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Main => General Discussion => Topic started by: starspirit on October 14, 2014, 11:59:38 pm

Title: Why are market-makers reluctant to make a tighter market?
Post by: starspirit on October 14, 2014, 11:59:38 pm
In the Nubits thread, member Chronos points out the difference in current buy-side liquidity between Nubits and BitUSD, here:
https://bitsharestalk.org/index.php?topic=9057.285;topicseen

Any discussion on Nubits v BitUSD can stay in that thread - my interest in this post is liquidity in BitUSD. I know there's been talk in other threads about running market-making bots, and I'm thinking about trying it myself at some point, but they do not appear to be very active based on current spreads and liquidity. What are currently the biggest barriers to current and would-be market-makers?
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: Mysto on October 15, 2014, 12:07:51 am
I don't think they are reluctant, I think it has to do with the fact that there is low demand for bitUSD right now. It's easy to get in but not so easy to get out. I think the only solution is to create demand for bitUSD through merchant adoption. The best mm bots can do right now is create artificial volume.
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: starspirit on October 15, 2014, 12:15:15 am
I don't think they are reluctant, I think it has to do with the fact that there is low demand for bitUSD right now. It's easy to get in but not so easy to get out. I think the only solution is to create demand for bitUSD through merchant adoption. The best mm bots can do right now is create artificial volume.
Is it a catch-22 though? Low demand because there is low liquidity?
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: Riverhead on October 15, 2014, 12:16:12 am
So far the only real users are those that are really bullish on BTSX so they are reluctant to go long bitUSD. The speculative appreciation of BTSX is far greater than the expected yield on bitUSD.

When BTSX has its first big spike to $0.10 or $0.50 I think we'll see a lot of people selling some BTSX to take some profits and hedge a bubble.
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: tonyk on October 15, 2014, 12:16:42 am
In the Nubits thread, member Chronos points out the difference in current buy-side liquidity between Nubits and BitUSD, here:
https://bitsharestalk.org/index.php?topic=9057.285;topicseen

Just as a side note - he is not a member - he is an aggressive NuBits promoter!

As for the main question - with the new market engine/next release, there should be [hopefully] significant improvements on the market depth and spread. The real market depth will come with the actual usefulness and adoption of bitUSD though.

And I know you did not ask but NuBits has artificial peg/liquidity/depth provided by people specifically paid to do just that.
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: biophil on October 15, 2014, 12:17:40 am
I don't think they are reluctant, I think it has to do with the fact that there is low demand for bitUSD right now. It's easy to get in but not so easy to get out. I think the only solution is to create demand for bitUSD through merchant adoption. The best mm bots can do right now is create artificial volume.

Well, I'm reluctant because if I decided to play market maker and added a bunch of buy-side liquidity, I'd end up with a great big pile of bitUSD and nobody to sell it to. The fact that nobody is buying bitUSD near the peg is evidence that there isn't much money to be made playing market-maker.

Sent from my SCH-S720C using Tapatalk 2

Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: Mysto on October 15, 2014, 12:52:53 am
I don't think they are reluctant, I think it has to do with the fact that there is low demand for bitUSD right now. It's easy to get in but not so easy to get out. I think the only solution is to create demand for bitUSD through merchant adoption. The best mm bots can do right now is create artificial volume.
Is it a catch-22 though? Low demand because there is low liquidity?
No, I think there is low liquidity because of low demand. I don't think adding more liquidity will increase demand very much. The only way I think bitUSD demand will go up is if you can use it to buy goods and services.

So far the only real users are those that are really bullish on BTSX so they are reluctant to go long bitUSD. The speculative appreciation of BTSX is far greater than the expected yield on bitUSD.

When BTSX has its first big spike to $0.10 or $0.50 I think we'll see a lot of people selling some BTSX to take some profits and hedge a bubble.

Yes but that will be temporary.


Well, I'm reluctant because if I decided to play market maker and added a bunch of buy-side liquidity, I'd end up with a great big pile of bitUSD and nobody to sell it to. The fact that nobody is buying bitUSD near the peg is evidence that there isn't much money to be made playing market-maker.

Sent from my SCH-S720C using Tapatalk 2

Yea I guess that would make one reluctant.
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: toast on October 15, 2014, 01:00:34 am
"There isn't enough demand for bitUSD" as an explanation for insufficient liquidity would be a signal that the peg was already broken!

You should think of it like, "are the shorts going to gamble even harder before they lock in their current losses?". Now with 30-day rotation on shorts it will be easy to see where the demand at anywhere below $1 comes from.

I think not enough people are comfortable using the existing market-maker bots, probably for good reason. But anyone who buys bitUSD undervalued and keeps a sell wall at the price feed will make the spread * volume every month. As soon as people realize they can compete for this "free" money the spread should narrow significantly.
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: starspirit on October 15, 2014, 01:30:49 am
"There isn't enough demand for bitUSD" as an explanation for insufficient liquidity would be a signal that the peg was already broken!

You should think of it like, "are the shorts going to gamble even harder before they lock in their current losses?". Now with 30-day rotation on shorts it will be easy to see where the demand at anywhere below $1 comes from.

