Author Topic: Potential new member for BitShares Exchange Network, if only...  (Read 7293 times)

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Offline BunkerChainLabs-DataSecurityNode

Re: Potential new member for BitShares Exchange Network, if only...
« Reply #45 on: October 05, 2015, 04:22:24 am »

Obvious answers that were probably already considered... coinbase, circle, itbit maybe paypal.  Circle would be the best since they are now allowed to hold USD.

I agree Circle is the best option. There withdrawal limits are $3000 weekly for bank accounts and they don't charge transaction fees, although an ACH fee is really only about $0.15.

Humor me here, what would a pitch to circle look like? What would be their incentive (in the grand scheme of things?)  I'm genuinely curious.

Circle is doing everything they can to make a gateway for bitcoin (cryptocurrencies) and have people using bitcoin (crypto currencies) without them realizing that they are. They have in the past year created the best gateway for that purpose. Aside from the speed of Bitcoin transactions the real problem that they have in garnering more adoption is that bitcoin is a commodity. So even though Circle now has USD accounts, when a user sells bitcoin for usd they are supposed to keep track of and report any gains or losses. Using bitusd would allow for the user to use cryptocurrencies without worrying about reporting requirements. Also bitassest markets are privatized, so not only can they control the market and but also accrue revenue from trading fees.

What do you mean by the bold part? Why would you want that?


I mean that if you want to go from bitusd to usd you there are no tax implications, if you go from bitcoin to usd there are. the former is more convenient than the latter.

I would recommend against that.. but regardless it makes a point for why you don't want to have such processing associated with bitcoin. Most of the suggestions here have been to use bitcoin 3rd parties that are doing what I am developing for bitshares atm.. and what CCEDK will be doing also for the euro market. Maybe someone else is working on something though.
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Re: Potential new member for BitShares Exchange Network, if only...
« Reply #46 on: October 05, 2015, 04:26:16 am »


I would recommend against that.. but regardless it makes a point for why you don't want to have such processing associated with bitcoin. Most of the suggestions here have been to use bitcoin 3rd parties that are doing what I am developing for bitshares atm.. and what CCEDK will be doing also for the euro market. Maybe someone else is working on something though.

Recommend against what?

Offline BunkerChainLabs-DataSecurityNode

Re: Potential new member for BitShares Exchange Network, if only...
« Reply #47 on: October 05, 2015, 04:43:58 am »


I would recommend against that.. but regardless it makes a point for why you don't want to have such processing associated with bitcoin. Most of the suggestions here have been to use bitcoin 3rd parties that are doing what I am developing for bitshares atm.. and what CCEDK will be doing also for the euro market. Maybe someone else is working on something though.

Recommend against what?

It depends on where you live really.. but treating bitUSD without tax implications is what I meant. I don't recommend it. Consider the very real possibility that when/if a tax regulation gets set down in bitUSD that they back date it to when bitUSD was created for where you live. Sure it is not easy for them to find out just how much you have/had.. but either way you are not going to enjoy the auditing. It is often easier in situations where regulations don't exist to operate as though they do. In some rare cases.. it spares real regulation coming down.
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Offline Murderistic

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Re: Potential new member for BitShares Exchange Network, if only...
« Reply #48 on: October 05, 2015, 05:06:40 am »

Obvious answers that were probably already considered... coinbase, circle, itbit maybe paypal.  Circle would be the best since they are now allowed to hold USD.

I agree Circle is the best option. There withdrawal limits are $3000 weekly for bank accounts and they don't charge transaction fees, although an ACH fee is really only about $0.15.

Humor me here, what would a pitch to circle look like? What would be their incentive (in the grand scheme of things?)  I'm genuinely curious.

