Silk Road forums
Discussion => Silk Road discussion => Topic started by: Sc0t1and_Y4rdi3 on April 11, 2013, 01:43 pm
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The out of transaction hedge
I see a lot of shit suggestions in this forum, this is not one of them
i'm sure this is a feature a lot of vendors and purchasers would like. I'm hearing horror stories of vendors with thousands in their account waiting to be cashed in discretely that have lost a lot of money and with hindsight these vendors would have paid a premium, say 8%, for funds to be hedged to protect their value
sure bitcoin is great but volatility in every markets fucks up market forces, this is why we have governments manipulating fiat in the real world. last time during the first bubble we lost a few vendors, this time we will see even more die. those that do stick around will leave and take their customers with them
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The out of transaction hedge
I see a lot of shit suggestions in this forum, this is not one of them
i'm sure this is a feature a lot of vendors and purchasers would like. I'm hearing horror stories of vendors with thousands in their account waiting to be cashed in discretely that have lost a lot of money and with hindsight these vendors would have paid a premium, say 8%, for funds to be hedged to protect their value
sure bitcoin is great but volatility in every markets fucks up market forces, this is why we have governments manipulating fiat in the real world. last time during the first bubble we lost a few vendors, this time we will see even more die. those that do stick around will leave and take their customers with them
How would you hedge the total value of bitcoin sitting in SR accounts? Who would you find to take on the risk of a day like yesterday? Hedging works on transactions because the total BTC in transaction at any one time is manageable, but the total amount of SR accounts might be more risk than anyone would be willing to take. I totally agree that a less volatile market would be fantastic for Silk Road, but if BTC is much bigger than SR, then we have a pretty limited ability to influence the volatility.
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The out of transaction hedge
I see a lot of shit suggestions in this forum, this is not one of them
i'm sure this is a feature a lot of vendors and purchasers would like. I'm hearing horror stories of vendors with thousands in their account waiting to be cashed in discretely that have lost a lot of money and with hindsight these vendors would have paid a premium, say 8%, for funds to be hedged to protect their value
sure bitcoin is great but volatility in every markets fucks up market forces, this is why we have governments manipulating fiat in the real world. last time during the first bubble we lost a few vendors, this time we will see even more die. those that do stick around will leave and take their customers with them
How would you hedge the total value of bitcoin sitting in SR accounts? Who would you find to take on the risk of a day like yesterday? Hedging works on transactions because the total BTC in transaction at any one time is manageable, but the total amount of SR accounts might be more risk than anyone would be willing to take. I totally agree that a less volatile market would be fantastic for Silk Road, but if BTC is much bigger than SR, then we have a pretty limited ability to influence the volatility.
this is why you charge double the standard hedge fee @ 8%, im sure calculations can be run to find an optimal premium
i'm well aware of how hedging works, the idea is not to limit the volatility of btc, clearly we have no effect on that but to instead limit the impact on vendors. a vendor has 100k in account during this crash has lost half it's value. realistically most vendors in that situation would not be able to continue without having their legs cracked
otherwise sr has to allow wiggle room in allowing vendors to carry out bulk transactions outside SR without penislising vendors
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I admit that I did take a tangent into the volatility issue (which is what I've mostly been thinking about lately), but the point still remains that someone would have to be willing to take the risk to pay off the 50% drop and I'm not sure an 8% fee would do that. Or ... the hedge could be run like AIG did in 2007-2008, just take the 8% and when the bill comes due, just say "oh, too bad, I fucked up and I can't pay suckers!"
Seriously, though, the 50% that everyone lost yesterday (not just the vendors) was money that they gained in the few days prior. The only true short term exposure is in the bitcoins involved in transactions (you give me 1 bitcoin and I'll give you drugs that I paid $x for).
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Let's just run it as a ponzi scheme. By the time critical mass approaches and funds are about to run out the value of BTC should rise solving everything
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Seriously, though, the 50% that everyone lost yesterday (not just the vendors) was money that they gained in the few days prior.
Not for people who bought their coins at over $210 each like me.
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Seriously, though, the 50% that everyone lost yesterday (not just the vendors) was money that they gained in the few days prior.
Not for people who bought their coins at over $210 each like me.
lol
you made it possible for me to cash out at $190 and I will always be grateful to you for helping me feed my kids
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Seriously, though, the 50% that everyone lost yesterday (not just the vendors) was money that they gained in the few days prior.
Not for people who bought their coins at over $210 each like me.
lol
you made it possible for me to cash out at $190 and I will always be grateful to you for helping me feed my kids
Glad I could help. I spent all my money though. I will never let these go!
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Fuck .
1. Fake ID off Silk Road
2. Use it to open a bank account
3. Use it for PayPal and link to bank account
4. Use it for bit coin exchange verification
Start taking western union money order/money gram / cash in mail via express post.
The risks are the same as bitcoin. If you know your customers and vendors its not so bad.
You can also hire homeless people to run your risky errands for you. They gladly help.
Selling drugs is bad any way you look at it. Might as well also get the fake ID and people to do your dirty work for you.
Just a thought.
With the fake ID you can cash out. Carders do it all the time.