Silk Road forums
Discussion => Silk Road discussion => Topic started by: muskabuzz on April 11, 2013, 04:48 pm
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At the time of this post SR is transacting as if bitcoins are worth usd160
btc-e is trading btc at 91
bitfloor is at 90
Mt Gox has suspended trading
Obviously this creates an arbitrage, buy on the exchanges and spend on SR for a 60% gain. The problem is that the loser is the seller, who is inclined to cancel the purchase rather than take a loss. This can only create cascading problems for everyone in our community.
Though it may be a difficult time for bitcoins SR needs to show honest leadership and continue trading on the only basis we can find. No matter how uncomfortable that may be it is is far better than the losses - of both money and trust - that a false pretense sires.
Muskabuzz
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I was going to purchase GL's coupons this weekend, but decided to hold off until everything stabilizes. Don't like the idea of a solid vendor not getting all his money just due to a technical issue.
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ditto!! also all orders in escrow will be finalized at the wrong rate hedged to the USD... i don't know what the solution should be but you should do something about it... we are all going to incur ridiculous losses at this rate!
trading may have to be suspended across SR until BTC stabilizes as we are going to go bust if we don't get the correct USD value of our hedged orders
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Obviously this creates an arbitrage, buy on the exchanges and spend on SR for a 60% gain. The problem is that the loser is the seller, who is inclined to cancel the purchase rather than take a loss.
That's what hedging is for.
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ditto!! also all orders in escrow will be finalized at the wrong rate hedged to the USD... i don't know what the solution should be but you should do something about it... we are all going to incur ridiculous losses at this rate!
trading may have to be suspended across SR until BTC stabilizes as we are going to go bust if we don't get the correct USD value of our hedged orders
you think they care ? ???
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Sshhhhhb! Dumb ass.
I got a pile of CPI s transfering over
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That's what hedging is for.
No, this is not a matter of taking a position and deciding to hedge it or not; it is a matter of an honest exchange rate. The SR hedge feature itself is tied to the false rate which enables a perverse game of its own but that is not what we are here for.
We are here to serve clients and would like to return to this with the actual BTC exchange rate, however unattractive that reality may be.
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This could hurt a buyer, too.
I exchanged $2,000 USD into bit coins over 2 days in order to make a purchase for "X" BTCs.
I put in my real USD, and spent the BTCs immediately after I got them, and now the order is 'processing'. If that were to be cancelled, to protect the vendor, then I'm obviously out a large % of my USD, due to the bitcoin crash since I put in my order.
I'm not saying any of you are wrong, but it can go both ways. I'm not proposing to have a solution. Just bitching.
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This could hurt a buyer, too.
I exchanged $2,000 USD into bit coins over 2 days in order to make a purchase for "X" BTCs.
I put in my real USD, and spent the BTCs immediately after I got them, and now the order is 'processing'. If that were to be cancelled, to protect the vendor, then I'm obviously out a large % of my USD, due to the bitcoin crash since I put in my order.
I'm not saying any of you are wrong, but it can go both ways. I'm not proposing to have a solution. Just bitching.
Heres to hoping the Inflated prices of drugs can survive the deflation of BTC. This SR has been an experiment. Some drugs seem like miracles until you find out your balls turned blue and your children will be born as wookies never to see in color or speak any language other than Bark.
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bought about 5 items ;) do you think the vendors will cancel them? :( dam
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I have gotten about 40 orders, packed them and only then found out about this. I will honor the orders because I guess most customers must have lost out as well in the BTC crash but since im on expose escrow this puts me several thousands of $ out of pocket. Every person who bought on SR with the intention of defrauding vendors by arbitraging the wrong exchange rate should be ashamed. To everyone with honest intentions, no harm done.
I will have considerable less capital to restock now but will work my way to the top again, im sure all you guys will help me with that by ordering again once the BTC price is reflected correctly on SR.
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Isn't fulfilling hedged orders safe for vendors right now?
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Isn't fulfilling hedged orders safe for vendors right now?
your bigger issue is your current listings hancock. check them against the current market price for btc https://bitfloor.com/
this is what you are actually selling your items for
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Isn't fulfilling hedged orders safe for vendors right now?
your bigger issue is your current listings hancock. check them against the current market price for btc https://bitfloor.com/
this is what you are actually selling your items for
wow
67 dollars .. :o
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Isn't fulfilling hedged orders safe for vendors right now?
Disclaimer: vendor here.
Yes, I believe so. Although you still have to get that money out and converted to USD before price fluctuates more.
Anyway, I agree with the overall premise of the thread, that there was an issue with price being pegged to the Gox weighted average yesterday. A better way of updating the currency could be useful.
