Author Topic: Proposal for Angelshares Investment in a DAC Trading Platform  (Read 23907 times)

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Offline oco101

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Offline domsch

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Any updates on this?  I would like to offer to help where I can.  This would be a good place to offer to interview you and propagate this message to a broader audience. 

It could also be used by you to recruit talent/set bounties (if this would be helpful).

Sorry for not keeping you guys up to date! I've been doing a lot of work behind the curtains and we were able to raise a financing round from an investor. This is going to allow us to build the MVP and work on the legal side more consistently and precisely.

I am definitely looking for help from the community. I will create a thread today and provide a list of skillsets we're looking at. But we're basically open to anyone and want this to be a community project.

Offline fuzzy

Any updates on this?  I would like to offer to help where I can.  This would be a good place to offer to interview you and propagate this message to a broader audience. 

It could also be used by you to recruit talent/set bounties (if this would be helpful). 
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Offline CLains

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Get Fiat <-> PTS up as quickly as possible, and publicize the site by promising support of and helping to explain the new DACs market; that way you can ride on the Invictus community and the Invictus promotion wave that is coming (now) to gain exposure. Team up with buypts.com? Gogo MVP. /2cents

Offline BTSdac

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we need this License, but no now ,  the most important thing now is to develop BTS, I think
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Offline santaclause102

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To form an opinion on this it would be interesting to know about when the bitshares p2p exchange will come. It would make sense to combine the fiat/IOU exchange with the p2p exchange if  that is possible?

That is what this idea is all about. A P2P exchange platform in the form of a DAC will be built on top of this. Therefor our ideology of privacy and decentralization is not lost and we can simultaneously work on both models: Fiat is there for reaching the masses, the DAC is there for getting them deeper into the ecosystem and spread our intentions.



For all the other replies: I am going to work something out with an individual investors and will discuss this in detail with Dan how we will proceed once we have the platform launched and how we can use the AGS for a DAC-exchange. I will create a thread seeking help soon, but if anyone wants to join this please send me a private message with what you can help with!

Is it technically / by definition possible to have a completely decentralized p2p exchange for fiat/crypto?

i believe it is possible, eMunie is working on a decentralized fiat-->crypto exchange

But how? IOU money has to be stored on some bank account and there has to be someone that is responsible for it...
« Last Edit: January 22, 2014, 08:34:43 am by delulo »

Offline Giga

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To form an opinion on this it would be interesting to know about when the bitshares p2p exchange will come. It would make sense to combine the fiat/IOU exchange with the p2p exchange if  that is possible?

That is what this idea is all about. A P2P exchange platform in the form of a DAC will be built on top of this. Therefor our ideology of privacy and decentralization is not lost and we can simultaneously work on both models: Fiat is there for reaching the masses, the DAC is there for getting them deeper into the ecosystem and spread our intentions.



For all the other replies: I am going to work something out with an individual investors and will discuss this in detail with Dan how we will proceed once we have the platform launched and how we can use the AGS for a DAC-exchange. I will create a thread seeking help soon, but if anyone wants to join this please send me a private message with what you can help with!

Is it technically / by definition possible to have a completely decentralized p2p exchange for fiat/crypto?

i believe it is possible, eMunie is working on a decentralized fiat-->crypto exchange

Offline Giga

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Wow, this would be very good. The trouble to change from protoshare to BTC and then to USD is a pain.

Definitely it will help solve a lot of problems for those looking to direct invest usd-->proto without losing on transfer fees, exchange fees, etc

Offline santaclause102

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To form an opinion on this it would be interesting to know about when the bitshares p2p exchange will come. It would make sense to combine the fiat/IOU exchange with the p2p exchange if  that is possible?

That is what this idea is all about. A P2P exchange platform in the form of a DAC will be built on top of this. Therefor our ideology of privacy and decentralization is not lost and we can simultaneously work on both models: Fiat is there for reaching the masses, the DAC is there for getting them deeper into the ecosystem and spread our intentions.



For all the other replies: I am going to work something out with an individual investors and will discuss this in detail with Dan how we will proceed once we have the platform launched and how we can use the AGS for a DAC-exchange. I will create a thread seeking help soon, but if anyone wants to join this please send me a private message with what you can help with!

Is it technically / by definition possible to have a completely decentralized p2p exchange for fiat/crypto?

Offline mav2000

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Wow, this would be very good. The trouble to change from protoshare to BTC and then to USD is a pain.

Offline domsch

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Domsch, how soon are you looking into deploying the exchange. Time is against us so I would assume an accelerated deployment process is part of the plan?

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That is our plan. But usually plans never work out, so we need to improvise. I will try and get development started asap while working on the banking/licensing problem. But there is no set ETD right now.


Domsch, how soon are you looking into deploying the exchange. Time is against us so I would assume an accelerated deployment process is part of the plan?

Sent from my Nexus 4 using Tapatalk

That is our plan. But usually plans never work out, so we need to improvise. I will try and get development started asap while working on the banking/licensing problem. But there is no set ETD right now.

Great, thnx for the update. I'm glad ur taking on this project as it seems to me you've got the right vision in place. Wish you all the best and I'll keep watching this thread for updates.

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Thank you! I will work out the details with Dan and then I will fully start and ask for more involvement from the community to help us with this!

So definitely stay tuned.

Offline Giga

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Domsch, how soon are you looking into deploying the exchange. Time is against us so I would assume an accelerated deployment process is part of the plan?

Sent from my Nexus 4 using Tapatalk

That is our plan. But usually plans never work out, so we need to improvise. I will try and get development started asap while working on the banking/licensing problem. But there is no set ETD right now.


Domsch, how soon are you looking into deploying the exchange. Time is against us so I would assume an accelerated deployment process is part of the plan?

Sent from my Nexus 4 using Tapatalk

That is our plan. But usually plans never work out, so we need to improvise. I will try and get development started asap while working on the banking/licensing problem. But there is no set ETD right now.

Great, thnx for the update. I'm glad ur taking on this project as it seems to me you've got the right vision in place. Wish you all the best and I'll keep watching this thread for updates.

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Offline domsch

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Domsch, how soon are you looking into deploying the exchange. Time is against us so I would assume an accelerated deployment process is part of the plan?

Sent from my Nexus 4 using Tapatalk

That is our plan. But usually plans never work out, so we need to improvise. I will try and get development started asap while working on the banking/licensing problem. But there is no set ETD right now.

Offline Giga

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Domsch, how soon are you looking into deploying the exchange. Time is against us so I would assume an accelerated deployment process is part of the plan?

Sent from my Nexus 4 using Tapatalk


Offline hasher

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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.
after deeply investigation of Bts concept i come to conclusion that this system not going to be disruptive, but complementary (may be wrong though).

Offline domsch

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To form an opinion on this it would be interesting to know about when the bitshares p2p exchange will come. It would make sense to combine the fiat/IOU exchange with the p2p exchange if  that is possible?

That is what this idea is all about. A P2P exchange platform in the form of a DAC will be built on top of this. Therefor our ideology of privacy and decentralization is not lost and we can simultaneously work on both models: Fiat is there for reaching the masses, the DAC is there for getting them deeper into the ecosystem and spread our intentions.



For all the other replies: I am going to work something out with an individual investors and will discuss this in detail with Dan how we will proceed once we have the platform launched and how we can use the AGS for a DAC-exchange. I will create a thread seeking help soon, but if anyone wants to join this please send me a private message with what you can help with!

Offline domsch

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"A global direct Fiat-DAC exchange handling all major (more than 3 or 4) fiat currencies is not needed and will not be profitable.
Doing two trades (first your local fiat-BTC exchange, then a global BTC-DAC exchange) is cheaper. Economies of scale for fiat-crypto-exchanges require that there are as few competing exchanges as possible. Trading n fiat currencies directly against m altcoins/DACs requires n•m markets, going through bitcoin requires n+m markets. If 2(n+m)<n•m the narrower spreads of the large exchanges will make trading via the largest crypto-currency (i.e. Bitcoin) cheaper."


One of the reasons why I think that there is still space for another fiat-exchange is because the current platforms are lacking functionality and services. There are "horror-stories" circulating on reddit/bitcointalk daily;  people losing their money on Cryptsy/BTER/Coinbase or how their withdrawal from 6 weeks ago did still not go through.
Personally, I prefer to work with 1 company that solely focuses on one subject (DAC) and pursues to become that best at what they are doing. There are companies like cryptsy that can be used for BTC<->DAC exchange, but personally, I think that their current platform is quite inefficient and does not offer what we intend to do and guarantee to the community.

There are obviously several more fixes that need to be done before mainstream adoption can start. We think that we can work on that and influence other start-ups as well by showing how we can bring this opportunity to the masses with new concepts and ideas.

