Yeah, I see how that could pass for an announcement. But you did not even mention then that you intended for this to be used as a vehicle for other people to short. All you said is that you would offer a naked issue comparable to PPT as a way for you personally to short.

For all I know, you only added a comment about the possibility to short your asset after I suggested that there is demand for this.

Edit: And by the way, sportsmanship also means not making a scene when your competitors don't offer you free advertising. I know I didn't waltz in to every mining bond thread and demand they pay tribute to PureMining.

I'm really not trying to provoke you or anything, I think the thread has been hijacked enough. I just wish you to be a bit more civil.

I read the forum plenty, please direct me to a place where you announced your offering prior to my own proposal, preferably in a relevant section.

You may be right that I am missing out on IRC, but it doesn't seem like a very productive medium to me. I can usually be found in #bitcoin-il though.

I don't follow mpex closely, nor do I see a reason why I should.

That's... Interesting, I guess.

I don't know what kind of bubble you live in, but people don't go daily to check Mpex. Bitcointalk announcement or it didn't happen. I did browse this forum and GLBSE to make sure nobody has made a similar suggestion. You announced this here after my own post. When I saw it I thought about giving it a mention, but decided against it because there was no real innovation in your offering - you can do with it exactly what you can do with PPT. And I did mention PPT.

If you must know, I came up with the idea while driving to the train station on my way to work yesterday. Of course, the rigorous mathematical modeling had to wait until I got home. If you are suggesting that I did in fact have knowledge of your own offering while I was making this post, then you are calling me a liar, and I will not tolerate such accusations.

Once again, you are not my foregoer. PPT offered a timed positive bond, you offered a timed positive bond, I offered a perpetual negative bond.

If you must take credit, it is true that I was somewhat inspired by your recent comments in the BTCST thread predicting a default.

I beg your pardon?

I'm assuming you're referring to this.

Even if this was announced two days ago as you say I had no knowledge of this when I devised the asset being offered, or when I wrote this post.

More importantly this is completely different. You have basically copied the PPT bond, which is a positive Pirate deposit, and merely stated that it can also be sold short. My offering is the exact opposite, each bond represents a negative investment, in a way which is original (maybe similar instruments exist in the financial world at large, but I have not seen anything like it here). It is much more streamlined and easier to use than any short position that can be taken utilizing PPT or your copy of it.

All that said, both our offerings are valid and investors can choose which they prefer, if any. I just wish my competitors would have a bit more sportsmanship.

In the bond described in the OP, this will have no effect. If investors believe this is indicative of a different default risk (likely reduced), they can react by exercising the right to sell bonds, or to refrain from buying more bonds. And I will also take this into consideration when pricing any newly issued bonds.

Edit: It is also possible that the interest rates would become so low that the bond no longer makes sense; in this case, no new bonds will be issued, and bonds that are not sold back will decay peacefully until they are forgotten. A new type of bond may be offered with a lower effective interest rate.

In the no-sell variant, it is likely that any material change any BTCST will offer bondholders a temporary right to sell bonds. This variant is more flexible wrt pricing, so whatever the new interest rate is, it can be issued at a price that makes sense with the predefined decay rate.

The above is still a concept; I have not made a final decision whether I would like to offer these bonds. I am writing this to hear any thoughts about the idea and learn if anyone would be interested in buying such bonds.

A face value equal to half the maturity value was chosen mainly because this leads to an effective interest rate equal to the decay rate, which is intuitive. A greater maturity value can be used, which will allow making an investment with a lower collateral (essentially a higher margin ratio), but this will mean that the decay rate needs to be higher for a given effective interest rate, which is less robust.

The asset as described can be cleanly equated to a negative deposit against collateral. There is an alternative offering I am considering: Dropping the right to sell the bonds at face value (and replacing it with a compensation clause for a scenario that the BTCST program changes materially without defaulting). This allows more flexibility with the pricing, but makes it harder to compare directly with BTCST deposits, except for the fact that this is a bet on an imminent default. Opinions on the preferred variant are also welcome.

Update: No longer just a concept. For now I went with the sell option, 200% maturity variant.

(reserved)

tl; dr: Each Anti-Pirate bond has a face value that starts at 1 BTC and decays by 7% (multiplicatively) every week. If Pirate defaults, the bonds will be purchased back for twice their face value. Bondholders have the right to sell bonds for their face value at any time. The asset is currently inactive.

Asset page: https://glbse.com/asset/view/ANTI-PIRATE

Introduction. For the past several months, forum member pirateat40 has offered the recently renamed Bitcoin Savings and Trust program (website), allowing investors to deposit funds and receive insanely high interest payments in return. The program is widely suspected to be a HYIP scam, though it has still attracted much interest from investors who believe that, even if the program will eventually default, they will make back their investment by then.

No doubt there are other people who believe that default is imminent and wish to take the opposite side of the bet. So far there hasn't been an effective way to do this. One possibility that comes to mind is borrowing pass-through bonds such as PPT and selling them, but there is no standard platform for this, and this is made cumbersome by the terms of the specific offerings.

