[ANN][KARM] Karma / ₭ / X11

[Alphi]

I want to buy more Karma now.
But I'm not sure if its better to wait for the next big dumper to make Karma even cheaper, and then I can buy more for the same LTC/BTC  

Is it cheaper to buy with LTC or BTC? BTC is at 1 satoshi. Should I convert my BTC to LTC then buy Karma?

Right now 1 satoshi = 92 litoshi. Buying for 1 satoshi is cheaper than buying for 110-115 litoshi, which is current price. 2 days ago it was better to buy for 120 litoshi, since LTC was much cheaper than it is now.

except that very few people are willing to sell for 1 satoshi so you will be waiting days or even weeks to get your order filled.

Btw, noone is responding to a big problem I opened on Karmashares forum, so I will open it here. Karm coin payouts in case of lill.com search will be very low, because Cryptsy and Mintpal own probably 30-50% of all KARM.  Those 2 exchanges will take all the KARM coin payout money. There was opened discussion about disabling KARM payouts and keep only KarmaShares payout. This should help KARM coin holders to increase revenue by exhanging them for shares. Current model is wrong and those who did not exchange coin and hope for big profits will be disapointed. There is no way ho to prevent sharing profit with crypty and mintpal except forcing people to exchange for shares and pay only shareholders.

lil beongs to karmashares and so all profits should go to karmashares holders.

this does not mean that Karma will not benefit from this.

Karmashares holders are also karma holders and big suppoters of the currency.
also a lot of money from the lil sale would likely be funnelled back into Karma development projects.

so even if you own Karma but don't own any Karmashares you will still benefit if the sale goes through.

it makes no sense at all for any of that money to go to Karma holders directly.. If Karmashares LLC wanted to help Karma holders directly it would be much easier and wiser for them to simply buy Karma on the open market, thus pushing the price up to benefit everyone. and then they would have even more Karma to use for development projects, so its win win all round.

so I really don't understand what you mean about Karma coin payouts going to Exchanges.

EDIT:... I'm still not entirely sure what you mean but I think I am agreeing with you on some points lol.

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[socoban]

I want to buy more Karma now.
But I'm not sure if its better to wait for the next big dumper to make Karma even cheaper, and then I can buy more for the same LTC/BTC  

Is it cheaper to buy with LTC or BTC? BTC is at 1 satoshi. Should I convert my BTC to LTC then buy Karma?

Right now 1 satoshi = 92 litoshi. Buying for 1 satoshi is cheaper than buying for 110-115 litoshi, which is current price. 2 days ago it was better to buy for 120 litoshi, since LTC was much cheaper than it is now.

except that very few people are willing to sell for 1 satoshi so you will be waiting days or even weeks to get your order filled.

Btw, noone is responding to a big problem I opened on Karmashares forum, so I will open it here. Karm coin payouts in case of lill.com search will be very low, because Cryptsy and Mintpal own probably 30-50% of all KARM.  Those 2 exchanges will take all the KARM coin payout money. There was opened discussion about disabling KARM payouts and keep only KarmaShares payout. This should help KARM coin holders to increase revenue by exhanging them for shares. Current model is wrong and those who did not exchange coin and hope for big profits will be disapointed. There is no way ho to prevent sharing profit with crypty and mintpal except forcing people to exchange for shares and pay only shareholders.

lil beongs to karmashares and so all profits should go to karmashares holders.

this does not mean that Karma will not benefit from this.

Karmashares holders are also karma holders and big suppoters of the currency.
also a lot of money from the lil sale would likely be funnelled back into Karma development projects.

so even if you own Karma but don't own any Karmashares you will still benefit if the sale goes through.

it makes no sense at all for any of that money to go to Karma holders directly.. If Karmashares LLC wanted to help Karma holders directly it would be much easier and wiser for them to simply buy Karma on the open market, thus pushing the price up to benefit everyone. and then they would have even more Karma to use for development projects, so its win win all round.

so I really don't understand what you mean about Karma coin payouts going to Exchanges.

Yea that what you are talking about would be cool and right, but it is simply not true currently. There is official info on karmashares web, where is written any KARM coin holder will get payout if he does not move his KARM coins for more than 30 days from his wallet during payout period. Conditions are more than 5 million not moving, 1000KARM = 1 Share.  So if KARM holder exchange for shares he get 1,75 share per 1000 KARM, if he just hold, he get payout equivalent to 1share per 1000 coins. Coin holder does not have any rights, he can just get payout. Check the official site, that info is public since KarmaShares were created.

