Bitcoin Forum
November 25, 2017, 08:23:21 AM *
News: Latest stable version of Bitcoin Core: 0.15.1  [Torrent].
 
   Home   Help Search Donate Login Register  
Poll
Question: Will you support Gavin's new block size limit hard fork of 8MB by January 1, 2016 then doubling every 2 years?
1.  yes
2.  no

Pages: « 1 ... 711 712 713 714 715 716 717 718 719 720 721 722 723 724 725 726 727 728 729 730 731 732 733 734 735 736 737 738 739 740 741 742 743 744 745 746 747 748 749 750 751 752 753 754 755 756 757 758 759 760 [761] 762 763 764 765 766 767 768 769 770 771 772 773 774 775 776 777 778 779 780 781 782 783 784 785 786 787 788 789 790 791 792 793 794 795 796 797 798 799 800 801 802 803 804 805 806 807 808 809 810 811 ... 1558 »
  Print  
Author Topic: Gold collapsing. Bitcoin UP.  (Read 2014106 times)
cypherdoc
Legendary
*
Offline Offline

Activity: 1764



View Profile
November 01, 2014, 05:21:13 PM
 #15201

My point being there will be a motive to short the SC token.

great point.  the shorts will do this b/c they will recognize that the SC is less secure and more prone to failure.

as they drive the price of scBTC down, all those here who think the 1:1 peg demands that the price of 1 BTC= 1 scBTC will sell their BTC to follow.

No one will try to short scBTC. If someone tried, people will buy the lower priced scBTC, transfer them to BTC and sell them for the real price.

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.
1511598201
Hero Member
*
Offline Offline

Posts: 1511598201

View Profile Personal Message (Offline)

Ignore
1511598201
Reply with quote  #2

1511598201
Report to moderator
1511598201
Hero Member
*
Offline Offline

Posts: 1511598201

View Profile Personal Message (Offline)

Ignore
1511598201
Reply with quote  #2

1511598201
Report to moderator
1511598201
Hero Member
*
Offline Offline

Posts: 1511598201

View Profile Personal Message (Offline)

Ignore
1511598201
Reply with quote  #2

1511598201
Report to moderator
Join ICO Now Coinlancer is Disrupting the Freelance marketplace!
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1511598201
Hero Member
*
Offline Offline

Posts: 1511598201

View Profile Personal Message (Offline)

Ignore
1511598201
Reply with quote  #2

1511598201
Report to moderator
Odalv
Legendary
*
Offline Offline

Activity: 1260



View Profile
November 01, 2014, 05:26:54 PM
 #15202

My point being there will be a motive to short the SC token.

great point.  the shorts will do this b/c they will recognize that the SC is less secure and more prone to failure.

as they drive the price of scBTC down, all those here who think the 1:1 peg demands that the price of 1 BTC= 1 scBTC will sell their BTC to follow.

No one will try to short scBTC. If someone tried, people will buy the lower priced scBTC, transfer them to BTC and sell them for the real price.

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.

I'll take your arguments only if you sell me your bitcoins for $100 or at least you find me somebody who sell. :-)
cypherdoc
Legendary
*
Offline Offline

Activity: 1764



View Profile
November 01, 2014, 05:34:07 PM
 #15203

Alot of scBTC will be only valuable inside community what creates(and secure) them. But inside this community it will have value exactly 1 BTC. No matter what is your value. It is win : win strategy
a) they do not spam bitcoin network.
b) they do not pay transaction fees.

And it can be more secure than Bitcoin -> b/c those members can met in personally and build safe "oracle (timestamp server)" what will sign every transaction.

why use Bitcoin then?  you might as well use Berkshare Bucks if you want or desire such a centralized solution.
cypherdoc
Legendary
*
Offline Offline

Activity: 1764



View Profile
November 01, 2014, 05:35:00 PM
 #15204

My point being there will be a motive to short the SC token.

great point.  the shorts will do this b/c they will recognize that the SC is less secure and more prone to failure.

as they drive the price of scBTC down, all those here who think the 1:1 peg demands that the price of 1 BTC= 1 scBTC will sell their BTC to follow.

