Bitcoin Forum

I started a fund for bitcoin today - a seed for a federal reserve system of the bitcoin :)

The idea is simple:

I hold 50% - 50% bitcoin and EUR on my xapo account. If the difference between two proportion reaches 10% - I made a transaction to balance it. It is easy with xapo.

If you will join - just create a fund on an exchange or an debit card application, u.s.w. - just as you will. You can deposit, maybe exchange some fiat (EUR, USD, ...) as you wish to this account.
Target is to make this funds balanced: 50% fiat (or gold, or silver) - 50% bitcoins.

If the difference between two proportion reaches 10% (or as you wish, but maximal 10%) then please act - make a transaction.

What is needed more?

A big, distributed and active community - of course.

And an app with charts for our community:

The app should be simple. It should have two fields to store the actual BTC and the actual fiat (or gold, or silver) values (two funds of the users). It should automatically follow the bitcoin price. If the two funds unbalanced more as 10% the app should notify the user somehow to take an action.

The charts should be simple also.

The charts should show the communicated values:
 - btc stored by app users (active and inactive also; inactive an user is, if the user takes no action (don't changed the fields) after a notify (timeout i.e. 1 hour))
 - btc value in usd.
 - fiats (or gold, or silver) and its values.
 - fiat (or gold, or silver) values summarized in usd.
 
If exists an app able to act as above - please post it...
If exists similar community already - I am willing to join...

Interesting idea. However, this will make xapo to become the gate keeper and I am not sure if they are good enough to take up this role...

The system is great but just like what you said Xapo is not up for the job. Xapo have their own design and system in which they will not be overruled by some modification not coming from within. But as a tip why dont you submit your proposal to xapo and if they will work hand -in-hand with you many will join and will have the confidence to be a part of your plan.

I choosed for my reserve xapo and EUR. But you can choose other exchange or payment system, i.e. poloniex with USDT, or KRAKEN with USD. So will be decentralised and distributed.

What is the objective of this federal reserve?
The value of your total funds will go up in a volatile environment, when there are wild swings in either direction of the price you invested in.
Otherwise, the fund will just keep selling bitcoins in an uptrend.

Objective of this idea is - to have and show a community with reserves and strategy, if the bitcoin price falls (or grows).


Yes - it is true. We (the community) can earn with this system also.


Yes, it is true also - and the fund in fiat (reserved if bitcoin price falls) grows. I think it is good also.

With such rapid growth of bitcoin as we are seeing now probably there are few people willing to freeze their euros or dollars. Yes, of course you can play it safe in case of falling of bitcoin prices, but this trend is not observed and more profitable to invest in bitcoin 100% of our Euro.

This thread not about profitability of trading. Of course I have more bitcoins (and altcoins also) as I funded for this reason.
Everybody can decided to join or not. The size of the reserve is also freely selectable.

I think this strategy long time profitable enough. At heavily grow or free fall of prices there are always reserves behind members. It can be very profitable also.

The app can show - how many active (and inactive) member and fiat behind, and can act as an information about the bitcoin market.

Why hold "50% fiat" in an era where state deficits are large and unsustainable with hyperinflation and fiat devaluation being likely prospects in the future? The united states economy being $20 trillion in debt is the reason savvy investors and countries like russia, japan and australia are shifting their holdings as far away from american fiat as possible.

The EU is very similar to the dollar in many ways & its value is likely to decrease. Many EU nations are giving illegal immigrants free welfare and healthcare which threatens to further impoverish their holdings, dragging their fiat value down with it. Especially if more nations commit to #brexit.

There are no advantages to holding euros with many disadvantages lurking on the horizon.

It might be better to hold 50% bitcoin / 50% gold or silver. With deficit and debt & concerns over currency devaluation the value of gold/silver is likely to increase, esp if currency devaluation/hyperinflation becomes real.

Good idea - and it is your decision. It is perfect, if you join with a such reserve... I will change the first post, just to save your idea.

