Topic: stock coins? p2p virtual stock & debt equity / cryptostocks (Read 9341 times)

as I may have mentioned before I am writing the weekly blog for mastercoin, one of the possible technological approaches to this.  check it out if you have the time, and if you are a developer with some spare time the Mastercoin Foundation has a 300 BTC code contest 

Making History With Distributed Exchange

News for the week 43.2013.

Last week we discussed the fantastic results of the 1st code contest. Through out this week a few key exciting events took place.

J.R. Willet, the person behind the Mastercoin protocol, announced the 2nd code contest which is to enable distributed exchange transactions between two currencies (BTC <-> MSC); this ambitious contest is giving away 300 BTC and will need support not just from those who will be developing the wallet and website applications but also from those who are willing to test the developed applications, so take a look and get involved. Your contributions will be rewarded.

We also saw an important decision take place with the Bitcoin code base.  According to Gavin Andresen Bitcoin a pull request which allows for the association of up to 80 bytes of arbitrary data transactions will make it into Bitcoin’s 0.9 major release; this will enable Class C Mastercoin transactions (more information below).

Lastly, earlier this week the Mastercoin Foundation Board had its first meeting. Scroll down to see the minutes.

Read more...

http://blog.mastercoin.org/2013/10/26/making-history-with-distributed-exchange/

so just a quick update, i have been pretty busy with work at my grad program, have a ton to read and write.

however, i have also started to help the folks at Mastercoin with their newsletters.

i think there technology is close to prime time.  there are also folks actively seeking a proven system for stock ownership.

what I would suggest is using Mastercoin to run a proof of concept, at least for 1 trial run

i hope to finish up the voice of customer later next week and run the study for a couple weeks.

Hi! I think the right way is colored coins.

I myself studied master coin and colored coin, and I found colored coin the most solid and transparent way to go for stock market. I found that master coin is the best to demonstrate property of physical goods, but not for things that have so many elements, like shares.

For example, with master coins you can demonstrate the property of your cell phone, because you can have 1, maybe 2 or 3. But for stocks you want to demonstrate property of maybe 2000 or more shares, and there master coin fails.

On the other side, colored coins is very good to demonstrate property of big number of equal items, just like shares. And also gives some interesting possibilities, like an easy way to identify your investors and pay dividends without asking their addresses.

I'm developing an stock exchange called coinmarket.pw (also coinmarket.mx and coinmarket.bit)

There I'm using colored coins, joining with bitmessage for p2p order book and trade contact and namecoin for colored coin's metadata definition.

If you want to follow the development or buy shares of my exchange, you can contact me here, and follow this link https://forum.litecoin.net/index.php/topic,6324.new.html#new.

yes that is exactly right but we need the code base for that, it doesn't really exist today in a way that is secure  (if you just cloned bitcoin someone could attack it with enough hashing power which is cheap to buy, thus it needs to be layered on top of bitcoin or a separate security algo then what the asics are made for, sha256).  also  there are some features missing which in some countries may be needed (i.e., identifying majority owners, etc)

Couldnt a company make their own coin, premine it all and then sell the coins, as a representation for the company?
Ideally that would be the best solution? wouldnt it?

I need to write down all the reading I have been doing the last week, but it would see for now that the most viable options are coming down to:

Colored coin
Mastercoin
Ripple

I still have to investigate ripple, trying to get in touch with the guy who made DYM

I should have an update by end of next week, after I finish the 20 pg paper I need to finish by Wednesday.

Saw this ... another one bites the dust. Shoot I need to update my list! Like half of them are gone in the last month...

In case you missed the news... bitfunder no longer available for US entities...


Important Notice (October 8th, 2013):

Please be advised that BitFunder is implementing the following rules and procedures:

As of October 8th, 2013, BitFunder will not accept new registrations from any United States persons or entities. All new registrants must supply the information required to obtain "Verified" status on their linked WeExchange account. BitFunder may, in its sole direction, decline to accept any new registrations.

As of October 8th, 2013, all current BitFunder users who are located in the United States or are determined to be United States persons or entities will not be able to enter into any new positions on the Bitfunder website, and, as of November 1, 2013, such users will also not be allowed to sell positions on the BitFunder website.

All current BitFunder users who are not United States persons or entities must supply the information required to obtain "Verified" status on their linked WeExchange account before November 1, 2013. Any such users who fail to provide the necessary information will not be able to enter into or sell positions on the BitFunder website as of November 1, 2013.

Users will be able to withdraw holdings and Bitcoins from their BitFunder accounts before and after November 1, 2013.

All assets and issuers must demonstrate that they meet BitFunder's requirements for the listing of assets, or the assets and issuers will, at BitFunder's sole discretion, be denied access to, or removed from, the site. Issuers will be notified of any additional information needed to demonstrate compliance with BitFunder's requirements.

BitFunder appreciates your understanding in these matters as we move forward.

Sincerely,
BitFunder

ok thanks Luckybit. 

just for everyone's reference, these are the documents relating to Hops (very early stage)

https://bitcointalksearch.org/topic/hop-whitepaper-altcoin-solution-for-trustless-decentralized-btc-usd-exchange-297147
https://anonfiles.com/file/14d9ed0ebc60f2fc30bc596c49e7b61f

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Looks like I will need to create some kind of feature/etc matrix for all of these.

So far the candidates appear to be:

Altcoin/bitcoin clone
Colored coin / bitcoinx
Mastercoin
Bitshares (not exactly an option since it is not FOSS but worth knowing the feature set)
Ripple (something similar to DYM https://bitcointalksearch.org/topic/introducing-ripple-currency-dym-149533)
Freimarket
OT

anyone want to throw in anything else?

