Um, he didn't disappear. He was out of home for several days during which I communicated with him daily, he's back now and starting to work on resolving the situation. He also wrote a lengthy reply to the accusations just two days ago (was poorly formatted and didn't focus on the right things IMO but whatever). See also this.

It's fine to want responsiveness especially in times of turmoil, but people have lives too and things take more than a few minutes to resolve.

This is my 2000th post.

Alberto is back home, and has paid the coupon of 0.032 BTC per bond, which includes the compensation for being 2 days overdue.

We have also discussed the future of the BDT bonds in light of the recent accusations on reddit and the forum and decided the following:
1. It will be hard to establish trust when Alberto is sitting on 10K BTC of debt which some people are worrying they're not getting back.
2. It's going to take a lot of time to establish trust in the Bitdaytrade platform, during which he pays a lot of coupons on the bonds without a revenue stream to show for it.

Therefore we are taking a strategic move to significantly lower his debt. As part of the process he has already recalled 2000 BDT bonds that were in my possession; he sent me about 4200 BTC to start offering people to sell their bonds back at their face value of 1 BTC each, and a bid has been placed. More bids will be placed once Alberto shuffles some funds around, as will I; it is expected that everyone will have a chance to sell. (In this I am letting go of the "not handling the funds myself" rule, but given the circumstances I believe it's best if I take the lead in handling this.)

I recommend that people take us on our offer. It makes sense for all parties involved, and ideally Alberto will only be in debt to me until we can figure out exactly how much capital he needs and at what terms. This is not a forced buyback though and people have a right to keep their bonds.

Alberto will make an announcement discussing the suggested security deficiencies and what he plans for the future of the Bitdaytrade platform.

Some security flaws have been suggested so Alberto has shut down the site until he can get home and work it out.

As mentioned Alberto is scheduled to be back home a few hours from now, at which point he will pay the coupons.

No.

There are much more efficient ways to solve systems of linear equations.

Presumably Alberto was unable to pay the coupons because he's not home. I talked with him and he said he will do it tomorrow.

I did indeed check Alberto's background to the best of my understanding. I sent a letter to the address in Italy he gave me and he learned its contents (which means either he or someone he is in touch with can access mail sent to this address), and I have an ID scan. My impressions from the process were that he intends and is able to make good on his obligations. But I am not omniscient and I am not a forensic expert. If I was 100% certain of this I would have just lent him the money myself, and it was clear that investors are sharing the counterparty risk. If it turns out I was wrong there is only a limited degree to which I can be held accountable.

He was scheduled to start working on Bitdaytrade full time next month.


Alberto was originally supposed to be home today and resume working with me on resolving the current situation; he now says there's been a change in plans and it will be tomorrow evening. Let's wait until tomorrow.

I have talked some more with Alberto. The summary is:
1. He says he's not Bitscalper. In particular, while Alberto uses the handle jjfarren in some places, I did not see any evidence that jjfarren on the forum is him.
2. We're figuring out a way to resolve the current situation.
3. Tomorrow he'll be home and he'll reformat his previous announcement and add more detail to it.
4. While I can sympathize with the people wanting to panic sell, it's their decision to make and they're ultimately responsible for it if it turns out being unwise.

As far as I can tell Alberto can fix the current issues; and even if Bitdaytrade ends up a dead end (merely the bad press from this controversy could harm its growth), he can still fulfill the bond contract.

I think you're mixing up the order of events and that this affects your narrative.

AFAIK Alberto's statement that bcrypt is used isn't recent. On the recent reddit threads he was quoted on a statement he made some time ago. So it's not true that "he said bcrypt and a few minutes later it was proven to be MD5".

Alberto says that it was originally bcrypt but there were implementation issues so he temporarily switched to MD5. As mentioned I'm not a security expert so I can't assess how plausible this is. I'll wait for Alberto to make a clarification of this and other issues.

Alberto says there is no relation.

I talked with Alberto. He may choose to make his own statement but the bottom line is that contrary to claims, no funds have been stolen from Bitdaytrade; whatever security deficiencies exist, they will be sorted out; and that bondholders shouldn't panic, he is still committed to fulfilling the contract and I will still assist him in doing so.

