Quote from: stripykitteh on August 20, 2013, 08:34:56 AM

Quote from: Vycid on August 20, 2013, 08:14:02 AM

I'm short via an options position, obviously. That position alone is not the motivation, though, as I don't think I really have much leverage in influencing the price level. It's got a lot more to do with my interest in AM as an apparent violation of rational markets theory.

Vycid, are you selling calls or buying puts? (I'm not an options guru btw, if you respond, ELI5 thanks).

I bought a loooot of puts over the last couple months at a reasonable spread of strikes.

It's easy for me to leverage my short position, actually. For example - I bought 3-month puts at a strike of 3.2 BTC for a ~0.30 BTC premium. That means that I have the right to sell a share of AM for anytime in the 3 months after the contract is issued for 3.2 BTC, in exchange for an up-front payment of 0.3 BTC.

So in the hypothetical situation that I buy 10 of these puts, I spend a modest 3 BTC. If the stock price drops to 2.9 and I buy 10 shares for 29 BTC, then sell them for 32 BTC, I've broken even.

If the price drops to 2 BTC, I buy 10 shares for 20 BTC and sell for 32 BTC, I've made 12 BTC for a 300% profit.

Suffice to say - if the share price drops much below 2.8 BTC or so, I will do more than break even.

Quote from: Jutarul on August 20, 2013, 08:41:11 AM

Quote from: Vycid on August 20, 2013, 06:15:53 AM

My hypothetical vision of the most valuable company in Bitcoin-land is not just a mining company, but instead a company that really capitalizes on Bitcoin as a PLATFORM instead of a currency - for example, enabling USD->BTC->USD transactions for significantly less than credit card fees. ... Who is more trusted and better funded to have done all this than AM?

You ask for utilizing bitcoin as a platform, yet you fall back to traditional thinking and are constrained by the notion of bitcoin as a unit of account.

If you really want to look into the future of this emerging technology you have to take the 50,000 feet view and realize that bitcoin combined a few concepts which are revolutionary beyond monetary use. You now have a decentralized transactional database for irreversible record keeping: the blockchain. This has a tremendous utility for the global society beyond monetary uses. For starters, it allows you to build tamper-detection into every database in the world by computing incremental hashes and submitting them as a bitcoin transaction. Maybe the whole software distribution system can be standardized by letting software developers issue a bitcoin transaction, whenever they release software, making the current system of using certificates obsolete (e.g. a potential application of colored coins).

Whatever the future of bitcoin holds, ASICMINER is a project to serve the mining community first and foremost. Google's "innovation" to go into the "ad" space was not really an innovation - it was the realization that users are willing to pay services by delivering their private information. And that there are companies who a willing to pay cash for that private information. Are you suggesting that ASICMINER should try to develop new monetizing strategies for their deployed hashing power? E.g. by offering a zero-transaction fee inclusion in exchange for something the user is willing to give up? Or maybe even a reward, based on the mining subsidy?

I don't doubt there are many potential paths AM could have taken, and you are right that I am taking a constrained view of Bitcoin. I have neither expended the time thinking about the potential uses, nor am I particularly gifted at appreciating growth possibilities. Apparently, neither is Friedcat.

I am a value investor first and foremost. I have beaten the market by an appreciable amount for five years in a row now, based on a simple value investment strategy. That strategy depends heavily on selecting boring companies that I can understand. In the past, that has included traditional mining companies. Now it happens to mean a bitcoin mining company; and instead of being undervalued, it's overvalued. So be it.

If this was truly acting like a growth company (and it should be - it's a year old!), I would never have bought those options. But, for whatever reason, Friedcat doesn't want to explore the rich possibilities available here. Franchising is his greatest innovation - a solution to a problem he doesn't have (threatening network stability because he's got too much hashpower). And the simple corporate structure (well, they mine bitcoins, and sell things that mine bitcoins) leads me to conclude, with a certainty that is all but impossible in traditional markets, that this thing is overvalued.

So, the question is - does the market stay irrational longer than I stay solvent? I guess I'm a gambler after all.