ah, so there are going to be investors in the bank itself,and it's going to trade options only if enough funds available. now that I can understand.
thanks for clearing things up
Topic: [ANN][DGC][FBD] Free Bank of Digitalcoin ~ Risk Averse DGC Investments - page 7. (Read 11656 times)
June 20, 2013, 12:15:41 PM
June 20, 2013, 12:14:29 PM
Let's say I buy 10,000 DGC at 1 BTC per 1,000 DGC. I pay 10.5 BTC (0.5 for a fee) and then get my coins. It doesn't matter if the price drops, as long as they hold my 10 BTC I can still get paid out and they made 0.5 BTC on the transaction. As long as there is no dipping into the payment funds, there will always be enough to payout.
Baritus, does it matter if it is the same DGC that is returned to the bank?
Let's say I buy my 10,000 DGC, but I am able to sell them for 20 BTC. The price then drops to 2,000 DGC/BTC. If I buy 10,000 DGC from you, this time it would cost me 5.25 BTC with the fee, could I call in my previous order and receive 10 BTC back?
And again, I ask this simple question: who's money are going to be used to buy DGC?Baritus, does it matter if it is the same DGC that is returned to the bank?
Let's say I buy my 10,000 DGC, but I am able to sell them for 20 BTC. The price then drops to 2,000 DGC/BTC. If I buy 10,000 DGC from you, this time it would cost me 5.25 BTC with the fee, could I call in my previous order and receive 10 BTC back?
If it's yours, then if price drops - baritus is going to need to sell more DGC for the same amount of BTC, to return to you. If it's not yours, then it's his, and he is taking a loss to pay you off, because your DGC is now worth less then he is paid for them. And if you buy back low - he's going to need to use his money again to buy you more DGC. Prices can rise and fall significantly at this point of time, he is going to need to be able to cover for that volatility.
I don't think the bank is going to attempt to sell any coins it does not already own. It can then add more coins by buying with the fees if necessary. It isn't an endless supply of coins at a set price.
June 20, 2013, 12:11:15 PM
The bank will only sell options when there are options available to sell.
That means there will be no digitalcoin sold which are not already in the bank's possession.
The bank issues options at a fixed rate and returns them at the rate promised, so there is no buying or selling of digitalcoin done by the bank except directly to investors.
The money in the bank will be backed by the shareholders of the bank. That means digitalcoin holders will have the opportunity to invest in the bank itself instead of using the bank only for investments.
The bank will generate returns through fees from issuing options, as well as from the trading of options done by investors(we intend for a platform to enable this). That means the options are not tied to specific coins, they are tied to the owner.
That means there will be no digitalcoin sold which are not already in the bank's possession.
The bank issues options at a fixed rate and returns them at the rate promised, so there is no buying or selling of digitalcoin done by the bank except directly to investors.
The money in the bank will be backed by the shareholders of the bank. That means digitalcoin holders will have the opportunity to invest in the bank itself instead of using the bank only for investments.
The bank will generate returns through fees from issuing options, as well as from the trading of options done by investors(we intend for a platform to enable this). That means the options are not tied to specific coins, they are tied to the owner.
June 20, 2013, 12:00:33 PM
Let's say I buy 10,000 DGC at 1 BTC per 1,000 DGC. I pay 10.5 BTC (0.5 for a fee) and then get my coins. It doesn't matter if the price drops, as long as they hold my 10 BTC I can still get paid out and they made 0.5 BTC on the transaction. As long as there is no dipping into the payment funds, there will always be enough to payout.
Baritus, does it matter if it is the same DGC that is returned to the bank?
Let's say I buy my 10,000 DGC, but I am able to sell them for 20 BTC. The price then drops to 2,000 DGC/BTC. If I buy 10,000 DGC from you, this time it would cost me 5.25 BTC with the fee, could I call in my previous order and receive 10 BTC back?
And again, I ask this simple question: who's money are going to be used to buy DGC?Baritus, does it matter if it is the same DGC that is returned to the bank?
Let's say I buy my 10,000 DGC, but I am able to sell them for 20 BTC. The price then drops to 2,000 DGC/BTC. If I buy 10,000 DGC from you, this time it would cost me 5.25 BTC with the fee, could I call in my previous order and receive 10 BTC back?
If it's yours, then if price drops - baritus is going to need to sell more DGC for the same amount of BTC, to return to you. If it's not yours, then it's his, and he is taking a loss to pay you off, because your DGC is now worth less then he is paid for them. And if you buy back low - he's going to need to use his money again to buy you more DGC. Prices can rise and fall significantly at this point of time, he is going to need to be able to cover for that volatility.
June 20, 2013, 12:00:19 PM
i love that you guys are all out there and shit , and doing things - , the price rose to quick on the recycled cash from the pools and the Xchnage maybe?
but i support you , and I'm along for the ride , right in there !
I'm just going to market my currency to people and say something retarded like :
"buy this it will go up, and if the world ends you will be rich, latest update is Terrorists are eating people in Syria , {pointing} so that's where we are at...."
"oh also its under 1c "
but i support you , and I'm along for the ride , right in there !
I'm just going to market my currency to people and say something retarded like :
"buy this it will go up, and if the world ends you will be rich, latest update is Terrorists are eating people in Syria , {pointing} so that's where we are at...."
