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1  Bitcoin / Project Development / Investment Opportunity - Bitcoin Gaming on: November 21, 2014, 01:23:52 PM
Hello - I'm developing a new bitcoin gaming platform that leverages the new possibilities that comes with the bitcoin eco-system and relies on proven business model.

Games like Satoshi Dice make a very nice profit on a daily basis making about 2-10 bitcoins for the site owners. Satoshi Dice is very simple, hardly engaging, yet very addictive and satisfying game. I'm building a platform that will provide visually rich games far beyond what today's sites provide (no offense to anyone), a large variety of games to chose from, and social interaction among the platforms users to increase engagement.

Without disclosing too much details about the operation, I'm developing it in such a way that these games can be played on the desktop as well as mobile platforms, and will be making 2-5 new games for users to play every month.

Beyond what said above, the platform will offer users to make money in number of ways, playing games, referring friends, and another method which I won't disclose here.

Investment needed is 150BTC - 60% will be used for initial development, 10% will be used for marketing, 20% will be used for upkeep, and remaining 10% will be used as house bankroll.

All funds will be kept in a multisig address with proper governance in place.
2  Bitcoin / Project Development / Trustless Physical Wallets on: November 16, 2014, 08:25:58 PM
I'm thinking of developing a trustless physical wallet that can be sold over-the-counter and wondering what other projects out there that exist that do the same thing?

What technologies are available? I mean besides plain paper wallets that you can print on your own - stuff like which is pretty simple and requires trust int he manufacturer.
3  Economy / Services / Business Review and Consultation on: August 22, 2012, 11:23:56 PM
Thinking about or developing a new business or app and need to make sure you're on the right track?
Not sure what kind of technologies you should use with your project?
Don't want to be surprised with your project down the road?
Not sure about a design that would fit your project?
Need something done and don't know where to start?

If you've answered yes at least to one of the questions, I can help.

I'm Eli, a business owner, freelancer, designer, developer, educator, and a bitcoin evangelist. At my day job I design and develop web and mobile applications working as an independent contractor for various high profile clients here in Israel. During the nights I whip out my inventor hat and create stuff like Safebit, and in between I do what ever is necessary to get a business or a product up and running.

My background is mostly technical, coding web apps and sites, but my interests are leaning on the aesthetic side of products and apps. I have a keen sense for quality graphic design with a lot of respect to the small details, I know what are the limitations and capabilities of the technology, and I can make almost anything you can imagine.

I specialize in: Javascript + HTML5 + CSS3, PHP, NodeJS, user interface design and development, art directing, and bitcoin.
Well informed: Web/Mobile apps design and architecture (client/server), (some) markets and (some) customers, graphic design, business development, and working and development environments (on and off line).


This is an experiment at this point, and I'll be offering two different services here;

Business Review - Tell me about your business, and I'll tell you if and how it can work and become profitable.
Price: 10Ƀ; as this is an experiment, the first two clients will receive this for free, so they can report back without risking wasting their money.

Consultation - Tell me what you need done, and I'll tell how to make it happen. Ask questions that you need answers to.
Price: 0Ƀ - 75Ƀ; some questions I'll answer for free (and you could send a tip if you'd like), others will usally have a short description of what I know and how I can help with a Ƀ price tag on it.

You can contact me via email:, expect a response within 48 hours. In urgent cases please state that.
4  Bitcoin / Bitcoin Discussion / Looking for 2-3 people to help me with a blitz website/service setup on: June 13, 2012, 02:43:08 PM
I've came up with a kickstarter-esque website/service that I want to "get out there" in the next few weeks.

The basic idea is to give people a way to raise funds using regular methods (paypal, google checkout, visa, mastercard, etc') and using bitcoin, and when the time of withdrawal comes they'll get the money in fiat currency or Bitcoin, their choice.

It's a business and social experiment, I have a "game plan" to get this running in the next 14-30 days, if it works it might draw some VC/Angels money into it, and if it doesn't I'll move on quickly without looking back.

