Silk Road forums
Discussion => Silk Road discussion => Topic started by: ladyjane on March 24, 2013, 02:19 am
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I need some advice SR. I'm still fairly new and have placed a few orders which have all been hedged. I'm now looking at ordering and it's unhedged.
I've read the wiki and through most of the threads and think I get the basic difference and reasons between the two. I'm just wondering, strictly from a buying point of view (not worrying about refunds for the moment) does it make any difference to me as a buyer?
With the hedged order, once you've put the order in the moneys in escrow and nothing more to think about. Is it the same with unhedged? You put in X amount of bitcoins to the escrow, and whatever value they end up being is what the vendor gets, but that doesn't affect the buyer as you've already put them into escrow? Or does the amount of bitcoins you pay vary and is not set until finalizing?
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Nah, what you is what you pay. Only once .
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So the amount of bitcoins is still locked in and it's just what the vendor recieves cash wise will fluctuate? (and what the buyer would get back in a cancellation / refund would also flucuate)
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Hey Jane! The unhedged escrow does not affect you as a buyer. Once youve placed your order there is nothing for you to worry about with the BTC fluctuations. If an item was $100 in BTC when you ordered, you will only pay that $100, nothing more and nothing less.
The unhedged escrow essentially affects the seller if they choose to use this option. It simply fluctuates the coin in escrow with the current BTC rates.
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Thanks XXXotica, was pretty sure that was the case but just needed some reassurance :D
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I have been struggling with this concept today as well. What if the $100 is 1.3 BTC today when you order, but when you finalize the BTC is worth less so its 2 BTC. Do you end up paying 2 BTC?
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I have been struggling with this concept today as well. What if the $100 is 1.3 BTC today when you order, but when you finalize the BTC is worth less so its 2 BTC. Do you end up paying 2 BTC?
From what I understand is once you place an order your price is locked in as a buyer. So if the LSD is $100 and that equals 1.3 BTC , 1.3 BTC goes to escrow and you have paid. If the BTC rate falls and 2 bitcoin is needed, that won't affect you as a buyer as you have paid. When you finalize, if the purchased was Hedged by the vendor, the extra bitcoins comes from somewhere else (DPR/SR/Market/Who Knows) so the vendor still gets the value of $100. If the listing is Unhedged, the vendor gets the current dollar value only so will get less than $100, but your paying is done.
^^ This only refers to buying not refunds or cancellations tho. I feel pretty sure I have it right, hopefully I will get corrected if I am wrong :D
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It must be noted that the below examples do not include SR commission and SR hedging commission and BTC is shown at a round figure for simplicity
Unhedged escrow:-
Buyer places an order for 1BTC and 1BTC is in escrow. When buyer receives their good 1BTC is released to the seller regardless of BTC price. In the event of a dispute any refunds will be calculated on the bitcoin. For example a 50% refund is agreed the buyer will receive 0.5BTC and the vendor will receive 0.5BTC.
Hedged escrow:-
Buyer places an order at 10am on 25 March 2013 for 1BTC and $100 is in escrow. The buyer receives their goods on 27 March and the bitcoin price has up to $200. 0.5BTC ($100) is released to the seller. In the event of a dispute any refunds will be calculated on the dollar. For example a 50% refund is agreed on 27 March 2013 where the bitcoin price is $200. The buyer will receive 0.25BTC ($50) and the vendor will receive 0.25BTC ($50).
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I need some advice SR. I'm still fairly new and have placed a few orders which have all been hedged. I'm now looking at ordering and it's unhedged.
I've read the wiki and through most of the threads and think I get the basic difference and reasons between the two. I'm just wondering, strictly from a buying point of view (not worrying about refunds for the moment) does it make any difference to me as a buyer?
With the hedged order, once you've put the order in the moneys in escrow and nothing more to think about. Is it the same with unhedged? You put in X amount of bitcoins to the escrow, and whatever value they end up being is what the vendor gets, but that doesn't affect the buyer as you've already put them into escrow? Or does the amount of bitcoins you pay vary and is not set until finalizing?
Unhedged listings increase the probability of your package not arriving when the price of bitcoin falls.