I think not enough people are comfortable using the existing market-maker bots, probably for good reason. But anyone who buys bitUSD undervalued and keeps a sell wall at the price feed will make the spread * volume every month. As soon as people realize they can compete for this "free" money the spread should narrow significantly.
As I understand it most of the shorts are grandfathered and currently not subject to the 30 day covering, is that right? So it appears we are not in that position for some time. If these were all rolled off, then the market would tighten considerably for the reason you state. At that point would there be anything in the way of market-makers keeping a tight and liquid market?
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: clout on October 15, 2014, 11:55:02 am
I think the new market engine will greatly increase the demand of bitUSD through the yield while also  adding to the market liquidity through the more frequent covering of short positions. What is the time frame for the new market engine launch?
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: merockstar on October 15, 2014, 12:06:36 pm
Is there still going to be a market maker profit button?
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: bytemaster on October 15, 2014, 12:07:23 pm
It all has to do with holding period on bit usd.  If I buy bit usd today and must wait 1 day to sell and btsx goes up 1% then I lose.   Likewise if I buy btsx and hold for a day I lose.   So spread is proportional to holding period and volatility. 

To have a tight peg we need usd to bitusd makers.
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: luckybit on October 15, 2014, 12:22:26 pm
I don't think they are reluctant, I think it has to do with the fact that there is low demand for bitUSD right now. It's easy to get in but not so easy to get out. I think the only solution is to create demand for bitUSD through merchant adoption. The best mm bots can do right now is create artificial volume.

Merchant adoption isn't how you create demand. The way to create demand is through payroll. People need to get paid in BitUSD.

If we are going to hire DAC developers they will want to get paid in BitUSD so that alone should be enough to create demand.

It all has to do with holding period on bit usd.  If I buy bit usd today and must wait 1 day to sell and btsx goes up 1% then I lose.   Likewise if I buy btsx and hold for a day I lose.   So spread is proportional to holding period and volatility. 

To have a tight peg we need usd to bitusd makers.

I think because we are in the early stages we put perhaps too much emphasis on BitUSD "adoption" when we should put more emphasis on using BitUSD ourselves. In order to do that we need ways to set up smart contracts or other means so that we can easily pay developers in BitUSD.

I think the future for BitUSD is bright but we have to use it before merchants will care about it. Bitcoin is slow to focus on payroll and paying wages because Bitcoin isn't good for that. BitUSD doesn't have to be slow at that because it's perfect for that.

So instead of focusing on where we can spend BitUSD we should focus on allowing people to earn it through DACs somehow so that more of us have some through earnings. It doesn't make a lot of sense why people would take regular USD out of their bank and buy BitUSD but it does make sense that people would work for BitUSD and then start using it.

I'm I am new to this space, never heard of Bitcoin before and I ask: "How can I earn some BitUSD?" what would I be told?

Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: clout on October 15, 2014, 12:27:44 pm
It all has to do with holding period on bit usd.  If I buy bit usd today and must wait 1 day to sell and btsx goes up 1% then I lose.   Likewise if I buy btsx and hold for a day I lose.   So spread is proportional to holding period and volatility. 

To have a tight peg we need usd to bitusd makers.

How do we get that operation up and running?
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: bytemaster on October 15, 2014, 12:32:45 pm
We have several such exchanges opening up.
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: biophil on October 15, 2014, 12:53:00 pm
It all has to do with holding period on bit usd.  If I buy bit usd today and must wait 1 day to sell and btsx goes up 1% then I lose.   Likewise if I buy btsx and hold for a day I lose.   So spread is proportional to holding period and volatility. 

To have a tight peg we need usd to bitusd makers.

Exactly - market-making isn't the risk-free proposition people seem to think it is. To make the market, I have to have a stash of BitUSD, and accept all the risks associated with that - mainly the risk that BTSX shoots up, which most people here believe will happen.
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: Rune on October 15, 2014, 12:54:14 pm
I'd be willing to contribute 20k bitUSD to a nubits style peg enforcement. IMO he best would actually be to have an extremely deep bitcoin to bitUSD market, rather than usd to bitUSD. I imagine that large volume usd to bitUSD will not happen on an exchange, but only once a more convenient on-ramp has been created.

Btw, the automatic short cover really should be implemented at 30 days for everyone instantly, perhaps with up to an extra 30 day randomly chosen offset to there isn't a huge btsx dump in a single day. I know it's unfair for the shorters who didn't expect it, but they are also btsx holders and must agree that for btsx to begin taking off we must have a deep bitUSD peg ASAP.
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: Stan on October 15, 2014, 02:30:54 pm
I think because we are in the early stages we put perhaps too much emphasis on BitUSD "adoption" when we should put more emphasis on using BitUSD ourselves. In order to do that we need ways to set up smart contracts or other means so that we can easily pay developers in BitUSD.

I think the future for BitUSD is bright but we have to use it before merchants will care about it. Bitcoin is slow to focus on payroll and paying wages because Bitcoin isn't good for that. BitUSD doesn't have to be slow at that because it's perfect for that.

So instead of focusing on where we can spend BitUSD we should focus on allowing people to earn it through DACs somehow so that more of us have some through earnings. It doesn't make a lot of sense why people would take regular USD out of their bank and buy BitUSD but it does make sense that people would work for BitUSD and then start using it.

I'm I am new to this space, never heard of Bitcoin before and I ask: "How can I earn some BitUSD?" what would I be told?

Good ideas here, but there is an overriding Universal Economic Truth that should be mentioned and you have created a "teachable moment" for us all:

Money is fungible.  If you want a certain kind of money, you should earn whatever kind of money you can earn most efficiently and then buy the kind of money you want to hold with it.

This is the idea behind the trend of "mining the most profitable asset, selling it, and using the proceeds to buy the most promising asset."

