Two Weeks - Mining Start on Schedule
Today, Metabank has received the chips from Bitfury to start building the first miners used to back BFMines. According to an update from one of their customers, there are some issues with getting power supply units, but Metabank still expects to ship miners within two weeks.
And yes, I realize the jinx of 'Two Weeks' statements.
Based on this, however, it is reasonable and ever more likely for BFMines to get our equipment as per the schedule. Even if Metabank is delayed, our schedule calls for mining start in September, and it seems ever more likely that we'll get up and running well before that deadline.
In the event that Metabank ships as fast as they are saying and mining begins within just over two weeks from now, I am expediting the updates to the contract. If you have not seen the pending changes to the contract, I encourage you to visit the forums to read about those updates as well as post questions or comments you may have.
The final version of the updated contract will be posted on August 5 to be added to the contracts page on BTCT effective immediately after that date.
Topic: [BTCT][BFMINES] - Mining Contracts Now Available - Bonus Divs First Months - page 2. (Read 26395 times)
July 29, 2013, 05:08:43 PM
July 25, 2013, 02:27:41 PM
Statement Regarding BTCT Trading
Recently there has been growing fear of imminent and negative changes to crypto stock exchanges after the US SEC charged the person behind a Ponzi scheme. Due to the added attention from regulatory bodies, people seem afraid that the US may shortly see a close in crypto stock trading. burnside, the operator of two major exchanges, among which is the exchange where BFMines is listed, has stated that a possible scenario is that US IP addresses will be banned from the exchange.
To address these concerns, I would like to outline the plan in case of closing of the trading at one or more exchanges in the future. I would like to point out that these are emergency plans only; I do not see it as likely that there will be a prolonged period where no exchanges remain online at all.
In case of shutdown of BTCT for US clients or for everyone, BFMines will continue to operate as normal. Twice each day, BTCT send out lists of contract holders to BFMines (and all other assets). If the exchange is no longer a viable trading platform, these contracts will still be honored according to the contract.
In an announced shutdown of the entire exchange, BFMines will stop trading no less than 24 hours in advance of the shutdown, provided sufficient notice is given by BTCT. This will prevent that any last-minute trades will not make it to the contract holder reports.
If there is an immediate shutdown, there is a risk to recently traded contracts that have not yet been recorded by BFMines. If this happens, we will work with burnside and BTCT to acquire details about these trades. We will also put up a solution to allow new or expanding contract holders to submit claims and a process to evaluate these claims.
If such an event happens prior to all IPO contracts being sold, BFMines will withdraw a sufficient number of contracts from the IPO ASK order to fill the claims submitted by contract holders. Pending resolution of these claims, these contracts will be held by BFMines in reserve.
If such an event happens after all IPO contracts are sold, BFMines will acquire contracts to the extent possible from the operator. These contracts will be granted to the BFMines reserve by the operator at no cost. To this effect, the operator may acquire additional contracts from the IPO, depending on the evaluation of trade volume and the risk of imminent closure of BTCT.
Should it prove impossible to determine the seller of these claimed contracts, BFMines will assume the loss and issue contracts to successful claims from the reserved contracts.
As for future open market trades, BFMines will pursue options to list the contracts on other exchanges. If this proves impossible, BFMines will work to establish a trading platform on its own. We may also, at our discretion, offer a buy-back according to the terms of the contract. If the 7-day average trade price on BTCT is unavailable, we will fall back on a backup solution based on the dividends paid deducted from the IPO price. Details on this is forthcoming and will be expedited in case of imminent need.
TL;DR: In case BTCT shuts down, BFMines will continue to operate as normal and protect contract buyers by assuming loss due to lost trades.
.b
Recently there has been growing fear of imminent and negative changes to crypto stock exchanges after the US SEC charged the person behind a Ponzi scheme. Due to the added attention from regulatory bodies, people seem afraid that the US may shortly see a close in crypto stock trading. burnside, the operator of two major exchanges, among which is the exchange where BFMines is listed, has stated that a possible scenario is that US IP addresses will be banned from the exchange.
To address these concerns, I would like to outline the plan in case of closing of the trading at one or more exchanges in the future. I would like to point out that these are emergency plans only; I do not see it as likely that there will be a prolonged period where no exchanges remain online at all.
In case of shutdown of BTCT for US clients or for everyone, BFMines will continue to operate as normal. Twice each day, BTCT send out lists of contract holders to BFMines (and all other assets). If the exchange is no longer a viable trading platform, these contracts will still be honored according to the contract.
In an announced shutdown of the entire exchange, BFMines will stop trading no less than 24 hours in advance of the shutdown, provided sufficient notice is given by BTCT. This will prevent that any last-minute trades will not make it to the contract holder reports.
If there is an immediate shutdown, there is a risk to recently traded contracts that have not yet been recorded by BFMines. If this happens, we will work with burnside and BTCT to acquire details about these trades. We will also put up a solution to allow new or expanding contract holders to submit claims and a process to evaluate these claims.
If such an event happens prior to all IPO contracts being sold, BFMines will withdraw a sufficient number of contracts from the IPO ASK order to fill the claims submitted by contract holders. Pending resolution of these claims, these contracts will be held by BFMines in reserve.
If such an event happens after all IPO contracts are sold, BFMines will acquire contracts to the extent possible from the operator. These contracts will be granted to the BFMines reserve by the operator at no cost. To this effect, the operator may acquire additional contracts from the IPO, depending on the evaluation of trade volume and the risk of imminent closure of BTCT.
Should it prove impossible to determine the seller of these claimed contracts, BFMines will assume the loss and issue contracts to successful claims from the reserved contracts.
As for future open market trades, BFMines will pursue options to list the contracts on other exchanges. If this proves impossible, BFMines will work to establish a trading platform on its own. We may also, at our discretion, offer a buy-back according to the terms of the contract. If the 7-day average trade price on BTCT is unavailable, we will fall back on a backup solution based on the dividends paid deducted from the IPO price. Details on this is forthcoming and will be expedited in case of imminent need.
TL;DR: In case BTCT shuts down, BFMines will continue to operate as normal and protect contract buyers by assuming loss due to lost trades.
.b
July 22, 2013, 12:22:22 PM
Perfectly understandable 
Once you are up and running and say the price is lower, you could once again close and come out ontop paying 110% of the average trading price over the last seven days. given that already the average of the last 7 days trading is 0.00396 (granted right now you would be out of pocket)
Its still all about trust, and in your terms you could withdraw at any point that you see fit.
