Topic: [BTC-TC] Deprived Mining Speculation (DMS) - page 86. (Read 198958 times)

Nope, it puts everything in a big pot, difficulty just defines the way it's distributed between Selling and Mining from this pot.
So it will not implode, but the pot will continue to shrink when distributing dividends, so that the numbers will drop.

My question was honest, not trolling or trying to start something. My asset just sells hashes, and is thus very simple to grasp.

I just wanted to make sure there wasn't a hole in the design the caused it to collapse on itself by its own nature (ignoring difficulty increases, etc).

Hey TAT, wrong Thread. Here's the right one: https://bitcointalksearch.org/topic/tatvirtualmine-223442

SCNR 

Understood. Selling then buying other PMBs would definitely be wrong at this time, that's why I chose to stay in MINING for now. Losses are only losses if you realise them...

The total NAV/U will slowly deplete through dividends (and increase slightly through investments and sales/buybacks of PURCHASE).

Right, I think it can go lower than what we have now before the next difficulty adjustment.


It's the other way around, the NAV/U of PURCHASE affects the price of MINING+SELLING. People can buy PURCHASE (= 1 MINING & 1 SELLING) for slightly more (105%) than the NAV/U from Deprived (unlimited supply) and sell PURCHASE for slightly below the NAV/U (98%).

So the price of MINING+SELLING together should stay locked to the NAV/U. On the short term, a drop in price of MINING should correspond to an increase of SELLING (arbitragers will make sure of it) and vice versa. In the long term, unless investments and other NAV-increases outweigh dividends (highly unlikely), the NAV/U and therefore the sum of MINING+SELLING prices will go down.

Do understand that the value of MINING is what the market decides 1 MH/S of PMB is worth.  If you made an error, don't compound it by selling then buying some other PMB at double the price.

If the price of MINING DOES reflect PMB value (or is still too high) then buying a different PMB higher is a worse mistake than staying in MINING - and would increase your losses.  In that scenario you should sell MINING and not touch another PMB.
If the price of MINING has fallen below value then swapping to a PMB at higher price would be reducing your profits - and the correct move would be to stay in MINING.

Selling and avoiding PMBs totally MAY be the right move.  Staying in MINING MAY be the right move.  Selling then buying (or continuing to hold) PMBs that cost more will rarely if ever be the correct move.  Which is the correct move depends on the true value of PMBs - which I don't claim to know and wouldn't reveal if I did.

On a more general note don't fall into the trap of believing that your lack of udnerstanding was due to the complexity of the contract.  If you bought MINING and now believe that decision was wrong then your lack of understanding was entirely that you didn't understand what ALL PMBs are actually worth.

No - the book value of PURCHASE is totally unaffected by what price MINING and SELLING trade at.  It's just the capital/shares.

If one falls the other pretty much has to rise - if it doesn't then it leaves open a massive arbitrage opening.

PURCHASE receives all dividends paid to MINING and SELLING - and there's no way for NAV/U to reduce other than through dividends (or theoretically through a loss in investments).  So eventually PURCHASE will receive back ALL of its current NAV/U - and trading in MINING/SELLING has zero impact on that.  As the fund will itself buy back pairs of MINING+SELLING at NAV/U-2% it imposes an effective bottom on combined bids - as if they fall below that then there's an immediate opportunity for someone holding one to bid on the other and be able to turn in the pair for a profit if the bid fills.  Even if noone else works the math out for that I'd be doing it on my personal account - as it's free money with no risk.

What's more likely to happen as MINING falls is that there'll be a lack of sales of PURCHASE.  But if MINING drops then at some point even the total retards buying PMBs for double the amount are going to realise they're giving away money - without even needing to have a clue as to the true value of PMBs (whatever that is).  And that should then increase MINING price - tempting people back to buy more PURCHASE.

The nature of the offering is that unless ALL the market agree on what a fair price for a PMB is there's always going to be some sector of it that perceives value in SOME activity here.  The price changing just alters which group see an opportunity - be it people who buy PMBs, people who want to sell PMBs, people who want to arbitrage, people who want to take profit on a position obtained at a different price, other PMB issuers who want to turn off their mining gear and back their offerings with MINING etc.

Selling is now more than double the price of Mining, not that much to gain anymore.
I do believe difficult will continue to rise, but it's hard to guess the exact amount.
I think I will prefer other investments now.

Thank you for 1 Btc profit and for creating an invtestment that will teach people about PMBs xD


Expect the same for other bonds with a fixed hasrate like Virtualmine, so you don't fall in that trap again.

DMS.MINING is just tanking every day anew...

Lesson learned.

a) could include other investments as well.

