Author Topic: Prospectus for BlockTrades public offering  (Read 13929 times)

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Offline dannotestein

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i am confused. on the obits.io website they state, that 0.2% or 100% of their tradingfees are going into buybacks, but with your statement this would put obits only to 50% or do i understand something wrong?
I've never read that info before, but I guess the info there should at least be clarified. Strictly speaking, in the section about trading fees, I guess it says 100% of the profits of OL for trading fees, which is 50% of the total trading fees. I am sure Ronny has publicly disclosed the 50/50 split with us several times in the past. It should also be noted I think that if Ronny didn't have BlockTrades doing this, he would have to pay someone to manage it, and those costs would come out of the profit from the trading fees anyways.

But I agree this page should probably be clarified to indicate there is a split of the trading fee revenue 50/50 between OL and BlockTrades acting as a gateway service provider. Please note that this split only applies to trading fees, BlockTrades does not participate in revenue sharing for other profit areas from OL (e.g. registration fees and other fees collected by OL).
« Last Edit: February 20, 2016, 05:50:30 pm by dannotestein »
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Offline Shentist

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Most of BlockTrades' current revenue is derived from the operation of the BlockTrades website that provides fast and convenient purchasing of various cryptocurrencies. BlockTrades also licenses use of the backend engine used by our website on an OEM basis. Currently this backend is licensed to OpenLedger to handle deposits and withdrawals in return for a 50% share of the market-trading fees collected for the assets it supports. BlockTrades has also undertaken several custom software development contracts and has pending negotiations for future software contracts as a means of providing development capital to support its long term business strategy.


i am confused. on the obits.io website they state, that 0.2% or 100% of their tradingfees are going into buybacks, but with your statement this would put obits only to 50% or do i understand something wrong?

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Fees incurred during trading transactions on Open assets.
Total of all 0.2% transaction fees incurred during trading of all current and future Open assets between OpenBTC, OpenLTC, OpenDOGE, OpenDASH, OpenMUSE, OpenPPC, OpenUSD, OpenEUR, OpenCNY, OBITS and QBITS, and any other assets on the platform that will be traded in the future with these Open assets. Openledger profits and connected projects are used for compulsory redemption of tokens on the first day of the month from the token owners, with 100% of profits used in the buy back. The buy-back option is possible at OpenLedger only, taking into consideration features of all other financial assets and the annual inflation rate, which reduces the true income of investors (thought to be at least 10% per year).

http://www.obits.io/

Offline Shentist

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i would be more interested in your monthly revenue streams and how they are splitted.

where comes the increase in the asset value? only from revenue streams?

do you plan to pay dividends?

Offline cylonmaker2053

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What % of the company are you guys putting up for sale? How much do you expect to retain?
We're planning to sell 50% to foreign investors to get out of the US classification of a controlled foreign company. For now we plan to retain the rest.

At some point in the future we may see if there's some way we can open up the investment opportunity to a limited number of US citizens, but this would likely only be available to accredited investors (i.e. high networth individuals) or personal contacts, pending changes to current US security laws. And to maintain an assurance that the company was 50% foreign held, we would probably need to track it with a different UIA.

cool, best of luck to you guys. i would have supported if i were not subject to my rulers protecting me from my own possibly poor decisions. will certainly be interested to see how things evolve and if you can figure a way to open participation up for Americans.

Offline dannotestein

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What % of the company are you guys putting up for sale? How much do you expect to retain?
We're planning to sell 50% to foreign investors to get out of the US classification of a controlled foreign company. For now we plan to retain the rest.

At some point in the future we may see if there's some way we can open up the investment opportunity to a limited number of US citizens, but this would likely only be available to accredited investors (i.e. high networth individuals) or personal contacts, pending changes to current US security laws. And to maintain an assurance that the company was 50% foreign held, we would probably need to track it with a different UIA.
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Offline cylonmaker2053

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What % of the company are you guys putting up for sale? How much do you expect to retain?

Offline CLains

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Great prospectus. Looking forward to the public offering :D

Offline dannotestein

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So you generated more than 200K profit with 29K initial fund in half a year from the direct exchange service only? It's amazing. Although due to the mark-to-market account method, some reasons could be pumping of the coins which you're holding, I still think you did a good job.  +5%

Maybe better to use a daily average of values of your assets in a period to value the shares? If as you mentioned "Majority of assets held in BTC", I think there would be no big difference to the result.

