Donald_Norman (OP)
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August 09, 2011, 10:49:02 AM |
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Citing MtGox as an example of how to properly run a bitcoin service has got to be a joke.
Hum...I took them as example of service that makes a lot of money. Are you sure about that considering the losses that they have already had to cover? |
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Anonymous
Guest
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August 09, 2011, 11:18:59 AM |
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You guys have my support for all you've done .
Mybitcoin was shown to be a hobby project. Equating them with bitcoin consultancy is immature and trollish.
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BitcoinBug
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August 09, 2011, 11:35:16 AM |
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You guys have my support for all you've done .
Mybitcoin was shown to be a hobby project. Equating them with bitcoin consultancy is immature and trollish.
Agree. Still, questions raised in this thread are important to discuss, specially Gavins. |
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Gavin Andresen
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Chief Scientist
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August 09, 2011, 12:12:22 PM |
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Getting insurance for bitcoin holdings is practically impossible, mostly due to the potential for massive swings in value.
So factor out the swings in value by insuring in a more stable currency. Obtaining insurance for "up to £X worth of bitcoins per account" seems like it aught to be possible. If X is a small number, then that's a strong indication that people shouldn't be using Vibanko for secure storage of coins. If you can't find an insurance company that will cheaply sell you (say) £1,000 of coverage for (say) 10,000 accounts then that is an indication that maybe you're riskier than you think. Can you afford to self-insure, and put up a £10,000,000 bond to cover potential losses? Or work backwards: how large a bond can you afford to put up? Divide that by the expected number of users and that's a good indication of how much wealth users should trust you with. |
How often do you get the chance to work on a potentially world-changing project?
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tenbagger
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August 09, 2011, 12:49:22 PM |
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£10,000,000 bond when they are running a free service?
Obtaining insurance for nascent markets comes with a significant premium. Even assuming the security standards at Vibanko were at the highest level, insurance would still be prohibitively expensive. Consumers, at least under current market conditions, will not pay the necessary fees to support such a level of insurance.
Gavin, with all due respect, I totally disagree with your statement that the level of trust that Vibanko deserves is directly proportional to the size of the bond that they can afford. That is not to say that a heavy dose of skepticism is warranted with any new e-wallet. However, the reality is that almost no bitcoin business, with the possible exception of MtGox, is sufficiently capitalized to post any bond of significant value. Therefore, using that as a metric to judge the trustworthiness of a new e-wallet is is akin to saying that all e-wallets are equally "untrustable". Bitcoin Consultancy has established a track record and a level of reputation. Now one may say that they don't trust bitcoin consultancy, or any third party for that matter to hold their coins. But to say that Bitcoin Consultancy, with the track record that they have built is equally untrustable as a random newbie, just because both entities are not able to post bond, is IMO unfair.
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tenbagger
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August 09, 2011, 01:09:45 PM |
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Citing MtGox as an example of how to properly run a bitcoin service has got to be a joke.
Hum...I took them as example of service that makes a lot of money. Are you sure about that considering the losses that they have already had to cover? Any losses that MtGox incurred is a sunk cost. What matters is that MtGox generates roughly $5K-$10K USD in trading fees with relatively a small amount overhead and this revenue stream has a tremendous amount of present day value. Even with conservative estimates and a P/E ratio valuation of 5, MtGox's present day value is still worth millions of dollars. So hypothetically speaking, let's assume this is truly the wild west with zero regulation and if MtGox were to walk away and steal all users coins, they could be assured of no repercussions. It would still be an economically rational decision for MtGox to remain honest and collect their steady stream of fees rather than steal even $5 million USD worth of coins. As for the technical end and the argument that they can lose their coins not through malice but through incompetence, that is a valid claim. I know this doesn't always correlate perfectly but generally speaking, the more there is at stake, the more resources and incentive there is for a bitcoin business to secure their wallets. I know the recent MtGox debacle disproves that theory but I see it as an isolated incident that was largely due to Mark being unprepared for the sudden growth of bitcoin. If we are to believe that Mark is rational and somewhat competent, he will be investing heavily in security and protecting that fat cash cow that he has under his control. That cash cow gives him the resources to invest in security and also a strong incentive to protect it. |
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Gavin Andresen
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Chief Scientist
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August 09, 2011, 01:10:40 PM
Last edit: August 09, 2011, 07:27:53 PM by Gavin Andresen |
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I'm curious to hear what other people think. I shut down ClearCoin when the value of its wallet threatened to get so large I was no longer comfortable self-insuring it with my own personal bitcoins. It is still shut down because I haven't found a group that I would trust to run it securely (and I don't want to take the time to raise the money and hire experts to run it properly).
We are starting to see well-capitalized, experienced companies creating bitcoin businesses; at this point, I think if you are holding other people's bitcoins then having insurance or posting a bond to self-insure up-to-some-value for each account is reasonable.
In my view, if your business model for your free service doesn't cover the cost of insurance or a bond, then you're just pushing a lot of hidden risk onto your users.
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How often do you get the chance to work on a potentially world-changing project?
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tenbagger
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August 09, 2011, 01:33:29 PM |
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In my view, if your business model for your free service doesn't cover the cost of insurance or a bond, then you're just pushing a lot of hidden risk onto your users.
