Topic: [GLBSE] BFLS.RIG - BFL Hardware mining & Sales - page 3. (Read 28359 times)

WTF?!

You did not contact me after the GLBSE meltdown and then you give away the proceeds from my share to other share holders as bonus? It was certainly not part of that contract that I have to be proactively reading this thread to receive any dividends (that you could easily have sent me as you (still) have an address associated with my share). Since when does one have to be "active" to be a share holder?

I'm certainly NOT pleased in how this is/was handled...

Glad someone's awake! You are actually referring to BFLS.RIG; I was using BFLS as an example, which started much earlier. BFLS IPO share price in BTC was 0.7-0.8 BTC/share but the exchange rate at that time was only $4.80/BTC. So BFLS was selling for around $3.60/share which is a 20% premium to its actual hardware value of $3.

RIG IPO'd at the end of June for 0.6-0.7 BTC. At that time BTC was worth $6.25. So a RIG share was going for around $3.75-$4.35. The actual hardware value of a RIG share was $15295/6058 or $2.52, making an investment in RIG more expensive. But it did give you a slightly higher hashrate. Those buying in at 0.6 BTC were paying a 50% premium; those buying at 0.7 were paying a 73% premium.

My records show that RIG started paying dividends at the end of August so, for RIG, 1 share has returned about 0.205 BTC to date (compared to a 0.537 return for BFLS since its inception in April 2012). I had forgotten the two were so different; thanks for pointing that out, @server.

One thing to take away from this is how important TIME is for bitcoin mining. BFLS had only a 4-month headstart on RIG, but in those 4 months it managed to generate more BTC per share than RIG did in its entire 11 months of operation. This is directly due to increases in difficulty; the same thing is happening now and that's why our dividends have slowed to a trickle. Which is why the call for action.

IPO was 0.6-0.7...

https://bitcointalksearch.org/topic/m.990272

If anyone is curious, my records show that 1 share of BFLS has paid out approximately 0.5366 BTC in dividends since the end of April 2012).

For those that have held on to their earnings, the dividends from that initial $3.60/share investment in 2012 would be worth $50 today. In terms of BTC, an initial investment of 0.7-0.8 BTC/share would not quite have been recovered yet (and with today's rising difficulty is unlikely to); that is perhaps the only blemish. Results look better from a fiat perspective.

Now that Josh has expressed his interest to wind things down, let's see how best we can proceed to maximize value for ourselves.

Ok, I understand, thanks Epoch for explaining that I'm screwed... I will back off.

No, @server, I scowl more than Josh does so I don't *think* we are the same person (EDIT: I see you've edited your post since I posted this). And I don't speak Korean nor do I fly planes. And I drive a hybrid vehicle which would make Josh either scowl or laugh at me. Or both.

Seriously: BFLS(.RIG) has always been tied to the hardware. For example, 200 shares of BFLS represented a $600 Single, making 1 share worth $3. Back then, if BTC was worth $9 you would have paid 0.33 BTC/share.

Yes, today BTC is worth 10x as much: $90. But your 1 share of BFLS still represents 1/200th of a Single, which is still $3. If you were to buy 1 share today it would not cost you 0.33 BTC as it did months ago; it would cost you 0.033 BTC.  

And why? Because that is what 1 share is worth. It still represents the same thing: 1/200th of a $600 Single or $3. And that is what you originally paid for it. You seem to be under the impression that you paid 0.33 BTC for 1 share of BFLS; you didn't. You paid $3. There is a difference. What that 1 share allowed you to do between the time you purchased it and now, is collect dividends. The share itself didn't change in value.

In today's valuation of BTC (I used $95), 1 share after adding in the ASIC upgrade, is worth exactly 0.06 BTC. That is, $2500/433 for an SC Single. Yes, if we did these calculations a year ago, it would be closer to 0.6 BTC/share instead of 0.06 because BTC was worth 1/10th of what it is now ... but the share's fiat value would still be the same. And these shares are valuated in fiat because they represent physical hardware that has a fiat value.

It sounds as if you would not want to part with your shares for 0.06 BTC/share. That is fine, and is your choice to make. It is neither right nor wrong, good nor bad. I've only presented this to Josh as an option. If he doesn't accept it, none of us are going to be parting with our shares for 0.06 BTC/share. And if he does, anyone who wants to be bought out can be. Others who prefer to hold on to them, such as yourself I'm assuming, would be free to do so.

There is no need for hostilities; we're just having a conversation and discussing possible options for the situation we find ourselves in. We are all in the same boat together. No one is talking about forcing people to do something they don't want to do.

Epoch are you Josh ?

Let me throw one other option out there: Inaba, for those preferring not to wait, would you be willing to offer an at-cost buyout? It turns out to be 0.06 BTC/share for both BFLS and BFLS.RIG according to my calculations.

The benefit to you would be higher profit since you'd be able to sell the ASICs at above-cost when they arrive and your portion of the shares would be greater; the benefit to shareholders would be that they free up their BTC now.

Using the numbers in my 'converting to ASIC' post I linked to earlier, here is what it might look like:

For BFLS (Singles):
- 200 shares per Single become 433 shares per SC Single
- at-cost value of an SC Single (50Ghps) is $2500
- each share is worth $5.77 ($2500/433), or 0.06 BTC

For BFLS.RIG (minirigs):
- 6058 shares per minirig become 11842 shares per SC minirig (1500GHps)
- at-cost value of an SC minirig (1500Ghps) is 3x $22484 or $67452
- each share is worth $5.70 ($67452/11842), or 0.06 BTC

Shares have not been accumulating any dividends.  All dividends have been divided up equally between active shareholders.

I should reasonable expect the ASICs within 3 months, that's almost guaranteed.  I'd say even 2 months. 1 month is iffy.  If people want to hold on to it and then sell the in hand ASICs when they arrive, I'm certainly willing to do that.

