Topic: [closed] Zeta Bitcoin Mining (Read 12991 times)

So you think you should get the pending dividends and a cash-out option to sell your shares for more than twice they are worth? You for sure can ask for that, but sorry: that's not the deal.

We discussed this in detail over email; if you changed your mind and would like to chose the dividends, please contact me. We can reverse the cash-out any time and you will get the accumulated and all future dividend payments instead. From the feedback received I'm pretty sure that this dealing was in the investors' best interest, and I'll do anything to counter your doubts about that.


Finally, it would be fair if you could please stop claiming that I forced you or anyone else to cash-out, since that's just not true (and evident from everyone's confirmation email).


Thanks,
Zefir

You didn't paid dividend for the time Nefario holding assets.
You just sent email explaining about dividend returns & asked/forced them sell.
Bonds bought with out giving dividend for more than a month.

Dear (ex-)investors,

while I was catching up this forum threads, I stumbled on this post that affected me personally: the author accuses security issuers of misusing the GLBSE fiasco to push investors out of their shares through buy-back-offers. AFAIK so far I am the only one who offered a cash-out option, therefore I feel personally attacked and indirectly charged with fraud / scam.

In my emails to investors and in this thread, for several times I explained why 1MHps will never make you more than 0.1BTC mining income over its remaining lifetime. I hoped for your understanding and your appreciation of that offer as my way to thank you for your support. In no way I did force anyone of you to take that offer, that's why I can't accept any allegations harming my integrity.


If anyone believes that this was a bad deal and expects to earn more through mining, I am willing to back my expectation with hashing power: 1GHps for 50BTC. That is, I'll sell you perpetual mining contracts for half the price I bought your ZETA-MINING shares back some days ago. If your math works for you, feel free to contact me for further details.



Cheers,
Zefir

Update: all claimed shares bought back; winding up almost complete


Dear (ex-)investors,

winding up ZETA-MINING is almost done: from the 4000 outstanding shares before GLBSE closed, I bought back all but 239 for 0.1BTC per share. Those remaining ones will remain claimable until end of Q1/2013 and will be granted the cash-out option. With that few shares left and no reasonable incentive to refuse the cash-out option for the remaining investors, I quit calculating and accounting of further dividends. With it, ZETA-MINING is effectively closed.


Thank you all for the great support. I wish you the best of luck with your further investments and your remaining claim processes with other assets. I am very sorry that your investment in ZETA was a loss (like any other mining investment in 2012). For sure it is no comfort to me, but if it makes you feel better: I lost way more than anyone of you. On the other hand, I learned a lot - not only technical aspects but also a lot on human nature and its dark side.

As soon as I receive my electricity bill at the end of this year, I plan to do a final revision and present you how this mining venture went from the issuer's / operator's perspective.



Cheers,
Zefir

Thanks zefir
got email
All the best in your future ventures
You know where to find me
Best wishes
Graet

Thanks folks for your support and the kind words.

Claim confirmation is progressing quite well: all but ~300 bonds from the GLBSE provided list are claimed. Additionally, I double checked that those investors that already cashed out without being on the list are missing for good reasons (i.e. pending return of double-payments or pending GLBSE claim). With this confirmation there is almost no risk left to be hit by new claims when Nefario updates the lists. Along with the fact that the deltas of the private claims were mostly in the investors' disadvantage (i.e. claimed less than they hold), I am very pleased to state that all ZETA-MINING investors are honest Bitcoiners

As for the claims, I did not confirm via email but instead added a status column to the online spreadsheet, along with a column for an updated address. If you need to distinguish between your claims / GLBSE paybacks, you can request a new payout address. Signing that request with the original address would be ideal, but I will also accept your request if it comes from your email address on file.

As you can see from that spreadsheet, all but one investor chose to cash-out. I hoped the buyback offer was clear, but since I had several investors asking, I want to clarify once again:

What's with the 2012-12-15 deadline?
That deadline was explicitly tagged as 'if we do not hear from Nefario'. We did and that's why it is void now and I will start payment this week.

Why can't I get the pending dividends and then cash-out?
Because that's the deal: I want to save myself from manually calculating who earns what (or writing scripts to do, or risking wrong payments caused by bugs / errors, or whatever) and am therefore willing to come clean with you by paying 0.1BTC per bond before I start calculating dividends. Therefore the choice for dividend payments or cash-out is an XOR decision. Your alternative dividend payment way would be: collect the accumulated dividends since GLBSE shutdown of 0.018BTC per bond, followed by mining income paid out every 2 weeks. If difficulty remains where it is now, it will take you ~2 years to make it to 0.1BTC per bond, but we know it will skyrocket soon and 1MHps most probably will take you forever to make that amount of coins. Do your math and realize that you need very good reasons not to cash out.

What's with your contractual forced buy-back option?
It was exactly meant for the situation we have now: so little outstanding bonds causing so much effort to be correctly handled. But we have no 120% of the 7d GLBSE averaged price, so this is no option anymore. Generally, I am not going to force anyone, but prefer to make offers you can't refuse

What happens to the unclaimed coins?
As for those on the GLBSE list, there I am a bit in a dilemma. From the original idea I should take the list for granted and just pay the dividends to the given addresses. After contacting investors directly to confirm the claims, I can only think of very little reasons not to reply a short ACK/NACK: a) after all the past drama people might have left the Bitcoin community, b) have been involved in dubious business and prefer to remain silent, c) are just AFK. While it is not on me to judge, I am not going to potentially destroy BTC by sending to some forgotten address. Therefore, I'll just wait and remind the silent investors to confirm. The buy-back option will be valid for them for some time, but not forever.

As for those still missing on the GLBSE list: including those I paid out before the list was sent, there are 145 bonds left unclaimed. So we are talking about 14.5BTC at the most, but more realistically about 10BTC over the next year. I think I will follow others and donate the coins when all pending claims are closed, or a wait period of at least six months has passed.



That's all for now. According to latest predictions for block reward halving, payments will start in two days.
Zefir

got the email and numbers match up. reply sent

QFT

Responded to the email aswell.

Responded to email.
Thank you for choosing a sane way to handle this - I realise it has been a strassful time for you, well done:)
Best wishes
Graeme

Yep, luckily I hold some PUREMINING bonds and was already pointed by Meni to the process he is using. Thanks for the heads-up!


Update: (Partial) investors' list received from GLBSE; payouts to restart after block reward halving

So, finally (and just when most of us started loosing hope) I received the ZETA-MINING investors' list from GLBSE. It is incomplete due to some folks did not file their claims or received double payments that need to be send back to show up in the list. From the 4000 outstanding bonds ~1300 are missing in the list, at the same time I bought back ~1150 bonds from people not on the list. Assuming that privately collected data was more or less accurate, I expect no big surprises popping up with the final list.

Although the total number of the privately collected claims and those from the GLBSE list are more or less matching, some individual claims have significant deltas. I therefore prepared a GoogleDoc spreadsheet and emailed all investors to ask for a final confirmation of their claims. At the same time I pointed to the buy-back option I offered two posts above. Obviously many investors do not read this thread, since the majority of the confirmations so far accepted that (new to them) offer.

So, what's next
The day after the block reward halving (which should be this Wednesday, 2012-11-28), I will
  a) pay those investors accepting the buy-back 0.1BTC per bond
  b) update the pending dividends since GLBSE downfall up to the block reward halving
  c) pay those that want to remain investors their portion of the accumulated dividends
  d) pay unclaimed dividends to a temporary address for later payout



Have a nice week,
Zefir

thanks for the update

https://bitcointalksearch.org/topic/m.1356246 is a suggestion to use sendmany to avoid paying extra txn fees when sending bulk payments

Best wishes
Graet

Back from LinuxCon Europe, with some mixed feelings. While it is always fun to see and meet such a huge bunch of nerds, the sentiment in the Linux movement is subtly changing when compared to last year's LinuxCon North America held in Vancouver. At that times all big players in the IT business jumped on the open source bandwagon and praised their belief in the free community and binding commitments to support the movement - we pretty much were in the euphoric phase. Almost all of that positive spirit vanished during the past 14 months - mainly driven by the fact that at the end of the day companies need to make money and some still don't see how collaboration will win over competition in the long run.


Back to topic:

Updates: claim process closing; accounting change; buyback offer

Needless to say: no news from GLBSE.

As for the claim process, the ratio reached 70-90% (variance due to uncertain number of bonds held). Although I feel uncomfortable with such a considerable amount of unverifiable claims, I want to end the drama soon and start dividend payments by 2012-12-15 if we do not hear from Nefario. At the same time the claim process will be closed, so if you have not yet claimed your shares so far - please do it now. Claims will not be accepted after this deadline.

At GLBSE times I did weekly dividend calculations, which I changed to difficulty period based now for easier processing. This started effectively from the difficulty period 102 (starting with block 205632), the calculations are done on a separate sheet in the Google Docs spreadsheet.