Or instead you could buy bitcoins with everything you've got and go to sleep for 5 years and after you woke up see you have 15 times more money than 5 years ago, federal reserve is for a centralized systems and it can not work in crypto where every thing is decentralized.
There will be no free fall for bitcoin market, there are only 21M bitcoins and anyone with more coins is going to win bigger than others in the future.
Imagine every one holding and not selling, what then? you can't go and print more money (mine more bitcoins) so eventually you will have half the value of your coins in fiat then what?

Sorry - I think you don't understand the first post. Please re-read it.

 - This will be a decentralized and well distributed system.
 - Nobody will print more bitcoin in future with this system - such work is a work for the well controlled miners. It will be exists through this system no more coins as before.

Bitcoin does not require federal reserve, its decentralized and anonymous nature makes it able to evolve, bitcoin is free unbinding unnecessary things make rules.

Report:
 - My funds on xapo (at this time): 3817 EUR (or 1.957242979 BTC)
 - In the past 24h I decided two times my funds to balance...

I don`t trust Xapo and many people are like me.
Anyway,it`s a good business idea and someone should create such exchange platform.
I don`t know will this be profitable with the rising btc transaction fees and confirmation time.

Report:
 - Just decided to act...
 - My funds on xapo (at this time): 4121,06 EUR (or 1.81859392 BTC)

Could you explain the purpose of all that?

I read it a few times and still can't understand your idea. I understand what you are going to do, basically, you choose to keep balance in your funds at some ratio between fiat and crypto. Obviously, you are free to do whatever you may choose to do with your money. Sell your coins, buy yours coins, even gift them all, but what end exactly this idea should help to achieve?

The whole idea is still not clear, can you break it down more? what if the difference exceeds 10%

Report:
 - Just decided to act...
 - My funds on xapo (at this time): 3916,85 EUR (or 1.91843410 BTC)

- This idea should increase the market depth of bitcoin.
- The volatility should decrease.

Report:
 - I decided to act again.
 - My funds on xapo (at this time): 3637.66 EUR (or 2.07594834 BTC)

I don't really understand how it could increase the market depth of bitcoin. In fact, I don't even understand what you mean by that. The same about volatility. How exactly should balancing of one's stash decrease volatility, and what does this all have to do "a federal reserve system for bitcoin". Are you posting this nonsense just to attract some attention to your personality?

If so, then more power to you

Report:
 - I decided to act.
 - My funds on xapo (at this time): 3913.22 EUR (or 1.93450976 BTC)

Analyse:

   xapo
date eur btc rate
2017-05-23   3817   1,95724298   1950,192203525
2017-05-25   4121,06   1,81859392   2266,0693817782
2017-05-26   3916   1,9184341   2041,2481200162
2017-05-27   3637,66   2,07594834   1752,2883059797
2017-05-28   3913,22   1,93450976   2022,8484140602

I see a small lost in bitcoin and a small increase in eur. Not a good profit. This post isn't about profitable trading - but it isn't a target to loose the funds. Plus Xapo was sometimes unreachable.
Maybe Xapo not the best platform for this experiment, as mentioned oft in this thread.
I searching for other platform. Can you tell me better platforms for this target? Please post it, if you have ideas...

I found a new platform - Lykke.
They promise 0 fees...
I installed the app on my mobile.
The app shows the lowest ask and highest bid prices also. It is possible to buy/sell/store in wallet XAU (gold) and XAG (silver), ... and EUR, USD, CHF, ... and of course BTC.
As first step I will deposit 2 BTC to my Lykke app.

I deposited 2 BTC to Lykke. I bought for 1 BTC CHF. My balances on Lykke is at this time: 2222.67 CHF and 1 BTC ...

I don't think you can influence the average Bitcoin price with small amounts of funds, let alone do it by using only one parameter (say Xapo). The Bitcoin "price" is actually the average price of all known/big and trusted exchanges combined to give you a general idea of the spot price each moment. Thus you'd need some 10-20 million dollars in a constant spinning at various exchanges.
Just let it work it's way up & down :)

I like the idea a bit. So you are willing to create, basically, a contrarian trading group that "backs" the price of Bitcoin in bear markets and limits the spikes in bull markets. It reminds me to an user in the German forum who has propagated this technique for years, but never did this "group" approach. It also reminds me a bit of NuBits.

