BitShares Forum

Main => Technical Support => Topic started by: matt608 on September 18, 2014, 05:00:10 pm

Title: Does demand for bitassets = demand for BTSX?
Post by: matt608 on September 18, 2014, 05:00:10 pm

Hi,
Newbie to bitshares here, I'm gradually learning out how it works. 

Is this basically true?

When someone buys a bitasset, they are effectively buying BTSX, denominated as their chosen bitasset and market pegged to the 'real word' value of the asset?  So bitassets are like a special type of BTSX, and buying them creates just as much demand for BTSX as buying BTSX directly does?  Therefore if speculating on bitassets become popular, BTSX price has a massive rise?

I'm not sure if this is right or not so please explain.

Title: Re: Does demand for bitassets = demand for BTSX?
Post by: speedy on September 18, 2014, 08:42:28 pm

When someone buys a BitUSD, they sell 1 dollar's worth of BTSX. Their buy price is matched against someone taking the opposite view and shorting BitUSD. At that point BitUSD is created based on the collateral that the buyer and shorter have put down.

Yes demand for BitAssets creates demand for BTSX, because each BitAsset is collateralized by 3 times the value of BTSX. Collateral is held for the duration of the BitAsset, until it is destroyed.