Topic: [Closing] [GLBSE] Philj's Impressive Mining Project (PIMP) (Read 6324 times)

Due to GLBSE closing I too will be closing up shop on this mining project. I don’t yet have full detail on the numbers of who has how many shares, but my guess at this point is that 4-5 people hold 2000+ bonds each, and that the remaining bonds are held in rather small numbers by a few people. The way I portioned out bonds:equipment was 2000 bonds for each BFL single and upgrade combo with 1500 bonds not released to cover my costs. In closing, I’d like to give bond holders two basic options, and we can work out details and timing.

   Option 1: a bond holder may turn in 2000 bonds and get one (1) BFL Single ASIC shipped to a United States address, once I receive the device myself. I will cover shipping costs. If someone is very close to the 2000 and they do want to get an ASIC, we can work something out. I do realize that one of the big advantages to ASICs will be the early adopters while the difficulty is still “low”, and I’m willing to work with bond holders to either point an ASIC at a pool/worker of their choosing for a few weeks, or try to work direct shipping arrangements from BFL.

   Option 2: Once all bondholders who have enough bonds to exercise option 1 have made their decision (not to exceed 1 week after ASICs are received) the remaining ASICs will be sold and funds will be distributed between remaining bond holders.

Sorry to anyone that this has inconvenienced, but all the negative Bitcoin scams and closing has really turned me off of Bitcoin recently, and I don’t want to continue without GLBSE. Hopefully this closing will be considered one of the better endings to something Bitcoin related.

In advance of getting data from GLBSE, I’d like to ask bondholders to either PM me or post how many bonds you have. If you have over 2000 please let me know which option you would prefer. For the most part I have a good idea who my big holders are, and I won’t be sending anything without verification, this is just to get a basic idea of how things look.

Sorry for the delay. I sent coins to glbse for this week's dividend early this morning, but they are still showing 0 confirms on my client. Hopefully they will be there in the morning.

What was the pricing on the incremental bonds?  The last public wall you put up at .25 never got touched...

I will be creating a new sub asset with a new contract that is the same wording except I will be giving myself a larger payment window (all day Sunday instead of 12-5 Sunday), and the bond will move to 20MH/s as long as the two following conditions are met.

1. The performance of the new singles is 40GH/s each. If for example they are each only 30GH/s then the bond will move to 15 MH/s.

2. I receive all 8 of the singles that have been ordered at the same time and they are in solid working order. If I get a subset of my full order or if any of my order does not work properly, then I will have to do a stair step upgrade. For example If I get 4 working singles instead of 8, then the bond will move to 10MH/s temporarily, then when the other 4 are received the bond will move to 20MH/s.

Everyone will get the ability to upgrade their bonds at no charge. The new contract will be created after I have the new gear in hand and can verify the speed of the new equipment. Bonds will be upgraded starting on a Monday and will cover that week beginning on Sunday, just as the current weekly payment method works (Sunday through Saturday, paid Sunday).

My goal throughout this process is to not screw over myself, or those that invested in this. I don't intend to pay out more than the equipment is capable of making, nor am I going to try to make a few extra bucks off of this upgrade process.


Also, at this time I'm not going to be releasing any more bonds because I really don't want to be in a situation where I can only upgrade part of my equipment at once. Currently I have 8 singles that will be upgraded which should be 320GH/s and I've sold 14500 bonds which equals 290GH/s. This leaves me with a little extra to cover electricity costs and potential downtime. I will still be expanding, just not releasing any more bonds until after the dust settles from the move to ASIC.

I hope this answers all your questions. If not, please ask away and I will answer openly and honestly.

Phil
 

ASICs coming on line is a whole different beast. Its entirely possible that one or two of the larger mining operations will be able to match today's entire network hash rate. The question is simply when this will happen. My guess is early to mid 2013.

I think friedcat has made a very good explanation of why this is not as bad as you might think. I know there are some other options in which you can invest your money for a much higher interest rate. It depends on your risk profile, for example you might want to invest in pirate bonds for a highest reward at the expense of a higher risk.

One of the best things of mining bonds is that although their returns are not very high,

Mining difficulty will smoothly react to absorb bitcoin prices fluctuations,  mining rewards halving in a few months or any technological advances that could hit the market.

IMHO the key difference here is how much confidence you might have in the skills of the issuer as she/he will have to deal with these kind of changes making the right decisions.

I dont understand how anyone can believe this is a sound investment. Mind you, that goes for all mining bonds on GLBSE, not just Philj's..

The difficulty curve of the past 6 months shows a slowing down of acceleration to me.

And in spite of the mass production of FPGAs, the difficulty hasn't recovered to the level of last August's. So it's a drop over the past 10 months.

Of course, it will even explode more once 20nm ASICs destroys 130, 65, and 45nm ASICs. The problem is when.

Besides the reasons I listed above, I have to add another: Imagine the Bitcoin price drops to 1/10 of the current level. If you have 100BTC (600+$) and don't invest in anything now you only 60+$. But if you buy PIMP bonds at 0.25BTC/each, we can safely predict that the difficulty will decrease to at least 1/4 of the current level (hard to pay electricity bills, lots of mining operations closing). Then you have a 28% per month return, which translates to 1934BTC after a year if you reinvest, that is, more than 1160$. Isn't it a good investment if you could turn 60$ to 1160$ in a year?

These bonds are sold at 0.25 BTC, they currently yield 0.0044315 BTC per week, correct? Thats what, ~7% per month?  So you are looking at ~40% ROI on your investment as dividends by December, at which time, mining revenue will half.

 So you'd be lucky  if dividend payments compensate the expected loss in value of your bonds and thats when completely ignoring the rather obvious trend over the past 6 months where difficulty has increased steadily by almost 10% per month on average

... a trend that will explode once they or anyone else starts shipping ASICs.

I dont understand how anyone can believe this is a sound investment. Mind you, that goes for all mining bonds on GLBSE, not just Philj's..

I really really wish I could short sell them. Perhaps I should instead set up a virtual mining bond thats not backed by any mining equipment but will just pay out dividends based on difficulty.