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Messages - monsterer

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1681
General Discussion / Re: Upgrading bitcoin
« on: November 18, 2014, 12:55:23 pm »
Quote from: Rune on November 18, 2014, 12:24:18 pm
It's as simple as paying 51% of them more than their current expected return. Using incentive structures that abuse the tragedy of the commons inherent in POW mining can reduce the price even further.

You can't pay them without 51% of them simultaneously agreeing to accept the payment. That is the key failure mode of this idea.

1682
General Discussion / Re: 100% delegate pay in USD could be $200/month due to slippage
« on: November 18, 2014, 12:50:57 pm »
Quote from: CLains on November 18, 2014, 10:23:04 am
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.

1683
General Discussion / Re: Should I even consider running a 100% pay delegate.
« on: November 18, 2014, 10:25:33 am »
Quote from: CLains on November 18, 2014, 10:14:53 am
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 illliquid markets.

edit: spell checking overrode meaning

1684
General Discussion / Re: Should I even consider running a 100% pay delegate.
« on: November 18, 2014, 09:56:37 am »
Quote from: CLains on November 17, 2014, 10:29:43 am
Was 100% Delegate pay 50 BTS per block? At 10 seconds block, that is 6 blocks per minute. 6*60 per hour, 6*60*24 per day, 6*60*24*30=259200 BTS per month. So pay is 50 BTS per block, times 259200 = 12 960 000 BTS. Then we divide this by 101? To get 128316 BTS a month per Delegate.

Delegate Income per month at 100% for different market caps:

$2279 at 35 million, (low-pay fulltime job)
$4558 at 70 million,
$6837 at 105 million, (high-pay fulltime job)
$22790 at 350 million,
$45580 at 700 million,  (3 high pay employees + $250k expenses a year)
$683700 at 10.5 billion..

Very possible I made some error here. Just trying to get an overview.

The error is with market depth. You can't just take the best price of BTS in USD and do a straight multiply - that gives you the very best possible case. Reality is that market depth means you could be looking at $200/month at 35 million - this is the very worse case.

Somewhere between $200 and $2279 per month at 35 million is the correct way to look at this.

1685
General Discussion / Re: Upgrading bitcoin
« on: November 18, 2014, 09:31:35 am »
This idea is madness. How much money do you think the bitcoin miners have invested in their warehouses of liquid-cooled, custom built racks of ASIC mining equipment, which are specifically designed to solve SHA256 hashes?

You seriously expect 51% of the mining power, with all that investment to all simultaneously agree to throw their existing tried and tested business model, equipment and infrastructure away on the promise of some untried, untested idea?

1686
General Discussion / Re: 100% delegate pay in USD could be $200/month due to slippage
« on: November 17, 2014, 10:16:24 pm »
Quote from: Ander on November 17, 2014, 09:20:50 pm
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. :)

1687
General Discussion / Re: Neolithically simple alternative bitasset peg
« on: November 17, 2014, 10:11:20 pm »
Quote from: bytemaster on November 17, 2014, 09:39:17 pm
So this means a variable spread based upon redemption demand.   If only $1 BitUSD is demanded you can do it at the feed.  If $1 Million BitUSD is demanded it will have to be at a steep premium. 

So if you can identify the proper function for adjusting the price relative to liquidity demands then you can emulate what the market is already doing today....

These are excellent points. There is undoubtedly a proper function for this, I think that's what the famous Kyle market maker paper was written about http://people.stern.nyu.edu/lpederse/courses/LAP/papers/Information,Fundamental/Kyle85.pdf.

The thing is, this plan is scuppered if the price is permanently altered away from the feed after just such a massive order (just as it would be in a free market). I'm not sure if that would be a requirement, or whether the risk associated with filling the order is completely covered by the fact that the spread changes as the volume in the order is consumed by the system.

edit: I.e. does it elastically snap back to what it was pre-order.

1688
General Discussion / Re: 100% delegate pay in USD could be $200/month due to slippage
« on: November 17, 2014, 08:25:07 pm »
Quote from: Ander on November 17, 2014, 08:20:50 pm
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.

1689
General Discussion / Re: 100% delegate pay in USD could be $200/month due to slippage
« on: November 17, 2014, 08:22:06 pm »
Quote from: pollux on November 17, 2014, 08:17:12 pm
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.

1690
General Discussion / Re: Neolithically simple alternative bitasset peg
« on: November 17, 2014, 07:37:56 pm »
Quote from: xeroc on November 17, 2014, 07:05:51 pm
the issuers are then the 101 delegates as they publish the price feeds .. is that desired?

Well, I don't think the trust requirement is any different than it is now since the price feed still controls everything either way?

1691
General Discussion / Neolithically simple alternative bitasset peg
« on: November 17, 2014, 06:51:49 pm »
The current bitasset pegging system is so fantastically complex because the assets are traded on a free market, which can be manipulated by any other market participants.

A neolithically simple alternative way to peg a bit asset to an external price would be to remove the other participants from the equation.

Create a different class of asset, which can only be bought and sold by the issuer. The issuer maintains a buy and sell price with a spread which takes into account adverse selection costs.

Issues:

100% trust is required of the issuer. Trust that they don't sell you the asset and then raise their buy price to $1M USD. Trust that they have enough liquidity to cope with adverse selection costs, so they're able to buy back the assets they sold you after the price goes up.

Now, take that idea and make the blockchain the issuer.

You then gain 100% transparency on the algorithm controlling the prices. You'd be able to see the 'balance' of the blockchain in advance to be sure it has liquidity reserves.

In addition, bitshares is ideally placed to implement this idea, since the necessary price feeds are already a fundamental component.

The only real remaining issue is designing the algorithm to set the bid/ask prices - perhaps something like the kalman filter (http://www.r-bloggers.com/the-kalman-filter-for-financial-time-series/) could be used over the feed data.

Thoughts?

1692
DAC PLAY / Re: BitShares PLAY articles
« on: November 17, 2014, 04:12:17 pm »
These are all in chinese - was that your intent?

1693
General Discussion / Re: 100% delegate pay in USD could be $200/month due to slippage
« on: November 17, 2014, 03:04:33 pm »
Quote from: kokojie on November 17, 2014, 02:38:41 pm
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.

1694
General Discussion / Re: 100% delegate pay in USD could be $200/month due to slippage
« on: November 17, 2014, 01:25:54 pm »
Quote from: abit on November 17, 2014, 01:15:14 pm
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.

1695
General Discussion / Re: 100% delegate pay in USD could be $200/month due to slippage
« on: November 17, 2014, 12:52:16 pm »
Quote from: abit on November 17, 2014, 12:26:24 pm
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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