stock coins? p2p virtual stock & debt equity / cryptostocks

[prophetx]

Like many people I have thought of the virtual companies who had recently in the last year or so created shares on centralized exchanges, and thought why were not these shares created using a peer-to-peer system like bitcoin?

WHY

Right now our weakest point are a few stock exchanges and/or manual tracking of shareholders- it posses a single point of failure, which can be easily brought down by any government.  We already have an example a few weeks after this thread was initiated:

News 23-09-13:  BTC-TC a leading exchange has announced that they will shut down http://thegenesisblock.com/btc-trading-corp-shutters-operations-cites-regulatory-environment/
News 08-10-13:BitFunder No Longer Available to US entities https://bitcointalk.org/index.php?topic=292384.msg3316080#msg3316080


WHAT

A system where people can transfer shares using the same technology we use to transfer virtual currency eliminates that issue.  It also makes it easy for companies to track ownership, and for all crypto exchanges to implement a new stock so that we can trade it for BTC, LTC, etc.

There are a few options available right now: colored coins, bitcoin or alt clones, ripple, Mastercoin as well as developments like bitshares and OT.  

HOW

That's to be determined by the survey and research at this point.  We want to keep it as simple as possible, at least in the beginning.

Most likely in this type of system, the miners would only get paid tx fees for changes in ownership, and possibly distribution of shares of dividends.  


INTERESTED?

I would suggest the thread is used to evaluate the viability of these options.  Then organize a test IPO to document the processes involved, test assumptions, document problems and deliver something that can be used by entrepreneurs to raise funds for their ventures without consuming their time in managing relationships with online exchanges, etc.

Working Document: P2P Digital Debt & Stock Equity System Based on Bitcoin, this includes a link to Trello account

I have tried to separate out different efforts so that people from different backgrounds (technical/development, business/marketing, regulatory/legal) can contribute.

https://docs.google.com/document/d/10YdUCKQ8MLOrjpxZtuQc6PhBVfThX6XU-stTOfGSOQE

CURRENT STATUS:

researching direction of technology effort.

CONTACTS:

jordan.dev https://bitcointalk.org/index.php?action=profile;u=85784
Prophetx https://bitcointalk.org/index.php?action=profile;u=90917

If you like your named added here PM me, or just start getting involved all the documents are open


If you want to help promote:

Code:

[size=11pt][url=https://bitcointalk.org/index.php?topic=292384.20][glow=yellow,12][b]Trade stocks and bonds P2P?!  Get FREE CryptoEquity shares in our proof of concept :D [/b][/glow][/url][/size]

The thread to get your CryptoEquity shares when we launch the proof of concept is here, this will be used as part of a crowdfunding campaign to support the development team involved as well as to get user feedback, so make sure you make a post.¨

https://bitcointalk.org/index.php?topic=307417

[1714892580]

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[1714892580]

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[prophetx]

this is something similar conceptually but for assets like currency and commodities

http://www.coindesk.com/bitshares-p2p-trading-platform-to-offer-dividends-on-bitcoins/

[chriswen]

It's an okay idea but you still need exchanges.

[prophetx]

It's an okay idea but you still need exchanges.

generally yes you can still have them, however this allows you to take your stock offline.

also, i wonder if if there is a way to create a dual confirmation system, so that the stock p2p network only confirms a stock transaction once a bitcoin tx to a specified address has been confirmed by the btc network?   

[nomailing]

I also hope that this will soon be implemented. And hopefully the exchange will be incorporated into the P2P system. So that trustless trading of bitcoins against stocks is easily possible. That would be the ultimate breakthrough for large scale bitcoin adoption.

[prophetx]

I also hope that this will soon be implemented. And hopefully the exchange will be incorporated into the P2P system. So that trustless trading of bitcoins against stocks is easily possible. That would be the ultimate breakthrough for large scale bitcoin adoption.

When you wrote this it made me think about that crowd funding legislation that the SEC has yet to implement the regulations for (they are almost a year late I think).  Just think how huge that would be.  There is NO WAY that any regular stock exchange could expeditiously implement stocks for thousands+++ ideas that could get crowd funded, nor would they want to as the money involved would be too low for them to profit from the operational costs.

Nor should one exchange have a monopoly, so the obvious (to me) answer is a bitcoin style cryptostock, and of course using bitcoins as a medium of exchange.  

all those asics could potentially be put to use for trading and maintaining such stock networks.

and as a side benefit we would get TX fees for the miners, and ideally control for the crazy high frequency trading that happens on wall street

[jungle_dave]

Its refreshing to see this type of new thinking!
Good idea, It could be profitable..

