Topic: [GLBSE] BFLS.RIG - BFL Hardware mining & Sales - page 13. (Read 28518 times)

I lost about 2500 BTC and 100 hours of my time (and counting) in the context of the BDT bonds.

Ok. I have considered your suggestion, and rejected it.

Back on topic now.

Actually, I'm fed up with people like you, which think that speaking all the time will cover their past actions. You and Armando stole 10000 BTC, and now you play angel. More then that, you still try to share your "knowledge". Maybe is time for you to step back a bit from the keyboard.

If you do not trust my judgement, take my argument at face value. Ad hominem attacks aren't helpful, and neither is derailing this thread.

I have never referred to Alberto Armandi as a friend, let alone after what he's done to me and others. You can follow publicly available details of the case at the BDT bonds thread.

Meni your detailed analysis and judgment of things you have no interest in, is very dubious to say the least. How is it going with your friend Armando?

I mentioned it completely intentionally.

It did not represent 1/200 of the cash value of a Single. It represented 1/200 of a Single. The two are not the same. If the value of a Single is >$600, the value of a BFLS share is >$3. Likewise, if for some reason the value of a single was now $50 (e.g., no upgrade plan with the advent of ASIC), the worth of a BFLS share would be $0.25.

Right. Now let's assume there were no ASICs, and FPGA BFL devices were sold out or only available with delays. A single would be worth, say, $700. A mini-rig would be worth about $21000. So if 200 BFLS shares can get you a Single, each is worth about $3.5. If 6058 BFLS.RIG shares can get you a mini-rig, each is worth $3.46. If Inaba were to merge the two, he should do it based on their worth, not based on some past ticket price.

Why do I think a mini-rig would be worth about $21000? Because both devices exist to generate hashes. What you can get out of a device is proportional to its hashrate, so what it would go for in the market is proportional to its hashrate - with some slight discount to the rigs, because the coarser granularity makes them less attractive for some customers (on the other hand, they are more power-efficient and much easier to deploy by big players).

And here is the crux, that ASICs are coming, there is an upgrade plan, and FPGA BFL devices are worth anything only inasmuch as they can be traded in. So their worth is whatever they can be traded in for. If these are the original ticket prices, there is a point in saying that this is their worth.

However, by offering trade-in values equal to original ticket price, BFL is unfairly disadvantaging mini-rig purchasers. And I think it would be good for Inaba to correct for this, making sure that BFLS.RIG buyers are not disadvantaged compared to BFLS purchasers. And again, the objective measure of worth (in absence of market data) is proportional to hashrate. One can argue that to make sure nobody receives less than the letter of the contract, Inaba should credit all of the merged shares at $3 per share (so BFLS owners are par and BFLS.RIG owners get a bonus).

You should also keep in mind that the upgrades aren't happening right now. There are still some dividends to be paid until then, which will on average be proportional to hashrate. By crediting BFLS.RIG owners at less than 1:1, they will get less dividends than the contract describes.

So I guess the simplest solution that is fair for everyone is to wait with the merger until the upgrades; credit $3 per BFLS share; credit as much as possible (typically between $2.52 and $3) per BFLS.RIG share.


As said I have no stake in this debate, and I assure you my love for math is unconditional.

Meni loves math, only when it is in his favor.

Meni, this is the second time you mention hashrate in this conversation. I let it go the first time, but I think a clarification is in order.

Under the original contract terms of BFLS (which existed long before BFLS.RIG was even proposed), it was made clear that purchasers were buying shares of hardware, not hashrate. 1 share of BFLS represented exactly 1/200th of the cash value of a Single (that is, exactly $3). One could calculate that the hashrate of that share was 832/200 (4.16MHps), but that is irrelevant to the contract terms. The key point of BFLS, and what made it unique at the time, was that the shares could be converted to actual hardware at any time.

If I had enough BFLS shares, I could ask Inaba to convert them to a Single and ship it to me today. And I can get a $600 discount under BFL's upgrade program for an ASIC upgrade today. Which makes a BFLS share worth exactly $3 today ($600/200 = $3).