Quote
The 'right of the operator' clause is there to prevent misuse. It does not void the clauses of the buy-back, but states that nobody can demand a buy-back with those terms at their leisure. In other words, you can't come and say "I don't think mining is profitable anymore, please buy back my shares for 10% more than I paid for them earlier today".
Once you are up and running and say the price is lower, you could once again close and come out ontop paying 110% of the average trading price over the last seven days. given that already the average of the last 7 days trading is 0.00396 (granted right now you would be out of pocket)
Its still all about trust, and in your terms you could withdraw at any point that you see fit.
Indeed, but keep in mind, this also works the other way. On closing, the market can easily bid up the price and make a guaranteed 10% profit on whatever they put in. Someone could buy out every BFMines contract for 100BTC and get 110BTC a week later.
Also, the price is completely out of my control, at least as long as I post my trading publicly (which I do and intend to keep doing).
You have answered my question above, ie 120gh on offer but only 40,000 shares sold gives a usage of 40gh, therfor you have 80gh/s free which in turn may equate to an extra 2mh per share if the answer was "yes", but since you are not offering this my question is irrevelant.
Hm... No, that wouldn't make sense directly because it would hurt early adopters if IPO completes. Ie someone buying now would buy expecting 3mhs but as more people buy IPO shares, that rate would drop every time someone bought IPO shares.
.b
July 22, 2013, 12:05:52 AM
Perfectly understandable
Once you are up and running and say the price is lower, you could once again close and come out ontop paying 110% of the average trading price over the last seven days. given that already the average of the last 7 days trading is 0.00396 (granted right now you would be out of pocket)
Its still all about trust, and in your terms you could withdraw at any point that you see fit.
You have answered my question above, ie 120gh on offer but only 40,000 shares sold gives a usage of 40gh, therfor you have 80gh/s free which in turn may equate to an extra 2mh per share if the answer was "yes", but since you are not offering this my question is irrevelant.
Quote
The 'right of the operator' clause is there to prevent misuse. It does not void the clauses of the buy-back, but states that nobody can demand a buy-back with those terms at their leisure. In other words, you can't come and say "I don't think mining is profitable anymore, please buy back my shares for 10% more than I paid for them earlier today".
Once you are up and running and say the price is lower, you could once again close and come out ontop paying 110% of the average trading price over the last seven days. given that already the average of the last 7 days trading is 0.00396 (granted right now you would be out of pocket)
Its still all about trust, and in your terms you could withdraw at any point that you see fit.
You have answered my question above, ie 120gh on offer but only 40,000 shares sold gives a usage of 40gh, therfor you have 80gh/s free which in turn may equate to an extra 2mh per share if the answer was "yes", but since you are not offering this my question is irrevelant.
July 21, 2013, 11:44:43 PM
Mainly just after one clarification
Is it this;
Or this;
Or is it a mix of both, option one for 6 months then option two?
Is it this;
Quote
Pre-release only (will be removed once mining hardware is operational): This contract does not pay dividends until the release date. To compensate for this, the first six months of operation will give approximately 20% higher dividends depending on the final performance of the miner. In case the hardware fails completely, the contracts will be repaid for 0.004BTC per bond.
Or this;
Quote
All expenses related to the operation will be paid for from the surplus mining capacity. The surplus mining capacity will be no less than 20% more than the capacity required for dividend payments. Excess funds from this surplus capacity will go to the benefit of the contract holders in the form of securing the long-term operation and stability of the mining operation, but will not be paid out as dividends.
Or is it a mix of both, option one for 6 months then option two?
Both; initially, BFMines pays out the dividends from the excess capacity and I bear the risk of hardware failure (which is mitigated by hardware warranty) or any other interruption.
If it is the first option and let say you sell a total of 40,000 units in your IPO, will the bonus dividends equate to an extra 2mh/s per share for 6 months?
Not sure I understand your question completely, but if you're asking about unsold shares and bonus from those, the excess capacity is there regardless (ie I have a 120 GHs miner; not a 33.3333GHs+20% miner). The excess capacity is based on a fully sold IPO but dividends from unsold shares won't be paid out to contract holders, no.
Effectively, this shouldn't matter; the excess capacity is the same per share regardless of whether 1 or 100,000 shares are sold and the overhead requirement to manage risk is also the same.
I may misunderstand your question, though, so please rephrase if I haven't answered what you asked.
Also I do like your fourth option for closing the fund
and then adding this in
Pretty much means you can Cancel BFmines on the first day of operation for any reason you see fit, and not pay back any funds to anyone.
Quote
4.The operator must close the contract for other reasons
and then adding this in
Quote
Please note that this buy-back is a right of the operator, not a duty. Any buy-back is solely at the discretion of the operator.
Pretty much means you can Cancel BFmines on the first day of operation for any reason you see fit, and not pay back any funds to anyone.
Ah, not quite; if I were to close the BFMines, I would still have to pay out BTCT 7-day average plus 10% so as long as the price keeps as stable as it has been, I would effectively have to pay ~40BTC from my own pocket to close it on day 1, assuming a fully diluted IPO.
The 'right of the operator' clause is there to prevent misuse. It does not void the clauses of the buy-back, but states that nobody can demand a buy-back with those terms at their leisure. In other words, you can't come and say "I don't think mining is profitable anymore, please buy back my shares for 10% more than I paid for them earlier today".
.b
July 21, 2013, 10:10:08 PM
Mainly just after one clarification
Is it this;
Or this;
Or is it a mix of both, option one for 6 months then option two?
If it is the first option and let say you sell a total of 40,000 units in your IPO, will the bonus dividends equate to an extra 2mh/s per share for 6 months?
Also I do like your fourth option for closing the fund
and then adding this in
Pretty much means you can Cancel BFmines on the first day of operation for any reason you see fit, and not pay back any funds to anyone.
Is it this;
Quote
Pre-release only (will be removed once mining hardware is operational): This contract does not pay dividends until the release date. To compensate for this, the first six months of operation will give approximately 20% higher dividends depending on the final performance of the miner. In case the hardware fails completely, the contracts will be repaid for 0.004BTC per bond.
Or this;
Quote
All expenses related to the operation will be paid for from the surplus mining capacity. The surplus mining capacity will be no less than 20% more than the capacity required for dividend payments. Excess funds from this surplus capacity will go to the benefit of the contract holders in the form of securing the long-term operation and stability of the mining operation, but will not be paid out as dividends.
Or is it a mix of both, option one for 6 months then option two?
If it is the first option and let say you sell a total of 40,000 units in your IPO, will the bonus dividends equate to an extra 2mh/s per share for 6 months?