[Alphi]

Yea that what you are talking about would be cool and right, but it is simply not true currently. There is official info on karmashares web, where is written any KARM coin holder will get payout if he does not move his KARM coins for more than 30 days from his wallet during payout period. Conditions are more than 5 million not moving, 1000KARM = 1 Share.  So if KARM holder exchange for shares he get 1,75 share per 1000 KARM, if he just hold, he get payout equivalent to 1share per 1000 coins. Coin holder does not have any rights, he can just get payout. Check the official site, that info is public since KarmaShares were created.

I think you are confusing two issues.

what you describe is how Karmashares works.

if you hold Karma (the coin) in your wallet for more than 30 days then you can get some free Karmashares.
this does not apply to exchanges, the coins have to be held in your wallet on your computer with an address that you control, and not on any exchange.

now if you do that and get collect your Karmashares then you are entitled to any profits that Karmashares LLC distributes to their shareholders.

this is the profit sharing arrangement for Karmashares.

this does not mean that if LIL.Com is sold all of the money goes to Karmashares and then to Karma holders. it is just describing how profits are distributed if there is a "dividend" issued by Karmashares LLC.

first the Karmashares investors have to decide on whether to sell LIL.com or not.
then after it is sold they can decide how to spend the money. e.g. return some to investors, give some to charity, use some for development, use some for advertising, use some for bounties, set up a fund .. etc etc etc.

but the point I was making is that even if you don't own any Karmashares and you just own some Karma.. you will get some kind of benefit if this sale (or any future sale) goes ahead.

[bondi]

Yea that what you are talking about would be cool and right, but it is simply not true currently. There is official info on karmashares web, where is written any KARM coin holder will get payout if he does not move his KARM coins for more than 30 days from his wallet during payout period. Conditions are more than 5 million not moving, 1000KARM = 1 Share.  So if KARM holder exchange for shares he get 1,75 share per 1000 KARM, if he just hold, he get payout equivalent to 1share per 1000 coins. Coin holder does not have any rights, he can just get payout. Check the official site, that info is public since KarmaShares were created.

I think you are confusing two issues.

what you describe is how Karmashares works.

if you hold Karma (the coin) in your wallet for more than 30 days then you can get some free Karmashares.
this does not apply to exchanges, the coins have to be held in your wallet on your computer with an address that you control, and not on any exchange.

now if you do that and get collect your Karmashares then you are entitled to any profits that Karmashares LLC distributes to their shareholders.

this is the profit sharing arrangement for Karmashares.

this does not mean that if LIL.Com is sold all of the money goes to Karmashares and then to Karma holders. it is just describing how profits are distributed if there is a "dividend" issued by Karmashares LLC.

first the Karmashares investors have to decide on whether to sell LIL.com or not.
then after it is sold they can decide how to spend the money. e.g. return some to investors, give some to charity, use some for development, use some for advertising, use some for bounties, set up a fund .. etc etc etc.

but the point I was making is that even if you don't own any Karmashares and you just own some Karma.. you will get some kind of benefit if this sale (or any future sale) goes ahead.

You're forgetting that exchanges have wallets with millions(billions?) of coins...

[multiinone]

looks like karm will go back under 100litoshi again

[socoban]

Yea that what you are talking about would be cool and right, but it is simply not true currently. There is official info on karmashares web, where is written any KARM coin holder will get payout if he does not move his KARM coins for more than 30 days from his wallet during payout period. Conditions are more than 5 million not moving, 1000KARM = 1 Share.  So if KARM holder exchange for shares he get 1,75 share per 1000 KARM, if he just hold, he get payout equivalent to 1share per 1000 coins. Coin holder does not have any rights, he can just get payout. Check the official site, that info is public since KarmaShares were created.

I think you are confusing two issues.

what you describe is how Karmashares works.

if you hold Karma (the coin) in your wallet for more than 30 days then you can get some free Karmashares.
this does not apply to exchanges, the coins have to be held in your wallet on your computer with an address that you control, and not on any exchange.

now if you do that and get collect your Karmashares then you are entitled to any profits that Karmashares LLC distributes to their shareholders.

this is the profit sharing arrangement for Karmashares.

this does not mean that if LIL.Com is sold all of the money goes to Karmashares and then to Karma holders. it is just describing how profits are distributed if there is a "dividend" issued by Karmashares LLC.

first the Karmashares investors have to decide on whether to sell LIL.com or not.
then after it is sold they can decide how to spend the money. e.g. return some to investors, give some to charity, use some for development, use some for advertising, use some for bounties, set up a fund .. etc etc etc.

but the point I was making is that even if you don't own any Karmashares and you just own some Karma.. you will get some kind of benefit if this sale (or any future sale) goes ahead.