"oh also its under 1c "
June 20, 2013, 11:53:44 AM
lol, what a joke, yea, lets bring banks and into cryptocurrencies, just what everyone wants. I see a target for hackers there, also, DGC is already hanging on by a thread, people selling back for what they bought for after a price drop will just kill it faster. I cant believe people are still mining this.
The only joke here is you, buddy.
June 20, 2013, 11:49:57 AM
sorry i had too. but no , seriously its a great idea !
June 20, 2013, 11:49:00 AM
Sounds good 
June 20, 2013, 11:47:55 AM
Let's say I buy 10,000 DGC at 1 BTC per 1,000 DGC. I pay 10.5 BTC (0.5 for a fee) and then get my coins. It doesn't matter if the price drops, as long as they hold my 10 BTC I can still get paid out and they made 0.5 BTC on the transaction. As long as there is no dipping into the payment funds, there will always be enough to payout.
Baritus, does it matter if it is the same DGC that is returned to the bank?
Let's say I buy my 10,000 DGC, but I am able to sell them for 20 BTC. The price then drops to 2,000 DGC/BTC. If I buy 10,000 DGC from you, this time it would cost me 5.25 BTC with the fee, could I call in my previous order and receive 10 BTC back?
Baritus, does it matter if it is the same DGC that is returned to the bank?
Let's say I buy my 10,000 DGC, but I am able to sell them for 20 BTC. The price then drops to 2,000 DGC/BTC. If I buy 10,000 DGC from you, this time it would cost me 5.25 BTC with the fee, could I call in my previous order and receive 10 BTC back?
June 20, 2013, 11:44:40 AM
As I said, price is too volatile now. Either your fees would have to be very big to cover all potential loss, or you are going to need to use lots of your cash to back it, as qwerty1231121 said. Otherwise, if enough people decide to cash out - you won't be able to pay them. Too risky.
June 20, 2013, 11:42:52 AM
It won't be risk free even if bank do write options since option has an expiry date. If bank provide option with no expiry date, then the fees must be massive.
June 20, 2013, 11:31:06 AM
The bank better have lots and lots of money backing it. This is giving put options for free and the person providing it will be very sorry when things go bad. You just don't get "risk free" investment with unlimited upside in a free market. I would suggest that the bank sells these put option for a price then it may become viable. The question is whether the investor will be willing to pay the price.
Fees are one way the bank remains viable. The investors have a lot of reason to pay for the service, including the value of the option itself and hedging.
June 20, 2013, 11:28:45 AM
The bank better have lots and lots of money backing it. This is giving put options for free and the person providing it will be very sorry when things go bad. You just don't get "risk free" investment with unlimited upside in a free market. I would suggest that the bank sells these put option for a price then it may become viable. The question is whether the investor will be willing to pay the price.
June 20, 2013, 11:28:18 AM
The structure of the bank is such that money that is from investor purchases and that is available for investors to sell back their DGC for will be in a public address.
June 20, 2013, 11:22:49 AM
lol, what a joke, yea, lets bring banks and into cryptocurrencies, just what everyone wants. I see a target for hackers there, also, DGC is already hanging on by a thread, people selling back for what they bought for after a price drop will just kill it faster. I cant believe people are still mining this.
Go spread your FUD elsewhere please
June 20, 2013, 11:08:22 AM
lol, what a joke, yea, lets bring banks and into cryptocurrencies, just what everyone wants. I see a target for hackers there, also, DGC is already hanging on by a thread, people selling back for what they bought for after a price drop will just kill it faster. I cant believe people are still mining this.
June 20, 2013, 10:57:53 AM
This would kind of make me nervous. Just look at the list of Ponzi schemes that BTC got hit with.
https://bitcointalk.org/index.php?topic=94900.0;wap2
I'm not saying this is what you're doing, but I could see this thread being inserted at the bottom of that list eventually. Just be careful!
https://bitcointalk.org/index.php?topic=94900.0;wap2
I'm not saying this is what you're doing, but I could see this thread being inserted at the bottom of that list eventually. Just be careful!
June 20, 2013, 10:56:50 AM
Price is very volatile. Imagine the situation: people bought in at high price. You need to give them DGC, so you have to use money to buy them. It's either buyer's money or your own. Then price falls, and it's only a half of what it was. Naturally, many people are going to want to use this situation. They are cashing out, and then buying twice more. Your bank are at huge loss. Who is going to cover the shortage? You?
Exactly...not to sound like a party pooper, but I have the same concern. "No risk for anyone involved" as another poster put it (to paraphrase) is the same as "too good to be true". What exactly are the downsides here?
Beyond that, thank you for your continued innovation on DGC. Happily mining and saving it.
June 20, 2013, 10:52:17 AM
Price is very volatile. Imagine the situation: people bought in at high price. You need to give them DGC, so you have to use money to buy them. It's either buyer's money or your own. Then price falls, and it's only a half of what it was. Naturally, many people are going to want to use this situation. They are cashing out, and then buying twice more. Your bank are at huge loss. Who is going to cover the shortage? You?
June 20, 2013, 10:48:53 AM
Worried about the outcome...this has been tried before:
https://bitcointalksearch.org/topic/bitcoin-savings-and-trust-home-closed-50822
https://bitcointalksearch.org/topic/bitcoin-savings-and-trust-home-closed-50822
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