[ANN] HaoBTC launches fixed term deposit account

[ranlo]

Hey Eric!

So after doing some research, I decided to entrust some BTC with HaoBTC!

I do have a couple of concerns I'd like to voice, though, publicly so others can see the answers as well:

1) If the mining business goes down or otherwise becomes unprofitable (such is the case with this largely unknown variable), would you just drop the APY to 0%? Are there any other ways you're earning money off deposits right now?

2) Are the funds somehow guaranteed? I find this hard to fathom when depositors can withdraw at any minute (meaning that the funds can't all be tied up, otherwise people couldn't all withdraw). So can you please give a bit more information on how all of this works out in terms of risk involved?

[Eric Mu]

Hey Eric!

So after doing some research, I decided to entrust some BTC with HaoBTC!

I do have a couple of concerns I'd like to voice, though, publicly so others can see the answers as well:

1) If the mining business goes down or otherwise becomes unprofitable (such is the case with this largely unknown variable), would you just drop the APY to 0%? Are there any other ways you're earning money off deposits right now?

2) Are the funds somehow guaranteed? I find this hard to fathom when depositors can withdraw at any minute (meaning that the funds can't all be tied up, otherwise people couldn't all withdraw). So can you please give a bit more information on how all of this works out in terms of risk involved?

Hi,
Our pleasure to have you!
I feel that I don't have all the answers ready but will try to address your concerns as much as I can:
While at the moment we make money mostly through mining, we are exploring alternatives that can potentially generate non-mining revenue. For example, we recently launched a service allowing users (right now only Chinese banks supported) to trade bitcoins and we charge a 0.1% commission. This has generated a small but growing income.
If the mining profitability diminishes but we manage to find replacements, we will continue to operate our Banking service and pay out interest.
The interest rate is pretty much dependent on market competition and that we drop it to 0 is extremely low.
If the company fails, the plan - not sure how official it is, but the CEO suggested at one point that all partners should take jobs and pay back the debt using their future income - I personally have no objections and think all the big name investment banks should do the same.
HaoBTC pretty much operates like a fractional-reserve bank (FRB) at the moment, and like all FRBs, it works on the assumption that all depositors won't withdraw at the same time. If we run out of reserve in a bank run scenario, one alternative is to borrow from the big exchanges, which have been giving loans for about 30 percent p.a.
Are the funds somehow guaranteed? Yes and no. It is not guaranteed by the law or state institutions, because there is little to no legislation in the space - not in China and not that I am aware of. It is guaranteed by our reputation and the scrutiny of users, esp. the Chinese ones. We make the commitment to our users that as long as the company exist, we will honor our obligations - this is true for the Chinese users and foreigners alike. If some unforeseeable events struck and the worst happened, in principle we will try to pay back the debt to the best of our ability - we don't have a specific plan but will publicize it once we do.
We have been considering bringing a third-party insurer onboard, but to be honest, it is hard to find one willing to provide such service and I don't think this is likely to happen soon.

[ranlo]

Hey Eric!

So after doing some research, I decided to entrust some BTC with HaoBTC!

I do have a couple of concerns I'd like to voice, though, publicly so others can see the answers as well:

1) If the mining business goes down or otherwise becomes unprofitable (such is the case with this largely unknown variable), would you just drop the APY to 0%? Are there any other ways you're earning money off deposits right now?

2) Are the funds somehow guaranteed? I find this hard to fathom when depositors can withdraw at any minute (meaning that the funds can't all be tied up, otherwise people couldn't all withdraw). So can you please give a bit more information on how all of this works out in terms of risk involved?

