Before I go into my story let me introduce myself. I work in the financial services sector, live in New York and am new to Bitcoin. Recently, I’ve decided to give a try and buy some bitcoins. Everyone talks bitcoin so I wanted to evaluate the future of the currency for myself. First, I googled the most popular ways to buy bitcoins. Decided to start with the exchange. After reading numerous stories about Mt. Gox, bitstamp and other exchanges decided to register with Coinbase for the reasons you all probably know. The basic registration process was straightforward and simple. However, in order to buy bitcoins you have to go through verification procedure. You need to link your bank account to Coinbase, provide your billing address and in case if you want to make buying bitcoins instant you also need to link your credit card. So you provide the same information you need to provide to any US bank to be able to buy bitcoins. There is no anonymity or privacy. It’s a myth. Then you buy bitcoins. You would expect instant transaction but instead you have to wait 4-5 days for the transaction to complete. So if I need to buy something with bitcoins the same day – I can’t. Moreover, the worst part is that while you are waiting for the transaction to complete the price of bitcoin fluctuates. In my case, it fell 15 USD which was more or less equal to 10% of the price of btc on the day of purchase. So btc lost 10% value against USD while I was waiting for the transaction to complete. In addition, you also have limits. You cannot buy more than 1000 USD worth of btc in one week. I thought this was totally ridiculous. What was the reason for going through all these verification steps if you are still facing limits? However, as I am new to btc decided to give another try. This time I registered with Coinbase Exchange. Again, you have to provide your SSN and link with coinbase account. When you register with the exchange Coinbase opens so-called “USD Wallet”. You can now transfer USD to this wallet and then instantly transfer them to btc or trade in the Exchange. However, the transfer again takes 4/5 days. I was totally disappointed by how the whole system works. I thought bitcoin users were treated like some kind of criminals. I wasn’t simply asked to verify my identity by providing all the usual KYC information, but I also faced buy/sell limits (1000 USD a week), 4/5 delays in transaction completion. Moreover, I had to provide all my bank details to Coinbase. I felt like I had no other choice as to trust Coinbase despite the fact that they disclose very little information about security measures they implement to store my personal information. Moreover, Coinbase was not different from any bank around the corner with its KYC procedures. Anyway, I thought it was too early to give up. Decided to try localbitcoins. Unfortunately, I experienced another disappointment. Bitcoins are sold in average with 6-7% premium. And you have to pay this premium every single time you buy btc. You also have limited options for buying btc: Moneygram/WU transfers, national bank transfers, paypal transfers and gift codes. From all these options the only instant and acceptable option was paypal. However, the seller of btc requested my photo holding some ID for verification process. Here you are not dealing with Coinbase, which is supported by NYSE, but with some ordinary guy who God knows how treats and secures the information you provide to him. I understand the reasons why he/she asks for the verification but still find it irresponsible to trust this person. I have no idea who he/she is and how he/she handles the information I provide (in case of buying using paypal). Of course you can also buy with cash. I tried that option as well. Buying with cash involves arranging a meeting with some stranger somewhere in your town. So you have to arrange the time and place to meet and both of you should agree on this. Then you have to carry cash with you, which is another risk. And of course you wont carry over 1000 USD especially if this is your first transaction with some stranger. Finally, again you have to pay around 10% premium. Then I found out about guys from LibertyX. I read some of their interviews and thought they were trustworthy. They claimed that one could buy their so-called Qpins in big stores nationwide and redeem them for btc. However, when I visited their website it turned out that I had some outdated information. In reality it’s possible to buy Qpins only from small stores in Manhattan and Brooklyn. They recommend calling the stores before visiting them. I followed their advice, but not a single store in Manhattan answered my call. So I decided to try my luck and go there without speaking to them on the phone. One store was out of business. Another one claimed that it didn’t sell bitcoins. In such case LibertyX recommends calling them, as they know how to handle such situations. So right from the store I called LibertyX. Guess what? All their operators (probably 1 or 2 people) were busy to answer my call. So decided to go to Brooklyn. And again one store was closed and the other store manager didn’t know what I was talking about. However, after 30 minutes of explanation the store manager finally figured out how to find in their system Qpins and sell them to me. Overall, the whole process took 1.5 hours. I came home, logged in to LibertyX website to redeem the pins and receive btc. They also collect personal information. I entered my real name and address. Their system gave an error message saying that it couldn’t verify the information I provided and asked me to send verification information (scan of ID). In order not to lose my money, I had to provide them the scan of my ID. Then I had to wait a day for my account to get verified. Please, note that they also have 1500 USD weekly limit. I am a stubborn guy and I hate banks enough to give another chance for bitcoin to prove itself as future currency and therefore I decided to try bitcoin ATMs instead of all methods described above. I visited coinatmradar.com to locate the nearest ATM. I found three ATMs in Manhattan and two in Brooklyn. Visited all of them and didn’t find any ATM in any of these locations. Finally, decided to try to register with the European exchange to compare with the US one. I couldn’t even register with them because Europeans avoid providing financial services to the US citizens. My attempt failed. The same happened when I tried to buy bitcoins through VirWox.com. So here are my conclusions.
Buying bitcoins is not anonymous.
Unless you use cold storage/offline solution you do not hold bitcoins but some institution like Coinbase does.
Buying bitcoins is not a straightforward process, is time consuming and requires risk acceptance.
