I see a lot of words there but no real meaning.

When someone withdraws their euros there's no "flowing between customers" - you have to sell Bitcoins to recover their euros.

You can pretend on paper that you still have enough BTC to cover euro-denominated deposits (by using an internal exchange-rate that isn't in track with the market) but you can't actually sell your BTC onto the open market at that internal index price.

The scenario I'm looking at is the typical bubble one - think of what happened earlier this year.  BTC rose up to $250+ vs USD then collapsed down to $100 very rapidly and stayed there for months (dipping even lower on occasions).  If you had 5 million euros on deposit with you and 1 million euros float and BTC halved vs the euro then at best you'd only have 3.5 million euros worth of realisable fiat.  i.e. you'd be insolvent.

Pretending BTC was still worth $250 doesn't solve that.  And as soon as customers notice and start withdrawing the deficit grows as every withdrawal has to be covered by selling BTC at the real price not some pretend index.

And what does "this additional time will enable us to take advantage of trading conditions to strengthen our position" mean?  You claim you'd be unable to even move the BTC around without customers signing transactions - so how can you trade with them?

How does having your own local index protect against exchange-rate movement?

Customer deposits Euro and wants a Euro-denominated account.  You can't use a local index to change how many Euros he deposits.
You then purchase BTC.  It doesn't matter what your index says, you have to buy them at market rate from someone selling them.
BTC then crashes vs Euro.
How does your index protect against that?

I can see your own index helping you when people deposit Euros and want a BTC-denominated account, but by your own estimates 98% of accounts will be Euro-denominated.  The 2% that are BTC-denominated can't provide useful hedging for the other 98% of customers no matter what your index says.

How are you planning to hedge against a heavy fall in the BTC/EUR rate?  I'm not aware of any cheap high-volume means to do so (other than converting into fiat which would be rather pointless).

Your plan pretty much relies on BTC rising vs EUR.  Whilst I'd tend to agree that long-term that seems likely it's also likely that any such rise won't be a steady one but will have the occasional large bubble + collapse.

If BTC happens to be at the top of a bubble when you launch it could be rather a problem for you.  Whilst you may hope your own purchases could extend the bubble you can't really base a whole business plan on hoping BTC doesn't have a collapse shortly after you start taking deposits (if it happens later then it isn't such a big problem - after a while only a total collapse of BTC would be a major issue for you).

It's certainly an interesting business model - borrow money denominated in EUR then bet it all on BTC rising.  And rather than paying interest for the loans to speculate with, charge them fees for the privilege.

Sold   250
Swapped   0
Total   250
Price   0.01212
Total   3.03
Less Fee   3.02394
Man Fee   0.0907182

BTC Balance (BTC-TC)   1536.794144
9071 LTC-ATF.B1    90.71000000
Coinlenders CD 27/9   201.271302
Coinlenders CD 12/9   101.6465035
Coinlenders Cash   3.95043354
Just-Dice Balance    244.82000000
TOTAL ASSETS    2,179.19238306
   
Outstanding MINING   180154
Outstanding SELLING   180154
Outstanding PURCHASE   8562
Effective Units   188716
   
Block reward   25
Difficulty   86,933,018
Hashes per MINING   5000000
   
Daily Dividend    0.00002892
50 days (Min Liquid)    0.00144625
100 days (Forced Close)    0.00289249
365 days (Buyback)    0.01055760
405 days (IPO)    0.01171460
400 days (Post SELLING div)    0.01156998
410 days (Pre SELLING div)    0.01185923
   
NAV Post MINING Div    2,173.73378352
NAV/U Post MINING Div    0.01151855
Days Dividend Post Div   398.22
SELLING Dividend    -         
NAV Post SELLING Div    2,173.73378352
NAV/U Post Selling Div    0.01151855
PURCHASE selling price    0.01209
PURCHASE buy-back price    0.01129
   
J-D House profit at report   5689

There's nothing wrong with changing a business plan.  There IS something wrong with trying to unilaterally change a contract.

