Quote from: Mike Hearn on October 21, 2012, 05:07:16 PM

To us it's self evident that decentralized peer-to-peer markets based on strong cryptography are superior to existing markets. They are more efficient. They are more trustworthy. They are international. They will probably have lower fees (or zero fees).

Intelligent and informed points with the exception quoted.

It's not self evident to any "us" that includes MPEx. Peer-to-peer markets are, as far as we can see, pure nonsense. Much in the same way wikipedia does not work as a textbook for training highly specialized professionals (surgeons, lawyers what have you) and much in the same way a public library where anyone can be the librarian will soon enough turn into a collection of comic books and pulp it is unreasonable to expect anything useful to show up on a p2p market.

Peer to peer markets will work exactly for what and exactly how GLBSE has shown them to work (a centralized market run by undistinguished members of the general public being indistinguishable from a peer to peer market in any practical sense): a collection of the useless, the dysfunctional and the pointless taking turns to become fashionable, thus copied, thus reinforced by "social proof", presided upon by many idiots of which some are useful and a handful are outright con artists, generating an ever increasing quantity of drama per BTC.

There's a reason lemon laws have to be introduced in any market where the costs of discovery are high and the actual value per unit variable: buyers are willing to offer "average" prices, sellers knowing this will never list anything of above average value, as a result the average spirals down. There's always going to be need for a place where the above average can be listed, and that's the end of the p2p market as a serious venue.

P2p works well for money because money is fungible. It's a good idea, much like flight is a good idea: for some applications. Not at all for anything and everything under the sun.

Quote from: Mike Hearn on October 21, 2012, 05:07:16 PM

From a buyers perspective, it means there's now a large and liquid debt market for small bonds.

A market of one billion dollars obtained through adding together one million different "securities" with markets averaging one thousand each is neither large nor liquid. It is painfully fragmented and utterly illiquid. Because, again, fungibility matters.

(Yes, you may be able to collateralize some of that smoldering crap into tranched CDOs or other derivatives and thus capture some real liquidity. The recent adventure of the US financials in this field should be informative.)

Quote from: Mike Hearn on October 21, 2012, 05:07:16 PM

In practice nobody should invest a lot of money into an entity that hasn't been through ID verification and which does not explain what they're going to do with the money (hedge funds are an exception to this common sense rule, but they're the result of regulatory loopholes and a broken financial system, they probably wouldn't exist in a world that used only Bitcoin).

It makes no difference if you're investing a lot or a little money. This is a completely imagined distinction, a bad buy is a bad buy at any size.

ID verification is pointless. For one, enforcement is expensive even with IDs. For the other, IDs are easily falsified (to the level where p2p-ers can't distinguish them from bona fide IDs). It's shocking to see this cargo cult understanding of investment being perpetuated when a cursory read of this very forum would immediately cure anyone of it.

Finally, most hedge funds do in fact disclose what they do with the money. It's true that they often fail, and it's true that they often fail to stick with what they said. Nevertheless, the hedge fund is not going away. The bank may be, either extinguished or altered into a marginal role by Bitcoin. The hedge fund however stands to be enhanced.

Quote from: Mike Hearn on October 21, 2012, 05:07:16 PM

this kind of thing is gold to people who may otherwise have a hard time building their personal reputation or case for promotions.

It would appear your experience with bureaucrats differs significantly from mine (and ours). I've never heard of careers being built on innovation, taking risks and going against consensus in a bureaucracy, but maybe they do it differently where you are.

Quote from: Mike Hearn on October 21, 2012, 05:07:16 PM

Unfortunately by it's very nature the assumption of locality can't be removed in just one place. A foreign regulator can believe you broke their laws even if the local one doesn't.

Actually, the reasonable avenue to breaking unwarranted assumptions of locality for Internet businesses is to domicile in a locale that fails to recognize such claims and stick to that. This is one of those points which will probably have to be etched into everyone's skin at the point of a sword: no, the US Congress doesn't have nor should it have any teeth outside of the US, even if it may feel this isn't right or fair.

Quote from: imfed on December 01, 2012, 05:05:52 PM

A p2p loan will be ok in most cases but if you are raising 100.000 BTC for your company publicly the SEC/FSA/BAFIN will knock on your door soon.

MPOE/MPEx is market-valued at around 600k BTC atm, and has been over 100k BTC for most of the current year. No knock. Will keep you posted.

Quote from: imfed on December 01, 2012, 05:05:52 PM

Arbitration would be the best way:

This may possibly be of interest to you: http://polimedia.us/trilema/2012/the-mpex-rota/

(Also re your signature: you're at the very least the third Bitcoin ratings "agency". The previous two notable ones, Peter Lambert and Patrick Harnett turned out to be scammers. Just FYI. And on that note, please see here.)