Topic: bitfloor needs your help! - page 16. (Read 177459 times)

I just saw this, and thought you might like to see this as well.  I am not sure why he tells the media about it, and not us, but it's still a mention of the information we were looking for either way.

http://www.bbc.com/news/technology-19633980

Everyone who wants to buy could send their actual transaction to the exchange instead of to the p2p network.

For example for each offer of fiat for sale, the exchange can publish a bitcoin address to send offers for that block of fiat to.

Everyone who sends an offer can watch that address, waiting to see it receive coins.

That address could in fact be the actual address of the seller of the fiat, not an address the exchange controls.

When you see that some offer other than yours was published sending bitcoins to that address, you know your offers was not the one accepted, so you send your offered coins somewhere else, that is, to another address of your own.

Once a block is published containing a payment to the offer address, you can start counting blocks for how confident you are that the offer published by the exchange really is going to go through.

You can also watch to see if the exchange publishes your offer in addition to someone else's offer, and to see when your coins not accepted do make it safely back to you.

(You need to sweep the address(es) you sent the offer from if the offer is not accepted, to minimise the window of time during which the exchange could accept multiple offers for the same block of fiat).

There are more-sophisticated things that could be done with multiple signature required transactions and such too probably of course.

-MarkM-

If you are describing where the transaction is started when the bitcoins are sent, then you have the possibility that two or more people will send coins attempting to sell to the same buy order.   

If instead you have it where the transaction starts with an electronic notice and then followed is a transaction through the blockchain then you have the legitimate scenario where the order can be removed from the pool without payment.

But there's probably ways to deal with this ... like enough of a deposit required so that if you don't settle after transmitting intent then a fee is assessed against your deposited funds. 

People are free to pull out of any trade at any time they like - people can already do this on mt.gox, just by cancelling the order if they see a shift in the market they don't like, or change their minds.
Once the order is confirmed on the block chain the exchange will credit the account of the bitcoin seller in fiat.
The mechanism of the trade would be dealt with automatically by the browser/software linked to the exchange - the exchange would still hold the fiat currency (which they can hold much more safely than bitcoins). They would use the block chain to confirm the trade has occurred.
If the trade hasn't occurred, then it's the same as someone cancelling an order in the orderbook just before the trade takes place.
The seller could attempt a double spend - but this would be akin to someone simply cancelling the order. They'd only have a few seconds to make the decision anyway.
After 6 confirmations - the trade would be fully initiated by the exchange. At zero it would be assumed to have occurred, but held in a pending state.
The software and exchange would need to manage the orderbook to prevent 2 people selling bitcoins simultaneously to the same buyer - but they already have to do this.

Interesting. It's kind of like in the real world financial markets, where the trade is made on paper, and then when it "clears" a few days later, that's when the funds and securities actually change hands. It's a neat idea. But as another post points out, how to ensure people follow through funding their trades? (and most important, ensure that they follow through on the losing trades as well as the winning ones

Bunch of strawmen and false claims.  Next time respond to what I actually wrote.

How about the value of lost data, if one does not feel insurance would directly cover BTC? One can also get insurance to cover just about anything, I have read about some really crazy stuff being insured (I remember reading about people's asses being insured after winning a 'most perfect butt' contest...LOL)

I also do not think it would be a "long shot" to prove BTC as an asset. Assets do not need to be official currency and most times are not.

A good lawyer would just have to point to Mt. Gox or BCT-E and show they are subject to AML/KYC laws. If BTC are valueless, how could it be used to launder money?

The answer: Of course BTC has value and thus is an asset.

Just because nobody has brought a proper case in front of a court (That has influence--small claims cases generally are not precedent setters), does not mean it has been decided that legally BTC has no value. Again the fact Mt. Gox has to follow AML/KYC laws says quite the opposite.

I am not trying to start an argument, and I have no idea which way a judge would rule, but to claim that BTC is valueless would be a terrible point to rely on in a court case as it could be easily shot down.

Edit: Added "Assets do not need to be"

Trolls manipulate Bitcoin prices by placing lots of orders they never follow through on?

Like most things, laziness plays a big factor in why people do what they do. An online wallet is also a lot more portable and convenient.

I do understand why "day traders" leave their BTC/cash in an exchange, though. Internal database queries/writes are much faster than the peer-to-peer Bitcoin network. Trade execution timing is everything to those folks.

Why is it necessary for any exchange to hold bitcoins?
A zero confirmation transaction is almost immediate - so it can be used for immediate (though pending) trades.

I hold the private keys to a bitcoin address, I associate this address with an order, and place an order. Local software (in my browser or elsewhere) initiates the trade when the correct conditions are met. The exchange gives me fiat in my account after I send bitcoins, and confirms it after 6 confirmations.

