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

[P4man]

I think more obvious if you've been a miner and look at it from that point of view.

This. My guess is most bond holders dont have a clue about mining and thought that by buying bonds they would profit like miners once did (and perhaps still do, for some time at least). In reality they purchased the huge risk of all the things that are about to happen.

[cuz0882]

Your views are so distorted on mining and bonds its ridiculous. Mining is more profitable right now, then it was this time last year. A bond worth 10mhash pays just as much as mining 10mhash yourself. Bonds hold their value when the btc price changes just like mining equipment.

Holding the price of a mining bond at a set btc amount or having dividends paid that way is ridiculous. If you don't think so write up a contract that way. Even if it was possible, there would be nothing safe about having your initial investment or dividends always hold the same btc amount. If the price of btc dropped down to 6 dollars you would have lost half your investment. If the value of btc went up, who would buy that bond? Not the issuer, he spent your investment on mining equipment to pay your dividends. Since the btc price went up he owes you more then that equipment is even worth now. With the increased price came increased difficulty, now he can't even pay dividends and is about to default on the contract.  No one else is buying your bond either, your asking way to much for it. They decide to buy the bond from the new issuer like yours, except that it came out after the price went up. Of course this is assuming anyone would be stupid enough to purchase them in the first place.

[EskimoBob]

Your views are so distorted on mining and bonds its ridiculous. Mining is more profitable right now, then it was this time last year. A bond worth 10mhash pays just as much as mining 10mhash yourself. Bonds hold their value when the btc price changes just like mining equipment.

Holding the price of a mining bond at a set btc amount or having dividends paid that way is ridiculous. If you don't think so write up a contract that way. Even if it was possible, there would be nothing safe about having your initial investment or dividends always hold the same btc amount. If the price of btc dropped down to 6 dollars you would have lost half your investment. If the value of btc went up, who would buy that bond? Not the issuer, he spent your investment on mining equipment to pay your dividends. Since the btc price went up he owes you more then that equipment is even worth now. With the increased price came increased difficulty, now he can't even pay dividends and is about to default on the contract.  No one else is buying your bond either, your asking way to much for it. They decide to buy the bond from the new issuer like yours, except that it came out after the price went up. Of course this is assuming anyone would be stupid enough to purchase them in the first place.

You are almost getting it but you are still stuck in your own little bubble that keeps you from understanding the big picture, the OP and why miningturds are a bad investment in market conditions like we are now and probably will be for a long-long time.

  Holding the price of a mining bond at a set btc amount or having dividends paid that way is ridiculous.

You are correct! Question is, where did this one come from? Let me guess, you have no idea what is the meaning of par in this context. My bad.
Par value, in finance and accounting, means stated value or face value.
If one issues a bond and states, that the face value is 1 then  the "coupon" will be calculated form 1 (the face value) no matter what the market price of this bond is at the moment.  Bond prices always fluctuate and this is normal but you can not confuse "coupon" and various types of other yields (current ..., ... to coupon, ... to maturity etc).
 
BTW, I do not recall asking to "fix the bond price" while it's traded on the open market.

Because you have probably misunderstood the "par value" and coupon, rest of your comment actually is distorted and ridiculous.

1) For start, I recommend you forget all about BTC:USD or any other exchange rates. BTC is the only currency you know from now on.
2) What is the expected difficulty trend if BTC popularity grows slowly and more real life uses for BTC pop into existence?
3) What happens to output form 1 Mh/s when difficulty keeps rising?
3a) and block reward gets halved?
3c) superior mining technology gets introduced? 

Now the tricky part:
4) What happens to a mining "bond" price, when it's payout drops after ever 2016 blocks? 
5) If those same miningturds loss of its resale value is grater than the gain from regular dividents, why do you want to buy one? (1+1-3="your actual income")

[bitcoinbear]

If one is making money in the bitcoin environment, then it is advantageous to have bitcoins continue. One could purchase some mining bonds to help continue bitcoin mining, and thus bitcoins. Even though the bonds themselves are not making a viable return on the investment, they perpetuate the bitcoin system, thus preserving the rest of this ones hypothetical business.

