but you won't be able to do anything with a mastercoin, at least until you get betting in for there to be any sort of market use, correct? then from there the sky's the limit?
That about sums it up
Topic: MasterCoin: New Protocol Layer Starting From “The Exodus Address” - page 153. (Read 448489 times)
August 05, 2013, 02:22:53 PM
That about sums it up
August 05, 2013, 02:22:07 PM
OK so you basically lose or gain 20% mastercoins if you sell respectively. Doesn't really matter from a buyers perspective as long as Mastercoin holds some value but;
Wouldn't this sort of price fluctuation in the parent currency (let's just call the parent Mastercoin as not to confuse things further) completely undermine the viability of an escrow fund;
An escrow fund could be supporting a child currency at a cost of 1 Mastercoin worth $10 one day and 1 Mastercoin worth $15 the next day in which case the premise of the Escrow funds health based on buying "cheap coins" no longer makes sense because the Parent currency doesn't have a stable price.
Wouldn't this sort of price fluctuation in the parent currency (let's just call the parent Mastercoin as not to confuse things further) completely undermine the viability of an escrow fund;
An escrow fund could be supporting a child currency at a cost of 1 Mastercoin worth $10 one day and 1 Mastercoin worth $15 the next day in which case the premise of the Escrow funds health based on buying "cheap coins" no longer makes sense because the Parent currency doesn't have a stable price.
Price fluctuations of MasterCoin (within reason) should not cause a problem. If MasterCoin rises in value, the escrow fund gets healthier. If MasterCoins fall in value, the escrow fund gets less healthy. At some point, continually falling MasterCoin values will trigger a collapse.
August 05, 2013, 02:11:47 PM
will mastercoin be initially worthless? I'm sorry, you probably explained this in other words but initially, what gives mastercoin that worth? its escrow, right? how do you put worth into this escrow?
Well, currently 100 MasterCoins are a little cheaper than 1 BTC (because of the time-bonus), because that is the initial price I set. After September 1st, their value will float freely. Hopefully up
but you won't be able to do anything with a mastercoin, at least until you get betting in for there to be any sort of market use, correct? then from there the sky's the limit?
August 05, 2013, 02:09:39 PM
You're confusing the question by adding other things in I'm not asking about, I'm asking very specifically what happens in Scenario 1) and 2) do you mind answering with your mathematical workings please?
So, with USDCoin backed by MasterCoin, if the price of MasterCoin rises 20%, price of USDCoin stays at $1 each. If the price of MasterCoin falls 20%, the price of USDCoin stays at $1 each.
If the USDCoin does diverge, the escrow fund intervenes as described earlier.
Now, if MasterCoin drops 99.9%, it's pretty clear that the USDCoin holders are screwed.
OK so you basically lose or gain 20% mastercoins if you sell respectively. Doesn't really matter from a buyers perspective as long as Mastercoin holds some value as it still translates back to the same usd value... but;
Wouldn't this sort of price fluctuation in the parent currency (let's just call the parent Mastercoin as not to confuse things further) completely undermine the viability of an escrow fund;
An escrow fund could be supporting a child currency at a cost of 1 Mastercoin worth $10 one day and 1 Mastercoin worth $15 the next day in which case the premise of the Escrow funds health based on buying "cheap coins" no longer makes sense because the Parent currency doesn't have a stable price.
August 05, 2013, 02:04:39 PM
will mastercoin be initially worthless? I'm sorry, you probably explained this in other words but initially, what gives mastercoin that worth? its escrow, right? how do you put worth into this escrow?
Well, currently 100 MasterCoins are a little cheaper than 1 BTC (because of the time-bonus), because that is the initial price I set. After September 1st, their value will float freely. Hopefully up
August 05, 2013, 02:03:00 PM
do i have this idea right that if this works, if everything distributes as planned, maybe say 1000 years down the road everything would trade at an equilibrium point?
