[IPVO] [Multiple Exchanges] Neo & Bee - LMB Holdings

[velacreations]

what will be the mechanism for verifying ownership and transparency of the direct shares system?  public log?  API?

[axilla]

We should not have to pay a fee to transfer from havelock when the new direct share site goes up...  That's a joke... I never wanted to be on havelock in the first place...

[LiteBit]

We should not have to pay a fee to transfer from havelock when the new direct share site goes up...  That's a joke... I never wanted to be on havelock in the first place...

+1
TAT could you elaborate on this scenario?
Cheers,

[snowdropfore]

We should not have to pay a fee to transfer from havelock when the new direct share site goes up...  That's a joke... I never wanted to be on havelock in the first place...

+1
TAT could you elaborate on this scenario?
Cheers,

+++1，i hate to pay a fee ，so  i choose direct shares!!

[velacreations]

+++1，i hate to pay a fee ，so  i choose direct shares!!

but then you pay a fee to move them anywhere.
notice that other direct share systems don't charge fees to move in and out of the system.  Why?  because there is no cost in updating a spreadsheet, and it can be made automatic pretty easily.

You can tell these guys are bankers, because they are charging you to move your own money (that you loaned to them at no interest).

[ThickAsThieves]

what will be the mechanism for verifying ownership and transparency of the direct shares system?  public log?  API?

To my knowledge, it is intended to be a centralized, private solution provided directly by the company. These are individual private accounts for managing personal, directly-held profit-shares. The site will not be an exchange. It will not facilitate trading needs like an order book or escrow, nor bitcoin transfers. There is no public aspect to the direct profit-share management aspects, as I currently understand it.

The database of holders and their holdings will be backed up regularly, in multiple ways, for both Neo and TAT Investments.

For those concerned about fees, please think long-term, and think about the real levels of data redundancy we have in place before you decide.

If you feel safer being direct, that is one thing. But if you intend to trade, or have ability to sell NEOBEE units readily, nothing will be more convenient than having your shares on a full-service exchange, like Havelock.

Note that Havelock's databases are backed up multiple ways as well, and those lists are provided to TAT Investments as backups. It is the case, across the board, that we are securing the data of all holders quite regularly.

The fees need to be in place as there is simply a high amount of oversight and attention required to manage the quantity of requests for transfers. We made sure that no one is forced to pay a fee in order to hold their current units. We have provided, and still provide, free transfers for thousands of requests for stranded people from BTCT and Bitfunder.

However, optional services are required to pay fees. We do review all fees and services offered regularly, but this is the current framework.

Thank you for your consideration.

[bitcoin.newsfeed]

I would be willing to sacrifice/lower this part because with current rates we're looking at several millions of $ in dividends, which is not the best plan for a startup.

True, if you look at everything through a fiat lens, that may not seem so bad, but I and many investors no longer think in fiat terms. We elected to buy shares in a Bitcoin company with BTC and expect to see our income and gains in BTC.

^ This. I would consider it as a breach of the Agreement.

I will also not change the agreement, it doesn't set the right precedent if the contract can or would be changed at will to suit the market conditions.

[Stuartuk]

+++1，i hate to pay a fee ，so  i choose direct shares!!

but then you pay a fee to move them anywhere.
notice that other direct share systems don't charge fees to move in and out of the system.  Why?  because there is no cost in updating a spreadsheet, and it can be made automatic pretty easily.

You can tell these guys are bankers, because they are charging you to move your own money (that you loaned to them at no interest).

+1

A $10 fee per transaction would be fair. Anyone with basic skills could carefully process these transfers at a rate of around three every 10mins - 18 an hour. So they would make $180 per hour, way above what you would need to pay a professional clerk to do this data processing.

[thehun]

I would be willing to sacrifice/lower this part because with current rates we're looking at several millions of $ in dividends, which is not the best plan for a startup.

True, if you look at everything through a fiat lens, that may not seem so bad, but I and many investors no longer think in fiat terms. We elected to buy shares in a Bitcoin company with BTC and expect to see our income and gains in BTC.

^ This. I would consider it as a breach of the Agreement.

I will also not change the agreement, it doesn't set the right precedent if the contract can or would be changed at will to suit the market conditions.

And it definitely would be.

