th1 dump begin 1 hour ago, now still chance to sell you th1 high
This is not margin selling with using swap, this is normal Exchange sell TH1, this mean big dump, i think 0.7 low
Topic: Bitfinex TH1 Contract - Hot Potato Theory (Read 4787 times)
i'm trying to get my head around this..
keep it simple for me :
so i buy 1 TH1. when it expires.. i only have what the dividents returns right?.
so lets this example :
September 16, 2014 - 03:08:44 AM CEST 320898 3,428.01 100 25.062 0.73109187
1TH would give me 0.7 /100 per day right? 0.007btc.
so if difficulty asuming would be stable .. it will take 1/0.007btc = 142 days to break even.. if you bought 1th for 1btc
so how long are those th1 contracts running..
am i making mistakes in my calculations?
The miscalculation is in the second line of your example. The dividend (0.007BTC in the example) isn't paid once per day necessarily, but once per block found by the pool. On average, the pool finds something like two blocks per day, so you should double the number to 0.014BTC per day, or break even in 70 days (all very rough estimates). It will probably be more than 70 days though because of increasing difficulty. In addition to that you can also lend out the TH1 you own to make a little bit extra from interest (you also still get dividend for the lent out TH1). keep it simple for me :
so i buy 1 TH1. when it expires.. i only have what the dividents returns right?.
so lets this example :
September 16, 2014 - 03:08:44 AM CEST 320898 3,428.01 100 25.062 0.73109187
1TH would give me 0.7 /100 per day right? 0.007btc.
so if difficulty asuming would be stable .. it will take 1/0.007btc = 142 days to break even.. if you bought 1th for 1btc
so how long are those th1 contracts running..
am i making mistakes in my calculations?
What i don't understand is why the dividend per block seems to change only gradually. I expected a sudden drop at the last difficulty increase, but that didn't happen.
I started a new thread in the Securities section to speculate on the TH1 value:
https://bitcointalksearch.org/topic/m.9020038
https://bitcointalksearch.org/topic/m.9020038
This hot potato is more like french fries.... what the heck is wrong that people valuate at 1.25BTC, thats even not reasonable if 0% difficulty increases
(Until it's too late that you've got cancer in your wallet with those "french fries")
(Until it's too late that you've got cancer in your wallet with those "french fries")
There are some people that believe difficulty may go down if BFL labs is offline now. Not saying it's true just some peoples logic.
This hot potato is more like french fries.... what the heck is wrong that people valuate at 1.25BTC, thats even not reasonable if 0% difficulty increases
(Until it's too late that you've got cancer in your wallet with those "french fries")
(Until it's too late that you've got cancer in your wallet with those "french fries")
The contract currently yields around 0.0141 BTC/day. The return varies due to luck. For instance, one day the pool mined four blocks and another day it mined one block.
i'm trying to get my head around this..
keep it simple for me :
so i buy 1 TH1. when it expires.. i only have what the dividents returns right?.
so lets this example :
September 16, 2014 - 03:08:44 AM CEST 320898 3,428.01 100 25.062 0.73109187
1TH would give me 0.7 /100 per day right? 0.007btc.
so if difficulty asuming would be stable .. it will take 1/0.007btc = 142 days to break even.. if you bought 1th for 1btc
so how long are those th1 contracts running..
am i making mistakes in my calculations?
keep it simple for me :
so i buy 1 TH1. when it expires.. i only have what the dividents returns right?.
so lets this example :
September 16, 2014 - 03:08:44 AM CEST 320898 3,428.01 100 25.062 0.73109187
1TH would give me 0.7 /100 per day right? 0.007btc.
so if difficulty asuming would be stable .. it will take 1/0.007btc = 142 days to break even.. if you bought 1th for 1btc
so how long are those th1 contracts running..
am i making mistakes in my calculations?
It looks like the last 100 TH1 contracts might not have been sold?
