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Messages - Empirical1

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General Discussion / Re: Stop Dumping please
« on: August 25, 2014, 02:20:33 am »

60-62 Million CAP, given the BTC price also 0.000061 BTC

(So just a 10-15% gain from where we are now, if BitAssets are on track to start tomorrow)

We're at $68 million and rising. :)

 +5% I'm happy that it's even better than I expected. 

Looking good  8) 

General Discussion / Re: bitUSD price
« on: August 25, 2014, 12:31:46 am »
If any motherfucker dares to short at $0.7 I will eat his collateral like a mama bear eats baby bear hunters

 :) I'll take that to mean I've misunderstood something here and that even if I'm really bullish on BTSX, besides damaging the peg, I shouldn't be willing to short too far below it if there are no longs at BitUSD 1-1

 Edit As an example. I think I'm very bad with this stuff, I may not understand it...

If you think BTSX will double or triple in value in the short term like most of us do, even if you think the peg will come back in line it seems you can short very far below it.

If Mr. B is going long at 0.8 BitUSD selling 10 000 BTSX for $10 000 they will make an easy $2500 profit if the peg comes back in line at 1-1

However by going short at 0.8  I now have the option to buy 10 000 BTSX at a later date for $12 500 worth of BTSX (the cost if the peg comes back in line) But I think the BTSX price will double or triple making those 10 000 BTSX worth $20 000-$30 000 so it's an easy trade to short at 0.8 BitUSD if no-one is willing to go long higher than that.

As I said I've never shorted anything, what am I missing?

General Discussion / Re: bitUSD price
« on: August 25, 2014, 12:18:17 am »
I think lots of people will be willing to short BitUSD, not a lot willing to go long at the start.

Might make BitUSD price trade too far below peg. But this will hurt BTSX price causing the situation to correct itself...

Seems like it may need interest rates if you really want to keep it at 1-1. Because a short may be willing to short BitUSD and pay X% interest to entice a long to trade.

You lost me here...why this will hurt BTSX price? If a lot of people go short bitusd, wouldn't bitusd fall relatively to BTSX price. Therefore BTSX will rise and will be worth more bitsud..

I think a lot of people are hoping BitUSD may track USD fairly close to 1-1 most of the time.

However because people are so bullish on BTSX and shorting BTSX lets you take a leveraged position on BTSX. BTSX bulls may be willing to short still at $0.70, this trading range will be so far from the peg that it could damage the credibility of the peg. This could make people sell BTSX. This will mean less BTSX bulls willing to short below the peg and the situation will correct itself.

I don't mind a BitUSD like that but it might not appeal as much to retailers and savers.

It seems to make it stable you should introduce free market interest rates.
Then you still short 1-1 but when most people are bulls like now you will pay a higher interest rate to short BitUSD as opposed to shorting very far below the peg.

General Discussion / Re: bitUSD price
« on: August 24, 2014, 10:30:09 pm »
I think lots of people will be willing to short BitUSD, not a lot willing to go long at the start.

Might make BitUSD price trade too far below peg. But this will hurt BTSX price causing the situation to correct itself...

Seems like it may need interest rates if you really want to keep it at 1-1. Because a short may be willing to short BitUSD and pay X% interest to entice a long to trade.

I forgot I wrote this here too, I was pretty happy with the little side trade.

I sold in the 0.0080-87 range having bought in the 0.0070-75 range, the rest of the alt-coin market was doing very badly much worse than BTC especially when I sold. So to hold value and gain in BTC terms over that period was really good actually.

Bullish on PTS going forward but not as bullish as on BTSX, so yeah it's probably taking some demand.

Once people understand BitShares better by noticing BitShares X they will want some PTS too, so BitShares X should help PTS in the long run.

General Discussion / Re: Bitshares X underline value
« on: August 24, 2014, 08:30:16 pm »
You missed out that a big part of the expected price rise is due to more people observing how good the dividends are due to all the burned transaction fees from market trading.