I'm planning to do it with minimal capital - $100 to $400, not more than that.

Needed skills: social media management/engagement, web development [front + back-end].

I'm not looking for NDAs, or micro-managing, I'm looking for people who are able to join a team, do the shit needed and quickly, and get it out there as fast as possible. We may or may not develop an actual product, more likely a proof of concept.

Equity is simple: equal shares (i.e. 4 people = 25% each, 3 people = 33% each...).
5  Economy / Services / Need Javascript/HTML/CSS Developer on: June 02, 2012, 02:02:47 PM
I'm developing Safebit and in the past month or so I've resumed to active development, and I'm looking for a developer to work with me (I'm working mainly on the design aspect of the application) to implement features.

The required skills include:
  • Ability to work from home/remote (I'm from Israel)
  • Self thought, self sufficient
  • Ability to follow guidelines to very specific details
  • Good Javascript, HTML5, CSS3 knowledge
  • Experience with Bitcoin JSON-RPC
  • Some experience with Chrome extensions/apps
  • Responsible and timely
  • Git/Github experience
  • Linux shell knowledge
  • Fluent English
  • Basic understanding of the current Safebit codebase (found here:
  • Ability to communicate via Gtalk/email and sometimes skype
  • Good understanding of Essential Javascript Design Patterns, follow Idiomatic.js style guide, and good understanding of the modern web standards.

Note: I can't pay much, around $10-$15/hourly wage all around, and I do expect the above requirements to be met in order to start working, so please consider all of this before applying. I'd prefer not get any applicants instead of starting to work with someone who doesn't met my expectation or I don't met theirs.

Payment can be either Fiat currency or Bitcoin - your choice.

- Consider all of the above
- Go over this: and this:
- Reply here noting you are interested (so I can see your past interaction with the bitcoin community, if you have any)
- Send an email to with the following details:
a) How long it will take you (i.e. "one week")
b) Your hourly wage (i.e "$12/hour")
c) The total amount you want for this specific task (i.e. "one week = 40 hours, $12 * 40 = $480")
d) Any previous work you've that might be related (both description and links are welcome)

Because I've been burned a few times now, please consider the following before applying: On the first job (i.e. the Transactions section) the payment will be provided only after full completion of the task and only if all the requirements are met (i.e. I approve the new code and behavior, it works well, and pushed into the public github repo). The payment will be as initially agreed upon.
6  Bitcoin / Development & Technical Discussion / Can vanity address be sold? on: May 26, 2012, 10:29:14 AM
Generating a vanity address is pretty easy - fire up a small tool, define what you're looking for, start working, and wait.

This process is kind repeated thousands of times daily (I'm guessing) and someone somewhere is just ignoring the address generated that would satisfy your search.

Assuming we create a network of a list of "wanted" vanity addresses, and every time someone searching for an address, it will also check the global list, and we can find some way to pay each other for found addresses.

Assuming all of the above - how would I know that the vanity address that you've sold me is "safe"? You created it, you have or at least had the private key with you at some point, you could simply wait and check if the address begins to have some coins in it, and when it has enough coins, you simply use your private key that you  sold to me. Problem, right?

Any way around it?
7  Bitcoin / Development & Technical Discussion / Signed transactions for distribution on: May 22, 2012, 07:59:14 AM
Ok, so I'm thinking about how Safebit could work in the real world without having any client-side bitcoin network interaction (I know it's not the best method, bare with me).

It's easy enough to create bitcoin addresses and private keys on the client side, plenty of examples on this front (BitcoinJS and BrainWallet are just two), and there is a way to create and sign transactions only on the client-side, which at that point can be sent to a third party that only forwards the transaction and pushes it into the bitcoin network.

So far so good.

Now if I wanted to create a service that receives a signed transaction and pushes is to the network, I would want some kind of compensation for that work, especially if the service becomes popular (you know, managing servers and keeping everything up to date and flowing), I'm thinking about letting through only transactions that have a nominal fee assigned with them that will be forwarded to an account of my choice.

