Topic: [IPVO] [Multiple Exchanges] Neo & Bee - LMB Holdings - page 199. (Read 658786 times)

The internal rate will not just be based on 30 day averages although that will be a tiny part, we shall be basing the rate on a multitude of factors such as local transaction volumes between deposits and withdrawals (local demand), the cost of coin acquisition, at what price can we cover all of our deposits, how much volume there is at the current market prices and other contributing factors.

Should the price drop to 100 from 200, the implementation of a local rate would give us a certain time frame to acquire the required amount of coins to cover the next rate (if we had insufficient BTC reserves prior to the drop), whilst acquiring those coins we would again be adding liquidity from our own reserves with those purchased on the public markets.

With regards to us accepting direct Bitcoin deposits, the points you make are valid and have been discussed at length. A final decision will be made when the contracts are drawn up for the individual account offerings. The options we have are clear to mitigate this risk.

• Don't accept deposits of BTC directly into pegged accounts
• Accept them at the BTC-Denominated Account rates (which will be more akin to the public markets)**
• Increase our hedging which in turn would increase the cost of doing so

** On the customer's UI they would be required to request a payment address (which would then forward the multi-sig address) with a very clear indication of the rate at which it would be converted at, with a comparison of the rate used for pegged accounts.

There is no guarantee of a minimum return on time based deposits, research indicates that people are more preferable to using a product that may increase at a rate higher than offered by a traditional bank whilst accepting the chance of a minimal loss (the latter was less favorable) over the chance of a guaranteed return with no idea if all/part of their money will be taken.

hi

i might be a dumb for asking.

i want to know, does this business work with any thing interest related?

for example, like dividends coming from interest income, etc

I was referring specifically to the message they'll get when looking at the security of their euro-denominated deposits.  I don't dispute there are benefits in other areas - but the most critical one with deposits of any kind is knowing that they won't vanish/devalue.

Let me also explain why having your own exchange-rate that lags behind the market won't work : as you don't appear to have grasped the problem.  I'll use an example of BTC halving vs Euro in a short time-frame : remember that on the recent bubble (and on previous ones) it actually fell by a lot more than 50%.

BTC has bubbled up nicely and your internal rate is at 200 euros per BTC (other exchange-rates have gone higher but you haven't caught up - which adds a seperate problem that I won't bother discussing).

BTC then crashes to 100 euros per BTC.

With your 30-day average your rate only drops to 190 euros per BTC (obviously your buy and sell spread are either side of that).

Problem is that you accept BTC deposits.  If your rate doesn't also drop to around 100 euros per BTC then people can:

Buy BTC elsewhere
Deposit them with you into a BTC-denominated account
Withdraw from that account in euros - either in cash if allowed or if not via purchasing with your cards.

There's plenty of ways to convert cash on a card into physical cash/cash in a bank account - most have costs associated with them but with an 80%+ profit margin those aren't going to be much of a barrier.  Most of your merchants are going to want euros not BTC so you''re left with the problem of internally valuing BTC at 190 but having to settle them when you can only get 100 for them on the open market.  And that cash isn't going to just cycle through once - anyone who spots the opportunity is going to shovel as much cash as they can through it.

And then when BTC finally rises back elsewhere, your rate is going to lag behind on the climb again - at which stage they can deposit the last batch of euros with you into a BTC-denominated account then withdraw the BTC as BTC.

There's no way around it unless you either:

a) Run a MASSIVE spread - which would discredit you immediately (can you even imagine the response if you gave one rate on deposit and a rate that was 50% worse on purchases?)
b) Disable transactions in one direction after large-scale currency moves - i.e. not just put your own head in the sand put force all your customers heads in there too.
c) Forget the stupid idea of having a pretend exchange-rate and stay fairly close to market rates.

Problem with c) is, of course, that you then need heavy-duty hedging in place.  And that costs a lot and isn't very easy to do - in part because noone else is doing it extensively so there's noone supplying the facility at reasonable rates and high volume.