Competition in every industry is better for the consumers: companies need to be able to compete with other companies (e.g. lower fees, more features, better support) in order to gain a proper market share. The more people that are working on making crypto-currencies easier accessible and reducing the buy-to-receive process, the better for all of us.

Because DAC's (e.g. Bitshares) are inherently different to what Bitcoin intends to do I think that a platform like this will be essential to change the public's perception of 2 different systems. Right now, altcoins mainly rely on the value of Bitcoin and they show now inherent distinction. That's what I want to change for DAC's.

The way the trading platform could function:
  • All DAC's are traded against Fiat. This means that potential investors know exactly the value of which they are investing and they only have to go through 1 process to get to their investment
  • We (the trading platform) created our own coin that is issued and will be used to weigh DAC's. Not really an advocate of this and I think it is inefficient.
  • We will work with current or new alternatives to Bitcoin that try to fix the current problems in an elegant way. This will then be used as the "go-to" coin for DAC's. Longer process until you get to your investment, but I think that this allows the creation of a decentralized and anonymous trading platform to be built on top of ours.

We can use a mix between option 1 and option 3. For projects like Bitshares we can open up a direct Fiat exchange (could be a separate, independent market for visibility and clarity), for projects like Memorycoin we can use existent coins (with monetary value) to value the DAC.

Why are all major commodities traded in USD only?

Here we could argue about the influence of the United States on international institutes and organizations (such as the IMF), their leading economy and their dominance as a standardized world-currency (which was established after the 2nd World War). Basically, the US was the dominant figure in the world as the largest economy after the 2nd World War (compared to the British Empire and the pound sterling during the Imperialism). Because of this the United States and the US Dollar had great influence on markets and USD was used as a kind of "norm" in commodity prices and Forex.

Now we are seeing a shift away from this. Countries like China, which are on par to the US with their GDP, are using their own currency on markets.


Quote from: Markus link=topic=2247.msg2a7485#msg27485 date=1389565640
Why did Cryptsy roll back from having direct markets between all alts to having only BTC-alt-markets?

Because it is a lot easier to value altcoins to something that has a direct monetary value. Bitcoin is exchanged against Fiat, therefor it will be a lot harder (and more inefficient) if Protoshares was traded against Peercoin instead of being valued against Bitcoin which has a clear value ($800 right now). And it would cause a lot of confusion to the market if each coin can be traded against a different set of other coins.

Quote from: Markus link=topic=2247.msg2a7485#msg27485 date=1389565640
Why can Mt. Gox charge 5 % fees for cross-(fiat)-currency trades and get away with it?

They once were the major trading platform that allowed BTC to be bought for USD without much hassle. As more players joined the market and competition for market share started, Mt. Gox had to adapt and lower their fees.

Quote from: Markus link=topic=2247.msg2a7485#msg27485 date=1389565640
Why are there so many BTC-altcoin exchanges but so few doing fiat-altcoin directly?

The entry barrier as a fiat-altcoin exchange is a lot higher than using already provided infrastructure (Bitcoin exchanges) to allow Altcoins to be traded for BTC. As a BTC-Altcoin exchange you do not require any specific licenses (as of now) and you won't even need a bank account or a company to get started.
As a Fiat exchange the list of requirements is much longer: You need a working bank account (preferably in several locations to lower the waiting time for Deposits/Withdrawals), an incorporated company, Licenses, AML (Anti-Money-Laundering) policies and you need to comply with the law. Obviously because of the huge demand of Fiat to Altcoin, the reward for such a company is much higher than an Altcoin-BTC exchange.

Offline santaclause102

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To form an opinion on this it would be interesting to know about when the bitshares p2p exchange will come. It would make sense to combine the fiat/IOU exchange with the p2p exchange if  that is possible?

It might make more sense and less risk to just use Ripple, but having an alternative to Ripple would be ideal.

So with ripple you would need your bank (or whoever holds your IOU) to use ripple too. Right?

Offline luckybit

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To form an opinion on this it would be interesting to know about when the bitshares p2p exchange will come. It would make sense to combine the fiat/IOU exchange with the p2p exchange if  that is possible?

It might make more sense and less risk to just use Ripple, but having an alternative to Ripple would be ideal.
https://metaexchange.info | Bitcoin<->Altcoin exchange | Instant | Safe | Low spreads

Offline santaclause102

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To form an opinion on this it would be interesting to know about when the bitshares p2p exchange will come. It would make sense to combine the fiat/IOU exchange with the p2p exchange if  that is possible? 
« Last Edit: January 14, 2014, 12:26:45 am by delulo »

Offline euzora

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fair points. in that case may I request that additional licences and bank accounts are eventually sought in the UK. low fee SEPA transactions don't seem to apply here (and we'll probably leave the EU in 2017 anyway), making things like bitstamp quite expensive for small buyers. cost me an arm and a leg already for some pitiful investments in angelshares...

Offline smiley35

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I'll start with I know almost nothing...but...

wouldn't a model similar to localbitcoins be easier to implement and more pliable to a decentralised structure? it could provide a single platform but with multiple competing escrow services...

just a thought

is not a very efficient method to trade...

Also much more susceptible to fraud.

Offline santaclause102

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I'll start with I know almost nothing...but...

wouldn't a model similar to localbitcoins be easier to implement and more pliable to a decentralised structure? it could provide a single platform but with multiple competing escrow services...

just a thought

is not a very efficient method to trade... 

Offline euzora

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I'll start with I know almost nothing...but...

wouldn't a model similar to localbitcoins be easier to implement and more pliable to a decentralised structure? it could provide a single platform but with multiple competing escrow services...

just a thought

Offline onceuponatime

Domsch,

This seems to be your second proposal to Invictus; this being the first: https://bitsharestalk.org/index.php?topic=1578.0

I personally applaud your spirit and creativity, but if the first proposal was to create an innovative and comprehensive marketing ideology that encompasses many aspects and would probably warrant a complete team to execute, how then one month later are you prepared to launch this much different venture that in essence is about a 180 degree difference in its nature (marketing to legal/regulatory)?

Are you still working on the marketing plan from the link above? Do you have a separate team dedicated to it?

Can you provide any evidence to your success in the areas of marketing and/or legal regulatory compliance?

These are important questions.

Offline bitcoinba

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Domsch,

This seems to be your second proposal to Invictus; this being the first: https://bitsharestalk.org/index.php?topic=1578.0

I personally applaud your spirit and creativity, but if the first proposal was to create an innovative and comprehensive marketing ideology that encompasses many aspects and would probably warrant a complete team to execute, how then one month later are you prepared to launch this much different venture that in essence is about a 180 degree difference in its nature (marketing to legal/regulatory)?

Are you still working on the marketing plan from the link above? Do you have a separate team dedicated to it?

Can you provide any evidence to your success in the areas of marketing and/or legal regulatory compliance?


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There is just very little to hold you to your word here.  If I was a VC an you came to me and I gave you start up capital, at least I would know your name and number to come shake the pennies out of you when this doesn't work out.  Sorry for the rough metaphor, but I think it gets the point across.

Also, your just a student who says he has good salesmanship.  Where are your actual business connections and your experience?

Can you provide a better timeline, budget, plan, collateral proposal, etc?


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Offline domsch

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Just to clarify, Is this a proposal to turn our $100k over to you to get a tool that will greatly increase the value and development of the DAC ecosystem that will also make us shareholders?  If so, $100k sounds like a drop in the bucket weighed against the potential of this project.  I'm ready to be all in with my support if Donsche can show us more substantial budgeting and greater evidence that his idea can come to fruition. Also, greater promise than 10% of ownership for AGS might persuade us who perceive this investment as riskier than standard DAC development.

Can anyone counter with a proposal to create a DAC trading platform that is less controversial to us AGS/PTS investors?


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Keep this in mind, for this you do not require a web developer. This requires an entrepreneur that has connections in major metropolis' around the world, someone who can negotiate and work-out deals that will push the company forward. I have that background and additionally I am currently studying psychology (and marketing psychology) and sociology. I know how to influence people and I know how to create emotionally touching stories that help with the promotion of a product. That is the reason why I wanted to start all this.

My proposed investment of $100k was set with the premise that no community member will join us on our mission (usually you always begin with the highest price in an estimate, just not to cause any sudden surprises for investors). If people like donshoe (He is German like me, and from Berlin, where we have one of our lawyer firms) and others join this project the expected price and required investment will obviously decrease.

This may be a risky investment, but the expected return for the entire DAC economy will pay-off. Instead of me proposing potential ROI's offered to the community: What do you guys say, what do you want to get in return for having such a project launched with an AGS investment?

