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Author Topic: Islamic Bank of Bitcoin{}بنك بتكوين الاسلامي  (Read 102514 times)
Danijel Habek
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August 28, 2011, 04:39:42 PM
 #161

One scammer can get a whole month's dividends if he doesn't pay his loans back!

IMHO, that's a good spent amount to get rid of the scumbags and young billythekids. IBB is doing some good things to the community, and as good always suffer, it get hurt a bit, moneywise.
But hey, it's just money!
A man's honour is worth more then few dividends, or money at all.

Yes, but real world honor is not bound to forum identities.

A scammer can create a new account every week, spam ~50 posts to get 'trust', scam IBB & start all over again using a proxy.

Not in my book. I'm using my real identity and asked the admin to delete my original, 1 post anon identity, in the name of trust and honour.
Yet again, there are some forum identities I can trust more then some real life samples I know, again moneywise.

I agree scammer is a scammer indeed, and will do anything just to make his scam work, and now he'll have to work his ass spamming the forums for 200 posts, and not to get banned or profiled to be a scammer for writing 150 stupid postcount trash.

Pitty that hurts honest low postcount peeps, and IBB business after all, but I agree such filter had to be added, until IBB comes up with it's own site and authorization/identification system.

Until then, I can only wish the best to IBB for what they're done so far in helping the ones in need of no profit loans, helping to weed out a few scumbags in the process, and making a fine example for many.

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For me, bitcoin is freedom that I never thought I'd see in my lifetime.
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Deprived
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August 28, 2011, 07:38:34 PM
 #162

I like the concept of IBB, but something's puzzling me in the August results.

You show a profit of ~6.5 BTC but have (at a quick count) 29 BTC in loans which are past their repayment date.

No doubt some of those have asked for an extension or explained why they'll be late repaying - but some of them have definitely stolen the money loaned to them.

Doesn't this mean that if you dividend out th 6.5BTC "profit" then in fact the asset value of IBB will have fallen?

So is there any rational reason why IBB shares are up very significantly?  Or is it just blind optimism?

One possibility could, of course, be that the joint ventures are doing well.  But looking at them, of the three:

One hasn't yet launched (but on twitter is saying they expect to shortly).
One has nothing at their listed web-page.
The last one has some kind of private content at their web-page - so presumably isn't operating.

In theory I'd be interesting in investing in IBB - but I can't see how to justify paying in excess of 1000% premium on shares in a venture which, on available evidence, appears to so far be running at a loss (the obviously stolen loans exceed the small declared profit).
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August 28, 2011, 07:54:45 PM
 #163

Just a question about your Arbitrage software.  Instead of selling it, why not just use it yourself? If you sell it to a bunch of people wont it eventually just become worthless cause a bunch of people are using the same software, therefore the fastest computer/internet connection wins?

Seems like you could make alot more $$ just by running the software and splitting up the profits?

Just a suggestion.

Doubt IBB has the funds to do the actual arbitraging themselves.  To arbitrage you'd need to keep significant amounts of BTC AND US$ on ALL exchange sites you were intending to trade on.  The profit comes from trading high volumes at a low profit each - and you lose that profit + more if every time you want to do a trade you have to transfer funds between sites.  You even have to keep BTC on each site as well - as the opportunity may have gone if you have to wait to purchase for a BTC transfer to be confirmed.
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August 28, 2011, 08:54:34 PM
 #164

"So is there any rational reason why IBB shares are up very significantly?  Or is it just blind optimism?"

speculation? profit potential? originally there were around 7  that pledged/invested in IBB, I didnt know they would sell their shares when shares went up.

i recently sold 10 shares @ 0.70 and bought back @0.60 so i made 1.00 btc there, and from dividends i will be getting around 1.00 btc so total 2.00 btc from IBB , a 1 month old company.

others have made over $1000 from buying/selling IBB shares.

".....be that the joint ventures are doing well.  But looking at them, of the three:"

we have no website yet for IBB, bitcoinstarter.com will launch soon within 2 weeks, and i am still developing 2 websites for bitcoinholdings.net

with scamming & loss of btc & no website yet, shares are still up


Yeah - speculation seems the most likely reason for the share price increase.  Which is a shame - as I was hoping there some reason more related to fundamentals.

