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Who her likes Konrad Graf? He is a leading Bitcoin economist.
He said both will be expected to trade in exchanges and probably for different prices. Who are you to disagree?
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Alot of scBTC will be only valuable inside community what creates(and secure) them. But inside this community it will have value exactly 1 BTC. No matter what is your value. It is win : win strategy
a) they do not spam bitcoin network.
b) they do not pay transaction fees.
And it can be more secure than Bitcoin -> b/c those members can met in personally and build safe "oracle (timestamp server)" what will sign every transaction.
why use Bitcoin then? you might as well use Berkshare Bucks if you want or desire such a centralized solution. b/c advantage: at the moment I need some utility (e.g. I want trade on exchange, I want buy cofe or gas) => I accept: at the same moment I cannot make international transfers. I can only transact with small group who accepts SC (for some utility). well then, it's obvious you're putting your priorities and wants above those of the community in general. in other words, you want the Bitcoin network to provide the security for your localized SC and you don't care if the price of BTC drops as a result. |
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My point being there will be a motive to short the SC token.
great point. the shorts will do this b/c they will recognize that the SC is less secure and more prone to failure. as they drive the price of scBTC down, all those here who think the 1:1 peg demands that the price of 1 BTC= 1 scBTC will sell their BTC to follow. No one will try to short scBTC. If someone tried, people will buy the lower priced scBTC, transfer them to BTC and sell them for the real price. let me put it in simple terms w/o numbers.
you're taking a chunk of coin off a very secure ledger and moving them over to a less secure ledger. it's to be expected those coins moved will be worth less b/c they are now less secure.
b/c of arbitrage, you can expect the moved coin to drag down the price of the not moved coin to a lower equilibrium.
I'll take your arguments only if you sell me your bitcoins for $100 or at least you find me somebody who sell. :-) you can try to personalize this but it doesn't negate my generalized market based argument. |
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Alot of scBTC will be only valuable inside community what creates(and secure) them. But inside this community it will have value exactly 1 BTC. No matter what is your value. It is win : win strategy
a) they do not spam bitcoin network.
b) they do not pay transaction fees.
And it can be more secure than Bitcoin -> b/c those members can met in personally and build safe "oracle (timestamp server)" what will sign every transaction.
why use Bitcoin then? you might as well use Berkshare Bucks if you want or desire such a centralized solution. |
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My point being there will be a motive to short the SC token.
great point. the shorts will do this b/c they will recognize that the SC is less secure and more prone to failure. as they drive the price of scBTC down, all those here who think the 1:1 peg demands that the price of 1 BTC= 1 scBTC will sell their BTC to follow. No one will try to short scBTC. If someone tried, people will buy the lower priced scBTC, transfer them to BTC and sell them for the real price. let me put it in simple terms w/o numbers.
you're taking a chunk of coin off a very secure ledger and moving them over to a less secure ledger. it's to be expected those coins moved will be worth less b/c they are now less secure.
b/c of arbitrage, you can expect the moved coin to drag down the price of the not moved coin to a lower equilibrium.
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My point being there will be a motive to short the SC token.
great point. the shorts will do this b/c they will recognize that the SC is less secure and more prone to failure. as they drive the price of scBTC down, all those here who think the 1:1 peg demands that the price of 1 BTC= 1 scBTC will sell their BTC to follow. |
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simple theory question for all SC proponents. so simple in fact what am i missing?
we have 13M BTC @ around $325. SC comes along and lets say 3M BTC --> scBTC (just for illustration). we know that the price of scBTC has to be lower given MM, newness, being unproven, risk of failure, etc. let's say price starts off @ $100.
why don't arb bots circle back around and drive BTC price down to say $250-270 or whatever the equilibrium is btwn BTC and scBTC, which we know is lower? multiply this by 1000 SC's.
I haven't kept up with the side chain hype. What's the mechanism of arbitrage here? How would you be able to profit off a price differential between this sidechain coin and bitcoin? read up above |
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let me put it in simple terms w/o numbers.
you're taking a chunk of coin off a very secure ledger and moving them over to a less secure ledger. it's too be expected those coins moved will be worth less b/c they are now less secure.
b/c of arbitrage, you can expect the moved coin to drag down the price of the not moved coin to a lower equilibrium.
