I've recently discovered BitsharesX and - on the face of it - it would seem to address many of the failings of the current incumbent; Bitcoin. But, I have a few questions;
1) BitUSD is likely to be the most useful asset for the majority *if* its value can truly be shown to be pegged to the USD. Now, I've acquired some BTSX and proceeded to try and convert it to BitUSD. First up; how do you obtain BitUSD at a more-or-less 1:1 value with USD? Looking in the BitUSD:BitX market in the client, and the liquidity is non-existent and the spreads are huge.
Yes it is somewhat volatile, and liquidity is lacking. Fixes are being honed and perfected to deal with volatility. From what I have seen it is usually much, much closer - within a 5% range. All things considered, that is pretty good. Only a few days after bitUSD was launched, BitShares X immediately went from 15 million market cap to 110 million and crashed to 40 million before it stabilized to where it is now - during that extreme volatility, bitUSD stayed very close to the dollar, which I think impressed a lot of people who were initially highly skeptical.
Unlike BTC or BTSX you know where bitUSD will stabilize: Very close to the value of the dollar. From what we have seen so far, all signs point to less volatility and more liquidity the more users adopt this system.
2) Hypothetically, if I were to operate a Coinbase-esque service that allowed people to convert USD->BitUSD - there would be an expectation that the values would be (almost) par (10 USD in, ~10 BITUSD out). How would this be made possible given the current pricing discrepancy and lack of apparent liquidity?
Liquidity will come if this is ever popular I think. Volatility is more tricky to perfect, but improvement are being made. However, even if we get within 1% of the dollar there will always be a small discrepancy. But there is a deeper problem that has nothing to do with bitUSD, and that is the fact that USD on different exchanges tend to be valued differently.
If we do the analysis from Bter correctly it will go like this: Bter has a BTC price of 415 atm. Coinbase has a BTC price of 396 atm. This means that the dollars on Bter are worth 5% less. Now let us look at bitUSD. I have to pay 1.0350 USD on Bter to get a bitUSD, and I get 0.9950 if I sell a bitUSD. That's a 5% difference as well. I think we can conclude that at this stage the spread will be significant, even if we hit it right on the nose.
3) I've read in some topics that holding BITUSD implies you receive a share of the profits from short positions as interest? Could someone clarify if this is the case and - as such - if this incentivizes the risk averse to actually hold wealth in the asset as opposed to trying to dump it out to the real world at the nearest FIAT<->CRYPTO exchange (E.g. Coinbase, Bitstamp etc) as soon as possible?
Yes. BitUSD gives you what we like to call yield
, which is almost like an interest on your bitUSD holdings. The money comes from fees associated with the bitUSD markets inside BitShares X, and is deposited directly into your account. We hope of course that this will get people to deposit bitUSD in our "vault" as opposed to banks or whatever other crypto they enjoy holding. As each bitUSD is backed by BTSX, the demand for bitUSD will grow the market cap of BitShares X. Demand for bitUSD will also make the market peg less volatile, and of course increase liquidity.
4) Bitcoin (somewhat) evolved this (and I'm thinking in particular in the context of the darknet markets here) by allocating each customer their own unique deposit address, thus removing the need for customers to provide a routing reference (MEMO) and the inherit risk and increased support overhead this introduces.
BitShares X has Bitcoin-style addresses included in the wallet, and you can use them to transfer. Under the hood I think it works a lot like Bitcoin. The idea here is that for most purposes, account names are better as they are easier to type and remember. In any case, exchanges, developers etc. will have to experiment and customize solutions for given applications.
If you have anything specific in mind or want more detail on any of these questions don't hesitate to ask. I only answer as I am amble, and there are many people here who can help you go in depth on all of these issues.
Also see http://wiki.bitshares.org/
for a broad overview.