On the startups not having websites operational yet, it wasn't my intent to suggest that they had scammed oranything: just that, as they aren't operating yet, they can't have generated any profit or demonstrable increase of the value of your investment in them.

Which leaves us with the point you didn't address.  If you made a loss in August (stolen loans being greater than all other profits combined), surely giving out a dividend reduces the asset value of IBB.  Is that wise?  Shouldn't you only be issuing dividends if you've actually made a proft?  Not if you've made a profit if you ignore your losses?
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August 28, 2011, 09:21:39 PM
 #165

Which leaves us with the point you didn't address.  If you made a loss in August (stolen loans being greater than all other profits combined), surely giving out a dividend reduces the asset value of IBB.  Is that wise?  Shouldn't you only be issuing dividends if you've actually made a proft?  Not if you've made a profit if you ignore your losses?

Isn't debt considered an asset? When do you book a default as a loss? 1 month? 6 months? 12 months?
indio007
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August 28, 2011, 09:25:00 PM
 #166

Credit cards don't charge off for 6 months of non-payment. I'm not really sure the accounting treatment they get till then . I  pretty sure they don't book the "loss".
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August 28, 2011, 11:10:57 PM
 #167

For overdue debts I'd suggest gradually writing their value down - to represent that as the overdue period grows the likelihood of you ever receiving repayment decreases.

I imported the current loans data into Excel and knocked up a quick spreadsheet using the following valuation for overdue debts (just a guesstimate by me - there's not  enough data to be accurate).  I'd say I'm most likely over-valuing them if anything:

Debt 1-7 days overdue - valued at 80% of principal.
8-14 days overdue 60% of principal.
15-30 days overdue 50%
31-90 days overdue 30%
91-180 days overdue 15%
181+ days overdue written off (0% value)

Based on assessment at 28th August 2011 this gives the following:



If we look at how it would be if no more repayments were received by the end of September we get:



Note that in that one the single current loan (i.e. the last one which isn't overdue or settled) would now be in default.  I'm not suggesting that will be the case - just showing how the written down value of outstanding debts would change.

I'd seriously suggest using either a spreadsheet or a database to track loans - ideally store the date on which repayments are made as well (especially for ones repaid after they were due).  Then you can actually start calculating real repayment rates for different time periods once you have a decent sample size.  e.g. if you've had 20 loans that were overdue a week and 3 of them were paid back befre it went 2 weeks late then you know that a debt which is 14 days late is worth about 15% less than one which is a week late.
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August 28, 2011, 11:30:27 PM
 #168

Very nice work Deprived. Thanks for the analysis.
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August 29, 2011, 12:12:17 AM
 #169

Could you inform the bitcoin police when someone doesn't repay, they're building up a credit worthyness database that will cause consequences for not paying back.

Anonymous+no consequences=going to get ripped off.

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indio007
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August 29, 2011, 12:38:11 AM
 #170

A couple comments.  I appreciate the spread sheet however I don't think this is how lenders account for delinquent loans. That being said, this isn't a pure credit money system. Therefore the current accounting mechanics (realization of losses) might not be good. It takes along time for an original creditor to mark a loan "uncollectable" versus "charged off". Charged off loans can still be sold.

I'll go back and look over some old bank accounting books when money use to be a commodity and see how they accounted for it. Hopefully I can figure out their gibberish.

We are actually treading over old ground here. They didn't have ID a couple hundred years ago so I'm sure they had the same dilemmas.

Second point is the 200 post requirement is a fresh policy.  70% or more of the data collected is based on an old model. The rate of default will hopefully change.



Deprived
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August 29, 2011, 02:19:51 AM
 #171

A couple comments.  I appreciate the spread sheet however I don't think this is how lenders account for delinquent loans. That being said, this isn't a pure credit money system. Therefore the current accounting mechanics (realization of losses) might not be good. It takes along time for an original creditor to mark a loan "uncollectable" versus "charged off". Charged off loans can still be sold.

