[2014-07-28] CD: Coinapult Launches LOCKS, a Tool to Eliminate Bitcoin Price Vol

delulo

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@ Coinapult

Quote from: delulo on August 06, 2014, 03:38:57 AM

Coinapult,

how does it help the farmer in Ghana exactly?

What (real world) use cases do you see for it? What advantages does it have towards something like Realcoin or BitUSD (part of Bitshares x) if it works ? With Realcoin you also have the qualities of Bitcoin (fast and cheap transfers) plus price stability. And with Realcoin you buy price stability at the price of trust in the company that is backing Realcoin (trust in the effectiveness of the market peg with Bitusd)? What advantages does LOCKS have? Because it has the disadvantage that you loose 1% every time you want to use your Bitcoins to transfer them...

Kosta#

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Quote from: Coinapult on August 11, 2014, 11:14:23 AM

Quote from: TraderTimm on August 07, 2014, 04:48:23 PM

Quote from: Kosta# on August 06, 2014, 07:46:29 PM

Dear Coinapult,

Please explain who gets the difference between future price of bitcoin ($646 for December contract, according to icbit.se) and the current price ($578). According to my calculations, it is 12%, not 1-2% you have mentioned.

In other words, if I move one bitcoin to icbit.se and short December contract, I get $646 worth of bitcoins in December. With you, I only get $578 minus fees and spread. (In fact, I don't even have to move whole bitcoin to icbit.se, only 1/leverage worth of bitcoin).

Bingo.

This is less about "making the world a better place" and more about certain co-founders making back what they lost in the Mt. Gox implosion.

Locks is not a futures contract with a specific date at which it can be redeemed. Users can unLock their coins at any time. A futures contract would demand a price premium because the bitcoins are irredeemable for an allocated period of time.

this is simply not true. cryptoexchanges work 24/7, so user can close his position any time he wants.

Quote

Locks allows basic Bitcoin users the ability to protect their value from fluctuations

so does selling futures, and with much better results, it seems.

Quote

without having to be a professional trader.

you don't have to be a professional trader to realize that having $X worth of bitcoin is better than having $X - 12% worth of bitcoin.

but I get your unspoken point - you've meant to say that your service is targeting users who are so dumb that they can't figure out how to sell futures on icbit.se. nice business model, bro.

Coinapult

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Quote from: TraderTimm on August 07, 2014, 04:48:23 PM

Quote from: Kosta# on August 06, 2014, 07:46:29 PM

Dear Coinapult,

Please explain who gets the difference between future price of bitcoin ($646 for December contract, according to icbit.se) and the current price ($578). According to my calculations, it is 12%, not 1-2% you have mentioned.

In other words, if I move one bitcoin to icbit.se and short December contract, I get $646 worth of bitcoins in December. With you, I only get $578 minus fees and spread. (In fact, I don't even have to move whole bitcoin to icbit.se, only 1/leverage worth of bitcoin).

Bingo.

This is less about "making the world a better place" and more about certain co-founders making back what they lost in the Mt. Gox implosion.

Locks is not a futures contract with a specific date at which it can be redeemed. Users can unLock their coins at any time. A futures contract would demand a price premium because the bitcoins are irredeemable for an allocated period of time. Locks allows basic Bitcoin users the ability to protect their value from fluctuations, without having to be a professional trader.

Coinapult

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Quote from: xeroc on August 06, 2014, 03:16:22 AM

Quote from: MarkyRamone on August 06, 2014, 12:33:23 AM

I think that everyone in this thread should take a look at bitshares-x (http://bitshares-x.info).
Basically is a distributed bank were you can hold your deposits in any currency (first iteration will have bitUSD, bitGold and bitBTC).
These are market-pegged assets or collateralized network issued IOUs .. If you have 1 bitUSD it will always be worth 1 USD worth of BTSX (the crypto that this network use).
The pegging is being done with a prediction market running in the blockchain that have 10 second confirmation time using DPOS (delegated proof of stake).
BTW: This bank makes money with transactions fees, inactivity fees, margin calls fees and this revenue goes directly to the shareholders. Just owning the underlying crypto BTSX (the one that bitUSD is backed) you are a shareholder.
For me is the most innovative thing ive seen since bitcoin.

