Author Topic: Where have all the bids gone?  (Read 9735 times)

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Offline GaltReport

No I don't but why such interest in BitUSD buyers? Thats all you guys have been talking about for last several posts. Unless you are holding many BitUSD's and looking to unload.

Because it's a big deal. If there are no BitUSD buyers, then the whole experiment that BTSX is, doesn't work.

There is a breakdown somewhere and I'm trying to figure out where. It could be a bootstrapping problem - no BitUSD buyers = no support = no trust in the system = even less BitUSD buyers.

Add to that the other theory above, that it is just not worth for anyone to buy this high, since I believe there are theoretical maximums.
...Most people are dumping into BTC or CNY, not the USD.
...
I managed to get some BitUSD sold into USD on bter at .90 which is probably near what i paid for it in BTSX.  Guess I need to get verified now or convert to BTC and send to coinbase.  Just testing how easy/hard to convert to fiat so far.

Offline Empirical1

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Another problem is we don't have BitBTC or BitCNY. We need both. Most people are dumping into BTC or CNY, not the USD.

Yes I agree with this BitBTC is the big one that can help a lot. Actually excited now!

A lot of people have a mental block where they keep their crypto investments separate from their fiat.
Keeping fiat in crypto form either requires a lot of faith in the BTSX system (in which case your a BTSX bull & would prefer to short) or a huge amount of distrust in the regular financial system. (BTSX is very new and can't engender that level of trust yet nor does it have any BitUSD utility yet.) So in the short term <3 months you're relying mainly on traders etc. vs. a lot of demand from people who actually want to keep a position in fiat on the blockchain.

However very few people could resist moving some of their BTC position into BTSX if people are effectively paying them high interest shorting below the peg.

The BitBTC peg will be tighter and effective BTC interest will be more of a talking point. Confidence in BitBTC on BTSX will be easier and more natural than fiat. So you will attract a lot more BitBTC longs than BitUSD longs in the shor term. That peg being tighter will help the BitUSD peg.
« Last Edit: August 27, 2014, 09:04:38 pm by Empire »

Offline luckybit

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No I don't but why such interest in BitUSD buyers? Thats all you guys have been talking about for last several posts. Unless you are holding many BitUSD's and looking to unload.

Because it's a big deal. If there are no BitUSD buyers, then the whole experiment that BTSX is, doesn't work.

There is a breakdown somewhere and I'm trying to figure out where. It could be a bootstrapping problem - no BitUSD buyers = no support = no trust in the system = even less BitUSD buyers.

Add to that the other theory above, that it is just not worth for anyone to buy this high, since I believe there are theoretical maximums.


The problem is information flow. Information doesn't flow quickly or efficiently enough to coordinate the behavior of market participants.

Another problem is we don't have BitBTC or BitCNY. We need both. Most people are dumping into BTC or CNY, not the USD.

And then we have to show people how it's more profitable to do things on Bitshares X than to work with real BTC or real CNY. BTC ultimately has to be translated into CNY or USD anyway to pay your bills so it doesn't make sense to dump into it unless you want to go speculate elsewhere.
https://metaexchange.info | Bitcoin<->Altcoin exchange | Instant | Safe | Low spreads

Offline Riverhead

Power to the pizza.

Reading this debate fills me with hope. We have a decentralized system for the first time ever on which these theories can be put to the test. On top of that we have some pretty great minds debating them. These are Exciting Times indeed.

Offline santaclause102

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If the price is fixed I think the market depth would fluctuate widely and often be below 10% especially at the beginning. So it would not abe good for bootstrapping the system if we keep the market depth requierement.
On the other side: Wouldnt BitUSD trade mostly at a discount as long as BTSX goes up (month, years)? This could lead people to think that the peg does not really work good enough.

Is this the trade of here?

Offline tonyk

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My theory is that bitUSD is a toy money at the moment. They are mostly bought out of curiosity, because the only business accepting them is a pizza brokerage 'business' operating out of this forum. The fact that the market values bitUSD with 10-15% discount is pretty encouraging actually. In crypto terms 10-15% is probably interest reflecting a time of just weeks before the market thinks bitUSD will have actual utility.

The good news is that this theory can be easily tested. If we start bitBTC we will see if it trades with a discount/premium or right at par.
Then we will know if we need to think about changing something, in particular if the shorts need additional disadvantages.
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline bytemaster

Ok, put you money where your mouth is... which way will the peg go?  From where I sit the peg is behaving perfectly given the low supply of liquidity providers.
Before answering, can I ask if you have a means to stop trading on short notice?  (such as delegates remove feeds)  - I don't want to make a problem worse.

I can stop trades by removing required depth.
Price of bitUSD crashes to worthless unless you do something.

If you believe that then you should be shorting it :)
How much BTC from AGS funds do I get if I'm right and bitUSD crashes or I convince you to make the change (preferred)?  Although I don't want to disincentivize changes... How much if my solution works?

Bet in the markets my friend.  Throw everything you have at it. 

You limit shorts which will limit "selling" of USD... but does not create any "buying" of USD.   If the value of BitUSD is less than USD then no BitUSD would ever be created and if someone did buy it at parity, they would have to sell at a loss to get in front of the shorts.  Then you have the latency in the price feed which will create arb. opportunities. 

