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Messages - kisa

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181
Technical Support / Re: !!! Stupid Questions Thread !!!
« on: September 26, 2014, 08:19:22 pm »
Another question.

For shorts, is 2 x BTSX collateral planned forever or just to start with? Can this be potentially changed to 0.5 x BTSX collateral in the future as BTSX value gets large and more stable? E.g. transition from 200% reserve to fractional reserve system?

I am trying to understand if the issuance of bitAssets will always be limited to ~1/3 of BTSX market cap... Then generating enough trading fees to support reasonable BTSX P/E might be challenging actually...?

Also contemplating wether bitUSD could potentially become large enough volume for extending credit beyond BTSX market cap...

182
General Discussion / Re: Who let the DOGEs Out?
« on: September 26, 2014, 06:27:29 pm »
Quote from: bytemaster on September 26, 2014, 02:04:50 pm
What does DOGE have that is driving it higher than Nxt?

DOGE has a fun legendary meme out there used by non - tech media crowd. There is no business like show business

183
General Discussion / Re: An open letter to Tonyk
« on: September 26, 2014, 06:15:15 pm »
Bitmarket, your friendly personality has got injured by Tonyk' direct style. Please get over it, you can't be friends with everyone. You are definitely welcome here on forum, just avoid trading insults with people who you don't like, ignore them or just learn from them. The differences might be personal characters, values, upbringing, or cultures. I appreciate Tonyk hints and trying to learn from them without putting any ego at stake... and please don't be afraid asking simple questions - that's important and someone will answer accordingly.

184
General Discussion / Re: yield on bitAssets not enough?
« on: September 25, 2014, 07:58:18 pm »
Quote from: toast on September 25, 2014, 07:37:44 pm
Quote from: kisa0145 on September 25, 2014, 07:31:04 pm
Quote from: toast on September 25, 2014, 06:55:17 pm
Quote from: kisa0145 on September 25, 2014, 06:38:33 pm
Alex hey - I don't care who that is, but about motivation. bot is just fine. I just care that there must be enough buyers at 100% also at times BTSX looks cheap. Otherwise bot won't be able to short at 100% and ther won't be market cap and liquidity of bitSLV. So I am trying to understand who are these buyers at 100% - they are not BTSX bulls and not bitSLV market makers...

The buyers at 100% are the people that want to hold some value as SLV. If there are none there won't be any bitSLV in existence. Seems like you're saying it's bad if there aren't bitSLV in circulation, but why? There's shouldn't be any unless someone wants to hold SLV over BTSX.

If there is no bitSLV in circulation, then where BTSX trading fees are coming from? ^^
We need actively traded bitAssets...

Fees from bitasset trading go into yield, not BTSX income. Though I suppose this could change if the yield is "too high".

Also, if you increase the yield, you are encouraging people to sit on their assets, not trade them. But I guess this is fine, that's what drives BTSX demand as it has to be locked up in collateral when people are sitting on the bitasset.

If having enough liquidity close to the peg does work without increase in yield, and so we get bitAssets issuance to 15-20% of BTSX market cap, then I am more than happy to own BTSX and thankful big time to people who buy bitAssets. :)

185
General Discussion / Re: yield on bitAssets not enough?
« on: September 25, 2014, 07:31:04 pm »
Quote from: toast on September 25, 2014, 06:55:17 pm
Quote from: kisa0145 on September 25, 2014, 06:38:33 pm
Alex hey - I don't care who that is, but about motivation. bot is just fine. I just care that there must be enough buyers at 100% also at times BTSX looks cheap. Otherwise bot won't be able to short at 100% and ther won't be market cap and liquidity of bitSLV. So I am trying to understand who are these buyers at 100% - they are not BTSX bulls and not bitSLV market makers...

The buyers at 100% are the people that want to hold some value as SLV. If there are none there won't be any bitSLV in existence. Seems like you're saying it's bad if there aren't bitSLV in circulation, but why? There's shouldn't be any unless someone wants to hold SLV over BTSX.

If there is no bitSLV in circulation, then where BTSX trading fees are coming from? ^^
We need large market cap, actively traded bitAssets for BTSX to be profitable..

Btw. can the 2 x amount of BTSX collateral for shorts be easily changed to less in the future if BTSX value stabilizes?

186
General Discussion / Re: yield on bitAssets not enough?
« on: September 25, 2014, 06:38:33 pm »
Alex hey - I don't care who that is, but about motivation. bot is just fine. I just care that there must be enough buyers at 100% also at times BTSX looks cheap. Otherwise bot won't be able to short at 100% and ther won't be market cap and liquidity of bitSLV. So I am trying to understand who are these buyers at 100% - they are not BTSX bulls and not bitSLV market makers...