From the number of investors and their claimed shares it is evident that processing manual payments will be a PITA. Some positions are so small that even with monthly payments the fees will be higher than the amount transferred. To save investors from scattered payments and myself from some work, I hereby provide you a limited buyback offer of 0.1BTC per share. This offer is valid until the above mentioned deadline 2012-12-15, but no later than the confirmed shipment date for any ASIC based Bitcoin mining device. This offer includes the accumulated dividends since GLBSE shutdown at this address (which for 4000 accounted shares is worth 1.4 Bitcents), i.e. you either take the buyback offer or you take the dividends. For a better estimate: at current difficulty, you need to hold one 1MHps bond for 50+ weeks to earn 0.1BTC - given that ASICs are around the corner I'd say this is a more than fair offer. If you want to take it, just email me and I'll send you the coins to the address you gave me with your claim.


Cheers,
Zefir

Thanks for keeping us updated - even if there is no news 
Enjoy  LinuxCon
Best wishes
Graet

Update: No major news; being off week 44.2012 for LinuxCon


Dear Investors,

you are following the GLBSE status and already know that there were no relevant news since last week

As for the private claims, I think we passed 50% with some left uncertainty (since some investors don't know their exact number). That's not yet enough to start manual payment of the accumulated dividends, so I'll wait a little bit more.


I am heading to the airport today to attend LinuxCon Europe in Barcelona next week, and will not be able to deal with Bitcoin related stuff. I'll confirm new claims when I'm back, thanks for your patience.


Have a nice week,
Zefir

Update: No news from GLBSE; slow claim process


Dear Investors,

paid the 4th dividend to the temporary address (1zetan) without hearing anything from GLBSE for a month.

At the same time the direct claim process is not progressing very well: so far, I have claims for less than 40% of outstanding shares. For obvious reasons we need to pass the claim phase before I can start with manual payments. This would require a defined threshold to be reached (say somewhere between 80 and 95%), therefore I'd like to remind you to file your claim if not done yet.

I know for sure that quite some Bicoiners were sick of drama after GLBSE closing and just left the scene, but I don't expect that 60% of ZETA-MINING investors went 'poof'. Also don't expect that 60% were sold back to me during the last days of GLBSE (when I was not active there but had a bid wall for all outstanding bonds somewhere at 0.09).

In some claims investors lost track on how many shares they exactly had - even then, please give me some rough estimate, I am not going to dispute for +/-1 share. Still hoping for Nefario to provide me with the required information.


Keep the faith and have a nice week,
Zefir

I am seeing lot of texts like this "< class="field field-name-body field-type-text-with-summary field-label-hidden view-mode-full">" in the above site.

https://ozcoin.net/content/luck-bitcoin - seems to be working atm 

email sent
working on luck
cheers
Graet

Then 'Hide email address from public?' in the account settings maybe also means to hide it from registered forum members? That would be stupid, since what would be the purpose to make the email symbol appear only for me?

Anyhow, hope to get the claims soon. And please do something with the luck at your pool, it has been sub-optimal lately

thanks man, yeah weird, I can see a email symbol under my profile but not yours.

Will send email shortly

Hi,

sorry, it seems you need to be logged into the forum to see the address.

Edited my previous post to add it: zefir(at)web(dot)de

Email:   hidden
Could you unhide it please
Cheers
Graet

Update: Claim process opened


Dear Investors,

more than tow weeks passed since GLBSE shut down, and I am still waiting for a shareholder list to start manual accounting.

Knowing that also my own claims for the assets I hold have not yet been forwarded to the issuers, I begin to suspect that something went really wrong at GLBSE. There are scripts linked in this forum for automatic evaluation of account data, and with another day of programming Nefario should have been able to combine those results with the claim requests data and resolve the mess already.

Did not happen so far. I'm personally prepared for the worst case, i.e. the asset information will not be released at all. Though I hoped GLBSE would at least support us with the data to get things straight, it seems it is inevitable to follow other issuers that already started a private claim process.


Claim Process
Please send me an e-mail to the address given in my forum profile <zefir(at)web(dot)de> specifying

• your GLBSE account name
• number of ZETA-MINING bonds you hold
• address where dividends should be paid to (paper wallet address or at least one you have the private key of)
• optional: e-mail address to be used to contact you for confirmation / updates (if not reply-to address)
• optional: anything you have available to prove your claims (screnshots, trade information, etc.)

I hope the claims will more or less match the number of outstanding shares, so I can soon start paying you the dividends manually.


Thanks for the support,
Zefir


Edit: Added my email address; was not aware that it is not visible until you log in, sorry.

Update: GLBSE recovery plans


Dear Investors,

while Nefario started to pay back some account holders, I am still waiting for my coins and the list of ZETA-MINING shareholders to resolve the mess. I'd like to shortly outline the next steps on that bumpy road.

Short Term
I continue to transfer the weekly dividends I am not able to pay via GLBSE to address 1zetan. Those payments are marked as 'pending' in the spreadsheet, I will continue to pay and account them until I am able to distribute the accumulated amount to the investors.

Mid Term
As soon as I receive the investors list from Nefario, I am going to consider different approaches and let investors to chose from, presumably between:

• winding down by buying back all outstanding shares
  The main problem for this approach is the lack of a free market for a fair price finding. Right before GLBSE closed, 1MHps was traded between 0.07 and 0.14 BTC, while my guaranteed buy-back offer was somewhere at 0.1 BTC. Some operators more clever than me (like Meni) might find a formula for a fair estimate on what 1MHps might give within its remaining lifetime, so let's wait and see how this option develops.
• continue operation with private accounting
  I would have to account dividend payments by myself and do the payments manually. Since I do not have an idea of the investors structure, this might turn out to be a PITA or even not feasible at all. It obviously does not make much sense to handle 2 shares from investor A and 5 from investor B. I might offer this option for larger investors (say in multiples of 500MHps quantities) and / or do payouts with some minimum thresholds (say after reaching 1BTC).
• move to a different exchange
  Frankly speaking, I will need some time to establish enough trust with some new exchange before I sent coins and expose them to risk again. Not sure how risk aware you investors are, but if there is a consensus to go that road, I will not refuse to provide it.

That's for now, I'll keep you informed as soon as I hear from GLBSE.


Have a nice week,
Zefir

Well said Meni.

I too have had times when the thoughts have been negative and desire to continue has waned.
Then I have found some of the good people pop out of nowhere and show me why I persist.
There are good people in this community and Bitcoin I feel does have a future - a future I would like to be a part of.

You are one of the good guys zefir, take some deep breaths, a little time out and lets see what actually happens with GLBSE - hopefully a sane way to sort out this ugly situation emerges.

Best wishes
Graet

Thanks for the kind and supportive words, Meni.

Frankly speaking, I was not expecting that someone is reading the updates that I basically post here as proof that Zeta mining is still operational. To add some authenticity, I intentionally include references to some current developments. Sadly, right now there is little positive sentiment around I could refer to and my disappointment might just reflect the current feelings of so many of us who invested time and money and seeing their efforts vanishing in vain.

I wish I could stay as rational and calm as you most of the time are (alas I felt how you got strained with the BDT fiasco), but right now most of us involved need to fight the impression that Bitcoin is attracting mostly the bad and the ugly (let alone the image shaping up for externals / newcomers).

After all, Bitcoin will for sure not only survive the GLBSE downfall, but also profit from it by shaping out the future of Bitcoin based business. We might realize that anonymous investments are not feasible without an immanent fraud risk (anonymity and enforcement don't jar together). Even worse: we might find out that established regulatory and laws we have in our real world (that we want to bypass with Bitcoins) are not bad altogether but a tribute to human nature :/


While it remains interesting, it is time to follow your advice and cool down.


PS: I am holding around 1k PUREMINING bonds, and since we both are verified issuers at GLBSE we should already comply to the AML requirements. Therefore me getting access to the bonds can serve as measure for the best-case delay while resolving this chaos.

As someone who has also been burned both financially and emotionally by some recent events, and is struggling to make sense of it all, I have the following advice:

1. Now that you're depressed about what happened is not the right time to figure out overreaching insights about life, the universe and everything. Make decisions when you're level-headed, neither euphoric nor depressed. Take some time to cool off to think about things.

2. Things are bad but they're not all that bad. For every person who scammed me I can name someone who despite all difficulties, and despite me having no real recourse, successfully struggled to uphold his sizable commitments.

A month ago, I would say that among the borrowers who pass a sniff test, the proportion of legitimate ones is around 100%. Most people said that it's essentially 0%. Turned out the proportion is closer to 50%. I think this is a very impressive achievement.

If you look at it from a Bayesian perspective you'll see how scammers are overrepresented. There are many good people (for some definition of "good") in the world and a few con artists, but it is the con artists who will approach you to take your money (and to that end appear to be nice and likeable). So it isn't that surprising when someone who wants your money turns out to be a scammer. We thought spotting these scammers would be easier; we were wrong.