So, we shouldn't create low-value make-work tasks for earning bitUSD.  If the most profitable use of your time is shining shoes for Zimbabwe dollars, well, shine shoes for Zimbabwe dollars!  Then quickly sell and buy bitUSD, bitGLD, bitBTC or BTSX.  :)

Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: bytemaster on October 15, 2014, 02:59:08 pm
It all has to do with holding period on bit usd.  If I buy bit usd today and must wait 1 day to sell and btsx goes up 1% then I lose.   Likewise if I buy btsx and hold for a day I lose.   So spread is proportional to holding period and volatility. 

To have a tight peg we need usd to bitusd makers.

Exactly - market-making isn't the risk-free proposition people seem to think it is. To make the market, I have to have a stash of BitUSD, and accept all the risks associated with that - mainly the risk that BTSX shoots up, which most people here believe will happen.

I started a whole new post on this comparing things to NuBits and user issued USD IOUs.   

It boils down to this, to perform "risk free market making" you must be the sole issuer and sell for the asset you wish to peg to while being willing to hold the asset you are pegging.

Also being a market maker means you are not earning interest on the USD you hold in bids... yet you will be paying interest on the USD you short. 

I think we need to re-evaluate what it means to peg two assets... the spread between USD and BitUSD doesn't mean the peg is broken any more than the spread between Bitstamp USD and Bter USD relative to BTC is broken.   

The key is that they move in the same direction at about the same time.   If BTSX were to fall by 25%... BitUSD would maintain its purchasing power that it has today... but still have the spread.  Likewise if BTSX were to rise by 25% BitUSD would be unchanged. 

Once you understand this and set the expectations properly then people can start using BitUSD for what it is... a new tool, a new asset. 


Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: luckybit on October 15, 2014, 08:06:13 pm
I think because we are in the early stages we put perhaps too much emphasis on BitUSD "adoption" when we should put more emphasis on using BitUSD ourselves. In order to do that we need ways to set up smart contracts or other means so that we can easily pay developers in BitUSD.

I think the future for BitUSD is bright but we have to use it before merchants will care about it. Bitcoin is slow to focus on payroll and paying wages because Bitcoin isn't good for that. BitUSD doesn't have to be slow at that because it's perfect for that.

So instead of focusing on where we can spend BitUSD we should focus on allowing people to earn it through DACs somehow so that more of us have some through earnings. It doesn't make a lot of sense why people would take regular USD out of their bank and buy BitUSD but it does make sense that people would work for BitUSD and then start using it.

I'm I am new to this space, never heard of Bitcoin before and I ask: "How can I earn some BitUSD?" what would I be told?

Good ideas here, but there is an overriding Universal Economic Truth that should be mentioned and you have created a "teachable moment" for us all:

Money is fungible.  If you want a certain kind of money, you should earn whatever kind of money you can earn most efficiently and then buy the kind of money you want to hold with it.

This is the idea behind the trend of "mining the most profitable asset, selling it, and using the proceeds to buy the most promising asset."

So, we shouldn't create low-value make-work tasks for earning bitUSD.  If the most profitable use of your time is shining shoes for Zimbabwe dollars, well, shine shoes for Zimbabwe dollars!  Then quickly sell and buy bitUSD, bitGLD, bitBTC or BTSX.  :)
How do we help people most efficiently earn BitUSD then? It's like analog to digital conversion or copying tape to tape in a studio where with each copy the signal quality reduces. The act of actually earning BitUSD is what conditions people to value BitUSD as they do USD. The same conditioning process would work for any of the other currencies supported by Bitshares X.

In my opinion if we want BitUSD to be used by everyone then instead of telling people to use Zimbabwe dollars before converting into BitUSD we should let them earn BitUSD or BitZWD directly. How else do you promote a currency if hardly anyone works for it directly?

Bitcoin is suffering from the same problem. Everyone says to buy Bitcoin but Bitcoin is volatile. If people said to work for Bitcoin then people wouldn't care as much about speculating with it. Bitcoin is volatile so people cannot save in it but with Bitshares X you can save your BitUSD as BitGLD.

So the idea is you want to get people to work to earn BitUSD (no matter if it's high or low value it's still activity which has some value), then store their savings in BitGLD. Mining for Bitshares could actually work to a certain extent for the mining community but if you want to bring the whole world into it then you have to market to the whole world.

If someone isn't from the USA then maybe they don't want BitUSD. Maybe they want to work and earn in their own currency. In order to market their own currency to them we need testimonials where people around the world are working and earning BitCNY, BitJPY, or whatever their local currency is.

This way if someone from here wants to start a business which is or is not a DAC then we can pay our employees in their local currency of choice easily. It doesn't really matter what the business is or how much money the business makes, it only matters that workers are exposed to and become accustomed to earning digital currency.

I hope we can avoid making the same mistakes Bitcoin made and actually encourage adoption by the working class (not just merchant class).  I think one problem I've identified with the current marketing is that it doesn't seem international in scope and the best way to make it international in scope is to translate into as many languages as possible while also launching all the different currencies so that people in these countries can pay their employees in BitAssets. I understand it's really early on in the development of this new industry but I think it should at least be a priority for each of us to try to reach a point in our lives where we earn all of our money in crypto-currency (BitUSD preferably) so that we can market the product by using it which is something the Bitcoin community isn't doing.

Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: Stan on October 15, 2014, 10:29:33 pm
I think because we are in the early stages we put perhaps too much emphasis on BitUSD "adoption" when we should put more emphasis on using BitUSD ourselves. In order to do that we need ways to set up smart contracts or other means so that we can easily pay developers in BitUSD.

I think the future for BitUSD is bright but we have to use it before merchants will care about it. Bitcoin is slow to focus on payroll and paying wages because Bitcoin isn't good for that. BitUSD doesn't have to be slow at that because it's perfect for that.

