Author Topic: How is BitUSD going to work?  (Read 12426 times)

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Offline hughmanwho

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Let's take Google. The share price of Google is supposed to be their book value plus some fudging for revenue, growth potential, etc. It's why share-price/book is a key stat that tries to guess how much intangible value pushing the price above or below book is correct.

Yes but owning a piece of Google stock means that you have voting rights in the company, it means that if Google were to ever be sold(not going to happen any time soon..), you'd earn a percentage of the sale.  You actually own a piece of google.  Otherwise, the stock would be valueless.

The way I, and I think most rationale investors will see BitUSD is like this, a few companies are planning on issuing NxtUSD assets on the Nxt AE any day now.  They will hold on to USD to back every asset.  This means 1 NxtUSD = $1 because at any time you can give back the NxtUSD and they'll give you USD in the process.  Now imagine that they got robbed or someone emptied the bank account and ran away.  Now the USD backing NxtUSD is missing.. surely you can't still say that NxtUSD is worth $1 is you can't redeem it for a dollar, right?  This is exactly what BitUSD is going to be, except you're starting off with a pre-robbed bank.

You guys are using fancy words and trying to justify it but what it really all comes down is that you are trying to convince people that nothing has value.  This isn't like a crypto that is a currency in and of itself and USD isn't great but at least there is a limited supply.

I do like that the currency is created via shorting but still the way I see it going is this: I just don't see it having $1 in value as no one will be willing to pay more than $1 for it, and those who short it will be doing it because they believe it'll go up to one dollar and are in it for the money.. so maybe it'll have a value of $0.95.. and stay around that value.. until people realize the value is actually $0.95.. so people will only be willing to short if it goes down to $0.90...  same thing and it goes down to $0.85..  then people realize it doesn't work and it collapses.

There is something to the idea, and though I am very skeptical, I hope it works.  All I'm saying is.. be very cautious when it comes to these 'market-pegged' assets, you short too much and you could lose a lot of money in the process.
« Last Edit: August 23, 2014, 08:13:08 pm by hughmanwho »

Offline luckybit

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So.. I'm very skeptical about BitUSD, BitGLD, etc.

How is the initial distribution of BitUSD going to occur?  Also, is there a fixed supply?  If so then is supply and demand forced to match price?

Too much demand and price goes higher than USD/BTS price, and people start dumping?

When funding allows we need some professional (visual style) videos which humorously explain how BitUSD works. We also need short videos which explain the basics of going long, going short, covering, and so on.

Bitshares has an extremely steep learning curve.
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Offline Riverhead

The way I've been thinking about why it will work, and I'm posting this more to have it corrected or validated, is to compare to what day traders do now.

Let's take Google. The share price of Google is supposed to be their book value plus some fudging for revenue, growth potential, etc. It's why share-price/book is a key stat that tries to guess how much intangible value pushing the price above or below book is correct.

Now let's take two day traders:

Trader A looks at the price of Google and says, "$400? Heck no.  They're about to be regulated out of existence and Amazon is releasing Amazon Search soon. I think it's worth $80" so they short.

Trader B thinks Trader A is off his rocker. The Google pipeline looks awesome and the stock will easily reach $600 by the end of the year. He bids long $500.

And so the game goes on. The big take away from this is neither have even the slightest interest in gaining a controlling stake in Google. It could be the worth of fiddle sticks for all they care.  The important thing is one person thinks it's worth more than the other and the market transactions tend toward a consensus of the intangible value above/below book.

Call them Google Shares or bitGoogle, it doesn't matter. It's not like if you had a Google share you could walk into Google HQ and start scarfing down the free food. The share really only has demand, and therefore value, because someone else thinks they can sell it for more later.
« Last Edit: August 22, 2014, 06:04:29 pm by Riverhead »

Offline oco101

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no backing .. just pegging .. you can also called it a consensus that a bitUSD is worth a USD ..

basically the engine (market) honor those that trade towards the consensus .. thats it .. feedback loop keeps the bitUSD where it belongs .. to 1USD ... or close to (that's the experiment)

It's worth experimenting I guess.. I sort of see it similar to the USD going off the gold standard but still claiming it is..  I definitely feel like it's valuable will never be worth 1 USD, because clearly USD is worth more..

idk, I'm not going to touch it for a year or so.. if it stabilizes, awesome!
When USD went off the gold standard, it meant that is was not backed by gold. This is not the case with bitAsset and this is the beauty of it  they will always be backed as long as BTSX has value of corse . Now BTSX value is 55 millions $ so you have a lot of backing and this is only the beginning. 
Your gold is btsx, so you can look at it this way : your bitUSD will be backed by BTSX and the price will be pegged to a USD. As long btsx has value your bitAssets will be baked . Now the only question remaining is if the market peg will function as is it is supposed too. But even if it is not working there is a backup plan. 

