Silk Road forums
Discussion => Silk Road discussion => Topic started by: Colonel_Foreskin on December 19, 2012, 10:00 am
-
Correct me if I'm wrong but...
The value of btcs has been rising pretty continuously and the hedging specifically has a detrimental effect to buyers. So if I purchase something, hypothetically, for $100 (10 btc), these btcs are transferred into SR's "bank" where they sit in escrow.
Fast forward one month, and the vendor offers a full refund. Unfortunately for the buyer, the value of a btc has risen 10%. So now when the buyer is refunded, he only receives 9btc.
While I still have the same amount of "cash" in my pocket, where did my extra btc go?
If I put in 10 btc's, and they are not converted into cash at any point, then I should be returned all 10 of my btcs.
Please, if I'm wrong (or confused), correct me.
-
What if the value falls 10%, and you were to get less cash back. Then how would you feel?
It works both ways. The vendor has that money sitting in escrow waiting for the customer to release the payment. If it takes two weeks for the customer to finalize and the bitcoin price plummets, that 100 dollar item the vendor sold isn't worth any less is it?
Its more of an insurance policy.
-
I understand that it's an insurance policy. But in the past year or two, all btcs have done is gain value.
My real question is....Who is getting my extra btc when I'm returned 9 of my initial 10?
So basically, this would give SR incentive to have 100% refunds and cancellations as long as btcs continue to gain value.
-
Escrow hedging is not a scam. DPR can keep all the bitcoins if he wanted to, hedging is also optional so if YOU think its a scam then YOU dont need to select the option that enables hedging on YOUR listings.
-
Woah there Hits.
Was just asking a question to EVERYONE. No need for YOUR animosity. Sorry if YOU woke up a little sad today.
I have previously read that SR/DPR are receiving multiple millions of dollars through this site. From what I understand, this money is being made off of the fees attached to each transaction. Do these final numbers actually include the btcs being pulled in regularly from refunds and cancellations? Or is it strictly limited to SR transaction fees.
Obviously, these numbers are mostly guesstimates, so basically my curiosity is getting the best of me at this point.
-
I am in a good mood everyday but I was a little on the offense because it just seems like there is alot of hate posts about SR and DPR lately.
-
I don't really understand your position... Are you a buyer or vendor?
Even still, if your a buyer you have no say in hedging or not. If you're a vendor then it is 4% of your net on an order.
In answer to your question no it is not a scam but as bitcoin value continues to rise it is a bad financial decision to hedge.
Dank
-
No hate for SR or DPR here.
Not exactly sure what I'd be doing without them.
Probably be a little more productive in life perhaps?
BTW. I am strictly a buyer.
-
I understand that it's an insurance policy. But in the past year or two, all btcs have done is gain value.
My real question is....Who is getting my extra btc when I'm returned 9 of my initial 10?
So basically, this would give SR incentive to have 100% refunds and cancellations as long as btcs continue to gain value.
Its really just protection from the ever fluctuating btc value. Maybe just consider it a charge for services rendered. Its not going to change anytime soon.
-
You obviously havent been here from the start.
there has been many times where BTC take a BIG hit. to the point where vendors were losing money on their deals.
BTC is certainly not guaranteed to keep going up.
-
I remember las year when bitfloor got hacked btc went down to like 4 or 5 dollars a piece, I would of been pissed if I had an order get cancelled after that if it wasn't hedged.
-
no scam although it would look like it.
its simple, all is pegged to the dollar
Suppose my listing is 1 btc for an item
My listing is pegged to the dollar so now you pay (as example) 10 dollar
In time is goes up or down
That means that you need to pay me the 1 btc to do so you need to change it.
When it go down the listing will be say 0.90 btc and for your dollar you will get 0,90 btc
Going up, price is in the listing 1.10 btc. your dollar will get you the 1.10 btc.
Of course this only works when the vendor has his prices PEGGED to the dollar
Now, today you payed 10 btc and refund could be 11 or 9.0...does not matter. When you order now with that or other vendor you will pay the same (say 100 dollar) whether 9 or 11 btc.
