Topic: Weekly loss of N% guaranteed - Enjoy perpetual loss with fixed Mh/s mining turds - page 4. (Read 14714 times)

Something like that.

I've been talking about bonds with free upgrades, but you are correct.

It also remains to be seen if they will indeed be profitable for miners that get them. My bet is that the vast majority of asic buyers will lose and never recover their investment. I would make that bet if there was just 1 asic provider (BFL), but as it seems there will be at least 2 players entering the market at roughly the same time, and that makes a price war and difficulty explosion unavoidable. Fixed MH bonds holders are going to be so screwed it will actually be funny .

But ASIC's coming out are not helpful to people who are holding a bond for "1 MHs", since ASIC's will certainly increase the total hashrate and therefore the difficulty, so your 1 MHs will certainly earn less.

If the block reward drops to 25, it's equivalent to the price of btc dropping in half in terms of dividends received. The last time the price was $7.50 things were going just fine. ASIC's coming out is actually beneficial to those people who are getting them.

Mining bonds are not valued in btc, saying they lose there value based off (original btc investment) - (current btc value) is stupid. Mining equipment/bonds can't hold btc value when the price changes. That's just the way it is and has always been.  If you think otherwise. Why don't you explain a way to invest in mining equipment while still being able to get back your original btc investment after a btc price increase. If you can't do that, just lock this thread and stop spreading this bs propaganda. All your doing is misleading people.

If one is making money in the bitcoin environment, then it is advantageous to have bitcoins continue. One could purchase some mining bonds to help continue bitcoin mining, and thus bitcoins. Even though the bonds themselves are not making a viable return on the investment, they perpetuate the bitcoin system, thus preserving the rest of this ones hypothetical business.

You are almost getting it but you are still stuck in your own little bubble that keeps you from understanding the big picture, the OP and why miningturds are a bad investment in market conditions like we are now and probably will be for a long-long time.


You are correct! Question is, where did this one come from? Let me guess, you have no idea what is the meaning of par in this context. My bad.
Par value, in finance and accounting, means stated value or face value.
If one issues a bond and states, that the face value is 1 then  the "coupon" will be calculated form 1 (the face value) no matter what the market price of this bond is at the moment.  Bond prices always fluctuate and this is normal but you can not confuse "coupon" and various types of other yields (current ..., ... to coupon, ... to maturity etc).
 
BTW, I do not recall asking to "fix the bond price" while it's traded on the open market.

Because you have probably misunderstood the "par value" and coupon, rest of your comment actually is distorted and ridiculous.

1) For start, I recommend you forget all about BTC:USD or any other exchange rates. BTC is the only currency you know from now on.
2) What is the expected difficulty trend if BTC popularity grows slowly and more real life uses for BTC pop into existence?
3) What happens to output form 1 Mh/s when difficulty keeps rising?
3a) and block reward gets halved?
3c) superior mining technology gets introduced? 

Now the tricky part:
4) What happens to a mining "bond" price, when it's payout drops after ever 2016 blocks? 
5) If those same miningturds loss of its resale value is grater than the gain from regular dividents, why do you want to buy one? (1+1-3="your actual income")

Your views are so distorted on mining and bonds its ridiculous. Mining is more profitable right now, then it was this time last year. A bond worth 10mhash pays just as much as mining 10mhash yourself. Bonds hold their value when the btc price changes just like mining equipment.

Holding the price of a mining bond at a set btc amount or having dividends paid that way is ridiculous. If you don't think so write up a contract that way. Even if it was possible, there would be nothing safe about having your initial investment or dividends always hold the same btc amount. If the price of btc dropped down to 6 dollars you would have lost half your investment. If the value of btc went up, who would buy that bond? Not the issuer, he spent your investment on mining equipment to pay your dividends. Since the btc price went up he owes you more then that equipment is even worth now. With the increased price came increased difficulty, now he can't even pay dividends and is about to default on the contract.  No one else is buying your bond either, your asking way to much for it. They decide to buy the bond from the new issuer like yours, except that it came out after the price went up. Of course this is assuming anyone would be stupid enough to purchase them in the first place.

