Topic: Stabilized Bitcoin using eMunie economics - page 2. (Read 4317 times)

lol.. goodluck with that theory.
it will only work if there was 1 sole exchange in existance... learn the term arbitrage. and why arbitrage is a real thing.

There are two chief issues in play here, I think:

1. I believe CIYAM's point is that there is nothing backing the stabilisation of the currency, except for the currency itself, which is the same way bitshares works. If demand crashes, there could be a downward spiral of devaluation causing a black swan. This is largely a fair point, which can only be resolved by having the backing currency off chain, which is hard to say the least.

2. Having the blockchain as a market maker subjects the currency itself to the adverse selection problem due to 'informed traders', which all marker makers face. This scenario manifests itself as traders buying from you when you ask is too low and selling to you when you bid is too high. There are a proportion of informed traders present in any market, alongside 'noise traders' who buy/sell at any price. Your simulation won't have included the effect of informed traders because it only manifests itself in live forward testing. However, you can add it to your simulation - informed traders know with certainty the future direction of the price after time period X, so they profit from your pricing mistakes.

edit: I meant to write about the difference between point 2 and bitshares approach, which you might find helpful - bitshares doesn't have a blockchain market maker, instead it socialises the adverse selection risk, because individual users lock up collateral (equivalent of your buffers) in order to create their pegged assets, and other users are required to take the other side of the trade. This way, the currency itself doesn't inflate wildly out of control in the case of a black swan, instead individual users get margin called.

IMHO in order to achieve mass adoption outside of the IT crowd a wallet service requires the following properties:

A. Fast payment. Customers are not willing to wait for more than 10-15 seconds for payment processing.
B. Value stability. After looking at the menu and ordering a steak dinner, customers cannot be expected to pay 10% more due to market instability when they are done eating.
C. Decentralization. The payment system should not be controlled and potentially manipulated by a bunch of people.
D. Scalability. Preferably scalable to Visa dimensions..
E. Easy of use. A grandma should be able to use it without a computer science course.

Currently everything available on the market fails on at least three of these five properties.

Bitcoin fails at A, B, arguably at C (huge block chain size, Chinese miners behind a slow firewall controlling a large portion of it), D (7 TX / sec) and arguably at E.

Why would people buy at a high price elsewhere when they too can buy on the main exchange at a lower price? - it will never happen.

no!

they sell at a higher price elsewhere... and then deposit fiat into emunie to buy your cheap controlled coins.. then withdraw.

basically the users dont hoard coins long term in your "buffer" they just use your exchange as a quick 2 minute flip.
im guessing your economics doesnt extend to flips and arbitrage of the open market.

so maybe its best you stick to your strengths of the centralised single exchange economy. as your theories fall flat and dont work out on bitcoins open market. but i do hope you get some fame in centralised markets and (utopian dream hope) that you become the person to solve world fiats issues.

No, but for them to have an opportunity to become interested in the first place, they have to know about me and my ideas, otherwise how else would you suggest we discover each other?  "Looking for distinguished Professor" adverts in the personals of newspapers?

If the idea really has zero merit, then fine, but what if that isn't the case?

It's more efficient for me to disclose the beginnings of an idea, and be informed by someone in the know that "I see the idea, but xyz" than for me to spend a lot of time writing papers, studies and everything else. Especially if there is an immediate problem in my critical thinking that I am not seeing, which someone else could point out to me saving a lot of wasted effort on my part, but maybe provides inception of a better idea themselves off the back of mine.

This got me thinking, so I'd like to clarify this "flipping".

I think you are stating that traders could use the buffer against itself to make a profit on trades.

That is they buy at the buffers lowest bid, and sell at its highest ask, but the buffer doesn't post trades that other traders can see, it only reacts to trades that others posted.  The rules that define how much it will buy/sell are strictly enforced but easy to calculate what the buffer will buy and sell at in any given moment.

Also bear in mind that the conversion of EMU->BTC/USD/GBP or anything else is frictionless and costless to the buffer, its a zero sum game.  If it didn't receive any new supply, and started with 1M units of the base asset, it could convert all of the USD, GBP, BTC token assets it made back to the base asset and it would end up back at 1M (this is due to the FIFO conversion queue).

So lets say that a trader A thinks he can profit, the buffer only buys if the ask is below current price-max delta, and only sells if the bid is above current price+max delta

With that in mind, how could he profit, I don't see any immediate means to do it?

thats the utopian dream if you are the only wallet service and the only exchange available..
again failing to see the sentiment of a open and free market.

