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The assumption that all the options have to have the same expected return is a strictly weaker requirement
("peg to a price everyone else pegs to and you win AND everyone else who agrees wins, else you all lose")
Quote from: JoeyD on March 17, 2014, 07:52:42 pmI'm trying to understand how the system comes to a consensus and trying to figure out what's keeping everyone on the same page, so to speak....Are you familiar with the concept of a Schelling point? Unless there is a global decision made to price BitUSD at something other than USD that the majority of the capital in the market is aware of and wants to participate in, the *only* rational profit-seeking move you can make it trade BitUSD at USD, since the only "consensus point" you could make in a distributed environment is just to look at the name of the asset.So back to GLD: If you see, absent any other information, that BitGLD has been trading for $1300-ish, the only profit-seeking rational move you can make is to assume BitGLD refers to one ounce of gold and place orders accordingly. To kick off the process, the chain creator should be clear about what denomination they are talking about. Everyone doing this at once pushes the price to the real ratio.
I'm trying to understand how the system comes to a consensus and trying to figure out what's keeping everyone on the same page, so to speak.
they could win by both choosing any square
Quote from: luckybit on March 17, 2014, 08:04:05 pmQuote from: toast on March 17, 2014, 06:54:15 pmWhoa whoa wait, I thought he was asking about how BTS X works?If he's talking about BTS Me then yes, you are just trading IOUs and should be "backed" the the issuer's reputation.Why back anything by reputation when you can back it by collateral?And how do you know I have that collateral? I was talking about Me, not X.
Quote from: toast on March 17, 2014, 06:54:15 pmWhoa whoa wait, I thought he was asking about how BTS X works?If he's talking about BTS Me then yes, you are just trading IOUs and should be "backed" the the issuer's reputation.Why back anything by reputation when you can back it by collateral?
Whoa whoa wait, I thought he was asking about how BTS X works?If he's talking about BTS Me then yes, you are just trading IOUs and should be "backed" the the issuer's reputation.
Yeah ignore those examples, they make it sound like an iou trading platform a la mastercoin.
BitGold is just an asset on the chain that can be traded for whatever the market thinks 1 BitGold is worth in terms of the underlying asset (XTS in this case). Read the whitepaper on the main site, it should clarify.
There's a great analogy running around somewhere called "Bookie Bob's solution to bitcoin volatility."
If bitcoins go up,...If bitcoins go down,
No don't confuse me any further, don't add seasonal value to Bob'sMattressGold and make it global or hemisphere dependent. I'm still having trouble wrapping my head around the idea of trading in the value of something, instead of trading the something itself.
Quote from: CWEvans on March 16, 2014, 10:17:06 pmBitGoxGold, BitKitcoGold, BitBob'sMattressGold, etc. would all be different assets that should reflect market participants' trust in Gox, Kitco, Bob, etc.I'm taking special note of the "should" in that quote. I take it that the social consensus is that BitBob'sMattressGold would be 1:1 interchangeable with real Bob'sMattressGold should Bob ever want to trade the comfort of his physical version for some of the advantages of its digital representative.
BitGoxGold, BitKitcoGold, BitBob'sMattressGold, etc. would all be different assets that should reflect market participants' trust in Gox, Kitco, Bob, etc.
Sorry for sounding uneducated, but I'm new to this type of trading. What's preventing the chosen price-standard to start leading a life on it's own? How will bitgold for example track gold, without becoming goxgold? Or will the prospect of losing ones collateral be enough of a safeguard for people not getting a raw deal?
Quote from: toast on March 16, 2014, 05:10:51 am[T]he whole idea behind BTS X is to establish price ratios without having an external price feed using just a prediction-market-like mechanism.Backed assets issued with BitShares Me probably will be a bit easier for people to visualize. They will be essentially warehouse receipts.BitAssets most likely will be issued to track the 'usual suspect' assets first, including USD, EUR, XAU, XAG, CNY, JPY, etc. Once people are used to those, it will be fun to see how the market prices BitUnobtainium, BitVaporware, and BitNothing.
[T]he whole idea behind BTS X is to establish price ratios without having an external price feed using just a prediction-market-like mechanism.
I had a similar question. What mechanism is used to determine the price for use in bitgold etcetera? Is for example the price of gold versus bitcoin taken from some price-index average or is it something decided on by the majority on the network? I'd be interested to know how those exchange rates get fed into the system, for short- and long-positions to be evaluated. Could be that this has already been answered, but I can't remember if an official plan or decision on that matter has already been made.
Is 1 bitGold to represent 1oz of gold?
Quote from: Graffenwalder on March 12, 2014, 09:46:20 pmThis might be an obvious question but what is Bitgold meant to be valued at, Troy ounce?Yes, in all commodities we need to know what are the measures, or I guess they will be implied by the price?
This might be an obvious question but what is Bitgold meant to be valued at, Troy ounce?
The unit and seed 'idea' behind each asset is in the hands of the individuals who create and launch a chain. I highly recommend they be a specific as possible so the market can operate as efficiently as possible.
That said, gold is my "anti-catastrophe" value store, I hold it in the event something so bad that internet connectivity is at the back of my mind happensbitgold < goldbitusd > usd
Quote from: Markus on March 12, 2014, 10:47:20 pmQuote from: biophil on March 12, 2014, 08:15:17 pmCan the gold bar in your basement be unexpectedly replaced (without your consent) with an equivalent number of XTS?This will not happen with BitGold. There are no margin calls on long positions.And furthermore the network NEVER replaces your assets without your consent. It only takes stuff you *willingly* put into collateral in order to go short on another asset.
Quote from: biophil on March 12, 2014, 08:15:17 pmCan the gold bar in your basement be unexpectedly replaced (without your consent) with an equivalent number of XTS?This will not happen with BitGold. There are no margin calls on long positions.
Can the gold bar in your basement be unexpectedly replaced (without your consent) with an equivalent number of XTS?
Quote from: CLains on March 12, 2014, 06:51:44 pmYes.There are also valid reasons one could say "no:"Can the gold bar in your basement be unexpectedly replaced (without your consent) with an equivalent number of XTS?Can market forces ever decide that the gold bar in your basement isn't worth its weight in gold?Can you use the BitGLD in your wallet to purchase something in the event of a large-scale power blackout?Everything depends on what you're looking for in gold and/or BitGLD. BitGLD has many many advantages over physical gold in terms of liquidity, fungibility, portability, etc., but when it comes down to brass tacks, it is not backed by physical gold. It is backed by a promise from the BitShares X network to pay a the market value of BitGLD in XTS. If, for whatever reason (whether it be the network is maliciously attacked, or something severe happens to weaken speculators' confidence), the network stops honoring its promise, BitGLD will go the way of MtGox's Bitcoins.If you want to take advantage of the long-term value stability (i.e., over decades) of physical gold, then BitGLD is absolutely worse than physical gold. If you want to use gold as a medium for exchange, then BitGLD is the thing for you.
Yes.
Is it better than physical gold?