Author Topic: Let's peg stock market indices: S&P, Dow, Nasdaq  (Read 12897 times)

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Offline xeroc

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merockstar

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It wont happen. Many people here will cite how it will upset regulators and cause negative publicity.

I don't recall hearing objections to this, but it will certainly happen.

Either in BTSX once we have sufficient cap/depth, or in a 3rd party clone.

Weeks ago I suggested something similar to this and someone freaked out about the SEC and the risk.

I hope we can do it ASAP though. We need at least one stock index to trade. If we want to lower the risk then pick something from a country other than the USA since a lot of US delegates seem to be freaking out. Go with the London stock exchange instead.

Hmmm. Now that you mention it, maybe it would be to our advantage to select only delegates from "safe" countries. I'm really glad we got into discussing this Luckybit (in the cannabis thread), it's really opening me up to the massive potential of BTSX. If we don't issue in-demand but controversial assets, I'm willing to bet someone will fork the exchange and do it with or without us.

theres a cannabis thread??? i belong there.

Offline Mysto

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The BTC-e crowd is full of traders switching positions on their crypto-currencies. Certainly there are some stubborn people who believe in "one crypto" but what evidence is there that this reflects the average exchange user? We could get the BTC-e crowd to a platform like this with a lot less initial convincing than fiat users in my view. They are already comfortable in this crypto-environment. We are not trying to convert them to BTS, BitUSD or anything else. We are merely offering a decentralised exchange service.
The challenge I think might be finding shorts willing to 'borrow' in these cryptos that can often go anywhere.

Last time BTC-e added a coin was in I think February of this year. I highly doubt they will add BTS unless we get really close to or pass BTC. It seems a lot of exchanges have stopped adding new coins and it doesn't look like that will change anytime soon.

Offline starspirit

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What if we peg crypto currencies instead? Promoting other cryptos? Keep an open mind for a moment...

The primary community likely to be first movers in the space we are currently operating in are crypto-enthusiasts. I think it might pay better initially to focus on what these people love, rather than trying to attract more distant users we do not understand well into the space through BitUSD. This will happen in time, but expand from the initial community first by giving them what they demand. I learnt this concept from the first video at this thread... https://bitsharestalk.org/index.php?topic=10178.0.

So once we get the current pegged assets, including BitBTC, working successfully with a tight peg and good liquidity for sellers, I'm wondering if pegged cryptos is a more fruitful path in the short term, appealing to the community right on our doorstep, instead of trying to convince a community of gold-enthusiasts, stock-traders, currency traders, merchants etc that they should be doing something very different to what they are used to.

If we offered pegged crypto-currencies to what is currently almost a $6bn market cap industry, the benefits offered to the crypto community are:

1) they can trade major crypto-currencies (any we choose to peg) in the same way as they do on other exchanges
2) there is no counterparty risk (no GOX moment)
3) they only have to deal with a single wallet to trade all of their cryptos
4) with the 30 day short expiry rule, there may also be more liquidity available than on other exchanges (as long as shorts are willing to issue)

This is a combination of features the crypto community has been absolutely clamouring for since the Gox insolvency if only they could get it. One might argue that adding a broad set of cryptos could dilute interest in (proposed) BTS. But on the contrary, it might introduce them to BTS, and when they see BTS outperforming their other cryptos, that will be a positive. Also no SEC risks...

I'm not a technical expert in this field, so I might be missing a lot of problems. But some possible difficulties I've thought of so far:

 - how do you get a reasonable price feed if the BTS exchange draws interest and liquidity away from other exchanges
 - how do you encourage shorts to offer the supply (they are the issuers) because they take on risk of volatile 'borrowing' sources that they may not find desirable in supporting each market.

