[ANN][DGC][FBD] Free Bank of Digitalcoin ~ Risk Averse DGC Investments

[jonsi]

Well that's my point. The bank is betting on the downfall of the coin in that case so he can charge the fees, because that is the only source of income of the bank, the people are betting in the rise of the coin that will led to decrease anyway... my point is that the coin would'n benefit from this ideea in bouth cases.

[HuuHachu]

I don't think this is a viable ideea. Assuming the case: DGC rises in price, everibody sell and they make a nice profit. After that DGC falls and the same people buy and sell back to the bank with the initial price witch is higher now than the market = nice profit again... And this is just one scenario... Think about it!

this !

[baritus]

I don't think this is a viable ideea. Assuming the case: DGC rises in price, everibody sell and they make a nice profit. After that DGC falls and the same people buy and sell back to the bank with the initial price witch is higher now than the market = nice profit again... And this is just one scenario... Think about it!

this !

Is there a free market where "everyone sells" and subsequently "everyone buys" in unison in existence?

Also, even in this scenario, how does the bank get affected?

Example:
1. Market is made of 2.5mil+ coins
2. The bank for example has 250k coins
3. Bank sells all 250k coins for 250 btc to investors
4. DGC price rises to 250k coins for 500 BTC
5. Investors sell their coins for 500 btc, make 250btc profit, and still have option to sell DGC back to us at 250k. But now they would have no DGC, so they would need to buy it before they could sell it to the bank for the rate they purchased it. The option only gives them the right to sell back DGC at that price, but first they must be able to buy it at that price.

You can research the principles of hedging further for an understanding of the concept.

In conclusion, it is a useful tool for investors who are thinking for the longterm. It guarantees a floor price but gives that freedom to go in search for profit. However, it cannot be circularly abused due to basic supply and demand principles.

[jonsi]

I don't think this is a viable ideea. Assuming the case: DGC rises in price, everibody sell and they make a nice profit. After that DGC falls and the same people buy and sell back to the bank with the initial price witch is higher now than the market = nice profit again... And this is just one scenario... Think about it!

this !

Is there a free market where "everyone sells" and subsequently "everyone buys" in unison in existence?

This "bank" it's not a free market. My point is that this is a good ideea for making some profit for the "bank", but it doesn't benefit the coin in any way. It's just a good business ideea that everyone will try to profit but you all know that it can't happend. If you know that kind of business point me to it and I'll invest right now

[baritus]

Jonsi, read my previous post, I expanded to explain.

Also, the benefit is to provide liquidity at a certain price. Investors do not know that if they buy at a price they can get their money back at it. We give them that guarantee.

This immensely benefits the coin by lowering risk for investments.

Any and all investors can use the service and it is completely safe. Their funds are kept at the rate they purchased them at, and they have the right to buy it back at that rate. That means there will never be an imbalance.

So yes, an investor can use the bank to lock in a rate and benefit from upward movement.

The bank will make a profit from both issuing the options and from letting them be traded on an exchange platform.

Conceptually: The investors in the bank are lending their digitalcoin in exchange for fees. Because the amount lent always equals the amount received in collateral, the balance does not break.

[HuuHachu]

I don't think this is a viable ideea. Assuming the case: DGC rises in price, everibody sell and they make a nice profit. After that DGC falls and the same people buy and sell back to the bank with the initial price witch is higher now than the market = nice profit again... And this is just one scenario... Think about it!

this !

Is there a free market where "everyone sells" and subsequently "everyone buys" in unison in existence?

Well, to rephrase this, I think you will get stuck because of the limited amount of capital in your bank.

Except for the (probably relatively small) fee, your bank is in essence providing a free way to bet on a market rise.
There is no risk for the guy buying DGC in your bank. If the market rises he sells them on exchanges and gets is benefits.
If the market drops, then he just sell them back to the bank.

In this situation, the winning strategy is clearly to buy up to the last DGC your bank can provide. If the market rises, almost all of them will be sold on exchanges.
The shareholder of your bank would them have essentially sold their DGC for fiat or others coins. And to continue operations you would need to buy new DGC (at higher price) or find new shareholders. You could also wait for the price to drop again ... but in any case your bank is taking a great risk.

[jonsi]

I have read it. Only that you omit the part when everybody rush to sell the price will decrease drastically.

[jonsi]

No. The ideea is very good, the bank will make a profit anyway, no matter how the price will go. If you want i can explain further.