Ill be watching

[jordan.dev]

Def. think this needs to happen, otherwise, it appears to me that ownership in "shares" of these companies are just database entries, and can't be moved or traded accross multiple exchanges.

I would like to contribute to this project if you get it going.

See my post about creating a centralized list of these virtual exchanges: https://bitcointalk.org/index.php?topic=283997.msg3039773#msg3039773

Furthermore, this idea also hints at a larger issue that block-chaining can solve: replacing the system of "Clearing", "Settlement" and "Chain of Custody" that is one of the biggest inefficiencies in interparty exchanges today... ever bought a house and signed a mortgage and paid for insurance on the "title" to your "title agent"? Or bought a stock and waited 3 days for it to "settle"? It's imbecilic in the 21st Century - but it gives plenty of useful idiots something to do for a living 

[prophetx]

Def. think this needs to happen, otherwise, it appears to me that ownership in "shares" of these companies are just database entries, and can't be moved or traded accross multiple exchanges.

I would like to contribute to this project if you get it going.

See my post about creating a centralized list of these virtual exchanges: https://bitcointalk.org/index.php?topic=283997.msg3039773#msg3039773

Furthermore, this idea also hints at a larger issue that block-chaining can solve: replacing the system of "Clearing", "Settlement" and "Chain of Custody" that is one of the biggest inefficiencies in interparty exchanges today... ever bought a house and signed a mortgage and paid for insurance on the "title" to your "title agent"? Or bought a stock and waited 3 days for it to "settle"? It's imbecilic in the 21st Century - but it gives plenty of useful idiots something to do for a living 

Thanks for posting this.  It lends more economic credence to why adapting the bitcoin code base to "shares" would hold some new productive value. 

My short term goals are two-fold: to gauge people's interest and to produce a paper via crowd effort to flesh out the concepts, such the ones as you have mentioned as well as the technical aspects. 

[jordan.dev]

Thanks for posting this.  It lends more economic credence to why adapting the bitcoin code base to "shares" would hold some new productive value. 

My short term goals are two-fold: to gauge people's interest and to produce a paper via crowd effort to flesh out the concepts, such the ones as you have mentioned as well as the technical aspects. 

Cool, I would love to start developing and spend more time programming on "core functionality" of a POWBC system. Right now, I mostly write trading software / engines.

I have also discussed ideas related to integrating BTC into common messaging systems that exist in real world trading protocols, and I think these area is "related" so this would be a good cross section.

I for one am happy to participate so put me on the list and we'll get it going if there is some interest (:

[prophetx]

Just some thoughts I had, if any cares to comment. 

Also I will be putting up a google doc soon, turns out it is the easiest solution for collaborative writing (there is a comment feature I found which I was previously unaware of)

-------

I know there is the concept of colored coins and open transactions and now bitshares, but none of those are really working yet.  Or not as adopted as the qt client we are all used to.

What are your thoughts on issuing coin  based on a clone of btc or ltc, etc that is representative of a company's stock?  This would be the easiest way to test market to do a proof of concept with an imaginary company stock.

Essentially since the coins would be representative of shares they would need to be almost completely premined and the network supported by just network fees.  Do you think that would work economically? How large would the tx fees need to be if so?

How difficult is it to pull off a clone in man hours?

And how to ensure that the blockchain for the stock is secure from attack?

If sha256 is used it would seem that someone pointing  a few asics at a particular stock could easily do a double spend attack right?  Or would users need to up the number of confirmations to ensure that stock transfer confirmations were legit?  How can this be addressed?

[jordan.dev]

Think we really need to get moving on this (not sure if you've seen but: http://thegenesisblock.com/btc-trading-corp-shutters-operations-cites-regulatory-environment/)

Obviously the need for a blockchain supported securities environment is necessary as the majority of the issues on these site crashed following this announcement, revealing one of the fundamental flaws we have previously identified.

I am also aware of "bitshares" and "colorcoins" though I have spoken to the creator of "Bitshares" I believe his projects differs in scope than this.

I will read more into your questions later -

Just a thought I had over the weekend - I think using a BTC or LTC blockchain clone would be fine with modifications to support initial "issuance" as a "genesis block" or "pre-mining" determination. The issue being that having multiple sets of securities running their own block-chains exposes them to all sorts of attacks due to the disparate nature of their mining (thus lower difficulty) - so it might be necessary to consider a sort of "controlled" mining environment where a key is used to "unlock" the mining so to speak for trusted miners whom earn as a payout of shares...