Look back to last week when the price of coin peaked at $75 and then fell sharply to $55 as people liquidated their positions. Keep in mind this fall happened over a couple of days. Now most vendors mark packages in transit a couple of days before actually sending them and if the price of coin was to suddenly drop during that period how many vendors would actually send out that package? The vast majority of hedged vendors would as the price fluctuations doesn't effect them with respects to the dollar amount received. Conversely a large number of unhedged vendors would most likely not send the package if the fall in coin results in a lower or negative profit margin. When the order gets taken to the resolution centre the unhedged vendor wins again by receiving half the coin for an order that was never sent and the buyer loses out twofold by receiving half the coins that have now reduced in value.
2 types of vendors that don't use hedging, the incredibly intelligent that have a knack of predicting short to mid term movements in the market and the stupid dumb fucks who don't understand the concept or implications of hedging. Most vendors here fall into the second category for fairly obvious reasons.
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Don't pay any attention to that guys post above. It does not increase the probability of your package not arrive if the vendor hedges.
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What about, an order has been placed but the vendor suddenly disappears and no sign of them logging on passed the 4 day period and I end up canceling.and the coins were not in hedge. In that case do I get the amount of coins I originally placed the order with or dollar amount?
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What about, an order has been placed but the vendor suddenly disappears and no sign of them logging on passed the 4 day period and I end up canceling.and the coins were not in hedge. In that case do I get the amount of coins I originally placed the order with or dollar amount?
Yes you would. If the vendor hedged you would get the amount your order as at the time of placing the order.
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Don't pay any attention to that guys post above. It does not increase the probability of your package not arrive if the vendor hedges.
Fuck me you're stupid
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What about, an order has been placed but the vendor suddenly disappears and no sign of them logging on passed the 4 day period and I end up canceling.and the coins were not in hedge. In that case do I get the amount of coins I originally placed the order with or dollar amount?
Yes you would. If the vendor hedged you would get the amount your order as at the time of placing the order.
hahaha you really are fucking stupid
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I encourage anyone who doubts me to search forum posts from June 2011, the last significant bitcoin crash. Around this period there was a significant increase in the number of vendors that had major loses from money sitting in their account and then suddenly disappeared after they requested FE and packages didn't arrive
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What about, an order has been placed but the vendor suddenly disappears and no sign of them logging on passed the 4 day period and I end up canceling.and the coins were not in hedge. In that case do I get the amount of coins I originally placed the order with or dollar amount?
Use your brain it isn't that difficult to work out
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Nevermind ...I used a partial of my brain and figured it out...
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I encourage anyone who doubts me to search forum posts from June 2011, the last significant bitcoin crash. Around this period there was a significant increase in the number of vendors that had major loses from money sitting in their account and then suddenly disappeared after they requested FE and packages didn't arrive
Fuck me you're stupid. Yes, shit like that happens hence the reason for the hedging option being in place. Also, you are talking about 1 incident which happened just under 2 years ago when SR was new and Bitcoin was only 2 years old.
Stop talking shit and do your business.
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So I am not great with math and all, but....
If you place an order and its say 1btc that is worth $50. Now that same bitcoin jumps to $70 by the time you finalize. Do you get credited back the extra $20?
Or does that 1 coin remain gone from your wallet and the vendor makes that $20 profit?
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I encourage anyone who doubts me to search forum posts from June 2011, the last significant bitcoin crash. Around this period there was a significant increase in the number of vendors that had major loses from money sitting in their account and then suddenly disappeared after they requested FE and packages didn't arrive
Fuck me you're stupid. Yes, shit like that happens hence the reason for the hedging option being in place. Also, you are talking about 1 incident which happened just under 2 years ago when SR was new and Bitcoin was only 2 years old.
Stop talking shit and do your business.
reading and comprehension aren't your strong points are they?
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Don't pay any attention to that guys post above. It does not increase the probability of your package not arrive if the vendor hedges.
I mean really???
I'm convinced danknugdumb posts are being written by a monkey or a clever nigger
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So I am not great with math and all, but....
If you place an order and its say 1btc that is worth $50. Now that same bitcoin jumps to $70 by the time you finalize. Do you get credited back the extra $20?