Hidden risk might be accurate for the complete newbie. As for the overwhelming majority of the bitcoin community, I would go as far to say the risk is absolutely not hidden and in full view. Just a quick read through this thread would prove my point. There is no way a free service can cover the cost of insurance or a bond. There is no way consumers would pay for a service that covers the cost of insurance or a bond, at least not at this stage of the game. Gavin, I admire your accountability in shutting down Clearcoin when you felt it grew too big for you to be personally responsible for it. However, the other side of the coin (pun intended) is that users were left with no other alternative. Worse yet, malicious and/or incompetent alternatives may pop up and unsuspecting users may decide to use them for a lack of a better alternative. As a consumer, if I fully understood the risks and you chose to operate Clearcoin with the caveat that you cannot be personally responsible, I would still use your service. The risk isn't hidden, but rather it is the least riskiest option out there. The world is full of risks and even more so in the nascent bitcoin world. In the real world, US credit ratings were downgraded and grandmas/grandpas all across the country who invested in treasuries for their retirement thinking there was no risk there awoke to a new reality. The reality in the bitcoin world is that risks abound at every turn. Does that mean we should shut everything down until we can eliminate all risks? Should no e-wallet or escrow service exist until they can fully insure every coin? These are critical services that are needed now to grow the bitcoin economy and I believe the objective of the community is to do the best we can and improve at every step along the way rather than waiting to get it perfect in one shot. Is Vibanko a perfect solution? It obviously isn't and there are significant risks involved but it's still the best, least riskiest option out there in terms of pure e-wallets. As for clearcoin, even if you were unable to self-insure, I would have trusted it 100x more than any of these other new alternatives that have popped up. Clearcoin, even in a reduced, non self-insured capacity was still the best option out there and it served a critical role in the bitcoin economy. I understand your reasons for taking it down but the entire bitcoin community suffered a big loss when that happened. |
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Trader Steve
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August 13, 2011, 04:09:52 AM |
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The statement "Your funds are safe with Bitcoin Consultancy" on your website might be considered misleading and it could be argued that it is an explicit guarantee. It seems to me that a good lawyer would ask you to take that statement down. Additionally, it might be wise to have a TOS page that outlines and discloses the risks of storing funds with an online wallet service. If anything, these suggestions can only help to reduce your liability in the event your system is compromised in any way. "Full Disclosure" as they say...
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Amit@bitcoin-central.net
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September 18, 2011, 04:43:39 AM |
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https://Vibanko.com - FREE New Wallet Service by Bitcoin Consultancy The Bitcoin Consultancy is proud to present a new wallet service called Vibanko.com We know that the bitcoin market is lacking real developers and that even the biggest merchant sites often offer very poor service and security. Britcoin.co.uk has been in operation since March and has never been hacked or suffered any major error. We had a couple of problems due to human error, but nothing that was not fixable. Slapping on a McAfee logo and two factor authentication can be akin to putting more locks on the doors when the walls are paper thin. Our new wallet service has been built and is being operated by us. We have been running as long as britcoin.co.uk and our security and service have been unmatched. The wallet service is also for now and for the foreseeable future completely free. Just like our exchange sites Britcoin.co.uk (GBP), Intersango.com (EUR) and Intersango.us (USD), we take absolutely no commission. Wallet features include: * Passwords are properly hashed * Proper db permissions * Simple Interface * Support Via Email: support@britcoin.co.uk* Who we are: www.bitcoinconsultancy.comWe plan on building an FAQ page and a good start is by answering the questions in this thread. Contact us privately for any questions you may have which you wish to keep private at support@britcoin.co.uk Congratulations on the launch!!!! |
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Jessica
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September 18, 2011, 05:30:05 AM |
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https://Vibanko.com - FREE New Wallet Service by Bitcoin Consultancy The Bitcoin Consultancy is proud to present a new wallet service called Vibanko.com We know that the bitcoin market is lacking real developers and that even the biggest merchant sites often offer very poor service and security. Britcoin.co.uk has been in operation since March and has never been hacked or suffered any major error. We had a couple of problems due to human error, but nothing that was not fixable. Slapping on a McAfee logo and two factor authentication can be akin to putting more locks on the doors when the walls are paper thin. Our new wallet service has been built and is being operated by us. We have been running as long as britcoin.co.uk and our security and service have been unmatched. The wallet service is also for now and for the foreseeable future completely free. Just like our exchange sites Britcoin.co.uk (GBP), Intersango.com (EUR) and Intersango.us (USD), we take absolutely no commission. Wallet features include: * Passwords are properly hashed * Proper db permissions * Simple Interface * Support Via Email: support@britcoin.co.uk* Who we are: www.bitcoinconsultancy.comWe plan on building an FAQ page and a good start is by answering the questions in this thread. Contact us privately for any questions you may have which you wish to keep private at support@britcoin.co.uk Congratulations on the launch!!!! They launched a long time ago, lol. |
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phantomcircuit
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September 18, 2011, 05:35:40 PM |
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There was temporary downtime while updating apache. |
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willphase
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September 19, 2011, 07:45:13 AM |
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Good luck on the new website. I've been a britcoin user for months now and had no issues. Amir and his colleagues are very responsive to emails and communication and I would personally always trust an open source platform that can be independently reviewed over a closed source one.
Will
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