[Bitshares] bitUSD discussion

[devphp]

We need a BTSX/NXT trading pair. Let's petition exchanges. Whether you're a BTSX believer or NXT believer, why do you want to go to Bitcoin? If you want to invest in both, and want to reshuffle your investments between the two as prices fluctuate, there is even less reason to exchange to Bitcoin first.


There must be a BTSX<->NXT direct exchange!
If you disagree, you're an enemy of both BTSX and NXT.

Please petition Bter in their support thread:
https://bitcointalk.org/index.php?topic=280806.0

[1714042908]

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[1714042908]

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[FandangledGizmo]

So, to sum up the situation:

BitsharesX probably is a legit operation.

The most vocal BTT/Bitshares community seems to be 3-5 new accounts plus C-f-A. (Way to go BTS!)

BTSX price (and the #3 market cap) is being propped up by using IPO money to pump it.

1. I would suggest the BitShares community is as big as NXT. Our forum has 5760 members. Besides me and a few others, they just don't come onto BTT as much. The provocative original title of this thread (BitShares - Great Satan on the blockchain ) as well as tasteless picture & baseless content from a few bad apples in NXT, which I otherwise like, is what drew a response from me.

2. The fact that BitShares want to increase their exposure to BTSX, for the investor minded, shows they have a lot of confidence in it. If they were selling I'd be worried. https://bitsharestalk.org/index.php?topic=7245.0

I personally enjoyed some of the content in this thread from Bytemaster when I was evaluating his views about the status quo etc. https://bitsharestalk.org/index.php?topic=2853.msg35523#msg35523

[CLains]

It is quite entertaining seeing what people are saying about me.  As someone who believes in finding free market solutions to secure our life, liberty, and property and whom is more anarcho-capitalist than anyone I have ever met it is absolutely hilarious that I am being accused of following Helicopter Ben.



My core value system is centered around property rights and my economics are Austrian.   

The problem this thread has is that everyone is talking past each other and that is understandable given how hard it is to internalize the market mechanics and then explain what you know to others. 

The primary assumption is that there exists a crypto-asset with no counter party and a non-zero value.  IE: bitcoin, Nxt, and BTSX.

The secondary assumption is that the volatility of this asset is within some reasonable range.  200% initial collateral seems to be reasonable, but it could easily be 400% if the volatility called for it.   

Given these assumptions we then assume there are two individuals in the free market that want a "contract for difference".  Contracts for difference are well established and proven and even used in counter party.  One person is given price stability and the other is given leverage.   

If you assume the contract for difference was settled by a 3rd party price feed then it is clear how it would work.   

So given those initial fundamentals we can slowly build up to BitAssets.   The first step is to take the same contract and remove the 3rd party price feed and instead use Nash Equilibrium.  Both parties will want to exit at some point and thus have to agree on a price in the future.  Assuming they were both equally wanting to exit their position the price they would agree at would be the "fair price".   Now clearly if there are only two parties to the trade they may not want to exit at the same time.    So you allow the "long" side to sell his position to others and you allow the "short" side to cover with anyone.   

If someone wants to be a stubborn jerk and not settle then that is fine.... eventually a margin call will be triggered.   The peg will fluctuate as the relative demand for longs vs shorts settling causes the peg to have a settlement premium sufficient to motivate settlement.   

I think it is fairly clear that if there is a price feed from a trusted source that was used to enforce settlement then the system would work to the extent that you could trust the feed.   The hypothesis is that this price feed is irrelevant given a market full of speculators and market makers willing to hold until a short voluntarily covers at a fair market price.

I hope that through this perspective I have shown what the economic incentives are and how the core principles are sound.  All that remains to be seen is whether "market consensus and speculation" is enough to enforce a peg via a "decentralized price feed" or "prediction market" mechanic.  My understanding of game theory and economic incentives tells me this will work, but even if I am wrong I know that price feeds can be used as a "trusted" judge on the "smart contracts for difference".   It is an entirely different game to trust someone to produce a fair feed (or 101 someones) than to trust someone to maintain a vault full of gold.

+101

[From Above]

The most vocal BTT/Bitshares community seems to be 3-5 new accounts plus C-f-A. (Way to go BTS!)

i love u arrogant dandy dafe   but i dont like bitshares & nxt ipo scams.

if anything NxT guys managed to drive my NxT investment down and down for months cuz u stakehoders bitches cash out everytime the prices rises a tiny lil bit .. this is why its worthless in it s entirety .

better ethereum or some other large scale scam than little nifty NxTsys boys.

without my buy support nxt would long be dead LOL 

~CfA~

[sparta_cuss]

I wonder how much of Bitshares project is in line with BCNext's overall plan. This is from Part Two. 

