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As long as you don't want to short you can buy and sell at the price of BTSX denominated in dollars by clicking the little circle arrows just to the right of the BitUSD : BTSX at the top of the USD market page.
wow,cool!!
As long as you don't want to short you can buy and sell at the price of BTSX denominated in dollars by clicking the little circle arrows just to the right of the BitUSD : BTSX at the top of the USD market page.
That was my first impression also, but then I realized that 23 is very helpful when you're thinking about going long or short. You go short when you think the price is going down, long when the price is going up - which would be backwards if we used 0.04. It really needs to be 23.
However, I do think we need to display the implied USD/BTSX price somewhere on the screen. I think both representations should always be displayed, despite the redundancy.
It may be only me but I find that the quote BTSX BITUSD of 23 instead of bitusd BTSX 0.043478 is very confusing...
I am used to see the prices from coinmarketcap or take the BTC price on the exchanges and multiply it by the BTCUSD price. Now I have to divide things and think the opposite way...
Is there a possibility we may change this? Do others feel the same way or it is just me?
I've just been playing with the new functionality making small test orders, and I am quite confused how it actually works.
I started off by shorting USD.
I couldn't see this left as an open position anywhere with information about collatoral and margin requirement, but I had thought the idea was I then needed to buy USD to cancel out this 'loan', so I bought the same amount of USD. But those USD were just added to my balance - so what happened to the loan? Do I still need to repay USD at some point, and if so when?
I was looking for more details than that. Do I just post an arbitrary number I come up with?
the point of a feed is to give the market a starting point from which people can buy/sell. You can use:
http://coinmarketcap.com/currencies/bitshares-x/#markets
as a guide. Someone has already posted a python script that checks and posts a new feed if the value changed by 5% since the last update.
as of this second, a valid feed could be
wallet_publish_price_feed <delegate_account> 0.035645 USD
Thanks,
Still confused about the validity of the feeds then. The price is extremely volatile right now and has moved near 100% in one day. A manually entered price feed could be obsolete within minutes of posting.
I found this from coinmarketcap.com :http://coinmarketcap-nexuist.rhcloud.com/api/btsx/price but I would have no idea how to implement it other than manually typing it into the console.
How would I implement the script? Is it something we can download and type in the console? Or does it have to be built in?
And is it made by I3 or Bitshares? In other words, is it safe?
I don't claim to understand all this stuff but the idea of a manually entered feed that is only updated once a day seems risky/scary. TBH why would we want to trust the delegates over say Forex with a script that checks and updates a feed ever 5 mins(the more the better to be honest). If we want to get the attention of large money I think the are going to want accurate pegging. When talking to others the term holographic peg seams to be a accurate description of what you describe. How can this be good?
Now that I am at a keyboard I can go into a tad more detail. When Bob wants to get his collateral back, he must buy USD using OTHER BTSX. Then once he has USD he can pay off his loan and get 100% of the collateral back. This was a simplifying implementation because in theory it would be legit to use the collateral. I like to think of this as a Hard & Soft collateral requirement. Hard collateral cannot be touched. Soft collateral is not "required" but is generally wise for a user to keep around.
In the event that price goes against the short, then the Hard collateral is used.
OK, I understand. Soft and Hard collateral distinction is now clear to me.
But what happens to the btsx that originally belonged to Alice? (I called it "the frozen btsx" in the text). Where does it go when Bob whats to exit by covering manually? It surely does not belong to Alice because she already sold it and it does not belong to Bob because he never paid for it. I thought that for the duration of the deal between Bob and Alice the system itself owns it and the system will use it to buy back the bitUSD when the deal is over.
It goes to Bob. At the time of the original deal between A&B they each put in "$100" of value in the form of BTSX. Alice received $100 BitUSD and bob received "$200 of BTSX" which was placed in collateral. The $200 belongs to bob only if hey pays off $100 BitUSD.
I'm not comfortable to publish the feed just yet. Waiting for the latest fixes to be released....We might as well give it a go... whats the worst that can happen?
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AFAIK .. in the long run .. price feeds will be unecessary .. because then the price feed will be build from the 24h moving average ..
Our spaceship to moon just needs an initial ignition
Here is my take on the concept of Bitshares X. I hope it can be useful for those who are still a bit confused. If I got something wrong please let me know so I'll edit and fix it.
First a few definitions to avoid ambiguity:
1. "Bitshares X" is a Decentralized Autonomous Company (DAC). Bitshares X being a DAC is not crucial here so if you are not familiar with the concept of DACs then for now you can think of it as a money payment business similar to PayPal or Visa.
2. "btsx" is a share in the Bitshares X business. You could think of it as a currency unit but for now it is easier to think of it as a share in a business.
3. "bitUSD" is a concept that does not have a direct analogy in the current financial system so it might be a bit difficult to grasp at first. bitUSD is an asset that represents as many btsx as there are needed to be worth one USD. So if the current market price of btsx is 0.028 USD per btsx then one bitUSD represents 35.71 btsx (=1/0.028). If the price moved to 0.050 USD per btsx then one bitUSD would represent 20.00 btsx and so on.
The primary purpose of the Bitshares X system is the ability to generate bitUSD (and other similar assets like bitEUR, bitGold etc). bitUSD is useful because (by definition) it has the same purchasing power as fiat USD and at the same time is as easily transferable as bitcoin.
So how can bitUSD come into existence? In essence by matching into pairs two kinds of people:
- those who prefer stability (i.e. they prefer avoiding losses even if it means the possibility of renouncing gains)
- and those who prefer the risk (i.e. they prefer to have the chance to earn profits even if it means the risk of incurring losses).
