[HAVELOCK] Dealcoin Official Thread

[havelock]

This is Dealcoin’s initial public offering of 50,000 units @ 0.01 BTC through Havelock Investments, representing 40% of the company.

Company Name: Dealcoin
Company URL: www.dealco.in
Ticker Symbol: DEALCO
Founder and CEO: Hakim Mamoni
IPO date:  September 3rd, 2013. 12:00 EDT.

Overview
Dealcoin is an In-Person Bitcoin exchange platform. Dealcoin enables the direct buying and selling of Bitcoins between members of a local community. Once the elements of a Bitcoin transaction (amount, price, and channel) have been agreed upon by the parties the transaction can be done through the chosen channel such as hand to hand cash exchange, payment through a bank transfer or an online transfer system. Dealcoin does not charge any commission on the trades and is not involved in any fiat currency trades.

Please see our Prospectus for more details under DEALCO.IN at https://www.havelockinvestments.com/reports.php
or
http://www.dealco.in/havelock

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[worldbridger]

Greetings everyone

I am Hakim, the founder of DealCoin.
I am available to answer questions from the community.
Don't hesitate to ask.

[vtropolis]

So 50,000 shares at 0.01btc each, representing 40% of the company.

That's $65,000 USD of issued shares at the current mt. gox price.

That's a $162,500 USD valuation of the entire company.


From what I can see, you have a website with virtually no traffic, and virtually no users. I could see justifying a few thousand for the development costs of the site, but beyond that I can't see what else there is here to pay for. Could you justify why your business is worth upwards of 150K?

[worldbridger]

How is it better, or different, than localbitcoins?

Thanks for the question pankkake.
DealCoin is based on a blind bidding system where dealers do not see the prices offered by others.
I expect this should help people wishing to buy / sell bitcoins to get better prices.
In my opinion, the price of any instrument should be related to the volume one may wish to buy or sell.
On LocalBitcoins, for whom I have great respect, prices are set by equations based on market prices on other exchanges.
On DealCoin prices will be set based on market conditions, volume of coins to trade, member reputation.

[joesmoe2012]

And what do you need $150k for?

[worldbridger]

So 50,000 shares at 0.01btc each, representing 40% of the company.

That's $65,000 USD of issued shares at the current mt. gox price.

That's a $162,500 USD valuation of the entire company.

From what I can see, you have a website with virtually no traffic, and virtually no users. I could see justifying a few thousand for the development costs of the site, but beyond that I can't see what else there is here to pay for. Could you justify why your business is worth upwards of 150K?

Hi vtropolis, the valuation of a company takes into consideration future revenue potential not current traffic or cost of the website. You can check the financials on www.dealco.in/havelock

[worldbridger]

And what do you need $150k for?

Hi joesmoe2012, DealCoin is not raising $150k but 500 BTC which is closer to $50k at the moment although if the BTC price continues rising we maybe there in a few weeks

DealCoin will be using the $50k essentially for marketing, development of additional services and business development.
For more details you can download the IPO prospectus at http://www.dealco.in/havelock

[vtropolis]

Thanks for the link. I do think your valuation is still very aggressive for something that essentially hasn't launched yet, but I do find your plans for expanding your business via augmenting services interesting - especially the VOIP & sms packages. It's a smart way of profiting off in-person transactions, the most difficult type of transaction to profit from.

In terms of convincing dealers to use your site, why would they use dealco.in over localbitcoins.com?  I think it will be difficult convincing dealers to use your service over localbitcoins, since localbitcoins already has more users (potential purchasers), and is free to use (no monthly fee).

[radiumsoup]

Thanks for the link. I do think your valuation is still very aggressive for something that essentially hasn't launched yet, but I do find your plans for expanding your business via augmenting services interesting - especially the VOIP & sms packages. It's a smart way of profiting off in-person transactions, the most difficult type of transaction to profit from.

In terms of convincing dealers to use your site, why would they use dealco.in over localbitcoins.com?  I think it will be difficult convincing dealers to use your service over localbitcoins, since localbitcoins already has more users (potential purchasers), and is free to use (no monthly fee).

The only incentive I see would be potential volume from marketing. But the number of people who are paranoid enough to require face-to-face meetings for fiat<->BTC transactions is small enough that I'm not sure the volume is there for any provider, be it Dealcoin or someone else. (I'm not saying the paranoid are the only users of localbitcoins, but let's face it - if you're going to buy regularly, and you're not paranoid, it's easier [and faster!] to get an account with an online seller like Gox or what have you than it would be to arrange a face-to-face meeting, drive there, and hope you don't get stood up - or worse, mugged.) I don't see that paradigm changing by any appreciable extent any time soon.