The flow looks something like this:

Client A needs to send 15 coins from address A to address B.
Client creates and signs a transactions with 15 coins going from address A to address B, and adds a transaction worth 0.1% (0.0015BTC) of the original transaction and sends it to address X.
Server receives signed transaction from Client A and checks to see if the transaction has a payment of 0.1% of the total transaction value (not including this tax/fee) going to address X, if it does, the server posts the transaction to the Bitcoin network, if it doesn't the transaction is ignored.

My question is - Can the server know in advance what are the addresses and the amounts in the transaction?

If not, how hard would it be to create a mock-network that won't be actually connected to the bitcoin network but would update the blockchain frequently, and then the server would use that network to "see" if the incoming transaction has a fee/tax in it?

In my view Bitcoin interaction with the end-users would be on this kind of level, where the clients don't actually have direct connection to the bitcoin network, but rather talk to a centralized server (wait, don't pull out the pitchforks just yet) that would receive these signed transactions and would only forward it to the network. Exactly like BitcoinJS nodes are supposed to operate.

The thing is - these server need to cover the operational costs, and if they aren't making any money on top of that, well, no one will be interested in operating them in the first place. So what I'm thinking about is these server could simply run on any domain, users would simply install a simple bitcoin service, and would "ping" the "clients" to notify them that they are accepting signed transactions.

When clients want to use that service, they will "ask" the server "what's the fee?" or "what's the rules to use your service?" - some servers will have no rules and no fees, other will have certain rules (for example - no transaction to known porn sites/business - just an example!), while other will have a fees but no rules [optimal], and if the conditions are accepted by the client it will forward the transaction to that server along with the required fees/rules.

Servers could compete with eachother on the fees that they require, and every web-host could easily support bitcoin transactions - hey - it's a great way to make extra money for any host/website - just allow users to push in transactions.

So, the answers I need:
a] Can I know in advance what addresses and amounts are in the signed transaction?
b] If [a] false how can I verify that these transaction actually follow my rules?
c] Any existing projects for this kind of concept (besides BitcoinJS which requires Node)? PHP/Python/Ruby?
8  Bitcoin / Development & Technical Discussion / [BOUNTY] Request: Server Launcher Tool on: May 21, 2012, 11:06:09 AM
Hey Guys,
As some of you might know already, I'm developing the Safebit bitcoin wallet, and one of the major problems that I see my users [including myself!] having issues with is launching the bitcoin client in server/daemon mode.

It seems that for some reason or another this is not a straight forward flow, and somehow the way parameters are passed is not very intuitive even for intermediate users [again, including myself].

I've decide to launch a simple bounty to create a simple, useful, and straight forward bitcoin client launcher. The idea is basically bundle the launcher with the default bitcoin-qt release so that developers and users alike will have an easy way of a) launching the bitcoin app with custom parameters, and b) easily creating shortcuts to those launch parameters so that users can fire up the previously defined configuration in a breeze.

I've designed a simple user interface to accommodate this new launcher tool - the idea of this launcher is to be super simple to understand and configure - these configurations are potentially very dangerous to the users bitcoins, so we need to be careful here and make sure that the users understand the configuration options and don't do something that might harm them.

Here's the design:

Right now as you can see it's pretty darn simple - two page, one of which is actually designed at the moment, and very minimal on the options - the other options could be added latter on.

Here's a basic specification for the launcher:

After clicking "Start Server" the button and all of the configuration fields will become disabled, and the stop server button will become enabled.
Optional: The area where the username/password fields are will disappear once the server is launched, and instead will appear a draggable element that will contain the username, password and port. This draggable element could for example be dragged into the Safebit application, which in it's turn will know what to do with the setting (i.e. configure the application to run with the provided information).

When clicking on the "Create Shortcut" tab a "Save" dialog will appear to save a shortcut to the bitcoin-qt app with the wanted parameters.