Hi,
Our pleasure to have you!
I feel that I don't have all the answers ready but will try to address your concerns as much as I can:
While at the moment we make money mostly through mining, we are exploring alternatives that can potentially generate non-mining revenue. For example, we recently launched a service allowing users (right now only Chinese banks supported) to trade bitcoins and we charge a 0.1% commission. This has generated a small but growing income.
If the mining profitability diminishes but we manage to find replacements, we will continue to operate our Banking service and pay out interest.
The interest rate is pretty much dependent on market competition and that we drop it to 0 is extremely low.
If the company fails, the plan - not sure how official it is, but the CEO suggested at one point that all partners should take jobs and pay back the debt using their future income - I personally have no objections and think all the big name investment banks should do the same.
HaoBTC pretty much operates like a fractional-reserve bank (FRB) at the moment, and like all FRBs, it works on the assumption that all depositors won't withdraw at the same time. If we run out of reserve in a bank run scenario, one alternative is to borrow from the big exchanges, which have been giving loans for about 30 percent p.a.
Are the funds somehow guaranteed? Yes and no. It is not guaranteed by the law or state institutions, because there is little to no legislation in the space - not in China and not that I am aware of. It is guaranteed by our reputation and the scrutiny of users, esp. the Chinese ones. We make the commitment to our users that as long as the company exist, we will honor our obligations - this is true for the Chinese users and foreigners alike. If some unforeseeable events struck and the worst happened, in principle we will try to pay back the debt to the best of our ability - we don't have a specific plan but will publicize it once we do.
We have been considering bringing a third-party insurer onboard, but to be honest, it is hard to find one willing to provide such service and I don't think this is likely to happen soon.

Great answers! Thanks, .

I also wanted to point out that some information on the site should ideally be translated to English as well, such as the questions page. I used Google Translate to read what it said, but translating it properly may help give ease of mind to English speakers.

[Eric Mu]

Hey Eric!

So after doing some research, I decided to entrust some BTC with HaoBTC!

I do have a couple of concerns I'd like to voice, though, publicly so others can see the answers as well:

1) If the mining business goes down or otherwise becomes unprofitable (such is the case with this largely unknown variable), would you just drop the APY to 0%? Are there any other ways you're earning money off deposits right now?

2) Are the funds somehow guaranteed? I find this hard to fathom when depositors can withdraw at any minute (meaning that the funds can't all be tied up, otherwise people couldn't all withdraw). So can you please give a bit more information on how all of this works out in terms of risk involved?

Hi,
Our pleasure to have you!
I feel that I don't have all the answers ready but will try to address your concerns as much as I can:
While at the moment we make money mostly through mining, we are exploring alternatives that can potentially generate non-mining revenue. For example, we recently launched a service allowing users (right now only Chinese banks supported) to trade bitcoins and we charge a 0.1% commission. This has generated a small but growing income.
If the mining profitability diminishes but we manage to find replacements, we will continue to operate our Banking service and pay out interest.
The interest rate is pretty much dependent on market competition and that we drop it to 0 is extremely low.
If the company fails, the plan - not sure how official it is, but the CEO suggested at one point that all partners should take jobs and pay back the debt using their future income - I personally have no objections and think all the big name investment banks should do the same.
HaoBTC pretty much operates like a fractional-reserve bank (FRB) at the moment, and like all FRBs, it works on the assumption that all depositors won't withdraw at the same time. If we run out of reserve in a bank run scenario, one alternative is to borrow from the big exchanges, which have been giving loans for about 30 percent p.a.
Are the funds somehow guaranteed? Yes and no. It is not guaranteed by the law or state institutions, because there is little to no legislation in the space - not in China and not that I am aware of. It is guaranteed by our reputation and the scrutiny of users, esp. the Chinese ones. We make the commitment to our users that as long as the company exist, we will honor our obligations - this is true for the Chinese users and foreigners alike. If some unforeseeable events struck and the worst happened, in principle we will try to pay back the debt to the best of our ability - we don't have a specific plan but will publicize it once we do.
We have been considering bringing a third-party insurer onboard, but to be honest, it is hard to find one willing to provide such service and I don't think this is likely to happen soon.

Great answers! Thanks, .

I also wanted to point out that some information on the site should ideally be translated to English as well, such as the questions page. I used Google Translate to read what it said, but translating it properly may help give ease of mind to English speakers.

