Author Topic: Proposal for Angelshares Investment in a DAC Trading Platform  (Read 23892 times)

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Offline Liberty

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Compliance is a noble goal, but it can't be achieved without the absence or sacrifice of worthy values.

Do not forget that we are talking about the establishment of disruptive technologies. It is interesting to see people feel it is possible to negotiate the legal and financial obstacles that are intended to block competitors. Compliance only lasts until an anointed agency changes the rules on you. You do not achieve escape velocity by following the rules but by rendering the rules moot. None of us would have heard of Bitcoin if success depended on the ability to negotiate regulatory hurdles. Bitcoin runs full speed around the hurdles because it values the ideals of liberty more than the blessings that come from kissing the ring of those that write the rules.

You are supposed to believe it is possible to disrupt established markets by playing by the rules, because otherwise you could not be stopped. The process uses your resources against you and ultimately helps your accepted master refine and enforce the rules by which you will comply. The vicious cycle ends when rules need to be made so oppressive (to restrain competition) that people finally reject the premise that they need to be ruled over. Positive change requires someone willing to avoid the obstacles to demonstrate what is possible. Freedom is when people act with knowledge that rule makers need you more than you need them and that the benefit of the rules is an illusion with fleeting value.

Sell your conformance if you think it will benefit, but mind the cost and be mindful of the bigger picture. It seems possible now that this dream started with an absence of worthy values and therefore nothing would be lost.

Offline luckybit

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I worked on a lot of issues along these lines when i began laying ground work for some of my ideas, and i was always told that it seemed as though the authorities would be making an exception, which they never like to do.

So, i have been working on a crafting the Articles of Decentralization, similar to Articles of Association which are used to define and govern how companies operate, If we have such a document then we have begun laying the foundation that Legalizes DACs.

If we have Bitshares on Board as well as 3 other DACs based in different parts of the world we can then support the "international" part of it. We will then set out to create frameworks similar to how authorities regulate normal companies, but ours will keep in mind the decentralization and privacy parts.

All this gives us a conversation point when we try to pitch our businesses to authorities and even when a bank does their KYC, we'll have structures recognizable for them to interact with. Some lucky guys in less restrictive countries will get ahead first and thier fame will help our cause in restrictive territories.

I like these ideas and I think this should be worked on. We need to at least attempt to have some formal legal recognition. I don't know what that should be just yet, but it's obvious we will need it.
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Offline domsch

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It should not be entirely AGS funded, though.  Domsch's friends in VC, other investors, etc., should be used to fund a very high percentage of the project.


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It will be funded partially by us and the AGS fund. The VC contacts will allow us to raise money 7-figures (if needed) and work on an international expansion. The AGS will help us to bootstrap this project and open up a Protoshares<->Fiat exchange, while simultaneously working on the legality and the required licenses.

Offline domsch

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i understand in the united state getting appropriate licenses will be v expensive and exhaust I3 resources. I was also thinking maybe set it up outside the states, slovenia maybe a good option not sure about taxes though, im sure we can do some good research about the location if this idea receives serious backing.

It is our intention to acquire the licenses as soon as possible. As I had mentioned in the update, we are working on obtaining the licenses right now through partnerships with companies that already possess them.  By no means am I asking for $7m in bonds here and I3 to get us a CCO.

The business will be incorporated in several locations so we can assure faster and cheaper trading. Think of it: ACH wire transfers (for the US) and SEPA (within the EU) are resolved mostly within a day and have little to no fees. International wire transfers can cost up to $35 and can take several days to resolve. Therefore it is in our focus to register the business initially in the US and EU. So think of this as Coinbase and Bitstamp combined - we are just more agile, faster and assure compliance with regulations.

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It should not be entirely AGS funded, though.  Domsch's friends in VC, other investors, etc., should be used to fund a very high percentage of the project.


