Naked short selling should be illegal in most instances as it's fraud,
but borrowing coins (for a daily fee) to sell them, then buy then back later, is fine as it helps create a market.
But yeah, you need a regulated market, to make sure the borrower returns the coins.
Contracts for Difference (CFDs) are the best way for doing this, as you can get a court to uphold a contract.
I believe the Winklevoss Twins were trying to set up a Bitcoin derivative, but I've not heard a lot about it recently.
Topic: Do you think shorting of Bitcoins should be allowed? - page 3. (Read 2810 times)
Allowed? WTF? How would you stop it? You can do it on Bitfinex and other places.
After reading the post again I am even more baffled: are you proposing that we should not be allowed to sell Bitcoins (go short)? People should only be allowed to buy them?
I sell high and buy back low all the time. You don't want to allow that?
Sorry to not be nice. This post is really, really bad.
Please add the choice "One of the stupidest polls ever" so I can have a way to vote.
It is ok to be ignorant. What is not is insulting someone based on your ignorance.After reading the post again I am even more baffled: are you proposing that we should not be allowed to sell Bitcoins (go short)? People should only be allowed to buy them?
...Bitcoins are at all time high prices now ... he would sell the Bitcoins ... and get cash. Then, later, when the price of Bitcoins falls ... would buy back all the Bitcoins ... the dishonest owner would have made money
I sell high and buy back low all the time. You don't want to allow that?
Sorry to not be nice. This post is really, really bad.
Please add the choice "One of the stupidest polls ever" so I can have a way to vote.
Sell bitcoins = go short, when you OWN the damn coins. TradeFortress would "borrow" those coins from inputs.io. Can you grasp the subtle difference that makes you an ass for bashing the OP?
Short selling is different from just selling your asset, since with short selling you sell an asset which you do not own, either by borrowing the asset or by going naked.
This will lead to better price discovery, since investors not owning the asset can participate in the price discovery.
This will lead to better price discovery, since investors not owning the asset can participate in the price discovery.
Of course and that was what I thought he was discussing at first (based on the title of the thread) but a more careful reading revealed that he was concerned about simple selling and buying back - unless you consider the theft of the coins to be the "borrowing" of the coins. Then I guess he is saying that the owner of inputs.io "borrowed" the coins and went short with the borrowed coins.
At any rate, the idea trying to prevent actual short sales of borrowed BTC is impossible. How do you prevent people from lending and borrowing BTC? How do you prevent people from selling the BTC they borrow? You can't.
Allowed? WTF? How would you stop it? You can do it on Bitfinex and other places.
After reading the post again I am even more baffled: are you proposing that we should not be allowed to sell Bitcoins (go short)? People should only be allowed to buy them?
I sell high and buy back low all the time. You don't want to allow that?
Sorry to not be nice. This post is really, really bad.
Please add the choice "One of the stupidest polls ever" so I can have a way to vote.
After reading the post again I am even more baffled: are you proposing that we should not be allowed to sell Bitcoins (go short)? People should only be allowed to buy them?
...Bitcoins are at all time high prices now ... he would sell the Bitcoins ... and get cash. Then, later, when the price of Bitcoins falls ... would buy back all the Bitcoins ... the dishonest owner would have made money
I sell high and buy back low all the time. You don't want to allow that?
Sorry to not be nice. This post is really, really bad.
Please add the choice "One of the stupidest polls ever" so I can have a way to vote.
First, some background. Shorting a stock makes for less violent swings in price. This is academic theory. One reason Bitcoin prices fluctuate so much is due to the inability for most people to short Bitcoins. So shorting is good for the community.
Now some interesting news. Recently there was a theft of some Bitcoins from an online storage of private keys wallet, of over $1 million USD. The owner of the wallet, who some have accused stealing through an inside job, made an interesting promise: that he would pay back the Bitcoins to all victims. Now some speculation with a twist: Bitcoins are at all time high prices now. If the owner is dishonest, he would do the following and still fulfill his promise: he would sell the Bitcoins he stole from his customers now, and get cash. Then, later, when the price of Bitcoins falls (even perhaps in response to the shock of the theft, affecting other Bitcoin owners who feel Bitcoin is not stable), this dishonest owner in my hypothetical would buy back all the Bitcoins he stole at a lower price. Then he would give these Bitcoins back to their rightful owners, and "everybody would be happy" (to get their Bitcoins back), but the dishonest owner would have made money, in the amount of the difference from the price he sold the stolen Bitcoins to the price he bought them back. This is, btw, essentially how shorting a stock works: you make money from a fall in price.
Now for the twist in the above tale (which is hypothetical): this activity by the dishonest owner is actually beneficial to Bitcoin owners everywhere! (except the ones ripped off by the owner). This is because academic theory predicts 'shorting' Bitcoin makes for a more stable price in the long run, and most people like stable prices. Whether shorting such a small amount of Bitcoins (> $1 million) makes a real difference in price fluctuations of all Bitcoins, whose value is much more than a mere million dollars, is of course debatable.
Finally, I believe Bitcoins have the ability to become like art: finite in supply, trendy, hence valuable in the future, with a real economic value, namely anonymous payments, which btw criminals favor. Hence when the price comes down I will be buying Bitcoins.
Thanks for reading. My first post here so be nice. :-)
Now some interesting news. Recently there was a theft of some Bitcoins from an online storage of private keys wallet, of over $1 million USD. The owner of the wallet, who some have accused stealing through an inside job, made an interesting promise: that he would pay back the Bitcoins to all victims. Now some speculation with a twist: Bitcoins are at all time high prices now. If the owner is dishonest, he would do the following and still fulfill his promise: he would sell the Bitcoins he stole from his customers now, and get cash. Then, later, when the price of Bitcoins falls (even perhaps in response to the shock of the theft, affecting other Bitcoin owners who feel Bitcoin is not stable), this dishonest owner in my hypothetical would buy back all the Bitcoins he stole at a lower price. Then he would give these Bitcoins back to their rightful owners, and "everybody would be happy" (to get their Bitcoins back), but the dishonest owner would have made money, in the amount of the difference from the price he sold the stolen Bitcoins to the price he bought them back. This is, btw, essentially how shorting a stock works: you make money from a fall in price.
Now for the twist in the above tale (which is hypothetical): this activity by the dishonest owner is actually beneficial to Bitcoin owners everywhere! (except the ones ripped off by the owner). This is because academic theory predicts 'shorting' Bitcoin makes for a more stable price in the long run, and most people like stable prices. Whether shorting such a small amount of Bitcoins (> $1 million) makes a real difference in price fluctuations of all Bitcoins, whose value is much more than a mere million dollars, is of course debatable.
Finally, I believe Bitcoins have the ability to become like art: finite in supply, trendy, hence valuable in the future, with a real economic value, namely anonymous payments, which btw criminals favor. Hence when the price comes down I will be buying Bitcoins.
Thanks for reading. My first post here so be nice. :-)
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