Topic: Invest Bitcoin now live!!! (Read 2404 times)

I tend to concur with kittucrypt

That's the point. In its current form, the OP can't deal with volatility of BTC. He is converting your BTC into INR and then investing INR in a fixed income asset. What it means in real terms is the following:

1. You sell your BTC and get INR say at X INR/BTC. If  you invest B BTC, your total INR =  B*X
2.  You invest INR in fixed income earning I% interest. After 1 year, you will have  = (B*X*I)/100
3. Now you convert INR back to BTC say at Y INR/BTC. You will get in return = (B*X*I)/(100*Y) = (B/100)*(X*I/Y)

Now you see, B, I are both >0. For your final investment to make any money(before any fees), X*I  should be greater than Y.

This means, THE ONLY WAY THIS INVESTMENT WILL MAKE MONEY IS IF BITCOIN TO INR CONVERSION RATE DROPS BY MORE THAN I%. .

If you want to short BTC, by all means go ahead and take this alternate route.

If you believe in bitcoin and it's future, your bitcoin investment will loose money as soon as BTC gains more than I% for the year. If you believe in Btc appreciating, be careful of this investment.

My 1 satoshi!

I know this, but user investing in BTC so how they will appreciate this thing. just think you invest 10 BTC when price was 500 usd and after 1 year price is 2k usd, so you will get only 2.5 BTC . it means you are loosing BTC. its not Fiat currency Benson. OP should write this in his site how he will deal volatilities of BTC.

OP plans to convert the BTC to INR at the point of deposit or withdrawal. So, he invests in INR, not in BTC.

Benson I dont thinnk he will get equivalent to 26500 + interest, coz if he invested in bitcoin then interest also in bitcoin, just think other way price will increase to 53k inr that time means he will get only 0.5 BTC + interest its means he will be in loss.

I did the app on a shoestring budget :p..
Will let him know that you are open to hiring :p

Dont get me wrong, the idea is different.....at least 50% good. I can hint it out whats wrong with this - re-look at the example I gave.

Best I can do here is pass this on to the person behind this.

It would help to understand the 'way around this' as that can also be passed on.



You would get back the equivalent at that point in time + the interest rate as per the application code.
So if the rate goes down, you will get the equivalent of eg. 265000 INR in BTC or any other currency + the interest rate. Which would mean that you would get more BTC than you had originally invested due to the rate drop.

Hope that answered.

As you said, investments are a very personal choice.

PS: I will advice him to take down the site and relaunch with better documentation, etc.. Hopefully relaunch with gold as well.

In your scheme one person is investing 1 bitcoin to get 1.06 bitcoin at the end of the year. We have seen it in INR where one person is investing Rs. 1 lac to get Rs. 1.06 lac at the end of a year. But, if u want to portray gold as an investment, u need to find a scheme which offers 1 ounce of gold investment to get 1.06 ounce of return at the end of a year.

The example you are giving is a classic example of collateral for loan, not an investment. In that case, the institution, e.g. Muthoot finance, is investing, not the person.

Thanks for the appreciation.
I think none of us in this thread are trying to dissuade "you" from investing. Its your money, if you think thats the best; then so be it.

As for gold, the thing is putting gold as a collateral happens in loans - in which the expectancy is to achieve a dream -- a business or education etc. That is not same as expecting a return as the person's goal is not that.  Hence the potato and oranges analogy here. If you consider them same, it will be like saying "housing loan" and "personal loan" are same cause both are "loans". Is it true? Absolutely not, cause the underlying reason changes.

And yes, gold investment can be done in various ways - buying physical, holding futures, MFs, ETFs etc. Now the MF you point actually invests in an ETF which in turn might invest in physical delivery of gold (or track the spot price). They are thereby creating 2 layers removed from spot gold and hence the returns. From the same page:
"SBI Gold Fund is an open ended fund of fund scheme, which will invest in units of SBI Gold Exchange Traded Scheme (SBI GETS). The scheme seeks to provide returns that closely correspond to the returns provided by SBI GETS". Invest in SBI GETS and seeks to provide, hmm, here is the page for GETS:
http://www.moneycontrol.com/mutual-funds/nav/sbi-gold-exchange-traded-scheme-sbi-gets-/MSB211
 
1yr is rather positive. 3yr more than double. So basically investing in something which again invests in something is a bad idea and the worst example you can quote off. So it is not surprising they paint a bad picture.

Milaap does uses the word "loan". I have yet to find something which actually charges interest from those people. All the EMI payments actually ful fill the commitment of the principal. Again this is not investing. It is donation by proxy wherein I help and get my money back (though the donation should be with an open mind and expect no returns). The end goal is different - charity vs investment - another potato to oranges comparison.

I think you are missing the point here - its not about gold or real estate but then again if its about you investing your money, I guess its upto you.

Thanks for not deleting my post

The ideas being presented are not "text book" rather actual reality of this investing world. If you consider them textbook just do the math in this post:
https://bitcointalksearch.org/topic/m.6212639

There is a way around this but given that I have yet to hear even mention of anything remotely connected; I have to doubt the financial understanding of the guys running this. Maybe some "text book" lessons when I can attend a Bangalore bitcoin meeting will be required

All said, if this is about you investing in something -- Please ignore this post.

http://www.sbimf.com/SBI_Gold_Fund/index.html is one path for investment in gold.

Taking a loan is merely providing surity for an injection of funds for any other investment.

