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With the recent news from the bunker, XPB - PebbleCoin might become the first sidechain of BitShares as they are already using DPOS !
BlockchainBunker - Uniting the World one Blockchain at a Time.
I feel this summer is going to be epic!
;p
First + 1 + 1 + 1 for going ahead with this.
I definitely think you should use bitBTC as collateral. This also means btc should not be part of the index. [Using bitUSD is the only thing better but you will just not find people (in crypto space) believing that all/top crypto will go down against fiat, so no shorters..]
Why bitBTC :
- it is easy to bet on BTC as it is- you just hold btc. And 99.9% of the people already hold btc before even coming into BTS.
- you will have much more people interested in betting on top 20 cryptos against BTC (as opposed to against BTS)
- for the shorters - being short the index against BTS as easy as pie - you short bitBTC to yourself and use the bitBTC to short the bitTop20
I am absolutely positive going with BTS as collateral will be a big mistake. Drop me PM if you do not understand/want me to expand on the reasoning above.
When you create a smartcoin you can choose the collateral asset .. and by this you also choose a base market .. e.g. USD:BTS (BTS is collateral)
Any price in markets are actually relations between 2 assets. Gold price is denoted in USD or EUR (two assets). BTS price is denoted in BTC (two prices).
Now people shorting speculate on the USD/BTS price to go down .. e.g. BTS to worth more USD. .. or USD being worth less BTS. Then they buy back and make a profit.
This you can do with an index as well .. if the TOP10 index has BTS as collateral, then you speculate the BTS price against the price of all top10 coins .. e.g. the BTS asset to climb in the list of top10 assets.
If the smartcoin had bitUSD as collateral .. then you would speculate on the USD nomination of the top10 index to go up or down (pretty much like the number at the very top of coinmarketcap.com)
So there will CERTAINLY be people shorting it ... if they only knew about it!
So... Basically the collateral asset has to be something that many people believe it will be more valuable than the smartcoin it's backing. Otherwise there won't be enough incentive to borrow the smartcoin into existence.
If CRYPTO10 is backed with USD, it means that there has to be lots of people (or at least a few who are rich and willing to invest in this market) who think that the cryptoindex will lose value against dollar. Not very likely. So there is no incentive to create more CRYPTO10, because the creator has to be adding more collateral every now and then so that he won't get margin called or force settled.
If CRYPTO10 is backed with BTS, it means that there has to be people who believe that BTS price will rise faster than the index. This is certainly possible because we have lots of Bitshares believers in the forum and in the DEX, of course.
But if you believe that BTS is good collateral for CRYPTO10, why would you buy it? Wouldn't it be rational to invest only in BTS in this case?
When you are designing smartcoins, it's important to understand the essentials of the market that you are creating:
- What are the incentives for somebody to borrow smartcoins into existence? What kind of beliefs that person has to have for long term? For example, fiat-smartcoins that are backed with BTS have pretty good incentives because there are lot of people who believe that price of BTS will rise in the future, so they can make money by creating fiat-smartcoins and selling them.
- What are the incentives for buyers? For example, if you create a smartcoin for a very inflationary fiatcurrency, you don't necessarily have any markets. Nobody wants to buy it.
I'd like to see speculation on:The way the index is done limit the % (the weight) of the biggest MC. BTC doesn't weight more than 10% in the Bit20 ( index of the 20 top crypto.)
AltCrypto10 (#2 - #11)
Crypto10 (#1 - #10)
I think you will have 2 different markets that have different opinions about adding in Bitcoin.
now let's assume we had a liquid USD .. then you could create that index with USD as collateral .. and really let people speculate on that one number on CMCThanks ! I will !
Shoot me a PM if you want to make this real and need concrete technical assistance!
Lots of persons would put some money in it, even invest part of their bank account fiat money. The index can't hardly go down on the long run. It would be like a hell of a good investment oportunity.In that case, why would someone spend the time and efforts to create a smartcoin if there is no economical incventives ? Pure altruisme is not the strong suit of human beeing ...
Did I understand it well ?
I've been around for some time and still don't really quite understand the mechanics of this and what's at stake.
Am I risking losing money if I borrow some BitCHF for instance?
Or if the closest sell for BitUSD is too far from settlement price, could I make a profit by borrowing some USD and selling it at a fair price?
It just seems a bit like wizardry, the rules are not so clear (or I failed to grasp them) .. maybe the incentives are not set up right.. I don't know.
It would be nice if someone has a nice article/blog post explaining this in a way that a trading noobie could grasp.
Other than that.. this really seems like a good idea, I'd buy 500€ worth of the stuff every month!
Personally I'd say going the Smartcoin way is the best option here. It's better if we dont' have to trust a 3rd party, especially over years .. otherwise it's no better than a brokerage account (well, less fees, but that's it) .. if the broker goes bust, that's it.
In fact, it's worse in this case, because the broker (UIA creator) would be small fish.
We need to take advantage of the Smartcoins.. getting rid of centralization and having to trust a third party was/is one of the big things which Bitshares could/can use to distinguish itself... IMO.
The french texts needs an update, they were made in july. I was thinking to update them and make a first draft in english and look for someone to correct it.We gave it a shot with a friend during these last months. It's a beta web site around two indexes.
"Bit20" is a weighted index of the top 20 crypto. The wieght is done like a classical index as the cac40.
To be able to related to fiat, we also created an index for fiat with the top 10 fiat, the FIAT10.
I'm no sure where I'm going with that but the math and calibration of the indexes are pretty decents.
You can find all the graphs, math and ponderations on the beta website here : http://www.bitsharesfcx.com/bit20/homepage_fr.php
Unfortunately, it's only available in french right now .. even like that, graphs are very cool to watch ;p
Anyone wanting to participate, translate, grow this project is very welcome.
This is pretty cool, You can probably talk to @xeroc and he can help you build a smartcoin for Bit20 ... I know a lot of people would be interested in something like this so I am down if you need any help... I can translate from english to spanish but no french lol
Thanks.We gave it a shot with a friend during these last months. It's a beta web site around two indexes.
"Bit20" is a weighted index of the top 20 crypto. The wieght is done like a classical index as the cac40.
To be able to related to fiat, we also created an index for fiat with the top 10 fiat, the FIAT10.
I'm no sure where I'm going with that but the math and calibration of the indexes are pretty decents.
You can find all the graphs, math and ponderations on the beta website here : http://www.bitsharesfcx.com/bit20/homepage_fr.php
Unfortunately, it's only available in french right now .. even like that, graphs are very cool to watch ;p
Anyone wanting to participate, translate, grow this project is very welcome.
This is so damn cool! I want to keep both bit20 and fiat10 on blockchain.