It's easy to establish some rules of thumb to avoid this kind of problems (and with the power of hindsight it's also easy to get oneself to apply them). Making a trade with someone where the value of the single trade is much smaller then that person's future profits from his activity = good. Giving a short-term loan to someone reputable to help with a temporary lack of liquidity = good. Giving a long-term loan to someone anonymous, to use in an unspecified risky way, with total liabilities many times his net worth or the value of any reputation he has = bad.

I still think it's possible to do business in a nontraditional way, and to use Bitcoin to power it. We just need to figure out how.

Update: GLBSE closing doors


Dear Investors,

after paying the dividends for week 39.2012, GLBSE closed shop this week.

Like most of other investors and issuers, I was caught with my pants down: not only I most probably lost all what was left from Pirate (due to my BTC being diversified in different assets becoming less worth - or worthless - now), but also was left without information required to pay back my investors.

---

Personal Feelings (please skip this section if you only care to know about your money)
I am following the various developments in the Bitcoin world with great interest and I sadly realize that its potential to establish a better world just failed.

So far, I regarded Bitcoin not only as yet another crypto-currency, but more as an instrument to form a better community. Better in a sense that we learned from the past mistakes our real world is suffering from and take our chance to prevent them. Getting in touch with Bitcoin initially as a miner, I felt I found the community I wanted to participate in - no wonder, most of us are geeks, and who would refuse to live in a geek's world?

Later, when I discovered the other Bitcoin sectors (lending and investing) I felt confirmed in my beliefs as I saw anonymous people trusting each other solely by their word of honor. At some point in time, an established lender asked me to help him out with some coins and I did: I gave some anonymous Internet guy coins with an equivalent fiat value enough to buy a new car, and got that coins back some days later. Only stupid would do this in the real world - for me this was the price to see if I found the community I was looking for. I want to believe that there is some world where people keep their word - and I prematurely thought I found it here.

I was wrong. Pirate broke his word of honor he gave to me. Folks I trusted before turned out to have lied and betrayed their investors (guaranteed deposits - my ass). Any non-mining related assets on GLBSE turned out to be directly or indirectly affected by BTCS&T. People start to establish exactly those toxic financial instruments that almost killed our real world economy just recently (CDOs anyone?). No, this is in no way better than the real world - contrary, it gives the dishonest one a better playground with maximized capabilities to rip off others.

GLBSE closing down is the last coffin nail for my Bitcoin engagement. I now lost everything and it somehow feels relieving to have a clear cut to say good bye. Alas, I am not going to leave without paying back my obligations.

---

Next Steps
At time of writing, the situation with GLBSE is fully unclear. There are plans to install some reclaim-codes based system to allow issuers direct dealings with the holders. This might require all of us to provide full ID documents and forgo our anonymity (I did already for the verification process). There might be a fully regulated GLBSE successor, where the assets can be traded, as well as a transition to some alternative trading platform.

Not sure how to deal with investors that do not want to sacrifice their anonymity, as there is currently no way to find out who owns what.

Until the dust settles, I am going to continue accounting the weekly dividends in the spreadsheet and pay them out as soon as I have the required information.



Good luck to us all,
Zefir

Update: dividends for week 38.2012 paid, trade walls for this week set at 0.09 and 0.2164


Dear Investors,

after the payment for past week, I updated the trading walls accordingly.


With the latest updates from the ASIC developments from multiple parties it gets quite evident that the remaining operational time for existing GPU and FPGA mining rig - and consequently for existing mining bonds - will end in Q2/2013. ngzhang alone sold 18TH (300 Avalons with 60GH each) within 24h as pre-series run to ship early 2013. Network will probably have reached 100TH by then, and with the ASIC manufacturers entering mass production the Petahash magnitude is not far away.

On one hand I realize that mining with my FPGA farm will become less profitable, on the other it becomes clear that from a practical standpoint the time is right for ASICs: I only need to go down to my mining room in the basement to see how insane Bitcoin mining currently is. My farm burns 3.5kW 24/7 and as a result my basement is (although the rig operates in front of an open window) at 32+°C. I am and always have been very conscious about my 'ecological footprint' and not long ago I replaced light bulbs in my flat with energy saving lamps to save another 10W here and there. But now for mining I am wasting 350 times that savings and I begin to wonder if Satoshi's major mistake was to overlook the continuous growing need for energy waste. Sure, that's how things work today, and sure other projects and/or companies pollute the environment on a different scale (check out Google's energy footprint), but for me as someone who thinks twice whether to take the car or the bike, mining maneuvered me into a serious conscience dilemma.

The coming six months are safe - it is getting cold and I can at least pretend to use my farm as heating device that waste dumps some valid shares   Thereafter, it is time for ASICs to save some energy (and yes, I am fully aware that by Q4/2013 everyone will scale up their ASIC mining farm to the same wasting levels we have today, that's why I call it conceptually flawed blasphemy )


Have a nice and prosper week,
Zefir

Update: dividends for week 37.2012 paid, guaranteed buy-back price for week 38.2012 set to 0.093


Dear Investors,

with the payments of dividends for the past week, the break-even price per bond reached 0.2196BTC. With the current 24h US$/BTC rate of 11.8 the guaranteed buy-back price for this week is set to 0.093 - bid and ask walls are accordingly set.

I had another small exchanges for ASICMINER shares and people asking if this offer is still valid. For clarification: yes, the offer is still valid. I'll stick to it and swap any 2 ZETA-MINING bonds for 3 ASICMINER shares until end of September 2012, no matter where the prices go. This is my way to provide my investors some way of ASIC upgrade.


Have a nice and prosper week,
Zefir

Hi EskimoBob,

let's leave it at that. We obviously do not agree on some points - but we do not even have to.

The market will decide who is right. And with the latest development of even 'guaranteed' investments at 1.8%/week defaulting, I personally do not see alternatives for zero-risk investments other than in mining. Soon the dust Pirate raised will settle and unveil how substantial those fancy non-mining related investing constructs really are. Most probably the GLBSE-top10 by the end of this year will consist of mining securities - call them 'turds' or not. Let's just wait and see. Deal?


Cheers,
Zefir

Hi dishwara,

well, you'll need to read the ASICMINER (they are shares, btw.) contract to decide if it is the way you want to go. They are not paying dividends right now, they will do if they succeed to realize their plans and provide ASIC miners in the early phase (i.e. before BFL, bASICs, etc. boost difficulty to new levels). If they succeed, you'll multiply your investment within months - if they fail you'll most probably loose your investment.

It all depends on what risk you are willing to take - and this is something you need to decide by yourself, do not expect (or accept) external advices.


HTH,
Zefir

claim 2
If i transfer my 10 zeta-mining bonds today to 15 asicminer bonds(its bond or share?), from when i will get dividend?
& how much btc i will get as dividend for 1 asicminer bond?

I think this has been hashed to death in other forums (see Mining etc). It all depends what you pay for electricity, what equipment you have etc.
In US probably, in some or most parts of EU probably not. There is no one definitive answer to your question. YOU have to to the math and find out.

Read up on bonds in general and you will understand, why I do not like perpetual debt where issuer has 0 obligation to buy it back and no fixed coupon to guarantee fixed income (yes, you as a issuer have to eat this risk).

Hi dishwara,

could you specifically ask what you do not understand? If it is about mining and bonds in general, you'll need to study the forums by yourself.

If it is related to ZETA-MINING, please ask what you need better explained. You might prefer to do it via PM initially and post it after we clarified the issues interactively.

The bond is still a perpetual mining bond with each share paying you weekly the equivalent mining income of 1MH/s 100%PPS. I recently posted offers to my investors to disprove some common accusations towards fixed MH/s mining bonds recently flowing through the forum:

1) claim: mining bonds are bad, mining companies are good, since you hold a portion of the mining rig
If you prefer mining by yourself, I'm fine: you transfer 800 bonds back to me, and I send you a CM1 board hashing at 800MH/s.

2) claim: ASICs will make existing mining bonds worthless
If you believe in ASICs, transfer me X ZETA-MINING bonds, and I'll send you 1.5X ASICMINER shares back. Offer valid until end of September 2012.

3) claim: mining bond issuers pass the risk to the holders completely and keep the rewards for themselves
At any time I will buy back ZETA-MINING bonds for the break-even price denominated in fiat (see post above). For this week 37.2012 this is at 0.102, a bid wall for 1k bonds is placed. If that wall is ever cleared, do not sell below that price at any time. Instead PM me and I'll buy the bonds for this price within 72h.


That is basically what I am adding as voluntary offer on top of the contract. If you want to use any of those, just PM me.


Does this help to clarify?


Cheers,
Zefir

Can anyone tell in VERY SIMPLE ENGLISH what is going on?
Also what options is given to bond holders?

Please use simple English.
All in this Bitcoin world are not professional CA's to understand every word & everything which is in too much technological terms.

