Opinions about tetherUSD, coinoUSD, BitShares 2.0 and BitUSD?

BurstIncomeAsset

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Quote from: SebastianJu on November 27, 2015, 08:29:19 AM

Quote from: BurstIncomeAsset on November 26, 2015, 10:58:59 PM

I think it is a bad idea to peg and asset to USD, but it can be helpful too to exchanges and money transmitters.

However it will be hard to maintain the peg.

It is a good idea for bitcoiners but probably risky for those offering it. Though the demand is there definitely so offers are there too. So far i believe that the liquidity providers of nubits still earn from providing liquidity. It's not that they lose money by doing so. And they survived some crashs till now. I think there is a risk but the longer they survive the lower will it get i think.

If they hedge properly then its no risk. They get money from comissions.

SebastianJu

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Quote from: mmortal03 on November 27, 2015, 11:41:40 AM

Quote from: SebastianJu on November 27, 2015, 08:27:12 AM

Coinapult looks like it would be a similar risk like simply exchanging bitcoins to fiat on an exchange and letting it lie around there. If the website goes down then the value is gone.

I tend to believe that the possible ways to lose your value are lower when holding a coin on your own wallet. Then the only risk is that the issuer goes down.

The thing with Mycelium looks similar or is it possible that you control your coins and even would be able to get your value out in case mycelium as a company goes down? Or would the backed value vanish then?

I've read that they're working on the capability to hold your own private keys by way of a token of some kind. However, the tricky thing is that even if you do hold such a token, say it's stored as TetherUSD, well, for any such redeemable value that is stored off chain, there's still a trust factor involved -- you must trust that the issuer's off chain value storage (a bank account, a vault) doesn't disappear or get mismanaged. In that case, you control the private keys, but you're still out of luck.

Yes, that's why i think it would be best to chose a coin and coin storage with the least needed trust as possible.

So far nubits still look the best, even though it is not perfect, especially when bitcoin is volatile.

mmortal03

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Quote from: SebastianJu on November 27, 2015, 08:27:12 AM

Coinapult looks like it would be a similar risk like simply exchanging bitcoins to fiat on an exchange and letting it lie around there. If the website goes down then the value is gone.

I tend to believe that the possible ways to lose your value are lower when holding a coin on your own wallet. Then the only risk is that the issuer goes down.

The thing with Mycelium looks similar or is it possible that you control your coins and even would be able to get your value out in case mycelium as a company goes down? Or would the backed value vanish then?

I've read that they're working on the capability to hold your own private keys by way of a token of some kind. However, the tricky thing is that even if you do hold such a token, say it's stored as TetherUSD, well, for any such redeemable value that is stored off chain, there's still a trust factor involved -- you must trust that the issuer's off chain value storage (a bank account, a vault) doesn't disappear or get mismanaged. In that case, you control the private keys, but you're still out of luck.

SebastianJu

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Quote from: BurstIncomeAsset on November 26, 2015, 10:58:59 PM

I think it is a bad idea to peg and asset to USD, but it can be helpful too to exchanges and money transmitters.

However it will be hard to maintain the peg.

It is a good idea for bitcoiners but probably risky for those offering it. Though the demand is there definitely so offers are there too. So far i believe that the liquidity providers of nubits still earn from providing liquidity. It's not that they lose money by doing so. And they survived some crashs till now. I think there is a risk but the longer they survive the lower will it get i think.

SebastianJu

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Quote from: mmortal03 on November 26, 2015, 10:08:39 PM

Quote from: SebastianJu on October 24, 2015, 01:14:46 PM

i'm searching an alternative to NuBits, that i used till now to hedge against a falling bitcoin price. To protect my value.

There's always Coinapult Locks. An account to lock your bitcoins to USD is actually built right in to the Mycelium wallet now. There are drawbacks to using it, but such is the case for the alternatives here.

Coinapult looks like it would be a similar risk like simply exchanging bitcoins to fiat on an exchange and letting it lie around there. If the website goes down then the value is gone.

I tend to believe that the possible ways to lose your value are lower when holding a coin on your own wallet. Then the only risk is that the issuer goes down.

The thing with Mycelium looks similar or is it possible that you control your coins and even would be able to get your value out in case mycelium as a company goes down? Or would the backed value vanish then?

BurstIncomeAsset

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I think it is a bad idea to peg and asset to USD, but it can be helpful too to exchanges and money transmitters.

However it will be hard to maintain the peg.

mmortal03

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Quote from: SebastianJu on October 24, 2015, 01:14:46 PM

i'm searching an alternative to NuBits, that i used till now to hedge against a falling bitcoin price. To protect my value.

