Bitcoin Forum

What kind of "cold storage" policy do you plan to implement?  In other words, what percentage of your bitcoin holdings do you anticipate keeping offline so it can't be hacked?

Thanks for the service.

1- Who is that happy girl at the homepage?
2- What is your business model? (i.e. how do you make money)

Do you offer merchant services for online shopping carts?  

Do you have any existing bitcoins (not customer coins) to back up customer bitcoins?

The worlds first bitcoin bank has opened to the general public.

On the FAQ drop down the fee schedule which explains the model.

...  it's virtually impossible to get someone to insure them...  any ideas on that and i'll take them.

We do have plans for offsite / offline storage... but we need to measure use and average trading vs just parking coins there to give a solid percentage.  Currently it's a very small base.. so we can answer this question better in a few weeks.

We are always looking into ways to better the service (IE: private keys),  but honestly on launch day we're still measuring traffic, and taking feedback (such as offline storage, keys, etc).

Merchant services (IE: an API) is being developed..

The TOS states that though we're exploring insurance options,  it's virtually impossible to get someone to insure them...  any ideas on that and i'll take them.

There is a security document published,  FAQ / Drop Down / Security.

Mildly iritating that I had to logout to get to the faq.

I'm virtually blind and have to zoom in 3-5 times to see your text. Now the options on the FAQ overlap.

It appears the only way to take funds out is by BTC and it costs a minimum of .01btc or .5% whichever is greater?

For a while I had been thinking that you were running a mining pool too.  But when you say "miner fees", you mean transaction fees that flexcoin pays out when sending to non-flexcoin accounts.

Account created.  I think "BitcoinBusiness" is as good of an ID registration as there could be :)  Anybody wanna buy it from me for 100BTC yet?

Someone registered  "casino" 

Meh.  Sounds like a gamble to me.

Greetings all,

First off, love the site, very clean and simple to use, looks great as well.

I know someone was talking about miner fees earlier in this thread, but I don't fully understand what that means, can you please explain it to me?

-KBundy

LOL!   Someone just got " webdesign "

http://img577.imageshack.us/img577/3253/rlmp.jpg (http://imageshack.us/photo/my-images/577/rlmp.jpg/)

Uploaded with ImageShack.us (http://imageshack.us)

Are you connected with Lycos Mail? Your website uses the same image as www.mail.lycos.com.

Are you connected with Lycos Mail? Your website uses the same image as www.mail.lycos.com.

Do you have an iPhone app, or a way I can pay with my iPhone without having to type in the address?  Like scan a q-code?

it's completely tested with mobile :)  do this.. bookmark the https://bank.flexcoin.com as a homepage icon...  you'll see the flexcoin icon there!

it's easier than a q-code if sending to id.. literally just send to flexcoin ID president from your iphone,  i'll send your coin back if you want to test it.

transfers are instant and works over mobile devices (tested on Android and iPhones) ...

one lower case letter,
one upper case letter,
one special character,
and one digit

Oh come on even Pf8ng8B9myPKJw5pTEJt isn't vaild? REALLY!

Ok, I see your idea here, you hope every merchant will have a flexcoin ID.  And it also benefits the consumer, because the transaction is free for them if the merchant has a flexcoin ID.

That's cool, I can see that.

So, then I just have two issues, one minor, one not.

* Not minor:  15 confirms before I can spend them?  6 is not good enough for you? For me to test your app as you suggested, I'd have to wait 3 HOURS, as I just sent some BTC to my Flexcoin account.

* Minor:  I can't access the FAQ or documentation from my account page.  The links are not there.

I think this can be a great service.  I realize you are in the early stages.  I wish you luck.

Minor : I will have the links put up,  programming guys want it as separate as possible from the WWW version of the site but I see your point and I will have that addressed.

Not Minor : I will agree with you that perhaps 15 was overboard,  we just learn from others experience,  and evidently what happened to mybitcoin was the lack of confirmations,  granted we might have went overboard but it was a security feature in our opinion,  what would be a reasonable number that won't allow for a backdoor like that?

...

Not Minor : I will agree with you that perhaps 15 was overboard,  we just learn from others experience,  and evidently what happened to mybitcoin was the lack of confirmations,  granted we might have went overboard but it was a security feature in our opinion,  what would be a reasonable number that won't allow for a backdoor like that?

Minor : I will have the links put up,  programming guys want it as separate as possible from the WWW version of the site but I see your point and I will have that addressed.

Minor: just include a link to the FAQ on the account page. you don't have to add the same html and associated code.
Not Minor: please explain in detail to everyone why this is a safe service and why, specifically, it is not going to rip off my bitcoins like mybitcoin did.

well typing in the register information over and over again because the flexcoin id is already taken is highly annoying
and it will only become worse with time.


even better... give me a quick easy to way to test if the id is taken or not.... or let me register and then pick an id so
i can try many times a minute until i find something neat. i would like to think we are not at the point i have to choose
sun1245 and can still get a generic noun.