Has this been proposed before? Thoughts?
I disagree. I think a lot of the crypto-world (specifically bitcoiners) are stubborn. We should go after people who don't worship their currency (i.e. fiat users). The crypto world will follow once we pass bitcoin in market cap.
The BTC-e crowd is full of traders switching positions on their crypto-currencies. Certainly there are some stubborn people who believe in "one crypto" but what evidence is there that this reflects the average exchange user? We could get the BTC-e crowd to a platform like this with a lot less initial convincing than fiat users in my view. They are already comfortable in this crypto-environment. We are not trying to convert them to BTS, BitUSD or anything else. We are merely offering a decentralised exchange service.
The challenge I think might be finding shorts willing to 'borrow' in these cryptos that can often go anywhere.

Offline Method-X

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If you're a delegate getting paid by Bitshares X and the SEC takes you to court then Bitshares X shareholders could vote on having additional dilution in order to fund legal defense. In my opinion a legal defense fund should be set aside to protect against this black swan event and the DAC itself could set money aside and additionally delegates themselves if they make enough money could set $100,000 aside for the SEC/IRS just in case they get harassed.

When delegates are making enough money they should start keeping an emergency fund. I think most people would vote for a delegate who kept an emergency fund, at least I know I would. I don't think this would effect the DAC very much though, it would just adapt. It is not necessary for the DAC to actually set aside funds or start DCI for this case at least.

Yeah wouldn't it make more sense to fire the delegate and vote in a new one? The community at large should raise funds for a legal defense if they choose. Share dilution should not be considered for this purpose.

Offline Mysto

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What if we peg crypto currencies instead? Promoting other cryptos? Keep an open mind for a moment...

The primary community likely to be first movers in the space we are currently operating in are crypto-enthusiasts. I think it might pay better initially to focus on what these people love, rather than trying to attract more distant users we do not understand well into the space through BitUSD. This will happen in time, but expand from the initial community first by giving them what they demand. I learnt this concept from the first video at this thread... https://bitsharestalk.org/index.php?topic=10178.0.

So once we get the current pegged assets, including BitBTC, working successfully with a tight peg and good liquidity for sellers, I'm wondering if pegged cryptos is a more fruitful path in the short term, appealing to the community right on our doorstep, instead of trying to convince a community of gold-enthusiasts, stock-traders, currency traders, merchants etc that they should be doing something very different to what they are used to.

If we offered pegged crypto-currencies to what is currently almost a $6bn market cap industry, the benefits offered to the crypto community are:

1) they can trade major crypto-currencies (any we choose to peg) in the same way as they do on other exchanges
2) there is no counterparty risk (no GOX moment)
3) they only have to deal with a single wallet to trade all of their cryptos
4) with the 30 day short expiry rule, there may also be more liquidity available than on other exchanges (as long as shorts are willing to issue)

This is a combination of features the crypto community has been absolutely clamouring for since the Gox insolvency if only they could get it. One might argue that adding a broad set of cryptos could dilute interest in (proposed) BTS. But on the contrary, it might introduce them to BTS, and when they see BTS outperforming their other cryptos, that will be a positive. Also no SEC risks...

I'm not a technical expert in this field, so I might be missing a lot of problems. But some possible difficulties I've thought of so far:

 - how do you get a reasonable price feed if the BTS exchange draws interest and liquidity away from other exchanges
 - how do you encourage shorts to offer the supply (they are the issuers) because they take on risk of volatile 'borrowing' sources that they may not find desirable in supporting each market.

Has this been proposed before? Thoughts?
I disagree. I think a lot of the crypto-world (specifically bitcoiners) are stubborn. We should go after people who don't worship their currency (i.e. fiat users). The crypto world will follow once we pass bitcoin in market cap.

Offline Mysto

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If you're a delegate getting paid by Bitshares X and the SEC takes you to court then Bitshares X shareholders could vote on having additional dilution in order to fund legal defense. In my opinion a legal defense fund should be set aside to protect against this black swan event and the DAC itself could set money aside and additionally delegates themselves if they make enough money could set $100,000 aside for the SEC/IRS just in case they get harassed.

When delegates are making enough money they should start keeping an emergency fund. I think most people would vote for a delegate who kept an emergency fund, at least I know I would. I don't think this would effect the DAC very much though, it would just adapt. It is not necessary for the DAC to actually set aside funds or start DCI for this case at least.