Similarly if I had enough BFLS.RIG shares, I could ask Inaba to ship convert them to a MiniRig and ship it to me today. And I can get a $15295 discount under BFL's upgrade program for an ASIC upgrade today. Which makes a BFLS.RIG share worth exactly $2.52 today ($15295/6058).

So if those $3 BFLS shares are now to be converted to BFLS.RIG, a BFLS shareholder would expect to get the same $3 worth of hardware for their BFLS share. Unfortunately, we know that 1 BFLS.RIG share is not worth $3; it is only worth $2.52. The Singles are on hand now, as are the MiniRigs. There is no 'delay' associated with a share conversion.

My main point is that due to these events that happened in the past, the current worth of a mini-rig is more than what its ticket price implies. It is still impossible to put down $15295 and get an instant minirig. If there was no ASICs or hardware advances, a minirig would sell in the aftermarket for much more than $15295. Thus you cannot argue that 6058 BFLS.RIG shares are worth only 25.492 times as much as 200 BFLS shares.

My argument is weakened by the existence of the upgrade plan, but I still claim that the most natural objective measure for the worth of such a share, which doesn't leave any party disadvantaged, is in proportion to hashrate.

BFLS.RIG owners will never get back the X BTC that the rig could have mined during the time of delay. Thus the manifestation of this loss and the speculative risks should remain until cashout. Denying them this right is a variation of Hershele's "Rolls and Doughnuts" story.

FWIW, I have private arrangements with Inaba which should be unaffected by this, but hold roughly equal value in singles and mini-rigs.

Meni, I've always respected your analytical abilities and contributions to bitcoin (and continue to do so), but I'm not sure that argument applies here. What you describe happened in the past; it is not an accurate description of the current environment.

If I have 200 BFLS today, I can ask Inaba to convert them to a Single. He can do that immediately because he has the hardware. Similarly, I can ask Inaba to convert 6058 shares of BFLS.RIG (assuming I had them) into an actual MiniRig. Again, he can do that immediately with hardware in hand. There is the same amount of waiting involved in either case.

I understand that in the past there was more of a delay with the MiniRigs. But that was built-in to the market-driven bid/ask price of the shares. Today you can no longer order a MiniRig (or Single) from BFL according to their website so we can no longer use this as a comparison, but you can from Inaba if you have enough BFLS or BFLS.RIG shares.

You may recall that there was a BFLS.FUTURES issue created original just for this situation. If actual hardware was not yet in hand, people had to buy FUTURES. Once actual hardware was in hand, the FUTURES shares were converted into BFLS.RIG. But that is not the situation now; both devices are 'in hand' and thus their share value in terms of hardware cost can be directly compared.

One other point to realize is that any 'disadvantage' the early BFLS.RIG adopters had due to longer wait times, exponentially decays with time. In the long run, the difference approaches 0 and we again reach the point of directly comparing # of shares vs. hardware cost. And under that comparison, 1 BFLS share is worth 1.19 BFLS.RIG shares.

I won't belabour this argument; ultimately it is up to Inaba to decide how to convert the shares, and I'm ok with that. In my dealings with him he has always been open minded and fair, so I will respect whatever decision he makes. I just wanted to point out that the current worth of a BFLS share may not be as close to 1:1 as some may believe.

Right, so one can argue that a better BFLS.RIG->ASIC conversion rate should be used. I don't know how cleanly Inaba's roles as BFLS issuer and BFL COO are separated, but it would make sense if the rate is determined by the ratio of devices he gets from upgrading the totality of BFLS-backing hardware to the number of outstanding BFLS.RIG shares after the merger.

The mistake here is assuming that a mini-rig is worth $15295.

At the time when the devices were bought, $15295 didn't get you a mini-rig. It got you a mini-rig to be delivered several months in the future. An actual mini-rig in your possession is hence worth much more than $15295.

At the same time $600 would get you a single within a few weeks. So a single is worth more than $600, but not by much.

Before there are ASIC upgrades, the 1:1 hashrate conversion makes sure that holders receive the same payments before and after the merger (as output is proportional to hashrate).

