Just who would loan if he has more than the loan's principle in liquid assets? Its like loaning $100 and giving $150 in collateral.  Are you asking who would borrow under those terms? A pawn shop user goes in with a diamond ring that cost $2K brand new, learns that the street value is $700 and can borrow $350 (50%) against it. So that person is putting up $700 of collateral in order to borrow $350 cash -- at a high interest rate level to boot. The key concept is that the borrower still owns the bitcoins. If they go up in value, the borrower keeps those gains. This technique is used by the wealthy as well: Our clients can pledge marketable* securities including equities and restricted stock, corporate and government debt obligations, mutual funds, hedge funds, commodity futures funds and other financial instruments for loans, letters of credit and derivative transactions requiring collateral.
Even art can be used as collateral according to their list. It's a [bailout-backed] pawn shop for multi-millionaires! Art Finance
Citi pioneered the concept of using art as loan collateral more than 30 years ago and remains a leader in this field.
- http://www.privatebank.citibank.com/our_services/individuals_families/financing/lending_services.htm |
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Your thoughts and recommendations appreciated. I would think that any companies that are generating revenue in terms of fiat will have a harder time generating dividends when the BTC exchange rate is rising (just as the opposite was true when the exchange rate was dropping). |
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I'm thinking of a variation to this.
This idea is for something similar to a pawn shop, where bitcoins are committed as collateral towards a cash (fiat money) loan. To borrow $100 USD cash the borrower puts up some amount, say $120 worth of BTCs, for instance
So I borrow $100 for a few months. If BTC price goes down by 20% or more, I just keep the dollars. If it doesnt go down, or not enough, I repay the loan. Bitcoinica is for suckers, your system is far better. Well, I pulled that 120% collateral percentage out of the air. The actual collateral percentage, interest rate and maximum duration of the loan would be based on market forces. If no lenders are willing to lend to a first-time borrower at 120% collateral on a 36% APR, fifteen-day loan (to pull a more complete example out of the air) then an adjustment to one or more of the criteria would be made until a willing lender is found. Of course, if you as a borrower wish to borrow again and get the lower interest rate, lower collateral requirement or longer loan length then you'll probably want to repay the loan even though you would be underwater on it. |
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I'm thinking of a variation to this.
This idea is for something similar to a pawn shop, where bitcoins are committed as collateral towards a cash (fiat money) loan. To borrow $100 USD cash the borrower puts up some amount, say $120 worth of BTCs, for instance. This can be P2P where the USD funds (or whatever currency is used) for the loan occurs from an individual lender or small pool of lenders. A loan servicer operates in the middle and holds the BTC collateral -- essentially the servicer is just an escrow.
If there is no repayment or only a partial repayment, then the bitcoins are liquidated by the servicer as needed to make the lender(s) whole (and cover liquidation fees).
The value to the borrower is that instead of selling bitcoins outright to raise cash, instead those coins are used as collateral and if the value rises the borrower does not lose that increase in value. Of course, if the Bitcoin exchange rate drops the possibility increases that the borrower will default. Because it is trivially easy to liquidate, the lender only loses if the price drops below the value of the collateral, and even then the losses should be marginal unless the Bitcoin value really tanks.
Of course, this method has a slew of hurdles. In the U.S., pawn shop laws in certain states require notifying the customer before you can liquidate for instance. There are lending laws that this approach doesn't match well against either. Perhaps the way to do this is to run the escrow service from a jurisdiction where this can be done.
The problems include how to handle the case where the lender sends funds (e.g., PayPal USD) to the borrower but the borrower claims to have not received them (or they are frozen). This can be the result of attempts to defraud by either the lender or the borrower, or as the result of human error. As a middleman though, the servicer has no access to the PayPal (or other payment intermediary) transaction info. By having the service transfer the funds makes the service vulnerable to monitoring and eventual negative attention that might arise.
Repayment of fiat to the lender is probably a little easier if centralized (i.e., can go through the servicer) as that can occur entirely within the jurisdiction where the servicer operates.
In the (hopefully) normal situation where the borrower makes repayment in full the collateral returned to the borrower are in bitcoins (a non-reversable transaction) so the borrower's repayment needs to be made in funds that are just as secure. Perhaps the borrower acquiring Mt. Gox codes (through BitInstant, as one method) would meet this requirement.
Another concern is how can the lender trust the servicer with the collateral held in escrow. Perhaps a certain amount of the collateral can be held by the lender until the fiat funds of the repayment have been secured by the servicer.
If this were used widely it could affect the bitcoin value in a few ways. It will lock up bitcoins as collateral that might otherwise be sold on the open market as an immediate response when the price drops. On the other hand, if the value drops for an extended length of time and the loans default the liquidating of the collateral will push the price down even further. Perhaps options or other derivatives fit in somewhere to lessen these risks.
Any thoughts on this?
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hmmm, this gives me an idea...
Why not solicit Coinstar to add cashing out in Bitcoins as an option?