[bitcoinstarter]

Let me know how I can help. If you want to leverage any of my brand name toward this let me know as I'm currently seeking a way to integrate IPO's/Stock into the platform .  I'll be watching this thread.

[jordan.dev]

Let me know how I can help. If you want to leverage any of my brand name toward this let me know as I'm currently seeking a way to integrate IPO's/Stock into the platform .  I'll be watching this thread.

awesome!

[prophetx]

Let me know how I can help. If you want to leverage any of my brand name toward this let me know as I'm currently seeking a way to integrate IPO's/Stock into the platform .  I'll be watching this thread.

Awesome, I have actually had you in mind as I think this would be very useful for you.

[prophetx]

Think we really need to get moving on this (not sure if you've seen but: http://thegenesisblock.com/btc-trading-corp-shutters-operations-cites-regulatory-environment/)

Obviously the need for a blockchain supported securities environment is necessary as the majority of the issues on these site crashed following this announcement, revealing one of the fundamental flaws we have previously identified.

I am also aware of "bitshares" and "colorcoins" though I have spoken to the creator of "Bitshares" I believe his projects differs in scope than this.

I will read more into your questions later -

Just a thought I had over the weekend - I think using a BTC or LTC blockchain clone would be fine with modifications to support initial "issuance" as a "genesis block" or "pre-mining" determination. The issue being that having multiple sets of securities running their own block-chains exposes them to all sorts of attacks due to the disparate nature of their mining (thus lower difficulty) - so it might be necessary to consider a sort of "controlled" mining environment where a key is used to "unlock" the mining so to speak for trusted miners whom earn as a payout of shares...

It was only a matter of time before the centralized stock exchanges would be targeted. I wrote about this a while back and still cannot believe that people did not think to put these on Tor....

And I agree about the controlled environment,  and in the future guys like bitcoinstarter or the ipo company can manage keys for mining service providers who are paid either in stock or btc fee for mining services. Perhaps some perpetual mining fund will find this as an extra source of income.

Note that professionalized mining operators would suffer legal and reputation repercussions if they were found to have launched or aided a double spend attack.

[markm]

The problem of how to secure a block chain is why coloured coins are so suitable for this kind of application. The whole blockchain thing is already taken care of for them.

-MarkM-

[prophetx]

The problem of how to secure a block chain is why coloured coins are so suitable for this kind of application. The whole blockchain thing is already taken care of for them.

-MarkM-

Yes but is the implementation ready or not?  From what I can tell it is not ready for prime time.  

I am looking at this from a market development perspective and my own research into uses of p2p tech, I could care less whether the car has a honda or chevy engine when only one of the engines is available today.

If colored coins cannot be done today but there is a need to handle p2p transfer of stock and debt equity, then the market need has to take precedence and people can deal with a migration later if color coins materialize as viable and a more efficient means.

Note that I agree that it would be better to use colored coins, due to the pre-existing network, but I just do not see any evidence of it being ready for use.

[bitcoinstarter]

Let me know how I can help. If you want to leverage any of my brand name toward this let me know as I'm currently seeking a way to integrate IPO's/Stock into the platform .  I'll be watching this thread.

Awesome, I have actually had you in mind as I think this would be very useful for you.

Yes, been talking to a few people how to bring something like this into the platform. Obviously, using the blockchain/decentralized type system with color coins or something along those lines. I'm glad to be part of this!

[jordan.dev]

The problem of how to secure a block chain is why coloured coins are so suitable for this kind of application. The whole blockchain thing is already taken care of for them.

-MarkM-

yeah I'd be interested to see what the options are around "coloured coins" and if it fits the needs no need to "reinvent the wheel" - Any recommended reading??

[prophetx]

The problem of how to secure a block chain is why coloured coins are so suitable for this kind of application. The whole blockchain thing is already taken care of for them.

-MarkM-

yeah I'd be interested to see what the options are around "coloured coins" and if it fits the needs no need to "reinvent the wheel" - Any recommended reading??

i posted some questions to killerstorm who i beleive is the main perosn working on that concept, and he has some responses here

https://bitcointalk.org/index.php?topic=106373.msg3214545#msg3214545

so overall it seems that it sort of works (but only on testnet?), but i do not understand yet how far away it is from actually working on the real blockchain.  

[markm]

Crapcoins of the day are not "ready for use" either. They are "ready to hand over your loot to anyone with more hashing power", which is NOT the use you hopefully want?

