Silk Road forums
Discussion => Silk Road discussion => Topic started by: HardHustle on July 18, 2012, 07:27 am
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I understand that the listings are pegged on USD and you can hedge escrow and all that - that's all well and good. But what I'm wondering is what about the btc actually in our accounts? Are they pegged on USD as well, or are they just at the mercy of the fluctuations? I ask this because even tho the btc price fluctuates pretty widely throughout the day, my btc balance stays the same. I imagine if the dollar/btc exchange rate went down, I'd have more btc in my account, and if it went up, I'd have less. Of course everythings fine now because you have btc increasing in value, but obviously it will come back down again at some point, and I don't know whether or not my balance will actually suffer because of that. Knowing SR, I doubt this is the case, but I'm just wondering exactly how it's done and why, if it is, that my balance in my account remains the same.
Sorry if this sounds kind of foolish. I really SHOULD know this type of thing by now but I've just never had a problem with it/noticed it until now.
Thanks
~HH
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Only read the title but: YES SO MUCH SO YES HOLY SHIT YES.
About a year ago when bitcoins peaked at 30 dollars, a shitload of transactions went down and a LOT of vendors lost out before of the finalization-time and the price dropping just as quick back down to 17 and under.
What happened is that, say, someone buys a pound of weed for $3800 at $30ish per bitcoin, so 126 bitcoins. Then the vendor ships it, bitcoin price tanks, person receives, vendor only gets $2140 worth.
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Only read the title but: YES SO MUCH SO YES HOLY SHIT YES.
About a year ago when bitcoins peaked at 30 dollars, a shitload of transactions went down and a LOT of vendors lost out before of the finalization-time and the price dropping just as quick back down to 17 and under.
What happened is that, say, someone buys a pound of weed for $3800 at $30ish per bitcoin, so 126 bitcoins. Then the vendor ships it, bitcoin price tanks, person receives, vendor only gets $2140 worth.
No this wasn't what I was talking about and they DO have a system in place to prevent this exact type of thing from happening - the "hedging" option for escrow. I was talking about the actual btc you have in your account I just don't understand why you can't just simply keep btc in your account and have the option to either peg it on the dollar or not just like you do with listings and escrow. idk it's just very strange to me.
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To peg it to the dollar, you'd have to lose or gain bitcoins over time. That is, yes, even just keeping it in your account can be a risk... or a gain. If it goes up, you win. If it goes down, you lose. Best to cash out immediately. Sorry I didn't actually go back to read your post and see that I'm an idiot.
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To peg it to the dollar, you'd have to lose or gain bitcoins over time. That is, yes, even just keeping it in your account can be a risk... or a gain. If it goes up, you win. If it goes down, you lose. Best to cash out immediately. Sorry I didn't actually go back to read your post and see that I'm an idiot.
Yeah but I just got to thinking that's kind of retarded if you think about it. Why wouldn't DPR just peg account btc's on the dollar like he did everything else? I feel like there's something here I'm simply just not getting.
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To peg it to the dollar, you'd have to lose or gain bitcoins over time. That is, yes, even just keeping it in your account can be a risk... or a gain. If it goes up, you win. If it goes down, you lose. Best to cash out immediately. Sorry I didn't actually go back to read your post and see that I'm an idiot.
Yeah but I just got to thinking that's kind of retarded if you think about it. Why wouldn't DPR just peg account btc's on the dollar like he did everything else? I feel like there's something here I'm simply just not getting.
Because that would literally be giving or taking bitcoins away from accounts, as the price changes. SR operates on bitcoins, not on dollars. The "show all in USD" and "peg listing to dollars" stuff is just about showing people the dollar-value of their purchases, nothing more.
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I understand that the listings are pegged on USD and you can hedge escrow and all that - that's all well and good. But what I'm wondering is what about the btc actually in our accounts? Are they pegged on USD as well, or are they just at the mercy of the fluctuations? I ask this because even tho the btc price fluctuates pretty widely throughout the day, my btc balance stays the same. I imagine if the dollar/btc exchange rate went down, I'd have more btc in my account, and if it went up, I'd have less. Of course everythings fine now because you have btc increasing in value, but obviously it will come back down again at some point, and I don't know whether or not my balance will actually suffer because of that. Knowing SR, I doubt this is the case, but I'm just wondering exactly how it's done and why, if it is, that my balance in my account remains the same.
Sorry if this sounds kind of foolish. I really SHOULD know this type of thing by now but I've just never had a problem with it/noticed it until now.
