@NewLiberty
I believe in such a scenario, the ETF would cease to be THE pricing mechanism. People will buy on the spot market as they become undervalued, decoupling the ETF rate from the "physical" rate. Unlike gold or any other asset, the barrier to actually move the bitcoins is relatively small.
Well. Comparing with gold again: why doesn't the physical market decouple from paper in gold? It seems the argument is that gold is hard to buy and costly to store and transact (which is not true for bitcoin). However: another reason is that big-shot institutional investors like pension funds or whatever might not be allowed to invest into gold directly. This is probably also true for bitcoin. So the case is not clear-cut. |
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When the price of BTC can be manipulated with no actual BTC trading hands and by using fiat collateral instead through trading ETF shares instead, we have the pernicious effect.
It doesn't seem to me that you have shown how collateral is in any way relevant: it is fiat in both cases, and in both cases either Bitcoins or ETF shares backed by Bitcoins must be borrowed. I find it almost incomprehensible that the implications of the difference between borrowing actual Bitcoins, and borrowing ETF shares backed by Bitcoins is not clear in light of the April 12,15 activities in the GLD ETF, in a market where the ETF is the pricing mechanism (as it largely is for gold). When market participants (including those that are not beholden to anti-manipulation rules, such as the central banks) can move the market price of a commodity without ever having to go to the market and acquire any of that commodity through the use of an ETF which acts as the price setting mechanisms, and can do so by securing their trades collateralized with fiat instruments that they can create at will... What part of this is confusing? If these market participants had to go to the market to acquire bitcoin in order to sell ETF shares, there would be a buyer for each seller in the price setting mechanism of actual Bitcoin which would limit the effect as actual Bitcoin owners could decide to sell or not at whatever the price may be. When you don't need to borrow any bitcoin, and only need to borrow ETF shares (and where no bitcoin need be bought at market to support the short selling) such market participants can change the market price of bitcoin at will with relative ease in whatever way they like. An ETF (such as the WBT) acting as THE pricing mechanism for BTC enables this. It resets the price of bitcoin with no bitcoins being traded, and does it through a small fraction of the bitcoin market (just those held in the trust). Can I get a show of hands that DO understand this issue? I feel that I am getting a bit repetitive here, and I don't want to belabor the point if it is not needed. I'm still unclear about how this works. You said earlier the shares of the ETF have to be 20% backed by bitcoins? So if there's 50,000 BTC in the ETFs coffers, it means the would've issued 250,000 shares for the trading games into the market. While this seems bad in and of itself (inflation of bitcoin M2 or whatever you might call it if you count in the shares of the ETF) it still seems there is a limit to the malicious short-selling. This leads to another question: you said the shares have to actually be borrowed in order to short-sell. What if all shares are in the hands of Joe Normal institutional investors and they are reluctant to lend? Is their consent needed for the lending of shares or will the Winklevoss just lend shares owned by others to the short-seller? |
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I finally read your article. You fail to mention mpex.co, which offers futures and options. I don't know how counter-party risk is handled and the operator seems to be perceived by many as an asshole, but isn't mpex at least worth mentioning?
Yes, certainly worth...mentioning. I generally avoid saying much about MPEx. I'm not aware of anything about the exchange that would change the general points of the derivatives article, including those on market makers, counterparties, and liquidity. well, I don't know much about this stuff, but there seem to be at least standardized options and I don't know how counterparty risk is handled. Of course you're probably correct, it doesn't invalidate your points. |
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I picked up a few coins today, sort of as insurance in case we run but also as I just hate not having any Bitcoins, yes, outside of 1 Casascius, I didn't have any! Knowing your fundamental view I must say you have balls of steel sitting there with no coins... |
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No, we will escape when they lose patience and start to buy in.
You forgot the other option, which is holders get scared and start to sell out. scared of what? Long term investment is bullish still, there is no reason to be scared. Yep. Most of the newbies have been spooked out already, and this ain't shit for us old hats. there's new noobs coming in, though. It seems quite a few have been waiting on the sidelines and now contact me on localbitcoins.com wanting to buy their first coin. |
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...The "advanced" financial instruments that might be desired by some big players/investors can surely be built on top of the underlying directly somehow, no?