Sadly the OP is about eleminating btc price volatilty .. I am pretty sure most people
around do not realize the power of the bitUSD and the bitGLD ..

if you guys don't know what bitUSD is => ~~blame~~ educate your self

Our CEO Ira Miller recently wrote a blog post for Coinapult regarding BitShares / Ripple / other altcoins and altchains, addressing this very question:

https://medium.com/@Coinapult/locks-comparisons-5141257af8e8

Please share your thoughts and comments!

TraderTimm

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Quote from: Kosta# on August 06, 2014, 07:46:29 PM

Dear Coinapult,

Please explain who gets the difference between future price of bitcoin ($646 for December contract, according to icbit.se) and the current price ($578). According to my calculations, it is 12%, not 1-2% you have mentioned.

In other words, if I move one bitcoin to icbit.se and short December contract, I get $646 worth of bitcoins in December. With you, I only get $578 minus fees and spread. (In fact, I don't even have to move whole bitcoin to icbit.se, only 1/leverage worth of bitcoin).

Bingo.

This is less about "making the world a better place" and more about certain co-founders making back what they lost in the Mt. Gox implosion.

Kosta#

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Quote from: Coinapult on August 04, 2014, 05:34:03 PM

Quote from: TraderTimm on August 04, 2014, 01:48:26 PM

What crap-a-pult fails to mention is that paid debit cards that are being rolled out by exchanges, notably Chinese based ones, allow anyone to have a method to use their funds without a bank account.

But of course, they wouldn't dare mention it, as it would become quite obvious that their only intention is to skim their margin from users anyway.

Hi TraderTimm,

In our above post, we specifically detailed why Locks is quite different from working with an exchange. How would you recommend a farmer in Ghana, with no bank account, sign up for a Bitcoin exchange account?

In addition, the charges that are associated with these debit cards seem to be in the same range as Coinapult's spread for Locks.

Dear Coinapult,

Please explain who gets the difference between future price of bitcoin ($646 for December contract, according to icbit.se) and the current price ($578). According to my calculations, it is 12%, not 1-2% you have mentioned.

In other words, if I move one bitcoin to icbit.se and short December contract, I get $646 worth of bitcoins in December. With you, I only get $578 minus fees and spread. (In fact, I don't even have to move whole bitcoin to icbit.se, only 1/leverage worth of bitcoin).

delulo

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Activity: 441

Merit: 250

Coinapult,

how does it help the farmer in Ghana exactly?

What (real world) use cases do you see for it? What advantages does it have towards something like Realcoin or BitUSD (part of Bitshares x) if it works ? With Realcoin you also have the qualities of Bitcoin (fast and cheap transfers) plus price stability. And with Realcoin you buy price stability at the price of trust in the company that is backing Realcoin (trust in the effectiveness of the market peg with Bitusd)? What advantages does LOCKS have? Because it has the disadvantage that you loose 1% every time you want to use your Bitcoins to transfer them...

xeroc

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Activity: 345

Merit: 250

Quote from: MarkyRamone on August 06, 2014, 12:33:23 AM

I think that everyone in this thread should take a look at bitshares-x (http://bitshares-x.info).
Basically is a distributed bank were you can hold your deposits in any currency (first iteration will have bitUSD, bitGold and bitBTC).
These are market-pegged assets or collateralized network issued IOUs .. If you have 1 bitUSD it will always be worth 1 USD worth of BTSX (the crypto that this network use).
The pegging is being done with a prediction market running in the blockchain that have 10 second confirmation time using DPOS (delegated proof of stake).
BTW: This bank makes money with transactions fees, inactivity fees, margin calls fees and this revenue goes directly to the shareholders. Just owning the underlying crypto BTSX (the one that bitUSD is backed) you are a shareholder.
For me is the most innovative thing ive seen since bitcoin.

Sadly the OP is about eleminating btc price volatilty .. I am pretty sure most people
around do not realize the power of the bitUSD and the bitGLD ..

if you guys don't know what bitUSD is => ~~blame~~ educate your self

MarkyRamone

newbie

Activity: 18

Merit: 0

I think that everyone in this thread should take a look at bitshares-x (http://bitshares-x.info).
Basically is a distributed bank were you can hold your deposits in any currency (first iteration will have bitUSD, bitGold and bitBTC).
These are market-pegged assets or collateralized network issued IOUs .. If you have 1 bitUSD it will always be worth 1 USD worth of BTSX (the crypto that this network use).
The pegging is being done with a prediction market running in the blockchain that have 10 second confirmation time using DPOS (delegated proof of stake).
BTW: This bank makes money with transactions fees, inactivity fees, margin calls fees and this revenue goes directly to the shareholders. Just owning the underlying crypto BTSX (the one that bitUSD is backed) you are a shareholder.
For me is the most innovative thing ive seen since bitcoin.

