Thanks. I think I've had this idea since Nov 2011, too bad it took me until May to write about it.

1. Bit-Pay allows merchant to accept Bitcoin payments without any currency risk. If he wants $10 he gets $10 (minus a small fee).
2. Even if he doesn't want to rely on Bit-Pay, why does he have to wait until tomorrow? He can sell any received bitcoins instantly via an API. He doesn't even need to wait for the coins to clear into the exchange, he can operate with a reserve, or sell short.
3. Was he just scared about volatility, or was he ever actually harmed by it? If he kept it going I doubt he would have any significant losses due to volatility, even without doing anything to protect from it.

You're being awfully negative. Accepting bitcoins is awesome for people who want bitcoins but is also great for people who don't.

Businesses strive to minimize risks. Even if his expected profit/loss from volatility is 0 it creates variance which is bad. The concern is legitimate, his decision is not.

A merchant's speculative position on BTC doesn't have anything to do with whether he should accept Bitcoin payments. He could accept Bitcoin because it's cheaper while going short because he thinks the price will go down, or he can take a long position because he thinks the price will go up but not accept them because it's not worth the hassle.

I want some of the 21 million, but I also want to be able to use them, merchants accepting bitcoins is vital and the more there are the better.

Not if there is an incentive system in place which allows users who want fast confirmations to pay the miners who deliver a quick block.

Exactly.

Of course if the block frequency is infinite, so will the forks be. Interestingly, I think the length of forks grows very rapidly with diminishing time between blocks, exp(1/T).

If block time decreases for everyone then yes, miners aren't worse off. In the context of my proposal, a miner deciding to personally go for a shorter time will have his hashes wasted since his block has a higher chance to be rejected. That's one of the market forces restoring equilibrium.

@gmaxwell - I've already addressed most of these points. I think the problem is a too narrow definition of market - everything can be a market if there's an appropriate incentive scheme. I guess your point is that there's currently no good incentive scheme - which is a challenge, but I don't think an insurmountable one.

More frequent blocks will make forks longer, but I don't think there's a sense in which they can not converge.

That's the market of miners who don't wish their hashes to be wasted, and the market of users who prefer to minimize the probability of their transactions being double-spent. It is still an open problem how to have a way for users to act on this preference.

The market of nodes who wish to cut costs.

The market of users. Though this is a small enough problem that it can be solved by agreement rather than direct action.

The users have a preference for more decentralization. Again there's some work to find the incentive scheme that's best for letting them act on it.

There's a tradeoff with regards to block frequency. Where there's a tradeoff there's an optimal value, and I see no reason to believe 10 minutes is it.

What I'm trying to say is that the weight placed on arbitrary decrees should be minimized. "10 minutes is the block frequency and there's nothing you can do about it" may solve the incentive issues but it leads to a result far from optimum. With a dynamic block frequency you'll still need some decree to keep the incentives in line, but most of the heavylifting of finding the best value will be done by the actions of those who are affected by the decision. Think of it as a sort of amplification.

That's probably true. P2Pool emulates frequent blocks for variance purposes, and these days I have a different idea on how to make fast payments, so having a dynamic block frequency isn't critical.

That's the one, and it was indeed presented on a major TV channel (not on prime time though).

I think you've missed the point. Block frequency has the effects that I described on Bitcoin users, nodes and miners.

In preparation for the olympics, there was a segment on a news broadcast here in Israel telling the story of the City of London (not to be confused with London). (The segment itself isn't of Israeli origin so others may have seen it as well.)

In at least 2 points, they talked about its commerce/wealth and used gold coin icons to visualize it.

Except that it wasn't just any gold coin. It was the Bitcoin icon.

I thought it was pretty cool.

I had suggested to Alberto to communicate more regularly and he said he would. I'll remind him of this if there's need.

I've seen this happen before, it looks like the positions were liquidated at a price of 0, which causes a huge loss bringing your balance to the negative. Alberto was supposed to fix this, I'll check with him soon for updates.

They assume no such thing. If the BTC price goes down ripper234 will have to pay his friend, that's the whole point. All the different ways to handle this are completely equivalent on the price response function, the only thing that changes is the technical details of how it is handled.

The friend can make his own investment decisions. If he reaps the rewards of a successful investment, why shouldn't he lose on a sour one? And why should ripper234 lose on a bad investment if he gains nothing from a successful one?

Anyway, in practice the amount at stake won't go all the way to $30K. When the BTC prices rises by, say, 50%, the friend will withdraw some of the deposit, and use it to settle part of the CFD, keeping the amount at stake at $10K which he is comfortable risking.

Yes, that's what I meant. Buy to have bitcoins, short to neutralize the position.

However, in the loan swap arrangement, the friend won't be the one physically buying coins.

Your friend will need to simultaneously buy bitcoins and take a short BTC position of equal size so that the overall exposure to BTC price is 0. There are several ways to physically take the short position, and the facts that you trust each other and that you are looking for a long position help. You can do a CFD as in the linked thread. Or you can do a CFD where the settlement is done by paying traditional currency rather than BTC. Or you can do a loan swap; the friend lends you some amount of USD (which you could use to buy bitcoins to lengthen your position) and you lend the friend some amount of BTC (which could be the same bitcoins that you just bought). And of course the friend could just short on a dedicated margin platform, but since the platform doesn't trust him and needs to profit, this will be more costly.

Yes, I'm consulting for Alberto so I have some knowledge about the current and future way things are handled (some of which I've put him up to), but the decisions and implementation are always Alberto's.

If you buy a contract at 1590 then when it reaches 1530 you are at $60 loss. The current maintenance for gold is 1% so to be force-liquidated at that point you need your net value to be 1%*1530=$15.3, which means that your balance should be $60+$15.3 = $75.3. If 1BTC = $8.5 this means your deposit should be 8.86 BTC.

Note that the deciding BTC rate is at the time of liquidation, not when opening the position. And this is all assuming everything works properly, which still needs to be tested.

Yeah, I should have clarified that this isn't a reply to your alertexchanger woes, more to your lament about difficulty getting bitcoins. If you don't manage to go forward with your current attempt, you could withdraw from Payza and try a Canadian option. I'm not sure what those are currently but maybe you could try https://www.nanaimogold.com/, they've existed for a long time.

You didn't specify your country, and your best bet for small amounts is likely specific to your country or region. If in the US you have many options, e.g. cash deposit in a bank via BitInstant.

FWIW, CryptoStocks is an aspiring alternative to GLBSE. I don't know what fees it charges though.

Among other things, the listing fee helps keep the GLBSE asset list uncluttered.

Also original post.

It's plenty different. Depending on the solution chosen (each with its own set of tradeoffs), you can do it without any third party. Even if there's a third party, then unlike CC they can't take your money whenever they want; the barrier of entry is very low, and so is the cost of providing the service, thus it will be much more competitive and efficient. There's minimal vendor lock-in, you don't even necessarily have to know who is providing the service, it can all be handled in the background by the software.

Raw Bitcoin transactions by design take time to be fully finalized; what makes it special is the powerful cryptography and scripting language which allows building flexible mechanisms on top of the raw transactions.