Kazu (OP)
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April 21, 2013, 05:18:43 AM |
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maybe because it's silly to agree to a bet in which your winnings are denominated in the currency whose exchange rate your bet is against.
Read thread please.
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Rodyland
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April 21, 2013, 05:41:08 AM |
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I've been trying to work out how escrow would work in a multi-currency bet like this. Escrow implies lack of trust that the parties will pay up honestly, of course.
Take a simple case of 50/50 odds. Each bets BTC1/$100, as today's price is $100.
Bear target:$50 Time: 1 month
Both parties expect to double their money (n their respective currencies) if they win the bet.
If the bear wins, the bitcoin the bull deposited is only worth $50, so the bear will only get half his winnings.
If the bull wins, the US$ the bear deposited may buy less that BTC1.
If all bets are converted to US$ on initiation, the bear is covered, but the bull may lose even if he wins. If all bets are converted to bitcoin on deposit, the bull is covered but the bear may lose even if he wins.
What you really need here is a futures contract. The bull needs a futures contract to sell BTC1 at today's price in 1 month. The bear needs a futures contract to buy BTC1 at today's price in 1 month. So what you really have is a future's contract between the two parties, each of whom doesn't trust the other will/can deliver.
Short of each participant depositing enough in escrow to cover a losing bet (bull to deposit US$100, bear to deposit BTC1), plus a margin to cover adverse exchange movements (say, an extra US$100 from the bear, and an extra BTC1 from the bull, at a minimum), I'm not sure how this would work.
Anyone else got any ideas?
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adraza
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April 21, 2013, 08:55:15 AM |
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well, in this case at least, it is quite simple, we agreed from the beginning to have the bet in USD. And use Bitcoin just for value transmitting properties.
For higher value bets we do need an escrow able to receive BTC and transfer it to USD, than keep the dollars safe until the end. I think this is not a trivial problem.
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Rodyland
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April 21, 2013, 09:49:08 AM |
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well, in this case at least, it is quite simple, we agreed from the beginning to have the bet in USD. And use Bitcoin just for value transmitting properties.
For higher value bets we do need an escrow able to receive BTC and transfer it to USD, than keep the dollars safe until the end. I think this is not a trivial problem.
If you're willing to trust me and mtgox, I can offer said service. I am in Australia, so my USD account is empty. There are others on these forums that offer escrow services as well.
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rpietila
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April 21, 2013, 09:49:52 AM |
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We are in bear mode! Doesn't someone want to short!
I am always willing to short, but not on bad odds.
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adraza
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April 21, 2013, 10:16:18 AM |
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well, in this case at least, it is quite simple, we agreed from the beginning to have the bet in USD. And use Bitcoin just for value transmitting properties.
For higher value bets we do need an escrow able to receive BTC and transfer it to USD, than keep the dollars safe until the end. I think this is not a trivial problem.
If you're willing to trust me and mtgox, I can offer said service. I am in Australia, so my USD account is empty. There are others on these forums that offer escrow services as well. what's your price?
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Rodyland
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April 21, 2013, 10:28:06 AM |
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well, in this case at least, it is quite simple, we agreed from the beginning to have the bet in USD. And use Bitcoin just for value transmitting properties.
For higher value bets we do need an escrow able to receive BTC and transfer it to USD, than keep the dollars safe until the end. I think this is not a trivial problem.
If you're willing to trust me and mtgox, I can offer said service. I am in Australia, so my USD account is empty. There are others on these forums that offer escrow services as well. what's your price? This is the first time I've done this, so I'll offer it for the cost of the conversion trades on each side (0.6% each way, per person, so 1.2% each). The only proviso is that I won't carry any delay risks for conversion of bitcoin to US$. As long as the size of the bets aren't large and you send the coins when I'm awake and at a vaguely pre-determined time, the price you send at should be the price I buy at.
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adraza
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April 21, 2013, 10:41:55 AM |
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well, in this case at least, it is quite simple, we agreed from the beginning to have the bet in USD. And use Bitcoin just for value transmitting properties.
For higher value bets we do need an escrow able to receive BTC and transfer it to USD, than keep the dollars safe until the end. I think this is not a trivial problem.