I have already stated several direct (no fees, contests, bounties, DAC Development Fund, premium features) and indirect (educating, marketing and promoting of DAC's, bringing in more investors - which means more money, increase in value etc.) benefits for the AGS investors. But please propose solutions you find more appealing!

bitbro

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Just to clarify, Is this a proposal to turn our $100k over to you to get a tool that will greatly increase the value and development of the DAC ecosystem that will also make us shareholders?  If so, $100k sounds like a drop in the bucket weighed against the potential of this project.  I'm ready to be all in with my support if Donsche can show us more substantial budgeting and greater evidence that his idea can come to fruition. Also, greater promise than 10% of ownership for AGS might persuade us who perceive this investment as riskier than standard DAC development.

Can anyone counter with a proposal to create a DAC trading platform that is less controversial to us AGS/PTS investors?


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Offline Empirical1

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If your VC can fund $7 million as you say, then there is little need for $100K from the AGS fund. 

AGS is supposed to be used to develop DACs.  You have stated a plan to implement a DAC in 18 months, at that time AGS funding may be appropriate. 

Partnering with existing exchanges would probably be far more profitable for AGS holders and then using $100K to fund the development of integration with Open Transactions based exchange integration may be a more compelling and DECENTRALIZED solution.   Also spending $100K for development of cross-chain trading and options trading / coordination systems that work with the block-chain provided hooks may provide more value. 

I really believe that your initial VC funding should get you to a deployed product and our $100K plus-up should be focused merely on integrating advanced features not available on other exchanges.

You have our moral support, but to qualify for AGS funding I think you need to prove your ability to reach the same threshold of other USD/BTC exchanges.  Once there we can begin working with you to take it one step further and give you a competitive edge over the competition.

+1

Offline santaclause102

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I followed and invested in Scharmbeck which is now in testing. It provides WDC/Fiat. They raised money by giving out shares in the company.

If AGS fund is used for this initiative, we should get shares in the company.

Which is what we intend to do. 20% of the profits (same as with a new DAC where 20% are given to PTS/AGS owners) will be put in a DAC Development Fund. The fund will be controlled by 1 Invictus member and 1 trusted community member.

I was talking about a more direct stake at the individual level.

If we are doing a fundraiser with several companies (or a few individuals) that is very possible. But how will we accomplish this (without Invictus directly representing AGS investors) when most of the investors of the AGS fund are not clearly identified or willing to be identified? As a stakeholder you are required to sign all the required papers and eventually go to board-meetings/vote in decision.

I much rather prefer the 20% DAC Development Fund and perks (e.g. no trading fees, rewards, contests, bounties) and delegate part of the decision power to the community in a transparent and open way. Else our supposed agility and flexibility will be crippled by unnecessary formality and bureaucracy.

How exactly did Scharmbeck handle the fundraiser? I know that no Kickstarter company has ever handed over shares, instead they focused on compensating investors through gifts or privileges. That is what we want to do as well.

But I am definitely open for ideas and if a few individuals want to invest in this and join the company please approach me.
This is a complicated issue to decide on. My suggestion would be to tell everyone what the explicit (empirically countable) benefits will be and how much that would cost:

For example: Setting up a fiat - PTS exchange: Costs 100.000 USD acquired by the BTC raised through AGS. Benefits: x % of Dividends (see silent partner model below) in the company for AGS holders. The x depends on how much VC Funding is raised compared to the initial investment of I3/AGS.  Additional benefit: Rise in PTS price by an assumed xy.
Goal 2: Costs, benefits....
Goal 3: ...

A general advice is: Develop a core business model: Pain -> Solution + address Scalability + address Costs/Benefits.   
There are a lot of problems you address with your set of solutions. Adding complexity is adding insecurity and makes it harder for people here to decide. It might make sense to separate the goals a bit and say how much money is needed for the first one of which we can be sure that it will be achieved. Explicitly say how much money you want from the community for this and how much money comes from 3rd Party investors and how that will effect the benefits for the community.  This means I think every single one of your goals is legitimate and really worth following. The questions is just whether this is the most cost effective way? Doing nothing about the goals you promoted on the long term would be the worst though.

You could choose a silent partner structure which gives investors a right for dividends but no right to vote (at least that is possible in Germany).
Given the silent partner model. I see a bit of an issue with only giving AGS holders a stake in your company. Because PTS holders paid the price with a 40+% percent price drop by the creation of AGS. Only honoring AGS holders would ignore this and let the price drop further (until the PTS/USD exchange works)!
This means work out everything more explicitly.

Where do the other 80% go (you talked about a 20% fund....)?

This sounds like a lot of critique. But is its not. There will surely be a first PTS/Bitshares (sorry BEXshare would that be right here?) Exchange and we will need it. See it as a refinement of your idea. I like and appreciate the way you approach it!! Thanks for your contribution to the community!
« Last Edit: January 12, 2014, 10:51:49 pm by delulo »

Offline Markus

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domsch,

can you convince me that this argument is wrong:

"A global direct Fiat-DAC exchange handling all major (more than 3 or 4) fiat currencies is not needed and will not be profitable.
Doing two trades (first your local fiat-BTC exchange, then a global BTC-DAC exchange) is cheaper. Economies of scale for fiat-crypto-exchanges require that there are as few competing exchanges as possible. Trading n fiat currencies directly against m altcoins/DACs requires n•m markets, going through bitcoin requires n+m markets. If 2(n+m)<n•m the narrower spreads of the large exchanges will make trading via the largest crypto-currency (i.e. Bitcoin) cheaper."


Why are all major commodities traded in USD only?
Why did Cryptsy roll back from having direct markets between all alts to having only BTC-alt-markets.
Why can Mt. Gox charge 5 % fees for cross-(fiat)-currency trades and get away with it?
Why are there so many BTC-altcoin exchanges but so few doing fiat-altcoin directly?

bitbro

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Domsch, without any proven headway or concrete evidence of this project, we would first be investing in only you.  Can you tell us about yourself

Offline domsch

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I followed and invested in Scharmbeck which is now in testing. It provides WDC/Fiat. They raised money by giving out shares in the company.

If AGS fund is used for this initiative, we should get shares in the company.

Which is what we intend to do. 20% of the profits (same as with a new DAC where 20% are given to PTS/AGS owners) will be put in a DAC Development Fund. The fund will be controlled by 1 Invictus member and 1 trusted community member.

I was talking about a more direct stake at the individual level.

If we are doing a fundraiser with several companies (or a few individuals) that is very possible. But how will we accomplish this (without Invictus directly representing AGS investors) when most of the investors of the AGS fund are not clearly identified or willing to be identified? As a stakeholder you are required to sign all the required papers and eventually go to board-meetings/vote in decision.

I much rather prefer the 20% DAC Development Fund and perks (e.g. no trading fees, rewards, contests, bounties) and delegate part of the decision power to the community in a transparent and open way. Else our supposed agility and flexibility will be crippled by unnecessary formality and bureaucracy.

How exactly did Scharmbeck handle the fundraiser? I know that no Kickstarter company has ever handed over shares, instead they focused on compensating investors through gifts or privileges. That is what we want to do as well.

But I am definitely open for ideas and if a few individuals want to invest in this and join the company please approach me.

sumantso

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I followed and invested in Scharmbeck which is now in testing. It provides WDC/Fiat. They raised money by giving out shares in the company.

If AGS fund is used for this initiative, we should get shares in the company.

Which is what we intend to do. 20% of the profits (same as with a new DAC where 20% are given to PTS/AGS owners) will be put in a DAC Development Fund. The fund will be controlled by 1 Invictus member and 1 trusted community member.

I was talking about a more direct stake at the individual level.

Offline domsch

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I followed and invested in Scharmbeck which is now in testing. It provides WDC/Fiat. They raised money by giving out shares in the company.

If AGS fund is used for this initiative, we should get shares in the company.

Which is what we intend to do. 20% of the profits (same as with a new DAC where 20% are given to PTS/AGS owners) will be put in a DAC Development Fund. The fund will be controlled by 1 Invictus member and 1 trusted community member.

sumantso

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I followed and invested in Scharmbeck which is now in testing. It provides WDC/Fiat. They raised money by giving out shares in the company.

If AGS fund is used for this initiative, we should get shares in the company.

Offline domsch

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If your VC can fund $7 million as you say, then there is little need for $100K from the AGS fund. 

AGS is supposed to be used to develop DACs.  You have stated a plan to implement a DAC in 18 months, at that time AGS funding may be appropriate. 

Partnering with existing exchanges would probably be far more profitable for AGS holders and then using $100K to fund the development of integration with Open Transactions based exchange integration may be a more compelling and DECENTRALIZED solution.   Also spending $100K for development of cross-chain trading and options trading / coordination systems that work with the block-chain provided hooks may provide more value. 

