The real question is where do we go from here?
No one seems to have figured that out. Will NeoBee go on Second Market when the new law takes effect for unaccredited investors? If they will then that is one way of dealing with it.

The next 6 months will see a lot of changes I predict for the better, but I think at the moment the lock-out ideas only do harm and I don't understand why the timing would be right now when crowdfunding is set to take effect in a matter of months making all of this legal.

I think issuers and companies should just wait it out. I think Bitfunder didn't want to wait it out because they are Americans and the FBi is currently arresting Silk Road and others. I also don't think they intended on complying with regulations when the law does take effect or perhaps it is too expensive for them to do it which could explain.

But that is not based on any truth.

Are you saying only the USA has an SEC type institution?
Has there been a single prosecution of a company which you can hold up to show that the SEC is persecuting Bitcoin companies?

Excluding US citizens isn't a solution which benefits the Bitcoin community. It benefits governments who would love to see the Bitcoin community divided along national lines afraid of the SEC or some other institution.

The only result of this is that the centralized exchange idea will be pushed aside because if centralized exchanges divide the community by nationality then it's becoming another kind of nationalist institution which goes against the entire purpose of Bitcoin. Bitcoin is a global currency.

The only real solution if you're going to follow the philosophy of Bitcoin is to decentralize the stock market just as Bitcoin is. This set of events will set into motion that process because I just can't see people trusting an unregistered unregulated market like Bitfunder, Havelock or any of these when they can just wait for crowdfunding law to take effect and go to SecondMarket and buy real shares in a regulated exchange.

Bitfunder is trying to avoid US regulation, under the impression that the market somehow needs their particular solution. It's about supply and demand and they can no longer supply US customers which take up a vast majority of the market. You also have to look at the situation as a fork in the road.

Do we want to be users, or do we want to be customers? If we build a decentralized solution then we are the users and we don't need to trust anybody. The congress would have to negotiate directly with users to set regulations. If we go the centralized route then you have to trust a central authority who will make decisions on your behalf and all the problems associated with that. On top of that you have to pay them a fee for the privilege.

I just don't see any benefit for US citizens to go any route but the decentralized route at this point and this is partially because trust has been permanently breached and the business model of the centralized exchange depends entirely on trust. The SEC has the role to try and protect the interests of customers, but if customers are taken out of the equation then it's just the users and the users have to define themselves because Bitcoin is not USD.

Miners generate coins, but miners are considered users and not money transmitters. If they are considered money transmitters then they have to get together and lobby to change the rules so that it makes sense for the industry and for the technology. The same will have to happen with Bitcoin stocks, otherwise there will be no Bitcoin stocks as people will just go back to trading the real stocks and not bother with it.

There is another part of that law set to phase in which will allow unaccredited investors to invest but I agree the law is set up poorly. It does allow anyone to invest eventually though.


I disagree entirely. You cannot expect to have liberty, human rights, or fair systems of governance if it's too centralized. Decentralization is the result of the erosion of trust in large centralized institutions who have abused their power. Decentralized governance, finance, and markets are the answer if the goal is to limit corruption and produce opportunities for innovation and success.

I think you're just plain wrong. But I understand it's in your economic self interest to say that.

The fact that you're a customer instead of a user is part of the problem. They are still an unregulated securities market, and wish to remain unregulated. If you're going to pay them for being unregulated why not just go to a regulated securities market or become a user of colored coins?

We have to look at why the SEC exists and figure out how we can solve the problems the SEC seeks to solve as a community by self regulation rather than external. The SEC will still be needed but the community, DATA, the Bitcoin foundation all have to come together to lobby to give cryptocurrencies a special status as a commodity with special rules. The rules currently set to go into effect allow for crowd funding but place too many limits and aren't really Bitcoin specific. Until that happens it probably will be best to just build it into the blockchain itself or go direct shares. Whether it is illegal or not is too late to worry about at this time, and by the time anything comes of it then it will be legal anyway because crowdfunding law will be taking effect as soon as the SEC publishes its rules.

The solution is both technological and political. Technological solutions can help give lobbyists from DATA a stronger voice. DATA should be the group that lawmakers negotiate with and discuss regulation with. The SEC cannot put the standard one size fits all regulation on Bitcoin and there should be a push to get a law passed to have customized regulatory status.

There are laws which say barter has to be taxed, but it's practically unenforceable. It's the same situation that will exist with Bitcoin. Bitcoin should not be used for terrorist financing, money laundering, or anything like that. The authorities have a legitimate concern there. The SEC does not have a legitimate reason or concern in messing up the Bitcoin stock market. The SEC should stand down and if anything must be done about fraud and scams there should be negotiations with the community itself. The SEC and congress should set rules according to the current norms and case studies. Until then there should be a moratorium on regulation.

