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Author Topic: Flexcoin is LIVE to everyone!  (Read 11787 times)
the founder
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August 11, 2011, 09:33:56 PM
 #101

How long would it take me to make 30 BTC from an original investment of, say, 10 BTC, using only Flexcoin?

That depends on how often people transfer out and flexcoin collects the transaction fee... theoretically you could make that in a month (when discount payments are sent) if the adoption rate was high with high bitcoin valued holders.  Because the transaction fees would be substantial, as would the discount payment sent to you....  it could also be 1000 years if the adoption rate is terrible.....   it completely depends on how well flexcoin does overall.

I will answer the rest of the questions later tonight...  I need to get home.


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August 11, 2011, 10:03:40 PM
 #102

Second of all, that was my point.  It's not fair to compare the two, which is exactly what my post was about.  He made the comparison between the two, throwing Flexcoin in the middle of the same sentence as being comparable to Mt. Gox and TradeHill in that they all charge a fee.  I said what I said because it's not a fair comparison.  I can profit significantly on TH and Mt. Gox but cannot do the same with FlexCoin.

They charge triple the fees we do  (they charge in both directions, and even more than triple if you count what has to go to dwolla) .. so it's VERY fair to throw them in there in the same sentence.   That's just my opinion.




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August 11, 2011, 10:06:25 PM
 #103

I'm sorry but any centralized organization is contradictory to the purposes of decentralization of bitcoin.

Get smart! Hold on to and secure your own bitcoins and STOP relying on ANY service that says "hey we'll store/hold your bitcoins for you".

 Grin

Yes, that's why I have written two documents, see my signature, to show the way how to make your Bitcoins REALLY secure!

http://www.scribd.com/doc/62124734/Vision-of-a-Bitcoin-Client-Linux-Distribution-v01
http://www.scribd.com/doc/61649663/Bitcoin-Safe-Usage-v05

Anyway, I think FlexCoin provides some advantages, but I would never put my complete funds there, even if I were 100% sure of their good intentions, because:

  • Do I know if they make proper backups of their Bitcoin wallets?
  • Do I know that not one of their employees is crazy one day and embezzles all of FlexCoin's BTC savings?

But the main question for me is indeed: Will they provide ongoing proof that they do not bring more FlexCoins into circulation than Bitcoins deposited in their "bank"? In other words: Will they continuously prove that they do not run fractional reserve system (like BullionVault proves that their gold bullions match the funds of their clients)? If they don't, I won't trust them a millimeter!

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August 11, 2011, 10:26:53 PM
 #104

AGAIN: Note that it is absolutely crucial that you provide prove that you are not running a fractional banking system.

Blockexplorer would provide the proof if they are being wired out...  we'll try to figure a way to display that the figures match 1:1 bitcoins to flexcoins...  but honestly we never even considered this as a question, much less something we had to build.    

I think that in his idea, you would display a nickname (or several) for each account holder along with their balance (or portion of their balance allocated to that nickname).  That way, everyone could look at the list and make sure their name was on it, that their balance was correct, and that the sum for accounts was the same as the sum of the addresses (shown on block explorer).  You wouldn't be able to go fractional by leaving some names off the list to balance things out because you wouldn't know which people are going to be looking for their own information.

Thank you kjj for putting it in your own words (I am not a native speaker...) and bringing it to the point so concisely, that's exactly what I wanted to say!

Note: BullionVault.com is a gold dealer where you can buy fractions of gold bullions that are located in vaults in Zurich/Switzerland, London or NYC (so you are owner of physical gold). They are using exactly the same principle to prove that the gold really exists and is under control of bullionvault, i.e. that they are not running a fractional reserve system. This definitely helps making them trustworthy, it is a very intelligently thought out mechanism. They are a big gold dealer administering roughly 0.01% of all gold that exists worldwide, so they did not do this just for fun, but because it really makes sense.

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August 11, 2011, 10:33:54 PM
 #105

I don't what you guys are thinking but I do not want by balance publicly displayed. I am sure any merchant that uses flexcoin agrees with me.
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August 11, 2011, 11:01:41 PM
 #106

I don't what you guys are thinking but I do not want by balance publicly displayed. I am sure any merchant that uses flexcoin agrees with me.

