BitShares Forum
Main => General Discussion => Topic started by: monsterer on November 17, 2014, 11:09:36 am
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I often see pay rate estimates in USD created by looking at the current 'price' of BTS and just doing a straight multiply to arrive at a number. However, this gives a distorted view because the top price often has so little volume associated with it.
Indeed the entire buy side order book at BTER.com for BTS/USD has less than $200!
This means, to cash out to USD, you have to go from BTS->BTC->USD.
Looking at the BTS/BTC market in BTER, a sell of 12,960,000 BTS (101 delegates at 100% pay rate for 1 month) would clean out the order book completely, and result in a slippage of around 500 BTC total value.
Long story short, on BTER, 100% pay, for 1 month, in USD at current market cap of 35M USD after slippage = ~$200
Obviously this is worst case, since I'm only considering 1 exchange here...
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You can find the best trading pair to obtain the best fiat or BTC value .
You can go to the http://en.btc38.com/ (http://en.btc38.com/) BTS:CNY pair , there you can get a lot of CNY .
Then , you can buy BTC with the CNY , and take the BTC to your wallet to do whatever you want (sell it on other exchange for USD maybe).
1 USD often = 6.1 CNY .
Of course , as for the delegates , we encourage them not to sell at least for a couple of months until the market depth is deeper than now .
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You can find the best trading pair to obtain the best fiat or BTC value .
You can go to the http://en.btc38.com/ (http://en.btc38.com/) BTS:CNY pair , there you can get a lot of CNY .
Then , you can buy BTC with the CNY , and take the BTC to your wallet to do whatever you want (sell it on other exchange for USD maybe).
1 CNY often = 6.1 USD .
Of course , as for the delegates , we encourage them not to sell at least for a couple of months until the market depth is deeper than now .
Yes CNY is by far the best Government Issued-National currency.
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You can find the best trading pair to obtain the best fiat or BTC value .
You can go to the http://en.btc38.com/ (http://en.btc38.com/) BTS:CNY pair , there you can get a lot of CNY .
What is the total order book bid depth in CNY?
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You can find the best trading pair to obtain the best fiat or BTC value .
You can go to the http://en.btc38.com/ (http://en.btc38.com/) BTS:CNY pair , there you can get a lot of CNY .
Then , you can buy BTC with the CNY , and take the BTC to your wallet to do whatever you want (sell it on other exchange for USD maybe).
1 CNY often = 6.1 USD .
Of course , as for the delegates , we encourage them not to sell at least for a couple of months until the market depth is deeper than now .
Yes CNY is by far the best Government Issued-National currency.
Sorry about the mix up . It should be 1USD = 6.1CNY
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You can find the best trading pair to obtain the best fiat or BTC value .
You can go to the http://en.btc38.com/ (http://en.btc38.com/) BTS:CNY pair , there you can get a lot of CNY .
What is the total order book bid depth in CNY?
The order book can only see 30 lists ? So I don't know all .
From current price to 0.0131USD , there are around 70000 USD worth of CNY buy orders .
And once the price is low enough , more people would want to buy , so the order book is not equal to reality .
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The order book can only see 30 lists ? So I don't know all .
From current price to 0.0131USD , there are around 70000 USD worth of CNY buy orders .
And once the price is low enough , more people would want to buy , so the order book is not equal to reality .
So, that would be roughly 330 BTC worth of slippage. Or $700 / month at 100% pay.
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The order book can only see 30 lists ? So I don't know all .
From current price to 0.0131USD , there are around 70000 USD worth of CNY buy orders .
And once the price is low enough , more people would want to buy , so the order book is not equal to reality .
So, that would be roughly 330 BTC worth of slippage. Or $700 / month at 100% pay.
Oh , I see where you are wrong .
There will not be 101 100% delegates .
By my est , there will only be 10-25 delegates who can have 100% payrate .
More than that , shareholders won't approve .
At this point , it's not even that easy to get all the developers to get a 100% delegate seat .
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Oh , I see where you are wrong .
There will not be 101 100% delegates .
By my est , there will only be 10-25 delegates who can have 100% payrate .
More than that , shareholders won't approve .
At this point , it's not even that easy to get all the developers to get a 100% delegate seat .
My calculations assume worst case, yes, but this is not an error, just the opposite end of the estimation bound.
So, lower bound is $200 / month, upper bound is $2500 / month.
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Oh , I see where you are wrong .
There will not be 101 100% delegates .
By my est , there will only be 10-25 delegates who can have 100% payrate .
More than that , shareholders won't approve .
At this point , it's not even that easy to get all the developers to get a 100% delegate seat .
My calculations assume worst case, yes.
If there comes to a point that 101 delegates successfully vote in with 100% payrate , then it means the value of the system is big enough , the numbers you are talking about will no longer apply .
