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BitUSD as collateral
mf-tzo:
thank you for the reply. Well understood!
MrJeans:
--- Quote from: Zeus on March 06, 2014, 09:00:45 pm ---I don't get that...
If someone can take a short position in BitUSD/BitGold and use as collateral BitUSD where does Bitshares come in to play? Why would bitshares would have any value then?Nobody is going to use them... what I am missing here?
As far as I understand bitshares is the internal value of the clearing house (Bitshares X) in exchanging IOUS between users.
It's value derives from the fact that people are willing to trade them since it is a way of honorring the IOUS.
More people are willing to place bets using bitshares about the future value of the different assets, means more people will want to buy bitshares from the exchanges and therefore bitshares price rise. if you can use other form of collateral than bitshares then the only reason someone would hold bitshares is for transaction fees? How does this work?
I am trying to understand all that but it is really confusing. If someone can present below with very simple examples the different options available for someone holding bitshares it would be very helpfull to better understand things.
--- End quote ---
This is just an idea.
To use bitUSD as collateral you would need to purchase bitUSD (which someone else would have lent into existence using bitshares) or use bitshares to lend bitUSD into existence. So bitshares will still be the source of value.
The idea here is that if you purchase bitUSD and use that as collateral, you collateral will be more stable and you wont have to monitor it as carefully. You pass on the collateral instability to someone else who can stomach the risk.
mf-tzo:
I don't get that...
If someone can take a short position in BitUSD/BitGold and use as collateral BitUSD where does Bitshares come in to play? Why would bitshares would have any value then?Nobody is going to use them... what I am missing here?
As far as I understand bitshares is the internal value of the clearing house (Bitshares X) in exchanging IOUS between users.
It's value derives from the fact that people are willing to trade them since it is a way of honorring the IOUS.
More people are willing to place bets using bitshares about the future value of the different assets, means more people will want to buy bitshares from the exchanges and therefore bitshares price rise. if you can use other form of collateral than bitshares then the only reason someone would hold bitshares is for transaction fees? How does this work?
I am trying to understand all that but it is really confusing. If someone can present below with very simple examples the different options available for someone holding bitshares it would be very helpfull to better understand things.
bytemaster:
--- Quote from: biophil on March 03, 2014, 02:43:50 pm ---One thing that could cause trouble with this is that at any time, if you hold BitUSD, you're subject to having your BitUSD automatically replaced with XTS, because margin calls can happen at any time. If I'm shorting BitGLD using BitUSD as collateral, my BitUSD could be replaced with XTS with no warning. There's nothing inherently wrong with that - collateral is collateral. But it adds some complexity that might not be good.
I'm not saying it can't be done, just trying to talk through the issues.
--- End quote ---
Holding BitUSD is never subject to margin calls... only being Short BitUSD.
I think that using BitUSD as collateral makes perfect sense for future systems.
toast:
Sounds like a great future for a future chain
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