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Author Topic: [GLBSE] BDT - 3% weekly interest bond, backed by Bitdaytrade  (Read 51656 times)
Meni Rosenfeld
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July 15, 2012, 12:54:50 PM
 #1

Update: Alberto is currently in default of his obligations.

tl; dr: Every BDT bond will have a face value of 1 BTC and will pay a weekly coupon of 3%. The funds raised will be used for the development of the margin trading platform Bitdaytrade. The IPO will be on July 19 2012, and initially a total of 10,000 bonds will be offered.

https://glbse.com/asset/view/BDT

Introduction. Bitdaytrade is a margin trading platform developed and owned by Alberto Armandi, where CFDs (contracts for difference) can be traded on the price of BTC and gold (BTC/USD is in closed beta), and in the future other assets. The platform is already up and running, but there is still much work to be done; to cover the cost of bringing it to the next level, Alberto is issuing bonds on GLBSE that will pay 3% weekly interest. A total of 8,950 BTC is expected to be raised with this offering.

Operation. The bonds will have a face value of 1 BTC and will be sold to the public at that price. Every week on Friday, at 20:00 GMT, bondholders will receive a coupon of 0.03 BTC per bond. The bonds do not have an expiration date.

If the coupon is not paid on time, a bonus of 0.001 BTC (1 mBTC) per bond will be paid for each calendar day between the scheduled date and the actual payment date. The delay will in no circumstance be longer than 2 weeks.

This is a callable bond. The issuer has the right to buy back all bonds for 1.2 BTC per bond (120% of face value).

The issuer, Alberto Armandi, is responsible for abiding by the terms of the contract.

IPO details. 10,000 bonds will be initially issued, with a total face value of 10,000 BTC. The IPO will be at July 19 2012 at 9:00 UTC.

1,000 bonds will be given to Bitdaytrade partners.

Up to 1,000 bond will be put up for pre-IPO sale. They will be sold at a 5% discount for 0.95 BTC each. This is only available to investors buying at least 100 bonds. Send me a PM to reserve your spot. (Sold out)

The scheduled coupons will be paid starting July 27. On July 20 a coupon of 0.005 BTC per bond will be paid as it is only one day after the IPO.

Update: All pre-IPO bonds have been reserved. Any further requests will be placed on a waiting list to be served if any of the first comers backs out.

Analysis. Unlike a deposit program, bondholders do not have the right to sell back the bonds for their face value; the capital will be used for both upfront payments and reserves, and bitdaytrade cannot commit to having the entire face value of the bonds on call.

However, the issuer does not have a right to change the interest rate. The coupons will be 0.03 BTC per week for as long as the bond is held; the bondholder has a guaranteed perpetual ROI, even if the typical interest rates in the Bitcoin lending market go down.

The issuer does have the right to buy back bonds (which he may do in conjunction with offering new bonds at a lower interest rate), but only by compensating bondholders with almost 7 weeks' worth of interest.

Since the issuer can buy back bonds for 1.2 BTC at any time, it is not advised to bid more than that on a bond in the secondary market.

Please note that the details of this IPO are significantly different from what was planned last month.

Contact information.

Alberto Armandi - Issuer
Email: info@bitdaytrade.com
GTalk: alberto.armandi@gmail.com
Forum: bitdaytrade
Linkedin: http://www.linkedin.com/profile/view?id=41459791

Meni Rosenfeld - IPO manager
Email: glbse@menirosenfeld.com
Forum: Meni Rosenfeld
Linkedin: http://www.linkedin.com/profile/view?id=99439111

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Meni Rosenfeld
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July 15, 2012, 12:55:20 PM
 #2

FAQ

What is your (Meni Rosenfeld) role in this?
I am the IPO manager. I am designing the IPO, consulting for the issuer on matters regarding Bitcoin, GLBSE and the forum, and am the contact for any inquiries by potential investors. I am also in charge of looking into the issuer's background and sharing my impressions with the public. I have no involvement in the operations of Bitdaytrade itself other than as a consultant and creditor.

How did you come to be the IPO manager?
As some of you know, Alberto originally intended to make an IPO with DeaDTerra as the manager, but that didn't pan out due to dissatisfaction with delays in an unrelated project developed by Alberto (Bitcoinrebate, which has since been successfully completed). At that time I approached Alberto as a potential investor, and he offered me to take this role.

I believe it is vital to have a way for everyone to choose their desired BTC position regardless of the amount of bitcoins they physically hold, so being involved in the development of a margin trading platform is definitely something I am interested in. Alberto also offered to generously compensate me for my services, so I accepted.

Why was the IPO delayed?
When I assumed the position of IPO manager I noticed there are problems with some of the terms of the intended contract, and it would cause chaos if the IPO went forward without a cooldown period to make the necessary changes. Also, I wanted to take some time to look into Alberto's background before becoming publicly associated with him.

How can I be sure the contract will be upheld? Are you offering a personal commitment to cover Alberto's obligations in case he fails to do so?
No, the only one offering a personal obligation is Alberto. I don't make a habit of giving a $70K obligation for things that are outside my control.

