Auction for a bitcoin bond

[grondilu]

-----BEGIN PGP SIGNED MESSAGE-----
Hash: SHA1

As a proof of concept, I hereby launch an auction for a bitcoin bond.

This means that I promess to pay a certain amount of bitcoin (called "nominal"), at a certain date (called "maturity").  The nominal is 100 BTC.  Maturity will occur at block number 120,000.

I sell this bond in an auction process that will occur on this thread.  To bid, just post a message with your bid in bitcoins.  Auction will end at block number 116,000.  Paiement should then be done within 10 blocks.

No starting price, but if at the end I'm not happy with the final winning bid, I will cancel the auction.

If selling does occur, I will materialize it with a GnuPG signed document where I will mention whe nominal, the maturity and the bitcoin address where the nominal should be paid at maturity.

Happy bidding!
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Version: GnuPG v1.4.11 (GNU/Linux)

iEYEARECAAYFAk2UNq0ACgkQq17371C4DmhQIQCg86UwjCUt0q8iyojsOXUI7juB
BpsAn2UtxuFqtXpLPwedvnYap+m2wrx9
=qC0c
-----END PGP SIGNATURE-----

[1715538167]

1715538167

[1715538167]

1715538167

[1715538167]

1715538167

[deadlizard]

I'll bid ฿16.10 (my account balance, lol) to get the ball rolling 

[grondilu]

I'll bid 16.10 (my account balance, lol) to get the ball rolling 

deadlizard initiates the auction and leads with 16.10 BTC

[theymos]

80

[grondilu]

80

theymos leads with 80 BTC

[gusti]

90

[grondilu]

90

gusti leads with 90 BTC

[左]

I bid 100BTC, which means that if I win, I'll just let you keep the darn bond.

OK, to be honest, I'm really unsure how this works. You want someone to pay you now, in exchange for a payout in the future?

[Alex Beckenham]

90.00000001

[grondilu]

I bid 100BTC, which means that if I win, I'll just let you keep the darn bond.

OK, to be honest, I'm really unsure how this works. You want someone to pay you now, in exchange for a payout in the future?

If you bid 100 BTC, this means you'll pay me 100 BTC at block 116,000, and I'll pay you back at block 120,000.  You would lend me money at zero interest rate.

[grondilu]

90.00000001

I can't accept this bid, since so far the bitcoin network only allows paiements with 0.01 BTC precision.

[gusti]

I understand you must pay the bid price now, and he will repay you the nominal value (100) at maturity time.
It's like a loan backed by a bond that you can also negotiate at market prices before maturity.

My bid is now 91.

[grondilu]

I understand you must pay the bid price now, and he will repay you the nominal value (100) at maturity time.
It's like a loan backed by a bond that you can also negotiate at market prices before maturity.

My bid is now 91.

You've just overbidded yourself, but why not...

Gusti leads with 91 BTC

[gusti]

I understand you must pay the bid price now, and he will repay you the nominal value (100) at maturity time.
It's like a loan backed by a bond that you can also negotiate at market prices before maturity.

My bid is now 91.

You've just overbidded yourself, but why not...

Gusti leads with 91 BTC

That was before I saw you did not accept 90.000001 bid, but for sure there will be higher ones too.

[ripper234]

Can you give a rough estimate in real calendar time when the bond will expire, for those of us who don't understand blockchains?

[grondilu]

Can you give a rough estimate in real calendar time when the bond will expire, for those of us who don't understand blockchains?

The time length is 20,000 - 16,000 = 4,000 blocks.   There are about 6 blocks per hour,  so 4,000 blocks is about 666 hours (?! number of the beast??  didn't do that on purpose!)

666 hours is 27 days, so about 4 weeks.

[gusti]

Can you give a rough estimate in real calendar time when the bond will expire, for those of us who don't understand blockchains?

See this : http://bitcoincharts.com/charts/  (upper side of page)

[grondilu]

Idealy people who bid should sign their bid in a message including my initial signed message.

This woudl allow the winning bidder to sign the final bitcoin address.

[gusti]

Idealy people who bid should sign their bid in a message including my initial signed message.

This woudl allow the winning bidder to sign the final bitcoin address.

I will do that later, need to register with GPG first.