The launcher application should check the configuration during "start server" phase to make sure that the configuration actually setup correctly and working properly as expected.

The launcher should run on all 3 major platforms - Linux, Windows, and MacOS and should be identical on all three.

The launcher should follow the Bitcoin-QT coding guidelines [comments, clean code] and eventually should be merged into Bitcoin-QT.

The starting bounty for this project is from myself at 10BTC.
9  Bitcoin / Press / 2012-04-20 A big cover story in the weekend edition of The Marker [Israel] on: April 20, 2012, 12:36:16 PM
I wake up to a cup of coffee, cigarette, and reading The Marker, the largest and the most interests-free financial news paper in Israel.
And today was no exception, except that I was greeted with a huge-ass cover story about Bitcoin.

Link to the digital version of the article:

10  Bitcoin / Project Development / Safebit is looking for a Javascript Developer for Full Time [x-post] on: April 18, 2012, 11:09:00 AM
Hey Guys,
I'm looking for a Javascript developer to work full-time on Safebit.

The payment will be $1,000 every month, paid via Bitcoin or your method of choice (not including PayPal).

For more details:
11  Economy / Services / [UPDATE] Looking for a Front-End (Javascript/HTML/CSS) developer for Safebit on: April 17, 2012, 08:16:01 PM
Hey Guys,
Haven't been here a long time, just dropping by to see whats new in the forums from time to time.

I've started Safebit Bitcoin almost a year ago, and for a while I was trying to raise some funds to develop it as a full-fledged product. I guess it was too soon to go to these kind of investment methods, and a lot of time was lost. But the product is still, and my passion towards Bitcoin is growing by the minute, and I still believe that bitcoin NEEDS a simple user interface that would cater to most of the general population.

I've decide to hire someone who can develop Javascript, HTML, CSS and perhaps Python to start working on Safebit.

This is what currently out there:
This is the main code repository:
This is the wiki for the project: (Plus: search for "Safebit Bitcoin" for some more details)
None of these have been maintained in the last 6-7 months.

The payment will be $1,000 USD paid either with FIAT currency (not PayPal) or Bitcoin, your choice.

Stock options plan will be included.

The request is that you work full time on this project (i.e. no other paid projects), and have experience and feel comfortable with Javascript, HTML, CSS and PHP or Python, and delivered at least one former project (please provide link).

Send application to

The payment is for a monthly salary, not weekly or global project wide.
1 month of work = $1,000
12  Bitcoin / Wallet software / Safebit - Official Preview Version released today! on: September 11, 2011, 02:08:38 PM
So after a few months that you've heard from me and my ideas, today I'm finally making a first release of Safebit. It's not the "Final" version, it's not anywhere close to that, right now it's a GUI wrapper around the regular bitcoind and this version intended for experienced bitcoin users - it's not ready for newbies who have no idea how to configure the JSON-RPC or what some of the terms in the bitcoin world mean.

Safebit is released as a Chrome Packaged App - meaning this is a web app that can be installed directly in Chrome without needing any additional software installation (except of course the official Bitcoin client to provide JSON-RPC), it's basically one-click install and all you need to start playing with it is a working version of Chrome - on any platform! Note: You can chose to provide an external JSON-RPC server (i.e. installed anywhere else on the internet, not locally on your machine) and this could potentially work as a "hosted wallet" - I would highly discourage that at this point, as I'm not sure how it will behave and there are no caching mechanisms inside Safebit and you will be basically hammering the external server (but you could do that if you chose...) - So if you're planning to experiment, please be careful, and if you could I'd really like to hear your results!

The App:

Also, Safebit has a new home: - this is the domain that Safebit will be using to release updates, information, and eventually it will the official home for Safebit.

I've also opened a GetStatisfaction account for Safebit: , also accessible directly within the app via the "Feedback" button at the bottom left of the screen. This could be a stage to provide ideas, report bugs, and general rants about Safebit, so feel free to go there and put your opinion there.

Safebit also has an official forum:, the forum is powered by Reddit, a community that I love very much and have supported the Safebit idea from the very first minutes of it's existence.