However, over the past 3 weeks I have done an extensive due diligence process. I talked with Alberto about many things and I am confident he is committed to making bitdaytrade work, and even if it fails, to pay back every last satoshi of debt, bringing to the table his personal assets if necessary (of which he has enough to cover his obligations). He is also committed not to have the kind of security negligence we have seen in Bitcoinica.

I have documents verifying his identity, and I have confirmed his address by sending a physical letter. I have looked at his business plan, and while it has some challenging goals, overall it makes sense.

More details about him can be found in his Linkedin profile. Alberto has had some unsuccessful ventures in the past, but he is learning from the mistakes he made.

I can respond to additional queries via this thread or PMs. But I would like to emphasize again that it is every investor's responsibility to assess his own trust in Alberto.

What will the capital raised be used for?
Bitdaytrade is a margin trading platform now offering gold trading and which will soon expand to BTC/USD and possibly other assets. The money raised by issuing BDT bonds will be used for all aspects of developing Bitdaytrade, including:
 - Security consultation, software and auditing
 - Servers and infrastructure
 - Design and branding
 - Marketing and advertising
 - Reserves for trading

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July 15, 2012, 12:56:39 PM
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(reserved)

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July 15, 2012, 01:01:12 PM
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I hope the site has less bugs than has been seen so far with bitcoinrebate.

Good luck.

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July 15, 2012, 04:03:25 PM
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I don't see this issue listed under the IPOs coming out on GLBSE.

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July 15, 2012, 04:51:10 PM
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I don't see this issue listed under the IPOs coming out on GLBSE.
This asset previously existed and Nefario disabled it manually, so we are waiting for him to relist it. I will link to it when he does.

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July 15, 2012, 05:03:07 PM
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Have you used Bitdaytrade much, Meni? Is it stable?

Up to 1,000 bond will be put up for pre-IPO sale. They will be sold at a 5% discount for 0.95 BTC each. This is only available to investors buying at least 100 bonds. Send me a PM to reserve your spot.

What is the purpose of a discount like this?

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July 15, 2012, 05:27:20 PM
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Have you used Bitdaytrade much, Meni? Is it stable?
I've used it a bit. There were a few bugs that needed fixing but it's working fine. Some more testing, as well as an external security review, will need to be done before it can be considered stable. Until then Alberto will limit activity (by restricting access to the more popular BTC/USD trading and/or limiting the size of positions) to keep any flaws that might turn up on a manageable scale.

Up to 1,000 bond will be put up for pre-IPO sale. They will be sold at a 5% discount for 0.95 BTC each. This is only available to investors buying at least 100 bonds. Send me a PM to reserve your spot.
What is the purpose of a discount like this?
It helps assess and build up demand, and gives earlier surety that at least a minimal number of bonds will be sold. It also gives an opportunity to be in touch with some of the more dedicated investors. It's not essential to do this, but it's fairly popular here and there's no real reason not to.

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July 15, 2012, 10:30:14 PM
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Bitcoinrebate, which has since been successfully completed

Just checked (malware) when I read this line and it's hung at this moment. The service is still intermittent and for no particularly "challenging" reason; bugs that I've encountered so far have been unbelievably lame. Since Bitdaytrade is a much more advanced platform, and with what happened with Bitcoinica even in the hands of experts I recognize, I think I'll wait until I see BDT functioning properly and start getting my dividends from REBATE.
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July 15, 2012, 10:43:52 PM
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Bitcoinrebate depends on several factors outside our control, thus coins auctions are sometimes unavailable. All bugs have been fixed since, if you are still facing technical glitches, please email support@(malware) ; bonds payment will start for rebate as well.
We hope to be making a difference in the bitcoin business, our primary aim and goal is to bring it to a next level. We do recognize this is outside our ability without a proper investment in terms of money and resources, hence the reason of this fund raising operation. Things like what we witnessed in the past won't be in the sphere of reality at all. If you want to know specifics, feel free to ask anything.
Thank you
Alberto Armandi

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July 15, 2012, 11:26:56 PM
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coins auctions are sometimes unavailable

Then it shouldn't hang displaying "13 seconds" when that's the case. Smiley

Things like what we witnessed in the past won't be in the sphere of reality at all. If you want to know specifics, feel free to ask anything.

You have detailed how you store passwords in your FAQ section. Can you give more detail about security practices in other areas, to the extent that you safely can?
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July 16, 2012, 12:20:37 AM
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coins auctions are sometimes unavailable

Then it shouldn't hang displaying "13 seconds" when that's the case. Smiley

Things like what we witnessed in the past won't be in the sphere of reality at all. If you want to know specifics, feel free to ask anything.

You have detailed how you store passwords in your FAQ section. Can you give more detail about security practices in other areas, to the extent that you safely can?