187
General Discussion / Re: yield on bitAssets not enough?
« on: September 25, 2014, 04:34:43 pm »
Quote from: Empirical1.1 on September 25, 2014, 02:31:09 pm
Quote from: kisa0145 on September 25, 2014, 12:38:23 pm
Wrt. diversification I have to disagree as bitAssets don't offer systematic diversification away from BTSX, while BTSX has superior risk/return characteristics...

Yes but there will probably be some profit taking that stays within BTSX. Rather than pay to convert BTSX at an exchange and then pay again to convert to fiat and then incur all the fees I listed above regards moving into silver, I'll find it much more worthwhile to go long BitSLV with some of my profit taking even though it will still have BTSX failure risk.

Not that I've actually properly shorted in practice yet, but in theory I should also be able to say short BitUSD with some of my BTSX while going long say BitSLV with another portion and keep the same overall exposure to BTSX at a time like this when I think the chance of BTSX falling a lot from this CAP is low.

Thanks Empirical appreciate your thoughts! The question I was pointing out to was that the guy who sells you bitSLV most likely BTSX bull and not rushing to cover. So when you decide to sell your bitSLV you need another willing buyer or you create downward pressure on bitSLV peg. Also an arbitrageur who might buy off you slightly below the peg will need a willing buyer closer to the peg. So I am just contemplating, if 5-10% yield will attract enough buyers at any time to ensure mkt depth and liquidity, given that there is likely to be strong interest in max shorting bitAssets. Hopefully as BM said there are enough diverse reasons apart from return for investing into bitSLV... or otherwise, at initial stage at least, shorts might need to share more of their profits with the longs...

188
General Discussion / Re: yield on bitAssets not enough?
« on: September 25, 2014, 12:51:22 pm »
Quote from: bytemaster on September 25, 2014, 12:44:46 pm
Quote from: kisa0145 on September 25, 2014, 12:38:23 pm
Quote from: bytemaster on September 25, 2014, 12:16:05 pm
Diversification...

Once merchants get on board (working on that) then demand for BitUSD to make purchases will be much higher... once the system is stable for a couple of months or more with a solid BitUSD peg then you can see huge demand for BitUSD..

Once on-ramps and off-ramps get easier and the yield has a solid history... watch out.

Not only watching out, Dan! Holding all my breath and looking forward! :) I would even suggest social consensus of investing 20% into bitAssets for all BTSX investors for the start phase. Yes merchants and payments utility probably the answer. Wrt. diversification I have to disagree as bitAssets don't offer systematic diversification away from BTSX, while BTSX has superior risk/return characteristics...

Not everyone is seeking return... many people want to diversify out of the banks with their purchasing power but don't want it exposed to the full volatility.  Others just want to do business.   

 +5%

189
General Discussion / Re: yield on bitAssets not enough?
« on: September 25, 2014, 12:38:23 pm »
Quote from: bytemaster on September 25, 2014, 12:16:05 pm
Diversification...

Once merchants get on board (working on that) then demand for BitUSD to make purchases will be much higher... once the system is stable for a couple of months or more with a solid BitUSD peg then you can see huge demand for BitUSD..

Once on-ramps and off-ramps get easier and the yield has a solid history... watch out.

Not only watching out, Dan! Holding all my breath and looking forward! :) I would even suggest social consensus of investing 20% into bitAssets for all BTSX investors for the start phase. Yes merchants and payments utility probably the answer. Wrt. diversification I have to disagree as bitAssets don't offer systematic diversification away from BTSX, while BTSX has superior risk/return characteristics...

190
General Discussion / Re: yield on bitAssets not enough?
« on: September 25, 2014, 12:02:54 pm »
Agree bitSLV easier to buy and hold than physical.

What probability do you see that you won't find a buyer for your bitSLV at pegged value when you need cash...?

What compensation would you expect for such a risk?

If you think the risk is close to 0, why invest in bitSLV if you can hold BTSX?

Who would then hold bitSLV if not you?

191
General Discussion / Re: BTSX Valuation based upon standard P/E ratio of 20.
« on: September 25, 2014, 09:03:57 am »
Quote from: jsidhu on September 16, 2014, 04:03:43 am
Based on the premise in the OP would the value of BTSX really be 3*bitUSD + 3*bitEUR * 3*bitGLD issued etc etc ?

If someone values BTSX at P/E of 20 means then annually generating 5% of BTSX market cap in trading fees,
which is 15% of bitAssets market cap!

At trading fee of, let' say 0,15% of transaction volume, means that we would need trading volume equal to 100xbitAssets market cap p.a. E.g. 100 times as actively traded as fiat/BTC nowdays... Sorry not learnt yet / not sure what trading fee assumption is more realistic...