Calling oneself a bank should not be done whimsically. I hope you have sought compliance with the laws of your jurisdiction. While there may not be laws specific to Bitcoin, there are almost assuredly laws related to banking practices.

I wholeheartedly agree with this one. I know beyond any shadow of a doubt that this is *highly* frowned upon by *most* legal jurisdictions that I have done business in.

The second we start accepting USD or any national currency I agree.. but we cleared this with legal 1000 times, as long as we stay within the bitcoin realm we're fine.

Oh dear, that implies you will never have a USD in or out. 8^(

* Requiring 15 confirmations on deposits when six is more than sufficient.

* Closing accounts with zero balance after two weeks. There are many scenarios where an account might need to have a zero balance for longer than that. If such a rule is needed at all, it should be at least two years, not two weeks.
* Closing accounts after 18 months of inactivity. There are many scenarios where an account might need to be inactive for longer than that. If such a rule is needed at all, it should be at least ten years, not 18 months.

I think that one is nitpicking a little bit.  9 more confirmations is just a little bit of extra security.

How much extra time do you thing the confirmations take?

Question, why has the terminology changed from "interest" to "discount" on the banking interface?

Greetings all,

I propose that instead of charging the fees that you do(.01 or .5%) and then give back the fees to the people, just charge a lesser fee in the first place.  The way I understand it, you are keeping 30% of the fees, and returning 70% to the customer.  How about instead, you charge 30% of the fee you want to charge in the first place, eliminating this extra step, and making it a more fair price for the service, and get more people to join.  Just a suggestion, but it is rather logical.

-KBundy

Some Questions from my side - first seven "quick questions", and then the most crucial important question at the end:

1.) Will there be an Android App to link to QR scanner, such that I can pay with flexcoins to an outside BTC-Address (like "bitcoin wallet" Android App)?

2.) I do not like that the account is closed after 2 weeks of zero balance. In that case, my flexcoin name would be gone and I would have to open a new account with another name. Very bad idea I would say. Is there at least a protection mechanism, such that I am not allowed to move my balance below 0.00001 Flexcoins or so?

3.) I do not like that 18 month of inactivity leads to closure of the account and loss of all flexcoins. This looks dubious. 18 month can quickly happen, for example if somebody goes to a journey around the world or Himalaya, or a severe disease. And when he comes back, all Flexcoins are gone. I think this period should be extended to 5 years minimum. Could you imagine to extend this period?

4.) Minimum payment of 0.5% or 0.01 BTCs appears a lot. 0.01 BTC = 0.10 USD is already in the order of magnitude of credit card fees, and 0.5% is 50 cent on 100 EUR, which is a lot, too.

5.) Who guarantees me that the terms and conditions do not change against my favour, once I have deposited some BTC funds into the Flexcoin bank? For example increase of fees or shortening of the idle times before the account is closed, etc.?

6.) Are you planning to issue flexcoin credits in the future?

7.) Are you planning to provide interest payments on flexcoin accounts in the future?


8.) You are calling yourself a "bank". Does this mean you are running a fractional reserve system? The informed reader knows that the main characteristic of a "bank" is that it uses a fractional banking system. This means, every bank possesses less cash than the sum of the money of all its bank accounts. This means, if every customer of a bank tried to withdraw the whole cash at the same time (a so called "bank run"), the bank could not cash it out - it could only cash out about 2 to 10% of it. (It sounds crazy, but it is no secret, you can read about this everywhere on the internet, even at the web sites of the central banks.) How about the "flexcoin bank"? Are you going to establish a fractional reserve system of Bitcoins with your bank, too? Technically, this would be no problem, because it is highly unlikely that every customer would withdraw his BTC funds from the flexcoin bank at the same time, so some "overbooking" would be possible. This is exactly how the fractional reserve banking system started to develop in banking history of our world. But of course, such banking system would not be desireable, because it means inflating the currency, it would not be limited to 21 Million any more, because there would be more flexcoins then Bitcoins in circulation.
   So my question is: If the total number of Bitcoins paid into your bank is, say, 1 Million BTCs, will there be exactly 1 Million Flexcoins in existence, or will there be more then 1 Million Flexcoins? I think a big criticism of the current financial currency system is the fractional reserve property, because it can create big problems and eventually does so, sooner or later. So for me it would be absolutely crucial that your bank does NOT implement a fractional banking system, and this would be an absolute Pre-condition before I would use your service, and I guess this is the case for many other informed users, too. So if flexcoin implements a fractional reserve system, Flexcoins are not better than EUROs or USDs in the long term, with all the "diseases" associated to them on the long term.

