Topic: Mining Bonds, Stocks For People Who Can't Do Basic Maths. - page 4. (Read 4456 times)
I owned this stock for a week, then sold for a little more than what I payed for it. I have been kicking myself for selling so early....until now. I didnt even notice this price drop. The dividends are not worth it, and you will lose more than what your divs will pay in the long term.
This is why I'd really like to be able to short securities on BTCT.
Before Deprived comes running in, you CAN do this with DMS.SELLING/MINING - that's the entire point of the security!
But I'd also like straight shorts, as well
Before Deprived comes running in, you CAN do this with DMS.SELLING/MINING - that's the entire point of the security!
But I'd also like straight shorts, as well
I like TF's post about this
Yay, waste more coins on PMBs that will have zero value soon 
Take a look at this: http://bitcoindifficulty.com/
Print it out, hang it on your wall - upside down - and this is your PMB's value.
Take a look at this: http://bitcoindifficulty.com/
Print it out, hang it on your wall - upside down - and this is your PMB's value.
It's quite clear that the majority of people buying mining bonds, haven't got a clue what they are actually buying, otherwise they wouldn't be paying such ridiculous sums.
Well, that is not limited on mining bonds, but includes pretty much everybody who bought USB Asics or other overpriced mining hardware in order to make profit...
In general, with a daily dividend D and a fractional difficulty increase per readjustment of X (so X = 0.1 for a 10% increase), the total dividends (or: mining revenue if you mine yourself) you will ever get from your investment is:
14 * D / X
(the full derivation is somewhere in the DMS-securities thread).
That means that with a 10% increase per readjustment, you will receive 140 times the daily dividend over the lifetime of the asset. If you pay more than 140 times the daily dividend, you will make a loss in this case. If you pay slightly less, it will still take a very long time to recover your investment.
14 * D / X
(the full derivation is somewhere in the DMS-securities thread).
That means that with a 10% increase per readjustment, you will receive 140 times the daily dividend over the lifetime of the asset. If you pay more than 140 times the daily dividend, you will make a loss in this case. If you pay slightly less, it will still take a very long time to recover your investment.
It's quite clear that the majority of people buying mining bonds, haven't got a clue what they are actually buying, otherwise they wouldn't be paying such ridiculous sums.
Look at TAT.VIRTUALMINE going for 0.00518 BTC. It's currently paying 0.00002600 BTC per day per share. At that rate, it would take 200 days to mine 0.00518 at a constant difficulty.
If we assume a 10% difficulty increase per round, then the daily dividends for the next 10 successive rounds look like the following:
Round 1 = 0.00002364 BTC
Round 2 = 0.00002149 BTC
Round 3 = 0.00001954 BTC
Round 4 = 0.00001776 BTC
Round 5 = 0.00001615 BTC
Round 6 = 0.00001468 BTC
Round 7 = 0.00001334 BTC
Round 8 = 0.00001213 BTC
Round 9 = 0.00001103 BTC
Round 10 = 0.00001003 BTC
Those 10 rounds will take just 12.7 days each, so say 13 days of dividends at that rate for each round. So, over those 130 days, a total of 0.00207722 BTC would be mined. In fact, with a constant 10% difficulty increase each round, over the next 57 successive rounds (next 2 years), only 0.00336580 BTC would be mined.
If you're looking into mining bonds, you should be looking at the short term profits over each difficulty round.
TAT.VM was still around 0.007 BTC per share at the beginning of this difficulty round. Assuming a full 14 days per round (no difficulty increase), then the maximum amount mined per share for the current round would be 0.00036406 BTC. If we assume TAT.VM would sell at 0.005 BTC per share at the end of this difficulty round, then that would be a net loss of -0.007 + 0.005 + 0.00036406 = -0.00163594 BTC. In order to make a profit, TAT.VM shares would have to sell for more than 0.00663594 BTC (ignoring trading fees) at the end of the round.
As you can clearly see, the current prices for these mining bond are insanely overpriced. Personally, I wouldn't pay more than 0.002 BTC per Mh/s.
Look at TAT.VIRTUALMINE going for 0.00518 BTC. It's currently paying 0.00002600 BTC per day per share. At that rate, it would take 200 days to mine 0.00518 at a constant difficulty.
If we assume a 10% difficulty increase per round, then the daily dividends for the next 10 successive rounds look like the following:
Round 1 = 0.00002364 BTC
Round 2 = 0.00002149 BTC
Round 3 = 0.00001954 BTC
Round 4 = 0.00001776 BTC
Round 5 = 0.00001615 BTC
Round 6 = 0.00001468 BTC
Round 7 = 0.00001334 BTC
Round 8 = 0.00001213 BTC
Round 9 = 0.00001103 BTC
Round 10 = 0.00001003 BTC
Those 10 rounds will take just 12.7 days each, so say 13 days of dividends at that rate for each round. So, over those 130 days, a total of 0.00207722 BTC would be mined. In fact, with a constant 10% difficulty increase each round, over the next 57 successive rounds (next 2 years), only 0.00336580 BTC would be mined.
If you're looking into mining bonds, you should be looking at the short term profits over each difficulty round.
TAT.VM was still around 0.007 BTC per share at the beginning of this difficulty round. Assuming a full 14 days per round (no difficulty increase), then the maximum amount mined per share for the current round would be 0.00036406 BTC. If we assume TAT.VM would sell at 0.005 BTC per share at the end of this difficulty round, then that would be a net loss of -0.007 + 0.005 + 0.00036406 = -0.00163594 BTC. In order to make a profit, TAT.VM shares would have to sell for more than 0.00663594 BTC (ignoring trading fees) at the end of the round.
As you can clearly see, the current prices for these mining bond are insanely overpriced. Personally, I wouldn't pay more than 0.002 BTC per Mh/s.
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