Buying bitcoins is expensive. You will normally pay 10% premium when buying for cash or paypal. This premium equals to a dream annual return of most hedge funds (and their investors accordingly).
You have to verify your identity when buying btc through exchanges or companies like LibertyX. You go through the same procedure as when opening a bank account.
There isn’t any operating ATM in New York. This is due to “bitlicense” uncertainty. However, even if bitlicense is implemented not a single ATM would operate profitably under money transmitter licensing.
You face limits when buying bitcoins. Coinbase and Circle have 1000 USD weekly limits. LibertyX has 1500 USD limit. Localbitcoins doesn’t have limits but you cannot buy btc using debit/credit card. Moreover, when buying through localbitcoins you have to be aware of scammers.
The high cost of buying btc can potentially offset the benefits of low transaction costs. It might be cheaper to use your debit card.
Therefore I don’t see a single benefit of dealing with bitcoin instead of fiat (i.e. banks) in current environment. There is no “killer app” requiring you to go through all the above procedures to buy bitcoin. I think the only people who are willing to go through all this hell in order to buy btc are the ones who use them illegally in the dark market, some enthusiasts/revolutionists/anarchists who believe in the long run success of btc, hate banks and current financial system; and people who either trade btc or use it occasionally for some purchases online. I don’t see how mass adoption can happen if you cannot buy bitcoins with two-three clicks online. I don’t understand who would wait 4/5 days to get btc when the price fluctuates every 10 minutes. What I do now is I buy btc using Coinbase. Then I send them to bitreserve.org and hold them in different currencies. However, even if I want and need to buy btc instantly I simply cannot do this. If instant buying is possible then I have to pay high premium. I find it much cheaper to use my debit card and pay bank fees, which are nothing in comparison with the premium to buy btc. Please, prove me wrong or enlighten me. Maybe I am missing something.
Then the price of Bitcoin will climb over time. I started buying in Oct. 14, and I will be converting 2% of every check into BTC for the entire 2015 year as long as my portfolio does not fall below 50% in value (USD). I am convinced that this will not happen because I hold BTC as Gold and USD (Bitreserve). I keep the proportionality of the fund distributed as per the current sentiment. Leading up to this formidable crash over the last 24 hours, I was only holding 30% as BTC. The result so far, since Oct., is that my fund is up 20% in total BTC, but -15% in total USD value. This is compared to almost -50% in the overall BTC market price. I plan on benefiting greatly when this ship turns around, and I can't help but to think... Are there another 1000 just like me out there in the world, and what will that mean for the price in the future as we lap up all the goods. With my current fund set up (between several family members) the price would have to fall to ~ $20/BTC for the fund to fall below 50% in value. In the same vein, my BTC holdings would rise > 650%. In some ways it feels like the only way to lose is to stop paying attention.
[ACTUAL SHILLING] Let's see who's defending Uphold over in /r/bitcoin.
So there's this company, Uphold, which basically made up most of their balance sheet by introducing a 100% premined cryptocurrency, Voxel. They claim to operate as a full reserve, but the nature of their assets doesn't match the nature of their liabilities. If you remove all Voxel assets and obligations, there's a negative balance. Note that this is according to the balance sheet they publish themselves which is not audited in any way (they don't even publish their BTC addresses and provide signed messages). Just three days after it was on /buttcoin, /bitcoinnoticed it too. In that thread, several people defended Uphold. Let's have a look at them. There's bittyboyboo with this comment:
OP is a Redditor for 12 hours, but sounds like a long-time and serious Uphold hater. Wonder why? Uphold is an awesome service and I use it to move money from my UK bank account to my UH wallet to buy BTC. They are the cheapest and easiest way to buy and sell BTC that I've found. What's cheaper than free? What's faster than instant? There's enough legit Garza/Gox action in cryptoland without bad-mouthing the only company that publishes what they are doing in real-time. OP--you sound like the insolvent (and butthurt) scammer.
The user history shows just three other comments, one hating on Cryptsy, one recommending another service, airtm.io, and, one month ago, a recommendation of Uphold. Now you might say, okay, so this guy is just a satisfied customer who doesn't like to post a lot. So let's go over to bitgoldtruth with this comment:
OP is way off and sounds like he's a competitor spreading FUD. Uphold is centralized, so I don't use them, but they are legit and have become a very important part of the BTC ecosystem. I've looked a the Voxel (VOX) as a potential scam (because that's what I like to do)-- see my previous posting history about Paycoin, Bitgold, etc. Voxel is a pre-mine, but it does have a very specific real-world use-case-- the purchase of content on Voxelus.com. UH puts it all out there on their transparency page, which is the only reason OP could do this analysis. I applaud that transparency. TL;DR: Voxel not a scamcoin, Uphold is solvent and the only financial service in the world that I know of that is 100% transparent in real-time. Instead of bashing UH, why not demand that Circle and Coinbase and Bitstamp also implement real-time transparency. You might not like their management, but there is no denying that they benefit BTC by offering an excellent and innovative service. Again-- I don't like them and don't use them, but let's save cries of insolvency and scamcoin for the company's that deserve it. I've been guilty of this myself and now am much more careful. There's plenty of bad guys in this space, but UH is not one of them.