I guess there's theoretically an option d) which is that you don't publish rates at all and people just have to accept whatever you give them - but that's like option a) just worse as far as credibility is concerned.

Now you can MAYBE bluff your way through with most people - but it doesn't need too many understanding the problem for there to be a run on euro withdrawals any time BTC falls significantly.  As if your disclosed strategies are no more than "we'll hedge but we haven't disclosed how and there's no provision in our accounts for any costs of hedging" then noone with any sense is going to leave euro-denominated deposits with you backed by BTC with a lower market value than the euros if they can just withdraw the euros into cash.  And even a small run on euro-withdrawals makes the situation much worse - as in the process of filling those you reduce the BTC/euro cover for the rest.

Your idea of time-locked deposits that pay a percentage of the increase in BTC's price is interesting on the face of it however:

1.  If you're guaranteeing no loss (or, worse, guaranteeing a minimum return) then it means you have to hedge even more efficiently (as by giving away part of the gain when it rises you have less surplus from that to hedge with against any fall).
2.  If losses are passed on then rather obviously they'd be better off just buying BTC themself and keeping ALL the gain and none of the CP risk.  Think even the really stupid ones would spot that.  As they can't spend it none of the other benefits apply to mitigate.

It also follows from 1. that if they get a percentage of gains then you must have a transparent means by which your rates are set based on third-party sources.  You can't be making them up yourself arbitrarily if you're paying variable interest on deposits based on those rates.  Which totally limits your flexibility in terms of the burying-head-in-sand strategy.

Looks like we're one vote away from approval on BTCT!

I have ordered those that will be handling this aspect of the business to structure a reply that will make our plans much clearer. One part to note that isn't as clear as it should be in the prospectus, is the fact that the retained deposits in the projections have been amalgamated as one figure, we will be offering time based deposits, these accounts allow the depositor to essentially lock the deposits in for a selected time period in exchange for a percentage of any gains this percentage will be small but still offer the potential of better returns than what the traditional banks offer over the same period of time. These payments back are calculated in the "payable to depositors" field.

I will get those figures separated to make it much clearer.

In relation to the comment about our marketing from Deprived

That is not the message we are putting across, we are giving our customers the ability to take control of their own money, they do not have to convert back to EUR to spend their money. Current eCommerce penetration is very low, we have already agreed with a new platform being launched here that is very similar to Amazon (Amazon has no operations here), there are many retailers that during the economic downturn could no longer afford their business premises so they have all their stock with no platform to sell it on. This new eCommerce platform will give them the opportunity provide themselves with an income once again. We have exclusivity on this platform because existing payment providers requested that each merchant sign up for an individual account and these accounts would be subjected to a settlement period of more than 60 days. Once a merchant has received payment from someone who already has the prerequisite of having an account with ourselves they will be in a position to use their Bee card to cover daily expenses.

We are also opening talks with the holder of the franchise for one of the largest brands in the world, they do not accept VISA/MasterCard here in Cyprus because of the terms even they were given. Once we have signed and sealed contracts we will provide the announcements.

Yea which makes this asset look more like an investment in a prop shop than a bank, people need to be aware that their deposits are at risk for depreciation.

On your first paragraph, yes - volume is (a large part of) the long-term solution.  By which I (and I assume you) mean much more conversion between BTC/X for purposes other than speculating on the price of BTC/X.  That they're trying to move in that direction is great - but the problem is that they're trying to do it by speculating with the funds of depositors which is going to make finding depositors hard unless they hide/play down the fact that they ARE actually speculating with depositors' funds.

On your second paragraph the effect if they held most in euros would be to make their IPO a non-starter.  Their profit plan is, in a nut-shell, "bet other people's money on BTC rising vs Euro then hope it rises".  That's their main profit-source by orders of magnitude.  Remove that and they have no profit.

the solution to the exchange rate issue is volume - unless a lot more people start exchanging between BTC and [name your fiat], the exchange rate will fluctuate wildly with minimal effort from large orders. (It doesn't matter which fiat, really, since they all have existing relationships presently through Forex. Higher trade volume with BTC<->EUR is just as good as BTC<->USD when trying to peg a more stable bitcoin value.) Volume creates liquidity, which creates a much more stable valuation. Yeah, these guys might be subject to more risk now than they would if they started this up later, but someone's got to be first... and with risk comes a greater potential for reward. Someone has to have the balls to try it first, and good for them to try and tackle this with regulatory oversight.

