Silk Road forums
Discussion => Silk Road discussion => Topic started by: Pfandleiher on June 26, 2013, 03:05 pm
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I dont know if this has been discussed yet, but we are loosing a lot of money due to that.
By now we all know that mtG is just plain unrealistic. they even stopped withdrawals for like 2 weeks.
Its insane
cheers
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we agree!
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What do you advise instead?
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While it's true the Silk Road BTC value is linked to MtGox, it's a slightly different one compared to what they have at the moment at MtGox - for specific information see my thread Exact Value of Bitcoin on Silk Road for different Currencies: dkn255hz262ypmii.onion/index.php?topic=171142.msg1240016
I don't see how Silk Road could solve this problem short of creating their own exchange which would hold the majority of the market, not very likely to happen. I agree it's unfortunate that we're stuck with something as bad as MtGox but the reality is no other exchange has been able to step up to the plate yet, which is kind of sad considering they don't have to be that good to begin with to exceed them. For an interesting view point from Max Keiser what's wrong with MtGox, see Keiser Report: Magic of Bitcoin Gathering (E432) : https://www.youtube.com/watch?v=IbSOHwCOnG0
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Max Keiser has suggested some type of USD peg until Bitcoin is more well established and less volatile:
CLEARNET http://rt.com/op-edge/bitcoin-currency-max-keiser-138/
I got lots of flak from the Bitcoin community when I suggested a currency peg to ease the transition for universal acceptance of bitcoin.
From the current price of around $100 to an interim target of $1,000, where it will achieve a market capitalization of approximately $15 bn., and a level where more sophisticated institutional products can be created, guidance on pricing needs to come from outside the bitcoin protocol.
The outcry heard from Bitcoiners is that any price peg destroys what Bitcoin stands for. This is untrue, but it sounds nice. Just like stakes are used to support young trees as they grow to keep them growing straight, Bitcoin needs similar support at this stage of its development. The Bitcoin protocol, as ingenious as it is, is a mining protocol, not a pricing protocol. This bit of the project was left hanging when Bitcoin was introduced and the community was left to deal with it as best it can.
BitPay, one of the pillars of the Bitcoin community (full disclosure: I am an investor in this company) has now switched from using MtGox (the largest Bitcoin exchange, handling approximately 75% of all Bitcoin trades) for pricing their merchant transactions - - to a new index-like composite price.
As I’ve said in previous blogs, the exchange piece in the bitcoin econo-metric ecosystem is the weakest link; it results in monopoly-pricing that precludes sufficient competition in the market to generate worthwhile price discovery.
Maintaining a peg (or something like it), as such, as I wrote about earlier; is an interim solution to get around the ‘MtGox problem.’ And implementation of said peg; like Bitcoin itself, can be original in design, but with results equal to a more traditional currency peg.
In other words, when I described the peg idea I pointed to the Bitcoin Foundation as a potential body to capitalize and maintain the bitcoin peg. My point was that the Bitcoin Foundation could be the oversight group to organize a price quote, but capitalizing and maintaining the ‘official’ BTC price does not necessarily mean putting up equal, (or significant partial amounts) relative to to the current float of BTC (approximately $1.4 bn.). It can mean doing what BitPay is doing; creating an indexed price; offering guidance for transactions that in turn boost confidence in price discovery which in turn increase liquidity and market capitalization.So far, so good.
The new price guidance effort is a good step in the right direction for Bitcoin. It’s something I predicted would be necessary given the fact that the Bitcoin protocol is a mining protocol and not a pricing protocol.
As the market capitalization of Bitcoin climbs into the 10’s and 100’s of billions of dollars - drawing in more institutional players along with its ascent, (a virtual guarantee now that the global banking system appears to be on the verge of another round of bailouts and money printing), another step toward another variation on the peg theme a peg will probably take shape. Will it be something closer to a traditional peg? Probably not, but that model still serves as a handy guide.
Bitcoin is our (i.e., the community of hacktivists who fight centralized, monopoly politics and economics) baby. We willed it into existence as counterpart to our complete dissatisfaction (and horror) at what the global banking (organized theft) system has become; a system of crony kleptocrats printing gads of cash for pet projects and wars destroying civil society and the environment while simultaneously inflating the cost of basic goods and services.
We’ll get to the goal of frictionless, math-based, cryptocurrency that redefines money in the end. All that’s needed is a little patience, some solid price discovery.
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While it's true the Silk Road BTC value is linked to MtGox, it's a slightly different one compared to what they have at the moment at MtGox - for specific information see my thread Exact Value of Bitcoin on Silk Road for different Currencies: dkn255hz262ypmii.onion/index.php?topic=171142.msg1240016
I don't see how Silk Road could solve this problem short of creating their own exchange which would hold the majority of the market, not very likely to happen. I agree it's unfortunate that we're stuck with something as bad as MtGox but the reality is no other exchange has been able to step up to the plate yet, which is kind of sad considering they don't have to be that good to begin with to exceed them. For an interesting view point from Max Keiser what's wrong with MtGox, see Keiser Report: Magic of Bitcoin Gathering (E432) : https://www.youtube.com/watch?v=IbSOHwCOnG0
good post +1 :-)
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DPR himself answered me, just wanted to add that the value is not pegged to MT.G
but its still way too high :)
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+1 good post wiggum :)
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(A) From the current price of around $100 to an interim target of $1,000 ...
...
(B) As the market capitalization of Bitcoin climbs into the 10’s and 100’s of billions of dollars - drawing in more institutional players along with its ascent, (a virtual guarantee now that the global banking system appears to be on the verge of another round of bailouts and money printing) ...
I'd just like to point out that the famous prediction that: "bitcoin's going to $1,000"
(as referred to in the sentence labelled (A) above). .. is much more likely
to come true if we see continued banking bailouts (money printing) mentioned in (B).
Let's imagine that this scenario does in fact play out.
1. a price peg would presumably hinder BTC's ascent to 4 digits.
2. the escalation of the price of BTC is something most people in the
SR and crypto-currency communities want to see.. ..since we own bitcoins.
In short..
BTC price volatility is good for the long term value of the BTC in your wallet.
It might well be a good idea to go out, buy 10 or 100 of them..
... and lock them away for 5 or 10 years.
But even if a price peg were to be used.. using US Dollars .. it seems to me
is a poor choice.. since the bankers are eroding it's value year by year with
incessant money printing. It would be better to peg it's value against real
money.. perhaps gold.. or a basket of precious metals (gold, silver, platinum)
just a thought :-)
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How about taking an average of the top most used sites for getting bitcoins and creating an average between them. From there you link that to SR and bang you have one of the most fair ways to decide how much the bitcoins should be worth.