Author Topic: BitUSD Trading Guide  (Read 11442 times)

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Offline hpenvy

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LOL
a good one. How did you dig out this ancient thread?

btw, I'm happy to see my former 2K (well almost 2k) self, posting something in his usual semi-comprehendible style.

I was hunting to see if any type of guide was started before pushing to reinvent the wheel in the marketing forum. :)

Well, the only people that know how the stuff works (in any particular iteration/ implementation) are busy enough with more important stuff than writing guides...so

I never worry about the things I can't control.  If someone steps up, great.  I'm willing to chip in for a bounty. If not, we'll know to move onto something else.  Plenty to do elsewhere in the marketing thread.
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zerosum

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LOL
a good one. How did you dig out this ancient thread?

btw, I'm happy to see my former 2K (well almost 2k) self, posting something in his usual semi-comprehendible style.

I was hunting to see if any type of guide was started before pushing to reinvent the wheel in the marketing forum. :)

Well, the only people that know how the stuff works (in any particular iteration/ implementation) are busy enough with more important stuff than writing guides...so

Offline hpenvy

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LOL
a good one. How did you dig out this ancient thread?

btw, I'm happy to see my former 2K (well almost 2k) self, posting something in his usual semi-comprehendible style.

I was hunting to see if any type of guide was started before pushing to reinvent the wheel in the marketing forum. :)
=============
btsx address: hpenvy
Tips appreciated for good work

zerosum

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LOL
a good one. How did you dig out this ancient thread?

btw, I'm happy to see my former 2K (well almost 2k) self, posting something in his usual semi-comprehendible style.
« Last Edit: November 21, 2014, 03:20:14 pm by tonyk2 »

Offline hpenvy

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There's been interest in creating step by step investment guides. I wanted to make sure this August post was brought back into our view.
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Offline tonyk

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Somebody edited and made the 'Covering Short Positions' paragraph too vanilla.

 It says last edit by Dan but I doubt it. If it is indeed Dan - Dan, I consider the older (initial) version of yours better.

Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline donkeypong

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I think it will be amazing also. We just cannot fall short with participation. I guess my link to your post was (or should have been) that I think BitUSD could trade a bit low initially, but this is less likely with greater participation and volume. No reason it needs to equal USD value all the time, though; I expect it may hang lower or higher at times.

Also, never forget that global FOREX markets are a real nightmare of hassle. And it is a nightmare for many foreigners to acquire hard currencies or move money. Given that this will be SO much easier to use, could we see a higher BitUSD value than we might expect? Might the real risk premium actually be with fiat dollars?

Offline Empirical1

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I think once the system has proved robust, it has more utility, it's other advantages,  as well as if traditional banking risk factors increase. A BitUSD may be worth more than a normal USD to me.

Is that irrational. Is that not how it works?

These factors are irrelevant to the consensus... Initially shorts will probably be paying interest (by having BitUSD available at a discount) to attract new people (like yourself) to hold BitUSD.   However, everyone who recognizes the opportunity to buy BitUSD cheap can get some free gains when it returns to mean.   Provided it returns to the mean faster than BTSX climbs in value.

Thanks for the explanation, sure you're right. It still seems in my head that even though you can seed it with a consensus of 1-1, the actual consensus could form around what is a BitUSD worth relative to a $, that will find a mean but not necessarily 1-1.

We will see. The whole thing depends upon robust participation. If we build it, will they come? Hopefully, the marketing is about to kick into high gear. I actually feel more confident now than ever before, given the participation and success thus far with BitShares X. Even with limited features (without the assets that soon will be added), it really is a fine product, and I think a lot of people are discovering that now. And yet, we are going to need more participation. Near the beginning, there should be some exciting volatility, but I expect that to stabilize as it grows. Let's hope, if interest does start to flag at any point, new asset classes (toys) can be added to keep the game rolling. I can see proxies for gold, platinum, silver, oil, and all the agricultural commodity classes as well as the currencies.

The other thing we are going to need is merchants and services who accept BitUSD. Or BTSX. Or BitGLD. Or one or all.

I think it will be amazing! History in the making!

Even if what I think could happen, happens, it just means BitAssets will trade 1-2% below the peg in the beginning but as it grows and matures, the reverse could happen and I expect BitAssets could trade/have their long term mean 1-2% above the peg.

Offline donkeypong

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I think once the system has proved robust, it has more utility, it's other advantages,  as well as if traditional banking risk factors increase. A BitUSD may be worth more than a normal USD to me.

Is that irrational. Is that not how it works?

These factors are irrelevant to the consensus... Initially shorts will probably be paying interest (by having BitUSD available at a discount) to attract new people (like yourself) to hold BitUSD.   However, everyone who recognizes the opportunity to buy BitUSD cheap can get some free gains when it returns to mean.   Provided it returns to the mean faster than BTSX climbs in value.

