agreed, I think it should be our duty to not only spread the idea of bitcoin as a governmentless, "be your own bank" system, but also setup systems in place to actively help people get bitcoin, don't sell them "1 btc coins" but start looking at 1mbit, 5mbit, 1cbit, 5cbit coins, to start having people realize the potential day-to-day trading value of a currency that physically can't decrease in value due to inflation. No one wants to lose money because their government can't stop printing bills, and the bitcoin foundation shown that with the proper lobbying, even the US congress can see the value with what bitcoin has to offer. EDIT: Just to clarify, this is coming from a person who sold all his bitcoins at 10 dollars for tuition and isn't spiteful of missing out on the price gain  |
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So initially back in 2011, I was skeptical of bitcoin.
I couldn't see the big deal, I didn't read the whitepaper, all I seen was a way to make easy money from mining, there wasn't much value in the coins themselves.
However, after seeing the congressional hearing and the rumors of the IMF potentially adding bitcoin to their "basket" for international trade, I started thinking. Bitcoin is superior to national currency in literally every way, there is absolutely zero reason not to own bitcoin over your local equivalent besides its ease of use, however even that's starting to change. I live in canada, Virtex has recently released their own bitcoin -> CAD debt card, this is huge, this means that if you're canadian and you trust virtex (which I do), you can essentially never actually hold Canadian Dollars if you don't specifically need to.
What I see happening sooner rather than later, is people beginning to convert to 100% bitcoin as their bank account, completely removing their own bank from the equation besides having some spending cash to buy drinks with, and even then I can see that being supplanted by physical bitcoins.
We're living in an amazing time, I can definitely see bitcoin taking off in my city, after the recent rise in value most of my buddies have been very interested in bitcoin as an investment tool, I've tried my best to talk them into using it as a replacement of dollars that stores value rather than slowly erroding it in fiat based economies.
Any thoughts guys? Pitfalls? I'm strongly considering mass producing a "standardised" physical bitcoin that I can sell locally in my friends shop, and sell via mail, creating almost like a "bitcoin information centre" in my city
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totally awesome! I might be moving to Vancouver island next year, will definitely check this out!
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from my understanding of what you propose, this isn't a cost of such an attack today, because we're not in perfect equalibrium yet, it could take another 10 years before we plateau into the state of "perfect competition". Wouldn't that mean that the value you suggest is an estimate of what the true value would be at this future date?
I don't have any background in economic theory so I could be quite wrong, but that's what makes sense to me.
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Is there a ts, mumble, or vent server?
From the original advertisement on Trilema, I don't believe there will be. Honestly, it is one thing I'd rather do without. Yeah, skype sort of replaces that now'n days for my group at least, we just skype call when we want to do something and add who's interested, a lot simpler than setting up TS/vent for everyone. |
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From the complaint:
"BTCST’s securities were not traded on any exchange"
The SEC is wrong about this one. See PPT.
GLBSE wasn't a real exchange, it was an illegal unlicensed "get into jail free" card. Just like all other Bitcoin "security exchanges". There is currently no regulated bitcoin "securities exchange", unless you like to gamble a bit, avoid them. |
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hah, neat, I imagine there is a quite a few bitcoin eve players around here...  |
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Then again... if you live in one of these.. you will probably need it too... as the first factor suffers greatly when those in charge need to find a way to finance this second metric.  where is this from? a website? interesting metrics. |
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Given that debt is normally senior to equity in terms of capital structure, I'm guessing that potential investors who think it might be a good idea to take an unhedged short position in Bitcoin in order to buy an equity share in a fiat-based business taking on fiat-based debt in order to produce a fiat-based income stream will be glad to find out in advance just how much claim they'll have on the assets of the business.
That might be especially important seeing as the scheme is guaranteed to lose money in Bitcoin-denominated terms unless the fiat-denominated total returns of the investment exceed any appreciation in the value of Bitcoin versus the dollar...