So instead of focusing on where we can spend BitUSD we should focus on allowing people to earn it through DACs somehow so that more of us have some through earnings. It doesn't make a lot of sense why people would take regular USD out of their bank and buy BitUSD but it does make sense that people would work for BitUSD and then start using it.

I'm I am new to this space, never heard of Bitcoin before and I ask: "How can I earn some BitUSD?" what would I be told?

Good ideas here, but there is an overriding Universal Economic Truth that should be mentioned and you have created a "teachable moment" for us all:

Money is fungible.  If you want a certain kind of money, you should earn whatever kind of money you can earn most efficiently and then buy the kind of money you want to hold with it.

This is the idea behind the trend of "mining the most profitable asset, selling it, and using the proceeds to buy the most promising asset."

So, we shouldn't create low-value make-work tasks for earning bitUSD.  If the most profitable use of your time is shining shoes for Zimbabwe dollars, well, shine shoes for Zimbabwe dollars!  Then quickly sell and buy bitUSD, bitGLD, bitBTC or BTSX.  :)
How do we help people most efficiently earn BitUSD then? It's like analog to digital conversion or copying tape to tape in a studio where with each copy the signal quality reduces. The act of actually earning BitUSD is what conditions people to value BitUSD as they do USD. The same conditioning process would work for any of the other currencies supported by Bitshares X.

In my opinion if we want BitUSD to be used by everyone then instead of telling people to use Zimbabwe dollars before converting into BitUSD we should let them earn BitUSD or BitZWD directly. How else do you promote a currency if hardly anyone works for it directly?

Bitcoin is suffering from the same problem. Everyone says to buy Bitcoin but Bitcoin is volatile. If people said to work for Bitcoin then people wouldn't care as much about speculating with it. Bitcoin is volatile so people cannot save in it but with Bitshares X you can save your BitUSD as BitGLD.

So the idea is you want to get people to work to earn BitUSD (no matter if it's high or low value it's still activity which has some value), then store their savings in BitGLD. Mining for Bitshares could actually work to a certain extent for the mining community but if you want to bring the whole world into it then you have to market to the whole world.

If someone isn't from the USA then maybe they don't want BitUSD. Maybe they want to work and earn in their own currency. In order to market their own currency to them we need testimonials where people around the world are working and earning BitCNY, BitJPY, or whatever their local currency is.

This way if someone from here wants to start a business which is or is not a DAC then we can pay our employees in their local currency of choice easily. It doesn't really matter what the business is or how much money the business makes, it only matters that workers are exposed to and become accustomed to earning digital currency.

I hope we can avoid making the same mistakes Bitcoin made and actually encourage adoption by the working class (not just merchant class).  I think one problem I've identified with the current marketing is that it doesn't seem international in scope and the best way to make it international in scope is to translate into as many languages as possible while also launching all the different currencies so that people in these countries can pay their employees in BitAssets. I understand it's really early on in the development of this new industry but I think it should at least be a priority for each of us to try to reach a point in our lives where we earn all of our money in crypto-currency (BitUSD preferably) so that we can market the product by using it which is something the Bitcoin community isn't doing.

I'm not sure we have anything to offer those who do not have a saving habit.  If you are living hand to mouth with no savings at the end of the month, then by definition you would be selling your bitUSD as soon as you got it.  You would not be holding it for yield and you would not be worried about your government inflating away its value or confiscating your nest egg. 

I guess we could collect fees for the wages passing through our network, but is that really helping people?

Such people are better off getting paid in fiat wherever they can earn the most for their time, cashing their paycheck, and spending it with no fees of any kind.

So, I view BitUSD as the best place for savers to keep their savings.  This option is open to everybody who is able to save, so this is where it makes the most sense to place the on-ramp.

Rather than engineering a thousand ways for different skill sets to earn bitUSD,
lets engineer just one way for all those skill sets to save. 

That's the most cost effective way to benefit everybody who can benefit.



Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: Riverhead on October 16, 2014, 12:21:54 am
I've started using bitUSD as my savings account. The money is only a couple days away and it kicks the living tar out of my checking account (yield is so low on savings accounts it's just not worth the hassle).

Besides if I'm not putting my money where my mouth is than what are we talking about? Time to get on board for real.

Sent from my SM-G900T using Tapatalk
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: luckybit on October 16, 2014, 12:26:02 am
I'm not sure we have anything to offer those who do not have a saving habit.  If you are living hand to mouth with no savings at the end of the month, then by definition you would be selling your bitUSD as soon as you got it.  You would not be holding it for yield and you would not be worried about your government inflating away its value or confiscating your nest egg. 
I'm talking about a closed loop where people actually work in the Bitshares ecosystem, get paid in BitUSD, spend most of their BitUSD and save some of it.

If a janitor were working for BitUSD why wouldn't they save some of it?
I guess we could collect fees for the wages passing through our network, but is that really helping people?
That's not exactly what I had in mind. I don't think the goal should be to deliberately help people. The goal should be to create an ecosystem where people can help each other while earning BitUSD. There doesn't need to be any active effort except to make it easier for people to facilitate earning BitUSD.

For example if someone started a brick and mortar janitorial company where they go into commercial offices with their team of people and clean up then they should be encouraged to use BitUSD. Businesses or sole proprietors need a way to pay their employees or contracts in BitUSD/BitJYP/BitCNY or BitGLD.
Such people are better off getting paid in fiat wherever they can earn the most for their time, cashing their paycheck, and spending it with no fees of any kind.
If we have that attitude why would people who have jobs paying in fiat ever care about BitUSD or Bitcoin? They'll only care when the job they have pays in BitUSD or the new job they get is offering to pay in BitUSD. At that point they will investigate what BitUSD is and discover Bitshares. That is free marketing to anyone looking for work and also if we are getting paid in BitUSD then we show we trust the system enough ourselves.

