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Author Topic: Gold collapsing. Bitcoin UP.  (Read 2011681 times)
Kupsi
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November 01, 2014, 03:39:35 PM
 #15161

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.
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November 01, 2014, 03:41:27 PM
 #15162

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 )
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November 01, 2014, 03:42:19 PM
 #15163

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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November 01, 2014, 03:45:13 PM
 #15164

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?

Quote
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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November 01, 2014, 03:49:37 PM
 #15165

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.

Someone have to believe increased utility on the SC makes up for less security. Otherwise, they won't transfer BTC to scBTC. They will not sell scBTC for a lower price than BTC is traded for because it's better to transfer scBTC back to BTC.
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November 01, 2014, 03:50:31 PM
 #15166

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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November 01, 2014, 03:52:23 PM
 #15167

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???
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November 01, 2014, 03:55:25 PM
 #15168

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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November 01, 2014, 03:57:05 PM
 #15169

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 transferring them back to BTC?
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November 01, 2014, 03:57:31 PM
 #15170

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.

If I'll move my BTC to SC then no one is able to arbitrage them. Only I have pk. If I'm so stupid and sell them for less than is bitcoin price then arb boot can do profit. It is up to you if you sell for less (in panic) or convert back into bitcoin.
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November 01, 2014, 03:58:23 PM
 #15171

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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November 01, 2014, 04:00:32 PM
 #15172

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?
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November 01, 2014, 04:05:07 PM
 #15173

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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November 01, 2014, 04:08:46 PM
 #15174

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.
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November 01, 2014, 04:10:16 PM
 #15175

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. 

Yes, the price will be the same in fiat terms as long as coins can flow freely between the chains.
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November 01, 2014, 04:10:18 PM
 #15176

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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November 01, 2014, 04:10:26 PM
 #15177

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.

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November 01, 2014, 04:10:52 PM
 #15178

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.
The first app is a mixing service for stolen coins it is likely there will be arb opportunities and likely Bitcoin price will drop.

Thank me in Bits 12MwnzxtprG2mHm3rKdgi7NmJKCypsMMQw
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November 01, 2014, 04:15:04 PM
 #15179

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.

You are right in term. BitstampBTC is draging down real BTC price.
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November 01, 2014, 04:17:37 PM
 #15180

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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