Also I do like your fourth option for closing the fund
Quote
4.The operator must close the contract for other reasons
and then adding this in
Quote
Please note that this buy-back is a right of the operator, not a duty. Any buy-back is solely at the discretion of the operator.
Pretty much means you can Cancel BFmines on the first day of operation for any reason you see fit, and not pay back any funds to anyone.
July 21, 2013, 08:35:43 PM
Update on Upcoming Changes in BFMines Contract
As announced, the BFMines contract is undergoing changes to clarify terms of the asset and actual operational details. The outline of the changes have been announced ealier, so this update serves to keep investors and the market up-to-date on the progress of these changes.
1. Clarification on Minimum Revenue Guaranteee
The contract updates on the minimum revenue guarantee (equivalent to 1 mhs PMB-style returns) are ready. The contract will be updated with the following clause:
This change will, in my opinion, only benefit contract holders and will thus be added to the contract without vote or an offer for buy-back.
2. Use of Surplus Mining Capacity
The contract currently states
As previously announced, the intent of this sentence is not that surplus mining capacity will be paid to the operator but that the revenue from the surplus capacity will not be paid out as dividends. The surplus capacity will be used to the benefit of the asset and thus the contract holders.
In the previous discussions in the BFMines forum, I explained that I am hesitant to include specifics about how those excess funds will be used due to the uncertainty of the stability of hardware and thus the need for a risk buffer.
However, I will be posting a separate post in the BFMines forum to outline and discuss various options for use of any excess funds to start the debate. A final determination and numbers will likely not be possible for several months.
I will, however, update the contract to clarify that the surplus mining capacity will be to the benefit of contract holders. See item #3.
3. Clarification on Transaction Fees
Although the contract doesn't explicitly mention this, BFMines is based on real mining and any revenue from that operation is paid out. This includes transaction fees and positive miner's luck (as described in item 1).
To clarify this, the contract will be updated as such:
Removed:
Added:
This clause is a somewhat complex change, so let me briefly comment on what I think will be questions about it.
Please note that the omission of 1mh/s from the clarified terms is not an oversight. The exact output is defined earlier in the contract.
Previously, the only clause was a somewhat ambigious "100% of 1mh/s of BTC mining power". Due to the initial use of the term 'mining bond' it was easy and maybe reasonable to assume this meant the standard formula of a PMB. The clarify, I have specifically stated that the dividends per contract is the total output of the mining operation divided by outstanding shares.
The clarification of payment of expenses is also necessary because the clause 'All expenses related to the operation will be carried by the operator' might seem to conflict with the previous paragraph that states 'The excess mining power will be held in reserve to account for operational cost, hardware failure, or other problems.'
This change adds clarification only (and cannot, in my opinion, be in any way not beneficial to contract holders) so I will include this change in the contract without vote or buy-back offer.
4. Cleaning Up
Although I had intended for the previous contract update to not include the omissions that are now stricken out in the BTCT contract, burnside included them in the update. That is fine and has no real impact on the contract, so to avoid confusion, I am removing the stricken out out content and the note about the rebranding. This, again, does not affect the contract in any way, so they will be included in the contract update.
I encourage your input and questions on these changes. If there are formulations and phrases that are unclear, I would be happy to update them.
The complete contract after the changes will look like this, pending any public discussion and feedback:
Contract
Overview
BFMines is a mining contract backed by physical hardware. The contract pays a dividend equivalent to 1 megahashes per second (mh/s) of mining power.
Please read the following article to understand what mining contracts are:
http://coin.furuknap.net/understanding-mining-bonds/
In summary, however, please note the following:
1. This is a mining contract, not a share in a company. You receive no voting rights and no other income than the stated dividend.
2. The mining contract is perpetual, which means it will continue to generate dividend until terminated following one of the below conditions. There is no defined termination date of the contract.
3. The mining contract pays the equivalent of income from 1 mh/s. Any excess payments not explicitly stated in this contract is solely at the discretion of the operator and should not be expected.
A total of 100,000 contracts will be issued backed by no less than 120 GH/s of mining power. The excess mining power will be held in reserve to account for operational cost, hardware failure, or other problems. Revenue from the excess mining power will not be paid out to contract holders.
Each contract is entitled to all output of the mining operation divided by the number of outstanding contracts. This output includes transaction fees and miner's good luck, but not miner's bad luck, according to the minimum revenue guarantee.
All expenses related to the operation will be paid for from the surplus mining capacity. The surplus mining capacity will be no less than 20% more than the capacity required for dividend payments. Excess funds from this surplus capacity will go to the benefit of the contract holders in the form of securing the long-term operation and stability of the mining operation, but will not be paid out as dividends.
In case funds from the surplus mining capacity is not sufficient to cover expenses, the operator will cover additional cost until such a time as the surplus mining capacity is again sufficient or the mining operation closes as per the terms of this contract.
Minimum Revenue Guarantee
BFMines is backed by real mining hardware and is thus subject to miner's luck. To preserve the stability of dividends, however, BFMines guarantees a minimum dividend equal to that of the current hash rate with a PMB style dividend. This cancels miners' bad luck while retains miners' good luck.
This minimum dividend will be scheduled at each difficulty change and paid on a daily basis. In addition, any positive dividends from miner's luck will be paid out at each difficulty change for the previous difficulty period. Any negative dividends from miner's luck will not affect current or future dividends and will be covered by the surplus mining capacity funds.
Changes to Contract
This contract may be updated at any time by the operator if it is to the reasonably undeniable benefit or of no consequence to contract holders. Changes that do not work in favor of existing contracts may be implemented only if the changes are accompanied by an offer to buy back contracts at the terms specified in this contract.
Operation and Buyback
The mine will operate perpetually and pay daily dividends, to be scheduled at or around the time of difficulty changes.
The term perpetual is unlikely for practical reasons, and as such, there exists provisions to close the contracts for one of the following reasons:
1.The operator becomes incapable of operating the contracts over an extended period
2.The overhead of operating the contracts becomes greater than its profits
3.Permanent and irreparable damage to hardware
4.The operator must close the contract for other reasons
If the contract must close for any of the above reasons, the operator or a duly appointed representative, in case the operator is permanently unavailable, can buy back contracts at no less than 110% of the average trading price at BTCT over the previous 7 (seven) days.
Please note that this buy-back is a right of the operator, not a duty. Any buy-back is solely at the discretion of the operator.
In any case of permanent and irreparable damage to hardware, the operator will pursue any means available to replace hardware as quickly as possible at no cost to contract holders. However, if replacement hardware cannot be obtained at reasonable costs, the operator may choose to suspend operation and dividends and start liquidation of the contract as explained above.
