This is delusional.

Is that the core of your argument?

Ok we are now short one on/off ramp, a rather large one, but there are more, and more are in the works as we speak.

That on/off ramp is 50% of our customer base. You have just no idea how badly this will hurt the demand for bit assets and BTS. Our market cap will drop by much more than 2M if BTER goes belly up.

2 million to buy a huge user base. You still think this will be a huge user base after this?

If BTER is put under decentralized dac-based management and cold wallet access moved to delegate controlled multisign, this will be a first in crypto history and I would be very surprised if the user base doesn't actually become bigger.

For marketing and PR we would hit most crypto news sites for sure. But is this the kind of marketing an PR we need?

Yes. 100 times Yes. Bitshares has been a marketing non-event since inception. We direly need to start to exist as something news worthy in the mind of our target customer base. Yes this will cost 20x Brian Page's yearly salary, but this will do 1000x time the effect all at once. It's not even speculation: by owning BTER, you effectively have all the altcoin community as a userbase and they'll keeping hearing about Bitshares every time they login to BTER.

We are sending out an message that a decentralised exchange fully depends on central exchanges to operate.

No, we are sending the message that we are a big player capable of acquiring companies, and have an influence in the real world. Being decentralized doesn't mean being completely cut from the real world. That's autism, not decentralization.

Seriously the reality check is on your end.

We shall see.
Hint: there is a reason why NXT almost considered a rollback last time BTER got hacked and strayed involve until a solution was found.

We have to take our losses and move on, without BTER. Nobody will care if BTER is run by a DAC, except this community.

Right, none of the thousands of altcoiners who have balances in BTER will appreciate to find out that they haven't lost their balance after all, and none of them will be interested to know that the cold wallets are becoming multisign and management is transparent, and none of the news outlet will relay that. We must definitely live in a very different reality.

Created a thread to discuss this further. Please post your replies there and let's keep this thread to discuss the evolution of the situation at BTER.
https://bitsharestalk.org/index.php?topic=14311.0

Creating a new thread to discuss this opportunity.

BTER is going to fail if not recapitalized ugently. The consequences for BitShares would be dire.
But we can save it by creating a BTER DAC and doing a crowdsale of its stake. The benefits for Bitshares are enormous. See discussion below.

Quote from: sumantso on February 16, 2015, 06:34:25 am

Quote from: klosure on February 16, 2015, 06:27:16 am

Their business is potentially worth much more than 7170 BTC and they would have no problem raising that much from a VC. 2M USD is pocket change for a VC. As a long time partner of BTER Bitshares is in a great position to close a deal first but we shouldn't ruin that opportunity by making a low ball offer.

A share dilution to support shorting 7170 bitBTC won't even affect the BTS price since the created BTS will be immediately locked in as collateral so it won't inflate the money supply.

It will need a 10% inflation at the current prices. the main issue though would be about running it. Will we be getting competent delegates to run it? BitShares is a decentralized movement and running an exchange directly doesn't seem to fit well, especially since we believe that if we are successful we won't need actual centralized exchanges.

How much of licensing they have anyway? CNY is possible through tradebts, and I doubt Bter has any USD licenses.

We can create a new DAC with 1:1 mapping of stake to real shares of the BTER company, which means that one unit of BTER stake entitles to the dividends of one unit of real BTER company shares and to one vote at the board. Thanks to that mapping, you can keep running BTER as a normal company and progressively DACify the management process as the ecosystem and management tools gets more mature. Meanwhile the shareholders can elect delegates to represent the DAC at BTER board.

Recapitalization of BTER can then be done without a share dilution. We can just organize a crowd sale of BTER shares so interested parties can invest in BTER. That way Bitshares isn't directly affected by the acquisition but still gets the benefits of having a large on/off-ramp tighly integrated in the eco-system. Holders of balances at BTER can elect to participate to the crowdsale at preferential rate and redeem BTER stake in lieue of their currency balance. This would help reducing further the pressure of the loss.