[cuz0882]

You are almost getting it but you are still stuck in your own little bubble that keeps you from understanding the big picture, the OP and why miningturds are a bad investment in market conditions like we are now and probably will be for a long-long time.

  Holding the price of a mining bond at a set btc amount or having dividends paid that way is ridiculous.

You are correct! Question is, where did this one come from? Let me guess, you have no idea what is the meaning of par in this context. My bad.
Par value, in finance and accounting, means stated value or face value.
If one issues a bond and states, that the face value is 1 then  the "coupon" will be calculated form 1 (the face value) no matter what the market price of this bond is at the moment.  Bond prices always fluctuate and this is normal but you can not confuse "coupon" and various types of other yields (current ..., ... to coupon, ... to maturity etc).
 
BTW, I do not recall asking to "fix the bond price" while it's traded on the open market.

Because you have probably misunderstood the "par value" and coupon, rest of your comment actually is distorted and ridiculous.

1) For start, I recommend you forget all about BTC:USD or any other exchange rates. BTC is the only currency you know from now on.
2) What is the expected difficulty trend if BTC popularity grows slowly and more real life uses for BTC pop into existence?
3) What happens to output form 1 Mh/s when difficulty keeps rising?
3a) and block reward gets halved?
3c) superior mining technology gets introduced? 

Now the tricky part:
4) What happens to a mining "bond" price, when it's payout drops after ever 2016 blocks? 
5) If those same miningturds loss of its resale value is grater than the gain from regular dividents, why do you want to buy one? (1+1-3="your actual income")

If the block reward drops to 25, it's equivalent to the price of btc dropping in half in terms of dividends received. The last time the price was $7.50 things were going just fine. ASIC's coming out is actually beneficial to those people who are getting them.

Mining bonds are not valued in btc, saying they lose there value based off (original btc investment) - (current btc value) is stupid. Mining equipment/bonds can't hold btc value when the price changes. That's just the way it is and has always been.  If you think otherwise. Why don't you explain a way to invest in mining equipment while still being able to get back your original btc investment after a btc price increase. If you can't do that, just lock this thread and stop spreading this bs propaganda. All your doing is misleading people.

[bitcoinbear]

 ASIC's coming out is actually beneficial to those people who are getting them.

But ASIC's coming out are not helpful to people who are holding a bond for "1 MHs", since ASIC's will certainly increase the total hashrate and therefore the difficulty, so your 1 MHs will certainly earn less.

[P4man]

 ASIC's coming out is actually beneficial to those people who are getting them.

But ASIC's coming out are not helpful to people who are holding a bond for "1 MHs", since ASIC's will certainly increase the total hashrate and therefore the difficulty, so your 1 MHs will certainly earn less.

It also remains to be seen if they will indeed be profitable for miners that get them. My bet is that the vast majority of asic buyers will lose and never recover their investment. I would make that bet if there was just 1 asic provider (BFL), but as it seems there will be at least 2 players entering the market at roughly the same time, and that makes a price war and difficulty explosion unavoidable. Fixed MH bonds holders are going to be so screwed it will actually be funny .

[cuz0882]

 ASIC's coming out is actually beneficial to those people who are getting them.

But ASIC's coming out are not helpful to people who are holding a bond for "1 MHs", since ASIC's will certainly increase the total hashrate and therefore the difficulty, so your 1 MHs will certainly earn less.

I've been talking about bonds with free upgrades, but you are correct.

[MPOE-PR]

Lending to greece and spain was never this profitable either

Something like that.

[ciuciu]

Lending to greece and spain was never this profitable either

Something like that.

The ideas of a stolen porn website operator, sure bring a lot of "substance" to the discussion. Mircea have you got some pictures?

[EskimoBob]

lets keep it civilized.

So, for a while it looked like there will be a new name for those so called "bonds".
 