The repository for Safebit has also changed (mainly because of the way things are handled as a Chrome app instead of relying on Python), and the new repository is accessible through: - My skills with git are just getting there so pardon if you see problems or something is missing, I'm doing my best...

If I'm forgetting anything right now, please feel free to ask, I'll respond and also edit this post to update with the forgotten details.


Support Safebit
As some of you may know, I'm currently hard at work trying to secure the funding to make Safebit a successful Bitcoin Wallet and there is some interest from all kinds of investors. If you'd like to help Safebit and make sure that it will be developed to the full potential, you have a lot of ways helping me in making this a reality:

  • Donation This is simple! If you're already using Safebit, just go to the "Support Safebit!" section (the rightmost-tab), or you can donate via any other bitcoin wallet to this address: 1Cm554iqhU9dLnZsi2LA5s1b576DdfM1GM
  • Promote Safebit If you like Safebit make sure you tell everybody you know that is somehow into bitcoin to try it out, and spread the word. The more people are downloading and installing the more chances I have of making this my day job and devoting more and more resources to developing Safebit
  • Facebook Like Visit our Facebook page: and make sure you "Like" the page, this little "Like" goes a long way especially if we manage to get a substantial amount of people who like Safebit, and it actually tells us that there are people who like the product and want to see more.
  • Subscribe to mailing list On the official site: there is a small input box that you can use to put your email down and subscribe for updates. The more people are subscribing to this the more demand there is for the product in the eyes of potential investors.
  • Join the forums As noted above, our forums are provided by Reddit - , so if you join (subscribe) it will get even more attention from Reddit users (as the users on /r/safebit are not exclusive and are shared across the entire Reddit ecosystem) and popular subreddits are sometimes promoted on the main page.
  • Write Plugins Safebit is a Web App written in Javascript, HTML, and CSS. So if you ever made a website chances are you'll be able to write plugins for Safebit. Feel free to visit the public repository:, download it, and start playing around with it (you need to enable "Developer Mode" in chrome to load-up unpacked extensions). If you want to submit anything to the main branch - let me know and create a pull request, I'll be happy to incorporate your plugin!
  • Exposures Exposure Exposure Anyway you chose to support Safebit is legit! Pick your prefered method and help make Safebit the leading open-source Bitcoin wallet that is designed to make newbies feel welcome and not distracted by complex UIs and hard-to-explain terminology. Spread the word, let people know about Safebit and Bitcoin, and feel free to contribute in anyway you like. Anything Goes!


Thanks for reading the above, and thanks for all the support I got from this community in the past couple of months. Without your kind words and the donations I wouldn't have taken on myself developing Safebit, so anyone of you who said anything nice or donated some coins you've actually helped to get Safebit up to this stage. Thanks Guys and Gals! Let's make Bitcoin a reality, and let's make it easy to use.
13  Bitcoin / Bitcoin Discussion / The Bitcoin Show and Bruce Wagner - Can someone sum up all the recent events? on: September 09, 2011, 09:55:32 AM
I've just noticed that The Bitcoin Sham has a new episode (watching it right now) which was released on Sep 8th, i.e. yesterday.

Can someone please sum up what happened with the Bruce Wagner/Tom Williams and all the rest?

Is the community is OK with a persona such as Bruce Wagner being the face of Bitcoin? Has he explained anything of the recent news on him and the Pattaya issue?

What's going on?
14  Bitcoin / Bitcoin Technical Support / JSON-RPC Transaction fee? on: September 02, 2011, 12:38:55 AM
How can I get the transaction fee before sending the transaction?

There doesn't seem to be documentation about it in the wiki.
15  Bitcoin / Bitcoin Discussion / Bitcoin official sites? why on separate domains? on: September 01, 2011, 11:41:34 PM
Why all the "official" sites related to bitcoin -,, - are on different domains?
16  Other / Meta / A couple of new features I'd like to see on this forum on: August 31, 2011, 04:14:10 PM
I see a lot of people posting messages like "+1" or "Like" just to support whoever posted whatever they posted.
And this makes sense in our day and age with all the social web, and it obviously works so well that we use "+1" and "Like" everywhere we can.

