The binary betting model does raise some interesting possibilities e.g :
For a low-dividend investment you could end up being better off betting on it paying than actually investing.
You could create an asset that appeared really terrible, buy up shares yourself (so that it had an obvious need to pay dividends), do absolutely nothing with it and just bet on the pay side. As you'd have little liabilities (hardly anyone invested but yourself) you should make a decent profit off everyone betting against it.
Scammers could bet against their own assets on sock-puppets accounts to make even more profit.
And the last two are the real problem with it - the asset owner KNOWS what the outcome of the bet will be (if it's short-term) so can flood that side of the bet on a second account (or via a partner), meaning noone legitimately betting gets any sort of decent value.
These are all very good points, but one way to resolve this is by only listing reputable people with real companies. Will it be any different when we are able to short these securities and the asset operator misses a dividend or gives some bad communication while he or she is shorting the asset? |
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GLBSE is offline
For those worried about their bitcoin, please calm yourselves there has been no hack and your coins are safe and all accounted for.
I apologize for the lack of notice and the downtime, but there isn't much choice. We will update our users on Saturday.
So why is Nefario not making this announcement himself? Very unprofessional how this was handled. I think he did make that announcement himself. That text was directly copy/pasted from the GLBSE site, which is maintained by Nefario. But I agree a second announcement on the forum should have made as well. Now all we can do is wait for Saturday. Which Saturday? |
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My messages get shorter the later it gets, heh, sorry, way past my bedtime here. I should in fairness point out that the proposed insurance has a downside for me that it doesn't for most others. I mainly day trade - so I'd be paying this 0.1% every trade (or every other trade) without receiving any real benefit of it. The (majority of the) benefit of insurance gos to those who hold securities long-term, not those whose hands it briefly passes through. It thus acts as a disincentive to actively trade - as it automatically reduces your margin.
The assets would have to trade hands 500 times, not 1000. The transaction fees are paid by both sides. I thought about trying to pool the insurance... discounted it pretty quickly, it doesn't seem like a good idea. I hear you with it hitting the day traders harder. It would hit the bottom line for LTC-GLOBAL a little bit as well. (reduced trades) Without people wanting to invest long term though you wouldn't really have a platform to day trade on, so I suspect increasing confidence in the platform would ultimately benefit everyone. I like the three tiered approach. Makes it worth my time to do the verification process. I liked where GLBSE was going with black, pink, and blue markets. In part largely because people KNOW a black market is stupid high risk, a pink market is high risk, and a blue market would be medium risk. (I don't consider any crypto-assets low risk.) This is why I suggested having a simple binary market for insurance. One party would may bet that the security would not pay its contractually obligated dividends, or bet that the bond would default, or whatever. A speculator would bet that the operator would pay a dividend, or would not default. It would have to be integrated into the exchange/brokerage site so that it would have maximum exposure. It would allow investors to voluntarily purchase the insurance and have speculators take on the risk and not the exchange.
That's an interesting thought. A little side market on every asset that pays or doesn't pay based on if the contract is met or not? Can you detail how you would see it function? Who determines when an asset defaults? What if there's gray area due to contradictions in the contract? There are some things that could be set in stone. For example, dividends will be paid every Monday, or 0.03 BTC (I don't know a realistic litecoin number) on Thursdays. They could only be matched with very strict asset contracts. Default is a grey area as many times in an asset contract default is not defined. It could be all defined in the insurance contract. I did give this a try on GLBSE but there was not a lot of demand. I suspect it was because it was not marketed well. Having the ability to bet right next to the asset's buy or sell page would drastically increase awareness. There was also one problem with the contract as I did one for TYGRR-B Bond. I stated that it would pay X bitcoins over the course of 30 days. A floating point rounding error (I think) on GLBSE caused the total dividends to not equal X, so those kinds of issues need to be taken into account. You can search for the assets under the Security forum by trying HEDGE.GIGAMINING.LONG I also think these kinds of binary insurance betting should be very short term and may require the exchange to act as the counterparty. There are some good and bad models to use for binary trading. GLBSE had a beta binary trading platform for about a month. It used a bad model. |
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That's interesting .. because compliance ordered by a foreign government.. would that stand up.