On a not entirely different note, what would the effect be if they decided to hold everything in Euros (meaning convert almost all BTC to Euro for the purpose of holding deposits, keeping only enough BTC on hand to cover an average day's worth of BTC transactions) and converting back to BTC only when they sell the BTC?

Once your ducks are in a row, please give a lead time when the IPO plans to go live.

This remains the largest problem I see with this.

On the one hand they project having millions of euros deposited with them - and trading well enough to be handle a crash in the price of BTC.  But on ther other hand they project zero profit from their trading.

The profit projections also don't seem to include any cost for hedging.  Hedging costs to do.  When you hedge you aren't looking to make a profit - you're intentionally giving up some profit in order to protect against potential loss.

The other strategy mentioned is the Ostrich approach - use an internal rate to pretend the rate hasn't changed.  That's flawed horribly in a few ways - doubly so when they also allow euros to be deposited but stored as BTC.  There are rather huge problems if you use a trailing rate but then allow people to perform transactions in both directions and withdraw BTC.  Short of having a massive spread between their buy/sell rates (by massive I mean that if BTC doubles or halves you get a 100% spread) it leaves them wide open to massive arbitrage making the problem they're trying to pretend doesn't exist become even worse.

There are also problems I can see with the marketting of it to the public.  Remember their projectiosn are that nearly all customers will be depositing euros and keeping their account denominated in euros.  And remember they're selling in Cyprus where bank users just lost a load of cash due to banks speculating badly with their funds.  Here's what seems to be the honest sales pitch to depositors:

We're not a bank - we buy BTC with your euros and use those to ensure you can get your euros back at any time.
If BTC rise vs euros then we keep the profit.
If BTC falls vs euros then you have to hope we make enough profit from undisclosed trading/hedging by undisclosed experts using our own funds which are a lot less than what we hold on deposit.  This is backed up by us pretending the rate hadn't changed and hoping that it rises again before people notice and start doing mass withdrawals to be safe.

It's not a sales pitch that would fill me with confidence that I'd be better off than just shoving the euros under my mattress.

A lot of what they're trying to do is great - but the whole revenue model seems to revolve around a belief that BTC will steadily rise vs Euros (if they're using a 30-day average or whatever as is claimed in this thread then even short-term spikes/dips will be exploitable by people arbitraging vs their own rate).  If they really are going to use an internal rate and a credible spread (like 5%) then there'll be some serious cash to be made from them until they wake up and realise you can't use a pretend price when you allow trades both ways and have to buy/sell from the market yourself if there's significant net trade in one direction.

You mentioned a few pages back

"1. We will implement a hedging strategy utilizing our own reserves, this strategy will be constantly changing, we will also be setting the price locally to ensure that sudden falls in price are not realized on the front line immediately. This gives us an opportunity to increase trading activities to strengthen our positions. A good trader(s) will make gains under volatile conditions, irrespective of the direction of the movement. Sorry I cannot provide the exact strategies for different scenarios but doing so would be like playing poker with see through cards."

How much of your revenue do you expect to generate via trading?

What are your primary sources of Alpha in your trading strategies?  (You don't have to give the secrets away just a high level idea.)

Who is in charge of currency exposure risk and how is that going to be handled?

What happens in the event you fail to properly hedge?

I shall not quote the full wall of text Skoutz, we are not offering kiosks at the initial launch other than at selected locations (Pafos & Larnaca airports and the two biggest malls). Our kiosks will be providing information and the ability to sign-up in advance for an account.