[worldbridger]

Thanks for the link. I do think your valuation is still very aggressive for something that essentially hasn't launched yet, but I do find your plans for expanding your business via augmenting services interesting - especially the VOIP & sms packages. It's a smart way of profiting off in-person transactions, the most difficult type of transaction to profit from.

In terms of convincing dealers to use your site, why would they use dealco.in over localbitcoins.com?  I think it will be difficult convincing dealers to use your service over localbitcoins, since localbitcoins already has more users (potential purchasers), and is free to use (no monthly fee).

Thank you for your comments on the expansion plan.
I understand you could find the business model to be validated but I hardly find a valuation @ $150k 'aggressive' these days specially for digital enterprises an $150k valuation is not what investors would consider 'aggressive'if you also consider the fact that I am giving away 40% of the company in the first listing with a 1% guaranteed monthly dividend…

LocalBitcoins has a head start I agree but the bitcoin economy is still at its early stage and frankly I believe there is room for more than one in-person exchange. By asking dealers to participate to the development of Dealcoin my objective is to provide more tools and more exposure and eventually make Dealcoin a better marketplace both for dealers and general members buying or selling bitcoin. Furthermore the membership fee is very low, under usd 2 / month and the blind bidding system should attract more people from the community wishing to get the best prices for the trades. 

[worldbridger]

The only incentive I see would be potential volume from marketing. But the number of people who are paranoid enough to require face-to-face meetings for fiat<->BTC transactions is small enough that I'm not sure the volume is there for any provider, be it Dealcoin or someone else. (I'm not saying the paranoid are the only users of localbitcoins, but let's face it - if you're going to buy regularly, and you're not paranoid, it's easier [and faster!] to get an account with an online seller like Gox or what have you than it would be to arrange a face-to-face meeting, drive there, and hope you don't get stood up - or worse, mugged.) I don't see that paradigm changing by any appreciable extent any time soon.

Hello radiumsoup,
Dealers and members can make the fiat transaction through other means than face-to-face. They may use any payment channels they agree on be it direct bank wire, paypal, etc.
The fact for Dealcoin not to be involved in these fiat transactions means much lesser risk of a regulatory clampdown which seems to be one of Mt.Gox main issues till now. Withdrawing USD on MtGox is not so easy at the moment...
Regarding the risk of mugging in face-to-face, we advise members to conduct their transactions in a bank lobby, preferably the bank of the seller where it will be safe, and convenient for the seller to have the notes checked while being deposited in their account.
Additionally DealCoin features a reputation system to help members deal with the most reliable dealers only.

[xchrisxsays]

I think I agree that the 150K is not a particularly aggressive valuation, given the current valuations in the space.

Other than that, you say you are partially spending the money on marketing. What channels of communication are you going to use to drive volume?

Another thought, is there anything stopping people that are currently using LocalBitcoins from using DealCoins as well? Maybe you should provide incentives to trusted dealers on LocalBitcoin to use DealCoin as well, so the business can start out with a solid reputation.

[worldbridger]

I think I agree that the 150K is not a particularly aggressive valuation, given the current valuations in the space.

Other than that, you say you are partially spending the money on marketing. What channels of communication are you going to use to drive volume?

Another thought, is there anything stopping people that are currently using LocalBitcoins from using DealCoins as well? Maybe you should provide incentives to trusted dealers on LocalBitcoin to use DealCoin as well, so the business can start out with a solid reputation.

Hi xchrisxsays, I believe that well targeted online communication is the most cost effective way to reach potential users. You can understand I cannot give you too much details since that would be divulging my communication strategy to potential competitors in a public forum. I certainly hope localbitcoins' users will also try and adopt Dealcoin! Thank you for your advice, I hope competitors' dealers will find Dealcoin services and model attractive enough to come from their own volition.

[igba]

This is a great idea, and I checked your resume on LinkedIn: JP Morgan, Sunguard, Bloomberg, and you speak 3 languages? Impressive. Why choose Havelock though instead of BTC-TC or BitFunder? They are more reputable IMHO due do their resiliency to DDOS attacks in the past. Havelock is based in Canada if I remember correctly- sure they look pretty and have a nice trading interface but the last time they were down it took them 2 WHOLE DAYS to recover. I think if you go with BTC-TC or BitFunder you are more likely to reach your goal because the trust is already there.

