Okay, it's not a crime. It's just the first step down the road which brings pretty much 9x% to crime within six months to a year. So, here are some simple easy steps for your convenience.

0. Starting a bitcoin business is a liability. The first thing you need to understand, and you need to understand it well. At sixteen hundred hours while you were sitting around your living room scratching your ear you were worth X. Your life, your ideas, your business, the shit around your house that you own, all that which makes up your life, added together, worth X. At sixteen fifteen, eight minutes after you had started your Bitcoin business you were worth X-k, where k is always positive and SIGNIFICANT. Starting a Bitcoin business is a liability, it makes you worth less. In fact, all the rest of your life in Bitcoinland will be attempts, more or less successful, to limit and reduce that liability. This is the outlook you must have not in order to be successful, but in order to have a shot at it. This is the outlook you must have in order to not guarantee failure.

1. Identify yourself to the community. This means, at the very least, creating a WOT account. If you do not have a WOT account you are not part of Bitcoin business. This is the criteria, no matter what you might think. That's where everyone looks, no matter what social media might be telling you. If you aren't in the WOT you aren't in Bitcoin.

This might also mean making a few social media profiles. The difference between an account on StumbleUpon called MyBTCBiz, a reddit account called BtcBlaBla, a myspace, tumblr, whatever and a forum account called MyBizPr is nil. They're all the same thing: social media profiles. Sure, they may be useful. You wouldn't think to substitute a forum registration for a company registration IRL, now would you? Same thing here.

2. After completing step 1 spend at the very least six months learning. This attitude whereby you think you're great and valuable, so great and valuable in fact that you had the business idea first, then you ran into Bitcoin and then in the heat of the moment saw to that formality of a forum account so now you're ready for "investment" five hours later after dealing with the pesky minimum posts rules is bullshit. Pure bullshit. This isn't how it works, if you've not been in the WOT for six months you are not ready to start a Bitcoin business for reason of intellectual incapacity, irrespective of what you might think. (And yes, of course you will think you're the exception to this rule. You are not the exception, you are just unskilled and unwarare of it. The rule is exactly about you.)

Yes, maybe if Warren Buffett decided to go into Bitcoin he'd just put a notice on his Berkshire Hathaway website identifying his WOT handle and be ready in five minutes. The reason Warren Buffett can do that and you can't is that you're not Warren Buffett. Yes, one day you might become the next WB. That doesn't mean you're it today, consumer credit does not work in this field.

So, what you do during your six months is that

2.1. You buy some Bitcoins. Get a good idea of what the options for doing that are, how the exchanges work, how the OTC market works (if by now you do not know what OTC or WOT stand for add two months to your lockdown as punishment for being the sort of idiot who, when he encounters words he does not know, instead of investigating their meaning brushes them off to "get on with the reading").

2.2. You sell some Bitcoins. Get a good idea of how that works, how you get your money back out, what the limits are, so on and so forth. You wouldn't want to discover later that you have a billion dollars in Bitcoins you can never spend in any way, other than by donating to the Bitcoin Gates Foundation now would you? What sort of WB would that be?

These are not a waste of time. They are here to give you an idea of how your future customers will be seeing life. You want to buy some Bitcoins even if you don't need them, and sell them even if you don't need to and buy back just on general principle. You are unit testing the currency. Boring? Fuck you.

2.3. You read, on this forum, and you discuss with the market participants. You get your pecking order straight. Who are the movers and shakers? Whose word is worth 10k Bitcoins no questions asked and from whom? Why? You get the history straight. Who were the scammers, historically? How did they do it ? What are the patterns? How did the people who matter react, and why? What does that say about them, how does that color their relationships among each other?

If you don't have the list and don't comprehend how the interactions work, if you look at DeathandTaxes and have no fucking idea who he is, if you think we're buddies cause I mention him by name and so forth you're not done with this. Must lurk moar.

2.4. You ask questions. Only on step 2.4 do you ask questions, by the time you're here you have already done a lot of work! You have sunk into this upwards of a hundred hours of your spare time, whether you like it or not, you've filled half a notebook with dumbass scribblings, you have fucking hand-drawn maps hanging from your bedroom wall. This level of intensity is not an upper bound to aspire to, but a minimum requirement.

