Author Topic: Least volatile measure of value. What could it be?  (Read 11128 times)

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Offline Empirical1.1

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« Last Edit: December 12, 2014, 11:49:34 am by Empirical1.1 »

Offline davidpbrown

Time.

Time is money.

Time is mostly stable.

bitTime ≠ $10?..  8)

If only there was a way to track a universal constant such as the speed of light and trade it as a bitasset...


That's why I suggested CPU.. Does Moore's law still hold?.. Speed of light is a constant in the same way as a number is a constant. The value - the cost - of doing 1 billion calculations.. or if you like c then 299792458 calculations. That doesn't need to be the fastest option available either.. could be a weighted average of what is available.
« Last Edit: December 12, 2014, 11:27:12 am by davidpbrown »
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Offline matt608

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Time.

Time is money.

Time is mostly stable.

bitTime ≠ $10?..  8)

If only there was a way to track a universal constant such as the speed of light and trade it as a bitasset...


Offline davidpbrown

..I think bitLand might be a good solution.

erm.. because there's no volatility in land prices!?..

United States housing bubble: Land prices contributed much more to the price increases than did structures.


I would expect the most volatile prices are the most valuable ones.. oil and rare earth and land and other forms of raw wealth. People projecting perception of value, is the source of volatility.. it's the cause of the pump and dump curves and of other bubbles.
« Last Edit: December 12, 2014, 11:11:28 am by davidpbrown »
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Offline Rune

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I'm convinced that once USD tanks, BTS will end up as the least volatile asset and the world reserve currency. By then it would have a trillion+ market cap measured in 2014 USD.

If that doesn't happen I think bitLand might be a good solution. A market based around price feeds that follows the total valuation of all land in developed countries where it is possible to make such an estimate with high reliability. Of course maintaining such a price feed for bitLand would be a huge enterprise, but it would be worth it for the immense utility having a least volatile asset would give us.

Offline davidpbrown

What OP is looking for is however per definition some kind of CPI/PPI basket of goods and services, with all its challenges...

Obviously so.. but I was semi-serious.

The measure that is not volatile, does not change over time. If you really want a base measure, then it has to be something unaffected by time.

The next nearest solution is the value of unit work - manpower cf horsepower cf CPU power.

However, I wonder absolute measures have limited value? The real value of a market at any one time is exactly the demand on it. If there is no demand, there is no value; and what value there is, is only relative to what others will offer in exchange. A basket of other values might not be on target.

So, it's well known market cap means nothing beyond a contributor to utility. If you sold the entire market, what sum total would that be.. and divide by total coins.

Market value is an illusion, not just for the market cap but also for offers on the market that might get pulled. Real value is about what you can sell one single coin for.. and perhaps a simple basket beats a complex one.


Getting an absolute measure in a relative world though I suspect is more what the OP wanted.. and time is that or otherwise work. The price of a McDonalds burger is the same idea.. base work unit. Perhaps in the world of crypto a measure of complexity would work?.. The cost of a math calculation??.. link to the BTC mining cost???


[1hr x CPU] worth of BTC mining, might be stable?
« Last Edit: December 12, 2014, 10:50:19 am by davidpbrown »
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Offline kisa

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bitHour, bitLBS, bitMile - all sounds fun :)

What OP is looking for is however per definition some kind of CPI/PPI basket of goods and services, with all its challenges...
« Last Edit: December 12, 2014, 11:01:55 am by kisa »

Offline davidpbrown

Time.

Time is money.

Time is mostly stable.

bitTime ≠ $10?..  8)
฿://1CBxm54Ah5hiYxiUtD7JGYRXykT5Z6ZuMc

Offline arhag

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So, then the delegates need to provide and vote for a new basket price once a month.

How about creating a metaAsset from the bitAssets that we already have? For example, create a basket from bitUSD, bitEUR, bitCNY, bitGLD and bitOIL (once all of these have sufficient price feeds of course). The DAC can track the basket value by looking at the internal markets and create an artificial price feed for the basket.

You could do that if you think a basket consisting of only USD, EUR, CNY, GLD, and OIL is good enough. I think we would want a more sophisticated basket than just that however.

Offline pc

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So, then the delegates need to provide and vote for a new basket price once a month.

How about creating a metaAsset from the bitAssets that we already have? For example, create a basket from bitUSD, bitEUR, bitCNY, bitGLD and bitOIL (once all of these have sufficient price feeds of course). The DAC can track the basket value by looking at the internal markets and create an artificial price feed for the basket.
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Offline Markus

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I wasn't too serious anyway. :)

I guess a weighted average of all commodities used in the global economy should do the job then.

Offline eagleeye

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Let me try to prove that what the OP wants is impossible:

Something might have a stable value but it's price will still fluctuate with supply and demand. And those can be highly dependent on location, time and other factors.

For example the most valuable commodities are air and water. But because they're in over-supply on the surface of earth their price is mostly zero. Different though on a space station ...

Something with negligible value like gold might fetch a huge price because of over-demand. In over-supply it will plummet, ask Midas about that.

