Author Topic: Some questions re Bit20  (Read 3801 times)

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Offline karnal

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Some questions re Bit20
« on: April 03, 2017, 12:09:46 pm »
Stoked to see that Bit20 is now (for awhile) available on the DEX.

Yesterday I was reading more about it and poking around, and here are my observations.. your comment is welcomed.

- There is no vertical "Settlement Price" on any BTWTY market I bothered to check, except for :BTS ..  seeing as BTS is itself part of the basket, would it not make more sense for the primary (more advertised) markets to be USD and CNY ? And either way, the price feed should work for all of them.

- The concept is cool, but here's something I've been having trouble understanding: Who in their right mind would short BITWY into existence? (well, I did, and now owe 0.04 due to a fundamental misunderstanding of the dex mechanics)

- Related to the above, and assuming one is in the camp that believes bit20 is headed for an extragalactic moon, why isn't everyone shorting USD and using it to buy BTWTY?


And small suggestion to whom it may concern, there is a valid TLS certificate at bittwenty.com, but by default the browser isn't instructed to use the secure version. Easy fix, such privacy.

Offline karnal

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Re: Some questions re Bit20
« Reply #1 on: April 03, 2017, 12:19:08 pm »
Any thoughts on how to clear that silly 0.04 debt also welcomed .. i sold to some lucky souls slightly above the price feed, thinking that would erase the debt (yeah, no) .. as far as I can see there's only two options, buying more or shorting more.. the next order is 50%+ away from the settlement price and shorting more seems like an awful idea :)

Offline mea123

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Re: Some questions re Bit20
« Reply #2 on: April 03, 2017, 03:45:40 pm »
thats why the none technical investors (investors which simply like to buy and to sell in a way it supposed to work in all kind of markets)
do not bother to get involved in this..to understand how this works
it takes a Harvard degree or close to it..I dont know but I have a feeling this can be easy as well..hundreds of broker can do it..
but as I already mentioned, I am not a tech guy just a regular user of Broker and their charting platform offered

Offline yvv

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Re: Some questions re Bit20
« Reply #3 on: April 03, 2017, 03:57:24 pm »
Quote
- There is no vertical "Settlement Price" on any BTWTY market I bothered to check, except for :BTS ..  seeing as BTS is itself part of the basket, would it not make more sense for the primary (more advertised) markets to be USD and CNY ? And either way, the price feed should work for all of them.

The primary market is bit20 vs collateral asset, which is BTS. We need liquidity for this pair in order for MPA procedure to work.

Quote
- The concept is cool, but here's something I've been having trouble understanding: Who in their right mind would short BITWY into existence? (well, I did, and now owe 0.04 due to a fundamental misunderstanding of the dex mechanics)

Those who seek for profit from price volatility are welcomed to short it.

Quote
- Related to the above, and assuming one is in the camp that believes bit20 is headed for an extragalactic moon, why isn't everyone shorting USD and using it to buy BTWTY?

Because it is illiquid at present state.

Offline nmywn

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Re: Some questions re Bit20
« Reply #4 on: April 03, 2017, 04:14:03 pm »
Any thoughts on how to clear that silly 0.04 debt also welcomed .. i sold to some lucky souls slightly above the price feed, thinking that would erase the debt (yeah, no) .. as far as I can see there's only two options, buying more or shorting more.. the next order is 50%+ away from the settlement price and shorting more seems like an awful idea :)

To pay your debt you need BTWTY.

Offline karnal

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Re: Some questions re Bit20
« Reply #5 on: April 03, 2017, 05:40:21 pm »
Any thoughts on how to clear that silly 0.04 debt also welcomed .. i sold to some lucky souls slightly above the price feed, thinking that would erase the debt (yeah, no) .. as far as I can see there's only two options, buying more or shorting more.. the next order is 50%+ away from the settlement price and shorting more seems like an awful idea :)

To pay your debt you need BTWTY.

Yeah that's what I realized after the fact, now the only choices appear to be piling debt on top of debt or buying at an absurd price.

Well done karnalius!

Offline karnal

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Re: Some questions re Bit20
« Reply #6 on: April 03, 2017, 05:45:48 pm »
Quote from: yvv
The primary market is bit20 vs collateral asset, which is BTS. We need liquidity for this pair in order for MPA procedure to work.

ELI5 on why BTS was chosen instead of USD?

Also, regarding the no settlement price on USD / CNY / BTC / etc, surely this is not related? I'm not too familiar / have forgotten some of the fundamentals, must the witnesses who provide the BTWTY price feed also provide for USD / CNY / BTC / etc, or can the engine internally perform the conversions ?

Either way, wouldn't it be a good idea to have the price feed for a few more other than BTS?

Quote from: yvv
Those who seek for profit from price volatility are welcomed to short it.

Realistically speaking though, since for now and likely for a long time to come, mostly only crypto enthusiasts appear to use the stuff, how likely is it that enough people will be betting that not one, not two, not five, not even ten, but the twenty top cryptos will devalue enough to bother shorting it?

(I'm genuinely curious)

Quote from: yvv
Quote from: karnal
- Related to the above, and assuming one is in the camp that believes bit20 is headed for an extragalactic moon, why isn't everyone shorting USD and using it to buy BTWTY?

Because it is illiquid at present state.

USD you mean?