Pre-Release Terms:
Please note that these terms apply only until the mining hardware has been delivered. Upon delivery, these terms will be removed from the contract.
The contracts are backed by miners that have yet to be released. The scheduled release is September 2013.
All funds received as part of the IPO process at BTC Trading Corporation (BTCT) will be held in escrow until said mining hardware is delivered and made operational (the release date). In case the mining hardware fails completely, all funds will be repaid fully at the listing price of 0.004BTC/bond.
No dividends will be paid until delivery. On the release date, the IPO funds will be released from escrow.
Upon delivery, any excess capacity from the mining hardware will be used to pay contract holders additional dividends for six months. The additional dividends is intended to compensate contract holders for not receiving dividends until the mining hardware has been delivered.
Expansion of Operation
This contract will always be backed by real mining hardware or equivalent mining assets. In case of expansion of the contracts, those contracts will be offered at a rate not lower than the lowest trading price at BTCT over the previous 30 days. Any expansion will be backed by mining hardware or mining assets.
Caveats
Please be aware of the following before investing:
A mining contract decreases in value as Bitcoin mining difficulty climbs. The biggest return on investment will happen early in the contract’s existence and gradually decline as the Bitcoin mining climbs.
Mining contracts are not shares, they are effectively contracts where the mining operator mines bitcoin on your behalf, to be rewarded in dividends based on mining power. The price paid for a mining contract will under normal circumstances not be repaid so your sole income will be from the dividend paid daily.
Due to the buy-back clause of this contract, please be careful of paying too much for this mining contract, especially when there are sudden price spikes. The operator may choose to buy back contracts at 110% of trading price so if you pay more than this, you may theoretically lose anything you pay above that.
Pre-release only (will be removed once mining hardware is operational): This contract does not pay dividends until the release date. To compensate for this, the first six months of operation will give approximately 20% higher dividends depending on the final performance of the miner. In case the hardware fails completely, the contracts will be repaid for 0.004BTC per bond.
.b
As announced, the BFMines contract is undergoing changes to clarify terms of the asset and actual operational details. The outline of the changes have been announced ealier, so this update serves to keep investors and the market up-to-date on the progress of these changes.
1. Clarification on Minimum Revenue Guaranteee
The contract updates on the minimum revenue guarantee (equivalent to 1 mhs PMB-style returns) are ready. The contract will be updated with the following clause:
Quote
Minimum Revenue Guarantee
BFMines is backed by real mining hardware and is thus subject to miner's luck. To preserve the stability of dividends, however, BFMines guarantees a minimum dividend equal to that of the current hash rate with a PMB style dividend. This cancels miners' bad luck while retains miners' good luck.
This minimum dividend will be scheduled at each difficulty change and paid on a daily basis. In addition, any positive dividends from miner's luck will be paid out at each difficulty change for the previous difficulty period. Any negative dividends from miner's luck will not affect current or future dividends and will be covered by the surplus mining capacity funds.
BFMines is backed by real mining hardware and is thus subject to miner's luck. To preserve the stability of dividends, however, BFMines guarantees a minimum dividend equal to that of the current hash rate with a PMB style dividend. This cancels miners' bad luck while retains miners' good luck.
This minimum dividend will be scheduled at each difficulty change and paid on a daily basis. In addition, any positive dividends from miner's luck will be paid out at each difficulty change for the previous difficulty period. Any negative dividends from miner's luck will not affect current or future dividends and will be covered by the surplus mining capacity funds.
This change will, in my opinion, only benefit contract holders and will thus be added to the contract without vote or an offer for buy-back.
2. Use of Surplus Mining Capacity
The contract currently states
Quote
The excess mining power will be held in reserve to account for operational cost, hardware failure, or other problems. Revenue from the excess mining power will not be paid out to contract holders.
As previously announced, the intent of this sentence is not that surplus mining capacity will be paid to the operator but that the revenue from the surplus capacity will not be paid out as dividends. The surplus capacity will be used to the benefit of the asset and thus the contract holders.
In the previous discussions in the BFMines forum, I explained that I am hesitant to include specifics about how those excess funds will be used due to the uncertainty of the stability of hardware and thus the need for a risk buffer.
However, I will be posting a separate post in the BFMines forum to outline and discuss various options for use of any excess funds to start the debate. A final determination and numbers will likely not be possible for several months.
I will, however, update the contract to clarify that the surplus mining capacity will be to the benefit of contract holders. See item #3.
3. Clarification on Transaction Fees
Although the contract doesn't explicitly mention this, BFMines is based on real mining and any revenue from that operation is paid out. This includes transaction fees and positive miner's luck (as described in item 1).
To clarify this, the contract will be updated as such:
Removed:
Quote
Each contract pays exactly 100% of 1mh/s of BTC mining power. All expenses related to the operation will be carried by the operator.
Added:
Quote
Each contract is entitled to all output of the mining operation divided by the number of outstanding contracts. This output includes transaction fees and miner's good luck, but not miner's bad luck, according to the minimum revenue guarantee.
All expenses related to the operation will be paid for from the surplus mining capacity. The surplus mining capacity will be no less than 20% more than the capacity required for dividend payments. Excess funds from this surplus capacity will go to the benefit of the contract holders in the form of securing the long-term operation and stability of the mining operation, but will not be paid out as dividends.
In case funds from the surplus mining capacity is not sufficient to cover expenses, the operator will cover additional cost until such a time as the surplus mining capacity is again sufficient or the mining operation closes as per the terms of this contract.
All expenses related to the operation will be paid for from the surplus mining capacity. The surplus mining capacity will be no less than 20% more than the capacity required for dividend payments. Excess funds from this surplus capacity will go to the benefit of the contract holders in the form of securing the long-term operation and stability of the mining operation, but will not be paid out as dividends.
In case funds from the surplus mining capacity is not sufficient to cover expenses, the operator will cover additional cost until such a time as the surplus mining capacity is again sufficient or the mining operation closes as per the terms of this contract.
This clause is a somewhat complex change, so let me briefly comment on what I think will be questions about it.
Please note that the omission of 1mh/s from the clarified terms is not an oversight. The exact output is defined earlier in the contract.
Previously, the only clause was a somewhat ambigious "100% of 1mh/s of BTC mining power". Due to the initial use of the term 'mining bond' it was easy and maybe reasonable to assume this meant the standard formula of a PMB. The clarify, I have specifically stated that the dividends per contract is the total output of the mining operation divided by outstanding shares.