This implies that others were just taking coins without delivering -- and that's really an unfair and false claim. I do not know of any single issuer of mining bonds that took money and ran - all of them are still paying coupons regularly. In contrast to them, look at all those shiny constructs that tried to squeeze out more than is essentially doable (which in fact is the current inflation rate of 50.4k fresh coins per week / 9.89M coins total = 0.5% weekly) - bust, illiquid or in the process of ceasing down.
Seriously, you do not see how insulting your posts are to people involved? Please, do read them again and look at it from a bond-issuer or holder perspective. I lost tons of fiat money and countless time to set everything up and keep it running to keep my promises. And then you come along and call what I am working so hard for (as others do) 'turd'? This is where I am putting every single minute of my time into, and reading your posts everywhere calling this a 'pile of shit' is, well, more than disrespectful.


You did not address the essence of my claim, which is: do you believe that mining in general is economically profitable? If it is, mining bonds can't be your 'guaranteed loss turds', if it is not, then: Goodbye Bitcoin.


Cheers,
Zefir

Hi Zefir. At least you are honest about it and not like some other "respected" (Respected for what? Taking your BTC?) characters.


No, I am not.


I agree, that good ROI days are over because of the absurdly high difficulty. Is mining economically viable has nothing to do with what we think.
If simple math show you that it makes a financial sense, please go for it. Mining is like buying coin but paying for it via equipment and cost of power, while taking a technology and "difficulty" risk. If you think that BTC price will rise in the future, you are probably better off buying the coin from the market and holding it.

Buyer of perpetual BBN bets that difficulty will drop or stays at the current level so he can not only earn the income form coupon payments but also preserve the principal. Reality is that at the moment investors loose the principal faster than income from coupons can cover it.

If you like to make a bet, that difficulty drops, buy perpetual fixed Mh/s thingis
If you think this bet is stupid, hold on to your coin.

Cheers.

Hi EskimoBob,

I cared not to mention you personally as the inventor of the 'turd' naming for mining-bonds and one of the few very enthusiastic detractor of those, but now since you step ahead and repeated your claims here (like you already did in almost any mining related GLBSE thread), let me please answer shortly.

Yes, I follow your argumentation and also admitted somewhere in this thread that the initial idea to make back the investment within 6-8 months is not achievable any more - it will maybe take 2-3 years. The result is a direct outcome of the broader availability of FPGA based mining rig and the anticipated arrival of ASICs that increased the difficulty in that short time, and put a pressure at existing mining securities, respectively. Now that's the inherent risk for investing in mining in general and in buying mining equipment in particular.

What I do not like in your argumentation are two factors: a) you are calling everyone who is invested in mining more or less idiots for not being able to predict the development that led to the current situation, and b) you are implying that mining is non economical in general. While the former is just impolite towards the folks around that are engaged and believe in Bitcoin (maybe even more than you do), the later is plain wrong and contradicted by the pure existence of Bitcoin.

I claim that investing in mining-bonds is an equivalent of investing in mining rig. When I did my IPO, the price for 1MH/s was about 1.5 times the cost for the mining boards alone. Now take that your boards are not running at 100%PPS (in retrospect, mine are at around 85%) and additional infrastructural investment required, let's assume for a moment the factor is a fair one. If you claim mining-bonds are a guaranteed loss, you equivalently state that buying mining equipment also is. Now, if that was the case, who do you think would buy mining rig to keep Bitcoin alive? Those generous people that have enough spare money to throw it away for just being nice and support the idea? Or those that believe difficulty / price ratio will develop in a way that mining remains profitable in the long run?

I believe in the second. If you personally don't, then you maybe even do not believe in the long term success of Bitcoin as a whole. Do you?


Cheers,
Zefir

If you got in at IPO, so far you have lost 9% (if you sold today, 4 shares @ 0.206206).
You will keep losing until the direction of difficulty is reversed and diff. gets adjusted dramatically.
Right. If you plan to sell, you have to look at the bid wall (or lack of it) and calculate, what the market can take before dropping to laughable price level. Yes, Mh/s has a fair price too   As of today, your minimum loss will be:

If you still do not understand, why perpetual Mh/s mining bonds BBN's (Bitcoin Burning Notes) are bad investment in current market conditions, go and read: Weekly loss of N% guaranteed - Enjoy perpetual loss with fixed Mh/s mining turds

Cheers.

PS! ASIC upgrade is just a temporary fix if difficulty keeps going up and block reward is halved.

Update: successful ASICMINER swaps & recall of bonds


Dear Investors,

I had an enormous feedback on the exchange offers for ZETA-MINING bods, with interests concentrated to swap for ASICMINER shares.

Several investors exercised the offer and I ended up with lots of ZETA-MINING bonds that I currently can not sell for a reasonable price. Now that Pirate went bust and caused most of the high-yield investment opportunities at GLBSE to cease operation, investors might soon realize that 1-1.5% weekly ROI is not too bad - and mining bonds are far from being 'turds'. At current difficulty 1% weekly would match a 1MH/bond price of 0.26BTC, which is around twice as high as mining-bonds are currently rated.

When the market is willing to correct the valuation of mining-bonds, I am open to sell more of mine to finance expansion. For now, I decided to do the opposite and recalled 5000 bonds. With the 1000 I left unsold in the asset account to provide some liquidity, there are 4000 bonds left outstanding. This matches exactly 10% of the physical hashing power I currently have to back them.


As stated in the exchange offer, I am accepting swaps for ASICMINER shares at a 1/1.5 ratio until end of September. Also I need to point to potential takers again that, while it seems a profitable move right now, remember that you are swapping a low-risk low-income investment for a high-risk high-income venture. You might multiply your coins within some weeks, but other ASIC manufacturers popping up might void ASICMINER's plans and profitability forecasts (that's nothing new, friedcat is openly pointing to those risks). Though it should be pretty obvious, I state it here for completeness: the offered swap is a one-way process, i.e. I will not swap back at no time.


Have a nice and successful week,
Zefir

Hi Elraffa,

thanks for your support. Most other mining bonds already provide some sort of 'ASIC ubgrade path' based on BFL's product upgrade offer. My intention is not to offer such a path (hence the limited offer for ASICMINER exchange), but to allow those who see FPGA mining threatened by ASICs an exit opportunity. It still might turn out to be an exchange of the one bird in the hand for the two in the bush, but at least you have a choice.

Feel free to PM me if you decide to.


Cheers, Zefir

Thanks for the offer, I really appreciate it. Issuers of other securities should take heed.

I definitely don't want physical hashing power (hey, I buy mining bonds to avoid the noise, heat and hassle) but I will probably take you up on the ASICMINER offer. First need to read through that mother of all threads, though. And collect at least two more dividends. :-) I'll PM you in September.

Update: exchange offer for physical hashing power or ASIC securities


Dear Investors,

With the latest difficulty increase of more than 11%, the earnings per week came down to 0.98% of IPO price. Including the compound earnings of ~22% since the IPO, the time frame to recover the investment got fairly long. If ASICs show up by the end of this year or early 2013, we might even end up with not being able to earn back at all.

This would be the first time that I fail to recover my investment in mining rig, and it makes me really sad that it happened with investors' money. Contractually wise I am not obligated to guarantee a ROI at all - I basically passed a portion of my risk from acquiring mining rig to you, hoping for a quick recovery and a long term profitability. We took a joined risk, and it did not turned out as expected. Please note that my personal involvement in this venture is more than 75%, i.e. I collected less than 10k$ through the IPO, but paid 40k$+ for the mining rig that operates ZETA-MINING. So, while I could refer to the contract, let the bond price deplete continuously, and remain perfectly compliant to the contract, I feel a moral commitment to not let those down that are supporting me.

Last week I already stated that I will pay at least the break-even price denominated in fiat (which for this week is 0.108BTC) for outstanding shares. I plan to keep this offer as long as possible, at the same time I admit that currently I have not enough liquidity to buy back all outstanding shares at once. I considered a variety of different options I could offer to investors and ended up with the following two that address the core criticism towards mining bonds in general and the main mid-term risk existing mining ventures have in common:

1) Bond holders are offered a trade option for physical hashing power. Each share qualifies for the break-even ratio of 1MH/s. Example: after dividend payments for week 34.2012, the break-even price of the bonds issued is 0.23BTC, which is 78% of the IPO price. Therefore, each outstanding share can be traded for 780kH/s of physical hashing power. A CM1 Quad-FPGA currently delivers 840MH/s, which during this week allows you to trade 1077 shares for one CM1 board. Bond holder is paying shipping and taxes. This offer will be always valid, the exchange ratio will be updated each week in the related spreadsheet.

2) At any time before October 2012, each ZETA-MINING share can be exchanged for 1.5 ASICMINER shares. If you believe that ASICs will kill GPU and FPGA-mining and have some confidence in friedcat's venture, this is your chance to participate. If the plan succeeds, each ASICMINER share will represent 30MH/s, allowing you to upgrade 1MH/s physical FPGA-based hashing power to 45MH/s assumed ASIC-based hashing power. I am in no way promoting ASICMINER or claiming the venture will be successful at all. The bond holder willing to swap needs to do so based on his own risk analyses and is fully responsible for the outcome.

If you are interested in one of these options, please contact me via PM. As said above, contractually I am not obligated to offer such an exchange program. I do it solely as a goodwill to thank you for the support I received so far. This implies that I reserve the right to cancel the offer on extreme and / or unforeseen developments.