"Regarding NXT as coins: NXTs are not coins... or at least the creator of Nxt didn't want them to be seen as coins. They are tokens that grant privileges for supporting Nxt.
Deflation is not much better than inflation. "Real" coins should be created on top of Nxt, and be issued in quantities that keep their value constant. BCNext understands that this is very arguable. The community should decide if it wants to follow the path showed by him, or stick to the Bitcoin legacy of an unchangeable supply of coins with which people hope to become rich by doing nothing."

See the full text here: http://wiki.nxtcrypto.org/wiki/BCNext%27s_Plan

[toast]

It is quite entertaining seeing what people are saying about me.  As someone who believes in finding free market solutions to secure our life, liberty, and property and whom is more anarcho-capitalist than anyone I have ever met it is absolutely hilarious that I am being accused of following Helicopter Ben.



My core value system is centered around property rights and my economics are Austrian.   

The problem this thread has is that everyone is talking past each other and that is understandable given how hard it is to internalize the market mechanics and then explain what you know to others. 

The primary assumption is that there exists a crypto-asset with no counter party and a non-zero value.  IE: bitcoin, Nxt, and BTSX.

The secondary assumption is that the volatility of this asset is within some reasonable range.  200% initial collateral seems to be reasonable, but it could easily be 400% if the volatility called for it.   

Given these assumptions we then assume there are two individuals in the free market that want a "contract for difference".  Contracts for difference are well established and proven and even used in counter party.  One person is given price stability and the other is given leverage.   

If you assume the contract for difference was settled by a 3rd party price feed then it is clear how it would work.   

So given those initial fundamentals we can slowly build up to BitAssets.   The first step is to take the same contract and remove the 3rd party price feed and instead use Nash Equilibrium.  Both parties will want to exit at some point and thus have to agree on a price in the future.  Assuming they were both equally wanting to exit their position the price they would agree at would be the "fair price".   Now clearly if there are only two parties to the trade they may not want to exit at the same time.    So you allow the "long" side to sell his position to others and you allow the "short" side to cover with anyone.   

If someone wants to be a stubborn jerk and not settle then that is fine.... eventually a margin call will be triggered.   The peg will fluctuate as the relative demand for longs vs shorts settling causes the peg to have a settlement premium sufficient to motivate settlement.   

I think it is fairly clear that if there is a price feed from a trusted source that was used to enforce settlement then the system would work to the extent that you could trust the feed.   The hypothesis is that this price feed is irrelevant given a market full of speculators and market makers willing to hold until a short voluntarily covers at a fair market price.

I hope that through this perspective I have shown what the economic incentives are and how the core principles are sound.  All that remains to be seen is whether "market consensus and speculation" is enough to enforce a peg via a "decentralized price feed" or "prediction market" mechanic.  My understanding of game theory and economic incentives tells me this will work, but even if I am wrong I know that price feeds can be used as a "trusted" judge on the "smart contracts for difference".   It is an entirely different game to trust someone to produce a fair feed (or 101 someones) than to trust someone to maintain a vault full of gold.
 

Thank you. This thread needs less knee-jerk reaction and more discussion of the actual mechanics.

Fortunately the OP seems to have become interested in how this thing works and has calmed down with the flaming a little bit... meanwhile I think it would do everyone good to take a few minutes to understand the fundamentals rather than make assumptions.

[TaunSew]

I wonder how much of Bitshares project is in line with BCNext's overall plan. This is from Part Two.  

"Regarding NXT as coins: NXTs are not coins... or at least the creator of Nxt didn't want them to be seen as coins. They are tokens that grant privileges for supporting Nxt.
Deflation is not much better than inflation. "Real" coins should be created on top of Nxt, and be issued in quantities that keep their value constant. BCNext understands that this is very arguable. The community should decide if it wants to follow the path showed by him, or stick to the Bitcoin legacy of an unchangeable supply of coins with which people hope to become rich by doing nothing."

See the full text here: http://wiki.nxtcrypto.org/wiki/BCNext%27s_Plan

Most people would take deflation over inflation.  Crypto Currencies only exist and have a following due to the stagflation we have seen since the 1960s (inflation + stagnating wage increases).

Why should any of us work our whole life and have little saved for retirement, because we were paying a 1%-6% "tax on the poor" (inflation) every year?  Inflation during the privatization of the former Soviet Union is what led to many pensioners to resort to eating dog food.  Much like every year it is becoming more difficult in the United States to feed a family due to stagflation and increasing CPI.