The only incentive I see would be potential volume from marketing. But the number of people who are paranoid enough to require face-to-face meetings for fiat<->BTC transactions is small enough that I'm not sure the volume is there for any provider, be it Dealcoin or someone else. (I'm not saying the paranoid are the only users of localbitcoins, but let's face it - if you're going to buy regularly, and you're not paranoid, it's easier [and faster!] to get an account with an online seller like Gox or what have you than it would be to arrange a face-to-face meeting, drive there, and hope you don't get stood up - or worse, mugged.) I don't see that paradigm changing by any appreciable extent any time soon.

Hello radiumsoup,
Dealers and members can make the fiat transaction through other means than face-to-face. They may use any payment channels they agree on be it direct bank wire, paypal, etc.
The fact for Dealcoin not to be involved in these fiat transactions means much lesser risk of a regulatory clampdown which seems to be one of Mt.Gox main issues till now. Withdrawing USD on MtGox is not so easy at the moment...
Regarding the risk of mugging in face-to-face, we advise members to conduct their transactions in a bank lobby, preferably the bank of the seller where it will be safe, and convenient for the seller to have the notes checked while being deposited in their account.
Additionally DealCoin features a reputation system to help members deal with the most reliable dealers only.

[radiumsoup]

Hello radiumsoup,
Dealers and members can make the fiat transaction through other means than face-to-face. They may use any payment channels they agree on be it direct bank wire, paypal, etc.
The fact for Dealcoin not to be involved in these fiat transactions means much lesser risk of a regulatory clampdown which seems to be one of Mt.Gox main issues till now. Withdrawing USD on MtGox is not so easy at the moment...
Regarding the risk of mugging in face-to-face, we advise members to conduct their transactions in a bank lobby, preferably the bank of the seller where it will be safe, and convenient for the seller to have the notes checked while being deposited in their account.
Additionally DealCoin features a reputation system to help members deal with the most reliable dealers only.

OK, I didn't realize that it's more than the localbitcoins model, but that actually raises even more questions...

If you're going to pitch this as an online alternative to the large exchanges, then you're going to have a HUGE trust issue to overcome. Not your trust, mind you, but the trust that buyers and sellers have with each other, and that's not always easily overcome with a trust/reputation rating. When bitcoin started, almost all transactions were either between people who knew each other or via small online traders that tried to make a reputation for themselves through volume and good service. Eventually, people got burned (or scared) enough by theft that they wanted to start meeting in person to overcome the problem with trusting anonymous folks online, and localbitcoins was born as a method for finding those local people (who had largely used sites like Craigslist to find each other - this still happens quite often, btw.) This was not a perfect setup either, so the market started to demand large exchanges to provide easy, fast, and trustworthy providers as opposed to the small, independant anonymous dealers online, and the major exchanges started popping up, providing exactly that. Today, due to the regulatory crackdowns on the larger exchanges, you're now offering this service as some sort of hybrid that allows buyers and sellers to more easily meet each other, either online or in person, without the overhang of regulation. A good idea on the surface, but that negates the single biggest draws that the major exchanges have: the speed of a transaction, and reliable trustworthiness over many millions of dollars' worth of transactions. It's no different from an individual trust perspective than meeting face to face, but at least with an in-person meeting you have the knowledge that you have a lot greater control over the transaction (you can get up and walk away if you feel uneasy.)

So really what you're proposing is more akin to a specialized Craigslist (or eBay, not really sure how you're going to present the data) to help bitcoin buyers and sellers match up with each other, who can then choose to meet up in person or not depending on their mutual needs. Fine - if you can brand it well enough somehow, you've got a fighting chance at success just from volume, which is what my original post was really getting at. But it isn't a novel solution, really, and reintroduces some of the problems already mitigated by other existing transaction methods.

There is a popular programming mantra, that you can pick exactly two of the following: Good, Fast, or Cheap. You can't have all three - if it's good and fast, it's not cheap; if it's good and cheap, it's not fast, and if it's fast and cheap, it's not good. (Yes, it's variation of a false dichotomy if taken literally, but the general pattern is sound empirically.)

To paraphrase that saying for this situation, pick two of: Trustworthy, Fast, or Best price. If you want trustworthy and fast, as either a buyer or seller, you're not going to get your best price. If you want trustworthy and the best price, it's going to take a while to look through all the listings finding your perfect trading partner, by which time the price may have changed. If you want the best price immediately, you're going to have to take the first person available and roll the dice on their trustworthiness. Additionally, by decentralizing the exchange, you're inherently lowering both the trustworthiness (the sum of trust of all transactions on the site does not imply trustworthiness of the individual with the best price) and the speed at which the transactions can take place. Best price is always fluctuating, so you can sometimes get lucky on that, but you're still limiting the market (compared to what's already out there) in two of three basic criteria.