Circle is doing everything they can to make a gateway for bitcoin (cryptocurrencies) and have people using bitcoin (crypto currencies) without them realizing that they are. They have in the past year created the best gateway for that purpose. Aside from the speed of Bitcoin transactions the real problem that they have in garnering more adoption is that bitcoin is a commodity. So even though Circle now has USD accounts, when a user sells bitcoin for usd they are supposed to keep track of and report any gains or losses. Using bitusd would allow for the user to use cryptocurrencies without worrying about reporting requirements. Also bitassest markets are privatized, so not only can they control the market and but also accrue revenue from trading fees.
That is essentially what Max and I have been trying to do for the last two years, along with Stan, Dan, & a few other people we've been working on relationships and development.

 This is pretty much coming to a head, because this last option is all we need. It won't be the prettiest to start with but with a partner like this we can get it done.

Offline Pheonike

Re: Potential new member for BitShares Exchange Network, if only...
« Reply #49 on: October 05, 2015, 08:30:59 am »

Maybe checkout some payday lenders. 

Offline lovejoy

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Re: Potential new member for BitShares Exchange Network, if only...
« Reply #50 on: October 05, 2015, 04:01:13 pm »

Obvious answers that were probably already considered... coinbase, circle, itbit maybe paypal.  Circle would be the best since they are now allowed to hold USD.

I agree Circle is the best option. There withdrawal limits are $3000 weekly for bank accounts and they don't charge transaction fees, although an ACH fee is really only about $0.15.

Humor me here, what would a pitch to circle look like? What would be their incentive (in the grand scheme of things?)  I'm genuinely curious.

Circle is doing everything they can to make a gateway for bitcoin (cryptocurrencies) and have people using bitcoin (crypto currencies) without them realizing that they are. They have in the past year created the best gateway for that purpose. Aside from the speed of Bitcoin transactions the real problem that they have in garnering more adoption is that bitcoin is a commodity. So even though Circle now has USD accounts, when a user sells bitcoin for usd they are supposed to keep track of and report any gains or losses. Using bitusd would allow for the user to use cryptocurrencies without worrying about reporting requirements. Also bitassest markets are privatized, so not only can they control the market and but also accrue revenue from trading fees.

So what you're suggesting as a benefit to circle is that bitusd would potentially present less or no tax burden.  I'm completely out of my depth here but if bitusd was treated as a commodity, under a 2.0 scheme with a possible bitusd floor of $1.0 and a market driven premium of perhaps 1.01 - 1.15 there may yet exist slight capital gains opportunity for operators working with a large enough volume. 

Beyond the potential benefits of bitusd from a tax standpoint, what other advantages to circle, or a similar entity, exist in using bitshares 2.0 as opposed to bitcoin / USD?   What's the sweet deal we have to offer our as of yet unidentified ACH processor partner?  There has to be one or we're not going to get the partnership, especially not if we seem like we're going to thank them and then eat their lunch.
« Last Edit: October 05, 2015, 04:03:37 pm by bitscape »

Offline luckybit

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Re: Potential new member for BitShares Exchange Network, if only...
« Reply #51 on: October 05, 2015, 09:40:34 pm »
The touch point when it comes to ACH is the delay.

ACH is cheaper because its slower.

It's like attaching a Lamborghini Huracán to a horse and buggy. You can all figure out which one in my analogy is the Huracán. :)

The 'good news' is that only recently (like a few months ago) they have moved to some transactions being processed 'same day'. Still a bit of a contrast to our 1 second block time. :)

There are two elements to this.. you need an ODFI and an Operator.

What you want 'ideally' so we can wack the buggy, set the horse free, and put a Lamborghini Veneno along side the Huracán is to have the ODFI and Operator to be one and the same... because ultimately its the clearing house that will determine the speed it gets to the RDFI.

Currently there are only a few Operators used by everyone and thus impacts the timing.

This is going to put the ODFI/Operator to the the BitShares network in a liability position that needs to be handled correctly, not just for compliance, but for security. Keep in mind when the banks mess up, they just need to make some phone calls to whom ever was on the other end and reverse the mistake. In interfacing with BitShares though.. that's not an option.. and that creates a significantly higher risk profile. Which is why so many of the current solutions work with mega delay. HOWEVER... we are anticipating a solution that could be engineered to minimize this liability thanks in part to some 2.0 features coupled with a little more engineering on our part. We cannot confirm any of this of course until we got 2.0. :)

You also have to consider the costs. It will double up on the transaction charges since there will be BitShares charging and then the ACH processing.