I am certainly not trying to incite a character assassination but I do wonder about the strategy that you are using here (as it is so far the same as what @CfB is using).

If there is simply no academic that has any interest in your project then you think that somehow that is their misunderstanding?

Well maybe if someone would assist me, which is what I'm asking for, instead of just stating I need a professor, I need a paper, I need this, I need that, maybe I'd be able to provide it.

I presented this here (and other places) in an attempt to maybe find someone that is knowledgeable about these aspects, and can help to determine if it really IS a thing or not.

A lot of people have criticized me for attempting all this on my own, but when I come to actually look for assistance in verification, I get zero.  

And in the case of you, it seems you're now trying to incite a character assassination :|

It sounds like an amazing thing - yet I don't see the peer reviewed algorithm design do I?

Why is that?

(just like I don't see the stuff behind other alt crypto currency promises)

You don't "trial an algorithm" on a forum (you do, however, manipulate and trick people on a forum).

The sentiment change would be:

A. the vast majority of traders would stop pumps & dumps, as they would not be profitable
B. few may try a coordinated pump & dump of an incredible amount in order to defeat the system buffer

it's not impossible to defeat the system (by exhausing the buffer), but because the buffer receives new currency during the pump, it's very difficult to accomplish.

With eMunie's economic model, BTC would be a digital currency, and not a speculative digital commodity.

Isn't that the wrong way around?

If the price being more stable means there are less people trading, then the buffer would have MORE resources and not less, because less trades are in the range where it needs to intervene, so it intervenes less.

if there were more stability in bitcoin within your exchange.. then there would be less people playing with them in your exchange as a day trading platform

although a usable currency stability outside of exchanges is good. but on exchange stability/stagnancy of prices are not good. it would effect peoples decision to hoard large sums on exchanges because there is no need to daytrade.(altering your supply buffer)

thus even in a stable exchange. your supply buffer would not be the same. and because there is lack of supply. people can abuse that. by arbitraging. and only using your exchange as a temporary 'flip' rather than a permanent store

in short. the results you released would not be the same. you cannot predict the reactions of change. your theory will fall flat on an open market. because you can never code sentiment accurately.

you would need to be the only wallet service and only exchange available to be able to control 'sentiment'..

however ill say it again, your altcoin could be useful if you aimed your theories not at the bitcoin free market. but at the fiat/altcoin centralised markets. and tried engaging your discussions in that economy. as the results (which still wont be perfect) would however have less variables to attempt to simulate.

again you would have more success and possible fame. if you aimed your PR at a centralised solution for currency economics

ok I think I understand what you are saying.

The sentiment, if the price was stable, would likely change for the better (less panic dumps, and dragon chasing pumps), but we are still applying the trades with the worst case sentiment.

So, if we are stabilizing with the worst case sentiment, that sentiment is now irrational compared to the price, and it's harder to stabilize a price when the trades are being made irrationally.  That then should imply that the model is able to handle very extreme situations.

exactly.. you didnt consider that sentiment would change. that people would react differently after you change the order matching. you presumed that people would still hand over funds in the same manner no matter what.

if you did include the variable that sentiment would react to your order matching tweeks. then the results would be different.

again how can i convey that sentiment behind a trade WOULD change, and thus the supply and demand beyond the first day of trades would change.. if you just accounted for such deviations

I'm not sure how else to convey that the sentiment behind the trade didn't change, nor how to say again so that it is understood that the supply and demand in this test was disabled.

your test lacked open supply of the freemaket, arbitraging, reactions to your prices changes(sentiment) and so the results are not conclusive to what bitcoin would really be like if emunie exchange was around in 2010.

yo might have great success concentrating on a altcoin you have full control of and try selling your theory to the fiat economists. but it falls flat in the bitcoin freemarket as it doesnt take much of bitcoin economics into account.. mainly fiat economics of centralised demand and supply

It was nothing to do with the topic of your question, its purely due to how this topic, a topic that I wanted to seriously discuss, has already descended into the same nonsensical, time wasting, childish, "tit for tat" games that happen in the Altcoin section.

I had hoped that at least here, where the so called "big boys" play, I'd have a chance of a serious, engaging discussion, regardless of if my model is correct or not.

As that is clearly not the case, then I just refuse to continue.

So - to all others - someone who won't even agree that "trinary logic" is "snake oil" should IMO be viewed as suspicious.

(you have been warned)