8.b) If your anwser to quesiton "8.)" is "No, we are NOT going to implement a fractional banking system, there will always be a 1:1 mapping of flexcoins in circulation and Bitcoins deposited in the flexcoin bank", then my question is: How will you prove this to the world? There is a possibility to prove it, as described in the following - will you implement it?
   Description: For example, you can assign each user a secrete ID or secret nick name (and the user can change this, if he wants), i.e. a nick name that only this user knows himself. And then, you publish on your website (open to be read by everybody) every day (or every hour or so) an up-to-date-list of secret nick names and associated deposited funds. The sum of these funds then amounts to the total number of flexcoins in circulation at this point in time. And everybody can check this. Since the nick names (or IDs) are secret, the list is anonymous, and nobody has to disclose his funds. To anonymize it even further, it is possible that a user defines several secrete nicknames and distributes his funds over these nicknames as he wishes. Then all these nick names will be listed in the pubic list, such that it would be even harder to track it. And the user could change these nick names at any time. Note that these nicknames are not to be confused with the flexcoin addresses like "coffeeshop"!!
   Now, the second part relates to the bitcoins. The Flexicoin bank also would have to publish all Bitcoin addresses (public addresses like "1Msio5Diu3t8jdfg..."), and the associated fund of this address at the time of publishing. This way, every internet user could see for himself (by comparison with data from "blockexplorer") if the amount of funds contained by these BTC-addresses is the same as the sum of all flexcoins, or lower than that. Of course, the flexcoin bank could also list "wrong" Bitcoin addresses in this list, i.e. Bitcoin addresses that they do not actually own. However, this would be dangerous, because if the true owner of this Bitcoin address realizes this, the whole thing would become public and everybody would know that flexcoin uses a fake list to hide the fact that it is actually running a fractional reserve system. In this case, the trust into flexcoin would vanish instantly.

Note that this mechanism I just described is the same as the mechanism that the gold platform BullionVault (http://gold.bullionvault.de/#GOLDMICCI) is using to prove that the gold that their customers have bought is really existing physically in the vaults. What is the gold in that case is the Bitcoins in our case. And what is the list of funds in the BullionVault case is the list of flexcoins in our case here.

9.) If you are NOT implementing a fractional reserve system, my advise to you would be that you should not call yourself a "bank". Because many people associate the fractional reserve system with a bank (which is correct, because actually this is the crucial thing that "banking" is all about). And this is quite the OPPOSITE OF WHAT THE BITCOIN SYSTEM NEEDS.

9.b) If you do implement a fractional reserve system (i.e. number of Flexcoins > number of Bitcoins deposited in your Flexcoin bank), I have no more to say, other than: "Without me!", and I think it will not be successful, because the Bitcoin users are better informed than the average people in our world, and Bitcoins is exactly the OPPOSITE of the idea of fractional banking.

So this is just an e-wallet, then?

Question, why has the terminology changed from "interest" to "discount" on the banking interface?

Some Questions from my side - first seven "quick questions", and then the most crucial important question at the end:


--------------------
For the record nearly all these are answered on flexcoin,  under the FAQ drop down box.   So I suggest reading that first before posting, but I will of course answer this here.  I am going to answer this below each question
---------------------

1.) Will there be an Android App to link to QR scanner, such that I can pay with flexcoins to an outside BTC-Address (like "bitcoin wallet" Android App)?

-------------------
The site has been tested in all mobile devices (android and IOS)  It works really well via mobile, in fact it appears to the the primary way people access the account,  all IOS individuals can bookmark the https://bank.flexcoin.com site and it will even render a Flexcoin Icon on your iPhone or iPad desktop).  Android users will have to bookmark and then move the bookmark, as direct linking isn't allowed on android, but it is simple to do the bookmark and move to make it a web app.  Transfering from a clumsy QR scanner or just type in flexcoin id coffeshop?  I'll take coffeeshop as it's quicker.
-----------------------------------

2.) I do not like that the account is closed after 2 weeks of zero balance. In that case, my flexcoin name would be gone and I would have to open a new account with another name. Very bad idea I would say. Is there at least a protection mechanism, such that I am not allowed to move my balance below 0.00001 Flexcoins or so?

-----------------------
This was done on purpose to stop cybersquatting....   Our fear is that someone registers 100,000 flexcoin id's  ... puts nothing in them and we find them on ebay selling ID's rather than putting them to work for people that are actually trying to develop a bitcoin business.
-------------------------------------

3.) I do not like that 18 month of inactivity leads to closure of the account and loss of all flexcoins. This looks dubious. 18 month can quickly happen, for example if somebody goes to a journey around the world or Himalaya, or a severe disease. And when he comes back, all Flexcoins are gone. I think this period should be extended to 5 years minimum. Could you imagine to extend this period?

-----------------
Again this is so people don't put in .000001 bitcoin into 1000 accounts,  and then cybersquat and sell the usernames on ebay.   It's not 2 weeks in this case because we felt that people would want to use this as a valid savings account, If they can't move .0000001 BTC from one free flexcoin id to another (a free transfers) every 1.5 years then the account most likely is abandoned.   