That does seem likely, but it also seems likely that something will eventually replace the bitcoin/mastercoin/usercoin stack with something cooler. Hopefully a long time from now!
August 05, 2013, 02:02:40 PM
You're confusing the question by adding other things in I'm not asking about, I'm asking very specifically what happens in Scenario 1) and 2) do you mind answering with your mathematical workings please?
So, with USDCoin backed by MasterCoin, if the price of MasterCoin rises 20%, price of USDCoin stays at $1 each. If the price of MasterCoin falls 20%, the price of USDCoin stays at $1 each.
If the USDCoin does diverge, the escrow fund intervenes as described earlier.
Now, if MasterCoin drops 99.9%, it's pretty clear that the USDCoin holders are screwed.
will mastercoin be initially worthless? I'm sorry, you probably explained this in other words but initially, what gives mastercoin that worth? its escrow, right? how do you put worth into this escrow?
August 05, 2013, 01:58:36 PM
You're confusing the question by adding other things in I'm not asking about, I'm asking very specifically what happens in Scenario 1) and 2) do you mind answering with your mathematical workings please?
So, with USDCoin backed by MasterCoin, if the price of MasterCoin rises 20%, price of USDCoin stays at $1 each. If the price of MasterCoin falls 20%, the price of USDCoin stays at $1 each.
If the USDCoin does diverge, the escrow fund intervenes as described earlier.
Now, if MasterCoin drops 99.9%, it's pretty clear that the USDCoin holders are screwed.
August 05, 2013, 01:53:05 PM
ah, gotcha. price stabilization of bitcoin and by extension every other currency
I actually have no idea if this will result in bitcoin price stabilization or not. Certainly, a successful MasterCoin would be good for bitcoin though.
do i have this idea right that if this works, if everything distributes as planned, maybe say 1000 years down the road everything would trade at an equilibrium point?
August 05, 2013, 01:44:19 PM
You're confusing the question by adding other things in I'm not asking about, I'm asking very specifically what happens in Scenario 1) and 2) do you mind answering with your mathematical workings please?
August 05, 2013, 01:38:44 PM
OK so;
-I buy 5 master coins for $100
-I spend 5 master coins on 100 $1 coins, I suppose I have to pay slightly over a $1 from these perhaps $101 for the lot if I'm buying directly from the escrow fund with a 1% aggression factor.
Now Master coin value goes either up or down in value while the child currency stays relatively stable;
Please can you describe for me what happens to my investment in the child currency if;
a) Mastercoin rises in value 20%
b) Mastercoin decreases in value 20%
-I buy 5 master coins for $100
-I spend 5 master coins on 100 $1 coins, I suppose I have to pay slightly over a $1 from these perhaps $101 for the lot if I'm buying directly from the escrow fund with a 1% aggression factor.
Now Master coin value goes either up or down in value while the child currency stays relatively stable;
Please can you describe for me what happens to my investment in the child currency if;
a) Mastercoin rises in value 20%
b) Mastercoin decreases in value 20%
I assume you are talking about something like USDCoins which would be intended to track the value of the U.S. Dollar?
If the escrow fund idea works (the question being debated endlessly here), small variations in MasterCoin values should not affect the price of USDCoins at all. The premium you would have to pay for USDCoins depends on supply and demand, not the aggression factor directly. The aggression factor just determines how quickly the escrow fund acts when the price of USDCoins diverges from target.
Now, if a competing idea gains traction and MasterCoin values head towards zero, your USDCoins will head towards zero too.
August 05, 2013, 01:34:40 PM
ah, gotcha. price stabilization of bitcoin and by extension every other currency
I actually have no idea if this will result in bitcoin price stabilization or not. Certainly, a successful MasterCoin would be good for bitcoin though.
August 05, 2013, 01:22:26 PM
so likely end result is that Mastercoin, if the protocol does what it says it does perfectly, becomes what it's named—a sort of supracoin
Yes, with bitcoin as the supracoin to MasterCoin
ah, gotcha. price stabilization of bitcoin and by extension every other currency
August 05, 2013, 01:22:08 PM
Yes I'm not suggesting they do, but don't all other currencies have to be purchased with MasterCoins?
