KoR_Wraith
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Post by KoR_Wraith on Mar 7, 2019 11:17:36 GMT
I know I'm torturing myself getting in to this. I'm afraid you have totally misunderstood the cost of crypto mining. You don't mine crypto buy buying it. It's an algorithmic process that works though data sets until it finds a workable blockchain in can turn into a crypto coin. This process takes a lot of processing power. So the cost of mining is basically the cost to run the processor (electric) plus a few other overheads, staff, cost of rent and what not. The day to day value of the crypto market is fairly irrelevant. The market value of all crypto would have to fall below the fixed overheads of the mining operation. What it means by 'Crypto is corrollated' is if Bitcoin bottoms out (market value drops below fixed overheads) they can just easily convert to sell in say Ripple instead which might be at profitable levels. Crypto coins tend to work in mirrors, so when ones having bad day others are having a good day. Crypto coins do not tend to work in mirrors: www.cryptocurrencychart.com/top/-1 (or rather, they actually do work like mirrors but opposite to your suggestion - in that when one goes up/down they all go up/down!) The price you get paid to mine changes on a day to day basis but your electricity costs remain the same. That means if the price you get paid drops you might not be able to turn a profit. Hence, you are very much exposed to cryptocurrency volatility. The fact that you 'cash out' each day has no effect on the continuing operation.
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p2pmark
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Post by p2pmark on Mar 7, 2019 11:19:40 GMT
I’m very sceptical about this one (as, admittedly, I am about almost anything to do with crypto): - This proposal is extremely dependent on the price of crypto going forward. As such, the statement that the company can “generate secure income exposed to cryptocurrency, but without the associated volatility” is flatly false and should be removed, ablrate . (That they convert currency daily is almost entirely irrelevant: if the price of all crypto halves - as the borrower proposal notes, the prices of different crypto are correlated with one another - then the future stream of income halves.” Incidentally, what price bitcoin is assumed? - Investing in a very risky proposition may be acceptable if there is appropriate upside risk as well as downside risk. Here, the upside risk is limited to 13% p.a. while the downside risk is great. - I’m doubtful the IT equipment would be worth much after such heavy usage and I expect much of its value is related to its customisation - What price bitcoin is assumed? - The intrinsic value of crypto is close to zero. I’d expect the price to fall to its true level over time. - As more crypto is “discovered” by industry it will be increasingly harder to mine them (this is a design feature), meaning costs can only rise over time. So I’m out. And, ablrate, could you please remove that statement about the income not being associated with crypto volatility? (Or tell me why I'm wrong.) I know I'm torturing myself getting in to this. I'm afraid you have totally misunderstood the cost of crypto mining. You don't mine crypto by buying it. It's an algorithmic process that works though data sets until it finds a workable blockchain in can turn into a crypto coin. This process takes a lot of processing power. So the cost of mining is basically the cost to run the processor (electric) plus a few other overheads, staff, cost of rent and what not. The day to day value of the crypto market is fairly irrelevant. The market value of all crypto would have to fall below the fixed overheads of the mining operation. What it means by 'Crypto is corrollated' is if Bitcoin bottoms out (market value drops below fixed overheads) they can just easily convert to sell in say Ripple instead which might be at profitable levels. Crypto coins tend to work in mirrors, so when ones having bad day others are having a good day. Not sure why you think I've misunderstood? The first half of what you say (up to "what not") is exactly my understanding. But the volatility of the price crypto is extremely relevant. If the price halves overnight (as stays halved) then the future value of mining is halved, since they rely on selling future mined coins. So the statement that the company can “generate secure income exposed to cryptocurrency, but without the associated volatility” is flatly false and should be removed. In terms of correlation, the borrowing proposal certainly implies that crypto prices are positively correlated with each other, and this is definitely the impression I had before but I haven't seen any definitive articles on this so happy to be corrected. [Edit, see korwraith's very helpful post.] LW, yes this is what they mean. So this helps to mitigate the risk (as they later state) but it does not remove it as the offending sentence implies. ablrate , I think that the sentence is misleading borrowers, and could get you into trouble. Please remove it.
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registerme
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Post by registerme on Mar 7, 2019 11:31:57 GMT
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SteveT
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Post by SteveT on Mar 7, 2019 11:32:10 GMT
Of course the "value of the crypto market" is relevant; it's more or less everything.
The crypto process is described as "mining" for a good reason, since it's rather comparable to gold mining (say). If it costs a gold mine an average of $900 to produce each ounce of gold then the mine's shareholders have a license to print money if the gold price rises well above $1000. But they are pretty much wiped out if the gold price falls below (or even close to) $900.