This would be true of ANY non mining/exchange business, as nothing can "produce" bitcoins without being impacted by the dollar in any physical investment. We believe our returns will be more than enough to counter the average bitcoin price inflation, at least in the current climate. Firstly it's NOT true of all non-mining/exchange businesses. Mining is generally fiat-denominated in practice - and is itself a short on Bitcoin (it's very simple to prove that). There's other business areas that exist (or have existed in the past) that are purely BTC-denominated - examples being trading funds, currency-trading funds, gambling assets (to an extent - there IS some impact of exchange-rate there). Pretty much anything that is a financial service can be BTC-denominated. And businesses that trade primarily in USD-denominated assets can also generate income in BTC - they just have to make enough profit to be able to hedge/cover their exposure to fiat. I run an LTC-denominated fund that mainly trades in BTC-denominated securities. Despite that, the fund itself only has 15% exposure to BTC - with the other 85% being LTC-denominated exposure. That's achieved by borrowing the BTC used so as to offset BTC-denominated assets with BTC-denominated liabilities (so the fund's own LTC-denominated assets are largely used just as collateral to borrow BTC). The same could be done for fiat exposure. Except the problem becomes that noone wants fiat exposure unless they can play along with the pretence that it's actually a BTC-denominated investment. And, of course, if you could borrow fiat to reduce exposure then you wouldn't be trying to raise BTC in the first place. The sad truth is that the primary reason for companies in a fiat-denominated business raising capital in BTC is simply that they lack the credit-rating/track-record/assets to get fiat-denominated capital. I'm interested in what you mean by "the current climate" when saying you believe you can out-perform BTC. What model for BTC price are you using to define this "current climate"? It would have to be a very short-term model if based on history to conclude that BTC's growth could be matched by the growth of a USD-denominated real-estate investment. There's nothing intrinsically wrong with raising funds here for a fiat-denominated business. Just please don't try to insult everyone by pretending it's a Bitcoin-denominated investment or is likely to make more profit than just holding Bitcoin would. Its target market should be those who want to invest fiat, not those who want to invest Bitcoin - and there should be a decent market for that from those who don't have much non-bitcoin capital and so could sensibly look at some fiat-denominated investments so that even if Bitcoin collapses they still have some assets left. I apologise, when I said it was only mining and exchanging I was wrong, there are some other avenues, however the sector investment cap is tiny, you can't continuously grow your gambling site per btc invested nor increase the probable odds of you winning in gambling by having more to play with. It is true that we need capital through BTC channels, I personally have a great credit rating and so does my partner, however the business we are going into while including Bitcoin investors is not something our local banks have shown interest in, as bitcoins are a "no-go area" for, at the very least, the vast majority of canadian financial institutions. Accepting BTC as rent would produce a BTC return for a BTC investment, however that return would be pegged to the dollar as this whole thing is in "meatspace", where the dollar is king, there really isn't much of a way around that currently. That doesn't mean were not OPEN to complete unhinge of the USD and using BTC once bitcoin starts picking up traction, but that's currently not feasible in any means. Our year/year projections indicate an average ROI of 14%. Now this isn't a major return, Tradefortress' www.coinlenders.com gives a 25% APR, but this is something that will be under complete US regulation, we physically can't run away with your money. If your money goes missing, we go to jail, period. If we purchase a home and can't provide the ROI that we believe we can do, and you and your fellow investors are dissatisfied and call a vote for liquidation, that will legaly bind us to sell the property and return the investment to our shareholders, no funny business. |
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This would be true of ANY non mining/exchange business, as nothing can "produce" bitcoins without being impacted by the dollar in any physical investment. We believe our returns will be more than enough to counter the average bitcoin price inflation, at least in the current climate.
I take it as obvious that only mining operations "produce" Bitcoins; but it sounds like you are saying there are no other true Bitcoin businesses except for mining and exchange which could possibly exist. I'm not sure what you mean by "without being impacted by the dollar in any physical investment"; maybe you don't believe currency hedging is possible? More to the point, however, you're saying that you believe your returns from a REIT using as-yet unspecified leverage and with as-yet unknown occupancy rates will more than exceed any rise in Bitcoin versus the dollar. You haven't mentioned where to find any evidence or argument to support this belief, but I understand that this implies a significantly negative view of Bitcoin's value versus the dollar, so it makes sense that you would be asking investors to share your view and take a short position in Bitcoin versus dollar-denominated real estate. A) we look to the bitcoin economy for both revenue and to share interest, I'm personally an avid bitcoin user, I have been buying and selling goods with bitcoin since 2011 (I lost my GPG key for this and my previous account due to an unfortunate reformat which lost my private keys) we plan to intregrate bitcoin as much into the infrastructure of our business as possible: for example, allowing rent payment in bitcoins, (legality permitting) enabling bitcoin ATMs to be used, rentals of mining floorspace at reasonable power costs, etc. This isn't just an investment via bitcoin, its an REIT that integrates bitcoins into its DNA from day 0.
