Topic: [BTC-TC] Deprived Mining Speculation (DMS) - page 47. (Read 198958 times)

Exactly. This is a game for spreadsheet lovers ;-) In other words (from the OP):
DMS.MINING - Behaves like a 5 Mega-Hash/Second PMB (The things people call perpetual mining bonds).
DMS.SELLING - Is a bet that people will pay too much for DMS.MINING.

Also if you want to buy just one part (e.g. MINING), you should check what is cheaper - buying PURCHASE and selling SELLING, or buying MININIG straightforward from the market.

Thanks twentyseventy, BitThink and Deprived.

Very interesting security.

So essentially its a game where I have to predict the correct difficulty increase and buy MINING if its undervalued or SELLING if I think MINING is overvalued.

The situation doesn't change.

If you buy a SELLING from someone else then the funds YOU pay go the person you buy from.  But the funds THAT person paid are still held by me and available to pay dividends to the associated MINING share.

I hold a fixed amount of cash for each pair of MINING+SELLING (the NAV/U of a PURCHASE).  Mining gets paid dividends from that cash as though it held shares in a mining operation.  SELLING gets dividends if/when difficulty rises sufficiently that a dividend can be paid and still keep 400 days of dividend for MINING in reserve.

When you buy a SELLING from someone in effect what's happening is that by buying, indicating that you believe the likely future value of dividends makes holding the share at that price better than having the trading price.

This (DMS) isn't a traditional investment fund where the manager makes profit for you (a small amount is made from investments but not enough to justify investment on its own).  Your profit or loss is made based on the trades you make of MINING and SELLING with other investors.  You can make profit (or loss) in broadly three ways:

1.  By more accurately predicting future behaviour of difficulty then buying whichever of MINING/SELLING (if either) is currently underpriced.  At times NEITHER will be underpriced (so worth buying) based on your predictions.
2.  By predicting how the market will respond to difficulty changes and other news.  typically the market over-reacts which provides opportunities for profit.
3.  By arbitraging MINING/SELLING vs PURCHASE and/or trading the spreads on them.

I won't make much profit for you - you have to make it yourself.  My role in DMS is far more that of an escrow/administrator than an investment manager.

Your understanding is correct. All MINING dividend are from SELLING holders. Changing holders of SELLING does not change anything. The new holder will continue supporting a MINING Contract. The price of SELLING and MINING does not matter since it will not change the contract. SELLING holders always pay the daily dividend to MINGING holders according to the mining difficulty.

I use Allchains.info as well, it's not pretty but it's a great resource!

Yes! When the Difficulty increases, the funds necessary to fund the MINING div decrease, and that difference is paid out to SELLING holders as a dividend. The real profit to be made from buying SELLING happens when the dividends paid exceed the amount paid for that share of SELLING.

There are always an equal number of SELLING and MINING, as they are sold in pairs via PURCHASE. When you purchase SELLING from someone else, you acquire it for a certain price. Ideally, that price should be less than what PURCHASE (a value that's known) less the value of MINING (a value you've calculated on your own).

So, if PURCHASE is valued at 20, and you buy SELLING for 15, that means that you value MINING at 5 or less (less, ideally).

You can buy SELLING on the market, but you can ALSO buy PURCHASE, exchange it for MINING And SELLING and then sell MINING on the market.

Which one is a better option depends on what people are Asking for SELLING and Bidding for MINING at any given moment.

Yes, I mean daily dividend. Mine is a very rough guess based on the curve of http://bitcoin.sipa.be/. I think yours are from http://bitcoindifficulty.com/? Highly likely it is more accurate than mine. indeed yours are correct.

So the flow is like this: funds from people buying SELLING become the MINING dividend which is paid out on schedule.

If the difficulty goes up a lot and the dividend required by MINING is smaller, then that difference is profit for SELLING and becomes a SELLING dividend.

Is this correct?

How does the situation change when you buy a SELLING share from someone whos selling one? Obviously the proceeds of that sale go to the seller instead of MINING dividends.

This isn't a Ponzi scheme, as the dividends for MINING are paid on schedule out of the SELLING reserves. SELLING is NOT guaranteed to make a profit or to necessarily pay anything out. SELLING is paid a dividend only if the Difficulty increases significantly. 

Ah, sorry, didn't consider that that was the MINING div he was referencing.

New Difficulty: 86,933,018!

I looked throughout this thread but could not find an "explain it like I am 10" explanation to how these securities work.

This is as much as I could put together, note that I am probably very wrong. Please correct me.

So dms.mining does not actually have miners, but pays out as if it did. The money to pay out the investors as the dividend actually come from the people buying dms.mining.

If you think that dms.mining share value is over priced then you can buy dms.selling, I am not sure where this dividend comes from.

Dms.purchase is simply the combination of the two.

Also this is a losing proposition as its similar to a ponzi except the payout is fixed towards what a mining bond would payout.

Thanks.