Thanks for the explanation, sure you're right. It still seems in my head that even though you can seed it with a consensus of 1-1, the actual consensus could form around what is a BitUSD worth relative to a $, that will find a mean but not necessarily 1-1.

We will see. The whole thing depends upon robust participation. If we build it, will they come? Hopefully, the marketing is about to kick into high gear. I actually feel more confident now than ever before, given the participation and success thus far with BitShares X. Even with limited features (without the assets that soon will be added), it really is a fine product, and I think a lot of people are discovering that now. And yet, we are going to need more participation. Near the beginning, there should be some exciting volatility, but I expect that to stabilize as it grows. Let's hope, if interest does start to flag at any point, new asset classes (toys) can be added to keep the game rolling. I can see proxies for gold, platinum, silver, oil, and all the agricultural commodity classes as well as the currencies.

The other thing we are going to need is merchants and services who accept BitUSD. Or BTSX. Or BitGLD. Or one or all.

Offline Empirical1

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I think once the system has proved robust, it has more utility, it's other advantages,  as well as if traditional banking risk factors increase. A BitUSD may be worth more than a normal USD to me.

Is that irrational. Is that not how it works?

These factors are irrelevant to the consensus... Initially shorts will probably be paying interest (by having BitUSD available at a discount) to attract new people (like yourself) to hold BitUSD.   However, everyone who recognizes the opportunity to buy BitUSD cheap can get some free gains when it returns to mean.   Provided it returns to the mean faster than BTSX climbs in value.

Thanks for the explanation, sure you're right. It still seems in my head that even though you can seed it with a consensus of 1-1, the actual consensus could form around what is a BitUSD worth relative to a $, that will find a mean but not necessarily 1-1. 

« Last Edit: August 19, 2014, 04:48:15 pm by Empirical1 »

Offline Frodo

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I think once the system has proved robust, it has more utility, it's other advantages,  as well as if traditional banking risk factors increase. A BitUSD may be worth more than a normal USD to me.

Is that irrational. Is that not how it works?

These factors are irrelevant to the consensus... Initially shorts will probably be paying interest (by having BitUSD available at a discount) to attract new people (like yourself) to hold BitUSD.   However, everyone who recognizes the opportunity to buy BitUSD cheap can get some free gains when it returns to mean.   Provided it returns to the mean faster than BTSX climbs in value.

I think that might be exactly the problem. With BTSX price being relatively volatile I can imagine that a lot of traders will think it will be more profitable to short BitUSD even if it is trading slightly lower than USD.
I hope I am wrong though.

 +5% for the guide, definitely helped me understand the system a bit better.

Offline bytemaster

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I think once the system has proved robust, it has more utility, it's other advantages,  as well as if traditional banking risk factors increase. A BitUSD may be worth more than a normal USD to me.

Is that irrational. Is that not how it works?

These factors are irrelevant to the consensus... Initially shorts will probably be paying interest (by having BitUSD available at a discount) to attract new people (like yourself) to hold BitUSD.   However, everyone who recognizes the opportunity to buy BitUSD cheap can get some free gains when it returns to mean.   Provided it returns to the mean faster than BTSX climbs in value.
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline bytemaster

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4) Being long and short at the same time and how short positions are closed in such case (need to see the final version tho).

Short positions are not closed in this case.  If you are short and long then that is your call, but you must manually cover with your USD.

In the last test run one could not cover with his bitUSDs.

If he can please post the commands to do so.

https://bitsharestalk.org/index.php?topic=6918.msg92375#msg92375

Our unit tests show covering working.  I think there was some misunderstanding.
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline Musewhale

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hu .. didnt see that one coming .. gonna read through it thos evening

"BTSX Bears",  It is difficult to hide

I must admit, I'm in here, "hu" is my family name  :-X :-X :-X
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Offline Empirical1

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BitUSD has been seeded with the consensus that the value of one BitUSD should be equal to the value of one US dollar.  Therefore, unless something happens to change this consensus the most profitable trade to make is to buy BitUSD when it is under 1 USD and sell BitUSD when it is over 1 USD.  If you trade against this then you are predicting others will do the same and as far as I know there is no rationale for any other price.


Not that I'd change it in the guide.

I'm not hot with this stuff, but from my perspective a BitUSD may be worth less than a USD in the beginning to me, because of system risk, lack of utility and the cost+effort of converting via a centralised exchange to say real USD for example.

I think once the system has proved robust, it has more utility, it's other advantages,  as well as if traditional banking risk factors increase. A BitUSD may be worth more than a normal USD to me.

Is that irrational. Is that not how it works?