But the reality is , most of the delegates can only get 3% payrate . The shareholders would be foolish to vote in 101 full paid delegates just to let them dump on the market without making significant value for the system .
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Oh , I see where you are wrong .
There will not be 101 100% delegates .
By my est , there will only be 10-25 delegates who can have 100% payrate .
More than that , shareholders won't approve .
At this point , it's not even that easy to get all the developers to get a 100% delegate seat .
My calculations assume worst case, yes, but this is not an error, just the opposite end of the estimation bound.
So, lower bound is $200 / month, upper bound is $2500 / month.
Image when the price of bts get rising.. It should be much more than that.
Don't just look at current price.
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Image when the price of bts get rising.. It should be much more than that.
Don't just look at current price.
Did you read the OP? The very point of this post is the problem *with* using the current price.
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Image when the price of bts get rising.. It should be much more than that.
Don't just look at current price.
Did you read the OP? The very point of this post is the problem *with* using the current price.
Yes but I can't totally catch you..
You mean the paid delegates can hardly sell out their earned bts? Or they earned too little?
I agree with these words posted by cn-members:
as for the delegates , we encourage them not to sell
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Yes but I can't totally catch you..
You mean the paid delegates can hardly sell out their earned bts? Or they earned too little?
They can sell their BTS, but the actual USD they get could be 100 times less than the amount you will often see estimated using the current 'price' of BTS.
Example: the commonly expressed estimate for 100% delegate pay is $2500 / month, but this could actually end up being only $200 / month due to slippage at the exchange.
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Yes but I can't totally catch you..
You mean the paid delegates can hardly sell out their earned bts? Or they earned too little?
They can sell their BTS, but the actual USD they get could be 100 times less than the amount you will often see estimated using the current 'price' of BTS.
Example: the commonly expressed estimate for 100% delegate pay is $2500 / month, but this could actually end up being only $200 / month due to slippage at the exchange.
Why sell into the bid wall? just put up a sell order at slightly higher than best bid, and your order will execute quickly, within 1 hour, that has always been my experience.
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I guess this situation isn't unexpected; especially with such low volume. Much like C-Level execs that have most of their compensation paid in stock options. They have to divest very slowly to not disrupt the market.
For example Oracle. There are some big moves but a lot of "automatic execution" entries too.
https://finance.yahoo.com/q/it?s=ORCL+Insider+Transactions
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Why sell into the bid wall? just put up a sell order at slightly higher than best bid, and your order will execute quickly, within 1 hour, that has always been my experience.
Because there is no other way to value any order than to take the immediately actionable value; if people are saying the USD value of N BTS is N * top bid price, then the truth actually is that you have to take N and eat into the bid side of the book to get the true current value.
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Oh , I see where you are wrong .
There will not be 101 100% delegates .
By my est , there will only be 10-25 delegates who can have 100% payrate .
More than that , shareholders won't approve .
At this point , it's not even that easy to get all the developers to get a 100% delegate seat .
My calculations assume worst case, yes.
If there comes to a point that 101 delegates successfully vote in with 100% payrate , then it means the value of the system is big enough , the numbers you are talking about will no longer apply .
But the reality is , most of the delegates can only get 3% payrate . The shareholders would be foolish to vote in 101 full paid delegates just to let them dump on the market without making significant value for the system .
+5% good point.
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Delegates who choose to use market orders to liquidate pay will be basically sharedropping investors who opportunistically provide liquidity at a discount price.
Realistically, delegates who need to liquidate pay will set limit orders on exchanges or will hedge with bit assets out of savings or by using credit to borrow until bitAssets are more liquid.
Original point is still valid of course, but I think the lesson to delegates is "figure out how you will be liquidating your pay, if you do at all".
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You need to not look at the lowest volume market.
Nobody has any USD on bter, thats why there is no volume in that market.
btc38's CNY/BTS pair has generally at least 60% of the volume. Yunbi's CNY/BTS and Bter's BTC/BTS pairs have almost all of the rest of the volume. There currently is no USD market for BTS that has any reasonable volume at all.
(Yes, this is why we need onramps).
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Realistically, delegates who need to liquidate pay will set limit orders on exchanges or will hedge with bit assets out of savings or by using credit to borrow until bitAssets are more liquid.
As soon as you set a limit order you become a speculator. This is incompatible with the need to convert to fiat.
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You need to not look at the lowest volume market.
Nobody has any USD on bter, thats why there is no volume in that market.
Which is why I did my maths with the BTS/BTC market on BTER. And if you read this thread through, you'll see that using CNY on bt38.com yields somewhere near $700 / month at 100% pay rate.
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A calculation of current max pay rate:
There are 360 blocks per hour. The delegate gets 1/101 of these, and thus creates 3.564 blocks per hour.
Each time they create a block they get 50 BTS. Therefore they get 178.2 BTS per hour.
178.2 * 24 hour/day * 30 day/month = 128300 BTS per month for a full pay delegate.
