cryptostocks.com   

What the F is this?

Are these supposed to be real stocks for sale?

They don't even verify that it's a real company.
You just have to make sure you have an email address that matches your website domain, and you can sell stock.

If you buy stock, how do you know you're getting real stock, and a real percentage of the profits?

If I'm a company and sell stock, since I'm not registered with the SEC, what will prevent stockholders from suing me if my company loses money?

Don't get me wrong, I'm very fascinated by the idea of using bitcoins as a way to finance new startup companies. There's a lot of cumbersome regulation with SEC if you're a company that wants to sell stock. I'm just trying to understand how cryptostocks work, as the website sure doesn't seem to explain much.

Bullshit! Mtgox was never designed to be a fly by night and Mark didn't actually profit from the exchange, it's ruined him.

Think about it.

If an exchange is not profitable and they have to choose between closing the business, or "borrowing" some of the bitcoins temporarily until they make up the difference next year, which do you think they'll choose?

The exchange will always choose the ladder.

It would actually make sense for the most successful exchange to be skimming the top, as that would give it the financial strength to out compete the other exchanges. Lance Armstrong anyone.

My exchange still has enough bitcoins to cover 95% of deposits.

What's the big deal?

It's not like 95% of customers are all going to try and withdraw at the same time.

My employees worked really hard and deserved a Christmas bonus. Not to mention, we needed new office furniture.

I'm just going to borrow a few coins from the exchange to pay for my mansion filled with prostitutes.

I will repay those coins with the income the exchange makes next year.

Don't worry. 

You can trust me. 

 

Don't you get it.

I shouldn't have to prove that they're fractional reserve.

They should have to prove that they aren't!

This is Eastern Europe and Bulgaria is one corrupt, poor country.

You really think these Bulgarian's are going to be sitting on millions and millions of bitcoins and aren't going to want to "borrow" or touch some of those coins. The temptation will be too great.

They could easily remove some of those bitcoin and then try to gamble with them, make more money, and then return the bitcoins safe and sound afterwards, and no one would ever no.

It it were my exchange and I had no over-site, I'd be tempted to do this myself.

What happened with mtgox is like Enron, it's not an isolated incident, it's actually widespread.

Btc-e.com is another exchange that is running fractional reserve, and ready to disappear with everyone's money at a moments notice.

Without an independent group of auditors, how do you know that bitstamp and blockchain.info aren't running thousand bitcoin deficits due to theft, loss, incompetence, etc?

You don't.

Until a bitcoin exchange/business passes an audit by an outside/independent body (and continues to do so at regular intervals), why should we assume anything but that this business is insolvent, running fractional reserve, or misappropriating funds in some other way?

Oh wait, we should just believe the business and take it at it's word.

Wallstreet has this type of problem even with tons of regulation and government bodies watching.

With bitcoin having none of this, it will certainly be even more widespread.

I'm not saying that government is the answer, but some sort of independent 3rd party bitcoin auditing service that will certify an exchange/bank as 100% solvent and not running fractional reserve is definitely needed.

You are the biggest moron!

21 billion bitcoins? really? And I need to get my math right before posting misinformation!

12,456,475 bitcoins in circulation divided by 700,000 is 5.6%.

Well, la de da, I was 1.6% off. Didn't really feel like getting the calculator out, but since you insist.

Minus 5.6% of the total supply, and if those mtgox people want there coins back, they'll have to rebuy. What percentage of bitcoin will they rebuy? You will then have to add that to 5.6%, for the increased valuation of bitcoin. If in theory, mtgox people wanted the whole 5.6% back, then the value of bitcoin "should" increase 11.2%, not withstanding the effects of lost consumer/investor confidence in bitcoin in general.  

 

Over 700,000 imaginary bitcoins just went up in smoke.

Mtgox was artificially increasing the supply of bitcoin, thereby driving the price down, just like a fractional reserve banking system.

This means that the "supply" of bitcoin has just shrunk by 700,000, which is like over 4% of total bitcoins. This means each real bitcoin remaining is now more rare and thus valuable.

Each person who got burnt by mtgox, will now have to start buying more bitcoin if they want to get back in the game, thereby increasing the price of bitcoin further.

An important question: of all the people who got burnt by gox, how many will stay in the bitcoin game and buy more, and how many will quite bitcoin all together?

Okay, yes it stinks that many people got burnt. However, I noticed for many months that bitcoins were selling for $150 plus on mtgox than all other exchanges. This is a major red flag! Why didn't people start ringing the alarm bells? Why on Earth would people buy coins on gox for 150 more than the true market value? Standard answer told to me: because no one can withdraw fiat from gox. Red flag! Something is truly rotten if all these people are forced to pay 150 extra per bitcoin, like holding your customers hostage, yet people still continued trading with kidnappers for months on end like nothing is wrong. Stockholm syndrome. Insane. Or maybe blinded by greed. 
 

I have a bitcoin wallet that I downloaded and is stored on my hard drive.

When I sync with the blockchain, or receive and send money, is my IP address recorded somewhere?

In other words, should I head to the local starbucks when using my bitcoin wallet if I don't want my location revealed?

I've noticed that I can buy bitcoins at market rate on coinbase.com and then resell them on localbitcoins.com for plus 12% of market value. Obviously, there is a little work involved. Dealing with numerous emails, small transactions, etc, and the potential for fraud.

However, it's not a lot of work, mainly just pushing the escrow release button 4-5 times a day after verifying deposits into my bank account.

Since I can sell around $1200 in coin per day, minus 1 percent for localbitcoins and 1 percent for coinbase, I can net about $120 per day, which is currently more than my day job.

Now, if something seems too good to be true, it generally is. In other words, the profits seem too easy for the work involved, that I worry that I'm missing something? I would think that the ease of profit would encourage more people do to it, thus making more competitive prices on localbitcoins and driving the price down.

What am I missing?

Will the feds eventually bust down my door for being a money changing business without a license? 
Will my bank eventually notice that I'm selling bitcoins and suspend my bank account?
Will the IRS notice what I'm doing and charge me with tax evasion if I don't report my profits at year's end?
Will I eventually get scammed somehow from a buyer, thus slashing my profits?
Will something else unforeseen happen to dissolve all profits?