Author Topic: bitUSD - USD - open.USD => what's the difference  (Read 1587 times)

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Offline ngenko01

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bitUSD - USD - open.USD => what's the difference
« on: January 04, 2018, 08:54:20 pm »
Hi All,

As I'm exploring the possibilities to use BitShares, I realized that it's not very clear when it's about Fiat currencies.

On openledger, there are USD and open.USD
On bitshares.eu, there is bitUSD, and I can't find anything else.

Then, on the white paper, I understood that it's possible to make smarts coins, that are worth 1 USD or 1 EUR, but they are not real USD or EUR. I did really understood where the value is stored (in some contracts, but I did not really understand the mechanism).

Can someone explain me why the assets are not named the same on these two platforms?
Can someone explain to me the difference between USD and open.USD?

Thanks in advance for your support.

Offline Customminer

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Re: bitUSD - USD - open.USD => what's the difference
« Reply #1 on: January 04, 2018, 09:51:26 pm »
bitUSD == USD (Just different ways of referring to it).

Open.USD is real FIAT USD deposited into OpenLedger's bank & issued to the user in return. bitUSD have 2 times the amount of collateral than Open.USD & the collateral is provable on the blockchain.

Offline benbogart

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Re: bitUSD - USD - open.USD => what's the difference
« Reply #2 on: January 09, 2018, 03:43:46 am »
I have these questions too, specifically:

1) if both these currencies are 100% (or more) backed but currency, why does open.BTC trade at .9 to bitBTC?  Does that mean if I wanted to withdraw using open ledger I would loose 10% of the value of my currency?

2) conversely if I transfer BTC into bitShares through openledger would it be theoretically worth 10% more than its value in bitBTC, but with no way to withdraw?

Clarification on the price variance of these pegged currencies would be helpful since they seem to vary significantly from each other.  I'm sure I'm just missing some important detail ;)

Thanks.

Offline ngenko01

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Re: bitUSD - USD - open.USD => what's the difference
« Reply #3 on: January 09, 2018, 07:36:47 pm »
bitUSD == USD (Just different ways of referring to it).

Open.USD is real FIAT USD deposited into OpenLedger's bank & issued to the user in return. bitUSD have 2 times the amount of collateral than Open.USD & the collateral is provable on the blockchain.

Thanks [member=42582]Customminer[/member], sounds quite clear now. Indeed, why not having several version of USD on Bitshares blockchain.
On OpenLedger, there are actually 3 types of dollars, including USDT, which I guess is USD Tether.

I have these questions too, specifically:

1) if both these currencies are 100% (or more) backed but currency, why does open.BTC trade at .9 to bitBTC?  Does that mean if I wanted to withdraw using open ledger I would loose 10% of the value of my currency?

2) conversely if I transfer BTC into bitShares through openledger would it be theoretically worth 10% more than its value in bitBTC, but with no way to withdraw?

Clarification on the price variance of these pegged currencies would be helpful since they seem to vary significantly from each other.  I'm sure I'm just missing some important detail ;)

Thanks.

I have been looking at the bitUSD/open.USD market, and there is actually some activity. The volume is quite low, but the price is stable around 1 to 1.
[member=47159]benbogart[/member], I see as well the market open.BTC/bitBTC. I don't understand either the 10% difference. If someone can explain.

If there is a big difference in price between bitBTC/open.USD and bitBTC/bitUSD, then there is an opportunity to make an arbitrage between the two market, using the USD/open.USD market. There might be many opportunities to make arbitrage between markets, and that would actually bring liquidity everywhere. Has someone already worked on that?

Online yvv

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Re: bitUSD - USD - open.USD => what's the difference
« Reply #4 on: January 09, 2018, 08:29:42 pm »
People hesitate to short bitBTC into existence, because BTC is always growing, that is why there is shortage of bitBTC and it is traded with premium. 10% is actually not that a lot, I was able to sell bitBTC with like 50% premium some times. There may be an arbitrage opportunity, but not necessarily.

Offline Troglodactyl

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Re: bitUSD - USD - open.USD => what's the difference
« Reply #5 on: January 10, 2018, 12:49:04 am »
Open.USD involves counterparty risk, so it trades at a discount to bitUSD since bitUSD is decentralized and collateralized.

Offline benbogart

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Re: bitUSD - USD - open.USD => what's the difference
« Reply #6 on: January 10, 2018, 01:50:08 am »
bitUSD == USD (Just different ways of referring to it).

Open.USD is real FIAT USD deposited into OpenLedger's bank & issued to the user in return. bitUSD have 2 times the amount of collateral than Open.USD & the collateral is provable on the blockchain.
This seems at odds with everything I have read so far.  I believe bitUSD is not USD, but instead a contract that is backed by the equity used to short positions.  In otherwords its an asset that has the same value as BTC backed by BitShares.  Its value should be close to USD but apparently isn't always.  To me USD means actual green bills or at least something I can exchange easily for actual green bills. 

open.USD seems more like USD to me in this case because it can be easily exchanged for USD.  Am I misunderstanding this?

Open.USD involves counterparty risk, so it trades at a discount to bitUSD since bitUSD is decentralized and collateralized.

Thank you [member=2611]Troglodactyl[/member] .  This makes sense.