To my mind, your personal history with Bitcoin doesn't seem in any way relevant to the proposal for a dollar-based REIT holding dollar-denominated assets and taking on unspecified levels of dollar-based debt with the intention of generating a principally dollar-based revenue stream. You could be a core programmer, or you could even be Satoshi, but that would make no difference whatsoever to the evaluation of the investment. Unless...you'd like to make it relevant by now introducing new information that you hadn't mentioned before: now you're planning Bitcoin rent, Bitcoin ATMs, Bitcoin mining with "reasonable power costs" (Bitcoin miners represent a significant part of your local market, I guess?), etc. Those extras which hadn't previously featured would require a basic grasp of Bitcoin. B)This isn't 100% the case, obviously there are a significant amount of exceptions, however if you look at (for an example) this Kimco Realty investment presentation, and look up the current managers of this fund, you can see that they have for the most part stuck with one or two funds their entire working career, we plan to offer something different to a different audience. We have the drive, the determination, the intelligence, and the ability fully manage a profitable REIT in the Canadian markets. The difference is that new entrants without any previous experience working in any REIT, let alone actually running one, do not typically aim to float their businesses with a public offering right from the get-go. James, taking a step back from this for a moment, I can't escape the feeling that your priority seems to be arguing with me rather than informing potential investors. I asked about leverage -- which I take to be so blazingly obvious to ask of any REIT that its absence from the original details was glaring. There are many others in the 'blazingly obvious' category that haven't even been mentioned yet. And in response to your suggestion that this investment was somehow a hedge for Bitcoin volatility, I noted that it was, on the contrary, asking potential investors to take an unhedged short position in Bitcoin versus underlying dollar-denominated assets. Rather than just acknowledging explicitly that that is exactly how this is structured -- so as to inform your potential investors -- you've come back now a few times attempting to counter, broaden, and now even to speculate on the future exchange rate trajectory. Each time I have responded to the new points you have introduced, this kind of pattern has played out again. I don't personally have much interest in engaging in that kind of pattern. I think the bottom line is that you've come asking for cash to set up a REIT, and it would be mildly zany to think that potential investors are going to keep their questions or observations to themselves. If those questions and observations are not at least as pointed and critical as those which would be brought to bear on a real, established company with a seasoned management team and significant operating history, looking to float on a regulated exchange or otherwise tap the capital markets, then your potential investors just aren't doing their due diligence. To the extent that you can acknowledge basic observations about financial structure and engage meaningfully in critical assessment of the investment itself, you'll be doing the job of informing investors, and that will reflect well on the proposed investment. I have no problems with your questions, frankly they are quite good, and I've done my best to address your questions as best I can. Where currently putting all of our effort into finding a legal strategy for angel investment. There are quite a few glaringly obvious things missing from this listing, I agree 100% with you, I have a document outlining exactly what will be posted and when, however currently we're in "go/no-go" mode as finding an avenue to complete our incorporation is proving challenging. if you have a specific set of information you would like to see such as your "glaringly obvious" questions, I'll be happy to answer them and put them in the FAQ when I have time. |
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Given that debt is normally senior to equity in terms of capital structure, I'm guessing that potential investors who think it might be a good idea to take an unhedged short position in Bitcoin in order to buy an equity share in a fiat-based business taking on fiat-based debt in order to produce a fiat-based income stream will be glad to find out in advance just how much claim they'll have on the assets of the business.
That might be especially important seeing as the scheme is guaranteed to lose money in Bitcoin-denominated terms unless the fiat-denominated total returns of the investment exceed any appreciation in the value of Bitcoin versus the dollar...
This would be true of ANY non mining/exchange business, as nothing can "produce" bitcoins without being impacted by the dollar in any physical investment. We believe our returns will be more than enough to counter the average bitcoin price inflation, at least in the current climate. From 'A.' I think I understand you to be saying that the only reason to be looking at the Bitcoin economy in the first place is that you'd like a source of capital to start a REIT, but that if you'd already managed to do so on your own, you wouldn't look at the Bitcoin economy as a source of capital at all. Any particular reason you favor the Bitcoin economy as a source of capital, given all the other sources of capital which are available, given that you're asking Bitcoin holders to take an unhedged short position to provide you capital, and given that the investment appears to be an entirely non-Bitcoin business from start to finish (apart from the obvious request for some Bitcoins to start you off)?
And from 'B.' I think I understand you to be saying that as far as you understand the industry, nobody has any experience running a REIT except those who have already destroyed one or those who are still running their first and only REIT. Do I have that right?