The problem I see is that it that in certain situations probably your group will be "out-traded" by big whales conspiring to make the price rise or fall. The group that does this contrarian strategy must be very big to be prepared for this kind of "attack". An idea would be the development of a bot that would be used by all the participants (just like in NuBits).

An alternative strategy I would prefer to limit volatility - but that involves the selling of goods and services - is that merchants could back the price giving "price guarantees" for their goods for a certain period (e.g. a day). This would, however, only prevent crashes, but not spikes to the upside. See here for the idea (https://bitcointalk.org/index.php?topic=1926913).

The advantage over a "backing the BTC price with fiat" like in your proposal is that goods cannot be easily "traded back" to Bitcoin, so an attacker would have huge transaction costs if he wants to game the system buying all available items, and also that "non-scarce goods" like digital goods would make this kind of attack entirely impossible.

That sounds reasonable.But at the end of the day we need to consider what makes the price of Bitcoin. Until now only big and "trusted" exchanges are counted. If we are to "impose" guarantees for x prices at y moments almost every price observation algorithm should have to include big merchants and at the same time BitPay, Coinify and other api providers should agree at the spreads of the price (eg at 19/6 UTC 00:00 the price stands at 2000$ & we guarantee this value until 12:00) but again the interval is big and they could lose or gain considerable amounts of fees if they are to convert their coins to fiat asap.

Not a new idea, this was thought of before and a few tried to implement but to no success.
To operate this concept, you cannot rely on a third party wallet, you have to be a full fledged wallet provider yourself. If you rely on a third party and one fine morning the site is gone with all your (rather other's I would say) coins, then you know where you have to head to.

Thank you for feedbacks :)

I think more such system works for BTC already independently. Every trader has reserves in fiat and in Bitcoin also. And every trader has a strategy to buy and sell. It is well distributed - and we can see, the big price peaks and big price crashes not more a nature of Bitcoin. Or?
I started an other thread, a poll: https://bitcointalk.org/index.php?topic=1903469.0
It shows the same result: most of people thinks, so big peak as in November 2013 is not more possible... If you has other opinions - please feel free to vote and post your opinions.

Only the app idea seems to me unique - it could give us informations about Bitcoin Market in a new way. Of course it needs a big, living community...

And: I decided to act again - I bought some CHF, and I have on Lykke Wallet 2842.23 CHF and 0.7802 BTC.

For the system to work, it would be necessary obviously that the participants use different wallets and exchanges. A good bet would be a "rebalancer bot" that does the rebalancing in an automatized way, is platform-independent and extensible by the API commands of the different exchanges and "fixed-rate shops" like Xapo.

It would be also interesting to integrate Bitsquare and Coinffeine (if it still exists) and perhaps also "fiat-backed" cryptocurrencies like the BitUSD. This way, single points of failure could be minimized.

PS: Just found this "portfolio rebalancing" bot (https://bitcointalk.org/index.php?topic=181584.0) that already uses the strategy since the year 2013. It was conceived for defunct exchange MtGox but surely can be adapted to be platform independent. Maybe there is a newer bot available.


In my idea (https://bitcointalk.org/index.php?topic=1926913), the system would be totally decentralized, so every merchant on every platform could choose the price that he considers convenient to give his price guarantees. BitPay would only have to enable the option for merchants, but the provider itself would not need to guarantee nothing (because then, the backing mechanism would be fiat-based, not backed by "goods and service"). A good idea would be to use a price index like the one Coindesk uses and computes various exchanges and maybe moving averages, to avoid short term spikes.

Alright. I'm not super great with economics, i failed economics when i was in 11th grade so i'm still trying to comprehend how this works. So in a nutshell this is essentially something to help bitcoin reach its minimal volatility possible, correct?

If i got this right... Why exactly is it called federal reserve? And why does bitcoin need a whole system behind it to prevent it from crashing?


So are you using Lykke as a platform to hold different currencies right now? What makes them better than, say holding funds on Xapo/a bank? Sorry for this, i just don't get it 100%.

Yes. Plus we become through an app more information about Bitcoin trading community.


It is a joke. I take this name from FED of US dollar. But if more people joining - we will have a reserve (in more fiat/precisous metal/...) for Bitcoin price "stability".