It'd be a massive amount more work to and sheer hardware and electricity cost to secure even just one blockchain let alone one per IPO, compared to just throwing money at programmers to get coloured coins finished off.

Do you want a pretend toy crappy little mickey-mouse pretend thing or some serious financial application software?

Also, what is the big deal about p2p / distributed? You have to trust the issuer regardless, else the crap is worthless. So might as well trust them to keep their server online, whether on Tor or whatever, and transact directly with them. (e.g. using Open Transactions, or Cyclos, or whatever the heck. Open Transactions has markets, altcoins, off the rack, don't and nor does Cyclos really,  just for sale / want to buy ads type of thing.)

-MarkM-

[prophetx]

Crapcoins of the day are not "ready for use" either. They are "ready to hand over your loot to anyone with more hashing power", which is NOT the use you hopefully want?

It'd be a massive amount more work to and sheer hardware and electricity cost to secure even just one blockchain let alone one per IPO, compared to just throwing money at programmers to get coloured coins finished off.

Do you want a pretend toy crappy little mickey-mouse pretend thing or some serious financial application software?

Also, what is the big deal about p2p / distributed? YOu have to trust the issuer regardless, else the crap is worthless. So might as well trust them to keep their server online, whether on Tor or whatever, and transact directly with them. (e.g. using Open Transactions, or Cyclos, or whatever the heck.)

-MarkM-

so you bring up 2 issues, one whether p2p is required and two whether color coins are the answer.  let me know if i misunderstood.

#1 why p2p for this

addressing your question regarding the big deal about p2p. perhaps i misunderstood what you wrote but there are regulatory or legal requirements for running an exchange. no company wants distraction from their focus on their mission. thus they outsource stock issue and exchange operations.

if one is running exchange services for stocks one need to fulfill certain legal requirements, this is true in most countries.  however, the large exchanges are not going to do an IPO for JoeSmoe's ASIC Fund.  thus places like btc-tc pop up. and get shut down.

however people have always been able to take a stock certificate and sell it to another person, as far as i am aware that is still legal in most places.

so p2p allows a person to person exchange of stock, while ensuring that there are no forgeries, and the issuing company need not be involved in the exchange operations. and i presume then the regulatory issues that come with running an exchange.

it may be that miners however are somehow legally obligated under SEC regulations and other national securities authorities to do something.  i have no idea on this.


#2 regarding color coins.  

is it absolutely necessary?  or is there another way to handle the problem of bad actors?  

has anyone done a real analysis of the risks of relying on another blockchain where core developers are not necessarily concerned with other, one may call them parasitic or perhaps symbiotic, applications utilizing the network for tangential purposes?

someone needs to evaluate whether the entire bitcoin network of miners would fall under SEC jurisdiction as well as every other securities exchange governmental entity.  so it may be better to have separate networks for this purpose.  again there is the issue of all our eggs in one basket.

some alternatives:

one way is not to use sha256; bitmessage for example use sha512

another poster proposes limiting the initial miners. possibly the issuing company would be responsible for paying these miners, not sure how that works but if it is possible it is another solution.

-----

i don't think it is about just throwing money at something, that has never been the solution to a problem

i appreciate you taking the time to write all this, i think it is important to understand all of the issues technical and otherwise (bad actors, legal, etc.) that can come up

[markm]

I am pretty sure you have to know who owns your stocks, and that they are not "bearer instruments" thus people passing them around changes nothing, in essence the certificate they are passing around either says on it that it certifies that some specific person owns so many shares of whatever stock or it implicitly "says" that due to some kind of serial number or stock number specifying which share it is so the company or their share-tracking agent can look up who it is exactly that specific instance of the stock belongs to.

That is part of why it can take three days or so to "clear", the shares being exchanged have to be looked up to check who they belong to, then updated to reflect who they belong to now, and maybe the company the shares are shares of might even have to be notified, though maybe they might not need to know every minute, maybe they just have to submit at year-end or something an up to date list of who their shareholders are and how many shares each holds.

It does not seem likely that a company is going to be able to claim like "oh we are innocent, we trusted money-and-stock laundry unicorporated, a p2p network, to do all that legal paperwork for us, if its not done right you should go see them about it...

See for example http://www.quatloos.com/bearer_shares.htm

-MarkM-

[prophetx]

I am pretty sure you have to know who owns your stocks, and that they are not "bearer instruments" thus people passing them around changes nothing, in essence the certificate they are passing around either says on it that it certifies that some specific person owns so many shares of whatever stock or it implicitly "says" that due to some kind of serial number or stock number specifying which share it is so the company or their share-tracking agent can look up who it is exactly that specific instance of the stock belongs to.