[HuuHachu]

I have read it. Only that you omit the part when everybody rush to sell the price will decrease drastically.

the price would not drop below the initial selling price of the bank, as people would have the choice between:
- selling back to the bank at almost no loss
- waiting for a new price increase

Your bank would thus not be able to buy back its coin (not all of them anyway). Gradually the capital would be sold entirely.

At least this is how I see thinks, but I'm no economist ^^

[jonsi]

In fact, the more i think about it the more i see how a brilliant ideea it is. If I would have the founds i would create one right now.
+100 baritus.

[jonsi]

I have read it. Only that you omit the part when everybody rush to sell the price will decrease drastically.

the price would not drop below the initial selling price of the bank, as people would have the choice between:
- selling back to the bank at almost no loss
- waiting for a new price increase

Your bank would thus not be able to buy back its coin (not all of them anyway). Gradually the capital would be sold entirely.

At least this is how I see thinks, but I'm no economist ^^

You are wrong. The bank will always profit. I can explain if you wish. This is one of the beast ideeas i have heard in a long time.

[darkproton]

People people calm down. Maybe I am missing something here but this isn't anymore revolutionary than a crypto exchange is to an actual exchange. Allow me to explain. Stop loss order. Done. Not trying to be inflammatory, I'm a fan of DGC, not a fan of smoke blowing. I honestly don't see the diff.
http://www.investopedia.com/terms/s/stop-lossorder.asp.
I mean, Cryptsy could offer Stop-loss trading and it would, as I see it, render this null and void. Again, maybe I missed something.

[RAMZA]

Good Job Baritus!!
Onother great idea from the creator of the BEST alt coin at the moment!!

Just AMAZING!!

[HuuHachu]

You are wrong. The bank will always profit. I can explain if you wish. This is one of the beast ideeas i have heard in a long time.

I'm interested, I don't see how I would loose in the scenario I described previously ^^
(except if the fee is high enough or something)

[baritus]

People people calm down. Maybe I am missing something here but this isn't anymore revolutionary than a crypto exchange is to an actual exchange. Allow me to explain. Stop loss order. Done. Not trying to be inflammatory, I'm a fan of DGC, not a fan of smoke blowing. I honestly don't see the diff.
http://www.investopedia.com/terms/s/stop-lossorder.asp.
I mean, Cryptsy could offer Stop-loss trading and it would, as I see it, render this null and void. Again, maybe I missed something.

A stop loss order is just a trigger for when the price falls below a certain price. The bank is a guarantee of repurchase at a certain price REGARDLESS of market movement or position. Meaning, the two concepts are completely unrelated.

Also, you can sell your DGC and you still own the options.

[jonsi]

People people calm down. Maybe I am missing something here but this isn't anymore revolutionary than a crypto exchange is to an actual exchange. Allow me to explain. Stop loss order. Done. Not trying to be inflammatory, I'm a fan of DGC, not a fan of smoke blowing. I honestly don't see the diff.
http://www.investopedia.com/terms/s/stop-lossorder.asp.
I mean, Cryptsy could offer Stop-loss trading and it would, as I see it, render this null and void. Again, maybe I missed something.

Yes, you are missing a lot . The exchange can't fluctuate the price, it will be self established by the buy/sell process. Instead, this "bank" can.

[jonsi]

Ok. The business ideea behind it, ass i see it is:
1. You buy lots of coins (no matter the name) at the actual price.
2. You create the "bank" as described in the thread.
3. You sell the coins a little higher, the people will buy anyway because it's no risk for them, they always can sell at the same price anyway.
Now the two cases:
 a. Price increase: people will cash out the coins to seel them on the market and the bank remain with the profit.
 b. Price decrease: people will sell back to the bank, and the banck charges fees and remain with the profit.

Once again great business ideea, but no really benefit for the coin.

[baritus]

The benefit for the coin is giving investors a more stable way to invest longterm.

[krasnyoktyabr]

Ok. The business ideea behind it, ass i see it is:
1. You buy lots of coins (no matter the name) at the actual price.
2. You create the "bank" as described in the thread.
3. You sell the coins a little higher, the people will buy anyway because it's no risk for them, they always can sell at the same price anyway.
Now the two cases:
 a. Price increase: people will cash out the coins to seel them on the market and the bank remain with the profit.
 b. Price decrease: people will sell back to the bank, and the banck charges fees and remain with the profit.

Once again great business ideea, but no really benefit for the coin.

It does have the benefits of bringing liquidity to the coin and offering multiple means of entry. The addition of purchase by USD and LTC are significant in their own rights.

[garumaru]

So approximately when this will enter its beta stage?