There's always Coinapult Locks. An account to lock your bitcoins to USD is actually built right in to the Mycelium wallet now. There are drawbacks to using it, but such is the case for the alternatives here.

CoinHoarder

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In Cryptocoins I Trust

Call me naive, but I am not worried about a black swan incident. I recently started using Bitshares' decentralized for all my trading for the smartassets that have volume or pricefeeds (minus the coins that aren't trading on there that I am also interested in.) I am 50% in Bitcoin 25% in Silver and 25% in Gold.

I am bearish on BTS at the moment, but think it has great potential as a decentralized derivative exchange. Once adoption and thus volume picks up it will be quite wonderful. The in-wallet gateways are a very nice addition.

monsterer

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Quote from: ?? on ??

yawn, bitcoin and bitUSD owners are unaffected for that period of time and beyond

now gamblers who shorted bitUSD into existance, then sold it,

Isn't bitUSD force liquidated into BTS during a black swan? And you're calling the people who create bitUSD gamblers?

testz

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Quote from: blackyblack on November 12, 2015, 02:39:32 AM

Black swan event is much more possible that the risks you described.

Don't forget that black swan event can happen for every commodity and fiat currencies as well.

blackyblack

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You are forgetting that price for bitassets is being fed by limited number of nodes based on centralized exchange prices. Attacker could counterfeit price feeds, or crash prices on thin orderbook for a short period of time (with leverage trading), or take node operators hostage.
You do not need to invent some catastrophe to see a Black Swan on BTS.

Me personally is scared to create bitUSD since I do not know how my collateral is safe from margin called. I can make 200-300% collateral but how can I know that we won't see 1 day flash crash or some exchange will go Gox and price feeds will not be relevant.

blackyblack

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Quote from: ?? on ??

Quote from: monsterer on November 11, 2015, 09:57:21 AM

bitAssets replace counterparty risk with systematic risk. On the one hand, you don't rely on a centralised entity which can get hacked, but on the other you have to play by the rules of the system, which is susceptible to black swan events and other systematic risks.

true, the possible systemic risks here are the same risks that bitcoin has:

1. Satoshi's core code gets hacked
2. The internet goes down worldwide and never recovers (which would also affect any USD token smart or otherwise)

These are the risks that bitcoin and bitUSD cannot shield you from

Black swan event is much more possible that the risks you described.

1aguar

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Quote from: SebastianJu on November 11, 2015, 05:19:40 PM

Quote from: 1aguar on November 11, 2015, 02:05:27 AM

Quote from: tokeweed on November 11, 2015, 01:29:40 AM

Quote from: e-coinomist on November 11, 2015, 01:13:49 AM

Sebastian, consider plain FIAT

Yeah, but it would suck holding that in an exchange.

You can store fiat at Uphold; it is the world's leading cloud-based money platform formerly known as BitReserve.

You still would have to trust the platform that you get your fiat out when you want to, right?

You could just convert your fiat right back to bitcoin at Uphold. You would probably need a verified account. As far as trust goes, you can read about their blockchain and ledger technology; I personally have no problem in trusting a bank that is operating with a full reserve.

By the way, 796 has much better volume and features nowadays. There is still the risk of socialized profits, but it is much smaller with their insurance fund.

SebastianJu

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Quote from: blackyblack on November 11, 2015, 07:40:19 AM

Quote from: ?? on ??

Quote from: blackyblack on November 11, 2015, 03:41:32 AM

Quote from: ?? on ??

non-smartcoin/counterparty backed USD tokens can be easily purchased in any quantity, but difficult to sell large quantities at $1 when crypto is rising

Counterparty backed USD tokens are not dependent on crypto price. They can be sold exactly at $1 if counterparty plays honestly and does not use partial reserves.

I'm just not really into wondering "if i can trust counterparties" anymore. That's the whole reason why I got into Bitcoin in the first place (so i can deal with robots instead of people)

Counterparty risk is well known. I just do not understand where did you get this idea that crypto USD should be hard to buy or to sell. I show you that with coinoUSD it is easy to buy and to sell.

You are asking "can you sell any quantity of non-smartcoins for exactly $1?". You can sell any amount of coinoUSD for exactly $1. It will take some time though while hot wallet is being refilled for really big orders.

Lets say $1000 already should be a problem when i see the orderbook for coinousd. And in the case you need it you want to exchange fast because most probable the bitcoin price is crashing at that moment.

