Author Topic: Gold gateway  (Read 17386 times)

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Offline Thom

If I recall correctly the inventory was needed because many established dealers won't ship small quantities of PM. Min order size was much larger than the expected order size on Cryptosmith.
To make any real margin you had to buy wholesale

Probably, but gotta start somewhere. As I said, the 50K inventory was seen as a way to jumpstart the crypto --> PM market, to provide an offramp for crypto without the strings imposed by mainstream FIAT pathways.

I see on the Daily Decrypt today that rrbi.co is a PM outfit that accepts bitcoin. Don't know about their minimum order size, info required to buy etc.
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Offline jsidhu

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If I recall correctly the inventory was needed because many established dealers won't ship small quantities of PM. Min order size was much larger than the expected order size on Cryptosmith.
To make any real margin you had to buy wholesale
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Offline Riverhead

Never underestimate a long con.


Very true. He may have had other irons in the fire too. 50k here, 20k there, etc. He had a real estate business as well that he might have ripped off. Wouldn't need a very big pile of loot to live like a king in the Philippines.

Offline tonyk

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You're basically just becoming a gambler with a lot of inventory if you can't rapidly turn it over. 

That's the key. In a low margin business, you must have high volume. That's the only way to make money. And with the price spikes of precious metals, if you're not turning them over quickly, then you are stuck with inventory that can lose a lot of value (or gain it) within days. And then you have the cost of storage, shipping, insurance, etc., which you damn well better figure into your costs. Plus, if you aren't doing enough volume, then your costs have to be higher than other sellers and people will shop around. So the only way for BitShares to engage with this, I think, would be to partner with an established business that already has that cost structure and wouldn't mind adding a bit more volume from us.

Nope... you must be complete idiot to 'work'  for an exchange that trades bitGold/Silver and to have gold/ silver inventory and lose value on that inventory. If someone else paid for the inventory??? well it makes it 'criminal' stupidity to lose money because of price movements.
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline gamey

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Never underestimate a long con.  Sociopaths enjoy it. I've seen people go on for months building friendships with people only to run off with a relatively small bag of loot. Then everyone comes to find out that the guy was deported after doing time in NY for financial crimes. The conman's promises of coming to some big get together were not even possible, given he it is doubtful he could gain entry into the states through normal means.

Jsidhu is the one that put up real work of value.  I hope he got part of that 50k. Everything I see about Ryan is questionable. Why not just leave the damn website up if it isn't getting any business for when the mining pipeline was finished etc ? 

Maybe the guy had some vice, or tried to freeroll the money on some speculative venture and it wasn't intentional.

One thing most people don't get, and especially us nerds is that the MORE LIKABLE A PERSON IS THE LESS YOU CAN TRUST THEM.  However, don't think just because someone isn't likeable you can trust them.. I've made that mistake!

I can google and email dropshippers too. That sort of work isn't hard nor does it take a hard skillset. Did he have an LLC and associated costs?  I would not cut the guy a bit of slack. It is unlikely a DA will prosecute this case though as it is too fuzzy and complicated with the crypto payments and emails.
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Offline Riverhead




If I recall correctly the inventory was needed because many established dealers won't ship small quantities of PM. Min order size was much larger than the expected order size on Cryptosmith.

Offline Empirical1.2

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From a business standpoint, gold inventory shouldn't have been a problem.  You can drop-ship gold if you have the right suppliers.  It's more about getting orders and customers and proving out your concept.  If he never got an order the business didn't show enough validation for funding or a loan in the first place. 

 +5%

You don't need stock initially,  at most a small subsidy to cover the price difference so BitGold to Gold is priced competitively.
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Offline Thom

Sucks to read about what happened.  If he left immediately after getting the funds, I don't think he had any intention of using it for the business.  It was pretty much a con job.   Not to say he didn't have some intention of running a legitimate business at the very beginning and was frustrated, but if he asked for money for gold inventory and immediately left he must have fully known what he was doing.  Hopefully he may want to salvage his reputation.  That's why it's much better to limit the risk to a much lower amount for any one person.  I've been ripped off a couple times before because I was too trusting, but you learn from it. 