OP is full of BS. Uphold is demonstrably solvent if you know how to do math. The only reason OP can pretend to do the math is Uphold publishes a real-time accounting of their assets and liabilities. I'm a long-time UH supporter and investor and they just keep getting better and better. The market values innovation and UH is by far the most innovative company in the fintech/crypto space. And for the record-- I'm long voxels because it's a bet on the future of virtual reality, which I have little doubt will do to video what video did to radio. Uphold FTW!
Now if you go through their comment history, it's basically one big Uphold advertisement, and before that, one big Bitreserve advertisement (as you remember, the old name of Uphold). I won't go into detail here because it's really that obvious, but note that they're also plugging airtm.io (and again), just like our four-comment friend bittyboyboo did. Well then. I think we can close the case now, Uphold is just a great company with a lot of satisfied users who all love Uphold and will defend it by attacking anybody who posts something against them. There is absolutely no foul play going on here.
A month ago there was lively discussion about Bitreserve. Since then, their leverage ratio has increased to 19.55 to 1 and their capital has dropped $4K to $124,000 even though the price of Bitcoin has increased. This is a higher leverage ratio than allowed for a bank. I qualify that this is only based on their reported status; they may have other financial resources (e.g. paid in capital, capital commitments from investors). From June 11: You are not "over reserved" any more than a typical bank is. If this is your full balance sheet you have about 14.47 to 1 leveraged (i.e. 6.9% of assets as Capital). This is calculated as assets/(assets-liabilities). You have about $128,000 in Capital, each 10% increase in the value of the GBP will blow away $19,000 and each 10% decline in the value of the Bitcoin will blow away $18,000. You are also exposed to the risk of a bank failure. If the bank holding your USD reserves goes under, only $250,000 is insured. You would need other sources of liquidity while you wait to get the rest.
I heard accepting Bitcoin on my website will lead to sales with negligible transaction fees. BitPay now integrated - Bring on the revolution!! Any btc marketing ideas?
I sell men's leisurewear via my site - Yimps.com. I am using the Bitpay Shopify integration. I figured it wouldn't hurt throwing the gateway up there and am all about doing my part to support bitcoin adoption/help increase the value of the bitcoin community. Recently started reading into the crypto-currency, specifically, reads from Andreas Antonopoulos, Marc Andreessen, and the Satoshi pdf. Also looked into platforms such as Coinbase and Bitreserve. Huge believer now. It seems using it as a vehicle for transactions is where it will play a key role in the disrupt of our current financial system. I have big plans for the next summer and would love to hear any bitcoin related marketing ideas our community may have. I am all ears. Extremely excited to see how this plays out and the future of virtual currency!
Bitreserve functions as a full reserve and offers 100% transparency
This is [mostly] a repost of a comment from: http://www.reddit.com/Bitcoin/comments/25nsn4/does_anybody_else_understand_how_big_a_deal/ (thanks to @Markateer for the recommendation to repost) My name is Byrne Reese, and I am the head of Product at Bitreserve. In a recent thread in this subreddit discussing our product, a number of different questions were expressed. But, there was one thing in particular that I felt would be the most helpful to shed some light on, and to spur a discussion around. Bitreserve functions as a FULL RESERVE of assets backing our obligations to our Members. We do not use the bitcoin people entrust with us as a funding vehicle for our business. Instead, our reserve has one goal: to protect the value deposited by our members. So, if in aggregate our Members have 1000 bitcoin and $1M dollars in value stored in our network, then our reserve will also hold 1000 bitcoin and $1M. The comparison to Mt.Gox and other services that have come up short with their customers assets is inevitable for any company in the bitcoin space. Therefore, I want to underscore specifically how we are different from every other company operating in this space: we are 100% transparent. We recognize that as a centralizing agent working on top of the blockchain, we need to offer all the transparency and traceability of the bitcoin network so that everyone knows how value enters, moves around, and leaves our system. Therefore we will be making available two very important resources to the public. The first is our Reserve Chain. Like the blockchain, it protects the privacy of our members, while providing a fully transparent, public and traceable real-time account of the flow of value across our network from one bitcoin address to another. The main difference is that it tracks both bitcoin and the fiat currencies we support--dollars, euros, pounds, yuan, and yen. The second resource is our Bitledger, which is a continuously updated accounting of our liabilities to our Members (derived from the Reservechain) and the assets we hold in our reserve. It works just like a regular accounting ledger. You might ask, "how do we know you are not just fabricating the numbers?" To build trust in these resources, every quarter a big-four accounting firm audits the bitledger to publicly verify our accounting of obligations and the assets we hold in our full reserve. We feel that this quarterly audit, combined with our Reserve Chain and Bitledger, is the best way for any service like ours to stay true to many of the principals and values of the blockchain itself, and to help our customers build confidence in and feel safe in entrusting their bitcoin with us. I hope that clears a few things up. If you have more questions, I encourage you to ask them here and I will do my best to respond.
