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Author Topic: [Bitshares] bitUSD discussion  (Read 18345 times)
CoinHoarder
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August 22, 2014, 11:29:46 PM
 #81

@CoinHoarder

You said "bitUSD will closely resemble the value of the US dollar because people will be able to easily profit from it if it doesn't."

Could you elaborate more on this?

If the value of 1 bitUSD is less than the value of 1 actual US dollar, then it would probably be an easy decision to buy bitUSD above the current bitUSD market price (closer to the actual real life value of the US dollar.) When the bitUSD market corrects to match your position, you will have profited off of that price movement, and you end up with more BitsharesX than you started with.

If the value of 1 bitUSD is more than the value of 1 actual US dollar, then it would probably be an easy decision to buy bitUSD below the current bitUSD market price (closer to the actual real life value of the US dollar.) When the bitUSD corrects to match your position, you will have profited off of that price movement, and you end up with more BitsharesX than you started with.

BitUSD Trading Guide by the BitShares communiy for the interested: https://docs.google.com/document/d/1fVyf5oVsLZCrjkptNi2I-GPldIp-QM3vmTKpyy_2ZVU/edit

I think Daniel explains the dynamics of trading better than I can in this document. I have not read it yet, so I apologize if I have spread any misconceptions. I do not think I have though... he just explains pretty much the same things in a different way.

For instance... I already learned something I did not realize. After quickly scanning over the document, it seems there is another protection from manipulation built into the market:

Quote
Maximum Price Movement
The ability to short and the price at which margin calls are executed is limited by a moving average of the price.  There is a maximum rate of change on this price equal to 0.09% every 10 seconds.  This averages out to about 33% per hour.   These price restrictions do not apply to those selling BitUSD for BTSX, only for those looking to short or for margin calls.   The purpose of these restrictions is to give the market time to react to potential manipulation attacks.
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ChuckOne
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August 22, 2014, 11:34:20 PM
 #82

@CoinHoarder

You said "bitUSD will closely resemble the value of the US dollar because people will be able to easily profit from it if it doesn't."

Could you elaborate more on this?

If the value of 1 bitUSD is less than the value of 1 actual US dollar, then it would probably be an easy decision to buy bitUSD above the current bitUSD market price (closer to the actual real life value of the US dollar.) When the bitUSD market corrects to match your position, you will have profited off of that price movement, and you end up with more BitsharesX than you started with.

If the value of 1 bitUSD is more than the value of 1 actual US dollar, then it would probably be an easy decision to buy bitUSD below the current bitUSD market price (closer to the actual real life value of the US dollar.) When the bitUSD corrects to match your position, you will have profited off of that price movement, and you end up with more BitsharesX than you started with.

This assumes that the correction happens.

Why should it happen?
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August 22, 2014, 11:36:29 PM
 #83

Quote
Maximum Price Movement
The ability to short and the price at which margin calls are executed is limited by a moving average of the price.  There is a maximum rate of change on this price equal to 0.09% every 10 seconds.  This averages out to about 33% per hour.   These price restrictions do not apply to those selling BitUSD for BTSX, only for those looking to short or for margin calls.   The purpose of these restrictions is to give the market time to react to potential manipulation attacks.

This assumes that people use the internal trading mechanism, right?

If they trade bitUSD and BTSX against each other on centralized exchanges, nothing will protect the price from fluctuating.

Are those assumptions correct?
From Above
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August 22, 2014, 11:40:42 PM
 #84

chuckone are u fucksing stupid or why do u have to ask everything like spoon by spoon when u can just read it all on dem web resources ?  where do u think the coinhorder man got his knowledge from asking him non stop ?

do u have some basic brains capable of reading ?


~CfA~

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August 22, 2014, 11:46:49 PM
 #85

@CoinHoarder

You said "bitUSD will closely resemble the value of the US dollar because people will be able to easily profit from it if it doesn't."

Could you elaborate more on this?

If the value of 1 bitUSD is less than the value of 1 actual US dollar, then it would probably be an easy decision to buy bitUSD above the current bitUSD market price (closer to the actual real life value of the US dollar.) When the bitUSD market corrects to match your position, you will have profited off of that price movement, and you end up with more BitsharesX than you started with.

If the value of 1 bitUSD is more than the value of 1 actual US dollar, then it would probably be an easy decision to buy bitUSD below the current bitUSD market price (closer to the actual real life value of the US dollar.) When the bitUSD corrects to match your position, you will have profited off of that price movement, and you end up with more BitsharesX than you started with.

This assumes that the correction happens.

Why should it happen?

It will correct because traders can profit off of the price correcting, and the people trying to manipulate the price will lose money as long as the majority of trading volume is not manipulating the price. By trying to manipulate the market, you are betting that others will follow your lead which is quite risky. If others don't try to manipulate the market and bitUSD stays close to the value of a US dollar, any manipulator will lose money.