From a business standpoint, gold inventory shouldn't have been a problem.  You can drop-ship gold if you have the right suppliers.  It's more about getting orders and customers and proving out your concept.  If he never got an order the business didn't show enough validation for funding or a loan in the first place. 

The internet is fucking creepy.

Yeah I don't care for the personal stuff about his family etc., but for him as a business I think you have to expect some level of transparency.  As a business I prefer more openness compared to anonymity.  That's why I don't trust Darkcoin or NXT or any businesses that are run by anonymous entities.   (I'm not commenting on the technology.)

Anyways I have some good contacts in the gold space and if I see the right business and the right team I would try to make the connection and help.  It's a low margin business as @donkeypong stated and you really have to validate the business model with a lot of customers and orders so I wouldn't be interested unless someone brought that to the table.   It takes a lot of experience too.  Gold has been in a bear market so some companies that have gold assets and dollar liabilities have gotten into trouble so you just have to be careful.  I know reputable companies (Tulving in SoCal) that went down during the current gold bear market.   I'm still a gold bug so I eventually would like to help put something together in the future.

As riverhead commented, Cryptosmith was not a flash in the pan con man effort. I too talked with Ryan on skype daily and he was quite transparent with me about the business. I see major parallels between the evolution of the BitShares ecosystem and how Cryptosmith evolved. Neither popped into existence quickly or in a vacuum. Many people were involved. I see several posts in this thread that assume a great deal about the business and Ryan's motives. I will never defend what gentso did but I will at least try to set the record straight and clear up the misinformation surrounding this unfortunate event in BItShares history.

You're basically just becoming a gambler with a lot of inventory if you can't rapidly turn it over. 

That's the key. In a low margin business, you must have high volume. That's the only way to make money. And with the price spikes of precious metals, if you're not turning them over quickly, then you are stuck with inventory that can lose a lot of value (or gain it) within days. And then you have the cost of storage, shipping, insurance, etc., which you damn well better figure into your costs. Plus, if you aren't doing enough volume, then your costs have to be higher than other sellers and people will shop around. So the only way for BitShares to engage with this, I think, would be to partner with an established business that already has that cost structure and wouldn't mind adding a bit more volume from us.

What could be more safe than gold inventory in the hands of a trusted, identifiable, long time community member? Granted, not a very liquid inventory, but quite safe as a reserve of value. The plan was that this inventory was to be seed money to jump start the operation.

As I recall it took some time to convince Stan to allow BitUSD to be used for purchasing the PM as opposed to only BItGold and BitSilver. Gentso was highly engaged in talks with Metaexchange and Jonathon at bunkershares to mine crypto into real PM, and in finding various sources for the PM including those that drop ship to many countries around the world. Plus he had to create the cryptosmith portal and managed to secure and manage very capable talent (jsidhu) to pull that off. He hired me to run his delegate. All of that real work does not paint a picture of a con man trying to turn a quick buck. He never demanded controlling interest (i.e. private keys, tho I was willing to provide them and suggested this to him several times) in the delegate.

The major flaw was a mistaken demand for the PM value cryptosmith could provide, plus it was limited to BitShares assets for purchase. It truly seemed to many it was a great victory for crypto and would really benefit the ecosystem. Why do you think this topic has popped up again? There must be some demand for a service like cryptosmith. Clearly there is, but apparently it takes much more effort to put together a solid business plan and ability to market than was done here. It was never seen as a risk free operation. What entrepreneural efforts are? Anyone thinking about taking on a similar challenge to cryptosmith would do well to study it before assuming it will be successful.

Injustice anywhere is a threat to justice everywhere - MLK |  Verbaltech2 Witness Reports: https://bitsharestalk.org/index.php/topic,23902.0.html

Offline jsidhu

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Well just do the public shunning thing and move on.

