Topic: [BTC-TC] BTC Growth: Capital Growth via Hedge Fund-Style Investing - page 2. (Read 251637 times)

Yep, I hear you -- in almost every way, I think an exchange is preferable, both for issuers and for participants.

Using PayPal as a KYC/AML gateway would only be suitable for something catering to participants wanting to forego the liquidity of an exchange and commit to a somewhat longer term horizon.

Using PayPal as a way of identification seems interesting, not a deal-breaker for me.
On the other hand (with current BTC securities environment) I'm not sure that I would invest in fund not traded on exchange.

Just so.

And unless 1) you've automated it or 2) your time is worthless or 3) you need to help yourself feel more clever by preying on other people's mistakes, deliberately mispricing options is so utterly pointless. And if you had actually done 1 (automated it), you probably wouldn't waste your time with noob traps, you'd move into legitimate market making and generate far greater profits -- something which I'd discussed at length with Ethan before BTC-TC went tango uniform.

(One could argue that mpbot provides an example of such usurious mispricing that it's one giant noob trap, perhaps even a great example of combining 1 and 3. My general rule is never even to mention that operation or operator unless I absolutely have to, but in this case I mention it specifically because the example fits so well.)

In any case, I wonder does anyone have any other thoughts on that whole PayPal suggestion I made a few posts back...? Deal-killer or a plausible alternative to handing over a bunch of private documents to an exchange operator with a hidden identity, operating without a real company, offering no data protection or retention policy, and subject to no accountability for potentially illicit use of those documents?

Gawd, I wondered why the options markets on btct.co looked like a playroom for kindergarteners. There was scarcely anything that looked like it ever *could* be value available.

The options situation on BTC-TC/Bitfunder was pretty horrible in that respect - whenever I looked at options the vast majority seemed to have strike/premium reversed or be a decimal place out.

I'll raise my hand to having bought on prices likely (when you're the only liquidity on offer you can't ever assume it was a typo to sell to you) off by an order of magnitude twice - though in both cases there were reasons why my orders were placed other than just hoping someone typoed.

Personally I tended to make most profit either by taking advantage of irrational (but predictable) behaviour (especially in response to news) or from noticing things about securities which others seemed not to have noticed.  The rest of your post (which I didn't quote) explains why I rarely invested - the quality of most 'investments' (I put it in quotes - as where there's no reasonable expectation of profit something isn't really an investment) was too low for me to want to risk relying on them actually making a profit and/or honouring their contracts.

As long as we keep believing there is little to no security to be had, I think that's exactly what we're going to get: little to no security.

I think part of the problem is that we as a community have such low standards, such low expectations, that we're far more accepting than we need be of folks telling us they accept responsibility for nothing, or folks telling us nothing is real and nothing is an investment, or folks telling us that shares purchased are purely for entertainment. We're simply far more accepting than we need be of dog and pony shows as a proxy for real investment.

(With my high horse moving on to a gallop, I'd also say we are far more accepting than we need be of words of wisdom passed down by traders -- not investors -- who manage to profit on small positions not through insight or strategy, but by exploiting the mistakes and inefficiencies of newcomers. Anybody can make high percentage gains on very small positions merely by setting "noob traps" -- for example, those designed to profit when someone mistakenly enters an order with a price off by an order of magnitude, or those which involve switching an option's strike and premium, in hopes of tricking someone into buying a grossly overpriced option. The forum is full of folks mistaking this sort of banal, labour-intensive and not at all scalable cherry-picking for actual trading ability or investment know-how.)

There, down from that high horse now.

Ah hey, I got his real name "Charles Ponzi", he seems to know up from down. I even got to see a copy of his driving license. Now I'll just give him some cash, and hope for the best. 

Real names tend to provide a false sense of security where there is little to none.

EDIT: This was a reply to someone who now says he didn't really make the post. (See the original...)


Gosh, that's a novel suggestion.  