But why will you move the coins in the first place??? for experimentation, speculation, stupidity, pump and dump, who knows? we know it will occur. But why will you sell them for a lower price instead of transfering them back to BTC? you don't have to do anything. the arb bots will take care of it for you. What??? Someone have to sell the cheap coins? do you seriously think that when a SC is first established on Day 1, 1 scBTC = 1 BTC in fiat terms?. it can't be b/c of newness, less security, chance of failure, etc. with time, as it proves itself, the arb bots will equilibrate the price but at a lower level b/c of the always present risk of failure of the SC. the SC is not Bitcoin. "newness, less security, chance of failure, etc." is compensated with "increased utility" so yes on Day 1, 1 scBTC = 1 BTC in is fiat terms and forever until SC crash. another way to address your point is that a "theoretical" will never trump a "known". we know MM is less secure than direct mining. we don't know that a new untested "innovation" will counter weigh the value of less security. MM is only one type of SC (it is good only for world wide use). It is possible to use "oracle" for mining or ... group of people at an island can use private SC with fixed difficulity (b/c they know each others) ... they can use their virtual currency, and this currency can be exchanged 1:1 bitcoin. They do not have to pay transaction fees if they agree and use only 1 confirmation (every 2 min). any SC that employs security any less than MM is even less secure. therefore, its scBTC will be valued even less. the feedback thru arb bots will be to drag down BTC even more. |
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simple theory question for all SC proponents. so simple in fact what am i missing?
we have 13M BTC @ around $325. SC comes along and lets say 3M BTC --> scBTC (just for illustration). we know that the price of scBTC has to be lower given MM, newness, being unproven, risk of failure, etc. let's say price starts off @ $100.
why don't arb bots circle back around and drive BTC price down to say $250-270 or whatever the equilibrium is btwn BTC and scBTC, which we know is lower? multiply this by 1000 SC's.
Btc price would go up first, because lower monetary base in the proven old bitcoin block chain (13m -> 10m) no, the BTC have just been transformed to lower value units, scBTC, b/c they have been moved to a less secure, unproven ledger. this will drag down the BTC price to an equilibrium price btwn the two. In order for the arb to work, the coins have to move back to the bitcoin blockchain. its a 2 way peg, so both BTC and scBTC can move freely back and forth. initially, scBTC are priced lower at $100 with BTC at $325. bots sell BTC for fiat, circle around and buys scBTC on the exchange, push scBTC back thru the peg to BTC, rinse and repeat. Why would anyone sell scBTC for $100 when they can transfer them to BTC and sell them for $325? look, we know that the SC is LESS SECURE. that means any scBTC riding on that less secure ledger is worth less. that has to be priced in and will feedback to BTC via the arb bots. Yes SC is LESS SECURE, but SC allow you trade bitcoins or SC will add diferent feature e.g. fast confirmation. The key is 1 BTC on MC = 1 BTC on SC Dream on. If it's a competing token there is an opportunity cost let's say laundering dirty coins or anonymity for the illegal activities. Then there is the SC needs an economic incentive to survive that erosion will degrade the 1:1 peg. Bitcoin already does this? Unregulated exchanges already exist, say into alt coins or BTC-E. No rush out the door to alt coins so far. that's b/c altcoins don't have the luxury of being MM'd by the Bitcoin miners. the only chance SC's have to sell their whole concept is if Austin Hill can introduce a market distortion by convincing miners to MM. you know, the "something for nothing" concept. |
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let me put it in simple terms w/o numbers.
you're taking a chunk of coin off a very secure ledger and moving them over to a less secure ledger. it's too be expected those coins moved will be worth less b/c they are now less secure.
b/c of arbitrage, you can expect the moved coin to drag down the price of the not moved coin to a lower equilibrium.
But why will you move the coins in the first place??? for experimentation, speculation, stupidity, pump and dump, who knows? we know it will occur. But why will you sell them for a lower price instead of transfering them back to BTC? you don't have to do anything. the arb bots will take care of it for you. What??? Someone have to sell the cheap coins? do you seriously think that when a SC is first established on Day 1, 1 scBTC = 1 BTC in fiat terms?. it can't be b/c of newness, less security, chance of failure, etc. with time, as it proves itself, the arb bots will equilibrate the price but at a lower level b/c of the always present risk of failure of the SC. the SC is not Bitcoin. "newness, less security, chance of failure, etc." is compensated with "increased utility" so yes on Day 1, 1 scBTC = 1 BTC in is fiat terms and forever until SC crash. another way to address your point is that a "theoretical" will never trump a "known". we know MM is less secure than direct mining. we don't know that a new untested "innovation" will exactly counter weigh the value of less security. |
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do you seriously think that when a SC is first established on Day 1, 1 scBTC = 1 BTC in fiat terms?. it can't be b/c of newness, less security, chance of failure, etc. with time, as it proves itself, the arb bots will equilibrate the price but at a lower level b/c of the always present risk of failure of the SC. the SC is not Bitcoin. Before the arb bots can work, first there has to be people who hold sidechain units who are willing to sell them for fiat at a loss instead of converting them back to Bitcoin. I'm not sure what the mechanism for this would be. there may be some in scBTC who need to get out fast for IRL reasons and would rather take a slight loss selling on an exchange rather than going back thru the peg with it's contest/confirmation delays. ppl do all sorts of crazy shit. several proponents here have already agreed scBTC would be priced less than BTC, at least initially. |
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forever until SC crash.