This. My guess is most bond holders dont have a clue about mining and thought that by buying bonds they would profit like miners once did (and perhaps still do, for some time at least). In reality they purchased the huge risk of all the things that are about to happen.

I agree, mila, it was obvious from the start. I think more obvious if you've been a miner and look at it from that point of view.

I don't get it. Two parties agreed on a thing called "perpetual mining bond"
that from the inception and as long as glbse is online the issuer will pay 'a coupon' denominated in hashing operations per second
buyer could do nothing, keep bitcoin and "profit" by avoiding potential loss in this trade.
since buyers decided to trade bitcoins for the perpetual mining contracts, it's theirs choice and probably a questionable investment decision but why repeating the obvious?

I see this same pointless argument popping up how someone bought equipment and how miningturds are like buying equipment or becoming a miner and blaa blaa. Or if you look at the equipment price id USD and what not, then .... News flash! This is all irrelevant! We are talking about bonds.

Lets get few things straight.  This is overly simplified so do not start nitpicking.

If  I buy SHARES with a reasonable contract (not bonds!) in your mining farm - I participate in your mining adventure as I participate in IBM's business when I get few shares of IBM (pun intended). You pay me dividends and I hope you have enough foresight to make correct decisions and not go belly up, before I earn few divs and sell shares at profit (or hold for bigger capital gain).
In this case, you sold me a slice of your mining farm to buy more equipment or what ever your plans are to improve the income. We share your business (equipment etc) and risks, as long as I am your share holder.  BTW, this is overly simplified, so do not get hysterical. I recommend you read more on this topic. Utterly retarded TV shows and Gordon Gekko films are not the source of correct information.

If I buy "BONDS", you have issued, I do NOT participate in your mining adventure as I do not participate running a government, while buying government backed bonds or any other DEBT! instruments. Corporate or gov.
Only thing I did is: I lent you and you borrowed from me a pile of (do not blink now!) BITCOINS! Lenders do not give a flying fuck to what currency you convert this and at what price you bought your equipment at. From bond holders simplified point of view - your responsibility is to pay them back those bitcoins (principal) and interest on TOP! of that.

The whole mining bond contract idea got fucked up for the investor, when the "currency" of interest payments become Mh/s - coupon is tied ONLY to what ever Mh/s can produce.
Bbb...bbb.... but but it still paid in bitcoins!
You see,  the bitcoin is built so that stronger it gets, higher the difficulty rises and harder it gets to mine the coins. What this means in perpetual bond context is this: All the risks from bond issuer is transferred to the perpetual turd holders. Period.

As I have written in my previous post and as it has been repeated to ad fkn nauseam buy multiple others, perpetual mining "bonds" with deteriorating coupon payments are junk and not worth investors time nor money.

No matter what some of you are attempting to show, the truth is that: 1+1-3=-1

Please, don't. There's enough emotive posting here without calling someone an arsehole.

You have a vested interest in ignoring the facts because you are a turd issuer 

It seems like its really necessary someone explains those things to you. Go read the contracts for any of the big mining bonds. Indeed the issuers are under absolutely zero obligation to increase their MH ratings for  their coupons. Gigamining voluntarily upgrades you from gigamining to terramining, giving you a free  4x (not 21x) increase. Many of the other bonds dont and none of them have to.

So it's conspiracy theories now? Dividends are just voluntarily donated profits. Nothing to do with contract obligations.. I'm glad we have you to explain these things.

Butterfly is letting people who purchased their equipment trade it in for ASIC at 100% value. It should be around 21x times faster. I've only seen one that requires switching the bond. It depends on the contract, mostly everyone with butterfly equipment is not charging anything for it.

So you are counting on "profits" that some bond issuers will voluntarily donate to you?
Sounds like a fantastic investment opportunity. Who knows how generous those miners will be. Maybe you will only lose 75% of your btc investment?

How do you upgrade a fixed Mhps bond? Do you make one new bond equal one hundred older ones? If so, it's not fixed.

Did I say anything about earnings for fixed mhash? Almost all the bonds will be upgraded to ASIC, so it is very unclear what earnings will be.