It would be your balance, but either a random token (or a nickname of your own choice) instead of your account name.  That way everyone could verify their own, but no one would be able to figure out any of the others (unless they wanted to pick an obvious nickname so that they could demonstrate that they have what they say they have too).

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August 11, 2011, 11:21:19 PM
 #107

first, let me say that i'm one of the people on the flexcoin development team.  i've been following along and letting roger take care of answering everyone's questions, but since these two almost directly relate to me as one of the developers (and as such an employee as well), i wanted to give my thoughts...

  • Do I know if they make proper backups of their Bitcoin wallets?

i can tell you that we do.  we have spent the better part of the last three months working on this, trying to hammer out every detail...it's why we took so long to launch it full-time to begin with.  we wanted to do our best to make sure EVERYONE was protected.  if we wanted to do it half-assed, we would have launched weeks ago.

of course, without looking at our backup system you can't know for sure (other than taking my word for it), but the same is true with any other wallet or exchange.  i hope we can earn everyone's trust as time goes on - you'll see we're not trying to scam anyone here.  we are providing what we feel is a very valuable service and we hope people will adopt it on a larger scale.

Quote
  • Do I know that not one of their employees is crazy one day and embezzles all of FlexCoin's BTC savings?
again, i personally can tell you that we're not nuts.  i have worked with the people involved on this project every day in some capacity for the past four years.  but i guess without taking my word for it, you can't.  

then again - using the same premise as the latter part of my answer above: how do you know that wouldn't or couldn't also happen at any other wallet service or exchange?

in the end (like i said before) it's all about trust.  i understand there have been some great security issues lately with some exchanges and wallets...but that's precisely the reason why we took a long time to build this in the first place.  we wanted to do our best to make sure it was safe and secure for everyone involved - both the users and ourselves...and we're going to continue to work on it and improve it as time goes on as well.  some of the ideas you guys have proposed here we're already working on implementing.

in the end it boils down to this: f you don't trust us enough right now, then don't use our service - i wouldn't blame you, as i certainly wouldn't put my money somewhere that i didn't trust.  however, we'll do our best and work hard to earn your trust over time - and i hope you'll at least give us a chance to do that.  
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August 11, 2011, 11:33:35 PM
 #108

Think about eGold for a minute.  People would buy eGold to launder their money through the centralized service.  The difference in your situation is that people have to buy bitcoin, then put it in FlexCoin to launder their money.  I fully expect that a judge given the case to dictate that you fall under 'know your customer' laws.  Granted you may operate without trouble for quite some time, until one person fucks up and gets caught laundering money through your service.

Well how do we solve that?  we would have to know where these bitcoins came from?  What is asked is physically impossible,  we can't reasonably be expected track down where a bitcoin came from? Because we would have to physically track each coin from it's inception and then on top of that find out who owned that coin from it's "birth"

Know YOUR CUSTOMER.  Banks don't have to know every person that has held a dollar bill.  Only the person who's putting the money in the bank.  Make sure to collect personal information for every account. It's that simple.

Edit- The whole idea is to make sure that only the people doing the illegal stuff are held liable for their crimes.

Quote
I want to point out in your example the point where they bought bitcoins (where they CANNOT do that on flexcoin) is where they laundered the money.

Criminals most likely would setup a TOR server and do garbage though that...  

This is not how money laundering works.  So I'll try to detail this for you

My Money is used to buy bitcoins, this is tracable, and if the government was watching me they could tell that I put money in a dwolla/paxum account, and then could tell that I spent money from that account to buy bitcoin. (The people I bought bitcoin from don't know who I am, but the dwolla account was directly tied to my bank, so the government does.)

That bitcoin is then sent into you service where it sits in a general fund.  Values are assigned to accounts but not identities. (I don't know if you collect identification information.  That is why I asked what you do to for these cases on the first page of this thread.)  So now money can move from anonymous account to anonymous account, but the difference from the bitcoin protocol doing this and Flexcoin doing this is that Flexcoin is a centralized service.  The decentralization makes the User and Trader solely liable for their crimes.  As a third party involved, if you cannot freeze an account on order of the U.S. Court (because you have no idea whose account is whose, and no idea how many accounts they may have) then you are liable for the criminal actions done through your service.