Please read that document if you haven't, it explains a lot of this in detail. I need to step away for a while.. my fingers hurt  my dog needs to go on a walk. Smiley bbl
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August 22, 2014, 11:47:39 PM
 #86

my fingers hurt  my dog needs to go on a walk. Smiley bbl

Are you typing it all on your iPad again? Wink
CoinHoarder
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August 22, 2014, 11:49:53 PM
 #87

my fingers hurt  my dog needs to go on a walk. Smiley bbl

Are you typing it all on your iPad again? Wink

It ran out of battery a hour ago rofl, but I was. Grin

Maybe someone else can help me out here. Wink

Am I doing a decent job so far in explaining this? I admit I am not entirely sure how bitassets will work either, but it mostly makes sense I think. Having this conversation has helped me too.
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August 22, 2014, 11:55:40 PM
 #88

my fingers hurt  my dog needs to go on a walk. Smiley bbl

Are you typing it all on your iPad again? Wink

It ran out of battery a hour ago rofl, but I was. Grin

Maybe someone else can help me out here. Wink

Am I doing a decent job so far in explaining this? I admit I am not entirely sure how bitassets will work either, but it mostly makes sense I think. Having this conversation has helped me too.

Thank you for putting up those pieces of information here. I think they gave us all a decent understanding what BitShares is about.

My assessment still is: it looks like a very complex and fragile system. If it ever gets out of balance, it blows up.

Furthermore, all of this assumes that people use the internal trading system and do not transfer bitUSD or BTSX via "normal" exchanges.
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August 23, 2014, 12:00:16 AM
 #89

I spent a 1 hour the other night to learn about nxt. The assets are back by reputation alone.......that doesn't work for me

It depends on the asset. Some are a representation of something, like the NxtGenMining assets. Each NxtGenGHS asset is 1 GH/s of SHA256 hashing power represented by real mining hardware. The asset pays "dividends" in the form of NXT purchased with the mined coin minus the fee to cover the hosting/electricity overhead.

Some are a token of value elsewhere... like the bitfinex_usd asset which is backed by a bitfinex account that is audited monthly. Also the mgwCOIN assets that are a representation of the actual coins help in the mgw wallets secured by multi-signature addresses.

Some are like mutual funds that hold other assets.

I think the hope is that some will become registered securities of real companies. But, basically, any Stock is similar... there are penny stocks and blue chips. You have to do your due diligence.
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August 23, 2014, 12:02:12 AM
 #90

LOL nxt-noobs hating on dem bitsharez-noobs

what a festival ! where is the beer and popcorn.

~CfA~

I don't see any hating here. You're trying to stir the pot rather than contributing something of value with your post.
From Above
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August 23, 2014, 12:05:19 AM
 #91

LOL nxt-noobs hating on dem bitsharez-noobs

what a festival ! where is the beer and popcorn.

~CfA~

I don't see any hating here. You're trying to stir the pot rather than contributing something of value with your post.

ok I see a picture of the bitshares creator with ben bernanke in the first posts with ben saying his young 'apprentice' unleashing a scam and the title of the thread is The Great Satan on the Blockchain

ROFL DO U suffer from HARDCORE DELUSION dude?  if this is not an extreme attack then id call it crypto cold war.  its obvious the nxt puppet is envying the bitshares puppetry like a dork so he wants to ridicule it LOL... to me this is entertainment cuz I just laugh at both

~CfA~

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August 23, 2014, 12:09:14 AM
 #92

ILL QUOTE THIS NOW in case the fucking nxt puppet wants to delete the crap hes postin LOL

~CfA~

source https://nxtforum.org/general-discussion/bitshares-the-great-satan-on-the-blockchain/


Kinda like how a $100 bill is worth $100 just because everybody believes it to be so? Exactly. Wink

The power of bitUSD is that it does not have a fixed supply. The BTSX network "prints" as much bitUSD as is necessary to keep the price of bitUSD below that of fiatUSD, and destroys as much as necessary to keep the price above that of fiatUSD. Hence, the price of bitUSD can be neither above nor below that of fiatUSD.

It's very simple: fixed supply = variable price, and fixed price = variable supply.

Sent from my SCH-S720C using Tapatalk 2

The Federal Reserve controls the USD supply.

Replace "Federal Reserve" with "DAC" and add "bit" to "USD"...

The DAC controls the bitUSD supply.

CONGRATULATIONS! YOU'VE JUST INVENTED FEDERAL RESERVE 2.0!

That's the goal. Now what if you had a chance to purchase shares in the Fed in 1920?

Sent from my SCH-S720C using Tapatalk 2

Bitshares is self-admittedly an attempt to recreate a central banking scheme in crypto form.  Bitshares' DPoS is a centralized consensus system that relies upon a set number of nodes achieving consensus.

Quote
In practice BitShares isn't a distributed system, it is more like coordinated synchronized time shared centralized system.  -bytemaster

These 101 delegates are responsible for including transactions on the bitshares network.  Now think about this.  The DAC attempts to set monetary policy for the "bit assets" depending on the market price.  If there are more sellers, the DAC destroys bit assets.  If there are more buyers, the DAC prints more bit assets.  So, whoever controls the transactions included on the blockchain controls the DAC or monetary policy that the DAC enacts on the entire network.  Who controls the transactions included on the blockchain?  The 101 delegates.