I think your concern is velocity but velocity doesn't matter unless crypto currencies hit $10+ trillion and it's just a single "one world currency" which replaces $Fiat.  Which I don't think it's possible as crypto currencies are currently very decentralized and plural (400+ alternates to Bitcoin).

Maybe someone like John Titor was correct in that monetary system of the future will be decentralized and crypto currencies is a good example of that.

[nikola384]

I wonder how much of Bitshares project is in line with BCNext's overall plan. This is from Part Two.  

"Regarding NXT as coins: NXTs are not coins... or at least the creator of Nxt didn't want them to be seen as coins. They are tokens that grant privileges for supporting Nxt.
Deflation is not much better than inflation. "Real" coins should be created on top of Nxt, and be issued in quantities that keep their value constant. BCNext understands that this is very arguable. The community should decide if it wants to follow the path showed by him, or stick to the Bitcoin legacy of an unchangeable supply of coins with which people hope to become rich by doing nothing."

See the full text here: http://wiki.nxtcrypto.org/wiki/BCNext%27s_Plan

Most people would take deflation over inflation.  Crypto Currencies only exist and have a following due to the stagflation we have seen since the 1960s (inflation + stagnating wage increases).

Why should any of us work our whole life and have little saved for retirement, because we were paying a 1%-6% "tax on the poor" (inflation) every year?  Inflation during the privatization of the former Soviet Union is what led to many pensioners to resort to eating dog food.  Much like every year it is becoming more difficult in the United States to feed a family due to stagflation and increasing CPI.

I think your concern is velocity but velocity doesn't matter unless crypto currencies hit $10+ trillion and it's just a single "one world currency" which replaces $Fiat.  Which I don't think it's possible as crypto currencies are currently very decentralized and plural (400+ alternates to Bitcoin).

Maybe someone like John Titor was correct in that monetary system of the future will be decentralized and crypto currencies is a good example of that.

And your point is

[TaunSew]

I wonder how much of Bitshares project is in line with BCNext's overall plan. This is from Part Two.  

"Regarding NXT as coins: NXTs are not coins... or at least the creator of Nxt didn't want them to be seen as coins. They are tokens that grant privileges for supporting Nxt.
Deflation is not much better than inflation. "Real" coins should be created on top of Nxt, and be issued in quantities that keep their value constant. BCNext understands that this is very arguable. The community should decide if it wants to follow the path showed by him, or stick to the Bitcoin legacy of an unchangeable supply of coins with which people hope to become rich by doing nothing."

See the full text here: http://wiki.nxtcrypto.org/wiki/BCNext%27s_Plan

Most people would take deflation over inflation.  Crypto Currencies only exist and have a following due to the stagflation we have seen since the 1960s (inflation + stagnating wage increases).

Why should any of us work our whole life and have little saved for retirement, because we were paying a 1%-6% "tax on the poor" (inflation) every year?  Inflation during the privatization of the former Soviet Union is what led to many pensioners to resort to eating dog food.  Much like every year it is becoming more difficult in the United States to feed a family due to stagflation and increasing CPI.

I think your concern is velocity but velocity doesn't matter unless crypto currencies hit $10+ trillion and it's just a single "one world currency" which replaces $Fiat.  Which I don't think it's possible as crypto currencies are currently very decentralized and plural (400+ alternates to Bitcoin).

Maybe someone like John Titor was correct in that monetary system of the future will be decentralized and crypto currencies is a good example of that.

And your point is

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" (likely fiction written by others after he left) when his real plan ended up being fire sell $100K+ worth of NXT and fleeing into the night?   The reason he never came back was because he would be too embarrassed to admit having sold 1-2 months early (could had pocketed millions instead of six figures).

[sparta_cuss]

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 message" 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.

[nikola384]

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

[tonyk]

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

I wonder how much of Bitshares project is in line with BCNext's overall plan. This is from Part Two. 

"Regarding NXT as coins: NXTs are not coins... or at least the creator of Nxt didn't want them to be seen as coins. They are tokens that grant privileges for supporting Nxt.
Deflation is not much better than inflation. "Real" coins should be created on top of Nxt, and be issued in quantities that keep their value constant. BCNext understands that this is very arguable. The community should decide if it wants to follow the path showed by him, or stick to the Bitcoin legacy of an unchangeable supply of coins with which people hope to become rich by doing nothing."

See the full text here: http://wiki.nxtcrypto.org/wiki/BCNext%27s_Plan

Sometimes I ask myself: 'Why do you still go back there?'

Posts like above, are the answer, for me personally...