The other thing is bitcoin "donations" that almost everyone on this forum has in his/hers signatures, and I think that they should be going the way of the dodo, because they are easily traceable and just plain ugly, making everybody here look like beggars (yea, check my signature at the bottom...).

My suggestions for two new features are:

1. A "+1" or "Like" or what-ever-you'll-name-it button that will allow users to click it and a small counter will grow on the post or comment, allowing people to show like/support for the post without leaving uninteresting comments like "+1" - Simple and easy

2. A "Tip" button to allow users to "tip" a certain post or comment with actual bitcoins directly from anyone (no need to be registered on the forum) to the address that the user that is being tipped set beforehand in his profile.
Almost every user on this forum has a "donation" address in his/hers signature, and it looks silly that it's so easily implementable to actually make donations, sorry Tips, so easy and straightforward.

Regarding implementation of a Tip button,
I think it would be useful if the forum software runs a small bitcoin client that all it does is creates addresses every time someone posts/comments, meaning that every new post on the forum has a unique bitcoin address, so whenever someone sends a "Tip" the forum software can pick it up, and write it down on the post. saying something like "1.18 bitcoins tipped".
After a Tip is sent, the forum software will send it to the predefined address set by the user of that post, or will do some hocus-pocus routing for the bitcoins to avoid direct tracing. For example, to reduce transaction fees, Bitcoins will be actually sent to the users once every 24 hours, in one transaction order.
17  Bitcoin / Bitcoin Discussion / False Alarm on: August 16, 2011, 06:31:19 AM
I've tried to use and received conflicting emails from Google Checkout. It now looks that my order was fully refunded and my suspicion was false.

Original post available upon request in private.
18  Economy / Marketplace / Looking for Banners and Textual links on Bitcoin related websites on: August 12, 2011, 01:26:36 PM
I'm currently trying to get an idea what's the prices of Bitcoin related websites/services that can put banners and/or textual links.

I need to get an idea of how much traffic there is on a site considering it's the most prominent location available (not footer "link exchange" or some other type of "link exchange").

I realize that not every Bitcoin site/service these days has a lot of traffic, but those are still interesting to me, as well as high-volume traffic sites.

I'm not a marketing/media buyer, so I'm not really familiar with all the terms except the most basic of them (PPC, PPM, etc').

Private messages are obviously welcome as not everyone want their information to be out there for everyone to see. If you decide to PM me, I promise that I won't disclose the information directly (i.e. saying this and that offered me this). At this point I really need to understand what are the general costs and what would a bitcoin related campaign would cost.

I'm able to pay in USD and BTC.
19  Bitcoin / Bitcoin Discussion / A call to create a new kind of exchange on: August 11, 2011, 06:47:37 PM
Without going into too much details discussed in other thread, there is a very serious problem with Bitcoins these days and that's the simple fact that it's hard as hell to get a hold of Bitcoins initially.

You can read a discussion I'm having on Reddit in this matter, and I've came to a realization that Bitcoin needs a new type of an exchange, and the current ones are hampering the progress of Bitcoin not because they exist, but rather because they are practically the only gateway to Bitcoin.

The largest exchanges that exists today are operated as Stock Exchange, while we all know that real-life exchanges are either small privately owned brick and mortar shops that you can come in and buy/sell currencies, or banks that people trade currency with the bank and not with other traders.

What I'm proposing is an exchange that will have it's own supply of money, and instead of trading against/with other traders, users will buy coins/dollars directly from the exchange (as long it has the currency in stock). Very much like the brick and mortar exchanges we all have down the street (well, some of us have them down the street, depending where you live).

In order for this exchange to operate, it will need to rely on the exchange rate to provide it with the actual exchange rates that Bitcoin is being traded on those stock markets.

