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Author Topic: [Bitshares] bitUSD discussion  (Read 18345 times)
testz
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August 26, 2014, 10:47:49 AM
 #141

Bytemaster is awesome - looking forward to BitUSD going live today  Smiley

Bter add the BitUSD/BTC pair https://bter.com/trade/bitusd_btc

That was quick to be added on a reputable alt coin exchange.

Did Mintpal, Poloniex, Cryptsy addded the pair yet?

Not yet, Bter was first.
Next probably will be btc38 or poloniex, they already trade BitSharesX (BTSX), all rest should integrate BitSharesX first, it's not Bitcoin style coin and required additional work in order to integrate it to exchange (like Nxt or Monero for example)

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dwdoc
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August 29, 2014, 07:07:40 PM
 #142


And yours is?  He made a lame rhetorical message.  I can't write my own rhetorical posts?

Honestly who gives a chit about BCnext's "plan" when his real plan ended up being fire sell $100K+ worth of NXT and fleeing into the night?  


What you call a "lame rhetorical point" is what many people call an example of an open, curious mind. I realize that forums are not good places for people to exchange ideas and try to learn. Most, it seems, assume that this is a debate, and one "earns points" by vanquishing an opponent in discursive combat. People become more entrenched in their own thinking, and gain the support of the echo chamber from whence they came. This is not my scene. Have fun.

You can find a few bad apples in every walk of life.
Do not leave, please!

Honestly, your post was one of the greatest things I read recently. Even though it is just - 'The Great Minds think alike!'

......

First they ignore you, then they laugh at you, then they fight you, then you win.

Mahatma Gandhi




Yes but sometimes it never makes it past phase 2.


ChuckOne
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August 29, 2014, 07:15:29 PM
 #143

The every increasing BitSharesX goes down. What does that mean for bitUSD?
brekyrself
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August 29, 2014, 11:33:28 PM
 #144

The every increasing BitSharesX goes down. What does that mean for bitUSD?

Of course there was going to be a correction after that increase.  BitUSD will not be going anywhere and its nice they are collaborating with the user base about any changes and or new features.


https://bitsharestalk.org/index.php?topic=7843.0

https://bitsharestalk.org/index.php?topic=7953.0
origin12
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August 29, 2014, 11:48:19 PM
 #145

There is the following buy order on bter.


Price          Amount(BTC)      Total(BITUSD)

578.00000000      0.8650          499.9700


What does the 578.00000000 price refer to if someone is buying 499.9700 BITUSD for 0.8650 BTC?
From Above
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August 29, 2014, 11:49:08 PM
 #146

There is the following buy order on bter.


Price          Amount(BTC)      Total(BITUSD)

578.00000000      0.8650          499.9700


What does the 578.00000000 price refer to if someone is buying 499.9700 BITUSD for 0.8650 BTC?

it means the bitcoin NSA illuminati will eat ur brain

~CfA~

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September 28, 2014, 11:03:52 AM
 #147

I have a hard time understanding this.  Bitshares wants me to give them my real USD for their bitUSD? 

How about they give me their real USD for some of my SomethingElseUSD?  I'll be more than happy to put it on an exchange and I promise I will always pay anyone back when they want.

Yes, I am trolling a bit here.  But I really don't get it.  What's the point?

NEM
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September 28, 2014, 12:57:30 PM
 #148

I have a hard time understanding this.  Bitshares wants me to give them my real USD for their bitUSD? 

How about they give me their real USD for some of my SomethingElseUSD?  I'll be more than happy to put it on an exchange and I promise I will always pay anyone back when they want.

Yes, I am trolling a bit here.  But I really don't get it.  What's the point?

BitUSD is pegged to the dollar. Means no volatility (other than USD inflation). It's only a matter of time that people wake up and realize the significant benefits of a cryptocurrency like BitUSD that has no volatility and thus doesn't need to be immediately dumped for fiat. All of this is done in the decentralized and free-market driven collateralized system that is BTSX. Incredible stuff, really.

But yea, investing in BitUSD now is more of a way to hedge against a possible short-term fall in BTSX price, due to the fact it's very young and therefore not widely adopted (yet). It's the future potential that is truly awe-inspiring. Plus, you earn interest on your BitUSD (or BitGLD, BitSLV, etc) estimated to be in the realm of 5-10%. Try doing that with a fiat CD in a centralized bank.  Wink
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September 28, 2014, 01:28:00 PM
 #149

I have a hard time understanding this.  Bitshares wants me to give them my real USD for their bitUSD? 

How about they give me their real USD for some of my SomethingElseUSD?  I'll be more than happy to put it on an exchange and I promise I will always pay anyone back when they want.

Yes, I am trolling a bit here.  But I really don't get it.  What's the point?