Thanks. Translation is definite one thing we can improve. Actually it is one of the first suggestions I made when I joined the company but was not taken on the ground that we were doing a new UI design, it would be a waste of time improving something that has no future. Then the new UI got delayed.

[SavellM]

This sounds a lot like CoinLenders or whatever it was (run by TF). We saw what happened with that one.

How public is your identity, OP? How can we verify who you are, and what you've done in the past? It's risky enough as it is. Even more so if we don't know you, .

My bio is pretty simple:
I worked seven years for a media startup called Danwei, which is an English language media website and consulting firm founded by Jeremy Goldkorn (https://en.wikipedia.org/wiki/Jeremy_Goldkorn ).
The company was sold to Financial Times in early 2013.
I worked at Financial Times' Beijing office for a little more than a year as a researcher and left the company in May, 2014.
I subsequently joined a few Bitcoin companies, including a brief stint at OKCoin (worked as a member of the overseas team responsible for media communications), Coinarch, an Australian exchange. HaoBTC is the third BTC company that I work for.  
I translated a few books as a hobby - still doing translation when I have time.
I am a contributor to CoinDesk and Forbes.
Can't think of anything to add.
Most info can be found on my Linkedin page.

Thanks for this information.  Can you briefly describe how deposits are secured internally?  I understand the need to keep somethings closer to the vest than others, but it would ease my mind knowing that two or three digit deposits are secure.

Thanks a million!

+1, could you explain how your assets are secured?

[SavellM]

So let me get this right.

If I invest 40btc, 12% p.a = 4.8 (I know it rises over time)
So for 1 whole year I get 4.8bt out of 40.
Means monthly I should earn 0.4btc profit.

Seems a big risk for little reward...

[Eric Mu]

So let me get this right.

If I invest 40btc, 12% p.a = 4.8 (I know it rises over time)
So for 1 whole year I get 4.8bt out of 40.
Means monthly I should earn 0.4btc profit.

Seems a big risk for little reward...

The 12% is only for the first month.
The interest rate increases progressively with a monthly increment added to the 12% base if your deposit is with us for over one month.

[Eric Mu]

So let me get this right.

If I invest 40btc, 12% p.a = 4.8 (I know it rises over time)
So for 1 whole year I get 4.8bt out of 40.
Means monthly I should earn 0.4btc profit.

Seems a big risk for little reward...

Out of curiosity, what kind of interest rate do you think will justify the risk?

[Eric Mu]

This sounds a lot like CoinLenders or whatever it was (run by TF). We saw what happened with that one.

How public is your identity, OP? How can we verify who you are, and what you've done in the past? It's risky enough as it is. Even more so if we don't know you, .

My bio is pretty simple:
I worked seven years for a media startup called Danwei, which is an English language media website and consulting firm founded by Jeremy Goldkorn (https://en.wikipedia.org/wiki/Jeremy_Goldkorn ).
The company was sold to Financial Times in early 2013.
I worked at Financial Times' Beijing office for a little more than a year as a researcher and left the company in May, 2014.
I subsequently joined a few Bitcoin companies, including a brief stint at OKCoin (worked as a member of the overseas team responsible for media communications), Coinarch, an Australian exchange. HaoBTC is the third BTC company that I work for.  
I translated a few books as a hobby - still doing translation when I have time.
I am a contributor to CoinDesk and Forbes.
Can't think of anything to add.
Most info can be found on my Linkedin page.

Thanks for this information.  Can you briefly describe how deposits are secured internally?  I understand the need to keep somethings closer to the vest than others, but it would ease my mind knowing that two or three digit deposits are secure.

Thanks a million!

+1, could you explain how your assets are secured?

Hi,

I replied to a similar question here: https://bitcointalk.org/index.php?topic=1023187.msg11649981#msg11649981

[ranlo]

So let me get this right.

If I invest 40btc, 12% p.a = 4.8 (I know it rises over time)
So for 1 whole year I get 4.8bt out of 40.
Means monthly I should earn 0.4btc profit.