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Offline Giga

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I think a DAC platform makes a ton of sense for this niche, but trying to get these licenses is a bit of a killer.  The process is arbitrary, subject to change at any time and expensive.   I support a DAC platform for trading DACs but I think it should ignore licenses because it is not a structure intended to be constrained by such licenses.
Consider that the goal isn't to attract trend setters and early adopters like us but to get to the masses.  The masses require regulation, which requires licenses and following arbitrary rules. It's the only way to get fiat into the ecosystem.

I think since the operation is centralized the main concern will be if it doesn't toe the line precisely then it will be shut down. How can you make it extremely difficult to shut down despite being centralized while also attracting the mainstream?

I think we should take a unique approach to this problem. Perhaps some sort of franchising mechanism but I don't know.

You misunderstand me.  This is a practical concern, getting those licenses and going through the processes required to achieve regulatory permission is too expensive to undertake to the point of being Moot.  Invictus could put all the money they've raised so far behind this and wait a year at least to see the result, which could still be "No".

51 of the 52 licences you mentioned are for the US. Wouldn't it be easier to not be based there? Or start up somewhere else and try to get the US licences as a second step.

I support this as a decentralized version that operates in whatever jurisdiction in the world is most advantageous to the purposes of the DAC.  If you tell me you want to spend DAC money on licenses in the US, something has gone horribly awry and we are not appreciating the flexibility a DAC grants you for things like this.

Think Bitstamp - Huge US customer base, in Slovenia

i understand in the united state getting appropriate licenses will be v expensive and exhaust I3 resources. I was also thinking maybe set it up outside the states, slovenia maybe a good option not sure about taxes though, im sure we can do some good research about the location if this idea receives serious backing.

Offline Pocket Sand

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Liquidity drives value for any crypto currency and this is something we'll need for protoshares and definitely bitshares, in my opinion this is an ideal project to use angelshares funding for.

Offline AdamBLevine

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I think a DAC platform makes a ton of sense for this niche, but trying to get these licenses is a bit of a killer.  The process is arbitrary, subject to change at any time and expensive.   I support a DAC platform for trading DACs but I think it should ignore licenses because it is not a structure intended to be constrained by such licenses.
Consider that the goal isn't to attract trend setters and early adopters like us but to get to the masses.  The masses require regulation, which requires licenses and following arbitrary rules. It's the only way to get fiat into the ecosystem.

I think since the operation is centralized the main concern will be if it doesn't toe the line precisely then it will be shut down. How can you make it extremely difficult to shut down despite being centralized while also attracting the mainstream?

I think we should take a unique approach to this problem. Perhaps some sort of franchising mechanism but I don't know.

You misunderstand me.  This is a practical concern, getting those licenses and going through the processes required to achieve regulatory permission is too expensive to undertake to the point of being Moot.  Invictus could put all the money they've raised so far behind this and wait a year at least to see the result, which could still be "No".

51 of the 52 licences you mentioned are for the US. Wouldn't it be easier to not be based there? Or start up somewhere else and try to get the US licences as a second step.

I support this as a decentralized version that operates in whatever jurisdiction in the world is most advantageous to the purposes of the DAC.  If you tell me you want to spend DAC money on licenses in the US, something has gone horribly awry and we are not appreciating the flexibility a DAC grants you for things like this.

Think Bitstamp - Huge US customer base, in Slovenia
Email me at adam@letstalkbitcoin.com

Offline domsch

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I worked on a lot of issues along these lines when i began laying ground work for some of my ideas, and i was always told that it seemed as though the authorities would be making an exception, which they never like to do.

So, i have been working on a crafting the Articles of Decentralization, similar to Articles of Association which are used to define and govern how companies operate, If we have such a document then we have begun laying the foundation that Legalizes DACs.

If we have Bitshares on Board as well as 3 other DACs based in different parts of the world we can then support the "international" part of it. We will then set out to create frameworks similar to how authorities regulate normal companies, but ours will keep in mind the decentralization and privacy parts.

All this gives us a conversation point when we try to pitch our businesses to authorities and even when a bank does their KYC, we'll have structures recognizable for them to interact with. Some lucky guys in less restrictive countries will get ahead first and thier fame will help our cause in restrictive territories.