In the process of responding to another reddit thread, I realized that my answer was addressing not just the poster's questions, but a number of questions I have seen redditors ask in one form or another about the company I work for: Bitreserve. So I thought I would create a new post to share my thoughts with a larger audience. Thanks to @_Sheaf for the inspiration to write this us. What can I do with Bitreserve once my bitcoin is in pounds/euros/etc.? Good question. I hear this question a lot, and I think the answer becomes much more apparent when one simplifies the question to, "what can I do with my bitcoin?" or "what can I do with my dollars?" But I don't want to put words in anyone's mouth, so let me answer the question directly. Bitreserve allows you to store digital money in the cloud. We are a wallet that gives users the choice of storing their value in dollars, euros, yuan, yen, pounds, gold, and/or bitcoin. Then, when you want to use your money for anything, you can use bitcoin rails to do so. Want to send someone money? Want to buy something at a store that accepts bitcoin? Want to speculate on the price of bitcoin or the value of gold? Want to store your money safely outside of a traditional bank, in an institution setting new standards for transparency? Yep, Bitreserve does all of those things. Which brings me full circle -- I want to reframe this question as, "what can I do with the money I have at Bitreserve?" And the answer is: anything you can do with bitcoin, you can do with the money you have at Bitreserve. Another question worth answering is the inverse: what can't you do with Bitreserve? For starters, we do not yet touch the legacy money system. That means you cannot yet transfer bitdollars directly to your bank account, or conversely, you cannot yet transfer dollars to your Bitreserve account to get started, nor can you yet use a credit card to buy bitcoin from within Bitreserve. Rest assured, we want what everyone else in the industry wants: we want to create a future in which digital money is the dominant form of value transfer in the world. Why? Because we believe that digital forms of value divorced from the traditional and opaque banking system are inherently more democratic, and will lead to a more egalitarian world. This is why it is a priority for us to build the necessary bridges, such as ACH, SWIFT, PayPal, Credit Cards, to help people emigrate their money to this new vision for the future. Can I transfer it to a traditional bank account? Not directly. At least not yet. Bitreserve is currently bitcoin in/bitcoin out only. And while I don't see this being the case forever, I also think one challenge we face in the industry is to eventually help people dispense with this feeling that they need to constantly be moving money between legacy and digital money systems. That is important right now, because we are in a period of transition, but eventually the need to store so much of our wealth in these older systems will diminish as services like Bitreserve, Coinbase, and Circle bring more and more utility to the world of money. We like to compare the advent of bitcoin to that of email, when some would print their email prior to reading them. This is an anachronism now, but once upon time, it was neither crazy or that uncommon. When my value is in dollars/pounds/euros, is it still just bitcoin? This is a common misperception because this is how companies traditionally solve this problem. Our competitors, for example, "peg" bitcoin to the value of the dollar. In this model, value is not stored in physical dollars. Value instead is hedged through the use of futures and options. At Bitreserve, when your value is stored in dollars, you are not holding bitcoin. You are holding value backed by physical dollars in our reserve. Upon hearing this, some people ask, "but doesn't this defeat the purpose of bitcoin?" An understandable question - and I suppose if you are someone who believes strongly that the only way to bring legitimacy to bitcoin is to hold bitcoin, and to hold anything else would betray your ideals, those of the community, or of Bitcoin itself, then yes, I suppose for you it would defeat the purpose. However, we want to create digital forms of value that people feel safe in using. Because long term stability will only come from people using digital money in their everyday lives, and if we want that to happen, then something has to be done about bitcoin's volatility. Period. Holding bitcoin because you think it's value will go up can only hurt the aforementioned goal, because it leads to hoarding, or to the destructive feedback loop of speculation. What are the pros/cons of transferring between currencies on Bitreserve? On the "pro" side of this equation, transferring value between currencies can service multiple goals:
When you transact in a currency often, it is helpful to denominate some of your money in that currency. Most of us use only one currency in our lives. But those of us who travel a lot, or who routinely send money home/overseas often use multiple currencies on a regular basis.
If you are a speculator, then using Bitreserve to instantly move between one currency and another at a very low cost is hugely valuable.
And if you are moving money from bitcoin to any other store of value, you are able to escape the volatility of bitcoin that can make it scary to hold.
The only con that I can think of is cost. And while Bitreserve is committed to driving down the costs of money, every exchange on our network has a small exchange fee. How does this work with gold? Gold works like any other asset on the platform. When someone converts dollars to gold, we use the corresponding dollars in our reserve to buy and secure gold in a vault. We do not use an ETF. We possess real physical gold bullion. Of course holding gold personally, e.g. in a vault in our office, in the quantities that we do and plan for is not wholly practical for Bitreserve at this time, not to mention practical for anyone really, therefore we have partnered with GBI as our Gold exchange and storage partner. We even had the pleasure of visiting one of their vaults to inspect the reserves ourselves. I will never forget the look on our founder's face when he got to see and touch a giant pile of gold bricks, and then got to hold one of those bricks in his hand. Awesome. What advantages does Bitreserve have over an exchange? First and foremost, our members get to take advantage of instant settlement. When you move dollars to bitcoin, the bitcoin is available instantly to be spent or sent elsewhere, or to be exchanged again for another store of value. No waiting. No settlement period. Second, we have very competitive rates that are clear and simple. We have no spread either, which means we are not able to hide costs behind a relatively opaque notion most consumers aren't well versed in. And if you are a gold trader, we have no holding fees, which can dramatically change the cost overhead for holding and transacting in gold. To wrap up - the value of Bitreserve is in the eye of the beholder. Those who are fanatical about bitcoin, and who feel that anything other than bitcoin is not to be used or trusted - well, Bitreserve may not feel like the best service for you. Those who are interested in participating in the world of digital money, but whose month-to-month budget cannot accommodate the price volatility of bitcoin -- well, Bitreserve might be perfect for you because it leverages the best of what different forms of money have to offer to create a service that removes much of the fear associated with switching to a new money system. (update: minor grammar edits, and a few word choice changes)
I invested in Bitreserve's B-round because I bought their argument that bitcoin was never going to be adopted massively by consumers (too volatile, slow, complicated), BUT that the time had come for I.T. to disrupt finance the way it has every other industry. They were going to be iTunes to BTC's napster. So far, so good... But then I see this coinbase blog and volatility is falling fast (though still way too high for bitcoin to displace the more stable fiat). That's a bit worrisome for an ardent Bitreserve cheerleader such as myself. So then I go over to check how Bitreserve is doing on their changemoney site--I've been on vacation for a few weeks and haven't been following their progress--and something really weird is happening: they've done $70MM of transactions in the last month, huge growth since offering free forex for fiat pairs, but the value in their system is only up 75% over the same period. $70mm in transactions is tiny compared to most financial systems but it seems big when compared to BTC/USD trade volume on the big US BTC exchanges, at least if (this Blockchain.info data)[https://blockchain.info/charts/trade-volume?timespan=30days&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=]. So what's going on at Bitreserve? Three possibile explanations occur:
There's a bunch of high frequency trading with BTC speculators taking advantage of zero-cost trades.
