The Rise of Pegged Cryptocurrency | Bitcointalksearch.org

d5000

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Quote from: deisik on May 01, 2017, 01:22:07 AM

Quote from: TheCoinGrabber on April 30, 2017, 05:53:32 PM

I was curious when I first heard that there are alts that "peg" their value to a fiat currency but by reading this thread I felt a bit more confused. Maybe I'd stay away from them for sometime till I got things figured out

If I'm not mistaken BitShares promised something to that tune
[...]
I don't even know how well it fares today or if it is still alive at all

It still exists and seem to work pretty well, although as with each experimental technology, there are challenges, and it seems to have not had massive adoption.

For example, BitUSD has actually a value very close to the USD (1 BitUSD = 0,98 USD now, see BitUSD's Coinmarketcap site). But sometimes it traded above 1,20 or under 0,80. In these cases it was possible to lose money if one was in a hurry.

An example with another mechanism that spectacularly failed was NuBits (although it seems to have recovered, I see now).

TheCoinGrabber

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Quote from: deisik on May 01, 2017, 01:22:07 AM

Quote from: TheCoinGrabber on April 30, 2017, 05:53:32 PM

I was curious when I first heard that there are alts that "peg" their value to a fiat currency but by reading this thread I felt a bit more confused. Maybe I'd stay away from them for sometime till I got things figured out

If I'm not mistaken BitShares promised something to that tune

It was claimed that you could buy, for example, BitGold, and the amount of this digital gold would allegedly match the same amount of real gold stored in some obscure vault. In this manner, the price of the former should be linked or pegged to the market price of the latter. The same should be equally applicable to BitDollars and so forth. Though I did hear a lot of good feedback about this project, so it was likely a typical good old scam in a somewhat fresh and novice disguise. I don't even know how well it fares today or if it is still alive at all

I thought so. One of my first reaction was "Why can't I just buy a dollar then?" I know it's a bit more expensive at banks but maybe some money-changer would have a lower rate.

pitham1

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Quote from: Populous World on April 17, 2017, 06:03:37 AM

1. How important is the role that cryptocurrencies like Tether.to will play in the blockchain economy.
2. How is it possible to build real business that rely on a stable trading environment to make profit.
3. Is everyone going to create their own pegged token in the future.
4. Would you trade your bitcoin into a pegged token if you were guaranteed 5% every 30 days

I'm very interested in your feed back.

Pegged currencies are important, only because of the restrictions placed by governments on exchanges which touch fiat. Hence they play an important role for traders who want to book profits on crypto-only exchanges. Otherwise, I see limited utility for them.

deisik

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Quote from: TheCoinGrabber on April 30, 2017, 05:53:32 PM

I was curious when I first heard that there are alts that "peg" their value to a fiat currency but by reading this thread I felt a bit more confused. Maybe I'd stay away from them for sometime till I got things figured out

If I'm not mistaken BitShares promised something to that tune

It was claimed that you could buy, for example, BitGold, and the amount of this digital gold would allegedly match the same amount of real gold stored in some obscure vault. In this manner, the price of the former should be linked or pegged to the market price of the latter. The same should be equally applicable to BitDollars and so forth. Though I did hear a lot of good feedback about this project, so it was likely a typical good old scam in a somewhat fresh and novice disguise. I don't even know how well it fares today or if it is still alive at all

TheCoinGrabber

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I was curious when I first heard that there are alts that "peg" their value to a fiat currency but by reading this thread I felt a bit more confused. Maybe I'd stay away from them for sometime till I got things figured out.

sportis

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Quote from: Populous World on April 17, 2017, 12:03:51 PM

--snip--

There are several reason why an invoice issuer would sell invoices at a discount. Lack of cash flow to pay staff could be one or even scaling the business another reason, which would require the funds due in say 90 days to be advance immediately.

Like I mentioned previously, by way of a charge over the company books or a personal quarantee from the director is sufficient enough for banks to advance money by this type of financing. We could could also take out a credit insurance policy, which is also very common and this would also quarantee that if the invoice issuers customer does not pay then the insurance company will. But this will eat in to the 5% profit.

I can confirm that is true because is a favorite usual practice which applied from banks. The obvious reason why people sell their invoices is because they want to ensure liquidity. But before banks give you this capability they want to minimize the risks asking for written collateral and in case of crook they demand the collateral and put your name in a blacklist which is common in a number of banks. But, here how this practice could be applied?

deisik

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Quote from: Populous World on April 17, 2017, 12:03:51 PM

There are several reason why an invoice issuer would sell invoices at a discount. Lack of cash flow to pay staff could be one or even scaling the business another reason, which would require the funds due in say 90 days to be advance immediately.

