Support BitUSD Price by Forced Covering at a Profit

[Riverhead]

Sure, only if it is implemented without changes you get the 1 Million bounty!

10Mil are you nuts?

Don't you think it's worth 10M BTSX if it worked?

Perhaps. But it's just your idea versus everyone else's that are posting up and everyone else thinks they have the solution too. Difference being of course they're collectively trying to solve a problem and you're...I'm not sure what you're doing lol. Buy a lot of BTSX, throw your golden screwdriver out there, and if it works your shares make you rich. If it doesn't you're no further behind.

[liondani]

I have a perfect solution to this pegging problem, only need one little change to the current system, no price feeds, no 90% stuff, if you post a 10 M BTSX bounty, I'll post it.

If you are so sure, buy cheap BTSX now by yourself and post your solution after that.
In no time you will profit even more that 10 M of current BTSX prices...

PS if you own allready BTSX, even better...

[yiminh]

not just me, everyone can compete in the bounty hehe

[yiminh]

Sure, only if it is implemented without changes you get the 1 Million bounty!

10Mil are you nuts?

Don't you think it's worth 10M BTSX if it worked?

[James212]

Surely bitUSD is a safe haven for any perceived future drop in BTSX. While BTSX rises perhaps it'll be tempting not to buy bitUSD but to short it? So, between those two, you have a draw into bitUSD.

I'm not sure whether you need to control the market as much as sell the idea of it. I wonder there needs to be some ELI5 descriptions for those of us with less experience of financial markets; and those of us who've drunk too much beer :p

If ever there is a prospect of bitUSD being widely available on exchanges and used in the real world, it seems very likely it'll find its market. USD is an imposed consensus; bitUSD is a distributed consensus and as such it's not bitUSD==USD but the peg and the utility and the idea of bitXYZ acknowledging real world assets is a powerful one. Just add time.. not rules.

Quote this:

The only way BitUSD will be used as a safe haven is if information flow and market signalling is improved. People make rational decisions only when they receive timely information otherwise it's just gambling.

BitUSD is best used when you have accurate pertinent information about a market disrupting event which is about to occur. A spike in the purchasing of BitUSD may be a statistical indicator that something has happened which will result in a crash in the price. If Mt Gox gets hacked, if the Bitcoin ETF is about to open, if big whale investors are about to enter the market, all of that influences whether or not people should buy BitUSD because it's a prediction market.

Information right now doesn't flow very well. It's hidden in the forums, in the Mumble meetings, etc. This lack of information flow causes a delay in people purchasing BitUSD, and it is partially why people don't value BitUSD yet. It's going to take a dramatically more interconnected and efficient information flow to create a true information market.

 

[yellowecho]

FTFY

if you post....... 1 M BTSX

[tonyk]

Sure, only if it is implemented without changes you get the 1 Million bounty!

10Mil are you nuts?

[yiminh]

I have a perfect solution to this pegging problem, only need one little change to the current system, no price feeds, no 90% stuff, if you post a 10 M BTSX bounty, I'll post it.

[yellowecho]

If we are going to rely on a price feed we can force covering any time the highest offer to buy BitUSD is less than 90% of the feed price.

Could price feeds reduce price security?  Could there be DDOS attacks on feed sources to could make the network less stable?  Just wondering..

Does this punish shorts?  I don't think it does.  I think it supports the peg by adding liquidity without adding any risk to the shorts. 

I think this added liquidity should come form which ever shorts are least collateralized.  This way the shorts which don't want to be forced into providing liquidity pre-maturely can avoid it by having a large surplus of collateral and thus making the entire network more secure. 

Under this system BitUSD is always worth at least $0.90 and the market makers / market will likely drive that to near $0.99- $1.01.

I don't mind this approach but I'm glad we're discussing it.  I have been Alice and run into a couple liquidity problems so far trading BTSX and I think what you're proposing would be fair and increase liquidity.  With that said, is it the best way?  Will liquidity not increase as other currencies/options are added to the platform?  In your example Alice is stuck because there is one exit from her USD position and it's blocked.  But what if there were more exits?  What if Alice could buy CNY from Zhang Li?    Or Bitcoins from Stan?   More exits = more liquidity. 

[yellowecho]

This is history in the making.

I love that you guys are taking the time to dissect every idea and try to implement something that works.

You are operating well outside of the dogmatic belief systems that some people have on here, and you can only be cheered for it.

I think considering to implement multiple, different solutions might be more productive than to just try to get the one way that will work out of the box, because who knows what happens when it gets out of the box?

Good job guys, keep an open mind.

