Flexcoin is LIVE to everyone!

[Ridi]

If they shut down us they most likely will be shutting down CampBX and every other US based bitcoin service.    The likely hood of them shutting us down is so tiny that it's mostly FUD, considering we do not deal in US dollars at all, and have zero plans to.   You know that a criminal entity would not use a service like flexcoin which clearly states it would work with authorities,  they most likely would setup something in TOR and do it that way....  

I know you weren't particularly replying to my question earlier about being held accountable for money laundering and illegal transactions, but this made clear your perspective on the matter.  I think I need to make it clear that there are precedents for you to consider.

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.

It's not just a matter of the gov' being opposed to bitcoin.  There is a legitimate criminal element to be considered.

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[the founder]

The TOS is updated:


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Account Inactivity: Flexcoin, LLC reserves the right to close accounts that have had no activity for a period of 1.5 years (18 months). If an account has had no transactions associated with it over the course of 18 months, it will be considered dormant. Flexcoin, LLC reserves the right to collect the bitcoins in any such account and label them as fees, which will in turn make the above section on discount payments applicable to any such bitcoins. Discount payments DO NOT QUALIFY as transactions for the purpose of this section. An active account must have at least one deposit, withdrawal, or transfer to another Flexcoin ID over the course of a rolling 18 month period to be considered active.  You will be notified at least 72 hours prior to the account being shut down via the e-mail address registered with the account.

Zero-Balance Inactivity: Flexcoin, LLC reserves the right to close any account that has a zero balance and is inactive for a duration of two (2) weeks.  This includes accounts that have not been activated via the e-mail activation process. You will be notified at least 72 hours prior to the account being shut down via the e-mail address registered with the account.
------------------------

I think I need to stress to you guys that ANY activity,  such as adding to your account (free), transferring from flexcoin to flexcoin account (free),  anything done to your account counts that moves bitcoins or flexcoins counts as a transaction....  

[the founder]

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"  .

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... 

[timmey]

WHO registered porn, sex and xxx before i had a chance?

[KBundy]

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

[Smalleyster]

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.

+1

[the founder]

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.

[nmat]

That being said, the way I understand the fee/discount system is that it's stealing from the poor and giving to the rich.

When you have money on the bank, you will earn more money from interest if you have more money on your account. Here happens the same. The fees are there to encourage people to use flexcoin for payments.

[shotgun]

I am trying to move BTC from Flexcoin to another address. My balance is X and it keeps saying, when I try to transfer the full amount of X that I do not have enough btc to do the transfer. WTF is this SHIT? If there is a fee cost to transfer you need to tell the user how much they can move without having to guess and play the subtraction game.

[shotgun]

That being said, the way I understand the fee/discount system is that it's stealing from the poor and giving to the rich.

When you have money on the bank, you will earn more money from interest if you have more money on your account. Here happens the same. The fees are there to encourage people to use flexcoin for payments.

Sounds more like the Flexcoin guys just want to monopolize the transaction system so that they get a % of the BTCs in their system even though they are basically providing nothing useful. Online wallets are pointless. If you can't run the client on your computer you need to wake up and get your head out of the sand - Flexcoin, Mybitcoin, Instawallet, etc ----> they're all here to siphon *just a bit* of the creme off top.

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

Exactly - keep the money in YOUR system for free as an incentive to not be taxed for the transfer. This whole flexcoin idea is a nice profit game for you isn't it. It's pretty clear you're just in it for the % gain from everyone else's mining efforts.

Reminds me of:

Code:

MICHAEL
It's pretty brilliant. What it does is where there's a bank transaction, and the interests are computed in the thousands a day in fractions of a cent, which it usually rounds off. What this does is it takes those remainders and puts it into your account.

PETER
This sounds familiar.

MICHAEL
Yeah. They did this in Superman III.

[the founder]

I am trying to move BTC from Flexcoin to another address. My balance is X and it keeps saying, when I try to transfer the full amount of X that I do not have enough btc to do the transfer. WTF is this SHIT? If there is a fee cost to transfer you need to tell the user how much they can move without having to guess and play the subtraction game.

Good point... we can have that displayed.

[Michael_S]

Hello FlexCoun Founder,

thanks for your efforts in this forum and for answering my questions.

