Topic: [BTC-TC] Deprived Mining Speculation (DMS) - page 96. (Read 198720 times)

True, my assumptions were based on extrapolation of the current trend of continually increasing mining difficulty.

There are some unstated assumptions about future increases in mining difficulty in your projections, are there not?  The dividends from each of these assets could vary greatly depending on how mining difficulty unfolds in the future.

Also, if I understand this security correctly:

1.) The dividends from DMS.MINING will asymptotically reach 0
2.) The dividends from DMS.SELLING will asymptotically reach 91.25% APR. (365/400)

Is this correct?

There are two ways to schedule a dividend.

- Lump sum payment spread across all shares in circulation at the time the dividend is paid, or
- Fixed amount per share distributed to all shares in circulation at the time the dividend is paid.

For this asset I'm certain Deprived is using the latter payout method.

Dividends can be processed give or take ~10 - 15 minutes from when they're scheduled, depending on if there are any other dividends scheduled around that time on other assets, etc.

Cheers.

At present the value of total assets controlled by the fund isn't listed anywhere.

But right now it's just the BTC raised from selling DMS.PURCHASE (less management fee due).

If you look in the financials section of any of the securities you'll see this link :

https://btct.co/portfolio/gbg8CQ==

If you go to it, it shows you the current assets held on BTC-TC by the fund - INCLUDING wallet balance.  That wallet balance IS the total assets controlled by the fund - until I invest some of it.  If you do the math you'll find that to be equal to PURCHASE SOLD * Sales price * .998.

The multiplication by .998 is because we pay a fee of 0.2% on all sales.

3% of that is due to me as management fee - I'll take that before paying first dividend (the 3% is only due on sales - not on balance - it's only for the first day that balance will equal sales).

So after paying management fee and first dividend the NAV/U will fall by 3-4% and the new sales price will be set at 5% above that : i.e. very slightly above current price (within a few days it'll drop below that).

I'll probably also do first investment before paying first dividend - exchanging bonds issued by my trading fund (LTC-ATF) for MINING/SELLING.  Those are bonds with a face-value of .01 BTC with a senior claim on all assets held by LTC-ATF (well over double the value of all bonds - with over 90% of that actually being cash) that pay 0.6% per week.  That'll give us a little bit of invome right away - investments into other issuers will need approval by investors first (I'll discuss that more - and raise first votes - tomorrow).  The bonds being traded in will be ones already held by me personally - not new debt (LTC-ATF is not issuing new debt at present and is about to return some more capital to investors).

If that's done before next dividend payment then it will be detailed here - and the 4th post in this thread will be updated to contain sufficient information such that investors can work out EXACTLY what we hold (and hence exactly what NAV/U is) other than any management fees owed but not yet paid.

The current NAV/U is 0.065258 as per the ask price for a DMS.PURCHASE

The current daily dividend from DMS.MINING will be 5*(1 day dividend from TAT.VIRTUALMINE) = 5*(0.00003223) = 0.00016115

The (NAV/U) / (Dividend) will be 0.065258/0.00016115 = 404.9

In this case, only DMS.MINING will receive a dividend.

Lets say in several days time, the difficulty increases by 20%

.00016115*(.80) = 0.00012892
(NAV/U) / (Dividend) = 0.065258/0.00012892 = 506.189

506 is greater than 410, so DMS.SELLING will receive a dividend x based on:
(0.065258/(x+0.00012892)) = 400;
x = 0.000034225

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I know my above understanding of this security is flawed because the NAV of DMS.PURCHASE changes. I am unclear as to how exactly the NAV is calculated as I am unsure where I can find "The total assets controlled by the fund".

Can you point me to where this value can be found?

Some of you may notice that the securities now have an indicator on them that some their details have been changed.

The change was simply that the following text was added at the top of the Executive Summary for all three:

IMPORTANT : The account to send DMS.PURCHASE to (to receive DMS.MINING and DMS.SELLING) is DeprivedMining

I CANNOT change the contract myself now (and do not want to).  On BTC-TC contracts can only be changed manually by burnside (and he'll only do it after making sure the change isn't unfair and was approved by shareholders).  In my view that's the correct policy - an issuer should NEVER be allowed to edit the actual contract themselves once they've started selling shares.

So don't panic or feel the need to re-read the whole thing looking for changes whenever you see that icon - there'll be a few changes in the short-term as I add more detail into the explanatory sections and/or address requests for clarification from investors or other interested parties.

Yeah - there IS definitely a theoretical risk that if enough people buy this (and yours) instead of real mining then difficulty will slow down rising and the shares would turn out to have been sold too cheaply.

But of course the selling price isn't down to me now - anyone can sell at whatever price they want.  I will not attempt to control the price either by price-fixing OR by restricting volume.  And risks like that are just one people selling MINING need to take into account to ensure they aren't selling too cheap (and so giving someone else profit at their own expense).

I'd argue that selling less than I do is playing with fire. If you compete with the costs of actual hardware you will find people buying your product rather than real mining, which will distort the potential for increased difficulty over time.

At roughly .03-.035 and below, DMS mining is a "deal" in this sense.

Just a quick note.

Transactions on BTC-TC are cached - meaning it can take up to about 5 minutes for transfers to show up at my end.

RIght now I KNOW someone bought 1000 PURCHASE and then transferred them to me (as they've gone from outstanding) - but until the transaction shows up for me I can't send the MINING and SELLING (as I don't know which account to send them to).

