BitShares Forum

Main => Technical Support => Topic started by: MarketingMonk on November 30, 2015, 11:08:55 pm

Title: bitUSD Being Pegged to the USD Is A Bad Thing Because...
Post by: MarketingMonk on November 30, 2015, 11:08:55 pm
If a bitUSD always equals 1 USD, what happens when the purchasing power of the 1 USD declines?

What if inflation stays around 2% per year?
What happens if the USD experiences hyperinflation?

Don't dollar pegged assets like bitUSD automatically inherit these problems?
Title: Re: bitUSD Being Pegged to the USD Is A Bad Thing Because...
Post by: yvv on November 30, 2015, 11:15:46 pm
Market pegged assets are supposed to follow the index of underlying asset regardless if it goes up or down. It is their essential property.
Title: Re: bitUSD Being Pegged to the USD Is A Bad Thing Because...
Post by: lil_jay890 on November 30, 2015, 11:17:56 pm
Quote from: MarketingMonk on November 30, 2015, 11:08:55 pm
If a bitUSD always equals 1 USD, what happens when the purchasing power of the 1 USD declines?

What if inflation stays around 2% per year?
What happens if the USD experiences hyperinflation?

Don't dollar pegged assets like bitUSD automatically inherit these problems?

Yep they do since they will always be closely correlated to the underlying asset (USD).

If hyperinflation hits, your bts will be worth many more bitusd hence worth many more dollars.  That's trading and the beauty of bitassets.

If your afraid of losing value during hyperinflation but also don't want to be exposed to bts but still want a decentralized investment, buy bitgold or bitsilver.
Title: Re: bitUSD Being Pegged to the USD Is A Bad Thing Because...
Post by: yvv on November 30, 2015, 11:25:58 pm
bitGold and bitSilver are much more risky investments right now than bitUSD, since liquidity is tiny.
Title: Re: bitUSD Being Pegged to the USD Is A Bad Thing Because...
Post by: xeroc on December 01, 2015, 10:34:54 am
We could create a new market pegged asset that tracks the SDR (Special Drawing Rights) ... @Rune is doing this with his dai on ethereum and I like the idea of tracking a basket of several currencies (btw .. CNY just recently became part of this basket)
Title: Re: bitUSD Being Pegged to the USD Is A Bad Thing Because...
Post by: karnal on December 01, 2015, 07:37:44 pm
Quote from: xeroc on December 01, 2015, 10:34:54 am
We could create a new market pegged asset that tracks the SDR (Special Drawing Rights) ... @Rune is doing this with his dai on ethereum and I like the idea of tracking a basket of several currencies (btw .. CNY just recently became part of this basket)

Vaguely related, but any updates on bitNASDAQ, bitNYSE, bitSP500 etc?

10/10 would invest in bitUSD:SP500
Title: Re: bitUSD Being Pegged to the USD Is A Bad Thing Because...
Post by: xeroc on December 01, 2015, 08:06:09 pm
We should reinitiate the discussion about how to run the NASDAQ, SHANGHAI , NIKKEI etc .. indeces ..
Title: Re: bitUSD Being Pegged to the USD Is A Bad Thing Because...
Post by: MarketingMonk on December 01, 2015, 09:17:54 pm
Thanks for the clarification fellas.
Title: Re: bitUSD Being Pegged to the USD Is A Bad Thing Because...
Post by: fuzzy on December 04, 2015, 10:01:34 am
Fistbumps for people who just seem to like helping new community members understand...and community members who are not afraid to ask.  Hell yeh.  Hell yeh.   8)

#sharebits "MarketingMonk" 1 FISTBUMP
#sharebits "yvv" 1 FISTBUMP
#sharebits "lil_jay890" 1 FISTBUMP
#sharebits "xeroc" 1 FISTBUMP   
#sharebits "karnal" 1 FISTBUMP
Title: Re: bitUSD Being Pegged to the USD Is A Bad Thing Because...
Post by: btstip on December 04, 2015, 10:02:52 am
Hey fuzzy, here are the results of your tips...
Curious about ShareBits? Visit us at http://sharebits.io and start tipping BTS on https://bitsharestalk.org/ today!
Source: https://bitsharestalk.org/index.php/topic,20363.msg263407/topicseen.html#msg263407
Created by hybridd (https://bitsharestalk.org/index.php?action=profile;u=40140)