Offline starspirit

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Yield on DJIA or SP500 or any number of other indices would/will make an incredibly compelling investment case.

Pegged indices will happen, just a matter of time.
One thing I'm not certain of is how yield will vary weigh different BitAssets. There are a couple of possible sources of yield:

1) a share of the pool of transaction costs - I'm not sure of the sustainability of this - ideally over time it would be better to lower cost frictions in the market as much as possible down to the network support cost, which should leave very little to distribute to BitAsset owners, and
2) an amount willingly paid by shorts to enter the position - however effectively the short would be borrowing in different assets to get their leverage to BTSX, and some of these may not be attractive to borrow in, especially volatile assets, so shorts will presumably pay less for this opportunity. In some cases, they may even want payment.

So I suspect the opportunity for yield may not be true of any BitAsset in a generalised sense.

Offline oldman

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Yield on DJIA or SP500 or any number of other indices would/will make an incredibly compelling investment case.

Pegged indices will happen, just a matter of time.


Offline donkeypong

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Offline luckybit

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Do you know how much money Bitshares X alone could make for delegates? When Bytemaster and the other delegates are multi-millionaires do you think they'll be financially ruined by the SEC trial?


Here's hoping they get that far. Without unnecessary headwinds, I think they will.
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Offline starspirit

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What if we peg crypto currencies instead? Promoting other cryptos? Keep an open mind for a moment...

The primary community likely to be first movers in the space we are currently operating in are crypto-enthusiasts. I think it might pay better initially to focus on what these people love, rather than trying to attract more distant users we do not understand well into the space through BitUSD. This will happen in time, but expand from the initial community first by giving them what they demand. I learnt this concept from the first video at this thread... https://bitsharestalk.org/index.php?topic=10178.0.

So once we get the current pegged assets, including BitBTC, working successfully with a tight peg and good liquidity for sellers, I'm wondering if pegged cryptos is a more fruitful path in the short term, appealing to the community right on our doorstep, instead of trying to convince a community of gold-enthusiasts, stock-traders, currency traders, merchants etc that they should be doing something very different to what they are used to.

If we offered pegged crypto-currencies to what is currently almost a $6bn market cap industry, the benefits offered to the crypto community are:

1) they can trade major crypto-currencies (any we choose to peg) in the same way as they do on other exchanges
2) there is no counterparty risk (no GOX moment)
3) they only have to deal with a single wallet to trade all of their cryptos
4) with the 30 day short expiry rule, there may also be more liquidity available than on other exchanges (as long as shorts are willing to issue)

This is a combination of features the crypto community has been absolutely clamouring for since the Gox insolvency if only they could get it. One might argue that adding a broad set of cryptos could dilute interest in (proposed) BTS. But on the contrary, it might introduce them to BTS, and when they see BTS outperforming their other cryptos, that will be a positive. Also no SEC risks...

I'm not a technical expert in this field, so I might be missing a lot of problems. But some possible difficulties I've thought of so far:

 - how do you get a reasonable price feed if the BTS exchange draws interest and liquidity away from other exchanges
 - how do you encourage shorts to offer the supply (they are the issuers) because they take on risk of volatile 'borrowing' sources that they may not find desirable in supporting each market.

Has this been proposed before? Thoughts?

Offline donkeypong

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Do you know how much money Bitshares X alone could make for delegates? When Bytemaster and the other delegates are multi-millionaires do you think they'll be financially ruined by the SEC trial?


Here's hoping they get that far. Without unnecessary headwinds, I think they will.

Offline Method-X

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Can you imagine if the SEC actually started shutting down American delegates? It would be absolute marketing gold. Everyone would see us as the underdog fighting against an unfair system. The media attention and eventual Streisand effect would take BTS to at least $1.00 per share.

Offline luckybit

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The FTC regulates mergers. Should we call our lawyers? Should we ask the FTC what they think?

I think these questions are ridiculous because Bitshares X is software not a security. If Bitshares X is a security then Bitcoin is a security. If Bitshares X is using BitUSD then is that counterfeiting? No because BitUSD is just BTSX.