BitThink was estimating the next daily mining dividend probably ... but, yeah, next difficulty will be around 87M ... more than 30% increase.

Not sure where your numbers are coming from, but next Difficulty will be around 86.7M, a 32% increase.

Dividend will be around .0032-.0034

It seems the next difficulty will be around 95M, nearly 50% increase? Next dividend may be around 0.000027.

Sold   1817
Swapped   0
Total   1817
Price   0.01582
Total   28.74494
Less Fee   28.68745012
Man Fee   0.860623504

BTC Balance (BTC-TC)   2152.554142
9071 LTC-ATF.B1    90.71000000
Coinlenders CD 27/9   200.7836427
Coinlenders CD 12/9   101.3865482
Coinlenders Cash   3.94154443
Just-Dice Balance    245.55000000
TOTAL ASSETS    2,794.92587756
   
Outstanding MINING   176028
Outstanding SELLING   176028
Outstanding PURCHASE   9469
Effective Units   185497
   
Block reward   25
Difficulty   65,750,060
Hashes per MINING   5000000
   
Daily Dividend    0.00003824
50 days (Min Liquid)    0.00191219
100 days (Forced Close)    0.00382438
365 days (Buyback)    0.01395899
405 days (IPO)    0.01548874
400 days (Post SELLING div)    0.01529752
410 days (Pre SELLING div)    0.01567996
   
NAV Post MINING Div    2,787.83176616
NAV/U Post MINING Div    0.01502899
Days Dividend Post Div   392.98
SELLING Dividend    -         
NAV Post SELLING Div    2,787.83176616
NAV/U Post Selling Div    0.01502899
PURCHASE selling price    0.01578
PURCHASE buy-back price    0.01473
   
J-D House profit at report   5850

joined this asset today

makes me feel like

http://www.youtube.com/watch?v=KWpHb0WF48o

Sold   1377
Swapped   0
Total   1377
Price   0.01585
Total   21.82545
Less Fee   21.7817991
Man Fee   0.653453973

BTC Balance (BTC-TC)   2131.735427
9071 LTC-ATF.B1    90.71000000
Coinlenders CD 27/9   200.6637398
Coinlenders CD 12/9   101.3226319
Coinlenders Cash   3.93932528
Just-Dice Balance    245.80000000
TOTAL ASSETS    2,774.17112401
   
Outstanding MINING   173706
Outstanding SELLING   173706
Outstanding PURCHASE   9974
Effective Units   183680
   
Block reward   25
Difficulty   65,750,060
Hashes per MINING   5000000
   
Daily Dividend    0.00003824
50 days (Min Liquid)    0.00191219
100 days (Forced Close)    0.00382438
365 days (Buyback)    0.01395899
405 days (IPO)    0.01548874
400 days (Post SELLING div)    0.01529752
410 days (Pre SELLING div)    0.01567996
   
NAV Post MINING Div    2,767.14650160
NAV/U Post MINING Div    0.01506504
Days Dividend Post Div   393.92
SELLING Dividend    -         
NAV Post SELLING Div    2,767.14650160
NAV/U Post Selling Div    0.01506504
PURCHASE selling price    0.01582
PURCHASE buy-back price    0.01476
   
J-D House profit at report   5905

An occasional and temporary 15% change in the rate that blocks are added is normal. At a minimum, to claim that some causal relationship exists, you have to show a correlation to something other than your imagination.

Sold   2493
Swapped   0
Total   2493
Price   0.01588
Total   39.58884
Less Fee   39.50966232
Man Fee   1.18528987

BTC Balance (BTC-TC)   2117.578295
9071 LTC-ATF.B1    90.71000000
Coinlenders CD 27/9   200.5433378
Coinlenders CD 12/9   101.2584495
Coinlenders Cash   3.93710738
Just-Dice Balance    245.10000000
TOTAL ASSETS    2,759.12718926
   
Outstanding MINING   172712
Outstanding SELLING   172712
Outstanding PURCHASE   9591
Effective Units   182303
   
Block reward   25
Difficulty   65,750,060
Hashes per MINING   5000000
   
Daily Dividend    0.00003824
50 days (Min Liquid)    0.00191219
100 days (Forced Close)    0.00382438
365 days (Buyback)    0.01395899
405 days (IPO)    0.01548874
400 days (Post SELLING div)    0.01529752
410 days (Pre SELLING div)    0.01567996
   
NAV Post MINING Div    2,752.15522858
NAV/U Post MINING Div    0.01509660
Days Dividend Post Div   394.75
SELLING Dividend    -         
NAV Post SELLING Div    2,752.15522858
NAV/U Post Selling Div    0.01509660
PURCHASE selling price    0.01585
PURCHASE buy-back price    0.01479
   
J-D House profit at report   5780

The DMS2 would have a MINING hashrate set at a different rate (e.g. 333 MH/s) and the market would likely value it at 333x MINING1's value. The two wouldn't compete against each other.