That is part of why it can take three days or so to "clear", the shares being exchanged have to be looked up to check who they belong to, then updated to reflect who they belong to now, and maybe the company the shares are shares of might even have to be notified, though maybe they might not need to know every minute, maybe they just have to submit at year-end or something an up to date list of who their shareholders are and how many shares each holds.

It does not seem likely that a company is going to be able to claim like "oh we are innocent, we trusted money-and-stock laundry unicorporated, a p2p network, to do all that legal paperwork for us, if its not done right you should go see them about it...

See for example http://www.quatloos.com/bearer_shares.htm

-MarkM-

That is a good point you bring up. Most likely the answer depends on jurisdiction.

Ultimately it is every individuals responsibility to abide by the tax laws of their jurisdiction, and each company's directors' to abide by the laws of the jurisdictions under which that company is formed.

And I suppose due to bitcoins nature we are presuming that this p2p network is completely anonymous.  If what is needed to make this kosher is peer recognition at the network level for the issuing entity I am sure no CEO will care as long as he can raise $1m for LatestGreatestIdeaCo.

Just because something is p2p does not mean the identities of participants are anonymous.

But at this point all the companies on btc-tc are likely breaking the law somewhere and they are not even using a p2p network making stock transfer a pain for shareholders.  So we can only improve the legal status of some companies and/or their shareholders by working on this and creating an infrastructure they can use.

I do think we need a lawyer to help out, otherwise we are like blind men stabbing in the dark.  Someone who is familiar with the new crowd funding exemptions and pink sheets.

for example, using registered identity and public blockchain tx record maybe just what is required to ensure these rules are enforced

http://www.sec.gov/info/smallbus/qasbsec.htm

Under JOBS Act crowdfunding, companies will be limited to raising $1 million in any 12-month period. Companies cannot crowdfund on their own, but will have to engage an intermediary that is registered with the SEC. These intermediaries will be subject to a number of requirements.

Individual investors will be limited in the amount they can invest by way of crowdfunding in any 12-month period to:

if your annual income or net worth is less than $100,000—the greater of $2,000 or 5 percent of annual income or net worth, or
 
if your annual income or net worth is more than $100,000—10 percent of annual income or net worth up to a maximum of $100,000.
(When calculating your net worth, you should not count the value of your primary residence.)

[jordan.dev]

Legality aside, I think an important first step would be not to get wrapped up in the legality of all this and instead get the underlying concept in place - than consider the legality of trading "Shares" as block-chain entries later if an exchange actually wants to implement it or we'd like to build our own...

[nomailing]

Legality aside, I think an important first step would be not to get wrapped up in the legality of all this and instead get the underlying concept in place - than consider the legality of trading "Shares" as block-chain entries later if an exchange actually wants to implement it or we'd like to build our own...

+1

Exactly. At this point, all legal arguments would be useless. It is as if Satoshi Nakamoto would have argued about the legality of bitcoin (e.g. is it allowed to mint a new currency). At that point (*EDIT* before it was released) the legality of bitcoin was absolutely unclear because nobody even knew how the system would work.
It's like arguing about the legality of file-sharing softwares before they were developed. Is it illegal? who knows? In the end it always depends on where and how you use it....
Would argue about the legality of building cars/rockets/whatever, before they were invented?

As long as it is not illegal to write an open-source software, then why argue about legality. In the end people will use it or not. Maybe it will be banned in some countries and not in others. And only if the technology is there, politicians will be able to decide about the legal framework.

[markm]

Well maybe ripple will be ideal then.

It avoids the hideously massive cost of paying "hashers" to secure a blockchain, yet anyone can issue assets.

So a company can issue share IOUs, redeemable for actual shares maybe even if someone wants to walk into the office of the secretary of the company or their share owner tracking service they employ if they have chosen not to be anonymous.

Dirt cheap, easy, already up and running, seems like a pretty obvious approach...

-MarkM-

[nomailing]

Well maybe ripple will be ideal then.

It avoids the hideously massive cost of paying "hashers" to secure a blockchain, yet anyone can issue assets.

So a company can issue share IOUs, redeemable for actual shares maybe even if someone wants to walk into the office of the secretary of the company or their share owner tracking service they employ if they have chosen not to be anonymous.

Dirt cheap, easy, already up and running, seems like a pretty obvious approach...