Current prices are around .105 CNY per BTS, or about 1.71 cents.
128300 * .0171 = $2194 a month.
So around 2200 bucks a month for a full pay delegate at current prices of BTS, on the most liquid market.
Your 700 number is way off. ;)
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Realistically, delegates who need to liquidate pay will set limit orders on exchanges or will hedge with bit assets out of savings or by using credit to borrow until bitAssets are more liquid.
As soon as you set a limit order you become a speculator. This is incompatible with the need to convert to fiat.
Every delegate is paid in BTS already. There's risk relative to fiat in holding BTS for any time. Following your logic delegates are all speculators whose choices are incompatible with the need to convert to fiat.
I respect the original point, but I think that an argument appealing to the moral hazard of "speculation" is absurd. We all speculating anytime we make any financial choice.
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Current prices are around .105 CNY per BTS, or about 1.71 cents.
128300 * .0171 = $2194 a month.
So around 2200 bucks a month for a full pay delegate at current prices of BTS, on the most liquid market.
Your 700 number is way off. ;)
Please, please read the first post in this thread. :)
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You're also off in that Delegates won't be selling once a month. They can sell multiple times a day.
Also, you get a 1% boost when depositing on Bter. Might want to factor that into calculations.
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Are you saying spreads and trading fees will net a 100% delegate $200 a month when their gross pay of $2200? Or are you saying they lose $200 due fees and spreads differences in market orders?
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Are you saying spreads and trading fees will net a 100% delegate $200 a month when their gross pay of $2200? Or are you saying they lose $200 due fees and spreads differences in market orders?
He's saying the price isn't real because there isn't enough depth currently to support high pay delegates cashing out to fiat.
Sent from my SM-G900T using Tapatalk
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Market price is information about what each share is worth. It is not just some random price floating in the air.
Market price depends on the volume you are trying to sell/buy. If you are using the best price, you have to understand that is the best possible estimate and is heavily biased, especially in liquid markets.
Volume increases when the price moves up or down. Think for a second about the whale at Bitstamp who sold 20 000 Bitcoin in one go. There was certainly not 20 000 worth of BTC in the buyorder book. In fact,
(http://i.imgur.com/XJCZKt6.jpg?)
The whale put that sellorder at less than 10% below the market price, and it was gobbled up within the day. If someone sees a sellorder that they judge to be valued too low, they buy it - expecting profit. Arbitrage happens not just between assets, but also across time for the same asset, in the sense that if a price is artificially low then the gap will be rapidly plugged by traders.
So yes if you sell everything into the buyorderbook in one go then you get that price, but it will instantly bounce back, and if you put a sellorder it will be gobbled up within the day.
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So yes if you sell everything into the buyorderbook in one go then you get that price, but it will instantly bounce back, and if you put a sellorder it will be gobbled up within the day.
Your other points are all about speculation. The point of this thread is to discuss the difference between using the best price as the value estimator, which assumes there is infinite liquidity and doing all it 'correctly' by considering the volume at each price level.
Your claims about the the behavior of the orderbook, 'bouncing back' depend heavily on the liquidity and resilience of the orderbook in the market in question. BTS is a very illiquid market, so I wouldn't expect the behavior you're claiming to be true in practice.
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In practice if you go 10% down on the orderbook at BTC38 and BTER you can sell BTS for 100 BTC. So if 20 100% delegates decide to cash our their monthly earnings in one instant they go 10% below price.
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In practice if you go 10% down on the orderbook at BTC38 and BTER you can sell BTS for 100 BTC. So if 20 100% delegates decide to cash our their monthly earnings in one instant they go 10% below price.
Last time I checked on BTER, the entire buy side orderbook for BTS/BTC was only ~40 BTC deep. Looking at BTC38, the situation isn't much different.
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I also counted the 80BTC+ at BTS/CNY at BTC38. I am counting 20 BTC at BTER now, and 18 BTC at BTS/BTC at BTC38. All within 10%.
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I also counted the 80BTC+ at BTS/CNY at BTC38. I am counting 20 BTC at BTER now, and 18 BTC at BTS/BTC at BTC38. All within 10%.
Ok, so if you cash out using every exchange possible and in every currency possible and somehow all manage to get this into USD (we didn't even consider the slippage going from BTC->USD), maybe you can do so within 10% of the best price. For 20, 100% delegates.
But it isn't going to be easy, by any definition. The whole point of this thread is to get people to realise that best price valuations are misleading at best, and meaningless at worst.
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You are right and it is more valuable to think of it in terms of how much direct buying pressure you need to have to sustain the price (roughly income = expenses). If BTS doesn't have real income then it depends on continuous positive speculation until it is profitable. Brutal =[
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(http://i.imgur.com/XJCZKt6.jpg?)
Now I have coffee all over my keyboard :P.