The reason dividends were going up was due to initial deployment not because reinvestment could keep up with difficulty rise. Leaving the reinvestment rate alone means investors lose less, and you still make a healthy profit.
Spot on! In the case of 65/35 dividend/reinvestment we cannot keep up with difficulty. This is why we are doing this IPO and changing our strategy, so we do keep up with difficulty and be able to grow large.
But this new reinvestment plan can only keep up with difficulty until August 4, 2014, as seen in your forecast in the prospectus. After that date we are in the exact same situation with not being able to keep up with the difficulty using just reinvestment funds. The only way it can sustain is if there is a big price spike in BTC before that date to buy much more miners with reinvestment funds when the reinvestment is largest and network hashrate is lowest, but then a different problem arises.
Are there any plans to to tackle this issue when it comes up again?
thats only 1 view based on one projection
you can generate thousands of multifactor exponential projections
when considering everything i think they can keep up, because they have the ability to adapt, unlike your projection
individuals miners have the same problems, yet we persist
That is not an exponential projection, it is a linear network hashrate projection. This is also not my projection it is the projection done by CryptX in the prospectus. Individual miners have the same problem but they have the ability to reinvest 100% and not worry about splitting income with other people so it is more sustainable in the long run as a solo miner. The reason I bring CryptX's projection up is because his business plan is derived from how he thinks the project will do. And it can be seen in the forecast that his own plan will start to fall apart August 4, 2014 leading us back right to this issue.
Also one issue with what you say is "..i think they can keep up.." You are putting faith into this mining operation because you are invested in it, not looking at what is laid out in front of you in the mine operators own forecast.
If you are going to be posting silly projections that CryptX's business plan isn't based off of then there is no point in talking to you, lose all of your investment. There is also one fatal flaw in the chart you just posted it assumes a BTC price of $4,000 by the end of this month.
again there is 0% certainty in the projection
these factors are the one im talking about:
$/BTC
Difficulty
cost$/Gh/s
w/Gh/s can also influence the outcome
$/kwh might aswell factor that in since it could change
they can adapt, and their current strategy is the kind of strategy that is needed
solo miners are not necessarily better off, they will have a harder time acquiring optimal reinvestment hashrate
a large operation is more efficient at reinvestments