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Official Response to “Bancor Is Flawed”

blog.bancor.network

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Re: Official Response to “Bancor Is Flawed”

#51

Post by brohee »

BaronSamedi wrote: post #20
rhart92 wrote: post #8

Earlier quoted context omitted.

That's not entirely true. Bitcoin's scripting language is not Turing complete, among other limitations that Ethereum addresses. https://github.com/ethereum/wiki/wiki/White-Paper#scripting

It is true that Ethereum has a more powerful scripting language. The real question, however, is if that feature has practical value. I think the jury is still out on that question but I personally lean towards no. If and when there are profitable applications of this technology, ones that wouldn't have been possible without ethereum scripts then I will be glad to change my mind.

For scammers and thieves, Ethereum is the place to be. Can't wait until Underhanded C Contest winners discover Solidity.

Re: Official Response to “Bancor Is Flawed”

#52

Post by [deleted] »

BaronSamedi wrote: post #20
rhart92 wrote: post #8

Earlier quoted context omitted.

That's not entirely true. Bitcoin's scripting language is not Turing complete, among other limitations that Ethereum addresses. https://github.com/ethereum/wiki/wiki/White-Paper#scripting

It is true that Ethereum has a more powerful scripting language. The real question, however, is if that feature has practical value. I think the jury is still out on that question but I personally lean towards no. If and when there are profitable applications of this technology, ones that wouldn't have been possible without ethereum scripts then I will be glad to change my mind.

[deleted]

Re: Official Response to “Bancor Is Flawed”

#54

Post by oddsinfinity »

dmix wrote: post #47
franciscop wrote: post #32

Well they should learn though: - Their clients tell them the message is not clear so they make a video. - "Bancor is Flawed" says too many buzzwords make it unclear and fluffy. - You have to Google to understand the words according to Bancor themselves. - They even have to add parenthesis in this article to explain some words! But they still think their message is clear. While I have no idea about this world, I do ca…

The best book for explaining your product idea is "Made to Stick" [1]. It has a great process for breaking your idea down in the most concrete terms and has some useful tools such as analogy to a similar product ("like dropbox for x"). The cliche adage here is that "if you can't explain your product in one or two sentences then I'm not interested". This is why the "Hollywood pitch" developed organically because peopl…

Nice analysis. True in a majority of the cases.

Re: Official Response to “Bancor Is Flawed”

#55

Post by irln »

The Double coincidence of Wants is solved by any Medium of Exchange (MoE). The bigger issue in my opinion is how to manage the creation of new MoE. The current system "solves" this by empowering a group (banks) to issue new MoE via loans. We have a significant body of history on the "efficacy" of this approach.

How does Crypto currency, Bancor or other, improve the management/new creation issues?

Re: Official Response to “Bancor Is Flawed”

#56

Post by marcosdumay »

JumpCrisscross wrote: post #33

> With Bancor, there is no need for two opposite wants to exist at the same time in order for the price discovery (through actual trading) to function I don't understand. If everyone wants to buy, nobody will trade and price discovery will not occur. Can someone please help me understand this?

That "at the same time" is the important piece. It means there's an speculator in the middle that will guess a price it can buy to sell later and make some money out of the transaction.

Re: Official Response to “Bancor Is Flawed”

#57

Post by JumpCrisscross »

marcosdumay wrote: post #56
JumpCrisscross wrote: post #33

> With Bancor, there is no need for two opposite wants to exist at the same time in order for the price discovery (through actual trading) to function I don't understand. If everyone wants to buy, nobody will trade and price discovery will not occur. Can someone please help me understand this?

That "at the same time" is the important piece. It means there's an speculator in the middle that will guess a price it can buy to sell later and make some money out of the transaction.

> an [sic] speculator in the middle that will guess a price it can buy to sell later and make some money out of the transaction

That's called market making [1]. The money made is the spread [2]. People have been doing this for centuries.

[1] https://www.sec.gov/fast-answers/answersmktmakerhtm.html

[2] http://www.investopedia.com/terms/m/marketmakerspread.asp

Re: Official Response to “Bancor Is Flawed”

#58

Post by laktek »

dmix wrote: post #47
franciscop wrote: post #32

Well they should learn though: - Their clients tell them the message is not clear so they make a video. - "Bancor is Flawed" says too many buzzwords make it unclear and fluffy. - You have to Google to understand the words according to Bancor themselves. - They even have to add parenthesis in this article to explain some words! But they still think their message is clear. While I have no idea about this world, I do ca…

The best book for explaining your product idea is "Made to Stick" [1]. It has a great process for breaking your idea down in the most concrete terms and has some useful tools such as analogy to a similar product ("like dropbox for x"). The cliche adage here is that "if you can't explain your product in one or two sentences then I'm not interested". This is why the "Hollywood pitch" developed organically because peopl…

So simplest way to explain Bancor is to call them a Bank? Has reserves, liquidates over the counter & centralized control (for better or worse).

Re: Official Response to “Bancor Is Flawed”

#59

Post by thisisit »

JumpCrisscross wrote: post #33

> With Bancor, there is no need for two opposite wants to exist at the same time in order for the price discovery (through actual trading) to function I don't understand. If everyone wants to buy, nobody will trade and price discovery will not occur. Can someone please help me understand this?

This is the very basic function of a market maker. They offer to "make" a market even when none exists. So if everyone wants to buy they will keep offering until their inventory runs out.

I haven't read the Bancor paper or code so I am not sure if this is implemented but every market maker's another objective is to make money. So they normally don't trade on a fair price, rather fair price - x/2 to buy and fair price + x/2 to sell where x is the spread to collect money. So effectively they buy low and sell high for a minute difference.

As for a scenario where they have only buyers, the algos or people on the floor tend to take stock of the existing orders and start moving the ask higher to compensate. This happens until it becomes untenable to buy and some sellers start entering the market to make a quick buck.

A good video on how trading works from Trading Places: https://www.youtube.com/watch?v=RLySXTIBS3c

Re: Official Response to “Bancor Is Flawed”

#60

Post by thisisit »

marcosdumay wrote: post #56
JumpCrisscross wrote: post #33

> With Bancor, there is no need for two opposite wants to exist at the same time in order for the price discovery (through actual trading) to function I don't understand. If everyone wants to buy, nobody will trade and price discovery will not occur. Can someone please help me understand this?

That "at the same time" is the important piece. It means there's an speculator in the middle that will guess a price it can buy to sell later and make some money out of the transaction.

My guess is you talking about arbitrage[1]. As Sirer pointed out tokens on Bancor present a huge opportunity for arbitragers and it is bad. As time is an unknown risk factor, the speculator will simply buy on Bancor, take the token out and sell it on exchange immediately to make a profit.

[1]http://www.investopedia.com/terms/a/arbitrage.asp

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