-----------------------

4.) Minimum payment of 0.5% or 0.01 BTCs appears a lot. 0.01 BTC = 0.10 USD is already in the order of magnitude of credit card fees, and 0.5% is 50 cent on 100 EUR, which is a lot, too.

----------------
It's free from flexcoin to flexcoin account.  It's free from bitcoin to flexcoin,  the fee only applies from flexcoin to bitcoin...and that fee includes both the MINER fees, our fees and THE BITCOINS that you get back every month.  How else do you expect us to pay for the servers, and the past 1/2 year building the bank?  Everyone wanted us to provide a revenue model and we did.  
--------------------

5.) Who guarantees me that the terms and conditions do not change against my favour, once I have deposited some BTC funds into the Flexcoin bank? For example increase of fees or shortening of the idle times before the account is closed, etc.?

--------------------
Any changes to the TOS are posted, and your notified of the changes, they do not take affect immediately,  they take affect a week after they are posted.  That gives you plenty of time to get out if you think that we're posting something terrible...  

-------------------

6.) Are you planning to issue flexcoin credits in the future?

------------------
no
-----------------

7.) Are you planning to provide interest payments on flexcoin accounts in the future?

---------
We already are,  it's called a discount payment.
-------


8.) You are calling yourself a "bank". Does this mean you are running a fractional reserve system? The informed reader knows that the main characteristic of a "bank" is that it uses a fractional banking system. This means, every bank possesses less cash than the sum of the money of all its bank accounts. This means, if every customer of a bank tried to withdraw the whole cash at the same time (a so called "bank run"), the bank could not cash it out - it could only cash out about 2 to 10% of it. (It sounds crazy, but it is no secret, you can read about this everywhere on the internet, even at the web sites of the central banks.) How about the "flexcoin bank"? Are you going to establish a fractional reserve system of Bitcoins with your bank, too? Technically, this would be no problem, because it is highly unlikely that every customer would withdraw his BTC funds from the flexcoin bank at the same time, so some "overbooking" would be possible. This is exactly how the fractional reserve banking system started to develop in banking history of our world. But of course, such banking system would not be desireable, because it means inflating the currency, it would not be limited to 21 Million any more, because there would be more flexcoins then Bitcoins in circulation.
   So my question is: If the total number of Bitcoins paid into your bank is, say, 1 Million BTCs, will there be exactly 1 Million Flexcoins in existence, or will there be more then 1 Million Flexcoins? I think a big criticism of the current financial currency system is the fractional reserve property, because it can create big problems and eventually does so, sooner or later. So for me it would be absolutely crucial that your bank does NOT implement a fractional banking system, and this would be an absolute Pre-condition before I would use your service, and I guess this is the case for many other informed users, too. So if flexcoin implements a fractional reserve system, Flexcoins are not better than EUROs or USDs in the long term, with all the "diseases" associated to them on the long term.

---------------------
The answer is NO...  there is no such thing as fractional reserve banking at flexcoin.  period.
--------------------

8.b) If your anwser to quesiton "8.)" is "No, we are NOT going to implement a fractional banking system, there will always be a 1:1 mapping of flexcoins in circulation and Bitcoins deposited in the flexcoin bank", then my question is: How will you prove this to the world? There is a possibility to prove it, as described in the following - will you implement it?
   Description: For example, you can assign each user a secrete ID or secret nick name (and the user can change this, if he wants), i.e. a nick name that only this user knows himself. And then, you publish on your website (open to be read by everybody) every day (or every hour or so) an up-to-date-list of secret nick names and associated deposited funds. The sum of these funds then amounts to the total number of flexcoins in circulation at this point in time. And everybody can check this. Since the nick names (or IDs) are secret, the list is anonymous, and nobody has to disclose his funds. To anonymize it even further, it is possible that a user defines several secrete nicknames and distributes his funds over these nicknames as he wishes. Then all these nick names will be listed in the pubic list, such that it would be even harder to track it. And the user could change these nick names at any time. Note that these nicknames are not to be confused with the flexcoin addresses like "coffeeshop"!!
   Now, the second part relates to the bitcoins. The Flexicoin bank also would have to publish all Bitcoin addresses (public addresses like "1Msio5Diu3t8jdfg..."), and the associated fund of this address at the time of publishing. This way, every internet user could see for himself (by comparison with data from "blockexplorer") if the amount of funds contained by these BTC-addresses is the same as the sum of all flexcoins, or lower than that. Of course, the flexcoin bank could also list "wrong" Bitcoin addresses in this list, i.e. Bitcoin addresses that they do not actually own. However, this would be dangerous, because if the true owner of this Bitcoin address realizes this, the whole thing would become public and everybody would know that flexcoin uses a fake list to hide the fact that it is actually running a fractional reserve system. In this case, the trust into flexcoin would vanish instantly.

