Why is a man worth $78 billion borrowing half a billion dollars at 20%? A look at the Blockstream Mining Note (BMN), the mines we can't find, and the fraud convicted felon spending lavishly.
Coming very soon. Email me nat@natinfosec.com if you are so impatient, I am happy to discuss. I am getting very popular in your neck of the woods. Aren't I?
>The notes are sold as a claim on Bitcoin mining. To pay back the more than $1.5 billion in outstanding investor notes Blockstream has promised investors, the company would need to operate 20+ exahash per second of mining capacity, rising to about 35-45 exahash once the contractual cushion in the Terms and Conditions is included. Blockstream’s own dashboard only shows mining capacity of 15 exahash per second.
This does not claim to show mining capacity but that 15.6672 Eh/s worth of notes remain outstanding. Each note is a claim on 1 Ph/s of Bitcoin mining, and there are 15,667.16 notes outstanding. Mining notes are fixed in Ph/s not dollar amount. The dollar value of the note floats based on bitcoin price and hashprice.
>In plain language: the Bitcoin you receive at maturity does not have to come from mining. It can come from money paid in by the next round of investors. Blockstream has already publicly admitted doing exactly this with the predecessor product, BMN1. According to Hashrate Index, Blockstream “employed a supplemental top-up strategy, by purchasing the exact amount of BTC on the open market” to ensure investors in earlier tranches received what they were promised. We don’t think this is what investors signed up for.
"Tranches enabled a staggered approach for Blockstream to deploy its mining operations. To ensure that all tranches would have an equivalent amount of bitcoin allocated to each BMN1, Blockstream employed a supplemental top-up strategy, by purchasing the exact amount of BTC on the open market that tranche 1 would mine up to the point of a newly released tranche. This was an important factor in ensuring fungibility and enabling liquid trading through a unified secondary market."
The mining notes had a three year duration, but later tranches did not mine for a full three years (all notes mature on the same date). Therefore, later tranches had to compensate earlier tranches for the exact amount of bitcoin mining they missed in order for their buy-in to be equivalent/fair to existing holders. This isn't new money paying old investors but late investors contributing bitcoin equivalent to what earlier investors had already earned.
Your comment is highly misleading, so engaging feels futile! Just wait for Part 3. Several new employees have already reached out with more damning information.
But let's take your own argument seriously for a second. You say the Blockstream dashboard does not actually show Blockstream's mining capacity. Okay. Then why does it exist? To deceive people?
And relabeling the number changes nothing. Call 15.6672 EH/s "capacity" or "outstanding claims," it is still Bitcoin that Blockstream owes to someone, and capacity to mine it is still nowhere to be found in Braiins attribution or anywhere else. So answer the question directly, how is Blockstream mining Bitcoin without visible mines?
Where is the hashrate? Which pool is Blockstream/Exacore pointing it at? Why is all this guarded so carefully by Blockstream?
Buying an underlying a later tranche did not have time to generate, to keep the tranches fungible, is standard, sure. But equalization only shuffles the timing of BTC that was actually mined. It assumes the mining happened and sorts out who gets the proceeds and when. It says nothing about whether total mining ever produced enough Bitcoin to cover the obligations in the first place. That is the entire question, and it is precisely the one your point dances around.
Worse, the Substitute Performance clause lets Blockstream satisfy the whole obligation from any source it likes, with no cap and no disclosure. Equalization explains a timing adjustment at the margin. It cannot explain there not being any Bitcoin mines! Or why this "Substitute Performance" clause which I call the "Ponzi scheme" clause was added into the contract.
If you want to prove Blockstream is not a Ponzi scheme (one of the worlds largest), there is a five minute way to do it. Show the wallets. Point to the addresses where the mined Bitcoin was deposited and let anyone match the mined volume against the historical block record and the outstanding obligations. How much was mined by Blockstream or Exacore's own hashrate, and how much was bought on the open market? If the mining is real at the scale of the obligations, this is trivial to show. Investors have been asking for exactly this since 2022, and all they have gotten is "an audit is being worked on," and then silence.
While we're at it lets talk about the Create-Redeem mechanism in the contract... This is all bad!
Show the hashrate. "Don't trust, verify," right? LOL.
absolutely incredible work
Thank you, David! Appreciate the support.
Hi! When will you come up with part 3? Thx, have a good day:-)
I know you read it already, https://natinfosec.substack.com/p/fraud-adam-back-samson-mow-chris
Coming very soon. Email me nat@natinfosec.com if you are so impatient, I am happy to discuss. I am getting very popular in your neck of the woods. Aren't I?
