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Author Topic: Reducing the wealth concentration of Bitcoin  (Read 6662 times)
BitPay Business Solutions
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June 25, 2012, 05:20:20 PM
 #21

Nice job of revealing the pre-order statistics for everyone to extrapolate from. So, more than $300k in sales on one preorder day? That's a lot of rigs.

Those are only the orders paid for with bitcoin. 

Good luck guessing how many mini-rigs are bought by wire transfer   Smiley

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interlagos
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June 25, 2012, 05:37:57 PM
 #22

Not sure if it's correct way of doing but maybe using options at bitcoinOPX.com is the way to go in this case.

From the explanation of options I read somewhere it goes like this:
 - you need to sell an asset X at a certain price (lock price of those orders)
 - you sell option contract to sell asset X at this fixed price within a month.
 - if asset price goes up you still get your fixed price plus the payment for the option contract
 - if asset price goes down you still have your asset plus the payment for the option contract

So it seems like win win for everybody, and asset X in this case is BTC.
I'm not an expert in this, sorry if it's totally off.

EDIT: it only makes sense for the buyer if he/she doesn't have enough money now but will have in a month.
So he/she can buy option contract from you to buy BTC at fixed price within a month.
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June 25, 2012, 06:06:16 PM
 #23

(total market cap 9.309 Million BTC!)
The market capitalization is not the total amount of bitcoins in circulation, but rather their total value.

Ok, sorry: The total number of bitcoins in existance is 9.309 Million.
Still true, 50k BTC is only 0.537% of the total amount of unequally distributed BTC in existance!
So the topic title is misleading (on purpose).
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June 25, 2012, 06:35:51 PM
 #24

So you decided not to hedge 100% on the spot and become a speculator instead of a payment processor, and then publicly disclose your position?

Seems like a very bad idea for you. Good luck selling all these Bitcoins for the prices the BFLs were sold for at the time.

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June 25, 2012, 06:42:20 PM
 #25

CRASH PRICES!! WREAK HAVOC!!!
LET THE GAMES BEGIN!
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June 25, 2012, 07:23:30 PM
 #26

(total market cap 9.309 Million BTC!)
The market capitalization is not the total amount of bitcoins in circulation, but rather their total value.

Ok, sorry: The total number of bitcoins in existance is 9.309 Million.
Still true, 50k BTC is only 0.537% of the total amount of unequally distributed BTC in existance!
So the topic title is misleading (on purpose).

Just start another topic then!

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June 25, 2012, 07:42:57 PM
 #27

CRASH PRICES!! WREAK HAVOC!!!
LET THE GAMES BEGIN!

go ahead, sell low, buy high.  You'll really come out ahead that way.

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interlagos
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June 25, 2012, 08:00:11 PM
 #28

After giving it a bit more thought, I believe options is a right thing to do in case if BFL agrees to wait for example 1 month for the funds. In this case you create option contract for each large chunk of BTC (10k USD equivalent) where you guarantee to sell
it at a fixed price during that period. You sell those contracts for a certain price.

Now people who are willing to invest in BTC but don't have enough funds right now might be interested to buy these option contracts hoping that when they accumulate 10k USD within a month they will get a good price at the end. If however the price goes down they wouldn't have to buy your BTC at higher than market value, but they already paid for the option contract so you get free money for just a guarantee to sell an asset at a fixed price for a period of time.

More discussions and examples are here:
https://bitcointalk.org/index.php?topic=84092.0

In the end it all depends on whether BFL is willing to wait to liquidate BTC efficiently or they need USD right now, which they shouldn't if the story about VC deal is to be believed.
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June 25, 2012, 08:59:46 PM
 #29

Options would be good if they are done correctly.  They would provide a proper hedging mechanism to buy time to sell the coins in an efficient manner.

However, options contracts are only as good as the counterparty.

Markets are being very efficient today.  It's over the weekends where the bias is lopsided to the downside.  Sellers can add liquidity over the weekend, but buyers cannot!

It would actually be more stable for bitcoin if the markets would close for the weekend.   People are used to the 24/7 operation, but the fact is it puts downward pressure on the price if only one side of the trade can put up money.