The clarification of payment of expenses is also necessary because the clause 'All expenses related to the operation will be carried by the operator' might seem to conflict with the previous paragraph that states 'The excess mining power will be held in reserve to account for operational cost, hardware failure, or other problems.'
This change adds clarification only (and cannot, in my opinion, be in any way not beneficial to contract holders) so I will include this change in the contract without vote or buy-back offer.
4. Cleaning Up
Although I had intended for the previous contract update to not include the omissions that are now stricken out in the BTCT contract, burnside included them in the update. That is fine and has no real impact on the contract, so to avoid confusion, I am removing the stricken out out content and the note about the rebranding. This, again, does not affect the contract in any way, so they will be included in the contract update.
I encourage your input and questions on these changes. If there are formulations and phrases that are unclear, I would be happy to update them.
The complete contract after the changes will look like this, pending any public discussion and feedback:
Quote
Contract
Overview
BFMines is a mining contract backed by physical hardware. The contract pays a dividend equivalent to 1 megahashes per second (mh/s) of mining power.
Please read the following article to understand what mining contracts are:
http://coin.furuknap.net/understanding-mining-bonds/
In summary, however, please note the following:
1. This is a mining contract, not a share in a company. You receive no voting rights and no other income than the stated dividend.
2. The mining contract is perpetual, which means it will continue to generate dividend until terminated following one of the below conditions. There is no defined termination date of the contract.
3. The mining contract pays the equivalent of income from 1 mh/s. Any excess payments not explicitly stated in this contract is solely at the discretion of the operator and should not be expected.
A total of 100,000 contracts will be issued backed by no less than 120 GH/s of mining power. The excess mining power will be held in reserve to account for operational cost, hardware failure, or other problems. Revenue from the excess mining power will not be paid out to contract holders.
Each contract is entitled to all output of the mining operation divided by the number of outstanding contracts. This output includes transaction fees and miner's good luck, but not miner's bad luck, according to the minimum revenue guarantee.
All expenses related to the operation will be paid for from the surplus mining capacity. The surplus mining capacity will be no less than 20% more than the capacity required for dividend payments. Excess funds from this surplus capacity will go to the benefit of the contract holders in the form of securing the long-term operation and stability of the mining operation, but will not be paid out as dividends.
In case funds from the surplus mining capacity is not sufficient to cover expenses, the operator will cover additional cost until such a time as the surplus mining capacity is again sufficient or the mining operation closes as per the terms of this contract.
Minimum Revenue Guarantee
BFMines is backed by real mining hardware and is thus subject to miner's luck. To preserve the stability of dividends, however, BFMines guarantees a minimum dividend equal to that of the current hash rate with a PMB style dividend. This cancels miners' bad luck while retains miners' good luck.
This minimum dividend will be scheduled at each difficulty change and paid on a daily basis. In addition, any positive dividends from miner's luck will be paid out at each difficulty change for the previous difficulty period. Any negative dividends from miner's luck will not affect current or future dividends and will be covered by the surplus mining capacity funds.
Changes to Contract
This contract may be updated at any time by the operator if it is to the reasonably undeniable benefit or of no consequence to contract holders. Changes that do not work in favor of existing contracts may be implemented only if the changes are accompanied by an offer to buy back contracts at the terms specified in this contract.
Operation and Buyback
The mine will operate perpetually and pay daily dividends, to be scheduled at or around the time of difficulty changes.
The term perpetual is unlikely for practical reasons, and as such, there exists provisions to close the contracts for one of the following reasons:
1.The operator becomes incapable of operating the contracts over an extended period
2.The overhead of operating the contracts becomes greater than its profits
3.Permanent and irreparable damage to hardware
4.The operator must close the contract for other reasons
If the contract must close for any of the above reasons, the operator or a duly appointed representative, in case the operator is permanently unavailable, can buy back contracts at no less than 110% of the average trading price at BTCT over the previous 7 (seven) days.
Please note that this buy-back is a right of the operator, not a duty. Any buy-back is solely at the discretion of the operator.
In any case of permanent and irreparable damage to hardware, the operator will pursue any means available to replace hardware as quickly as possible at no cost to contract holders. However, if replacement hardware cannot be obtained at reasonable costs, the operator may choose to suspend operation and dividends and start liquidation of the contract as explained above.
Pre-Release Terms:
Please note that these terms apply only until the mining hardware has been delivered. Upon delivery, these terms will be removed from the contract.
The contracts are backed by miners that have yet to be released. The scheduled release is September 2013.
All funds received as part of the IPO process at BTC Trading Corporation (BTCT) will be held in escrow until said mining hardware is delivered and made operational (the release date). In case the mining hardware fails completely, all funds will be repaid fully at the listing price of 0.004BTC/bond.
No dividends will be paid until delivery. On the release date, the IPO funds will be released from escrow.
Upon delivery, any excess capacity from the mining hardware will be used to pay contract holders additional dividends for six months. The additional dividends is intended to compensate contract holders for not receiving dividends until the mining hardware has been delivered.
Expansion of Operation
This contract will always be backed by real mining hardware or equivalent mining assets. In case of expansion of the contracts, those contracts will be offered at a rate not lower than the lowest trading price at BTCT over the previous 30 days. Any expansion will be backed by mining hardware or mining assets.
Caveats
Please be aware of the following before investing:
A mining contract decreases in value as Bitcoin mining difficulty climbs. The biggest return on investment will happen early in the contract’s existence and gradually decline as the Bitcoin mining climbs.
Mining contracts are not shares, they are effectively contracts where the mining operator mines bitcoin on your behalf, to be rewarded in dividends based on mining power. The price paid for a mining contract will under normal circumstances not be repaid so your sole income will be from the dividend paid daily.
Due to the buy-back clause of this contract, please be careful of paying too much for this mining contract, especially when there are sudden price spikes. The operator may choose to buy back contracts at 110% of trading price so if you pay more than this, you may theoretically lose anything you pay above that.
Pre-release only (will be removed once mining hardware is operational): This contract does not pay dividends until the release date. To compensate for this, the first six months of operation will give approximately 20% higher dividends depending on the final performance of the miner. In case the hardware fails completely, the contracts will be repaid for 0.004BTC per bond.
.b
July 19, 2013, 11:36:03 AM
I forgot to post when I did it, I apologize. But I updated the contract per the motion a couple of days ago. 
Cheers.
Cheers.
Thanks, burnside!
I've been somewhat busy myself so I didn't pick up the change. I'll post an update on the pending changes shortly (probably over the weekend) and ask for comments or objections before making them part of the contract.
.b
July 19, 2013, 12:09:08 AM
I forgot to post when I did it, I apologize. But I updated the contract per the motion a couple of days ago.