My 2cts

TraderTimm

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Sure, you guys are changing the world out of the sheer goodness of your hearts.

I'm betting you won't be giving a "farmer in Ghana" any relief from your middleman-skimming, eh?

That's right, you're just a business, and even if your marketing materials exude that "help everybody, yay!" spin, it just comes down to your profit margin on poor schmucks who have no other alternative.

How convenient for you...

Coinapult

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Merit: 10

Quote from: TraderTimm on August 04, 2014, 01:48:26 PM

What crap-a-pult fails to mention is that paid debit cards that are being rolled out by exchanges, notably Chinese based ones, allow anyone to have a method to use their funds without a bank account.

But of course, they wouldn't dare mention it, as it would become quite obvious that their only intention is to skim their margin from users anyway.

Hi TraderTimm,

In our above post, we specifically detailed why Locks is quite different from working with an exchange. How would you recommend a farmer in Ghana, with no bank account, sign up for a Bitcoin exchange account?

In addition, the charges that are associated with these debit cards seem to be in the same range as Coinapult's spread for Locks.

TraderTimm

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What crap-a-pult fails to mention is that paid debit cards that are being rolled out by exchanges, notably Chinese based ones, allow anyone to have a method to use their funds without a bank account.

But of course, they wouldn't dare mention it, as it would become quite obvious that their only intention is to skim their margin from users anyway.

Coinapult

member

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Merit: 10

Quote from: seriouscoin on August 02, 2014, 06:10:09 PM

I have just tried the LOCK feature,

Basically its their wallet, not yours. You set the amount you want to "LOCK" (max is $3k), then you're requested to send the equipvalent in BTC to their wallet either from your external wallet (any wallet) or your Coinapult wallet(basically you sold your coins LOL). The exchange rate is ofcourse the "hidden fee". ie Bitstamp currently at $593/btc, their rate is $584/btc. And i only tried less than 1 btc, i assume with larger fund, the rate is even worse.

I hate it when the Coinapult asshole talked like this feature is so innovative, while infact hes just taking the cut on every trade he does for you on the exchange.

Hi Seriouscoin, thanks for your feedback, hopefully we can explain why we think Locks is an innovation that goes beyond a normal exchange.

Anytime a user wants to use an exchange, they are taking ownership of fiat into a verified bank account. There are a few noteworthy disadvantages to this:
1. The non-trivial and time-consuming process of gathering and verifying documentation (days or weeks)
2. The lack of privacy
3. The necessity of having a bank account

#3 is perhaps the most striking. If over 50% of the world doesn't have a bank account, you are effectively cutting off 50% of the world from accessing Bitcoin as a payment network. One of Coinapult's primary motivations is bringing Bitcoin access to developing countries and economies, and requiring all of our customers to have bank accounts would not be conducive to our mission.

Our fee is not hidden, we have a spread of approximately 1-2% (closer to 1% when volatility is normal) any time someone Locks or unLocks. We are actually mid-preparing a new "Price Discovery" page for our site that will give more details into how we calculate an averaged BTC index price, as well as Coinapult's spread.

LiteCoinGuy

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In Satoshi I Trust

but at least its a nice step in the right direction and it solves "a problem"....in my view.

seriouscoin

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I have just tried the LOCK feature,

Basically its their wallet, not yours. You set the amount you want to "LOCK" (max is $3k), then you're requested to send the equipvalent in BTC to their wallet either from your external wallet (any wallet) or your Coinapult wallet(basically you sold your coins LOL). The exchange rate is ofcourse the "hidden fee". ie Bitstamp currently at $593/btc, their rate is $584/btc. And i only tried less than 1 btc, i assume with larger fund, the rate is even worse.

I hate it when the Coinapult asshole talked like this feature is so innovative, while infact hes just taking the cut on every trade he does for you on the exchange.

knight22

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--------------->¿?

