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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1807511 times)
cypherdoc
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November 01, 2014, 03:26:24 PM
 #15181

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.

equilibrium price ends up lower than $325
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November 01, 2014, 03:27:48 PM
 #15182

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?
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November 01, 2014, 03:29:03 PM
 #15183

why?  b/c SC's have decreased the overall security in the system by encouraging MM.
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November 01, 2014, 03:31:22 PM
 #15184

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.
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November 01, 2014, 03:33:23 PM
 #15185

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.

I think kupsi has nailed it..

I share your concerns with regard to a side chain potentially damaging bitcoin if there is a floating peg between the two.
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November 01, 2014, 03:33:59 PM
 #15186

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
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November 01, 2014, 03:35:22 PM
 #15187

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. $325

why don't arb bots circle back around and drive BTC price down to say $250-270?  multiply this by 1000 SC's.
FTFY

it can't start off @ $325 b/c the SC IS less secure and the risk of being on an entirely different ledger with less security means the instantaneous initial price has to be lower.  yes, with time the 2 prices will equilibrate, but at a lower price.

Bitstamp is sidechain controlled by central server. Is bitcoin from bitstamp worth only $100 ?
Not 100, but certainly less than true value.
LocalBitcoin price says that Bitstamp trades at a discount.
There is a rumor circulating that Bitcoin is a P2P technology.

FREE MONEY1 Bitcoin for Silver and Gold NewLibertyDollar.com and now BITCOIN SPECIE (silver 1 ozt) shows value by QR
Bulk premiums as low as .0012 BTC "BETTER, MORE COLLECTIBLE, AND CHEAPER THAN SILVER EAGLES" 1Free of Government
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November 01, 2014, 03:37:13 PM
 #15188

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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November 01, 2014, 03:39:12 PM
 #15189

in fact, is this what the market is pricing in now since the announcement?
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November 01, 2014, 03:39:35 PM
 #15190

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
 #15191

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 )
cypherdoc
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November 01, 2014, 03:42:19 PM
 #15192

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
 #15193

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
 #15194

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
 #15195

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
 #15196

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
 #15197

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
 #15198

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
 #15199

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
 #15200

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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