Whether or not there is enough BitUSD flowing has a lot to do with how large the ecosystem of producers, service providers, merchants, but the problem is just telling merchants to accept BitUSD doesn't get the majority of the economy to accept it. What about their employees? What about the parent who could be paying their child's allowance in BitUSD? The ideal situation would be if we could convince businesses like Overstock to agree to pay it's employees using BitUSD because that would immediately get BitUSD to circulate.

So, I view BitUSD as the best place for savers to keep their savings.  This option is open to everybody who is able to save, so this is where it makes the most sense to place the on-ramp.
We agree BitUSD is a great place for savers. The problem is you cannot spread BitUSD like it's some commodity that people buy if it's supposed to be the ultimate digital version of USD. It has to spread viral and the way to make that happen is as simple as making it easy to pay employees/workers in BitUSD.

This way if any of us start businesses in the future we can set them up to pay higher salaries to people who accept BitUSD instead of USD for example. If workers get paid more if they accept BitUSD then they'll accept it and at the same time it would be subtle marketing by business owners. I think just accepting Bitcoin and immediately converting it to fiat doesn't support Bitcoin except to spend it which is why it's not much of a currency and isn't spreading viral but if people actually went to work one day and their boss offered to pay them in Bitcoin the polls I've seen show that a significant number of people actually want to get paid in Bitcoin despite it's volatility. http://www.coindesk.com/getting-paid-in-bitcoins/
Rather than engineering a thousand ways for different skill sets to earn bitUSD,
lets engineer just one way for all those skill sets to save. 

That's the most cost effective way to benefit everybody who can benefit.

Why not do both? The success of the dollar and reason everyone uses it (beside the fact that it is legal tender) is that you can get a job and it's always going to pay in dollars. This isn't going to change until Silicon Valley and the majority of the companies in the tech industry start paying in their own currencies, in Bitcoin or in BitUSD. If a tech entrepreneur offered their employees the option to get paid in BitUSD I'm sure some of them would give it a try and if they find out the peg holds that is when they'll go all in.

I think yes we should market it to savers. I absolutely support that idea. I just think if money isn't flowing in from savers today and savers aren't paying attention to Bitcoin either it could be that they don't understand what it is because they don't have experience getting paid in it. I think if barbershops and casinos for example started paying their employee in BitUSD then it would spread viral pretty quick and it's an advantage for BitUSD because Bitcoin cannot make a good currency due to volatility.

I don't think the Bitshares team has to do much to make this happen I just think we need to balance out the on-ramps with the off-ramps. The Bitshares team does not have to directly hire people or create fake jobs it just has to encourage BitWage and similar companies to integrate BitUSD into their product. Then the product should be marketed to business owners who want to be able to hire tech workers internationally without having to deal with the expense of converting between different currencies or having workers wait weeks to get paid when they could be paid in real time.

I've started using bitUSD as my savings account. The money is only a couple days away and it kicks the living tar out of my checking account (yield is so low on savings accounts it's just not worth the hassle).

Besides if I'm not putting my money where my mouth is than what are we talking about? Time to get on board for real.

Sent from my SM-G900T using Tapatalk

This is a good start. We need some businesses to actually put their savings in BitUSD. We also need businesses to start paying employees in BitUSD so that all the employees can do the same.

It would be nice if Overstock could be made to pay it's employees in BitUSD instead of Overstock coin. It would be even better if large tech companies agree to pay their employees in BitUSD.
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: Mysto on October 16, 2014, 01:54:30 am

If we have that attitude why would people who have jobs paying in fiat ever care about BitUSD or Bitcoin? They'll only care when the job they have pays in BitUSD or the new job they get is offering to pay in BitUSD. At that point they will investigate what BitUSD is and discover Bitshares. That is free marketing to anyone looking for work and also if we are getting paid in BitUSD then we show we trust the system enough ourselves.

 +5% I agree with this. We have to start somewhere and this would be a great starting place!
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: bytemaster on October 16, 2014, 02:03:13 am

If we have that attitude why would people who have jobs paying in fiat ever care about BitUSD or Bitcoin? They'll only care when the job they have pays in BitUSD or the new job they get is offering to pay in BitUSD. At that point they will investigate what BitUSD is and discover Bitshares. That is free marketing to anyone looking for work and also if we are getting paid in BitUSD then we show we trust the system enough ourselves.

 +5% I agree with this. We have to start somewhere and this would be a great starting place!

We are planning on converting all remaining AGS funds to BitUSD and paying salaries from the BitUSD with the goal to scale the burn rate so the interest earned on the BitUSD is able to sustain the development team for BTSX.    We are also moving to pay everyone on the team in BitUSD.   

Those of us on the team are willing to accept it a par value for prior salaries. 
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: 天籁 on October 16, 2014, 02:30:35 am
 +5% +5% +5% +5% +5%

If we have that attitude why would people who have jobs paying in fiat ever care about BitUSD or Bitcoin? They'll only care when the job they have pays in BitUSD or the new job they get is offering to pay in BitUSD. At that point they will investigate what BitUSD is and discover Bitshares. That is free marketing to anyone looking for work and also if we are getting paid in BitUSD then we show we trust the system enough ourselves.