I really believe that your initial VC funding should get you to a deployed product and our $100K plus-up should be focused merely on integrating advanced features not available on other exchanges.

You have our moral support, but to qualify for AGS funding I think you need to prove your ability to reach the same threshold of other USD/BTC exchanges.  Once there we can begin working with you to take it one step further and give you a competitive edge over the competition.

Raising $7m in a seed round is (nearly) impossible for any start-up and only a few start-ups I've heard of have raised that much in a seed round. Obviously raising that much in a seed round would mean giving up the majority of the shares which will mean less power inside the company. And we do absolutely not want a VC firm to have the last word in decisions.

I have stated several reasons why this project can not be run as a DAC initially, it will be difficult for us to operate legally and obtain everything that is required, such as licenses and partnerships. After we have built the initial structure that operates legally and smoothy, we can work on building a DAC exchange on top of this. It is already hard to get banking as a crypto-startup, so if we want the project to focuse on our ideals, anonymity and decentralization, finding a bank and a company willing to partner for the licenses will be a lot more difficult.

We not only want to be a trading platform but we will also support DAC's and help them with promotion and with our own DAC Fund (which can be compared to AGS). So the AGS invested in this project are not only there for a legit trading platform to be established, but to also generate another partner for DAC's and enhance development.

The reason why we will do a better job at this than other exchanges opening Fiat<->DAC is because we solely focus on this operation from the beginning on and do not do any other trading except from Fiat<->DAC. All our resources are focused on one exchange and we will do our best to fix where other exchanges are falling behind (customer support, delays, slow trading process etc.). This allows us to create specific features that improve trading and create a more effective and painless trading process. Most have the bigger exchanges are currently hands-full with managing their Bitcoin exchange and have not started adopting altcoins as of now. So it would take significantly longer for them to work with DAC's and implementing them to their system. And obviously none of them directly support the development of DAC's by providing financial and intellectual help.
Additionally, we will play a major role in the educational mission and help users understand the concepts of DAC's and convince them to participate. With this project I can work on some of the marketing plans mentioned here https://bitsharestalk.org/index.php?topic=1578.0 and we will work alongside with Invictus to make it all happen.

As a note, it would be fantastic if there will be other trading platforms that focus on decreasing the entry barrier for the masses to join. It is not our intention to gain an absolute market share in the trading space. Our goal is it to lower the entry barrier and embrace the masses to participate and to invest.


I wanted to raise the seed round through AGS; use that money to build the first PTS<->Fiat exchange and then work on the more sophisticated trading platform while also beginning the educational mission (together with Invictus eventually). After we have gained enough traction and have done a significant amount of trading I can try and raise a higher Series A round in order to finance the licenses and an international expansion.
The reason why I want AGS for our seed round is because it allows us to stay within the community and do things that would not be possible if an outside investor joined. The community will play an active role in the development process, they can participate and influence their ideas/changes to the project at any time. And the DAC Development Fund that we create will outgrow the current AGS fund and most importantly, our fund will be continuous and it will increase on a monthly basis (20% of the profits made through trading fees). That's why I think that this project will be a great addition to further help the community to grow and to develop more awesome projects.

Offline bytemaster

If your VC can fund $7 million as you say, then there is little need for $100K from the AGS fund. 

AGS is supposed to be used to develop DACs.  You have stated a plan to implement a DAC in 18 months, at that time AGS funding may be appropriate. 

Partnering with existing exchanges would probably be far more profitable for AGS holders and then using $100K to fund the development of integration with Open Transactions based exchange integration may be a more compelling and DECENTRALIZED solution.   Also spending $100K for development of cross-chain trading and options trading / coordination systems that work with the block-chain provided hooks may provide more value. 

I really believe that your initial VC funding should get you to a deployed product and our $100K plus-up should be focused merely on integrating advanced features not available on other exchanges.

You have our moral support, but to qualify for AGS funding I think you need to prove your ability to reach the same threshold of other USD/BTC exchanges.  Once there we can begin working with you to take it one step further and give you a competitive edge over the competition.

For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline AdamBLevine

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For what you're trying to do interfacing with US dollars, you will want to deal with ripple.  That's the one thing they're really really good at, if you connect with me on Skype I'll invite you to the Ripple federation chat where you can learn more about accessing ripples liquidity flows.
Email me at adam@letstalkbitcoin.com

Offline mf-tzo

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I like the whole platform DAC-Fiat idea. I am in favor of such a project and in favor if such a project was to take place to fund part of it with Angel Shares and if the project completes initial founders to get benefits (as with Kehottee for example). That is the idea I believe in supporting the community's projects. I liked the nice surprise with Angel shares for Kehottee Founders but If such benefits are known in advance, even better. Budgets and estimations and some numbers would be nice...For example estmated total project cost, estimated funds needed, estimated benefits (shares from the platforms profits for example would be nice) for those who contribute if the project succeeds etc..

I would suggest to follow the model of Bitstamp or BTC-E and pursue licenses from cryptocurrency friendly countries rather than in the US. Slovenia, Bulgaria are friendly but risky. UK, Germany I think might be good options since are friendly as well and less risky. I would also suggest Cyprus. The Bitcoin was known to the masses after Cyprus banks deposits were confiscated. The University accepts Bitcoins as payment now, they are a taxheaven country so you may find very good support over there for obtaining licenses and operate.

I agree a lot with Bitcoinfan. Let Bitcoin give the fights obtaining regulation from the US and the rest of the world. Once this is achieved everything will be easier for the other cryptocurrencies as well. Ofcourse beeing proactive is always good! I also liked the idea of a partnership with Ripple. I don't like how it operates, it is quite complicated for a user like me but I don't see any harm in such a partneship. In the end of the day the user will have the option to exchange PTS-BTC-Fiat and PTS-XRP-Fiat. Although I think there is already a PTS gateaway within Ripple. Again I am not very familiar with Ripple. I just like the idea of partnerhips.

What about Cryptsy? They have announced on their site for quite some time that soon USD market will be available. How will they do that? They are in they US, they are FINCEN registered. If they do it I3 should be able to create a DAC-fiat platforma well. Maybe I am mistaken but I don't think Chryptsy is a very big company with many funds...




Offline domsch

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What are your thoughts on having this Platform interface as a gateway with Ripple?

It is not our intention to use Ripple. But we can maybe work on implementing it as an additional source of funding.

Ripple as of now is still difficult to use and they have their own problem of educating/adopting, therefor it is smarter to use something that everyone has (Fiat) and give them the chance to invest. Using Ripple would require us to first convince them of the functionality/usage of Ripple and then further explain DAC's. Instead, if we focus our resources on just one concept we will achieve a greater and faster output.

Offline Bitcoinfan

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Compliance is still not defined by all state money transmitter laws and the companies know they have to be regulated and they go to every full measure they can to make sure they are safe and compliant.  Coinbase started with an AML policy and careful compliance to Fincen/MSB they did not start out allowing wire transfers without any details and blatant money laundering. I don't know how you got this idea that these companies just started out with these completely idealistic ideals that they were above all regulation, they instead got every compliance they were advised to and have kept away from ones that aren't "legally required" yet. The businesses are regulated and they are compliant with current laws. Thank you for your argument.

Any smart company or individual would act to avert legal harm and would not claim to be above a law. You are correct in that you do not know my familiarity with these companies. There was delight in the furthering of technologies that are beyond regulation. That is not to say that the companies ever acted to willfully violate any law. The draw to decentralized autonomous corporations is that they are decentralized autonomous corporations that can avoid oppressive regulations as necessary. I3 began with some lofty ideals too.

I3 is a company that is creating both technologies and companies. Traditional companies (like I3 itself) are easily forced to comply. The technologies can be forced to comply to the extent that they are managed by an entity that can be controlled. I3 sold an ideal that is disruptive to the notion of how companies may be formed and regulated, but is implementing what is practical within the rules it must comply with. Rules get modified as necessary to change what disruption to established interests is practical. I3 is not beyond the law but can act where laws do not yet restrict.

Everyone would agree that it is beneficial to have businesses that can act in compliance with laws. The question here is if the creator of the technology should be the one financing compliance for users of the technology. I doubt it is possible to spend enough to accomplish that without also sacrificing ideals.

We are not sacrificing the ideals of Privacy and Decentralization of the entire ecosystem, for the advantages of being compliant to the law and legally operating.

Think of us like this: We are currently building an entry to a cave. Our entry is easily accessible, visible and can be used by everyone. If our entry collapses and the passage is completely blocked the cave will still be accessible through other smaller but harder to access entries.
If this project will be shut down by the government, for whatever reason, the DAC's and the ideology behind them will still live on. If Coinbase is shut down, Bitcoin will move on.