Quote from: bitpop on August 02, 2014, 05:17:41 PM

Because you can't get bitcoins instantly to buy stuff unless you do it yourself by keeping fiat at Bitstamp, etc

Well, it gives the opportunity to businesses to keep their bitcoins instead of exchanging them to fiat instantly.

bitpop

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Because you can't get bitcoins instantly to buy stuff unless you do it yourself by keeping fiat at Bitstamp, etc

Raeg

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Quote from: bigasic on August 02, 2014, 08:23:45 AM

So, if its pegged to the us dollar, they just hold your fiat in dollars, if you peg it gold, they just purchase the gold with your fiat, I really don't see the advantage, why not just hold your fiat and buy bitcoin when you want to use it, it wont gain any value.. This is just waste of time.

That's exactly what I thought. I'd rather not trust a third party with my money either,

bigasic

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So, if its pegged to the us dollar, they just hold your fiat in dollars, if you peg it gold, they just purchase the gold with your fiat, I really don't see the advantage, why not just hold your fiat and buy bitcoin when you want to use it, it wont gain any value.. This is just waste of time.

jl2012

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Quote from: Whitehouse on July 29, 2014, 09:01:23 AM

Where do you get the coins to pay everyone if that actually happened? If bitcoin suffers a catastrophic crash and most of your users decide to cash out how can you cover that?

It should work like this: when you deposit bitcoin to them, they will sell at market rate and hold fiat. When you want to withdraw bitcoin, they will buy at market rate and give you the bitcoin. That's why you can "lock" the value in USD: you have sold your bitcoin for USD

TraderTimm

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This is just another "service" that essentially books the profit from any Bitcoin appreciation and leaves the customer holding the bag at a static price point. How much do you want to bet they keep their fees in Bitcoin? Its just another payment aggregator that is saying "trust us", while taking their slice of the action, and then some...

DeathAndTaxes

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Gerald Davis

Quote from: bitpop on July 30, 2014, 02:22:05 AM

Maybe I'm dumb but why do you guys make it so complicated with futures etc? I hope that's not the case. I really hope the Bitcoin is just sold for cash or gold with audited statements.

Delivery (taking final possession of converted funds) is generally expensive and doing it twice for a roundtrip transaction is just insanity. Go ahead and price what markup/markdown would be needed to go from BTC -> USD -> GOLD -> USD -> BTC. I am 100% absolutely sure, the customer's deposited BTC isn't sold for dollars or physical gold. To do that they would need to have fees in the 5% range and who is going to use a service which eliminates volatility but guarantees a 5% loss.

Smack That Ace

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Free Free Palestine

Read the article and i think its a great step towards bringing the common man closer to bitcoin.

Good luck with the project to Coinapult Team.

Duke

Kosta#

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Quote from: odolvlobo on July 29, 2014, 03:42:55 AM

Quote from: Kosta# on July 29, 2014, 03:01:34 AM

How is it different from selling futures with 1:1 leverage?

Well, one difference is that a futures contract has an expiration date.

you can always roll forward. btw, bitcoin futures market is in heavy contango, so they just pocket the difference between the present and future price. nice gig if they can find customers that stupid.

Quote

Another is that you never actually exchange bitcoins for anything.

futures settlement is also in bitcoin, so no difference here.

bitpop

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Quote from: Whitehouse on July 29, 2014, 09:01:23 AM

Where do you get the coins to pay everyone if that actually happened? If bitcoin suffers a catastrophic crash and most of your users decide to cash out how can you cover that?

Your Bitcoin is already sold, they shut down and give you the cash. It's very simply. I really hope this isn't convoluted like your theories. They should have full fiat and gold reserves, there is no risk.

bitpop

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Quote from: mailmansDOGE on July 30, 2014, 02:24:13 AM

B-b-b-But... I thaught volatility was what made bitcoin popular to investors. The possibility it gives for good earning in a short period of time make it what it is to some extent.

Bitcoin has many uses, a payment rail is one of the top ones. Someone working at McDonald's saving for a shitpad can't afford any volatility before sending to newegg.

mailmansDOGE

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B-b-b-But... I thaught volatility was what made bitcoin popular to investors. The possibility it gives for good earning in a short period of time make it what it is to some extent.

bitpop

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Maybe I'm dumb but why do you guys make it so complicated with futures etc? I hope that's not the case. I really hope the Bitcoin is just sold for cash or gold with audited statements.