Not saying it can't be done or it will be too expensive.. just depends what degree of service will be expected and how much it will take to deliver on it.

I only know all this because of the work we are doing in regards to what BunkerDEX is offering and our Rewards and another yet announced product.

I am not saying that we have the final solution 'now'... but I am working on it. There are some creative ways this can be accomplished.

This will be necessary in the mean time until we can close the loop (ie. all transactions in the DEX).

FYI ACH includes US, it's territories, and Canada.

I am sure you got lots of peeps to talk with now Stan... but I would be happy to help out however I can if the need arises.

@Shentist - Yes.. ACH is US own inter-bank transfer system.. while most of the rest of the world uses SWIFT. Kinda like how we all use metric and US still uses imperial :) Canadian banks use SWIFT also.. so Canada is uniquely positioned to be able to talk to both networks and provide BitShares on/off ramp for both... and nuclear bunker hardened security to boot if we have anything to do with it. :)

Oh and Holy Shanaynay this is awesome! :D

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Offline Pheonike

Re: Potential new member for BitShares Exchange Network, if only...
« Reply #52 on: October 06, 2015, 04:28:33 am »

How about Simple Bank. They are online only. 

https://www.simple.com/

Offline fuzzy

Re: Potential new member for BitShares Exchange Network, if only...
« Reply #53 on: October 06, 2015, 05:01:13 am »


I would recommend against that.. but regardless it makes a point for why you don't want to have such processing associated with bitcoin. Most of the suggestions here have been to use bitcoin 3rd parties that are doing what I am developing for bitshares atm.. and what CCEDK will be doing also for the euro market. Maybe someone else is working on something though.

Recommend against what?

It depends on where you live really.. but treating bitUSD without tax implications is what I meant. I don't recommend it. Consider the very real possibility that when/if a tax regulation gets set down in bitUSD that they back date it to when bitUSD was created for where you live. Sure it is not easy for them to find out just how much you have/had.. but either way you are not going to enjoy the auditing. It is often easier in situations where regulations don't exist to operate as though they do. In some rare cases.. it spares real regulation coming down.

Though you are probably correct...the implications of that fact sucks.  This is my question:  "How do we not have to worry about all this regulation destroying us like we are criminals when we are in fact not anything close?"

As I've been learning about tax law, the more I learn the more I realize just how rigged it is.  I mean we are supposed to consider EVERYTHING a taxable event.  When in question, pretend its taxed!
Then also account for it as such until your mind is so bogged down by trying to reach a level of "total compliance" that you have no energy to even thinks straight anymore. 

Sigh...depressing if you ask me.   
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Re: Potential new member for BitShares Exchange Network, if only...
« Reply #54 on: October 06, 2015, 03:02:36 pm »

Obvious answers that were probably already considered... coinbase, circle, itbit maybe paypal.  Circle would be the best since they are now allowed to hold USD.

I agree Circle is the best option. There withdrawal limits are $3000 weekly for bank accounts and they don't charge transaction fees, although an ACH fee is really only about $0.15.

Humor me here, what would a pitch to circle look like? What would be their incentive (in the grand scheme of things?)  I'm genuinely curious.

Circle is doing everything they can to make a gateway for bitcoin (cryptocurrencies) and have people using bitcoin (crypto currencies) without them realizing that they are. They have in the past year created the best gateway for that purpose. Aside from the speed of Bitcoin transactions the real problem that they have in garnering more adoption is that bitcoin is a commodity. So even though Circle now has USD accounts, when a user sells bitcoin for usd they are supposed to keep track of and report any gains or losses. Using bitusd would allow for the user to use cryptocurrencies without worrying about reporting requirements. Also bitassest markets are privatized, so not only can they control the market and but also accrue revenue from trading fees.

