Topic: CoinLab News = Price collapse - page 3. (Read 6895 times)

If i loan 50k BTC @ 1% interest over the week - e.g. so must pay back 50500BTC, and sell 50k BTC at once time, it'll start a panic / bubble burst.

Still trying to figure out how this will cause a crash. (i've never played other markets).  If you loan someone 50k BTC plus interest and they have to pay you back bitcoins then how does that involve selling at all? Or are you saying that they loan in bitcoins but expect to be paid in cash?

The real goal would be to help the public know they really can and should demand proof that their deposits are safe and sound and not fractionally pledged, the same way "provably fair gaming" is teaching us by example that we should demand, well, provably fair games.

In turn, this would cut down the number of "paper bitcoins" in existence (or rather, I should say, "bitcoin-denominated promises", because the "paper bitcoins" I have in mind - like bitaddress.org and bip38 - are actually close to the best kind of bitcoins you can have!)

In addition to the news that CoinLab is gonna manage USA/CA funds from Mtgox, they are announcing a professional, safe and licensed trading platform for US Corporations.

Trading platform = shorting.

3 or 4 medium sized corporations with 3 or 4 multimillion shorts puts the prices in $10 or below in no time.

if you could prove that your coins were there how does that prove that extra coins aren't there?

Trading platform = shorting.
3 or 4 medium sized corporations with 3 or 4 multimillion shorts puts the prices in $10 or below in no time.

The ability to short doesn't magically allow the price to be driven down longer than the term of the loan contract.  They have to rebuy the units they short-sold within the time limit, and if the rest of the market hasn't agreed with them during that period of time, they lose money on the short.

I would like to remind all Canadians that http://cavirtex.com/ is an outstanding exchange I really feel i can trust them with my money ( and with more security improvements on the way!) .  Keep using cavirtex!

This idea requires cooperation between your clients which isn't realistic unless anonymous. So really, you can as well have these coin ranges in a form of a public but anonymous ledger. Anybody who knew his/her id in the ledger would be able to verify quickly that their coins are on display. No overlaps possible. No communication needed A completely transparent bank.

If i loan 50k BTC @ 1% interest over the week - e.g. so must pay back 50500BTC, and sell 50k BTC at once time, it'll start a panic / bubble burst.

There's enough people out there looking for "ways" to invest their BTC with viable returns.

As soon as someone makes a nice platform to short, the bubble will burst a lot quicker.  It wont take more than a sell off of say 100k BTC lent to cause a crash.  As soon as it crashes, can easily buy it back in a weeks time to cover the short.

If i loan 50k BTC @ 1% interest over the week - e.g. so must pay back 50500BTC, and sell 50k BTC at once time, it'll start a panic / bubble burst.

OP is now on my ignore list.

I have thought of making a proof-of-concept "Casascius Bank" but where I accept no more than about 1000 BTC in total deposits.

The real goal, though, wouldn't be to become a bank.  It would be to illustrate a proof-of-concept: provably secure depositing.

I have thought of making a proof-of-concept "Casascius Bank" but where I accept no more than about 1000 BTC in total deposits.

The real goal, though, wouldn't be to become a bank.  It would be to illustrate a proof-of-concept: provably secure depositing.

My "bank" would create cryptographic signatures on a daily basis proving in fact that I have every single bitcoin I say I have on deposit.  Meanwhile, I would break down that 1000 BTC into "ranges" to assert that they are owned by specific depositors (but only in a manner where the depositors themselves can identify their own funds, not the public).  For example, if I held 4 deposits for 4 people, and they were 100, 200, 300, and 400, then I would say that coins 1-100 belong to depositor 1, coins 201-400 belong to depositor 2, 401-600 and 601-1000 belong to depositors 3 and 4.  I would sign and send messages to each depositor, which would allow them to reconcile, catch, and out me if (for example), I told two people they each own the same range of coins.

The real goal would be to help the public know they really can and should demand proof that their deposits are safe and sound and not fractionally pledged, the same way "provably fair gaming" is teaching us by example that we should demand, well, provably fair games.

In turn, this would cut down the number of "paper bitcoins" in existence (or rather, I should say, "bitcoin-denominated promises", because the "paper bitcoins" I have in mind - like bitaddress.org and bip38 - are actually close to the best kind of bitcoins you can have!)

This idea requires cooperation between your clients which isn't realistic unless anonymous. So really, you can as well have these coin ranges in a form of a public but anonymous ledger. Anybody who knew his/her id in the ledger would be able to verify quickly that their coins are on display. No overlaps possible. No communication needed A completely transparent bank.