applies to all the mining turds out there.

I just wrote a piece elaborating on that. Hadn't seen your (very well thought out) post, smickles pointed it out tho.

Your comparing purchasing btc to purchasing mining bonds... There is no way to know what bitcoin will be worth in the future. You should be comparing holding your money in dollars vs purchasing mining equipment or bonds. It's pretty clear that mining and bonds are paying out well. There are no capital investment loses right now on the bonds using singles or mini rigs. Even gpu's hold their value pretty well. I expect most gpu's have already paid for themselves.

Shares arent purchased with dollars. If gigavps was listed on the NYSE and you could buy and sell in USD then you might have a good argument 

You suggesting that I should charge a higher dollar amount to purchase and run a single for someone? Even though it still costs me the same dollar amount.. And if the price of btc drops to one dollar how would I purchase a single for a fraction of what butterfly charges.. When you purchase a bond, its used to purchase equipment for a set dollar amount. The bitcoins are not just sitting around fluctuation with the price.

I wouldnt mind buying bonds so much if your dividend didnt also take a haircut. Investors lose on both counts.

[cuz0882]

Bonds are usually good for preserving your capital and earning you a fixed income from dividends. If you think about it, mining turds offer you none of the previously mentioned benefits. At the moment, dividends do not cover the depreciation of your invested capital. Sorry, but this applies to all the mining turds out there.

I just wrote a piece elaborating on that. Hadn't seen your (very well thought out) post, smickles pointed it out tho.

Your comparing purchasing btc to purchasing mining bonds... There is no way to know what bitcoin will be worth in the future. You should be comparing holding your money in dollars vs purchasing mining equipment or bonds. It's pretty clear that mining and bonds are paying out well. There are no capital investment loses right now on the bonds using singles or mini rigs. Even gpu's hold their value pretty well. I expect most gpu's have already paid for themselves.

Shares arent purchased with dollars. If gigavps was listed on the NYSE and you could buy and sell in USD then you might have a good argument 

You suggesting that I should charge a higher dollar amount to purchase and run a single for someone? Even though it still costs me the same dollar amount.. And if the price of btc drops to one dollar how would I purchase a single for a fraction of what butterfly charges.. When you purchase a bond, its used to purchase equipment for a set dollar amount. The bitcoins are not just sitting around fluctuation with the price.

I wouldnt mind buying bonds so much if your dividend didnt also take a haircut. Investors lose on both counts.

In what sense? Earning per mhash have been increasing for a while. It's unclear how the reward drop and ASIC release will effect it though.

[P4man]

[quote author=cuz0882 link=topic=98517.msg1100910#msg1100910
In what sense? Earning per mhash have been increasing for a while. It's unclear how the reward drop and ASIC release will effect it though.
[/quote]

lol. How is that unclear? Bitfountain claim they will have 12 TH online by october or november, and that they can easily expand to 50TH shortly after. Butterfly labs is expected to ship a comparable hashrate around the same period.  And there are at least two other ASIC projects underway. One of them might fail or miss their deadlines, maybe even two. But all of them? Bloody unlikely, since its difficult to imagine an ASIC that is easier to design than a bitcoin miner.  None of those asics will be unplugged when rewards halve, whatever gpuminers do is essentially irrelevant. Now guess what will happen with your cherished fixed MH bonds.

[organofcorti]

Now guess what will happen with your cherished fixed MH bonds.

Exactly the same as a miner with a fixed Mhps GPU. They will earn significantly less btc. No point guessing what USD they'll earn though - if you knew that, you'd be set to make a killing on MTGOX.

[P4man]

Exactly the same as a miner with a fixed Mhps GPU.

Not quite exactly the same, because a gpuminer can salvage part of his investment by selling his cards to gamers, or perhaps even participate in that distributed computing project by (dont remember the name, that VC backed startup?). Most FPGA miners (BFL) will be able to salvage their investment by either upgrading or selling their kit to people who want to buy ASICs. A fixed MH bond holder? He is simply screwed. IN fact he is doubly screwed because last time I checked, per MH bonds were more expensive to buy than GPUs, and they will have close to zero residual value.