Bitcoin doesn't need this system. Bitcoin can work well in volatility also. Only humans (we both i.e.) angry because of heavy volatility... This system is for us, for humans :D


It is your choice, if you will join. I tried xapo also - see above - but I trying just Lykke, because they promise no fee's.

Report:
 - I decided to act again.
 - My funds on Lykke (at this time): 2407.76 CHF and 0.9449 BTC

My funds on Lykke not reachable at this time :( The same amount... But not as valuable, as before. I try to contact Lykke support this year also... I need patiente, I know.

A question: did sombody implemented this algo? Or act similar at price changes?

I like this idea, it helps to ensure that there is no overspend. However, it will be hard to maintain in a volatile market unless you have a lot of capital to make up the difference. Never used xapo so i won't participate but it is interesting nonetheless.

Many thanks. I think - it needs an app. With gun.db i.e. It could be act through a community - using such app. Every member can decide - how to do, but should be save the actual portfolio after every step.
I am at this time in an other project...... No time for all ideas - sorry. But this algo is unlicenced here :) But please let me inform, if you are ready with the implementation - I would like to be a node or member :) Sure.

My funds are unreachable at Lykke - since end of 2017? :)
I trying to solve it, but I have no enough time to do everything...

My Lykke wallet working!!!! Many thanks for the Support from Lykke......
I see my assets again.

This thread shows a possible FED system for bitcoin. But... It exists many issues. Fee's or unreachable accounts on exchanges, wallets...... Randomly.

We should learn from past - I think.
I started a development to establish a backed crypto - Charm. 100 Charm are 1 Kiss. It is possible then to pay with Kisses for a pizza or caffe :D It shouldn't be taxed. Or?
This "money" backed through "cells" and values as gold, silver, emeralds, ... later: oil, immobiles, ...

We planning this asset for Bitcoin network also! We hope, we find partners for our development. Dorotheum? Christie? ... Some is under diskussion already.

Please see and follow the steps of our development in the official thread:
https://bitcointalk.org/index.php?topic=4392525.0 (https://bitcointalk.org/index.php?topic=4392525.0)

Many thanks for attention, for any support...

I do not think such community is already in existence here and would also be interested in been a member if there’s any but my fear is on how we prevent whales from over dominating the group as we are sure of definitely having them and there might be chances of collaboration on their path to either increase or drop prices and this would sure forfeit the purpose of the group.

Please can you also try to put more light on the gun. DB., i understand you have a tight schedule but please understand that this is a necessity to many at the moment and you would be an hero to come through.

And an important information.
We hired a person, to be the CEO of our FED:

I would like to present his face:

https://i.imgur.com/HS9xnH1.png

I just met with he on the bitcoinwisdom. Bitstamp.

please:
https://github.com/amark/gun

https://github.com/ifinta/ourfed (https://github.com/ifinta/ourfed) working? :D I know a fund because MtGox what fund would be able to do this work - and earn. And Japan needs a stable bitcoin - in Japan can we pay with bitcoins in many shops... It would be a round idea to do or try a role of FED from side our Trustee in Japan - on the bitcoin market at 5000 dollars. Why not?

https://i.imgur.com/VAP7PxF.png

Or a big whale, i.e. Satosi (?) started to govern the market? ??? Why not?

Well, the guys that brought us the "Bart Simpson" chart pattern maybe are some kind of "Federal Reserve" ;)

https://blockexplorer.com/news/wp-content/uploads/2019/01/Crypto-bart-pattern-1024x531.jpg

While this is an old image, the pattern was very much used between 6000 and 7000 and also somewhat between 3000 and 4000.

Obviously, the reason are short-term traders. But they have the same effect than as if was a "FED" - they've stabilized the price a bit. So encouraging short-term trading techniques (including arbitrage and short-term short selling) seems a viable strategy to stabilize the Bitcoin price and make it more useful "as a currency" ;D

(I'm still working on the idea I linked before (http://). Maybe this year I can code a prototype. However, it seems this year is to become bullish, so it wouldn't get massive acceptance, but at the end of a bull phase stabilization mechanisms will get more demand (as people become increasingly fearful) ;) )

Sure :D

FYI