But they probably aren't going to listen to that and will abuse their power? The ability to write code is free speech and you have a constitutional right.


No point. We should just build the decentralized exchanges and then let that operate without ever again having to worry about the point of failure or the trust in a central authority called a central exchange. We do not need Havelock and it is very likely that Havelock's lawyers will make them shut down as well. There is no point in putting your money on the line based around someone else's paranoia. No more suggestions of a centralized exchange, either the issuer will do direct shares, or we build a decentralized exchange. I will not put my money at risk at any centralized exchange even to buy a stock as critical as this one. I don't have the money to waste and would rather give that money to a colored coin project.

It's over. Deal with it.


Doesn't this defeat the whole point. That would be completely selling out to big capital.
If there is something that NeoBee can do to secure shares for unaccredited investors they should do it.

If direct shares are not the answer then they should find a temporary answer until either the crowdfunding law takes effect or the decentralized exchanges come online. Whichever happens first.

I wouldn't be surprised if this kind of stuff is why Bitfunder is shutting down. The heat is coming.

Pull all your investments out now unless you have direct shares.

I suggest you take your disgust and your money and put it into funding bounties for something better. Many ideas are out there and only development is needed.

For now the Bitcoin stock market is dead.

It's not really about politics. It was a stupid idea to create centralized stock exchanges for a decentralized currency. There is a reason Bitcoin is decentralized, but somehow people thought stocks would be different? Did you forget that this could happen? And no, the US government isn't the only government which will crack down.

The smart property function can be built into the blockchain rendering all of this moot.
Contact politicians for what? So they can pass a law which was already passed? The SEC already has the crowdfunding law on the books and is taking their time to put it into effect.

So what law do you want people to vote for? The divide and conquer nationalism only helps the state.

Stupid idea. Trying to get them to crack down on Bitcoin? That is how.

I don't even use stuff like Silk Road but that idea is just epic fail.

In light of recent events, you would think that Mastercoin stands most to benefit from Bitfunder and BTCT shutting down. If Havelock is on the way then perhaps now is the time for developers to start focusing on Mastercoin.


Smart property by far. Not everyone can benefit from stuff like SR. Most people aren't demanding it. Everyone benefits form smart property and it's a completely legitimate use which can only grow the global economy.

The sooner there is smart property the better because it gives people stuff to buy with Bitcoins. What I want to know is whether or not the technology developed by Mastercoin can be ported over to Litecoin? If the answer is yes then this idea has a great long term future but if its for Bitcoin only then it has a point of failure (Bitcoin) and that in my opinion isn't good.


How far away from this are you?

Perhaps you should offer a bounty to people who bring developers to Mastercoin? The moment of opportunity is now to get developer interest. Advertise Mastercoin now, start a thread or go to the threads where people are in panic. I've already taken liberty of directing some of them to Mastercoin but since you are the Mastercoinminster it should be you.

Any solution should be builtin to the blockchain itself. It wouldn't be hard to set up an altcoin called stockcoin, use Colored coin or Mastercoin and run that. Hops is one way of doing it, Mastercoin is another, Bitshares is another, Freimarket is another.

What is needed is a kickstarter and bounty system of some sort to get it built.

Converting shares to havelock wont help. Havelock and all centralized exchanges will be blocking US investors. US investors will have to go to direct shares and a decentralized exchange until crowdfunding law takes effect.

Bitcoin can be legitimate and a Bitcoin stock market can work if its part of the blockchain itself. Instead of people looking for the next point of failure exchange people should be looking at how to remove that point of failure using technology. Bitcoin would never have existed if people thought about how to regulate it before innovating. You innovate first and think about how to regulate it after you innovate.

Mastercoin seems to have the right idea. The blockchain itself has every necessary component to allow for issuing shares in a decentralized way. As long as the shares can be tracked to some digital signature nothing else is needed. Any exchange asking for your full name and address is probably doing that to try to block you if you're a US investor.  All any issuer needs is a Bitcoin address and a digital signature. Bitcoin itself allows for digital signing so the best idea is to get out of all centralized exchanges, it's over.

I will not buy any shares in anything until it's built into the blockchain.  I would buy shares in NeoBee. Out of every Bitcoin company out there I think NeoBee is the most important but I wont be able to trust anything like Bitcoinfunder so unless they will do direct shares, go decentralized via the mastercoin protocol, or wait for the SEC laws to take effect, I cannot invest.