+1 And +1 to seeing them add Bitcoin as a payment method for their RedBox kiosks as well. I suppose they would also require a deposit in bitcoins to protect against the late return and damaged/lost replacement costs though. I bet they lose a respectable amount of money to the payment processors today. |
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I have been banging my head against a wall for about a week now and cannot figure something out ?
didnt think i could post tech stuff in newbie forum , also read through all the stuff i could find on here and nothing seemed to be ?
exactly the same as the issue im having
Perhaps explaining what your specific problem is will yield some helpful responses. There also is the #bitcoin-mining IRC channel. Perhaps someone there would be willing to help as well. - http://webchat.freenode.net/?channels=#bitcoin-mining |
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could the US or any other government actually make the bitcoin itself illegal?
A Bitcoin private key is data. When data is created using software running on your own computer it is probably safe to consider that as protected free speech. So it is unlikely that creating these bitcoin addresses and private keys on your own computer is ever something that could be made illegal. However, there are certain things governments could do in response to Bitcoin and an even wider list of things they could try to do (e.g., require any party that accepts online digital currency to follow Know Your Customer requirements for instance). Here are some relevant links: - http://www.quora.com/Is-Bitcoin-legal - http://www.bitcointalk.org/index.php?topic=6247.0 |
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That is one challenge when working with a pseudonymous digital currency -- even simple metrics like "total [real] spending volume" are very difficult to report on accurately. Some of that was funds from addresses with large amounts of funds. Sending 0.01 btc from a bitcoin address that has 10,000 BTC on it may make it look like that was 10K of funds moved, not 0.01 BTC of funds that moved. Additionally, with the bitcoin client released with encrypted, those volume metrics could have been transfers to accommodate having an encrypted wallet. If there was a jump in the adoption rate of Bitcoin, with it being used in a significantly greater manner then the number of transactions would have jumped as well: - http://blockchain.info/charts/n-transactions |
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On my browser the Lost password? link doesnt work when you enter your username and password wrong,
FYI, I was able to confirm this behavior in Chrome 14 and have opened a support ticket ( #17024 ) with Mt. Gox where I reported the problem. |
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their password reset form says that there is no account associated with my email, which I find bizarre.
The form that I use does not respond with any indication that the email you entered is truly a valid account or not -- it ALWAYS appears to respond with: "An email has been sent to your email address." (even if a bogus email address is entered). - http://mtgox.com/login/lost-passwordSo if you are getting different results what method are you using to try to reset the password? |
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Along the same lines as Google AdSense is Operation Fabulous: - http://operationfabulous.comYou as a website publisher can list your inventory and advertisers bid for that space. |
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Once you payment is made, AurumXchange will send you the USD MtGox code within seconds.
If I understand the process correctly, that last step in the process concerns me. Mt. Gox codes are redeemable by the bearer. Is AurumXChange seriously sending the Mt. Gox code through e-mail? E-mail messages are transmitted using the SMTP protocol. SMTP is not a secure method for communicating. SMTP [RFC-821] servers and clients normally communicate in the clear over the Internet. In many cases, this communication goes through one or more router that is not controlled or trusted by either entity. Such an untrusted router might allow a third party to monitor or alter the communications between the server and client. - http://www.ietf.org/rfc/rfc2487.txtAt some point, some unscrupulous network engineer or sysadmin at one of those router hops or a compromised system somewhere enroute is going to start filtering and capturing the mtgox codes and then redeem them. The chances of getting caught, if done properly, are likely extremely low -- any hop could have been the one where the sniffing occurred and even then the code, once redeemed, can get converted to bitcoin funds and withdrawn. Has there ever been an AurumXChange customer that claimed that the code they received showed that it had already been redeemed? If so, it will be difficult for either AurumXChange or Mt. Gox to determine if it was the customer attempting to double spend that code or if it instead was the result of some cyber thief somewhere between AurumXChange and my open wi-fi connection at this coffee shop. If e-mail will be the method or transferring the code then, at a minimum, the risks should be explained and I as the customer then be given the option for the message to be sent encrypted (using my PGP public key). |
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Oh any if anyone is doing the same thing that i did (Looking at the bottom left corner of the backside of the coin at what appear to be tool marks)
The photo was taken under natural light -- direct sunlight which shows the brilliance of the hologram but also shows the tool marks and how the clasp does bubble the sticker at the point where it clamps down -- especially when viewed at about 4X zoom. These are not noticeable to most under normal lighting unless you are specifically looking for flaws. That clasp is metal, Not gold
Not sure why you would make that statement. The bezel used for this says 14K gold, but I'll verify with the jeweler to ensure that not even the clasps are anything but 14K gold as well. |
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But the value of $10,000+... these are not dollar values in our wallets, but bitcoin values. I thought it was entirely exempt. So if someone had a trillion warcraft gold, would they have to report it? If not, then you don't have to report your bitcoin balance.
[...] if the aggregate value of these accounts exceeds $10,000 at any time during the calendar year.
The fact that the value is in bitcoins, warcraft gold, or Swiss francs (CHF)s doesn't matter. For U.S. persons, as long as the value exceeds $10K USD and is held in a foreign account the funds must be reported. If the warcraft gold is stored in your account with a U.S. gaming site, then no -- it would not need to be reported. Now if your foreign holdings were more than $10K and some of those holdings include linden dollars loaded at Austrian-based VirWox, for example, then that too would need to show on the FBAR. Disclaimer: I'm not an tax advisor, accountant, lawyer, etc. |
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