Bitcoin Difficulty Derivative (BDD) is a set of three distinct linked contracts, B.MINE, B.SELL, and B.EXCH, that allows users to speculate on the future of the Bitcoin Network Difficulty.

B.MINE acts as a 5 GH/s (5 GigaHash per second) Mining Bond
B.SELL is a bet that buyers will overvalue B.MINE
B.EXCH is the contract that can be purchased to receive a BDD Pair (1 B.MINE and 1 B.SELL)

Users that purchase B.EXCH will have it bought-back from them and will be issued a BDD Pair (one B.MINE and one B.SELL).

Please be sure to read the entire BDD contract under 'Fund Reports' or on the Bitcointalk thread!

Updates will be posted most frequently to the BDD Bitcointalk thread at https://bitcointalk.org/index.php?topic=430137


B.EXCH exists to provide a means through which B.MINE and B.SELL can be distributed into the market in equal amounts without being sold directly by the Manager. B.MINE and B.SELL must always be issued in equal amounts, and remain in equal amounts outstanding, to ensure that each B.MINE contract is backed by the funds of a B.SELL contract.

A user can purchase B.EXCH from the Fund Manager for the NAV/U (Net Asset Value / Unit) plus 3% on the Market. The 3% surcharge breaks down into 2% as a Management Fee paid to the Manager, .4% to cover the Exchange Fee assessed by Havelock Investments on all sales on the site, and .6% back to the fund itself. The Fund Manager may issue an unlimited number of B.EXCH into the Market via direct sales to users on the Market, but only at the NAV/U + 3%. Once B.EXCH is purchased by a user, the exchange will automatically buy back the EXCH contract(s) at zero value and issue one B.MINE contract and one B.SELL contract (a BDD Pair) for each B.EXCH contract purchased. The user can then sell or hold one or both of the contracts.

The Period NAV/U is calculated at the beginning of each Period, which begins after a Difficulty change. The Manager will also provide a Daily Published NAV/U on the Bitcointalk thread. The NAV/U is calculated by dividing the total assets of the fund by the total number of issued contract pairs (number of B.SELL or B.MINE issued).

Period 19, Day 8 Report - September 9, 2014

Balance Post Divs: BTC 269.18104603

Total Units: 15372

NAV/U: BTC 0.01751112

Period 17, Day 9 Report - August 17, 2014

Balance Post Divs: BTC 323.01166694

Total Units: 13874

NAV/U: BTC 0.02328179

Period 18, Day 11 Report - August 31, 2014

Balance Post Divs: BTC 301.89336247

Total Units: 15210

NAV/U: BTC 0.01984834

Period 18, Day 9 Report - August 29, 2014

Balance Post Divs: BTC 301.60195822

Total Units: 15045

NAV/U: BTC 0.02004665

Looking like diff will change Sunday night / Monday morning, so it's looking like SELL dividend will be issued Monday if the current increase trend keeps up.

Period 17 End Report - August 20, 2014

Previous Units              12777
EXCH Sold                   1671
Less Buybacks              119
New Total Units            14329

Previous Balance          312.99457435
Price per EXCH             0.02523161
Gross Sales of EXCH      42.16202031

Less Fees                    0.16864812
Less Dividends              20.71307808
Less Buybacks              2.80162945
Less Mgmt Fee              0.81867303
Net Balance                  330.65456598

End of Period NAV/U     0.02307589

New Difficulty                  23,844,670,039
New Daily Dividend         0.00010545
New Reserve per Unit        0.02109000

NAV/U Less New Reserve = 0.02307589 - 0.02109000 = 0.00198589

SELL Dividend                 0.00198589

Days of Dividends On Hand    ~219 (Before Sell Div)

You'll notice that I calculate the new Dividend to eight digits and multiply that times 200 Days to get the new Reserve. Those of you that did your own calculations may come up with a slightly different number if you chose not to round or to round elsewhere.

New EXCH Sales Price          0.02172270

Period 19, Day 10 Report - September 11, 2014

Balance Post Divs: BTC 266.52771142

Total Units: 15381

NAV/U: BTC 0.01732837

Period 18, Day 1 Report - August 21, 2014

Balance Post Divs: BTC 310.29123743

Total Units: 14857

NAV/U: BTC 0.02088518

Period 18, Day 7 Report - August 27, 2014

Balance Post Divs: BTC 304.77494872

Total Units: 15045

NAV/U: BTC 0.02025755

Period 18, Day 6 Report - August 26, 2014

Balance Post Divs: BTC 306.34029809

Total Units: 15044

NAV/U: BTC 0.02036295

Period 18, Day 8 Report - August 28, 2014

Balance Post Divs: BTC 303.18845347

Total Units: 15045

NAV/U: BTC 0.02015210

Period 19, Day 5 Report - September 6, 2014

Balance Post Divs: BTC 273.39005795

Total Units: 15371

NAV/U: BTC 0.01778609

Period 17, Day 11 Report - August 19, 2014

Balance Post Divs: BTC 325.40608547

Total Units: 14116

NAV/U: BTC 0.02305228

Period 18, Day 5 Report - August 25, 2014

Balance Post Divs: BTC 306.72137277

Total Units: 14987

NAV/U: BTC 0.02046582

Period 17, Day 8 Report - August 16, 2014

Balance Post Divs: BTC 324.33623594

Total Units: 13856

NAV/U: BTC 0.02340763

Period 17, Day 7 Report - August 15, 2014

Balance Post Divs: BTC 326.10204458

Total Units: 13856

NAV/U: BTC 0.0235350783

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