Topic: [HAVELOCK] PETAMINE - 1,150 TH/S HASH RATE (1GH/S per Unit) - page 29. (Read 565829 times)

Anyway, tomorrow I predict a great dividend.

You're confusing pool luck with trends.
Dividends will go down by a somewhat greater rate than the difficulty increase.
You must be looking at the wrong charts.
Only if your goal is to lose money.
Unless you stole or found some coin, you now have less in your pocket than you did before you "invested."  
You also have less coin on Havelock, and there's absolutely no guarantee that said coin will ever see your pocket again.  Judging by your post, you'll end up (what's the favored euphemism for what you do here? "Investing"?) investing it again.

Actually, they are the exact the same thing. Somebody seeing a post on reddit and jumping into peta on havelock may not have sat down and done a true valuation, BUT as they decided what the could invest and bought in, they do a quick valuation and decided current price is worth purchasing.

We've already surpassed last week's dividend amount and still have tomorrows to receive.
The difficulty will be going up but how much will that really affect the dividend? Yeah... a bit...
All the negative on this forum has not really come to pass yet.
This is still a darned good investment!
So go a head and speculate and gripe all you want, but the reality (real bitcoins in our pocket) does not exactly concur.
 

To be fair, the value of securities like PETA is mainly speculative, since the underlying value is unknown and is in constant flux.  When the difficulty goes up X%, the asset value [hardware] goes down ~X%.*  We don't have enough info to predict difficulty.  Throw in irrationality and illiquidity of the market, and market price becomes the only interesting indicator.

*Actually a bit more, since there's a floor below which the hardware stops generating profit, i.e. (the cost of hosting+electricity) becomes greater than (the coin mined).

Price, even price people are paying and value are two different things.  A valuation is a statement of value and doesn't have anything directly to do with price.   If price is higher than the value of something, it is over valued.  

Since PETA can only be profitable if the difficultly grows less than 5%, I believe it is overvalued.   A reasonable price is probably 30% or more lower than it currently is.  

At any given time, a small part of the market could be driving price way up, it doesn't mean everyone values the commodity at that price, only the people that are paying that price match that value.   Over the short term, markets are often wrong, that is common.  

I took the existing equipment into account.  I wouldn't say it is a large source of funds.  It may be worth a large amount of money today, but by the time new equipment is needed, it won't be worth too much.  Mining equipment depreciates quickly.  Rationally speaking, why would a prospective buyer spend more $$/GH on older mining equipment than what can be purchased brand new?  Also, newer equipment is more energy efficient-- more GH/watts, which makes older equipment less attractive, thus cheaper.  Yes, they can sell the existing equipment for some residual value, but more capital is required to fully replace today's equipment.

Where does PETA get that extra capital?  I suppose if cryptx uses his own money to buy the new equipment, then selling the old equipment will offset some of the cost.  Perhaps he can use the excess capacity of the new equipment to do some mining to repay the loan, then do an IPO to sell those new shares.  As long as the IPO price is less than CEX, that might be a good strategy.

Your are forgetting 1 large source of funds, the existing equipment. They could easily list hardware for sale and as soon as it sells they buy new hardware with those funds. They also apparently have quite a bit of personal funds they have invested in this project. Don't forget that while the shareholders hold the bag currently so to speak, they bought the original and second set of hardware out of their own pocket. They could very easily estimate what they could resell equipment for and do a short term loan for the new hardware so that their is no downtime while selling/swapping.

You mustn't also ignore the fact that if they for example were able to swap out the 1150ghs we have now for say 2000ghs, thats an extra 850ghs they can list on havelock or wherever to offload the mining risk.

Yes, I'm assuming that the hardware is not swapped out down the road for a few reasons.

Originally, mining income was allocated to three areas.  It first paid for overhead/electricity.  40% of the remaining income went to dividends, and 60% went towards equipment.  The equipment fund is vital to the success of PETA, because without new equipment the old equipment eventually becomes worthless and the dividend goes to zero.

I'm not sure what prompted a shareholder vote to be called, but in early June, shareholders decided that dividends should be raised to 50%.  This lowered the amount of money used to pay back the loan and save up for new equipment.  It still looked like the loan could be paid off, but due to the difficulty increases, the dividend was falling and there wouldn't be much of an equipment reinvestment fund.

Probably because of that fear, another vote was called earlier this month to convert the loan into outstanding shares and change dividends to 100%.  The shareholders approved.  Now there is no loan to repay and no budget for new equipment.

How do we get new equipment?  Capital will need to be raised.  How is capital raised?  Another IPO.  If a new IPO is successful, then equipment could be replaced with more energy efficient miners.  This would extend the life of shares for existing shareholders.  Without another IPO, I think the fund's days are numbered.