Offline xeroc

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It's worth experimenting I guess.. I sort of see it similar to the USD going off the gold standard but still claiming it is..  I definitely feel like it's valuable will never be worth 1 USD, because clearly USD is worth more..

idk, I'm not going to touch it for a year or so.. if it stabilizes, awesome!
I sure cannot tell anyone how to invest but I can point you towards some info material in order to understand the market peg and why the bitUSD WILL be worth 1 USD.

http://wiki.bitshares.org/index.php/Market_Peg

Offline hughmanwho

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no backing .. just pegging .. you can also called it a consensus that a bitUSD is worth a USD ..

basically the engine (market) honor those that trade towards the consensus .. thats it .. feedback loop keeps the bitUSD where it belongs .. to 1USD ... or close to (that's the experiment)

It's worth experimenting I guess.. I sort of see it similar to the USD going off the gold standard but still claiming it is..  I definitely feel like it's valuable will never be worth 1 USD, because clearly USD is worth more..

idk, I'm not going to touch it for a year or so.. if it stabilizes,
« Last Edit: August 22, 2014, 10:23:01 pm by hughmanwho »

Offline unsoindovo

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That snapshots will be taken from btsx ..

perfect!!!

thank you for confirm it...

no ETA yet for snapshot date?

Snapshots will be in future for different economics approaches etc, but in general it will just be Bitshares X from here forward.

if it is so, for several months we have only 2 chain
1) PTS/AGS
2) BTSX

and all block chine snapshot will be taken from there
« Last Edit: August 22, 2014, 11:25:55 am by unsoindovo »

Offline gamey

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That snapshots will be taken from btsx ..

perfect!!!

thank you for confirm it...

no ETA yet for snapshot date?

Snapshots will be in future for different economics approaches etc, but in general it will just be Bitshares X from here forward.
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Offline xeroc

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That snapshots will be taken from btsx ..

perfect!!!

thank you for confirm it...

no ETA yet for snapshot date?
to clarify: these snapshots are for products within the Banking&Exchange ecosystem ... all other ecosystems (DNS,Play,Vote,Music,...) WILL snapshot from PTS/AGS

No additional chain announced within BitSharesX. I am sure the devs need to make sure that X works well before they are planning other chains. Give them a few months

Offline unsoindovo

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That snapshots will be taken from btsx ..

perfect!!!

thank you for confirm it...

no ETA yet for snapshot date?

Offline xeroc

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That snapshots will be taken from btsx ..

Offline unsoindovo

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So.. I'm very skeptical about BitUSD, BitGLD, etc.

How is the initial distribution of BitUSD going to occur?  Also, is there a fixed supply?  If so then is supply and demand forced to match price?

Too much demand and price goes higher than USD/BTS price, and people start dumping?

just a simple question..

for BitUSD, BitGLD, BitOil an other PEG DAC will be taken another snapshot?
if yes, the snapshot will be taken to bitShare-PTS / or bitShare AGS-X blockchain?
the next snapshot is already planned?

thank you guys!!!

Offline mf-tzo

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Bitcoin was and is still an experiment! Bitusd to be usd is just the normal thing to follow...

Offline xeroc

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I've seen this one: http://wiki.bitshares.org/index.php/Market_Peg

I did like BTS's idea for shorting assets though: http://www.devtome.com/doku.php?id=bitshares_-_market_pegging

The basic idea though is that we are just creating an asset out of thin air though and whether it's shorting or buying or selling or whatever.. we're just saying, why don't we all agree that's equal to a dollar?  But it's not actually backed by any dollars..
no backing .. just pegging .. you can also called it a consensus that a bitUSD is worth a USD ..

basically the engine (market) honor those that trade towards the consensus .. thats it .. feedback loop keeps the bitUSD where it belongs .. to 1USD ... or close to (that's the experiment)

Offline hughmanwho

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I've seen this one: http://wiki.bitshares.org/index.php/Market_Peg

I did like BTS's idea for shorting assets though: http://www.devtome.com/doku.php?id=bitshares_-_market_pegging

The basic idea though is that we are just creating an asset out of thin air though and whether it's shorting or buying or selling or whatever.. we're just saying, why don't we all agree that's equal to a dollar?  But it's not actually backed by any dollars..
« Last Edit: August 22, 2014, 07:44:46 am by hughmanwho »