The Anti-Pirate bonds offer a streamlined method to short BTCST, and are equivalent to depositing a negative amount in the program (where the payment for the bond acts as collateral, much like when selling on margin). If you believe that investment in BTCST has a net negative expected value, then an Anti-Pirate bond, bought at an appropriate price, will have a net positive expected value.

Method of operation. Bonds will have a face value which starts at 1 BTC and will be sold at a price which is somewhat higher than the face value. The face value of all Anti-Pirate bonds will decay by 7% per week (at 03:30 UTC on Tuesday), multiplicatively (after X weeks, the face value will be 0.93^X BTC). The bond represents a perpetual obligation by the issuer to be bought back, if the BTCST program defaults, at a price equal to the maturity value, which is twice its face value at the time of default. The faster Pirate defaults, the higher will be the return on investment; conversely, if Pirate never defaults or only after a very long time, the investment will be lost entirely.

The issuer is also obligated to buy back bonds at any time, at the request of a bondholder, for their face value at the time. Taking all this into account, buying Anti-Pirate bonds with total face value of 1 BTC is completely equivalent to the following:

1. Depositing (-1) BTC in Pirate's BTCST program at the 7% weekly interest tier;
2. Instead of receiving 1 available BTC, depositing 1 BTC as collateral;
3. Each week, withdrawing 7% of the balance (making the negative balance closer to 0), and correspondingly withdrawing 7% of the collateral;
4. Paying an advance, non-refundable fee for the service equal to the difference between the traded price and the face value. For bonds bought from the issuer, the fee represents a compensation for the risk in offering this bond.

This is because depositing 1 BTC creates a profit of 7% per week, where a default causes a loss of 1 BTC; while buying Anti-Pirate bonds causes a loss of 7% per week (represented as a depreciation in the face value of the owned bonds), a default would cause a gain equal to the negative balance, the scale of investment is reduced by 7% unless new bonds are purchased, and the position can be closed at any time allowing withdrawal of the collateral.

The pricing of any future bonds offered will take into consideration the reduced face value. The asset can be used indefinitely, but requiring ever growing quantities for a given value.

Details on the current face value of bonds is available at http://bitcoinantipirate.com/. This website is informational only and is in no way binding.

Determining a default scenario. The contractual payment in the scenario of a BTCST default will require a community consensus that a default has taken place. A partial default will count as a default for this purpose; on the other hand, a single person claiming he is unable to withdraw funds is not sufficient evidence. The time of default for the purpose of determining the effective face value is the time that real evidence first comes to light, which in retrospect will lead to a conclusion of default. Any isolated incident will not count for the purpose of locking the face value.

The issuer can also choose at any time to buy back the bonds at the maturity value (equal to twice the face value), even if there is no default.

Timing. The issuer will keep as reserves, in either a local machine or a GLBSE balance, an amount of bitcoins equal to at least the face value of all outstanding bonds. Should any loss or theft of the reserves occur, the issuer will make a best effort to quickly replenish them.

The issuer will maintain bids on the GLBSE platform for the bonds, at a price equal to at least their face value, in a quantity which is expected to be sufficient for the demand to sell back bonds. If the bids are executed, the issuer will make a best effort to place new bids quickly, which will usually take no more than 2 days. Contacting the issuer can help expediting this.

The issuer is not obligated to keep in immediately available reserves the due payment for a case of BTCST default. However, the issuer has more than enough assets to be able to cover the obligation, and these will be liquidated as necessary to fulfill the obligation. Said liquidation is expected to take several days.

Trustworthiness. I, Meni Rosenfeld, am issuing the Anti-Pirate GLBSE asset, and committing to fulfilling the terms of the bond as described. I am a veteran of this forum and other Bitcoin communities, and own a Bitcoin business. I am using my real name which can be linked to my identity via my extensive online presence, and I have verified my identity with GLBSE.

The only way I can conceive not honoring the terms is if a malicious cracker hacks into my GLBSE account and issues new bonds on my behalf. The obligation thus created is arbitrarily high and there is no way to commit to it (of course, if the damage is within reason I will absorb the losses). I am using a strong password for GLBSE and keeping my computing environment reasonably secure, but cannot absolutely preclude this scenario. Do not buy newly issued shares unless I announce them on the forum, and in case of suspicious activity you would do well to verify via additional channels. Going forward I will look for robust ways to limit the plausibility of this scenario.

To paraphrase Einstein: If GLBSE is illegal, then I would feel sorry for the dear law. GLBSE is correct.

Of course.

That depends on the smartphone. There's no reason why there shouldn't be smartphones that maintain a tolerable level of privacy, though I don't know if any are currently available. It can also be a dedicated Bitcoin storage device, which doesn't need to be connected to the internet, a cellular network or anything - it can connect wirelessly to the merchant to send a transaction, and at your home to synchronize. Such a device can also be smaller than a smartphone, possible comparable with a CC.

Just like banks, credit cards etc. exist to overcome the limitations of traditional physical cash, so can services exist to overcome whatever limitations Bitcoin has (which are much milder than for cash). You can have Bitcoin credit cards and physical tokens, either including a private key or not - the latter would require more trust in the issuer, but will allow smaller denominations (in both cases the issuer will need to be trusted and have an infrastructure to prevent counterfeiting).

