Topic: Do Bfx Chain Split Tokens prices tell us segwit should not trigger on hashrate? (Read 948 times)

Yes, it is the users' answer to the question:

what is the chance of a hard fork and the market cap of BTU

vs

(what is the chance of no hard fork or the chance of a hard fork and the market cap of BTC).

Not:

"in the case of a hard fork:
what is the market cap of BTU vs BTC-C"

I think you misunderstand the clause.  If on 31 december NO HARDFORK HAPPENED, then all your virtual BTU are destroyed, but all your virtual BTC-C can be withdrawn.

So the price you see is:
"BTC": the price for "BTC-C OR NO HARDFORK

"BTU" the price for BTU ONLY IF HARDFORK otherwise zero.

Suppose they turned this around, and they said:

If at the end of the year, there is no hard fork, then we allow you to withdraw your BTU as real BTC, but if you have BTC, we destroy them and you have nothing, what do you think the price ratio would be ?

In other words, the price ratio is NOT the gamble on:

IF A HARD FORK OCCURS, what would be the preference of BTU / BTC-C ?

But rather  (BTU and hard fork)  / (BTC-C or no hard fork).

The condition left is much harsher, with the "and" than the condition on the right.

Let us put probabilities.  Suppose that people think:

- 20% chance of a hard fork this year, in that case, price will be 50/50
- 80% chance of no hard fork.

Note that they think that after hard fork, both will have equal value.  What would be the rational outcome on Bitfinex ?

BTU: 0.2 * 0.5 = 10% of total price

BTC-C: 0.2 * 0.5 + 0.8 * 1 = 90% of total price.

So if total price is $1000, Bitfinex would indicate that BTU is $100 and BTC-C is $900.
Nevertheless, people really think that IF there is a hard fork, both will be equal value.  But they think that the hard fork happening has only 20% chance this year.

there's absolutely nothing on the line here compared to a real split price. it indicates preferences but has nothing to do with realities.

who knows what the price or ratio would do if chains were seizing up, miners were going bust or attacking each other and users were running for the door?

if for once bitfinex and the rest of the exchanges that agreed to split btc find it good to have BU i guess the decision of splitting will happen. its funny because all these can be manipulated by themselves as well. for them, they decide for what to do with btc. these exchanges are holding us up high by our neck.

Yes, you are right. I will correct my wording.
It is not Bitfinex's answer, but it's users current answers.
Thanks.

That's not the Bitfinex answer. It is the result of traders who are stupid enough to gamble on a one-sided bet.

Just so you know, since you post a lot without knowing.

If the BU hardfork fails in maintaining majority hash, BU chain dissolves and all
work and txs on that chain is lost. The margins between the BTC and BTU is lower
not because BTU coins will be destroyed by Bitfinex, but because BTU coins are
destroyed by the network's Miners themselves.

The Bitfinex bet is really: What are the chances that BTU chain dissolves?
Bitfinex Users' current answer:  currently 70% chance of loss.

Edit: see below comment from AngryDwarf

Ah, answer to my question !  No wonder BTU is lower price !!!  Big manipulation: one token is redeemable for real bitcoin, the other one is to be destroyed.  Anyone trading BTC for BTU is risking to lose them ; on the other hand, all those trading BTU for BTC will IN ANY CASE be able to withdraw full BTC if they do it before the split (say, two hours before).

It is even amazing that BTU has any score at all under these asymmetrical conditions ! 

Until that point, did the people trading there, put their money really at stake ?  Or not ?

Suppose I deposited 10 BTC, and that I sold my BTC-c for BTC-u.  I have now much more BTC-u.  Can I withdraw BTC with that ?  Did the fact of converting BTC-c in BTC-u change anything for me if I withdraw BTC (no split) ?

What the hell bitfinex is doing, they are trading tokens backed by nothing  
They may be trying to get back some free bitcoin from noobs by giving them a product/token that even doesn't exist. I have left this trading platform full of security bugs a long time ago.

Token Trading T&C's

https://www.bitfinex.com/cst_token_terms



In my opinion, anyone trading these tokens need their head examining.

I think if thermonuclear bitcoin war breaks out, it's going to be a bloodbath with many economic factors coming into play, and it won't be started without a long term goal.
I'll just keep my coins unmoved and let the radiation settle.
I don't think a few dreaming day traders playing pass the token IOU about for a packet of peanuts is much of an indication of what may be to come.

True. Definitely lots of unknowns, and things could change quickly. I see the chain split tokens as giving us information about a very specific hypothetical scenario, i.e. BU hard forks off from the status quo. I would not be surprised if the BU team looks at this info and decides that a hard fork right now would not be in their strategic best interests. If it happens, and they do not have > 50% of hash power directly under their control without the possibility of defectors, then the hash power will favor Core chain, the core chain will get longer than the BU chain, and every BU miner will automatically switch back to core. It would be an epic epic failure.

Which means that the BU team has two options: 1) make lots of noise but do nothing, or 2) make some change to their code so that they can create a stable fork even with less hashpower than the core chain. The very act of writing and releasing that code would be ... more provocative than anything they have done so far.

This is why I find the prices interesting. I think it will indicate to the BU team that they have a choice between 1) and 2). What they do will be interesting to watch.



* minor edits

Too many unknown factors that can occur. Fears of enforced activation and an emergency POW change could shift asic miners attitude towards voting in one direction. This could lead to a high level of consensus between miners. Exchanges and users then may follow.

We are a long way from any strong level of consensus, so all this action does is allow a few altcoin traders to play their speculation game. I would view it as nothing more than cold war propaganda.

^^^ Someone tell me why I'm wrong.

I'm guessing their fees are the same as for any of their other trading.

If a split happens, then they will be converted into coins that can be actually withdrawn. If a split does not happen or has not yet happened, they can be converted back into btc and actually withdrawn.

I think this market is providing extraordinarily interesting information. This is our best guess as to how the post-split prices would stand relative to one another, which in turn would drive the post-split relative hash power, which will tell us which chain would have more support. 

These coin tokens can't be deposited or withdrawn, but can be traded for a nice fee I suppose. Perhaps you could post the T&C's behind trading these tokens? Just sounds like financial wizardry for a few people to play the pump and dump game rather than anything that could be classed as a real world depiction of what could happen in reality.

Despicable behaviour in my opinion. It is intentionally prematurely decisive.

If the fork happens, then they are no longer theoretical tokens, they convert to actual coins.

Sure, the fork might not happen. But most of bitcoin's value right now is based on people speculating about what bitcoin's future *might* be. Uncertainty about the future does not render market prices meaningless.

These guys are trading theoretical coin tokens on a coin split that has not, or may not even happen.

Naked derivative IOU's backed by the price of nothing.

Right now on Bitfinex, the market is pricing the hypothetical post-split BU coin BCU at $240, with BCC at $810 (and BTC price at $1050). That is, BU coin is priced at 23 % of the total, with BTC (Core) priced at 77%. However, relative hash power tells a different story:

http://xtnodes.com/#blocks_pie_graph

Going by hashpower, it would appear that miners value BU + Classic at 36%, Core at 64%.

36% is a lot different that 23%. The ether split teaches us (as Vitalik has discussed) that hash power follows price. If the split were to happen today, and the market gave Core's coin 77% the value of BTC + BCC, then hash power would quickly follow suit. (Mining one chain at a loss for ideological reasons will be short lived.)

So the question is this: does it make sense to wait for the miners to achieve 95% consensus before activating SegWit? maybe we should use something like Chain Split Tokens to tell us when it's time to activate.

Perhaps this is the idea behind the user activated soft fork ... ?