Topic: Weekly loss of N% guaranteed - Enjoy perpetual loss with fixed Mh/s mining turds - page 7. (Read 14714 times)

Please detail what about the contract you think was deceitful.

And as Meni has posted in detail, they was major risk for him in issuing his securities. That risk paid off, but if it hadn't, he would still be bound to his obligations.

Which ones, actually? Please say the asset IDs on GLBSE...

Edit:
@sarpar: Just check when actually PUREMINING was started - Meni would be the last person to blame for selling overpriced bonds in the light of FPGAs and ASICs!

EskimoBob? And here I had you pegged for a redneck.

Careful with the unfair latter statement!

But I also advise investors to read contracts carefully. Fair play is not to be expected with Meni Rosenfeld - you might get fucked already by design!

A true business venture worth to invest in creates a win-win situation for receiver and donor of the funds. In other words those issuing should be convinced to invest themselves in their asset if they had enough cash available. Not the case here. There is practically no risk for Rosenfeld with very high return (which is per se a contradiction). Rosenfeld sticking to his contract contrary to others shows that his venture didn't just unintentionally turn this way. Be warned there is nothing virtuous about sticking to deceitful contracts - true the price might stabilize when ASIC hit the market for a short time but already so low that it would make no sense not to buy them back. Subsequent technology shifts are also up to come with similar devastating effects (doesn't matter whether there are buy back programs or not).

Way to twist my words. On day one there was no ASIC on the horizon. Now the ASIC prospects seem promising, but there is still uncertainty if and when BFL will deliver; if it happens any time soon then yes, the value of deterministic mining bonds will greatly decrease.

By the way, back then even BFL's FPGA products were considered vaporware/scam by many. I took all the information available to me and estimated that they are in fact legitimate. Because of this I was able to offer bonds at a price that made use of their products' cost-effectiveness. After a long time (during which I still paid coupons!) they did indeed deliver (some, I'm still waiting for my second order). If they had not, I would have suffered a major loss and still be committed to my deterministic obligation. That was a risk I took, not the investors. I took a bet on BFL and won, and it's perfectly fair for me to profit from it. If we instead penalized people for making the right decisions we'd be in a lot of trouble.

I've used something called an "analogy".
If I take 1 BTC debt, I still owe 1 BTC even if the value of a BTC decreases.
If I take 1 MH/s debt, I still owe 1 MH/s even if the value of a MH/s decreases.

Your argument would have made some sense if there was indeed a global splitting of hashrate. But there's not, miners who bought equipment from one specific manufacturer will get an increase at some unspecified time which differs between them (and which they are unable to prove). Others are either stuck with what they have (other FPGAs) or sell their equipment at a loss (GPUs).

It is unfortunate that they think deterministic assets are wrong, and this indicates that the Bitcoin market lacks maturity and economic understanding.

Thank you, I've been waiting for the right time to unwatch this thread and add you to my ignore list (you're at the respectable 2nd place). Happy trolling.

It's too late for me but for future reference if you want people to read what you write you should consider the following:
1. Only write about things you understand.
2. Present your argument in a clear, methodical way.
3. Avoid personal attacks and offensive terms.

This +1.

Did I really?


Thank you Rosenfeld for clearing this up and finally stating, that you have sold turds to your investors from day one.
Rosenfeld, you are the master of nonsense here. No, its more like utter bull shit and this applies to most of your posts, where you attempt to talk "white in to black" and so on.
Your counter example is also wrong - you took out the loan in Mh/s not in BTC and when Mh/s gets "globally devalued", you think you have right to ignore it and fuck your investors for extra profit. I am not here to stop you. I just hope people realize what a greedy fuck you actually are and stay clear form your next snake-oil deal. I guess this greed shit runs in your blood. LOL...
What I am saying, is this:  Some of the "bond" issuers have understood, that this is wrong and have done everything to set up a deal so no one gets hurt. You and some others), on the other hand, are abusing the situation and keep twisting it for your own profit. You are like a fkn war profiteer.

If you want, I can use bigger and friendlier letters to make sure you actually read, what I write.

This is crazy. If a fixed Mhash bond is worth so little don't buy it. What a dumb game to go around guessing who will randomly increase the Mhash and by how much. Do what you say, that's what matters.

Nonsense. This is more like if I take a 1 BTC loan when 1 BTC=$10, clarify that it is BTC-denominated, the BTC price drops to $0.5 and then you'll expect me to pay back 20 BTC because that's worth the same $10.

You are also forgetting that only people who bought from BFL get a free upgrade. People who bought alternative FPGAs do not get anything, do they also need to increase their bond x20?

I never said otherwise. I only said that's part of the risk investors are taking and for which they are ultimately responsible.

Rosenfeld, chill out and screw your investors any way you like it. Be a true Rosenfeld.

Good news is, that some of the "bond" issuers have understood that this is like any other devaluation situation. Everything gets a new value and  20 is the constant used. Miner gets a 20x more powerful equipment for free, "bond"holders get a 20x bigger dividend for free and 10 Mh/s = todays 0.5 MH/s. Nobody in this example gets shafted. Except the ones who did not upgrade or who's "bond" issuer realized, that this is a once in a lifetime opportunity to turn the outstanding debt in to a 1/20 of what it's worth today. Only one who gets seriously fucked here, is the "bond" holder.

Imagine it like this: all the money is exchanges to a new money and you get 20:1 what you had before. Your 1 becomes 20.
Only problem is, that some of the guys, who borrowed money from you, decide that they will be paying you back the same sum of money as before, so what it's 20 times less.