You only put in a contract the things that won't change.  Operational things which are at the manager's discretion don't go in a contract (though the contract may define the scope the manager has for making decisions).  Contracts define what you CAN'T do and what you MUST do - they don't define what you WILL do (which can be anything you want within the defined constraints).

A contract is a binding agreement between two parties.  Both parties have to agree to any change to it.  It follows from this that you can't change a contract during IPO - as the other party (investors) is in the process of being defined.  Right now there may be people buying your shares from BTC-TC who have only seen the contract there and don't check the forums.

My objection isn't at all against changing plans - that's an entirely sensible thing to do at times.  My objection is to you apparently believing that a contract is something one party can amend at will - and not just that but that one party can redefine the contract and publish it in a location other than where the original was published.

I'm not talking about a 'business plan'.  You aren't selling equity in a business and have never published a business plan (a business plan for what you're doing would detail things like the markup you make on the contracts you sell to the public and how much extra you can make if BTC rises vs USD plus what your contingency plan was if BTC fell vs USD before you ordered).  Don't try to make it sound like you're selling equity in a company - you aren't, you're selling a sort of 'PMB with reinvestment'.

I'd just like to remind all SELLING holders that the vote on whether or not to approve CIPHERMINE bonds for investment ends today.

At present only a minority of investors have voted at all.  If you don't want to approve it for investment (I know some don't want to invest at all - which is a perfectly valid stance) then vote NO.  If you don't care either way then Abstain.  And if you want to approve it as a valid investment then vote YES.

But please vote - as I don't want to have to keep putting the motion back up until it finally gets settled one way or the other (or it becomes irrelevant).

Well technically he had the right to close it at any time:

"Should mining become unprofitable or other circumstances cause the operator to be unable or unwilling to perform his duties, sale of all hardware and equal distribution of funds will commence according to the number of shares held by each individual."

So all he needs to do is prove he sold the hardware and properly discharged his fiduciary duty to his fellow owners by obtaining the best possible price for it.  So let's see Josh post links to his request for bids/auction and receipts for the sale of hardware then this unfortunate matter can be laid to rest.

Of course I can't be 100% sure it's a scam.  In fact, depending on how you define 'scam' I don't necessarily think it's one at all (I believe it's designed to guarantee the issuers profit without any real likelihood of profit for investors - is that a scam?).

When someone asks for millions of dollars is it really too much to ask that they get a few paragraphs of text right?  I mean they claim to have legal counsel - yet rather obviously their contract was never run past such (there's a totally unremarked-upon ambiguity over their fees for one thing).

I'm VERY lazy myself - and the contracts for my own securities have typoes in.  But despite never even properly proof-reading them myself (let alone getting anyone else to) I've NEVER needed to edit one mid-IPO.  Am I just lucky?  Or are they just incompetent?  I means the DMS contract is way more complicated than this - yet other than a few tiny changes it's all worked fine.  And I just typed it in then submitted it - and I don't have any legal counsel or whatever (well I do, but not for that).  It's trivial to get a few pages of text roughly right - so why would you even consider investing in anyone who:

a) was too incompetent to do so,
b) was too delusional to hire someone competent to do so?

Do bear in mind that right now they're pretending to be selling shares under some forum-post contract that has never been approved for the actual listing on BTC-TC (which requires a vote by shareholders lasting at least 7 days to change the contract).  I just don't see what is conceivably so brilliant about this as to ignore such a major fuck-up.

Nothing wrong with asking questions - other than when there's already evidence to suggest that no matter what the answers are you shouldn't touch it.  Amending contracts mid-IPO is one such piece of evidence - once that happens asking more questions is just a waste of time as there's no sensible scenario in which an investment could make sense.

It's like asking a convicted paedophile what they believe the age of consent should be.  They may have a valid opinion but you don't need to hear it to decide not to hire them to babysit your kids.

Yeah you got me fair and square.

I have to admit to a huge conflict of interest.  I trade shares and badly want ones where there's transparency on the contracts, where the issuer works out what they're doing BEFORE selling shares (and then sticks to it) and where the's a non negliglible chance of investors making a BTC-denominated profit.  So I'm VERY biased against shit like this.

Good catch.  Now go do your lemming impression.