There's continuous dialogue about systematic improvements  in order to increase efficiency and reduce costs like a company (DA) should do. A beautiful aspect of the Bitshares platform is that it incentivizes R&D! 

[tonyk]

So this discussion is mostly focused on "how do we make a peg work in a thin market".

...without thinning the market more :-)

Yes, please do not complicate this market with lots of regulations and profit limits for arbitrages, and strange policies like only people who are long bitUSD can short for the same amount... If I had a position and saw it forcefully closed I would say: "What shit is this??@!" Also if I have to be long and short at the same time, I do not enter the market at all. You eliminate all the profit!!

Also market feeds do not reflect sudden -50% to +90% price moves of the value of BitShares X!!

Let the people make their bets and introduce another market on Bter in order to increment the transparency of the market and let the arbitrage work. PLEASE!!! This will help the market to be attractive for traders and give it more and more liquidity. You have to give it some time....

I tend to agree with that... my only concerns are that we have many "newbies" that express the same thing, and less  "older" members they do...(?) 


PS Don't take it personal 

I personally do not like text in red... although in this case it is in the correct color for wrong.

[liondani]

So this discussion is mostly focused on "how do we make a peg work in a thin market".

...without thinning the market more :-)

Yes, please do not complicate this market with lots of regulations and profit limits for arbitrages, and strange policies like only people who are long bitUSD can short for the same amount... If I had a position and saw it forcefully closed I would say: "What shit is this??@!" Also if I have to be long and short at the same time, I do not enter the market at all. You eliminate all the profit!!

Also market feeds do not reflect sudden -50% to +90% price moves of the value of BitShares X!!

Let the people make their bets and introduce another market on Bter in order to increment the transparency of the market and let the arbitrage work. PLEASE!!! This will help the market to be attractive for traders and give it more and more liquidity. You have to give it some time....

I tend to agree with that... my only concerns are that we have many "newbies" that express the same thing, and less  "older" members they do...(?) 


PS Don't take it personal 

[okidoki]

So this discussion is mostly focused on "how do we make a peg work in a thin market".

...without thinning the market more :-)

Yes, please do not complicate this market with lots of regulations and profit limits for arbitrages, and strange policies like only people who are long bitUSD can short for the same amount... If I had a position and saw it forcefully closed I would say: "What shit is this??@!" Also if I have to be long and short at the same time, I do not enter the market at all. You eliminate all the profit!!

Also market feeds do not reflect sudden -50% to +90% price moves of the value of BitShares X!!

Let the people make their bets and introduce another market on Bter in order to increment the transparency of the market and let the arbitrage work. PLEASE!!! This will help the market to be attractive for traders and give it more and more liquidity. You have to give it some time....

[Blahbleuhbleuh]

This is history in the making.

I love that you guys are taking the time to dissect every idea and try to implement something that works.

You are operating well outside of the dogmatic belief systems that some people have on here, and you can only be cheered for it.

I think considering to implement multiple, different solutions might be more productive than to just try to get the one way that will work out of the box, because who knows what happens when it gets out of the box?

Good job guys, keep an open mind.

[bytemaster]

Surely bitUSD is a safe haven for any perceived future drop in BTSX. While BTSX rises perhaps it'll be tempting not to buy bitUSD but to short it? So, between those two, you have a draw into bitUSD.

I'm not sure whether you need to control the market as much as sell the idea of it. I wonder there needs to be some ELI5 descriptions for those of us with less experience of financial markets; and those of us who've drunk too much beer :p

If ever there is a prospect of bitUSD being widely available on exchanges and used in the real world, it seems very likely it'll find its market. USD is an imposed consensus; bitUSD is a distributed consensus and as such it's not bitUSD==USD but the peg and the utility and the idea of bitXYZ acknowledging real world assets is a powerful one. Just add time.. not rules.

Quote this:

The only way BitUSD will be used as a safe haven is if information flow and market signalling is improved. People make rational decisions only when they receive timely information otherwise it's just gambling.

BitUSD is best used when you have accurate pertinent information about a market disrupting event which is about to occur. A spike in the purchasing of BitUSD may be a statistical indicator that something has happened which will result in a crash in the price. If Mt Gox gets hacked, if the Bitcoin ETF is about to open, if big whale investors are about to enter the market, all of that influences whether or not people should buy BitUSD because it's a prediction market.

Information right now doesn't flow very well. It's hidden in the forums, in the Mumble meetings, etc. This lack of information flow causes a delay in people purchasing BitUSD, and it is partially why people don't value BitUSD yet. It's going to take a dramatically more interconnected and efficient information flow to create a true information market.

+5!