Markus, it matters how much the fluctuation is.

Offline Markus

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Let me try to prove that what the OP wants is impossible:

Something might have a stable value but it's price will still fluctuate with supply and demand. And those can be highly dependent on location, time and other factors.

For example the most valuable commodities are air and water. But because they're in over-supply on the surface of earth their price is mostly zero. Different though on a space station ...

Something with negligible value like gold might fetch a huge price because of over-demand. In over-supply it will plummet, ask Midas about that.

Offline eagleeye

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What BitShares is doing with BitAssets is great. It's a way to avoid the crazy volatility present in the crypto world but the BitUSD only pegs to the USD, which is controlled by the FED. BitGold only pegs to Gold which like all commodities can be tampered with.


Are there any projects out there, or thinkers, philosophers, that have an idea how to get a stable measure of value. Something that's barely, if at all, volatile.

I say this because we could create a BitAsset that tracts just that.

Not that this is a priority of course, BitUSD is one hell of an leap forward from any other crypto out there, but it would be interesting to have a crypto that is stable AND free from the FED price controls and market manipulation of gold and silver.

I read an E.C.Riegel book a few weeks ago. He has an interesting approach to money. His approach is an anarchistic, volatility free, IOU approach that looks like it would be a perfect fit with blockchain technology. I have no idea how strong his theory is. I haven't really had the time to think it through and research it more in depth yet. Not with the PeerTracks project!
I'm wondering if there's anything insightful out there on the internet about this very subject.

What would make the perfect crypto unit of account?

I am a Financial Scientist and a thinker.  I am not an Economist.

You want something that can be determined either Federal Funds Rate Futures Contract or US Government T-Bills (Treasury Bills).  Bytemaster Dan has already made a revaluation system in the bitUSD market by making it essentially a contractless contract because it expires at the end of the month.  So look at the Futures market.

If you dont like this, peg the value of a stock or mutual fund that does essentially this

SPDR Barclays Capital High Yield Bnd ETF (Has a 6.11% yield=dividend=interest_rate_per_year)  ---- This security=stock=etf=pegged_to_bonds is good because it will cause hype because of the nature of the $550 Junk bond Oil Market
https://www.google.com/finance?q=NYSEARCA%3AJNK&ei=R5aKVKD9NO20iAKB8oDoDA

iShares Barclays 20+ Yr Treas.Bond (ETF) (Has a 2.76% yield=dividend=interest_rate_per_year)  ---- This is a laddered ETF (essentially stock that tracks bonds)  --  This is all essentially what Bytemaster is trying to do with his derivatives bitUSD market
https://www.google.com/finance?q=NYSEARCA%3ATLT&ei=R5aKVKD9NO20iAKB8oDoDA

Vanguard Total Bond Market ETF (Has a 2.52% yield=dividend=interest_rate_per_year)----  This is a bond mutual fund/etf  --- ETFs are essentially low cost mutual funds that are mostly passively invested (not forever though they have begun to be actively investment vehicles I believe (meaning the managers who run it change stocks on intervals they desire))
https://www.google.com/finance?q=NYSEARCA%3ABND&ei=R5aKVKD9NO20iAKB8oDoDA

iShares Premium Money Market ETF  (Has a 0.78% yield=dividend=interest_rate_per_year) ---- Riskless money 0.78% dividend yield (interest rate) yearly.  This is pegged to the Bank of Canada Central Bank Interest Rate, (ie like the US Federal Funds Rate = Government Rate = Backed by the people of the country = Backed by the interest rate = http://futures.tradingcharts.com/chart/ZQ/ = Symbol ZQJ6)
https://www.google.com/finance?q=TSE%3ACMR&ei=sZeKVKitMtG1iAKnt4DoBw

Im way ahead of you guys in terms of implementation of these assets I know how to create a platform that takes into consideration a fully functioning derivatives market where the future end result would be bts_asset_backed_security_barclays_secured_loans_4_percent_expires_2022_December_25 .  If you dont understand that you dont know how far ive thought.


As a note I put the underscores on purpose
« Last Edit: December 12, 2014, 08:09:03 am by eagleeye »

Offline fuzzy

Once the training wheels (price feeds) are off, like when BTS has $200 billion valuation or whatever, won't the BitShares blockchain itself be the "source of value" to which you are referring?

Does it matter if the dollar loses value or gold is manipulated? Governments and (centrallized) markets will collapse, but as long as some fungable source of exchange exists amongst people outside of BTS, than BTS will provide the service of allowing tranparent derivative creation (or whatever we are calling it).

Hell, if the BRICS alliance has anything to say about it,  USD might not even be what ends up propelling BTS to the moon.

I believe bitUSD is BM's way of trying to help the dollar keep international traction (he is a patriot in my mind, so this likely is not too far from the mark).  However, I sadly will tend to agree with you that USD will probably not be what takes us to the moon.  I say sadly because I, too, love America (or what it was supposed to stand for).  You may be right about the BRICS alliance, man...I believe they (and the cartels) have bought out almost all our politicians, too.  Not a bad reason for bitshares VOTE.  :)
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