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Offline BldSwtTrs

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What are the incentives to use bitassets?
« on: January 18, 2014, 08:28:55 PM »

The more I think about Bitshare, the more I understand it and the more I am excited about it. But one thing still comes to my mind that I am not sure about it.
Why someone would use bitassets to speculate or hedge against something instead of using what already exist to do so?

5% of interest  seems pretty high to me and even if it's good for bitshares holders it may be a barrier for using bitassets. I mean Bitcoin is adopted because it lower the costs of transfering and storing value. It wouldn't work if it would make the cost of doing these things higher. So I guess my question is what are the cost one paye to buy a future on gold on a centralized market place, more or less than 5%?
« Last Edit: January 18, 2014, 08:32:22 PM by BldSwtTrs »

Offline bytemaster

Re: What are the incentives to use bitassets?
« Reply #1 on: January 18, 2014, 08:58:46 PM »
The more I think about Bitshare, the more I understand it and the more I am excited about it. But one thing still comes to my mind that I am not sure about it.
Why someone would use bitassets to speculate or hedge against something instead of using what already exist to do so?

5% of interest  seems pretty high to me and even if it's good for bitshares holders it may be a barrier for using bitassets. I mean Bitcoin is adopted because it lower the costs of transfering and storing value. It wouldn't work if it would make the cost of doing these things higher. So I guess my question is what are the cost one paye to buy a future on gold on a centralized market place, more or less than 5%?

Holding BitAssets PAYS you 5% interest.   Shorting BitAssets costs you 5% so the borrowing costs are lower than etrade and the savings yield higher than your bank because there is no middle man.
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 heropzy

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Re: What are the incentives to use bitassets?
« Reply #2 on: January 19, 2014, 01:35:37 PM »
I have a question, if many years later, the 5% interest is not suitable for the economy system. Who has the right to change the "5%" since BTS X is Pos and consensus, is it the over 51% shareholder of BTS X?

Offline bytemaster

Re: What are the incentives to use bitassets?
« Reply #3 on: January 19, 2014, 02:45:13 PM »
The market will introduce a new chain and version 2 of bitshares will use a prediction market to set the rate. 


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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 Markus

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Re: What are the incentives to use bitassets?
« Reply #4 on: January 19, 2014, 10:25:54 PM »
The market will introduce a new chain and version 2 of bitshares will use a prediction market to set the rate. 

If a successor chain like this is introduced, will the genesis block recognise the version 1 holders to 100 % at launch date or will you (have to) stick to your published social contract and acknowledge PTS/AGS with 10 %, leaving max 80 % for version 1 holders?

Offline bytemaster

Re: What are the incentives to use bitassets?
« Reply #5 on: January 20, 2014, 12:17:23 AM »
The market will introduce a new chain and version 2 of bitshares will use a prediction market to set the rate. 

If a successor chain like this is introduced, will the genesis block recognise the version 1 holders to 100 % at launch date or will you (have to) stick to your published social contract and acknowledge PTS/AGS with 10 %, leaving max 80 % for version 1 holders?

Any chain that inherits a chain that honored AGS and PTS is still valid as this is the means by which chains 'upgrade'.   However, upgrading the chain requires funding and thus will consume *new* capital to build and therefore it should be allocated proportional to those who funded it and thus AGS and PTS should be honored 50/50 in the new chain.  Of course, to get people to move over to the upgraded chain it might be wise marketing to do 33/33/33.   

In other words, I don't have an answer for you just yet other than that all of the above strategies would be legitimate. 
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 Markus

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Re: What are the incentives to use bitassets?
« Reply #6 on: January 20, 2014, 12:27:23 AM »
So I gather that anything between 10/10/80 and 50/50/0 is possible, right?

I think you will need to allocate a major share to the holders of the old chain.
Otherwise the mere threat of a chain upgrade will undermine the value of chain version 1.

Offline BldSwtTrs

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Re: What are the incentives to use bitassets?
« Reply #7 on: January 20, 2014, 01:29:42 AM »
The market will introduce a new chain and version 2 of bitshares will use a prediction market to set the rate. 

If a successor chain like this is introduced, will the genesis block recognise the version 1 holders to 100 % at launch date or will you (have to) stick to your published social contract and acknowledge PTS/AGS with 10 %, leaving max 80 % for version 1 holders?