Note that this mechanism I just described is the same as the mechanism that the gold platform BullionVault (http://gold.bullionvault.de/#GOLDMICCI) is using to prove that the gold that their customers have bought is really existing physically in the vaults. What is the gold in that case is the Bitcoins in our case. And what is the list of funds in the BullionVault case is the list of flexcoins in our case here.

--------------------
It doesn't work that way currently,  i'll run this by the programmers but I think what you described would mean shutting down flexcoin and building a whole new site.. which would completely break everything we did over the past 1/2 year.
---------------------

9.) If you are NOT implementing a fractional reserve system, my advise to you would be that you should not call yourself a "bank". Because many people associate the fractional reserve system with a bank (which is correct, because actually this is the crucial thing that "banking" is all about). And this is quite the OPPOSITE OF WHAT THE BITCOIN SYSTEM NEEDS.

---------------------
Bank technically means storage,  and that's what people are doing, storing and using bitcoins / flexcoins.    We qualify it secondarly by paying regular payments to clients.  No such thing as fractional reserve at flexcoin.
---------------------

9.b) If you do implement a fractional reserve system (i.e. number of Flexcoins > number of Bitcoins deposited in your Flexcoin bank), I have no more to say, other than: "Without me!", and I think it will not be successful, because the Bitcoin users are better informed than the average people in our world, and Bitcoins is exactly the OPPOSITE of the idea of fractional banking.

-----------------
Then it's good that we don't do that.   I hope to see you get a flexcoin id.
-------------------

We do have plans for offsite / offline storage...

First, I think there is way too much negative feedback in this thread. "Don't use it if you don't like it" applies, and any and all serious businesses that help grow the Bitcoin economy are to be cheered. In the decentralized reputation economy trust is something you earn and FlexCoin do seem to want to operate that way. Kudos.

To my question: While you state on the website that you operate under US law, will you have non-US offsite storage? The US readily seize domains with content that is fully legal in their local jurisdictions and I consider it a significant possibility that we will see servers in the US hosting Bitcoin wallets be seized as well at one point in time. Being a non-US resident I have to judge that as a risk.

And please add to the FAQ that you will constantly notify the client before closing the account.

* Closing accounts with zero balance after two weeks. There are many scenarios where an account might need to have a zero balance for longer than that. If such a rule is needed at all, it should be at least two years, not two weeks.
* Closing accounts after 18 months of inactivity. There are many scenarios where an account might need to be inactive for longer than that. If such a rule is needed at all, it should be at least ten years, not 18 months.

That's a good idea... 

If they shut down us they most likely will be shutting down CampBX and every other US based bitcoin service.    The likely hood of them shutting us down is so tiny that it's mostly FUD, considering we do not deal in US dollars at all, and have zero plans to.   You know that a criminal entity would not use a service like flexcoin which clearly states it would work with authorities,  they most likely would setup something in TOR and do it that way....  

Think about eGold for a minute.  People would buy eGold to launder their money through the centralized service.  The difference in your situation is that people have to buy bitcoin, then put it in FlexCoin to launder their money.  I fully expect that a judge given the case to dictate that you fall under 'know your customer' laws.  Granted you may operate without trouble for quite some time, until one person fucks up and gets caught laundering money through your service.

Like I said before, instead of charging a fee and returning 70% of those fees as discounts, (a large part going to the BTC wealthy,) simply charge 30% of the fee you're trying to charge in the first place.

EG: 0.003BTC or 0.15% on all withdrawals.

Hello again,

The idea to attract "big money" is on the whole, a good thing.  It shows that people are still willing to take the substantial risk of loss on investment to convert to bitcoin, and this ballsiness is important if bitcoin is to succeed.

That being said, the way I understand the fee/discount system is that it's stealing from the poor and giving to the rich.  People wishing to transfer small amounts out of their flexcoin accounts are going to have to pay a minimum fee, making the withdrawal of  micro-payments impractical for the little guys.

To be fair, I really like the site, and what it's about, the thing is that me, the average user, is being turned off by the fees being unevenly weighted.

EG: Say I want to withdraw just 1BTC from my account, the minimum I'd have to pay is .01BTC (1%)  <- this is a lot.  These fees are then given to those who have a ton of  BTC just sitting in their accounts as "discounts", hence, stealing from the poor and giving to the rich.  Something fundamentally wrong here, but easily corrected by charging a fair flat rate.

Like I said before, instead of charging a fee and returning 70% of those fees as discounts, (a large part going to the BTC wealthy,) simply charge 30% of the fee you're trying to charge in the first place.

EG: 0.003BTC or 0.15% on all withdrawals.

-KBundy

That being said, the way I understand the fee/discount system is that it's stealing from the poor and giving to the rich.

When you have money on the bank, you will earn more money from interest if you have more money on your account. Here happens the same. The fees are there to encourage people to use flexcoin for payments.

You realize it's free to transfer flexcoin to flexcoin ...  tell the person you want to transfer that .0000001 to his flexcoin address.

