Topic: [DVC]DevCoin - Official Thread - Moderated - page 216. (Read 1058949 times)

It is much less work than an open source devcoin atm. However, 96 shares is nowhere near enough for the atm, it would probably be at least a thousand shares. All the bounty for the atm got was complaints that it was not big enough. The reason the boounty was offered is because it was asked for, it is not enough to get the atm because devcoin can't afford that yet.


The email bounty was there for about 6 months before it worked when I tested it. The challenge response is harder than just email. I don't want to wait another 6 months, I want it now.


It would go to a forum wallet, so the forum would have to check that wallet or a block explorer.


Yes, but it would be small, that's just a nice bonus from stopping spam.


The addresses would belong to the forum email system. It's up to the developer how to the handle payments.


Alternately, they could check existing block explorers. That would mean a lag of typically ten minutes, but that's not a big deal because the average lag from answering an email is at least several hours.

Since the email is already being intercepted firing off a response to it does not sound hard, the same procmail or whatever tool that does the intercepting is designed already to do recipes that send responses as well as recipes that file the emails into different places or recipients or mailboxes or send them to scripts etc etc so respondng is trivial.

Figuring out whether someone paid something would be the hard part.

There would need to be some way of checking whether the address they were told to pay to did get paid to.

This could be an income for the forum by the sound of it?

Since it wouldn't probably be giving out addresses belonging to the email recipient as payment addresses but, rather, addresses belonging to the forum email interception system itself?

Would they be paying via a third party payment processor so that they have choices of what kinds of (crypto)currencies to pay with?

Presumably using a third party of that kind would be easier than dealing directly with one or more coin daemons?

-MarkM-

96 shares is on par with an open source devcoin atm machine... is this equivalent work?

Im not sure what Ive come up with Weisoq, I wrote it up last night : http://www.devtome.com/doku.php?id=devcoin_fund

Ive never done anything like this and I admit absolute ignorance but the idea wouldnt go away lol

Sent from the forum to gmail and gmail back to the forum. Deja vu.

Novacadian made two way email on his test forum at:
http://trollkeep.com/forum/

I sent an email from my forum account to [email protected] and replied to it from gmail, and it went my forum inbox. For this Novacadian gets half of the 48 shares plus 6 million devcoin bounty forum email bounty. That bounty is closed. When Novacadian gets it working on coinzen, then he and Tenthirtyone will share the remainder, each will get 12 shares plus 1.5 million devcoins.

The ultimate email plan is to have a challenge response system, where a sender not on the recipient's whitelist has to pay about 30 cents in cryptocurrency to send to a coinzen account. This would stop spam completely and is a difficult project. I suggest a payment of 96 shares to Novacadian and Tenthirtyone to implement challenge response. Then another 96 shares to implement payment challenge response. This would be 3/4 for Novacadian and 1/4 for Tenthirtyone. If the basic challenge response is not implemented in two months, this would become an open bounty.

Any objections, or should something be changed?

I don't know what the actual correlation is, but assuming the 30% band implies it's high then that's trading correlation risk really, rather than hedging - a basis trade. Basis trades are great until they're not. You wrote: 'If devcoin gains in value, you would get paid more for your writing. If it falls, it will likely be in tandem with the fall of bitcoin and you will recover some of the losses with your bitcoin short hedge.' That also means if devcoin rises in tandem you will lose some of your gains with the bitcoin hedge.

The issue is that as a writer, writing for devcoins, the only risk you're really concerned about is dvc price falls, not rises. If it falls > 30% tolerance you've given yourself then you can be left worse off than just being long devcoin. So really you'd need to structure it so that the trade has skew which would need options.

True if we only allow hedge of one round of shares.. I guess its a good compromise although for devtome something would have to be figured out about the rolling share system across to the next round.

Yeah I've seen the thread on FF but not really read a lot of it. That's certainly true if for example you're running a fund with the aim of profiting entirely from correlation. And yes  I do believe that all correlations break down at some point. Here we're only talking about hedging the risk until the next devcoin payday, so the most you would lose with a hedge done correctly should be 1 or 1/2 of a paycheck even if unpredictable few SD events occur.

You ever read, "old dog with new tricks" over at forexfactory.com? Interesting read on this topic... correlation is a tricky thing, it can work for 100 years and then one day wipe you out. Kind of like martingale because for each band standard deviation away you will have to pour in exponentially more money to return back to the mean in your profit loss column... so 1 black swan event can wipe you out, unless you "know" to get out at the right time... take your profit and go home.