I am:
1. A spokesperson, consultant and facilitator for everything related to the BDT bonds. I'm not the issuer on GLBSE though and I don't touch the funds.
2. A consultant for anything Alberto wishes to consult with me. In this capacity I may sometimes choose to speak about Bitdaytrade on the forum, but I am not an official spokesperson.
3. A creditor, I have some BDT bonds and I have a separate loan to Alberto.
4. A person who has given a vote of confidence for Alberto.
5. A user, as should be pretty clear I have an interest in BTC margin trading. Right now I'm mostly testing, as said the platform isn't mature enough to use it with large amounts, and I have some better ways to control my position. But going forward my usage could increase.

I do not have equity, ownership or any other rights or control of Bitdaytrade, I'm not an employee, I don't write or review its code (except perhaps looking at tiny snippets), I do not handle its finances directly, or any other thing I could think of. I don't make any decisions, though in some cases my advice is firm enough that it may as well have been my own decision to make. I haven't even met Alberto for that matter, but that will hopefully change soon.

I understand this and I'm doing my best to make sure bondholders get what they were promised. But I also wanted to make clear (and perhaps I wasn't clear enough in the OP) what my level of involvement with Bitdaytrade is. I haven't touched any of the IPO funds or Bitdaytrade deposit funds. I don't audit the code or do pentesting. I spend a lot of time chatting with Alberto and what I report is to a large extent the information I get from him, and I don't believe he is lying to my face. If it somehow turns out I was wrong there is only a limited degree to which I can be held accountable.

If someone believes that I did not accurately represent the situation and that this adversely affected his decision to invest, let me know and we'll see if something can be worked out.

I will discuss with Alberto in more detail the recent security accusations.

I responded to TheBitcoinRifleman by PM but only now noticed this thread.

The profit vectors are:
1. The spread between the price I sell the bonds and the price at which I am obligated to buy them.
2. The time value of the money which is in my control for the duration that the bond is outstanding.
3. Another instrument for me to control my BTC position.

I know more cryptography than the average guy but as far as mathematics go I don't consider it one of my stronger fields. Anyway theoretical crypto has very little to do with website security, about which I know very little, and I have no involvement with Bitdaytrade's code or its parts dealing with security. I doubt Bitdaytrade uses unsalted MD5 passwords though (edit: If it does then Alberto really has some explaining to do).

I did advise to Alberto to take security very seriously and to avoid rapid growth until the platform has had a chance to be properly tested. The platform is still in beta and until some more time has passed for issues to pop up and be fixed and an audit has been made by external security experts (which IMO is on a timescale of months), it is unwise to put large amounts of money in it. In any case the vast majority of the money is stored offline and withdrawals are (edit: currently) inspected manually, so even if something happens it should still be in a level which Alberto can absorb without affecting customers.

I'm also advising Alberto not to offer interest rates for deposits (only for positions). Though they make functional sense, they might mislead people into thinking that a fledgling margin trading platform is the proper place to put one's life savings like in the Bitcoinica stories we've heard. People should only put in as much as they need for the desired position.

Well, Edit watchlist sorts items by the time of the last new post, so you can browse it until you encounter a post you've already seen.

Yes, that's one of the basic ways to offer mining shorting. The main problem with this is that it doesn't account for the time value of money. There are some fairly safe deposit programs offering 1%-2% per week. An investor in SHRT will have to tie up his funds for 6 months and not get anything for it. Remember also that the amount tied should be pretty high to guarantee that it's sufficient for the difference.

You could reflect the time value in the price, and actual invest the raised funds to complement the profit, but then you run into fuzziness about what is the actual time value.

If the time spanned is shorter this becomes less of a problem, but then it's much more of a hassle to use the asset.

This is still viable, but not very elegant.

The proper way of course is to have a market which allows selling mining bonds on margin. This way you can exactly mirror the bonds, and you can get pretty good leverage (a larger position per money tied up).

Probably not, maybe October though.

Ok, I apologize for that remark.

We can't share the details yet but so far Nefario has been very cryptic and unresponsive.