 +5% I agree with this. We have to start somewhere and this would be a great starting place!

We are planning on converting all remaining AGS funds to BitUSD and paying salaries from the BitUSD with the goal to scale the burn rate so the interest earned on the BitUSD is able to sustain the development team for BTSX.    We are also moving to pay everyone on the team in BitUSD.   

Those of us on the team are willing to accept it a par value for prior salaries.
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: Riverhead on October 16, 2014, 02:34:00 am
if we are getting paid in BitUSD then we show we trust the system enough ourselves.

We are planning on converting all remaining AGS funds to BitUSD and paying salaries from the BitUSD with the goal to scale the burn rate so the interest earned on the BitUSD is able to sustain the development team for BTSX.    We are also moving to pay everyone on the team in BitUSD.   

Those of us on the team are willing to accept it a par value for prior salaries.


Certainly makes me feel better using bitUSD as a savings account.  +5%
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: BTSdac on October 16, 2014, 03:33:02 am
There is no interest for unbit , and only can buy at 1.01usd, sell at 0.99usd,    buyer must lost money when he buy ,and the big risk is the seller steal usd and run.
but why there are much volume , the mainly reason is the trasnlation is  unbit/BTC, becasue of price wave of btc. it is like gain money through translation unbit , compare with hold usd with any operation,no matter how smart you are to translate with unbit. you must lost USD.  so it is a false appearance.

PS : if open bitusd/btc  there are more volume than unbit.   because  bitusd will have interest .
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: Overthetop on October 16, 2014, 08:23:02 am
I've started using bitUSD as my savings account. The money is only a couple days away and it kicks the living tar out of my checking account (yield is so low on savings accounts it's just not worth the hassle).

Besides if I'm not putting my money where my mouth is than what are we talking about? Time to get on board for real.

Sent from my SM-G900T using Tapatalk

 +5%
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: zerosum on October 16, 2014, 09:45:18 am

If we have that attitude why would people who have jobs paying in fiat ever care about BitUSD or Bitcoin? They'll only care when the job they have pays in BitUSD or the new job they get is offering to pay in BitUSD. At that point they will investigate what BitUSD is and discover Bitshares. That is free marketing to anyone looking for work and also if we are getting paid in BitUSD then we show we trust the system enough ourselves.

 +5% I agree with this. We have to start somewhere and this would be a great starting place!

We are planning on converting all remaining AGS funds to BitUSD and paying salaries from the BitUSD with the goal to scale the burn rate so the interest earned on the BitUSD is able to sustain the development team for BTSX.    We are also moving to pay everyone on the team in BitUSD.   

Those of us on the team are willing to accept it a par value for prior salaries.

I will be more than happy with converting even 50% of the AGS to bitUSD.... and the rest from BTC to BTSX...but if you really plan to do that is, it's much better... I do not really know if Pluton is a planet or just a reference point.   :)
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: alt on October 16, 2014, 12:07:28 pm

If we have that attitude why would people who have jobs paying in fiat ever care about BitUSD or Bitcoin? They'll only care when the job they have pays in BitUSD or the new job they get is offering to pay in BitUSD. At that point they will investigate what BitUSD is and discover Bitshares. That is free marketing to anyone looking for work and also if we are getting paid in BitUSD then we show we trust the system enough ourselves.

 +5% I agree with this. We have to start somewhere and this would be a great starting place!

We are planning on converting all remaining AGS funds to BitUSD and paying salaries from the BitUSD with the goal to scale the burn rate so the interest earned on the BitUSD is able to sustain the development team for BTSX.    We are also moving to pay everyone on the team in BitUSD.   

Those of us on the team are willing to accept it a par value for prior salaries.
Please keep  BTSX and PTS, you should sell these at more higher price.
If you sell all BTC for USD, buy bitUSD with these USD is enough for now.
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: bytemaster on October 16, 2014, 12:10:04 pm
I mean sell remaining btc.  Keeping pts and btsx
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: bytemaster on October 16, 2014, 12:10:31 pm

I mean sell remaining btc.  Keeping pts and btsx

About 2000 btc left
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: alt on October 16, 2014, 12:11:12 pm
I mean sell remaining btc.  Keeping pts and btsx
+5% +5% +5%
very good! :D
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: lzr1900 on October 16, 2014, 12:19:39 pm

I mean sell remaining btc.  Keeping pts and btsx

About 2000 btc left
awesome! +5% +5%
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: speedy on October 16, 2014, 12:34:31 pm

I mean sell remaining btc.  Keeping pts and btsx

About 2000 btc left

Can you say when you will do this? 2000 btc would eat the sell wall like the cookie monster.
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: luckybit on October 16, 2014, 12:36:13 pm

I mean sell remaining btc.  Keeping pts and btsx

About 2000 btc left

Can you say when you will do this? 2000 btc would eat the sell wall like the cookie monster.

Now wouldn't be a good time to do it. BTC is too cheap.
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: speedy on October 16, 2014, 12:54:25 pm
Now wouldn't be a good time to do it. BTC is too cheap.

What makes you think BTC is going much higher soon ? We just had a rally.
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: svk on October 16, 2014, 01:24:40 pm

If we have that attitude why would people who have jobs paying in fiat ever care about BitUSD or Bitcoin? They'll only care when the job they have pays in BitUSD or the new job they get is offering to pay in BitUSD. At that point they will investigate what BitUSD is and discover Bitshares. That is free marketing to anyone looking for work and also if we are getting paid in BitUSD then we show we trust the system enough ourselves.

 +5% I agree with this. We have to start somewhere and this would be a great starting place!