Like I mentioned previously, by way of a charge over the company books or a personal quarantee from the director is sufficient enough for banks to advance money by this type of financing. We could could also take out a credit insurance policy, which is also very common and this would also quarantee that if the invoice issuers customer does not pay then the insurance company will. But this will eat in to the 5% profit

I don't know about others but I see no logic in your reasoning

Though now I see your point but I still don't see how it makes sense. Basically, you are talking about the transfer of accounts receivable. But, first, if a company has to sell these accounts (e.g. due to lack of cash flow to pay staff, as you yourself suggest), what weight their promises would have then? There is no rationale in selling the accounts for 95% and then guaranteeing the remaining amount (if they could just sell them for so much and get done with that. But this is not the most important thing here. You don't explicitly mention it, but it seems that the buyers of this financial instrument will in fact be paying for these receivable accounts, so it may well turn out that they don't just fail to receive allegedly guaranteed 5% (which are in no way guaranteed, obviously) but may also won't get back the principal. This is second. And further, you still didn't explain how it could possibly be a monthly interest since this is no interest by any means

hermanhs09

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Quote from: Populous World on April 17, 2017, 06:03:37 AM

1. How important is the role that cryptocurrencies like Tether.to will play in the blockchain economy.
2. How is it possible to build real business that rely on a stable trading environment to make profit.
3. Is everyone going to create their own pegged token in the future.
4. Would you trade your bitcoin into a pegged token if you were guaranteed 5% every 30 days

I'm very interested in your feed back.

There are certainly a lot of pegged cryptos right now out there.

To oanswer your questions, personally I think that pegged cryptos aren't that good of a thing because usually they are backed by trust and "reserves" that the company issuing the tokens might hold.

If you look at the different types of pegs, for example, Tether USD and Bitshares, you realise that with Tether USD there isn't much of a difference between that and Paypal or Perfectmoney. Whilst Bitshares tokens issued on its network isn't backed by anything but Bitshares itself, and when bitshares crashes then there is a high chance that you'll lose money.

And 5% per month? That sounds too high to be true. I know that BitUSD and these assets offer interest, but definitely not 5% per month.

numismatist

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Quote from: Populous World on April 17, 2017, 06:03:37 AM

1. How important is the role that cryptocurrencies like Tether.to will play in the blockchain economy.

If Wells Fargo backs up any possible losses with their guaranties, perhaps this concept would have a future. And MagicalTUX would need to stop blogging about it.

Populous World

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Quote from: deisik on April 17, 2017, 11:53:10 AM

Quote from: Populous World on April 17, 2017, 07:01:13 AM

Quote from: deisik on April 17, 2017, 06:34:48 AM

Quote from: Populous World on April 17, 2017, 06:18:44 AM

Quote from: deisik on April 17, 2017, 06:04:47 AM

Quote from: Populous World on April 17, 2017, 06:03:37 AM

1. How important is the role that cryptocurrencies like Tether.to will play in the blockchain economy.
2. How is it possible to build real business that rely on a stable trading environment to make profit.
3. Is everyone going to create their own pegged token in the future.
3. Would you trade your bitcoin into a pegged token if you were guaranteed 5% every 30 days

Sounds too good to be true

On the other hand, it is not clear what you mean by being guaranteed to earn 5% every 30 days. Sheer words don't count anymore anywhere, so I think you will have to explain in detail what you mean by "guaranteed" here. If your "guarantee" of this amount comes from the folks pouring their money into this "token", then my opinion is downright negative, obviously. Otherwise, you will have to explain where all these profits would be coming from

For example if you converted your bitcoin into a pegged token and that token was used to factor or discount an invoice that returned 5% profit of the 100% face value of the borrowers invoice. Then would be guaranteed subject to the invoice issuers customer pays on the due date. To offset the risk of default, a charge would be taken on the business and the personal assets of the director of the business

Honestly, I didn't understand anything of what you just said

If it was your way of suggesting lending money and earning interest off borrowers, I'm curious how you are going to grab "the business and personal assets of its director". Apart from that, why would anyone in their clear mind want to pay 5% monthly on something which I cannot yet comprehend? This phrase "used to factor or discount an invoice that returned 5% profit of the 100% face value of the borrowers invoice" is beyond my comprehension. Care to explain in layman terms what you refer to here?

