Topic: [IPVO] [Multiple Exchanges] Neo & Bee - LMB Holdings - page 164. (Read 658701 times)

I think you're misunderstanding. Pegged accounts are continually balanced to maintain the original amount deposited. If bitcoin takes a dive, Neo is the one suffering that loss, not the customer. If the customer has a bitcoin denominated account, then yes, they will suffer that value loss just like anyone holding bitcoins.

Actually I care more about the risk to Bitcoin's reputation than my investment in this company. That means having to fully inform the customers of the risks. Then again, what value are we providing?

• Even if the bank is removed from the face of the Earth, with all its databases, people can still access their coins.
• Customers will be able to take advantage of the Bitcoin network to make free (as in freedom) transfers.

However, I'm far from being certain that this is enough. More clarification is needed on this subject for sure.


Or else a milder protection from volatility using different methods. Neo should also sell fully Bitcoin accounts whenever possible.

This is what I've posted a while back in this thread.

People are more emotional than rational and there's a good chance quite a few will buy into this. I can see, though, bigger appeal coming from big players that want to stash 100k+ euros. They should consider targeting rich players as they won't care about the 100K euro deposit insurance but fear further confiscations.

I hope they will try to get more revenue from people purchasing Bitcoin with euros and keeping those Bitcoin in with associated debit/credit card. They might need higher volume to be profitable but it's better in the long term. There won't be any disgruntled customers that have seen their euros devaluing while bitcoin value went through the roof. Unfortunately, they say this will probably be just 1% of their business and it's something they won't actively advertise most likely.

Why not try to combine these two models? Instead of offering a 100% peg, why not also offer a 25%, 50% or 75% peg? You will still get to make profits if Bitcoin goes up but customers will also get to profit from upward move. It will also limit your risk if Bitcoin experiences a big crash.

Which by definition at that point are worth a tiny fraction of their originally deposited Euro amount.

Thanks, you have not disproved or even argued against a single one of my points, so I'll just leave it to the investors to decide if they want to accept all this risk, good luck to those that do!

Of course persuading customers that they should invest deposits with you may be a harder since they care nothing for Bitcoin and your pegged and guaranteed deposits are only pegged and guaranteed until Bitcoin falls enough for you to fail and at that point they'd be wishing they'd just left them in a Euro account with the benefit of the 100k EU bank guarantee that you cannot offer (not being a regulated or legal bank).

+1

Just a note that TAT.NEOBEE migrations from BTCT.co will be processed AFTER TAT.ASICMINER migrations are complete. You can track that progress here: https://bitcointalksearch.org/topic/m.3245924

Once the data is parsed it will be handed off to Havelock for batch processing.

For the people that chose Bitfunder, I will attempt to get Bitfunder to process the imports as one batch as well, after the data is parsed. However, I do not have confirmation that BF can help automate in this way, so it may take longer.

Thank you for your patience. This is a lot of work and comes at a very inconvenient time due to other events taking my time this week and next, but we'll get it all taken care of ASAP!

THanks!! I agree with you and I believe this is the answer to the non-believers.

Oh we have had a debate sorry I missed it,

Just to make some points (some are repeated from a long time ago),

A "run" on withdrawals would serve only to reduce our liabilities unlike a traditional bank.
We will have both options and futures trading available to us prior to launch (with substantial volume)
We will also be basing our business model on the additional services we shall be offering, ie insurance, international remittance (there are more but I will provide more detail when we have more solid progress).

Yes substantial losses in the value over a long period of time would not be of benefit to anyone neither ourselves or anyone that holds Bitcoin as a store of value, however if we fail our customers can still obtain their own Bitcoin. For these recurring losses to happen it would also pretty much mean an end for Bitcoin too (if they were to happen at this point in time), something I don't foresee happening anytime soon. For everyone who likes doomsday scenarios, if you think your going to wake up tomorrow with Bitcoin valued at 0, it just isn't going to happen because of the fact that if two people agree on a value then it will always be worth something.

We are offering pegged wallets to provide stability so commerce can take place, yes Bitcoin can also be used as a medium of exchange (with its cryptographic security remaining intact) and not just a store of value amongst many other potential uses also.

Amsterdam Update

The conference has been great so far, I have made some really good contacts and had some interesting discussions, whilst being on the receiving end of some good proposals.

The regulation panel was great, it brought a few laughs from the crowd too (Asking the Police if Silkroad had helped remove violence from drug dealing on the street, was a great question).