[ripper234]

I'll bid 93.5.
How essential is the PGP signing? (Remember, this is only a POC)

[theymos]

-----BEGIN PGP SIGNED MESSAGE-----
Hash: SHA256

Bidding 95 BTC for grondilu's bond.
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iF4EAREIAAYFAk2UUI4ACgkQxlVWk9q1keeUJgD/Vt2++eEFVpYUbKDBW1T/66Ma
G2k6SYFitfoY4YD3aNIA/Rwgyw9dtro4JF9kjIqTf1zRYNIdBSq0S12v/4hShtJr
=DSjd
-----END PGP SIGNATURE-----

[grondilu]

theymos leads with 95 BTC.

I may be anal here, but the bid should include the signature of my initial message, so that we know which auction we're talking about.

[grondilu]

I'll bid 93.5.
How essential is the PGP signing? (Remember, this is only a POC)

I will accept a bid even if it's not signed.  But precisely because it's a POC, we should look for the way to do things properly.

[grondilu]

Basically a bid could look like this:

-----BEGIN PGP SIGNED MESSAGE-----
Hash: SHA1

XX BTC
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> Version: GnuPG v1.4.11 (GNU/Linux)
>
> iEYEARECAAYFAk2UNq0ACgkQq17371C4DmhQIQCg86UwjCUt0q8iyojsOXUI7juB
> BpsAn2UtxuFqtXpLPwedvnYap+m2wrx9
> =qC0c
> -----END PGP SIGNATURE-----

-----BEGIN PGP SIGNATURE-----
Version: GnuPG v1.4.11 (GNU/Linux)

iEYEARECAAYFAk2Uc8EACgkQq17371C4DmhXSQCdGnXrJG6/4cA411b6lkXwX5Uc
LL8AnjuQGKNmI6LEbHpYAPca8P/GMqKL
=btiF
-----END PGP SIGNATURE-----


But I'm not sure it is really important.  It's not related to the bond process, but to the auction process anyway.  I don't think we would need it if we were on biddingpond, for instance.

[theymos]

I may be anal here, but the bid should include the signature of my initial message, so that we know which auction we're talking about.

The date is in the signature, so there's not much chance of confusion...

[grondilu]

I may be anal here, but the bid should include the signature of my initial message, so that we know which auction we're talking about.

The date is in the signature, so there's not much chance of confusion...

I'm not sure the timestamping in a GnuPG signature is trustworthy.  If it was, the bitcoin network would use it instead of a distributed time server.


Anyway, now that I think about it, signing bids is not necessary.  It is really an auction protocol issue.  Here the proof of concept is about bonds, not forum auctions.

What has to be signed is my promess to pay.  So once I get a bitcoin address from the auction winner, I'll sign it along with the bonds terms, and that will be all.

[Nefario]

This is exactly the sort of thing that our stock market will be suitable for.

[grondilu]

This is exactly the sort of thing that our stock market will be suitable for.

Well, I'll be the first in bitcoin history to actually "do" it 

[Raulo]

I would bid 95.5 BTC but if the 116000 block happens during the night at my timezone, I wouldn't be able to send the payment in 10 blocks which is less than 2 hours. Please extend the payment window to at least 60 blocks.

[­­­Atlas_]

I wonder if this will become the standard for Bitcoin loans. This seems a lot simpler than establishing some obscure interest rate.

[grondilu]

I would bid 95.5 BTC but if the 116000 block happens during the night at my timezone, I wouldn't be able to send the payment in 10 blocks which is less than 2 hours. Please extend the payment window to at least 60 blocks.

No, sorry.   You just have to stay awake.  I don't want to wait 10 hours for a paiement.

[grondilu]

I wonder if this will become the standard for Bitcoin loans. This seems a lot simpler than establishing some obscure interest rate.

I think it's a standard procedure in bond markets.

[­­­Atlas_]

I wonder if this will become the standard for Bitcoin loans. This seems a lot simpler than establishing some obscure interest rate.

I think it's a standard procedure in bond markets.

Sure -- but with Bitcoin being non-inflationary and such, establishing interest rate-based loans is a bit difficult. It would be nice if this bond concept was applied to lending Bitcoins overall.

