BitShares Forum

Main => Technical Support => Topic started by: ybcstyle on January 07, 2015, 05:33:49 am

Title: BitBTC advantages over Bitcoin
Post by: ybcstyle on January 07, 2015, 05:33:49 am

Hello everyone.  I am just curious to know would it be better to hold BitBTC over just holding on to bitcoin? I would think if you can earn a yield of purchasing BitBTC in theory if you decide to convert your BitBTC back to bitcoin you could earn more bitcoin than what you originally started off from correct?  Second, since bitcoin is more volatile, should that be another reason to keep it in the form of  BitBTC since it doesn't suffer from the same amount of volatility? I am just weighing the option of keeping a portion of my bitcoin as bitcoin, or would make more sense to convert all of  them into BitBTC for the reasons I mentioned?  I just want to make sure I fully understand the pros and cons of doing that. Any advice or information you could give would be great. Thanks.

Title: Re: BitBTC advantages over Bitcoin
Post by: robrigo on January 07, 2015, 05:44:09 am

Yield and 10 seconds to send your bitBTC as opposed to 10 minutes. Also the ability to trade bitBTC against other market issued assets. A future feature is planned to allow you to short any asset against any other market issued asset so you could use bitBTC to back your short orders when that is implemented.

In theory the price should track vanilla BTCs price fairly close. So you will still be exposed to the volatility of BTC.

One downside is the market isn't very liquid atm, but when some of the gateway projects are finished this should improve.

Title: Re: BitBTC advantages over Bitcoin
Post by: toast on January 07, 2015, 05:54:55 am

You have it all right except for this:

Quote

Second, since bitcoin is more volatile, should that be another reason to keep it in the form of  BitBTC since it doesn't suffer from the same amount of volatility

BitBTC and BTC are equally volatile because they have the same price.

Title: Re: BitBTC advantages over Bitcoin
Post by: CLains on January 07, 2015, 06:07:00 am

Quote from: ybcstyle on January 07, 2015, 05:33:49 am

Hello everyone.

Hi and welcome!

Quote from: ybcstyle on January 07, 2015, 05:33:49 am

I am just curious to know would it be better to hold BitBTC over just holding on to bitcoin? I would think if you can earn a yield of purchasing BitBTC in theory if you decide to convert your BitBTC back to bitcoin you could earn more bitcoin than what you originally started off from correct?

It could be better! bitBTC exists on the BitShares blockchain, so you get the speed and efficiency that goes with that. You also get a yield (positive rate of return) of at least a few per cent a year for holding bitBTC. The downside is that BitShares is also quite young at this point in time, so it might take some time to get orders filled, and system might still be a bit buggy. You might want to keep a portion of bitcoin as bitcoin if you want to use BTC actively, e.g. send to a regular BTC address or using a regular BTC; for that you need to convert back to BTC first.

Title: Re: BitBTC advantages over Bitcoin
Post by: ybcstyle on January 07, 2015, 08:29:25 am

Thanks everyone, very good information. I appreciate everyone's feedback and insight.

Title: Re: BitBTC advantages over Bitcoin
Post by: christo on January 07, 2015, 02:29:11 pm

There is of course a compounded systemic risk. If Bitcoin crashes due to security defects, you will lose of course.  With BitBTC you can also lose if that happens to BitShares.

Title: Re: BitBTC advantages over Bitcoin
Post by: sschechter on January 07, 2015, 02:58:35 pm

BitBTC will be just as volatile of BTC.  However, if you suspect a bitcoin crash is coming, you can trade your bitBTC for bitUSD.  bitUSD is like the functional equivalent of owning dollars, but its stored on the blockchain, so you never have to support the American tax system  8)

Edit: These types of newbie posts make me feel all warm and fuzzy inside

Title: Re: BitBTC advantages over Bitcoin
Post by: kamir.tam on January 10, 2015, 06:15:41 pm

Well you will still be exposed to bitcoin volatility whether your hold bitcoin or BitBTC, with that being said you will gain speed and also the yield.

Title: Re: BitBTC advantages over Bitcoin
Post by: Stan on January 10, 2015, 06:41:20 pm

Quote from: kamir.tam on January 10, 2015, 06:15:41 pm

Well you will still be exposed to bitcoin volatility whether your hold bitcoin or BitBTC, with that being said you will gain speed and also the yield.

(http://imgu12.eu5.org/ava.gif)

Pegging to BTC is pegging to a roller coaster.
Pegging to USD is pegging to a nice gentle glide slope ... until it isn't.
Pegging to GLD is pegging to whatever the paper gold manipulators want it to do.

Best bet is to peg to your favorite mix.

Stability depends on your time scale.    :)

(http://blogs-images.forbes.com/pascalemmanuelgobry/files/2013/01/usd-purchasing-power-tumblr_mg0kox7DP11qcfvc7o1_1280.jpg)