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Offline Empirical1

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Is Bitshares worse for crypto than Comex is for gold?
« on: November 26, 2013, 05:02:10 PM »

Hi, I woke up in a cold sweat last night, as I said in a previous post I'm a newbie to bitshares, can you please explain how my following train of thought is wrong...

People take the price for gold from the Comex which we all know is a scam because Comex owns and trades very little of the underlying asset, gold. It allows nefarious actors to manipulate and suppress the gold price by taking massive Comex short positions even though in the real world they would have no hope of getting enough of the underlying to cover that position.

So how did the 'Majority' become dumb enough to trust the Comex price? Is it the same way they may become dumb enough to trust the Bitshares price?

Right now as a Bitshares video points out, BTC's value is different on all exchanges, depending on many factors. So it would be very useful if there a way to derive a true decentralized value for BTC? Wallah! Bitshares!

At first Bitshares will give an accurate price for BTC that reflects available information, so in a short time people will start to trust that the best idea of BTC price is derived from bitshares and not from a particular centralized exchange.

However people are taking long/short positions on BTC via bitshares without owning the underlying BTC?  So pretty soon nefarious actors, (Gov and traditional banks) will be able to influence and suppress the BTC price by taking massive positions. And by then even if the core BTC community knows the bitshare price is a sham (like Comex) there will be enough mainstream BTC adopters that still believe bitshares is a fair reflection of available BTC information.

Should we be praying for the future of cryptos and humanity that bitshares fails spectacularly?
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Offline phoenix

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Re: Is Bitshares worse for crypto than Comex is for gold?
« Reply #1 on: November 26, 2013, 05:16:52 PM »
I don't think there's any need to start praying that it's a total flop. First of all, the prices on the Bitshares exchange don't give the price of BTC directly, they tell you the market price of BitBTC. Then, there's a separate exchange rate between BitBTC and BTC. So even if the price of BitBTC is directly manipulated by some large entity, the exchange rate of BitBTC to BTC will still be able to keep the exchange rate between Bitshares an BTC the same. If the price of BitBTC goes up relative to Bitshares, then either it will take fewer BitBTC to buy a Bitcoin, or the value of Bitshares will fall relative to BTC. Either way, the exchange rate will remain stable.
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Offline smiley35

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Re: Is Bitshares worse for crypto than Comex is for gold?
« Reply #2 on: November 26, 2013, 07:02:44 PM »
To add on to what phoenix is said, don't forget that we are on the verge of decentralized exchanges. Mastercoin, Colored coins, Bitshares itself. Why would we follow bitbtc when we can just look at the value of the real thing.

Offline Empirical1

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Re: Is Bitshares worse for crypto than Comex is for gold?
« Reply #3 on: November 26, 2013, 07:27:54 PM »
To add on to what phoenix is said, don't forget that we are on the verge of decentralized exchanges. Mastercoin, Colored coins, Bitshares itself. Why would we follow bitbtc when we can just look at the value of the real thing.

Thanks for the replies guys.

As the Bitshares video and you seem to say smiley35, it is hard to derive the true value of BTC from centralized exchanges so we would be checking decentralized exchanges to 'look at the value of the real thing?'

But when you say 'why would we follow the bitbtc ratio to derive the value of BTC', do you mean bitshares will be such an insignificant decentralized exchange when compared to Mastercoin/colored coins that most people will be discerning the real (non centralized exchange) BTC value from them instead?


 

Offline bytemaster

Re: Is Bitshares worse for crypto than Comex is for gold?
« Reply #4 on: November 26, 2013, 11:14:59 PM »
The difference between COMEX and BitShares is that on the COMEX they are no collateralized positions.

Someone who wanted to short BTC would have to buy 2x much value in BTS.  Therefore, they would be pushing the price of BTS through the roof in an attempt to manipulate BTC down.    Now when people consider BTS to be overvalued the manipulators will be stuck in a massive short squeeze.

In conclusion, manipulators cannot manipulate BTC down, they can only manipulate PTS up.   

Remember, BitBTC is a promise to pay 1 BTC worth of value in BTS.  It can never manipulate the value of BTC itself.
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Offline Empirical1

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Re: Is Bitshares worse for crypto than Comex is for gold?
« Reply #5 on: November 27, 2013, 04:15:18 PM »
Thanks for the reply Bytemaster!

Remember, BitBTC is a promise to pay 1 BTC worth of value in BTS.  It can never manipulate the value of BTC itself.

Similarly, a Comex contract is a promise to pay 1 Ounce Au worth of value in $ & yet it easily manipulates the value of Au itself?

(In theory Comex can settle in Au but they make in difficult to do for most participants.)

So atm I still think my above concerns are valid. Though I do see that unlike US$, which the Comex manipulators have unlimited access to, and which are printed by a central source. BTS have a cap and have to be acquired on the open market so it's possible that my concerns are moot even if BTC buyers and sellers start pricing off BTS because they think it gives a more accurate indication of BTC value than centralised exchanges.

Also I should add I do actually own PTS for BTS even though i have these newb concerns, thanks for taking time to explain some of it, Im sure I'll understand it better eventually :)



Offline luckybit

Re: Is Bitshares worse for crypto than Comex is for gold?
« Reply #6 on: November 27, 2013, 05:06:17 PM »
The difference between COMEX and BitShares is that on the COMEX they are no collateralized positions.

Someone who wanted to short BTC would have to buy 2x much value in BTS.  Therefore, they would be pushing the price of BTS through the roof in an attempt to manipulate BTC down.    Now when people consider BTS to be overvalued the manipulators will be stuck in a massive short squeeze.

In conclusion, manipulators cannot manipulate BTC down, they can only manipulate PTS up.   

Remember, BitBTC is a promise to pay 1 BTC worth of value in BTS.  It can never manipulate the value of BTC itself.

It seems to work a lot like Mastercoin to me.
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Offline bytemaster

Re: Is Bitshares worse for crypto than Comex is for gold?
« Reply #7 on: November 27, 2013, 05:10:58 PM »
Mastercoin works a lot like bitshares  I earned a 3 bitcoin tip for pointing out to JR's how his original design did not work.  He then updated his design based upon what I was doing with bitshares

Mastercoin still relies on a trusted price feed and in that aspect is fundamentally broken.  Mastercoin also suffers from scalability issues.


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