Sure,

Some businesses have to wait 30 -90 days before their invoice are paid. To receive funds from the invoice earlier, say with 24hrs, they don't mind selling those invoices on at a discount, say 95% of the value, That is called factoring/discounting. Now by using by asking a director to sign a personal guarantee stating that he will cover the value of the invoice if his customer those not pay the invoice is common practice and taking out a fixed or floating charge 'debenture' on a company is also another business practice used by banks to secure loans, mortgage and other types of financing from a company

Okay, but I still don't see any meaning in all that

First, why would any business want to sell these invoices if there is a contract which stipulates the payment terms? If it is fixed in the contract that the counterparty will pay within 90 days, there is no reason to sell this invoice at 95% of its price. Typically, the contract terms already take into account the possible delays in payments. Further, if the counterparty defaults on its obligations (say, it doesn't pay on time), then paying 95% for this invoice is just absurd since you will lose all minus 5% of the contract price that you may receive as a redemption

There are several reason why an invoice issuer would sell invoices at a discount. Lack of cash flow to pay staff could be one or even scaling the business another reason, which would require the funds due in say 90 days to be advance immediately.

Like I mentioned previously, by way of a charge over the company books or a personal quarantee from the director is sufficient enough for banks to advance money by this type of financing. We could could also take out a credit insurance policy, which is also very common and this would also quarantee that if the invoice issuers customer does not pay then the insurance company will. But this will eat in to the 5% profit.

deisik

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Quote from: Populous World on April 17, 2017, 07:01:13 AM

Quote from: deisik on April 17, 2017, 06:34:48 AM

Quote from: Populous World on April 17, 2017, 06:18:44 AM

Quote from: deisik on April 17, 2017, 06:04:47 AM

Quote from: Populous World on April 17, 2017, 06:03:37 AM

1. How important is the role that cryptocurrencies like Tether.to will play in the blockchain economy.
2. How is it possible to build real business that rely on a stable trading environment to make profit.
3. Is everyone going to create their own pegged token in the future.
3. Would you trade your bitcoin into a pegged token if you were guaranteed 5% every 30 days

Sounds too good to be true

On the other hand, it is not clear what you mean by being guaranteed to earn 5% every 30 days. Sheer words don't count anymore anywhere, so I think you will have to explain in detail what you mean by "guaranteed" here. If your "guarantee" of this amount comes from the folks pouring their money into this "token", then my opinion is downright negative, obviously. Otherwise, you will have to explain where all these profits would be coming from

For example if you converted your bitcoin into a pegged token and that token was used to factor or discount an invoice that returned 5% profit of the 100% face value of the borrowers invoice. Then would be guaranteed subject to the invoice issuers customer pays on the due date. To offset the risk of default, a charge would be taken on the business and the personal assets of the director of the business

Honestly, I didn't understand anything of what you just said

If it was your way of suggesting lending money and earning interest off borrowers, I'm curious how you are going to grab "the business and personal assets of its director". Apart from that, why would anyone in their clear mind want to pay 5% monthly on something which I cannot yet comprehend? This phrase "used to factor or discount an invoice that returned 5% profit of the 100% face value of the borrowers invoice" is beyond my comprehension. Care to explain in layman terms what you refer to here?

Sure,

Some businesses have to wait 30 -90 days before their invoice are paid. To receive funds from the invoice earlier, say with 24hrs, they don't mind selling those invoices on at a discount, say 95% of the value, That is called factoring/discounting. Now by using by asking a director to sign a personal guarantee stating that he will cover the value of the invoice if his customer those not pay the invoice is common practice and taking out a fixed or floating charge 'debenture' on a company is also another business practice used by banks to secure loans, mortgage and other types of financing from a company

Okay, but I still don't see any meaning in all that

First, why would any business want to sell these invoices if there is a contract which stipulates the payment terms? If it is fixed in the contract that the counterparty will pay within 90 days, there is no reason to sell this invoice at 95% of its price. Typically, the contract terms already take into account the possible delays in payments. Further, if the counterparty defaults on its obligations (say, it doesn't pay on time), then paying 95% for this invoice is just absurd since you will lose all minus 5% of the contract price that you may receive as a redemption

Reid

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Quote from: Populous World on April 17, 2017, 06:03:37 AM

1. How important is the role that cryptocurrencies like Tether.to will play in the blockchain economy.
2. How is it possible to build real business that rely on a stable trading environment to make profit.
3. Is everyone going to create their own pegged token in the future.
3. Would you trade your bitcoin into a pegged token if you were guaranteed 5% every 30 days

I'm very interested in your feed back.

