Author Topic: BitShares XT - Security against Market Manipulation FIND ATTACKS FOR TIPS  (Read 52293 times)

0 Members and 1 Guest are viewing this topic.

Offline xeroc

  • Board Moderator
  • Hero Member
  • *****
  • Posts: 12922
  • ChainSquad GmbH
    • View Profile
    • ChainSquad GmbH
  • BitShares: xeroc
  • GitHub: xeroc

Offline tonyk

  • Hero Member
  • *****
  • Posts: 3308
    • View Profile
tony, I'm sorry again for misunderstanding you and for trying to read your mind   :) and I appreciate your contributions.

I think we all just want to get a test network up and running so we can see the exact implementation.  I imagine these conversations will be more easily resolved when we can all try things out.  So this must be the focus for now.
We are all waiting on you...Dan
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline Agent86

  • Sr. Member
  • ****
  • Posts: 471
  • BTSX: agent86
    • View Profile
tony, I'm sorry again for misunderstanding you and for trying to read your mind   :) and I appreciate your contributions.

I think we all just want to get a test network up and running so we can see the exact implementation.  I imagine these conversations will be more easily resolved when we can all try things out.  So this must be the focus for now.

Offline tonyk

  • Hero Member
  • *****
  • Posts: 3308
    • View Profile
Keep your tip… give it to yourself / Agent86 for his excellent mind reading abilities…Other than his excellent mind reading he deserves the tip for many more achievements today – Defending your high character when nobody is attacking it; building and delivering made up accusation; and probably most important of all – building in the conscience of masses that – “As long as BM has said that decoupling of bitUSD from USD can occur, it makes it OK, almost desirable you know…”

In exchange to the financial benefits offered to me, I will gladly accept  you PM me  your 'airdropping secret plan…'
« Last Edit: May 14, 2014, 03:34:30 am by tonyk »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline bytemaster

Tonyk, 
  You have clearly spent significant time analyzing our designs and systems and then debating in this thread.  You certainly deserve a tip for that effort. 

  Agent86 did a wonderful job reviewing the so-called attack or proof that the system cannot work.   I spent some serious time considering the implication of any imbalances that could result from the short/long at the same time approach.   Here is my analysis:

  There is opportunity cost associated with the move in many cases.
  Agent86 rightly pointed out that in the far more likely case (slow moves) your short position will have been closed out with a penalty long before the entire position was liquidated.
  The position is only apparently advantageous in the event of a rapid global blowout. 
  Agent86 rightly pointed out that BitUSD would likely break parity in the short run until people accepted their losses, however, if you held it long enough you could eventually get parity.

  So my conclusion is that market participants will each calculate their own risks and that the market will do something and that something will likely be useful by some metric and we can learn.

 
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline Agent86

  • Sr. Member
  • ****
  • Posts: 471
  • BTSX: agent86
    • View Profile
Agent86,
Thanks for accusing me of accusing Dan… when I just said he can (not he will). But hey go ahead…

I'm sorry if I misinterpreted.

Offline tonyk

  • Hero Member
  • *****
  • Posts: 3308
    • View Profile
Agent86,
Thanks for accusing me of accusing Dan… when I just said he can (not he will). But hey go ahead…


@toast at 12:56 AM 5/14 Wait a second, you still lost money, just less money.
tonyk   at  05:21:58 PM 5/13 "First of all it does not always win!" …
I am tired of going in circles, repeating one and the same thing in 7 different ways and as a result receiving made up accusations.
I think I am done with this thread.… read or not… decide or not…implement or not… I really do not care… That’s my last post in this thread.
« Last Edit: May 14, 2014, 01:33:18 am by tonyk »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline toast

  • Hero Member
  • *****
  • Posts: 4001
    • View Profile
  • BitShares: nikolai
Quote
3. Scenario - BTS crashes...:

‘Simple Neutral Position’: 2 BTS worth $0.33 for a total of $.66
‘System Enhanced  Neutral Position’ ; your short was closed so you end with 0 BTS from the collateral; you have 1 bitUSD worth 3.03 PTS; you sell it and end up with 3 BTS; 3*$0.33~ $1

Wait a second, you still lost money, just less money. So it's not a free lottery ticket, it's just lower EV to go long BTS without shorting some amount of BitUSD along with it. And you win less than if you had held a BTS instead of a BitUSD outside of the short position.

Not this just seems like a normal hedge and in low volatility you win against people who just hold USD, or people who are short USD and re-short or just hold the BTS outside the collateral instead of getting a BitUSD.
Do not use this post as information for making any important decisions. The only agreements I ever make are informal and non-binding. Take the same precautions as when dealing with a compromised account, scammer, sockpuppet, etc.

Offline Agent86

  • Sr. Member
  • ****
  • Posts: 471
  • BTSX: agent86
    • View Profile

2. Scenario - BTS doubles...:

‘Simple Neutral Position’  2BTS * $2 = $4;
‘System Enhanced  Neutral Position’ – you sell your 1bitUSD and at the same price cover your short (i.e -1 bitUSD); 2 BTS collateral is released back to you; 2BTS * $2 =$4

3. Scenario - BTS crashes...:

‘Simple Neutral Position’: 2 BTS worth $0.33 for a total of $.66
‘System Enhanced  Neutral Position’ ; your short was closed so you end with 0 BTS from the collateral; you have 1 bitUSD worth 3.03 PTS; you sell it and end up with 3 BTS; 3*$0.33~ $1

I'm not at all convinced of this "attack".