The whole point of bitcoin is that we can maintain control.
There doesn't seem to me any reason why people trading bitcoins for fiat cannot maintain control over those bitcoins until the actual moment of exchange.

Let me know when you find an insurance company willing to replace lost/stolen BTC.  Bankruptcy is always an option.

While a judge "may" rule against USD account holders that doesn't prevent bitfloor from entering bankruptcy or being liquidated.  I would also point out no court has (at least to date) recognized BTC owed as a legal claim.  So it is a huge longshot for BTC creditors to seek compensation in bankruptcy.  They would need a judge to both find their claim valid AND clawback USD balances paid out.  Baring that you can't get blood from a stone, my understanding is Bitfloor has no significant assets.

IMHO (and I don't speak for Roman or bitfloor) the only plausible scenario where bitfloor returns to operation and creditors receive compensation is a capital injection.  At this point without knowing what requirements new investors may have Roman can only hurt the chances of that happening by blabbing on some forum.

I am not sure if Bankruptcy is an option anymore, his creditors that happen to have USD in their accounts have been paid back AFTER the incident.

If he declares Bankruptcy now, a bankruptcy judge might consider that "favoring certain creditors".

What bothers me even more, and not just in the Bitfloor incident, being a business person myself I know the important of INSURANCE when running a business.

It seems to me a large chunk of these BTC business that get "hacked" do not even have basic business insurance policies. Some of these business are even properly registered in there respective states under some corporate structure and I know in some jurisdictions it is REQUIRED to carry a certain level of protection.

Most professionals are required to carry insurance, and you know damm well that any smart successful business is going to cover their ass, required by law or not.

Why does the BTC business community feel no need to carry it?

It is entirely possible bitfloor will go bankrupt.  It needs new investors (and new capital) to restart.  Those investors may (almost certainly will) have requirements and conditions.  Making promises (even open ended and vague) is counter productive. 


It is never that simple.  bitfloor, Inc doesn't have the funds to make right.  Period.  To make it right requires attracting new capital. Making promises before you have the ability to execute them is just false hope.  I am fairly confident that bitfloor will attract the capital it needs.  I have even indicated I am willing to provide some of that capital however "fixing" a loss like this is tricky.  The deal has to make sense for current creditors, it has to make sense for Roman, it has to make sense from a business perspective (being competitive, properly capitalized), and it has to make sense for investors.

Roman is doing the right thing IMHO.  That doesn't mean creditors will get paid, it must means blabbing on the forum makes it LESS LIKELY creditors will get paid.

So basically I need the help of the community to get bitfloor up and running but I don't feel comfortable giving you even the slightest hint at if we plan to paying the stolen bitcoin back. I'm ok with him not being specific to how much or how long or any of those kind of details a simple "make right what was lost" would be enough. There is a difference between not trying to spread misinformation and avoiding something altogether. The response from the community should be we don't feel comfortable supporting you until you have made it clear accounts will be repaid.

I am migrating the bitfloor servers. As the migration to new servers takes effect you will see the website again. This should take no more than 24 hours before you can access the site again.

I noticed at 9:00 EST this morning that bitfloor could no longer be logged in to -- there was simply a message saying it was down for maintenance. An hour or two later I noticed my browser timed out when I attempted to load the homepage. This is still happening. I would like an update from Shtylman as to what is going on with the site. Makes me wonder if this is the new permanent state of bitfloor. Hope not.

I was getting that error as well. Using a different connection, it worked fine.

He also said he doesn't want to spread misinformation before anything is 100% assured.
I'm certain he's trying his hardest to get the site back operational and to pay back all that was lost. He's simply covering his ass just a little (since we all know how people can get on these forums).

You need to read between the lines in his post.  That's exactly what he's working on figuring out when he says "finding a way to proceed".
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I would prefer he actually say it than just assume it. I'm not asking for a specific on how or when just a simple "and repay stolen BTC" would be enough.

If a creditor, whether it is someone who held a bitcoin balance or maybe an ISP, forces BitFloor to file for bankruptcy, your USDs are gone -- and probably will then go to the lawyers who will be paid first.

 - http://www.blakeleyllp.com/content/2011/05/02/a-proper-purpose-for-commencing-an-involuntary-bankruptcy-petition-preserving-a-preference-action
 
 - https://blog.bdo.com/index.php/2011/06/23/treatment-of-customer-deposits-after-a-retailer-files-for-bankruptcy/

If BitFloor finds investment capital and regains solvency, you can always add funds back into your account.  In the meantime though, don't think you are doing BitFloor a favor by not pulling every one of your USDs out.