A few more things:

[...]
1.) Will there be an Android App to link to QR scanner, such that I can pay with flexcoins to an outside BTC-Address (like "bitcoin wallet" Android App)?
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The site has been tested in all mobile devices (android and IOS)  It works really well via mobile, in fact it appears to the the primary way people access the account,  all IOS individuals can bookmark the https://bank.flexcoin.com site [...]  Transfering from a clumsy QR scanner or just type in flexcoin id coffeshop?  I'll take coffeeshop as it's quicker.
-----------------------------------

So the answer is that there is no Android app but just your web site that I can use on my Android phone. What I would like is to integrate the payment function into an app and to be able to pay from the FlexCoin universe to the Bitcoin Universe (not only inside the flexcoin universe), and all this with good usability that only an app can offer - a website cannot offer this and cannot integrate a QR scanner like e.g. the app "bitcoin wallet". You have to be open to payments outside the Flexcoin universe (and facilitate them by simple user interface) from the beginning, otherwise your service will not get the "critical mass".

2.) I do not like that the account is closed after 2 weeks of zero balance. [...]
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This was done on purpose to stop cybersquatting.... [...]
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3.) I do not like that 18 month of inactivity leads to closure of the account and loss of all flexcoins. [...]
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Again this is so people don't put in .000001 bitcoin into 1000 accounts,  and then cybersquat and sell the usernames on ebay [...]
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I understand this. But I think there are much better ways to do this, methods that are more "graceful" to the customer. Also an email notification 72 hours before closure is definitely not enough, because I myself often have periods of several days without email access, for many reasons, including: loss of phone/crash of PC/holidays in the caribics/ failure of my email provider's IT infrastructure/false positive of my email provider's spam filter/stress in private life/... to name only a few.
Better ways:

• After the 18 month period, and after having informed the customer SEVERAL times at least SIX WEEKS before the closure (note that 6 weeks is short compared to the 18 month period), the account is still not closed immediately, but a special fee is imposed, such that each day 1% of the funds will be debited from the account. This way, the account is not closed AT ONCE, but GRACEFULLY. According to the exponential function, after one year, the funds on such an account will decrease to 0.99^365 = 0.25 = 2.5% of its original value. Only if the value afterwards falls below e.g. 0.01 BTC, the account will finally be closed.
  This way, if the account owner misses to re-activate his account in time and is late by a few days, the consequences for him are not immediately catastrophic, but he has just lost a few percent of his funds, not all at once. This is what I mean with "graceful degradation", which is much more customer friendly and would still serve the purpose that you explained.
• Concerning the Two-Weeks-Zero-Funds rule, I consider this rule completely unnecessary, because someone could deposite 0.01 BTC and could still offer the name on ebay. This rule will hence likely hit the innocent users. Proposal: Either abandon this rule, or implement a mechanism that enables the user to configure a "minimum funds" parameter in his personal settings, such that the FlexCoin system will disallows any outgoing payment if it results in a balance below that threshold.

8.) You are calling yourself a "bank". Does this mean you are running a fractional reserve system? [...]
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The answer is NO...  there is no such thing as fractional reserve banking at flexcoin.  period.
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8.b) If your anwser to quesiton "8.)" is "No, we are NOT going to implement a fractional banking system, there will always be a 1:1 mapping of flexcoins in circulation and Bitcoins deposited in the flexcoin bank", then my question is: How will you prove this to the world? There is a possibility to prove it, as described in the following - will you implement it?
   Description: For example, you can assign each user a secrete ID or secret nick name (and the user can change this, if he wants), i.e. a nick name that only this user knows himself. And then, you publish on your website (open to be read by everybody) every day (or every hour or so) an up-to-date-list of secret nick names and associated deposited funds. The sum of these funds then amounts to the total number of flexcoins in circulation at this point in time. And everybody can check this. Since the nick names (or IDs) are secret, the list is anonymous, and nobody has to disclose his funds. To anonymize it even further, it is possible that a user defines several secrete nicknames and distributes his funds over these nicknames as he wishes. Then all these nick names will be listed in the pubic list, such that it would be even harder to track it. And the user could change these nick names at any time. Note that these nicknames are not to be confused with the flexcoin addresses like "coffeeshop"!!
   Now, the second part relates to the bitcoins. The Flexicoin bank also would have to publish all Bitcoin addresses (public addresses like "1Msio5Diu3t8jdfg..."), and the associated fund of this address at the time of publishing. This way, every internet user could see for himself (by comparison with data from "blockexplorer") if the amount of funds contained by these BTC-addresses is the same as the sum of all flexcoins, or lower than that. Of course, the flexcoin bank could also list "wrong" Bitcoin addresses in this list, i.e. Bitcoin addresses that they do not actually own. However, this would be dangerous, because if the true owner of this Bitcoin address realizes this, the whole thing would become public and everybody would know that flexcoin uses a fake list to hide the fact that it is actually running a fractional reserve system. In this case, the trust into flexcoin would vanish instantly.

Note that this mechanism I just described is the same as the mechanism that the gold platform BullionVault is using to prove that the gold that their customers have bought is really existing physically in the vaults. What is the gold in that case is the Bitcoins in our case. And what is the list of funds in the BullionVault case is the list of flexcoins in our case here.