I dont think so. Even if there is a guarantee there must be proofs of this.
How about creating a trust first to those people who would want to enter that kind of business.
Here I have seen a lot of those businesses that offers this kind of thing. Even the gambling site have an investment option now.
If I would be in a much risk in that pegged token then why not just stay with the old good gambling site which also offers the same or maybe better.

Xester

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Quote from: Populous World on April 17, 2017, 06:03:37 AM

1. How important is the role that cryptocurrencies like Tether.to will play in the blockchain economy.
2. How is it possible to build real business that rely on a stable trading environment to make profit.
3. Is everyone going to create their own pegged token in the future.
3. Would you trade your bitcoin into a pegged token if you were guaranteed 5% every 30 days

I'm very interested in your feed back.

Even at this point of time we are trading our bitcoins into other altcoins and exchange them back to bitcoin when their price is high. The same way if there are tokens that will guarantee 5% interest on our investment then possibly I will place some of my bitcoins into it. But of course we must also be careful so that is why we must not also place all our bitcoin into that one investment alone to reduce the risk.

Populous World

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https://i.imgur.com/nDGTBjp.png

Quote from: deisik on April 17, 2017, 06:34:48 AM

Quote from: Populous World on April 17, 2017, 06:18:44 AM

Quote from: deisik on April 17, 2017, 06:04:47 AM

Quote from: Populous World on April 17, 2017, 06:03:37 AM

1. How important is the role that cryptocurrencies like Tether.to will play in the blockchain economy.
2. How is it possible to build real business that rely on a stable trading environment to make profit.
3. Is everyone going to create their own pegged token in the future.
3. Would you trade your bitcoin into a pegged token if you were guaranteed 5% every 30 days

Sounds too good to be true

On the other hand, it is not clear what you mean by being guaranteed to earn 5% every 30 days. Sheer words don't count anymore anywhere, so I think you will have to explain in detail what you mean by "guaranteed" here. If your "guarantee" of this amount comes from the folks pouring their money into this "token", then my opinion is downright negative, obviously. Otherwise, you will have to explain where all these profits would be coming from

For example if you converted your bitcoin into a pegged token and that token was used to factor or discount an invoice that returned 5% profit of the 100% face value of the borrowers invoice. Then would be guaranteed subject to the invoice issuers customer pays on the due date. To offset the risk of default, a charge would be taken on the business and the personal assets of the director of the business

Honestly, I didn't understand anything of what you just said

If it was your way of suggesting lending money and earning interest off borrowers, I'm curious how you are going to grab "the business and personal assets of its director". Apart from that, why would anyone in their clear mind want to pay 5% monthly on something which I cannot yet comprehend? This phrase "used to factor or discount an invoice that returned 5% profit of the 100% face value of the borrowers invoice" is beyond my comprehension. Care to explain in layman terms what you refer to here?

Sure,

Some businesses have to wait 30 -90 days before their invoice are paid. To receive funds from the invoice earlier, say with 24hrs, they don't mind selling those invoices on at a discount, say 95% of the value, That is called factoring/discounting. Now by using by asking a director to sign a personal guarantee stating that he will cover the value of the invoice if his customer those not pay the invoice is common practice and taking out a fixed or floating charge 'debenture' on a company is also another business practice used by banks to secure loans, mortgage and other types of financing from a company.

deisik

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Quote from: Populous World on April 17, 2017, 06:18:44 AM

Quote from: deisik on April 17, 2017, 06:04:47 AM

Quote from: Populous World on April 17, 2017, 06:03:37 AM

1. How important is the role that cryptocurrencies like Tether.to will play in the blockchain economy.
2. How is it possible to build real business that rely on a stable trading environment to make profit.
3. Is everyone going to create their own pegged token in the future.
3. Would you trade your bitcoin into a pegged token if you were guaranteed 5% every 30 days

Sounds too good to be true

On the other hand, it is not clear what you mean by being guaranteed to earn 5% every 30 days. Sheer words don't count anymore anywhere, so I think you will have to explain in detail what you mean by "guaranteed" here. If your "guarantee" of this amount comes from the folks pouring their money into this "token", then my opinion is downright negative, obviously. Otherwise, you will have to explain where all these profits would be coming from

For example if you converted your bitcoin into a pegged token and that token was used to factor or discount an invoice that returned 5% profit of the 100% face value of the borrowers invoice. Then would be guaranteed subject to the invoice issuers customer pays on the due date. To offset the risk of default, a charge would be taken on the business and the personal assets of the director of the business

Honestly, I didn't understand anything of what you just said

If it was your way of suggesting lending money and earning interest off borrowers, I'm curious how you are going to grab "the business and personal assets of its director". Apart from that, why would anyone in their clear mind want to pay 5% monthly on something which I cannot yet comprehend? This phrase "used to factor or discount an invoice that returned 5% profit of the 100% face value of the borrowers invoice" is beyond my comprehension. Care to explain in layman terms what you refer to here?