Absolutely, they could be! Unfortunately, so far the Bitcoin economy as a whole hasn't yet mustered what is needed to reinvent that wheel. As I mentioned in the article on Bitcoin Derivatives, Liquidity and Counterparty Risk, which is linked from the article that kicked off this thread, the Bitcoin economy could desperately do with decent derivatives. I finally read your article. You fail to mention mpex.co, which offers futures and options. I don't know how counter-party risk is handled and the operator seems to be perceived by many as an asshole, but isn't mpex at least worth mentioning? |
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...The "advanced" financial instruments that might be desired by some big players/investors can surely be built on top of the underlying directly somehow, no?
Absolutely, they could be! Unfortunately, so far the Bitcoin economy as a whole hasn't yet mustered what is needed to reinvent that wheel. As I mentioned in the article on Bitcoin Derivatives, Liquidity and Counterparty Risk, which is linked from the article that kicked off this thread, the Bitcoin economy could desperately do with decent derivatives. However, existing Bitcoin exchanges haven't yet even advanced to the point of acting as counterparty to the trades they broker or providing market making services -- they're still operating as trading network style exchanges with transactions between one person and another -- let alone moving in a direction that would permit a standardized options clearinghouse to function. If you want a shortcut to all that, the relatively easier way to make it happen is to stuff the Bitcoins into an ETF wrapper, backed by real Bitcoins, that enables all the existing market apparatus to be applied to it: introduce a Bitcoin ETF, and if there is sufficient volume, expect options on the ETF to follow. I get that to some folks the very idea of any transaction Bitcoin-related that doesn't occur directly with real Bitcoins is anathema. However, unless real businesses handling significant sums can find a way to hedge currency exposure, I think it's going to be pretty tough to convince many of them to take Bitcoin transactions seriously. It seems we have arrived again at the "great divide"... some want to integrate cryptocurrency into the existing (proven) structures in order for it to be able to grow into something serious and game-changing... a new kind of money. Some want to just fuck away with all the shit, hang the banksters and their masters and start over "System D"-style. I can understand both approaches. The rebel in me tends to prefer the latter "solution" and suspects evildoing from advocates of the former approach. At this point I was initially going to write about the part in me that preferred the former approach of integration, but quite frankly, I am failing to come up with a convincing story... to be continued. |
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I guess when you have Winklevoss money you can pay a PR firm to come here with some sock puppet accounts and try to promote this bullshit.
Let's give Dr. Greg the benefit of the doubt, please. There's no gain for anyone in destroying the friendly atmosphere. |
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Anyone dumb enough to invest in a bitcoin ETF, or any "share" of bitcoin being held by someone else, is dumber than a pile of rocks - seriously.
Just buy the fuckin bitcoins and keep them yourself. Why put your trust in an unknown entity? I think a lot of you are still children that need someone to hold your hand for you.
Anyone dumb enough to invest in a gold ETF, or any "share" of gold being held by someone else, is dumber than a pile of rocks - seriously. Just buy the fuckin gold and keep it yourself. Why put your trust in an unknown entity? I think a lot of you are still children that need someone to hold your hand for you. |
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This is my problem as well. I have SWIFT and Account Number, but not IBAN.
What do you mean you have SWIFT and acct number? I think you can construct IBAN from that data, no? Thanks! still don't get it? Did you guys somehow get your own SEPA-capable fiat account? |
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The pattern is awesome, I've never seen it before. Good luck with selling!
Thanks. The pattern is a swirl damascus. Over 200 layers of high carbon steel, which gives the metal that awesome look. awesome, I ordered.
Well Done! I bought model 1 and 3. Thanks
Awesome. Both your orders (molecular's and Wangdu's) are being shipped out as I speak. yay! really looking forward to it. I've been looking for a knife for quite some time but couldn't get myself to buy one. I kinda looked at #2 and thought: this is the one... don't know why. I had been scanning ebay for knifes... I guess being able to pay with coins made it easier  |
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The pattern is awesome, I've never seen it before. Good luck with selling!