Thanks
~HH
if you had 1 BTC in SR, regardless of what the BTC was doing in the market you will still have 1BTC . It will increase or decrease in value.. so let say, at the time of my buy, if 1 BTC was worth 100 USD and i wanted to buy a bag of weed listed at 1BTC or 100USD.. i would could buy... But if you saved your BTC and it went up now its worth 120USD... the seller should adjust his BTC weed cost. lets say he still wants 100USD for the same bag of weed, his BTC cost would read .833 BTC.. NOW if the value of your bit coin went down to 90USD then you would need 1.111 BTC to buy that same bag of weed listed at 100USD.....I think my math is right , but if not you get the idea i hope..THIS IS JUST AN EXAMPLE....for all you anal math nerds... :P
K fuck this no one is even getting what I'm asking so I'm just gonna assume we are at the mercy of the fluctuations. Thanks.
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I understand that the listings are pegged on USD and you can hedge escrow and all that - that's all well and good. But what I'm wondering is what about the btc actually in our accounts? Are they pegged on USD as well, or are they just at the mercy of the fluctuations? I ask this because even tho the btc price fluctuates pretty widely throughout the day, my btc balance stays the same. I imagine if the dollar/btc exchange rate went down, I'd have more btc in my account, and if it went up, I'd have less. Of course everythings fine now because you have btc increasing in value, but obviously it will come back down again at some point, and I don't know whether or not my balance will actually suffer because of that. Knowing SR, I doubt this is the case, but I'm just wondering exactly how it's done and why, if it is, that my balance in my account remains the same.
Sorry if this sounds kind of foolish. I really SHOULD know this type of thing by now but I've just never had a problem with it/noticed it until now.
Thanks
~HH
if you had 1 BTC in SR, regardless of what the BTC was doing in the market you will still have 1BTC . It will increase or decrease in value.. so let say, at the time of my buy, if 1 BTC was worth 100 USD and i wanted to buy a bag of weed listed at 1BTC or 100USD.. i would could buy... But if you saved your BTC and it went up now its worth 120USD... the seller should adjust his BTC weed cost. lets say he still wants 100USD for the same bag of weed, his BTC cost would read .833 BTC.. NOW if the value of your bit coin went down to 90USD then you would need 1.111 BTC to buy that same bag of weed listed at 100USD.....I think my math is right , but if not you get the idea i hope..THIS IS JUST AN EXAMPLE....for all you anal math nerds... :P
K fuck this no one is even getting what I'm asking so I'm just gonna assume we are at the mercy of the fluctuations. Thanks.
I run into people NOT understanding my point on here all too often. too many drugs I suppose. Let me take a stab at it and say to you YES. you are correct. Best thing to do is move your coins off of your vendor accnt and to a place where you can either hold them as BTC or convert them to USD/EURO as soon as the exchange is at a price that you like. Mt.Gox allows you to place "sell orders" so that You can take the BTC you have there and put an "offer" out to sell. But only sell @ $X.XXUSD. So your BTC sits there until somone is willing to pay $X.XX for it, and then it is converted to USD for you.
Does that help answer?
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Ok, so now you move the BTC from SR to a trading platform....and deposit the BTC in the account. this would give you the ability to play the market and if you done well increase the number of BTC's . The quantity of BTC's and the value of BTC's are two different things. I can have 100 BTCs valued at 100USD or i can 1 BTC valued at 100USD..yes we are at the mercy of fluctuations. but not at the mercy of the value. as long as the product you are buying is compensated to those ups and downs. The SR market could not survive if fluctuations were that unstable. Otherwise how could you buy something today and have it not worth nothing tomorrow. This is why its important for the seller and buyer to make the deal, ship the goods and get there BTCs fast so they can cash them in or deposit them in a Trading platform. But i would suspect most would cash them in as fast as they could to avoid loosing money. Unless they want to let the BTC sit and see if the value increases before they cash them in....either way your playing the market.
Agreed, but waiting for a buyer to autofinalize aka 17days is hardly "quick" not when the BTC fluxs 2 or 3 USD whole dollars in a day. As far as the market is concerned, you win some and you lose some. In order to bet the market, you need to have your BTC on hand. ready to move, not 3 days away on a wire transfer and certainly not 17 days away wait for a sale to AF.
My point of view is any sale made today will be useable to me 1 month from now. It is at that point I will have total control of it to play any market. barring wire transfer or money paks or any laundry or fog service. You have to become rather long sighted as a vendor. it takes a while to get all your ducks in a row..... and I have only been around a month. I still don't have everything that I want set up currently set up.
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I understand that the listings are pegged on USD and you can hedge escrow and all that - that's all well and good. But what I'm wondering is what about the btc actually in our accounts? Are they pegged on USD as well, or are they just at the mercy of the fluctuations? I ask this because even tho the btc price fluctuates pretty widely throughout the day, my btc balance stays the same. I imagine if the dollar/btc exchange rate went down, I'd have more btc in my account, and if it went up, I'd have less. Of course everythings fine now because you have btc increasing in value, but obviously it will come back down again at some point, and I don't know whether or not my balance will actually suffer because of that. Knowing SR, I doubt this is the case, but I'm just wondering exactly how it's done and why, if it is, that my balance in my account remains the same.