you just proved my point. that single fact means a scBTC will forever be worth less than a BTC. thru arbitrage, the scBTC will drag down the BTC price to where it "appears" they are equal in fiat terms. |
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let me put it in simple terms w/o numbers.
you're taking a chunk of coin off a very secure ledger and moving them over to a less secure ledger. it's too be expected those coins moved will be worth less b/c they are now less secure.
b/c of arbitrage, you can expect the moved coin to drag down the price of the not moved coin to a lower equilibrium.
But why will you move the coins in the first place??? for experimentation, speculation, stupidity, pump and dump, who knows? we know it will occur. But why will you sell them for a lower price instead of transfering them back to BTC? you don't have to do anything. the arb bots will take care of it for you. What??? Someone have to sell the cheap coins? do you seriously think that when a SC is first established on Day 1, 1 scBTC = 1 BTC in fiat terms?. it can't be b/c of newness, less security, chance of failure, etc. with time, as it proves itself, the arb bots will equilibrate the price but at a lower level b/c of the always present risk of failure of the SC. the SC is not Bitcoin. |
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let me put it in simple terms w/o numbers.
you're taking a chunk of coin off a very secure ledger and moving them over to a less secure ledger. it's too be expected those coins moved will be worth less b/c they are now less secure.
b/c of arbitrage, you can expect the moved coin to drag down the price of the not moved coin to a lower equilibrium.
But why will you move the coins in the first place??? for experimentation, speculation, stupidity, pump and dump, who knows? we know it will occur. But why will you sell them for a lower price instead of transfering them back to BTC? you don't have to do anything. the arb bots will take care of it for you. |
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let me put it in simple terms w/o numbers.
you're taking a chunk of coin off a very secure ledger and moving them over to a less secure ledger. it's too be expected those coins moved will be worth less b/c they are now less secure.
b/c of arbitrage, you can expect the moved coin to drag down the price of the not moved coin to a lower equilibrium.
But why will you move the coins in the first place??? for experimentation, speculation, stupidity, pump and dump, who knows? we know it will occur. |
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let me put it in simple terms w/o numbers.
you're taking a chunk of coin off a very secure ledger and moving them over to a less secure ledger. it's to be expected those coins moved will be worth less b/c they are now less secure.
b/c of arbitrage, you can expect the moved coin to drag down the price of the not moved coin to a lower equilibrium.
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simple theory question for all SC proponents. so simple in fact what am i missing?
we have 13M BTC @ around $325. SC comes along and lets say 3M BTC --> scBTC (just for illustration). we know that the price of scBTC has to be lower given MM, newness, being unproven, risk of failure, etc. let's say price starts off @ $100.
why don't arb bots circle back around and drive BTC price down to say $250-270 or whatever the equilibrium is btwn BTC and scBTC, which we know is lower? multiply this by 1000 SC's.
