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monsterer

legendary

Activity: 1008

Merit: 1007

Quote from: sherbyspark on March 03, 2015, 12:26:53 AM

I always think that Cryptocurrency.Altcoin , and bitcoins never relate to stability.
Whats the point of buying if you wish the prices to be stable. WOuldn't fiat be a more desirable option ?

With The Ideal Reserve, profitability for investment/speculation is inverted. Instead of price instability, there is supply instability, so if demand for MØ increases, all account totals increase pro rata to maintain a stable real per unit price of MØ and vice versa.

So, one day I look at my balance and I see 9.8 IDR, the next its 0.2 IDR?

sherbyspark

hero member

Activity: 910

Merit: 1000

I always think that Cryptocurrency.Altcoin , and bitcoins never relate to stability.
Whats the point of buying if you wish the prices to be stable. WOuldn't fiat be a more desirable option ?

robrigo

full member

Activity: 138

Merit: 100

Quote from: ?? on ??

Quote from: robrigo on March 02, 2015, 09:49:57 PM

Positions shorting bitUSD could lose if BTS falls against the dollar, but holders of bitUSD aren't liable for the short and can safely hold their bitUSD without liability. You are exposed to systemic risk if the peg were to fail.

Other relatively stable bitassets include bitGold, bitSilver, and bitCNY.

There's no doubt that bit assets produce real prices of the underlying under normal conditions.

The problem comes from abnormal conditions.

I can't find the specifications on the contract, and their claim that there're no IOUs doesn't give much confidence because a short sale is always without a doubt a loan of underlying. Yes, it would be poorly structured indeed if the longs were somehow liable for shorts, but what happens if the bottom falls out, and the shorts cannot be covered within their margin? Can the issuer devalue by selling new supply, or is the issuer on the hook for shorts' losses?

Regardless, the onerous margin is high cost, and the above risk also will eventually be priced in. A liabilityless method will almost always be less costly.

Quote from: fartbags on March 02, 2015, 10:35:59 PM

1 CANN = 1 gram of CANNdy (Cannabis)

http://canndy.org/

From what little I can find on Cannabis Coin's reserve model, it appears as if the price is tied to a single commodity that represents a small portion of the greater economy. That would not qualify as price stability, defined as no change in the general price level.

If the reserves truly are stores of cannabis, Cannabis Coin will be subject to this periodic problem of single asset reserve backing.

If the bitassets were to become undercollateralized faster than the margin calls can unwind positions due to a falling BTS price, it would trigger a black swan event. This could happen in extremely volatile scenarios. The planned way to handle black swans is to force all positions in that market to settle as soon as the asset becomes under collateralized. This isn't implemented yet. They are discussed more in this post: http://bytemaster.bitshares.org/article/2015/01/27/BitAssets-and-Black-Swan-Events/

fartbags

legendary

Activity: 1190

Merit: 1004

1 CANN = 1 gram of CANNdy (Cannabis)

http://canndy.org/

robrigo

full member

Activity: 138

Merit: 100

Positions shorting bitUSD could lose if BTS falls against the dollar, but holders of bitUSD aren't liable for the short and can safely hold their bitUSD without liability. You are exposed to systemic risk if the peg were to fail.

Other relatively stable bitassets include bitGold, bitSilver, and bitCNY.

ChicagoSchooler

newbie

Activity: 29

Merit: 0

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