Their user base has exploded and lots of people are moving small amounts of value through Bitreserve (BTC<=>stable cloud money<=>BTC) and pulling it out almost immediately (remittance and other low-value cross-border payments).
Developers on the Bitreserve API are moving a lot of small amounts of BTC through Bitreserve, but pulling it out immediately on the other side as BTC. Bitreserve claims there are over 100 developers building stuff using their API (I know of approx ten personally so the claim doesn't seem outlandish).
1 doesn't seem very auspicious for Bitreserve since they aspire to be the hub of the new "Internet of Money", not some small fish day-trader tool.
2 or #3 would be very promising and would prove Bitreserve's thesis and value proposition (and bode well for my investment).
I contacted a Bitreserve exec I sometimes email and he responded (a bit coyly seemed to me) that all three of the above explanations were partially responsible for the explosive growth in transaction volume and the more modest growth in value in the system. He wouldn't go into details, said he'd get back to me... Any bitcoin geniuses out there who can crunch the blockchain and Bitreserve's reservechain and offer any insights into what's going on over at Bitreserve? I'm seriously thinking of dropping money into a cool app built on top of Bitreserve AirTM, but I don't want to throw good money after bad in the case that Bitreserve is just a BTC speculator's wet dream (free forex, real-time proof of solvency so you can't be Goxed) and isn't gearing up to put the banksters out of business the way iTunes did the record stores. 1 BTC tip to the most cogent analysis of WTF is going on over at Bitreserve. Danke!
How to handle a Greek like crisis like a Bitcoiner.
So this is a throwaway account for privacy reasons. Nobody needs to know my strategy, but I like to share it with you. Andreas Antonopoulos (andreasma) made this comment on twitter: "If Greeks already have cash in hand, bitcoin is unnecessary. If they don’t, then bitcoin is unattainable. It’s a bank liquidity crisis." It made me think, because why is Andreas saying this? I expected him to rise and shine and tell about the advantages of bitcoin. That's why I like to share with you, shortly, how I would have handled this crisis if I were Greek. Removing your money from the legacy financial system At the first signs of a bankrun I'd take action and I would transfer all my money in batches to kraken.com. I'd keep 10% in Bitcoin. 90% I would send to services like coinapult, vaultoro and bitreserve. Businesses where you can exhange your bitcoins for other store of values. What the ecosystem needs by the way, is brokerage accounts, that can be financed with Bitcoin Now your money is safe from the legacy financial system. At any time you can exchange any store of value for bitcoin and exchange it for euros. Also your money is free to be moved around the internet without any restrictions and you are in no risk of your money being taken in case of bail-ins.
Hey Guys. I want to diversify and store some of my savings in Gold. I want something exactly like bitreserve.org, but a company that is not related to the US
Hi Guys Bitcoin is great but I want to diversify. The only other sane store of value is gold. I don't want to physically hold gold, I want something exactly like bitreserve.org (you buy gold ounces in bitcoin, but you never own the gold, just that ounce value in gold. They are also audited). I have already googled the topic, but want to hear from the community if they can make any recommendations based on personal experience. Is there any other company that operates like bitreserve.org that is not related to the US? Any company that has hooked up Bitcoin <-> Gold exchanges the way bitreserve.org has done it? It doesn't have to be as advanced as bitreserve, just the basics need to be in place Thank you
Merchants can already use bitcoin without volatility through services like Bitpay & Coinbase. Services need to launch that solve volatility for the consumer. If we can separate volatility from the transaction network, it will be usable to more people.