-MarkM-

Sorry for my ignorance, but I don't understand how you could use ripple to trade stocks... You say that the company could issue stock-IOUs. But I couldn't trade these through the ripple network, because none of my friends would accept IOUs denominated in these stocks.

1) Isn't everything you are holding in the ripple network based on IOUs with one of your trusted friends?
So if I want to use ripple to buy a stock of some company I cannot easily transfer that stock through the ripple network considering that I have no friend who would accept that stock as an IOU.

2) Furthermore in ripple the company couldn't easily distribute dividends. In contrast, in a blockchain the public addresses of the shareholders would be known in the blockchains and therefore it would be easy to distribute dividends.

3) The same problem is if the company wants that the shareholders should vote for some investment strategy. In a blockchain like system it would be very easy to implement this using proof-of-stake.

[markm]

Ripple ledgers are public so you know what accounts hold how many of your stocks at any given iteration of a complete accurate ledger.

Your trusted friends are deprecated in modern Ripple, you are advised to trust a "gateway", in this case the secretary of the company, or the service they engage to track and handle their shares, would be the "gateway".

About the only aspect that isn't off hand known for sure right now by me is whether in RIpple you can designate a currency as integer-only, to prevent people from trading fractions of a share.

But if not then lobbying them to support integer "currencies" should commence ASAP if they never thought of this yet themselves.

-MarkM-

[prophetx]

Ripple ledgers are public so you know what accounts hold how many of your stocks at any given iteration of a complete accurate ledger.

Your trusted friends are deprecated in modern Ripple, you are advised to trust a "gateway", in this case the secretary of the company, or the service they engage to track and handle their shares, would be the "gateway".

About the only aspect that isn't off hand known for sure right now by me is whether in RIpple you can designate a currency as integer-only, to prevent people from trading fractions of a share.

But if not then lobbying them to support integer "currencies" should commence ASAP if they never thought of this yet themselves.

-MarkM-

Interesting I didnt initially think of ripple.  Might be worth looking into, they are supposed to go open  source imminently?

I dont know if the fractional thing is an issue, it may just be a contractual thing, unless their is some specific regulation but I have fractions of mutual fund shares

[matt608]

If shares can be issued using ripple, wouldn't that make them dependent on ripple, i.e Open Coin?  I'm still figuring out ripple, so I could be wrong.  Whereas coloured coins would be much more secure, even if the exchange was a website and not in the bitcoin client the transactions would be stored in the blockchain (would they?), so if the exchange went down a new one could be put up and the shares would still be owned by their rightful owners.  Am I correct?

[prophetx]

If shares can be issued using ripple, wouldn't that make them dependent on ripple, i.e Open Coin?  I'm still figuring out ripple, so I could be wrong.  Whereas coloured coins would be much more secure, even if the exchange was a website and not in the bitcoin client the transactions would be stored in the blockchain (would they?), so if the exchange went down a new one could be put up and the shares would still be owned by their rightful owners.  Am I correct?

Yes and no. It depends...

If OpenCoin open sources their ledger server code as they are supposed to and therefore anyone can run a ledger server if should be possible?

... I have not been following them as of late, but if that is the scenario then it would make sense.  

[prophetx]

sorry for the delay but i have an initial document for this effort located here.'

i have tried to separate out different efforts so that people from different backgrounds (technical/development, business/marketing, regulatory/legal) can contribute.

the doc should be free to edit

https://docs.google.com/document/d/10YdUCKQ8MLOrjpxZtuQc6PhBVfThX6XU-stTOfGSOQE

[prophetx]

I have added a voice of customer survey i am working on for this

https://docs.google.com/forms/d/1MIIQCdFV_TutvsL3UqIUHVOrjdrEWlK9vI_XgTZcQmM/edit

feel free to add others or post them to this forum first

first two questions are:

QUESTION 1

Identify your involvement in the use of digital stock or debt equity: *
 have traded stock or debt equity (i.e., perpetual mining bonds)
 have used an online exchange to trade
 have used a message board, email or chat to trade
 have issued stock or debt equity as a company owner
 have participated in the issue of stock or debt equity as an intermediary (you run an exchange or pass through, not a company representative)
 None of the above

QUESTION 2

Rate how important is having physical possession of a financial instrument? *
For example, with bitcoins a person can hold them "physically" in a private key print out or on their own computing device (USB stick etc).