Some good discussion going on here. Please continue.

@Vbs: you make good points, as you often do. Mentioning the BFLS(.RIG) valuation relationship with expected ASIC delivery is spot-on.

@Server: thanks for joining the discussion. The more discussion we have the better and more informed our decision can be.

@Blank: I agree that selling in-hand ASICs is *much* more preferrable (and profitable) than selling pre-orders. But this  is a tough call. If we *knew* that the ASICs would arrive in, let's say, 1 or 2 or even 3 months then I'd say "let's wait for them". If we *knew* they would arrive July 2014 then I'd say "let's liquidate now". Our problem is that, from what Josh has said, we *do not know* when they will show up. Could be next month, could be next year. It is difficult to evaluate the best course of action under this condition. It is why I am encouraging discussion, and your input is very much appreciated!

@Sukrim: I have been maintaining a database of dividends/per share for BFLS(.RIG) payments since Day-1. If you can tell me the date of your last payout, I can tell you fairly accurately how much your share has accumulated since then.

I only have this one from you.

I still have full control over both my email address you have on file (where I did not receive any mail from you about claiming shares by the way) as well as the Bitcoin address associated with the share.
I know that currently I would only get very little, however to my understanding it has been accumulating dividends already for months by now...

hmm i would have thought as long as we can continue on long enough it would be better to auction off the real "in-hand" ASIC's rather than all the issue's in selling off the dreaded "Pre-order".

^^^ +1

What Vbs said.

+1

I think Inaba (as a personal customer) should get the orders filled in the exact same place as he originally put them. Doing otherwise is not a fair treatment neither to Inaba neither to any of the BFLS shareholders, since at the very least anyone that got into BFLS(.RIG) is getting a very costly delay with no practical justifiable reason (in my understanding). One of the key points in valuing this offer against others was Inaba's Day 1 upgrades.  

Hmm, do you know who at BFL is responsible for determining when you get your gear? Any chance of getting some firm info from them? It is unreasonable to keep you in the dark about your own place in line.

You have Day-1 orders. I can understand BFL wanting to avoid the appearance of giving you preferential treatment as an employee, but a 'reasonable' worst-case would be that once BFL is done with all other customers' Day-1 orders, they would then release yours. I'm not running things there but if I were, I'd release your Day-1 orders before shipping out other customers' Day-2 orders. Doing any different is beyond unfair, employee or not. Your orders were placed before you were employed there.

If you truly cannot know when your orders will arrive, have you considered the option of just selling the ASIC preorders at-cost? You/we don't lose anything (except the possibility of selling at a higher price), and we'd be able to begin liquidation immediately. I'm not suggesting you *should* do this, but merely throw it out there for general consideration.

Option 1 is probably the best way to go, although it's hard to value the upgrade's in a sale price, since I don't have a specific ship date and there's no way I would even begin to guarantee one at the moment.  That's my only concern with that.

Josh, I was going to wait a couple of weeks before posting this, but don't really much point in delaying.

We are all seeing the income from BFLS/BFLS.RIG drying up as difficulty climbs. It is only going to get worse as the weeks pass. With your post a week ago stating that you really don't know when the ASIC gear is going to show up, and you considering stepping down from BFLS or liquidating it, it leaves shareholders in somewhat of "limbo".

If no one is stepping up to purchase BFLS, and ASICS are not expected to show up any time soon, I think (as much as I hate to say it) that liquidation may be in the shareholders' best interest and we should seriously consider/discuss it. And the sooner the better, because our asset value will only drop as difficulty continues to climb.

Let me start by throwing out a few thoughts to encourage discussion.

Option 1: Full Liquidation

- factor in the ASICs already ordered. If all FPGA hardware has been earmarked for upgrade, the calculations here apply:
https://bitcointalksearch.org/topic/m.1455088
or, if not all FPGA hardware has been reserved for upgrade, these calculations will need to change a bit.
- auction off the hardware (ASIC preorders and whatever FPGA gear that isn't slated for upgrade). Another option might be to negotiate with Lab_Rat; he is looking for hardware to add to his mining farm and he would certainly pay a premium for ASIC gear that will arrive soon. With his recent IPO he should have a lot of bitcoin.
- distribute the BTC to shareholders.
- BFLS and BFLS.RIG would then be considered cleanly closed.

Option 2: Partial Liquidation

- Josh, in case you want to keep some of the incoming ASIC hardware for yourself, here is a way to do so. With the extra shares you would obtain from the ASIC conversion (see links above), you would certainly have enough for 1 or more SC MiniRigs and Singles. So instead of paying yourself out in BTC by liquidating everything, you would keep some of the hardware in lieu of your payment.
- as a rough example, let's assume you get assigned 1/2 the shares of an ASIC minirig and you have ordered 6. Your shares are then the equivalent of 3 minirigs. You liquidate 3 of them and distribute the proceeds to the shareholders (excluding yourself), and you keep the other 3 for yourself.
- this way, BFLS and BFLS.RIG are still cleanly closed, and you get to keep a chunk of the ASIC hardware whenever it happens to show up.

In both Option 1 and Option 2, shareholders would receive the exact same payment. The only difference is that Option 1 gives you your cut as well, while Option 2 gives you a portion of the incoming ASIC hardware in lieu of your cut.

Comments?

So BFL can deliver the rigs we ordered but you refuse to accept these because of what reason exactly?

Your job overthere ??

Nevermind..

Not really, Sukrim.  It's all pretty much done and buried at this point.  Do you have other shares already active or just that one?

I have no intention of playing the Devil here but, pragmatically, let it go. One share is not worth anyone's time, including yours. You would currently be getting approximately 0.00005 BTC per day.