Even if somebody did manage to launder their money through the BTC trading, which is not unlikely, I could only see it making money laundering charges easier to bring upon organizations further down the line.

Further more I also asked about fraud.  If an anonymous person frauds somebody using your service and you provide no way for the government to subpoena the identity of the fraudster from your records, you are likely to become liable for the damages.

Granted this is only if the government takes an interest in BTC, which with the Silk Road active, that is becoming more and more likely.

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August 12, 2011, 12:09:07 AM
 #109

Know YOUR CUSTOMER.  Banks don't have to know every person that has held a dollar bill.  Only the person who's putting the money in the bank.  Make sure to collect personal information for every account. It's that simple.

This is the part that I don't understand,  you want me to collect social security numbers for people that are depositing bitcoins?   My whole problem with this is the following:

A)  the bitcoins can be sent though http://bitcoinlaundry.com/ ... or just forwarded around 400 times,  the point is that there is no real valid way without allocating hundreds of man hours to try to trace where a bitcoin went.  Rendering "know your customers" much more difficult as compared to dealing with US dollars.

B) you want me to collect information on my clients, such as their social security number?   I could imagine that working well  "just upload your bitcoins to flexcoin after you supply your social security number, occupation, age, etc.."  You realize that is impossible?   You might provide that information,  but most (if not anyone else) would not provide that.

Look I am not completely dismissing what you are saying,  I am just saying that it's virtually impossible to trace who is using what...  how can I verify (even if I required a social security number)  that the number is real in the first place?  Or the address?  The only solution is to run a credit check on each person...   that is a hell of alot of expense for a bitcoin storage facility.






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August 12, 2011, 12:17:25 AM
 #110

As a third party involved, if you cannot freeze an account on order of the U.S. Court (because you have no idea whose account is whose, and no idea how many accounts they may have) then you are liable for the criminal actions done through your service.

Huh

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August 12, 2011, 12:20:19 AM
 #111

 Make sure to collect personal information for every account. It's that simple.


I'd rather not provide my Slave Number to use the service.
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August 12, 2011, 12:22:22 AM
 #112

Make sure to collect personal information for every account. It's that simple.


I'd rather not provide my Slave Number to use the service.

I think you're not alone,  considering it's not even dollars.. it's bitcoins...   I sort of don't get the idea of collecting information like that for bitcoins...  if we were accepting dollars... and we were an exchange like mtgox or tradehill (do they require social security numbers?) then maybe... but for bitcoins and only bitcoins .. with no dollars ..




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August 12, 2011, 12:43:29 AM
 #113

I don't what you guys are thinking but I do not want by balance publicly displayed. I am sure any merchant that uses flexcoin agrees with me.

I am afraid you did not understand my point correctly. I have pointed out that balances will only be published anonymously! And to have even more camouflage, a balance can be split into SEVERAL ANNONNYMOUS items. But maybe it is clearer with an example:

Concrete Example: How Flexcoin can prove that they do not run a fractional system:

Imagine that FlexCoin has total funds of 100 BTC and a total of 3 users as of 12.08.2011, 00:00 GMT:
  • User 1:
    Balance = 30.00 BTC
    public FlexCoin address = "coffeshop"
    Secret IDs (defined by user 1 himself, only visible in his login area):
    ID1 = bitbyte --> 30.00 BTC
  • User 2:
    Balance = 60.00 BTC
    public FlexCoin address = "michael"
    Secret IDs (defined by user 2 himself, only visible in his login area):
    ID 1 = bitfan --> 52.41 BTC
    ID 2 = newyork --> 7.59 BTC
  • User 3:
    Balance = 10.00 BTC
    public FlexCoin address = "pizzaservice"
    Secret IDs (defined by user 3 himself, only visible in his login area):
    ID 1 = freak0815 --> 7.10 BTC
    ID 2 = MrXYZ --> 2.90 BTC

Now here is how FlexCoin's published lists will look like (e.g. as downloadable comma separated ASCII text file, and listed in HTML on its website):

List 1: List of Secret IDs with balances:
Code:
Secret IDs      Balance
-----------------------
bitbyte         30.00
bitfan          52.41
freak0815        7.10
MrXYZ            2.90
newyork          7.59
-----------------------
TOTAL          100.00