We are planning on converting all remaining AGS funds to BitUSD and paying salaries from the BitUSD with the goal to scale the burn rate so the interest earned on the BitUSD is able to sustain the development team for BTSX.    We are also moving to pay everyone on the team in BitUSD.   

Those of us on the team are willing to accept it a par value for prior salaries.

This is amazing news and shows real faith in the system. In my opinion this should be used as marketing material even, would be great to see an article on Coindesk saying "Bitshares developers now taking salaries exclusively in bitUSD" or something like that. Maybe even write a blog post on Bitshares.org highlighting this and any other recent developments, that blog could definitely use some new content.

If someone has a Bitshares project that needs a web developer I'd also happily accept being paid in bitUSD, just saying ;)
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: oldman on October 16, 2014, 03:09:30 pm

I mean sell remaining btc.  Keeping pts and btsx

About 2000 btc left

Can you say when you will do this? 2000 btc would eat the sell wall like the cookie monster.

Now wouldn't be a good time to do it. BTC is too cheap.

It would be wise to divest BTC over a six or 12 month period.
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: luckybit on October 16, 2014, 07:09:05 pm

I mean sell remaining btc.  Keeping pts and btsx

About 2000 btc left

Can you say when you will do this? 2000 btc would eat the sell wall like the cookie monster.

Now wouldn't be a good time to do it. BTC is too cheap.

It would be wise to divest BTC over a six or 12 month period.

It's never wise to sell on a downward pressure in something which has long term growth potential. BTC has long term growth potential and is at an all time low. It would be wise not to sell this year also because a lot of BTC has been stolen, Wall Street hasn't jumped in yet, mainstreet hasn't jumped in yet, 2000 BTC is millions of dollars worth of BTC.

In my opinion when it's worth enough that the interest on the BTC is enough to start hiring people then Bytemaster should trade BTC for BitBTC or BitUSD. If it's BitBTC then 2000 BTC is always 2000 BTC but you get interest. If it's BitUSD it doesn't make much sense at these prices.

When Bitcoin is at all time highs all of us are going to want that interest. The really interesting question is will the interest be in BitBTC or in BitUSD?
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: sschechter on October 16, 2014, 07:33:32 pm
Quote

It's never wise to sell on a downward pressure in something which has long term growth potential. BTC has long term growth potential and is at an all time low. It would be wise not to sell this year also because a lot of BTC has been stolen, Wall Street hasn't jumped in yet, mainstreet hasn't jumped in yet, 2000 BTC is millions of dollars worth of BTC.

In my opinion when it's worth enough that the interest on the BTC is enough to start hiring people then Bytemaster should trade BTC for BitBTC or BitUSD. If it's BitBTC then 2000 BTC is always 2000 BTC but you get interest. If it's BitUSD it doesn't make much sense at these prices.

When Bitcoin is at all time highs all of us are going to want that interest. The really interesting question is will the interest be in BitBTC or in BitUSD?

By all time low....you mean '10 month' all time low right? There is no invisible hand holding up the bitcoin price above $280. We all know mining is an eventual dead one.  No one here can guarantee bitcoin will ever go over $1000 again, or even $500.  For all we know, the fad has run its course, and no one cares about it anymore. Of course whether bitcoin rises are falls in the future is irrelevant as a question.  The question that matters when it comes to AGS funds is which of bitcoin or bitshares will be worth more relative to the other in the future.

With the recent BTC rally and BTSX weakness, I think the BTSX/BTC ratio will soon be turning in our favor. Now is a good time to at least partially divest.  Moving to bitBTC is a good idea to, will help support the system while earning a yield.
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: zerosum on October 16, 2014, 07:34:17 pm

It's never wise to sell on a downward pressure in something which has long term growth potential.
Huuh?

BTC has long term growth potential and is at an all time low.
Huuh? What are talking about man? All time low was less then a penny man.

It would be wise not to sell this year also because a lot of BTC has been stolen, Wall Street hasn't jumped in yet, mainstreet hasn't jumped in yet, 2000 BTC is millions of dollars worth of BTC.
What? Last I checked it was less than a mill.

In my opinion when it's worth enough that the interest on the BTC is enough to start hiring people then Bytemaster should trade BTC for BitBTC or BitUSD. If it's BitBTC then 2000 BTC is always 2000 BTC but you get interest. If it's BitUSD it doesn't make much sense at these prices.

When Bitcoin is at all time highs all of us are going to want that interest. The really interesting question is will the interest be in BitBTC or in BitUSD?
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: Empirical1.1 on October 16, 2014, 08:57:48 pm
+5% +5% +5% +5% +5%

If we have that attitude why would people who have jobs paying in fiat ever care about BitUSD or Bitcoin? They'll only care when the job they have pays in BitUSD or the new job they get is offering to pay in BitUSD. At that point they will investigate what BitUSD is and discover Bitshares. That is free marketing to anyone looking for work and also if we are getting paid in BitUSD then we show we trust the system enough ourselves.

 +5% I agree with this. We have to start somewhere and this would be a great starting place!

We are planning on converting all remaining AGS funds to BitUSD and paying salaries from the BitUSD with the goal to scale the burn rate so the interest earned on the BitUSD is able to sustain the development team for BTSX.    We are also moving to pay everyone on the team in BitUSD.   

Those of us on the team are willing to accept it a par value for prior salaries.