Fact is, that most (if not all) fixed Mh/s mining "bonds" aka turds, with no free plan for upgrade, have become the ultimate junk and will be worth next to nothing when those damn ASIC's hit the market. So far, I have not seen a single calculation that proves this to be wrong.
Those turd will lose money until the difficulty stops rising and drops dramatically. Depends, how high the difficulty has risen, there is a good chance, you will never get back your invested money.

Clearly our views on this subject differ. Yes, the deterministic model doesn't handle the current events very gracefully. But it's not about the current events, deterministic contracts will play a key role for many years to come, and I am not interested in contaminating the concept.

Not to be misunderstood:
1. I am not invested in these perpetual mining funds.
2. I respect him for his reliability
BUT - to me contractual design is unfair because risk distribution is skewed. Looking at the market reaction people having bought this asset might have not been aware of the contractual implications (compare to complexity of derivatives sold to the elderly). Others miners realized how inappropriate their deal was and voluntarily corrected their contract only to their investors' benefit.

As I said multiple times, an investment being "recommended" is a function of the price. It will be inappropriate for me to discuss whether the investment is recommended at any specific price. I am currently not offering any new bonds so I have no direct interest in people buying them at this point.

You can doubt it all you want, it was my intention. I wanted to simultaneously make a profitable, honest business venture, offer people a streamlined way to invest in mining, and move us one step closer to a hashrate commodity market.

When I created the bond I did not know when would ASICs arrive, did not expect them to be introduced with such an aggressive pricing strategy, and I definitely didn't expect the trade-in program. To suggest that I somehow plotted to cunningly profit from these events is ludicrous.

In the long term issuers don't determine the price of bonds, the market does. I explained very clearly what the asset does, what factors go into valuating it, and that it is every investor's responsibility to evaluate how much they stand to gain from it. It is not my fault if someone decides to pay 0.7 BTC per bond (not to me, in the secondary market) and it ends up a bad investment.

In theory the prospect of profiting from upgrade plans and such would make its way into the price the issuer is willing to offer the bond at. In my case I had not expected such a plan, and so it was not reflected in my initial price.

I am not. (Not like most greedy people, or like most people of any kind for that matter. I do like money however.) If I was I would probably have given up my word and my values and offered an upgrade plan to win the popularity contest. Or try to offer new bonds the moment ASICs arrive to capitalize on the uncertainty with regards to the target equilibrium.

You keep focusing on the "fairness" of issuers sharing the outcome of every positive event with investors but never stop to consider the bad things that can happen, and the risks of being committed to stick to the contract no matter what. I could die and continue to pay coupons from beyond the grave, would many greedy people do that?

Seriously: Given that, for whom can you still recommend an investment in your fund?

The only scenario I can think of with a small chance for profit is when the trade-in fails.

Blaming the 100% trade-in is not entirely correct, since mining equipment might have multiple uses in the future (f.e. research, alternative mining etc.). Also a 50% trade-in might be as drastic if the hash-rate multiplies respectively.

I doubt your intention creating a win-win situation, you bet to find investors stupid enough to finance your one-sided game. Since you made a clear contract, it is your right to do so - still fair is different! You must be like many a greedy person.

I am thinking of establishing a long term trust-relationship with my investors by doing exactly what I said I would do, rather than resort to whims and marketing gimmicks. Really, if you read the PureMining OP and contract appendix you'll see I went out of my way to specify what I would do in every contingency and why, and I made a huge deal out of it being deterministic. I have no idea how could anyone get the impression that upgrading the bond was an option. If I wanted to do a mining company like everyone else I would have done a mining company.

Switching from GPU/FPGA to ASIC is once in a lifetime. There will be further hardware advances but they won't be anywhere near as drastic. The disruptive thing here isn't the ASIC, it's BFL's upgrade plan. There's no way every time they make a new device they will allow everyone to do 100% value trade-in.

Buying back does not harm investors. If the asset devalues it means so have its expected earnings, at which point the investors are better off with the issuer buying the bonds back.

Which was the scenario to be expected considering rising difficulty paired with technology cycles - while you issuing the shares profit additionally (besides IPO profit margin) from customers losses by exchanging mining equipment (protecting your hardware currency from devaluation). Technology shifts not being a specific scenario in the contract gives you all right to realize the full share of additional profits, but the question whether this is fair still remains. Other issuers obviously answered the question differently. They might have thought of establishing a long term trust-relationship with their investors instead of gambling against them.

People investing in these vehicles should already think of further technology shifts (this is not a once in a lifetime scenario) and how their issuer decided to pursue. but i guess not long and those gambling against their customers bought back their shares (financing of your mining farm nicely done - trust gone).
 

Yes. They didn't invest in FPGA currency or BFL currency or whatever (and there are ways to do that if that's what you want). They invested in MH/s currency. Usually when a currency you invest in is devalued you will suffer loss.

Yes, because they would get even more phucked if they personally invest in mining with anything else than BFLs, IF asics are really incoming as they say.

Since many (me included) have more than one doubt about the promised BFL Asic's performances and timing of delivery, non-asic mining bonds can deliver anyway if such doubts materialize.

It just takes that mining bonds sustain their dividends around 2% maintaining a stable price for a few months to get the capital back.

Moreover, whatever will happen, much depends on decisions by the bond issuers: some might decide to upgrade too, or liquidate and offer a partial refund, others might just liquidate and run.