MICHAEL
It's pretty brilliant. What it does is where there's a bank transaction, and the interests are computed in the thousands a day in fractions of a cent, which it usually rounds off. What this does is it takes those remainders and puts it into your account.

PETER
This sounds familiar.

MICHAEL
Yeah. They did this in Superman III.

I am trying to move BTC from Flexcoin to another address. My balance is X and it keeps saying, when I try to transfer the full amount of X that I do not have enough btc to do the transfer. WTF is this SHIT? If there is a fee cost to transfer you need to tell the user how much they can move without having to guess and play the subtraction game.

Sounds more like the Flexcoin guys just want to monopolize the transaction system so that they get a % of the BTCs in their system even though they are basically providing nothing useful. Online wallets are pointless. If you can't run the client on your computer you need to wake up and get your head out of the sand - Flexcoin, Mybitcoin, Instawallet, etc ----> they're all here to siphon *just a bit* of the creme off top.

AGAIN: Note that it is absolutely crucial that you provide prove that you are not running a fractional banking system.

+1

Blockexplorer would provide the proof if they are being wired out...  we'll try to figure a way to display that the figures match 1:1 bitcoins to flexcoins...  but honestly we never even considered this as a question, much less something we had to build.   

If you don't want to use any service that charges a fee like tradehill, mtgox, flexcoin, campbx or any other bitcoin service then no one is forcing you to....  regardless you had a valid point regarding the balance displayed and that's being addressed.

If you don't want to use any service that charges a fee like tradehill, mtgox, flexcoin, campbx or any other bitcoin service then no one is forcing you to....  regardless you had a valid point regarding the balance displayed and that's being addressed.

But with TradeHill and Mt.Gox, I have been able to make 200% profit from my original investment in as little as 1 month.  How long would it take me to make 30 BTC from an original investment of, say, 10 BTC, using only Flexcoin?

That's like comparing a bank deposit with gambling. You earned 200%, but it was risky. Investments with lower risks provide lower interests.

How long would it take me to make 30 BTC from an original investment of, say, 10 BTC, using only Flexcoin?

Second of all, that was my point.  It's not fair to compare the two, which is exactly what my post was about.  He made the comparison between the two, throwing Flexcoin in the middle of the same sentence as being comparable to Mt. Gox and TradeHill in that they all charge a fee.  I said what I said because it's not a fair comparison.  I can profit significantly on TH and Mt. Gox but cannot do the same with FlexCoin.

I'm sorry but any centralized organization is contradictory to the purposes of decentralization of bitcoin.

Get smart! Hold on to and secure your own bitcoins and STOP relying on ANY service that says "hey we'll store/hold your bitcoins for you".

 ;D

I think that in his idea, you would display a nickname (or several) for each account holder along with their balance (or portion of their balance allocated to that nickname).  That way, everyone could look at the list and make sure their name was on it, that their balance was correct, and that the sum for accounts was the same as the sum of the addresses (shown on block explorer).  You wouldn't be able to go fractional by leaving some names off the list to balance things out because you wouldn't know which people are going to be looking for their own information.

I don't what you guys are thinking but I do not want by balance publicly displayed. I am sure any merchant that uses flexcoin agrees with me.

Well how do we solve that?  we would have to know where these bitcoins came from?  What is asked is physically impossible,  we can't reasonably be expected track down where a bitcoin came from? Because we would have to physically track each coin from it's inception and then on top of that find out who owned that coin from it's "birth"

I want to point out in your example the point where they bought bitcoins (where they CANNOT do that on flexcoin) is where they laundered the money.

Criminals most likely would setup a TOR server and do garbage though that...  

Know YOUR CUSTOMER.  Banks don't have to know every person that has held a dollar bill.  Only the person who's putting the money in the bank.  Make sure to collect personal information for every account. It's that simple.

As a third party involved, if you cannot freeze an account on order of the U.S. Court (because you have no idea whose account is whose, and no idea how many accounts they may have) then you are liable for the criminal actions done through your service.

 Make sure to collect personal information for every account. It's that simple.

I'd rather not provide my Slave Number to use the service.

I don't what you guys are thinking but I do not want by balance publicly displayed. I am sure any merchant that uses flexcoin agrees with me.

Secret IDs      Balance
-----------------------
bitbyte         30.00
bitfan          52.41
freak0815        7.10
MrXYZ            2.90
newyork          7.59
-----------------------
TOTAL          100.00

Bitcoin Address                               Balance
-----------------------------------------------------
1gDh45GdsGglAw2qe4HaHst...                    14.25
15GdDggkaL57wjhAfsd6dzh...                     5.13
1Ldfge64mdaYsFrZ68sffgh...                     1.75
1gshgsJdrh546EHs6eDGhfd...                    14.64
1AAhEh22bSH4wD2tSHlFtfh...                     7.41
1dKZtTROvBCMf54GgUGgShd...                     3.58
1jfFhgKSBfqfmNnXUu9M4Zi...                    11.25
1fHed34Zr6r7KFsgHJKr1DF...                     9.47
1JeC5sM8MgHD8oTKqSni6fZ...                    12.49
1QwKLLoTdWRTnsu9gEoPbiS...                    20.03
-----------------------------------------------------
TOTAL                                        100.00

This is the part that I don't understand,  you want me to collect social security numbers for people that are depositing bitcoins?

