3301
General Discussion / Re: BitShares - Decentralized Autonomous Bank & Exchange
« on: April 09, 2014, 11:48:34 pm »
bytemaster, It is all well and good, as long as the people willing to take the extra risk of going short for the extra profit (*1), as opposed to simply staying long BTS X, will equal the demand for bitUSD by people preferring bitUSD to USD. It might be the case, but if one envision huge interest in bitUSD this might not be true at all.
In other words relying on enough risk tolerant players to essentially ‘print’ all the bitUSD needed/required by everyone seeing the benefit of using bitUSD (instead of USD) is something I am not totally comfortable with…
*1 It is pretty straightforward but someone buying a BTSX at @ $100/BTSX will profit $100 if the price goes up to $200/BTSX and $200 if buys at the same price and shorts bitUSD (assuming 2x margin and USD~~bitUSD). Going short unfortunately proportionally increase the loses in case of unfavorable price movement.
In other words relying on enough risk tolerant players to essentially ‘print’ all the bitUSD needed/required by everyone seeing the benefit of using bitUSD (instead of USD) is something I am not totally comfortable with…
*1 It is pretty straightforward but someone buying a BTSX at @ $100/BTSX will profit $100 if the price goes up to $200/BTSX and $200 if buys at the same price and shorts bitUSD (assuming 2x margin and USD~~bitUSD). Going short unfortunately proportionally increase the loses in case of unfavorable price movement.