Main > General Discussion
A Practical Example - Getting Gold In & Out of The Exchange??
phoenix:
--- Quote from: bytemaster on December 27, 2013, 09:20:23 pm ---
--- Quote from: phoenix on December 27, 2013, 09:00:59 pm ---
--- Quote from: bytemaster on December 27, 2013, 08:42:53 pm ---No gold ever needs to exist in the hands of any user. BitGold will have the purchasing power of gold but is not a promise to pay gold.
--- End quote ---
How do you expect people to honor the purchasing power of gold without the promise to pay gold?
--- End quote ---
If you haven't grasped this detail of BitShares and are already a huge fan, then when this finally sinks in you will really appreciate how valuable BTS will be :)
BitGold is lent into existence like a Gold Bank Note from back in the day. When you went to get a mortgage on your house you promised to pay the bank 100 oz of Gold and pledged your house as collateral. In exchange the Bank promises to pay you 100 oz of Gold On Demand by either giving you bank notes or a balance in your checking account. They never actually gave you the gold you supposedly borrowed from the bank and instead played a fancy game of IOU swapping. An IOU from the bank is worth more than a personal IOU and therefore the bank charges you interest. The bank also demands collateral because they need to have the ability to make good on their IOU or there will be a bank run. Namely, if you don't pay the bank is still solvent so long as the collateral can be seized and sold to cover the loan.
BitGold is like a bank note backed by Stock in Bank of BitShares. Someone had to borrow it and pledge Stock as collateral. Just like with a real bank loan, you can only borrow up to 50% of the value of the collateral. Just like a real bank loan, if the value of the collateral starts to fall the bank can foreclose or demand you put up extra money. Unlike traditional bank loans, Stock in Bank of BitShares is far more fungible and liquid than title to a unique house. In effect, a 'bank run' just means loans get called and a short squeeze begins, the short squeeze represents an opportunity to open a new short position and profit when the price settles down post-squeeze.
In other words, BitGold is a promise to pay 1 oz of gold worth of BitShares. From day to day the number of BitShares you receive for your BitGold will change, but those BitShares will always equal about the same value as 1 oz of gold. The way the price tracks is very similar to how prediction markets can track the value of abstract ideas.
--- End quote ---
One word describes my feelings about this: "WOW!" This is awesome, I can't wait to get my Bitshares! Happy New Year!
hasher:
--- Quote from: bytemaster on December 28, 2013, 03:36:35 am ---
--- Quote from: hasher on December 27, 2013, 09:44:25 pm ---
--- Quote from: bytemaster on December 27, 2013, 09:36:05 pm ---
No need to track IOUs like ripple. In ripple someone can default, in BTS it cannot default.
--- End quote ---
Bytemaster, its mean to me like real knowhow, i crossed my fingers and hope your team doing something great, and i wish you success in New Year. :D
--- End quote ---
I suspect your english translation didn't work well. We will do our best to deliver great things.
--- End quote ---
bytemaster, you right, i have some problems with translation of whitepaper and your posts here, and today, i have looked them more closely with dictionary (even with experience in futures/stocks trading its not easy) and finally i got your concept!
Its huge, and banksters would be unhappy about all of this!
bytemaster:
--- Quote from: hasher on December 27, 2013, 09:44:25 pm ---
--- Quote from: bytemaster on December 27, 2013, 09:36:05 pm ---
No need to track IOUs like ripple. In ripple someone can default, in BTS it cannot default.
--- End quote ---
Bytemaster, its mean to me like real knowhow, i crossed my fingers and hope your team doing something great, and i wish you success in New Year. :D
--- End quote ---
I suspect your english translation didn't work well. We will do our best to deliver great things.
bytemaster:
--- Quote from: hasher on December 27, 2013, 09:33:49 pm ---
--- Quote from: bytemaster on December 27, 2013, 09:20:23 pm ---
--- Quote from: phoenix on December 27, 2013, 09:00:59 pm ---
--- Quote from: bytemaster on December 27, 2013, 08:42:53 pm ---No gold ever needs to exist in the hands of any user. BitGold will have the purchasing power of gold but is not a promise to pay gold.