Right. On one hand I like cash, on the other I find it archaic to have to mess with composing amounts from various coins and/or receiving change rather than simply having a digital representation of the exact amount. I wouldn't mind paying by pulling out a device and entering a PIN.

It's very difficult to reverse a transaction even with 0 confirmations. Shop owners can be completely safe accepting payment immediately for most purchases.

For large purchases you can either wait for a confirmation or two or use a layer on top of Bitcoin, such as a split-key eWallet with a green address. There will also be insurance services and so on.

Thank you, I'm glad to offer a valuable service.

Essentially yes, though there was a token discount.

I have been contacted (by one who also happens to be a Bitcoil customer) to make a presale of 5500 bonds, and I agreed. Because of this, and to stay with round numbers, I will issue 6000 new bonds (total of 10000 so far), of which 500 will be publicly offered at 0.4 BTC.

That's one way to do it (with the current standard client), but as I said, in principle (using Armory offline wallets etc) to send coins you don't need the computer with your private keys to be connected to the internet or any network. That's the beauty of digital signatures.

But yes, the more secure and inconvenient the wallet, the more it is suitable for long-term savings rather than a spending wallet.

Don't the same risks exist with whatever medium you use to install the OS?

Anyway, with split keys you can make this even more secure. Have one computer in your house with one OS installed with some medium, another at a friend's house (which could be on the other side of the globe) with a different OS and installation medium. Have both of them offline, collect the public keys to generate the address, then manually input transactions and output signatures from both computers. Stealing your coins would require compromising two offline computers with different systems in different locations. I'm sure that's pretty hard.

It definitely does work and it's what I'm using.

I've started this related thread for discussion of ways to solve this problem going forward.

As for the current situation: The default language is determined by the dates format. Many people have their OS with an English interface but use the local format for dates and stuff. (eg in Israel we use d/m/y rather than m/d/y). So this means that many people will encounter an unwanted translation; and that resolving it doesn't require "removing languages", just setting the defined format language to US (and the formats themselves can be customized for this language to match the local style).

Alternatively, you can use psy's suggestion of editing bitcoin.conf (haven't tested this), or simply add -lang=en_US to the target of whatever shortcut you are using to launch Bitcoin.

It may or may not be factually true that Nefario has "very little knowledge of how capital markets actually work". This has no relevance on whether GLBSE (or the ecosystem GLBSE is a part of) should be an exact copy of traditional markets. There's no problem with providing a service that serves multiple functions.

In the future, assets in the Bitcoin world will be based on a decentralized blockchain like Bitcoin itself; issuing, transferring and even atomic Bitcoin-asset trades will be done on this blockchain. Matching buyers and sellers can also be done on a p2p network if there is no problem with fake orders. There will be separate services that allow continuous trades and guaranteed orders.

But right now the Bitcoin market is too small for a separation of powers with multiple competing offerings for each function.

As others said, the 100 are in reserve and not displayed.

Not only are individual transactions stored on the blockchain, they are displayed in the client in the "Transactions" tab. So you can have a "rent for tenant A" address (or from the sender's side, this address will be called "rent to landlord"), and you can track the payments to this address every month.

No. Once the transaction is out in the open, it's final and cannot be reversed (up to some technical issues). They don't need to be "received" by the beneficiary. In fact you don't even need to connect the computer with the wallet to the internet to send these coins, you can just have it create signatures and pass these manually to a connected computer. With this method, there's no way to compromise your wallet without physical access.

For maximum security, Split keys / multi-signature transactions are an important part of the solution.

This description is based on Bitcoin's old wxWidgets GUI that was used before version 0.5. Starting with 0.5 there's a QT GUI which is quite different. You could contact Gavin about updating the faucet description.

In the "Receive coins" you have your own addresses which people can use to send to you, pick one or generate a new address to give to the faucet. It should have one address to begin with. In "Address book" you have other people's address which you can send to, if you haven't added anything it will be blank.

The most common practice is to use an address for each purpose, this has both bookkeeping and privacy implications. So I have an address for forum donations, a different address for donations from Wikipedia, and I have an address for each eWallet of all sorts (including exchanges and mining pools), and an address for each customer, etc., but I don't demand a new address for every transaction.

I have issued 2000 new bonds (a total of 4000) at 0.4 BTC each.

Nefario has also finished verifying my account.

I have been reminded that BFL singles don't work with P2Pool because of the frequent LP, so that's off the table.

I'll proceed with my original plan - which is to use whatever combination I see fit of physically operating hardware, colocation, mining contracts, mining company investments or hedging on available markets, which I deem will provide me with the best combination of profit and risk. I will divulge information on my course of action for the sake of transparency, but this is irrelevant to my unconditional obligation to fulfill the deterministic terms, and I will not go out of my way to prove that I have the stated backing.

As a reminder, in the short term there are 13 BFL single units on the way to be colocated with Inaba (which may be absorbed into his BFLS offering), who will operate them utilizing GPUmax and the last fortress of hoppability, Deepbit. I'm also waiting for news from Largecoin, I have the deposit money ready.