My whole problem with this is the following:

A)  the bitcoins can be sent though http://bitcoinlaundry.com/ ... or just forwarded around 400 times,  the point is that there is no real valid way without allocating hundreds of man hours to try to trace where a bitcoin went.  Rendering "know your customers" much more difficult as compared to dealing with US dollars.

B) you want me to collect information on my clients, such as their social security number?   I could imagine that working well  "just upload your bitcoins to flexcoin after you supply your social security number, occupation, age, etc.."  You realize that is impossible?   You might provide that information,  but most (if not anyone else) would not provide that.

Look I am not completely dismissing what you are saying,  I am just saying that it's virtually impossible to trace who is using what...  how can I verify (even if I required a social security number)  that the number is real in the first place?  Or the address?  The only solution is to run a credit check on each person...   that is a hell of alot of expense for a bitcoin storage facility.

Additionally, it alleges that while e-gold placed "value limits" on certain accounts suspected of criminal activity, they suggested that the owner open a new account, placing no restrictions on their ability to move funds out of the original account.

Law Enforcement: Flexcoin, LLC is located in the Commonwealth of Pennsylvania, United States of America. Flexcoin, LLC will cooperate with any federal and / or state authorities as the law requires.

I'm not a lawyer either, but I don't think this applies.  See 31 CFR 103.11 (http://www.ffiec.gov/bsa_aml_infobase/pages_manual/regulations/31CFR103.htm)

31 CFR 103.11(uu) giveth, but 31 CFR 103.11(h) taketh away.

If I recall correctly, this is the specific reason that Flexcoin operates with bitcoin only.

Hi Kbundy,

You realize it's free to transfer flexcoin to flexcoin ...  tell the person you want to transfer that .0000001 to his flexcoin address.

I don't know how you end up doing it.  The reason I asked in the first place was to find out if you'd addressed it at all.  I'm not likely to use a service that is going to end up being shut down for this kind of crap.  Paxum, Dwolla, Paypal, all have to verify their users one way or the other.  There are very specific laws regarding money transfer services. 

You have failed to understand several basics going on here:

• Flexcoin and how it interacts with BTC is not a money transfer service. It's a BTC transaction service. No USD or other currency is being dealt with so those "laws" you are referring to not only don't apply, they don't even exist for BTC.

So I'm not sure what your user identity tracking high-horse soapbox rant is all about but you need to realize the following:

"a business can clearly engage in money transmitting without limiting its transactions to cash or currency and would commit a crime if it did so without being licensed." UNITED STATES OF AMERICA v. E-GOLD, LTD


That is a form of verification that can be used.  Paypal allows you to verify your identity the same way.


Again "a business can clearly engage in money transmitting without limiting its transactions to cash or currency and would commit a crime if it did so without being licensed." UNITED STATES OF AMERICA v. E-GOLD, LTD

(In case this is not going through.  BTC doesn't even need to be a currency.


No soapbox here, just the internet.


When trying to make a point, absolutes are not your friend.  I can name at least one person who won't do business at all with a company who is standing to lose his BTC.


Individuals in the U.S. have to report their capital gains by law.  If they don't, it's their business and I don't care if manage to evade the IRS or not.  Any business or citizen within the U.S. does fall into their jurisdiction by simple definition of the word.  Whether this is a just system may be debatable, but that is reality.

You are confusing the ability to hide your assets with the legality of hiding your assets.  I'd be interested to find out how you feel about big business.  Since you are advocating the same kind of money harboring to escape fiscal responsibility brought upon by offshore banking.  Double standard much?


Bank of America is not held liable because they 'know their customers.' eGold on the other hand, did get shut down for the illegal transactions of their clients. Your example is a situation of 'Exception proves the rule.' BofA and Chase and USBank and etc and etc and etc of all legally functioning banks who know who own every account.

In short, if Flexcoin is a "Money Transmitting Business" under US law, then we all are too.

No, I mean "all of us".  Not just US corporations, not just US businesses, not just US citizens.  All of us.

Read 31 CFR 103 and USC 1960 again.

Above all you are mistaking the fact that BTC is not a USA currency and does not fall under any of its laws. You're assuming everyone in this discussion is in America? Come on man.

E-Gold is one example of your US Laws but it is not canonical and certainly does not apply to the whole global use of BTC. Sure you may know one business or two or however many that won't do business without identity tracking but one of the main goals of BTC is the lack of identity required to operate transactions. You seem like you are hard up to make BTC another USD or Euro but it isn't and it never will be. If you want the requirements you're bantering on about you should go elsewhere because BTC will never fit that mold.