BitUSD is pegged to the dollar. Means no volatility (other than USD inflation). It's only a matter of time that people wake up and realize the significant benefits of a cryptocurrency like BitUSD that has no volatility and thus doesn't need to be immediately dumped for fiat. All of this is done in the decentralized and free-market driven collateralized system that is BTSX. Incredible stuff, really.

Please help me if I don't understand this right.  You are saying the goal of BitUSD is to create a crypto that is pegged to the dollar.  Then people can use that BitUSD and not have to worry about if it will go up or down?  Then my question is, who is minting all these bitUSDs? and when I give them my real dollar for their bitUSD, what are they doing with it? 


But yea, investing in BitUSD now is more of a way to hedge against a possible short-term fall in BTSX price, due to the fact it's very young and therefore not widely adopted (yet). It's the future potential that is truly awe-inspiring. Plus, you earn interest on your BitUSD (or BitGLD, BitSLV, etc) estimated to be in the realm of 5-10%. Try doing that with a fiat CD in a centralized bank.  Wink

Interest sounds good.  I like interest.  Sooooo... do I have to turn in real gold to get bitgold too?  And where does this interest magically appear from?  How can my rock of gold grow bigger, or my wad of cash get thicker.  Wouldn't for me to get richer, somebody else would have to be paying for it and they are getting poorer?  How would they feel about that? 

Again, a little bit of a troll, but still serious questions and I thank you for taking the time to answer my last ones.  I'm still trying to put this all together in my head.

NEM
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September 28, 2014, 03:30:22 PM
 #150

I have a hard time understanding this.  Bitshares wants me to give them my real USD for their bitUSD?  

How about they give me their real USD for some of my SomethingElseUSD?  I'll be more than happy to put it on an exchange and I promise I will always pay anyone back when they want.

Yes, I am trolling a bit here.  But I really don't get it.  What's the point?

BitUSD is pegged to the dollar. Means no volatility (other than USD inflation). It's only a matter of time that people wake up and realize the significant benefits of a cryptocurrency like BitUSD that has no volatility and thus doesn't need to be immediately dumped for fiat. All of this is done in the decentralized and free-market driven collateralized system that is BTSX. Incredible stuff, really.

Please help me if I don't understand this right.  You are saying the goal of BitUSD is to create a crypto that is pegged to the dollar.  Then people can use that BitUSD and not have to worry about if it will go up or down?  Then my question is, who is minting all these bitUSDs? and when I give them my real dollar for their bitUSD, what are they doing with it?  


But yea, investing in BitUSD now is more of a way to hedge against a possible short-term fall in BTSX price, due to the fact it's very young and therefore not widely adopted (yet). It's the future potential that is truly awe-inspiring. Plus, you earn interest on your BitUSD (or BitGLD, BitSLV, etc) estimated to be in the realm of 5-10%. Try doing that with a fiat CD in a centralized bank.  Wink

Interest sounds good.  I like interest.  Sooooo... do I have to turn in real gold to get bitgold too?  And where does this interest magically appear from?  How can my rock of gold grow bigger, or my wad of cash get thicker.  Wouldn't for me to get richer, somebody else would have to be paying for it and they are getting poorer?  How would they feel about that?  

Again, a little bit of a troll, but still serious questions and I thank you for taking the time to answer my last ones.  I'm still trying to put this all together in my head.

bitUSD doesn't function like an IOU; it is "minted" into existence by matching a short sell on the decentralized exchange built into the BitSharesX blockchain, the order of which puts up at least 2x the collateral in BTSX. Risk is assumed by the two voluntary parties involved in a matched order. Some tweaks to the market rules have been introduced recently to rank shorts by the amount of collateral put up, which will increase liquidity in the BitAsset markets. You can think of it as, 1 new bitUSD is minted by "locking up" more than the amount of BTSX equal to the value of 1 USD. Same deal with the other BitAssets. These are essentially financial instruments that correlate closely to the value of whatever a BitAsset is tracking.  Variable yield is paid out from a fund that receives value from accumulated market fees. There is more to it than that but rather than try to explain it all I will point you at some useful resources.

I'd suggest reading here for more detailed information about how the peg works:

Explanation of the market peg: http://wiki.bitshares.org/index.php/Market_Peg
"The Market Peg Works": https://bitsharestalk.org/index.php?topic=8358.0;topicseen
Discussion of yield (aka "interest"): https://bitsharestalk.org/index.php?topic=8520.0
Discussion of new rules that order shorts by amount of collateral put up: https://bitsharestalk.org/index.php?topic=9029.0

Twitter: @robrig0

In Detroit? Want to learn more about BitShares? RSVP for the meetup! http://www.meetup.com/bitshares-worldwide/
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September 29, 2014, 03:58:52 AM
 #151


Thanks for the links and answering my questions despite my dryness.  