[cuz0882]

Exactly the same as a miner with a fixed Mhps GPU.

Not quite exactly the same, because a gpuminer can salvage part of his investment by selling his cards to gamers, or perhaps even participate in that distributed computing project by (dont remember the name, that VC backed startup?). Most FPGA miners (BFL) will be able to salvage their investment by either upgrading or selling their kit to people who want to buy ASICs. A fixed MH bond holder? He is simply screwed. IN fact he is doubly screwed because last time I checked, per MH bonds were more expensive to buy than GPUs, and they will have close to zero residual value.

Did I say anything about earnings for fixed mhash? Almost all the bonds will be upgraded to ASIC, so it is very unclear what earnings will be.

[organofcorti]

Exactly the same as a miner with a fixed Mhps GPU.

Not quite exactly the same, because a gpuminer can salvage part of his investment by selling his cards to gamers, or perhaps even participate in that distributed computing project by (dont remember the name, that VC backed startup?). Most FPGA miners (BFL) will be able to salvage their investment by either upgrading or selling their kit to people who want to buy ASICs. A fixed MH bond holder? He is simply screwed. IN fact he is doubly screwed because last time I checked, per MH bonds were more expensive to buy than GPUs, and they will have close to zero residual value.

Did I say anything about earnings for fixed mhash? Almost all the bonds will be upgraded to ASIC, so it is very unclear what earnings will be.

How do you upgrade a fixed Mhps bond? Do you make one new bond equal one hundred older ones? If so, it's not fixed.

[P4man]

Did I say anything about earnings for fixed mhash? Almost all the bonds will be upgraded to ASIC, so it is very unclear what earnings will be.

So you are counting on "profits" that some bond issuers will voluntarily donate to you?
Sounds like a fantastic investment opportunity. Who knows how generous those miners will be. Maybe you will only lose 75% of your btc investment?

[cuz0882]

Exactly the same as a miner with a fixed Mhps GPU.

Not quite exactly the same, because a gpuminer can salvage part of his investment by selling his cards to gamers, or perhaps even participate in that distributed computing project by (dont remember the name, that VC backed startup?). Most FPGA miners (BFL) will be able to salvage their investment by either upgrading or selling their kit to people who want to buy ASICs. A fixed MH bond holder? He is simply screwed. IN fact he is doubly screwed because last time I checked, per MH bonds were more expensive to buy than GPUs, and they will have close to zero residual value.

Did I say anything about earnings for fixed mhash? Almost all the bonds will be upgraded to ASIC, so it is very unclear what earnings will be.

How do you upgrade a fixed Mhps bond? Do you make one new bond equal one hundred older ones? If so, it's not fixed.

Butterfly is letting people who purchased their equipment trade it in for ASIC at 100% value. It should be around 21x times faster. I've only seen one that requires switching the bond. It depends on the contract, mostly everyone with butterfly equipment is not charging anything for it.

[cuz0882]

Did I say anything about earnings for fixed mhash? Almost all the bonds will be upgraded to ASIC, so it is very unclear what earnings will be.

So you are counting on "profits" that some bond issuers will voluntarily donate to you?
Sounds like a fantastic investment opportunity. Who knows how generous those miners will be. Maybe you will only lose 75% of your btc investment?

So it's conspiracy theories now? Dividends are just voluntarily donated profits. Nothing to do with contract obligations.. I'm glad we have you to explain these things.

[P4man]

So it's conspiracy theories now? Dividends are just voluntarily donated profits. Nothing to do with contract obligations.. I'm glad we have you to explain these things.

It seems like its really necessary someone explains those things to you. Go read the contracts for any of the big mining bonds. Indeed the issuers are under absolutely zero obligation to increase their MH ratings for  their coupons. Gigamining voluntarily upgrades you from gigamining to terramining, giving you a free  4x (not 21x) increase. Many of the other bonds dont and none of them have to.