[organofcorti]

lets keep it civilized.

lol

[matthewh3]

I agree buying a fixed MH/s rate perpetual bond in bitcoin mining doesn't make sense with the long term trend in increasing network difficulty hash-rate.  That's why at RSM - https://bitcointalk.org/index.php?topic=63257.0 - you own actually own a share of all the hardware, wallet and anything else of value.  With us also saving between 90% to 50% of mining profits (to be decided by motion) to purchase more ASIC's to increase the MH/s a share-rate to beat the long term trend in growth increasing network difficulty hash-rate.  Meaning our share price value shouldn't decrease on the long term trend of increasing network difficulty like fixed rate bonds but actually grow and with that you will get a weekly dividend.

[bitcoinbear]

I agree buying a fixed MH/s rate perpetual bond in bitcoin mining doesn't make sense with the long term trend in increasing network difficulty hash-rate.  That's why at RSM - https://bitcointalk.org/index.php?topic=63257.0 - you own actually own a share of all the hardware, wallet and anything else of value.  With us also saving between 90% to 50% of mining profits (to be decided by motion) to purchase more ASIC's to increase the MH/s a share-rate to beat the long term trend in growth increasing network difficulty hash-rate.  Meaning our share price value shouldn't decrease on the long term trend of increasing network difficulty like fixed rate bonds but actually grow and with that you will get a weekly dividend.

But what you describe is a share of a bitcoin mining operation, which is totally different than a fixed hash bond. A fixed share bond only makes sense to buy if you think the difficulty will go down, which has not happened even when the bitcoin price dropped by an order of magnitude.

[matthewh3]

I agree buying a fixed MH/s rate perpetual bond in bitcoin mining doesn't make sense with the long term trend in increasing network difficulty hash-rate.  That's why at RSM - https://bitcointalk.org/index.php?topic=63257.0 - you own actually own a share of all the hardware, wallet and anything else of value.  With us also saving between 90% to 50% of mining profits (to be decided by motion) to purchase more ASIC's to increase the MH/s a share-rate to beat the long term trend in growth increasing network difficulty hash-rate.  Meaning our share price value shouldn't decrease on the long term trend of increasing network difficulty like fixed rate bonds but actually grow and with that you will get a weekly dividend.

But what you describe is a share of a bitcoin mining operation, which is totally different than a fixed hash bond. A fixed share bond only makes sense to buy if you think the difficulty will go down, which has not happened even when the bitcoin price dropped by an order of magnitude.

If difficult goes down on a long term trend then that means bitcoin is going (down) out of use on a long term trend.

[Bitcoin Oz]

Your views are so distorted on mining and bonds its ridiculous. Mining is more profitable right now, then it was this time last year. A bond worth 10mhash pays just as much as mining 10mhash yourself. Bonds hold their value when the btc price changes just like mining equipment.

Holding the price of a mining bond at a set btc amount or having dividends paid that way is ridiculous. If you don't think so write up a contract that way. Even if it was possible, there would be nothing safe about having your initial investment or dividends always hold the same btc amount. If the price of btc dropped down to 6 dollars you would have lost half your investment. If the value of btc went up, who would buy that bond? Not the issuer, he spent your investment on mining equipment to pay your dividends. Since the btc price went up he owes you more then that equipment is even worth now. With the increased price came increased difficulty, now he can't even pay dividends and is about to default on the contract.  No one else is buying your bond either, your asking way to much for it. They decide to buy the bond from the new issuer like yours, except that it came out after the price went up. Of course this is assuming anyone would be stupid enough to purchase them in the first place.

When you get a car loan your payments dont decrease because the car depreciates in value. A bond is a loan and you should get back your principal + your interest. Otherwise you are better off just loaning coins to Patrick Harnett at a constant 1% a week return.

[matthewh3]

Your views are so distorted on mining and bonds its ridiculous. Mining is more profitable right now, then it was this time last year. A bond worth 10mhash pays just as much as mining 10mhash yourself. Bonds hold their value when the btc price changes just like mining equipment.

