Topic: [BTCT][BFMINES] - Mining Contracts Now Available - Bonus Divs First Months - page 6. (Read 26395 times)

Pretty much, except you don't have to pay for electricity, maintain or configure it, risk it breaking, or suffer the noise or added heat.

.b

so spending 12 btc would be like having a miner of 3ghs?

Comparison of Mining Assets
As per Deprived's request in the forum (although his was just the trigger; I get a lot of these) I've written an article that compares the various mining investments on BTCT to BFMines. Right now, BFMines is the second cheapest (TAT.VM is cheapest after today's drop).

The analysis focuses on price per mhs mostly. Be aware that mining companies and mining contracts behave differently when it comes to upgrading.

Please note that the reason I have been hesitant to write such an article so far is that these numbers change on a daily basis. TAT.VM, for example, fell considerably today, but was trading at over 0.005 just a few days ago.

Also, I don't speculate in difficulty changes as a policy, but I've chosen to account for 15% per month for the next two months when comparing the numbers. This may or may not be right but regardless, it shouldn't affect the comparison of assets too much, only mining investments in general.

http://coin.furuknap.net/comparing-bfmines-to-alternatives/

Enjoy,

.b

Trading Begins on BFMines

As of now, and I'm sorry about the delay for a few minutes, trading is open on the BFMines mining contracts on BTCT.

https://btct.co/security/BFMINES

100'000 shares have been placed on the market at BTC0.004 each. The ASK order will be kept on the market until sold.

The latest update on delivery is that Metabank is on schedule to deliver between August and October, with the latest estimate from them being that shipping begins in early September (as per information given to our hosting provider).

I will publish an article later today regarding comparing BFMines to other assets on BTCT.

As always, run your own numbers, make up your own mind, listen to both sides of the arguments, and never invest anything you cannot afford to lose.

.b

We are, just a few moments :-)

.b

Are we not at 6PM UTC?

Actually, I started on an article like Deprived suggested instead. Seemed more appropriate as it also will answer your questions. I'm trying to get that up before trading starts tonight.

.b

Seems you won't 

I've been hesitant to compare this to alternatives for a number of reasons, but maybe I should.

I'll see if I can get an article up later tonight or tomorrow.

.b

Heh I sold mine (my fund's) at about 0.75 (the first time - have bought and sold many times since) - everyone gets it wrong occasionally (they were bought for ~0.1 around IPO).

Furuknap's article does describe most of the factors to weigh up when considering his contract - though it misses out one of the largest ones (the BTC/USD exchange-rate - in general if that rises ALL mining investments become worse, if it falls they become better).  It also doesn't much address comparing his contract to alternatives.  It would have been more useful had it provided formulae to work out return for standard scenarios (e.g. difficulty rises steadily to X until end of year then stays constant - what is return by end of 2014, so people could plug in different X).  But noone else provides that so no reason why he should.

You can of course believe what you want, but there is no reason to be a douchebag about it. What does the fact that he sold ASICMINER at 1.70 have to do with anything? I sold a bunch at 2.20 and sure, while it in hindsight was a bad sell I also purchased them under 0.50 so why cry over making 5x your money?

It's now 22 hours left until the first shares hit the market, and over 30% of the IPO assets have been ordered (including my announced stake).

Pending trade start, I encourage any potential investors to read through this article that describes the risks involved with this asset.

http://coin.furuknap.net/bfmines-bitcoin-mining-contracts-ready-for-listing-heres-how-you-should-evaluate-investing/

.b

I will, later today :-)

.b

Notification of Insider Trade

Although not required in unregulated markets, I try to maintain a standard I would like all crypto assets to maintain, including what would in a regulated market be a mandatory notification. I am making a purchase of contracts for myself and on behalf of a friend, and as I am a primary insider, this information should be public.

As such:

As part of the IPO process, Bjørn Furuknap, the asset issuer and key insider, will purchase 10000 (ten thousand) contracts of BFMines. 5000 (five thousand) of these will be held personally by Bjørn Furuknap, and 5000 (five thousand) will purchased on behalf of a friend.

These contracts will be directly issued from the pool of 100000 (one hundred thousand) contracts total. The purchase price is BTC0.004 per contract.

After the trade, Bjørn Furuknap holds 10000 (ten thousand) contracts.

