Topic: "Shorting" altcoins - page 2. (Read 3004 times)

You have a point.

Sure, its just that an asset is an asset. Once the capability is in the code, which asset pair it is used with is of no importance to the code.

Plus of course the ideal is to "do this right", in such a way that the only risk lies in whether the tokens you play with in the Open Transactions server will turn out to actually be convertible into "real assets" such as actual bitcoins, actual devcoins, actual groupcoins, actual litecoins, actual namecoins, actual iocoins, actual ixcoins etc.

That risk exists regardless of why one bothers to use such tokens instead of using assets directly, but properly speaking the counterparty of that risk is not the server but, rather, the issuer of each type of token.

It just happens to be the case on my server that I have not yet allowed anyone else to issue assets on my server, due to not wanting to be seen as an enabler of issuers of fraudulent/scam assets, issuers planning to fly by night with the actual assets etc etc.

So if anyone has tokens on the server they already have the risk. The question then is would they like to loan out tokens to earn interest?

-MarkM-

Didn't Roger Ver just have 24k btc stolen because of lending his bitcoins out?

Once again sounds like it could start another run with people's money. I'm not saying anyone in particular. Just the concept is sketchy with btc.

Open Transactions development has reached a point where it is time to start figuring out how best to handle "shorting" of assets. Since I already support a number of altcoins on my server, looking into how shorting of altcoins would work seems a reasonably good idea.

Since shorting involves borrowing an asset from someone, it would seem that introducing shorting to an asset introduces a demand for loans of that asset, thus it provides people who own that asset an opportunity to earn interest by loaning it. Possibly shorting might therefore create a demand for loans of assets that hitherto no one had any desire to borrow.

How much interest are people likely to want on loans when they know the loan is going to be used to try to drive down the value of that which is loaned?

Might shorting drive up demand for an asset due to people wanting to own some to loan in order to earn interest?

Are there, for each altcoin type, people in the community who hold large numbers of that type and are willing to loan them out for shorting?

Each type of coin the server supports will of course be shortable against each other type of coin, supply of coins available to be borrowed permitting. Thus it is not only altcoins that will be short-able. You will also be able to short Bitcoins and, in general, any asset available for borrowing.

-MarkM-