Your questions will get a lot of stupid answers but also a complete set of correct answers. Pick the set, disregard the rest, you're on your way.

3. Announce your business plan. If you think your business plan has to be kept secret because otherwise others will steal it you are probably too stupid to be in business (not just BTC, but in general).

Let me explain to you how business "stealing" works: at the time MPEx was created (Feb 2012) there existed GLBSE already, which sucked at that time. Nobody flailing around in a cloud of stupidity almost mould-like in consistency seemed to be aware of it, but GLBSE sucked. And so Mr. P decided to make a securities exchange that worked right and was run correctly.

So, pro tip #1: there's so much to do and so few people capable of doing it in Bitcoin that if your plan makes sense and you seem even remotely competent everyone else who is competent will breathe a sigh of relief. They aren't going to "steal" your idea of doing the absolutely fucking obviously banal, cause so much is needed I couldn't begin to tell you.

Pro tip #2: if you are incompetent, the people who are competent aren't going to steal your business early. They are going to steal it late, just like MPEx demolished GLBSE. They don't need early mover advantage, they will come to your market six months or a year late, break off your arms and beat you over the head with them until you are reduced to a bloody mess.

So, forget about anyone "Stealing" your business. When S.DICE was announced, a bunch of forum muppets rambled on about how it's not worth its valuation because "everyone could do it". And I laughed at them then and so to prove my point that they're laughable idiots they declared that they shall do it! It's been months, who has managed to steal the business? You can't steal any business from the competent, and if you're competent yourself you don't even try to, cause it makes no business sense.

Thus, at the very least, step 3 gives you this measure of protection, whereby other competent people know you're doing X and so don't start doing X too. It saves our time and effort, rather than doing something twice do two of the fifty billion things that still need doing.

Obviously your announcement will gather a bunch of crap from a bunch of nobodies. But lucky for you, you've been doing this by the numbers, and you have the list. You know why you don't care what Joel Katz says about anything: what people who don't run businesses say is irrelevant. You know why you care what piuk says about anything to do with the blockchain (do you?).

4. Almost there.

4.1. If you actually got no objections, just pats on the back you're golden. Go do your thing, try your best not to fuck up, when in doubt ask people you trust and that's that.

4.2. If you actually had some objections, do not proceed until the people who raised them declared themselves satisfied. The odds that they don't have a point are dismal, and more importantly, the odds that they wouldn't withdraw objections along the lines of the most favorable construction for you are nil. If someone's pointing things out to you that won't work with your model they're right. If nobody is that still is not proof your model can work.

Stick to this and I might be hearing your name in a year or two. Don't, you just fade into the background noise, yet another of the many who keep paying ten or fifty dollars a month to be part of a new and exciting MMORPG, sorta like the glassy eyed FB credits buyers.

Good luck in any event.

I understand (and actually happened to do) most of that stuff, but these two points elude me. Are you trying to say that most of us will soon become criminals? And where does the "k" come from? From prospective necessity to hire lawyers? How much is it, for example, in case of MPEx? Funny that Mircea forgot to mention anything like that in his truly exquisite MPEx market value calculation.

True, it's not far from how much worth of my time I sank into coinbr for it to be able to use keys away from filthy VPSes and have reliable bookkeeping.

I think you misconstrue the WOT. For one, millions of dollars' worth of trade happened there (literally). Compare that to the measly tens of k's or whatever in any other venue. So no, the WOT is for the BTC millionaires, the other venues are where silly/geeky/whatever kids gather.

For another, suppose Joe Doe of 9 Ransack Avenue posts his gov't issued id or whatever here. Two weeks later he runs with your money and three weeks later he logs in to say sorry, but someone accessed his forum account. Not him though. (This, you will note, has actually happened). What now?

The irc-based identification prevents that, because people have to identify during each session, which requires them to actually decode an encrypted challenge. Quite a different level of safety. In point of fact, this forum was not designed to carry financial business any more than the now defunct GLBSE was. The WOT is an entirely different story.

MPEx demolished GLBSE?  When did this happen?  MPEx sucked from day one and continues to suck.  GLBSE self imploded and MPEx played exactly zero part in that.