My point/concern is that if a startup solely concentrates on paying dividends (in this case for a total value higher than the valuation of the company), when will there be any growth? In the Bitcoin world we are used to mining stocks, which have a short life-span that justifies a 100% dividend, but this company is completely different. In the real world companies generally don't pay any dividends at all in the first years of operation and concentrate solely on growth.

[gannicus]

People should forget about dividends by now and worry about this business getting clients and start generating profits. Dividends are a secondary issue. If the shares are worth less than you would have if you had just hold your BTC, this is because the company has grown less in value compared to BTC, which is just one of the possible outcomes when you had invested in it. Had the BTC dropped and the company value not in the same proportion, you would have lost less, so in no way you can say that this company worthing much more in terms of fiat money is bad, this is completely nonsense. When you buy the stock you add another layer of risk than can both protect you from losses and reduce your gains. Supposing in a far future a stock of this company value is worth 10x less in terms of BTC, but BTC becomes worth 100x more in terms of fiat and this "100x in fiat" has half of purchasing power than it had at the beggining, it would be nonsense to say you lost money in this since you can buy more than you could before. Would you be better if you had just hold your money all this time? Yes, sure, but in no way you could know that this was the outcome of this situation. The whole thing "1.2 BTC is worth more than 1 BTC" is a lie if you consider it at different times. If today I can go to the restaurant and pay my lunch with 0.1 BTC and in 3 years the same lunch costs 0.05 BTC, then 1 BTC now is worth less than 1 BTC in three years regardless the "1=1" thing. Being against it is believing that in an opposite situation, when you have inflationary money, that "1 dollar is always 1 dollar so they are worth the same".

[crumbs]

People should forget about dividends by now and worry about this business getting clients and start generating profits. Dividends are a secondary issue. If the shares are worth less than you would have if you had just hold your BTC, this is because the company has grown less in value compared to BTC, which is just one of the possible outcomes when you had invested in it. Had the BTC dropped and the company value not in the same proportion, you would have lost less, so in no way you can say that this company worthing much more in terms of fiat money is bad, this is completely nonsense. When you buy the stock you add another layer of risk than can both protect you from losses and reduce your gains. Supposing in a far future a stock of this company value is worth 10x less in terms of BTC, but BTC becomes worth 100x more in terms of fiat and this "100x in fiat" has half of purchasing power than it had at the beggining, it would be nonsense to say you lost money in this since you can buy more than you could before. Would you be better if you had just hold your money all this time? Yes, sure, but in no way you could know that this was the outcome of this situation. The whole thing "1.2 BTC is worth more than 1 BTC" is a lie if you consider it at different times. If today I can go to the restaurant and pay my lunch with 0.1 BTC and in 3 years the same lunch costs 0.05 BTC, then 1 BTC now is worth less than 1 BTC in three years regardless the "1=1" thing. Being against it is believing that in an opposite situation, when you have inflationary money, that "1 dollar is always 1 dollar so they are worth the same".

^^Pure nonsense.
This argument has been shot with silver bullets, killed with fire & burred with a wooden stake through its heart.  Yet the zombler refuses to stay down.

So again:
If you are holding BTC-denominated securities which are tanking, sell them & keep your money in your wallet.
If BTC gains value relative fiat, you'll win more.
If BTC loses value relative fiat, you'll lose less.
If BTC price stays the same, the value of your coins will stay the same, while the tanking shares depreciate.
Children know this.

[gannicus]

Yet I don't see in your post a single argument that killed my argument with silver bullets, fire and wooden stake. If the "BTC-denominated securities" are worth more in terms of fiat today than a few days ago, (supposing fiat has the same purchasing power, which is a perfectly valid assumption for the US dollar during this frame of time), how does the BTC/USD rate can possibly change the fact that you have more now than you had before? Of course "keeping the money in your wallet" is always better if you KNOW that money is growing in value and you don't know if the company will or not grow in value. Yet you don't. For example, do you prefer having 2000 BTC today or 1000 BTC in 3 years? The answer to this question is not obvious if you DO NOT know if it will be worth more or less in the future.