.b

I think that is wrong.

Ok, lets assume the following:

-   buy IPO share at 0.004
-   mining start at beginning of September
-   network hashrate 350 TH/s at beginning of September (that means ~100% increase from now and 130% increase in difficulty, 23% per jump!)
-   10% difficulty increase from September each month in the next 6 month until end of February

The dividend at beginning of September will have been dropped down to 0.00001028. Your 20% bonus in the first 6 month included, it’ll be 0.00001234.

The dividend will be lowered by every 10% difficulty jump. After 6 month, about ~0.00135 will have been paid out in dividends per share.

The bondprice will drop due to lowered dividends, and will be worth about ~0.00125 after those 6 months.

All paid dividends and bondprice together will be about ~0,0026 at the end of February. The price we paid at IPO was 0,004.

At the same time, Coinlenders will be at ~0,00465 (profit ~16%).

I don't know why you choose those high difficulty increases. If you assume an average increase below 8%, investments could be profitable with those numbers.

Please show me where I made mistakes in my calculation!

That discussion is not really interesting because we're talking about two vastly different assets. However, to please your inquiry, assuming 350TH/s netowrk hash rate and mining start in August (mining could also start in September), BFMines makes more money (about double) than coinlenders for the first 6 months with a difficulty increase of 10% per month.

After that, PPG difficulty will make it about the same for the next 6 months, and then be below. Also, the moon may fall down by then.

Now you can argue that coinlenders insures their deposits against loss, that you can repeat your investments, that tradefortress is certainly a nice guy, and all that, but you'll only be arguing about one thing; whether difficulty will rocket up or continue upwards on a declining slope, and possible how high it will go before it flattens out this time. That is what separates coinlenders from mining investments if you just look at numbers. Coinlenders does not have exposure to difficulty, mining does.

.b

Whatever you like, just use 6 or 12 months. You also don't have to use "perpetual proportional growth" numbers, you can take whatever numbers you want for the difficulty jumps. It only has to generate more profit than coinlenders in the same period and the numbers should be valid (thats to be discussed I guess).

If you think so, you should not buy. I can't make that decision for you, only give you the information I can.


In what timeframe?

Your question is loaded, though. I don't think you're not really looking for an answer, just an argument about why fish are so much better than apples.

I have stated why I do not believe in the perpetual proportional growth theory (the one you call average difficulty increase) before and I really don't see why repeating it will make it clearer, especially since you seem to have already made up your mind.


I don't think this is true. I believe this contract will be profitable for investors, but I also believe that having that cash in hand for me allows be a better return on investment as I invest the time and resources to stay on top of the investment game.

Investors who are not interested in spending that time will get a reasonable return for a reasonable risk. They may lose everything or they may swim in cash, or anything in between.

.b

On the positive side, I think your contract is clear and complete.

On the negative side, your asset is (just like nearly all other mining bonds) overpriced.

Please tell me, how high would the average difficulty increase allowed to be at a maximum, if I want the profit to be at least as high as with coinlenders? (27% APR)

Mining Bonds are simply a bet of the issuer against their own investors. One side has to lose, and I doubt it'll be the side who makes the rules...

Thank your for your input,

I did sell my AM shares at around 1.7 because that was the rate where the fundamental support for the price was right for my risk profile. Right now, AM is hashing at 100mhs per share and charges 0.044 per mhs, more than 10 times what my contracts do. In other words, AM must increase their hashrate by 10 times just to match the mining yield my contracts do. They do sell hardware, but not near 10x what their mining revenue is.

They may do that at some point, but when they do, the rest of the network needs to be at roughly 1500 THs. If you believe in a 10x increase in global hash rate very quickly then, as I explained in the article, you should not buy this contract (or any mining investment, really).

Further, an ASICMiner investment in an additional 600 THs needs to be paid for through the dividends, whereas my asset has no such provisions. In other words, with AM, you first have to pay for the shares and then pay for the hardware before you get your dividends.

These are two widely different assets, though. Perhaps an article elaborating on why they are different will help clarify?

However, I stand by my ASICMiner sale; I sold at a time when the price was around 2x higher than what I believe mining investments plus the growth that AM is capable of, are worth. There's no loss there for me; I earned good money on investing in AM. If people are indeed willing to pay twice for what I sold, then that is their choice.

.b