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It doesn't work that way currently,  i'll run this by the programmers but I think what you described would mean shutting down flexcoin and building a whole new site.. which would completely break everything we did over the past 1/2 year.
---------------------

I think you misunderstood my proposal. What I explained does not at all mean that you have to change anything about your current system or even build a new site. It just means you have to add some extra feature. The extra feature mainly can be considered an independent piece of software running on your server. This piece of software just needs as input the current list of BTC-adresses that belong to FlexCoin's bitcoin wallet. And it needs as further input the list of FlexCoin funds with its associated secrete nick names. This is an extremely simple exchange of data bases, you could organise this exchange by simple comma separated ASCII files. Then this software builds from this the table and places this list (again , comma separated ASCII file) for download or display at your website - that's all. Please see how BullionVault.com have done it if you want to know how.

AGAIN: Note that it is absolutely crucial that you provide prove that you are not running a fractional banking system. Just saying you don't doesn't mean anything, only the naive will believe you. Don't get me wrong, I do not say you have bad intentions. But I do not know who you are, so I posses a sound amount of skepticism. You must prove that you are trustworthy on this matter, and the technical means exist for providing this prove, the barriers are not that high at all. If you will not provide this prove in mid-term, there is only one conclusion for me, namely that you are not telling the truth (because otherwise you would provide the prove).
   TODAY, when you say you are not going to run a fractional banking system, you MIGHT say this in good intentions. But as time goes by, you will be tempted to increase the amount of FlexCoins over the amount of Bitcoins deposited in your bank. First a little bit, and then more and more so. This is just natural, this is how the Gold Smiths have done it in banking history, and I do not need to be a prophet to predict that you are going to do the same. If you say you won't do that, you must prove it, and the means for proving it are there and really not that difficult to implement.

I don't expect you to have this SW implemented today or next week, but you should really have this on your roadmap of new SW features for your FlexCoin server.

9.b) If you do implement a fractional reserve system (i.e. number of Flexcoins > number of Bitcoins deposited in your Flexcoin bank), I have no more to say, other than: "Without me!", and I think it will not be successful, because the Bitcoin users are better informed than the average people in our world, and Bitcoins is exactly the OPPOSITE of the idea of fractional banking.

-----------------
Then it's good that we don't do that.   I hope to see you get a flexcoin id.
-------------------

Me being healthily skeptical by nature, I have to say: If you provide the prove (see above) I am very likely to make use of your service!! If not, no way!

Think about it! If you really mean what you say about NOT having the intention of implementing a fractional banking system, you can make a VERY big deal of advertisement and establishment a big deal of trust by implementing the "BullionVault"-like mechanisms.

If you feel that you still do not quite understand how this should work, even after browsing along the web site of BullionVault, do not hesitate to ask me (also private msg).

[the founder]

Sounds more like the Flexcoin guys just want to monopolize the transaction system so that they get a % of the BTCs in their system even though they are basically providing nothing useful. Online wallets are pointless. If you can't run the client on your computer you need to wake up and get your head out of the sand - Flexcoin, Mybitcoin, Instawallet, etc ----> they're all here to siphon *just a bit* of the creme off top.

If you don't want to use any service that charges a fee like tradehill, mtgox, flexcoin, campbx or any other bitcoin service then no one is forcing you to....  regardless you had a valid point regarding the balance displayed and that's being addressed.

[the founder]

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.   

[kjj]

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.

+1

You pay a transaction fee of X BTC to send coins out.  Flexcoin includes a transaction fee of Y BTC in the transfer.  X is easy to calculate from the transfer amount, because it is set by Flexcoin policy using a simple formula: X=max(0.01,amount*0.005).  Y is not easy to calculate in advance, because of the way the bitcoin client works.  But you don't care, because you don't pay Y directly, you pay X.

Next, Flexcoin calculates Z, which is the sum of all the cash out fees paid by users (X), minus the sum of all their paid network transaction fees paid by Flexcoin (Y).  Z is their operating profit for whatever accounting period they use.  They then distribute 70% of Z back to depositors as profit sharing (their lawyer makes them call it a "discount" so they don't have to file paperwork with the IRS), and they keep 30% of Z as their net profit.

Is that clearer?

[kjj]

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.

[shotgun]

Sounds more like the Flexcoin guys just want to monopolize the transaction system so that they get a % of the BTCs in their system even though they are basically providing nothing useful. Online wallets are pointless. If you can't run the client on your computer you need to wake up and get your head out of the sand - Flexcoin, Mybitcoin, Instawallet, etc ----> they're all here to siphon *just a bit* of the creme off top.