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June 25, 2012, 09:00:22 PM
 #30

CRASH PRICES!! WREAK HAVOC!!!
LET THE GAMES BEGIN!

go ahead, sell low, buy high.  You'll really come out ahead that way.

http://www.lvrj.com/news/las-vegas-icon-bob-stupak-defied-the-odds-61743247.html

Quote
Introducing Polish Roulette! We lose money on every spin. But we hope to make it up in volume. No zeros.

(this post is not meant as a diss toward Tony--just expanding upon the observation)

~Bruno~
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June 25, 2012, 09:20:34 PM
 #31


We are listing these bitcoins for sale on a number of bitcoin exchanges, starting now, to give as many people as possible the opportunity to buy.

We have them on

Mt. Gox
Bitfloor
CampX
BitStamp

50,000 BTC are up for grabs (not all at once obviously).

Tony, you should definitely consider having some for sale on Bitcoin-Central, for the sake of decentralization  Wink

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June 25, 2012, 09:26:34 PM
 #32


We are listing these bitcoins for sale on a number of bitcoin exchanges, starting now, to give as many people as possible the opportunity to buy.

We have them on

Mt. Gox
Bitfloor
CampX
BitStamp

50,000 BTC are up for grabs (not all at once obviously).

Tony, you should definitely consider having some for sale on Bitcoin-Central, for the sake of decentralization  Wink

Dont forget: https://bitmarket.co/
interlagos
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June 25, 2012, 09:44:00 PM
 #33

Options would be good if they are done correctly.  They would provide a proper hedging mechanism to buy time to sell the coins in an efficient manner.

However, options contracts are only as good as the counterparty.

Markets are being very efficient today.  It's over the weekends where the bias is lopsided to the downside.  Sellers can add liquidity over the weekend, but buyers cannot!

It would actually be more stable for bitcoin if the markets would close for the weekend.   People are used to the 24/7 operation, but the fact is it puts downward pressure on the price if only one side of the trade can put up money.

Agreed.
If 6.30 holds for a day we should see a reversal to the upside throughout the week.
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June 25, 2012, 09:55:00 PM
 #34


Agreed.
If 6.30 holds for a day we should see a reversal to the upside throughout the week.


Agreed.  Which is why i was being responsible and not crashing the market on a weekend.  It sounds like some people wished I would have because they wanted to buy real cheap.  

In fact, I personally would like to buy some more bitcoins under $6, but I'm not going to crash the market with BFL's money to do that.

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June 25, 2012, 09:57:16 PM
 #35

Options would be good if they are done correctly.  They would provide a proper hedging mechanism to buy time to sell the coins in an efficient manner.

However, options contracts are only as good as the counterparty.

Markets are being very efficient today.  It's over the weekends where the bias is lopsided to the downside.  Sellers can add liquidity over the weekend, but buyers cannot!

It would actually be more stable for bitcoin if the markets would close for the weekend.   People are used to the 24/7 operation, but the fact is it puts downward pressure on the price if only one side of the trade can put up money.

Agreed.
If 6.30 holds for a day we should see a reversal to the upside throughout the week.


*not* agreed at all! ok … partially agreed. If we had a monopoly, I would love to have order settlement once per 24h or once per week. Why should the price change faster than I can settle a purchase? As we will never have a monopoly, people will put their money where they can react in case of significant news and therefore the exchanges would only stop 24/7 upon being regulated.

(Actually a pause in price-making would definitely not increase stability as users would get nervous against that deadline on Friday. Also the exchanges would need extra capacities for the unnatural activity spikes.)

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June 25, 2012, 09:58:21 PM
 #36

Options would be good if they are done correctly.  They would provide a proper hedging mechanism to buy time to sell the coins in an efficient manner.

However, options contracts are only as good as the counterparty.

Markets are being very efficient today.  It's over the weekends where the bias is lopsided to the downside.  Sellers can add liquidity over the weekend, but buyers cannot!

It would actually be more stable for bitcoin if the markets would close for the weekend.   People are used to the 24/7 operation, but the fact is it puts downward pressure on the price if only one side of the trade can put up money.

Agreed.
If 6.30 holds for a day we should see a reversal to the upside throughout the week.


WTF!?!? So you discuss dumping this amount soon publicly and tell in the same thread that you have no intention of manipulating anything in your own favor? That doesn't compute somehow.

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June 25, 2012, 09:59:49 PM
 #37

*not* agreed at all! ok … partially agreed. If we had a monopoly, I would love to have order settlement once per 24h or once per week. Why should the price change faster than I can settle a purchase? As we will never have a monopoly, people will put their money where they can react in case of significant news and therefore the exchanges would only stop 24/7 upon being regulated.