As to IRS and income reporting - the IRS doesn't give a shit about BTC. If I change it into USD and put it in my US bank account that might be one thing - but I'll repeat myself and remind you that I do not and am never required to do anything with a bank account to use my BTC funds. That is the beauty of BTC - I can buy sell, purchase, and trade goods and services for/with BTC without any interaction with any government backed currency.

Done and done.

In short, if Flexcoin is a "Money Transmitting Business" under US law, then we all are too.

I'd prefer all bitcoin transactions to be free, and you make your money by buying and selling bitcoins for real world currency.

Even if the accounts have 'secret' nicknames I can look at all the nicknames and balances, send a tiny amount ot someone, and then look at the 'secret' nicknames again and find out which is theres. multiple secret nicknames gets around this but I do not want to have to bother setting that up.

Even if the accounts have 'secret' nicknames I can look at all the nicknames and balances, send a tiny amount ot someone, and then look at the 'secret' nicknames again and find out which is theres. multiple secret nicknames gets around this but I do not want to have to bother setting that up.

"a business can clearly engage in money transmitting without limiting its transactions to cash or currency and would commit a crime if it did so without being licensed." UNITED STATES OF AMERICA v. E-GOLD, LTD

Consider this... in the USA gold/silver is money, gold/silver coin is lawful money. Silver coin is currency. Coins and bank notes are cash and currency. So you can transfer gold bullion (a type of money) without transferring currency, cash or bank money. Bank money is not currency, it's a currency equivalent. US savings bonds are not cash or currency. You could trade US savings bonds and be money transmitting. If you did the same with barrels of oil you would not be transmitting money! Hopefully, you get the point.

Under USA law, Canadian Law, UK Law, Euro Law, Iranian Law, Chinese Law, Indian Law it's not clear what Bitcoin is. But anyone claiming it's legally money is just guessing and/or hoping.

I like what Flexcoin is doing and I will use it and ask that my customers do so as well. Thank you for the service. I believe many users in this thread have good ideas that need to be considered and I'm really attracted to the way you seem to LISTEN. So keep up the good work flexcoin team.

BTW, please consider the example of E-gold (http://en.wikipedia.org/wiki/E-gold), with regards to FlexCoin's regulatory posture.

In broad strokes, E-gold obtained legal counsel that said they did not have to register as an MSB or file CTRs (http://en.wikipedia.org/wiki/Currency_transaction_report) and SARs (http://en.wikipedia.org/wiki/Suspicious_activity_report), because their gold-backed virtual currency was not "money." 

The US federal government -- and common sense -- disagreed, once substantial amounts of value were being transferred overseas using E-gold.

Precedent has shown that the US government wants to track the movement of "funds" all over the world; be proactive about compliance and use common sense: bitcoins are money for all practical purposes.

And yes, I read your Terms of Service (http://www.flexcoin.com/?page_id=118) in its entirety.

Another question:  If Flexcoin takes off and there are less and less transaction fees floating around, isn't that shooting yourself in the foot?  If miners are going to be making a larger part of their income from transaction fees in the future, doesn't flexcoins model hurt that?

+1 very interesting question...

Another question:  If Flexcoin takes off and there are less and less transaction fees floating around, isn't that shooting yourself in the foot?  If miners are going to be making a larger part of their income from transaction fees in the future, doesn't flexcoins model hurt that?

I sent bitcoins to my account:
date (time): 08-30-2011 (03:57:58 PM)

its 6:26 and i still dont see the funds in my "available balance", but theyre in my "total balance" and i cant send anyone bitcoins...whats up with that? PM sent and support contacted.

7. Bitcoins deposited with Flexcoin will not be available for transfer until 15 confirmations have accrued on the bitcoin network.

When do people receive the "discount"? Is it at a fixed day every month? I couldn't find it in the FAQ.

I sent bitcoins to my account:
date (time): 08-30-2011 (03:57:58 PM)

its 6:26 and i still dont see the funds in my "available balance", but theyre in my "total balance" and i cant send anyone bitcoins...whats up with that? PM sent and support contacted.

You guys should add it so that lets say I have 2.3 bitcoin I want to withdraw them I withdraw 2.3 not enough funds fff so whats the fee I can't find it you need to post when withdrawing how much you can withdraw so you don't have to keep guessing what the fee will be.

First week of each month..  Next one is going out in 48 hours or so

will you be making a app for flex coin?

Simple idea.  Prove you have X (hopefully X > 1000) bitcoins available under your control that are not customer coins.  Keep those coins in 'cold storage'.  Have an operating corporate charter and presence in a country that is not designed to hide responsibility and identity.  This still insulates you in case of most accidental liability but allows the community to know you have some investment and who you really are.