Quote from: fcmatt on December 09, 2012, 06:17:46 AM

Quote from: MoPac on December 09, 2012, 06:02:50 AM

I was doing the math on this reversal idea earlier, and I think there is an aspect being overlooked.

There were five tranches of shares issued, starting at 5k and eventually reaching 40k. Just for demonstration, I'll focus on shares in the first tranche.

If I understand correctly, the contracts were sold for 1 BTC. This generated approximately $5.12 for Giga to spend in the normal economy on hardware and other business costs for the operation.

Counting up until the last dividend that was actually paid on GLBSE, the share generated a total of about 0.48 BTC for the owner, leaving 0.52 BTC to pay to the owner in order to negate the original contract, according to what has been proposed here.

But due to the dramatic increase in BTC value, Giga would actually have to spend about $7.01 this week just to cover that 0.52 BTC, significantly more than the dollar capital that the whole share generated in the first place to actually buy equipment, space, and electricity!

One other perspective that you might or might not find to be relevant: it is easy to calculate the fair market value in dollars of each dividend at the time it was paid. The cumulative FMV of all the dividends that were actually paid through GLBSE is $3.68 on that trache of shares, or 72% of the $5.12 FMV that went in. If you sum all the way through the Dec 10 dividend payment in the queue, the total rises to about $4.84 in dividends, or 95%.

That's assuming that each dividend is immediately cashed out into dollars. If a holder of a share in that tranche has kept the whole 0.48 BTC in dividends in their wallet, its FMV now is $6.49, still a return significantly over 100% of the dollars it took to acquire the share at the time. Naturally, that ignores opportunity cost, etc, but it's till something interesting to know.

Price of btc could have just as easily fallen. Paid in btc to operator... Operator should also pay in btc. No dollar conversion should be considered.

The contract would need to specify that the btc was simply a way to send USD value to the operator for this to work.

Only then could they have accounting in fiat.

Just say you have $100 sitting in your bank which you use to buy btc and send to the operator the only time your money is in btc is the time it takes to redeem the shares. In the same way the operator only has btc when they need to pay the dividends.

This would work if you dont use bitcoins you already own but buy them for the specific purpose of sending the fiat value.