Post
Topic
Board Securities
Re: [Havelock] Bitcoin Difficulty Derivative (BDD) - Now Live!
by
Auburn
on 31/01/2014, 17:30:00 UTC
I have a few questions about BDD, being new to these derivatives:

1.  Does the difficulty reset every 10 days on average?

2.  At the posted BDD.EXCH price of 0.24310364, if this price includes the 1% fee, then is the NAV/U actually 0.24069666?

3.  If this 0.24310364 does in fact represent 210 days of daily dividends, then is this daily dividend = 0.00114617?

4.  Using the formula in the prospectus (5,000,000,000*25*86,400*65,535/2^48/2,514,532)  the daily dividend computes to 0.00000023.  Why the difference?  Does it imply 5,000 shares outstanding? (0.00114617/0.00000023)

5.  About how much time will each cycle (intro to end game) represent?  Do you intend to restart the derivative funds anew after the end game has concluded?

6.  Since you are not actually mining for BTC, where do the BTC you need to pay those daily dividends come from?  In other words, is there an independent source of income using cash flows not provided by your investors?

7.  I get the impression that the way you have designed the BDD pairs it's a zero sum game--if difficulty increases the BDD.Mine will get most of the 0.24 initial cash flow and if difficulty decreases then BDD.Sell will get the majority of the cash flow.  Is this inference accurate, and if not why not?

Thanks in advance for your help.  I am seriously considering investing in BDD but I need some answers to these questions before I commit BTC, and I can't find simple explanations in the Prospectus.