Legal services are definitely not essential for this newly created space - but they are crucial add-ons to the crypto world that allow for a much faster adoption rate. They speed-up the process and give non-techies the chance to join a new and revolutionary project without the necessary requirements. Basically, they allow for ideas to spread and adopted at a much faster pace and they do a fair amount of educating of the userbase.


The ideal solution would obviously be an anonymous, decentralized trading platform that gives everyone the chance to invest in new DAC's. We are not quite there yet and we need to work on a centralized solution that will help us accomplish that goal in the future. A decentralized and anonymous trading platform can and will be built on top of the proposed trading platform and we will definitely work on that.

What are your thoughts on having this Platform interface as a gateway with Ripple? 

Offline domsch

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Can you show us an initial budget for the angel shares funding?


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The exact costs depend on a lot of factors such as the involvement of the community, exact incorporation costs, fees etc. But I had proposed a figure of roughly 80 - 120 BTC to Dan. This would allow us to set-up the trading platform for PTS, the online wallet, get the legality sorted (through partnerships), bounties and work on the future trading platform for DAC's (which requires a more sophisticated approach)

Offline domsch

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Compliance is still not defined by all state money transmitter laws and the companies know they have to be regulated and they go to every full measure they can to make sure they are safe and compliant.  Coinbase started with an AML policy and careful compliance to Fincen/MSB they did not start out allowing wire transfers without any details and blatant money laundering. I don't know how you got this idea that these companies just started out with these completely idealistic ideals that they were above all regulation, they instead got every compliance they were advised to and have kept away from ones that aren't "legally required" yet. The businesses are regulated and they are compliant with current laws. Thank you for your argument.

Any smart company or individual would act to avert legal harm and would not claim to be above a law. You are correct in that you do not know my familiarity with these companies. There was delight in the furthering of technologies that are beyond regulation. That is not to say that the companies ever acted to willfully violate any law. The draw to decentralized autonomous corporations is that they are decentralized autonomous corporations that can avoid oppressive regulations as necessary. I3 began with some lofty ideals too.

I3 is a company that is creating both technologies and companies. Traditional companies (like I3 itself) are easily forced to comply. The technologies can be forced to comply to the extent that they are managed by an entity that can be controlled. I3 sold an ideal that is disruptive to the notion of how companies may be formed and regulated, but is implementing what is practical within the rules it must comply with. Rules get modified as necessary to change what disruption to established interests is practical. I3 is not beyond the law but can act where laws do not yet restrict.

Everyone would agree that it is beneficial to have businesses that can act in compliance with laws. The question here is if the creator of the technology should be the one financing compliance for users of the technology. I doubt it is possible to spend enough to accomplish that without also sacrificing ideals.

We are not sacrificing the ideals of Privacy and Decentralization of the entire ecosystem, for the advantages of being compliant to the law and legally operating.

Think of us like this: We are currently building an entry to a cave. Our entry is easily accessible, visible and can be used by everyone. If our entry collapses and the passage is completely blocked the cave will still be accessible through other smaller but harder to access entries.
If this project will be shut down by the government, for whatever reason, the DAC's and the ideology behind them will still live on. If Coinbase is shut down, Bitcoin will move on.

Legal services are definitely not essential for this newly created space - but they are crucial add-ons to the crypto world that allow for a much faster adoption rate. They speed-up the process and give non-techies the chance to join a new and revolutionary project without the necessary requirements. Basically, they allow for ideas to spread and adopted at a much faster pace and they do a fair amount of educating of the userbase.


The ideal solution would obviously be an anonymous, decentralized trading platform that gives everyone the chance to invest in new DAC's. We are not quite there yet and we need to work on a centralized solution that will help us accomplish that goal in the future. A decentralized and anonymous trading platform can and will be built on top of the proposed trading platform and we will definitely work on that.

Offline Bitcoinfan

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Compliance is still not defined by all state money transmitter laws and the companies know they have to be regulated and they go to every full measure they can to make sure they are safe and compliant.  Coinbase started with an AML policy and careful compliance to Fincen/MSB they did not start out allowing wire transfers without any details and blatant money laundering. I don't know how you got this idea that these companies just started out with these completely idealistic ideals that they were above all regulation, they instead got every compliance they were advised to and have kept away from ones that aren't "legally required" yet. The businesses are regulated and they are compliant with current laws. Thank you for your argument.

Any smart company or individual would act to avert legal harm and would not claim to be above a law. You are correct in that you do not know my familiarity with these companies. There was delight in the furthering of technologies that are beyond regulation. That is not to say that the companies ever acted to willfully violate any law. The draw to decentralized autonomous corporations is that they are decentralized autonomous corporations that can avoid oppressive regulations as necessary. I3 began with some lofty ideals too.

I3 is a company that is creating both technologies and companies. Traditional companies (like I3 itself) are easily forced to comply. The technologies can be forced to comply to the extent that they are managed by an entity that can be controlled. I3 sold an ideal that is disruptive to the notion of how companies may be formed and regulated, but is implementing what is practical within the rules it must comply with. Rules get modified as necessary to change what disruption to established interests is practical. I3 is not beyond the law but can act where laws do not yet restrict.

Everyone would agree that it is beneficial to have businesses that can act in compliance with laws. The question here is if the creator of the technology should be the one financing compliance for users of the technology. I doubt it is possible to spend enough to accomplish that without also sacrificing ideals.

+1

Offline Liberty

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Compliance is still not defined by all state money transmitter laws and the companies know they have to be regulated and they go to every full measure they can to make sure they are safe and compliant.  Coinbase started with an AML policy and careful compliance to Fincen/MSB they did not start out allowing wire transfers without any details and blatant money laundering. I don't know how you got this idea that these companies just started out with these completely idealistic ideals that they were above all regulation, they instead got every compliance they were advised to and have kept away from ones that aren't "legally required" yet. The businesses are regulated and they are compliant with current laws. Thank you for your argument.

Any smart company or individual would act to avert legal harm and would not claim to be above a law. You are correct in that you do not know my familiarity with these companies. There was delight in the furthering of technologies that are beyond regulation. That is not to say that the companies ever acted to willfully violate any law. The draw to decentralized autonomous corporations is that they are decentralized autonomous corporations that can avoid oppressive regulations as necessary. I3 began with some lofty ideals too.

I3 is a company that is creating both technologies and companies. Traditional companies (like I3 itself) are easily forced to comply. The technologies can be forced to comply to the extent that they are managed by an entity that can be controlled. I3 sold an ideal that is disruptive to the notion of how companies may be formed and regulated, but is implementing what is practical within the rules it must comply with. Rules get modified as necessary to change what disruption to established interests is practical. I3 is not beyond the law but can act where laws do not yet restrict.

Everyone would agree that it is beneficial to have businesses that can act in compliance with laws. The question here is if the creator of the technology should be the one financing compliance for users of the technology. I doubt it is possible to spend enough to accomplish that without also sacrificing ideals.

bitbro

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Coinbase is doing fine because they have the backing of Andreesen Horowitz and the privileged-starts-only Silicon Valley Bank that isn't taking any more Bitcoin business right now (We checked, they're on "pause" right now even though we're a company that just sells sponsorships for Bitcoin).  Coinbase just got another 25 millionUSD in venture, I'm not  saying it's impossible but I am saying Invictus doesn't have anywhere near enough money, so it's a terribly inefficient way to spend it.

What Coinbase has done with Andreesen Horowitz we will achieve with my VC/accelerator/incubator contacts. I'm waiting for Techstars (Accelerator program) to respond to my last email. They partner with SVB and there may be a possibility to still get banking done through SVB. Else we will try and take another route. Just don't draw this entire operation off because SVB has closed their doors for now. I will call a few other Start-up friendly banks on Monday, like Square 1. I will keep you posted on what they say.

I actually think that this will be a useful way to invest Angelshares in an outside project that has potential to influence the output of Invictus' projects. What I ask for is enough money to bootstrap the initial operation (PTS<->Fiat trading platform and the incorporation), to get the required numbers on board in order to close a higher financing round to take on some of the bigger challenges.

Can you show us an initial budget for the angel shares funding?


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Offline domsch

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Coinbase is doing fine because they have the backing of Andreesen Horowitz and the privileged-starts-only Silicon Valley Bank that isn't taking any more Bitcoin business right now (We checked, they're on "pause" right now even though we're a company that just sells sponsorships for Bitcoin).  Coinbase just got another 25 millionUSD in venture, I'm not  saying it's impossible but I am saying Invictus doesn't have anywhere near enough money, so it's a terribly inefficient way to spend it.