Or does that 1 coin remain gone from your wallet and the vendor makes that $20 profit?
the $20 gain in value is stored in a buffer fund to provide extra liquidity in the market place. make a note of any gains you notice and at the end of the SR financial year you can claim it back after filling in the cashback section under my account on your SR profile
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So I am not great with math and all, but....
If you place an order and its say 1btc that is worth $50. Now that same bitcoin jumps to $70 by the time you finalize. Do you get credited back the extra $20?
Or does that 1 coin remain gone from your wallet and the vendor makes that $20 profit?
the $20 gain in value is stored in a buffer fund to provide extra liquidity in the market place. make a note of any gains you notice and at the end of the SR financial year you can claim it back after filling in the cashback section under my account on your SR profile
Finally a decent intelligently written post. I won't get into a sparring match over who's point is more valid in regards to package arrivals so chill out with your nonsense shit talk all in the space of 8 minutes.
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I need some advice SR. I'm still fairly new and have placed a few orders which have all been hedged. I'm now looking at ordering and it's unhedged.
I've read the wiki and through most of the threads and think I get the basic difference and reasons between the two. I'm just wondering, strictly from a buying point of view (not worrying about refunds for the moment) does it make any difference to me as a buyer?
With the hedged order, once you've put the order in the moneys in escrow and nothing more to think about. Is it the same with unhedged? You put in X amount of bitcoins to the escrow, and whatever value they end up being is what the vendor gets, but that doesn't affect the buyer as you've already put them into escrow? Or does the amount of bitcoins you pay vary and is not set until finalizing?
Unhedged listings increase the probability of your package not arriving when the price of bitcoin falls.
Look back to last week when the price of coin peaked at $75 and then fell sharply to $55 as people liquidated their positions. Keep in mind this fall happened over a couple of days. Now most vendors mark packages in transit a couple of days before actually sending them and if the price of coin was to suddenly drop during that period how many vendors would actually send out that package? The vast majority of hedged vendors would as the price fluctuations doesn't effect them with respects to the dollar amount received. Conversely a large number of unhedged vendors would most likely not send the package if the fall in coin results in a lower or negative profit margin. When the order gets taken to the resolution centre the unhedged vendor wins again by receiving half the coin for an order that was never sent and the buyer loses out twofold by receiving half the coins that have now reduced in value.
2 types of vendors that don't use hedging, the incredibly intelligent that have a knack of predicting short to mid term movements in the market and the stupid dumb fucks who don't understand the concept or implications of hedging. Most vendors here fall into the second category for fairly obvious reasons.
Quoting this
Gonna enjoy watching the next couple of weeks unfold on the SilkRoad
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How can i tell if my order was hedged or not? I know it tells me at the shopping cart, but now where is it located after i have placed the order?
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How can i tell if my order was hedged or not? I know it tells me at the shopping cart, but now where is it located ?
In your shopping cart there should be the following headings
seller item price quantity sub-total postage total hedged
It should say hedged or unhedged under that
BTW I wouldn't order now, the mtgox weighted average price has not updated for an hour, more than likely all orders placed in the past couple of hours will get cancelled.
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So in answer to my question, i figured out that there is no place it officially tells you if the order was hedged or not after you leave the shopping cart.
HOWEVER, if you look at your transactions , and click on the transaction# it will bring you to the order information. If you look down at the "total price:", it'll read either in BTC or $$$.
If it is $$$ it is hedged, and if it is BTC's its NOT hedged.
Not agreeing with Sc0t1and_Y4rdi3, but i CAN see what he is saying....
I just bought earlier this morning for something that was $189. It was unhedged and it is now worth of
.76BTC's@ $150eaBTC = 114. So unless the vendor is cool with the $75 loss ... he has a decision to make....
a) Continue with the order and honor your business
b) Selective scam, and mitigate the loss
c) Cancel the order and bone the buyer, because i would only receive the BTC's that i put in escrow back.
So i think it is safe to say that the hedged option protects not only the vendor, but the buyer also. So like Sc0t1and_Y4rdi3 said, unless the vendor knows the market and how the prices of BTC's will fluxuate, and not to mention understand shipping times so that they know when they will receive the BTC's... its not a good idea to used unhedged.
Just my opinion guys =P don't taze me brahges!
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Finally! Someone that has a fully functioning brain