No one will try to short scBTC. If someone tried, people will buy the lower priced scBTC, transfer them to BTC and sell them for the real price.

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.

I'll take your arguments only if you sell me your bitcoins for $100 or at least you find me somebody who sell. :-)

you can try to personalize this but it doesn't negate my generalized market based argument.
Nekrobios
Moderator
Legendary
*
Offline Offline

Activity: 1694


Bitcoin Maximalist


View Profile
November 01, 2014, 05:37:23 PM
 #15205

I read it but I feel like I'm missing something:

Quote
its a 2 way peg, so both BTC and scBTC can move freely back and forth.
Can you elaborate? How are the both to be pegged? How is the peg rate determined, and does it float?

Since you are free to move coins between BTC and scBTC, the price will be the same. You don't sell scBTC for a lower price when you can transfer it back to BTC and sell it for the full price.
But how does this work? Is it just a way of destroying Bitcoins without actually destroying them (ie destroying Bitcoin and creating Sidecoins and vice versa creating Bitcoins and destroying Sidecoins, "converting" them 1:1) at the protocol level? I suppose cypherdoc's argument is that assuming Sidecoins will be valued less than Bitcoins of equal convertible value, people will be arbitraging that.

If I have understood correctly, then this doesn't seem a problem. To profit off this arbitrage, you need to buy Sidecoins (for USD say) and sell them for Bitcoins (selling those again). Thus the price has to rise to a level where friction prohibits arbitrage. It sounds like we're discussing a perpetuum mobile here. Either that, or I still misunderstand. Cheesy
Odalv
Legendary
*
Offline Offline

Activity: 1260



View Profile
November 01, 2014, 05:38:45 PM
 #15206

Alot of scBTC will be only valuable inside community what creates(and secure) them. But inside this community it will have value exactly 1 BTC. No matter what is your value. It is win : win strategy
a) they do not spam bitcoin network.
b) they do not pay transaction fees.

And it can be more secure than Bitcoin -> b/c those members can met in personally and build safe "oracle (timestamp server)" what will sign every transaction.

why use Bitcoin then?  you might as well use Berkshare Bucks if you want or desire such a centralized solution.


b/c
advantage:
at the moment I need some utility (e.g. I want trade on exchange, I want buy cofe or gas) =>

I accept:
at the same moment I cannot make international transfers. I can only transact with small group who accepts SC (for some utility).
cypherdoc
Legendary
*
Offline Offline

Activity: 1764



View Profile
November 01, 2014, 05:43:35 PM
 #15207

Alot of scBTC will be only valuable inside community what creates(and secure) them. But inside this community it will have value exactly 1 BTC. No matter what is your value. It is win : win strategy
a) they do not spam bitcoin network.
b) they do not pay transaction fees.

And it can be more secure than Bitcoin -> b/c those members can met in personally and build safe "oracle (timestamp server)" what will sign every transaction.

why use Bitcoin then?  you might as well use Berkshare Bucks if you want or desire such a centralized solution.


b/c
advantage:
at the moment I need some utility (e.g. I want trade on exchange, I want buy cofe or gas) =>

I accept:
at the same moment I cannot make international transfers. I can only transact with small group who accepts SC (for some utility).

well then, it's obvious you're putting your priorities and wants above those of the community in general.  in other words, you want the Bitcoin network to provide the security for your localized SC and you don't care if the price of BTC drops as a result.
Odalv
Legendary
*
Offline Offline

Activity: 1260



View Profile
November 01, 2014, 05:52:02 PM
 #15208

Alot of scBTC will be only valuable inside community what creates(and secure) them. But inside this community it will have value exactly 1 BTC. No matter what is your value. It is win : win strategy
a) they do not spam bitcoin network.
b) they do not pay transaction fees.