The hang was probably just temporary. We usually display some notice when auctions are not available.
About bitdaytrade security, as a starter, the server will be a dedicated machine housed in a safe data center, a car drive away from my office.
Access control is practiced beyond redundancy levels at said data center. Cameras record and store a video of any physical access to the machine, shall it be eventually required, and i'll be able to access the server room 24/7 using a security badge and providing identification at the entrance. We'll also be able to monitor/manage the machine remotely. We will hire a security consultant ( with great track record in the industry ) to review/fix any security issue on our code or practices. We will make use of intrusion detection systems at the network and application level, more so we will conduct regular penetration testing with the latest commercially available exploit databases. As per the Bitcoins, we will store everything we can in a offline wallet with no internet access at all and the trading shall be executed on a different machine, which won't run any web server or daemon, but a dedicated custom server app, which will be also audited and tested properly as described above. It is much harder to exploit a custom application for which the source code is unknow. It requires reverse engineering of the protocols and encryption first, and then an attacker needs to be able to find an exploitable hole, and write actual code to execute the break-in. All this work is stripped out if you just run a popular daemon, such as apache for example, as exploits are available on the interwebs, and as such, it is a big security problem. On top of this, we are already running regular redundant backups of all data which is being processed by our application. Any further question ? Thank you for your attention.

Alberto Armandi

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July 16, 2012, 01:50:07 AM
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Do you use other exchanges to provide liquidity the same way bitcoinica did ? If so are all your accounts 2 factor protected ?

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July 16, 2012, 02:47:12 AM
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Thank you for the detailed reply, I appreciate it.

the server will be a dedicated machine housed in a safe data center

Sorry if I misunderstood, but the IPO is within 3 days. Has the service already moved to that data center? Will everything be in place in time?
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July 16, 2012, 03:29:37 AM
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Thank you for the detailed reply, I appreciate it.

the server will be a dedicated machine housed in a safe data center

Sorry if I misunderstood, but the IPO is within 3 days. Has the service already moved to that data center? Will everything be in place in time?


No problems. The answer is no, the service is still running in a virtual machine located in a hosted server at the moment.  About one week after the IPO date we will be moving everything to the new location and setting up the new said standards. Funds raised via pre-IPO and IPO are and will be kept in a secure location and offline.

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July 16, 2012, 03:43:04 AM
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Do you use other exchanges to provide liquidity the same way bitcoinica did ? If so are all your accounts 2 factor protected ?
Yes, Mt. Gox is used, the account uses 2-factor authentication and the API key has no withdraw access.

the server will be a dedicated machine housed in a safe data center
Sorry if I misunderstood, but the IPO is within 3 days. Has the service already moved to that data center? Will everything be in place in time?
The IPO is to raise the funds needed to properly secure the site (and other things). Launching the site fully will not coincide with the IPO.

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July 18, 2012, 06:28:57 PM
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Hmm. I have concerns about this in the ToS:

Quote
Bitdaytrade reserves the right to suspend the operation of this site or any part or sections of it. In such an event, Bitdaytrade may, at its sole discretion (with or without notice), close out the customers` open trades at prices it considers fair and reasonable at such a time and no claims may be entertained against the Company in connection thereto.

I was interested in this service, but I'm not interested in having positions closed arbitrarily. I've had this happen with another, now defunct, leveraged trading platform, and really don't care to repeat the experience.

Also, it would be my suggestion that you find a way to insure yourself against loss - I cannot see putting my money into yet another trading site that has insufficient backing to cover unexpected thefts or other losses. What is my protection from the site running off with my funds if I use it? (AFAICT, there are no trading sites that offer protection for the traders, and this is making it more difficult to want to place any funds with those sites)

Raising enough funds to complete the site and it's security seems insufficient.

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July 18, 2012, 07:21:02 PM
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Hmm. I have concerns about this in the ToS:
Quote
Bitdaytrade reserves the right to suspend the operation of this site or any part or sections of it. In such an event, Bitdaytrade may, at its sole discretion (with or without notice), close out the customers` open trades at prices it considers fair and reasonable at such a time and no claims may be entertained against the Company in connection thereto.

I was interested in this service, but I'm not interested in having positions closed arbitrarily. I've had this happen with another, now defunct, leveraged trading platform, and really don't care to repeat the experience.
I'm not sure what exactly you're complaining about. What is supposed to happen if the company closes shop? You'll keep a position in a platform that doesn't exist? It's perfectly fair to liquidate positions at the price relevant to the time of closing, perhaps at a rate tweaked at the customer's favor.

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July 18, 2012, 09:23:53 PM
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I'm not sure what exactly you're complaining about. What is supposed to happen if the company closes shop? You'll keep a position in a platform that doesn't exist? It's perfectly fair to liquidate positions at the price relevant to the time of closing, perhaps at a rate tweaked at the customer's favor.

I think the term should be more specific about the rate part, and it shouldn't happen without notice. If it's without notice, customers with positions in the negative should be compensated to a certain degree, and the numbers need to be specified in the contract.
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July 19, 2012, 09:49:28 AM
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The bonds are now being sold - you can buy at https://glbse.com/asset/view/BDT.

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