Yup, but you still do not get what I am talking about.  Anyone who hold KARM for 30 days is eligable for payout. What I am telling is, exchanges have probably 30-50% of all KARM coins in their wallets. There is no way how to distingvish between my personal wallet and the wallet owned by exchanges. So exchanges can have for example 1000 cold wallets and in every wallet 30 million KARM. And they can ask for payout, since they are holding coins of other people on their wallets. There is no way how to find out which wallets are owned by exchanges and which are owned by people. So this means, the idea was to pay KARM belivers and KARM holders. But the fact is, biggest KARM holders are exchanges, they hold people's coins. They will ask for payout thanks to the coins they do not own, but they hold them. Do you understand what I am talking about? They will get payout using others people KARM.

[socoban]

looks like karm will go back under 100litoshi again

Perfecf, time to transfer your LTC and buy as much as you can:)

[Alphi]

Yup, but you still do not get what I am talking about.  Anyone who hold KARM for 30 days is eligable for payout. What I am telling is, exchanges have probably 30-50% of all KARM coins in their wallets. There is no way how to distingvish between my personal wallet and the wallet owned by exchanges. So exchanges can have for example 1000 cold wallets and in every wallet 30 million KARM. And they can ask for payout, since they are holding coins of other people on their wallets. There is no way how to find out which wallets are owned by exchanges and which are owned by people. So this means, the idea was to pay KARM belivers and KARM holders. But the fact is, biggest KARM holders are exchanges, they hold people's coins. They will ask for payout thanks to the coins they do not own, but they hold them. Do you understand what I am talking about? They will get payout using others people KARM.

OK there is no 100% fool proof method for determining which wallets are exchange wallets and which are personal.. but just by looking at the addresses it should be pretty easy to determine which ones are likely to be owned by exchanges.. just by the size and sheer number of transactional volume they generate.

the thing about exchanges is that their wallets are always in flux so the coins are unlikely to stay in one address for more than 30 days unless they are moved into cold storage.

the other thing to consider is that in order to claim your karmashares you have to actually send a signed message from your wallet.
this means that someone in the exchange would have to sign with the cold wallet + their email address to claim the karmashares.
access to cold wallets (even for employees) is something that most exchanges do not allow for obvious reasons.

also if anyone was discovered cheating then their karmashares could easily be voided.

so you are right when you say there is no way to guarantee that an exchange isn't cheating and claiming Karmashares, but given the circumstances I would say that it is highly unlikely that they would or could do it easily and even if they did, it would be quite easy to spot and remove them from the list of karmashares holders. (because the Karmashares list is controlled by Karmashares LLC)


as far as an exchange getting a payout using someone else's money is concerned.
technically this is not possible because when you send your money to an exchange it is not your money anymore so you don't have any rights to claim karmashares with it anyway.

I think this is the key point about Exchanges and Crypto currency that most people do not understand... if you don't control the private Key.. the money is not yours.

All the coins you think you own on an exchange are just IOUs and you hope (and sometimes pray) that when you want to withdraw those coins the exchange will actually honor those IOUs and give you coins in return. Most people do not realize that.
Just like in a casino, those plastic exchange tokens aren't worth anything until the exchange gives you real coins when you request a withdraw.

[Alphi]

You're forgetting that exchanges have wallets with millions(billions?) of coins...

I'm not forgetting at all, you're misunderstanding how karmashares are issued. please see my more detailed response.

[kosmost]

Yea that what you are talking about would be cool and right, but it is simply not true currently. There is official info on karmashares web, where is written any KARM coin holder will get payout if he does not move his KARM coins for more than 30 days from his wallet during payout period. Conditions are more than 5 million not moving, 1000KARM = 1 Share.  So if KARM holder exchange for shares he get 1,75 share per 1000 KARM, if he just hold, he get payout equivalent to 1share per 1000 coins. Coin holder does not have any rights, he can just get payout. Check the official site, that info is public since KarmaShares were created.