One other thing that is important to understand is that these exchanges are not ment to be used by day traders, but instead to provide an entry for regular users who only want to acquire Bitcoins to use them or to sell Bitcoins that they have in order to get fiat money to pay bills and rent. It could be used by day traders, but in my opinion the exchange would have to protect itself by increasing the cut it takes from users (day traders) in order to stay profitable and avoid an exchange being used as a stock market.

Creating such an exchange (not a stock market) requires the exchange owner having a lot of currency being held in stock for people to buy and sell the currencies he buys and sells.

This looks like a problem because not money people are interested in dropping the necessary funds for such an exchange.

If we consider that there are approximately 7 million coins in existence (neglecting the fact that there are a lot of "lost coins"), and at the current exchange rate that means around $70,000,000 worth of coins out there.

The average amount of coins that a regular user needs is around $100 - $5,000 worth of coins (my own assumption and numbers, they don't mean anything, and are just used for the sake of this explanation), that means that there are at most 14,000 people with $5,000 worth of bitcoins, and at most 70,000 people with $100 worth of bitcoins. In any case this is a worth while business as long as bitcoin does not completely collapses it's has a lot of money in it, and it's clearly needed and used by people around the world.

There are around $500,000 - $1,500,000 bitcoins traded daily on all the stock markets (MtGox, TradeHill, etc'), most of these exchanges are probably day traders who try to profit from the high volatility of Bitcoin.

Let's assume that the day traders are responsible for 60% of all the traffic in the stock markets, and let's assume that the average volume traded is $1,000,000 - a nice round number.

So from those assumptions we conclude that there are $400,000 worth of coins exchanging hands every day by people who are not day traders, and are actually helping the bitcoin economy because they buy stuff and services and sell them.

So if we want to create a true exchange service (not another stock market) we need a lot of money, at least $400,000 to start with in Bitcoins and USD. This is just to buy Bitcoin to keep them for customers when they are interested in buying Bitcoins, and having some USD in order to buy bitcoins from customers who want USD.

On top of that, a good exchange would provide easy ways of getting money to them. Eventually these exchange are for-profit, and the more traffic they have within them the better it's for them, and the more profitable they are. So providing good, easy, and fast methods of converting Bitcoin to USD (and other currencies in the future) will need at least $30,000 - $50,000 (wages, salaries, bank/visa fees, etc') to operate.

$50,000 monthly is not sounding so bad when considering a market that grows at a rate of 577% on average every month for Bitcoin exchanges.

Let's assume that a good, easy, fast Bitcoin exchange will have a daily traffic of $400,000, so monthly it means $12 million. In order for the exchange to be profitable, or at least maintaining a break even stability, it needs $50,000 monthly, that means 0.41666% is needed to be taken by the exchange in order to cover its expenses. Obviously not including rise and fall in bitcoin-to-usd value which can sometimes dramatically change the bottom lines.

So in order to provide a worth while exchange for people to have as a good, fast, reliable gate into and out of bitcoins, we need $400,000 in cash, and initially $200,000 to support 4 months of operation assuming loss, and assuming that by the 4th month the exchange can at least break even.

For this we also need to add the cost of setting up such an operation, that would require to open bank account in at least 4-5 desirable locations (USA, UK, Central Europe, Middle East, far east is not included in this list as I'm not familiar with them or their methods of operations as of now), this would cost an additional $20,000 - $50,000 before the exchange start operations.

All in all, we need around $650,000 in initial investment to create such an exchange. Or 70,000 Bitcoins.

I have a hard time imagining anyone dropping more almost a million dollars in advance in to Bitcoin today, but an investment of $250,000 is something that some investors would take seriously if proposed with the right business idea and plan.

So, we can assume to find an entrepreneur that would be willing to devote his time to such a project, and we can assume to find an investor that will be willing to invest the initial funding needed ($250,000) when there is a sound business plan and the right people behind it.

Where to get the missing $400,000? The users.