Actually that is the function of any government. What do you think the world wars were about?

The SEC isn't the problem. The SEC is in the process of making crowdfunding legal. All this does is clear the way for another group of US companies to set up a regulated exchange.

SecondMarket or Sterlingfunder for example. The best thing to do is pull your coins out of all these exchanges and wait it out. The SEC has nothing to do with people panic selling or with exchanges shutting down and votes have nothing to do with the inaction of the SEC to publish their rules for crowdfunding.

My advice is don't trade at all. The centralized exchanges have a single point of failure and will never again regain the prominent status once held by BTCT. It's over.

Withdraw all your Bitcoins before its too late. Specifically don't give your Bitcoins to any exchanges run by people in the US. BTCT was run in the US. Bitfunder is also run in the US. And if you go to Havelock it's possible that something could happen there too, they have been talking to their lawyers and there is a strong possibility the SEC or someone else has sent them a letter.

https://bitcointalk.org/index.php?topic=135035.msg3295426#msg3295426

Asicminer is okay because they are direct shares. Anything which requires an exchange you should sell immediately.

Are they becoming a bank now? that is even more than MtGox lol.

The stock exchange can be hosted on the Bitcoin blockchan itself making it impossible to shut down. It could still be regulated if the users want regulation but the users would be in control of the SEC and the kind of regulation and the SEC would have to work with the users, similar to how it is with Bitcoin which will be regulated of course but only when the community has a seat at the table to discuss how it should be regulated and what the community can and can't accept.

Bitcoin is its own space. It's not Kickstarter. It's not a typical commodity or stock. It cannot be regulated by typical SEC regulations. A new set of special categories have to be invented for Bitcoin.

I think the technical solution should be to build stocks and bonds into the Bitcoin blockchain through either Mastercoin, Hops, or Bitshares. I think this event should be the trigger event to actually rush to develop these three main options and see which one is the best through technological darwinism.

I think we still will need an SEC to tackle fraud and scams. Issuers should still have to register, as that would still be good for the Bitcoin community but the registration requirements should be a bit more lax as the Bitcoin community by the act of using Bitcoin itself is willing to accept more risk than the traditional stock market. Eventually a technological solution may make it so that there is no need for an SEC to oversee it as much, so focus on the technology to make it safer or investors.

https://bitcointalk.org/index.php?topic=297147.0
https://bitcointalk.org/index.php?topic=279771.0

No, they aren't. People trying to bring politics into it are people who want to divide a community. Why not bring race and gender into it? There are few minorities and women in the Bitcoin community. Does any of it matter to the situation at hand? No not really.

Alex Jones will not help you write code to save your life. If you want a coin exclusively for Wikileaks then create a Wikileaks altcoin.

They can ban free speech too and see how that will work. No one is going to ban Bitcoin and all of this paranoia, are you on drugs?

The Bitcoin industry would have to be in the trillions of dollars before it would be so threatening that they'd want to ban it and I don't even think it would be banned then. Has the Internet been banned because of Bittorrent?

They claim they'll have them sometime in 2013. Push the technical solution to pressure them to get it done sooner, but I don't understand the panic. Why would you run a securities site and then wait until the end of 2013 to decide to shut it down? What were you thinking all during 2012?

The SEC isn't likely to arrest anyone but who knows maybe they got a take down notice. If they haven't then this is paranoia and serves to divide the community and not much else. Bitshares, Ripple, Mastercoin, all are technical solutions which will work fine until the crowdfunding rules are published and a regulated set of exchanges can come online.

Most people dont have a problem with regulation, uncertainty is the problem. Not knowing what the rules are is the problem. I think the end result of Bitfunder and BTCT shutting down abruptly will be that the community will unite around a technical solution which cannot be regulated because the exchange is built into the blockchain itself.

We are witnessing the end of the centralized stock exchanges as a business model. The reason it will end is because the single point of failure has been identified and it's Burnside and Ukyo or whoever runs the centralized exchange. When it's decentralized then it will be as hard to shut down as Bittorrent.

Expect the community to set up bounties and competitions and develop one of the many plans that exist. Cunicula has a plan which few people have looked at called hops. I think it's time we take a good hard look at his whitepaper. Forget all the politics and nationalist division.

https://bitcointalk.org/index.php?topic=297147.0

Bitshares or Mastercoin or Colored coins all seem to have more promise. You can also just wait for the US crowdfunding legislation to take effect.


Bradley Manning has nothing to do with this. Why would that have anything to do with any of this other than to divide the community? Just like excluding the US divides the community. Which government wants a nationally divided Bitcoin community? All of them.