[mgio]

People should forget about dividends by now and worry about this business getting clients and start generating profits. Dividends are a secondary issue. If the shares are worth less than you would have if you had just hold your BTC, this is because the company has grown less in value compared to BTC, which is just one of the possible outcomes when you had invested in it. Had the BTC dropped and the company value not in the same proportion, you would have lost less, so in no way you can say that this company worthing much more in terms of fiat money is bad, this is completely nonsense. When you buy the stock you add another layer of risk than can both protect you from losses and reduce your gains. Supposing in a far future a stock of this company value is worth 10x less in terms of BTC, but BTC becomes worth 100x more in terms of fiat and this "100x in fiat" has half of purchasing power than it had at the beggining, it would be nonsense to say you lost money in this since you can buy more than you could before. Would you be better if you had just hold your money all this time? Yes, sure, but in no way you could know that this was the outcome of this situation. The whole thing "1.2 BTC is worth more than 1 BTC" is a lie if you consider it at different times. If today I can go to the restaurant and pay my lunch with 0.1 BTC and in 3 years the same lunch costs 0.05 BTC, then 1 BTC now is worth less than 1 BTC in three years regardless the "1=1" thing. Being against it is believing that in an opposite situation, when you have inflationary money, that "1 dollar is always 1 dollar so they are worth the same".

^^Pure nonsense.
This argument has been shot with silver bullets, killed with fire & burred with a wooden stake through its heart.  Yet the zombler refuses to stay down.

So again:
If you are holding BTC-denominated securities which are tanking, sell them & keep your money in your wallet.
If BTC gains value relative fiat, you'll win more.
If BTC loses value relative fiat, you'll lose less.
If BTC price stays the same, the value of your coins will stay the same, while the tanking shares depreciate.
Children know this.

When you invest in a security using bitcoins, YOU ARE NO LONGER INVESTED IN BITCOINS. This is 100% true if you invest in a company that is not bitcoin related and holds no assets in bitcoins. This is NOT true for bitcoin mining companies who have expenses in fiat but revenue in bitcoins. Higher bitcoin value means more profits for them.

Now, Neo&Bee is somewhere in the middle but they are much more like the first example. They will hold assets in bitcoin but they necessarily had to convert bitcoins into fiat to fund the development of their business. So even if the bitcoin value goes up, their valuation in terms of bitcoin goes down. You aren't invested in bitcoin anymore. You are invested in a company.

Here is an example. Let's say a company raises 10,000 BTC when Bitcoin is at $100. That is $1 million.
Say they convert half of that to fiat for $500k and keep the other 5,000 BTC. Say there is 1,000,000 outstanding shares. Each one would worth 0.01 BTC.

Now let's say the price of bitcoin goes up to $250. The company has 5,000 BTC left which is now $1.25 million in bitcoin, plus $500,000 in cash (or assets they purchased with that cash).
The company is valued at $1.75 million, or 7,000 BTC. Wait, that is LESS than the 10,000 BTC they raised. That's right, it's because they had to convert some BTC to fiat when they started. The more they converted the more their valuation in terms of BTC dropped when the price of BTC went up. Now, each share is no longer worth 0.01. It's worth 0.007 BTC.

Let's say you spent $10k and bough 10,000 shares. Those shares are only worth 70 BTC now instead of the 100 BTC you spent but that 70 BTC is worth $17.5k. So you actually made $7.5k in terms of fiat. But, of course, you would have made more if you had simply held the BTC.

What does this all mean? It means that if you are going to invest in a company, you must believe that the valuation of that company will increase faster than the value of bitcoin!

With Bitcoin tripling in the past few months, this is very very hard to do.

I still feel that Neo&Bee is a good investment, though. Why? Because their success is somewhat independent of the price of bitcoin. It's a way to diversify your investments in a way that is not directly related to the very volatile bitcoin market. It's a way to invest in bitcoin's future without simply just buying bitcoin. If Neo&Bee succeeds it will likely cause the price of bitcoin to rise as it will create more demand for bitcoin. So it also helps your bitcoin investment.

[velacreations]

what will be the mechanism for verifying ownership and transparency of the direct shares system?  public log?  API?

To my knowledge, it is intended to be a centralized, private solution provided directly by the company. These are individual private accounts for managing personal, directly-held profit-shares. The site will not be an exchange. It will not facilitate trading needs like an order book or escrow, nor bitcoin transfers. There is no public aspect to the direct profit-share management aspects, as I currently understand it.

