Quote from: toast on October 08, 2014, 03:16:21 am

It helps most people but the people it misleads (bitusd is a standard cfd which is not funfible) are more valuable per person (more likely to start trading)

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With a standard cfd, I can leverage and get margin calls. I didn't think that was the case here? What aspect do you think is misleading? Not doubting you, just trying to understand.

To be clear, I'm talking about holders of BitUSD, not the shorts (who are issuers).

It seems to me the simplest explanation of BitUSD is something like this:

BitUSD is a currency that is backed by a network reserve of at least two times the value in BTSX. The reserve is available to support a full monthly buy-back of units no longer demanded.

Much of the marketing material refers to two parties (e.g. Alice and Bob) coming to an agreement (like a derivative) where one takes the risk of BTSX and the other doesn't. This seems somewhat irrelevant to most potential BitUSD users, who may never need to deal with BTSX in any way, and although the principle is similar, is not really an accurate reflection of the mechanics, as there are no individual contracting parties.

To me, the simplified description also highlights an important feature of BitUSD over NuBits, in that shareholders do not hold adequate reserves to support buying back 100% of its NuBits.

[When the material presents BitUSD like a derivative, it becomes very confusing. I've been here for a while and have misunderstood how mechanisms like short-covering or margin calls affect BitUSD owners (they don't). Thanks to members like Troglodactyl and Chuckone pointing these errors out to me.]

Quote from: Ander on October 07, 2014, 05:50:26 pm

Regarding the cause of the high NuBits volume:


NuBits is traded on bter.com.   The NuBits devs maintain a bot which trades NuBits on bter, with a very large supply, and low spread.  There were thousands of bitcoins worth of nubits available on the ask, and hundreds of bitcoin worth on the bid side.  The bot fixed the price of NuBits very close to $1. 


On bter, volume in trading bitcoin into USD or CNY is quite low.  Most trades there are between bitocin and altcoins.    If someone had a large amount of bitcoins on bter during the bitcoin price crash last weekend, and they wanted to hedge their position, they couldnt just sell the bitcoins into cash, wait for what they thought was the bottom, and then buy back.  The spread was too large, and the volumes were too low for this to be possible without massive slippage.


However, due to the NuBits bot, and its low spread and high volume, it WAS possible to sell into cash.  And people did this.  Thousands of BTC worth of volume traded back and forth between BTC and NuBits, with NuBits essentially acting like USD.


This is why NuBits had such high volume.



Takeaways:
A market maker bot operating on a small spread, with a large capacity to buy and sell will do a VERY good job at both enforcing a peg, and providing liquidity!   It will be heavily used in the absence of other market makers who are providing liquidity.


I anticipate that there will be a lot of volume in bitUSD as well in the future, once we have a similar market maker bot buying at .995 and selling at 1.005, with hundreds of thousands of bitUSD available on both the bid and ask.

Fascinating explanation. Thanks for the perspective.

They also had at least some high volume that did not represent market demands because the walls their bots had in place were shifting frequently and crashing into each other during the most volatile period.

The point is, it's easy to get confused. I read through the forum a lot, and I'm still confused sometimes on how the market mechanics work, and even starspirit with 71 posts (which suggests he did quite a bit of reading in here) still has some misunderstanding of what is really required to hold bitUSD.

So I can imagine how confusing it must be for someone who never heard of crypto just trying to get a grasp of the concept.

Edit 1: Or anybody holding Bitcoin who wants to understand pegged assets, it's not like learning to play tic tac toe
[/quote]

Oh how I've tried to understand! Sorry I'm not quite there yet, but its difficult to keep poring over threads to try to scratch things together in an ad hoc fashion. It would be useful for someone in the community to start producing some "How To" documentation.

None of the pegged currency concepts is yet ideal. And all are in constant development. So I think its important to not get on our high horses and be overly critical of any innovation, its all moving to a better world.

The robustness problem with NuBits is well acknowledged here. But there are positives from a user perspective that should also be acknowledged - it is very simple and accessible.

BitUSD is not ideal yet either.

Though BitUSD has a flexible supply to deal with demand shocks, sellers of any size will still need to take some haircut to the peg to exit. The proposed rule that shorts must cover in 30 days will help to ensure the discount does not grow too great.

But the main issue to adoption in my view is complexity. It requires a BTSX wallet (and BTSX as collateral) to access and hold BitUSD. Its a multi-step process. And trading it requires a knowledge of some quite complicated (and constantly shifting) rules to understand the market dynamic, at least until enough history means people can just default to trusting it. For outsiders interested in holding BitUSD it requires some view on this relatively unknown thing called BTSX, which is held as additional collateral at risk, but also if it moves up too far can knock you out of your BitUSD position through a margin call. This requires another layer of monitoring and risk.

These are big hurdles for the outside layman, and does not facilitate easy trading of BitUSD outside its specialised environment, so heavily constrains liquidity. NuBits by comparison is bought and sold like any other crypto and so can be used easily by traders on the exchanges.

I'm not taking any sides here.

But I think it would be useful if BitUSD could be wrapped in some way that is simpler to handle. For example, if there were a fund/DAC/crypto/ETF that did the job of managing all this on behalf of the underlying investors.

For mac:
https://github.com/keyid/keyid/releases/download/v0.0.2/KeyID.dmg

Thanks clayop, that did the trick.
For others trying to work this out, I then followed the instructions in this thread to import the DNS associated with my PTS wallet snapshot:
https://bitsharestalk.org/index.php?topic=9728.0

For the devs, it would be useful to have clear and easy-to-find sets of instructions somewhere for the less technically endowed such as myself!

ripplexiaoshan, when I click the download button I get a message saying that the website is not available.
gnarl, your first link is same result as ripplexiaoshan's, and your second takes to to a bewildering (to the amateur) github library of files from where I have no clue what to do next

Thanks guys, I appreciate your trying to help, but I may need more direction. I may have just assumed that there is a working wallet/client available for Mac. Is that right or am I too early?

As I understand it from their forum, one custodians wall accidentally hit another custodians wall at some point in last few days. That may also help explain a one-off spike in volume if that's what occurred (?).