You're seriously asking a 40 post account for details of what they'll do if you send them a few million USD?  I can think of worse things to do with thousands of BTC (flushing them down the toilet, burning them, investing them with usagi) but none are MUCH worse - and likely investing with usagi is better as from past results you'd get 10-15% back after a year.

Seriously, if someone hasn't got a track record and hasn't got (provably) a load of cash then just ignore them (shockingly there's a reason why people without cash lack cash - and it doesn't make them good investments).  When you look at potential investments you absolutely MUST look for reasons NOT to invest - not look for excuses to throw your cash away.  These guys haven't even worked out how BTC-TC works yet - and are selling under a contract (which only exists in forum posts that they can edit) that isn't even the one listed on the exchange.  And you're seriously asking for clarification on details of a theoretical contract in an irrelevant forum post? 

Just destroy your coins and jump off a cliff - it'll achieve the same result faster without spamming the forum while you work out just how fucking stupid you are.

There's some seriously strange maths going on here.

From the contract:

"The first batch is a initial sale of 14,500,000  (14.5 million) shares, which will be sold on BitFunder for 0.0014 BTC per share. "

"The second batch of 3,500,000 (3.5 million) shares and will be sold at 0.0015 BTC per share."

That's 18 million shares in total - and adds up to 25550 BTC.  Call it 25400 BTC to allow for transaction fees.

Yet the table quoted in the post above claims that with 18.5 million shares sold (500k more) only 20k BTC has been raised.  Somewhere over 5K BTC ($0.5 million) has vanished.  Have some private unpaid shares somehow accidentally got into the public section?

There's further problems with the math in the table.  Look at the 3 different examples.  They're 20k BTC, 27.5K BTC and 35K BTC - so same gap of 7.5k BTC between each set.

Now look at the hashing-power.

When capital increases from 20K to 27.5K hashing power increases from 235.3 Th to 303.03 Th - an increase of just under 68 Th.
When capital increases from 27.5k to 35K hashing power increases from 303.03 to 363 Th -- an increase of just under 60 Th.

Somehow extra hashes get MORE expensive per hash the more you buy?  That's the opposite way round to how pricing usually works on bulk purchases.

I think there's just been a cockup on BTC raised in each line (and not anything dodgy going on) - as it appears from the table that 4 million shares at .0016 raise the first extra 7.5k public BTC then 3 million more public shares (at the same price) raise another 7.5k BTC.  When in fact neither of those sizes of public share sales raises anywhere near 7.5k.  It looks like the table was changed at some point and one of the columns (BTC raised) didn't get updated when the others did.

EDIT:  Was reviewing the BTC-TC listing as it claimed to be updated.  It also has silly things like "These assets have to be sold by the 25th of October (00:00:00 UTC, 4 November 2013) before the offer expires."  In the Financial Planning section.

I appreciate you're only asking for a few million dollars - so can't really justify someone proof-reading a few paragraphs of text - but noone even skim-read it for obvious howlers like that? (which also totally contradicts the contract which claims the IPO ends in September anyway).

Sold   1125
Swapped   0
Total   1125
Price   0.01215
Total   13.66875
Less Fee   13.6414125
Man Fee   0.409242375

BTC Balance (BTC-TC)   1539.311341
9071 LTC-ATF.B1    90.71000000
Coinlenders CD 27/9   201.1498005
Coinlenders CD 12/9   101.581735
Coinlenders Cash   3.94820938
Just-Dice Balance    244.90000000
TOTAL ASSETS    2,181.60108565
   
Outstanding MINING   179191
Outstanding SELLING   179191
Outstanding PURCHASE   9275
Effective Units   188466
   
Block reward   25
Difficulty   86,933,018
Hashes per MINING   5000000
   
Daily Dividend    0.00002892
50 days (Min Liquid)    0.00144625
100 days (Forced Close)    0.00289249
365 days (Buyback)    0.01055760
405 days (IPO)    0.01171460
400 days (Post SELLING div)    0.01156998
410 days (Pre SELLING div)    0.01185923
   
NAV Post MINING Div    2,176.14971735
NAV/U Post MINING Div    0.01154664
Days Dividend Post Div   399.19
SELLING Dividend    -         
NAV Post SELLING Div    2,176.14971735
NAV/U Post Selling Div    0.01154664
PURCHASE selling price    0.01212
PURCHASE buy-back price    0.01132
   
J-D House profit at report   5706

Is it possible to have an API call that returns only last 24 hours/48 hours of trades?

