Silk Road forums
Discussion => Silk Road discussion => Topic started by: a10101 on March 01, 2013, 10:23 pm
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How is the BTC rate determined? Right now, doing the math, I see they are using $34.11/BTC, but that is about $0.50 less than what I see on mtgox. That difference can really add up on a big order.
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Like everything else, it is determined by the supply-demand ratio, and since the supply is fixed (well, it changes, but at a known, fixed rate), it is basically determined by demand.
More specifically, it is determined by all the standing bid/ask orders at the exchanges, and since MtGox handles 80% of that trade, it is basically determined by the bid/ask orders at MtGox.
Take a look at this: http://mtgoxlive.com/orders
The green line is the USD exchange rate for a bitcoin, and the orange and blue lines show how much BTC would have to be converted to USD, or vice versa, in order for the exchange rate to change to that point.
The value of BTC listed on SR depends on where they are scraping the info. That source could lag behind MtGox by several hours (or SR may only scrape every few hours), so it will be slightly different.
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Maybe I wasn't clear in my question. I understand how the general exchange rate works. I just want to know how SR determines what rate to apply.
I always look at cost in $$, but if the rate that SR uses is out of line with the exchanges, then the price is effectively different. Could be higher or lower, depending on the discrepancy.
Is there any documentation about how SR determines the rate? I can speculate as well as the next guy. I'm looking for something solid.
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Maybe I wasn't clear in my question. I understand how the general exchange rate works. I just want to know how SR determines what rate to apply.
I always look at cost in $$, but if the rate that SR uses is out of line with the exchanges, then the price is effectively different. Could be higher or lower, depending on the discrepancy.
Is there any documentation about how SR determines the rate? I can speculate as well as the next guy. I'm looking for something solid.
I don't know if it's documented anywhere, but I've seen it posted here several times that a moving Mt. Gox 24 hour average is used. I have no way of verifying that, but that would be consistent with the current SR value being less than the current Mt. Gox value.
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Maybe I wasn't clear in my question. I understand how the general exchange rate works. I just want to know how SR determines what rate to apply.
I always look at cost in $$, but if the rate that SR uses is out of line with the exchanges, then the price is effectively different. Could be higher or lower, depending on the discrepancy.
Is there any documentation about how SR determines the rate? I can speculate as well as the next guy. I'm looking for something solid.
I don't know if it's documented anywhere, but I've seen it posted here several times that a moving Mt. Gox 24 hour average is used. I have no way of verifying that, but that would be consistent with the current SR value being less than the current Mt. Gox value.
OK. That seems right, but it doesn't make sense. With the rate changing so fast lately, the SR rate could be very different than the actual rate. I'm surprised that this isn't given more attention. I wish this was more transparent.
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FYI - I've been a buyer almost a year on here, and it seems to always be a little bit lower than the MT Gox or Preev.com rate.
My assumption was that since it can take a few hours to get BTC, they were being fair and "locking it in" for that hour.
Just an idea.
I can't believe it's almost $35 USD!!
When I started in April it was around $4.75. Some people are getting awfully rich. l just hope this latest trend doesn't draw unwanted attention.
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OK. That seems right, but it doesn't make sense. With the rate changing so fast lately, the SR rate could be very different than the actual rate. I'm surprised that this isn't given more attention. I wish this was more transparent.
Don't you want it to be smoothed out over a larger time frame? Sure, it sucks when BTC is rising, but when it's dropping, lots of people buy the bare minimum BTC for their order and end up a fraction of a BTC short (check out the Official Spare Coins Thread). Averaging over a larger time frame protects against that.
From SR's perspective, those are lost or delayed purchases, and therefore commission.
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I can't believe it's almost $35 USD!!
When I started in April it was around $4.75. Some people are getting awfully rich. l just hope this latest trend doesn't draw unwanted attention.
It's funny because a few weeks ago, people were saying that $20 was a bubble. :)
The difference between now and the June 2011 bubble is that the bitcoin economy is much bigger. There's a lot more trade and a lot more people with stakes in the game. Legit sites like Wordpress.com and Reddit are accepting BTC and that will continue to expand.
Also, MtGox is partnering with Coinlab to make bitcoin purchases much easier for US citizens, who are the biggest demographic.
Unless something catastrophic happens, like governments banning bitcoin exchanges, I don't see it going below $20 ever again.
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I got on board with my buyers account on SR last March 1 year ago and my 1st btc purchase was through a vendor the exchange rate was $4. It was not as difficult to obtain btcs either. MT Gox , Dwolla noone had verification processes in place either. It's been 1 year and it's went up 8X.
I had a time earlier in the year where I didnt transfer any btcs and I made a 23% profit. That being said I don't do that because we all know the theory "what goes up must come down".
ce
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The real question here is how long are the tyrannical government-financial-bank complexes of this world going to let bitcoin go before they step in and ruin it?
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The real question here is how long are the tyrannical government-financial-bank complexes of this world going to let bitcoin go before they step in and ruin it?
Yep.
Modzi