--- End quote ---
How do you expect people to honor the purchasing power of gold without the promise to pay gold?
--- End quote ---
If you haven't grasped this detail of BitShares and are already a huge fan, then when this finally sinks in you will really appreciate how valuable BTS will be :)
BitGold is lent into existence like a Gold Bank Note from back in the day. When you went to get a mortgage on your house you promised to pay the bank 100 oz of Gold and pledged your house as collateral. In exchange the Bank promises to pay you 100 oz of Gold On Demand by either giving you bank notes or a balance in your checking account. They never actually gave you the gold you supposedly borrowed from the bank and instead played a fancy game of IOU swapping. An IOU from the bank is worth more than a personal IOU and therefore the bank charges you interest. The bank also demands collateral because they need to have the ability to make good on their IOU or there will be a bank run. Namely, if you don't pay the bank is still solvent so long as the collateral can be seized and sold to cover the loan.
BitGold is like a bank note backed by Stock in Bank of BitShares. Someone had to borrow it and pledge Stock as collateral. Just like with a real bank loan, you can only borrow up to 50% of the value of the collateral. Just like a real bank loan, if the value of the collateral starts to fall the bank can foreclose or demand you put up extra money. Unlike traditional bank loans, Stock in Bank of BitShares is far more fungible and liquid than title to a unique house. In effect, a 'bank run' just means loans get called and a short squeeze begins, the short squeeze represents an opportunity to open a new short position and profit when the price settles down post-squeeze.
In other words, BitGold is a promise to pay 1 oz of gold worth of BitShares. From day to day the number of BitShares you receive for your BitGold will change, but those BitShares will always equal about the same value as 1 oz of gold. The way the price tracks is very similar to how prediction markets can track the value of abstract ideas.
--- End quote ---
is there would be possibility to track ious like in ripple?
--- End quote ---
No need to track IOUs like ripple. In ripple someone can default, in BTS it cannot default.
bytemaster:
--- Quote from: phoenix on December 27, 2013, 09:00:59 pm ---
--- Quote from: bytemaster on December 27, 2013, 08:42:53 pm ---No gold ever needs to exist in the hands of any user. BitGold will have the purchasing power of gold but is not a promise to pay gold.
--- End quote ---
How do you expect people to honor the purchasing power of gold without the promise to pay gold?
--- End quote ---
If you haven't grasped this detail of BitShares and are already a huge fan, then when this finally sinks in you will really appreciate how valuable BTS will be :)
BitGold is lent into existence like a Gold Bank Note from back in the day. When you went to get a mortgage on your house you promised to pay the bank 100 oz of Gold and pledged your house as collateral. In exchange the Bank promises to pay you 100 oz of Gold On Demand by either giving you bank notes or a balance in your checking account. They never actually gave you the gold you supposedly borrowed from the bank and instead played a fancy game of IOU swapping. An IOU from the bank is worth more than a personal IOU and therefore the bank charges you interest. The bank also demands collateral because they need to have the ability to make good on their IOU or there will be a bank run. Namely, if you don't pay the bank is still solvent so long as the collateral can be seized and sold to cover the loan.
BitGold is like a bank note backed by Stock in Bank of BitShares. Someone had to borrow it and pledge Stock as collateral. Just like with a real bank loan, you can only borrow up to 50% of the value of the collateral. Just like a real bank loan, if the value of the collateral starts to fall the bank can foreclose or demand you put up extra money. Unlike traditional bank loans, Stock in Bank of BitShares is far more fungible and liquid than title to a unique house. In effect, a 'bank run' just means loans get called and a short squeeze begins, the short squeeze represents an opportunity to open a new short position and profit when the price settles down post-squeeze.
In other words, BitGold is a promise to pay 1 oz of gold worth of BitShares. From day to day the number of BitShares you receive for your BitGold will change, but those BitShares will always equal about the same value as 1 oz of gold. The way the price tracks is very similar to how prediction markets can track the value of abstract ideas.
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