List 2: List of Bitcoin addresses of FlexCoin's Bitcoin wallet
(of course Bitcoin address must be shown completely, so it can be verified in blockexplorer by everybody):
Code:
Bitcoin Address                               Balance
-----------------------------------------------------
1gDh45GdsGglAw2qe4HaHst...                    14.25
15GdDggkaL57wjhAfsd6dzh...                     5.13
1Ldfge64mdaYsFrZ68sffgh...                     1.75
1gshgsJdrh546EHs6eDGhfd...                    14.64
1AAhEh22bSH4wD2tSHlFtfh...                     7.41
1dKZtTROvBCMf54GgUGgShd...                     3.58
1jfFhgKSBfqfmNnXUu9M4Zi...                    11.25
1fHed34Zr6r7KFsgHJKr1DF...                     9.47
1JeC5sM8MgHD8oTKqSni6fZ...                    12.49
1QwKLLoTdWRTnsu9gEoPbiS...                    20.03
-----------------------------------------------------
TOTAL                                        100.00

If FlexCoin runs a fractional system (i.e. if sum of all Flexcoins is greater than sum of all Bitcoins possessed by Flexcoin), they would have to hide this by one of the following means:
  • In List 1, omit one or several secret IDs (danger: If a user checks the list and does not find his ID)
  • In List 2, also list such Bitcoin addresses that do not belong to FlexCoin (danger: if a user finds a listed address to be his own private address, and he realizes that FlexCoin would falsely pretend this to be their address)

Practically, especially the 2nd kind of fraud (List 2) might be difficult to detect in reality. So, FlexCoin should make it practical for everybody to check their integrity. This can be easily done in the following way, to make their trustworthiness more apparent to the world:
  • Flexcoin maintains only a small number (e.g. =10, i.e. small enough to be captured by the human eye) of public BTC addresses in their Bitcoin wallet. This is easily possible, they just need to run a slightly modified version of the official bitcoin client software, modified in that it does not generate new addresses automatically. This way it is easier to verify and check by everybody
  • Flexcoin regularly moves their set of operational Bitcoin addresses to new ones, and announces the set of new addresses BEFOREHAND. Suitable interval would be e.g. once every 3 months. Idea: 1 week before the end of the 3 month period, Flexicoin publishes 10 new Bitcoin addresses that will be used starting from next quarter. Then, at the given point in time, they move all their Bitcoins from their 10 old addresses to their 10 new ones.
  • --> Advantage: This way, FlexCoin proves to the world:
    (a) that they are still in control of their Bitcoins (and have not lost their private keys), and
    (b) that the addresses that they list in List 2 above really belongs to them, and not to any random Bitcoin user in the world!

You see, it would be easy for Flexcoin to prove:
  • that they are not running a fractional system, AND
  • that they are under control of all their Bitcoins

At the same time, the anonymity of the users is fully guaranteed, because they are only listed in the public list with their SECRET IDs. Moreover, to make these users even more anonymous, Flexcoin could implement mechanisms that allows each user to define SEVERAL secret IDs, and the user could be allowed to specify HOW he wants to distribute his funds between the different secret IDs (e.g. in percentage, or in absolute numbers or some formulas) Given this fact, AND given the fact that "List 1" (see above) is not updated on a minute or hour basis but only once a day (or even once a week would be sufficient), also an outside user could hardly "back-engineer" which secret ID belongs to which FlexCoin Address. For example, a "curious attacker" could transfer a certain amount of 123.45 BTC to the "coffeshop" address. Then he looks at the published list (List 1 above) and checks which of the secret IDs has 123.45 BTCs more funds than last time. However, unluckily for our "curious friend", he was probably not the only one who has sent some BTCs to "coffeshop" since the last update of "List 1" (which was e.g. 1 week ago) [but our "curious attacker" has lost 123.45 BTC in this example]. Therefore, this sort of "curiosity attack" will not work, i.e. the users account information are kept secret. On top of that, the user can change his Secret IDs any time, and he could even write an automated script (if this is supported by the flexcoin platform) to change his secret IDs according to a given schedule in the future.