It is bizarre to me he was given 50k.  It is a low margin business, but it also means that there is little saved by buy purchasing wholesale.  You're basically just becoming a gambler with a lot of inventory if you can't rapidly turn it over.  At least the inventory doesn't depreciate I guess.  I wonder what his spiel was.... hustlers and their game are endlessly fascinating to me.
I had to change the prestashop price updater in the core because it only updated every few days while we needed realtime pricing so i based it off of the median price in bitshares which worked well. Did a nice ticker scrolling asset prices at the top as well.
I made it dropshippable by sending out an dhtml designed email upon order completion of a bitshares payment which sent the wholesaler the address of thr customer to ship to, so inventory doesnt even need to be held.
« Last Edit: December 17, 2015, 04:41:21 pm by jsidhu »
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Offline donkeypong

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You're basically just becoming a gambler with a lot of inventory if you can't rapidly turn it over. 

That's the key. In a low margin business, you must have high volume. That's the only way to make money. And with the price spikes of precious metals, if you're not turning them over quickly, then you are stuck with inventory that can lose a lot of value (or gain it) within days. And then you have the cost of storage, shipping, insurance, etc., which you damn well better figure into your costs. Plus, if you aren't doing enough volume, then your costs have to be higher than other sellers and people will shop around. So the only way for BitShares to engage with this, I think, would be to partner with an established business that already has that cost structure and wouldn't mind adding a bit more volume from us.

Offline Riverhead



Well just do the public shunning thing and move on.

It is bizarre to me he was given 50k.  It is a low margin business, but it also means that there is little saved by buy purchasing wholesale.  You're basically just becoming a gambler with a lot of inventory if you can't rapidly turn it over.  At least the inventory doesn't depreciate I guess.  I wonder what his spiel was.... hustlers and their game are endlessly fascinating to me.


It was actually a fairly long and drawn out process. The business was built over months with a lot of work from a number of people. He actually had the inventory for a while before going dark. I recall asking him now and then how the pile of PM was doing. We spoke daily over Skype.


Offline gamey

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Well just do the public shunning thing and move on.

It is bizarre to me he was given 50k.  It is a low margin business, but it also means that there is little saved by buy purchasing wholesale.  You're basically just becoming a gambler with a lot of inventory if you can't rapidly turn it over.  At least the inventory doesn't depreciate I guess.  I wonder what his spiel was.... hustlers and their game are endlessly fascinating to me.
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Offline Riverhead

The internet is fucking creepy.

It can be for sure but what I posted is all information in the public domain; especially Twitter and LinkedIn which she put out there herself. There are a lot of things I found that I didn't, and won't, post because it isn't part of a public facing image.

I believe Ryan had every intention to run an honest business. However people's lives are complex and we'll likely never know what events lead him to the final decision to go dark. Maybe he got robbed, had gambling debts, sick family with big medical bills, or any of a million other possibilities other than he was just a con from the start.

Offline merivercap

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Sucks to read about what happened.  If he left immediately after getting the funds, I don't think he had any intention of using it for the business.  It was pretty much a con job.   Not to say he didn't have some intention of running a legitimate business at the very beginning and was frustrated, but if he asked for money for gold inventory and immediately left he must have fully known what he was doing.  Hopefully he may want to salvage his reputation.  That's why it's much better to limit the risk to a much lower amount for any one person.  I've been ripped off a couple times before because I was too trusting, but you learn from it. 

From a business standpoint, gold inventory shouldn't have been a problem.  You can drop-ship gold if you have the right suppliers.  It's more about getting orders and customers and proving out your concept.  If he never got an order the business didn't show enough validation for funding or a loan in the first place. 

The internet is fucking creepy.

Yeah I don't care for the personal stuff about his family etc., but for him as a business I think you have to expect some level of transparency.  As a business I prefer more openness compared to anonymity.  That's why I don't trust Darkcoin or NXT or any businesses that are run by anonymous entities.   (I'm not commenting on the technology.)

Anyways I have some good contacts in the gold space and if I see the right business and the right team I would try to make the connection and help.  It's a low margin business as @donkeypong stated and you really have to validate the business model with a lot of customers and orders so I wouldn't be interested unless someone brought that to the table.   It takes a lot of experience too.  Gold has been in a bear market so some companies that have gold assets and dollar liabilities have gotten into trouble so you just have to be careful.  I know reputable companies (Tulving in SoCal) that went down during the current gold bear market.   I'm still a gold bug so I eventually would like to help put something together in the future.
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Offline puppies

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The internet is fucking creepy.
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