How does the Federal Reserve set the monetary policy for the US dollar?

Federal Reserve monetary policy is decided by the FOMC (Federal Open Market Committee).  What is the FOMC?

Quote
It is this Federal Reserve committee which makes key decisions about interest rates and the growth of the United States money supply. -Wikipedia

The Federal Reserve achieves consensus on its monetary policy via a committee made up of delegates.

Bitshares = "Federal Reserve 2.0"
Bitshares' delegates = FOMC

PilotofBTC
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August 23, 2014, 12:13:42 AM
 #93

Ever heard of hyperbole? He was just stating his understanding... the thread was very civil discussion, well, until now I guess. Continue your ad hominem attacks.
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August 23, 2014, 12:17:03 AM
 #94

Ever heard of hyperbole? He was just stating his understanding... the thread was very civil discussion, well, until now I guess. Continue your ad hominem attacks.

dont worry my little nifty boy i'll do my best to find a pic of urs and chuckone nifty faces and post it saying u r a satan on the blockchain unleashing a ben bernanke scam cuz i dont understand ur Nxt Coin ROFLMAO

lower than low the nxt bitches.  will u ever learn ?  ben bernanke prob did more than u ever will hahaha Cheesy

~CfA~

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August 23, 2014, 12:19:13 AM
 #95

I spent a 1 hour the other night to learn about nxt. The assets are back by reputation alone.......that doesn't work for me

It depends on the asset. Some are a representation of something, like the NxtGenMining assets. Each NxtGenGHS asset is 1 GH/s of SHA256 hashing power represented by real mining hardware. The asset pays "dividends" in the form of NXT purchased with the mined coin minus the fee to cover the hosting/electricity overhead.

Some are a token of value elsewhere... like the bitfinex_usd asset which is backed by a bitfinex account that is audited monthly. Also the mgwCOIN assets that are a representation of the actual coins help in the mgw wallets secured by multi-signature addresses.

Some are like mutual funds that hold other assets.

I think the hope is that some will become registered securities of real companies. But, basically, any Stock is similar... there are penny stocks and blue chips. You have to do your due diligence.


Your right. I even saw that a user created a company that will do audits on other users assets to make sure that they really have what they say they have. Nxt also has a leg up in the fact that its got some age to it and has taken it's knocks so to speak. The system isn't bad its just different.

At Bitshares, once the platform was released the pace has been fast, very fast. I have found the people to have a unique blend of tech know how coupled with a (what I believe) great understanding of economics. Monday will tell us alot but I think even if it is not a successful run that the problems will be corrected.

But alas this is all speculation. We all bet on the platform we *think* will be the new big thing. Do some reading on the bitshares forum I know I gathered a few ideas from the nxt forum.  
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August 23, 2014, 12:20:52 AM
 #96

Yes it's a Cold War.  Bitshares is Chinese Communists vs the free NXT world.  NXT does not know there is a war and hence they are losing.  Who do you think has been DOSing and hacking NXT over and over?

There ain't no Revolution like a NEMolution.  The only solution is Bitcoin's dissolution! NEM!
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August 23, 2014, 12:23:26 AM
 #97

Yes it's a Cold War.  Bitshares is Chinese Communists vs the free NXT world.  NXT does not know there is a war and hence they are losing.  Who do you think has been DOSing and hacking NXT over and over?

i dont give a care if its called nxt or bitshares its all capitalism 2.0 in favor of riches like me so i like it.  as long as it makes great fiat money in my bank account im all for it.  just funny to see the dorks raging over their penny investments fearing the shit out of it like Chuck one lol

~CfA~

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August 23, 2014, 12:51:04 AM
 #98

LOL nxt-noobs hating on dem bitsharez-noobs

what a festival ! where is the beer and popcorn.

~CfA~

PIPE DOWN INFIDEL

FUD first & ask questions later™
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August 23, 2014, 12:55:57 AM
 #99

Yes it's a Cold War.  Bitshares is Chinese Communists vs the free NXT world.  NXT does not know there is a war and hence they are losing.  Who do you think has been DOSing and hacking NXT over and over?


sorry but i would take Chinese communism over USA free world freedom enforced with the barrel of a machine gun..
wonder why Russia and China are clamping down in the news over various US exports ?
the world is thoroughly fed up with USA no.1 round eye and now they are doing something about it !

by the way the only thing the USA is no.1 at is Chinese imports.. and debt.. and being the worlds most problematic war monger.. and ...

Ya let's model a digital currency on a failed American economy  Roll Eyes

FUD first & ask questions later™
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August 23, 2014, 01:04:41 AM
 #100

Hmm. I think I will need to sleep one night or two over this. That system looks a bit fragile if you ask me.

(btw. there will be NXT backed assets shortly in the next major feature release, so, not back by reputation alone anymore.)

How is Nxt planning on doing this? I have a feeling it may be the same as BitsharesX's back up plan.. getting the average of a bunch of market data feeds.

If it is a different approach, could you explain how you guys are planning on doing it?
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