Thanks for your continuous support and have a nice week,
Zefir

Update: dividends for week 34.2012 paid

Dear Investors,

I just paid the dividends for week 34.2012, and when I compared to last week's payments I noticed I made a mistake. Instead of paying 22.6566 BTC last week, I obviously sent only 22BTC. I must have entered either wrong decimal sign (comma instead of dot), or it was a GLBSE problem.

Whatever, I corrected the mistake and paid the remainder of 0.66BTC today. Please accept my apologies  for the inconvenience.


Cheers, Zefir

Dear Investors,

today ZETA-MINING price hit rock bottom. Someone first sold into my bid wall at 0.12, cleared it, and finally sold 882 shares at 0.00171 for a total of ~1.5BTC.

I can only suspect that either some account got hacked and cleared, or someone placed a wrong order.

If otherwise someone needed to cash out, selling them for any price was a really stupid idea. As promised two posts above, I am willing to buy back shares at any time for the break-even price denominated in fiat, which for this week was 0.12 BTC. Pirate's closing down of BTCS&T currently impairs my ability to liquidate assets I hold for a fast buy-back, so that I might not be able to keep the 72h buy-back deadline. But still, dumping shares for any price is nonsensical by any means.


Cheers,
Zefir

Dividends for week 33.2012 paid early.

Due to RL issues I paid some hours early. I will seek to transfer at the scheduled time to keep a constant payment interval, but reserve the right to pay early when I am not online at that time.


Have a nice week,
Zefir

Update: dividends for week 32.2012 paid, operational status, market situation

Dear Investors,

with the dividend payment for week 32.2012 it is time to give a sign of life, even if there are no relevant news to spread.


Operational Status
Since Enterpoint staff left for holiday season or is occupied with other projects, the community was basically left alone to help ourselves. Some enthusiastic developers were quite successful isolating the problems the boards initially faced, while the affected CM1 operators pledged a bounty to at least partially compensate their efforts (with 195BTC collected so far).

The outcome of this community work are FPGA bitstreams that allow the CM1 boards to operate at around 800MHps, at least with those boards being delivered lately. The risk I took buying the first large bulk of boards did not pay off for me this time, since almost 40% of my boards are not stable for mining. Nevertheless, my FPGA based hashrate reached 27GHps. Since the current market is not willing to pay reasonable prices for mining bonds and I am not willing to sell bonds at any price (I got almost zero interest for more bonds), I'll postpone further expansion until investors regain their confidence in the profitability of mining. For you as investor the relevant fact is: each 1MHps bond you hold is backed by almost 4MHps physical hashing power.

Another fact for successful long term operation is the achieved efficiency. For those 27GHps a total of 1.3kW is pulled from the wall. With my electricity cost of 0.12$/kWh and current exchange rates, I mine 1BTC for 0.03BTC operational costs - I will remain profitable until (difficulty / exchange rate) ratio increases by factor 30 from today's values.


Market Situation
After a longer period of steady (and by design depleting) price well over 0.2BTC, this week it was hit by strong and irrational movements. In a sharp downturn it fell down to below 0.1, to just come back to the 0.16 range. With other mining bonds already going down the road to ~0.14BTC/MHps, this reflects the current market valuation and was inevitable for ZETA-MINING to reach, too. Still, the only fundamental underlying for the bond price is the difficulty, and while it raised significantly with the recent updates, daily price swings of 100+% are irrational and harmful for the long-term investor.

I can't and won't participate in the secondary market, but I set up the following walls to prevent similar exaggerating price-swings in the future:

• at the ask side, I placed an order for 950 bonds at the 'break-even price', i.e. the initial IPO price of 0.295BTC reduced by the compound earnings received so far (as calculated in the online spreadsheet). Those bonds were issued during IPO and never sold. I'm not expecting the order to be intentionally executed, but it will prevent swings caused by fat-finger-trades.
• at the bid side, there is an order at the break-even price denominated in fiat, i.e. divided by 11.6$/5$. I hear your claims that it is nonsensical to mix fiat rate into the formula, but fact is: I converted the collected coins to fiat to buy mining HW - to return it to you, I need to reverse that conversion. Again, I do not expect this wall to be hit with regular trades, but it should prevent erroneous orders. If otherwise someone has to cash out at any price and the wall is not high enough, please PM me, I guarantee that I will buy any outstanding share at this price within a 72h period.

Those walls will be adapted weekly after the dividend payments and will hopefully prevent those irrational movements we saw.


Thats for now. Have a nice and successful week,
Zefir

Update: dividends for week 29.2012 paid, external mining contracts terminated

Dear Investors,

the dividends for week 28.2012 were paid in time with no significant news to be told. With today's payment for week 29.2012, ZETA-MINING is independent again: the external mining contracts that backed the hashing power until the Cairnsmore1 boards arrived were canceled effectively by mid of July.

The current hashing power is around 20GHps:

• the 5 BFLS still provide 4GHps (so far, summer in Switzerland is cold )
• 30 CM1 boards work stable in Icarus mode with a constant 0.38GHps, providing another 11.4GHps
• the remaining 20 CM1 are unstable with various problems (e.g. only one FPGA pair mining, low hashrate, no valid shares, etc.) and deliver a combined hashrate between 3 and 5 GHps; they will be soon returned to Enterpoint for further inspection.

Note that the given hashrate is provided in Icarus mode, which means that
 a) only half of the FPGAs are used for mining
 b) the bitstream is not optimized for the CM1 HW

An Icarus based bitstream working on all four FPGAs will be available soon and double the hashrate per board, while a dedicated CM1 bitstream is supposed to unleash the full power and provide up to 1GHps per board, but will take longer to get finalized. The week I first see ZETA-MINING total hashing power exceeds 50GHps, I will add a one time 100% bonus and double that week's dividend payments. Stay tuned!


Have a nice and successful week,
Zefir

Thx for the update!

Update: dividends for week 27.2012 paid & Cairnsmore1 Quads arrived & Expansion Planning

Dear investors,

with the payment of the dividends for week 27.2012 I added a calculation of total ROI since IPO in the Google Doc spreadsheet. Investors holding the bonds since IPO made 11.5% of their investment back after 8 weeks.

The 50 Cairnsmore1 Quad boards arrived 10 days ago. I definitely underestimated the effort required to set up such a high number of FPGA units and it took me all of my spare time to get some of the boards up and running. Since at the current stage the Cairnsmore1s are basically development boards that Enterpoint is still engineering with us pre-orderers acting as testers, they can not yet be set up to reliably mine. You'll find my problem reports and claims in the related thread. The most reliable operation I was able to install is with 25 boards running as Icarus (i.e. with only one active FPGA pair) generating about 11GHps (you should now find zeta-mining always in Ozcoin's top-20).

With updates on controller FW and bitstream the projected hashrate for the complete array is at least 36GHps. As soon as a stable configuration is achieved and the numbers are confirmed, I am going to offer more bonds to investors if there should be enough demand. With the investment volume of 37k$ I spent and the projected expenses for a minimum mining operation of two years, with current exchange rate of 7$/BTC I will be able to offer 1MHps bonds at or below latest market value.

Investing further in non BFL mining operations clearly comes down to whether you believe that ASICs will show up by the end of this year and wipe out any other mining technology. Since you are still reading, you might at least have some doubts. I will not dump additional bonds to the market without knowing that there is demand - either by creating a motion or by collecting positive feedback. Feel free to PM me with your interest and/or suggestions.


Have a nice week,
Zefir

Hi IIOII,

thank you for the remainder.

I stated earlier somewhere in this thread that I am not a fried of hyping public with pseudo-updates to remain in the news. I am confident that in the long run going the understatement route will be more profitable. So while I understand your concern and agree that ZETA-MINING could stand more attention from the investment community, I think a handful conscientious and loyal investors holding the majority of the shares will be more profitable in the end than having traders involved.

As for the news: yes, in fact there are some FPGA related updates. I have been holding them back from publication for some time now to present them when everything is up and running. But since you imply interest, I'll post some intermediate status update ASAP. Thanks for your confidence and patience.

How about an update?

While dividends are flowing nicely, investors still might be interested in the current status of the FPGA mining.

Moreover I think this quality asset deserves more attention from the investment community.

Update: dividends for week 25.2012 paid & Cairnsmore1 Quad shipped

Dear investors,

dividend payments for the past week were processed. With a return of 4.2456 mBTC/bond and today's 5-day average price of 235 mBTC this week's yield is 1.8%.

The 50 Cairnsmore1 Quads I ordered for expansion has been shipped last week and will be at my company early next week. Currently, a modified Icarus bitstream can be used to operate the Quads in dual-FPGA mode at 360+ MHps per board, while a dedicated bitstream (being currently worked on by Enterpoint and community developers) should push it more to the 800 MHps range. At the final performance level and the resulting efficiency gain along with the recent increase of BTC/fiat exchange rates I will be able to offer new bonds worth 30 GHps at a very competitive price to the public.