I think you are confusing two issues.

what you describe is how Karmashares works.

if you hold Karma (the coin) in your wallet for more than 30 days then you can get some free Karmashares.
this does not apply to exchanges, the coins have to be held in your wallet on your computer with an address that you control, and not on any exchange.

now if you do that and get collect your Karmashares then you are entitled to any profits that Karmashares LLC distributes to their shareholders.

this is the profit sharing arrangement for Karmashares.

this does not mean that if LIL.Com is sold all of the money goes to Karmashares and then to Karma holders. it is just describing how profits are distributed if there is a "dividend" issued by Karmashares LLC.

first the Karmashares investors have to decide on whether to sell LIL.com or not.
then after it is sold they can decide how to spend the money. e.g. return some to investors, give some to charity, use some for development, use some for advertising, use some for bounties, set up a fund .. etc etc etc.

but the point I was making is that even if you don't own any Karmashares and you just own some Karma.. you will get some kind of benefit if this sale (or any future sale) goes ahead.

You're forgetting that exchanges have wallets with millions(billions?) of coins...

I've addressed that issue here: http://karmashares.com/forums/index.php/topic,559.msg3449.html#msg3449

To summarize: "These are challenges for the industry and Karma investor relations efforts rather than strictly technical challenges relating to how we are doing it."

[toeshe]

Long story short this a LTC  market now right?

[mitache365]

Yea that what you are talking about would be cool and right, but it is simply not true currently. There is official info on karmashares web, where is written any KARM coin holder will get payout if he does not move his KARM coins for more than 30 days from his wallet during payout period. Conditions are more than 5 million not moving, 1000KARM = 1 Share.  So if KARM holder exchange for shares he get 1,75 share per 1000 KARM, if he just hold, he get payout equivalent to 1share per 1000 coins. Coin holder does not have any rights, he can just get payout. Check the official site, that info is public since KarmaShares were created.

I think you are confusing two issues.

what you describe is how Karmashares works.

if you hold Karma (the coin) in your wallet for more than 30 days then you can get some free Karmashares.
this does not apply to exchanges, the coins have to be held in your wallet on your computer with an address that you control, and not on any exchange.

now if you do that and get collect your Karmashares then you are entitled to any profits that Karmashares LLC distributes to their shareholders.

this is the profit sharing arrangement for Karmashares.

this does not mean that if LIL.Com is sold all of the money goes to Karmashares and then to Karma holders. it is just describing how profits are distributed if there is a "dividend" issued by Karmashares LLC.

first the Karmashares investors have to decide on whether to sell LIL.com or not.
then after it is sold they can decide how to spend the money. e.g. return some to investors, give some to charity, use some for development, use some for advertising, use some for bounties, set up a fund .. etc etc etc.

but the point I was making is that even if you don't own any Karmashares and you just own some Karma.. you will get some kind of benefit if this sale (or any future sale) goes ahead.

There is no way how to distingvish between my personal wallet and the wallet owned by exchanges.

screenshots.

[clayop]

I moved a large portion of my Karm from Mintpal to my qt-wallet a week ago. So if I hold them over 30 days, am I considered to have Karmashare? Do I have to move the rest of Karm from Mintpal? Asking your opinions. Thanks

[socoban]

Yup, but you still do not get what I am talking about.  Anyone who hold KARM for 30 days is eligable for payout. What I am telling is, exchanges have probably 30-50% of all KARM coins in their wallets. There is no way how to distingvish between my personal wallet and the wallet owned by exchanges. So exchanges can have for example 1000 cold wallets and in every wallet 30 million KARM. And they can ask for payout, since they are holding coins of other people on their wallets. There is no way how to find out which wallets are owned by exchanges and which are owned by people. So this means, the idea was to pay KARM belivers and KARM holders. But the fact is, biggest KARM holders are exchanges, they hold people's coins. They will ask for payout thanks to the coins they do not own, but they hold them. Do you understand what I am talking about? They will get payout using others people KARM.

