First there's the weasel words of "the reasonably perceived benefit of contract holders". Reasonably perceived by whom? If by contract holders then why are you trying to allow it unilaterally - when there's voting system that allows factual determination of what the perception of contract holders is. If you mean "reasonably perceived" by yourself then it's meaningless - as it gives you free reign to do anything you want so long as you claim it's "reasonably perceived" by yourself.
Reasonable is a fairly well-understood term and is perfectly usable in legal contracts. The term "beyond a reasonable doubt" is an example of this. It will not be unilaterally determined by me as I can be very unreasonable at time. That is why the intent is to publish changes well in advance.
An example of an unreasonable objection may be that "I don't want these changes because I don't like the color of your car". This is clearly unreasonable because the color of my car is not in any way related to the operation of the contract.
An example of a resonable objection may be that "I don't want these changes because I think difficulty will drop by 50%". This is reasonable because, although someone may disagree or agree with the prediction, it is a reason that would affect the operation of the contract.
In any event, any change that tries to make the bonds/contracts into some kind of communal ownership asset - where some holders can vote to change the rights of others - should NOT be allowed for anything claimed to be a bond. It removes the certainty of expectation that holding a bond should deliver.
This is one reason why the rebranding is required; this is not a bond, it is a mining contract. I'd be happy to treat it as a bond like the original contract stated, but this will effectively remove benefits from contract holders, and I'll elaborate more on this in a moment.
The second part appears to be attempting to remove your obligation to pay the equivalent of 1 MH/s of mining output and instead replace it with the actual output of your hardware. That removes all guarantee of payment - and changes the entire nature of payouts from being PMB-like to be equivalent to owning shares : just with a much larger management cut than things openly admitting to be shares charge.
A 1.1% transaction fee bonus in no way compensates for stales, orphans, loss of net connection, equipment breakdown etc.
It does not. That is the purpose of the excess capacity, as stated in the contract. However, the excess capacity will not be paid out so it will only benefit contract holders as an added insurance.
However, let's again as an extreme example say that friedcat's predictions of a 100% transaction fee by 2016 comes true. This will effectively double the output of the contracts, and that will be paid out to contract holders.
Even in your article you appear confused over this yourself - on the one hand saying invnestors get what's mined and on the other saying (in big type) :
"Note: During the first six months, while the hardware is still under warranty, the surplus mining power in BFMines is paid out as a bonus to contract holders, meaning that for half a year, contract holders get more dividends than guaranteed."
What's guaranteed if it becomes a contract? What is the absolute minimum investors will get paid per dividend? There isn't one.
This is actually one of those planned changes, and because this is
not now (edit: spelling) a public forum, I'll reveal the details of that particular upcoming change. I eluded to this in the article, but I'd like to iron out the final details before I include it in the contract.
Please note that the following is a preliminary change and will not be worded this way in the final contract.
Unlike PMBs, mining contracts guarantee the output of a certain hash rate from actual mining. This means that in theory, that mining output may be zero (and in theory can be any remaining block reward forever).
Due to this variance in output, contract holders would normally have an unpredictable output that may very well be below expectations. It will also introduce significant overhead to the operation and dividends must be paid daily and cannot be scheduled. Dividends must also be paid out after the mining occurs, although this is a minor effect as the total impact would be the interest of one day with a daily dividend payout.
To ensure a stable output, BFMines will pre-schedule daily dividends on the basis of an average output using the expected dividends (likely using the DMS.Mining and TAT.VM formulas as they seem to be the commonly accepted standards).
Then, on a weekly basis, surplus dividends from lucky streaks and transaction fees will be paid out.
However, under no circumstance will that additional dividend be negative or affect future dividends payments. In other words, like the PMB style of the original contract, there is an absolute guarantee of the expected output from 1mhs. If the real output is lower, that will be covered by the operator.
This change benefits contract holders beyond a resonable doubt (in my opinion) as such:
- It guarantees a mining payout equivalent to a PMB
- It offers contract holders the upside of good luck
- It offers protection against bad luck
- It offers an additional payout of transaction fees once per week
The third change is the worst of the lot - it would be fine with one change.
As your proposal stands, if the original hardware doesn't show up you could then order from someone else - and evenn if it didn't arrive for another year investors would be locked in at the same price and receive minimal return when hardware finally arrived. If you want the flexibility to use other hardware then a fair change would be to allow other hardware to back the bonds/contracts so long as it was operational by the end of September (the originally defined target time-scale). That removes the loophole in your proposed change where you can keep changing proposed hardware sources until either hardware prices are tiny OR market price is so low you can just buy back per the contract and pocket a fat profit without ever having mined anything.
That is also one of the proposed changes that would be added, but for which the details are not defined.
I am working under the assumption that contract holders would benefit from starting mining as soon as possible. I realize this is not absolutely true in all cases; some are just speculating.
Right now, I'm in the process of securing hash power from additional sources to serve as backup power for BFMines. However, the way the contract is formulated, hashing will not commence until Metabank delivers. That means that (although in theory) the backup power can be available tomorrow, it would just sit idle for months if Metabank is delayed.
There is no clause that says a specific date for when the IPO funds would be returned if hardware does not arrive, which is really another oversight. If I were dishonest, I could hide behind this oversight forever with the current terms, and this would go against the best interest of contract holders as well as my intent.
As such, I've proposed to remove the named hardware and when details about hardware delivery are more firm (whether from the backup sources or Metabank) a fixed date will be added, at which either mining commences or IPO funds are returned.
However, because I do not yet know the details of when neither Metabank or the backups arrive, I cannot yet fix this date, so I'm not including that change in this proposal. I'm keeping everyone, contract holders or others, up-to-date on every development I learn, positive or negative, so the moment I know, I will reveal this information.
.b
