bitfloor needs your help!

[bb113]

I really don't understand: "convert btc debt into dollar debt". He buys bitcoin elsewhere, then credits your account and you can sell for this mythical stable price if you so choose. What is the advantage here?

[Rassah]

As a bitcoin investor, obviously I would prefer to get what I was investing into, since as an investor I was expecting my investments to continue to grow, not stagnate (had I wanted that, I would've just put my money into a savings account).

But then, I may just be biased and greedy.

Also, since I'm investing long-term, I can wait for years to be paid back.
Also, with MtGox having scaling issues (lags), the concerns about them being too big, and a lot of newbies going to Bitfloor (MtGox having huge application ques), I don't think Bitfloor will have too much trouble paying off the debt.
Also, even if MtGox has a lot of trouble paying off the debt, if Bitcoin continues to grow, eventually a 5% return of what we're owed could STILL be worth way more than the value of what we lost.

That said, I would be concerned if Roman wasn't making enough profit for himself to make this be worth his while.

[SgtSpike]

That said, I would be concerned if Roman wasn't making enough profit for himself to make this be worth his while.

That is my concern as well - that he has lost inspiration for the project.  It would suck to work hours a day on something that you won't see payouts on for four years.  But I know people do that all the time, so...

Another concern is whether he is MT/MSB registered, and whether he is doing the proper reporting.

[DeathAndTaxes]

That said, I would be concerned if Roman wasn't making enough profit for himself to make this be worth his while.

That is my concern as well - that he has lost inspiration for the project.  It would suck to work hours a day on something that you won't see payouts on for four years.  But I know people do that all the time, so...

This.  Most of these creditors unrealistic goals assume repayment = 100% of gross revenue and that running bitfloor has no costs and Roman will gladly work for 3 to 5 years without any compensation.  Of course if the exchange rate goes higher and higher and higher the drive to repay creditors 1000%, 5000%, 20,000% of what they lost (in USD terms) for years and year and year is likely going to run dry.  Any debt scenario (any from loan shark to mortgage) involves benefit and risk for both parties.  When benefit/risk becomes significantly onsided then one entity will seek to end the agreement. 

For full disclosure TC, LLC sold our debt to a third party so I have no direct involvement however we do move some significant volume through bitfloor so our company has a vested interest in bitfloor being a solid growing exchange.

Another concern is whether he is MT/MSB registered

It is just MSB.  MT is just one classification of MSB.  Bitfloor is registered as an MSB (has been for sometime) although since it was prior to the FinCEN guidance IIRC the classification is "currency exchange" not "money transmitter".   All MSBs are subject to the same reporting, AML program, compliance officer, and third party audits.  It would make no sense for Roman to register (a defacto admission one believes they must be compliant) and then not comply.  My guess (no inside information) is that he is complying with MSB requirements.  He can file with FinCEN to have the MSB classification changed. 

[qxzn]

That said, I would be concerned if Roman wasn't making enough profit for himself to make this be worth his while.

That is my concern as well - that he has lost inspiration for the project.  It would suck to work hours a day on something that you won't see payouts on for four years.  But I know people do that all the time, so...

I think it would be reasonable for him to split the revenues 50-50; take half for profit or further business development, and use the other half to make regular payments on the lost coins.

(full disclosure: I own a fair amount of bitfloor debt)

[SgtSpike]

That said, I would be concerned if Roman wasn't making enough profit for himself to make this be worth his while.

That is my concern as well - that he has lost inspiration for the project.  It would suck to work hours a day on something that you won't see payouts on for four years.  But I know people do that all the time, so...

This.  Most of these creditors unrealistic goals assume repayment = 100% of gross revenue and that running bitfloor has no costs and Roman will gladly work for 3 to 5 years without any compensation.  Of course if the exchange rate goes higher and higher and higher the drive to repay creditors 1000%, 5000%, 20,000% of what they lost (in USD terms) for years and year and year is likely going to run dry.  Any debt scenario (any from loan shark to mortgage) involves benefit and risk for both parties.  When benefit/risk becomes significantly onsided then one entity will seek to end the agreement. 

For full disclosure TC, LLC sold our debt to a third party so I have no direct involvement however we do move some significant volume through bitfloor so our company has a vested interest in bitfloor being a solid growing exchange.

Another concern is whether he is MT/MSB registered

It is just MSB.  MT is just one classification of MSB.  Bitfloor is registered as an MSB (has been for sometime) although since it was prior to the FinCEN guidance IIRC the classification is "currency exchange" not "money transmitter".   All MSBs are subject to the same reporting, AML program, compliance officer, and third party audits.  It would make no sense for Roman to register (a defacto admission one believes they must be compliant) and then not comply.  My guess (no inside information) is that he is complying with MSB requirements.  He can file with FinCEN to have the MSB classification changed. 

Well, it is a relief bitfloor is MSB registered.  Thanks for clarifying that D&T.

[EuSouBitcoin]

It is ludicrous to demand that anyone who loses value X be repaid at value X*10.

Look at the exchange rate on the day of the hack, and return debt based on that.

I think those that had X bitcoins on the day of the hack should be repaid X bitcoins, not 10X bitcoins.

[jwzguy]

It is ludicrous to demand that anyone who loses value X be repaid at value X*10.

Look at the exchange rate on the day of the hack, and return debt based on that.

I think those that had X bitcoins on the day of the hack should be repaid X bitcoins, not 10X bitcoins.

I haven't seen anything to indicate that Roman disagrees with you.