 +5%
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: Sonny Jim on October 16, 2014, 09:07:14 pm
+5% +5% +5% +5% +5%

If we have that attitude why would people who have jobs paying in fiat ever care about BitUSD or Bitcoin? They'll only care when the job they have pays in BitUSD or the new job they get is offering to pay in BitUSD. At that point they will investigate what BitUSD is and discover Bitshares. That is free marketing to anyone looking for work and also if we are getting paid in BitUSD then we show we trust the system enough ourselves.

 +5% I agree with this. We have to start somewhere and this would be a great starting place!

We are planning on converting all remaining AGS funds to BitUSD and paying salaries from the BitUSD with the goal to scale the burn rate so the interest earned on the BitUSD is able to sustain the development team for BTSX.    We are also moving to pay everyone on the team in BitUSD.   

Those of us on the team are willing to accept it a par value for prior salaries.

 +5%

 +5%

Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: Mysto on October 16, 2014, 10:58:14 pm

I mean sell remaining btc.  Keeping pts and btsx

About 2000 btc left

Can you say when you will do this? 2000 btc would eat the sell wall like the cookie monster.

Now wouldn't be a good time to do it. BTC is too cheap.

It would be wise to divest BTC over a six or 12 month period.

It's never wise to sell on a downward pressure in something which has long term growth potential. BTC has long term growth potential and is at an all time low. It would be wise not to sell this year also because a lot of BTC has been stolen, Wall Street hasn't jumped in yet, mainstreet hasn't jumped in yet, 2000 BTC is millions of dollars worth of BTC.

In my opinion when it's worth enough that the interest on the BTC is enough to start hiring people then Bytemaster should trade BTC for BitBTC or BitUSD. If it's BitBTC then 2000 BTC is always 2000 BTC but you get interest. If it's BitUSD it doesn't make much sense at these prices.

When Bitcoin is at all time highs all of us are going to want that interest. The really interesting question is will the interest be in BitBTC or in BitUSD?

Ok let's assume BTC goes to $2000, if that were to happen then most alts would follow it. So wouldn't it help the community a lot more if it was converted to BTSX and maybe only some was converted to bitUSD to hedge?

That would show that the devs have 100% faith that the system will work and grow imo.
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: bodenliu on October 16, 2014, 11:15:52 pm
great thoughts!especially when btc is dropping like shit and seems no way to rise like $1000 again
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: bodenliu on October 16, 2014, 11:27:07 pm
but still, I believe it is better for 3i to convert btc to most BTSX and a necessary amount of bitusd (instead all to bitusd).
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: liondani on October 16, 2014, 11:57:17 pm
I3 should convert the BTCs to the asset with the more potential.(and inside the bitshares ecosystem)
So it is wiser perhaps to buy 1/5 BTSX, 1/5 PTS, 1/5 DNS, 1/5 bitUSD,  1/5 bitGOLD for example...
and of course pay salaries every month with bitUSD and buy more when you are short on bitUSD...
Title: Re: Why are market-makers reluctant to make a tighter market?
Post by: starspirit on October 17, 2014, 05:01:41 am
Given the interest in the side-conversation that has sprung up about paying people in BitUSD, I feel almost guilty bringing us to back to the initial question. But for completion, and given I raised the question, I feel I must at least for a moment. Perhaps a new thread on paying people in BitUSD is warranted?

Now, why are market-makers reluctant to make a tighter market? Let me summarise the responses.

One response given is that market-makers don't want to hold BitUSD because they do not want to miss out on BTSX price gains. But any individual has a simple solution to this. They can separate their bullish BTSX book (either through direct BTSX holdings or short BitUSD) from their market-making book. If holding BitUSD is so painful in the market-making book, why not just add to the bullish BTSX book to compensate?

That leaves 2 real concerns for market-makers:

1) they will find it difficult to move out of BitUSD without a haircut due to the low demand,
2) there is market movement risk on the inventory when holding BTSX if it falls, or holding BitUSD if BTSX rises

On (2), market-makers do not actually require a 'guaranteed' profit as some suggest. Market-makers can still make good profits on more volatile pairs, as they do in a number of active crypto markets. They just need to step in and 'discover' the price level and spread where they can earn enough profit (equal to spread times volume) to compensate for the volatility. This does not even require any price anchor such as a peg. The issue is that buyers and sellers are staunch in their current positions, without a middle ground.

The essential problem seems to be the current impasse between buyers and sellers. Holders of BitUSD are reluctant to sell far below the peg, maybe because issuance at the peg has conditioned them they should not accept less. Traders that could potentially employ BitUSD (e.g. as a hedge against other cryptos, for arbitrage or market-making profit) will not step across the gap to buy because it is an instant loss to them when they sell again.

I think this problem could resolve when most of the shorts are on 30 day expiries, which will increase buy-side demand in the market as much as required to guarantee a peg price within 30 day rolling windows. That would give the confidence for traders to buy without the concern of getting a haircut, increasing demand and liquidity. It will also allow market-makers to come in confidently and serve the role of minimising these discounts for more urgent sellers. It may reduce supply significantly in the short term, but that may not be such a bad thing.

I think we need to ask a very critical question - what do shorts have to gain by keeping their grandfathered positions, versus rolling them over and improving BitUSD as a product and prospects for BTSX growth? I don't necessarily think they should be forced out, but let's openly tackle the concerns they might have.

I think until the grandfathered shorts are rolled off, the price where supply and demand meets is currently at a discount that will shrink over time. Therefore BM's discussion about a discount to the peg being acceptable, if the price behaviour is similar to USD, may also be a useful one to reset expectations for current holders of BitUSD, and bring sellers to where they need to be at the moment.

While longer term it is important to boost demand from merchants, employees etc, I do not see these as solving the current dilemma in such an early stage for the currency.