Loan is considered as an investment ? I mean the person who is taking loan against his/her gold is investing ?

This is the first post in here that has taken the trouble to look some things up. Well appreciated.

I stick to my guns. There are various investment opportunities and I do not mind spending some BTC to see how this comes through.
Never will I invest my entire pocket, nor will I expect any more returns than satoshi dice can give me. That is true for every investment on this planet.

As far as gold is concerned, putting it down for collateral and then expecting returns on that will be considered an investment. You do store gold for times when investment injection is required in various forms. I cannot see any potatoes or orange analogy here. In fact, you can even invest your gold directly in several places. eg. http://www.sbimf.com/SBI_Gold_Fund/index.html. And they do not provide any prettier pictures.

Milaap provides loans, not donations, so you do get your money back at the end of the term. You also get tax benefits for Indian contributors, so not that shabby after all.

I must be honest to divulge that the main interest of mine to help the person, is his access to regulators. His social standing leads me to believe that he cannot cheat or scam anyone at this point or anytime in the near future. That was brought up to address the gambit of SEBI. I have not yet seen it, but I am keen to see how some of his moves work out for the Indian Bitcoin community in the near future.

He has also advised me that the next stages will be for Gold and Real Estate. Wish he had done Gold first, it would have been easier with the answers

That being said, I will not delete your post as it does carry some awesome valid questions.

I agree that my knowledge in finance may not be 'text book', but there are millions of Indians who have invested in FD's. No one is trying to prove that these are the most superior returns. This is another avenue to invest and it would be awesome if people can get their heads around it.

Indian bank FD mostly upto 10% but you choose Company FD or company Bonds you will get easily upto 12% but normally people dont know about Company FD or Bonds thats why its not that kind popular like Bank FD

I had posted some of the figure calculations in the thread existing in the securities sub forum. There was no answer to the calculation. With all due respect to your knowledge on bitcoins (cause I know you are gonna be pissed with this post), your lack of knowledge about finance is staggering.

First, gold loan is not an "investment". If you look at the ads about gold loans all of them have one feature -- a person having a dream - open a business, becoming an artist etc, puts his/her gold as a collateral  to get the money. What it means, if the business is successful he/she is going to get back the gold being put. So there isn't even apple to oranges..rather potato to oranges comparison when saying things like that.
If you really want to make a comparison --- why not prove that converting your gold into INR and investing in FDs (or bonds) will give you superior returns. You cant!!! Reason it doesnt do that.

Secondly, people converting their BTC to INR - I am just stumped how people doing that are implying govt securities will outperform? Yes there is an interest funda here but that doesn't tie to govt securities at all:
If a person buys BTC using his INR, hypothetically he is giving up on his rights to earn interest. How is that? A normal savings account will earn somewhere around 4% interest on yearly basis (ex. http://www.icicibank.com/interest-rates.html) So basically if I have 25k and I dont do anything with it, I earn 4% on it without doing anything. But if I were to buy 1 BTC instead I loose that right. The obvious thinking here should be (which normally people dont put) is that, BTC will rise above 4% in a year to actually make "investing" sense.

Conversely, if I sell BTC and convert it to INR, then hypothetically I can earn 4% on that money. It has nothing to do with government securities, rather RBI interest rate. And no, they are not same as "government securities".
But that said, people convert BTC to INR for various spending reasons. Suppose I want to buy a shiny new Ps4, I dont give a damn about the 4% in INR. How am I implying the so called government securities have anything to do with it?

And I think you are completely misunderstanding, who said people dont invest in INR.  It is just that this program is full of potholes like Bangalore roads . Btw Milaap is a NGO, isnt? Is Gorrick earning a % - 6 or watever - from "investing" in Milaap? Nope. So its another of potatoes to oranges comparison and show complete lack of understanding of any finance related stuff.

Last but not the least, are you guys registered investment advisor or NBFC? You might think as long as I am taking BTC, I will be fine. Wrong!!! The moment you convert it to INR, you are in the gambit of the Indian government or rather SEBI. If one was to report this, you can bet they will come after you. And then again it will be such hue and cry over how our government is draconian etc etc. Before you quote me example of other INR or USD based programs -- let me say this they also flout regulation.

PS: Please dont mind the post. I have tried my best to explain the fallacies in your reasoning but if you think it is still correct, just delete this post.

http://www.allbankingsolutions.com/DEPSUB1.htm

Do advice which banks provide over 10% a year.

Lol Indian Bank Gives 10% Per Year .

Looks Like Another Gox.

Gold can be reinvested and it is done quite often as well. I assume that the idea of a gold loan is crap to you as well.


That assumption that you have made must be applied to people who convert BTC to INR as well in that case? Aren't people who sell their Bitcoins implying that govt securities would outperform?? 


Please understand what you are investing in before proceeding. This goes without saying.

Most of the signups and deposits so far, as I am told are from the US. This was expected. It is easier for an Indian to invest in an Indian security like FD's, but not others outside the country.

If there are any assumptions that people do not invest in INR, then take a look at some of the older Bitcoiners like Stephen Gornick, who ensures a monthly sum invested in INR through Milaap. This is only one example.

There were a lot of warnings posted here:

https://bitcointalksearch.org/topic/invest-bitcoins-due-to-launch-shortly-563303

For the good of larger investor community, please review the views above before investing.

That must be a some kind of joke. You imply that govt securities would outperform BTC or are you trying to run a Ponzi scheme here?