That would be a very exciting opportunity and it would feel very reassuring for BTER users to know that the exchange is now operated under tight control from a Bitshares DAC and cold wallets are controlled by delegates using multisig. For Bitshares the benefit is enormous as we can make bitAssets a central element of the trading books and ensure that bitAsset markets are getting always more liquidity until the point where the peg is so tight that we can start accepting 1:1 deposit / withdrawal between BTER balances and corresponding BitAssets.

Quote from: klosure on February 16, 2015, 06:08:43 am

Quote from: fluxer555 on February 16, 2015, 03:44:45 am

Quote from: mitao on February 16, 2015, 03:39:02 am

Why can't we bail out bter? Buy it completely as our onramp/offramp channel?

I'm guessing that would be very expensive...

7170 BTCs minus reserves if any. But then future profits could be paid as dividends to shareholders to compensate for the massive sharedilution that would be necessary to bail out BTER.
Not sure how willing shareholders would be to do such acquisition. Personnaly I would throw a bunch of money in support of the price if this happens as Bitshares would suddenly become a major player in the crypto space and it would get a very positive image for saving the day.

It won't be a 7170 BTC bailout, that money is gone. What they can expect is some compensation. Maybe they are offered some assets in lieu which entitles them to a portion of the income.

One benefit for us would be the snapshot/vested balance issue.

Their business is potentially worth much more than 7170 BTC and they would have no problem raising that much from a VC. 2M USD is pocket change for a VC. As a long time partner of BTER Bitshares is in a great position to close a deal first but we shouldn't ruin that opportunity by making a low ball offer.

You can just hold the bitAssets you want for as long as you want until you decide to cash out or trade again. Most people, however, don't see it that way. They immediately think that just because bitshares is mentioned, it's propaganda and we're trying to make them invest. They really don't need to. People need to understand they can be safe without ever having to risk investing in bitshares.

Ripple has been struggling with the very same perception problem since inception and it seems that it's a hard problem: people keep missing the forest for the tree and keep focalizing on XRP distribution although the Ripple community is putting the stress on *using* Ripple as exchange as opposed to investing in XRP. The Bitcoin community in particular seems to have a very very short attention span and a severe tentency to overreact and refuse to reassess beliefs so changing perception is near impossible.

Quote from: matt608 on February 15, 2015, 06:38:37 pm

Quote from: Empirical1.2 on February 15, 2015, 06:12:21 pm

btw, why do you have a new account?

https://bitsharestalk.org/index.php?topic=11871.msg185151#msg185151

My favourite number is 888 so I ended Empirical1.1 after 888 posts.

This leaves you exposed to impersonnification as we will now assume that Empirical1.X has to be you.
You should pre-generate Empirical1.3, 1.4 etc. to thwart that attack.

Something puzzles me in the history of Bter cold wallet transaction
http://www.walletexplorer.com/wallet/Bter.com-cold

The withdrawals from the cold wallet are all 100 BTC withdrawals with only a few very rare exceptions, all sent to the same hot wallet address. This does very much look like pre-generated pre-signed offline transactions being broadcasted as needed, save for the eventual custom offline transactions. The two transactions that happened at the time where the cold wallet was alledged to be compromised are most certainly pre-generated pre-signed transactions because to top-up 200 BTC, they didn't send a 200 BTC tx but two standard 100 BTC transactions exactly like all other transactions made in the last month.

Now, If that's the case and Bter was indeed broadcasting pre-generated pre-signed offline transactions to top-up the hot wallet, how did the cold wallet get compromised? The only two rational explanations I can see are that the transaction of 7k+ was generated and signed offline, or the private key of the cold wallet was leaked by the cold wallet operator and the balance withdrawn. Either way, looks very much like an insider job and it should be easy to find the culprit as you would expect that only a few select people would have access to the cold wallet given that production staff (actually most likely a script) can top-up by broadcasting pre-generated and pre-signed transactions.

Even more puzzling is the fact that the hot wallet wasn't actually emptied. As of now, it still has a balance of 0.01860446 BTC. Sounds very congruant with other round number withdrawals.