Topic: Seeking Discussion - GLBSE bonds for web hosting upgrades. - page 3. (Read 3576 times)

Very good points.  If (big if) I were able to convince GLBSE to build a "message broadcast" mechanism, then registration on a per-bondholder basis would not be necessary.  I'd broadcast a new login/password to the portal at some regular interval.  No need for the company to know to whom the message is being delivered.

I don't like this part. I'd rather have a buyback price that is pegged to the initial value of these bonds.
This can be priced in USD:
Let's say I buy 1 bond for 1 BTC - you get 6 USD for that.
You can buy back the bond any time for 8 USD converted to BTC - even if that means you only pay 0.1 BTC (if Bitcoin bubbles up to 80 USD per coin) on GLBSE.

Otherwise you have a high motivation to bring down bond prices for 5 days (have sock puppet accounts tell you're broke and don't respond or something), buy back and take the profits. I don't want to check more than once every week(!) if my investment is still good...

Also I don't really like the secrecy aspect - if you need that you might be better off elsewhere, as far as I heard there are several P2P loan websites available/popping up.

Bear in mind that a sizeable chunk of the potential investor population will want to remain anonymous. There are a few reasons for this; that's just the personality Bitcoin attracts (given it's properties as a currency), investing with/in Bitcoin is illegal / legally untested in the country of residence of the investor, exposure as an investor in Bitcoin / Bitcoin businesses would damage the reputation of the investor ...

I would certainly aim to ensure that investor registration of any kind is not required, or accept that requiring such will limit the volume and rate of investment.

I would personally consider investing in an asset which did mandate investor registration, however, I would expect additional reward for the higher risk that accompanies limiting the investor demand for that asset.

Of course, much of the reasoning for investors wanting to remain anonymous is equally applicable to asset issuers, however, again, I think it appropriate that investors expect additional reward to compensate for the higher risk that generates too.

Definitely appreciate the input.


Precisely why I think something like what I'm offering is needed.  It's only a matter of time before that house of cards comes tumbling down.  I expect a lot of people out there know this at some level.


Not too worried about that.  People have been trusting their online business to our company for well over a decade.  Documentation is easy to find and verify.


I guess I'll have to make a case with GLBSE for a messaging mechanism.    Somehow all the companies on the NYSE and NASDAQ know where to find their stockholders.  Seems somewhat necessary to operate a security.


It mostly boils down to lowering our interest rate a point or two.  I've explored some other options that attempt to cut out the banks and this seems to be one of the better ones.

If you're concerned about the currency risk of accepting a BTC loan with USD expenses, you can take a leveraged long BTC position. I don't think bonds tied to USD will be popular.

You'd need to pay about 2% weekly interest (280% annualized) to compete with other offerings.

Getting people to trust you with 25000 BTC won't be trivial.

I don't think GLBSE currently has a feature to message all bondholders, but they might add it sometime. I doubt it will allow you to know whether anyone is still holding their bonds.

All in all I'd say that as long as you can get loans from your bank, you'd need very good reasons to go the GLBSE route.

It just occurred to me that I could fulfill the private investor SEC requirement by managing my own authentication mechanism into the portal where the company sales numbers would be available.  Anyone prudent and wanting to invest would need to register with the site to gain access.  

Not sure how I'd tell if they ever sold their shares though.  Anyone have any backend experience with operating a security on GLBSE?  What tools do they provide?

Future FAQ... ?

I'm relatively new to Bitcoin.  I've jumped into the fray recently, doing some small scale mining, and more importantly, I've spent the last couple of weekends coding support for Bitcoin into our website.  

While doing this, and while figuring out the most productive places to put my newly mined BTC to use, I stumbled upon GLBSE.  So here are my thoughts.  Hopefully you all can comment and help me figure out if any of this makes sense.

My company has been in business for ~15 years now.  Until now, I have never sought investment.  I have always funded growth via what was available to me at the local banks.  The debt load for the company is like a seesaw, we incur debt to expand, we spend a few years paying it off, then we incur more debt to expand again.  Thus far this has proven a fairly prudent approach, and we've never bit off more than we could chew.  It occurred to me, as I was looking at the various securities on the GLBSE that maybe issuing bonds would be a better way to approach the company's funding needs.

I've researched the legality of offering up bonds in the US.  It seems legal, at least on the surface.  Small fry's are allowed to offer up bonds to private investors without having to register with the SEC.  So I just have to make sure that at some level my bond investors are "private".  I would thus define the potential pool of private investors in my bonds by saying our bonds are only available to those in the GLBSE Bitcoin Club, (aka, registered members of the GLBSE)  or something of the sort...  However... I'm not really sure if this would pass the test of an actual US courtroom or not.  The definition of a "private investor" seems somewhat vague.

I've researched the various payout strategies and approaches to the various securities.  I know for instance that with our current corporate structure, I cannot offer stocks.  That seems to really only leave bonds.  I've also thought a lot about the risk involved and it seems like most of the risk to the company stems from the volatile and unpredictable nature of the exchange rates.  For example, the company has to operate based on USD, which means revenue comes in in USD, and bills get paid in USD.  

Some of my ideas for bonds are:

COMPANY.BND.A - Initial offering of 100,000 shares at 0.25 BTC/ea.  Bond to mature at 5 years.  Company converts all 25000 BTC to USD, ends up with some amount USD, call this $VALUE.  Company pays interest at 3% of $VALUE, minus the USD->BTC transaction costs at monthly intervals.  Company reserves right to buy back bonds at 1.5x the 5 day average at any given time.  At maturity, company buys back all bonds at $VALUE USD, converted to BTC at that time.  

COMPANY.BND.B - Initial auction of 100,000 shares starting at 0.25 BTC/ea.  Bond to mature at 5 years.  Each share is a coupon entitled to 0.000003% (total offering value = 0.3%) of the company's actual revenue, currently a bit north of $1 mil/yr and growing at ~8% annually.  Company converts all BTC to USD, ends up with some amount USD we will call $VALUE.  Company pays dividends monthly based on company's actual revenue.  Company reserves right to buy back bonds at 1.5x the 5 day average at any given time.  At maturity, company buys back all bonds at $VALUE USD, converted to BTC at that time.

COMPANY.BND.C - Initial auction of 100,000 shares starting at 0.25 BTC/ea.  Bond to mature at 15 years.  Each share is a coupon entitled to .000008% (total offering value = 0.8%) of the company's actual revenue, currently a bit north of $1 mil/yr and growing at ~8% annually.  Company pays dividends monthly based on company's actual revenue.  Company reserves right to buy back bonds at 1.5x the 5 day average at any given time.  At maturity, company buys back all bonds at $0.01 USD, converted to BTC at that time.

All of these options would be extremely stable from a USD perspective and would bring additional stability to the GLBSE.  The last bond feels like the most risk to the company, but it seems to accomplish nearly the same thing as a stock offering.  If growth follows the established pattern, in 10 years 0.8% of the company's revenue would represent a pretty significant gain.

If we do move forward of course all the relevant records and numbers necessary to achieve transparency would be made available to bond holders.  I was trying to figure out a way to authenticate bond holders somehow... It'd have to use the GLBSE site somehow to distribute a new password to the site every 6 months or something.  Does the GLBSE currently have a mechanism for privately emailing or messaging all bond holders?

Thoughts?  Does this seem like a security anyone would be interested in?