Additionally, the whole bit about WOT is a joke.  Very few people care about, pay attention to or use WOT.  The idea behind WOT is not a bad one, but much like MPEx, the user interface is shit, whereas the user interface on MPEx is complete, utter shit.  As such, nobody really cares about either website in the greater bitcoin community.  I'm not sure why you are trying to push WOT so hard, but whatever.  

The fact that you use MPEx as an example of a "good" Bitcoin venture is rather telling, though.  WOT is only for the hardcore geeks, as is MPEx.  The rest of the Bitcoin community has little to zero knowledge and cares even less about either of them.  There is no way in hell you're going to get Joe Sixpack to use either site.  Citing irc-based identification as a good thing also indicates you have absolutely no idea what you're talking about when you're talking about the general public.  

Some of what you've written is definitely true, but you have a very tenuous grasp on the fundamental interaction between Bitcoin and the general population unfortunately, so most of your message will be discarded.  

GPG would be an incredibly hard concept for just about anyone I know to grasp or learn to use.  So yes, it does invalidate that consideration.  WOT and MPOE miss the mark on general populace usability, and no amount of "no really, it's not that hard" is going to change that fact.

http://www.cbsnews.com/8301-205_162-57539366/the-25-most-common-passwords-of-2012/

And you somehow think those millions of people are going to use GPG?  They can't even be bothered to use a unique password (I did not even say secure) and you think they are going to use GPG?  Really?  Cause that's Joe Sixpack right there.

What exactly is the problem with hiring someone to do what they need to do but can't or won't?

If they don't use the WOT they don't have a BTC business. Simple as pie. Are there people who will foolishly charge forward on the mistaken assumption that they have a BTC business when they do not? Certainly. Will it come to anything? Certainly not. Will these people make a difference? Nope. That's pretty much the whole story.

To put it another way, meet Rakim:

http://www.bannedinhollywood.com/wp-content/uploads/2010/05/computers-are-racist-588x281.jpg
(Mod edit: removed embedding because it was causing this page to be detected as malware)

Rakim believes computers are too complicated, and Rakim feels they should be made "easier", so people from "the community" could get good paying jobs. This is what you are arguing: an argument from ignorance ("I don't know how to use X") coupled with an argument from laziness ("And I'm too lazy to learn"), all supported on the very queasy footing of an appeal to the people ("And we are all lazy and ignorant").

Well...what difference does any of that make? It takes skill to drive a car, it costs money, you need to buy the actual car...what difference does any of that make? Even if 99.9% of "the people" are too lazy to learn how to drive a car, even if 99.9% of the citizenry thinks learning all those complicated traffic lights is too much hassle...these sorts of things are exactly the type that build civilizations. As such, they will be learned either willingly or at gunpoint, but learned they will be.

The criteria is not whether Rakim feels GPG is easy enough for him. The criteria is that GPG solves a problem nothing else solves. As such, GPG is the solution (and Rakim is part of the problem, or moreover, Rakim is a problem all of his own).

To address the earlier point about who demolished GLBSE: MPEx had higher volume than GLBSE every month since about June or July, every week since June or July and pretty much every single day since August. Related to this, GLBSE volume was dropping every month, almost every week and most days. The event of Nefario running away from it is an event, but the process of MPEx owning GLBSE was not something Nefario or anyone else of their people could have either prevented or even slowed down. So, if Nefario wasn't Nefario you'd still look at a GLBSE default just like if Trendon Shavers wasn't Pirate you'd still look at a BTCST default. The timing might have varied. The net result was pretty much set in stone due to reasons far outside of the reach of either. I wonder, however, why do you feel so strongly on this matter? Do you think yourself an expert on the topic? Are you just threatened by the apparent need to learn something quite to the degree of frothing around the mouth?

I think there's around a dozen or so people in the bitcoin-community that want to run "beer factories", as someone put it.
The whole econosphere is much too small for multiple endeavors of that scale.

Most of the eco-universe surrounding bitcoin consists of micro-breweries with handwritten receipts.
As those breweries grow, they will necessarily have to adapt most procedures outlined.
Then they will be able to buy a factory. But that's years later.

By and large, your abstract comes across kind of condescending, and I wonder what the motivation was to write such a pamphlat, since anyone could just open a business101-leaflet and be told just about the same thing (sans the btc specifica).