Honestly I don't think there is anything lawyers could say to help when it comes to truly ground breaking innovations. No one really knows how authorities will react. In China they banned Bitcoin and who knows the SEC could react the same way but even if that happens Bitshares X is supposed to be able to survive that.

Even if every one of us were fined Bitshares X should be able to survive. Additionally if there is a lot of money made then will the fine be the worst thing in the world? It becomes just like a tax.

You know I respect your opinions. I've agreed with most of them on the forum. And I can see your point here also. Mine is that I'd like us to do this legally and get it right. SEC shoots first and asks questions later; by the time you get your day in court, you've been financially ruined and your innocence is beside the point. Why take that risk when Overstock is spending the money to solve those problems for the whole industry? Let them bridge that gap and let us jump in when the time is right. There's enough good stuff in BitShares without breaking the law.

Legally in which country? We aren't all in America. Financially ruined? Do you know how much money Bitshares X alone could make for delegates? When Bytemaster and the other delegates are multi-millionaires do you think they'll be financially ruined by the SEC trial?

And also did you contact the FTC because a crypto-merger might upset them right? Just calling it a merger puts you under FTC jurisdiction?

The SEC does not have jurisdiction over all trade activity all around the world any more than the Chinese trade commission does. Even if it somehow did have the legal authority it would be practically unenforceable and more like the situation file sharers faced for copryright infringement. My point is that if you're a US citizen and they haven't specifically said you're breaking the law then you have no way to know whether it's illegal or not until people start getting fined.

If Bitcoin developers waited for regulators, the IRS, and others to decide whether Bitcoin was a currency or not then Bitcoin could never be developed. If you the tax payer waited to buy Bitcoins because the IRS didn't tell you how to pay taxes then you'd miss out on profits.

The only answer is to just develop the software and find out. If you get fined by the SEC then pay the fine. If you get in trouble with the IRS then pay whatever you owe. The only problem I have is people who are so afraid of the government that they won't touch crypto at all. If you wont touch crypto at all why are you here? If you're not willing to take a risk why do you expect to get rich off Bitshares X by being a delegate?

Dilution means Bitshares X will be self funding and can afford to protect it's delegates

Bitshares X isn't going to make anyone rich without risk just like the early adopters of Bitcoin all risked getting in trouble to use that. If you don't take risks you don't win. If you're a delegate getting paid by Bitshares X and the SEC takes you to court then Bitshares X shareholders could vote on having additional dilution in order to fund legal defense. In my opinion a legal defense fund should be set aside to protect against this black swan event and the DAC itself could set money aside and additionally delegates themselves if they make enough money could set $100,000 aside for the SEC/IRS just in case they get harassed.

I'd rather want to see the Bitshares wallet become more user friendly before more assets are added. I needs to be super fast and easy to use.

Counterparty is eating Bitshares X lunch while you wait. In this industry the team who sits and waits is the team who doesn't get rich. In the altcoin environment the people who took the risks earl y on are the ones who have millions of dollars. Somehow now everyone is afraid of the SEC even though the SEC has never attacked Bitcoin itself or any blockchain. Why would the SEC suddenly target Bitcoin itself?

I'm not saying they couldn't do that but even if they did that then how much of a fine would it be if the SEC did go after Bitshares delegates? And what would ultimately happen? Delegates who are US citizens would pay the fine and then there wouldn't be any more US citizens as delegates as Bitshares X develops an immunity to the SEC.

So I don't think it would make a lot of sense. It would be a lot like what happened when the recording industry started suing fans for copyright infringement. All it did was make the software even better, harder to find people because it started to go anonymous, and Bittorrent was the ultimate result.  If the SEC were to target victimless crimes to make a political statement it might result in entire communities developing their software specifically to avoid SEC interference. The fear of the SEC is in effect specifically because the SEC hasn't revealed it's hand, and it's similar with the IRS (the IRS is actually the bigger danger).



« Last Edit: October 22, 2014, 04:25:06 am by luckybit »
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