I read the link above and the first question that pops in my head is this.  What if I buy bitBTC with the price right now just being under $400, and next week Paypal and Amazon both announce full integration of Bitcoin coming 2015.  In one day the price of bitcoin jumps from $390 to just over $1100.  I see the bubble and want to cash out.  The person that minted the bitUSD put in 200% but now bitcoin has raised almost 300%.  Where does my extra money come from when I am cashing out?  

NEM
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September 29, 2014, 04:05:58 AM
 #152


bitUSD doesn't function like an IOU; it is "minted" into existence by matching a short sell on the decentralized exchange built into the BitSharesX blockchain, the order of which puts up at least 2x the collateral in BTSX. Risk is assumed by the two voluntary parties involved in a matched order. Some tweaks to the market rules have been introduced recently to rank shorts by the amount of collateral put up, which will increase liquidity in the BitAsset markets. You can think of it as, 1 new bitUSD is minted by "locking up" more than the amount of BTSX equal to the value of 1 USD. Same deal with the other BitAssets. These are essentially financial instruments that correlate closely to the value of whatever a BitAsset is tracking.  Variable yield is paid out from a fund that receives value from accumulated market fees. There is more to it than that but rather than try to explain it all I will point you at some useful resources.

I'd suggest reading here for more detailed information about how the peg works:

Explanation of the market peg: http://wiki.bitshares.org/index.php/Market_Peg
"The Market Peg Works": https://bitsharestalk.org/index.php?topic=8358.0;topicseen
Discussion of yield (aka "interest"): https://bitsharestalk.org/index.php?topic=8520.0
Discussion of new rules that order shorts by amount of collateral put up: https://bitsharestalk.org/index.php?topic=9029.0

So the way I understand it is that BitsharesX is a coin which is basically like engine that bitSomething runs on.  I buy these BitsharesX and then I pick an asset I want to short.  Hopefully somebody will see my short and they will go long against me.  So basically the whole platform is just for people to bet long or short on any commodity.  But the commodity doesn't really exist.  If I own 1 barrel of bitOIL, that is not redeemable for for oil.  At best it is redeemable for BitsharesX.  Is that true?

NEM
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September 29, 2014, 04:21:00 AM
 #153


bitUSD doesn't function like an IOU; it is "minted" into existence by matching a short sell on the decentralized exchange built into the BitSharesX blockchain, the order of which puts up at least 2x the collateral in BTSX. Risk is assumed by the two voluntary parties involved in a matched order. Some tweaks to the market rules have been introduced recently to rank shorts by the amount of collateral put up, which will increase liquidity in the BitAsset markets. You can think of it as, 1 new bitUSD is minted by "locking up" more than the amount of BTSX equal to the value of 1 USD. Same deal with the other BitAssets. These are essentially financial instruments that correlate closely to the value of whatever a BitAsset is tracking.  Variable yield is paid out from a fund that receives value from accumulated market fees. There is more to it than that but rather than try to explain it all I will point you at some useful resources.

I'd suggest reading here for more detailed information about how the peg works:

Explanation of the market peg: http://wiki.bitshares.org/index.php/Market_Peg
"The Market Peg Works": https://bitsharestalk.org/index.php?topic=8358.0;topicseen
Discussion of yield (aka "interest"): https://bitsharestalk.org/index.php?topic=8520.0
Discussion of new rules that order shorts by amount of collateral put up: https://bitsharestalk.org/index.php?topic=9029.0

So the way I understand it is that BitsharesX is a coin which is basically like engine that bitSomething runs on.  I buy these BitsharesX and then I pick an asset I want to short.  Hopefully somebody will see my short and they will go long against me.  So basically the whole platform is just for people to bet long or short on any commodity.  But the commodity doesn't really exist.  If I own 1 barrel of bitOIL, that is not redeemable for for oil.  At best it is redeemable for BitsharesX.  Is that true?

Yes and no.  At a high level these BitAssets can be traded directly on a centralized exchange such as Bter.  So BitUSD vs USD has its own market.  You are correct in that the pegs allow for traders to play the market without ever having to use a central exchange unless they want to cash out to their bank account.  Moving forward though if the pegs hold, businesses may be more inclined to accept BitUSD as the value always = 1 usd.  This gets rid of the volatility problem and could eliminate the need for businesses to use an intermediary such as BitPay.  Again thinking high level, think about the usage of BitUSD, BitEuro, Bitxyz currency, for an international corporation.  BitShares could provide a payment platform.
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September 29, 2014, 05:51:16 AM
 #154


Yes and no.  At a high level these BitAssets can be traded directly on a centralized exchange such as Bter.  So BitUSD vs USD has its own market.  You are correct in that the pegs allow for traders to play the market without ever having to use a central exchange unless they want to cash out to their bank account.  Moving forward though if the pegs hold, businesses may be more inclined to accept BitUSD as the value always = 1 usd.  This gets rid of the volatility problem and could eliminate the need for businesses to use an intermediary such as BitPay.  Again thinking high level, think about the usage of BitUSD, BitEuro, Bitxyz currency, for an international corporation.  BitShares could provide a payment platform.