Not Important at All                     Very Important
0
1
2
3
4
5

[prophetx]

just a quick update

so i started this thread to give away "shares" in a proof of concept, whenever you all on the tech side have something working that can be tested.

https://bitcointalk.org/index.php?topic=307417.msg3295590#msg3295590

go add a comment so you all can be on the list

my main purpose is to build you a userbase, and also use it as a promotional tool so that perhaps we can attract more developers to the effort.  the guys at ripple/opencoin did something similar and i think it appeared to work well for them.

if things go well at some point i envision working with the exchanges or the bitcoin crowd funding folks to raise some money so you all can get financial support.

i'm thinking it would be cool to have a system that uses data from sourceforge (ohloh.com) or github to compensate people based on code lines, check ins, etc...but that's way down the line and I have no clue how that would even work...

[Luckybit]

The problem of how to secure a block chain is why coloured coins are so suitable for this kind of application. The whole blockchain thing is already taken care of for them.

-MarkM-

yeah I'd be interested to see what the options are around "coloured coins" and if it fits the needs no need to "reinvent the wheel" - Any recommended reading??

i posted some questions to killerstorm who i beleive is the main perosn working on that concept, and he has some responses here

https://bitcointalk.org/index.php?topic=106373.msg3214545#msg3214545

so overall it seems that it sort of works (but only on testnet?), but i do not understand yet how far away it is from actually working on the real blockchain.  

Any solution should be builtin to the blockchain itself. It wouldn't be hard to set up an altcoin called stockcoin, use Colored coin or Mastercoin and run that. Hops is one way of doing it, Mastercoin is another, Bitshares is another, Freimarket is another.

What is needed is a kickstarter and bounty system of some sort to get it built.

[prophetx]

Any solution should be builtin to the blockchain itself. It wouldn't be hard to set up an altcoin called stockcoin, use Colored coin or Mastercoin and run that. Hops is one way of doing it, Mastercoin is another, Bitshares is another, Freimarket is another.

What is needed is a kickstarter and bounty system of some sort to get it built.

ok thanks Luckybit. 

just for everyone's reference, these are the documents relating to Hops (very early stage)

https://bitcointalk.org/index.php?topic=297147.0
https://anonfiles.com/file/14d9ed0ebc60f2fc30bc596c49e7b61f

---
Looks like I will need to create some kind of feature/etc matrix for all of these.

So far the candidates appear to be:

Altcoin/bitcoin clone
Colored coin / bitcoinx
Mastercoin
Bitshares (not exactly an option since it is not FOSS but worth knowing the feature set)
Ripple (something similar to DYM https://bitcointalk.org/index.php?topic=149533.0)
Freimarket
OT

anyone want to throw in anything else?

[prophetx]

In case you missed the news... bitfunder no longer available for US entities...


Important Notice (October 8th, 2013):

Please be advised that BitFunder is implementing the following rules and procedures:

As of October 8th, 2013, BitFunder will not accept new registrations from any United States persons or entities. All new registrants must supply the information required to obtain "Verified" status on their linked WeExchange account. BitFunder may, in its sole direction, decline to accept any new registrations.

As of October 8th, 2013, all current BitFunder users who are located in the United States or are determined to be United States persons or entities will not be able to enter into any new positions on the Bitfunder website, and, as of November 1, 2013, such users will also not be allowed to sell positions on the BitFunder website.

All current BitFunder users who are not United States persons or entities must supply the information required to obtain "Verified" status on their linked WeExchange account before November 1, 2013. Any such users who fail to provide the necessary information will not be able to enter into or sell positions on the BitFunder website as of November 1, 2013.

Users will be able to withdraw holdings and Bitcoins from their BitFunder accounts before and after November 1, 2013.

All assets and issuers must demonstrate that they meet BitFunder's requirements for the listing of assets, or the assets and issuers will, at BitFunder's sole discretion, be denied access to, or removed from, the site. Issuers will be notified of any additional information needed to demonstrate compliance with BitFunder's requirements.

BitFunder appreciates your understanding in these matters as we move forward.

Sincerely,
BitFunder

[jordan.dev]

Saw this ... another one bites the dust. Shoot I need to update my list! Like half of them are gone in the last month...

In case you missed the news... bitfunder no longer available for US entities...


Important Notice (October 8th, 2013):

Please be advised that BitFunder is implementing the following rules and procedures:

As of October 8th, 2013, BitFunder will not accept new registrations from any United States persons or entities. All new registrants must supply the information required to obtain "Verified" status on their linked WeExchange account. BitFunder may, in its sole direction, decline to accept any new registrations.