Cyprus has a very conservative population whilst providing a way to take control of their own money, we cannot introduce too many changes in their daily routines, mainly kiosks are used to buy fruit smoothies, frozen yogurt and frappes asking them to engage with a kiosk at this moment in time would be an optimistic request at the very least. Once we have established the trust between our customers and the brand we can start introducing new methods of interacting with our business.

Will the Cyprus Neo Bitcoin Bank offer this service?

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Bitcoin kiosks coming to Canada this fall

By Alexandra Posadzki  The Canadian Press

TORONTO – The first time Ryan Johnson bought Bitcoins — an emerging digital currency that isn’t controlled by any authority such as a central bank — was with a pocket full of cash from a stranger he had met online.

“It was almost like a sketchy drug deal,” recalls the 31-year-old Vancouver resident.

Since that first transaction in January, Johnson has been exchanging his Canadian cash for digital currency at Bitcoiniacs, a physical store in Vancouver that acts like a Bitcoin broker.
 
 “It’s just much more comfortable to go sit down in an office at a brick-and-mortar building with a professional that knows a lot about Bitcoins, do a professional transaction and get a receipt for it,” says Johnson. “It’s reassuring.”

Soon, Johnson and other Canadian Bitcoin enthusiasts will be able to exchange Canadian cash for the digital currency through a kiosk that’s similar to an ATM.

Bitcoiniacs says it has ordered five Bitcoin kiosks from a Las Vegas-based company called RoboCoin and intends to roll them out across Canada in the coming months, with the first machine expected to land in Vancouver in early October.

Four more kiosks will arrive in December and although their locations are not yet certain, Bitcoiniacs says it’s eyeing major Canadian cities such as Toronto, Montreal, Calgary and Ottawa.

“Basically, it just make it easier for people to buy and sell Bitcoins and hopefully will drive the adoption of Bitcoin, and make it more accessible for people,” says Mitchell Demeter, the 27-year-old owner of Bitcoiniacs.

Bitcoins are mathematically generated through a series of commands executed by computers in a peer-to-peer network. The process is called Bitcoin “mining” and is set up so that the total number of Bitcoins that can ever be generated is limited to about 21 million.

While some have doubted Bitcoin’s validity and others have raised concerns that the unregulated currency is being used for nefarious means, a U.S. judge ruled last month that Bitcoin, which has been around since 2009, is a real currency.

Currently, acquiring Bitcoins is often done through an exchange, an arduous process that requires users to jump through several hoops, including linking their bank account to the exchange and sending in paperwork to verify their identity.

When Toronto resident Robert Burko signed up with a Canadian Bitcoin exchange in April, he says it took more than 10 days — “an eternity” — for his account to get verified.

By then the price of Bitcoin had ballooned to around US$260, before falling back down to closer to $100, and Burko had missed his chance to cash out.

“I didn’t really want a long-term investment opportunity in Bitcoins, I wanted a short-term one,” Burko says. “And because they took so long to verify my account I missed out on that entire window, which was very frustrating.”

The alternative to using an exchange is to find someone who wants to sell their Bitcoins in an online forum, meet up with them in person, hand them some cash and scan each others’ smartphones to transfer the Bitcoins to your digital wallet — which is managed through an app.

The RoboCoin kiosks are expected to make the process of buying and selling Bitcoins much easier says Jordan Kelley, the company’s chief executive.

“Our goal is to make Bitcoin truly grandma-friendly,” says Kelley.

Using a kiosk means you don’t have to wait to verify your account on an exchange or hand cash to a stranger, says Kelley. It also makes Bitcoins more accessible to people by adding an element of legitimacy and increases liquidity in the market.

“We’re trying to provide customers an in-person access,” says Kelley. “Doing that really provides visibility to Bitcoins and adds a lot of trust.”

The kiosks allow users to select how much money they would like to spend, insert cash into the machine and then scan a QR code on their phone to transfer the Bitcoins to their wallet. It also allows users to redeem their Bitcoins for cash.

Kelley says since announcing the machine, they have been swamped with pre-order inquiries, from everywhere from Australia to Kenya.