A child currency could be purchased with MasterCoins or any other child currency. The actions of the escrow fund are determined by the price of the child currency in units of its parent currency, which could be MasterCoins or another MasterCoin-derived currency. At first, the parent currency will usually be MasterCoins, but technically it could be another child currency.
The parent currency is what is stored in escrow.
OK so;
-I buy 5 master coins for $100
-I spend 5 master coins on 100 $1 coins, I suppose I have to pay slightly over a $1 from these perhaps $101 for the lot if I'm buying directly from the escrow fund with a 1% aggression factor.
Now Master coin value goes either up or down in value while the child currency stays relatively stable;
Please can you describe for me what happens to my investment in the child currency if;
a) Mastercoin rises in value 20%
b) Mastercoin decreases in value 20%
August 05, 2013, 01:16:04 PM
so likely end result is that Mastercoin, if the protocol does what it says it does perfectly, becomes what it's named—a sort of supracoin
Yes, with bitcoin as the supracoin to MasterCoin
August 05, 2013, 01:14:52 PM
Yes I'm not suggesting they do, but don't all other currencies have to be purchased with MasterCoins?
A child currency could be purchased with MasterCoins or any other child currency. The actions of the escrow fund are determined by the price of the child currency in units of its parent currency, which could be MasterCoins or another MasterCoin-derived currency. At first, the parent currency will usually be MasterCoins, but technically it could be another child currency.
The parent currency is what is stored in escrow.
August 05, 2013, 01:10:58 PM
OK I'll try again,
-I buy 5 master coins for $100
-I spend 5 master coins on 100 $1 coins, I suppose I have to pay slightly over a $1 from these perhaps $1.01 if I'm buying directly from the escrow fund with a 1% aggression factor.
Now Master coin value goes either up or down;
If it goes down in value 20% I gain 20% mastercoins but no extra value.
If it goes up in value 20% I lose 20%
Is that correct?
MasterCoins themselves do not have a target value, and do not have an escrow fund. Only currencies based on MasterCoin have these features. Please take a look at the spec for details.
Yes I'm not suggesting they do, but don't all other currencies have to be purchased with MasterCoins?
August 05, 2013, 01:09:37 PM
OK I'll try again,
-I buy 5 master coins for $100
-I spend 5 master coins on 100 $1 coins, I suppose I have to pay slightly over a $1 from these perhaps $1.01 if I'm buying directly from the escrow fund with a 1% aggression factor.
Now Master coin value goes either up or down;
If it goes down in value 20% I gain 20% mastercoins but no extra value.
If it goes up in value 20% I lose 20%
Is that correct?
MasterCoins themselves do not have a target value, and do not have an escrow fund. Only currencies based on MasterCoin have these features. Please take a look at the spec for details.
August 05, 2013, 01:07:31 PM
No it doesn't matter if it's you, what do you see as the escrow fund taking as a cut for buying and selling, or in other words what % can it drop by before they start buying back given the point of the escrow is to pay buyers the value of the coin back
Take a look at the "aggression factor" described in the specification. How quickly the escrow fund reacts is defined by whoever launches the currency, using this parameter.
OK I'll try again,
-I buy 5 master coins for $100
-I spend 5 master coins on 100 $1 coins, I suppose I have to pay slightly over a $1 from these perhaps $1.01 if I'm buying directly from the escrow fund with a 1% aggression factor.
Now Master coin value goes either up or down;
If it goes down in value 20% I gain 20% mastercoins but no extra value.
If it goes up in value 20% I lose 20%
Is that correct?
August 05, 2013, 12:55:49 PM
so likely end result is that Mastercoin, if the protocol does what it says it does perfectly, becomes what it's named—a sort of supracoin
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