This project will lay the foundation of DAC's and their relations with legal entities. Not only will we do research and testing with this to help design the functionality and usage of DAC's, but we will also help get everything sorted about the legality, which is still a huge problem that needs to be solved.


Offline domsch

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Sounds like a good thing to have.

How much funding would you want to have from the Angelshares? And when? What is the total capital needed?

51 of the 52 licences you mentioned are for the US. Wouldn't it be easier to not be based there? Or start up somewhere else and try to get the US licences as a second step.

Still in discussion about the exact amount. The purpose of this thread is to get the support of the community. Details about the amount will be announced in a follow-up thread/post. I'll have to discuss this thoroughly with Dan/Invictus.

As I had mentioned, getting the licenses is the second step and we do not require them initially to get the platform of PTS<->Fiat started.

Offline barwizi

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I worked on a lot of issues along these lines when i began laying ground work for some of my ideas, and i was always told that it seemed as though the authorities would be making an exception, which they never like to do.

So, i have been working on a crafting the Articles of Decentralization, similar to Articles of Association which are used to define and govern how companies operate, If we have such a document then we have begun laying the foundation that Legalizes DACs.

If we have Bitshares on Board as well as 3 other DACs based in different parts of the world we can then support the "international" part of it. We will then set out to create frameworks similar to how authorities regulate normal companies, but ours will keep in mind the decentralization and privacy parts.

All this gives us a conversation point when we try to pitch our businesses to authorities and even when a bank does their KYC, we'll have structures recognizable for them to interact with. Some lucky guys in less restrictive countries will get ahead first and thier fame will help our cause in restrictive territories.
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Offline Markus

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Sounds like a good thing to have.

How much funding would you want to have from the Angelshares? And when? What is the total capital needed?

51 of the 52 licences you mentioned are for the US. Wouldn't it be easier to not be based there? Or start up somewhere else and try to get the US licences as a second step.






Offline domsch

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I think since the operation is centralized the main concern will be if it doesn't toe the line precisely then it will be shut down. How can you make it extremely difficult to shut down despite being decentralized while also attracting the mainstream?

Sadly, I do not have a straight answer for a "Contingency Mechanism" as of now. This project will try it's best to comply with the law and stay up to date on any new laws/hearings to not cause any surprises that will lead to a shut down.

I'll discuss the details on a corporation umbrella with my lawyers when I meet him next week. As of now it is still not clear where to base the main-company but we'll find a proper solution to the problem.

Offline domsch

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I think a DAC platform makes a ton of sense for this niche, but trying to get these licenses is a bit of a killer.  The process is arbitrary, subject to change at any time and expensive.   I support a DAC platform for trading DACs but I think it should ignore licenses because it is not a structure intended to be constrained by such licenses.

I have talked with a few of my VC contacts and they said that this is still just testing new and unproved grounds. But they did show their interest in joining this with financial help if we show traction and prove the business model.

Owning all the licenses is not needed initially and we can open up the PTS<->Fiat without them (similar to Coinbase). But actually acquiring the licenses will be a long process that asks for patience from all parties. Even if we meet all requirements, it takes several months to get all them in each state. Obviously it will be quite risky since the concept of crypto-currencies and DAC's is still very new to governments and more, clear regulations are yet to come. But see in us as a warrior at the front, that tries to influence decisions and fight for the better.


As luckybit had mentioned, something like this is required to approach the masses. This will be the easy to use solution for them to join something revolutionary. Everyone with fiat will get the chance to opt-in and participate without much hassle. Therefore I think that licenses are required, to set something up that complies with the law and has trading open for everyone.


Setting something like this up and managing it is very resource and time intensive - that's why I don't think that Invictus can pull this off on their own.
« Last Edit: January 11, 2014, 11:37:22 am by domsch »

Offline Giga

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I've been a vocal supported of a USD-->Protoshares/Bitshares service + secure web wallets. This is very important to insure mainstream adoption and continued success of Bitshares on the long run.

right now process of converting usd-->BTC--->Proto is time consuming, lots of loss with fees etc and complicated for the average user.