Hello Forum!

A quick update from the Marketing Dept:

March 21 will be the launch of our brand new website, bitshares.org. New site? Didn't we just get a new site you may be asking? Well, yes and no.  Invictus.io was created to be a temporary step in the right direction from our original site at invictus-innovations.com.  And it's serving it's purpose for now. But our plan was to eventually build a permanent top-shelf site for the bitshares concept and brand.  And that new site is in now in development: bitshares.org. 

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I think it's T-time.

I don't understand how BitUSD comes with more risk than simply holding bitshares, not to mention taking the position of shorting one of the derived assets. Bts constitutes a stake in the network and validates you're belief in its utility. If bitshares x does not work than price of Bts outside of the network will go down, but the price of a BitAsset will not. In holding BitUSD there is no risk that you will loose money only the risk of a greater opportunity cost due to pegging your stake in the network to some other asset. I think if there should be a fee/interest rate at all it should fall on the person holding the BitAsset since after all it is the BitAsset that is being "lent" into existence not the other way around. I think there should be a premium for holding BitAssets because those shorting the price of other assets are inherently providing a service through there collateral. The notion that a hard coded 5% interest rate or any other rate is kind of silly now that I think about it. The price within the market will correct to include any premium that should be paid for the BitAsset. By not hard coding an interest rate you consequently provide a floating interest rate, as the premium that people pay for BitAssets constitutes that rate. The floating interest rate is thereby: (price of BitAsset - price of real asset) / price of the real asset. The interest rate will be greatest when the demand for BitAssets is higher relative to Bts and low (probably negative) when demand for Bts is higher than demand for BitAssets. In early stages when there is uncertainty around Bitshares success there will be greater demand for BitAssets. I think the interest rate people will pay for them will be higher than even 5%. As Bitshares X proves it success more people will want to cash in on that success so there will be less demand for BitAssets and more demand for Bts so the interest rate will be negative and there may be very few holders of BitAssets.

Where my understanding of this exchange system got lost was in the analogy of BitShares being a bank. It can serve that purpose but it more simply allows participants in the network to make contracts with each other in order to redistribute risk. Short positions take all the risk/reward associated with the volatility of the networks underlying currency while holders of BitAssets peg the their stake in the network to some other asset and are thereby only subject to the price volatility of that asset. There is now borrowing, there is no lending, there is simply this underlying contract.

In terms of early adoption phases I think it behooves everyone to short BitAssets as much as they can because if the price of bitshares ever drops by 50% the experiment is over and Bitshares X is valueless and so is any stake within that network.

The risk in holding BitUSD is not relative to holding/shorting Bitshares but relative to holding FedUSD. Where that risk comes from you explained in your last sentence.

If 6) is a valid possibility I might add another one. This one is from the shorts perspective.

Hypothesis 7) BitUSD will not track USD and have infinite value

I guess the 5 Feb Newsletter had a significant effect, announcing the 28 Feb AGS snapshot.
That's about when PTS donations jumped from 3000 a day to 4000 a day.
http://www1.agsexplorer.com

I believe in Hypotheses 2-4. I'm not saying I have understood all details either but here is why I think what I think:

contra 1) and pro 2) for the same reasons:
The dollar might have retained its purchasing power the day after gold pegging was abolished. Now, 40 years down the track, I wouldn't claim that anymore. Once an asymmetry between long and short holdings is introduced, I would think the price will lean that way too (slowly).

3) and 4) both are true.
The weaker one will be cancelled out. Risk will be considered less and less after time, I assume, so 3) wins.
Convenience (divisible, private, instant transfer) will have a minor effect, above market interest rates will pop the ceiling out. If short sellers have to pay high interest they won't short, not even high above parity.

… looking forward to the big experiment.

Would it be possible to launch subsequent chains with cross-chain trading so that they can absorb BTS from the original chain? For example 5% chain or complex derivatives chain would be able to work on BTS (from BTS X)

edit: or is it even necessary/desirable? If there is free trade between core assets. Just more appealing to current PTS/AGS holders I guess.

As I understand it, no DAC may have any secrets. That includes owning a private crypto key for an independent chain.
Don't know how this inbuilt cross-chain trading could work otherwise.

Quote from: bytemaster on February 12, 2014, 07:41:14 am

Quote from: toast on February 12, 2014, 07:38:27 am

Quote from: bytemaster on February 12, 2014, 06:00:29 am

In the case of BitAssets they still require fees to be paid in BTS when they are transferred.

If this is the case then there should be a way to buy enough BTS for the tx fee and perform the BitAsset transfer in one transaction, and the reference client should use that by default when you're only holding Assets

Most people will just want to hold BitCurrency and not worry about purchasing BTS for fees

Challenging task. 

For sure, I'm thinking that should happen the same time you make a GUI and/or web wallets, so not soon

This sounds similar to what Ripple is like. You run out of XRP and suddenly your account is frozen because you can't afford to pay for transactions.