What Coinbase has done with Andreesen Horowitz we will achieve with my VC/accelerator/incubator contacts. I'm waiting for Techstars (Accelerator program) to respond to my last email. They partner with SVB and there may be a possibility to still get banking done through SVB. Else we will try and take another route. Just don't draw this entire operation off because SVB has closed their doors for now. I will call a few other Start-up friendly banks on Monday, like Square 1. I will keep you posted on what they say.

I actually think that this will be a useful way to invest Angelshares in an outside project that has potential to influence the output of Invictus' projects. What I ask for is enough money to bootstrap the initial operation (PTS<->Fiat trading platform and the incorporation), to get the required numbers on board in order to close a higher financing round to take on some of the bigger challenges.
« Last Edit: January 11, 2014, 07:11:07 pm by domsch »

Offline Pocket Sand

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Bitcoin has only grown because of the LEGAL and COMPLIANT exchanges and businesses (coinbase/bitpay) that has brought this technology to the masses. Bitcoin only existed as a niche technology until these businesses actually have brought them to the less technology adept.

Thank you for your arguments, but the companies you mention did not begin with compliance but came to it as rules were refined to include them. Bitcoin evolved from niche technology before compliance was achieved. Those companies were able to avoid compliance long enough to acquire capital to become compliant with existing barriers to entry. These aberrations happened because they formed faster than the regulations could adapt. Use of Bitcoin is a rejection of the capital controls by state, and the state will do whatever is in their power to obstruct it. Non-compliant exchanges continue to be important. Bitcoin exists in spite of the regulations, not because of the regulations.
I don't know why you think you can just say blatant lies and treat them as truth Liberty. "Bitcoin evolved from niche technology before compliance was achieved" Compliance is still not defined by all state money transmitter laws and the companies know they have to be regulated and they go to every full measure they can to make sure they are safe and compliant.  Coinbase started with an AML policy and careful compliance to Fincen/MSB they did not start out allowing wire transfers without any details and blatant money laundering. I don't know how you got this idea that these companies just started out with these completely idealistic ideals that they were above all regulation, they instead got every compliance they were advised to and have kept away from ones that aren't "legally required" yet. The businesses are regulated and they are compliant with current laws. Thank you for your argument.

Offline AdamBLevine

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If we proceed and simply say "Fuck you USA" a la MtGox and don't comply with regulations we will soon see our accounts seized and operations halted. That is why I am for conducting this all within legal borders and try to acquire the licenses as soon as possible.
Bitstamp right now simply works with international wire transfers to their accounts in the UK. (They are actually registered in the UK, but I think they operate from Slovenia). We intend to take a similar approach but are focusing on getting US Banking set-up and acquire the licenses as soon as possible. A huge problem could arise in which the US requests all trading platforms to be incorporated in the US, work with a US bank and get the required licenses. If we work on getting all this done prior such a hypothetical, but very likely, regulation, we will be ahead and trading would continue without any difficulties.

And I need to emphasize this again: Initially we will be able to operate WITHOUT these licenses

The only problem with your plan is Mt.Gox spends a huge amount of money on lawyers and compliance professionals.  You are assuming they're just bad actors, but that's not true.  The problem is in an environment lacking solid rules, the best you can do with your compliance effort is to make a bet at what you think it'll be.  That's crazy. 

You can try this however you'd like, I'm just saying please consult with a US attorney who knows the Bitcoin startup space before you commit to a business model that requires licenses in the US.

That is also how Coinbase did it and still does it. They entered a grey area and are doing fine as of now, but they are trying to get everything sorted by getting their state MTB licenses. We will take a similar approach.

Currently we are in talks with 3 lawyers from the US, Hong Kong and Germany. I'm still trying to work on that contingency plan mentioned on the first page of the thread and on a proper incorporation strategy that allows us to target the most prominent countries first while expanding to other countries. And we have also contacted several other attorneys from Singapore, UK and Australia to plan ahead and know what will be required.

It should be interesting to hire our own General Counsel. Similar to known start-ups that have challenged laws: Airbnb(local hotel zoning laws), Uber (taxi licensing requirements), and Pinterest (posting copyrighted images). Obviously that is another long-term goal, but if this platform shows traction and we raise money from a VC I do think that there is a possibility on not only hoping for a better output on a hearing, but also actively fighting for it.

Reference: http://techcrunch.com/2014/01/04/why-startups-hire-their-own-lawyers/

Coinbase is doing fine because they have the backing of Andreesen Horowitz and the privileged-starts-only Silicon Valley Bank that isn't taking any more Bitcoin business right now (We checked, they're on "pause" right now even though we're a company that just sells sponsorships for Bitcoin).  Coinbase just got another 25 millionUSD in venture, I'm not  saying it's impossible but I am saying Invictus doesn't have anywhere near enough money, so it's a terribly inefficient way to spend it.
Email me at adam@letstalkbitcoin.com

Offline domsch

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If we proceed and simply say "Fuck you USA" a la MtGox and don't comply with regulations we will soon see our accounts seized and operations halted. That is why I am for conducting this all within legal borders and try to acquire the licenses as soon as possible.
Bitstamp right now simply works with international wire transfers to their accounts in the UK. (They are actually registered in the UK, but I think they operate from Slovenia). We intend to take a similar approach but are focusing on getting US Banking set-up and acquire the licenses as soon as possible. A huge problem could arise in which the US requests all trading platforms to be incorporated in the US, work with a US bank and get the required licenses. If we work on getting all this done prior such a hypothetical, but very likely, regulation, we will be ahead and trading would continue without any difficulties.

And I need to emphasize this again: Initially we will be able to operate WITHOUT these licenses

The only problem with your plan is Mt.Gox spends a huge amount of money on lawyers and compliance professionals.  You are assuming they're just bad actors, but that's not true.  The problem is in an environment lacking solid rules, the best you can do with your compliance effort is to make a bet at what you think it'll be.  That's crazy. 

You can try this however you'd like, I'm just saying please consult with a US attorney who knows the Bitcoin startup space before you commit to a business model that requires licenses in the US.

That is also how Coinbase did it and still does it. They entered a grey area and are doing fine as of now, but they are trying to get everything sorted by getting their state MTB licenses. We will take a similar approach.

Currently we are in talks with 3 lawyers from the US, Hong Kong and Germany. I'm still trying to work on that contingency plan mentioned on the first page of the thread and on a proper incorporation strategy that allows us to target the most prominent countries first while expanding to other countries. And we have also contacted several other attorneys from Singapore, UK and Australia to plan ahead and know what will be required.

It should be interesting to hire our own General Counsel. Similar to known start-ups that have challenged laws: Airbnb(local hotel zoning laws), Uber (taxi licensing requirements), and Pinterest (posting copyrighted images). Obviously that is another long-term goal, but if this platform shows traction and we raise money from a VC I do think that there is a possibility on not only hoping for a better output on a hearing, but also actively fighting for it.

Reference: http://techcrunch.com/2014/01/04/why-startups-hire-their-own-lawyers/

Offline Liberty

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Bitcoin has only grown because of the LEGAL and COMPLIANT exchanges and businesses (coinbase/bitpay) that has brought this technology to the masses. Bitcoin only existed as a niche technology until these businesses actually have brought them to the less technology adept.

Thank you for your arguments, but the companies you mention did not begin with compliance but came to it as rules were refined to include them. Bitcoin evolved from niche technology before compliance was achieved. Those companies were able to avoid compliance long enough to acquire capital to become compliant with existing barriers to entry. These aberrations happened because they formed faster than the regulations could adapt. Use of Bitcoin is a rejection of the capital controls by state, and the state will do whatever is in their power to obstruct it. Non-compliant exchanges continue to be important. Bitcoin exists in spite of the regulations, not because of the regulations.

Offline luckybit

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I'm with it. I think the key to getting community support is offering a good crowd funding bargain.
If you're going to seek investment via crowd funding you have to offer some promise of a return on investment and that part is going to be difficult initially. Neo Bee seems to be doing a good job as a payment network and they were crowd funded so it's possible but it's hard.

I think something like Bitshares really needs a fiat -> BTS exchange.

Neo Bee is doing a good job because they are a full reserve bank. They are more solvent and traditional than the fractional reserve banks that regulations exist for. They bypassed most of the regulatory obstacles. The profits of a fractional reserve banking system had driven full reserve banking out of the market. Neo Bee will do well because they stand alone as people lose confidence in fractional reserve banking and the fiat that they are based upon.

DACs have similar advantages being unmanned businesses. Some of them will go on to be immensely profitable and as technology advances they will only become more efficient. Human run businesses will not be able to compete with them in the long term.