Any chain that inherits a chain that honored AGS and PTS is still valid as this is the means by which chains 'upgrade'.   However, upgrading the chain requires funding and thus will consume *new* capital to build and therefore it should be allocated proportional to those who funded it and thus AGS and PTS should be honored 50/50 in the new chain.  Of course, to get people to move over to the upgraded chain it might be wise marketing to do 33/33/33.   

In other words, I don't have an answer for you just yet other than that all of the above strategies would be legitimate.
Btw, technically PTS doesn't fund the infrascture only AGS does.

So is it possible that someone following this reasoning would honor only AGS and not PTS?
« Last Edit: January 20, 2014, 01:31:50 AM by BldSwtTrs »

Offline Simulacra_and_Simulation

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Re: What are the incentives to use bitassets?
« Reply #8 on: January 20, 2014, 04:41:28 AM »
The more I think about Bitshare, the more I understand it and the more I am excited about it. But one thing still comes to my mind that I am not sure about it.
Why someone would use bitassets to speculate or hedge against something instead of using what already exist to do so?

5% of interest  seems pretty high to me and even if it's good for bitshares holders it may be a barrier for using bitassets. I mean Bitcoin is adopted because it lower the costs of transfering and storing value. It wouldn't work if it would make the cost of doing these things higher. So I guess my question is what are the cost one paye to buy a future on gold on a centralized market place, more or less than 5%?

Holding BitAssets PAYS you 5% interest.   Shorting BitAssets costs you 5% so the borrowing costs are lower than etrade and the savings yield higher than your bank because there is no middle man.

Not sure I follow you.

I trade options frequently and I don't get charged anything but a contract fee. When I go short on margin from a put contract getting exercised I don't get charged a fee other than a trade fee to buy the stock or sell it. I am Just required to have a certain amount in my account but never the full risk amount.

Can you explain what borrowing costs you are talking about? Do you mean lost interest or dividend risk?
« Last Edit: January 20, 2014, 04:43:37 AM by Simulacra_and_Simulation »

Offline bytemaster

Re: What are the incentives to use bitassets?
« Reply #9 on: January 20, 2014, 04:58:51 AM »
The more I think about Bitshare, the more I understand it and the more I am excited about it. But one thing still comes to my mind that I am not sure about it.
Why someone would use bitassets to speculate or hedge against something instead of using what already exist to do so?

5% of interest  seems pretty high to me and even if it's good for bitshares holders it may be a barrier for using bitassets. I mean Bitcoin is adopted because it lower the costs of transfering and storing value. It wouldn't work if it would make the cost of doing these things higher. So I guess my question is what are the cost one paye to buy a future on gold on a centralized market place, more or less than 5%?

Holding BitAssets PAYS you 5% interest.   Shorting BitAssets costs you 5% so the borrowing costs are lower than etrade and the savings yield higher than your bank because there is no middle man.

Not sure I follow you.

I trade options frequently and I don't get charged anything but a contract fee. When I go short on margin from a put contract getting exercised I don't get charged a fee other than a trade fee to buy the stock or sell it. I am Just required to have a certain amount in my account but never the full risk amount.

Can you explain what borrowing costs you are talking about? Do you mean lost interest or dividend risk?

Options are different that short sells.    If you borrow stocks or cash to buy or sell on margin you will pay 8.5% for anything less than $25K and over 5% for anything less than $500K with 4% being the lowest borrowing costs you can get from them.

We also have options contracts and these only charge a minimal transaction fee proportional to the bytes used in the blockchain. 
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 Simulacra_and_Simulation

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Re: What are the incentives to use bitassets?
« Reply #10 on: January 20, 2014, 05:47:10 AM »
The more I think about Bitshare, the more I understand it and the more I am excited about it. But one thing still comes to my mind that I am not sure about it.
Why someone would use bitassets to speculate or hedge against something instead of using what already exist to do so?

5% of interest  seems pretty high to me and even if it's good for bitshares holders it may be a barrier for using bitassets. I mean Bitcoin is adopted because it lower the costs of transfering and storing value. It wouldn't work if it would make the cost of doing these things higher. So I guess my question is what are the cost one paye to buy a future on gold on a centralized market place, more or less than 5%?

Holding BitAssets PAYS you 5% interest.   Shorting BitAssets costs you 5% so the borrowing costs are lower than etrade and the savings yield higher than your bank because there is no middle man.