I'll go back and look over some old bank accounting books when money use to be a commodity and see how they accounted for it. Hopefully I can figure out their gibberish.

We are actually treading over old ground here. They didn't have ID a couple hundred years ago so I'm sure they had the same dilemmas.

Second point is the 200 post requirement is a fresh policy.  70% or more of the data collected is based on an old model. The rate of default will hopefully change.

It's not my argument that what my quick spreadsheet does was the ideal way to account for delinquent loans.  My point was that they must be accounted for in some way - and currently weren't.  They definitely have a value below the principal loaned - and that needs to be reported in some way.  The way in which IBB handles them is likely to be different to the way in which they're dealt with "normally" for a few reasons:

1.  Usually a large portion of deliquent loans would be sold off to debt-collectors at a discount.  It's doubtful that could be the case here.
2.  Normal requirements for reporting are based upon tax and accounting requirements.  Which I'd guess aren't going to be especially relevant here.  Hence we can (if we choose) report things in a fashion which focusses on reporting (as much as possible) the "real" value of delinquent loans rather than complying with tax/accounting requirements.

Do bear in mind that a significant part of recent economic troubles was CAUSED by banks etc over-valuing investments/debts that were unlikely to ever be realised at listed value.  There's no reason to be doing the same here.

I DO agree that the delinquency rate should drop with the much tigher requirements to get loans.  Were I doing the record-keeping I'd also be tempted to keep stats relating to each loan - things like number of posts/number of good references etc.   Then, down the line, you could actually start looking at what (if any) correlation there was between certain factors and delinquency.   It's entirely possible, for example, that certain requirements could actually have a correlation in the wrong direction.
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August 29, 2011, 03:21:57 AM
 #172

After a little research, it seems the generally accepted accounting practice is to set up a bad debt reserve and subtract uncollectable debts from the reserve at the end of each accounting period. Apparently determining whether a debt is uncollectable or not is completely arbitrary and based on the reasonable expectation of repayment. That is completely subjective. In fact , the loan doesn't even have to be in default and it can still be deemed uncollectable.

Like you said though, it can be used an accounting gimmick by marking the value of the debt to fantasy.

I tend to think accounting like this really is a gimmick. I'll try and dig up how bad debts were historically treated before the current credit money system.

I dug this up on the way.
http://www.coveringcredit.com/business_credit_articles/Credit_Management/art254.shtml
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August 29, 2011, 03:36:19 AM
 #173

After a little research, it seems the generally accepted accounting practice is to set up a bad debt reserve and subtract uncollectable debts from the reserve at the end of each accounting period. Apparently determining whether a debt is uncollectable or not is completely arbitrary and based on the reasonable expectation of repayment. That is completely subjective. In fact , the loan doesn't even have to be in default and it can still be deemed uncollectable.

Like you said though, it can be used an accounting gimmick by marking the value of the debt to fantasy.

I tend to think accounting like this really is a gimmick. I'll try and dig up how bad debts were historically treated before the current credit money system.

I dug this up on the way.
http://www.coveringcredit.com/business_credit_articles/Credit_Management/art254.shtml

Well broadly speaking (ignoring the terminology of how it's defined) there's two ways of doing it:

1. A binary system - where each debt is either valued at full or written off.  This is similar to the "direct write-off" system in your link - with the same weakness that it leads to overvaluing of accounts receivable (as deliquent debt is treated as full value until it's totally clear it'll never be paid off).

2.  Writing the debt down over a period of time.  This is similar to the "allowance method" in your linked system - where accounts receivable are amrked down based on various factors over time (and eventually totally written off).


Method 2 is (imo) clearly the better - and is what my spread-sheet is a simplistic version of.  Simplistic, as the only factor I used is amount of time the debt was overdue by.  Had no option but to simplify in this fashion - as there's no other information (I had) to allow valuation of individual debts based on a wider range of criteria.  It is a safe assumption that the longer a debt has been delinquent for, the lower it should be valued (unless there are other factors indicating a specific exception).  So that's where I started.

