Topic: Weekly loss of N% guaranteed - Enjoy perpetual loss with fixed Mh/s mining turds - page 13. (Read 14714 times)

I think you are comparing a bit different things here. I am talking about "Mh/s only" bonds and not equity in a mining farm.   

Sure,  you can make money with bonds by day trading. But this is not the idea behind the bond. Thank you for asking, but my personal portfolio is doing well but I see no reasons to get back into turds any time soon.
 

Aside from pirate I mean 

 In that case are there any bonds at all on glbse that fit the criteria ?

BDT has a 3% weekly coupon and buy back clause @1.2, but no maturity date is set.
BDK.BND - has a 1% weekly coupon, will be bought back at .101 but no maturity date is set. Issuer can dump unlimited number of bonds on the market at any price he wills. I don't like this at all.
CIUCIU.BOND -  has a 1.1% weekly coupon, will be bought back at and no maturity date is set. Issuer can dump unlimited number of bonds on the market at any price he likes. I do not like this because it can turn in to a bottomless pit of debt - outstanding debt gets extended and new debt gets piled on top of it. Usually a red flag and a sign, that there is no positive cash flow in sight. Refinancing a bond is a different story because old bonds are called.

Hi EskimoBob,

If you think Mh/s only bonds are, as you call "turds", then are you calling bitcoin mining the same thing?

Also, what exactly is your strategy for investing in these things? I would like to point you to a post that should help form your strategy when dealing with deleting assets.

https://bitcointalksearch.org/topic/m.1014750

Just because your investment strategy isn't working to your benefit doesn't mean others haven't figured out the game.

Best regards,
gigavps

 

...which you, only by the way of example, are happy to suggest. I see what you did there

reserved

made some minor edits and removed a section about the .25 BTC rip-off fee.

EDIT: 25.08.2012
You can read all the 11+ pages of this thread if you have nothing better to do with your life. There are some interesting points and counter arguments but it all boils down to this: Buying miningturds (fixed Mh/s perpetual "bonds")  will guaranteed, that every month you can buy less crap with your coin (what ever currency) if you cash in your "investment" -  aka value of your investment is deteriorating. 
If you still think that miningturds are a good investment, please use simple calculations and actual data from GLBSE to confirm, what so many will tell you in this thread - your dividends will not cover your loss of principal even if BTC:EUR (USD, Tögrög or what ever currency) exchange rate improves over the same time. You are better off sitting in BTC.
How hard is it to understand this? Looks like for some this is a serious problem. If you have difficulty understanding 1+1-3=-1, please go play somewhere else
 
Cheers and happy reading. Keep your BTC safe and remember that X Mh/s is meaningless, if you do not know what the "difficulty" is/was/...
 

If you have any investment experience in the real world, especially in the fixed income instruments, you have probably noticed how the word "bond" is misused in this forum over and over again.

Bond is a very specific investment instrument. Fancy way to put it is -  bond is a negotiable certificate that acknowledges the indebtedness of the bond issuer to the holder. Other way to say it is: bond is a loan to bond issuer and who ever holds the bond, receives the payment form the issuer. It's like a IOU.
Another important feature of the bond is this: Issuer is obliged to pay interest (the coupon) to use and/or to repay the principal at a later date, termed maturity.
This means, that you do not only receive the regular coupon payments, but at date X, your bonds will be bought back by the issuer at predetermined price X.
 
Information about different types of bonds and notes is readily available all over the internet. I recommend you read it and make sure you understand the basic ideas of bonds and why people invest in bonds.  

Now, typical mining bonds issued via GLBSE are perpetual mining bonds with fixed Mh/s coupon. It is very important to understand, that there is NOTHING fixed about this type of coupon- Especially, when it comes to your earnings. When difficulty goes up, you earn less per Mh/s. When difficulty drops, you earn more per Mh/s.
I call them mining turds, because they are almost like Floating Rate Notes (FRN) aka floaters - hence the name "turd".  
  
Why are bonds good and turds bad?

Bonds are usually good for preserving your capital and earning you a fixed income from dividends. If you think about it, mining turds offer you none of the previously mentioned benefits. At the moment, dividends do not cover the depreciation of your invested capital. Sorry, but this applies to all the mining turds out there.

There have been some exceptions, where turd price has actually gone up temporarily. One of the example is the GIGAMINING. Vps managed to push his turd prices up temporarily. Last month he increased dividends by 10% (110% PPS) for few weeks. Lets be honest, this was just a ruse, to get you all worked up over nothing.  

Did I really make 2.3841% per week?

To understand, what you have actually lost/gained by investing to mining turds, look at the price you paid for you turd and how much have you earned form your dividends. If you sell your turd today, will your loss of of invested capital be offset by the continuously diminishing dividends?  

If one month ago you paid 0.30 for your "bond" and you have earned 0.038 BTC in dividends, did you actually made money?
You say "Yes!", I say "No!"
OK, lets look at the market price. Oops, as of today, your turd is worth only 0.145 BTC! Now, did you make money or did you actually lose ~40% of your investment in one month to "earn" 0.038.
If diff keeps going up or stays where it is now, you are not going to see your principal returned to you any time soon. As you know, turd issuer has no obligation to buy it back from you at the IPO price. How long will it take for a monthly dividend of 0.038 to earn you those 0.155 BTC, to cover the loss?  4 months if diff stays at or below the current level and price is not dropping another 40%. If it diff keeps rising and price keeps dropping, you are almost perpetually screwed.
 

Bonds, I'll or you can invest in

Only mining bonds (not a turd!), that make any sense to invest in, are the ones with a truly fixed or partially fixed coupon. Bonds with floating rate must have a part of the coupon fixed at % from IPO price (par) and a part of the coupon tied to a Y Mh/s or something similar.

"Mh/s only" turds are garbage and burn investors hard earned bitcoins, while buying turd issuer a room full of equipment at 0 risk.
Difficulty and market risks are all left to to you - turd holder.
 
 If you truly believe that difficulty is going to go trough a massive drop, then yes, you have a good chance of getting back the money you paid for the turd. Now, lets not forget, that the income from mining will be halved soon. No more 50 BTC blocks. Can you see, how this affects your income and turd price, dear turd holder?