[Raulo]

No, sorry.   You just have to stay awake.  I don't want to wait 10 hours for a paiement.

OK, your auction, your rules but if you want to set up a bitcoin bond standard, such rules are rather bizarre in any bond market.  Bonds usually have 2 days settlement and the bond duration starts at settlement, not the auction time.

[grondilu]

OK, your auction, your rules but if you want to set up a bitcoin bond standard, such rules are rather bizarre in any bond market.  Bonds usually have 2 days settlement and the bond duration starts at settlement, not the auction time.

I have no idea what justifies those two days settlement, but I suspect it is related to clearing.  And there is no clearing with bitcoins.

[mpkomara]

95.6 bid

[grondilu]

95.6 bid

mpkomara leads at 95.6 BTC

(One block left)

[grondilu]

95.61 BTC

Vladimir leads at 95.61

[mpkomara]

95.62 bid (i will buy 5 such bonds)

[N12]

95.63

[mpkomara]

95.64

[grondilu]

Just post your bid and I'll lock the thread once I see block 116,000

[theymos]

96

[mpkomara]

96.1

[grondilu]

96.1

mpkomara wins the auction with 96.1 BTC

Paiement should be on this bitcoin address:

13HL9oCYx3JcYAqqm8E5wJe1MgZTP9wKeP

Please provide me a bitcoin address for paying you back 100 BTC at maturity.


Sorry for other bidders.  Had I known there would be that many people interested, I would have ended the auction on IRC.

[theymos]

mpkomara beat me at the last moment.

This is an interesting way to get a loan. It seems much more effective than the normal way.

[Vandroiy]

Hey, nice thread to measure traders' expectations.

Looks like people expect an inflation of BTCs in the near future. Almost everyone would rather have less than 100 BTC now than 100 BTC later.

Might be an indicator for traders to sell some BTC. Maybe I should have waited with my selling offer... on the other hand, maybe the traders only didn't appear because the amount is too low? Who knows~

[grondilu]

This is an interesting way to get a loan. It seems much more effective than the normal way.

It *is* the normal way

It should be, anyway.


@mpkomara:

I'm waiting for your paiement.  Please also provide me your bitcoin address here in this thread.

[theymos]

A website that manages loans like this might be a good idea for a project. It could calculate the appropriate starting bid and bond amount based on the specified minimum loan amount and maximum interest rate. I'd certainly be interested in loaning to reputable individuals. It might be fun.

[grondilu]

ok I acknowledge paiement.  Please post your bitcoin address on this thread so I can sign it along with the bond terms.

[mpkomara]

1EWMwa7GEj4V5x1BF67pJq68HHbHB4qXMc

@vanadroiy:  i would have paid more, but don't forget counterparty risk.  in this case, grondilu has very good credit.

[grondilu]

-----BEGIN PGP SIGNED MESSAGE-----
Hash: SHA1

mpkomara won the auction and I acknowledged paiement in due time.

He provided me the following  bitcoin address:
1EWMwa7GEj4V5x1BF67pJq68HHbHB4qXMc

This bitcoin address will be used to pay the nominal at maturity.
> -----BEGIN PGP SIGNED MESSAGE-----
> Hash: SHA1
>
> As a proof of concept, I hereby launch an auction for a bitcoin bond.
>
> This means that I promess to pay a certain amount of bitcoin (called "nominal"), at a certain date (called "maturity").  The nominal is 100 BTC.  Maturity will occur at block number 120,000.
>
> I sell this bond in an auction process that will occur on this thread.  To bid, just post a message with your bid in bitcoins.  Auction will end at block number 116,000.  Paiement should then be done within 10 blocks.
>
> No starting price, but if at the end I'm not happy with the final winning bid, I will cancel the auction.
>
> If selling does occur, I will materialize it with a GnuPG signed document where I will mention whe nominal, the maturity and the bitcoin address where the nominal should be paid at maturity.
>
> Happy bidding!
> -----BEGIN PGP SIGNATURE-----
> Version: GnuPG v1.4.11 (GNU/Linux)
>
> iEYEARECAAYFAk2UNq0ACgkQq17371C4DmhQIQCg86UwjCUt0q8iyojsOXUI7juB
> BpsAn2UtxuFqtXpLPwedvnYap+m2wrx9
> =qC0c
> -----END PGP SIGNATURE-----
-----BEGIN PGP SIGNATURE-----
Version: GnuPG v1.4.11 (GNU/Linux)

iEYEARECAAYFAk2U0doACgkQq17371C4Dmi42wCeI/odd75ulRfscbg5lllnSYW/
OTYAnA8Ec616wA/JFV3y7qRBVsm37HgA
=8+9B
-----END PGP SIGNATURE-----