Holding the price of a mining bond at a set btc amount or having dividends paid that way is ridiculous. If you don't think so write up a contract that way. Even if it was possible, there would be nothing safe about having your initial investment or dividends always hold the same btc amount. If the price of btc dropped down to 6 dollars you would have lost half your investment. If the value of btc went up, who would buy that bond? Not the issuer, he spent your investment on mining equipment to pay your dividends. Since the btc price went up he owes you more then that equipment is even worth now. With the increased price came increased difficulty, now he can't even pay dividends and is about to default on the contract.  No one else is buying your bond either, your asking way to much for it. They decide to buy the bond from the new issuer like yours, except that it came out after the price went up. Of course this is assuming anyone would be stupid enough to purchase them in the first place.

When you get a car loan your payments dont decrease because the car depreciates in value. A bond is a loan and you should get back your principal + your interest. Otherwise you are better off just loaning coins to Patrick Harnett at a constant 1% a week return.

Investing with Patrick relies on him not messing up.  With RSM - https://bitcointalk.org/index.php?topic=63257.0 - you own a share of all the hardware, wallet and anything else of value as long as you trust me not to disappear.  Major investors can be added to my personal Facebook page where I have over thirty family members all confirmed by relationship.

[Bitcoin Oz]

Your views are so distorted on mining and bonds its ridiculous. Mining is more profitable right now, then it was this time last year. A bond worth 10mhash pays just as much as mining 10mhash yourself. Bonds hold their value when the btc price changes just like mining equipment.

Holding the price of a mining bond at a set btc amount or having dividends paid that way is ridiculous. If you don't think so write up a contract that way. Even if it was possible, there would be nothing safe about having your initial investment or dividends always hold the same btc amount. If the price of btc dropped down to 6 dollars you would have lost half your investment. If the value of btc went up, who would buy that bond? Not the issuer, he spent your investment on mining equipment to pay your dividends. Since the btc price went up he owes you more then that equipment is even worth now. With the increased price came increased difficulty, now he can't even pay dividends and is about to default on the contract.  No one else is buying your bond either, your asking way to much for it. They decide to buy the bond from the new issuer like yours, except that it came out after the price went up. Of course this is assuming anyone would be stupid enough to purchase them in the first place.

When you get a car loan your payments dont decrease because the car depreciates in value. A bond is a loan and you should get back your principal + your interest. Otherwise you are better off just loaning coins to Patrick Harnett at a constant 1% a week return.

Investing with Patrick relies on him not messing up.  With RSM - https://bitcointalk.org/index.php?topic=63257.0 - you own a share of all the hardware, wallet and anything else of value as long as you trust me not to disappear.  Major investors can be added to my personal Facebook page where I have over thirty family members all confirmed by relationship.

 Patrick doesnt let someone borrow off him and pay back less than what he lent out.

[racerguy]

Eskimobob, wealth isn't however much of currency N you hold, it's how much real stuff you can buy with currency N.  If you believe wealth is whatever some numbers on a computer somewhere says instead of the amount of real stuff you have bankers are gonna own your ass bitcoin or no bitcoin.

[EskimoBob]

Eskimobob, wealth isn't however much of currency N you hold, it's how much real stuff you can buy with currency N.  If you believe wealth is whatever some numbers on a computer somewhere says instead of the amount of real stuff you have bankers are gonna own your ass bitcoin or no bitcoin.

I do not recall arguing against it. Buy miningturds (fixed Mh/s perpetual "bonds")  and it's guaranteed, that every month you can buy less crap with your coin (what ever currency) if you cash in your "investment". 
If some of you still think that miningturds are a good investment, please use simple calculations and actual data from GLBSE to confirm, what so many have told in this thread - your dividends will not cover your loss of principal even if BTC:USD price improves over time. You are better off sitting in BTC.
How hard is it to understand this?
If you have difficulty understanding 1+1-3=-1, please go play somewhere else