Sorry if this sounds kind of foolish. I really SHOULD know this type of thing by now but I've just never had a problem with it/noticed it until now.
Thanks
~HH
if you had 1 BTC in SR, regardless of what the BTC was doing in the market you will still have 1BTC . It will increase or decrease in value.. so let say, at the time of my buy, if 1 BTC was worth 100 USD and i wanted to buy a bag of weed listed at 1BTC or 100USD.. i would could buy... But if you saved your BTC and it went up now its worth 120USD... the seller should adjust his BTC weed cost. lets say he still wants 100USD for the same bag of weed, his BTC cost would read .833 BTC.. NOW if the value of your bit coin went down to 90USD then you would need 1.111 BTC to buy that same bag of weed listed at 100USD.....I think my math is right , but if not you get the idea i hope..THIS IS JUST AN EXAMPLE....for all you anal math nerds... :P
K fuck this no one is even getting what I'm asking so I'm just gonna assume we are at the mercy of the fluctuations. Thanks.
Hi HH,
The answer is yes - the Bitcoins in your account are at the mercy of exchange fluctuations. It helps to think of Bitcoin as just another currency.
Let's say for instance in your desk drawer at home you had 100 South African Rand. If you took those out of the drawer and went to the bank to change them back into dollars you would get roughly USD 12.27 in exchange for them.
Let's say though that you left them in the drawer and the Rand strengthened against the dollar i.e you could buy more dollars with your Rand. You could then take them out of the drawer and take them down the bank and exchange them at the new rate e.g you might USD 14 instead.
In each case you'd still have 100 Rand in your drawer and in each case this is what you would be exchanging. It's the same for the number of Bitcoins in your wallet.
I imagine this is nothing new to you, so bear with me!
Silk Road gives buyers and sellers the option to display prices and your SR account balance in USD. So if for instance I have three Bitcoins in my account and the current rate is USD 6 to the Bitcoins my account balance would show USD 18. If the exchange rate then increased so that one Bitcoin was now worth 7 USD each my account balance would show as USD 21.
Of course this works both ways. If the value of the Bitcoin goes down against the dollar, then the USD equivalent of your Bitcoins would also be lower - nevertheless you would still have three Bitcoins in your wallet.
Let me know if this makes sense.
V.
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you asked..But what I'm wondering is what about the btc actually in our accounts? Are they pegged on USD as well, or are they just at the mercy of the fluctuations? I ask this because even tho the btc price fluctuates pretty widely throughout the day, my btc balance stays the same. I imagine if the dollar/btc exchange rate went down, I'd have more btc in my account, and if it went up, I'd have less.
I answered..1 BTC is one fucking BTC...your not going to see your BTC turn to TWO BTC's, if the BTC value double in a day your 1 single, little BTC will be all by its self, but more valuable... if you don't understand this, please don't do any more drugs
You just summarized for me how btc works. Not what I asked. I asked whether or not we got the btc's in our accounts pegged on the dollar. By that I mean do we have the option to NOT lose or gain any money based on btc fluctuations. You basically just explained to a five year old how currency exchange works. Not what I asked. And no need to tell people you don't know that they're hopelessly stupid drug addicts just because you're angry. I don't indulge anyway.
Didn't ask about hedging escrow/pegging listings. Not the subject of this thread and YES vendors/buyers are protected in those cases. And yea shroomeister I got the point. Thanks.
Idk I just figured you could back the currency with another that fluctuated less, like the dollar, so vendors could be protected. YES, BUYERS ARE PROTECTED I KNOW THIS. But idk why sr can't provide the same level of protection for vendors. I mean a dollar is not worth 2 euro one day and 3 euro the next, but with btc that could sure as fuck occur any old time. In the past week it's gone up like 2 bucks maybe more. So it's not the same thing as having 100 bucks (or rand..) in a drawer. 100 bucks doesn't turn into 120 bucks/80 bucks over a 24 hour period.
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you asked..But what I'm wondering is what about the btc actually in our accounts? Are they pegged on USD as well, or are they just at the mercy of the fluctuations? I ask this because even tho the btc price fluctuates pretty widely throughout the day, my btc balance stays the same. I imagine if the dollar/btc exchange rate went down, I'd have more btc in my account, and if it went up, I'd have less.
I answered..1 BTC is one fucking BTC...your not going to see your BTC turn to TWO BTC's, if the BTC value double in a day your 1 single, little BTC will be all by its self, but more valuable... if you don't understand this, please don't do any more drugs
But idk why sr can't provide the same level of protection for vendors. I mean a dollar is not worth 2 euro one day and 3 euro the next, but with btc that could sure as fuck occur any old time. In the past week it's gone up like 2 bucks maybe more. So it's not the same thing as having 100 bucks (or rand..) in a drawer. 100 bucks doesn't turn into 120 bucks/80 bucks over a 24 hour period.
