Thank you, Cass. I am, and I am not, a new user. Somewhere in the middle. I think I posted under my first name a few times back in the Keyhotee days, just questions about setting up the client and such, but that seems like ages ago. I had gotten sidetracked on other projects in the interim.
Thank you, BJ2.0, for the entertaining article. You're right. I don't think I can top that, so I won't try. BitMarmots!
Gamey and hrossik, you ask just the questions to which I am trying to discover the answers. I wrote a post last night just before I went to bed, but I didn't want to clutter up the thread with too many ideas at one time, so I held it back. Your questions segue into what I wrote last night, so I will append it below this post.
The short answer, gamey, is that modern CFDs possess the very same problems that the bucket shops possessed. There are fundamental problems with this arrangement, as I will demonstrate in my following post. A modern, regulated financial system may improve on the betting arrangement which was offered by the bucket shops, and a blockchain might improve on the betting arrangement which was offered by the bucket shops, but neither can eliminate the intrinsic problems. They improve by mitigating or eliminating some of the problems, but not all of them. This is largely what Preston Byrne was talking about. Arranging sophisticated trading systems is not easy. However, he doesn't even go far enough, as he suggests it should be left to professionals. However, even professionals bugger it up from time to time. Just think about Collateralized Debt Obligations.
Some of the biggest financial institutions in the world participated in CDO debacle. The arrangement collapsed as many predicted it would. It was based upon flawed assumptions. Houses and mortgages are never fungible. Location, location, location! When was the last time you heard someone say "location, location, location!" about gold? Gold is fungible, houses are not. Even though some actuarial science may be reasonably brought to bear on masses of mortgages for the sake of efficiency, it must always be remembered that houses, no matter how many houses they may be, are not fungible. When this practice is pyramided on top of a housing bubble born out of fractional reserve banking, it is clear to see that this is an unworkable arrangement. So, it had to implode.
Just because some major markets around the world allow for the trading of contracts for difference doesn't mean that people should trade contracts for difference. Frankly, I think people should be allowed to trade whatever they want, and let the buyer beware. Having said that, I would not be surprised to see the existing CFD arrangement fall by the wayside of the mainstream financial system at some point. Afterall, it's just a fancy name for a bet.
Hrossik, to specifically answer your questions about how BitAssets work exactly, I can only say that I don't know. I'm not sure than anyone does. Maybe Bytemaster and some of the top developers understand it inside and out. Or maybe they have let, for example, the Australian Stock Exchange do their intellectual work for them, and they have decided, "if it is good enough for the ASE, it is good enough for BitShares. We'll just arrange it like the ASE does." Of course, I can't know that. But, if one cannot explicitly understand and describe every angle of a trading platform; every possible trading variation, any bear raid, any short squeeze, any off-exchange manipulation that is possible in reality or in the minds of creative speculators, one should not trade on that platform. OK, I'll append last night's thoughts below.