Bitcoins, so is my impression, brings about the entrepreneur in a lot of people. Let them try, fail, try again.
If someone decides to sind >5000k into his "start up", good for him. But it's not for accounting or MLA regulations, it's for the very simple stuff. A website, some decent code,

What in the world are you on about?


If you plan to live in a four room house arguably it's better to start building it according to the four room floor plan even if you're only building one room for now.


But the BTC specifica is very important, and moreover people don't tend to realize that the business 101 leaflet is relevant. Because "Bitcoin is new" or somesuch. So that's two reasons right there. In general, I am hired to speak for MPOE, and many of my posts fall in line with the general education CSR expenditure of that business.

(It's pamphlet btw).

Ok, something more like that, yeah.

Well, the anonymity side has been intentionally left blank. I can say for sure you're not the only one holding that position however.

Well, your numbers are a little off.

The largest Bitcoin business in existence (not arguably, but provedly) is MPOE/MPEx, currently market-valued at a little under half a million bitcoins (or a little over, I forget).

The second largest Bitcoin business in existence (idem) is currently SatoshiDice, currently valued in the hundreds of k's range.

Other large Bitcoin businesses would probably be MtGox and (if indeed it exists, and indeed it makes money) that shadow marketplace whatever it's called.

It's great that you think the company you represent is large, it's fine that you want to argue the point, but you will need something a little more solid than just that passion. Trying to evaluate the claim, I know your competitor that used to go under ASICMINER before GLBSE imploded was worth in their estimation something like 200k x 0.1 = 20,000 Bitcoin. I presume you think yourself larger than them, how much larger? 10x? That'll put you (arguably) in third position.

Moving on: you're free to use or not use whatever you want. What bearing does that have on anything? You're not about to tell me now that you're also (arguably) the greatest Bitcoin businessman in existence or something?

At some points you'll have to revisit the simple concept that declaratory statements do not change the cold hard reality of the outside world, or else I'ma start calling you Rakim. Seriously, re-read this post. You'd have to be particularly boneheaded to not realize that the exact arguments you imagine you're bringing against the WOT are the "arguments" people bring against Bitcoin. Ignorant, useless people, that is.

The cheaper alternative would be for you to learn how to use the WOT, rather than trying vainly to prove how the superior solution isn't really superior because "we the people".

Seriously, this arguing from ignorance again...


Compare that to


Whopdee for you. Anyone with a modicum of common sense would understand that you're attempting to compare your own secret recipe with Worchestershire sauce. You say your secret recipe is the best there is. Well done, but that's a claim, not any sort of proof. Get BFL listed and we can talk apples to apples (same goes for MtGox, obviously).


Anecdotal evidence will hardly work in this context you realize. There's people who crossed the Atlantic in a barrel, that scarcely "shoots to hell and gone" the otherwise undisputed theory that you need some sort of ship in order to offer transatlantic transportation.

But for the record, as far as I'm concerned you're not much of a Bitcoin businessman. You're a forum loud mouth, currently stuck in the position of extracting BFL from the entire mess with the CEO-convicted-of-fraud, the entire mess with the "we've announced one spec, then the competition announced better stuff so we magically upped our spec", the entire mess with the "we're going to deliver in October except November except etcetera" and whatever other messes I don't know about, not being particularly interested in the completely marginal business you're in (mining, that is). So...yeah.


Anyone with a modicum of common sense - hey, I like that expression! - would understand that had in fact MtGox used a GPG based system they wouldn't have found themselves in the sorry position of asking their entire userbase to change passwords and excuse the impending spam because "independent contractor" last year. If you weren't such a hard-headed ignoramus you might have noticed that Tux is in the WOT, as well as mtgox itself.

Why do you persist? After having what you're doing wrong explained, you stop doing it and move on. Not too hard now is it? Do you particularly wish to be remembered as "that ignorant lazy fuck who couldn't get over the fact that ignorance and laziness aren't arguments"?

Says the guy who works for BullshitLabs.