Cheers.
Cheers.
July 18, 2013, 09:32:07 PM
when is Metabank supposed to deliver again? I lose track
The latest I've heard is September (specifically 'before October', which technically can mean September 31 at 11:59 pm) which is why I've used that consistently. When they sold units on their site, they said deliveries start in August, but the contract states October at the latest.
The chips are done but because they had less performance than anticipated per chip, Metabank wanted to do additional work to ensure the devices work optimally. That also means that the total hash power released on the network is less, which is good news for BFMines since we still get our 120GH regardless.
.b
July 18, 2013, 09:26:55 PM
when is Metabank supposed to deliver again? I lose track
July 15, 2013, 10:08:03 PM
Would you be OK with the clarification, the link to your post here, and the two paragraphs quote in the article?
.b
.b
Yeah sounds reasonable.
Updated:
http://coin.furuknap.net/why-bfmines-is-a-better-mining-investment-than-a-pmb/
.b
July 15, 2013, 10:01:41 PM
I don't want to confuse people beyond making it clear that what they are buying isn't mining, and that the funds from which they receive dividends are the same funds used to buy shares (in any of the assets). As such, there is no way to bring more funds into the asset pools so if those funds run out, payments will stop. They will run out, and fairly quickly, if mining difficulty does not increase.
If mining difficulty does not increase, they can expect to get the exact same dividends from BFMines. The lump sum payment won't cover the rise in price, as any asset that consistently and over time will yield perhaps 100% will drastically rise in value and definitely much more than double overnight.
If mining difficulty does not increase, they can expect to get the exact same dividends from BFMines. The lump sum payment won't cover the rise in price, as any asset that consistently and over time will yield perhaps 100% will drastically rise in value and definitely much more than double overnight.
Actually the asset pool DOES increase slowly due to investment though, to date, that's been at a slower rate than the payment of MINING dividends (haven't done the exact math but think on average profit covers over about 1/3 of dividends).
That is only true as long as you have a positive ROI on your .Selling investments, which may or may not be true (if Dooglus or TradeFortress drove into a concrete wall tomorrow, those funds would likely be worthless and cause a loss).
Like I said, I'd be happy to write a more comprehensive article on DMS, but I want to clarify the article on BFMines so you don't feel I'm doing you or your investors injustice.
Would you be OK with the clarification, the link to your post here, and the two paragraphs quote in the article?
.b
Yeah sounds reasonable.
July 15, 2013, 09:59:39 PM
I don't want to confuse people beyond making it clear that what they are buying isn't mining, and that the funds from which they receive dividends are the same funds used to buy shares (in any of the assets). As such, there is no way to bring more funds into the asset pools so if those funds run out, payments will stop. They will run out, and fairly quickly, if mining difficulty does not increase.
If mining difficulty does not increase, they can expect to get the exact same dividends from BFMines. The lump sum payment won't cover the rise in price, as any asset that consistently and over time will yield perhaps 100% will drastically rise in value and definitely much more than double overnight.
If mining difficulty does not increase, they can expect to get the exact same dividends from BFMines. The lump sum payment won't cover the rise in price, as any asset that consistently and over time will yield perhaps 100% will drastically rise in value and definitely much more than double overnight.
Actually the asset pool DOES increase slowly due to investment though, to date, that's been at a slower rate than the payment of MINING dividends (haven't done the exact math but think on average profit covers over about 1/3 of dividends).
That is only true as long as you have a positive ROI on your .Selling investments, which may or may not be true (if Dooglus or TradeFortress drove into a concrete wall tomorrow, those funds would likely be worthless and cause a loss).
Like I said, I'd be happy to write a more comprehensive article on DMS, but I want to clarify the article on BFMines so you don't feel I'm doing you or your investors injustice.
Would you be OK with the clarification, the link to your post here, and the two paragraphs quote in the article?
.b
July 15, 2013, 09:49:43 PM
I don't want to confuse people beyond making it clear that what they are buying isn't mining, and that the funds from which they receive dividends are the same funds used to buy shares (in any of the assets). As such, there is no way to bring more funds into the asset pools so if those funds run out, payments will stop. They will run out, and fairly quickly, if mining difficulty does not increase.
If mining difficulty does not increase, they can expect to get the exact same dividends from BFMines. The lump sum payment won't cover the rise in price, as any asset that consistently and over time will yield perhaps 100% will drastically rise in value and definitely much more than double overnight.
If mining difficulty does not increase, they can expect to get the exact same dividends from BFMines. The lump sum payment won't cover the rise in price, as any asset that consistently and over time will yield perhaps 100% will drastically rise in value and definitely much more than double overnight.
Actually the asset pool DOES increase slowly due to investment though, to date, that's been at a slower rate than the payment of MINING dividends (haven't done the exact math but think on average profit covers over about 1/3 of dividends). DMS.Mining is explicitly designed to allow speculation on the value of PMBs during periods of fast growth - where the residual payments once the difficulty rise stops are likely to be relatively small. Current difficulty is pretty irrelevant to the value of PMBs - its where it'll be when it stops/slows right down that really matters. And at some stage there's almost certainly going to be a period when DMS.Mining will be great value due to those buying DMS.Selling not realising the halt is about to happen (at which stage DMS/Mining ends up with 90%+ of all funds). It won't give out the residual small payments PMB would - but it WILL give out a good sum in one payment immediately. Once that point comes into sight DMS.Mining will cease to be comparable to PMBs - at present it still is (or nearly everyone believes it is) because there's so likelihood of difficulty ceasing to rise in the near future.
Last paragraph doesn't really apply. The point at which DMS/Mining would (or might) close is when growth slowed to around 3% per change - not if it ever reached total stagnation. Total stagnation (zero growth) is unlikely for some years and probably unlikely ever for any significant period. To get stagnation requires that the price of hardware doesn't fall AND the exchange-rate of BTC doesn't rise. Hardware is almost certain to drop heavily in price - and long-term BTC price must rise if it doesn't fail/stagnate itself.
There IS one scenario where DMS.Mining is horribly worse value than any actual mining operation - the collapse of BTC, where BTC loses (nearly) all value for whatever reason. I don't rate that as massively relevant but it DOES exist - if that happened (and network hash-rate dropped massively - which it would) then DMS.Mining would just get all the capital back whilst actualy mining operations would get the large sums of BTC actually mined. It's not that relevant as having a lot of worthless tokens rather than a few matters not at all (we're not talking about BTC dropping to $10 for a while, we're talking about it dropping to the point where it becomes near or actually worthless) and if anyone believes there to be a significant chance of that then they shouldn't invest in ANY BTC investments.