So what you're suggesting as a benefit to circle is that bitusd would potentially present less or no tax burden.  I'm completely out of my depth here but if bitusd was treated as a commodity, under a 2.0 scheme with a possible bitusd floor of $1.0 and a market driven premium of perhaps 1.01 - 1.15 there may yet exist slight capital gains opportunity for operators working with a large enough volume. 

Beyond the potential benefits of bitusd from a tax standpoint, what other advantages to circle, or a similar entity, exist in using bitshares 2.0 as opposed to bitcoin / USD?   What's the sweet deal we have to offer our as of yet unidentified ACH processor partner?  There has to be one or we're not going to get the partnership, especially not if we seem like we're going to thank them and then eat their lunch.

There is no capital gain if bitusd is bought and sold at face value (with a spread). For example, the reason why the bitcny market works very well is that btc38 (facilitated by transwiser) accepts bitcny at facevalue. To that end yunbi also has a cny/bitcny market where bitcny is bought and sold at face value less the marginal spread of 0.2-4%. Bitassets are not commodities they are fixed income financial products. Even if there is a capital gain, it is negligible. That doesn't mean you don't owe the government tax dollars it just means its easier to account for.

The real benefit for a company like Circle is that it is trying to appeal to millennials that want alternatives to the current banking options. Bitusd presents a viable alternative where bitcoin does not because of its volatility. The whole point of bitusd, regardless of integration with a major partner like Circle, is that it provides all the advantages of a cryptocurrency without the drawbacks that bitcoin presents (mainly price volatility and speed of payment settlement).

I'm not saying that Circle will partner with bitshares, but if they were more forward thinking and less enamored with bitcoin they would. The only drawback is that there is no regulatory guidance on cryptocurrency derivatives, which presents legal risks that they have not fully investigated.

Offline merockstar

Re: Potential new member for BitShares Exchange Network, if only...
« Reply #55 on: October 06, 2015, 10:37:00 pm »
maybe the trick here is to empower shapeshift and metaexchange to handle ACH deposits assigned to a certain bitUSD account name.

Offline lovejoy

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Re: Potential new member for BitShares Exchange Network, if only...
« Reply #56 on: October 07, 2015, 12:40:43 am »
maybe the trick here is to empower shapeshift and metaexchange to handle ACH deposits assigned to a certain bitUSD account name.

Ahhh, intriguing.  A more platform agnostic approach, which could have serious merits... but navigating the legal labyrinth of interfacing with ACH, I can only imagine.  Care to elaborate on what you might mean by 'empower' in this instance?

Offline merockstar

Re: Potential new member for BitShares Exchange Network, if only...
« Reply #57 on: October 07, 2015, 12:26:55 pm »
maybe the trick here is to empower shapeshift and metaexchange to handle ACH deposits assigned to a certain bitUSD account name.

Ahhh, intriguing.  A more platform agnostic approach, which could have serious merits... but navigating the legal labyrinth of interfacing with ACH, I can only imagine.  Care to elaborate on what you might mean by 'empower' in this instance?

Well, I imagine one of them would have to set up a different section of their site for ACH payments, that would work similarly to how their current services work, but would convert fiat from an ACH into bitUSD.

This would require customers using the service to meet KYC regulations, and setting that up would cost them money.
Perhaps a crowdfund would be necessary to motivate one of them to do this?

Offline Akado

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Re: Potential new member for BitShares Exchange Network, if only...
« Reply #58 on: October 07, 2015, 04:23:40 pm »
Make it Gemini too, even though it might take a while..

https://np.reddit.com/r/IAmA/comments/3nu7gj/we_are_cameron_and_tyler_winklevoss_but_you/cvrd0x2

We've discussed internally Litecoin and we're definitely open to other cryptocurrencies. You'll notice that we didn't put the name 'bit' in our name on purpose – with that said, we're going to wait to an extent to see what the users are demanding and what people are asking for, rather than try to guess ourselves.
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Offline karnal

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Re: Potential new member for BitShares Exchange Network, if only...
« Reply #59 on: October 07, 2015, 05:35:16 pm »
Most interesting....

Following this thread with enthusiasm!