Populous World

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https://i.imgur.com/nDGTBjp.png

Quote from: stompix on April 17, 2017, 06:14:17 AM

Quote from: Populous World on April 17, 2017, 06:03:37 AM

1. How important is the role that cryptocurrencies like Tether.to will play in the blockchain economy.
2. How is it possible to build real business that rely on a stable trading environment to make profit.
3. Is everyone going to create their own pegged token in the future.
3. Would you trade your bitcoin into a pegged token if you were guaranteed 5% every 30 days

I'm very interested in your feed back.

1. Probably 0.
2. The question is far to complicated because you offer little to no information on the subject.
By real business you mean (production, commerce) ? Then it is pretty simple, you do it like you're doing it right now.
3. No
4.Of course not. Guaranteed earnings is synonymous to you're gonna lose it all at one point.

Thanks for your feedback, Q2 example, you have a business and your margin is say 5% profit every time you sell an item, if you except bitcoin how can you hedge your profit? with a pegged token you would not have to worry about hedging.

Populous World

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https://i.imgur.com/nDGTBjp.png

Quote from: deisik on April 17, 2017, 06:04:47 AM

Quote from: Populous World on April 17, 2017, 06:03:37 AM

1. How important is the role that cryptocurrencies like Tether.to will play in the blockchain economy.
2. How is it possible to build real business that rely on a stable trading environment to make profit.
3. Is everyone going to create their own pegged token in the future.
3. Would you trade your bitcoin into a pegged token if you were guaranteed 5% every 30 days

Sounds too good to be true

On the other hand, it is not clear what you mean by being guaranteed to earn 5% every 30 days. Sheer words don't count anymore anywhere, so I think you will have to explain in detail what you mean by "guaranteed" here. If your "guarantee" of this amount comes from the folks pouring their money into this "token", then my opinion is downright negative, obviously. Otherwise, you will have to explain where all these profits would be coming from

For example if you converted your bitcoin into a pegged token and that token was used to factor or discount an invoice that returned 5% profit of the 100% face value of the borrowers invoice. Then would be guaranteed subject to the invoice issuers customer pays on the due date. To offset the risk of default, a charge would be taken on the business and the personal assets of the director of the business.

stompix

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Blackjack.fun

Quote from: Populous World on April 17, 2017, 06:03:37 AM

1. How important is the role that cryptocurrencies like Tether.to will play in the blockchain economy.
2. How is it possible to build real business that rely on a stable trading environment to make profit.
3. Is everyone going to create their own pegged token in the future.
3. Would you trade your bitcoin into a pegged token if you were guaranteed 5% every 30 days

I'm very interested in your feed back.

1. Probably 0.
2. The question is far to complicated because you offer little to no information on the subject.
By real business you mean (production, commerce) ? Then it is pretty simple, you do it like you're doing it right now.
3. No
4.Of course not. Guaranteed earnings is synonymous to you're gonna lose it all at one point.

deisik

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English ⬄ Russian Translation Services

Quote from: Populous World on April 17, 2017, 06:03:37 AM

1. How important is the role that cryptocurrencies like Tether.to will play in the blockchain economy.
2. How is it possible to build real business that rely on a stable trading environment to make profit.
3. Is everyone going to create their own pegged token in the future.
3. Would you trade your bitcoin into a pegged token if you were guaranteed 5% every 30 days

Sounds too good to be true

On the other hand, it is not clear what you mean by being guaranteed to earn 5% every 30 days. Sheer words don't count anymore anywhere, so I think you will have to explain in detail what you mean by "guaranteed" here. If your "guarantee" of this amount comes from the folks pouring their money into this "token", then my opinion is downright negative, obviously. Otherwise, you will have to explain where all these profits would be coming from

Populous World

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Activity: 280

Merit: 112

https://i.imgur.com/nDGTBjp.png

1. How important is the role that cryptocurrencies like Tether.to will play in the blockchain economy.
2. How is it possible to build real business that rely on a stable trading environment to make profit.
3. Is everyone going to create their own pegged token in the future.
4. Would you trade your bitcoin into a pegged token if you were guaranteed 5% every 30 days

I'm very interested in your feed back.

Topic: The Rise of Pegged Cryptocurrency (Read 753 times)