At present the only request for transaction history give the entire transaction history - which uses up a ton of bandwith for no purpose when you're only after new trades.  I have a bot running that handles the exchanges for DMS.  Running it every 2 minutes uses up well over 1 GB of bandwidth per day - which totally scuppered my plan to run that on a seperate computer on a backup mobile bandwith connection (as it far exceeds the bandwith paid for on that connection).  And of course that's only going to get worse as time passes if entire history is sent every time (plus something similar will be running on 4 more of my accounts in the not too distant future).  And it's wasting bandwidth at the server end too.

I'm requesting a new API call - not a change to the existing one.

I'm not sure how a thread from a total unknown asking for thousands of BTC for vapourware has got to 4 pages.  Surely there's nothing to actually discuss.

The situation isn't quite as bad as you think.

For example on BASIC-MINING the extra increase in shares was done by issuing new shares in return for a BFL mini-rig.  It was definitely a good deal for existing investors (and a horrible one for the guy with the mini-rig - as he took shares valued right at the top of a bubble) and was approved by shareholder vote that passed with over 80% YES votes.

Active-mining is really a pass-through to the main issue on Bitfunder (as it as launched on Bitfunder without there ever being a shareholder vote to convert it to a dual listing).  The maximum shares were set before a change in the structure of the company and should really be reduced to the current actual maximum.  Unfortunately AMC has been pretty terrible all along when it comes to clearly explaining, reporting and sticking to a plan on sale of shares.

I certainly agree with you that in a lot of BTC companies there is significant opportunity for a controlling interest to act against the interests of smaller investors (something which is illegal in nearly all countries).  But the most blatant ways of doing that don't involve issuing new shares at all.  And remember that what are reported as shares on securities aren't actually shares for the majority of securities : most are things like bonds or units where there doesn't need to be control of issuance/redemption provided the issuer doesn't do things which would break their obligation to investors (things such as buying back units above NAV/U or selling units below NAV/U in funds which have the ability to constantly issue new units).

The thing that most needs to be stamped out in my view is securities changing the contract mid-IPO.  Especially where they set targets that must be reached then remove them when it becomes apparent they won't be hit.  If a contract needs a change mid-IPO then the IPO should be aborted, all funds returned, the security delisted and moderator votes removed.  Then when they've changed the contract they should go through the approval process again.

A contract needs to be something that's fundamentally set in stone BEFORE shares are sold - not something that's changed randomly as the IPO progresses (or fails to progress).

Just a brief update.

As you may have noticed LTC has risen significantly vs BTC.  That means two things:

1.  The rise reduces growth (expressed in LTC).  Recent weeks have seen growth boosted by LTC falling - looks like this week will be the opposite.  At present despite having made over 2.5% trading this week we're only up 0.14%.
2.  This rise greatly diminishes the likelihood of needing to issue more units.  At present the bonds:NAV ratio is at around 93% which is pretty much exactly where I like it to be (75%-100% range is my target).

For those new to the fund let me explain about our currency exposure.  We raise most of our BTC-denominated capital from bonds - which generate liabilities cancelling out our BTC-exposure on that capital.  But we can't raise ALL our BTC-denominated capital from bonds as that would potentially leave bond-holders exposed in the event of a fast depreciation in the LTC/BTC exchange-rate coupled with even a modest trading loss in BTC-denominated investments.  So we always maintain around a 15% exposure to BTC - with orders set on BTC-E to keep us at that level of exposure if the exchange-rate moves significantly.

Because we do have some exposure to BTC any rise in LTC vs BTC decreases our NAV/U (our BTC-denominated investments become worth less LTC) and any fall in LTC vs BTC increases our NAV/U.  For small movements this has negligible impact but for larger moves in the exchange-rate it does produce a noticable effect.