That brings us back to the idea of localbitcoins and their (largely) face-to-face model as the alternative. The market for face-to-face sales is still quite limited compared to the major exchanges, and it seems from your last post that your primary market will be those users. The only real advantage you appear to have, then, will be the tracking of trust/reputation, which is difficult at best due to subjectiveness. Again, great idea on the surface, but it's not going to be the driving criteria for all transactions.

As for the risk of mugging, I think you missed the point I was making: it's not about the safety of the transaction itself, it's about the choice the buyer or seller has to make regarding the method used for the transaction; again, weighing trustworthiness, price, and speed... for the in-person transaction, the decision on trustworthiness would include trust that you won't get murdered.

I know this was rather long-winded, sorry - but I do have a specific purpose in saying all of this.

[havelock]

This is a great idea, and I checked your resume on LinkedIn: JP Morgan, Sunguard, Bloomberg, and you speak 3 languages? Impressive. Why choose Havelock though instead of BTC-TC or BitFunder? They are more reputable IMHO due do their resiliency to DDOS attacks in the past. Havelock is based in Canada if I remember correctly- sure they look pretty and have a nice trading interface but the last time they were down it took them 2 WHOLE DAYS to recover. I think if you go with BTC-TC or BitFunder you are more likely to reach your goal because the trust is already there.

We at Havelock are striving to offer the highest quality companies for bitcoin investors and I believe our reputation and trust in the community matches that.  We perform due diligence on our listed companies which exceeds any other exchange and do not allow just anyone to list, which sets us apart.  As for the DDOS attacks, we were down intermittently during those two days but every site is susceptible to a degree as illustrated by fact that BTCTC was down a few days ago themselves due to DDOS attacks.  Thanks for your interest in our latest listing.

[MonkeyBear68]

This is a great idea, and I checked your resume on LinkedIn: JP Morgan, Sunguard, Bloomberg, and you speak 3 languages? Impressive. Why choose Havelock though instead of BTC-TC or BitFunder? They are more reputable IMHO due do their resiliency to DDOS attacks in the past. Havelock is based in Canada if I remember correctly- sure they look pretty and have a nice trading interface but the last time they were down it took them 2 WHOLE DAYS to recover. I think if you go with BTC-TC or BitFunder you are more likely to reach your goal because the trust is already there.

As a trader I have dealt with Havelock for over a year now and have had excellent service from them. I have never had a problem getting BTC in or out. DDOS can happen to any site. Havelock has a very well designed interface and I have never had an issue executing trades. They keep most of the BTC in a cold wallet and thus have limited their customers exposure to theft should someone breech the hot wallet. I highly recommend setting up an account with Havelock, it is fast and easy. IMHO Havelock is just as trustworthy as the other BTC Stock Exchanges and has had many successful IPO's to date.

[worldbridger]

This is a great idea, and I checked your resume on LinkedIn: JP Morgan, Sunguard, Bloomberg, and you speak 3 languages? Impressive. Why choose Havelock though instead of BTC-TC or BitFunder? They are more reputable IMHO due do their resiliency to DDOS attacks in the past. Havelock is based in Canada if I remember correctly- sure they look pretty and have a nice trading interface but the last time they were down it took them 2 WHOLE DAYS to recover. I think if you go with BTC-TC or BitFunder you are more likely to reach your goal because the trust is already there.

Hello igba, thanks for your comment. I do speak 3 languages. 3.25 if i count my basic knowledge of Mandarin
I believe the people at Havelock are a very serious and professional team.
There has not been any horror story out of Havelock thanks to their due diligence and strict selection process.

[Pale Phoenix]

I don't think Havelock is any less reputable than any other exchange. They seem to be quite responsive and are building a nice portfolio.

I haven't gotten too far into the details of this IPO, but I'm surprised at the size of the float. Wouldn't DealCoin be better off self funding, or raising 500BTC privately, and going public once there's a viable business with revenue?

This really seems like more of a seed stage investment, and to compete, aren't you going to need far more capital later on?

[worldbridger]

OK, I didn't realize that it's more than the localbitcoins model, but that actually raises even more questions...