Those who are not convinced that FPGA mining becomes obsolete by October and also do not believe in the world's Armageddon by the end of 2012: stay tuned for a promising investment offer.


Have a nice week,
Zefir

Update: dividends for week 24.2012 paid & clarification on ASIC upgrade

Dear investors,

with yesterday's payment of dividends for week 23.2012 we had a row of relatively constant weekly returns of around 1.5%. I wish I could promise that this will continue and allow us to recover our investments within less then a year. But while I hope for the best, there's no room for promises. The decline in mining bond prices that started last week is continuing and brought back some of them for almost 40%. One component of this decline is clearly the rise in BTC-to-fiat exchange rate, since a given amount of Bitcoins buys you more mining rig and consequently the price per MH/s should be less. While this almost always is only half the truth (coins collected from investors are put in pre-orders or converted to fiat to prepare rig payments), there is an evidence that market is currently behaving irrational: the top five mining bonds (which I do not count Zeta in) are issued by highly respected and trustworthy community members - but the market price for their bonds normalized to 1MH/s differs significantly. Ideally all face the same risk (assuming all are evenly trustworthy) and offer identical returns - still some are 60% more expensive than others. Heads up for more glitches to come until mining bonds consolidate in the long run.


The other large disruption we had the past week was BFL's announcement of their 'soon to come' ASIC based mining rig. The related forum threads are long and entertaining enough for an enjoying weekend reading - no need to add more to the ongoing speculation. But I've been contacted by investors who are asking for some free upgrade to ASIC based mining bonds that other issuers are offering. That gimmick would imply that when the issuer upgrades his existing rig to ASICs, the issued 1MH/s bonds become 20MH/s ones... As you'd already guessed by my choice of the word for this 'instrument', there will be no such free upgrade feature for ZETA-MINING.

The first and practical reason for that is that most of my mining rig is not from BFL - my inventory is 5 BFLS and 50 Cairnsmore1 Quads. The Quads are, as soon as Enterpoint provides fully operational bitstream, the most efficient mining devices around (maybe the MiniRigs are comparable). Consequently, all today's mining rig needs to be wiped out first before I need to pull the plug due to negative mining ROI. Needless to say that I will upgrade to ASICs as soon as they are available to remain competitive, but until then lots of blocks are to be mined.

The other reason I see such upgrade program will fail is its inherent lack of transparency. How do I as a bond issuer prove or disprove that I already traded my BFLS for SC Singles? Fact is, bonds are traded per MH/s, not as MH/s generated by GPU or FPGA - the rig used to mine is completely irrelevant and therefore renders any upgrade or exchange program useless.


Now what does all this ASIC hype mean to you as an investor? It comes down to exactly the same as it does to me: will it allow me to get back my investment and earn some profit before the next generation mining rig pushes me out of the market? If you do not believe in that, you should bail out from any mining investment (bonds or mining equipment) right away. But think further: if the majority is scared off and stops investing in mining, the difficulty remains the same and helps ROI of existing miners. The self stabilization of difficulty to give miners enough incentive to mine worked so far and I personally think this was Satoshi's most ingenious idea.



Have a nice week,
Zefir

No, I don't feel you are babbling - you're just telling the obvious. Two things I'd like to comment:

1) Pirate's business and its impact on mining
True, everyone who is willing to take the risk would be just stupid to not put his money into BTCS&T and instead invest in mining business. My own money is with Pirate while I am waiting to pay the mining rig I ordered and guess what - I earn 5 times more from BTCS&T payouts per week than I do with mining. Now while this is a great opportunity, we all know that there is a mathematical necessity that this will not work for too long. From the number of direct and indirect investments of lenders, PPT bonds and other pass-through businesses I'd assume that Pirate manages 250kBTC. Now 7% weekly means factor 33 per year - how long can this work before all existing coins are held by Pirate? It is inevitable that the system either collapses if Pirate had dishonest intentions (which I do not believe), or he will adjust his rates to more realistic values. Still your argument is valid: if he came down to say 2% weekly, there's still no incentive to invest in mining for less than 1.5% Time will tell...

2) Inner value of mining bonds
Just stating mining bonds are generally overpriced and should consolidate at 0.2 per 1MH is shortsighted. You can't just take the current price of a BFLS and its hashing rate to calculate the supposed fair value. This would currently result in ~0.135 BTC per 1MH and since BFLS are price wise the current optimal choice this is the absolute minimum inner value. Add on top of that taxes (VAT), fees (shipping) and infrastructural investments (PSU, cooling) and you're approaching the 0.2 range. Now take into consideration that your rig is mining at 95% of its lifetime on average (service, downtime, network issues) but you are paying 100%, plus add the energy cost you as operator pay from your pockets, 0.2BTC per 1MH today would mean loss to the bond issuer. Based on my initial calculations (based on 5$/BTC), I'm able to guarantee mining for a bond issued at 0.27 for two years. With the recent rate increase I see the par line at 0.25 - not 0.2 if you do serious business.

Competition is good, since it forces operators to head for the most energy efficient devices. But if someone is offering GPU based 1MH/s bonds for 0.2BTC, it should be obvious that this won't survive for too long.


Cheers, zefir

If Germany beats Portugal I am going to pay the bonus. I am supporting the weaker one, which I think is Portugal here (might be wrong, since I am really not interested in soccer generally). So bets are good for the extra 10% maybe.

OTOH: Denmark just kicked Netherlands' ass some minutes ago! Favorites often fall, let's see

Dear investors,

during the last two weeks mining business has gotten more competitive. We saw many new miners entering the bond market, along with established ones flooding the market with newly issued bonds in anticipation of the MiniRigs to be delivered soon.

As a result of this overcrowding, silently operating businesses (like I want Zeta-Mining to be) soon get lost from investor's radars: companies listed in the securities section of the Bitcoin forum disappear from the front page if they do not post news every day. Due to the fact that with continuous long-term operations like mining there are not always news to tell, people start to generate 'creative' news, like varying PPS or re-scheduling payout times. Those PR actions are established everywhere and it is completely legitimate to apply them here to stay in the news. But this is not the way Zeta-Mining will go. I expect my investors to know what they pay for and what to exactly expect in return - without the need for continuous publicity campaigns.

While this will remain a no-frills investment, I'll take care to update you at least once a week to let you know that business is alive - if not more, the payment of dividends is at least something worth to report for those of you who are not looking at the provided Google Doc spreadsheet.

That said, lurking in IRC I fooled around and made a statement that I need to post here officially to put my money where my mouth is:
The dividend payment for week 23.2012 is scheduled for tomorrow with ~4.434 mBTC per coupon. At current market price of 0.2788 this yields a weekly ROI of 1.6%. I will add 10% on top of the payments in case Germany beats Portugal in today's European soccer championship match. Not that I am a soccer fan or believe Portugal is stronger. But since Switzerland is not participating, I support the weaker side - go Portugal go!


Have a nice weekend,
Zefir

Update: dividends for week 21.2012 paid & announcement for upcoming expansion

Dear investors,

the dividends for week 21.2012 were paid with 420449 Satoshi per bond. Due to the lack of support for automated payments at pre-defined times at GLBSE and me being away from keyboard yesterday, I paid several hours early. With you being rather investors than traders sniping for the payment time to gain 1.3% profit, I assume you are fine with that until GLBSE provides according functionality to exactly schedule them.

The upcoming expansion is knocking at the door. The Cairnsmore1 Quads are scheduled to ship within two weeks. Enterpoint engineers are working on a modification of the Icarus bitstream to work around a layout bug they had with a RX/TX line in their HW design, but with their competence they proved so far I am quite confident to have the additional 40GH/s fully operational by the end of June.

My initial plans for short term growth were to offer the added mining power to the public quickly and collect enough capital to place another order for Quads at Enterpoint within June to get the pre-series price of 640$/board secured. While this is still an option, the order backlog at Enterpoint is filled up for July already, new orders will be processed for August at the earliest (maybe later due to summer holiday season). My attempts to establish a license agreement with existing FPGA manufacturers and build my own boards on demand were successful, but again with lead times for the Spartan6 of 8+ weeks it is currently impossible to quickly add hashing power.

Aside from existing FPGA based mining solutions, the development of alternatives and improvements got an increased momentum recently. BitFury showed up with a large scale Spartan6 based modular system that provides 100+ GH/s condensed in a 19" rack at BFL competitive prices per MH/s but with better energy efficiency. They use a custom bitstream providing 250-300 MH/s per chip, the same improvements that EldenTyrell is going to unveil and sell in June. ButterflyLabs themselves uncovered their work on a Bitcoin ASIC with the best possible performance and energy efficiency, along with a program to secure investments in current BFL products with a buy-back option. Lastly, the OpenBitAsic is working on a community attempt to produce a sASIC with better performance and energy efficiency compared to FPGA.

It is a fascinating journey to follow and exciting to be able to participate. No matter which technology will establish in the short and survive in the long run, the capital required to take advantage of the accelerating development is steadily growing. To be able to quickly react (like I did when ordering 50 Cairnsmore1 Quads to get them for pre-series price), a significant amount of liquidity is needed. If you trust in Bitcoin generally as I do and trust in me and my ability to follow this development to provide a solid and continuous participation in Bitcoin mining rewards, I'll be glad to have you on my side.