The database of holders and their holdings will be backed up regularly, in multiple ways, for both Neo and TAT Investments.

so, there's no transparency?  -1

it IS like an exchange, because they allow people to transfer shares between each other.  If I am going to buy shares OTC from someone, I want to make sure they actually own the shares. maintaining a public database with BTC addresses and amount of shares owned would solve this issue, and should be the bare minimum for a direct shares system. Otherwise, how can ownership be proven?

For those concerned about fees, please think long-term, and think about the real levels of data redundancy we have in place before you decide.

I am thinking long term.  When BTC is $10K, it'll cost me $5K to migrate shares worth $30.

If you feel safer being direct, that is one thing. But if you intend to trade, or have ability to sell NEOBEE units readily, nothing will be more convenient than having your shares on a full-service exchange, like Havelock.

so, what happens when Havelock fails and/or closes? These band-aid solutions are inadequate and illustrate the lack of planning and concern for shareholders.

The continued dependency on 3rd part exchanges, when a direct shares system SHOULD HAVE BEEN in place BEFORE the IPO should raise alarms with shareholders.  If this company can't take the basic effort to ensure that their shareholders' funds are protected internally, how can we expect the company to handle customer funds appropriately?

The fees need to be in place as there is simply a high amount of oversight and attention required to manage the quantity of requests for transfers.

with proper planning and some effort into building a better solution (even an internal one) would greatly reduce oversight required.  The fact is, any significant amount of time updating a shareholder database is the fault of the people designing and maintaining the database, not the shareholders.  Yet, it's the shareholders that are paying the cost.

Bite the bullet and make a simple database program to take the effort out of this.  It would literally take less than 5 seconds to input number of shares and BTC address into a form.

However, optional services are required to pay fees.

knowing who owns what is not optional, it's a necessity
providing transparency is not optional, it's a necessity
liquidity is not option, it's a necessity

it's unreasonable and unethical to charge your shareholders for those basic services.  After all, it's our money.

[cryptocyprus]

Incorrect due to the fact there will be a public ledger of shareholders.

Havelock is now owned and operated by a licensed fund. (I know the guys behind this fund). We spent more time developing the business on all levels, to cater for shareholders core needs. No business, no returns.

TAT has already stated TAT's fees are always reviewed.

it will be transparent, people will know who holds what and we are actually working to bring more liquidity to the Bitcoin securities space, see previous news releases.

Apologies for not quoting the wall of text.

[ThickAsThieves]

A public ledger of shareholders does not protect direct private trades. Only escrow can do that.

Exchanges are, essentially, automated escrow systems, and that is why people bother with them.

[velacreations]

Incorrect due to the fact there will be a public ledger of shareholders.

no problem on not quoting the text, but there is a discrepancy here.

TAT said:

There is no public aspect to the direct profit-share management aspects, as I currently understand it.

so, will there be a public ledger or not?

Havelock is now owned and operated by a licensed fund. (I know the guys behind this fund). We spent more time developing the business on all levels, to cater for shareholders core needs. No business, no returns.

Even being licensed doesn't make them immune to shut down.  Developing the business is great, but lacking a way for your shareholders to manage their shares SHOULD have been something you did BEFORE taking shareholder money.  It is of great concern that it is taking you this long to address this issue.  BTCT closed some time ago, and really, a direct share system should have been in place before that.

no shareholders, no business.

TAT has already stated TAT's fees are always reviewed.

yet, he's charging shareholders $175+ to move shares worth $0.63

we are actually working to bring more liquidity to the Bitcoin securities space, see previous news releases.

adding a .5 BTC fee for share migrations is not adding liquidity.  I have yet to see you provide additional liquidity to the BTC securities market.

[velacreations]

A public ledger of shareholders does not protect direct private trades. Only escrow can do that.

Exchanges are, essentially, automated escrow systems, and that is why people bother with them.

first of all, a public ledger shows ownership.  I shouldn't have to explain why transparency is a good thing in BTC securities.  It should be the bare minimum of a direct shares system.

Secondly, it insures that YOU, the manager, are managing the shares properly.  Being the escrow AND the issuer/manager is a conflict of interest, and certainly does not add trust to a transaction.  so no, a biased escrow does not protect private trades.

Guys, this isn't hard, and I'm surprised you are even arguing against more transparency and public accountability.

[mutex]

Would you guys consider migrating shares to colored coins, or mastercoins, or similar technology, once it gets mature enough?

[KSV]

keep us informed on the procedure to move to havelock.