I.e. this digital asset combines usefulness (bitUSD) with great economics (dividends).

I understand that about btsX but will bitUSD have the same feature? I mean, will parts of its fees be burned and that process work as paying dividends for bitUSD holders?

No I don't think so. I think the fees will go to an insurance fund in case there is a collateral problem.
(This is good imo. It is better than BTSX being diluted if there is a collateral problem.)

Has this insurance fund proposal been implemented?

All BitUSD fees collected by network are saved and used in the event that a short runs out of collateral.   If the fees are not enough then the fund will go negative and will slowly pay it back over time.

General Discussion / Re: Bitshares X underline value
« on: August 24, 2014, 08:04:33 pm »

The big question now: Why Bitshares X will be worth billions in the future?
Answer: Increased demand to purchase Bitshares X in order to use the "platform" and keep your assets, currencies saved there and have all the benefits that the platform offers.

I would also say because we have first mover advantage and the 'Bitshares with Bytemaster' advantage  :)

Also imo BTSX can be worth billions very quickly once the market is confident the system as a whole works, just by participants anticipating the future demand you have identified.

General Discussion / Re: Cost of Creating an Asset?
« on: August 24, 2014, 06:28:45 pm »
I went to check this out and it seems that the cost of creating an asset is currently about $5000

How can this be?

Fees for creating a new asset: 196,589.0304 BTSX

BTS X is not designed for every user under the sun to issue assets, but instead is trying to focus on larger high-value assets.  BitShares ME will be for everyone else.

 +5% I like this strategy vs. having 10001 $30 user issued assets on the main BTSX blockchain.

General Discussion / Re: Stop Dumping please
« on: August 24, 2014, 03:16:28 pm »

60-62 Million CAP, given the BTC price also 0.000061 BTC

(So just a 10-15% gain from where we are now, if BitAssets are on track to start tomorrow)

General Discussion / Re: Stop Dumping please
« on: August 24, 2014, 02:48:16 pm »
If everything is still on plan for Monday to start BitAssets, I expect the price to rise up to 60-62 in the next 18 hours.
Depending on how well BitAssets function will determine where it goes in the next week or two obv.
If everything is good it can take Litecoin quickly imo.

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 ?? 
What is realistic?  BitUSD-> CoinBase ->Bank Account->Mortgage Company ?
Yes, as in CoinBase or somebody else.
I like it!!  +5%

The cost in fees and time of having to transition via a coinbase initially is why I feel a BitUSD may have a practical value that is 1/2% off a $. (You highlighted earlier in this thread an advantage that may push it the other way though.)

Either way if a BitUSD value is within 1.5% for most they'll be directly interchangeable.
If not I'm still not worried because a BitUSD will still have crushed volatility compared to crypto-currency, so retailers/savers will be a happy to use BitUSD even if it involved a small conversion.
I actually believe a BitUSD will have a practical value of more than 1 USD in the medium term+

How many 5 year old bettors do you know? Just kidding... :)
Or one with knowledge of Nash equilibrium?

True :) I find some of it hard to understand let alone explain.

I also think non-bettors going long BitUSD, (Retailers/Savers etc.) will find a BitUSD has a practical value that could be 1-2% off a USD and it's possible the bettors could adjust slightly to reflect that too, but I didn't want to have to explain that...

The best pretty simple explanation is maybe Bytemaster's from yesterday -

The primary assumption is that there exists a crypto-asset with no counter party and a non-zero value.  IE: bitcoin, Nxt, and BTSX.

The secondary assumption is that the volatility of this asset is within some reasonable range.  200% initial collateral seems to be reasonable, but it could easily be 400% if the volatility called for it.   

Given these assumptions we then assume there are two individuals in the free market that want a "contract for difference".  Contracts for difference are well established and proven and even used in counter party.  One person is given price stability and the other is given leverage.   