As explained earlier, such an exchange would need to have $400,000 in Bitcoins and USD to operate on a daily basis without "currency out of stock" error messages. So that means the exchange will need around $200,000 in USD and $200,000 in Bitcoins, or 10,000 bitcoins.

If such an exchange would rise today, to could take 2-4% from every exchange made on it, creating a profit margin of ~1.5-3.5%. This high % is high indeed, but considering that it suppose to be a business, and considering that it's the only one, it needs that kind of profit margins to be profitable and to exist. I'm paying a lot more when I'm getting a bank check or a wire transfer any way, and PayPal and services like it take those kind of percentages anyway.
An unlike PayPal, once you got Bitcoins, you are no longer paying transaction fees like you have to with fiat currency and services like PayPal and Dwolla, so this fees should not scare anyone or seem outrageous. And when Bitcoin evolves and becomes the next best things as we all hope and dream, than exchanges like that will be a regular business type in the Bitcoin landscape, so you can expect fees to get lower and lower to levels of below 0.41666% as the game progresses.

The users I mentioned earlier - The only way to get the funding the initial funding needed for such an exchange is from us, the early adopters of Bitcoin, people who already have coins lying around in our offline wallets or sitting on a stock exchange like MtGox.

The fact that you have coins in MtGox or your offline wallet means only one thing - it's locked away from the rest of the users, and no one, including yourself is not profiting from the existence of the coins.

In the world we so oftentimes criticize we have banks that pay us interest for any excess money we have. This works pretty good (except that we have a centralized bank...) for all the parties involved - The bank gets to have your money and make even more money by lending or buying stocks with it, and you get to have interest on any excess money (or other types of property/tangibles) that we may have.

So in order for the exchange to operate, and for us the users to have interest in helping it operate, the exchange needs to promise us that it will include us, the bitcoin holders, in the profits it makes. Bitcoins that will be deposited into such an exchange will have interest rate to them, and your money will start working for you, with the help of the exchange.

It may sound like a bank, and it may sound like we are going to trust some unknown entity to safegaurd our cash, and it sounds correct, but it's necessary for Bitcoin to become a widespread tool used by many people around the world, and in general advancing the bitcoin economy. And in any case that's what happens in our real life today, so at least we could opt to move to Bitcoins like Rick Falkvinge did a while ago.

What is really needed for this to become a reality is a few of us that have in total enough bitcoins to create the initial liquidity that such an exchange needs, and we need a trustworthy entity that is willing to take all the necessary regulatory steps to be liable for the cash that people invest in it.

Such an exchange needs to be entirely transparent, all of the code used to manage the exchange and all of the banking information needs to be reviewable by attorneys and people who just want to take a peek into the books.

I would be willing to put $1,000 worth of bitcoins on a very risky business like that that has the potential to get me a high return on investment even if bitcoin remains in $10 or even goes down to $1, I won't really care, because my money will generate interest just because it exists, and not because some speculations are moving the exchange rate up or down.

I'm not a financialist or an attorney, I don't fully understand what is needed to create such an entity, but I do understand that if it's done right, it's something that I will fully support with my hard earned cash in order to push Bitcoin to where it needs to be, even if that investment can very risky.

I'm pledging 16.8295 Bitcoins as an investment (loan for the initial liquidity) for any business that comes along and can stand to the rigorous expectation that I have and will be written if this gets the support it needs from the community.

Let me know if this makes any sense...
20  Bitcoin / Bitcoin Discussion / Can anyone please send me some testnet coins? on: August 05, 2011, 02:35:49 PM
I've started working on the part of sending/receiving coins a couple of weeks ago on Safebit, and until this point I was using the regular net, which isn't very smart... Smiley

I've learned about testnet a while ago, and now I'm going to use this while developing Safebit.

So if you be kind enough to send me some coins or let me know what's the fastest way of getting coins to my client on the testnet, I would greatly appreciate it Smiley

The addresses that you can send to my testnet wallet are:


Thanks Smiley
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