[bytemaster]

The biggest problem here is that Average Joe (regarding financial instruments) does simply not understand what you mean by short, long, margin call, Nash equilibrium, contract of difference, peg, a short covers, settlement premium, etc. etc. and now we got Average Joe relying on somebody who, first, is able to understand all of that, AND second, is even able to change the bitUSD supply.


Those two observations lead to the question what is this bitUSD asset about and where is the difference to the current monetary system we have? Because as it seems (or at least the perception is) that financial investors, speculators and banksters are misusing the current system in order enrich themselves just because they can and understand the system; whereas Average Joe does not.


Am I correct that if bitUSD is really peggable by the USD, it would allow to build an economy around that cryptocurrency much faster than with Bitcoin or Nxt because merchants can be sure to have stable prices?

The average Joe isn't going to be able to understand the system any more than they understand the current banking system or even bitcoin.  At the end of the day most people have to watch it work and then learn to trust it.   While there is some value in trying to explain it to the average Joe in simple terms, much is lost in translation and that is really beyond the point of this particular thread.

I think that if someone wishes to "attack" the idea BitUSD but lacks the background to know the terms used, then they also lack the standing to publicly criticize and declare a scam, fraud, or broken system.   I do not like to hide behind fancy language and have taken great effort to explain it in simple terms in many places.   Unfortunately the simple explanations are never "complete, accurate, and authoritative".

The primary difference between BitUSD and the FED is that it is market driven and all IOUs are collateralized 200%.   In the case of the Fed they can print up $2 trillion dollars without having any collateral.  BTSX would require collateral worth $4 trillion dollars to exist.   The next difference is transparency.   Another difference is the complete lack of "price fixing".

[sparta_cuss]

Thank you for the support.

BCNext is a hell of a lot smarter than I am. His thoughts are worth considering because he has provided not just a cryptocurrency, but a way of thinking about how to create, through math, ways for people to interact. Based on what he wrote, he seems to have been interested in how Nxt could encourage social cohesion rather than selfish behavior. I am, of course, interested in whether he was "right," however we want to define right. But my first question is, What can we learn by taking his challenges and questions seriously? That is why returning to his three-part plan is worthwhile. It is an exercise, a heuristic, if nothing else.

It seems like Bitshares aims to satisfy one of BCNext's goals for Nxt: cooperation by algorithm and mutual interest. (I am not suggesting that Bitshares is copying BCNext, only that there is congruence between the two plans.) I understand that many disagree about whether this can work, but whether it does or does not, a deeper question is raised for me: If cooperation/mutual interest is enforced by the algorithm, is it really cooperation?

CfB wrote this, speaking for BCNext:
"Bitcoin relies only on math, but math can't solve problems arising because of the illogical nature of the man. Mining in Nxt relies on the cooperation of people, and even forces it. Without cooperation, Nxt becomes weak and can be easily attacked. It's like a system in unstable equilibrium. If people stop caring about cooperation, Nxt will fail very quickly."

Maybe enforced cooperation is the best we can do?

I realize that many of you will think that these are abstract, philosophical questions that have little place here. But I think that without these philosophical questions, without a sense for the good that any cryptocurrency can do and how it can do it, we are just creating a tool that can be used for good or evil. (Many in this thread already believe that Bitshares is a tool for evil, as you can see from the OP.) My point is, we must ask not only, "Does it work?" but "Is it good for the world?"

[devphp]

We need a BTSX/NXT trading pair. Let's petition exchanges. Whether you're a BTSX believer or NXT believer, why do you want to go to Bitcoin? If you want to invest in both, and want to reshuffle your investments between the two as prices fluctuate, there is even less reason to exchange to Bitcoin first.


There must be a BTSX<->NXT direct exchange!
If you disagree, you're an enemy of both BTSX and NXT.

Please petition Bter in their support thread:
https://bitcointalk.org/index.php?topic=280806.0

And it happened, folks!

https://bter.com/trade/btsx_nxt

now we don't need to touch Bitcoin with a ten foot pole

[pythonista]

Bytemaster is awesome - looking forward to BitUSD going live today 

[anasazi]

In case you haven't seen it already: http://prestonbyrne.com/2014/08/17/dont-walk-away-run/

What do you think?

[testz]

In case you haven't seen it already: http://prestonbyrne.com/2014/08/17/dont-walk-away-run/

What do you think?

Check this one also: http://prestonbyrne.com/2014/08/24/what-goes-up/

[testz]

Bytemaster is awesome - looking forward to BitUSD going live today 

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

[NapoleonBonaparte]

Bytemaster is awesome - looking forward to BitUSD going live today 

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?