Btc price would go up first, because lower monetary base in the proven old bitcoin block chain (13m -> 10m) no, the BTC have just been transformed to lower value units, scBTC, b/c they have been moved to a less secure, unproven ledger. this will drag down the BTC price to an equilibrium price btwn the two. In order for the arb to work, the coins have to move back to the bitcoin blockchain. its a 2 way peg, so both BTC and scBTC can move freely back and forth. initially, scBTC are priced lower at $100 with BTC at $325. bots sell BTC for fiat, circle around and buys scBTC on the exchange, push scBTC back thru the peg to BTC, rinse and repeat. Why would anyone sell scBTC for $100 when they can transfer them to BTC and sell them for $325? look, we know that the SC is LESS SECURE. that means any scBTC riding on that less secure ledger is worth less. that has to be priced in and will feedback to BTC via the arb bots. Yes SC is LESS SECURE, but SC allow you trade bitcoins or SC will add diferent feature e.g. fast confirmation. The key is 1 BTC on MC = 1 BTC on SC but 1BTC on MC =! 1 scBTC on SC in fiat terms. and that is the result of less security being on a different blockchain/ledger. the equilibrium fiat price will be lower. If the price is different in fiat then you can arbitrage and extract fiat -> 1 BTC = 1 scBTC ( you can free exchange, this cost you only fees for miners ) did you even read what i wrote? initially, scBTC are priced lower at $100 with BTC at $325. bots sell BTC for fiat, circle around and buys scBTC on the exchange, push scBTC back thru the peg to BTC, rinse and repeat. forget the $100, that was just for illustration. pick any price below 325. |
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simple theory question for all SC proponents. so simple in fact what am i missing?
we have 13M BTC @ around $325. SC comes along and lets say 3M BTC --> scBTC (just for illustration). we know that the price of scBTC has to be lower given MM, newness, being unproven, risk of failure, etc. let's say price starts off @ $100.
why don't arb bots circle back around and drive BTC price down to say $250-270 or whatever the equilibrium is btwn BTC and scBTC, which we know is lower? multiply this by 1000 SC's.
Btc price would go up first, because lower monetary base in the proven old bitcoin block chain (13m -> 10m) no, the BTC have just been transformed to lower value units, scBTC, b/c they have been moved to a less secure, unproven ledger. this will drag down the BTC price to an equilibrium price btwn the two. In order for the arb to work, the coins have to move back to the bitcoin blockchain. its a 2 way peg, so both BTC and scBTC can move freely back and forth. initially, scBTC are priced lower at $100 with BTC at $325. bots sell BTC for fiat, circle around and buys scBTC on the exchange, push scBTC back thru the peg to BTC, rinse and repeat. Why would anyone sell scBTC for $100 when they can transfer them to BTC and sell them for $325? look, we know that the SC is LESS SECURE. that means any scBTC riding on that less secure ledger is worth less. that has to be priced in and will feedback to BTC via the arb bots. Yes SC is LESS SECURE, but SC allow you trade bitcoins or SC will add diferent feature e.g. fast confirmation. The key is 1 BTC on MC = 1 BTC on SC but 1BTC on MC =! 1 scBTC on SC in fiat terms. and that is the result of less security being on a different blockchain/ledger. the equilibrium fiat price will be lower. Increased utility has to make up for less security if someone is willing to use the SC. The price will be the same with a two way peg. but that won't be proven right out of the box. it will take time, experimentation, and speculation on the SC before the market will "trust" the SC, if ever at all. in the meantime, expect the true value of 1 scBTC < 1 BTC. |
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in fact, is this what the market is pricing in now since the announcement?
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simple theory question for all SC proponents. so simple in fact what am i missing?
we have 13M BTC @ around $325. SC comes along and lets say 3M BTC --> scBTC (just for illustration). we know that the price of scBTC has to be lower given MM, newness, being unproven, risk of failure, etc. let's say price starts off @ $100.
why don't arb bots circle back around and drive BTC price down to say $250-270 or whatever the equilibrium is btwn BTC and scBTC, which we know is lower? multiply this by 1000 SC's.
Btc price would go up first, because lower monetary base in the proven old bitcoin block chain (13m -> 10m) no, the BTC have just been transformed to lower value units, scBTC, b/c they have been moved to a less secure, unproven ledger. this will drag down the BTC price to an equilibrium price btwn the two. In order for the arb to work, the coins have to move back to the bitcoin blockchain. its a 2 way peg, so both BTC and scBTC can move freely back and forth. initially, scBTC are priced lower at $100 with BTC at $325. bots sell BTC for fiat, circle around and buys scBTC on the exchange, push scBTC back thru the peg to BTC, rinse and repeat. Why would anyone sell scBTC for $100 when they can transfer them to BTC and sell them for $325? look, we know that the SC is LESS SECURE. that means any scBTC riding on that less secure ledger is worth less. that has to be priced in and will feedback to BTC via the arb bots. Yes SC is LESS SECURE, but SC allow you trade bitcoins or SC will add diferent feature e.g. fast confirmation. The key is 1 BTC on MC = 1 BTC on SC but 1BTC on MC =! 1 scBTC on SC in fiat terms. and that is the result of less security being on a different blockchain/ledger. the equilibrium fiat price will be lower. |
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