OK there is no 100% fool proof method for determining which wallets are exchange wallets and which are personal.. but just by looking at the addresses it should be pretty easy to determine which ones are likely to be owned by exchanges.. just by the size and sheer number of transactional volume they generate.

the thing about exchanges is that their wallets are always in flux so the coins are unlikely to stay in one address for more than 30 days unless they are moved into cold storage.

the other thing to consider is that in order to claim your karmashares you have to actually send a signed message from your wallet.
this means that someone in the exchange would have to sign with the cold wallet + their email address to claim the karmashares.
access to cold wallets (even for employees) is something that most exchanges do not allow for obvious reasons.

also if anyone was discovered cheating then their karmashares could easily be voided.

so you are right when you say there is no way to guarantee that an exchange isn't cheating and claiming Karmashares, but given the circumstances I would say that it is highly unlikely that they would or could do it easily and even if they did, it would be quite easy to spot and remove them from the list of karmashares holders. (because the Karmashares list is controlled by Karmashares LLC)


as far as an exchange getting a payout using someone else's money is concerned.
technically this is not possible because when you send your money to an exchange it is not your money anymore so you don't have any rights to claim karmashares with it anyway.

I think this is the key point about Exchanges and Crypto currency that most people do not understand... if you don't control the private Key.. the money is not yours.

All the coins you think you own on an exchange are just IOUs and you hope (and sometimes pray) that when you want to withdraw those coins the exchange will actually honor those IOUs and give you coins in return. Most people do not realize that.
Just like in a casino, those plastic exchange tokens aren't worth anything until the exchange gives you real coins when you request a withdraw.

1. Cryptsy is well known for earning POS revenue on coins they not own. They are earning really lot of money on that. They stake them and most of them dump. There was even situation when they forced dev of coin to change from POW to POS. There is no reason to believe they will not take their opportunity to cash their KARM revenue. I am 100% sure every other exchange does the same.

2. The official KarmaShares conditions does not say anything like exchanges can't stake their coins. So if some coins holders are paid and some are not, those rejected can easily ask for payout by putting this issue on court. This will break the law.

3. There is no way how to detect cold storage wallets, number of transactions is low and there can be thousands of them. Screenshots will not help, it is very easy to import such wallet to windows official wallet on PC

4. There is nothing stoping exchange owner from using fake ID, or his personal ID, ID of a friend. We are talking about 30-50% of all KARM coins, it is naive to think exchanges will not CASH out, especially now, when their income is lower and lower month by month. In case of selling lill and payout, it will be hundreds of thousands of USD, it is such big money that they will for sure do anything to take their profit.  

I think this problem kills whole idea, lets disable karm payout and allow only karm to karmashares exchanging, otherwise we will cry later a lot.

[kosmost]

I moved a large portion of my Karm from Mintpal to my qt-wallet a week ago. So if I hold them over 30 days, am I considered to have Karmashare? Do I have to move the rest of Karm from Mintpal? Asking your opinions. Thanks

You would be considered to also be owning a percentage of the LLC, through share points. Right now the minimum is 10 million coins, and 30+ days for holding for that quarter. (Holding only 30 days would be about 33% of the quarter's share of profits)

Hope this answers your question.

[kosmost]

Yup, but you still do not get what I am talking about.  Anyone who hold KARM for 30 days is eligable for payout. What I am telling is, exchanges have probably 30-50% of all KARM coins in their wallets. There is no way how to distingvish between my personal wallet and the wallet owned by exchanges. So exchanges can have for example 1000 cold wallets and in every wallet 30 million KARM. And they can ask for payout, since they are holding coins of other people on their wallets. There is no way how to find out which wallets are owned by exchanges and which are owned by people. So this means, the idea was to pay KARM belivers and KARM holders. But the fact is, biggest KARM holders are exchanges, they hold people's coins. They will ask for payout thanks to the coins they do not own, but they hold them. Do you understand what I am talking about? They will get payout using others people KARM.

OK there is no 100% fool proof method for determining which wallets are exchange wallets and which are personal.. but just by looking at the addresses it should be pretty easy to determine which ones are likely to be owned by exchanges.. just by the size and sheer number of transactional volume they generate.

the thing about exchanges is that their wallets are always in flux so the coins are unlikely to stay in one address for more than 30 days unless they are moved into cold storage.

the other thing to consider is that in order to claim your karmashares you have to actually send a signed message from your wallet.
this means that someone in the exchange would have to sign with the cold wallet + their email address to claim the karmashares.
access to cold wallets (even for employees) is something that most exchanges do not allow for obvious reasons.

also if anyone was discovered cheating then their karmashares could easily be voided.

so you are right when you say there is no way to guarantee that an exchange isn't cheating and claiming Karmashares, but given the circumstances I would say that it is highly unlikely that they would or could do it easily and even if they did, it would be quite easy to spot and remove them from the list of karmashares holders. (because the Karmashares list is controlled by Karmashares LLC)


as far as an exchange getting a payout using someone else's money is concerned.
technically this is not possible because when you send your money to an exchange it is not your money anymore so you don't have any rights to claim karmashares with it anyway.