When is part 2 coming out?
Here you go, https://natinfosec.substack.com/p/adam-back-lies-greg-maxwell-chris
yikes.
Thank you for taking the time to read and comment, Brad. More is coming soon.
>The notes are sold as a claim on Bitcoin mining. To pay back the more than $1.5 billion in outstanding investor notes Blockstream has promised investors, the company would need to operate 20+ exahash per second of mining capacity, rising to about 35-45 exahash once the contractual cushion in the Terms and Conditions is included. Blockstream’s own dashboard only shows mining capacity of 15 exahash per second.
Are you referring to this dashboard: https://bmn2.mining.blockstream.com/ ?
This does not claim to show mining capacity but that 15.6672 Eh/s worth of notes remain outstanding. Each note is a claim on 1 Ph/s of Bitcoin mining, and there are 15,667.16 notes outstanding. Mining notes are fixed in Ph/s not dollar amount. The dollar value of the note floats based on bitcoin price and hashprice.
>In plain language: the Bitcoin you receive at maturity does not have to come from mining. It can come from money paid in by the next round of investors. Blockstream has already publicly admitted doing exactly this with the predecessor product, BMN1. According to Hashrate Index, Blockstream “employed a supplemental top-up strategy, by purchasing the exact amount of BTC on the open market” to ensure investors in earlier tranches received what they were promised. We don’t think this is what investors signed up for.
More specifically, the source ( https://hashrateindex.com/blog/tokenizing-hashrate-blockstream-mining-note-2-bmn2/ ) states:
"Tranches enabled a staggered approach for Blockstream to deploy its mining operations. To ensure that all tranches would have an equivalent amount of bitcoin allocated to each BMN1, Blockstream employed a supplemental top-up strategy, by purchasing the exact amount of BTC on the open market that tranche 1 would mine up to the point of a newly released tranche. This was an important factor in ensuring fungibility and enabling liquid trading through a unified secondary market."
This is equivalent to standard and well-understood equalization methods used in traditional finance (e.g. https://www.qapita.com/blog/equalization-in-fund-accounting-how-it-protects-early-and-late-investors ).
The mining notes had a three year duration, but later tranches did not mine for a full three years (all notes mature on the same date). Therefore, later tranches had to compensate earlier tranches for the exact amount of bitcoin mining they missed in order for their buy-in to be equivalent/fair to existing holders. This isn't new money paying old investors but late investors contributing bitcoin equivalent to what earlier investors had already earned.
Your comment is highly misleading, so engaging feels futile! Just wait for Part 3. Several new employees have already reached out with more damning information.
But let's take your own argument seriously for a second. You say the Blockstream dashboard does not actually show Blockstream's mining capacity. Okay. Then why does it exist? To deceive people?
And relabeling the number changes nothing. Call 15.6672 EH/s "capacity" or "outstanding claims," it is still Bitcoin that Blockstream owes to someone, and capacity to mine it is still nowhere to be found in Braiins attribution or anywhere else. So answer the question directly, how is Blockstream mining Bitcoin without visible mines?
Where is the hashrate? Which pool is Blockstream/Exacore pointing it at? Why is all this guarded so carefully by Blockstream?
Buying an underlying a later tranche did not have time to generate, to keep the tranches fungible, is standard, sure. But equalization only shuffles the timing of BTC that was actually mined. It assumes the mining happened and sorts out who gets the proceeds and when. It says nothing about whether total mining ever produced enough Bitcoin to cover the obligations in the first place. That is the entire question, and it is precisely the one your point dances around.
Worse, the Substitute Performance clause lets Blockstream satisfy the whole obligation from any source it likes, with no cap and no disclosure. Equalization explains a timing adjustment at the margin. It cannot explain there not being any Bitcoin mines! Or why this "Substitute Performance" clause which I call the "Ponzi scheme" clause was added into the contract.
If you want to prove Blockstream is not a Ponzi scheme (one of the worlds largest), there is a five minute way to do it. Show the wallets. Point to the addresses where the mined Bitcoin was deposited and let anyone match the mined volume against the historical block record and the outstanding obligations. How much was mined by Blockstream or Exacore's own hashrate, and how much was bought on the open market? If the mining is real at the scale of the obligations, this is trivial to show. Investors have been asking for exactly this since 2022, and all they have gotten is "an audit is being worked on," and then silence.
While we're at it lets talk about the Create-Redeem mechanism in the contract... This is all bad!
Show the hashrate. "Don't trust, verify," right? LOL.