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Author Topic: Should I go public and accept Bitcoin or Create my own coin?  (Read 1536 times)
fordlincoln
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March 17, 2014, 08:54:32 PM
 #1

I'm launching a company and since Bitfundr closed down I'm looking for alternatives at raising capital, disseminating equity, and finding equity investors.

Theres cryptostocks.com allowing companies to list on their site but I'm not familiar with their process and reviews. Maybe someone can help shed some light on this?

I've also been evaluating different protocols as I like the idea of being able to create my own currency to achieve the same goal, and then I don't have to deal with an exchange.

The concept is:
Create 1M tokens, each token is 1 share or 1 equity stake in the company
Dividends would be distributed through the currency similar to how its described here: https://github.com/mastercoin-MSC/spec#pay-dividends-send-all


Is it better to just list on cryptostocks? Looking for feedback here
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halfawake
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March 17, 2014, 09:00:08 PM
 #2

Just FYI: Another option is Bitcoinstarter.  I am not affiliated with the site at all, but it looks pretty well run from what I've been able to see.  There have been a few projects that were able to be funded. 

It sounds like you're talking about starting your own altcoin, except for equity purposes in your company.  I'd recommend against that, as it sounds like more trouble than most people would bother with to invest in a company.

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fordlincoln
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March 17, 2014, 10:22:50 PM
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Thanks for the feedback and I'll check out that site! Appreciate the input on whether to raise using Bitcoin or create a currency instead, I think that it would require some time and effort in the beginning to create the currency but afterwards it may be easier to just push data out to my users to receive a dividend instead of having to use real names and identities the same old fashioned brokerage way
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March 18, 2014, 12:10:17 AM
 #4

Thanks for the feedback and I'll check out that site! Appreciate the input on whether to raise using Bitcoin or create a currency instead, I think that it would require some time and effort in the beginning to create the currency but afterwards it may be easier to just push data out to my users to receive a dividend instead of having to use real names and identities the same old fashioned brokerage way


It might take less effort down the road, but I really don't think people are going to bother with downloading a blockchain and all just to buy stock in your one company.  Now, if someone setup a distributed stock market this way, that I could understand using.  But just for one company?  I just think you'll have a hard time getting to use it just for yourself.

Incidentally, someone should totally create a distributed stock exchange like that though.  If there's a way to do it and have people trust it, you might cut out the middlemen and save people money with all the $5 or $9 trading fees.  This would be a great idea for an alt "coin", I think I'll go suggest it over in that forum.

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March 18, 2014, 12:14:12 AM
 #5

Use Counterparty : https://www.counterparty.co/

You can create your shares and raise bitcoins on top of Bitcoin protocol, with much lower fees than bitfundr would have charged.

Ask in the forum for technical help. Everybody will be glad to help you.
fordlincoln
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March 19, 2014, 12:44:54 AM
 #6

Thanks - using a Distributed Exchange is exactly what I'm thinking of

Looking to give users of my coin a stake in the company, and that way I only track the coins and not the shareholders
They can trade their coins and thereby trade their ownership rights
I can issue different classes of coins for different dividend or voting rights


I'm thinking of using Mastercoin - but this is also the one I'm closest to so I'm not sure whether this is the best platform for what I'm looking for
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March 19, 2014, 01:14:48 PM
 #7

I think that it is easier to join btc community as it is already has a history and a good reputation so Bitcoin  is liquid currency and if you create new altcoin you need time to buld the reputation
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March 20, 2014, 03:23:28 PM
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Yeah there are a lot of coin right now and it is just ridiculous. There is no innovation or progress. Just stick to bitcoin.

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March 20, 2014, 07:37:45 PM
 #9

I'm launching a company and since Bitfundr closed down I'm looking for alternatives at raising capital, disseminating equity, and finding equity investors.

Theres cryptostocks.com allowing companies to list on their site but I'm not familiar with their process and reviews. Maybe someone can help shed some light on this?

I've also been evaluating different protocols as I like the idea of being able to create my own currency to achieve the same goal, and then I don't have to deal with an exchange.

The concept is:
Create 1M tokens, each token is 1 share or 1 equity stake in the company
Dividends would be distributed through the currency similar to how its described here: https://github.com/mastercoin-MSC/spec#pay-dividends-send-all


Is it better to just list on cryptostocks? Looking for feedback here

I don't understand the advantage over issuing stock.  All you're doing is allowing people to purchase equity in your company.  A lot of Bitcoin users are hostile to alt-coins so I would say sticking with stock is a better option.  The alt-coin market is already incredibly diluted anyway.