[Bitcoin Oz]

Did I say anything about earnings for fixed mhash? Almost all the bonds will be upgraded to ASIC, so it is very unclear what earnings will be.

So you are counting on "profits" that some bond issuers will voluntarily donate to you?
Sounds like a fantastic investment opportunity. Who knows how generous those miners will be. Maybe you will only lose 75% of your btc investment?

So it's conspiracy theories now? Dividends are just voluntarily donated profits. Nothing to do with contract obligations.. I'm glad we have you to explain these things.

You have a vested interest in ignoring the facts because you are a turd issuer 

[organofcorti]

Did I say anything about earnings for fixed mhash? Almost all the bonds will be upgraded to ASIC, so it is very unclear what earnings will be.

So you are counting on "profits" that some bond issuers will voluntarily donate to you?
Sounds like a fantastic investment opportunity. Who knows how generous those miners will be. Maybe you will only lose 75% of your btc investment?

So it's conspiracy theories now? Dividends are just voluntarily donated profits. Nothing to do with contract obligations.. I'm glad we have you to explain these things.

You have a vested interest in ignoring the facts because you are a turd issuer 

Please, don't. There's enough emotive posting here without calling someone an arsehole.

[EskimoBob]

I see this same pointless argument popping up how someone bought equipment and how miningturds are like buying equipment or becoming a miner and blaa blaa. Or if you look at the equipment price id USD and what not, then .... News flash! This is all irrelevant! We are talking about bonds.

Lets get few things straight.  This is overly simplified so do not start nitpicking.

If  I buy SHARES with a reasonable contract (not bonds!) in your mining farm - I participate in your mining adventure as I participate in IBM's business when I get few shares of IBM (pun intended). You pay me dividends and I hope you have enough foresight to make correct decisions and not go belly up, before I earn few divs and sell shares at profit (or hold for bigger capital gain).
In this case, you sold me a slice of your mining farm to buy more equipment or what ever your plans are to improve the income. We share your business (equipment etc) and risks, as long as I am your share holder.  BTW, this is overly simplified, so do not get hysterical. I recommend you read more on this topic. Utterly retarded TV shows and Gordon Gekko films are not the source of correct information.

If I buy "BONDS", you have issued, I do NOT participate in your mining adventure as I do not participate running a government, while buying government backed bonds or any other DEBT! instruments. Corporate or gov.
Only thing I did is: I lent you and you borrowed from me a pile of (do not blink now!) BITCOINS! Lenders do not give a flying fuck to what currency you convert this and at what price you bought your equipment at. From bond holders simplified point of view - your responsibility is to pay them back those bitcoins (principal) and interest on TOP! of that.

The whole mining bond contract idea got fucked up for the investor, when the "currency" of interest payments become Mh/s - coupon is tied ONLY to what ever Mh/s can produce.
Bbb...bbb.... but but it still paid in bitcoins!
You see,  the bitcoin is built so that stronger it gets, higher the difficulty rises and harder it gets to mine the coins. What this means in perpetual bond context is this: All the risks from bond issuer is transferred to the perpetual turd holders. Period.

As I have written in my previous post and as it has been repeated to ad fkn nauseam buy multiple others, perpetual mining "bonds" with deteriorating coupon payments are junk and not worth investors time nor money.

No matter what some of you are attempting to show, the truth is that: 1+1-3=-1

[mila]

I don't get it. Two parties agreed on a thing called "perpetual mining bond"
that from the inception and as long as glbse is online the issuer will pay 'a coupon' denominated in hashing operations per second
buyer could do nothing, keep bitcoin and "profit" by avoiding potential loss in this trade.
since buyers decided to trade bitcoins for the perpetual mining contracts, it's theirs choice and probably a questionable investment decision but why repeating the obvious?

[organofcorti]

I agree, mila, it was obvious from the start. I think more obvious if you've been a miner and look at it from that point of view.