A) we look to the bitcoin economy for both revenue and to share interest, I'm personally an avid bitcoin user, I have been buying and selling goods with bitcoin since 2011 (I lost my GPG key for this and my previous account due to an unfortunate reformat which lost my private keys) we plan to intregrate bitcoin as much into the infrastructure of our business as possible: for example, allowing rent payment in bitcoins, (legality permitting) enabling bitcoin ATMs to be used, rentals of mining floorspace at reasonable power costs, etc. This isn't just an investment via bitcoin, its an REIT that integrates bitcoins into its DNA from day 0. B)This isn't 100% the case, obviously there are a significant amount of exceptions, however if you look at (for an example) this Kimco Realty investment presentation, and look up the current managers of this fund, you can see that they have for the most part stuck with one or two funds their entire working career, we plan to offer something different to a different audience. We have the drive, the determination, the intelligence, and the ability fully manage a profitable REIT in the Canadian markets. |
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As you can imagine this allows for an unprecidented hedge against bitcoin volatility while still partipating in the bitcoin ecosystem Actually, I'm a bit puzzled by this. On the face of it, investing Bitcoins into a security whose principal assets are not Bitcoin-demoninated amounts to taking an unhedged short position in Bitcoin relative to whatever the other asset happens to be. As a result, these investments incorporate unlimited risk with respect to appreciation in the value of Bitcoin as expressed in units of whatever the other non-Bitcoin asset happens to be. For example, buying a fund which invests in gold is equivalent to taking a short position Bitcoin relative to gold and therefore incorporates unlimited risk with respect to appreciation in the value of Bitcoin as expressed in units of gold. You invest 1 Bitcoin and get 1 share of a security holding 1 unit of gold. Then the value of Bitcoin appreciates, so that you can buy twice as much gold with your Bitcoin. But oops, you're short Bitcoin, having sold your 1 Bitcoin in exchange for 1 share of a security holding 1 unit of gold. You decide you'd like your Bitcoin back, so you sell your 1 share of the security, but now you only get back .5 Bitcoins, because that's all the Bitcoins you can buy with 1 share of a security holding 1 unit of gold. Likewise for a REIT, except replace gold with real estate. I'm not saying the proposed project is a good, bad, or indifferent investment -- only that your statement that it "allows for an unprecidented [sic] hedge against bitcoin volatility" is puzzling at best. On the contrary, it seems like a paradigmatically unhedged position which is equivalent to selling your Bitcoins and buying an ordinary listed REIT on an ordinary regulated stock exchange. Unless, by "hedged", you mean "something which will decrease in value when the value of Bitcoin goes up versus the dollar"...? But, don't you think, that it is much easier with this REIT to transfer your value in and out of the bitcoin currency? Therefore I would agree that it indeed is a very good hedge against bitcoin volatility. At the moment a trader could try to sell bitcoins at a high USD price and buy them for a low USD price at exchanges to make a profit. This would keep the bitcoin volatility down. But not many traders would like to do that because they would have to go through exchanges. It would take several days until you move your bitcoins into some other investment fund. If it is possible to directly exchange between bitcoins and other financial instruments, then more people would actually use this way to make a profit. Therefore they would keep the bitcoin price stable. The same applies to some companies, which might be trading in bitcoins with customers. They could easily temporarily move their bitcoin positions to this REIT and directly back to bitcoins without needing exchanges and without the need to go through USD. They would be safe against bitcoin price volatility. exactly, not only that but there are very few non bitcoin investments that can actively produce reliable, safe income in the bitcoin world. You could exchange your bitcoins for fiat, then purchase property, however going directly from bitcoins to property skips an uncessary step, and doesn't expose you unecessarily to potentially volatile fiat valuation. |
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I posted in your other thread about the peculiarity of describing this as a way to hedge Bitcoin volatility, since that's where you had promoted the idea, but since this seems to be the thread where you're talking more about specific investment plans, maybe this is the place to ask another question or two. Normally, equity REITs are at least moderately leveraged, but as far as I can tell in what you've provided here, you've talked only about equity. Do you have plans for debt financing as well? (If so, will you be describing where equity holders will sit in terms of capital structure relative to future creditors?) And can you point us in the direction of material explaining more about the team's background in real estate management in general and REITs in particular? Yes, we will be leveraging with mortgages, the specific Debt ratio is to be decided. We won't be touching other instruments such as bonds, keeping this as simple as possible. The shareholder indenture that will be forthcoming following angel investment will outline the specific creditor status of all unit holders. We have real estate management experience, but no REIT management experience, if we did we either would have: A. An already established REIT, which basically means we would have absolutely no need to look into the bitcoin economy. B. Have experience forming a REIT, however it failed for some reason and we're seeking on forming a new one. |
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cool, I'd recommend hiring someone to design your site, it looks extremely tacky atm. I'm in the market for mens clothes so this is up my alley, get some more high quality colours and patterns and I'd be interested, I would take a look at www.ministryofsupply.com as inspiration, I have most of my wardrobe from them |
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interesting, a little different then our strategy, interesting design I like to enable the bitcoin economy more than just have a kickstarter |
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hey reed, We'd be interested in a meet, there are quite a few coffee shops around, do you know any other haligonian bitcoiners?
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Just to update this page if you fellas aren't following my securities post |
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updated the main post, the FAQ, first property and preferred units, and investment. I'll be available to answer any questions for the next few hours |
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big update today, we are nearing completion of everything sans legal/accounting, we're currently in talks with some angel investors on securing funding to complete the full, regulated incorporation structure. The business model we will be using will be updated this evening.
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