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pi
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Post by pi on Mar 7, 2019 12:17:14 GMT
I stay away from anything that has crypto or Lendy in it...err wrong thread?? may be not.
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madpierre
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Post by madpierre on Mar 7, 2019 12:19:26 GMT
Worth noting that the containers the equipment is housed in, that is shipped from China would have a certain value. Please don't mention shipping containers on Ablrate!
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Post by ablrate on Mar 7, 2019 12:24:02 GMT
ped - These guys don't hold onto the mined coins, they sell all coins at the end of the day davidspindle - The fact that the energy is generated from the removal of tyres from the ecosystem (a big issue: ecogreenequipment.com/how-do-old-discarded-tires-affect-the-environment/) is a big plus @bobo - It burns electricity generated from getting rid of tyres, "The interesting part is that all of our energy is created from waste. Our main product comes from used tyres! We use a pretty nifty process called pyrolysis to break down waste into an oil. We then use a clever mix of technologies to refine this oil into fuel feedstocks. Our fuel is then used in a mixture of generators or turbines to create electricity... The really great thing is that we do all this with really low emissions - in fact hardly any." ladywhitenap - the proposal does not assume holding of crypto, it assumes that all crypto is sold at the end of the day and not held. The assumed price for the sake of the assumptions bitcoin $3900. We take your point on the phrase and we will remove that. We will also add in a mitigant because it is the cost of power that is is the downside protection and the antidote to volatility - i.e because they are generating power for an extremely low cost, the company could reduce the power costs to well below what other miners are paying (as the director owns the powerplant and is being paid to take in tyres). As miners leave the space, the difficulty of mining coins reduces (the hashrate) so more coins can be mined. We need to make it clearer, thanks for the feedback. Lastly, we appreciate the passions, and it's important that debate is there. But something like crypto mining can create a very marmite situation. We have said this before; if you have questions, those are great and welcome by us and the borrowers and I would imagine, the rest of the community, but opinions are something we can't really answer as it could be seen as advice and probably should be kept to yourself unless you can add informed balance or informed value to those opinions. My team put lots of work into potential loans. We have been speaking with the business for some time, management are known tech industry professionals and investors (including one who is on the same advisory board as a founder of Apple). Like we say, questions = awesome but dismissing people's business as 'socially and morally worth nothing' and 'low quality offering' on public forums, will just drive potential borrowers away from p2p and really don't encourage us to interact either, if we are honest, as it adds the sum total of zero to the debate without informed balance.
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Post by Badly Drawn Stickman on Mar 7, 2019 12:29:58 GMT
Worth noting that the containers the equipment is housed in, that is shipped from China would have a certain value. Please don't mention shipping containers on Ablrate! I thought I had slipped it in under the radar, would also have a bit of traction on MT currently. I am getting the distinct feeling this particular loan is going nowhere fast, I just need to come up with a suitable change to the working title, and I think my work here will be done.
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Post by Proptechfish on Mar 7, 2019 12:31:34 GMT
I do love to stoke a fire. I traded Crypto for a little a while, through CFDs and back then I think there were 84 recognised currencies there's probably even more now. KoR_Wraith yes and no on the macro I agree they tend to move together and drops usually follow government level announcements where the market interprets a threat to the future of crypto as a whole. On the micro level though there were significant polorisatitions between currencies. This, as I understand it, is mainly driven by a trader (or a lot of traders) moving from one currency to another to migrate drops. Crypto traders have tended to be fairly loyal over the last decade ie. they stay in Crypto just change currencies. In terms of the price not being relevant of course it's relevant on the sell out/disposal. I was just trying demonstrate that the mining process itself is a relatively fixed cost (could have been written better). I got out of Crypto in the end because it was just too rich/risky for me although I made a little bit. I do rate Crypto on the whole though and I do believe it has a future and this is mainly driven by the progress it has made in the last decade. It has gone from being dismissed as an outright scam, survived the torrent of cyniasium and has since been recognised on multiple levels, from acadiama, to regulators, to stock markets to mainstream banks (most high street banks now have a least little bit of interest in Crypto in one way or another) granted not fully adopted but they are certainly now taking a more serious look at it. So given all that, this Ablrate offering lands bang in the middle of my risk profile. I don't think it's as risky as the raw exposure of day trading but it is operating in an inovatie new industry that I'm quite excited about. Time to get controversial, where I'm struggling to risk assess this offering is around the generational question. The average P2P lender is about 55, the average Crypto investor is about 30 and I can't help but view the expected resistance on this forum as being largely driven by on older demographic who are naturally more risk averse as opposed to a younger generation (i'm early 30's) who has a little more appetite for risk, or indeed whether that assessment is even fair. I do think Ablrate are being a tad ambitious trying to market this to (if it is in fact) an older lender base, i do think it will struggle fill on that reason alone. I do like a good ding dong though, it's what these forums are for so thanks guys.