I think this is the key point about Exchanges and Crypto currency that most people do not understand... if you don't control the private Key.. the money is not yours.

All the coins you think you own on an exchange are just IOUs and you hope (and sometimes pray) that when you want to withdraw those coins the exchange will actually honor those IOUs and give you coins in return. Most people do not realize that.
Just like in a casino, those plastic exchange tokens aren't worth anything until the exchange gives you real coins when you request a withdraw.

1. Cryptsy is well known for earning POS revenue on coins they not own. They are earning really lot of money on that. They stake them and most of them dump. There was even situation when they forced dev of coin to change from POW to POS. There is no reason to believe they will not take their opportunity to cash their KARM revenue. I am 100% sure every other exchange does the same.

2. The official KarmaShares conditions does not say anything like exchanges can't stake their coins. So if some coins holders are paid and some are not, those rejected can easily ask for payout by putting this issue on court. This will break the law.

3. There is no way how to detect cold storage wallets, number of transactions is low and there can be thousands of them. Screenshots will not help, it is very easy to import such wallet to windows official wallet on PC

4. There is nothing stoping exchange owner from using fake ID, or his personal ID, ID of a friend. We are talking about 30-50% of all KARM coins, it is naive to think exchanges will not CASH out, especially now, when their income is lower and lower month by month. In case of selling lill and payout, it will be hundreds of thousands of USD, it is such big money that they will for sure do anything to take their profit.  

I think this problem kills whole idea, lets disable karm payout and allow only karm to karmashares exchanging, otherwise we will cry later a lot.

The problem here is one of ownership. Once you transfer your coins to your account at Cryptsy you have transferred ownership. Crypsty can then rightfully stake "your" coins and claim the benefits from them.

It is kind of like when you deposit money into your account. Once you do so it becomes the bank's money and the bank essentially just promises to pay it back (with additional backings, if had, by whatever authority provides insurance for the account).

This is an industry problem because of lack of centralization It sort of goes with the territory, and allows for all kinds of abuses from exchanges

[kosmost]

Is anyone interested in a poll to see how many coins people keep on exchanges, and for how long they've been kept there? (this won't be entirely accurate of course, as some will answer falsely but should be an interesting indicator)

[socoban]

Yup, but you still do not get what I am talking about.  Anyone who hold KARM for 30 days is eligable for payout. What I am telling is, exchanges have probably 30-50% of all KARM coins in their wallets. There is no way how to distingvish between my personal wallet and the wallet owned by exchanges. So exchanges can have for example 1000 cold wallets and in every wallet 30 million KARM. And they can ask for payout, since they are holding coins of other people on their wallets. There is no way how to find out which wallets are owned by exchanges and which are owned by people. So this means, the idea was to pay KARM belivers and KARM holders. But the fact is, biggest KARM holders are exchanges, they hold people's coins. They will ask for payout thanks to the coins they do not own, but they hold them. Do you understand what I am talking about? They will get payout using others people KARM.

OK there is no 100% fool proof method for determining which wallets are exchange wallets and which are personal.. but just by looking at the addresses it should be pretty easy to determine which ones are likely to be owned by exchanges.. just by the size and sheer number of transactional volume they generate.

the thing about exchanges is that their wallets are always in flux so the coins are unlikely to stay in one address for more than 30 days unless they are moved into cold storage.

the other thing to consider is that in order to claim your karmashares you have to actually send a signed message from your wallet.
this means that someone in the exchange would have to sign with the cold wallet + their email address to claim the karmashares.
access to cold wallets (even for employees) is something that most exchanges do not allow for obvious reasons.

also if anyone was discovered cheating then their karmashares could easily be voided.

so you are right when you say there is no way to guarantee that an exchange isn't cheating and claiming Karmashares, but given the circumstances I would say that it is highly unlikely that they would or could do it easily and even if they did, it would be quite easy to spot and remove them from the list of karmashares holders. (because the Karmashares list is controlled by Karmashares LLC)


as far as an exchange getting a payout using someone else's money is concerned.
technically this is not possible because when you send your money to an exchange it is not your money anymore so you don't have any rights to claim karmashares with it anyway.