Its even more dangerous for arbritary "synthetic" baskets you would create (the cost of doing business rises)  because once the underlying fundamentals change resulting in a shift in the correlation it would change drastically and usually quickly enough to do the one thing that your system could not handle  in terms of margin requirements.... if you don't use margin its fine but you would be in the red until who knows when.

On that note I guess I might as well post these URLs:

http://galaxies.mygamesonline.org/indevcoins.html

http://galaxies.mygamesonline.org/plotdvc.html

http://galaxies.mygamesonline.org/sharesindvc.html

http://galaxies.mygamesonline.org/plotsharesindvc.html

In theory real options should help keep exchange rates more stable.

I am not sure MPOE style options really accomplish that since they don't actually involve going to exchanges and actually buying dollars using bitcoins nor going to exchanges and actually buying bitcoins using dollars. They deal only with bitcoins, no dollars actually exchanged at all.

-MarkM-

http://www.cryptohits.info/index.php?coin=DVC

1 DVC = 0.00000076 BTC
1 DVC = 0.00002935 LTC
1 DVC = $0.00070262 USD (Based on BTC)
1 DVC = $0.00058935 USD (Based on LTC)

yep I was just joking. Using a short btc/usd position you're only ''screwed'' if the relationship breaks down and devcoin prices go down while bitcoin prices stay flat or go up. Speaking of devcoin prices in USD here.

I consider this to be a less likely scenario, a more likely outcome is that both cryptos rise/fall together in terms of fiat.

Another possible outcome is that devcoin prices rise a lot more then bitcoin, under this scenario you'll still gain by increased pay so if that part of the relationship breaks down you're not screwed.

A way to directly short devcoin or use devcoin options is of course preferred because it removes another moving risk variable. But I'm not sure this could be achieved with the small market cap devcoin has atm. A large player that already owns a lot of devcoins could maybe get into market making and start to offer this as a financial product.

The question to answer is will there be enough interest on the writers side for this product? With bitcoin and devcoin prices up over 1,000 percent in 2013, I'm not sure many will see the value in this type of risk protection.

You are not screwed for real on any sensible options setup designed to avoid anyone being screwed.

The worst that can happen, barring hacks, thefts, embezzling and such, is that you miss out on potential profits you could have made had you taken some other course of action.

For example if the DeVCoin Credit Union has ten thousand dollars on hand and makes a deal with you to let you buy up to ten thousand dollars for X number of DeVCoins the Credit Union makes a definite profit in terms of DeVCoins, not only on the actual sale if it happens but also in the form of the price of the option, that is, the service charge it charges you for making such a deal with you.

The Credit Union would already know how many DeVCoins it had paid for those dollars, thus how many DeVCoins of profit it would make if you did end up exercising the option.

So it would in effect be trading a guaranteed locked in profit against a chance that maybe it could have gotten more DeVCoins for those dollars had it instead waited for a better offer (someone offering a higher price for such an option) or for an exchange rate more in its favour (an exchange where it could buy more DeVCoins for those dollars than you exercising the option would end up providing it.)

Similarly the person buying the option would only be screwed to the same extent any insurance screws people. They could end up having paid for an option they end up choosing not to exercise, just like with fire insurance you could end up paying for the insurance then not having a fire.

So really the only unlimited losses involved are opportunity costs. You could end up not buying a winning lottery ticket or somesuch on account of getting into an options deal instead.

I suppose someone is going to argue that if DeVCoins become worthless then the Credit Union would lose a lot. But fergoshsakes it is a DeVCoin credit union, to it DeVCoins are profit, they are value, they are "worth". Its entire accounting system is based on how many DeVCoins it has, and if it has more now than it had before that is profit.

(Its shareholders might not think so, thinking gosh I should have invested in a dollars credit union instead of a DeVCoin credit union, but so what, either they were okay with that or they would not have invested so there would not have been a DeVCoin credit union in the first place. As long as such an institution does exist and it does gain more DeVCoins than it had it still gets to report that to its shareholders as "profit". The fact that dollars went up in value relative to DeVCoins or that a lottery ticket it did not buy did win billions of dollars or even billions of DeVCoins is fundamentally irrelevant.)