If you're going to pitch this as an online alternative to the large exchanges, then you're going to have a HUGE trust issue to overcome. Not your trust, mind you, but the trust that buyers and sellers have with each other, and that's not always easily overcome with a trust/reputation rating. When bitcoin started, almost all transactions were either between people who knew each other or via small online traders that tried to make a reputation for themselves through volume and good service. Eventually, people got burned (or scared) enough by theft that they wanted to start meeting in person to overcome the problem with trusting anonymous folks online, and localbitcoins was born as a method for finding those local people (who had largely used sites like Craigslist to find each other - this still happens quite often, btw.) This was not a perfect setup either, so the market started to demand large exchanges to provide easy, fast, and trustworthy providers as opposed to the small, independant anonymous dealers online, and the major exchanges started popping up, providing exactly that. Today, due to the regulatory crackdowns on the larger exchanges, you're now offering this service as some sort of hybrid that allows buyers and sellers to more easily meet each other, either online or in person, without the overhang of regulation. A good idea on the surface, but that negates the single biggest draws that the major exchanges have: the speed of a transaction, and reliable trustworthiness over many millions of dollars' worth of transactions. It's no different from an individual trust perspective than meeting face to face, but at least with an in-person meeting you have the knowledge that you have a lot greater control over the transaction (you can get up and walk away if you feel uneasy.)

So really what you're proposing is more akin to a specialized Craigslist (or eBay, not really sure how you're going to present the data) to help bitcoin buyers and sellers match up with each other, who can then choose to meet up in person or not depending on their mutual needs. Fine - if you can brand it well enough somehow, you've got a fighting chance at success just from volume, which is what my original post was really getting at. But it isn't a novel solution, really, and reintroduces some of the problems already mitigated by other existing transaction methods.

There is a popular programming mantra, that you can pick exactly two of the following: Good, Fast, or Cheap. You can't have all three - if it's good and fast, it's not cheap; if it's good and cheap, it's not fast, and if it's fast and cheap, it's not good. (Yes, it's variation of a false dichotomy if taken literally, but the general pattern is sound empirically.)

To paraphrase that saying for this situation, pick two of: Trustworthy, Fast, or Best price. If you want trustworthy and fast, as either a buyer or seller, you're not going to get your best price. If you want trustworthy and the best price, it's going to take a while to look through all the listings finding your perfect trading partner, by which time the price may have changed. If you want the best price immediately, you're going to have to take the first person available and roll the dice on their trustworthiness. Additionally, by decentralizing the exchange, you're inherently lowering both the trustworthiness (the sum of trust of all transactions on the site does not imply trustworthiness of the individual with the best price) and the speed at which the transactions can take place. Best price is always fluctuating, so you can sometimes get lucky on that, but you're still limiting the market (compared to what's already out there) in two of three basic criteria.

That brings us back to the idea of localbitcoins and their (largely) face-to-face model as the alternative. The market for face-to-face sales is still quite limited compared to the major exchanges, and it seems from your last post that your primary market will be those users. The only real advantage you appear to have, then, will be the tracking of trust/reputation, which is difficult at best due to subjectiveness. Again, great idea on the surface, but it's not going to be the driving criteria for all transactions.

As for the risk of mugging, I think you missed the point I was making: it's not about the safety of the transaction itself, it's about the choice the buyer or seller has to make regarding the method used for the transaction; again, weighing trustworthiness, price, and speed... for the in-person transaction, the decision on trustworthiness would include trust that you won't get murdered.

I know this was rather long-winded, sorry - but I do have a specific purpose in saying all of this.

On top of the reputation feature, DealCoin offers an additional feature to enable its members to find out more about unknow dealers; we call it Need-to-know Privacy. We encourage dealers to link their account to up to 4 different social network profiles from LinkedIn, Google+, Facebook or Twitter. This private information is made available only to members about to trade with a dealer. Prior to accepting a deal, our members may choose to connect with and get to know a dealer via their social network of choice. The most transparent dealers will probably be the most requested ones.

Additionally we are planning to launch a series of premium services to add additional layers of security for our members, starting with a BTC escrow service in November 2013.

As for price fluctuations taking place while the payment takes place, I understand this may be an issue for active speculators like day traders. For such speculators, soon-to-be regulated exchanges like Mt Gox would be the place where they maybe able to turn around quickly. I suspect most of the dealers on DealCoin (and LocalBitcoins) would probably also have an account with Mt Gox or one of their competitors. But in my opinion, Bitcoin is useful for more than just day traders. Consider people travelling in foreign places who prefer using bitcoins instead of carrying cash or travelers cheques. Upon arrival in their travel destinations, they probably won't have access to a local bank account to connect to Mt Gox. Consider also the unbanked who do not have access to a bank account and may wish to participate in the Bitcoin economy or may wish to sell bitcoins sent to them by family members abroad. We are still in the early days of Bitcoin and as more people recognize the benefits of this currency, some will be guided to use regulated exchanges while some will choose to use services like DealCoin.