Idea for an additional business opportunity for Flexcoin:
Flexcoin could make this "annonymizing feature" a feature for premium users and request an extra fee for this. For example, every user has one secret ID free (of course also for this free secret ID the user must be able to chose the name of this ID by himself, otherwise FlexCoin could map the same ID to several users and thereby hide a fractional system). If a user wants to use more than one secret ID (for an increased degree of "camouflage"), this service could be sold to this user for a certain fee! For an even further degree of camouflage (e.g. the user is able to program a sequence in the future in which the Secrete IDs change, and also the percentages of funds allocated to the different secret IDs could be scheduled by the user).

Hope this was clear now, for both nmat and Flexcoin Funder :-)

As I said, it is not just a fancy proposal that I am making here, it is in fact my EXPECTATION that Flexcoin is implementing this mechanism in the future and puts it on its feature roadmap. I assure that I am not holding any intellectual property rights for any of these ideas - but donations are of course always welcome for the work I have done here :-)
   In my view, implementation of this feature would be a BIG quality certificate for any web service provider that administers Bitcoins for its users, as Flexcoin intends to become one. And given the ambitious plans flexcoin has expressed, I have no doubt that they just have to implement it if they want to be trusted. As a side effect, they would set a new standard of trust!

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August 12, 2011, 01:35:13 AM
 #114

This is the part that I don't understand,  you want me to collect social security numbers for people that are depositing bitcoins?

I don't want you to do anything in particular.  I'm trying to point out a big loophole in your business plan.


Quote
My whole problem with this is the following:

A)  the bitcoins can be sent though http://bitcoinlaundry.com/ ... or just forwarded around 400 times,  the point is that there is no real valid way without allocating hundreds of man hours to try to trace where a bitcoin went.  Rendering "know your customers" much more difficult as compared to dealing with US dollars.

I can launder my money hundreds of times before putting it in the bank too.  The bank doesn't need to know how I got the money, only that I (John Doe) deposited money ($400) in my account (#555) or my daughter's account (#556).

Everything preceding that and coming after my transaction is the government's job to prove that I did anything illegal.  Unfortunately if my drug dealer has a flex account, and I have a flex account, and you don't know either of us, you're still liable for handling the transaction.  Cash or no, buying drugs with anything is still illegal.  You don't even have to care if we do illegal transactions, again that's the governments job. 

If the FBI calls and says John Doe has been selling drugs and makes his money by trading in flexcoin, we have a subpoena for his account information, you have to be able to provide that information.

Quote
B) you want me to collect information on my clients, such as their social security number?   I could imagine that working well  "just upload your bitcoins to flexcoin after you supply your social security number, occupation, age, etc.."  You realize that is impossible?   You might provide that information,  but most (if not anyone else) would not provide that.

Look I am not completely dismissing what you are saying,  I am just saying that it's virtually impossible to trace who is using what...  how can I verify (even if I required a social security number)  that the number is real in the first place?  Or the address?  The only solution is to run a credit check on each person...   that is a hell of alot of expense for a bitcoin storage facility.

I don't know how you end up doing it.  The reason I asked in the first place was to find out if you'd addressed it at all.  I'm not likely to use a service that is going to end up being shut down for this kind of crap.  Paxum, Dwolla, Paypal, all have to verify their users one way or the other.  There are very specific laws regarding money transfer services.  If your lawyers still insist that they don't apply to digital currency, you should have them look up how those laws were applied to eGold.

http://en.wikipedia.org/wiki/E-gold

Read 2008 Indictment and Trial for more information about the case.

and of course the specific wording of the ruling.  "a business can clearly engage in money transmitting without limiting its transactions to cash or currency and would commit a crime if it did so without being licensed."


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August 12, 2011, 01:57:35 AM
 #115

it seems to me (from reading the wiki you linked to) like the owners of e-gold were MUCH more complicit in the money laundering that was going on than just running a business.