The thing is, though, that there is ALREADY a method for vendors staying safe from this type of problem. You use the hedging option. Nearly every vendor is using expose escrow because the price has been going up so much that they gained from doing so. Yesterday and today the price DROPPED big time, and those vendors that are exposed lose a bunch of money.
There's nothing wrong with this, that's the vendor's choice. And I don't want to hear other vendors bitching about losing a ton of money because they DECIDED to go exposed. How much profit have the already made staying exposed? A LOT. And that's because you're taking a high risk / high reward option. That's all fine.
One REAL problem that I see is that vendors that WERE hedged could have gotten screwed if their buyers finalized while SR's price was at $230 while the actual price of coin was at $150. That's just because of the same issue of price updating, though, which needs to be fixed.
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Well it looks like someone is reading this thread, my price per bitcoin dropped to 70 per and then back up to 120 (I think someone pegged it at current market price and then switched it over to 24 hour average on one of the none frozen exchanges).
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Fuck, Mine dropped big time too, as I was just about to make a purchase. DAMNIT!
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This crash is likely going to cause most vendors to cancel all processing orders...I don't blame them though, I just wish I wouldn't have placed 2 orders before I checked the trading sites :-[ the site's lagged exchang rate is fucking everyone over.
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there is ALREADY a method for vendors staying safe from this type of problem. You use the hedging option.
no friend, the hedge is only effective against a drop in the value of the SR's BTC price.
the issue for SR is not the drop in the value of BTC (we all need to mange these risks and the hedge works for this) it is the false exchange rate inside our garden.
you bring up a very important point though, the underlying source of the problem is the mt gox average. with the current panic gox is regularly shutting down trading and reporting old prices.
redskull what you see is an update to the average gox price, this is still nearly double the real exchange rate on open markets.
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So, if I have a small order from a vendor I like that's already in transit, would it'd be best to FE to ensure that they get the proper dollar amount for their product? Given the rapid decline, I'd hate to see my trusted vendors get ripped off (I know crazy of me) or does hedging orders protect the from this decline? I'm under the impression that it doesn't.
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there is ALREADY a method for vendors staying safe from this type of problem. You use the hedging option.
no friend, the hedge is only effective against a drop in the value of the SR's BTC price.
the issue for SR is not the drop in the value of BTC (we all need to mange these risks and the hedge works for this) it is the false exchange rate inside our garden.
you bring up a very important point though, the underlying source of the problem is the mt gox average. with the current panic gox is regularly shutting down trading and reporting old prices.
redskull what you see is an update to the average gox price, this is still nearly double the real exchange rate on open markets.
ignore moxycotton, he doesn't have a fully functioning brain
I addressed this hedging issue in this thread http://dkn255hz262ypmii.onion/index.php?topic=145730.0 DPR was messaged requesting a response. Since he is the only one that services the main site this issue will probably remain unresolved for a little while
in this thread I addressed the obvious perils of unhedged listings http://dkn255hz262ypmii.onion/index.php?topic=137501.15
It's not that I possess more intelligence than everyone it's just the vast majority posses significantly less than me
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Sellers are better off waiting until mtgox resumes trading. I don't think the price on other exchanges is reliable in the current state because of their low volume compared to mtgox, a lot of people are dumping their btc due to fear that the mtgox price will crash when it resumes.
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wow
http://preev.com/ $61 dollars :o
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Note now it has reversed so buyers are hurt:
Buy btc in the open market for gox last price = us$109
-> bring it here and its only worth us$85 (mt gox avg price) sadly
The volatility of bitcoins makes average price spread far away from last price. Since we use the average on SR either buyer or seller will always be at a disadvantage when this occurs.
Again this has nothing to do with the hedging option it's that simply that last price is the way to go, it appears even blockchain.info changed to this yesterday.
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Note now it has reversed so buyers are hurt:
Buy btc in the open market for gox last price = us$109
-> bring it here and its only worth us$85 (mt gox avg price) sadly
The volatility of bitcoins makes average price spread far away from last price. Since we use the average on SR either buyer or seller will always be at a disadvantage when this occurs.
Again this has nothing to do with the hedging option it's that simply that last price is the way to go, it appears even blockchain.info changed to this yesterday.
Not to mention most of the exchanges are still wildly different from each other. I prefer to use Bitfloor, which is 30 dollars above the Gox average. BTC-e is a bitch to get money into from what I have heard (and is also 10$ above Gox avg), and Bitinstant has been in decline from what I have read.
Perhaps use an aggregate avg of BTC-e, Gox,and Bitfloor last prices? Got a couple things I REALLY want/need to get, but unless I use Gox I'm losing money...and I hate Gox with a passion >:(