Further to my above post it appears it IS updating the amount to be paid correctly - just with a fairly significant delay.  Guess it only gets updated when the dividend-payment cron job runs.

I'm also puzzled on how it works.

The dividends were scheduled (by me) based on a fixed payment per share (NOT a total amount).  It seems that, at a minimum, the amount reported in the system as going to be paid is not correctly updated when shares are sold.

From past experience I believe that it WILL pay the correct amount when the dividend is actually processed.

Unfortunately the reason I scheduled the dividends was NOT to schedule the dividends (sounds crazy I know) but mainly to try to allow people to see what the next dividend would be - and it fails at that.  So, as I actually need to be around when dividends are paid (to catch on exchanges and to adjust PURCHASE price after) I'll be cancelling the scheduled dividends and doing them manually.

The procedure for paying dividends will be as follows:

1.  Calculate what the dividend will be per MINING share (this can be done at any time after midnight - earlier if I'm confident difficulty won't change).
2.  Shortly before I pay dividends, halt trading on PURCHASE and remove any orders placed by issuer.
3.  Make sure I'm up to date on all transfers.
4.  Pay dividends to MINING and to PURCHASE.
5.  Calculate current NAV, NAV/U and whether a dividend is due to SELLING (usually will only be the case on the day after a difficulty change - and definitely won't be the case until the next difficulty change initially).
6.  Calculate new selling and buyback prices for PURCHASE.
7.  When dividend has left my account reenable trading on PURCHASE and place new Asks and Bids (Bids will only be placed if doing so would not reduce liquid capital too low - until we have significant investments I'll always be able to place Bids and probably will be able to nearly all the time.

It sounds pretty complicated but will only take a few minutes of my time (plus a wait of a few minutes between steps 6 and 7) - other than the very first time (tomorrow) when there'll be a longer delay due to me recalculating everything by hand to ensure the spreadsheet is correctly set up.

There's also a step 8 - which will occur tomorrow and probably most days - of posting some extracts from the spreadsheet here so everyone can see how the dividend, new NAV/U and new selling price were calculated.  When I do that tomorrow I'll also explain every line in the data dump.

I'm curious, as I'm not really sure how BTC-TC works behind the scenes regarding dividend scheduling - are the currently queued dividends static or based on the number of units sold as of when the dividend was queued? (There have been 1139 units sold as of this post and there are a little less than 17 hours remaining until the first dividend, if I'm not mistaken.) In other words, if you sell more units in the interim, will the currently queued dividend amount change to correlate with the number of outstanding units at the ex-dividend time?

This really is a fascinating set of securities, I'm watching very closely to see how the market acts on them.

I've caught up on transfers again.

The inconsistency in the capitalisation of issuer names has now been corrected  - thanks burnside for fixing that promptly.  I don't believe there was any actual risk (you can't create accounts with same name but different capitalisation) but it removes some confusion.

It's interesting to watch the spreads on SELLING and MINING tighten as, even with relatively few traders, competition forces it.  We're already past the point where you can BUY MINING 'hash-power' for LESS than you can SELL TAT 'hash-power' - suggesting that the market's definition of PMB value (in DMS) will be even lower than TAT had already reduced it to.

DeprivedMining is the correct spelling - I'll nudge burnside about the all-caps version as it's wrong and potentially dangerous.

Internal transfer from Portfolio menu is the way to do it, yes.

On a seperate issue do NOT expect much volume of trading until after the first dividends are paid tomorrow.  A lot of investors compare securities on dividends - and until they see one won't trade.

Have sent MINING and SELLING to everyone who sent PURCHASE back to me so far.

Will be checking for more transfers regularly whenever i'm online.

agree with #1 and #2, not sure about #3, seems wrong to me  but I'm sure you have a reason....in other news TAT VMs entire offering just sold out instantly...lets do this!!

I can give a one line description of each - but unless you understand most of the detail it's unlikely you'll make a profit from investing/trading in them.

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.
DMS/PURCHASE - Is a way to get one each of MINING and SELLING at a price that will probably deliver a small profit.

The real profit comes from correctly pricing MINING and SELLING and trading with people who get it wrong.

At present difficulty MINING will pay a dividend of 0.00016113 per day.  That will change (almost cetainly downwards) when difficulty next changes.

The Whole project  is for me a bit confusing....perhaps because of my english knowledge...
anyway  could you tell me the dividends per day  with 1 (one)  DMS  Mining share?

Whats the difference between DMS PURCHASE,  DMS MINING & DMS SELLING......please make use of easy and basic english..;-)

A FEW PREDICTIONS

As well as allowing the market to determine a price for fixed-rate hashing, the performance of this fund will also allow testing and examination of market participants in a few other ways.

Here's a few predictions I'll make now - I'm not going to explain the reasoning in detail behind these predictions (as doing so would make them less likely to be correct).  In general terms these predictions are based on my view of how many market participants assess the value and desirability of investments.

1.  I expect there to be far more trading volume in MINING than in SELLING despite an equal number of both being issued to investors.
2.  I expect MINING to trade at a significantly lower price per hash than PMBs on BTC-TC (by which I mean at a 25% or more discount - not just some small amount that could be accounted for by contract differences).  Initially this is inevitable (as PURCHASE is being sold below the price of PMBs) but I expect it to remain true in at least the medium term (months).
3.  I expect there to be a significant quantity of PURCHASE that never gets exchanged for MINING or SELLING and which is held long-term.

This post will be not be edited - so in some months time we'll see if any/all of the above were correct.