Seems a big risk for little reward...

Out of curiosity, what kind of interest rate do you think will justify the risk?

That's a pretty heated question, and it's really tough. It's really a balance between what's viable and what's worth risking, and it's hard to see what that amount is. It's important to keep in mind that cryptos are still young, and the majority of sites don't even last a year. This puts anything crypto-related in a high-risk category. The problem is paying out too much would put the business at risk.

I'm personally happy with whatever keeps the business going. To me, 1% of something is better than 100% of nothing.

[Eric Mu]

So let me get this right.

If I invest 40btc, 12% p.a = 4.8 (I know it rises over time)
So for 1 whole year I get 4.8bt out of 40.
Means monthly I should earn 0.4btc profit.

Seems a big risk for little reward...

Out of curiosity, what kind of interest rate do you think will justify the risk?

That's a pretty heated question, and it's really tough. It's really a balance between what's viable and what's worth risking, and it's hard to see what that amount is. It's important to keep in mind that cryptos are still young, and the majority of sites don't even last a year. This puts anything crypto-related in a high-risk category. The problem is paying out too much would put the business at risk.

I'm personally happy with whatever keeps the business going. To me, 1% of something is better than 100% of nothing.

For us, it is a matter of balancing between staying competitive and maximizing margin.
Ideally we would like to pay users zero interest rate, but since the other guys out there pay something so we have to keep up with their offering to get a market share.
But we don't want to bankrupt ourselves by paying users rates unsustainablly high.
So the interest rate is pretty much determined by the market and our competitiveness.

[SavellM]

What I'm trying to get at is I would get more at Hashnest with mining.
Why pay for your mining if I dont get good returns.

Even at 16% - 40btc x 16% = 6.4btc per year.
So my monthly is = 0.53 per month.

This is after investing for a whole year, and hoping that you guys dont run into any issues.

I could earn more @ hashnest with my funds.
So what incentives do I get for putting my money with you guys?

[marcotheminer]

What I'm trying to get at is I would get more at Hashnest with mining.
Why pay for your mining if I dont get good returns.

Even at 16% - 40btc x 16% = 6.4btc per year.
So my monthly is = 0.53 per month.

This is after investing for a whole year, and hoping that you guys dont run into any issues.

I could earn more @ hashnest with my funds.
So what incentives do I get for putting my money with you guys?

Can you resell GHash with hashnest?

With hashnest your principal is invested and not easily withdrawn, isn't it?

[Eric Mu]

What I'm trying to get at is I would get more at Hashnest with mining.
Why pay for your mining if I dont get good returns.

Even at 16% - 40btc x 16% = 6.4btc per year.
So my monthly is = 0.53 per month.

This is after investing for a whole year, and hoping that you guys dont run into any issues.

I could earn more @ hashnest with my funds.
So what incentives do I get for putting my money with you guys?

You can redeem your fund anytime?

[SavellM]

What I'm trying to get at is I would get more at Hashnest with mining.
Why pay for your mining if I dont get good returns.

Even at 16% - 40btc x 16% = 6.4btc per year.
So my monthly is = 0.53 per month.

This is after investing for a whole year, and hoping that you guys dont run into any issues.

I could earn more @ hashnest with my funds.
So what incentives do I get for putting my money with you guys?

Can you resell GHash with hashnest?

With hashnest your principal is invested and not easily withdrawn, isn't it?

Yes you can sell your GH/s anytime on the market.
Market prices are also very stable and dont move much at the moment.

[Eric Mu]

What I'm trying to get at is I would get more at Hashnest with mining.
Why pay for your mining if I dont get good returns.

Even at 16% - 40btc x 16% = 6.4btc per year.
So my monthly is = 0.53 per month.

This is after investing for a whole year, and hoping that you guys dont run into any issues.

I could earn more @ hashnest with my funds.
So what incentives do I get for putting my money with you guys?

Can you resell GHash with hashnest?

With hashnest your principal is invested and not easily withdrawn, isn't it?