SebastianJu

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Quote from: 1aguar on November 11, 2015, 02:05:27 AM

Quote from: tokeweed on November 11, 2015, 01:29:40 AM

Quote from: e-coinomist on November 11, 2015, 01:13:49 AM

Sebastian, consider plain FIAT

Yeah, but it would suck holding that in an exchange.

You can store fiat at Uphold; it is the world's leading cloud-based money platform formerly known as BitReserve.

You still would have to trust the platform that you get your fiat out when you want to, right?

SebastianJu

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Quote from: ?? on ??

when i say hard to buy i mean that only select exchanges carry bitUSD, coupled with the fact that bitUSD usually sells for a premium (like the premium you pay when purchasing physical gold or silver).

I should have said

bitUSD (smartcoin) = expensive to buy, but easy to liquidate any amount at $1

non-smartcoin/counterparty backed USD tokens can be easily purchased in any quantity, but difficult to sell large quantities at $1 when crypto is rising

Yeah, BitShares is hard to learn

thats why they made bitUSD simple with 1 rule only:

"you can sell any quantity at $1"

what more do you need to know?

can you sell any quantity of non-smartcoins for exactly $1?

Sounds good for protecting against a bitcoin price crash. Though it still would be a costly thing when you would have to pay a premium to go back. Or to go into bitusd again. You only can sell them when you bought them before. So i don't know if it makes much sense.

SebastianJu

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Quote from: testz on November 10, 2015, 09:16:20 PM

Quote from: SebastianJu on November 10, 2015, 06:22:53 PM

Quote from: testz on November 10, 2015, 08:33:40 AM

Quote from: SebastianJu on November 10, 2015, 08:06:09 AM

So bitUSD really have no volume? http://coinmarketcap.com/assets/bitusd/#markets

coinmarketcap not updated yet after BitShares 2.0 release.
BitShares developers will provide to coinmarketcap new data source for internal BitShares markets soon and when you will see BitUSD volume. But meanwhile you can check BitUSD volume in BitShares 2.0 online wallet: https://bitshares.openledger.info

coinmarketcap also doesn't count CCEDK BitUSD volume:
https://www.ccedk.com/bitusd-usd

I would need to create an account there. Can you tell me the volume and can you agree with the hard to buy part bitcoinsatan explained?

I mostly use these coins to protect me against a falling bitcoin price.

To create account you just need specify user name and password, no additional info like e-mail, and it's cost 0.
Last days, BTS/USD trading volume 3000-11000$ per day, BTS/CNY: 0-39000 CNY, BTS/GOLD: 0.3-1 troy ounce .999 fine gold, BTS/SILVER: 0-196 troy ounce .999 fine silver

Hm, sounds still like it is not very much. I wonder if the orderbook is filled enough at all to exchange a couple thousand USD worth. Nubits on poloniex have 88k volume per day. plus the other exchanges. but even then it is only usefull because they artificial create buy and sell walls you can buy into.

SebastianJu

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Quote from: e-coinomist on November 11, 2015, 01:13:49 AM

Sebastian, consider plain FIAT

Fiat means you have to hold it on an exchange. Which is, we know, very risky. And if you push fiat from and to your bank account then this is very slow. Means when bitcoin is rising you need days to put it on an exchange. At that time the price already might drop.

It's better if it is possible to act fast and don't have to trust the exchange to not get hacked or being run by scammers.

SebastianJu

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Quote from: 1aguar on November 10, 2015, 06:54:20 PM

Quote from: 1aguar on November 10, 2015, 06:35:48 PM

Why not use futures to protect against a fall in the bitcoin price?

Futures are very liquid and designed for hedging; I like to use 796 exchange where they have no fees to hedge and speculate.
In addition, you can typically sell the future at a price higher than the spot rate and make an arbitrage between spot and futures markets; all it takes to make a profit is the patience to hold until expiration and enough margin to protect yourself from volatility. There is sometimes a counterparty risk on the futures exchanges though.

I traded on 796.com too once. But the support was nonexistant. Which drove me away. I believe another problem was the spread in orderbook. Too low volume so that it was hard to close positions with a profit. I now, if i do it at all, trade cfd on okcoin.com. It is the best place for leveraged bitcoin trading i found so far.

SebastianJu

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Quote from: 1aguar on November 10, 2015, 06:35:48 PM

Why not use futures to protect against a fall in the bitcoin price?

Because you have to trust the exchanges with your value then. I would like to take my coins into my own wallet. Then i only would need to trust the coin itself.

Topic: Opinions about tetherUSD, coinoUSD, BitShares 2.0 and BitUSD? (Read 3428 times)