(Actually a pause in price-making would definitely not increase stability as users would get nervous against that deadline on Friday. Also the exchanges would need extra capacities for the unnatural activity spikes.)

If the exchanges become regulated, which they should, the regulations will mandate equal protection for buyers and sellers.  This may mean that trading cannot occur during periods of time when only one group of participants can deposit and withdraw, and the other group cannot.  In other words, unless banks are open 24/7 bitcoin cannot trade 24/7.


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June 25, 2012, 10:10:57 PM
 #38

Options would be good if they are done correctly.  They would provide a proper hedging mechanism to buy time to sell the coins in an efficient manner.

However, options contracts are only as good as the counterparty.

Markets are being very efficient today.  It's over the weekends where the bias is lopsided to the downside.  Sellers can add liquidity over the weekend, but buyers cannot!

It would actually be more stable for bitcoin if the markets would close for the weekend.   People are used to the 24/7 operation, but the fact is it puts downward pressure on the price if only one side of the trade can put up money.

Agreed.
If 6.30 holds for a day we should see a reversal to the upside throughout the week.


*not* agreed at all! ok … partially agreed. If we had a monopoly, I would love to have order settlement once per 24h or once per week. Why should the price change faster than I can settle a purchase? As we will never have a monopoly, people will put their money where they can react in case of significant news and therefore the exchanges would only stop 24/7 upon being regulated.

(Actually a pause in price-making would definitely not increase stability as users would get nervous against that deadline on Friday. Also the exchanges would need extra capacities for the unnatural activity spikes.)

I only agreed with highlighted text that the price tends to go down on weekends due to inequalities in bid/ask liquidity.
But I don't think that closing exchanges for a weekend is a good solution.
It doesn't seem compatible with vibrant 24/7 Bitcoin economy.

By the way I only learnt about "banking days" and "non-banking days" when I first transferred some fiat to the BTC exchange!
And I thought it was totally silly that I cannot do electronic transfer on a weekend in the age of the Internet.
If some exchanges become regulated they will be wiped out by 24/7 competition.
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June 25, 2012, 11:03:19 PM
 #39

*not* agreed at all! ok … partially agreed. If we had a monopoly, I would love to have order settlement once per 24h or once per week. Why should the price change faster than I can settle a purchase? As we will never have a monopoly, people will put their money where they can react in case of significant news and therefore the exchanges would only stop 24/7 upon being regulated.

(Actually a pause in price-making would definitely not increase stability as users would get nervous against that deadline on Friday. Also the exchanges would need extra capacities for the unnatural activity spikes.)

If the exchanges become regulated, which they should, the regulations will mandate equal protection for buyers and sellers.  This may mean that trading cannot occur during periods of time when only one group of participants can deposit and withdraw, and the other group cannot.  In other words, unless banks are open 24/7 bitcoin cannot trade 24/7.

With these silly posts from you I think about betting on bitpay's bankrupcy over at betsofbitcoin. With equal rights for buyers and sellers we should delay all transactions to 2 weeks as that's what my deposits at gox took twice. Maybe the satoshi client should only accept blocks with at least 2 weeks old inputs? Omg what that would be secure!!1

(I guess it's the cold that put me in a trollish mood.)

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June 25, 2012, 11:35:56 PM
 #40

I love this, you can only buy miners with BTC and bankwire, so everyone gives Bitcoin away, BFL sells it all pushing down the price and forcing GPU miners out of the market, then 8 months later the difficulty increases exponentially as they "test" their ASIC on Inaba's pool, then they release it first to GigaVPS, who hypes up how "awesome" it is and single handedly mines a huge portion of the 3100btc/day till the next difficulty readjustment.

Then everyone after two weeks more who gets their devices finds their ROI is about 10 years. GG.

Very wise. I agree with this 100%. People don't have any idea what they are getting themselves into now.

Better buy BTC than buy BFL mining gear.

If BTC goes kaboom then both will be WORTHLESS. Nobody needs double SHA256 ASIC crap.

But the difference is : buying BTC outright you have much more chance to make a huge $$$ when drop comes in Dec and BTC prices rise like mad.

But disregard me, I can't wait to see the SHEEP get burned again, again and yet again !
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