Quote from: laffenlarry on April 06, 2013, 07:37:16 AM

Quote from: dflatline on April 06, 2013, 07:19:39 AM

Quote from: Slackware1995 on April 06, 2013, 06:58:59 AM

I never stated that he'd hold or not hold BTC. I just showed how he takes BTC, and accounts for it on his ledger, then how he pays (scams) you back in BTC. His risk is very low, his customer risks are very high.

As another example, about 2 months ago BTC was worth about $25. If you deposited 1 BTC with him back then, your ledger would show $25. Withdrawing today would get you 0.176 BTC before he takes his "fee".

No thanks, I'll hold my BTC today so that tomorrow it's still a BTC.

If he's not holding the deposits in Bitcoin he would need to buy the equivalent value in Bitcoin back to fulfill the value on the ledger. The 1 BTC you deposit with him will be converted into some sort of asset. His ability to pay interest, or even back his deposits depends solely on what assets his 'bank' owns. He's essentially taking bitcoin, converting it to non-bitcoin currency and investing it in commodities, then selling those commodities, using what he made selling those commodities to buy bitcoin which he then gives back to you.

Except, he's stated that he's not going to be investing anyone's money in commodities, he's going to invest the fees. So his operating capital is a small percentage of the value on his ledger; he will have to make far more than 4% on those transaction fees to cover the ledger value.

There we go. We are starting to think about the margins. Now, reduce costs, decentralize, and even though there may be thin margins, it's about the breadth of the waters being sailed. The balancing is delicate. But once it's gotten to a point of Neutrality it will swim for the next 150 years or more.

Bitcoin is a "Present Value" currency, with an inability to carry and hold it's value. Like a dwindling gold mine, or the good old gold rushes. But the mine will run dry. The cost will vastly increase, and it no longer service as daily use purpose.

However, as payment clearing system and transaction system Bitcoin is nearly flawless.

You sir, have a strong mis-conception of what money is and is not. As long as I can exchange bitcoin for something I value, it therefore has value. There are only 3 differences between bitcoin and USD.
1. USD are required to pay taxes
2. USD are backed by the faith of a country/world
3. It is much easier to carry transactions currently in USD because of 1 and 2 above.

The money value of USD and bitcoin are both based on faith in the system.

If anything, I'd say that bitcoin has more "ability to carry and hold it's value" than perhaps any other fiat money in the world. If bitcoin was a '"Present Value" currency' as you state, the value of bitcoin would be going down, not up. Which, based on your business model, I'm sure you understand.

Where your business concept fails is that at bitcoin's present appreciation, you will be hard pressed to find any commodity that raises in value as at an equal or greater appreciation. If, as you claim, you never use deposited bitcoin for investment, there is literally no way to sustain your business model as you present it. Therefore, my belief is that you are being dishonest with us. I'd even wager that if you did, in fact, use deposited bitcoin for investment, you would still be very hard pressed to find a commodity that is appreciating as fast.

Therefore, I conclude that your whole business model is to hold use the appreciation of bitcoin against your customers that are trying to "save".

As I've stated before, anyone that deposited 1 BTC a couple of months ago would only have about $25 on account with you. But if they request a withdrawal now, you give them $25 of $142 or 0.176 BTC. Then to add an extra dagger, you additionally charge 2.25% transaction fee.

If today I deposit 1 BTC, I would get about $142 on account with you. You are counting on next month that BTC will be worth $200 (or more). In which case, I get back 0.71 BTC before fees. You obviously want people to keep that money on deposit for longer periods (by saying that if you leave it in for 6 months you get 1% interest on the ledger amount or 4% after 1 year or more).

If you truly cared about us saving and earning you would keep everything in BTC. I deposit 1 BTC, I have 1 BTC. If I leave that there you would pay interest on what I have deposited. No, your whole business model is based on BTC raising in value, therefore you give back much less than you originally received.

Furthermore, we only have your word that we would ever receive anything back. Anyone that sends you any BTC should just consider it a donation, because that is more than likely all it will ever be.