Bottom line, you cannot get rid of "interest rates" or "premiums" by resorting to price feeds or price fixing. 
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 Agent86

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Ok, put you money where your mouth is... which way will the peg go?  From where I sit the peg is behaving perfectly given the low supply of liquidity providers.
Before answering, can I ask if you have a means to stop trading on short notice?  (such as delegates remove feeds)  - I don't want to make a problem worse.

I can stop trades by removing required depth.
Price of bitUSD crashes to worthless unless you do something.

If you believe that then you should be shorting it :)
How much BTC from AGS funds do I get if I'm right and bitUSD crashes or I convince you to make the change (preferred)?  Although I don't want to disincentivize changes... How much if my solution works?

Offline JakeThePanda

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They can also short below price X but it is not valid unless the exchange rate drops.
to clarify by "not valid" I mean these shorts do not appear on the standard order book and can not be matched with buy orders for bitUSD.

So 2 willing consenting parties involved. 1 wants to take the risk of a short below standard market rates.  The other wants to buy.    All participants are acting from their own information, their own judgements of profitability etc.  I don't see the problem. 

If shorting below standard USD market rate is a bad idea, then these actors will pay the price.

I don't think the market should be subject to the 'desires' that only these traders are allowed to trade and only at this price.  The market should be subject to the resulting inclination of all participants to "put their money where there mouth is" making there own decisions and paying the price for bad, uninformed ones.

If the market peg holds 10% below the standard, there is a reason for that.  Unless your *removing* barriers to free participation, it should not be meddled with.

Shorting below market rates is not a free ride, and trading at all on this new market carries great risk.  It will take some time for a more clear and distinguished consensus about where bitUSD should be valued to emerge.  I personally think as the tree and it branches grow the price will tend to a tighter range around the standard USD market and I will place my bets accordingly.  If you feel otherwise, you know what to do.

+1mm

Offline santaclause102

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If the price is fixed I think the market depth would fluctuate widely and often be below 10% especially at the beginning. So it would not abe good for bootstrapping the system if we keep the market depth requierement.

Xeldal

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They can also short below price X but it is not valid unless the exchange rate drops.
to clarify by "not valid" I mean these shorts do not appear on the standard order book and can not be matched with buy orders for bitUSD.

So 2 willing consenting parties involved. 1 wants to take the risk of a short below standard market rates.  The other wants to buy.    All participants are acting from their own information, their own judgements of profitability etc.  I don't see the problem. 

If shorting below standard USD market rate is a bad idea, then these actors will pay the price.

I don't think the market should be subject to the 'desires' that only these traders are allowed to trade and only at this price.  The market should be subject to the resulting inclination of all participants to "put their money where there mouth is" making there own decisions and paying the price for bad, uninformed ones.

If the market peg holds 10% below the standard, there is a reason for that.  Unless your *removing* barriers to free participation, it should not be meddled with.

Shorting below market rates is not a free ride, and trading at all on this new market carries great risk.  It will take some time for a more clear and distinguished consensus about where bitUSD should be valued to emerge.  I personally think as the tree and it branches grow the price will tend to a tighter range around the standard USD market and I will place my bets accordingly.  If you feel otherwise, you know what to do.

Offline bytemaster

Ok, put you money where your mouth is... which way will the peg go?  From where I sit the peg is behaving perfectly given the low supply of liquidity providers.
Before answering, can I ask if you have a means to stop trading on short notice?  (such as delegates remove feeds)  - I don't want to make a problem worse.

I can stop trades by removing required depth.
Price of bitUSD crashes to worthless unless you do something.

If you believe that then you should be shorting 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 Agent86

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Ok, put you money where your mouth is... which way will the peg go?  From where I sit the peg is behaving perfectly given the low supply of liquidity providers.
Before answering, can I ask if you have a means to stop trading on short notice?  (such as delegates remove feeds)  - I don't want to make a problem worse.

I can stop trades by removing required depth.
Price of bitUSD crashes to worthless unless you do something.

Offline bytemaster

They can also short below price X but it is not valid unless the exchange rate drops.
to clarify by "not valid" I mean these shorts do not appear on the standard order book and can not be matched with buy orders for bitUSD.

I understand what you are saying.... so lets describe BitUSD better:

BitUSD is a market between those who want leverage and those who want stability.  The "price" in this market will depend upon the interest rate people are willing to borrow at to get the leverage they desire.

What you want to do is price fix the interest rate.   The result of price fixing the interest rate will be "gas lines" for those who would like to short as shorts pile up on the price.   Now the start of the line is constantly moving as the feeds are updated and every time a short updates their "price" they go to the back of the line. 

The huge demand to "short" will thus provide liquidity for those who want to go long USD.   Where as under the non-price-fixed scheme there is less liquidity.

I think this approach has some real potential to help in the bootstrapping phase.


For every benefit there is an equal and opposite side effect.   Today there is a huge demand to "short"... at the top of the next bubble there will be a huge demand to go "long" as a hedge.   When this happens BitUSD will break the peg to the upside (be worth more than 1 USD).   
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

Ok, put you money where your mouth is... which way will the peg go?  From where I sit the peg is behaving perfectly given the low supply of liquidity providers.
Before answering, can I ask if you have a means to stop trading on short notice?  (such as delegates remove feeds)  - I don't want to make a problem worse.

I can stop trades by removing required depth.
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.