I must say this EskimoBob. You are the most annoying TROLL I have seen on this forum. If you can't figure out how a investment that gives a full return in a matter of months is profitable, there is little hope for you. You seem to be under the impression that by calling something a share, it will sprout a higher return rate. My mining equipment only earns so much. I basically charge 15% initially for maintaining equipment. Calling it a share or changing the contract is not share is not going to generate bitcoins out of this air. Bonds will remain profitable so long as mining is profitable and there is no reason to believe that will change.
cuz0882, no need to get personal and start trolling the thread. Relax, it's nothing personal (unless you feel guilty and this causes you get mad. BTW, this is actually a good reaction - there is still hope
It's highly profitable even with the dividend returns likely lowering over time. Hydro bonds has been paying out almost 2.5% weekly. This will most likely increase when butterfly delivers the new ASIC's. I keep the price about $1.45 -$1.50 per mhash or currently .13 btc. Apparently you need to brush up on your math, because that is a highly profitable return rate. If you want your payouts to increase every week you need to reinvest some of your dividends. The same way miners reinvest into their farms. You can't have your cake and eat it too. Also calling something a bond or a share has little relevance. The contract is all that matters.
BTW, I like your upgrade path because you have no additional rip off fee attached to it. Interesting, how you brought the fiat into this equation but this is is irrelevant.
OK, lets look at the HYDRO.BONDS
About 4 weeks ago you managed to get the outstanding bonds number close to 700. It was trading at 1.9 or close to it.
As of today, your bonds market value has lost about 34,2% and dropped to 1.25. Lets not forget, that the lucky turd holder has earned impressive 0,15 BTC in dividends (no pun intended). Now, -0.65+0,15=-0.49 BTC. This equal to about 25% loss in 4 weeks. Impressive, I must say. Impressive indeed. If difficulty makes another jump, the loss will grow and earnings will shrink even more.
In those 4 weeks, your dividends per bond have lost 0,00262597 BTC, (- 6,51%)
BTW, I have one question: "Do you understand, that your hydro power at X cents per KWh has absolutely NOTHING to do with how many bitcoins 10 Mh/s can crank out and it has no benefit for bond holders? For shareholders, yes.
Back to the topic at hand.
Looks like some, who have done simple math, do agree with me that outlook is not good and once invented "new bond" is not what it used to be. Nothing is written in stone. BTC can take another hit and difficulty will be back where it was 6 months ago. BFL can go under and ASIC hysteria is over. Anything can happen.
I am sure that most bond issuers will be scrambling to call the outstanding bonds and buying back the debt for pennies.
For some of you, sorry but you hyperboles are bull shit and not lets waste time on those.
Furthermore, not all (traditional finance industry) bonds have a maturity. Perpetual bonds, or
perpetuities, have no maturity date; some of which are actively traded. For all intents and purposes, century or 100-year bonds might as well be a perpetual bond in terms of pricing.
If you read the article, take a look at consol's too. I bet you understand, why perpetual mining turds can not really be compared to bank and gov notes.
I think at the crux of this discussion, is that mining bonds have some unique pricing model parameters, foremost of which is
that mining bonds are short difficulty.
This is very elegantly put.
Thank you. For others, if you are unsure what is the meaning of this is, let me explain: You make a bet, that difficulty will go lower (and hopefully stay there) from the moment you made the bet.
On top of that, there are the traditional factors, such as exchange risk (e.g., BTCUSD rate), counter-party and default risk (i.e., GLBSE, issuer), and what I would call exploit risk (risk that Bitcoin, and the implementations thereof, are exploited). Of course, regular bond pricing constructs, such as interest rates and duration, are applicable as well, although the concept of the "risk-free rate" is less well-defined for bitcoins than for traditional fiat currencies.
TL;DR: Mining bonds are certainly bonds, though they are fundamentally new and come with new pricing models
I'll use this opportunity to simplify a typical mining turd contract (yes, there are exceptions and btw, "most" in not the same as "all".)
Contract:
1) You give me N bitcoins and I'll buy hardware with this - you have 100% risk, I have 0 - it's all your money.
2) I'll promise to pay you a share of the income what ever N Mh/s can produce. I have 0 risk, you, dear investor have 100%-what ever the N Mh/s managed to produce.
3) I can issue new bonds any time I like to and buy (or not) new equipment with this money) - 0 risk for miner, bond holder get's it all
4) I can call back the bond at some arbitrary price. - all the risk is at the shoulders of the bond holder, Miner has committed to nothing.
... and so on
So far, am I right or am I wrong?
Yes, it is a contract. Is this a bond (loan) contract? No, it is not. BTW, this is why I started this thread. I think the terms are crap and calling it bond is confusing the issue.
First I thought that maybe FRN fits, but not really. FRN's use combination of floating and fixed rate - and issuer guarantees to pay the coupon an buy the notes back at some predetermined date and price.
Please, keep those "if you do not like it, do not buy it" comments to yourself. This is not kindergarten After some of you got really pissed off and try to make me look like I fool, do I still believe that most of the mining bonds are actually turds? Yes I do.