We could use a daily average of our assets, which would stabilize the numbers on a day-to-day basis, but the reality is that our assets are worth whatever they are worth on a given day, so averaging just masks the painful or happy reality of the current value :-) In general, as you guessed, the swings aren't too big, since our primary holdings are in BTC, but they do "matter". For example, in large part due to the rise of BTC in the past 2 days, we're up about 7K from the posted spreadsheet. Generally I believe that over time these swings just average out, and our long term profit is therefore from the convenience and safety offered by our site.

I should point out, that while we're very happy with the profits we've made from the cryptocurrency website so far, this isn't really where we've planned to make our long term profits. We've always felt that the largest profits will come with technology that acts as a better bridge between cryptocurrencies and fiat currencies. That said, we do plan to begin actively promoting the site before too long to the larger cryptocurrrency community, as it has been a good profit center.

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By the way, would you like to pay for translating your offer and/or related documents into Chinese? I think @ebit would glad to help. China is a big market for your offer imo.
Yes, this sounds like a great idea, especially if he's willing to accept payment in some form of cryptocurrency, since that's what BlockTrades primarily deals in. Have him PM me if he's interested.
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Offline cylonmaker2053

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Very cool except for us super free Americans blocked from buying...


Offline xeroc

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Offline abit

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So you generated more than 200K profit with 29K initial fund in half a year from the direct exchange service only? It's amazing. Although due to the mark-to-market account method, some reasons could be pumping of the coins which you're holding, I still think you did a good job.  +5%

Maybe better to use a daily average of values of your assets in a period to value the shares? If as you mentioned "Majority of assets held in BTC", I think there would be no big difference to the result.

By the way, would you like to pay for translating your offer and/or related documents into Chinese? I think @ebit would glad to help. China is a big market for your offer imo.
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Offline dannotestein

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@dannotestein in the Profit and Loss Statement, could you please classify the income / current assets by sources? For example how much income is from directly trading on the website / in-wallet bridge service, how much from revenue share by tech support, how much from software development? Thanks!
Currently essentially all the income I've reported is from purchases from the web site, none from service contracts or revenue sharing arrangement with OpenLedger.

Revenue from service contracts performed by BlockTrades has been relatively small to date, and we have fully expensed them as payments to SynaptiCAD, which has performed the actual coding work (BlockTrades doesn't directly employ any programmers), leaving BlockTrades with zero net income from those contracts. This was done to avoid having to compute Subpart F income on our US tax returns for what were relatively small profits.

We have not yet computed profit associated with the sharing arrangement with OpenLedger, but I believe that it is a relatively small amount currently, although it has the potential to grow significantly with increased utilization of the BitShares exchange.

As a side note, we haven't published actual revenue for BlockTrades (i.e. total funds sent to BlockTrades to purchase cryptocurrency), nor do we currently have a readily available calculation for it, although we could do it by writing some code to query our transaction database. Instead, we decided to using a mark-to-market account method for accounting for profit from the web site, which dramatically simplifies our accounting procedure. Essentially with a mark-to-market method, we only need to compute the current and past value of the assets in our inventory to calculate profit over a period of time. We automatically track this value on a daily basis (converted to a US dollar equivalent, as that's the "functional currency" we selected), so this makes it easy for us to determine our profit over any given period of time. Here's more information on mark-to-market accounting, for those interested: https://en.wikipedia.org/wiki/Mark-to-market_accounting

For other future profit centers, such as service contracts and software sales, we'll need to use the more familiar method of accounting using revenue - expenses = profit, of course. For that, we have trusty, reliable, and annoying QuickBooks.
« Last Edit: February 18, 2016, 02:49:30 am by dannotestein »
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Offline Riverhead


Excellent prospectus. I wish I could participate but sadly I live in the land of the "free".

Best of luck!!

Offline btstip

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Hey ebit, here are the results of your tips...
Curious about ShareBits? Visit us at http://sharebits.io and start tipping BTS on https://bitsharestalk.org/ today!
Created by hybridd

Offline ebit

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 +5%
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