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halfawake
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March 21, 2014, 12:39:20 AM
 #10

I don't understand the advantage over issuing stock.  All you're doing is allowing people to purchase equity in your company.  A lot of Bitcoin users are hostile to alt-coins so I would say sticking with stock is a better option.  The alt-coin market is already incredibly diluted anyway.

I'm totally with CurbsidePropher on this one, as is probably obvious by my earlier posts.  The other advantage to sticking with Bitcoin is that a lot more people use Bitcoin than any of the altcoins, probably than all of them combined, I'd wager. 

Besides, if you know how to program (or are willing to pay someone to program for you), you could probably just program something for your company to setup a one-company stock system for you.  All you'd need is a) a database listing: the total number of shares, an "IPO" stock price.  That and a user login system, and you could set it up so that people could login, buy shares, sell shares, etc.  After the initial / IPO share price is set by you, the share prices thereafter would just be set by stock owners demand. 

It's an interesting enough project that I'd be willing to program it myself, if I weren't in the middle of graduate school.  If you do decide to go the alt-coin method, I think Counterparty would be a great way to do it.  Just be aware that there will likely be a lot less demand if you go that way than if you go with Bitcoin itself.

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fordlincoln
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March 21, 2014, 03:49:07 AM
 #11

Use Counterparty : https://www.counterparty.co/

You can create your shares and raise bitcoins on top of Bitcoin protocol, with much lower fees than bitfundr would have charged.

Ask in the forum for technical help. Everybody will be glad to help you.

Thanks! will consider this - it's pretty close to the Mastercoin protocol so we'll take a look and evaluate

I don't understand the advantage over issuing stock.  All you're doing is allowing people to purchase equity in your company.  A lot of Bitcoin users are hostile to alt-coins so I would say sticking with stock is a better option.  The alt-coin market is already incredibly diluted anyway.

I'm totally with CurbsidePropher on this one, as is probably obvious by my earlier posts.  The other advantage to sticking with Bitcoin is that a lot more people use Bitcoin than any of the altcoins, probably than all of them combined, I'd wager. 

Besides, if you know how to program (or are willing to pay someone to program for you), you could probably just program something for your company to setup a one-company stock system for you.  All you'd need is a) a database listing: the total number of shares, an "IPO" stock price.  That and a user login system, and you could set it up so that people could login, buy shares, sell shares, etc.  After the initial / IPO share price is set by you, the share prices thereafter would just be set by stock owners demand. 

It's an interesting enough project that I'd be willing to program it myself, if I weren't in the middle of graduate school.  If you do decide to go the alt-coin method, I think Counterparty would be a great way to do it.  Just be aware that there will likely be a lot less demand if you go that way than if you go with Bitcoin itself.

I think we're looking at this the wrong way - it's the value of the business that will set the currency, rather than the 'free-market' system determining altcoin prices today.



halfawake
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March 21, 2014, 04:17:45 AM
 #12

I think we're looking at this the wrong way - it's the value of the business that will set the currency, rather than the 'free-market' system determining altcoin prices today.

There's a famous economic theory about the stock market called the "efficient market hypothesis" - that there is no point in trying to be an active trader of stocks, because all the information about stocks is always priced into stocks at all time.  It's a compelling theory, and it may get things mostly right, but it's not totally accurate. 

Here's why: it excludes something called human psychology.  A lot of people are like "herd animals" in a way, which is why buying low and selling high is good in stocks (and bitcoins) but many people do the opposite.  You're reminding me of a non-fiction book I read recently about the recent financial crisis that happened in 2008.  There was one point in the book where the quants were talking about a crash that happened recently, and said, "That's a 27 standard deviation event.  It's so out of the norm that it may as well be impossible."  But there's no disputing the fact that the crash happened.  (Personally, I'd argue that most of huge run-ups in value of stocks (and commodities like bitcoin) are more due to human psychology than the underlying value of the entity, but that's another conversation entirely.)

The reason I bring up all this back story is to say that well, yes, sometimes the value of the business is what sets the value of the stock, with traditional stocks.  But I think you're setting up enough road blocks in the way of your potential investors that human psychology is going to make it unlikely for a lot of people to buy "stock" in the currency, even if it's a great business.  For people to be willing to invest in your company, they have to a) have bitcoins (I presume that's what you'll be selling the shares for), and b) think your business is awesome, and c) be willing download a second alt-coin blockchain to their computer and maintain it in order to buy and sell their shares. 

