This sounds so true, and I agree that some hedging would be good.

Bitcoins are not very like wheat, though, for a variety of reasons.

I don't believe that holding bitcoins for long periods is sensible for a mining business, that is to say, if one believes that a mining business is a good business to be in, then holding bitcoins should only be for hedging purposes, not an 'investment' strategy. The mining is the investment strategy.

No, Tawsix is right to do what he plans to do; the point of this company is to mine. (Oh, and pay dividends). If we wanted to hold BTC for speculation, we could do it on our own.

Looks fixed to me just now.

I'm having the same problem; I think there's a server error. You can always email admin@mtgox.com

I voted.

I'm not so testy, but I agree that it would be nice to see the three rigs purchased. Some photos and receipts might go a long way here; I bet additional shares get picked up more quickly, too.

Speaking of which, hey Tawsix, got an update for us?

Regarding taxes,

Washington State in America has an annual 'inventory tax' which would likely apply to BTC, whether or not sold. I'm out of my depth applying US state tax concepts to BTC though, even my federal tax law knowledge is workmanlike at best.

@unk, agreed.

I would expect professional miners to pay inventory taxes, although probably not hobbyists, (again, the line is tough here) hobbyists I would expect to pay income tax on sale.

Regarding taxes,

A simple purchase is never taxable for the purchaser unless there are specific asset-transfer taxes (think registration for a car) in the US, or any state in the US. Period, end of story.

BitCoins paid for services rendered or goods are certainly taxable, and they would likely be marked to market at end of year, or at time of exercise to USD on recommendation from a CPA.

BitCoins 'mined' with your computer are a little harder, and I don't think there's good indication here as to what they are, or if they should be taxed yet -- do you have to pay taxes on a piece of art you made, and haven't sold yet? (The answer is no, even if your paintings are worth millions). In any event, I think it unlikely that BTC mined will be reported and taxable in the near future for a combination of reporting and other reasons.

----- Now, for a more personal perspective ----

Regarding "this is how capitalism works", unless you're a sort of weird objectivist type who's come to love robber barons, anytime a business party knowingly misrepresents the value of something and makes significant gains, there may well be civil or criminal liability. Capitalism involves helping people transfer assets around for cash, build jobs and wealth, and keeping people from getting screwed doing so.

I don't know if KnightMB misrepresented, nor do I know if his agreements are solid, but I do know if he wrote a note that said "Hey, I'll take those computers and hard drives off your hands for $5k" and they said "OK," he will CERTAINLY be getting a nastygram one day, and his counsel is going to recommend settling, not fighting.

On the other hand, if he wrote up a proper asset purchase including everything, hardware and data, and made no warranties, and they also acknowledged they were getting out and signed proper indemnifications, seller beware. That's an all's fair in business sort of moment, and they should have looked more closely at what they were doing.

Of course, if this was a bunch of grandmas that KnightMB pitched originally, that will play differently than if it were some forex trading hedge fund managers; lots depends on the context. I don't think we've heard the last of this story, or the facts of it yet.

For your own sake knightmb, I hope you spent roughly triple that on iron-tight mutual indemnifications. If not, here is my advice (I'm not a lawyer, btw):

1. Get a lawyer, right now
2. On review, figure out if you need to get a settlement in place which covers all mutual indemnifications.
3. Get those things locked down. You will likely have to pay some of your $3m USD in earnings to get that sorted.

When you have a technical partner knowingly buying assets from non-technical partners for pennies on the dollar, there may well be significant repercussions. And, as someone here mentioned, it's also just kind of shitty.

Food for thought.

For those mentioning taxes -- unless he's selling his BTC, he likely doesn't have a requirement to mark his BTC to market; this is no doubt a gray area in the tax law right now. I wouldn't say he owes right now unless he's liquidating.

OK, I bit (and bought). One issue; the IPO is so large that initial liquidity for investors is tough.

Can anyone raise a vote? I'd like to vote that you limit the IPO to 1,000 shares to start; that's more than enough to get building and generating. We could then vote on a secondary capital raise.

How does GLBSE manage stuff like this? Nefario?

As a note, this 'half +1 share for me' is really confusing. Typically corporations issue a bunch of shares for cheap to founders, then go and sell extra shares; the ownership changes as the corporation sells more shares.

You are doing something hard to understand which is saying 'I will borrow enough from the corporation to  just barely keep control, and try and quickly pay it back.'

Better would be 'I have 5,000 shares, and I'll pay 3,800 BTC for them, later, I swear. I'm selling shares, up to 4999 of them (or I now suggest 1000) at .75BTC per and will dividend out everything over run-rate costs plus withholdings for miner growth.' Instead, we have a world in which your putative shares owned change as more are sold; confusing!

Doing it my way means, for instance, that early "angel" funders will get a better bite, that is, in a later capital raise, the price will hopefully go up, meaning the angels will get some equity appreciation. Also, people will understand and be able to debate whether or not you have priced the company fairly and properly. Right now, that calculation is sort of tough. As a side note, I would say a fair price for this sort of activity would be a fund-manager style price: 2% of gross capital utilized/20% of earnings, since you bring no capital to the picture. But, I bought anyway, so I hope you're successful!

Also, I feel bound to warn you that doing this in the US is without a doubt, highly illegal without filing a Reg. D, and the SEC will probably require you return any losses you incur to investors. I'm not a lawyer, just a startup entrepreneur.

Final update: I sold BitLaundry to Mike Gogulski. He's in charge now.

And, this is closed, paid and transferred.

Mike now owns BitLaundry -- complaints and congrats go to him!

 

Updated: Looks like Mike and I have come to terms, thanks everyone!

Thanks!

I thought "Shit!" Luckily a small amount, but I appreciate the refund very much.

That's probably a good edge case to think about; it's easy to accidentally resend.

Oops. I sent a bitcoin payment to a previous address for the bit flip.

I PM'ed you some details. What does bitflip do in this circumstance?

Update: Confirmed that I have the code. (Python - GAE)

And, p.s., BitLaundry is what I'm selling, not a knockoff. In case that wasn't clear from my post. : )

An update to this thread: BitLaundry and it's code are for sale. Check here: http://bitcointalk.org/index.php?topic=6939.0