Silk Road forums
Discussion => Security => Topic started by: YattaYatta on June 09, 2012, 12:29 pm
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By hedging all bitcoins and only using a fake sort of exchange rate (let's call it the Clown Rate), the dollar values stay the same, but the number of bitcoins will vary to avoid any tracking done by size of payments - say by adding a "fractional debiting" layer to even further obliviate any possible tracing by chopping one withdrawal into multiple chunks.
There should be no reason to allow a real exchange rate when the bitcoins are digitally arbitrary anyway. It is in everyone's interest to keep the exchange rate flat and not variable. We already have enough variable exchange rates to keep a balance of equity between different currencies, yet bitcoins are not actually a different currency = they are an encryption modality and thus should have no exchange rate-type of variation but only in appearances only and not substance.
When I first saw this glaring error in monetary policy, I was shocked. You should want payments from and to vendors and customers to be at a stable amount. To do otherwise would be to gamble from one minute to the next on this deliberately "mysterious" and convoluted scheme by persons unknown - purposely unknown!
You ask me to trust whoever sets these fake "exchange rates" when there is nothing behind them beyond avoiding international exchange rates with no structure behind the transactions. You could pretend the exchange rate is suddenly 10000 to one, cash in on this in minutes, and then switch it back to 5 to 1 = knowing that most people are not able to conduct quick transactions of any sort .....a fact you put forth as being a good thing because these delays and "tumbles" add layers of secrecy and encryption to make everyone safer. But how about the people manipulating these so-called "exchange rates" between bitcoins and whatever currency? Their actions can be done in seconds while it takes hours or days for a person to get any kind of transaction going - an unfair advantage without any basis in fact, usefulness, or security.
And here's the kicker: All these bitcoins can disappear forever once the "capitalization" of the system reaches a point where these anonymous people decide to just "embezzle" all the money and disappear rather than game and scam the users of bitcoins.
It hasn't happened yet because they are making so much money by scamming people with these fake exchange rates. Total bullshit. I was so disappointed to see no reason to risk my money at this "gambling table" of distant, anonymous people fiddling with the exchange rates for no good reason.
Aren't the fees enough? You gotta skim another percentage using fake exchange rates? And if you ever get enough what is there to stop you from simply liquidating everything and disappearing ? Nothing stands in your way that I can see.
I came here because I am truly desperate for medical marijuana - and find a rat's nest of encryption and security processes with major and fatal flaws.
If you want me to put my money into bitcoins, you'll have to not only ensure that no one can just run off with the whole bag of them at any time, but you'll also have to ensure that no one messes with my money without my approval.(meaning no fake exchange rates!!!!)
I have no problem with an OPENLY fake exchange rate to confound the efforts of those who want to violate our privacy, but to have a secretly fake exchange rate that you actually pretend changes the value of someone's money - while only providing "hedgeing" services to vendors is to show you have no intention of providing a stable and trustworthy transaction and escrow service.
Let there be an openly "Clown Rate" but have the money always stay the same behind the scenes. The actual number of bitcoins should be acknowledged to be meaningless. You already control the transactions and the marketplace...and you already get a percentage using fees and such....so why should the stated number of coins mean anything? It should be properly considered to be a part of the encryption process and not an actual currency with actual exchange rates.
I hope I'm making myself clear here.
Plus, the process for getting "bitcoins" should be easier, faster, and simpler. More things should be automated. You have people doing MANUAL security processes, MANUAL encryption, and are wasting everyone's time and frankly it looks very bad so far.
TONS of FAQs, blog questions, topic, newbies like me wandering around and getting fed up with all the FUCKING STEPS needed to do ONE FUCKING TRANSACTION.
And on top of it all it's not secure, not guaranteed, not stable, trustworthy, or realistic. You've got people dancing like monkeys through a thousand hoops to install this, configure that, buy a special thumbdrive, encrypt it, and put encrypted stuff inside the encrypted drive, use PGP everywhere, and you guys look like scammers from here. Fuck this crap and fuck your fake fucking bitcoins! My money is good, it does not change from one day to the fucking next and does not require me to constantly baby it, hedge it, or even hide it. I can lay money down and other people don't give a fuck they just take it and spend it and they don't have to waste hours on the internet reading your thousand and one bullshit rules you pulled out of your fucking ASS!
I will check back later to see if you guys are serious about having a good encryption and security / privacy service. If you are, you'll change some things and make it more realistic and usable. This is bullshit.
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Baaaaaaaaaaaaaaaaaaaaaaaaawwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww :'(
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I really don't think bitcoins work the way you think they do. Read up on them some more! =)
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Nothing more amusing than someone who bitches about something they have no clue about while simultaneously acting like they are so much smarter than everyone else about the topic that they have no fucking clue about
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No, no, no a thousand times no, clearly you're not a banker. (For any British people reading this you might have been thinking of a similar word to "banker" to describe the OP though!) :-D
Where do I start?
The Bitcoin economy is not regulated via Silk Road - like economies for any currency it fluctuates due to a huge amount of factors - the chief of which is how many people are actually buying and selling Bitcoins. If you read the latest article The Bitcoin Trader magazine then it would seem the economy is gradually stabilising but as with any fiat currency of course it's going to be subject to external forces including the ease of mining Bitcoins, the availability of Bitcoins in new markets (for instance the Chinese Bitcoing trading platform caused it to spike in value recently) and also the ease at which it can be cashed out.
To call the rate of exchange a "clown rate" shows you haven't gone to all the trouble of reading the free guide on the SR site which says that when sellers list items they can do so in USD pegged to the MtGox rate - therefore your main beef should be with MtGox if anyone.
Secondly the idea that hedging would assist buyers is ludicrous in the extreme. The reason it is only available to vendors is because it it is only any use to them.
Let's say for instance you bought some "medicinal" marijuana for the Bitcoin equivalent of USD 400 at a time when the going rate was 5 dollars to the Bitcoin. You place the order using 20 Bitcoins and the funds are placed in escrow. The seller then dispatches your item i.e $100 worth of Marijuana - it is the VENDOR who is now at the mercy of market rates between now and when your order is finalised and the funds are released to him.
If the rate drops so that it is $4 to the Bitcoin instead of $5 they will indeed lose $20 in real value from the sale and this is why hedging exists - however by this point you have already smoked your way through your $100 of bud and are beyond such concerns!
As for having automated security processes - answer your own question, why don't we do this? You can't have it both ways. Apparently the people running this site are pulling the strings to massage the currency rate but are trustworthy enough to allow you to place orders centrally?!
I am always happy to help people new to the forum or using Bitcoin but what you're saying makes no sense at all to me.
V.
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all BTC exchange rates are calculated using the actual bitcoin exchange sites. They used to be displayed on the front page of the site, however there can be some security flaws with integrating a clearnet API into a hidden service (obviously), so that was scrapped a while back. The exchange rate is not arbitrary. Take the price of an item and go to one of the major exchanges and stack it up against the current exchange - it will be close, a little higher because of listing fees.
The algo for calculating the exchange rate for the site uses a rolling, front-weighted 24 hours moving average to level out major spikes if a big buy or sell order goes off on the exchanges and pushes the price one way or the other. It is more than fair.
I think you should do some way more serious research into what's going on here before you come out with a post like that. It is better to ask questions than come in with "I know it all, and here's how it should be, even though I just got here." I've been here for over a year.