I guess there is that teensy weensy inconvenient little detail that if you'd like it to be exchange-traded, then you'll have to turn over a high-resolution copy of your passport, driving license, and other documentation to somebody who declines to provide his real name, does not operate in the context of a real company, does not provide a real data protection or data retention policy, and cannot be held accountable for potentially illicit use of your identifying documents.

But as long as you're happy with all that, you should be good to go!  

What's that, you don't want to hand over all that detail to an exchange? No problem then: just find some dude named 'Guido67', give him some cash, and hope for the best. I mean, it's all anonymous, right, so who cares whether Guido67 knows up from down?

Well Greg cannot, unless he uses another account and in any case we could not tell it was Greg's fund.

So for Greg's purpose he can not run an anonymous hedge fund whilst we know it was his.

Then run an anonymous hedge fund.


EDIT: This post was done by a hacker that took control over my account. I had not changed my password on bitcointalk and I had an easy one. I have no regained control over the account. Ignore this post.

Unfortunately running a fund where the participants are anonymous is not going to survive very long, especially from a UK based financial fund manager.

Bitcoin is anonymous, running a hedge fund is not.

Greg it is clear you are a state actor. Stop trying to idntiy us, bitcoin was anonymous for a reason and you are trying to ruin this. go back to patting down at the airpot

EDIT: This post was done by a hacker that took control over my account. I had not changed my password on bitcointalk and I had an easy one. I have no regained control over the account. Ignore this post.

No no no, you did not read what Greg wrote.

Greg wants to use paypal so that all the identities of the investors are known for compliance purposes so that he can operate the fund without having to do compliance himself. The paypal is just for identification.

Immediate deal-breaker.

If it's just about "who-owns-what" and speed of an exchange doesn't matter, why don't you wait for colored coins?

Now that the original exchange-traded BTC Growth fund is no more, I've been pondering some other ways of managing membership structure that could enable a fund to be independent of the vagaries of an exchange, reduce the overheads associated with KYC/AML compliance, and also avoid turning it all into an admin-by-email nightmare.

I know that PayPal is almost universally hated across all of Bitcoin-land, but if something involving PayPal isn't just an immediate deal-breaker, I'd be grateful for any thoughts people might have on the following...

What would folks think of a system which required a small PayPal payment as a precondition for participating in a fund? This could offload the whole KYC/AML aspect of dealing with individual participants onto PayPal: to the extent that PayPal can be counted on to have established the identity of their customers, and to be adhering strictly to any and all KYC/AML requirements in every jurisdiction in which they operate, a fund provider could simply point to the PayPal transaction as having established the identity of the participant. My thinking is that this would obviate the need to handle any type of identity documents by saying, in effect, "if your details are good enough for PayPal, they're good enough for us".

The second benefit of a PayPal-based setup is that I already operate some sites which use a membership management system that integrates with PayPal: people pay a fee to become members of a site, and their details are then organised by a membership management system which I know to be fairly usable. By leveraging this same type of membership system, I could reduce at least some of the hassles associated with managing direct participation in a fund.

(None of this would do a thing for liquidity, of course: it would only be suitable for a fund with a fixed initial period of commitment, as distinct from a fund where people could just trade in and out at will.)

Would trying to involve PayPal in something like this just be a silly idea? Is it something people would consider trying?

Lost money.


Would invest again. 

Well handled, considering current state of that market. Was prepared for worst outcome, but at the end it's 2.5% loss for me. I also hope you'll bring something similar in the future.

You handled it pretty ok given the facts. Thanks and I hope you bring something similar in the future!

Thanks Greg. I've lost a bit with this security overall but did buy back in near the end at a discount to NAV and made a small profit on that. I'll keep an eye out for future investments you offer.

Thanks, you handled it very well! I have lost less then 5% (I bought more in the BTCT panic) which is great compared to market, other funds or with the rest of my btc-securities.

Now I must agree that closing the fund was probably the best option, btc-securities markets seems pretty dead now.