I do agree with you that a debt doesn't even need to be overdue to be written-off (or written down).  An obvious example would be if someone took a loan then stated they were scamming and logged off for good.
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August 29, 2011, 10:44:14 PM
 #174

    Report August 2011



    Income / Revenue

    • Dividend 2x SIN shares = 0.01518 BTC 27/7/11
    • Dividend 2x SIN shares = 0.0229181 BTC 10/8/11
    • Dividend 2x SIN shares = 0.0142274 BTC 18/8/11
    • Dividend 2x SIN shares = 0.0115842 BTC  25/8/11

    Loans

    Donations

    • 0.08749867 BTC 3/8/11 *used for glbse fees
    • 0.01 BTC 13/8/11 *used for glbse fees
    • 0.11 BTC 18/8/11 *included in revenue/income paid out as dividend
    • 0.55 BTC 20/8/11 *included in revenue/income paid out as dividend



    Joint Ventures - Musharakah

    • Bitcoin Starter             -    www.bitcoinstarter.com        -  ticker symbol - BST 40% ownership

    • NEW company listed on GLBSE.com   BH - Bitcoin Holdings new Joint Venture company : operating 2 websites, details soon.

    Gratuity /Revenue so far from loans:-


     0.20
     2.00
     0.15
     0.05
     0.021818
     0.05
     0.25
     0.25
     0.02
     0.20
     2.00
     0.03
     0.06
     0.50
     


    Donations:-

    0.11
    0.55

    Dividend from SIN shares:-


    0.01518 BTC 27/7/11
    0.0229181 BTC 10/08/11
    0.0142274 BTC 18/8/11
    0.0115842 BTC 25/8/11

    total =6.5057277 profit/revenue->$65.00 @ current market rate[/list]

    Dividends will be paid on 30th August -6.5057277 BTC will be paid (6.5057277/1000=0.0065057277 per share)

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    August 29, 2011, 11:37:07 PM
     #175




    {Dividends} First Statement Release 30/8/11

    IBB was started from a 'project development' thread on June 24th and after just a month from an idea in a forum, IBB shares have soared to over 1.40 BTC.

    We are listed on the Global Bitcoin Stock Exchange (GLBSE.com) and have released shares at the beginning of July. Shares since then have risen steadily, and we hope for great growth in the near future. We thank you for the support and encouragement many forum readers gave us and of course to the many satisfied customers. To which without, we would not be.

    With the above said we are proud to announce the paying out of dividends to our valued investors. 6.5057277 BTC in total will be paid out in dividends to 1000 shareholders, each share will receive 0.0065057277 BTC.

    Special thanks to 'Dank' for IBB's logo and special thanks in no particular order to trentzb, bitcoinTrader & danijel habek for their continued support


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    IBB - Islamic Bank of Bitcoin
    www.ib-bitcoin.com

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    August 30, 2011, 01:51:41 AM
     #176

    I'd like to see a balance sheet report that compares the balance sheet with the market value for the shares, and analyzes how the balance sheet (net assets) has changed since the start of the company.


    Don't day trade.
    teflone
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    August 30, 2011, 02:03:26 AM
     #177

    I'd like to see a balance sheet report that compares the balance sheet with the market value for the shares, and analyzes how the balance sheet (net assets) has changed since the start of the company.



    Have you visited GLBSE.com ?


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    indio007
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    August 30, 2011, 04:04:59 AM
     #178

    w00t!
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    August 30, 2011, 06:39:05 PM
     #179

    Before we got derailed by recent forum threads, I was about to post something on the board regarding how brilliant it is, in my opinion, to have an Islamic Bank of Bitcoin.

    Kudos to you... this could be a significant player in the Bitcoin community in the not too distant future.
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    August 30, 2011, 07:05:43 PM
     #180

    Second point is the 200 post requirement is a fresh policy.  70% or more of the data collected is based on an old model. The rate of default will hopefully change.

    Yeah, but the business is basically kaput. 200 posts? How many people is that? How many need a loan?

    Nevermind.

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