Yes you can sell your GH/s anytime on the market.
Market prices are also very stable and dont move much at the moment.

We launched the new product for a little more than a week, and we are happy with the numbers. I have no problem that some users opt for Hashnest. Diversity is good.

[Eric Mu]

What I'm trying to get at is I would get more at Hashnest with mining.
Why pay for your mining if I dont get good returns.

Even at 16% - 40btc x 16% = 6.4btc per year.
So my monthly is = 0.53 per month.

This is after investing for a whole year, and hoping that you guys dont run into any issues.

I could earn more @ hashnest with my funds.
So what incentives do I get for putting my money with you guys?

Can you resell GHash with hashnest?

With hashnest your principal is invested and not easily withdrawn, isn't it?

Yes you can sell your GH/s anytime on the market.
Market prices are also very stable and dont move much at the moment.

P.S - Our model requires us to keep some fund as reserve so we can't invest 100% of the deposited money, this means in theory we can't pay as high a rate as those selling mining contracts even if we have same profitability and willingness to share our profit with investors. The original concept of HaoBTC is a combination of the convenience and security of a wallet service and steady (not necessarily the highest) investment return that to the greatest extent eliminates the risk of market fluctuation that is usually shouldered by investors.  

[Valanor]

What I'm trying to get at is I would get more at Hashnest with mining.
Why pay for your mining if I dont get good returns.

Even at 16% - 40btc x 16% = 6.4btc per year.
So my monthly is = 0.53 per month.

This is after investing for a whole year, and hoping that you guys dont run into any issues.

I could earn more @ hashnest with my funds.
So what incentives do I get for putting my money with you guys?

Can you resell GHash with hashnest?

With hashnest your principal is invested and not easily withdrawn, isn't it?

are you want to say Bit-X is best of investment in this moment ? because in Bit-X you can sell your GHS also you can earn everyday from GHS

[monbux]

What I'm trying to get at is I would get more at Hashnest with mining.
Why pay for your mining if I dont get good returns.

Even at 16% - 40btc x 16% = 6.4btc per year.
So my monthly is = 0.53 per month.

This is after investing for a whole year, and hoping that you guys dont run into any issues.

I could earn more @ hashnest with my funds.
So what incentives do I get for putting my money with you guys?

Can you resell GHash with hashnest?

With hashnest your principal is invested and not easily withdrawn, isn't it?

Yes you can sell your GH/s anytime on the market.
Market prices are also very stable and dont move much at the moment.

At the moment.  Wait a year and the prices will be so low, due to the introduction of better, and stronger miners.
I'm wondering, why is the banking interest so high at 8%?  How can you guarantee an interest that high??? Here in Canada, savings accounts offer interests of ~1%...

[Eric Mu]

What I'm trying to get at is I would get more at Hashnest with mining.
Why pay for your mining if I dont get good returns.

Even at 16% - 40btc x 16% = 6.4btc per year.
So my monthly is = 0.53 per month.

This is after investing for a whole year, and hoping that you guys dont run into any issues.

I could earn more @ hashnest with my funds.
So what incentives do I get for putting my money with you guys?

Can you resell GHash with hashnest?

With hashnest your principal is invested and not easily withdrawn, isn't it?

Yes you can sell your GH/s anytime on the market.
Market prices are also very stable and dont move much at the moment.

At the moment.  Wait a year and the prices will be so low, due to the introduction of better, and stronger miners.
I'm wondering, why is the banking interest so high at 8%?  How can you guarantee an interest that high??? Here in Canada, savings accounts offer interests of ~1%...

The interest rate for the HaoBTC Bank is adjusted according to multiple variables, chief of them all our profitability level and competitor offerings. It may drop to 1% one day (highly probable given the Bitcoin's diminishing return design ), but now we decide 8% is something that we can afford and makes us competitive enough.
I notice that I get polarized responses when I ask people what do they think of our interest rate - they either think it is too high - so we must be running a Ponzi, or too low - that we are exploiting people and the risk is too much for the tiny gain.