That's because the dollar price around the world for most currency is fairly stable, it may suck but bitcoin changes a lot and yea you could lose money but why should SR make it so the amount wont change? That's the risk you take dealing in BTC. The product being sold doesn't change value so that's why it varies in price as BTC goes up and down, it just the way it goes once in your account really, i don't see why it should be on SR to lock it at a certain value.
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There are pros and cons
If a vendor has to wait a couple weeks to get their coin.. if the value of btc goes down then they lose money.
Yet the inverse is also true. Those who, during the recent rise of btc value, had money waiting to be released to them from escrow.. will have made a nice profit from it.
And right now I really can't see the value of btc going down, so I think it's pretty good for vendors tbh. Btc is a lot more stable than it used to be.
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Like I said, being a vendor, you have to be rather long sighted. Always have a little stream trickling by you.
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This experiment is trying to get away from the rich or governments or country controlled currencies and make our own ...you in or out?
+ You can buy shrooms with it! .. Fuck yeah IM IN! ;)
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Bitcoins fluctuate constantly and it kind of sucks! But, as others have said, the fluctuations aren't so bad and, unfortunately, you truly are at the mercy of the exchange rates... a small price to pay for anonymity.
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I'm being lazy here and I can't be bothered to read the whole thread (bit fucked) but if you are a vendor you and you are savvy you can turn the fluctuations to your advantage. It just takes effort to be savvy to start with.
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I understand that the listings are pegged on USD and you can hedge escrow and all that - that's all well and good. But what I'm wondering is what about the btc actually in our accounts? Are they pegged on USD as well, or are they just at the mercy of the fluctuations? I ask this because even tho the btc price fluctuates pretty widely throughout the day, my btc balance stays the same. I imagine if the dollar/btc exchange rate went down, I'd have more btc in my account, and if it went up, I'd have less. Of course everythings fine now because you have btc increasing in value, but obviously it will come back down again at some point, and I don't know whether or not my balance will actually suffer because of that. Knowing SR, I doubt this is the case, but I'm just wondering exactly how it's done and why, if it is, that my balance in my account remains the same.
Sorry if this sounds kind of foolish. I really SHOULD know this type of thing by now but I've just never had a problem with it/noticed it until now.
Thanks
~HH
I understand exactly what you mean, and I'm probably answering your question again, but you are VERY much exposed to the dollar value fluctuations of your bitcoin balance. Not sure how much about the whole thing you understand, but think about it this way - you are getting paid in bitcoin, not dollars, and your balance is in bitcoin, not dollars.
If however you have your account set to show dollar prices, TSR simply uses the most recent market price to show you what value your bitcoin currently are worth. It does not take your coins and sell them for you or convert them in any way to dollars for you. When you go to withdraw your balance, it is bitcoin you will get. So those dollars are not real dollars. You have to realize that it is really just an estimate of what your bitcoins would be worth if you could sell all of them instantaneously at the most current market rate.
It is you who ultimately decides on the price of those bitcoin, because when you go to sell them to someone else it is you who decides the price. If it is too low for your liking at a particular time, then hold off until the price rises again.
The best way to protect yourself from these fluctuations is to set your account to 'hedge escrow' instead of 'expose escrow'. If you have expose escrow enabled, you will get the same amount of bitcoin that the customer paid initially no matter what happened to the exchange rate - if it went up, thats great... but if it falls, you stand to lose a lot of money while you wait for the customer to finalize the transaction.
If on the other hand you have hedge escrow enabled, TSR will immediately sell those bitcoins for you at the current market rate as soon as the customer sends payment. Then when they finalize, the dollars that were made from the original sale of those bitcoin are used to purchase back more bitcoin to the same dollar value. So if the price drops, you get more bitcoin but still wind up with the same value in dollars. Likewise, if the price rises you will wind up with less bitcoin than what the customer originally paid but the dollar value will remain the same.
Once the customer finalizes the transaction though, TSR's financial assistance is over. The bitcoin are deposited in your balance, and their dollar value is not hedged. So if you leave the bitcoin sitting in your account you are exposing yourself to a loss in dollar value if the exchange rate falls. So if dollars are what is important to you, the best thing to do is withdraw the bitcoin immediately as soon as the customers finalizes and sell them straight away.
If you choose not to do that, you are basically taking a long position on the bitcoin price i.e. speculating (some call it gambling) that it is going to increase - which is not a bad bet to be honest, at least in the medium/long term. If you are savvy as others have alluded to, you will know that the best time to sell is at the top of the market with the intention of buying back in again at the ground floor and riding the rollercoaster around the track once more. Very profitable if done correctly, potentially disastrous if you don't know what you are doing.
Phew... simple, eh?