July 15, 2013, 09:26:56 PM
Your new post says the following :
"One particular case where this becomes apparent is with DMS.Mining. DMS.Mining, although an interesting speculator’s tool, is designed to fail if mining is profitable. The dividends you get from DMS.Mining is the same funds you pay when you buy the shares. If it turns out that mining difficulty does not grow indefinitely, DMS.Mining will close down because it won’t actually have more funds to pay out. "
That's not accurate. The funds available are MORE than what you pay when you buy a DMS.Mining - depending on how you look at it, they're either ~400 days of current dividend OR the funds from the sale of one DMS.Purchase OR the funds you pay PLUS the funds someone buying (or holding) a DMS.Selling paid. All three descriptions amount to the same thing - however you look at it, DMS.Mining share at any point in time are backed by significantly more than what they sell for and ALL of those funds are available to DMS.Mining investors if difficulty change is favourable.
"One particular case where this becomes apparent is with DMS.Mining. DMS.Mining, although an interesting speculator’s tool, is designed to fail if mining is profitable. The dividends you get from DMS.Mining is the same funds you pay when you buy the shares. If it turns out that mining difficulty does not grow indefinitely, DMS.Mining will close down because it won’t actually have more funds to pay out. "
That's not accurate. The funds available are MORE than what you pay when you buy a DMS.Mining - depending on how you look at it, they're either ~400 days of current dividend OR the funds from the sale of one DMS.Purchase OR the funds you pay PLUS the funds someone buying (or holding) a DMS.Selling paid. All three descriptions amount to the same thing - however you look at it, DMS.Mining share at any point in time are backed by significantly more than what they sell for and ALL of those funds are available to DMS.Mining investors if difficulty change is favourable.
Hm... This wasn't a complete description, but would be more accurate, in my opinion, if I changed the statement to
Best advice to potential investors in BFMINEs is to hold on. It looks unlikely to sell out soon, so there's no rush to buy - and no discount for buying now rather than later. When the hardware looks likely to ship, see how much difficulty has changed, work out how many years that would take to return capital even with no further changes, compare to other available options and decide then. As there's no way to sell back at or near buying price right now there's no incentive to gamble and buy without a clear delivery date when you can wait and see how difficulty changes and the prices of competitors (including any new ones that show up) rise/fall.
I agree, potential contract holders should not be in any rush to acquire contracts but spend significant time researching the offering, review the (updated) contract, evaluate the mining landscape in general, and only then decide whether to invest and finally where.
The bonus was designed to ensure that there is no rush, and that unless there were dramatic rises in prices (from a flattening in difficulty or some other factor) a rational market would price the competing assets in such a way that makes it irrelevant when during the IPO phase they buy.
.b
July 15, 2013, 09:04:43 PM
Your new post says the following :
"One particular case where this becomes apparent is with DMS.Mining. DMS.Mining, although an interesting speculator’s tool, is designed to fail if mining is profitable. The dividends you get from DMS.Mining is the same funds you pay when you buy the shares. If it turns out that mining difficulty does not grow indefinitely, DMS.Mining will close down because it won’t actually have more funds to pay out. "
That's not accurate. The funds available are MORE than what you pay when you buy a DMS.Mining - depending on how you look at it, they're either ~400 days of current dividend OR the funds from the sale of one DMS.Purchase OR the funds you pay PLUS the funds someone buying (or holding) a DMS.Selling paid. All three descriptions amount to the same thing - however you look at it, DMS.Mining share at any point in time are backed by significantly more than what they sell for and ALL of those funds are available to DMS.Mining investors if difficulty change is favourable.
Your paragraph pretty much states that all they can ever get back is what they paid for the share - that's a lie when expressed as a generality. If difficulty immediately stopped rising now then DMS.Mining shares would receive back well over double the price they currently sell at and would probably receive it all within the next few months. Conversely, if difficulty keeps rising rapidly for a long time then when difficulty finally levels off they WOULD receive a final payment but the dividends by then would be near irrelevant compared to what they receive now.
It may be the case that the only way your investors would ever make a profit is if difficulty stops rising soon (or alternatively if it stops rising middle of next year and they don't mind waiting a few decades and hope your hardware lasts that long). But as there's little likelihood of it stopping rising soon, arguments based on the assumption that it will are pretty meaningless. Yes it IS true that when difficulty stops rising (and I DO agree with you that it likely will - at least for a while) DMS.Mining ceases to behave like a PMB - giving a lump-sum golden hand-shake rather than a daily pittance. But that pittance that they don't get would realistically be at a tiny part of today's dividend - with the vast majority of all dividends they'd receive in, say, 3 or 5 years of operation having already been received.
And, of course, your own offering also will end and pay out a final amount as well - when depends more on the reliability of your hardware than difficulty changes : so it could be sooner or later than DMS.Mining (I'm not sure how the warranty/guarantee on the hardware is). At which point they get a random final payment - depending on what market price is.
Most of the rest of your comments are pretty fair (some aren't clear - e.g. the benefits of luck depend on what pool/payout structure you will use which isn't disclosed. Luck could have anything from zero effect if you mined on strict PPS to a massive impact if you solo mined) - or WILL be fair once the contract is updated to clearly reflect benefits you refer to.
And of course "better value" ALWAYS depends on the price. If your contract adds in the extra things promised then, once you start mining (and ONLY then), you definitely WILL be better value per MH/s than DMS.Mining or TAT/VM - but that isn't the same thing as being better value at ANY price. At present (with difficulty changes still some way off) I'd estimate the change in ending terms makes DMS.Mining at most about 5% less valuable than equivalent actual hashing - and that's IF you believe operator can/will pay indefinitely even when their hardware fails from old age (an unknown parameter for ASICs so far). TAT.VM has a significantly worse final payment than DMS.Mining so the margin would be higher there.
Best advice to potential investors in BFMINEs is to hold on. It looks unlikely to sell out soon, so there's no rush to buy - and no discount for buying now rather than later. When the hardware looks likely to ship, see how much difficulty has changed, work out how many years that would take to return capital even with no further changes, compare to other available options and decide then. As there's no way to sell back at or near buying price right now there's no incentive to gamble and buy without a clear delivery date when you can wait and see how difficulty changes and the prices of competitors (including any new ones that show up) rise/fall.
