Introducing mining contracts

We are pleased to offer mining contracts as trading product on the Bitfinex platform. We have worked for some time to develop what we believe is a superior approach to “cloud mining” that is smartly packaged to offer simplicity and transparency. While we are very excited about this offering, please note that we consider this a “live beta” as we continue to tweak the product to meet the need of our traders. Because it is a beta phase product, the first “tranche” is purposely small and short-dated. As we gain experience in administering this product, assess demand, and incorporate feedback from our traders, we will introduced larger and longer dated tranches. The contract specifications follow:

  • Trading Pair: TH1BTC
  • Tranche Size: 100 THS (terahashes per second)
  • Expiration: 3 Months
  • Pool: TH1 is part of a larger pool (~3,500 THS total). Statistics regarding this pool will be posted regularly along with blockchain transaction id’s will be posted and frequently updated.
  • Pool Fee: 3%
  • Hosting: All hosting, power and maintenance cost for the duration of the contract is included in the price per TH.
  • Margin: TH1 can be borrowed and sold short. We will start out with a 25% Initial Margin Requirement, but we see that going as low as 12.5% in the near future.
  • Dividends: The blockchain time stamp on block rewards will be used to determine “holders of record” at the time that the block was mined. Positions will be aggregated between balances in the Exchange Wallet and trading position in the trading wallet to determine a “net position”. Dividends will be computed as the pro rata share of the block reward less the pool fee. Longs will get paid dividends in their default wallet. Shorts will pay dividends from the Trading Wallet only. Longs who provide TH1 swap liquidity will still receive dividends.

The product is designed as a “depleting asset”, whose value will continue to go down all the way to zero at expiration. Coupled with the fact that all hosting and maintenance is already included, we expect fair value analysis to be much easier for the average trader and cloud miner. TH1 will also be the first shortable mining contract (that we are aware of) further enhancing efficient price discovery. Trading will commence at 9 AM EDT on Monday September 15, 2014. We welcome your feedback and, as always, we thank you for your business and continued support.

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