I think this is the key point about Exchanges and Crypto currency that most people do not understand... if you don't control the private Key.. the money is not yours.

All the coins you think you own on an exchange are just IOUs and you hope (and sometimes pray) that when you want to withdraw those coins the exchange will actually honor those IOUs and give you coins in return. Most people do not realize that.
Just like in a casino, those plastic exchange tokens aren't worth anything until the exchange gives you real coins when you request a withdraw.

1. Cryptsy is well known for earning POS revenue on coins they not own. They are earning really lot of money on that. They stake them and most of them dump. There was even situation when they forced dev of coin to change from POW to POS. There is no reason to believe they will not take their opportunity to cash their KARM revenue. I am 100% sure every other exchange does the same.

2. The official KarmaShares conditions does not say anything like exchanges can't stake their coins. So if some coins holders are paid and some are not, those rejected can easily ask for payout by putting this issue on court. This will break the law.

3. There is no way how to detect cold storage wallets, number of transactions is low and there can be thousands of them. Screenshots will not help, it is very easy to import such wallet to windows official wallet on PC

4. There is nothing stoping exchange owner from using fake ID, or his personal ID, ID of a friend. We are talking about 30-50% of all KARM coins, it is naive to think exchanges will not CASH out, especially now, when their income is lower and lower month by month. In case of selling lill and payout, it will be hundreds of thousands of USD, it is such big money that they will for sure do anything to take their profit.  

I think this problem kills whole idea, lets disable karm payout and allow only karm to karmashares exchanging, otherwise we will cry later a lot.

The problem here is one of ownership. Once you transfer your coins to your account at Cryptsy you have transferred ownership. Crypsty can then rightfully stake "your" coins and claim the benefits from them.

It is kind of like when you deposit money into your account. Once you do so it becomes the bank's money and the bank essentially just promises to pay it back (with additional backings, if had, by whatever authority provides insurance for the account).

This is an industry problem because of lack of centralization It sort of goes with the territory, and allows for all kinds of abuses from exchanges

Yes, you give them ownership. But the original idea was to reward holders and KARM believers, not to pay exchanges. If exchanges will claim their profit, they will claim all their coins. Many people will not claim profit even they have right for that. So it is possible exchanges will get almost all the profit paid to coin holders, since many human holders will not claim.

[KarmaKaguy]

Is anyone interested in a poll to see how many coins people keep on exchanges, and for how long they've been kept there? (this won't be entirely accurate of course, as some will answer falsely but should be an interesting indicator)

I would be interested. This might also rise awareness....

[Alphi]

Yes, you give them ownership. But the original idea was to reward holders and KARM believers, not to pay exchanges. If exchanges will claim their profit, they will claim all their coins. Many people will not claim profit even they have right for that. So it is possible exchanges will get almost all the profit paid to coin holders, since many human holders will not claim.

I think you are continually missing the point.

1) if any project was sold for 2.5 million dollars... most of that money would not go directly to Karmashares investors as a cash payout.. that would simply be a complete waste of money. there is not a company on earth that distributes all of the money from the sale of an asset to its shareholders.. not unless it was being wound up.

2) the profit sharing is controlled by karmashares.. if big amounts were going to be paid out to shareholders then its a very simple matter of due diligence to determine whether or not those shares are being held by an exchange before any money is paid out. very simple. just by looking at the Karma addresses you can tell which ones are likely used by exchanges and which are not. no need to verify email addresses no need to check ID. you can even ask your shareholders to claim their rewards by singing a transaction to prove they still control the address.


you seem to be making a mountain out of a mole hill by creating theoretical problems that do not exist yet and could easily be fixed...

YES karmashares is not 100% exploit proof just like no exchange is 100% exploit proof. but is is fault tolerant.. meaning that if something goes wrong it can be fixed very easily.

if you are so worried about exchanges claiming Karmashares then do something about it.. you are a community member, you have block explorer.. I'm sure it wouldn't take you long to write an algorithm to determine which addresses are controlled by exchanges. ill give you a hint.. very simple transactional analysis should show you based on the number of inputs and outputs. Once you have the addresses of the exchanges its a very simple matter of suspending any karmashares linked to those addresses because they did not follow the rules.

we live in the age of the blockchain where all transactions are public. This is our greatest defence against fraud.