As of October 8th, 2013, all current BitFunder users who are located in the United States or are determined to be United States persons or entities will not be able to enter into any new positions on the Bitfunder website, and, as of November 1, 2013, such users will also not be allowed to sell positions on the BitFunder website.

All current BitFunder users who are not United States persons or entities must supply the information required to obtain "Verified" status on their linked WeExchange account before November 1, 2013. Any such users who fail to provide the necessary information will not be able to enter into or sell positions on the BitFunder website as of November 1, 2013.

Users will be able to withdraw holdings and Bitcoins from their BitFunder accounts before and after November 1, 2013.

All assets and issuers must demonstrate that they meet BitFunder's requirements for the listing of assets, or the assets and issuers will, at BitFunder's sole discretion, be denied access to, or removed from, the site. Issuers will be notified of any additional information needed to demonstrate compliance with BitFunder's requirements.

BitFunder appreciates your understanding in these matters as we move forward.

Sincerely,
BitFunder

[prophetx]

I need to write down all the reading I have been doing the last week, but it would see for now that the most viable options are coming down to:

Colored coin
Mastercoin
Ripple

I still have to investigate ripple, trying to get in touch with the guy who made DYM

I should have an update by end of next week, after I finish the 20 pg paper I need to finish by Wednesday.

[h0lybyte]

Couldnt a company make their own coin, premine it all and then sell the coins, as a representation for the company?
Ideally that would be the best solution? wouldnt it?

[prophetx]

Couldnt a company make their own coin, premine it all and then sell the coins, as a representation for the company?
Ideally that would be the best solution? wouldnt it?

yes that is exactly right but we need the code base for that, it doesn't really exist today in a way that is secure  (if you just cloned bitcoin someone could attack it with enough hashing power which is cheap to buy, thus it needs to be layered on top of bitcoin or a separate security algo then what the asics are made for, sha256).  also  there are some features missing which in some countries may be needed (i.e., identifying majority owners, etc)

[osoverflow]

Hi! I think the right way is colored coins.

I myself studied master coin and colored coin, and I found colored coin the most solid and transparent way to go for stock market. I found that master coin is the best to demonstrate property of physical goods, but not for things that have so many elements, like shares.

For example, with master coins you can demonstrate the property of your cell phone, because you can have 1, maybe 2 or 3. But for stocks you want to demonstrate property of maybe 2000 or more shares, and there master coin fails.

On the other side, colored coins is very good to demonstrate property of big number of equal items, just like shares. And also gives some interesting possibilities, like an easy way to identify your investors and pay dividends without asking their addresses.

I'm developing an stock exchange called coinmarket.pw (also coinmarket.mx and coinmarket.bit)

There I'm using colored coins, joining with bitmessage for p2p order book and trade contact and namecoin for colored coin's metadata definition.

If you want to follow the development or buy shares of my exchange, you can contact me here, and follow this link https://forum.litecoin.net/index.php/topic,6324.new.html#new.

[prophetx]

so just a quick update, i have been pretty busy with work at my grad program, have a ton to read and write.

however, i have also started to help the folks at Mastercoin with their newsletters.

i think there technology is close to prime time.  there are also folks actively seeking a proven system for stock ownership.

what I would suggest is using Mastercoin to run a proof of concept, at least for 1 trial run

i hope to finish up the voice of customer later next week and run the study for a couple weeks.

[prophetx]

as I may have mentioned before I am writing the weekly blog for mastercoin, one of the possible technological approaches to this.  check it out if you have the time, and if you are a developer with some spare time the Mastercoin Foundation has a 300 BTC code contest 

Making History With Distributed Exchange

News for the week 43.2013.

Last week we discussed the fantastic results of the 1st code contest. Through out this week a few key exciting events took place.

J.R. Willet, the person behind the Mastercoin protocol, announced the 2nd code contest which is to enable distributed exchange transactions between two currencies (BTC <-> MSC); this ambitious contest is giving away 300 BTC and will need support not just from those who will be developing the wallet and website applications but also from those who are willing to test the developed applications, so take a look and get involved. Your contributions will be rewarded.

We also saw an important decision take place with the Bitcoin code base.  According to Gavin Andresen Bitcoin a pull request which allows for the association of up to 80 bytes of arbitrary data transactions will make it into Bitcoin’s 0.9 major release; this will enable Class C Mastercoin transactions (more information below).

Lastly, earlier this week the Mastercoin Foundation Board had its first meeting. Scroll down to see the minutes.

Read more...

http://blog.mastercoin.org/2013/10/26/making-history-with-distributed-exchange/