Long-term the trading performance of the fund has had far more impact than the exchange-rate : we've delivered over 800% profit DESPITE LTC massively rising vs BTC over the life-time of the fund (that rise means the profit delivered measured in LTC has been REDUCED from what it would otherwise have been).

Personally I prefer weeks like this one so far (no real change in NAV/U with decent trading profits being cancelled by a rise in LTC) to ones like last week (higher growth - but largely due to LTC falling vs BTC).

Due to J-D losing a bit in the last day and few sales of PURCHASE yesterday, the SELLING dividend is very slightly lower than my estimate yesterday.

Sold   62
Swapped   0
Total   62
Price   0.01574
Total   0.97588
Less Fee   0.97392824
Man Fee   0.029217847

BTC Balance (BTC-TC)   2166.450008
9071 LTC-ATF.B1    90.71000000
Coinlenders CD 27/9   201.0287618
Coinlenders CD 12/9   101.5172132
Coinlenders Cash   3.94598648
Just-Dice Balance    244.25000000
TOTAL ASSETS    2,807.90196933
   
Outstanding MINING   176908
Outstanding SELLING   176908
Outstanding PURCHASE   10433
Effective Units   187341
   
Block reward   25
Difficulty   86,933,018
Hashes per MINING   5000000
   
Daily Dividend    0.00002892
50 days (Min Liquid)    0.00144625
100 days (Forced Close)    0.00289249
365 days (Buyback)    0.01055760
405 days (IPO)    0.01171460
400 days (Post SELLING div)    0.01156998
410 days (Pre SELLING div)    0.01185923
   
NAV Post MINING Div    2,802.48314159
NAV/U Post MINING Div    0.01495926
Days Dividend Post Div   517.18
SELLING Dividend    0.00338929
NAV Post SELLING Div    2,167.53109645
NAV/U Post Selling Div    0.01156998
PURCHASE selling price    0.01215
PURCHASE buy-back price    0.01134
   
J-D House profit at report   5574

The bonds' face value is fixed in BTC so unaffected by exchange-rate moves.   It's only the interest that is calculated in EUR.  So we don't face losses if exchange-rate moves, just a change in the interest paid.

Motion for approval of an investment.  Motion is set to run for 3 days (as it isn't a change to contract - but rather a vote specifically detailed in the contract - it doesn't require a minimum of 7 days).

A motion has been raised on BTC-TC to allow investment in bonds issued by CIPHERMINE.  At present the bonds in question aren't approved for trade - and some minor changes to the contract are likely.  I'm raising the motion now so, if the motion passes, I have the option to invest when they launch - rather than THEN having to raise a motion and potentially miss out (as was the case with X-BOND which I'd have considered us investing in were there enough notice prior to IPO to pass a motion).

For our purposes it isn't particularly important whether or not our investors believe CIPHERMINE will be profitable, is a good investment and/or its shares are trading at a fair price.  All that matters to us is whether the bonds have sufficient backing and meet the conditions necessary for DMS to invest.

My belief is that they WILL meet our criteria - subject to Kate clarifying the extent to which all assets of CIPHERMINE back the bonds.

Although the bond has a face value in BTC it pays dividends based upon the EUR exchange-rate at the time they are issued.  Initially that will mean the interest rate will be 22% whatever it is measured in - but as the exchange-rate moves that could rise or fall when expressed in BTC.  So although it would definitely meet our minimum return criteria initially that could later change - if it changed unfavourably then obviously I would then need to cease buying more and divest.

Buy-back at face value is guaranteed (though with a 3 month waiting period if within first 12 months).  In practice I'd expect us to divest via the market if/when we need to.

My recommendation is to vote YES to this - but, as usual, I'll vote with my own shares in line with the majority view (i.e. I won't tip the vote to YES if the majority of others who vote choose NO).

The vote is to be allowed to invest up to 25% of capital in this - the actual amount invested would be determined by me based on the circumstances at the time.  This would effectively replace Coinlenders for us - offering similar rate of interest with faster liquidity (if via market) and slower liquidity (if via redemption with issuer).