[Alonzo Ewing]

This.  Most of these creditors unrealistic goals assume repayment = 100% of gross revenue and that running bitfloor has no costs and Roman will gladly work for 3 to 5 years without any compensation.  Of course if the exchange rate goes higher and higher and higher the drive to repay creditors 1000%, 5000%, 20,000% of what they lost (in USD terms) for years and year and year is likely going to run dry.  Any debt scenario (any from loan shark to mortgage) involves benefit and risk for both parties.  When benefit/risk becomes significantly onsided then one entity will seek to end the agreement. 

I hope I've made it clear that these numbers are simplified, just to spur discussion.  I don't expect him to operate without expenses; nor do I expect him to not keep ANY profits for himself.  My message here is that Bifloor is growing like a weed, and there is a way for everyone to win here.  If not now, then very soon as it continues to grow.

[Alonzo Ewing]

I really don't understand: "convert btc debt into dollar debt". He buys bitcoin elsewhere, then credits your account and you can sell for this mythical stable price if you so choose. What is the advantage here?

Suppose the current debt is 23,300 BTCs which equates to $3.27 million at the current price of $140.

He can pay it back in two ways:

1) Build up his commissions, which are in dollars, and periodically pay off the debt in bitcoins.  That means he accumulates dollars, then buys BTCs.  If the price of BTCs doubles to $280, he will still owe 23,300 BTCs which would equate to $6.54 million.  As the price of bitcoins grows, so does the dollar value of what he owes.

or

2) Take a loan for $3.27 million, buy 23,300 BTCs, return those BTCs to whom they are owed.  Then he needs to generate $3.27 million to pay back to whomever he borrowed from.  If the price of BTCs doubles to $280, his commissions will also double, and time taken to pay off the debt gets cut in half for a given volume of BTCs traded.

-----

If he had taken approach #2 after the heist, he would owe someone $250K, an amount he'll probably make in revenues in 2013.  Instead, he owes close to $3.27 million.  

Who would give him a loan for $3.27 million?  Maybe nobody.  But I think there could be investors out there.  With the growth in trading volume since the beginning of 2013, the revenue growth rate is astronomical.  Correct me if I'm wrong, but I think Bitfloor is the largest US based exchange.  As a user, I think it's fantastic, probably as good as any other exchange, if not better, out there.  There is huge room for growth here.

And he doesn't necessarily need to take a loan.  He could sell ownership of 49% of the company and still keep control.

[Rassah]

There is option #3: Take commission in BTC and use those BTC to pay down the loans. MtGox does about 2.3 mil of BTC in volume a month, meaning they rake in about 11,000 BTC in commissions alone. If Bitfloor continues to grow, and overall trade volume continues to grow, he may be able to make the 25,000 btc back in two years. Even if it takes 4, personally I would rather take the full amount of appreciating btc over 4 to 8 years, than a much smaller chunk of cash now.

[Alonzo Ewing]

There is option #3: Take commission in BTC and use those BTC to pay down the loans. MtGox does about 2.3 mil of BTC in volume a month, meaning they rake in about 11,000 BTC in commissions alone. If Bitfloor continues to grow, and overall trade volume continues to grow, he may be able to make the 25,000 btc back in two years. Even if it takes 4, personally I would rather take the full amount of appreciating btc over 4 to 8 years, than a much smaller chunk of cash now.

That's very similar to what I meant in #1. To earn enough commissions to pay everything back in 2 years, he'd need an average trading volume of 10K per day. That's about 4x current levels. 

Having said that, the volume has risen by 4x over the last two months.

I still think if we assume long term increase in BTC prices, converting to dollar debt is a no brainier. If, for example, volume jumps to 10K per day and the price doubles, it would only take 1 year to get back to even.

[EnergyVampire]

FYI:

"BitFloor will be offline for maintenance on 2013/4/6 from 3:00 AM to 6:00 AM EST (7 AM - 10AM UTC). The matching engine and trading will be unavailable during parts of this maintenance window as we improve our services. Deposits and withdrawals will continue to be processed."

Link: https://bitfloor.com/

So in another 8 hours or there abouts.

[Minor Miner]

It is ludicrous to demand that anyone who loses value X be repaid at value X*10.

Look at the exchange rate on the day of the hack, and return debt based on that.

I find it strange that you think of the debt in fiat, not the bitcoin currency it was held in.   The loss was bitcoins, the debt is bitcoins, their F/X worth to other things is irrelevant.   I do not think anyone is asking to be re-paid 10X more bitcoins than they were owed.

[Han]

If yall want to get your coins back ASAP, you'd best promote bitfloor's advantages: US based, cold storage security, advanced matching engine, etc. now that Roman's stopped posting on his lawyer's advice (except for routine service announcements).

[MPOE-PR]

If yall want to get your coins back ASAP, you'd best promote bitfloor's advantages: US based, cold storage security, advanced matching engine, etc. now that Roman's stopped posting on his lawyer's advice (except for routine service announcements).

Especially the cold storage security.

[muyuu]

Does Roman have an address for donations? Sorry if it was already posted.

[qxzn]

Does Roman have an address for donations? Sorry if it was already posted.

You could use this:

https://thewalletlist.com/api/lookup/rshtylman@bitfloor.com

[muyuu]

Does Roman have an address for donations? Sorry if it was already posted.

You could use this:

https://thewalletlist.com/api/lookup/rshtylman@bitfloor.com

How can I be sure that address is correct? someone else could have listed his address, or it could be a compromised address.

I wouldn't want to send coins to the wrong person.

[qxzn]

How can I be sure that address is correct? someone else could have listed his address, or it could be a compromised address.

I wouldn't want to send coins to the wrong person.

You can't be sure, and you're right to mistrust.

But, there's a decent chance it's right. So for small amounts, e.g. tips, you could use it.

But if you want to confirm that it gets to him, you'll probably have to contact him somehow.