Silk Road forums
Support => Technical support => Topic started by: LionwareTradingCo on February 20, 2013, 03:22 pm
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Why did some money end up on one side and some on the other?
Sorry if this is an obvious answer.
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I'm not sure what you are asking? more detail please.
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he is asking about the account page.
most prices are hedged and will end up in the usd:
http://dkn255hz262ypmii.onion/wiki/index.php?title=Buyer%27s_Guide#Escrow_hedge
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Some of these posts lack clarity, yeah what he said ^^^^
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I'm taking a guess at this, correct me if I'm wrong, but I think it has to do with whether or not the price of the item is tied to bitcoin or currency (USD, in this case). It has its pros and cons.
A vendor has 2 choices to set up a listing:
1) make it a fixed bitcoin price (meaning that it takes a certain amount of bitcoin to purchase it, regardless of what value the bitcoin has in relation to the dollar) - the benefit of this is that while in escrow, your amount is fixed in bitcoin, so regardless of what happens, if you decide to cancel or there is a refund, you get the bitcoin back in full - the bad side is that as the price of bitcoin goes up, it takes more to purchase (1 bitcoin = $30 today, maybe $32 tomorrow, etc...)
2) make it fixed dollar price -- the benefit to this is that the price of it will fluctuate in bitcoin, but not dollars ($30 today, will be $30 tomorrow, regardless of what the value of 1 bitcoin is) -- the bad side is that while in escrow (in USD), if you purchased it originally for $30 (1 Bitcoin) and then something happens a week from now and you get a refund, but the value of bitcoins is now $40 for 1BTC - your refund will be .75 BTC (not the 1BTC you originally purchased it with).
The one thing I'm not sure about is whether or not the vendor has a choice in how your money will be fixed while in escrow (USD vs BTC) or if it is tied directly to how the listing is fixed.
Hope this helps (hope its correct) -- if I'm wrong, I would love to know exactly how it works myself (does the vendor have a choice?)
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The one thing I'm not sure about is whether or not the vendor has a choice in how your money will be fixed while in escrow (USD vs BTC) or if it is tied directly to how the listing is fixed. I would love to know exactly how it works myself (does the vendor have a choice?)
Not sure myself, it's a little confusing... Maybe this helps: On my settings page, after the option to peg listing to USD or BTC, is an option to either hedge escrow(recommended) or to expose escrow. I'm assuming this might refer to the actual hedging option, which is why it is recommended, because SR gets the hedge fee then. So that might not answer your question. There is no other option on my settings page related to this.
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I'm taking a guess at this, correct me if I'm wrong, but I think it has to do with whether or not the price of the item is tied to bitcoin or currency (USD, in this case). It has its pros and cons.
A vendor has 2 choices to set up a listing:
1) make it a fixed bitcoin price (meaning that it takes a certain amount of bitcoin to purchase it, regardless of what value the bitcoin has in relation to the dollar) - the benefit of this is that while in escrow, your amount is fixed in bitcoin, so regardless of what happens, if you decide to cancel or there is a refund, you get the bitcoin back in full - the bad side is that as the price of bitcoin goes up, it takes more to purchase (1 bitcoin = $30 today, maybe $32 tomorrow, etc...)
2) make it fixed dollar price -- the benefit to this is that the price of it will fluctuate in bitcoin, but not dollars ($30 today, will be $30 tomorrow, regardless of what the value of 1 bitcoin is) -- the bad side is that while in escrow (in USD), if you purchased it originally for $30 (1 Bitcoin) and then something happens a week from now and you get a refund, but the value of bitcoins is now $40 for 1BTC - your refund will be .75 BTC (not the 1BTC you originally purchased it with).
The one thing I'm not sure about is whether or not the vendor has a choice in how your money will be fixed while in escrow (USD vs BTC) or if it is tied directly to how the listing is fixed.
Hope this helps (hope its correct) -- if I'm wrong, I would love to know exactly how it works myself (does the vendor have a choice?)
So this is partially true...
A listing can be pegged to the USD, this means that as bitcoin fluctuates up and down the listing will remain at the same USD price and BTC will adjust accordingly.
A listing can also be pegged to btc which means if you listed for 1BTC and they were $35 today, and they go up tomorrow to $45 your price just increased with the btc value.
Most vendors peg to the USD, however that doesn't really apply to escrow.
Escrow can be hedged as described above, which means regardless of the fluctuation in bitcoin you still get the same USD back if you get a refund, or the vendor gets the USD value at the time of purchase in BTC when finalized.
If unhedged, then the buyer/vendor take the risk of BTC falling in value between when the item was purchased and the coins released (in either direction).
In several cases there are things for sale that are of lower cost (i.e. have higher margins) and thus will be pegged to the USD but then unhedged so if there is a rise the vendor gets that increase, I do this on several of my listings because the cost is more time than it is materials. However if what you vend's cost is more material than time or otherwise product inventory then hedging is probably in your best interest.
If you have an order in transit and it's hedged, you will see it listed in escrow in the USD slot, if it's unhedged you will see it in the BTC slot.
Hope that clarifies things