To me it seems like being short and long at the same time would be about equivalent to just holding BTS and being neither short or long.
I agree with your first "scenario" that both positions have the same outcome.

I don't agree with your second scenario.

first of all, if the shorts have been blown out it is not a fair assumption that bitUSD tracks the dollar anymore.  Bytemaster has already stated that in a short squeeze if bitUSD runs out of collateral it can go below the dollar until BTS recovers or people just have to sell their bitUSD at a loss.  So you don't get the $1 value for your bitUSD that you were counting on.

Second of all, you can lose money another way.
If BTS falls from $1 to $0.75 now you only have $1.50 of BTS backing the bitUSD and I think this is the actual point that you run into a margin call and it sells your collateral to cover your loss.  It doesn't wait all the way up until BTS has dropped to $0.50 before you have to sell to cover.

So all that needs to happen is for BTS to drop 25% and then you are paying a penalty for forcing the sale of your collatoral.


You can always say that something is not my solution by changing just some little detail…

This is a ridiculous accusation.  You are calling into question bytemaster's honor and ethics for no reason at all.   He has always been very reasonable and a man of his word.  If you don't believe bytemaster is a man of his word than I have no idea why you are investing in this project in the first place.  There is no justification for you to accuse bytemaster of being so petty that he will cheat you out of 100PTS.

Then you turn around and expect the community to pay you upfront to reveal your "solution" and trust that it has value without even seeing it.

If we start paying everyone who claims to have some important piece of information but we can only find out by paying up front we will be out of money in no time and will have given a lot of money to people who obviously don't care about bitshares.  You only have to look at the number of people who post ideas that they haven't thought through to see why this is a non-starter.
« Last Edit: May 14, 2014, 12:42:18 am by Agent86 »

Offline tonyk

  • Hero Member
  • *****
  • Posts: 3308
    • View Profile
Let see if he considers this an attack...  :)

 I do not, but I do consider it something even more dangerous…
« Last Edit: May 14, 2014, 12:07:04 am by tonyk »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline toast

  • Hero Member
  • *****
  • Posts: 4001
    • View Profile
  • BitShares: nikolai
If you formulate it like "I won't tell unless you pay", of course he is not going to pay.
If Dan says "I will only pay if I think it is a solution to an attack", of course you are not going to tell.

If you looked at Dan's history you'll see him tip not only people who find non-attacks, but also people who didn't ask for tips but contributed to the discussion anyway. So I think he was hedging against the possibility that your attack is a non-attack or your solution is a non-solution and doesn't want to set a precedent for people to hold knowledge hostage.

Want me to help you guys come up with a mutually beneficial deal or can you work it out yourself?
Do not use this post as information for making any important decisions. The only agreements I ever make are informal and non-binding. Take the same precautions as when dealing with a compromised account, scammer, sockpuppet, etc.

Offline tonyk

  • Hero Member
  • *****
  • Posts: 3308
    • View Profile
Why 5 year olds?

 I think (and obviously Dan too) that it is only reasonable to expect that a development team that is paid about $200,000 -$250,000 a month or 100 PTS every 20 minutes ( according to this post https://bitsharestalk.org/index.php?topic=3916.msg57306#msg57306 ) + Dan, to have much better chance of finding elegant solution to the problem, than my lonely self.

Additionally, he did not ask for my help and me offering it (with strings attached nevertheless, be it pocket change or not) is kind of stupid on my behalf, , so Dan responded with his unfulfillable conditions.
« Last Edit: May 13, 2014, 11:31:48 pm by tonyk »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline toast

  • Hero Member
  • *****
  • Posts: 4001
    • View Profile
  • BitShares: nikolai
Good news!!!!!

I think I have a solution,  BM!
It is pretty ugly (both from market point of view and will definitely delay the implementation...)

If you can offer a bounty of 100 PTS (total for the attack + the solution)  I can go ahead and save you some time and effort …

If I use your solution and agree that it is an attack then I'll pay you 100 PTS.... if I see no attack or reject your solution then no pay.   

...if I see no attack...
If your see no attack/ deficiency of the model, I do not think those PTS will be worth much anyway... we cannot afford unwise prophet.

You can always say that something is not my solution by changing just some little detail… so I read your answer as ‘Thanks. But no, thank you”, which is fine with me because mine is ugly solution anyway and you might come with something more elegant

FACEPALM! ARE YOU GUYS 5??!?
Do not use this post as information for making any important decisions. The only agreements I ever make are informal and non-binding. Take the same precautions as when dealing with a compromised account, scammer, sockpuppet, etc.

Offline tonyk

  • Hero Member
  • *****
  • Posts: 3308
    • View Profile
...if I see no attack...
If your see no attack/ deficiency of the model, I do not think those PTS will be worth much anyway... we cannot afford unwise prophet.

You can always say that something is not my solution by changing just some little detail… so I read your answer as ‘Thanks. But no, thank you”, which is fine with me because mine is ugly solution anyway and you might come with something more elegant
« Last Edit: May 13, 2014, 09:17:22 pm by tonyk »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline bytemaster

Good news!!!!!

I think I have a solution,  BM!
It is pretty ugly (both from market point of view and will definitely delay the implementation...)

If you can offer a bounty of 100 PTS (total for the attack + the solution)  I can go ahead and save you some time and effort …

If I use your solution and agree that it is an attack then I'll pay you 100 PTS.... if I see no attack or reject your solution then no pay.   
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.