If you don't want to use any service that charges a fee like tradehill, mtgox, flexcoin, campbx or any other bitcoin service then no one is forcing you to....  regardless you had a valid point regarding the balance displayed and that's being addressed.

Forgive the anger of my previous post - I've been thinking about mybitcoin too much today. Anyway, there is one difference that I still can't figure out here - mtgox, tradehill, etc provide a service to get USD (and other currencies) into an account so you can move BTC<->USD.

• What exactly am I getting from the fee that Flexcoin is charging
• How do I know what the income incentive is to point my mining rig payments to Flexcoin? This isn't mentioned anywhere on the site that I can see.

I understand the solutions you're describing on the site - regarding address and payment flexibility/ease - but isn't that more of a "keep the money at flexcoin" vs creating a scalable and community-wide useful system similar to DNS? Basically what you're describing is a BTC DNS system that resolves easy to remember names like "coffee shop" to e55bbc849e5d9ac825a5a69942af1ad2 (or similarly hard to deal with). But it's nothing more than a remake of Paypal.

[the joint]

Sounds more like the Flexcoin guys just want to monopolize the transaction system so that they get a % of the BTCs in their system even though they are basically providing nothing useful. Online wallets are pointless. If you can't run the client on your computer you need to wake up and get your head out of the sand - Flexcoin, Mybitcoin, Instawallet, etc ----> they're all here to siphon *just a bit* of the creme off top.

If you don't want to use any service that charges a fee like tradehill, mtgox, flexcoin, campbx or any other bitcoin service then no one is forcing you to....  regardless you had a valid point regarding the balance displayed and that's being addressed.

With all due respect, I have made 2 accounts with you, and am very reluctant to deposit any BTC for many of the concerns listed here (e.g. proof of non-fractional reserves, no current implementation or proof of offline storage -- by the way, at least 95% should be stored offline -- the cater-to-the-rich interest system, etc.).  Comparing your site to tradehill/mt.gox/campbx is unjustified.  It's like making the argument "Bob likes pizza, Mike likes pizza, therefore bob is mike" (in the context that they both like pizza).  Yes, they all implement fees, But with TradeHill and Mt.Gox, I have been able to make 200% profit from my original investment in as little as 1 month.  How long would it take me to make 30 BTC from an original investment of, say, 10 BTC, using only Flexcoin?

I am not trying to hound you, even though after some of my more positive posts earlier in this thread it may now appear that I have jumped on a bandwagon of negativity and scrutiny.  But prima facie evidence suggests that not only have peoples' scam/loss worries increased exponentially since Mt. Gox, MyBitcoin, etc., but the number of scammers have increased exponentially as well, even during the past few weeks.

With reference to the interest problem, I think that a system that caters to the POOR would help your business long term.  So, for example (I haven't given this a lot of immediate thought), take into account the total number of BTC in you system, maybe average both the mean and median of total BTC in your system, have a set fee % rate, and then have all transaction fees from accounts below that average pay out to those above the average, and have all transaction fees from accounts above the average pay out those below it.  So...imaginary 11 account data set...

BTC = {1, 2, 5, 10, 15, 25, 50, 100, 1000, 5000, 10000}
Mean =1620.8
Median = 25
1625.8/2 = 822.9
So, with the set fee, accounts 1, 2, 5, 10, 15, 25, 50, and 100 would all pay fee interest to the accounts with 1000, 5000, and 10,000.  In contrast, those with 1000, 5000, and 10,000 BTC would pay fees to the other 8 lower accounts below the 822.9 BTC threshold.  This would take into account the early adopter problem and the presumed fact that, like American class system, the top 1-5% of the Bitcoin population probably owns 95-99% of the Bitcoins (maybe a little less, I obviously am not sure).  Then, you can skim your little bit off the top.

[nmat]

But with TradeHill and Mt.Gox, I have been able to make 200% profit from my original investment in as little as 1 month.  How long would it take me to make 30 BTC from an original investment of, say, 10 BTC, using only Flexcoin?

That's like comparing a bank deposit with gambling. You earned 200%, but it was risky. Investments with lower risks provide lower interests.

[the joint]

But with TradeHill and Mt.Gox, I have been able to make 200% profit from my original investment in as little as 1 month.  How long would it take me to make 30 BTC from an original investment of, say, 10 BTC, using only Flexcoin?

That's like comparing a bank deposit with gambling. You earned 200%, but it was risky. Investments with lower risks provide lower interests.

Well, first of all, it wasn't that risky    Quite easy I thought it was.  I'm a day trader so that minimizes risk.  And, Tradehill and Mt. Gox have shown their faces.  I like that.

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.