Offline yvv

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Re: Some questions re Bit20
« Reply #7 on: April 03, 2017, 06:05:05 pm »

Quote from: yvv
Quote from: karnal
- Related to the above, and assuming one is in the camp that believes bit20 is headed for an extragalactic moon, why isn't everyone shorting USD and using it to buy BTWTY?

Because it is illiquid at present state.

USD you mean?

I mean BTWTY lacks liquidity. There is not enough supply. You have to buy it at huge premium and then wait a long time before you can settle it at same price you bought.

Offline karnal

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Re: Some questions re Bit20
« Reply #8 on: April 03, 2017, 07:15:39 pm »
Right, yeah.

But my point is that it seems extremely unlikely that anyone interested in crypto (that would be by definition and until/if this sort of thing is maintream, 100% of users) would take a short position with BTWTY.

If you believe in crypto, then it seems like a wise bet to make that the top 20 of all cryptos (and a dynamically list of 20 top cryptos as that) will never devalue much against fiat.

In other words, close to zero incentive to short.

Offline tbone

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Re: Some questions re Bit20
« Reply #9 on: April 08, 2017, 08:46:46 pm »
Right, yeah.

But my point is that it seems extremely unlikely that anyone interested in crypto (that would be by definition and until/if this sort of thing is maintream, 100% of users) would take a short position with BTWTY.

If you believe in crypto, then it seems like a wise bet to make that the top 20 of all cryptos (and a dynamically list of 20 top cryptos as that) will never devalue much against fiat.

In other words, close to zero incentive to short.

A real market maker will hedge his position on external markets.  So when he shorts BTWTY, he will buy corresponding amounts of the constituent assets on an exchange like Poloniex.  By doing so, he doesn't care which direction the market goes.   His profit comes from the spread.  In other words, he buys at the bid and sells at the ask and earns the difference.  We need more sophisticated market makers like this and should incentivize them.

Offline rgcrypto

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Re: Some questions re Bit20
« Reply #10 on: April 10, 2017, 02:13:25 pm »
Are there bit20's on outside exchanges?

Offline EstefanTT

Re: Some questions re Bit20
« Reply #11 on: April 12, 2017, 12:39:42 pm »
Quote
- There is no vertical "Settlement Price" on any BTWTY market I bothered to check, except for :BTS ..  seeing as BTS is itself part of the basket, would it not make more sense for the primary (more advertised) markets to be USD and CNY ? And either way, the price feed should work for all of them.

The primary market is bit20 vs collateral asset, which is BTS. We need liquidity for this pair in order for MPA procedure to work.

Quote
- The concept is cool, but here's something I've been having trouble understanding: Who in their right mind would short BITWY into existence? (well, I did, and now owe 0.04 due to a fundamental misunderstanding of the dex mechanics)

Those who seek for profit from price volatility are welcomed to short it.

Quote
- Related to the above, and assuming one is in the camp that believes bit20 is headed for an extragalactic moon, why isn't everyone shorting USD and using it to buy BTWTY?

Because it is illiquid at present state.

Thanks for the answers IVV, I haven't checked the forum in a while and completely missed this thread.
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Offline EstefanTT

Re: Some questions re Bit20
« Reply #12 on: April 12, 2017, 12:48:44 pm »
Right, yeah.

But my point is that it seems extremely unlikely that anyone interested in crypto (that would be by definition and until/if this sort of thing is maintream, 100% of users) would take a short position with BTWTY.

If you believe in crypto, then it seems like a wise bet to make that the top 20 of all cryptos (and a dynamically list of 20 top cryptos as that) will never devalue much against fiat.

In other words, close to zero incentive to short.

Why would someone ever sell or short an Amazon or Google share? These things are going up on the long run, right ?
Because in the short term, the will act just like any share, they will rise and drop. So you can make money when they drop.
BTWTY follow this pattern and when it is about to drop it's a good moment to short.
There is another thing to consider. If you short when BTWTY goes down AND BTS does up, you win double money !!!! You can't do that with stables BitAsset because you only win on BTS price increase.

Have a look on April 2 (http://cryptofresh.com/a/BTWTY_BTS), BTWTY went from 2,400,000 BTS to 1,000,000 BTS, that was a great opportunity to make money shorting BTWTY. On this day we had around 5000$ volume exchanged. Plenty of shorters have made money on their operations. The BTWTY:BTS market will be highly volatile, thus opportunities to make money buying or selling ( & short selling) will arise.

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Offline EstefanTT

Re: Some questions re Bit20
« Reply #13 on: April 12, 2017, 12:52:18 pm »
Quote from: yvv
The primary market is bit20 vs collateral asset, which is BTS. We need liquidity for this pair in order for MPA procedure to work.

ELI5 on why BTS was chosen instead of USD?

The BTWTY:BTS market is more interesting to create the first wave of liquidity because it's more volatile. BTS AND BTWTY are volatile, thus opportunities to make money will arise more frequently. There will be also more opportunities for shorters.

BitUSD:BTWTY market is only moving when BTWTY moves.
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Offline EstefanTT

Re: Some questions re Bit20
« Reply #14 on: April 12, 2017, 12:54:41 pm »
Are there bit20's on outside exchanges?

Not at the moment. I feel that any exchange will laugh before even considering it. The BTWTY market cap is only a few thousand $.
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