Bitcoin is three things:
A transaction network
A currency/token of exchange
A store of value
Early on, transaction companies like bitpay & coinbase show that it's possible for merchants to selectively use the parts of bitcoin that interest them most. While some choose to hold a percentage of their bitcoin sales in bitcoin; most choose to simply use bitcoin as an upgraded and cheaper paypal. Because these services have made it possible to selectively use parts of bitcoin you want to use, merchants have had an easy time adopting bitcoin as a transaction network. I think we need the same tools for consumers. I love bitcoin and currently use it for getting discounts at various locations and websites (I only spend BTC when there is a discount over USD -- which is often). My friends and family find this very cool and want me to teach them how to get similar discounts by using bitcoin. Yet there is a catch. It takes awhile for them to purchase bitcoin because of coinbase's delays thus when they buy $50 worth of coin to make a few purchases; it may not be enough when they actually make the purchase later on. Some friends have bought more than they needed to prevent this and either gained money or lost money -- an experience that wards off others. Thus the savings are hard to predict beforehand making the whole experience not worth doing (since they were doing this to save money). They are still interested in using bitcoin to send money quickly and use the new services, apps, and discountsthatcomeouteveryday -- yet they want a more stable platform to "play" and experiment from. Coinapult's LOCKS and the BitReserve are a great start to what I think needs to happen next in bitcoin. If we want more consumer adoption to happen, we need more platforms for people to test the waters the same way we provide for merchants. Let's keep dissecting bitcoin into different parts so people can voluntarily choose which parts they want to use.
So I was really excited to try out Tether until...
For those of you who don't know Tether is a new platform similar to BitReserve that allows you to "tether" the value of your cryptocurrency to a specific fiat currency. Right now they only allow you to hold Tether USD but Yuan and Euro appear to be coming soon. I like the idea because supposedly you can hold fiat in the same manner you would hold Bitcoin (e.g. in a paper wallet, on a thumb drive, etc), and you can send the Tether USD to exchanges like Bitfinex. I got a beta code in my email today, signed up, set up 2FA, and then proceeded to the account verification page. I've posted below what they require. Granted I knew there would be some compliance on my part (I assumed SSN, DOB, maybe a picture of my license), instead they go all out on the identity verification. Fuck that, see you in the funny papers Tether. I'm not giving up on using the service because I have anything to hide or because I require anonymity. I just don't feel like going through this huge pain in the ass process to simply try out your product. If you wish to acquire or redeem USD₮, your account must be verified in order to comply with relevant anti-money laundering (AML) and counter terrorism financing (CTF) laws and regulations. Tether offers two types of accounts: INDIVIDUAL VERIFICATION
An account in the name of an individual at least 18 years old
An account in the name of a corporation/partnership/trust
Individual Verification Tether has adopted an online verification procedure which will require you to complete an online questionnaire and attach certain documents as support. You will also need to download, sign and upload a declaration form confirming the accuracy of the information provided and authorizing Tether to verify the information. Verification Documents for Individual Accounts:
Two (2) forms of photo identification
Proof of residency
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I opened a new account for this because I'm concerned about legal action from the people behind Bitgold, Inc. I'm not a nOOb and I've been a bitcoiner since 2012. My motivation for this post: I've been thinking for a long time that a gold-backed colored coin might be the path to mass bitcoin adoption, a bridge from the past of non-fiat value to the future. E-gold didn't have the tech chops to execute and went down in a Gox-like implosion of hackers, malware, and crap management. Bitshares doesn't convince me for lots of reasons. And Bitreserve is a centralized service, which is a non-starter for me, though there service is easy as pie to use. But these Canadian Bitgold, Inc people really worry me because I worry they are up to something seriously fishy. If they end up scamming a lot of investors and/or users, it will be a huge setback for the gold <==gold colored coins==> bitcoin adoption that I think is bitcoin's best shot at near-term mainstream adoption. I first heard about them when I saw this on Coindesk. I was excited, as it seemed like some serious investors were backing an effort to bridge gold and bitcoin.
Sebag, BitGold's CEO, said technological breakthroughs in decentralised payment technologies such as the blockchain and Ripple have created a historical opportunity to make gold a useful means of payment in daily transactions.
They have a placeholder site (www.bitgold.com) with a count-down clock (they are going to launch in 14 days) and an email sign-up that promises $20 in gold per email. That struck me as a bit generous, but I remember reading that Paypal dished out $10 per user when they first started. And who am I to second-guess their marketing strategy. But then this came across by bitgold google alert yesterday. Despite having just raised $3.5 million, Bitgold, Inc is "going public" to raise more money (an additional $6mm target) by reverse-merging into a publicly-traded company also controlled by the Bitgold,Inc. principals who are named Sebag and Crumb (Dickens would have been pleased!). Let me count the ways this smells fishy to me:
Soros?First off-- there's no mention of the $3.5 million that they supposedly previously raised, nor the big name they trotted out for the announcement-- a Soros. So, what happened to that?
Sprott? For this announcement, there's another big name trotted out in the headline--Sprott--but when you read a bit further there's not much to it:
Sprott Inc., a leading alternative asset manager, has commenced discussions with BitGold to assess the potential business opportunities and commercial feasibility of establishing a strategic relationship.
Uh, okay, but then there's this farther below:
BitGold has obtained a lead order from Sprott Inc. and certain of its directors who intend to subscribe for an aggregate of 2,222,222 Subscription Receipts for an aggregate purchase price of $2,000,000.
So, which is it? Is Sprott in or is Sprott out. Or is going to be like the Soros bait and switch?
They are planning to pay a 12% commission (6% cash, 6% warrants) to the brokers who have signed up to sell the shares in the reverse-merged publicly-listed Bitgold. This doesn't sound like your usual venture capital deal to me. I'm imagining boiler room-style pumping by these brokers who are super-incentivized by the rich commission. Any finance experts, please tell me if I'm mistaken about this.