[mndrix]

A website that manages loans like this might be a good idea for a project. It could calculate the appropriate starting bid and bond amount based on the specified minimum loan amount and maximum interest rate. I'd certainly be interested in loaning to reputable individuals. It might be fun.

I agree.  For those who haven't seen the thread, there are some interesting ideas about how to operate a Bitcoin lending website at http://bitcointalk.org/index.php?topic=5027.0

I would love to make such a site, but already have too many irons in the fire

[grondilu]

-----BEGIN PGP SIGNED MESSAGE-----
Hash: SHA1

Maturity has almost been reached (current latest block is 119998)
Here is the hash of the paiement transaction:

00ebc0bfbc8074b75f3b09cf8b546eef64e27a2d6222f76ed40c8b49615500ad

>-----BEGIN PGP SIGNED MESSAGE-----
>Hash: SHA1
>
>mpkomara won the auction and I acknowledged paiement in due time.
>
>He provided me the following  bitcoin address:
>1EWMwa7GEj4V5x1BF67pJq68HHbHB4qXMc
>
>This bitcoin address will be used to pay the nominal at maturity.
>> -----BEGIN PGP SIGNED MESSAGE-----
>> Hash: SHA1
>>
>> As a proof of concept, I hereby launch an auction for a bitcoin bond.
>>
>> This means that I promess to pay a certain amount of bitcoin (called "nominal"), at a certain date (called "maturity").  The nominal is 100 BTC.  Maturity will occur at block number 120,000.
>>
>> I sell this bond in an auction process that will occur on this thread.  To bid, just post a message with your bid in bitcoins.  Auction will end at block number 116,000.  Paiement should then be done within 10 blocks.
>>
>> No starting price, but if at the end I'm not happy with the final winning bid, I will cancel the auction.
>>
>> If selling does occur, I will materialize it with a GnuPG signed document where I will mention whe nominal, the maturity and the bitcoin address where the nominal should be paid at maturity.
>>
>> Happy bidding!
>> -----BEGIN PGP SIGNATURE-----
>> Version: GnuPG v1.4.11 (GNU/Linux)
>>
>> iEYEARECAAYFAk2UNq0ACgkQq17371C4DmhQIQCg86UwjCUt0q8iyojsOXUI7juB
>> BpsAn2UtxuFqtXpLPwedvnYap+m2wrx9
>> =qC0c
>> -----END PGP SIGNATURE-----
>-----BEGIN PGP SIGNATURE-----
>Version: GnuPG v1.4.11 (GNU/Linux)
>
>iEYEARECAAYFAk2U0doACgkQq17371C4Dmi42wCeI/odd75ulRfscbg5lllnSYW/
>OTYAnA8Ec616wA/JFV3y7qRBVsm37HgA
>=8+9B
>-----END PGP SIGNATURE-----
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Version: GnuPG v1.4.11 (GNU/Linux)

iEYEARECAAYFAk20r64ACgkQq17371C4Dmg7wwCcD4+og03O6wNZlKzjZr5Dk0G6
BBIAoL8ZcgHTf6utteGXt0SYe+YPVPIA
=6C0i
-----END PGP SIGNATURE-----

[Alex Beckenham]

grondilu, I'd be interested to hear if you made profitable use of the coins in the time that you held them, or if this was just an experiment that cost you 3.9 BTC.

[grondilu]

grondilu, I'd be interested to hear if you made profitable use of the coins in the time that you held them, or if this was just an experiment that cost you 3.9 BTC.

I did sell some of these 96.1 BTC and then bought others at a lower price.

But I could have used my own bitcoins.

So to tell you the truth, it was much more of a proof of concept that I wanted to make.

Might be usefull for my reputation if I have to borrow bitcoins in the future, though.