Yes, dividends going to zero are not in the interest of cryptx, but they may launch other projects that can leverage their data center.  Their data center does not exist solely to support PETA.

You are of course assuming that cryptx doesn't swap out the current hardware for the next gen when it comes available.
IF and this is a big IF, cryptx has the same zeal for this project as pre ipo, they would be looking for the next gen to upgrade to. They are making some very nice residuals off the energy/hosting, it would be against their interest to just let the mine dwindle to zero profits.

I strongly disagree.  PETA has fixed costs such as electricity and data center rental.  At some point, the total mining income will be less than the fixed costs, and the dividend will eventually be zero.  At that point, the share price will be worth almost zero.  The Bitcoin network will continue to function with newer, faster, and more efficient ASICs.

I owned some PETA shares.  My assumption was a 14% difficulty increase every 14 days.  With that scenario, the current share price is higher than the sum of all future dividends.  It looks like we're only jumping 9% in 2 days, so maybe I was overly pessimistic.  In any case, don't think that PETA is a perpetually paying asset.  I would think sometime next summer the dividends will end.

If this were to ever happen then the entire network would cease to function.

I would say its not overvalued at this point at all,it is unfortunate that many people bought when this was much higher but from the perspective of someone who has been in only for the past few weeks its been great;the value I see is the current value of the future cash(bitcoin) flows by means of the daily dividend.Yes the dividend will eventually go to zero but for the time being with all of these low difficulty increases the dividends are extremely valuable and with the potential of the P2P news or another hardware upgrade anything can happen.But like I said for the time being im just letting the dividends roll in(if and when the switch to P2P happens dividends will be ever sweeter)

Another decent dividend. Difficulty in 2 days, I wonder how much of an impact it will have on the share price. Considering it's only going to be around a 9.22% increase. 

Bahhhh What???? How did I change the facts. If you look closely at almost everything I post I go straight down the middle laying out facts and trying to not sound like I fall on either side of the fence.

To sum up both of my posts in a way that might be easier to understand.

ALL valuations on any asset are whatever a person is willing to pay. If I am extremely thirsty and am willing to pay 5$ for a bottle of water, than at that moment in time that bottle of water is worth 5$ to ME. Peta in my opinion is not extremely overvalued, its sitting at maybe 25% over where it should be. In either case of peta of or cex, you will pay a premium over buying your own hardware. When your purchasing GHS in this scenario, (A perpetually paying asset) you are not purchasing the hardware, your asset is more abstract, if some of the hardware dies and gets replaced, your ghs still remains, if you purchased your own hardware and it goes down, your SOL.

Comparing one overvalued asset against another doesn't change the facts. 

Yes me, I decided it was overvalued.  Each person hast to make their own judgment call.  When you can't figure out a reasonable way for the dividends to pay back the investment before the end of life, it is overvalued in my book.  It doesn't matter what people are paying for it.   The market isn't always right and in fact it is often wrong over the short term.

In this case the computation is simple, when 5 PETA shares cost more than one B.Mine (Which pays the max possible dividend without fees) it is overvalued, assume B.Mine is correctly valued.  Undervalued is a harder call to make.   Overvalued or undervalued refer to the value of the share, not the price of the share.  In the case of PETA you are paying for everything in reduced dividends.  When the dividends go to zero, the value will be zero.  

https://bitcoinwisdom.com/bitcoin/calculator

Current 1 TH/s will run at least 2.8 BTC.   I had to set the power to $.23/kWh @ 1000 W, to get similar dividends, you can look at the output in days.  However there is always some fudging.   Still even at 5% difficulty increases you can't break even.    If the increases are around 10% average then the price shouldn't be more than .0013 to break even.    There is a lot of wiggle room, but I don't see how it can't be considered overvalued.  

B.Mine right now is right on par with PETA as I write this, but B.Mine is 100% virtual, no power/hosting bills.   With it you can break even if the difficulty goes up 13% on average.   Things are a little more complex with it because it has a defined endgame, but that only makes a small difference.  

When I made my overvalued statement, PETA was 3.1 BTC per TH/s and B.Mine was around 2.9 BTC per TH/s.

It's called variance.

Dividends looking pretty damn pitiful these past couple of days :/

Exactly, but cex is a whole other story. I have a feeling that the price is being propped up by the people behind cex. They have said that they release new ghs onto the market they do it in a way to not affect the price. They are making a shitton of money, they are run by bitfury so their cost for hardware is nothing compared to the market rate. if they are able to produce hardware at say 25c/ghs and they are selling it .0048 I think was the last price I saw, thats over 2.5$/GHS profit, an 800% markup.