No tech background for this tech venture. Neither Sebag nor Crumb have tech backgrounds. They've never built, run, or worked for a tech start-up. They propose hiring this guy to be their CTO. He seems legit. But I don't see how they are going to launch in two weeks and still don't have anyone with tech, dev, or crypto as a founder. I guess we'll see what they come out with in two weeks.
No tech background, but patent-pending technology? Here's Sebag from their latest announcement:
True gold ownership requires gold to be safely vaulted and stored, making it extremely difficult to spend, especially in micro-transactions. BitGold solved this problem by developing a patent-pending technology and platform that is part gold exchange, part payments technology and part custodian, resulting in a powerful user experience that advances gold from a physical element to an instantly accessible unit of account and store of value for the internet, an operating system for gold.
Despite their original Soros-era chatter that implied they were going to be built on top of a decentralized crypto solution-bitcoin, ripple, or something new-- seems like they are going to be another trusted-party, centralized system. That's fine, but what I worry about is that this is a Neo & Bee that's going to seriously tarnish the whole concept of bitgold. Coindesk covered this latest Bitgold, Inc announcement, as they did the previous one. Sebag once again pays some lip service to decentralization:
“You can drop in a bitcoin and it turns into physical gold, and you can redeem the physical gold to bitcoin,” Sebag said in a more candid moment. “We’re fully compatible with blockchains like bitcoin and ripple, but the platform itself, a lot of it is built around security.”
What's that supposed to mean? Can anyone tell me? I'm all in favor of anything that will move the world away from funny money fiat and toward bitcoin, but I'm seriously afraid that these Bitgold, Inc guys are going to forever link the term bitgold to a pump-n-dump calamity for users and investors. I'm going to keep digging, but I'd welcome help from the community. Where's Nick Szabo's bitgold--the kind we really need!
Following Up On My Last Post About Crowdfunding: BitReserve Is Close To Finishing Up Series B Funding Round, Led By Crowdfunding Investors (€6 million)
In my last post, some of you pointed out the current lack of actual direct equity investments via crowdfunding, so I thought it'd be good to follow up with this. A bitcoin company named BitReserve has almost reached the €6 million crowdfunding goal it placed as part of its current Series B funding round. The platform used, UK-based CrowdCube allows for investments as little as €10. As always, curious as to your thoughts on this and the general growing trend of companies turning to crowdfunding vs traditional capital raising methods! Feel free to read the full story yourself: http://www.coinsetter.com/bitcoin-news/2014/12/08/bitreserve-set-raise-600000-crowdcube-1967
Bitreserve, the Charleston, South Carolina based company that allows for the seamless conversion of Bitcoin to USD and other currencies, is set to raise £6,000,000 from CrowdCube, the UK based equity crowdfunding platform. Bitreserve is the only Bitcoin company on CrowdCube, which allows UK investors to invest as little as £10 to own equity in a non-public company. This is a Series B round for Bitreserve, and this crowdfunding operation is only a partial funding effort, with the rest coming from institutional investors. In the US, only accredited investors can invest in companies like Bitreserve at that stage of their operation. For this round, Bitreseve is selling 10.7% of the company in the equity offering, valuing the company at around $87 million, as a crude approximation. Bitreserve had raised $5 million in an earlier round. Halsey Minor, a tech entrepreneur, is the founder and CEO of Bitreserve. Bitreserve allows for the seamless conversion between Bitcoin and fiat currencies like USD. In that regard, its functionality is similar to BitPay or Coinbase for merchants, in that the merchants don’t see any Bitcoin at all, but instead just get USD deposited into their bank account, without taking on any Bitcoin price volatility risk. Bitreserve charges 0.45% BTC to USD conversion fees, however. Bitreserve also publishes a proof of solvency, which shows that they are not operating a fractional reserve at any one point in time. This is a big focus for the company, and it hopes to set a standard for Bitcoin businesses in terms of transparency of assets. Bitreserve holds user’s Bitcoins denominated in several different currencies, or just as Bitcoin. Bitreserve has been focusing more on users so far instead of merchants. Bitreserve is also developer-friendly, with several APIs that developers can use to develop Bitcoin related products. They provide APIs for trading, clearing, custody, and other related Bitcoin functions, and already, some of the Bitcoin exchanges operate using Bitreserve’s API. Bitgold Bitreserve recently unveiled a new product, Bitgold, which gives customers instant access to an electronic gold token corresponding to how many Bitcoins they hold, i.e., an instant conversion between Bitcoin and gold. Bitgold is backed by physical gold (not ETFs) from GBI. It makes it easy for merchants to accept Bitgold if they already accept Bitcoin, thus providing a powerful incentive for some kinds of merchants, especially in the precious metals industry. Bitreserve also caused a minor controversy by claiming a trademark on ‘bitgold’. ‘Bit gold’ as a concept was used as far back in 2005 by Nick Szabo (re-posted in 2008) and enumerated a lot of ideas behind Bitcoin. Bitreserve also claims a trademark over bitsilver, bitpalladium, bitpeso and others.