They aren't listed on the mining_stats page for the last set of dividends. Could easily be a typo as well. But I thought I saw "400" in the Asset Size last time I checked.
https://www.bitfinex.com/pages/mining_stats
They aren't listed on the mining_stats page for the last set of dividends. Could easily be a typo as well. But I thought I saw "400" in the Asset Size last time I checked.
https://www.bitfinex.com/pages/mining_stats
Nice find, OP.
I'd say that's the most interesting thread in this forum this year so far.
It's a bold proposition that leveraged trading can give a truly worthless asset face value just by itself and I think you are right.
I'd say that's the most interesting thread in this forum this year so far.
It's a bold proposition that leveraged trading can give a truly worthless asset face value just by itself and I think you are right.
I'm guessing they use the new contracts to fill bid orders. The ask side is pretty weak.
I think someone wrote that they market-sold the first additional 100 shares.
I think someone wrote that they market-sold the first additional 100 shares.
Having a look at the mining contract size increase notice, seems that additional contract DOES NOT directly hang on the order book nor even transact. In fact the whole orderbook right after the effective time doesn't really change and doesnt sum up to >100THS
refer to BFXdata for details
effective time:
after 322327 is #322503 @ 2014/09/25 11:13
after 321969 is #322181 @ 2014/09/23 11:23
So where the F are they?
refer to BFXdata for details
effective time:
after 322327 is #322503 @ 2014/09/25 11:13
after 321969 is #322181 @ 2014/09/23 11:23
So where the F are they?
You get paid dividends in BTC if you are long the TH1 contract, or if you are short you must pay the mining dividends.
So when it goes to zero at expiration, you can have more BTC from dividends, than you spent on the mining contract.
So when it goes to zero at expiration, you can have more BTC from dividends, than you spent on the mining contract.
I've finally figured out who loses. When you buy a contract to short it you are selling it back to the market. So the person who buys this contract is paying too much! It's kind of like "pass the hot potato" and the person who gets left with the hot potato loses. In this case the person who is left with a $1 contract at the point where it becomes worth $0 loses.
There is a transfer of $1 from the person stuck with the worthless contract to the contract issuer who manages to sell the contract at a $1 premium. In our case Bitfinex is making this profit at the expense of the contract holders.
There is a transfer of $1 from the person stuck with the worthless contract to the contract issuer who manages to sell the contract at a $1 premium. In our case Bitfinex is making this profit at the expense of the contract holders.
According to your logic, correct to say that value comes from gambling. 
The current TH1 swap rate is around 0.21%/day and is falling. I guess it's going down to 0.03-0.05%.
Can you explain ?
a) how borrower can make profit
b) how lender can make profit
Borrower (aka shorter) profits if the mining contract falls to its real value (and does so before they pay too much in swap rates - which is hard to predict).
Lender makes profit if mining difficulty doesn't increase (as compared to the expected 10% increases).
I'm still confused on how mining contract works....
The current TH1 swap rate is around 0.21%/day and is falling. I guess it's going down to 0.03-0.05%.
Can you explain ?
a) how borrower can make profit
b) how lender can make profit
The current TH1 swap rate is around 0.21%/day and is falling. I guess it's going down to 0.03-0.05%.
BFX just added 100 shares of TH1. Probably because the bid wall is strong - 120 demanded shares at 1.15.
Who are these crazy people buying it at 1.15? Short all the mining contracts!
Who are these crazy people buying it at 1.15? Short all the mining contracts!
I do not know, but maybe they can rebuy them 3 months later @ $0
Edit:
I would lend for 0.5%/day => 1.005^90 = 1.57, but I'm not sure if I understand contract.
Edit2:
1.57 * $0 is still zero :-)
Edit3:
maybe borrower pays interest daily in $
BFX just added 100 shares of TH1. Probably because the bid wall is strong - 120 demanded shares at 1.15.
Who are these crazy people buying it at 1.15? Short all the mining contracts!
Who are these crazy people buying it at 1.15? Short all the mining contracts!
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