My speech was also recorded, as soon as I can get a link to the hosted video, it will be posted here, I received a good reception and some great questions.

Neo & Bee update will be happening later today it is currently 5:45am here in Amsterdam, once I have tied a few loose ends up today, I will present the updates in one long post, this will also detail our path to regulation.

Options purchases have already been mentioned earlier.

Now, this is a really interesting discussion and its a pity I have to go (but I for sure will follow it tomorrow ).

So, If i got it correctly, NEOBEE would survive the worst (up to now) crush but with very big losses. If this gets worse (5% decline every month for a year) it will fail (without depositors loosing their BTCs though). On the other hand if BTC grows NEOBEE will also Grow (with winnings going mainly to the investors, and non EUR depositors). The latter, of course, is non sustainable, BTC will at some point stop growing (which that point will be, nobody has any idea, hence the bet). If though, NEOBEE offers services like secure storage, insurances, etc. and bases their business model on them (charging fees for them) then it would be operating like a proper bank (one that charges you to keep your money safe and does not invest/speculate with them, if you want to invest/speculate then maybe they can offer an additional  service for you ).
This is what i think they are trying to do btw. Did I got it correctly up to here? N_S, Ex-trader I am really interested in your opinion at the subject.  It is also a pity that we don't have Danny here tonight, I am really interested in his opinion as well (I which him luck In Amsterdam though ).

Have a nice night Guys/Girls,
SK
p.s. It is my opinion that if this is done correctly, and not as a bet, it can change a lot of things to the better.      

ex-trader, I am glad you are challenging this business model and are raising some excellent points.  I am going to follow this conversation before deciding to jump in.

My gut feeling tells me this is going to be a big winner.  Perhaps not very scientific, I'll agree, but everything is a bet when making money is concerned.

Thanks for that, that opened straight away.

Looking through that at a high level it shows exactly what I expected.

Bitcoin falls from $230 to $56 and in turn the equity in the company (it's shareholder value) falls from $2.1m to $800k. That is with only $2.5m of total deposits to start with vs almost identical capital. Obviously this scales up if the deposits are larger and there's no way this business will be a success with only $2.5m of deposits.

It's really simple, if you claim to make money from BTC rising value then you (or your customers) must lose if it goes down. The risk profile is symmetric, unless you add assymetry via external option purchases, which are not mentioned (and no-one could write the volumes anyway).

This business is not a bank, it's a bet.

I suggest Neo can attempt to disprove this by showing what the profitability looks like with a 5% decline every month for a year and with substantial deposits. The reason is must be done like this is usually it's hard to make perhaps 1-3% on gross interest margin, so you need deposits that exceed your capital by a large factor to make profits once costs are accounted for. Most banks have leverage ratios (assets/capital) of 20-30 for that reason.

Perfect, it looks ok.
thanks Rannasha.

Ex-trader, Now you should be able to open it.

http://ge.tt/5UxhJ8t/v/0?c
Opened the .ods in LibreOffice and saved as .xls. Didn't check to see whether the conversion went okay.

I'm well aware of the volatility it's experienced in the past, yes. What I was mentioning was negative growth rates for a period measured in months, not days or hours. Aside from a specific 30-day period between April/May 2013, there hasn't been a negative month in the past two years. The past month, for example, has been fairly uneventful at least as far as price movement goes, and we're still looking at a 5% gain.

If anyone has a Windows machine please convert this (www.lmb-holdings.com/opening_week_crash.ods) to .xls . For some reason, even though I can open see and play around with it, I cannot convert it.

SK
p.s. or install libreOffice

This is precisely Neo&Bee's intent as best I can tell.

N_S, have you been paying attention to how insanely volatile bitcoin is?  ex-trader has a really good point because while the fairly long term progression of bitcoin is upward, there is a LOT of short term volatility where it plunges 20 - 30%.  It's not a question of in case it does go negative, it's a question of when it does go negative, we've probably got a long ways before bitcoin becomes less volatile than it is now.  Even the US Dollar loses value from time to time, even aside from the massive printing of money that devalues it, there are exchange rate fluctuations between the US Dollar and some other currency like the Euro.  And the US Dollar has a market cap in the trillions, vs almost $1.5 billion for bitcoin.  

Yes but i think their plan in the long run is to offer exactly what you say, provide services. On top of that is the bitcoin rise which ofcourse will happen at the beginning (because of their entrance) and hopefully later as more enterprises mimic their business plan (if its successful that is). Did i got it correctly? 

p.s. I will try to save the odt file in a different format for you