What points would you like me to address? I've addressed all your points already and you've provided nothing the counter, so the discussion appears to be over.  Your valuation of MPEx is ludicrous in the extreme.  You deny the fact that all of the major Bitcoin business do not use WOT (you've yet to name a single large Bitcoin business that uses WOT) and continue to maintain that WOT is required to run a successful business... which I've already shown that is a false statement.  

You hold up MPEx and Satoshi Dice as successful businesses, and give them valuation in the millions of dollars.  I mean, seriously, what is there to argue?  I've already provided you evidence and reasons as to why the utter nonsense you're claiming is evidence for your arguments is false and you just keep providing the same nonsensical arguments over and over.  BFL has sold tons of hardware, that is verifiable proof.  Bitpay is doing hundreds of thousands of dollars in business, that is verifiable proof.  MTGox does hundreds of thousands of dollars of transactions, that is verifiable proof.  

Your proof?  Random number input into the gribble calculator.  Heh... yeah, we are done here.

This MPOE-PR has gone too far. Claiming that their options exchange is the largest bitcoin business, false accusations to ICBIT to proof that MPOEX is the biggest exchange and ICBIT is scam, now attacking everyone else.

Ok. I now copy your tellings, pictures, whatever you put up and claim I'm you. What can you do?

Read this and think about it. It may be seem long, unnecessarily complicated or whatever. It's in fact the minimally complex functional solution.


This may be true. On the other hand, you never know when it will. Your proposition is akin to not having a credit score irl because "you don't plan to need it". Any financial advisor will tell you this is a bad strategy.


What is this, organizing The ButtHurt Team?

It's not too hard, if you join either #bitcoin-otc or #bitcoin-assets there's very likely someone there willing to help you.

I can sum up this entire thread in one sentence: My way or the highway.

+1

I really wish this could be ingrained in anyone looking to start a business...bitcoin or not. Even I thought starting up mine would be easy, but as I generated my "To Do" list I found out quite quickly that this was no easy task. If you want your business to be started correctly and taken seriously, you've got to spend the time to be thorough...and that takes a lot of work.

I have several shelf companies, I keep them around so as to remind me just how difficult having your own "profitable" business can be.

Thanks!

Obviously nothing is foolproof. Let's look at it in the drive-vs-fly perspective: the fact that flight is a superior mode of transportation over driving if long distances are involved does not imply either that cars should never be used or that planes can never crash.

Personally, I had better luck with heatware.  Same basic principle, it just works with multiple websites/trading groups...

This part caught my eye...
"Who are the movers and shakers? Whose word is worth 10k Bitcoins no questions asked and from whom? Why?"

Does anyone in the Bitcoin community really have this sort of unshakable faith in any other member?  Any person who could convince a dozen others each to trust him/her with 10k Bitcoins would have to be considered a flight risk.

50000-100000 Bitcoin has a lot of value compared to a reputation.  I wouldn't trust ANYONE with that kind of temptation, it would seem kind of foolish to even consider doing so.

Then again you're new, so that's both naturally to be expected and quite reasonable.

On the other hand, communities build trust over time, irl people end up married even, it's how these things work. In time.


Not quite as many as there used to be, sadly.

HAHA I was thinking the same thing.

And why is that? They take those 10k BTC and run?  

You know of 31 different people that you would willingly loan 10,000BTC? I can think of maybe 5.

Lol no he's using a binary that's basically 2^(number of fingers you use). On one hand, that means counting to 31. If he had 31 fingers, he could count to 2.1Billion!

Bingo!

I'd have said the stupid days of Bitcoin are behind us. Sorta like how the Van Buren crisis brought an end to the stupid days of America.

lol

lol, true but doing stupid things it's the only way we can learn some very good lessons and be able to watch out for ourselves, hence leaving the "nanny" state behind.

^^ TL,DR:  Dumbasses got propelled into the propellers of the Bitcoin capitalist engine. *Bzzzzzzzzzzzzz*

Exactly.


Your math has one thing in common with goat's math. For a cookie, guess what. For a slap with a trout, explain how come. For irony, pretend other people's math is "fuzzy" < done.

Carry on.

But Digital, MPEx has a transaction volume over 2000 BTC!  It's the largest bitcoin business in the world!  How can you question the fact that it's worth more than 45 million dollars with 2000 BTC traded in the same few "stocks" traded over and over each day?  Isn't it obvious, MPEx is bigger than Amazon and Google!