According to sourceforge.net, the largest number of downloads of Bitcoin software last month were in the U.S., followed by China, Germany, Russia and the U.K. Canada came in sixth place.

RoboCoin plans to ship out 10 to 15 kiosks to customers before the end of the year. The first one will go to Bitcoiniacs, says Kelley.

Demeter says many Bitcoin startups are gravitating to Canada because the Financial Transactions and Reports Analysis Centre of Canada — also known as FINTRAC — aren’t as strict as regulators in the U.S.

“It’s a lot more open up here, that’s for sure,” says Demeter.

Once the branch is up and operating, it will be much more convincing to all those who are sceptical.

Very exciting developments for all bitcoiners!

Sorry for the delay and now relatively short answers as I am currently between meetings, if people want further clarification, just say and I shall provide it this evening.


We have significant progress on the ground here in Cyprus, all of our partnerships are in place. Those that have been privileged to spend the day with me have seen this for themselves. With regards to authenticity, Ukyo has all of my company information and personal identification documents, all of our strategic partners will be confirming the partnership exists with TAT also.

The card is a branding concept, the branding was completed on September 5th.

Should you find yourself in Cyprus I would be happy to show you more.


Part of our branding strategy is to develop a movement, we will also be driving home the message that by using us and Bitcoin you are taking control of your own money. We have the best in the business here working on our Marketing and Branding.


We will release all documents as and when the become ready, this will also be big news locally (something we will ensure for PR purposes). There is publicly available information from the ECB stating that Bitcoin is not "Money", Germany is the only country to go on record at this moment in time to clarify any different, which in turn we are using as an example throughout the lobbying process.


TAT will answer the questions in relation to the transfer of shares.

The conference is being filmed, I also believe they are looking into providing a solution for live streaming. So my talk (We are limited to 18 minutes) will be available online following the conference.

Thank you for the good luck wishes.


Many of our partners are accepting BTC for their services, our legal team dictated that before we even had to ask the question. So no we shall not be "dumping" large volumes of BTC onto the open market.

New to this party but if I use the shares I hold in Xbond on havelock my btct account will be pushed shares or are the shares directly purchased and converted? Found a sufficient answer on btct under rules and instructions
But for clarification since the asset originates on bitfunder for the IPO will the one bitcoin transfer fee be included or waived

Transfer of Shares

Shares of the underlying asset on BitFunder may be imported or exported into any TAT.NEOBEE passthrough, or the underlying asset on Bitfunder. There is no minimum quantity for transfers, but any transfer order must pay a 1.0 bitcoin service fee.

FV = 0.001  Current Price 0.0011389 Havelock
Xbond Price 0.0025
IPO Price 0.003
Correct

Slowly catching up through the thread as well


Thanks for the clarification the arbitrage is safe then puts a few calculated risks at ease.
Another asset to evaluate hope it translates into real bitcoin growth in the long run


V IPO
Virtual Initial Public Securities offering if were inventing new terms it would be VIPs as the only significant differentation between a release of shares on a standard market and bitcoin is the virtual aspect the rest can be considered noise.

After the IPO I guess it would be a Virtual Public Security etc.


If you can provide a video after the conference for future reference it would be appreciated

And up to date best of luck

I believe Neo & Bee is heading the right path to providing low cost solution for debit card consumptions via bitcoin network, but in the short term how to reduce the risk of volatile BTC EUR exchange rate is my major concern.  On the other hand, I think we all would like to see the official documents released by Cyprus government and Neo & Bee that announce both sides are under agreement on the related banking regulations like money laundry policy, account suspension policy. etc.

Once the Pre-IPVO phase begins, I will try to provide updates during the 72-hour period. Hopefully a couple times per day. If they sell out, before the deadline, I will also update with the news.

To everyone else, please note that it is sleepy time in Cyprus for several more hours, but surely Danny will have answers for you once he is available again.

Question for TAT: How do we know how many shares of the pre-ipo XBOND transfers are still available?