And it can be more secure than Bitcoin -> b/c those members can met in personally and build safe "oracle (timestamp server)" what will sign every transaction.

why use Bitcoin then?  you might as well use Berkshare Bucks if you want or desire such a centralized solution.


b/c
advantage:
at the moment I need some utility (e.g. I want trade on exchange, I want buy cofe or gas) =>

I accept:
at the same moment I cannot make international transfers. I can only transact with small group who accepts SC (for some utility).

well then, it's obvious you're putting your priorities and wants above those of the community in general.  in other words, you want the Bitcoin network to provide the security for your localized SC and you don't care if the price of BTC drops as a result.

if BTC drops as a result then same happens to scBTC. But I do not know why. The less BTC is available at MC the more scarce BTC are, and the more utility BTC can provide. SC does not print new money.

SC brings new utility. (value)
Kupsi
Legendary
*
Offline Offline

Activity: 1191


9.9.2012: I predict that single digits... <- FAIL


View Profile
November 01, 2014, 06:01:37 PM
 #15209

I read it but I feel like I'm missing something:

Quote
its a 2 way peg, so both BTC and scBTC can move freely back and forth.
Can you elaborate? How are the both to be pegged? How is the peg rate determined, and does it float?

Since you are free to move coins between BTC and scBTC, the price will be the same. You don't sell scBTC for a lower price when you can transfer it back to BTC and sell it for the full price.
But how does this work? Is it just a way of destroying Bitcoins without actually destroying them (ie destroying Bitcoin and creating Sidecoins and vice versa creating Bitcoins and destroying Sidecoins, "converting" them 1:1) at the protocol level? I suppose cypherdoc's argument is that assuming Sidecoins will be valued less than Bitcoins of equal convertible value, people will be arbitraging that.

If I have understood correctly, then this doesn't seem a problem. To profit off this arbitrage, you need to buy Sidecoins (for USD say) and sell them for Bitcoins (selling those again). Thus the price has to rise to a level where friction prohibits arbitrage. It sounds like we're discussing a perpetuum mobile here. Either that, or I still misunderstand. Cheesy

You got it right.
molecular
Donator
Legendary
*
Offline Offline

Activity: 2408



View Profile
November 01, 2014, 06:07:04 PM
 #15210

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. 

I think there wont be a need for scBTC <-> fiat exchange. Since coins can be moved to main chain with low cost, it doesn't make much sense to directly trade sc/fiat, does it? As someone else put it: why would anyone sell scBTC when you can just move them back to BTC main chain?

PGP key molecular F9B70769 fingerprint 9CDD C0D3 20F8 279F 6BE0  3F39 FC49 2362 F9B7 0769
molecular
Donator
Legendary
*
Offline Offline

Activity: 2408



View Profile
November 01, 2014, 06:10:14 PM
 #15211

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.

Why? People will just move dirty BTC to mixSCBTC, stirr well, and then move them back to mainchain, no?


PGP key molecular F9B70769 fingerprint 9CDD C0D3 20F8 279F 6BE0  3F39 FC49 2362 F9B7 0769
adam3us
Sr. Member
****
Offline Offline

Activity: 400


in bitcoin we trust


View Profile WWW
November 01, 2014, 06:15:56 PM
 #15212

I read it but I feel like I'm missing something:

Quote
its a 2 way peg, so both BTC and scBTC can move freely back and forth.
Can you elaborate? How are the both to be pegged? How is the peg rate determined, and does it float?

Since you are free to move coins between BTC and scBTC, the price will be the same. You don't sell scBTC for a lower price when you can transfer it back to BTC and sell it for the full price.

Correct.  I think its worth clarifying that the peg is algorithmic, because its seems from the thread that some people may not understand that.  You, personally, can ask the network automatically to swap unlimited quantities of BTC on the sidechain for BTC on the main bitcoin chain.

The only reason to swap with users using atomic swaps or trades is to do that faster.  No one is going to take anything other than a negligible price difference because they can click a button and move the coins between chains themselves.

Further because that 2wp backstop is there, and anyone and his dog can do arbitrage, with full confidence that they'll be able to exercise the 2wp and capitalise on the small time-preference, the will be small.  It seems just as likely that the sidechain coins sell at a small premium for the time-preference access to side-chain features.  (Time-preference means someones preference to gain access to something sooner rather than waiting eg 24hrs, and they'll sometimes be willing to pay a small fee to get it earlier, eg check advances or such things).