Does it always equal the peg?  As far as I could read, it was just hoped for.  What if a big buyer has inside information and buys everything?  Or what of the opposite, what if a big holder sees the exit time and totally dumps? Are these possibilities?  

I am just wondering because telling people that $1 is supposed to be pegged to 1 bitUSD and then hoping they believe that declaration and act in accordance with that sounds a bit scary to me.  Because in the end 1 bitUSD is not $1.  It exists in a completely different system, with its own unique properties and rules, none of which are the same as a real dollar bill in my pocket, except for the fact that the issuer of the bitUSD is hoping for them to roughly be valued the same.  Other than they are hoped that the market will treat them as the same value, they are entirely two different things.  bitUSD might be worth more than a real dollar bill in my pocket because of its properties, or maybe less, but I doubt exactly the same.  It is hard for me to imagine that they would both be worth exactly the same all the time.  It seems like there would be quite a bit of volatility.  

NEM
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September 29, 2014, 06:03:06 AM
 #155


Thanks for the links and answering my questions despite my dryness.  

I read the link above and the first question that pops in my head is this.  What if I buy bitBTC with the price right now just being under $400, and next week Paypal and Amazon both announce full integration of Bitcoin coming 2015.  In one day the price of bitcoin jumps from $390 to just over $1100.  I see the bubble and want to cash out.  The person that minted the bitUSD put in 200% but now bitcoin has raised almost 300%.  Where does my extra money come from when I am cashing out?  

I want to bump this question.  One month ago I posted that Dogecoin was at its bottom and would only go up from there.  Now if BitsharesX had been around then I am guessing somebody could have issued bitDoge hoping to short Doge and since I thought it would go up, I could have bought and I could have gone in there and bought it all being very confident in my choice and having big pockets.  Now one month later, Doge is up four times.  I read the issuer to issue had to have double the value.  Assuming BitsharesX value stayed the same (it could actually move and make this scenerio worse I guess) and I want to cash out all my bitDoge, where does the extra money come from.  In the last month I have watched Doge sky rocket and now I think it is at its peak (which I really do) so I want to sell now.  So where is the surplus going to come from? 

NEM
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September 29, 2014, 06:04:18 AM
 #156

Normally, the surplus should come from people on the other side of the trade. There needs to be someone providing liquidity on the other side.
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September 29, 2014, 06:52:20 AM
 #157

Normally, the surplus should come from people on the other side of the trade. There needs to be someone providing liquidity on the other side.

200% is a nice surplus, but we all know things in this world can be very volatile.  Some things can go up a lot more.  Doge isn't the only coin that went up over 200% in the last month.  http://www.coinfinance.com/gainers_losers/30_days

So again, if somebody issues bitDoge, they only paid 200% to issue that.  If I buy it all because I think the issuer is stupid, and I win, Doge goes up 259% and I want to cash out, where does my extra 59% come from?

NEM
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September 29, 2014, 11:15:25 AM
 #158



If you want to listen to this stuff talked about some.

https://soundcloud.com/beyond-bitcoin-hangouts/beyond-bitcoin-community-dev-hangout-2014-9-26

https://soundcloud.com/beyond-bitcoin-hangouts/bitshares-community-and-developer-hangout-9-12-2014

https://soundcloud.com/beyond-bitcoin-hangouts/bitshares-community-and-developer-hangout-9-5-2014

The first hour or so usually has the lead dev/founder of Bitshares ecosystem discussing Bitshares X.
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September 29, 2014, 02:33:50 PM
Last edit: September 29, 2014, 06:44:05 PM by CoinHoarder
 #159

Normally, the surplus should come from people on the other side of the trade. There needs to be someone providing liquidity on the other side.

200% is a nice surplus, but we all know things in this world can be very volatile.  Some things can go up a lot more.  Doge isn't the only coin that went up over 200% in the last month.  http://www.coinfinance.com/gainers_losers/30_days

So again, if somebody issues bitDoge, they only paid 200% to issue that.  If I buy it all because I think the issuer is stupid, and I win, Doge goes up 259% and I want to cash out, where does my extra 59% come from?

Edit: My brain isn't working today. Sad
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September 29, 2014, 03:04:46 PM
 #160

Thank you for answering CoinHoarder.  So it makes sense that if a coin changes so much that an automatic margin call kicks in. 

So the way I understand Bitshares is it is a way for a person to put up money betting on a short, and then others can accept on the other position and try to go long. 

NEM
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