There's also a couple of other things that can change NAV//U upwards:

d)  When a new PURCHASE is sold, after management fee is taken on it the funds added to capital are still above NAV/U.  That increases overall NAV/U very slightly.
e)  If someone sells PURCHASE back (or a MINING + SELLING - not available at present but will be if it ever becomes needed) it would be at 2% below NAV/U, also increasing the NAV/U of remaining units.  Selling MINING + SELLING back will only be offered if/when there's a need for it - i.e. if it isn't possible to sell a MINING + SELLING to market for at least the amount a buy-back at NAV/U -2% would give.  That's necessary (and promised in the contract) to ensure noone is ever locked in with zero demand for BOTH MINING and SELLING.

On point e, I'll already buy back pairs of MINING + SELLING in decent quantities if anyone wants to get out at NAV/U -2%.  That guarantees a minimum level of liquidity - and gives a baseline price people can rely on if they want to close a position by buying the other of the pair to match their holdings.

I have not taken the time deeply grasp the interactions here, but the pattern I see is the ceiling continuously lowering itself.

What if MINING buyers only post lower and lower bids? Yes, a bottom will surely be reached, but that bottom could get pretty damn low, right?

What if SELLING owners don't have enough people to unload shares to? This will also seek a lower and lower bottom, no?

The book value of those both affect the NAVU of PURCHASE, correct? Doesn't that also lower the ceiling daily?

Almost. There's an additional factor that can increase NAV/U, the sale of new PURCHASE units. Each PURCHASE is sold for 105% of NAV/U. Minus a 3% management fee on new sales, there's still a small premium over NAV/U, which goes into the fund and increases the NAV/U of all outstanding units (slightly).

What do you mean?

I can see it being possible MINING will fall even lower - but the relative prices of MINING/SELLING have no impact on what capital cover is maintained.  All they do is change the maximum potential profit you can make on each one.  As MINING falls lower, the maximum possible percentage profit you an make from a SELLING drops.  But that isn't implosion - it's just a part of how the market will finally settle at a price.  If the ratio moves far enough then those who bought SELLING cheaper will reach the point where they decide they're better off taking profit now rather than staying in - which will then move the prices back in the other direction.

Is this gonna implode?

Regarding the NAV/U, am I right in thinking that the only things that can affect it are:
a) dividends from LTC-ATF.B1 (positively only, this cannot subtract from the BTC balance)
b) paying out DMS.MINING dividends (subtracts from it)
c) paying out DMS.SELLING dividends (subtracts from it)

Just trying to make sure I understand the cashflow correctly...

Can't say for sure what someone else is using in their calculations, but in my reports :

Total Assets (same as NAV) = all cash held + book value of all other assets owned.
Effective Units is the number of PURCHASE sold less any PURCHASE bought back.  That can be calculated in practice by looking at number of PURCHASE outstanding andd adding to it either of MINING or SELLING outstanding (as there's always the same of those).  It's how many PURCHASE would be outstanding if all MINING/SELLING were converted back to PURCHASE.  As all dividends paid to MINING OR SELLING are also paid to purchase it's the number of shares between which dividends are split - and also the number that NAV has to be divided bt to get NAV/U.

How do you calculate "TotalAssets" (which I assume means net asset value)? EDIT: Ignore me, I just saw Deprived balance sheet post...

Is "EffectiveUnits" the number of shares outstanding, or the number of shares issued?

That's not % it's BTC

Fee is 3%

Why are you charging a 24% management fee?

Sold   150
Swapped   0
Total   150
Price   0.054412
Total   8.1618
Less Fee   8.1454764
Man Fee   0.244364292

BTC Balance (BTC-TC)    961.23784813
12500 LTC-ATF.B1    125.00000000
TOTAL ASSETS    1,086.23784813
   
Outstanding MINING   20608
Outstanding SELLING   20608
Outstanding PURCHASE   351
Effective Units   20959
   
Block reward   25
Difficulty   19,339,258
Hashes per MINING   5000000
   
Daily Dividend    0.00013002
50 days (Min Liquid)    0.00650111
100 days (Forced Close)    0.01300222
365 days (Buyback)    0.04745810
405 days (IPO)    0.05265898
400 days (Post SELLING div)    0.05200887
410 days (Pre SELLING div)    0.05330910
   
NAV Post MINING Div    1,083.51271315
NAV/U Post MINING Div    0.05169678
Days Dividend Post Div   397.60
SELLING Dividend    -         
NAV Post SELLING Div    1,083.51271315
NAV/U Post Selling Div    0.05169678
PURCHASE selling price    0.05428161
PURCHASE buy-back price    0.05066284