I dont think it realistic that we would see anyone willing to sell sidechain BTC at anything significantly below par in either direction, to do so is to burn money needlessly.  People will arbitrage it and its open to anyone to arbitrage.  So unless someone wants to burn money (and bitcoin already supports proof of burn or pay to miners if you're into burning money or donating to miners), no one will be offering to swap sidechain BTC for BTC at anything far below or above $350 (assuming current market price of $350).  eg $349.50 to $350.50 might be an example which is 15 basis points, that'd give someone a 15% return on an annual basis with steady arbitrage for a 2 day clearance time on the peg.  They can maybe get a higher return (and hence be willing to offer even lower margins) by holding a float on both sides and cancelling some trades against others as those happen faster so they get more than one arbitrage fee per exercise of the 2wp.

Obviously no one is encouraging anyone to put real money into untested or buggy sidechains.  I dont think there will be lots of sidechains and the main sidechains will be extremely well tested and coded to the same rigor as bitcoin itself.

Adam

hashcash, committed transactions, homomorphic values, blind kdf; researching decentralization, scalability and fungibility/anonymity
cypherdoc
Legendary
*
Offline Offline

Activity: 1764



View Profile
November 01, 2014, 06:16:02 PM
 #15213

Who her likes Konrad Graf? He is a leading Bitcoin economist.

He said both will be expected to trade in exchanges and probably for different prices. Who are you to disagree?
Nekrobios
Moderator
Legendary
*
Offline Offline

Activity: 1694


Bitcoin Maximalist


View Profile
November 01, 2014, 06:30:00 PM
 #15214

Who her likes Konrad Graf? He is a leading Bitcoin economist.

He said both will be expected to trade in exchanges and probably for different prices. Who are you to disagree?
Haven't heard of him, but economists are typically horrible when it comes to speculative calls. Cheesy

I'm pretty sure that the price difference will be negligible and close to whatever ratio is pegged at protocol. If you are certain that you are right, it seems it is an inevitability that this arbitrage perpetuum mobile will drag Bitcoin to nothingness under the assumption that it will always be valued below the threshold for arbitrage and that this feedback loop will continue forever. Why not sell Bitcoin in that case?

I keep thinking I'm missing something obvious, because this seems a ridiculous train of thought from you. Is the bear market getting to you? Tongue
Odalv
Legendary
*
Offline Offline

Activity: 1260



View Profile
November 01, 2014, 06:34:35 PM
 #15215

Who her likes Konrad Graf? He is a leading Bitcoin economist.

He said both will be expected to trade in exchanges and probably for different prices. Who are you to disagree?

Quote
$350 (assuming current market price of $350).  eg $349.50 to $350.50 might be an example
tvbcof
Legendary
*
Offline Offline

Activity: 2324


View Profile
November 01, 2014, 06:43:08 PM
 #15216

- snip - one of many desperate lines of FUD -
...
I keep thinking I'm missing something obvious, because this seems a ridiculous train of thought from you. Is the bear market getting to you? Tongue


Something is making the guy soil himself multiple times per day.  Probably being wrong for nearly a year is contributing as stress, but it doesn't really help shed light on the root cause of his malady.


Adrian-x
Legendary
*
Offline Offline

Activity: 1372



View Profile
November 01, 2014, 07:48:06 PM
 #15217

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.

Why? People will just move dirty BTC to mixSCBTC, stirr well, and then move them back to mainchain, no?


The mix is better if new virgin players pull the BTC out. So sell the SC token at a discount in fiat. Then the speculators to take advantage of the arb and now you have clean BTC to pull out (exchange)

Thank me in Bits 12MwnzxtprG2mHm3rKdgi7NmJKCypsMMQw
Adrian-x
Legendary
*
Offline Offline

Activity: 1372



View Profile
November 01, 2014, 07:53:28 PM
 #15218

I read it but I feel like I'm missing something:

Quote
its a 2 way peg, so both BTC and scBTC can move freely back and forth.
Can you elaborate? How are the both to be pegged? How is the peg rate determined, and does it float?