While the upgrade plan does not take this into account, the fact is that buyers of BFLS.RIG had to wait more before getting payments; this should be compensated by an increase in the credited value. The most natural objective measure by which to compare the two is the hashrate.

The only question remaining is how much of the new ASIC devices will a BFLS.RIG share get you.

Well, Inaba would like to be excused from having to do any math on the grounds that it's hard.

A single payout bucket is welcome but I have a concern about the proposed 1:1 conversion: as commented on earlier in this thread (https://bitcointalksearch.org/topic/m.1255003), a 1:1 conversion does not appear to represent fair value for BFLS shareholders. Unlike 'regular' mining bonds such as Gigamining, BFLS and BFLS.RIG represent a share of hardware, not hashrate, so:

BFLS (1 Single/200 shares): $600/200 = $3 per BFLS share
BFLS.RIG (1 MiniRig/6058 shares): $15295/6058) = $2.52 per BFLS.RIG share

This indicates that a BFLS share is worth more ($3/$2.52, or 1.19x) than a BFLS.RIG share. Put another way, 5098 BFLS shares ($15295) are worth the same as 6058 BFLS.RIG shares ($15295) which is the value of 1 MiniRig.

So to fairly convert the hardware value of BFLS into BFLS.RIG, 1 BFLS share should be converted to 1.19 BFLS.RIG shares. A 1:1 conversion would mean that BFLS shareholders take a 19% loss. If my analysis is flawed, I'd like to know where it fails.

I still haven't gotten anything from GLBSE as far as assets go, hopefully soon.  I'm ready to get things rolling on this end as soon as I have that data. 

I am going to be converting BFLS shares into BFLS.RIG at 1:1, so everyone will in one payout bucket.  I will eventually be fully automating everything, so payouts will come more frequently than once a week, but in smaller amounts.

Just updating everyone.  As soon as I have the data from GLBSE, I'll let everyone know.

I don't want to take this too far off-topic, but it is Nefario who is not fulfilling his obligations to GLBSE shareholders and issuers. You are suggesting to pay him for something he is obliged to do anyway (morally, if not legally). Pay him to release something that is ours to begin with, that he is holding hostage for unknown reasons? The phrase 'we do not negotiate with terrorists' comes to mind here ...

James has not paid out all BTC owed to GLBSE users, and he has not published the asset list to the issuers. I hesitate to use the word 'criminal', but at the very least he is acting in bad faith.

So my view is that until he meets his outstanding obligations to GLBSE shareholders and issuers, paying out all BTC and publishing the asset list, I'm not inclined to pay him anything. Especially not with BFLS user funds that Inaba is holding for us.

If James comes clean in the next few weeks/months, everything will be fine. If not, the time for waiting will be over. Inaba mentioned that, as a last resort, he may have to look at the data he has on hand and figure out who has what and start payments again. I think it is too early for that step, but it may come to that.

We should continue to wait and see how the Nefario saga continues to unfold.

$600? BFLS.RIG weekly div was over 1000 bitcoins..

And the second option, we pay him ?

Maybe we can set an example that other asset issuers will follow and Nefario will be rewarded for all his hard work.

I know we paid allready for the full glbse experience...but sometimes paying a little extra can make a big difference.

One week of mining revenue is less than $600 or so, if that.   Nefario is also in another country.  Basically, all the accumulated fund of BFLS right now would go towards paying a lawyer who may or may not be able to get anything done and even then, the money probably wouldn't be enough to actually get something done. 

Ok, hearing some information from you is better than weeks of silence.

But why don't you use a lawyer to push Nefario out of his comfort zone ?

I think: use one week of mining revenue for a lawyer -> sue Nef -> result

Or just use the money to pay Nefario -> get data -> make shareholders happy

Well, I would like to and I have no problem with it, but my one reservation is that if I start it for some and not for others, its' going to be some tough accounting to get everyone caught up if and when GLBSE does come through with the data or I institute a program without the GLBSE data.  I'm open to suggestions on how to handle that, though.