Quote
Additionally, it alleges that while e-gold placed "value limits" on certain accounts suspected of criminal activity, they suggested that the owner open a new account, placing no restrictions on their ability to move funds out of the original account.

not to mention we have the following in our TOS:

Quote
Law Enforcement: Flexcoin, LLC is located in the Commonwealth of Pennsylvania, United States of America. Flexcoin, LLC will cooperate with any federal and / or state authorities as the law requires.

granted i'm a programmer, not a lawyer...but i'm just saying i don't really see how flexcoin is at all similar to e-gold.
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August 12, 2011, 02:13:33 AM
 #116

I'm not a lawyer either, but I don't think this applies.  See 31 CFR 103.11

31 CFR 103.11(uu) giveth, but 31 CFR 103.11(h) taketh away.

If I recall correctly, this is the specific reason that Flexcoin operates with bitcoin only.

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August 12, 2011, 02:38:04 AM
 #117

I'm not a lawyer either, but I don't think this applies.  See 31 CFR 103.11

31 CFR 103.11(uu) giveth, but 31 CFR 103.11(h) taketh away.

If I recall correctly, this is the specific reason that Flexcoin operates with bitcoin only.

I'm not a lawyer either, until I see a judge ruling on it, I'm not going to take my chances with FLEX.  (Though I think the specificity of 31 CFR 103.11(h) is a very valid defense.)  Mostly because I think BTC should be a recognized currency.  I think that is what the community is working towards.  That said, I think that we BTC could benefit from a service like this, I don't think taking advantage of the BTC's nature as a loophole is the way to go about it though.

Understandably difficult situation, I'll be watching, but I don't intend on buying.  I'm not trying to rag on FlexCoin.  From everything they are doing, and the way they interact with the community, I expect them to be forging well ahead of the crowd when the fog clears on BTC legitimacy issues.

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Public address 1vedbt1pLCKyBfS9eApCfL4UAwQ1et12z
I don't support the artificial value of BTC, don't buy BTC at ridiculous prices.  Let Miners learn the lesson banks wouldn't.  The Supply has outgrown Dema
KBundy
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August 12, 2011, 02:46:05 AM
 #118

Hello again,

The idea to attract "big money" is on the whole, a good thing.  It shows that people are still willing to take the substantial risk of loss on investment to convert to bitcoin, and this ballsiness is important if bitcoin is to succeed.

That being said, the way I understand the fee/discount system is that it's stealing from the poor and giving to the rich.  People wishing to transfer small amounts out of their flexcoin accounts are going to have to pay a minimum fee, making the withdrawal of  micro-payments impractical for the little guys.

To be fair, I really like the site, and what it's about, the thing is that me, the average user, is being turned off by the fees being unevenly weighted.

EG: Say I want to withdraw just 1BTC from my account, the minimum I'd have to pay is .01BTC (1%)  <- this is a lot.  These fees are then given to those who have a ton of  BTC just sitting in their accounts as "discounts", hence, stealing from the poor and giving to the rich.  Something fundamentally wrong here, but easily corrected by charging a fair flat rate.

Like I said before, instead of charging a fee and returning 70% of those fees as discounts, (a large part going to the BTC wealthy,) simply charge 30% of the fee you're trying to charge in the first place.

EG: 0.003BTC or 0.15% on all withdrawals.

-KBundy

Hi Kbundy,

You realize it's free to transfer flexcoin to flexcoin ...  tell the person you want to transfer that .0000001 to his flexcoin address.




You realize that in order for that person to convert that .0000001 to USD should they ever desire, they would be the one to pay the fee.

- Welcome to the new free economy
shotgun
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August 12, 2011, 04:10:49 AM
 #119

I don't know how you end up doing it.  The reason I asked in the first place was to find out if you'd addressed it at all.  I'm not likely to use a service that is going to end up being shut down for this kind of crap.  Paxum, Dwolla, Paypal, all have to verify their users one way or the other.  There are very specific laws regarding money transfer services. 

You have failed to understand several basics going on here:

  • Flexcoin and how it interacts with BTC is not a money transfer service. It's a BTC transaction service. No USD or other currency is being dealt with so those "laws" you are referring to not only don't apply, they don't even exist for BTC.
  • Dwolla doesn't verify their users - they link your bank account and do not have any control over the validity or legality of the bank account you are linking to.
  • Users of Flexcoin do not have to move USD into their account to transact BTC, ever, at all. Everything is funded via BTC.
  • USD never even has to interact with any BTC use unless you choose to. The perfect example is a 24x7 miner that has generated BTC out of thin air (and electricity). I can fund my Flexcoin account via BTC I've mined and never ever have a money trail or identity trail involved -- the gov (whichever one you are referring to given that BTC and Flexcoin are not linked to any country's economy anyway) has no idea or trace of my BTC generated through the mining process.