As we will see in the next section the side effect of this matching happens to be our primary purpose: the bitUSD.
Imagine two people: Alice and Bob. Each of them owns a balance in btsx (in other words both have a long position in btsx). And for both of them the base currency is USD (which means they have bought their btsx with USD and their main concern is valuation of btsx in terms of USD).
Let's assume that Alice prefers stability and is worried that the value of her btsx [relative to USD] might fall soon and she would like to hedge against it: she wants the value of her btsx [relative to USD] to be maintained in case the market price of btsx falls. In other words she would like to hedge her long position in btsx.
Bob has the opposite view: he is confident that market price of btsx will rise soon and he would like to take advantage of his prediction: he wishes he had more btsx than he already has so that he could profit from the predicted price rise even more. In other words he would like to leverage his long position in btsx.
If btsx was a standard crypto-currency Alice in order to execute her hedge would have to sell all of her btsx and keep her wealth in USD for a while (at least until she decides the danger of btsx falling further in value [relative to USD] is over and it's safe to convert her wealth back into btsx).
Also, if btsx was a standard crypto-currency Bob in order to take advantage of his prediction would have to borrow USD (or in some other way get USD funds) and buy the extra btsx to increase the amount of btsx he already has and then he would have to hold this increased amount of btsx for a while (at least until he decides his prediction of btsx rising further in value [relative to USD] is no longer valid and then to reduce his btsx holding to its original size and sell the extra btsx to pay back his USD debt).
But maybe there is a smarter way to do this. Consider this:
Let's assume Alice finds Bob and says "Hey, Bob, I know you like the risk so here are my btsx, please take care of them. I don't care how many btsx will be left when I come to get them back. All I care is that they maintain their value in the future as it is now."
And Bob says: "That's fine, I'll be glad to do that. So I am taking your btsx and here is a receipt you need to show me in the future to claim your btsx back. I cannot promise how many btsx will be left but I can promise that their dollar value will be as it is today."
Both parties should be happy to make a deal because this way they both get what they initially wanted: Alice is hedged in case the market price goes down and Bob is able to keep the profits from Alice's btsx in case the market price goes up. Obviously the opposite is also true: Alice will have to give up any gains on her btsx in case the market price goes up and Bob will have to cover (using his own btsx) Alice's loss in valuation on btsx in case the market price goes down.
And here comes the final trick: we can see that Alice's part of the deal with Bob has a constant revaluation in terms of USD so we can package it as a separate asset and call it "bitUSD". What's more, we can make it transferable to other people - this is possible as from Bob's perspective it doesn't really matter who the counter-party is, all he really cares for is that his part of the deal is unchanged.
So how can the above relationship be implemented inside Bitshares X? Let's try to translate it into more financial terms:
1. Alice's and Bob's complementary needs are matched together by the system inside Bitshares X. This can be easily done through the standard bid/ask matching.
2. Alice converts her btsx into bitUSD. In other words she goes long bitUSD and short btsx. We can also say she sells her btsx for bitUSD. Now she is free to do with her bitUSD whatever she wants: she can keep it or sell it (for fiat USD or btsx) to anyone who is willing to buy. This way bitUSD is released into the world.
3. The amount of btsx received from Alice gets "frozen" inside the system and now we need Bob to take care of its value. By taking up this role Bob becomes the actual issuer of the bitUSD that Alice has released into the world. We can say he goes short bitUSD and long btsx.
4. To perform his part of the deal, inside the Bitshares X system Bob enters a long position in a futures contract for the amount of the "frozen" btsx (the short position in this contract is taken by the system itself). The futures contract refers to the market price of btsx. Bob will be using his own btsx as a means to cover any losses in case the market price goes against him (i.e. it goes down).5. Bob just like Alice can easily free himself from the deal but in a slightly different way than Alice. To terminate his part of the deal he needs to buy on the market the same amount of bitUSD that he has issued and once he does that two things happen simultaneously:
- the futures contract is terminated (with Bob forced to accept any losses or profits resulting from the contract)
- Bob's short and long position on bitUSD cancels out and this amount of bitUSD ceases to exist
EDIT: I now think the final section would be more precise with this modification:
5. Bob just like Alice can easily free himself from the deal but in a slightly different way than Alice. To terminate his part of the deal Bob communicates his will to the Bitshares X system and as a result the following things happen simultaneously:
- The futures contract is terminated with Bob forced to accept any losses or profits resulting from the contract.
- The "frozen" btsx is used by the system to buy for Bob on the market the same amount of bitUSD that has been initially issued by him. The important thing is that it does not need to be "the same" bitUSD he has issued: it can be any bitUSD existing in circulation.
- As a result Bob has now both long and short position in bitUSD. Bob's short and long position in bitUSD cancel out and this amount of bitUSD ceases to exist.
6. In case things go wrong for Bob and he gets close to running out of his own btsx to support the futures contract the system automatically terminates the contract for him as described in 5.
I'm starting to see how BitUSD could maintain it's expected market peg to USD within the BitShares system but I'm also starting to think about how one would spend either BitUSD or USD as one still needs to these days until people and organization directly accept BitUSD in place of fiat USD. So, it seems to me that for me to pay my mortage if I am holding in BitUSD it would be:
BitUSD->BTSX->Bter Exchange->BTC->Coinbase->Bank Account->Mortgage Company
which is still too unnecessarily convoluted. What is the Ideal? BitUSD->Mortgage Company ??
Yes
What is realistic? BitUSD-> CoinBase ->Bank Account->Mortgage Company ?
Yes, as in CoinBase or somebody else.