If you assume the contract for difference was settled by a 3rd party price feed then it is clear how it would work.   

So given those initial fundamentals we can slowly build up to BitAssets.   The first step is to take the same contract and remove the 3rd party price feed and instead use Nash Equilibrium.  Both parties will want to exit at some point and thus have to agree on a price in the future.  Assuming they were both equally wanting to exit their position the price they would agree at would be the "fair price".   Now clearly if there are only two parties to the trade they may not want to exit at the same time.    So you allow the "long" side to sell his position to others and you allow the "short" side to cover with anyone.   

If someone wants to be a stubborn jerk and not settle then that is fine.... eventually a margin call will be triggered.   The peg will fluctuate as the relative demand for longs vs shorts settling causes the peg to have a settlement premium sufficient to motivate settlement.   

I think it is fairly clear that if there is a price feed from a trusted source that was used to enforce settlement then the system would work to the extent that you could trust the feed.   The hypothesis is that this price feed is irrelevant given a market full of speculators and market makers willing to hold until a short voluntarily covers at a fair market price.

I hope that through this perspective I have shown what the economic incentives are and how the core principles are sound.  All that remains to be seen is whether "market consensus and speculation" is enough to enforce a peg via a "decentralized price feed" or "prediction market" mechanic.  My understanding of game theory and economic incentives tells me this will work, but even if I am wrong I know that price feeds can be used as a "trusted" judge on the "smart contracts for difference".   It is an entirely different game to trust someone to produce a fair feed (or 101 someones) than to trust someone to maintain a vault full of gold.

This is kind of how I explain to gambling people...

Imagine betting on a big soccer match; If the score is 2-0 with 5 minutes to go, there's no way if I gave you the same betting odds for the 2-0 winning team as the 2-0 down team that you'd bet on the losing team right?

From that we can see that betting on the team likely to lose without receiving much better odds is a bad idea. 

With BitUSD everybody has already agreed beforehand the outcome of the 'soccer match' was 1-1. 

As a result it's very hard to move the market too much in another direction, because it's simplicity itself for the majority of bettors to notice if 1BitUSD is moving too far from 1USD.

As an example - If BitUSD was 0.95 to 1 USD, unless you were getting better odds for it to go to 0.9, there's no reason to fight the bettors taking it back to 1-1. It would be like betting for the losing team without being given better odds to do so. So the right move is always to bet in the direction of  1-1. 

Provided you trust the collateral system* to back up the bets, then you can have a lot of confidence the bettors are going to keep 1BitUSD very closely tied to 1USD.

As a result retailers/savers/other can substitute BitUSD for USD if it benefits them to hold/accept an asset mirroring the value of a USD held in a decentralised way.

*The collateral system. Because crypto-currencies are volatile people going short have to post a lot of collateral in the form of BTSX. Additionally as a contingency, fees charged for making bets are directed to an insurance fund. However in practice only an extremely rapid BTSX flash crash of more than 50% would bring any of the insurance fund into play

General Discussion / BTSX Market GUI cosmetics
« on: August 23, 2014, 09:23:43 pm »
I like the GUI when you click onto a trading pair.

When you click on markets though in the wallet you are presented with a long stream of a lot of assets.

It seems like it would be better if the top third of the screen was 'prettier' and had 4/5 Key assets. (Whatever those are, BitUSD, BitCNY, BitBTC, BitGold maybe with a little icon next to each like a gold bar for BitGold.)

The rest can be underneath or accessed via a 'other markets' tab or something.

I presume something like that will come later on as time allows? Or are most happy with the layout atm?

General Discussion / Re: "Bitshares - The Great Satan on the Blockchain"
« on: August 22, 2014, 07:26:03 pm »
Is that the same ChuckOne who was posting in the ethereum Bitshares collaboration thread?

Pretty hysterical if it is :)

Reeks of desperation. They've tried to do a similar full on campaign with Ethereum I think.
Basically anyone that's not NXT is evil :)

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