Even if GLBSE got closed down as a result of investigations initiated by US authorities, it doesn't mean they weren't breaking UK law in respect of unregistered securities. It's highly possible that the existence of GLBSE could be brought to the attention of the UK's FSA and that the FSA would take it from there without US law being involved at all. I have no idea whether US law prevents unregistered securities being offered to US residents by foreign operators. Maybe there is some technicality which allows them to go after off-shore, unregulated exchanges even if those exchanges are legal in their local jurisdiction in the same way that they were able to go after the online poker services which were allowing US players on the technicality of transferring funds through US financial services for the purpose of online poker playing. There are so many things affecting the value of Bitcoin "investments" at the moment that it would not be easy to establish Nefario's role in any decline in value of assets listed on GLBSE. You'd be looking at an expensive legal case, assuming that it wasn't dismissed out of hand (unlike the US, you can't "sue anyone for anything" in Commonwealth countries and lawyers themselves get sanctioned for bringing frivolous cases before the courts). There's no need for anyone to have brought GLBSE to the attention of the FSA - nefario was actually trying to get it registered with them. One pretty reasonable theory on what's happening gos like this: Nefario: Hi FSA, I'd like to register my company GLBSE as a financial services provider. FSA: Do you provide services that are required to be registered with us? Nefario: Yes FSA: Then please submit your application. Oh - and if you're already providing such services then you need to stop until we approve or decline your application to register. The application/approval process typically takes a few months. He can't register with the FSA unless he provides services that they register. And if he DOES provide services that should be registered with them, then he shouldn't be providing such services without being registered. Obviously if GLBSE ends up registered with the FSA then it would have to comply with AML/KYC requirements - so if the announcement on Saturday mentions FSA registration everyone should start getting their photo id, proof of address etc ready if they want to get back access to their assets. Note: I'm in no way saying the GLBSE WILL end up FSA regulated. Nor is the above the only credible scenario for what's happening - just the most likely in my view. |
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I should in fairness point out that the proposed insurance has a downside for me that it doesn't for most others. I mainly day trade - so I'd be paying this 0.1% every trade (or every other trade) without receiving any real benefit of it. The (majority of the) benefit of insurance gos to those who hold securities long-term, not those whose hands it briefly passes through. It thus acts as a disincentive to actively trade - as it automatically reduces your margin.
This is why I suggested having a simple binary market for insurance. One party would may bet that the security would not pay its contractually obligated dividends, or bet that the bond would default, or whatever. A speculator would bet that the operator would pay a dividend, or would not default. It would have to be integrated into the exchange/brokerage site so that it would have maximum exposure. It would allow investors to voluntarily purchase the insurance and have speculators take on the risk and not the exchange. |
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A general standard across cryptocurrency denominated exchanges should be implemented so that in case one exchange falls, securities can migrate to other exchanges.
The problem is when you have a situation like this one where an exchange lists so many toxic assets that no-one in their right mind would want them migrated to their own exchange. There should be contractual standards as well, and of course an exchange operator has the right of refusal. For example, an OBSI security may not be transferable but a GIGAMINING or COGNITIVE might be. This might even increase the trading of more reputable securities. |
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Alright, where's the successor of GLBSE?
I've been contemplating taking the LTC-GLOBAL code and putting up a bitcoin version. I have a few major features I'd like to finish first. (1 week of dev work?) Swapping out some text, the css, the litecoind for a bitcoind, and the header/footer would be easy. Another option I've been thinking about is finishing up the major features, then putting up the code for sale along with a single-use (restricted to bitcoin) license. I suspect the shareholders of LTC-GLOBAL would be happy with either option. Both would be a nice payday for shareholders. You will have the same issues as glbse eventually. a wise man once said doing the same thing and expecting a different outcome is silly  I'm not convinced of that. There are a lot of differences in approach. And ultimately even if we fail, by design we're not leaving our users hanging. Asset issuers will have everything they need to transition to whatever's next. A general standard across cryptocurrency denominated exchanges should be implemented so that in case one exchange falls, securities can migrate to other exchanges. |
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...In a way, the exchanges (even if they eventually become a frontend for open transactions) will always act as a sort of filter for keeping the junk out. At least they should. I'm still working on the terms for LTC-GLOBAL, but there will be significant restrictions in place to keep funds from cross-investing in each other and bringing down the entire exchange economy. Would love to discuss other possible restrictions that (a) do not hamper legitimate companies trying to crowdfund and (b) do impede fraud or inadvertent destruction of investor value. (please post suggestions to the LTC-GLOBAL thread tho: https://bitcointalk.org/index.php?topic=101694.0) I am not sure if this has already been mentioned, but default contracts should be in place. There are only so many investment types and having a default contract which an asset creator inputs their variables using a simple form would be great. Also, work on putting some kind of insurance on the assets. I don't think central insurance "companies" would work for bitcoin assets at this stage. Instead, my suggestion is to create a simple binary trading platform where investors can hedge their risk of a collapse of a security or failure of an operator to fulfill its contractual obligations. |
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Lets all move to litecoinglobal  The service is in beta but it looks already pretty good and admin is committed to his site. Pfffffffffftch. How about no. +1  (we don't want the crazies) What I do like about litecoinglobal is that the asset operators has up-to-date information on their asset holders. If an exchange shuts down (for any period of time) then the operator can list their asset on another exchange if necessary. But it looks like Open Transactions is the future. I'm not so sold on open transactions. There's no rules to what can be traded. There needs to be some reasonably thought out rules or it'll just be more of the same. Even seemingly "open transactions" like the postal service had to establish rules for the content of their mail. (transactions) The ease with which evil proliferates in an anonymous open system can be astounding. (please correct me if any of my impressions of how open transactions would actually function are incorrect, I admittedly have not yet finished researching it.) Cheers. I have not looked too much into it either as I have no time right now, but for what I know contracts cannot be changed by vote. A problem would be the contracts not being fulfilled, but as can be seen on centralized exchanges contracts are not being followed all the time. A surety, arbitration, and credit rating markets would be needed to back up any open transaction assets. |
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I'm just checking to see how many people who use bitcoin actually play MMO games
The MMO I play is bitcoin. |
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This is nothing, not only do I have a Chinese wife, but I also have a Chinese mom and sister.