Any solution should be builtin to the blockchain itself. It wouldn't be hard to set up an altcoin called stockcoin, use Colored coin or Mastercoin and run that. Hops is one way of doing it, Mastercoin is another, Bitshares is another, Freimarket is another.

What is needed is a kickstarter and bounty system of some sort to get it built.

just a quick update

so i started this thread to give away "shares" in a proof of concept, whenever you all on the tech side have something working that can be tested.

https://bitcointalksearch.org/topic/m.3295590

go add a comment so you all can be on the list

my main purpose is to build you a userbase, and also use it as a promotional tool so that perhaps we can attract more developers to the effort.  the guys at ripple/opencoin did something similar and i think it appeared to work well for them.

if things go well at some point i envision working with the exchanges or the bitcoin crowd funding folks to raise some money so you all can get financial support.

i'm thinking it would be cool to have a system that uses data from sourceforge (ohloh.com) or github to compensate people based on code lines, check ins, etc...but that's way down the line and I have no clue how that would even work...

I have added a voice of customer survey i am working on for this

https://docs.google.com/forms/d/1MIIQCdFV_TutvsL3UqIUHVOrjdrEWlK9vI_XgTZcQmM/edit

feel free to add others or post them to this forum first

first two questions are:

QUESTION 1

Identify your involvement in the use of digital stock or debt equity: *
 have traded stock or debt equity (i.e., perpetual mining bonds)
 have used an online exchange to trade
 have used a message board, email or chat to trade
 have issued stock or debt equity as a company owner
 have participated in the issue of stock or debt equity as an intermediary (you run an exchange or pass through, not a company representative)
 None of the above

QUESTION 2

Rate how important is having physical possession of a financial instrument? *
For example, with bitcoins a person can hold them "physically" in a private key print out or on their own computing device (USB stick etc).

Not Important at All                     Very Important
0
1
2
3
4
5

sorry for the delay but i have an initial document for this effort located here.'

i have tried to separate out different efforts so that people from different backgrounds (technical/development, business/marketing, regulatory/legal) can contribute.

the doc should be free to edit

https://docs.google.com/document/d/10YdUCKQ8MLOrjpxZtuQc6PhBVfThX6XU-stTOfGSOQE

Yes and no. It depends...

If OpenCoin open sources their ledger server code as they are supposed to and therefore anyone can run a ledger server if should be possible?

... I have not been following them as of late, but if that is the scenario then it would make sense.  

If shares can be issued using ripple, wouldn't that make them dependent on ripple, i.e Open Coin?  I'm still figuring out ripple, so I could be wrong.  Whereas coloured coins would be much more secure, even if the exchange was a website and not in the bitcoin client the transactions would be stored in the blockchain (would they?), so if the exchange went down a new one could be put up and the shares would still be owned by their rightful owners.  Am I correct?

Interesting I didnt initially think of ripple.  Might be worth looking into, they are supposed to go open  source imminently?

I dont know if the fractional thing is an issue, it may just be a contractual thing, unless their is some specific regulation but I have fractions of mutual fund shares

Ripple ledgers are public so you know what accounts hold how many of your stocks at any given iteration of a complete accurate ledger.

Your trusted friends are deprecated in modern Ripple, you are advised to trust a "gateway", in this case the secretary of the company, or the service they engage to track and handle their shares, would be the "gateway".

About the only aspect that isn't off hand known for sure right now by me is whether in RIpple you can designate a currency as integer-only, to prevent people from trading fractions of a share.

But if not then lobbying them to support integer "currencies" should commence ASAP if they never thought of this yet themselves.

-MarkM-

Sorry for my ignorance, but I don't understand how you could use ripple to trade stocks... You say that the company could issue stock-IOUs. But I couldn't trade these through the ripple network, because none of my friends would accept IOUs denominated in these stocks.

1) Isn't everything you are holding in the ripple network based on IOUs with one of your trusted friends?
So if I want to use ripple to buy a stock of some company I cannot easily transfer that stock through the ripple network considering that I have no friend who would accept that stock as an IOU.

2) Furthermore in ripple the company couldn't easily distribute dividends. In contrast, in a blockchain the public addresses of the shareholders would be known in the blockchains and therefore it would be easy to distribute dividends.

3) The same problem is if the company wants that the shareholders should vote for some investment strategy. In a blockchain like system it would be very easy to implement this using proof-of-stake.

Well maybe ripple will be ideal then.

It avoids the hideously massive cost of paying "hashers" to secure a blockchain, yet anyone can issue assets.

So a company can issue share IOUs, redeemable for actual shares maybe even if someone wants to walk into the office of the secretary of the company or their share owner tracking service they employ if they have chosen not to be anonymous.

Dirt cheap, easy, already up and running, seems like a pretty obvious approach...

-MarkM-

+1

Exactly. At this point, all legal arguments would be useless. It is as if Satoshi Nakamoto would have argued about the legality of bitcoin (e.g. is it allowed to mint a new currency). At that point (*EDIT* before it was released) the legality of bitcoin was absolutely unclear because nobody even knew how the system would work.
It's like arguing about the legality of file-sharing softwares before they were developed. Is it illegal? who knows? In the end it always depends on where and how you use it....
Would argue about the legality of building cars/rockets/whatever, before they were invented?

As long as it is not illegal to write an open-source software, then why argue about legality. In the end people will use it or not. Maybe it will be banned in some countries and not in others. And only if the technology is there, politicians will be able to decide about the legal framework.