31–40 of 73 posts
An unregulated leveraged options platform with essentially no assets and what will undoubtedly be super senior debt deals with their prime broker writing naked contracts on something that moves 30% based on one website lagging out for a hour or two? what could go wrong
This is a big deal. With leverage and shorting, the only people who will have use for BitCoins (as opposed to a long position in a margin account) will be the small set who need the specific type of liquidity that BitCoin offers... and that will prove to be a small set. (People who need regular anonymous liquidity have other means.) I will also remark that, even when a bubble is underway, shorting is dangerous. If yo…
It won't take much more than a large industry coalition to settle the price fluctuation around bitcoins, which will follow the basic organic market coalition... i.e. vendors accepting bitcoins.
In the future, we may not be using bitcoins, but you can bet we're going to be using coins made of bits. I don't know if my bitcoins will be worth anything eventually, but they will be an artifact of great change at least.
Earlier quoted context omitted.
And? This is the very definition of a margin call. Retail investors ought to RTFM when it comes to financial services products, especially when it comes to forex.
Yes I was just walking through the mechanics of a margin call on a short position that goes sour. Lots of people understand that shorting helps you profit when prices decrease, but not everyone understands the risks, especially in the face of manic bubble buying.
*[1] https://www.khanacademy.org/science/core-finance/stock-and-b...
Wouldn't this, ironically, stabilize Bitcoin, if others try to take advantage of its growth and try to bring it down again?
It would indeed stabilize Bitcoin, but I don't see what's so ironic about it. Short-selling and other derivatives substantially stabilize a lot of markets, popular delusion to the contrary notwithstanding.
I don't know how trading bitcoins work, but won't this increase volatility both ways in addition to overal stability (taken as an average).
This is a big deal. With leverage and shorting, the only people who will have use for BitCoins (as opposed to a long position in a margin account) will be the small set who need the specific type of liquidity that BitCoin offers... and that will prove to be a small set. (People who need regular anonymous liquidity have other means.) I will also remark that, even when a bubble is underway, shorting is dangerous. If yo…
You miss the big picture. Digital currencies will exist as an instrument to hedge against currency fluctuations, commodity manipulation, and to let you deploy liquid money into assets with calculable appreciation/depreciation rates. It won't take much more than a large industry coalition to settle the price fluctuation around bitcoins, which will follow the basic organic market coalition... i.e. vendors accepting bit…
Well, in that most sovereign currency denominated accounts in the modern world exist as digital records, sure, we have been for many years.
Earlier quoted context omitted.
You miss the big picture. Digital currencies will exist as an instrument to hedge against currency fluctuations, commodity manipulation, and to let you deploy liquid money into assets with calculable appreciation/depreciation rates. It won't take much more than a large industry coalition to settle the price fluctuation around bitcoins, which will follow the basic organic market coalition... i.e. vendors accepting bit…
> In the future, we may not be using bitcoins, but you can bet we're going to be using coins made of bits. Well, in that most sovereign currency denominated accounts in the modern world exist as digital records, sure, we have been for many years.
Earlier quoted context omitted.
On the Bitcoin Software Maturity Scale, where hundreds of thousands of dollars routinely gets entrusted to 17 year olds coding bucket shops in Ruby on Rails and 80% of the global transaction volume is run through a company in Tokyo set up to trade Magic: The Gathering cards, a guy with financial industry and experience and enough money to pay for a single professional security audit is practically IBM.
> and 80% of the global transaction volume is run through a company in Tokyo set up to trade Magic: The Gathering cards Gasp ! You're right! What other companies have I foolishly entrusted parts of my life to? /looks at his video game console, run by a company in Kyoto set up to sell handmade hanafuda cards Not you too, Nintendo! ;_; I don't know what to believe in now.
Earlier quoted context omitted.
Under what scenario would this increase stability in bitcoins?
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Support for shorting doesn't allow sellers whereas a system without such support allows only buyers; to have buyers you have to have sellers -- any market has both.
Shorting is essentially equivalent to acquiring a debt denominated in the commodity shorted (so "shorting bitcoins" is essentially just borrowing bitcoins) and immediately converting the borrowed commodity into something else (presumably, bitcoin shorters would generally be converting them into traditional sovereign currencies.)
This is a big deal. With leverage and shorting, the only people who will have use for BitCoins (as opposed to a long position in a margin account) will be the small set who need the specific type of liquidity that BitCoin offers... and that will prove to be a small set. (People who need regular anonymous liquidity have other means.) I will also remark that, even when a bubble is underway, shorting is dangerous. If yo…
You miss the big picture. Digital currencies will exist as an instrument to hedge against currency fluctuations, commodity manipulation, and to let you deploy liquid money into assets with calculable appreciation/depreciation rates. It won't take much more than a large industry coalition to settle the price fluctuation around bitcoins, which will follow the basic organic market coalition... i.e. vendors accepting bit…
National currencies are much less volatile than Bitcoins have shown themselves to be.
In the future, we may not be using bitcoins, but you can bet we're going to be using coins made of bits.
I think we can agree there. "Bits" have nothing to do with it. It's this:
Money pre-1800: metal (usually gold or silver) that can be used to pay taxes and hire killers to defend land.
Money 1800-2075[?]: debt of large institutions, with equity a small player.
Money post-2075: access to talent (the new limiting factor on getting ideas into implementation). We're starting to see that. I put that at 2075 because people are very conservative when it comes to money, so even though that will be the definition of wealth decades before that, I think it will take a long time before we can come up with a reasonable talent-based currency. What would the proof-of-work model be? It's hard to say.