So I'm not sure what your user identity tracking high-horse soapbox rant is all about but you need to realize the following:

  • No one is ever going to give their personal information in order to setup accounts for BTC transactions where USD (or other gov backed currency) is not involved.
  • No one wants to be tracked via BTC for various reasons, most of all taxes and the fact that BTC is independent of governments - those gov's can suck it when it comes to BTC as they have no hold/jurisdiction/etc on the BTC economy.
  • Illegal activities are your own business and if you want to engage in said activities it's not the transaction processors liability that comes under question - do you think Bank Of America gets raided every time some drug dealer takes money out of the ATM?

<luke-jr> Catholics do not believe in freedom of religion.
Ridi
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August 12, 2011, 05:04:15 AM
 #120


You have failed to understand several basics going on here:
  • Flexcoin and how it interacts with BTC is not a money transfer service. It's a BTC transaction service. No USD or other currency is being dealt with so those "laws" you are referring to not only don't apply, they don't even exist for BTC.

"a business can clearly engage in money transmitting without limiting its transactions to cash or currency and would commit a crime if it did so without being licensed." UNITED STATES OF AMERICA v. E-GOLD, LTD

Quote
  • Dwolla doesn't verify their users - they link your bank account and do not have any control over the validity or legality of the bank account you are linking to.

That is a form of verification that can be used.  Paypal allows you to verify your identity the same way.

Quote
  • Users of Flexcoin do not have to move USD into their account to transact BTC, ever, at all. Everything is funded via BTC.
  • USD never even has to interact with any BTC use unless you choose to. The perfect example is a 24x7 miner that has generated BTC out of thin air (and electricity). I can fund my Flexcoin account via BTC I've mined and never ever have a money trail or identity trail involved -- the gov (whichever one you are referring to given that BTC and Flexcoin are not linked to any country's economy anyway) has no idea or trace of my BTC generated through the mining process.

Again "a business can clearly engage in money transmitting without limiting its transactions to cash or currency and would commit a crime if it did so without being licensed." UNITED STATES OF AMERICA v. E-GOLD, LTD

(In case this is not going through.  BTC doesn't even need to be a currency.

Quote
So I'm not sure what your user identity tracking high-horse soapbox rant is all about but you need to realize the following:

No soapbox here, just the internet.

Quote
  • No one is ever going to give their personal information in order to setup accounts for BTC transactions where USD (or other gov backed currency) is not involved.

When trying to make a point, absolutes are not your friend.  I can name at least one person who won't do business at all with a company who is standing to lose his BTC.

Quote
  • No one wants to be tracked via BTC for various reasons, most of all taxes and the fact that BTC is independent of governments - those gov's can suck it when it comes to BTC as they have no hold/jurisdiction/etc on the BTC economy.

Individuals in the U.S. have to report their capital gains by law.  If they don't, it's their business and I don't care if manage to evade the IRS or not.  Any business or citizen within the U.S. does fall into their jurisdiction by simple definition of the word.  Whether this is a just system may be debatable, but that is reality.

You are confusing the ability to hide your assets with the legality of hiding your assets.  I'd be interested to find out how you feel about big business.  Since you are advocating the same kind of money harboring to escape fiscal responsibility brought upon by offshore banking.  Double standard much?

Quote
  • Illegal activities are your own business and if you want to engage in said activities it's not the transaction processors liability that comes under question - do you think Bank Of America gets raided every time some drug dealer takes money out of the ATM?

Bank of America is not held liable because they 'know their customers.' eGold on the other hand, did get shut down for the illegal transactions of their clients. Your example is a situation of 'Exception proves the rule.' BofA and Chase and USBank and etc and etc and etc of all legally functioning banks who know who own every account.

I use Trade Hill, you can use my referral code (TH-R115864) for a 10% discount on commissions
Public address 1vedbt1pLCKyBfS9eApCfL4UAwQ1et12z
I don't support the artificial value of BTC, don't buy BTC at ridiculous prices.  Let Miners learn the lesson banks wouldn't.  The Supply has outgrown Dema
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