Afaik it's folded over and over many times. Hence the pattern. |
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Why not just register the firstbits by sending like 0.001 ltc to each address and put the rest in later?
I think this is a good suggestion. Other remark: Mike is specifically offering delayed loading for customs purposes. Afaik he will fund coins at some point in any case. |
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Site is stuck At block 246725
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The first bits address you will be able to look up on the litecoin block chain. This has always been an option to verify funds.
I will release a public list of funded addresses in the near future. This way you can cross check to see if the coin being resold (assuming you are buying from someone else besides me) does in fact have coins at the specified address.
Each coin comes with a certificate with the FULL ADDRESS of the coin too.
Firstbits is not sufficient. Recipient of unloaded coin could vanity-gen an address with identical firsbits. You have to use producer list to verify coin. Good point. Then the certificate and the list I provide will be sufficient. Not sure about that, as I understand it, say the coin's FirstBit was Labcde then anyone vanity generating the same would get a FirstBits of Labcde x, so when checking the original Firstbits would show as an unfunded address still. edit: if FirstBits is just the first 5 chars, ie Labcd, then that would be the coin's & a van-gen would have Labcd xi think this is correct. I thought the assumption was smoothie would send unfunded coins. In such a case the attacker firstbits would be Labcd and smoothie would not even load the coin because it was reported "lost" by postal service / recipient / attacker. Therefore everything would look fine (even 10 LTC would be on Labcd) to an unsuspecting user only checking firstbits. Only upon redemption attempt would he find out the private key doesn't match (or when attacker moves the 10 LTC and the user checks the firstbits again). Also: firstbits is handled a little differently by different sites. For example blockchain.info just searches for the first occurrence of a given prefix (no matter the length). |
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Yeah like currently widely accepted. Sadly winkelvoss are the only ones that can bring legitimacy, eg. no more bank accounts getting seized. without winkelvoss, we may never have true legitimacy
"true legitimacy"? Like the current criminal financial system? How on earth does the winklevoss ETF avoid bank accounts getting seized? For some in-depth analysis of that stuff interested people can read: https://bitcointalk.org/index.php?topic=252330.0 |
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apart from the danger of "them" "pulling a GLD" on us by making the WTF THE pricing mechanism for BTC and then in some sort of colluded half-secrecy pulling levers to convert it into an "orderly market" (i.e. keeping it down using printable collateral), isn't there another possible negative effect: the redirection of demand from bitcoin to the WTF. Holding a share of WTF is by no means the same as holding a Bitcoin (privacy, third-party risk, transactability) and I'd hate to see people want to join Bitcoin and then be sold some paper by their bank.
In general: even if this is an evil plan to keep bitcoin small, I somehow doubt it will work. Bitcoin is not gold and it already has low transaction and storage cost and can be transacted electronically. There is no need for a substitute in my mind. The "advanced" financial instruments that might be desired by some big players/investors can surely be built on top of the underlying directly somehow, no?
Also: I don't necessarily want an orderly market, I primarily want a free market.
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Was there anything really expensive sold about 8h ago?  lol, you mean bitmit was sold again? |
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without winkelvoss, we may never have true legitimacy
"true legitimacy"? Like the current criminal financial system? |
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Our user's accounts will be protected by the "Garantie des dépôts" which is the French equivalent of the American FDIC (the insurance cap applies to each account individually, and not to the sum of all user balances, so unless your EUR balance exceeds 100kEUR your fiat is 100% insured by the French taxpayer)
Each account will in a few months get its very own IBAN number, users will be able to use it as any other bank account, have their salaries and pensions sent there and have them automatically converted to Bitcoin if they so wish) I still wait for my "very own" IBAN number. This is my problem as well. I have SWIFT and Account Number, but not IBAN. What do you mean you have SWIFT and acct number? I think you can construct IBAN from that data, no? |
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