It is still up to us to negotiate with the larger finance and banking community. They present some rules they want or expect our community to comply with and whether those rules make sense or are problems to be solved later. What we can do now is codify some rules of our own which we would want businesses to follow if they use our DACs, our software, our hardware, or anything we create which could be of value to them. Since we are in a position to set rules, while you start of course with the social consensus license which applies to any entity which legally wants to use the software produced by that license, there are many other possible licenses which all can be used to defend the community. Some licenses are more defensive, some are more offensive, some are aggressive and some aren't.

The strategy I propose is that free speech be used to protect the DAC community and ecosystem.  Free speech could take the form of legal documents which protect the little guy from being exploited by the big guy, or which promote decentralization. For example it could be a legally formal tradition for us to favor the more decentralized solutions and we can easily take that principle and others like it and set up a certification system where the community certifies certain DACs as being compliant and other DACs as not being compliant as a way to protect the community from hostile DACs which promote centralization in the name of compliance, politics, or some profit scheme.

Legal speech just like writing software are both represented under the free speech umbrella. Free speech is what can defend the community and the DAC community at the core has to be a free speech community. The moment we start censoring ourselves and stifling innovation in favor of compliance or profit is when we lose the disruptive and innovative essence.
I feel like eventually if bitshares are mainstays in the altcoin world, then one of the big exchanges bitpay/ coinbase will begin implementing it into their operations. 

However, I do see where this idea would be crucial 5 or 6 years down the line, just skeptical about its viability and benefits today.

Centralized big exchanges implementing it isn't as good as a bunch of little exchanges doing it. It's the same problem with https://bitcointalk.org/index.php?topic=406152.0

We should try to find a way to do it where it's franchised in a way and not centralized into one jurisdiction. I don't know how to decentralize it but we should at least see if it's possible to do it because centralization should be the last resort for us rather than the first. Can we do a decentralized fiat -> BTS exchange which is compliant?

BTC global has an interesting scheme which we should look into. It is decentralized and could work but of course I'm no lawyer.
Quote
Providing a solution, BTC Global has announced today what they call “Massive Parallel Licensing”. Last month we wrote about BTC Global and their ambitious plans for the future (Living in the Future Today). Centered around their Uruguay based exchange, BTC.UY, BTC Global is seeking to create a multi-service bitcoin company that includes merchant solutions, secure storage facilities, digital currency conversions, and consulting services. With its team situated around the world, BTC Global considers itself a ‘true’ distributed startup. Utilizing the same methodology of leveraging its team’s knowledge and resources from around the globe that it is using to operate BTC Global, the company wants to do the same thing for bitcoin regulation.

Mauro Betschart, CEO & Co-Founder, BTC Global
Mauro Betschart, CEO & Co-Founder, BTC Global
Massive Parallel Licensing (MPL) is a partnership program that is part franchising and part crowdsourcing, and which BTC Global believes will provide a solution to “regulatory issues in the United States and worldwide facing bitcoin”. In their prepared statement, BTC Global explained that “the highest hurdle for entrepreneurs interested in launching a Bitcoin exchange business is the significant international and local regulatory requirements.” They added that “it is estimated that an investment of over $10 million would be required to reach total legal compliance in all the U.S. 50 states alone.” To solve this problem, MPL will allow bitcoin operators to partner with BTC Global, and leverage each other’s regulatory infrastructure and resources.
http://forexmagnates.com/compliance-through-alliance-btc-global-introduces-crowdsourced-bitcoin-regulation/
http://bitcoinmagazine.com/5233/btcglobal-commoditizing-the-bitcoin-exchange/
« Last Edit: January 11, 2014, 06:21:32 pm by luckybit »
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Offline AdamBLevine

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If we proceed and simply say "Fuck you USA" a la MtGox and don't comply with regulations we will soon see our accounts seized and operations halted. That is why I am for conducting this all within legal borders and try to acquire the licenses as soon as possible.
Bitstamp right now simply works with international wire transfers to their accounts in the UK. (They are actually registered in the UK, but I think they operate from Slovenia). We intend to take a similar approach but are focusing on getting US Banking set-up and acquire the licenses as soon as possible. A huge problem could arise in which the US requests all trading platforms to be incorporated in the US, work with a US bank and get the required licenses. If we work on getting all this done prior such a hypothetical, but very likely, regulation, we will be ahead and trading would continue without any difficulties.

And I need to emphasize this again: Initially we will be able to operate WITHOUT these licenses

The only problem with your plan is Mt.Gox spends a huge amount of money on lawyers and compliance professionals.  You are assuming they're just bad actors, but that's not true.  The problem is in an environment lacking solid rules, the best you can do with your compliance effort is to make a bet at what you think it'll be.  That's crazy. 

You can try this however you'd like, I'm just saying please consult with a US attorney who knows the Bitcoin startup space before you commit to a business model that requires licenses in the US.
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Offline domsch

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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

This is something I had talked about with Daniel. To make this clear for everyone: This project will not be a DAC per se (at least not for the next 12 - 18 months). As of now, I (and others) do not know how to handle this in a decentralized way that will allow us to comply with the law and get everything that is required for us to operate.
The biggest issue with all this will be to obtain banking (for deposits/withdrawals) within the US. The licenses can by acquired through partnerships with businesses who are already licensed (Look at Kraken for example) or by directly obtaining them. Obviously that is very long process and not even Coinbase has their MTB license as of now (they do have an MSB license though) - but they are working on it. And lastly, our resources are focused on building up the platform and work on legality/expansion.

All this would not be possible if we start out operating as a DAC. Getting a bank or partnering with another company (or obtaining the licenses) requires security and assurance. The grey legality of DAC's currently will make attempting to get a bank account nearly impossible as banks are scarcely allowing crypto-currency services to open accounts as is. The added risk that they may run in to major legal problems between our company being a DAC and dealing in crypto-currencies will hardly seem worth the risk for any bank.
To be clear, I am not against DAC - I am an advocate and want to support the project with as much as I can. I just don't think that we will be able to handle this project in a decentralized manner that accomplishes our goal of creating an easy to use and fast trading platform that complies with the law. Once we have some clarity we can definitely transform this into a proper DAC.


My concession to the community was it to set-up a 20% DAC Development Fund instead of honoring them with a 20% stake in the operation. That is the best I can offer to help support the community and award developers of DAC's with the required funding to start launch their operation. So we help DAC's get funded, and additionally help them with the adoption/promotion internally (through our platform) and externally through other medium.


If we proceed and simply say "Fuck you USA" a la MtGox and don't comply with regulations we will soon see our accounts seized and operations halted. That is why I am for conducting this all within legal borders and try to acquire the licenses as soon as possible.
Bitstamp right now simply works with international wire transfers to their accounts in the UK. (They are actually registered in the UK, but I think they operate from Slovenia). We intend to take a similar approach but are focusing on getting US Banking set-up and acquire the licenses as soon as possible. A huge problem could arise in which the US requests all trading platforms to be incorporated in the US, work with a US bank and get the required licenses. If we work on getting all this done prior such a hypothetical, but very likely, regulation, we will be ahead and trading would continue without any difficulties.

And I need to emphasize this again: Initially we will be able to operate WITHOUT these licenses

Offline Bitcoinfan

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What difference does it make.  Once you buy any crypocurrency your already in a frictionless market.  Buying bitcoins means you can easily exchange for any DAC.  And vice-versa.  Bitcoin is by itself taking care of the regulatory hurdles for us.  I do like the idea, and am openly entertaining it, but there is a part of me that says doing this will drive attention from governments when a time DACs need to be incubated-- there is something to say governments will want to restrict and legislate  formation of enterprises.  Is our vision to build something different from the financial system in place today?

I feel like eventually if bitshares are mainstays in the altcoin world, then one of the big exchanges bitpay/ coinbase will begin implementing it into their operations. 

However, I do see where this idea would be crucial 5 or 6 years down the line, just skeptical about its viability and benefits today. 

Offline Liberty

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I'm with it. I think the key to getting community support is offering a good crowd funding bargain.
If you're going to seek investment via crowd funding you have to offer some promise of a return on investment and that part is going to be difficult initially. Neo Bee seems to be doing a good job as a payment network and they were crowd funded so it's possible but it's hard.

I think something like Bitshares really needs a fiat -> BTS exchange.

Neo Bee is doing a good job because they are a full reserve bank. They are more solvent and traditional than the fractional reserve banks that regulations exist for. They bypassed most of the regulatory obstacles. The profits of a fractional reserve banking system had driven full reserve banking out of the market. Neo Bee will do well because they stand alone as people lose confidence in fractional reserve banking and the fiat that they are based upon.

Offline Pocket Sand

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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.
This is not a project about creating a disruptive technology, it's already there in the DAC's from memorycoins, protoshares, and eventually bitshares. Your argument regarding "You do not achieve escape velocity by following the rules but by rendering the rules moot" is entirely off-centered. Bitcoin has only grown because of the LEGAL and COMPLIANT exchanges and businesses (coinbase/bitpay) that has brought this technology to the masses. Bitcoin only existed as a niche technology until these businesses actually have brought them to the less technology adept. In order for us to bring DAC's to the masses we need businesses/services that will spread the message and bring them to the average person.

