Silk Road forums

Discussion => Silk Road discussion => Topic started by: nexus68 on January 20, 2012, 10:07 am

Title: How does SR calculate the exchange rate between dollars and BTC?
Post by: nexus68 on January 20, 2012, 10:07 am
For the past few hours the going rate for a bitcoin on MtGox has floated around $6.50 yet the exchange rate on SR seems to be lower.  For example an Item that cost $112.86 shows up in my cart as exactly 18 BTC.  According my math that means SR is using an exchange rate of $6.27 a bitcoin, much less then the current spot value at the time of this posting (again around $6.50).

I understand swings in bitcoin exchange rates have to be accounted for but $0.27 seems like a steep difference. Anyone know what the deal is? I've been paranoid about this since SR admin took the BTC exchange rate off the bottom of the website. Also at the time SR said it did not matter that this was removed because the exchange rate is the latest MtGox price and told us just to look it up there.
Title: Re: How does SR calculate the exchange rate between dollars and BTC?
Post by: oxiD on January 20, 2012, 10:30 am
Yes I would like also that the value at the bottom of the page back.. So that our clients feel secure

oxiD
Title: Re: How does SR calculate the exchange rate between dollars and BTC?
Post by: nexus68 on January 20, 2012, 11:01 am
After a bit more observation, the exchange rate seems to be slowly creeping up. The spot price remains the same but the item in my cart is now 0.03 btc less with a new SR exchange rate of 6.28. 
Title: Re: How does SR calculate the exchange rate between dollars and BTC?
Post by: nexus68 on January 20, 2012, 10:27 pm
The exchange rate on SR is now $6.40/btc and it took all day to get to this level after a stable btc rate of around $6.50 on MTGox. 

Now looking at the numbers it looks like SR may base there exchange rate on MtGox's BTC weighted average, which at this moment is $6.40621.  This weighted average is almost the same as SR's exchange rate so this may be the figure they use, but I won't know for sure without a bit more observation or confirmation from SR.

With potentially $10,000s of BTC running through The Silk Road every day it really makes me wonder why this isn't a more transparent issue (although maybe I'm just paranoid).  Do people really not care about this issue? Not to accuse anyone of wrong doing, but SR could potentially be skimming lots of money off the top...Which is why I ask for more transparency in this otherwise dark and unknown underground world.
Title: Re: How does SR calculate the exchange rate between dollars and BTC?
Post by: LankWithDank on January 20, 2012, 10:31 pm
Yes, the BTC calculator thing needs to come back.

More closure.
Title: Re: How does SR calculate the exchange rate between dollars and BTC?
Post by: CaptainSensible on January 20, 2012, 11:17 pm
The Bitcoin to dollar exchange rate has always lagged behind the current price on MtGox.  It may be that SR uses the Bitcoin average price, but that doesn't seem right.

I've learned that when the Bitcoin price starts to spike it's best to wait a few hours for SR to catch up with it's Bitcoin exchange rate.
Title: Re: How does SR calculate the exchange rate between dollars and BTC?
Post by: uniwiz on January 20, 2012, 11:45 pm
I agree, wait for the rate to calm down.
I would like to know cause if you catch it right you win, if not you loose.

What I really hate is buying BTC to find it dropped $2.00, or half overnight.
BTC suck, period. So SR Tax %6-%10, BTC transfer anywhere from %0 to %50, so far.
If you don't time it right, it costs way too much, and it's basically hidden from you, until you figure out you been screwed.
Title: Re: How does SR calculate the exchange rate between dollars and BTC?
Post by: thesatelliteoflove on January 20, 2012, 11:48 pm
The btc/usd conversion on the bottom of the page was taken down due to security reasons, I believe.
Title: Re: How does SR calculate the exchange rate between dollars and BTC?
Post by: nexus68 on January 21, 2012, 12:04 am
The btc/usd conversion on the bottom of the page was taken down due to security reasons, I believe.

I know it was taken down because SR admin said it was a security risk.  My point is I think SR should confirm/disclose the methods they use to calculate the conversion rate as a measure of good faith, transparency, and continued trust among the community.

I hope someone from SR can confirm this, but it looks like my hunch that the conversion rate is based on the MTGox weighted average might be correct. The item I mentioned in my OP now costs 17.55btc, bringing the SR effective exchange rate to $6.43/btc, which happens to be almost the same number as the current weighted average of $6.43549. I can't confirm this myself because I have only been making obervations concerning this for less then a day.
Title: Re: How does SR calculate the exchange rate between dollars and BTC?
Post by: doublemint on January 21, 2012, 02:34 am
For the past few hours the going rate for a bitcoin on MtGox has floated around $6.50 yet the exchange rate on SR seems to be lower.  For example an Item that cost $112.86 shows up in my cart as exactly 18 BTC.  According my math that means SR is using an exchange rate of $6.27 a bitcoin, much less then the current spot value at the time of this posting (again around $6.50).

I understand swings in bitcoin exchange rates have to be accounted for but $0.27 seems like a steep difference. Anyone know what the deal is? I've been paranoid about this since SR admin took the BTC exchange rate off the bottom of the website. Also at the time SR said it did not matter that this was removed because the exchange rate is the latest MtGox price and told us just to look it up there.

It updates periodically, slightly lagged behind MTgox.
Title: Re: How does SR calculate the exchange rate between dollars and BTC?
Post by: OldGuard on January 21, 2012, 01:03 pm
Using the weighted 24 hour average is the only smart way to do it as btc is to volatile to use the current price as 20-40 cent swing in minutes is common. If they used the current price you could see an item and price put it in your cart and by the time you start to check out a 20 cent swing could cost you an extra 2-3 bits from starting checkout until completion. Just look at the big drop from $6.40 down to $6.15 from last night   https://classic.mtgox.com/ 

People would be going crazy if the cost of items constantly swung up and down as wildly as the bit price does.
Title: Re: How does SR calculate the exchange rate between dollars and BTC?
Post by: diamadov1 on January 23, 2012, 02:02 am
The conversion rate is the weighted average on MTGOX.
Title: Re: How does SR calculate the exchange rate between dollars and BTC?
Post by: czxtvr on January 24, 2012, 04:47 am
I just would like to see the rate without having to go anywhere else.