I mean it is THE BTC stock exchange after all!  (Never mind it's basically the ONLY BTC stock exchange at the moment and was dwarfed by GLBSE when it was operating)  I mean, at least 10 people have heard of MPEx, maybe even 15!  It's HUGE!

Link please.

I'm interested, but not enough to have to wade through dozens of random threads to find it...

See here.

Looky here : http://live.coinbr.com/?mpsic=S.MPOE

That's the share price over whatever interval. Multiply the share price with the total number of shares and you have the implicit market valuation. Pretty basic stuff.

If you did your research, you'd have seen that the 433BTC is not everything there is at all. They paid up to 9.9% monthly interest ( 4`083.99552 BTC ) to the bondholders who financed the options market. But they also took the MPOE loss, so the net revenue for bondholders was actually lower 4083-1961 = 2122 BTC. That's ~ 25k USD just in one month. All considered, together with future potential, millions of USD valuation really isn't much of a stretch.

I'll retry on this from another angle. The number you decided to fixate yourself so much on is there only because bondholders asked for over 9% interest. So it alone doesn't change much on the soundness of the core MPOE business. Had the bondholders asked for 5% (like it went few months ago), the capital expenses would be only 2062 BTC and there would be some profit in the end.

On the other hand, if MPEX is a stock (is it? I don't know) paying out dividends in that same situation, then the dividend amount is somewhat irrelevant. They are slowly shrinking their total cash pile, but giving you some of their cash anyway. Why? I don't know, but all that does is reduce the time they have to turn around and start making profits before their cash reserves run out. In this scenario, pretty much the only things that matter is what their loss rate is, and how long they can sustain it. Stock dividends are usually not a very good indication of a company's health and growth prospects.

That applies to real live corporations, too. Paying a dividend sends a signal that the company doesn't have anywhere to grow any more, and is just sitting on an ever increasing pile of cash it doesn't know what to do with. It's why tech companies are so reluctant to pay them, and why Microsoft only recently started. Any change in dividend payment amount is also seen as a a signal about the strength or weakness of a company, and this is why even failing companies just keep paying out the same dividends, hoping no one will notice they are failing, or that everyone thinks the managers know something the investors don't. It's also why companies that never paid them before are reluctant to start, or start very small: lowering a dividend payment because they can't afford it is seen as VERY bad news, so they would rather pay much less than they're able, and have a big buffer of cash just in case.

This has been pretty much an exercise in "I won't bother to find out what I'm talking about but here's what I think anyway". Guess what? Something like that isn't called thinking.

The interest went from 5% to 9% because the capital retained went from ~7k to over 40k. This happened because a lot of options were sold. Hardly a bad thing.

The student debt is irrelevant because you pay a fixed %. MPOE bonds don't work that way, they're auctioned monthly. Please read up on how it actually works.

The "made them lose" money is also nonsense, because MPOE bonds don't work that way. Neither MPOE nor MPEx can in fact lose money, ever, no matter what happens. This is probably one of the main reasons the stock is so attractive to investors.

Re paying dividends: MPOE/MPEx retains no profit whatsoever, all it makes is distributed as dividends. This is so for a reason.

Can you see where that analogy breaks down, if I take the time to select things out for you?

Nah, it's really two coconut halves and we're banging them together.


MPOE is the options trader. As a result, the BTC amount is revenue/expenditure on the actual contracts bought or sold. If someone sells the bot 100 CALLs at 1 BTC each then the bot has just expended 100 BTC. If someone buys 100 PUTs at 2 BTC each then the bot has 200 extra revenue. These are added up and reported.


This is the confusing part, I bet. MPOE is the options trader, just that. MPEx is the exchange itself, just that. These two were independent entities, and were conglomerated in April, by means of MPOE buying MPEx, and creating a single entity which trades under the S.MPOE symbol and reports revenue/expense separately but at the same time.