Maybe the best way to get an Olympian perspective on options is to think about the case where you print/mint yourself two different currencies then offer options between the two. Looking at it that way maybe you can see that frankly you come out ahead no matter which one gets to be worth how much more or less than the other one if you can manage to sell any at all of either one of them! (Well, enough to cover the cost of printing/minting the stuff anyway.) Plus you get paid a fee for the options themselves too! I guess ideally you would charge in bitcoins for for the options themselves, so that regardless of whether foo or bar comes out as worth more you got yourself some bitcoins regardless! (Or charge meals for the options themselves, so that regardless of whether foo or bar turns out to be worth more you got yourself some meals regardless. Etc.)

-MarkM-

I believe the technical term for that is ''you're screwed''. 

That is why we need software for doing arbitrary pairs.

It would let us do DVC/BTC or BTC/LTC or BTC/DVC or LTC/DVC options, and any other currency or institution or site or group etc to do whatever pairs they wish to do.

It has been suggested that one can use smart contracts, which Open Transactions can do. But contracts are not an asset one can trade on the Open Transactions markets.

A lot of people seem to think it is important to be able to re-sell their options, though I do not know whether options began from scratch historically as an asset that can be traded rather than as, say, a more private deal between two parties.

Smart contracts would at least let two parties lock themselves into an option. Maybe they don't need to be able to re-sell that option? Could it suffice merely to be able to choose whether or not to exercise the option instead of trying to turn it into a thing one runs around trying to re-sell to other people?

-MarkM-

Imo that is the best way to pay via ad revenue or individuals requesting and paying.. it would open up shares for something else.We woukdnt have to worry about hedging or anything I think.

So a synthetic hedge via correlation.. What happens if the band is broken and difference is greater than 30%?

No, as soon as you buy stuff with it - real stuff like fiat-denominated gift cards - you have done barter so tax will probably be involved.

It is unreal stuff like shares and game-gold and crypto-coins and magic swords in virtual worlds and such that might manage to skip the taxes for a while until cashed out into something more 'real'. Check with your local licensed accountants and lawyers for how it works in your jurisdiction.

I am getting the feeling that maybe on planets where I am licensed to practice law the government will make plenty enough just doing business that it won't need taxes. Maybe not though as maybe Charles Gallagher was right that every new government expenditure results in a unit of beaurocrats and that such units once raised cannot be disbanded thus will continue to drain the economy long past any actual need for them.

One way to hedge the shares is to not issue direct shares. Make Devtome operate the way the other planned websites are intended to work, receiving shares itself but then paying its people its own way probably even in its own currency. It could then set the pay for a round up front, based on how much it has in its coffers before the round begins. Heck it need not even use the same rounds as the shares.

-MarkM-

Hedging the writer's risk is exactly what I'm working on atm. Here's a part of my writing application I sent to Fuzzybear yesterday.

-----

One of my crypto related articles I’m working on atm is on hedging the devtome writers risk. Since I’ve started thinking about the prospect of getting paid in devcoins I started brainstorming about the possibility of hedging some of the risk due to the large fluctuations in the writers compensation month to month. As you’re aware, pay can wary from 10 to 200 usd per share. One of my ideas is to partially hedge this exposure by shorting bitcoins. Here’s the thinking behind it. Because to my knowledge, there is no way to short devcoin outright, by using btc as a proxy and shorting it instead you stand to gain if cryptocurrencies decline in value.

From the data I’ve seen so far (could only find data since June 2013) devcoin’s price in usd tends to follow bitcoin/litecoin’s rise or fall. In the 8 months I have data for, DVC traded within a 30% band against bitcoin/litecoin. In other words, as bitcoin/litecoin price in USD skyrocketed in 2013, devcoin followed suit and only lagged/outperformed by 30%. So basically by shorting btc ( or even ltc) you could in theory cover some of the risk associated with the fluctuating writers pay. If devcoin gains in value, you would get paid more for your writing. If it falls, it will likely be in tandem with the fall of bitcoin and you will recover some of the losses with your bitcoin short hedge. I’m still trying to find more data on dvc and see how it performed versus bitcoin before June 2013.

-------

Still trying to find more data on DVC/BTC going prior to June of last year. If It is something that I can import in MT4 it would be even better. If this turns out to be a somewhat viable plan to partially hedge the risk I plan to write an article on this for devtome. I think bitcoin options would be an even better option but I'm not sure that the broker's edge on these makes it worthwhile as a hedging mechanism. With a short btc option you win if bitcoin prices fall but you won't get ''violated'' if btc prices rise by tenfold like in November.

Another bonus of a short bitcoin position or option is that the devcoin price won't be affected at all.

It's an interesting discussion.