Since you are free to move coins between BTC and scBTC, the price will be the same. You don't sell scBTC for a lower price when you can transfer it back to BTC and sell it for the full price.

Correct.  I think its worth clarifying that the peg is algorithmic, because its seems from the thread that some people may not understand that.  You, personally, can ask the network automatically to swap unlimited quantities of BTC on the sidechain for BTC on the main bitcoin chain.

The only reason to swap with users using atomic swaps or trades is to do that faster.  No one is going to take anything other than a negligible price difference because they can click a button and move the coins between chains themselves.

Further because that 2wp backstop is there, and anyone and his dog can do arbitrage, with full confidence that they'll be able to exercise the 2wp and capitalise on the small time-preference, the will be small.  It seems just as likely that the sidechain coins sell at a small premium for the time-preference access to side-chain features.  (Time-preference means someones preference to gain access to something sooner rather than waiting eg 24hrs, and they'll sometimes be willing to pay a small fee to get it earlier, eg check advances or such things).

I dont think it realistic that we would see anyone willing to sell sidechain BTC at anything significantly below par in either direction, to do so is to burn money needlessly.  People will arbitrage it and its open to anyone to arbitrage.  So unless someone wants to burn money (and bitcoin already supports proof of burn or pay to miners if you're into burning money or donating to miners), no one will be offering to swap sidechain BTC for BTC at anything far below or above $350 (assuming current market price of $350).  eg $349.50 to $350.50 might be an example which is 15 basis points, that'd give someone a 15% return on an annual basis with steady arbitrage for a 2 day clearance time on the peg.  They can maybe get a higher return (and hence be willing to offer even lower margins) by holding a float on both sides and cancelling some trades against others as those happen faster so they get more than one arbitrage fee per exercise of the 2wp.

Obviously no one is encouraging anyone to put real money into untested or buggy sidechains.  I dont think there will be lots of sidechains and the main sidechains will be extremely well tested and coded to the same rigor as bitcoin itself.

Adam

That's an idealistic assumption money laundering can cost much over a 10% burn, unsuspecting traders take the arb.

Thank me in Bits 12MwnzxtprG2mHm3rKdgi7NmJKCypsMMQw
Adrian-x
Legendary
*
Offline Offline

Activity: 1372



View Profile
November 01, 2014, 08:04:30 PM
 #15219

- snip - one of many desperate lines of FUD -
...
I keep thinking I'm missing something obvious, because this seems a ridiculous train of thought from you. Is the bear market getting to you? Tongue


Something is making the guy soil himself multiple times per day.  Probably being wrong for nearly a year is contributing as stress, but it doesn't really help shed light on the root cause of his malady.



That's insulting. I've outline why SC will leach value out of Bitcoin and the most viable argument against my point is exchanging value on a side chain. I.e. using side chains as money is using Bitcoin.

It's not no Bitcoin TX fees are paid and the value created by the network effect reside on the SC.

There is no 1:1 peg guarantee. If the SC is inflationary and appeals to a central bank more than Bitcoin they'll use that not BTC. And the minority who want BTC hard money will be eaten for breakfast.

Thank me in Bits 12MwnzxtprG2mHm3rKdgi7NmJKCypsMMQw
XBTJackpot
Jr. Member
*
Offline Offline

Activity: 49


View Profile WWW
November 01, 2014, 08:10:49 PM
 #15220

I hugely disagree with the belief that sidechains will decrease the value of Bitcoin. Having more uses for the Bitcoin blockchain will almost certainly increase its value, rather than decreasing it.

XBTJackpot.com - The Best Bitcoin Casino!
Pages: « 1 ... 711 712 713 714 715 716 717 718 719 720 721 722 723 724 725 726 727 728 729 730 731 732 733 734 735 736 737 738 739 740 741 742 743 744 745 746 747 748 749 750 751 752 753 754 755 756 757 758 759 760 [761] 762 763 764 765 766 767 768 769 770 771 772 773 774 775 776 777 778 779 780 781 782 783 784 785 786 787 788 789 790 791 792 793 794 795 796 797 798 799 800 801 802 803 804 805 806 807 808 809 810 811 ... 1558 »
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!