MPOE made some money selling options and exercising options sold to it by customers. MPOE also spent some money, buying options, paying exercises against its sold contracts by customers, and paying for the capital to back all this trade up. So to revisit November numbers:

Revenue : 25`553.98115344 BTC, of which :
(this means overall MPOE received a total of 25`553.98115344 BTC)
contracts sold : 23`577.52108954 BTC
(of which by means of selling contracts 23`577.52108954 BTC)
contracts exercised : 1`976.4600639 BTC
(and by means of exercising against customers 1`976.4600639 BTC)

Expenditure : 27`515.29937379 BTC, of which :
(this means overall MPOE paid a total of 27`515.29937379 BTC)
contracts bought : 21`642.46998797 BTC
(of which by means of buying contracts 21`642.46998797 BTC)
contracts exercised : 1`788.83386582 BTC
(and by means of customers exercising against it 1`788.83386582 BTC)
capital expenses : 4`083.99552 BTC (41`252.48 x 9.9%)
(and to pay the bondholders 4`083.99552 BTC, which is 9.9% for the month over a 41`252.48 BTC capital base)

This all comes to : -1,961.31822035 BTC, overall. On the strength of its trade, MPOE made 2,122.67729965 BTC in the month of November. This was fully paid to bondholders. 1,961.31822035 BTC extra, which were also needed to pay the bondholders was actually taken out of their bonds (which is how those bonds work, any shortfall is met by the bond capital). So therefore people who deposited 41,252.48 BTC received 4,083.99552 BTC in cash as interest payment and were left with 39,291.1617796 BTC in capital, for a net gain of 2,122.67729965 BTC.

Had the cost of capital not exceeded MPOEs actual results from trade, there would have been a profit there. For instance in September revenue was 17,307.84070878 BTC, expenditure 13,022.03561971 BTC (including capital expenses of 506.18979000 BTC), leaving a profit of 4,285.80508907 BTC which was distributed to shareholders.


From the contract:


That 41,252.48 means that in the worst case scenario, if BTC would have gone either to zero or to infinity, the most that MPOE might have owed would have been 41,252.48. For this reason this sum was retained, to be able to repay customers trading options in any event.


MPOE bonds work a little different from "normal" bonds. Someone interested in participating has to notify (such as via email) the sum they intend to deposit, the address they want payments made to and the interest rate they seek. Once the sum is sent it will figure starting with the next full month (so, sending on the 5th or 19th does the same thing basically). At the end of each month, MPOE calculates how much BTC it would have needed (retrospectively), sorts the bonds ascending by interest rate asked and strikes a line through the one that fills the need. Everyone above the line gets the same interest rate as the last bond accepted. Everyone under the line (including the portion of the struck through bond not needed) gets nothing.

So, armed with that: total capital is always going to be = to the needed sum, as calculated. This list is itemized by receiving address, so people can see themselves on the list. Any shortfall that has to be made up (such as the 1,961.31822035 BTC) is applied proportionally to all bonds listed, and the new list is published (so everyone can keep track of their bonds' value).


The first part is judiciously correct: MPOE/MPEx retains 0 capital etc. The second part is certainly debatable. On one hand, the open market is the open market. On the other hand, a lot of money is a lot of money. The matter is discussed a little more for instance in the "Why S.MPOE is worth more than MtGox" article but in the end the truth is we just don't know.

Historically, MPOE existed as a public company and had shares out before MPEx was created. The shares were allocated in batches, using a double blind auction model (the batch size and a cutoff date were announced, then anyone interested would deposit as much BTC as they wanted - very similar to how bonds work, just a 999 ending - and then on the cutoff date the share block was divided proportionally by sums contributed).

There were two such issues (March and April. The first batch was 1,000,000 shares, the 2nd 4,000,000 shares. The first went for ~9k satoshi each, the 2nd for ~2.x k each (so in between 20% and 4% of current prices). MPOE.ETF, a GLBSE traded etf and also the highest gain GLBSE asset of all time made ~1200% over its (four month) lifetime by subscribing investor funds and then selling the resulted MPEx shares. The price has been more or less on a growth curve since then, not without its ups and downs.

So, to get back to the original question...I dunno. It is what it is.


On the yet another hand, September dividends were close to 5k, which in the same model would make it be worth over 800k. The fact of the matter is dividends fluctuate wildly, and possibly investors are attracted by perspectives more than just dividends alone. Still...your guess is as good as mine/ours.

Hope that wasn't too long a read.