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SteveT
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Post by SteveT on Mar 7, 2019 12:40:24 GMT
ablrate “The really great thing is that we do all this with really low emissions - in fact hardly any." Ermm, excepting all the CO2 inevitably produced when the resulting “feedstock fuels” are burned, presumably!! Unless they’ve also perfected carbon-capture too?
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Post by ablrate on Mar 7, 2019 13:03:51 GMT
ablrate “The really great thing is that we do all this with really low emissions - in fact hardly any." Ermm, excepting all the CO2 inevitably produced when the resulting “feedstock fuels” are burned, presumably!! Unless they’ve also perfected carbon-capture too? fair point Steve.. ..the production of the fuel is low impact... and it would be burned regardless or there would be no point in having a plant that produced it. I am no expert, but my reading (of a University of Queensland paper) says that emissions are less from tyre oil as fuel then oil from fossil sources.... but now we are getting into a whole new thing that I do not pretend to understand!
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KoR_Wraith
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Post by KoR_Wraith on Mar 7, 2019 13:12:27 GMT
KoR_Wraith yes and no on the macro I agree they tend to move together and drops usually follow government level announcements where the market interprets a threat to the future of crypto as a whole. On the micro level though there were significant polorisatitions between currencies. This, as I understand it, is mainly driven by a trader (or a lot of traders) moving from one currency to another to migrate drops. Crypto traders have tended to be fairly loyal over the last decade ie. they stay in Crypto just change currencies. I think we'll have to agree to disagree on this. I believe that capital enters and exits crypto markets on a regular basis. A quick google search will reveal billions of dollars can move in and out of these markets over a few days. There is no mention of the company hedging against a downturn in crypto so a macro downwards shift would be nigh impossible to avoid despite 'day trading' strategies. Of course, upwards volatility would result in big upside potential, but there is zero guarantee either way. In terms of the price not being relevant of course it's relevant on the sell out/disposal. I was just trying demonstrate that the mining process itself is a relatively fixed cost (could have been written better). The cost is fixed but the income is not and will vary on a daily basis. You need both sides of this equation to be fixed before claiming price volatility to be non-significant, especially since crypto pricing is naturally much more volatile than electricity prices. The average P2P lender is about 55, the average Crypto investor is about 30 and I can't help but view the expected resistance on this forum as being largely driven by on older demographic who are naturally more risk averse as opposed to a younger generation (i'm early 30's) who has a little more appetite for risk, or indeed whether that assessment is even fair. I do think Ablrate are being a tad ambitious trying to market this to (if it is in fact) an older lender base I'm 29 (and a half). That being said, my views are often inevitably informed by the older generation. However, I've strong connections to many tech centred 30-somethings and I assure you that those who view crypto as uninformable gambling are in the majority. Except that one guy who tripled his money...and the other guy who went all in at the high and gives gospel that the era of Government backed currency has come to an end...actually I think that might be the same guy...
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copacetic
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Post by copacetic on Mar 7, 2019 13:19:45 GMT
Socially and morally this investment is worth nothing, it merely burns electricity to make something of no inherent value, I will not be lending.
No, I'm not looking for an argument. Just my views. As always, good luck to those who invest.
Worse, crypto currencies do have an inherent value as an anonymous means of tranferring large amounts of money - a high proportion (44% according to this article) of bitcoin, etc transactions are involved in drug trades and much worse.
Personally I have plenty of other things to invest in without indirectly supporting that type of industry.
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Post by Proptechfish on Mar 7, 2019 13:20:14 GMT
KoR_Wraith I can't really disagree with any that. I think we may have found a settled no-man's land. Isn't it beautiful
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Post by ablrate on Mar 7, 2019 13:35:32 GMT
Socially and morally this investment is worth nothing, it merely burns electricity to make something of no inherent value, I will not be lending.
No, I'm not looking for an argument. Just my views. As always, good luck to those who invest.
Worse, crypto currencies do have an inherent value as an anonymous means of tranferring large amounts of money - a high proportion (44% according to this article) of bitcoin, etc transactions are involved in drug trades and much worse.
Personally I have plenty of other things to invest in without indirectly supporting that type of industry.
We take your point, and no one wants to fund such things and I am not looking for a fight here - your point, as I say is well taken, ... but here is a classic example of how you could add balance to the argument - a high proportion (50% according to this article quoting the Bank of England) of bank notes just in the UK, are involved in drug trades and much worse. We are all essentially 'mining' these notes by working and investing, but we don't stop working or investing because criminals use cash.
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