Silk Road forums
Discussion => Off topic => Topic started by: dance4life on December 20, 2011, 05:37 am
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I have placed an order from a reputable vendor.
1)The transaction is HEDGED.
2)The item is around $300.00 USD ( 86 total coins at that time )
3) purchased it when BTC price was at 3.2 (or thereabouts)
4)Currently the BTC price is at 4.50 as I write this (crazy run right now)
As I understand it the buyer (me) in this instance will be gaining on this transaction because it is hedged. So I will get back $1.30 per BTC I originally transferred this vendor, is this correct? So 86 x 1.3 = $118.00 coming back to me? Can this be right, I mean if I finalized now?
God, I have been fucked so many times before hedging was even available this would be sweet coming back the other way for once. I am thinking though we get to $5.00 BTC soon.
Do I have this all correct besides my speculation in price?
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If I'm not mistaken, hedging only affects the seller.
If they hedged the Bitcoins, they'll get the current US Dollar amount in Bitcoins instead of the actual amount of Bitcoins you sent them.
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Are you fucking kidding me? I thought it went both ways? Like the seller had the original choice, but if the seller does this then you both either gain or lose btc in the final transaction. This would make both originally marked to the original price in bitcoins.
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I've only made one transaction on SR so far (non-hedged), so I could be wrong. Hopefully someone more knowledgeable on this can pitch in here.
But after reading the explanation on how the hedged escrow system works, it was my understanding that it's just a way for the seller to ensure they receive the same amount of cash if the Bitcoin price drops (or rises).
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If the seller has hedging enabled on his account, what that means is the second those coins hit his account they are converted to USD.
Once the order finalizes they are converted back to BTC and transferred to the seller's available balance. If you or the seller cancel the order, you will get back the current USD value of the listing in BTC. Ergo, you don't gain anything at all because the bitcoin value is higher so you get less BTC in return (actually you lose a few percent because of the heding fees).
There is nothing to gain here. if you are thinking of cancelling the order to try to ring some more BTC up it's a no-go. The USD is converted back into BTC at market value and transferred back to your BTC balance, less the hedging fee.
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So for a buyer when there is inflation in the price you lose out on that end? In the reverse of things happening lately, if there is starting to become a huge run there is a big incentive NOT to purchase anything and just keep the coins in your account. Doesn't seem to make sense. Shit on me if this is the case though.
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As the buyer, you've already paid. So no matter what happens to the Bitcoin price while in escrow, you have nothing to lose, hedged or not (unless you are refunded).
But yes, if the price is rising, you'd be better off keeping them in your account until the price stops climbing.
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Yeah fuck me. I never win. Spend my coins before they go up and lose them on the way down. Pretty much par for the course though hahahha.
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I got lucky and had about 300 coins sitting from my last few transactions early in the day when it was around 3.50. It's around 4.10 right now.
Heding was implemented to keep sellers around (they were losing a ton of money when the crash hit). It also stopped sellers from cancelling orders if BTC dropped to far and leaving buyers holding the bag for the losses, which was pretty common in the old days. Trust me, things are better for both of us by a shitpile with the heding option available.
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Oh, I totally agree. I first started vending when BTC was around 30+. So I've been there and done that.
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par for the course, then? ;)
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We get nothing here but drugs. No friends. No alliances. Drugs.
We pay for these drugs. We pay for the convenience of home delivery. We pay for semi-anonymity. But we pay. That's what being a buyer is. We pay for drugs. Nothing free. No returns.
I'm OK with this. The Seller takes a huge risk as well, and he/she cant even judge how much exposure they are getting. In real life, they might only deal with one or two people. They need to be compensated for this.
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If an item is hedged, the sales or refund will be calculated according to USD, which means you get same amount of USD, even though BTC fluctuates. Just to keep in mind commission is involved in determining the final amount of currency.