If you're willing to trust me and mtgox, I can offer said service. I am in Australia, so my USD account is empty. There are others on these forums that offer escrow services as well. what's your price? This is the first time I've done this, so I'll offer it for the cost of the conversion trades on each side (0.6% each way, per person, so 1.2% each). The only proviso is that I won't carry any delay risks for conversion of bitcoin to US$. As long as the size of the bets aren't large and you send the coins when I'm awake and at a vaguely pre-determined time, the price you send at should be the price I buy at. for small bets I do not need escrow. As you can see I already trusted OP with a 100 USD bet (and another 1$ already finished).
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adraza
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April 21, 2013, 10:54:48 AM |
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So for a large bet we have to trust you AND MtGox. But I have read this https://bitcointalk.org/index.php?topic=169957.0http://www.bitescrow.org/https://en.bitcoin.it/wiki/User:Casascius/Escrow_scheme_draftand this a different aproach. And a better one! We do not have to trust the escrow, we need the third party only as a judge if we do not agree. And the judge can not "run-away" with the wage. He needs one of us. The only problem is that this is an essentially Bitcoin technology ( Another good reason to be long term bullish), so considering that I want the bet to be denominated in USD, the bull has to deposit more BTC at the begining, just to cover BTC decline in price. On the other hand if the the Bull wins he will take only a part from the deposit equivalent to USD (higher price BTCUSD). So we can pay the "judge" only if we need his opinion; or a basic small fee for keeping the 3rd key and a bigger fee if we need his opinion.
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Rodyland
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April 21, 2013, 11:24:50 AM |
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So for a large bet we have to trust you AND MtGox. But I have read this https://bitcointalk.org/index.php?topic=169957.0http://www.bitescrow.org/https://en.bitcoin.it/wiki/User:Casascius/Escrow_scheme_draftand this a different aproach. And a better one! We do not have to trust the escrow, we need the third party only as a judge if we do not agree. And the judge can not "run-away" with the wage. He needs one of us. The only problem is that this is an essentially Bitcoin technology ( Another good reason to be long term bullish), so considering that I want the bet to be denominated in USD, the bull has to deposit more BTC at the begining, just to cover BTC decline in price. On the other hand if the the Bull wins he will take only a part from the deposit equivalent to USD (higher price BTCUSD). So we can pay the "judge" only if we need his opinion; or a basic small fee for keeping the 3rd key and a bigger fee if we need his opinion. I recall seeing this before, and have now read into it further. This looks incredibly cool. I'd love to act as 3rd party just to give it a try. I guess the only downside is, as you acknowledge, the bull needs to deposit extra bitcoin to account for adverse exchange movement. I'm guessing that this would be implemented as two separate three-party transactions, given that each transaction has a single payer?
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adraza
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April 21, 2013, 11:27:59 AM |
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exactly!
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Rodyland
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April 21, 2013, 12:05:08 PM |
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exactly!
This is really cool. I've just been playing with http://www.bitescrow.org/Took a while for me to get my head around it, but damn, this is an awesome idea.
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Kazu (OP)
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April 21, 2013, 03:26:17 PM |
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We are in bear mode! Doesn't someone want to short!
I am always willing to short, but not on bad odds. 1. Since when were you shorting, you looked like a permabull. 2. I pretty much offer the best odds on binary options on any instrument anywhere.
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adraza
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April 21, 2013, 06:35:50 PM |
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I guess I will win this time.
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adraza
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April 21, 2013, 06:37:50 PM |
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of course we need a price quotation from somewhere else.
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Kazu (OP)
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April 21, 2013, 06:40:28 PM |
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of course we need a price quotation from somewhere else.
No, we will wait till Gox gives a price just like said in the OP. The price you picked on open was based on the goxxian price, btc-e was already much lower than gox was at the time.
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adraza
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April 21, 2013, 06:44:18 PM |
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I would propose an average from the others exchanges.
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adraza
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April 21, 2013, 06:45:20 PM |
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what if MtGox is down forever?
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Kazu (OP)
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April 21, 2013, 06:48:15 PM |
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what if MtGox is down forever?
MtGox won't be down forever? Its a DDOS attack. People that think its going to randomly be down forever are the people that sell off like idiots. And if it were, we would all be so screwed $100 would be the least of our problems. It'll probably be back up by the time the bet expires anyway. If it isn't, then we can worry about other stuff.
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Kazu (OP)
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April 21, 2013, 06:50:54 PM |
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See? up already
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