Offline luckybit

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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.

I'm with it. I think the key to getting community support is offering a good crowd funding bargain.
If you're going to seek investment via crowd funding you have to offer some promise of a return on investment and that part is going to be difficult initially. Neo Bee seems to be doing a good job as a payment network and they were crowd funded so it's possible but it's hard.

I think something like Bitshares really needs a fiat -> BTS exchange.
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.

I think it should at least be attempted, but it should not be attempted at the cost of our principles. Innovation is more important than compliance, but compliance is how you get liquidity through mainstream adoption. The mainstream banking industry has a community which we have to negotiate and they present to us rules we must follow to obtain their support? So we present to them the rules they must follow to obtain support of our community. So far we have the social consensus, but there are other principles we could codify into the legal language in order to protect the integrity of the DAC community.

We want compliance but we also need to formally declare our rules so that any foreign entity who interacts with us in the legal space has to follow the community standards rather than impose their standards on the community. Compliance should therefore go both ways. We comply with them but they comply with us. This will require negotiation (tit for tat, comply with KYC but they must accept the social consensus and adhere to the principle of decentralization).

Decentralization and privacy should not be on the table. Those are absolutes. Innovation should also not be stifled or suppressed for any political reason. If the planet is not going to explode then we should innovate.



« Last Edit: January 11, 2014, 05:57:21 pm by luckybit »
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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.

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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
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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.

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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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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.

Offline luckybit

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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.
« Last Edit: January 11, 2014, 12:09:36 pm by luckybit »
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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.

Email me at adam@letstalkbitcoin.com

Offline domsch

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Proposal for Angelshares Investment in a DAC Trading Platform

After discussing the matter with Dan, we agreed that it would be the best to bring my proposal to the community and gain support for our mission.

I want to create the first international, legal and automatic DAC Trading Platform. Not only would it guarantee an easy entry to DAC’s through Fiat, it would also allow trading to be conducted with different DAC’s.



What will we exactly do?


There are several things we will work on, but our primary focus will be to create an international and legal trading platform. That means we will work on acquiring all the required licenses (either through partnerships with other companies, or by buying the licenses). There are 3 major licenses we need to acquire in order to function as a legitimate exchange:
  • MTB License (Money Transmitting Business. This is a license which we need to acquire in all 50 states)
  • MSB License (Money Service Business. This is a federal license)
  • PSP (Payment Service Provider. Registered in the EU)
  • And other licenses to assure our legality in all the major countries

As mentioned, initially we will acquire these licenses through strategic partnerships with current license-holders. Directly applying to these licenses is out of question right now as we do not meet the current requirements (e.g. $7m in bonds, having a CCO, etc.). But we are definitely looking to get these licenses in our hand as soon as possible.


Secondly, we will work on a secure web wallet not only for Protoshares and Bitshares, but also for all the other future DAC’s that Invictus and other developers have planned. Since most of us are paranoid about hackers, we will combine some of the best techniques available right now to offer our users the best possible security for their money. This includes:
  • 2FA (standard)
  • Multi-Signature Wallet (Similar model to https://www.bitgo.com/p2sh_safe_address )
  • Cold storage on machines that have never touched the internet and will be hosted by us (so no relying on third parties)

Optional
  • You can set a daily limit on how much you usually spend. When you reach that threshold you are prompted to verify ownership of the account
  • You can also set an estimated time around when you usually buy/sell. Let’s say you usually trade between 7AM/8AM in the morning. If someone makes a sell request on 12AM, further verification is required
  • And obviously more

Thirdly, since we are an advocate of the adoption of DAC’s, we will not only help already established DAC’s with promotion, but we do also want to help them through funding. Therefore we will create an official “DAC Development Fund” in which we donate 20% of our profits. This money would be donated to ambitious Teams and Projects that have been voted and decided on by the community. To add transparency to this entire operation, I would like to get 1 Invictus member and 1 trusted Forum member on the board of the company. They will give additional insight of our operations to the community and act as an independent third-party that control the donation fund with us.

Lastly, (as a long term project of mine), I want to create a platform that functions as a place where ideas are exchanged, knowledge is shared and help is given. It would basically be a Start-up and DAC Owners Manual. Past founders talk about their experience, mistakes, failures and success they have had in the past and what exactly led to it all. Additionally groups will be created in which ideas are exchanged and potential future DAC’s are organized.


Tell us more!

Our focus is it to lower the entry-barrier and give everyone the chance to invest and participate in jaw-dropping new projects. As such, we try to give everyone with Fiat in their hands, the chance to swap to something more technologically advanced and secure. We try to get as many payment options on board as possible, but initially our capabilities are limited. Some of the payment methods we intend to accept are:
  • US Bank Wire (ACH)
  • EU Bank Wire (SEPA)
  • Moneygram
  • Western Union
  • PerfectMoney.com
  • Ukash.com
  • Webmoney
  • Mobile Carrier Payments

(The section below is here to show what can be done)
Once we have the licenses and are operational there is a lot more we can and will do. For example, as a PSP organization within the EU you basically function as a “bank” (without the money lending though). So what does that exactly mean?
  • We can offer insurance on fiat stored on our platform (up to 100,000.00 €)
  • EU residents will get their very own IBAN code. That means that users can give their employer that IBAN and their monthly salaries will be automatically transferred into Bitshares through the platform!
  • We can issue debit cards (I’m not an advocate of this though)
  • Faster and Better banking infrastructure
  • more “legality” to the entire project.

This will be our legal tender for EU residents, but it is our intention to increase the benefits and offers for our users in every country in the world.


What are our goals with this project?

Short-term: Build the very first legal and automatic USD <-> PTS exchange! Not only that, but we do also want to initiate our educational mission for Bitshares, Keyhotee and Protoshares. Some of the methods mentioned here https://bitsharestalk.org/index.php?topic=1578.0 will be used. But our short-term goal is it to prepare ourselves with the needed material for the Bitshares launch so we can get started on educating and acquiring more and more users!

Mid-Term: From the beginning on we want to be one of the first Bitshares exchanges and online wallets. As mentioned above, we do also want to work closely with future DAC’s and implement them on our exchange and wallet. For specific and quite interesting DAC’s that show a true purpose (such as the LTBCoin for example) we will help with the promotion through our platform. For the “DAC Owners Manual” platform I intend to get as many past-founders and people “that have been there and done that” on board as possible and have them share their experience. This platform should eventually grow to an independent community where like-minded people meet each other and come up with the craziest ideas.

Long-Term: Have my mother, that does not know how to turn on a PC (no I am not kidding), understand DAC’s and join a project through her own initiative! Obviously that is a very long sighted goal but I think we have a very clear roadmap on how we need to proceed. With the right resources and the community we will be able to cross and obstacle.

TL;DR The exchange platform is there to lower the barrier of entry to Bitshares and other DAC’s. Additionally it creates an easy to use environment that can be understood and used by your average non-tech oriented user. We will invest heavily on the educational and adaption part of this and other projects!


How to get started

My inquiry to the community is it to invest some Angelshares to this mission so we can get fully started.  The invested money will be used exclusively on the project and will be spent in an open and transparent way.
As mentioned, our first object is it to set-up a functional (and legal) Protoshares <-> Fiat exchange with a multi-signature wallet. After that is completed, we will simultaneously focus on an international expansion and creation of the actual trading platform.
I will also set-up a blog so the entire community will get daily/weekly updates on the progress.

This is a project by the community for the community and the future of DAC's. Therefore I will be happy to get more participants to help us with this project. If you are interested in joining this, please just send me a message with your skillset and what exactly you want to work on!


So what do you guys think: Should Angelshares be invested in this project or not? Please post your opinion below!


The exact required sum will be discussed in detail with the Invictus members and the community can decide whether it is adequate or not in the next thread.


Update on our progress

Legal progress:
  • We have talked with several lawyers over the last week (Hong Kong, Singapore, London, Berlin and the US) and we have set-up a proper proposition on how to get the initial PTS<->Fiat exchange up and running without much hassle.
  • We have been responded to by multiple MTB & MSB licensed businesses and we are currently in talks to work with them for the future. We are just waiting for the support of the community to proceed here.

Development progress:
  • The initial design concept has already been made and we are currently working on a blueprint. Once that is done, we can simply forward it to my friend (who owns a design and dev. company) to work on the front-end.
  • For the wallet we are trying to partner with Bitgo
« Last Edit: January 14, 2014, 07:16:30 pm by domsch »