The better retort would be to argue that the as the adoption increases, the price will rise so the fixed size (in coins) tail reward has an adaptive valuation.
But I will retort that the value of shorting also scales up accordingly.
Shorting can't erase the cost due to PoW (burning energy). It can only erase a cost from loss of value of a holdings (PoS and other methods that claim to turn holding coins into "virtual miners").
If attacking a coin causes its price to decline, shorting can return a profit. If that profit exceeds the cost due to PoW, then it erased it. Cover the short, stop the attack. Repeat if the price rises again.
Yes but if the attack doesn't succeed, the energy burn cost is still there (i.e. risk of failure)
If, by contrast, you try to attack a coin almost
costlessly via PoS exploits and if your attack doesn't succeed then your your coins nor your short loses value. Then you can just try again, until you succeed...
I agree that "coins will go down in value" does not enhance the security of PoW; that would attempting to impute a some sort of stake-based incentive to mining, as some do, and that is flat out wrong, or at best, very weak security.
Your Term costlessly is exaggerated , IMO. The usual way to short a currency is to use a currency pair—something like EUR/USD, the value of a euro denominated in dollars—which trades as a single unit. For example, if the euro was trading at $1.3000, you would “borrow” a currency pair from your broker, which you have to return within a certain period of time, and sell it on the open market, pocketing $1.30. If after an hour EUR/USD is trading at $1.2950, you can buy the currency pair at that price and return it to your broker, making a profit of $0.0050. (If you’re wrong, you lose out.)
1. If Shorting is so Easy as you guys like to pretend, why are'nt all of you rich from Shorting Coins & Stocks? You Have to Fund Your Margin Account which holds Collateral used to Secure Loans used in Margin Trading.But if you have a short position, there’s no limit to how much money you can lose if the shares rise. If the share price increases soon after you place a short position, you could quickly “cover” by buying back the shares and returning them to the investor you borrowed them from. If you’re lucky, you might not lose very much.
But an investor named Joe Campbell was not so lucky when he placed a $37,000 short position on KaloBios Pharmaceuticals Inc. US:KBIO earlier this month, only to find out a day later that the shares had shot up about 800% after Turing Pharmaceuticals CEO Martin Shkreli gained control of a majority of KaloBios’ shares.
If you have not received
insider info
(which is illegal by the way),
then you are a
sucker and will learn the below term very quickly.
What Is a Forced Liquidation?
A forced liquidation is when all or part of your positions are closed automatically to prevent further loss and ensure you do not default on your loans. Forced liquidations are executed using one or more market orders; as such, order book liquidity at the time of these orders will affect the extent of the losses you incur from the liquidation. Forced liquidations occur when your Current Margin dips below your Maintenance Margin. It is strongly advised that you check the markets and your open positions regularly, mitigating your risk as necessary by reducing the size of your positions or transferring additional collateral into your margin account. Markets can change very quickly, and no guarantee can be made that you will receive a Margin Call warning in time for you to prevent a forced liquidation.
https://bitsharestalk.org/index.php?topic=17141.0Hey guys,
Just have an interesting case study of my trading experience on Poloniex last week. I traded on Poloniex's margin trading platform and was margin called on June 15th 17:15 when the prices went from .000029 BTC per BTS to .000014 BTC per BTS back to .000028 BTC per BTS in a ten minute span. (Down 50% in less than 10 minutes!) I didn't realize the liquidity was so low on Poloniex, but it's interesting to know what can happen. I lost a chunk of money.
I think someone or some bot just ran down the book on all the buy orders and got the price really low to trigger all the margin calls and bought back at low prices, but not sure of the exact mechanics.
2. Even your claims of creating Online Wallets will have a cost involved , VPS & Internet & Marketing costs .
Plus the fact is that your amount of coins will fluctuate , and in no way guarantee your staking power stays high, and that is only if you actually get alot of coins, which will be doubtful as most PoS users distrust online wallets.
3. Buy or Create an Exchange , do I really need to point out the costs there.