This service is critical for people who want to use Bitcoin as a payment rail and not a volatile investment. It's like a universal PayPal with a balance then send it anywhere. Its what I thought circle was doing.

CJYP

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This is actually useful. It allows you to use bitcoin without being exposed to it. It's exactly like if you just buy your bitcoin on Coinbase right before you need to send it, except your bank account isn't charged (with the 1% coinbase fee) every single time you need to make a transaction.

TheButterZone

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RIP Mommy

Capital gain realized the instant it converts to fiat?

Chef Ramsay

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Quote from: Whitehouse on July 29, 2014, 09:36:18 AM

Oh, so they don't actually hold the btc, just the cash value of it you put in? If so, that does seem a bit silly but I'm sure it cant just be that and we've missed something here.

From my perspective and cursory understanding of this service, it allows people to think they have exposure to Bitcoin while feeling safe in fiat terms. So many people have no idea what it's like to one's stomach lining to experience these kinds of shifts in pricing. Many have only gone through it once during the last recession and freak out about getting into Bitcoin for using or spending knowing the potential for a freak show happening again. My only curiosity is what does this service add to market cap when it's just an illusion? I know I'm missing something here. Undecided

DeathAndTaxes

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Gerald Davis

It would be an interesting way to "short" bitcoin without using an exchange however more transparency on how coinapult is securing the peg is needed.

cr1776

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Quote from: Bit_Happy on July 29, 2014, 10:33:20 AM

Bitcoin price volatility is a blessing which will hopefully resume in the near future.

As you hint, the "bitcoin price volatility" over the last 4 years has been wonderful. ;-)

LiteCoinGuy

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Quote from: Whitehouse on July 29, 2014, 06:31:28 AM

I've read the 'how it works' explanation but still don't understand how this works. So if you lock or peg your coins to a fiat price that's the amount of fiat worth of coins you will get back anytime?

https://www.youtube.com/watch?v=AxriIkGaY60

Bit_Happy

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A Great Time to Start Something!

Bitcoin price volatility is a blessing which will hopefully resume in the near future.

Whitehouse

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Oh, so they don't actually hold the btc, just the cash value of it you put in? If so, that does seem a bit silly but I'm sure it cant just be that and we've missed something here.

colinistheman

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Quote from: Coinapult on July 29, 2014, 08:45:30 AM

Thats exactly right. So if you have $600 of BTC locked with Coinapult, then the price of Bitcoin halved in value, you will still have $600 of BTC in your wallet to redeem at any point.

You could do the same by keeping $600 cash in your bank account and just buying on coinbase when you're ready. This service is a waste and an illusion of a service.

They just get to hold your fiat instead of you holding it.

colinistheman

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It sounds like they just hold your money and buy the bitcoins at the time you want to use them. Basically like a centralized bank which converts at the last second to bitcoin.

It seems to defeat the purpose of bitcoin unless I am misunderstanding something.

Whitehouse

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Where do you get the coins to pay everyone if that actually happened? If bitcoin suffers a catastrophic crash and most of your users decide to cash out how can you cover that?

Coinapult

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Thats exactly right. So if you have $600 of BTC locked with Coinapult, then the price of Bitcoin halved in value, you will still have $600 of BTC in your wallet to redeem at any point.

Whitehouse

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I've read the 'how it works' explanation but still don't understand how this works. So if you lock or peg your coins to a fiat price that's the amount of fiat worth of coins you will get back anytime?

odolvlobo

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Quote from: Kosta# on July 29, 2014, 03:01:34 AM

How is it different from selling futures with 1:1 leverage?

Well, one difference is that a futures contract has an expiration date. Another is that you never actually exchange bitcoins for anything.

Kosta#

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How is it different from selling futures with 1:1 leverage?

LiteCoinGuy

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In Satoshi I Trust

Coinapult Launches LOCKS, a Tool to Eliminate Bitcoin Price Volatility

http://www.coindesk.com/coinapult-launches-locks-tool-eliminate-bitcoin-price-volatility/

great and important step! Circle wants to do the same or something like that in the future.

-LiteCoinGuy-

Topic: [2014-07-28] CD: Coinapult Launches LOCKS, a Tool to Eliminate Bitcoin Price Vol (Read 5463 times)