Not sure I follow you.

I trade options frequently and I don't get charged anything but a contract fee. When I go short on margin from a put contract getting exercised I don't get charged a fee other than a trade fee to buy the stock or sell it. I am Just required to have a certain amount in my account but never the full risk amount.

Can you explain what borrowing costs you are talking about? Do you mean lost interest or dividend risk?

Options are different that short sells.    If you borrow stocks or cash to buy or sell on margin you will pay 8.5% for anything less than $25K and over 5% for anything less than $500K with 4% being the lowest borrowing costs you can get from them.

We also have options contracts and these only charge a minimal transaction fee proportional to the bytes used in the blockchain.

That makes sense. I never naked sell stock or borrow to buy.

-

Will you be able to leverage and how will the margin requirements be? Will it be a bit for bit ratio or 2 to 1 etc.? 
I love the probabilities of options and am interested in how black-scholes will apply given that volatility is a big factor.  Very interesting. Can't wait.

About the market: will there be established Market makers guaranteeing liquidity or will it just be based on luck to find someone to take he opposite side of the trade?

Offline bytemaster

Re: What are the incentives to use bitassets?
« Reply #11 on: January 20, 2014, 05:51:47 AM »
The more I think about Bitshare, the more I understand it and the more I am excited about it. But one thing still comes to my mind that I am not sure about it.
Why someone would use bitassets to speculate or hedge against something instead of using what already exist to do so?

5% of interest  seems pretty high to me and even if it's good for bitshares holders it may be a barrier for using bitassets. I mean Bitcoin is adopted because it lower the costs of transfering and storing value. It wouldn't work if it would make the cost of doing these things higher. So I guess my question is what are the cost one paye to buy a future on gold on a centralized market place, more or less than 5%?

Holding BitAssets PAYS you 5% interest.   Shorting BitAssets costs you 5% so the borrowing costs are lower than etrade and the savings yield higher than your bank because there is no middle man.

Not sure I follow you.

I trade options frequently and I don't get charged anything but a contract fee. When I go short on margin from a put contract getting exercised I don't get charged a fee other than a trade fee to buy the stock or sell it. I am Just required to have a certain amount in my account but never the full risk amount.

Can you explain what borrowing costs you are talking about? Do you mean lost interest or dividend risk?

Options are different that short sells.    If you borrow stocks or cash to buy or sell on margin you will pay 8.5% for anything less than $25K and over 5% for anything less than $500K with 4% being the lowest borrowing costs you can get from them.

We also have options contracts and these only charge a minimal transaction fee proportional to the bytes used in the blockchain.

That makes sense. I never naked sell stock or borrow to buy.

-

Will you be able to leverage and how will the margin requirements be? Will it be a bit for bit ratio or 2 to 1 etc.? 
I love the probabilities of options and am interested in how black-scholes will apply given that volatility is a big factor.  Very interesting. Can't wait.

About the market: will there be established Market makers guaranteeing liquidity or will it just be based on luck to find someone to take he opposite side of the trade?

I am sure market makers will find it profitable to operate on the chain, but we will not be performing that function.

Initial collateral requirements is 2x and maintenance is 1.5x the borrowed assets 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 voldemort628

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Re: What are the incentives to use bitassets?
« Reply #12 on: January 20, 2014, 11:27:54 AM »
The market will introduce a new chain and version 2 of bitshares will use a prediction market to set the rate. 


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Why dont we integrate a prediction market into bts in the first place?

Offline bytemaster

Re: What are the incentives to use bitassets?
« Reply #13 on: January 20, 2014, 02:41:49 PM »
The market will introduce a new chain and version 2 of bitshares will use a prediction market to set the rate. 


Sent from my iPhone using Tapatalk

Why dont we integrate a prediction market into bts in the first place?

Because it is another moving part and I want to walk before attempting to do more.   I will consider it.
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 santaclause102

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Re: What are the incentives to use bitassets?
« Reply #14 on: January 20, 2014, 03:03:35 PM »
The market will introduce a new chain and version 2 of bitshares will use a prediction market to set the rate. 


Sent from my iPhone using Tapatalk

Why dont we integrate a prediction market into bts in the first place?

Because it is another moving part and I want to walk before attempting to do more.   I will consider it.

Isn't bts a Prediction market?

 

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