The code's open source, you're free to ignore me and setup your own altcoin / counterparty system for your business if you like, I'm just saying I'd be surprised if you get a lot of investors.

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fordlincoln
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March 21, 2014, 05:06:12 AM
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I think we're looking at this the wrong way - it's the value of the business that will set the currency, rather than the 'free-market' system determining altcoin prices today.

The reason I bring up all this back story is to say that well, yes, sometimes the value of the business is what sets the value of the stock, with traditional stocks.  But I think you're setting up enough road blocks in the way of your potential investors that human psychology is going to make it unlikely for a lot of people to buy "stock" in the currency, even if it's a great business.  For people to be willing to invest in your company, they have to a) have bitcoins (I presume that's what you'll be selling the shares for), and b) think your business is awesome, and c) be willing download a second alt-coin blockchain to their computer and maintain it in order to buy and sell their shares. 

The code's open source, you're free to ignore me and setup your own altcoin / counterparty system for your business if you like, I'm just saying I'd be surprised if you get a lot of investors.

That read somewhat like an academic paper - thank you.

Downloading an alt-coin blockchain is indeed a pain and for that reason I don't even want to update the bitcoinqt on my macbook air.

I like the Counter Party system but after reading the thread I am not sure where they are with OP_RETURN and prunable transactions.

If you've been following some Bitcoin news recently, you may find that there is indeed investment for what I'm talking about:
http://www.coindesk.com/1-million-grabs-texas-bitcoin-conference-hackathon/
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March 21, 2014, 05:20:32 AM
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That read somewhat like an academic paper - thank you.

Downloading an alt-coin blockchain is indeed a pain and for that reason I don't even want to update the bitcoinqt on my macbook air.

I like the Counter Party system but after reading the thread I am not sure where they are with OP_RETURN and prunable transactions.

If you've been following some Bitcoin news recently, you may find that there is indeed investment for what I'm talking about:
http://www.coindesk.com/1-million-grabs-texas-bitcoin-conference-hackathon/


Thanks for that.  I'm sorta trying to go into academia, so I guess it's a good thing that even my forum posts come off academic sounding now. 

I'm not surprised that it's being invested in, the blockchain is definitely an innovative technology.  The BusinessWeek magazine that I subscribe to was talking about it recently, saying that it's likely to pop up in all kinds of ways beyond just bitcoins. 

Here's my main objection to what you're talking about: it's not that it's inherently a bad idea, it's just that you'd be asking your investors to go to a lot of work to invest in one company.  If you come up with an entire distributed stock exchange however, and that would not be a trivial project, but if you did, I bet you'd get a lot of interest from the bitcoin community, if not in your company, definitely the project as a whole. 

But in itself, it'd be kind of a huge project: it's essentially taking an exchange and the existing protocol, and mashing them together into an entirely new protocol that does both.

BTC: 13kJEpqhkW5MnQhWLvum7N5v8LbTAhzeWj
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March 21, 2014, 07:08:32 AM
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You might want to have a look at Bitshares too: http://invictus.io/bitshares.php
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March 21, 2014, 06:03:15 PM
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You might want to have a look at Bitshares too: http://invictus.io/bitshares.php

Uh, I have to say, I'm immediately suspicious of something that flat out lies about Bitcoin on its home page.  There is no such thing as an "Additional 12% Security Tax", the only taxes with Bitcoin are what the traditional governments might charge you for appreciation of Bitcoins, which is obviously different based on which country you live in.

BTC: 13kJEpqhkW5MnQhWLvum7N5v8LbTAhzeWj
Broseph Stalin
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March 21, 2014, 07:37:49 PM
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You might want to have a look at Bitshares too: http://invictus.io/bitshares.php

Uh, I have to say, I'm immediately suspicious of something that flat out lies about Bitcoin on its home page.  There is no such thing as an "Additional 12% Security Tax", the only taxes with Bitcoin are what the traditional governments might charge you for appreciation of Bitcoins, which is obviously different based on which country you live in.

Now clarified in this thread by the creator: https://bitsharestalk.org/index.php?topic=3747
"Your shares (bitcoins) are being diluted at 12% per year as new shares are issued to miners."

So he was simply referring to the new bitcoins being mined.
halfawake
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March 21, 2014, 09:28:51 PM
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Now clarified in this thread by the creator: https://bitsharestalk.org/index.php?topic=3747
"Your shares (bitcoins) are being diluted at 12% per year as new shares are issued to miners."

So he was simply referring to the new bitcoins being mined.

It's still ridiculously misleading.  That's baked into the way Bitcoin works.  It's not a tax.

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