As soon as Enterpoint proves that their Quad boards are able to mine with the anticipated hashing rate and I get my shipment confirmed, I am going to issue more bonds and provide up to 75% to the public. They will be sold at the arithmetic average between bid and sell price at time of issuence. As with the pre-IPO, large scale investors willing to buy blocks of 50 bonds can PM me for early investing.


Cheers, Zefir

Update: preparations for first dividend payment & termination of bail-out period

Dividends will be paid Sundays at around 13:00 UTC, with the first payment scheduled for tomorrow May 20th.

I set up a Google Docs spreadsheet for weekly dividend calculations here. Dividends are calculated for each week Sundays at 12:00 UTC for the previous 7 days, with difficulty adjustments being taken into account with an accuracy of down to seconds. The update will be based on the timestamp of the according block.

The dividend for the past week at an unchanged difficulty of 1.733M is 0,00406229 BTC per bond.

Right before the dividends are paid tomorrow, I will remove the bid wall I set up for the first post-IPO week to allow investors a bail-out at no cost. I'll be glad if you stay invested with me, but if you feel unsure, do not miss to place your sell order in time. I might at my discretion set up bid walls to prevent investors from accidentally selling their bonds for Satoshis, but my guaranteed buy-back offer expires tomorrow.


Cheers, Zefir

Ztex power good to know.

Confirming, that my FPGA mining rig runs for zefir in order to secure this bond dividends until hardware is delivered.

Cheers,

roomservice

Update: external mining contract signed

I turned off nearly all my GPU based mining rig (left only the controlling PC active with 1.8GH/s) to keep ambient cold for the BFLS. GPUs will not be considered for expansion any more, I'll fully concentrate on FPGAs hereafter.

To back the bonds with real mining power, I reached an agreement with an established miner to provide me 6GH/s+ (FPGA based) until the Quads are delivered. This external mining farm is pointing to Ozcoin: you can find user 'zeta-mining' anytime either in the Top20, or if the mining-proxies are taking the top ranks in the round-share stats.

I let it to the provider's discretion to confirm here publicly, while the relevant numbers are publicly visible.

They are still good mining cards and if FPGAs did not catch up cost-wise recently, I'd bought more (especially the Gigabyte that runs at stock 1200MHz and handles 720MH/s at 220W).

As for believing in Bitcoins, while I was just mining and earning money for the next GPU, I got often to disbelieve in the idea of Bitcoin - mostly when I saw BTC/fiat rate tanking with my hard earned coins becoming less worth. With moving from just hoarding coins to using them, my attitude changed in 'subtle shades' ^{((tm)1993 Nuance)}: I am thinking more and more in the Bitcoin world and care less and less to its fiat exchange rate You know, like those people that don't care about gas prises - since they always fill up for 50 bucks...

Bottom line: Yes, I want to believe - and I do.

As for the risk buying 50 Quads: yes it is not foolproof. But compared to folks ordering multiple MiniRigs or even those working on ASICs, it is not extraordinary speculative. Plus with you folks willing to share the risk and participate in the profits increased my confidence that this is the right way to go.

Yes, they are expensive over here. I was thinking about them as a replacement for my 5850 but they are not paid off yet. Got them from Brack for 220 each. For the moment they still make a gain but at the end of the year things will change.

50 quads sound serious. Glad to see that other locals belive in Bitcoin. I don't have the funds for 50 boards but I support those who take the opportunity (with all the risks).

Bought them when they were short here in Switzerland (end of March):

• XFX HD7970 Black Edition: 580 CHF
• Gigabyte HD7970 UD: 618 CHF

Their retail prices went down 10-20% within less than 2 months, way more than they have mined so far - bad luck this time

What brand are the 7970s ? How much have you paid ?

Update: added some words on what is next on the schedule to first post.


Hi,

I have cold standby GPU rig worth ~3.7GH and gave it a try today - it did not work out well - after several hours the location got that hot that my BFL Singles started to throttle and loose a cumulated average of 1.4GH (and summer is still to come).

So while the GPU rigs for sure are still operating profitably, they are unusable in my setup with burning that much energy. Sad thing is, I bought 4 of the HD7970 just two months ago and won't get any reasonable resale price.

As written in the updated news, it is currently impossible to quickly add FPGA hashing power. To meet the maximum 75% sold to available hashing power in the contract without the GPUs, I am going to buy a 5GH/s FPGA based contract from an established miner until I expanded my own farm. I'll post details when the contract is signed.


Cheers, Zefir

Hiya,

Good news with the IPO, and I guess even better news for your that it's so popular...
Any thoughts what those older (possibly inefficient) rigs would do to the returns?

And I guess now it means expanding for you

Update: IPO took off successfully

Thank you all for your confidence and your will to invest in a long-term Bitcoin future. I'm amazed how - after Bitcoin suffered from all the bad incidents and people trying to rip off others - you trust me with your hard-earned coins and give me a chance to prove that there is room to make money the honest way. I am not planing to disappoint you.

Well, for some reason it was even over-successful.

I over-sold, i.e. had two large scale last-minute investments coming in parallel that added to 6000 pre-IPO sales in total. To not send the coins back and have at least some bonds for the public, I had a last-second discussion with Nefario and decided to add another 2500 bonds right after IPO to a total of 7500.

A total of 7.5GH/s is still within the hashing power I have available (though I'll have to re-activate GPU rigs that I turned off for inefficiency), i.e. all issued bonds are backed by mining power.

Furthermore, with a bond and deterministic dividends, there is no negative implication to price with a higher number of total outstanding bonds.

Nevertheless, since there was not enough time to announce the increased issue, I will grant you all an option to bail out of your investment with zero looss: I've put a bid wall at 0.297BTC (IPO-price + 0.5% GLBSE fee + small compensation) to allow you all to give back the bonds if you feel uncomfortable with the decision. I will grant you that option for one week after the IPO.


Getting late here and I need to get some sleep for my (hopefully soon to be terminated ) day job.

Good night,
Zefir

Hot Bond!

zefir does serious business - i'am in too!

I'm ready, start the sale

Update: IPO-details finalized

Meni contacted me personally and gave me some insights in his Puremining business that clarified why there is a significant premium on the price when just comparing the bare hashing values. Bottom line, the higher price is justified alone by the reputation he has as initiator of publicly traded mining power and the very complete contract he set up.

I am going to license that contract for ZETA-MINING soon, right now I have to accept that I first need to build up reputation and therefore can't include Puremining fully to the price building formula.

Considering this, I set the IPO price at 0.295BTC per 1MH/s 100%PPS bond and updated post #1 accordingly, including the number of 4350 bonds available to the public, after 13 blocks have been sold to pre-IPO investors.

Happy bidding / trading.
Zefir

PS: those having time to fool around and place satoshi bids, you won't get any I am going to set up a bid wall at 0.28BTC during the first week for investors that change their mind, so you won't get them cheaper than that.

Short update on GLBSE verification (also updated post #2 accordingly):

• my email address has been verified meanwhile
• I won't get my home address verified. According to their verification policy, addresses in Switzerland can not be checked

If my home address is vital for your trust, PM me and I'll disclose for your personal verification.

Yes, thanks for the clarification.

I added the formula for IPO price calculation to post #2, along with some pre-IPO statement that was requested via PM.

As for PUREMINING, I also do not get why it is that much overpriced. From reading the contracts, it is just a mining bond for 1MH/s at 100%PPS (i.e. exactly what I am going to offer), yet it is traded at 60% premium. I like it as it pushes the average price up , at the same time I'm unsure if there is something I have missed. If you know more or have an explanation, I'm okay with removing PUREMINING from the price calculation formula.

See OP:


Current average should be something about 0.35 BTC per MH/s, I'd expect the IPO to be around 0.3 BTC, like nearly every other 1 MH/s bond out there (except for Puremining, their prices are crazy! )

What's supposed to be the starting price of every share?

Thank you, those are quite helpful. I also eschew most social networking services, no hard feelings there.

Thanks. Added an initial section to second post. Please feel free to ask for further information.

Subscribed. Any references you care to provide?

--reserved--

FAQ & user requested information

---

References, Reputation and Trust
I am not social in the virtual world. That is due to the rule I am strictly following to not disclose personal information into a network that never forgets. As a consequence, there are no Facebook, G+, LinkedIn, Tweets, Blogs or whatsoever profiles I can refer to.

The trust I am going to provide to investors is based on two core aspects: first, I've got a real life that is highly dependent on my reputation and second, I am not seeking for anonymity. In fact, my nick is my real name and if you visit my research track where I worked before here, you'll find my full name. Google me, I'm unique worldwide. You'll find most entries either referring to some research papers I wrote or to Linux kernel development, for both I had to build up reputation based on a long and steady track record. That is what allows me to earn my and my family's living and even 21M+1 BTC won't tempt me to risk my real life's fundament.