"One particular case where this becomes apparent is with DMS.Mining. DMS.Mining, although an interesting speculator’s tool, is designed to fail if mining is profitable. The dividends you get from DMS.Mining is the same funds you pay when you buy the shares. If it turns out that mining difficulty does not grow indefinitely, DMS.Mining will close down because it won’t actually have more funds to pay out. "
That's not accurate. The funds available are MORE than what you pay when you buy a DMS.Mining - depending on how you look at it, they're either ~400 days of current dividend OR the funds from the sale of one DMS.Purchase OR the funds you pay PLUS the funds someone buying (or holding) a DMS.Selling paid. All three descriptions amount to the same thing - however you look at it, DMS.Mining share at any point in time are backed by significantly more than what they sell for and ALL of those funds are available to DMS.Mining investors if difficulty change is favourable.
Your paragraph pretty much states that all they can ever get back is what they paid for the share - that's a lie when expressed as a generality. If difficulty immediately stopped rising now then DMS.Mining shares would receive back well over double the price they currently sell at and would probably receive it all within the next few months. Conversely, if difficulty keeps rising rapidly for a long time then when difficulty finally levels off they WOULD receive a final payment but the dividends by then would be near irrelevant compared to what they receive now.
It may be the case that the only way your investors would ever make a profit is if difficulty stops rising soon (or alternatively if it stops rising middle of next year and they don't mind waiting a few decades and hope your hardware lasts that long). But as there's little likelihood of it stopping rising soon, arguments based on the assumption that it will are pretty meaningless. Yes it IS true that when difficulty stops rising (and I DO agree with you that it likely will - at least for a while) DMS.Mining ceases to behave like a PMB - giving a lump-sum golden hand-shake rather than a daily pittance. But that pittance that they don't get would realistically be at a tiny part of today's dividend - with the vast majority of all dividends they'd receive in, say, 3 or 5 years of operation having already been received.
And, of course, your own offering also will end and pay out a final amount as well - when depends more on the reliability of your hardware than difficulty changes : so it could be sooner or later than DMS.Mining (I'm not sure how the warranty/guarantee on the hardware is). At which point they get a random final payment - depending on what market price is.
Most of the rest of your comments are pretty fair (some aren't clear - e.g. the benefits of luck depend on what pool/payout structure you will use which isn't disclosed. Luck could have anything from zero effect if you mined on strict PPS to a massive impact if you solo mined) - or WILL be fair once the contract is updated to clearly reflect benefits you refer to.
And of course "better value" ALWAYS depends on the price. If your contract adds in the extra things promised then, once you start mining (and ONLY then), you definitely WILL be better value per MH/s than DMS.Mining or TAT/VM - but that isn't the same thing as being better value at ANY price. At present (with difficulty changes still some way off) I'd estimate the change in ending terms makes DMS.Mining at most about 5% less valuable than equivalent actual hashing - and that's IF you believe operator can/will pay indefinitely even when their hardware fails from old age (an unknown parameter for ASICs so far). TAT.VM has a significantly worse final payment than DMS.Mining so the margin would be higher there.
Best advice to potential investors in BFMINEs is to hold on. It looks unlikely to sell out soon, so there's no rush to buy - and no discount for buying now rather than later. When the hardware looks likely to ship, see how much difficulty has changed, work out how many years that would take to return capital even with no further changes, compare to other available options and decide then. As there's no way to sell back at or near buying price right now there's no incentive to gamble and buy without a clear delivery date when you can wait and see how difficulty changes and the prices of competitors (including any new ones that show up) rise/fall.
July 15, 2013, 05:49:48 PM
Contract Update
As per the previous announcement, BFMines has recently posted a motion to update the contract. In brief, this update includes the issuer’s ability to update the contract when those updates benefit contract holders only, it rebrands the asset as a mining contract rather than a mining bond, and also removes Metabank as the named hardware provider.
The motion has passed without a single No-vote (21251 Yes votes, 6 Abstain votes), and is thus to be updated on the BTCT site. The new contract will be effective as soon as BTCT updates it, which is a manual process.
The purpose behind the update is to make it possible to improve the terms of the contract. On writing, I was more concerned with protecting contract holders and in the process locked myself out from making the terms better.
I encourage contract holders, potential or existing, to review the discussion on the changes in the forum.
https://bitcointalksearch.org/topic/m.2692532
This discussion also contains details about the upcoming intended changes, including:
I would also like to stress that any changes that are not, without a reasonable doubt, in the favor of contract holders will be accompanied by a buy-back offer as per the contract.
I have also published an article that better explains why BFMines is a better investment than traditional PMB assets.
http://coin.furuknap.net/why-bfmines-is-a-better-mining-investment-than-a-pmb/
.b
As per the previous announcement, BFMines has recently posted a motion to update the contract. In brief, this update includes the issuer’s ability to update the contract when those updates benefit contract holders only, it rebrands the asset as a mining contract rather than a mining bond, and also removes Metabank as the named hardware provider.
The motion has passed without a single No-vote (21251 Yes votes, 6 Abstain votes), and is thus to be updated on the BTCT site. The new contract will be effective as soon as BTCT updates it, which is a manual process.
The purpose behind the update is to make it possible to improve the terms of the contract. On writing, I was more concerned with protecting contract holders and in the process locked myself out from making the terms better.
I encourage contract holders, potential or existing, to review the discussion on the changes in the forum.
https://bitcointalksearch.org/topic/m.2692532
This discussion also contains details about the upcoming intended changes, including:
- Guarantee of minimum mining performance to cancel the effect of miner’s bad luck while retaining the chance to miner’s good luck
This will have a positive impact on dividends of on average half the miner’s luck variance (5-10%) - Clarification on inclusion of transaction fees in the dividend payouts (whereas a PMB pays from a fixed forumla using the block reward only)
This will have a positive impact on dividends of the transaction fees over time, currently around 1.1% - Clarification on the use of the excess mining power, which is to bo to the benefit of the contract holders, not the operator.
Although not directly paid out, this will have a positive impact on the stability, security, and longevity of the contracts, and will in some form or another, go back to the contract holders.
I would also like to stress that any changes that are not, without a reasonable doubt, in the favor of contract holders will be accompanied by a buy-back offer as per the contract.
I have also published an article that better explains why BFMines is a better investment than traditional PMB assets.
http://coin.furuknap.net/why-bfmines-is-a-better-mining-investment-than-a-pmb/
.b
July 13, 2013, 12:58:58 AM
A true graph to replace the falseness above, using furuknap own assumptions, PAJKA is now incorrect so BFmines wins against one. woo hoo
http://i.imgur.com/4O1PNGk.jpg
http://i.imgur.com/4O1PNGk.jpg
July 12, 2013, 12:55:29 AM
Updated price comparison:
.b
Edit: Error in first chart
.b
Edit: Error in first chart
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