Not sure how difficult it is to buy USD or other assets that will maintain value in challenging economic times but what does Venezuela think of this solution? Step 1. Find a place to buy bitcoin, perhaps an website connected to a bank account, ATM where you can deposit cash, or a countryman who exchanges cash for bitcoin. Step 2. Transfer bitcoin to bitreserve.org. I am not sure of an restrictions due to country, but you can always buy a VPN and make it look like you are coming from Switzerland or the Netherlands. Step 3. Once deposited in bitreserve.org you can choose to buy USD, Gold, Oil, Yuan, EUR, GBP or leave it in BTC. Withdrawal would be done by withdrawing the btc to transfer to hard cash, gold, etc. (or soon enough many more merchants will take btc directly.) Feasible?
Circle + Bitreserve = Next big thing in Bitcoin Adoption.
I think that the way Circle integrates instant buy on a wide range and the way that bitreserve stores bitcoin for their fiat value is the next step in Bitcoin adoption. Imagine a world where fiat and bitcoin coexist but if you go to the grocery store one day and see the price for something is say B.01 the next day it is still B.01 and not B.1 because the value fluctuated overnight. What I'm trying to get at is that the developers of these two amazing services need to collaborate to combine their services. I love that whenever I'm surfing the internet and find something I want to buy in bitcoin, that I can just open Circle, input the amount, and the Bitcoin is available. Please someone make a service that combines the two so I can throw all my money at it.
Bitreserve.org offers the cheapest way to lock in the value of your BTC but still retain instant access for withdrawal
It took me a little while to figure out how to use bitreserve.org. Main value is if you think price of BTC is going to decline and you want to preserve your purchasing power, bitreserve.org allows you to lock in current value to USD. Unlike selling your coins on most exchanges however, you have instant access to withdraw the value as BTC whenever you want. Also - it offers better exchange rates than coinbase or circle or even bitstamp. Overall - I am impressed- definitely a good way to send someone some Bitcoin to pay off a debt and not have to worry about price fluctuations.
Hi /bitcoin! We’re the co-founders of AirTM a safe, easy, and low-cost way to deposit and withdraw value to and from Bitreserve’s cloud money system. We are two guys from Mexico City who are big fans of bitcoin, Bitreserve, reddit, and helping people protect their hard-earned money. We expect to have a positive impact on the local bitcoin market wherever we launch because the only way for AirTM cashiers to move value into their Bitreserve account is via bitcoin (for now anyway). AirTM is built on top of the Bitreserve API and we help connect the old money system (banks) to Bitreserve’s new cloud money system, by matching AirTM clients with AirTM cashiers. We’re in the final stages of QA with AirTM and will be entering private Beta soon (sign up to get your invite to the AirTM Beta here. Special thanks to the Bitreserve Team for their API partner support and for helping us with introductions to investors and banks. You can follow our progress on : Facebook, Twitter, Youtube and Linkedin and feel free to ask us anything about AirTM in the comments. Gracias! Ruben & Ton
What's the best way to deal with bitcoin's volatility?
I'll start off with, I'm a huge fan of bitcoin-the-concept. However, the volatility concerns me. A few months ago I bought about one bitcoin and by the time I am using it now, it has reduced so far in value that I am easily paying 20, 25% more for my services than if I had just used a credit card. For the sake of experiment/playing, that's ok. But in reality, it just doesn't make sense to shop around for a good deal on a service (even internationally, this is the Internet!) and then effectively paying 25% more with bitcoin because the currency is so volatile. How do you all deal with that problem? There's bitreserve for instance, and coinbase seems to offer a USD "wallet" in some US states. Is that advisable?
Not sure how difficult it is to buy USD or other assets that will maintain value in challenging economic times but what does Greece think of this solution? Step 1. Find a place to buy bitcoin, perhaps an website connected to a bank account, ATM where you can deposit cash, or a countryman who exchanges cash for bitcoin. Step 2. Transfer bitcoin to bitreserve.org. I am not sure of an restrictions due to country, but you can always buy a VPN and make it look like you are coming from Switzerland or the Netherlands. Step 3. Once deposited in bitreserve.org you can choose to buy USD, Gold, Oil, Yuan, EUR, GBP or leave it in BTC. Withdrawal would be done by withdrawing the btc to transfer to hard cash, gold, etc. (or soon enough many more merchants will take btc directly.) Feasible?
Bitreserve – started this summer by Halsey Minor, former CNET founder turned investor – works by emphasizing the use of Bitcoin as a mode of transmission as opposed to a currency, or more to From their site: "Bitreserve uses the concept of a “card” as a store of value. Each card is denominated by a currency or store of value, and every card is automatically provisioned one or more addresses to which value can be sent." Contractually, Bitreserve currently owes you the bitcoin equivalent of any of the virtual assets we enable FREE. It is free to open an account and hold value with Uphold. Uphold accounts are free to members who maintain active accounts. Fund your account FREE when funded by a bank account, using bitcoin, or from another Uphold account. If using a Debit/Credit Card or China Union Pay to fund your account, a fee of 3.99% applies. Send and receive money The equivalent of just under 22% of the world's publicly traded bitcoin has been transacted on Uphold, which places equal value on business success and social benefit - waiving all fees for Bitreserve allows its users to deposit bitcoin into their account and convert it to its corresponding value in fiat currency, protecting them from any losses due to bitcoin price volatility. The user can then convert it back to bitcoin and instantaneously transfer it to anyone across the globe.
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