Are you trying to show off that you think your mom and sister are hot? I think his mom and sister are hot  I thought bragging was the whole point of this thread. |
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Hoarding will destroy the value of Bitcoin... assume for a second that everybody just hoards their coins... then there is really no use for Bitcoin and therefore no value
We need an economy to accept Bitcoin for it to retain/gain value
I am really surprised with all the sh*t that's been going on lately that BTC is still valued above $12
i guess we have all the pot smokers on Silk Road to thank for that
Disagree. In order to hoard you need to obtain them in the first place. Mine, buy, or trade something of value. Next, anyone who hoards is still going to wish to (or need to) adjust their position from time to time. Sufficient number of people hoarding will dry up supply changing the price-point (upward.) I have a fair amount of Bitcoin. Are you saying that for the good of the solution I should blow them all tonight on some stupid gambling site or getting people to diddle themselves while I watch on a web-cam? Or that I should trust them to the tender mercies of some named something like 'pirate' or 'nefarious'? Sorry...I'll rely on other suckers to do those honors. I'll tuck my BTC into bed and wake them up when I have a compelling reason to do so. If you are not putting your bitcoins up for sale (for USD, shoes, a wank) then your bitcoins have no value. If no one is willing to use bitcoins to purchase things, then no one will offer to take them for their other assets. If no one wants bitcoins then they are worthless. |
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I agree with others that the lack of advance notice and the vagueness of the announcement suggests legal issues. I suspect that if GLBSE comes back online in the near future, those legal issues will be reflected in how it operates from now on and that people probably aren't going to like any changes Nefario makes to keep the service operating.
I hate to say it, but you're probably right. The reason I went to GLBSE in the first place was not only for it's attractiveness, ease of use (compared to other exchanges), and popularity, but also because you could work on your business / IPO without the red tape found under normal, real world, government regulated exchanges. To bring in the FSA and UK laws means that, sure, there won't be any more scams (or at least harder to spot), but there would be increased fees and a lot more time and BS to wade through. Makes me wonder if it's a better option to drop $350 and work with MPEx or figure out some feasible way to work with LitecoinGlobal.... There is cryptostocks as well. |
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Lets all move to litecoinglobal The service is in beta but it looks already pretty good and admin is committed to his site. Pfffffffffftch. How about no. +1 (we don't want the crazies) What I do like about litecoinglobal is that the asset operators has up-to-date information on their asset holders. If an exchange shuts down (for any period of time) then the operator can list their asset on another exchange if necessary. But it looks like Open Transactions is the future. |
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Since IF GLBSE ever comes back online it seems most likely that a panic selling will happen (even more than the BTC price after the Gox hack), I would guess that we are already royally screwed anyway.
Oh well, it's just money.
all existing orders should be canceled before the site comes back up. This should be the least of our worries. |
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I feel sorry for anyone who didn't pull out after learning that the SEC guy knew something would be happening with GLBSE.
This was one of the reasons why I closed my asset. I did not want to be holding funds and no way to pay back. I just hope the people that got their funds back a few days ago took them out of GLBSE. |
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So I posted the question "does anyone else here use bitcoin?" Within seconds an admin deleted my post and deducted 5 points  from my "score". I was told that this was against the TOS, and tha they do not allow sales at the forum. I P.M.ed him back explaing that I am not selling anything, I just wondered if others use it. Please investigate and you will see. He took it to some kind of panel for review. Here is their response. A decision has been made, unanimous vote, "It has no place in Political Chat and on Bersa Chat as a whole." So no more posting of bidcoin on Bersa Chat will be allowed.
Again I removed all points, (just a PM warning) and ran this through the board for a reading.
RC What B.S. they obviously did not look into it, they even spelled it wrong. I will be ending my account there. The gun sucks too. There is a manufacturer error in the trigger. I had it fail on me while target practicing. Thank god I identified the problem, but doing some research I found it is common in these pistols. |
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Thanks for info... how are you affiliated with glbse? I thought nefario is the only person running it.
That is a quote from glbse when going to the site. To me, not notifying for downtime is a big red flag that something unforeseen occurred. I hope it is up again by Saturday and there is not some kind of announcement on why it is down. |
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Local rules are a bad idea. By having local rules, it gets rid of an important way to evaluate a person. Lots of people on these forums have lost credibility just in the way they handle confrontation or disagreements. I am going to see if I can make some local rules when I do my thesis defense in a few weeks. |
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