In the Bitcoin community there are

• some developers who can prove I'm real (ckolivas, kano)
• some lenders who currently hold four digit amounts of my BTC liquidity (pirateat40, ineededausername, hashking)
• Matthew who took my payment for 12 issues of Bitcoin Magazine without delivering any so far
• Cablez who manufactured cables to connect my BFL Singles to a gold PSU
  
• Clipse whose BonusPool most of my rig is mining for (check my stats with my forum nick here)
• GLBSE that verified my ID and my email address

As stated above, GLBSE is not going to verify my non-existing FaceBook an LinkedIn profiles. They also won't verify my phone number (it is a VoIP based one) and my home address (Switzerland does not belong to the list of countries that are verified).

If you feel you need more information for your due-diligence, please PM me or post your request in this thread.

---

IPO price calculation
With the existence of already established mining bonds the initial price will be set to match the averaged ROI of those minus an IPO discount of 10%.

It will be calculated as follows (based on the 5Day averaged price at GLBSE):

As of time of writing (2012-05-07, 14:00): (0.625/2.1 + 1.53/5 + 0.493 + 0.336 + 0.323) / 5 * 0.9 = 0.35 * 0.9 = 0.316

---

pre-IPO sales
Investors interested in buying one or more blocks of 50 bonds before IPO please PM me.

There are no additional discounts for pre-IPO sales, the price per bond is calculated with above formula at day of sale.

---

---

Changelog
2012-05-06: added 'References, Reputation and Trust' as requested by BinaryMage
2012-05-07: added 'IPO price calculation' and 'pre-IPO sales'
2012-05-09: updated GLBSE email and home address verification

Zeta Bitcoin Mining: Perpetual mining bond, previously traded at GLBSE, ticker ZETA-MINING

---

---

News

---

2013-01-37: Done.
2012-12-04: All claimed shares bought-back; Operation closed
2012-11-25: Investors' list received from GLBSE, Payments restarting
2012-11-12: Claim Process closing, Buy Back Offer
2012-10-20: GLBSE recovery: Claim Process open
2012-10-14: recovery plans after GLBSE closing
2012-10-07: GLBSE closing down
2012-09-08: swaps for ASICMINER shares executed, bonds recalled => 4000 left outstanding
2012-08-24: voluntary offer to investors to exchange shares for physical hashing power or ASIC securities
2012-07-10: FPGA boards delivery
2012-05-28: dividend payments & upcoming expansion
2012-05-19: bail-out period ending & dividend calculation
2012-05-17: GPU deactivation & external FPGA mining contract
2012-05-14: what's next?
2012-05-13: successful IPO
2012-05-13: finalized IPO details & added projected ROI figures
2012-05-05: initial announcement

---

GLBSE recovery: Claim Process open
Please send me an e-mail to the address given in my forum profile specifying

• your GLBSE account name
• number of ZETA-MINING bonds you hold
• address where dividends should be paid to (paper wallet address or at least one you have the private key of)
• optional: e-mail address to be used to contact you for confirmation / updates (if not reply-to address)
• optional: anything you have available to prove your claims (screnshots, trade information, etc.)

---

FPGA Boards Delivery
The 50 Cairnsmore1 Quad-FPGA boards pre-ordered at Enterpoint have been delivered. The FW and bitstreams are still in development status and as a result the boards are currently rather used for testing than for mining.

When projected final performance is reached, a total of up to 30GHps will be offered to the public.

---

Dividend Payments & upcoming Expansion
Since GLBSE has no support for automated pre-scheduled dividend payments, I will process the manual payment early when I am away from keyboard at the defined payment time (Sundays at 13:00 UTC).

Expansion is on the horizon with the Quad boards' anticipated shipment within 2 weeks. 75% of the added hashing power will be offered to the public by issuance of new bonds. The bonds will be priced at market value. Investors interested in buying blocks of 50 bonds please contact me via PM.

---

Bail-out Period ending & Dividend Calculation
Dividends will be paid Sundays at 13:00 UTC, with the first payment scheduled for tomorrow May 20th. I set up a Google Docs spreadsheet for weekly dividend calculations here.

Right before the dividends are paid tomorrow, I will remove the bid wall I set up for the first post-IPO week to allow investors a bail-out at no cost. I'll be glad if you stay invested with me, but if you feel unsure, do not miss to place your sell order in time.

---

Replaced GPUs with external Mining Power
Most GPU rig that turned to operate inappropriate in my setup has been deactivated, leaving ~6GH/s (mainly in BFLS) active.

Until the FPGA Quads are delivered, the issued bonds are additionally backed by external mining power. Find it mining with 6.5+GH/s at Ozcoin's Top20 or round-share stats.

---

Coins Collected - What's next?
With the IPO capital collected, the next obvious challenge is how to re-invest in mining power extension quickly. Besides GPUs that would be available immediately but already had their times and will not be considered for expansion, today any FPGA based mining rig has a lead time of 8+ weeks. Since second hand availability is either zero or only at rip-off prices, there is no practical way for instant expansion.

I have 50 Cairnsmore1 Quad boards ordered from the first batch. Enterpoint promises to have them ready for delivery within June. If they keep up with that (or with even small delays) that is the earliest most occasion to extend FPGA based mining power. The available IPO capital will be invested fully into this order.

Until then, 750 coins are reserved to provide the bail-out bid walls in the post-IPO week and for market liquidity thereafter. The remainder of ~1500 BTC has been converted to fiat and is reserved to fund the expansion.

---

Sucessful IPO
The IPO was successful, all bonds were sold at IPO-price. Due to high demand from large scale investors 2500 additional bonds has been issued within an hour after IPO.

Thank you all for your trust and your will to invest in a long-term Bitcoin future.

I grant all investors a free bail-out period to get back your invested coins without any loss for one week after the IPO, i.e. I will keep an according bid wall active until 2012-05-20.12:00 GLBSE time.

---

IPO Details Finalization

• IPO price: 0.295 BTC
• availability: 650 bought by pre-IPO investors, available to the public at IPO: 4350

ROI projections
This is basically a do-the-math-for-you of the formula defined by Meni here, based on the IPO price of 0.295BTC and current difficulty of 1.733M:

• weekly income per bond: 86400 * 7 * 50 * 10^6 / (1733207 * 2^32) = 0.00406 BTC
• weekly ROI: 0.00406 / 0.295 = 1.38%

---

Initial Announcement

Folks,

I've been with Bitcoins for almost a year now. While finding that agglomeration of brilliant people in this community and learning so many new things is exciting, I reached a point where I am investing too much (in terms of money and time) to continue it as a hobby project. With the ups and downs (including the past numerous incidents) we had so far, I gained enough confidence that Bitcoin will survive in the long run and got motivated to extend my leisure-time involvement to a serious business.

As one core component of that business I am going to significantly increase my mining capabilities from currently 7.5GH/s to a target of at least 1% of the global hashing power by the end of 2012. Right now I am negotiating with an established FPGA-board manufacturer for a license program to be able to gradually add FPGA based hashing power at prices competitive to the current best ROI-efficient devices.

The upfront investment to produce 50+ Quad boards and add ~40GH/s with that approach is quite huge and I therefore want to spread the risk and collect some coins for investing with issuing ZETA-MINING bonds  at GLBSE. The contract is basically equivalent to existing ones (sorry gigavps and amazingrando for copy-pasting), i.e. you buy 1MH/s at 100% PPS and get paid with your portion of mined coins once a week. I'm not adding further details here, assuming all potential investors already know. Feel free to ask for additional info you would like to see as part of the contract.


Since my Zeta Bitcoin Mining business is explicitly planned for growth, I add the following statements:

1) Issued hashing power
At any time I will issue no more than 75% of the available hashing power. The remaining portion will be used to
  a) cover operational costs
  b) provide liquidity to the secondary market
  c) fund expansion
  d) cover operation risks (e.g. downtime)

2) Growth
All coins collected by issuing bonds are invested 100% in growth, i.e. used to buy more mining equipment.

3) Sustainability
Long term competitive operation is assured by minimizing operating costs. ROI calculations for new equipment are performed for an operating time of 18 months and assure  to remain competitive with latest generation devices.

4) Operational costs
Initially the operational costs are limited to the electricity that I am going to pay out of my pocket and from my portion of the coins mined. As soon as upon growth infrastructural investments become required, bond holders will have to vote whether to accept fees to be deducted from their dividends.

5) Liquidity provision
I will provide liquidity to the secondary market to some extent by placing ask and bid walls at each side of the averaged trading price. This is not to drive the market but to increase investors' confidence in the bond by assuring they can bail out for a reasonable price.


IPO details

• date: May 13th 2012
• bonds to be issued: 5000 representing 5GH/s
• price: cut-off will be set at IPO day at (5-day 1MH/s average of other mining bonds) - 10% discount

That's for the details. Apologize if I forgot some important points, but I'm learning (how often do you sell your securities outside the Bitcoin world ) and will add them incrementally.


Thanks for your interest,
zefir