Same as you want to change it back... you payed 100 dollar to get 10btc and it changed so your 9 btc will still give you 100 dollar
Sound a bit strange but this is how it works
My items are listed like that and this is the only way of doing honest business and people always pay what it is worth.
10 dollar will stay 10 dollar no matter the btc rate
-
I remember las year when bitfloor got hacked btc went down to like 4 or 5 dollars a piece, I would of been pissed if I had an order get cancelled after that if it wasn't hedged.
I came on the scene right after that. Really wish I would have stocked up on BTC then when they were so dirt cheap. I'm glad that most vendors go by a dollar value on their shit, though, as opposed to a flat value in BTC. Makes the ups-and-downs of the bitcoin market a little less scary on a buyer.
-
no scam although it would look like it.
its simple, all is pegged to the dollar
Suppose my listing is 1 btc for an item
My listing is pegged to the dollar so now you pay (as example) 10 dollar
In time is goes up or down
That means that you need to pay me the 1 btc to do so you need to change it.
When it go down the listing will be say 0.90 btc and for your dollar you will get 0,90 btc
Going up, price is in the listing 1.10 btc. your dollar will get you the 1.10 btc.
Of course this only works when the vendor has his prices PEGGED to the dollar
Now, today you payed 10 btc and refund could be 11 or 9.0...does not matter. When you order now with that or other vendor you will pay the same (say 100 dollar) whether 9 or 11 btc.
Same as you want to change it back... you payed 100 dollar to get 10btc and it changed so your 9 btc will still give you 100 dollar
Sound a bit strange but this is how it works
My items are listed like that and this is the only way of doing honest business and people always pay what it is worth.
10 dollar will stay 10 dollar no matter the btc rate
saying that...the only one who can get ''fucked'' is the vendor.
Suppose you pay me 100 btc, I have to transfer that to my bank and now it is say 1100 dollar and if the bad thing happens that I wait to long it can drop to 10 and I will just get 1000 so I loose 100 dollar ...its all in the game but for buyers its much safer.
-
no scam although it would look like it.
its simple, all is pegged to the dollar
Suppose my listing is 1 btc for an item
My listing is pegged to the dollar so now you pay (as example) 10 dollar
In time is goes up or down
That means that you need to pay me the 1 btc to do so you need to change it.
When it go down the listing will be say 0.90 btc and for your dollar you will get 0,90 btc
Going up, price is in the listing 1.10 btc. your dollar will get you the 1.10 btc.
Of course this only works when the vendor has his prices PEGGED to the dollar
Now, today you payed 10 btc and refund could be 11 or 9.0...does not matter. When you order now with that or other vendor you will pay the same (say 100 dollar) whether 9 or 11 btc.
Same as you want to change it back... you payed 100 dollar to get 10btc and it changed so your 9 btc will still give you 100 dollar
Sound a bit strange but this is how it works
My items are listed like that and this is the only way of doing honest business and people always pay what it is worth.
10 dollar will stay 10 dollar no matter the btc rate
Pegging to the Dollar and hedging are two different stories. If your listing is pegged to the dollar, the price for your item in BTC will be automatically adjusted so that the price in Dollar remains constant. This has nothing to do with hedging. Pegging only has an effect on the price until an item is bought.
After that, if an item is hedged, it is protected against BTC fluctuations until the transaction is either finalised or cancelled.
So pegging keeps the price (in $) constant before the sale, hedging does the same after the sale.
-
Correct me if I'm wrong but...
The value of btcs has been rising pretty continuously and the hedging specifically has a detrimental effect to buyers. So if I purchase something, hypothetically, for $100 (10 btc), these btcs are transferred into SR's "bank" where they sit in escrow.
Fast forward one month, and the vendor offers a full refund. Unfortunately for the buyer, the value of a btc has risen 10%. So now when the buyer is refunded, he only receives 9btc.
While I still have the same amount of "cash" in my pocket, where did my extra btc go?
If I put in 10 btc's, and they are not converted into cash at any point, then I should be returned all 10 of my btcs.
Please, if I'm wrong (or confused), correct me.
That 1 BTC didn't "go" anywhere. It went to the free market.
The escrowed BTC was sold for USD at the time of sale. The USD was sold for BTC at the time of escrow release. There is no extra bitcoin. You're getting your USD worth.