192
General Discussion / yield on bitAssets not enough?
« on: September 25, 2014, 07:30:48 am »
This night I was thinking about 10% yield once again.

Why should Sally invest in bitUSD or bitGLD? Effectively, she is lending USD to the startup exchange at 10% interest. Will she get her money back? Well, that depends on whether the peg holds and bitAsset market stays liquid. For the peg to hold and stay liquid systematically, we need enough bitUSD or bitGLD longs at ANY point in time, not only when "BTSX looks overvalued". Imho we need some 10-15% of BTSX market cap to be invested in bitAssets longs so that there is little downward or illiquidity pressure on respective pegs.

So, many Sallys would ask, why should I systematically hold bitUSD if I believe that the peg will hold and stay liquid? Then I better invest in BTSX for 10000% prospective yield... Wait, at least until we have enough depth and become established, well known and trusted bank, there is a substantial risk that pegs won't always work as planned. But then Sallys need better compensation for such risk than 10% yield. Perhaps some 20-30% participation in shorts profits sounds rather fair.

I might be overlooking something, and let's say payments utility might help to increase bitUSD long holdings. But I sense that either each larger BTSX investor should be "expected" to exchange 15% of his holdings into bitAssets for the sake of their liquidity and peg stability. Or the compensation for bitAssets longs should become proportional to the risk of peg future disruption/illiquidity and opportunity cost of missing on BTSX rally. Otherwise sounds like BTSX investors looking for people who enable their prospective 10000% return for 10% yield with uncertain payback.

Note - bitAssets don't offer systematic diversification from BTSX business model risk. Yes, you can diversify short term price risk, but that doesn't create reason for critical mass of longs at all times...

So my intuition tells me that we will likely see deficit of bitAssets longs going forward... someone else concerned?

193
General Discussion / Re: The Boston Federal Reserve, agreeds with BitShares on analysis of Bitcoin
« on: September 21, 2014, 09:22:23 pm »
Quote from: James212 on September 18, 2014, 03:51:51 pm
The wall Street Journal also posted the story yesterday. 

http://blogs.wsj.com/moneybeat/2014/09/17/bitbeat-boston-fed-sees-bitcoin-flaws-but-cryptocurrency-potential/

Paragraphs 5,6,7 are most interesting regarding their negative opinion on mining and the conclusion that in there opinion Bitcoin "will probably not survive in the long run" due to this issue. (is that why bitcoin is going down??)

thanks for pointing out the articles! i don't think this is the reason behind current BTC weakness. "as originally designed, and especially its associated digital currency, will probably not survive in the long run." also BM pointed out repeatedly at PoW flaws. BTC devs have some time yet to react to the weaknesses, and who knows there might be other developments helping BTC in the short or medium term, while "in the long run we are all dead". still, Boston FED research sounds even more encouraging for Ripple and Bitshares!

194
General Discussion / Re: Ripple has overtaken Litecoin
« on: September 17, 2014, 02:21:44 pm »
Quote from: luckybit on September 17, 2014, 01:22:53 pm
Quote from: tbkmcjl on September 17, 2014, 05:34:04 am
Quote from: jwiz168 on September 17, 2014, 04:04:01 am
When will btsx does this feat? Once investors have a clear path to different BitAssets available in X , it will be a helluva ride. :)

ripple can easily overtake BTC if it changes its supply again....

Exactly. Ripple has 99 billion units.

well, not quite as big as BTC... at current valuation even with the whole supply 100bn x 0.0054 USD = 500m USD

recent XRP rally (+10-12% and decent volume 1m USD per day) mainly due to the news of cooperation between RippleLabs and City National Bank (50th biggest in the US). Also the mickey mouse Fidor bank of Gemany making some progress with Ripple integration.

195
General Discussion / Re: bitBTC price
« on: September 15, 2014, 10:08:58 pm »
Quote from: bitsharesrussia on September 15, 2014, 05:09:21 pm
Quote from: jsidhu on September 15, 2014, 05:04:32 pm
btc38 looks really heavy... big short orders... waiting for big bulls to come and eat the bears up and bears to switch back to long. I expect the low to be here somewhere. Maybe in 4-5 hours we might see a bump up.

i was on about the bitBTC price on the platform - why is it way below what it should be? (but thanks for the TA anywas  :D )

1 - its early days and little liquidity in bitBTC, arbitrage is difficult to execute in reasonable volume.
2 - current BTSX market participants are rather BTSX bulls, and prefer short bitBTC position, pushing bitBTC below BTC peg.
3 - the search for an appropriate level interest on bitAssets holdings to ensure sufficient demand is continuing

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