Silk Road forums

Discussion => Newbie discussion => Topic started by: sunrise89 on April 23, 2013, 02:11 pm

Title: Do vendors prices change with Bitcoin exchange rate?
Post by: sunrise89 on April 23, 2013, 02:11 pm
I'm wondering whether to wait a while for the price of BTC to go down a bit before I purchase, or will this not make any difference?

Do vendors prices change with Bitcoin exchange rate automatically?

Thanks ???
Title: Re: Do vendors prices change with Bitcoin exchange rate?
Post by: Blue Dragon on April 23, 2013, 02:36 pm
A vendors price does change with the flucuation of the market. Sometimes though it takes SR a bit to catch up with the flucuation. Just keep an eye on it.
Title: Re: Do vendors prices change with Bitcoin exchange rate?
Post by: 88fxstc on April 23, 2013, 03:56 pm
I don't think their prices change but I'm pretty sure that your buying power increases with the rise of BT value.
Title: Re: Do vendors prices change with Bitcoin exchange rate?
Post by: sunrise89 on April 23, 2013, 08:34 pm
Ok. So it pretty much doesn't matter how much the Bitcoin fluctuates? The vendor's products will reflect the current Bitcoin value, right?

I was hoping I was on to a winner as some coins I purchased last week are now almost twice the 'value'.

Title: Re: Do vendors prices change with Bitcoin exchange rate?
Post by: captainjojo on April 24, 2013, 12:10 am
The vendors price is in fact in US$.  The system converts that amount to BTC based on the current weighted average value from MTGOX.

What this means is that as the BTC price climbs, the amount of bitcoins you need to purchase the vendors listing will in fact drop as the value of your BTC increases.  But the amount you pay is always equal to the price in US$ that the vendor listed the product at.

If the price of BTC drops then the amount of bitcoins you will need to purchase the listing goes up, but the price of the item is still the same in US$.

I don't know how often SR updates the BTC rate on the site, but from past experience it seems to be about every 30-60 minutes.

Several times I have placed an order for something only to find that I was short a small amount of BTC (between .05 and 1 BTC).  I just left the order sitting until the price of BTC went high enough that the BTC price of the order fell below what I had in my SR account, then immediately submitted the order, before the BTC could go back down.  It takes patience but it is certainly easier than going out and buying more BTC and transferring them to SR.

Title: Re: Do vendors prices change with Bitcoin exchange rate?
Post by: Ron Swanson on April 24, 2013, 12:17 am
yes and no. it depends if the vendor uses the hedging service. you'll see if it is hedged or unhedged when you add an item to your cart. if it is then it means the price will be tied to the weighted average $ amount but if not then it's just been set by btc amount and fluctuations could significantly affect the $$ amount you will pay.
Title: Re: Do vendors prices change with Bitcoin exchange rate?
Post by: captainjojo on April 24, 2013, 02:17 am
Hedging is only active after you have placed the order.  Up until the point at which you actually place the order, the BTC cost of the item is rising and falling with the fluctuations in the BTC rate.

Once you submit your order, if it is hedged, you and the seller are insured against any rise or fall in the BTC.  If it drops the vendor will still get BTC equal to the value of the original order in US$.  If the order is cancelled you will receive back BTC equal to the US$ of the original order. In each instance there is a 4% fee for the service.

If the order isn't hedged and the price of BTC drops, when the order is finalized the vendor will receive BTC in the exact amount you placed in escrow, meaning they will lose money as the value of those BTC has dropped.  If however the BTC price rose, they will in fact make more money than they were originally expecting.

If you cancel and the order isn't hedged and the price dropped, you will take the loss as the BTC you get back will no longer be worth what they were when you placed the order, if the price rose you will actually be making money as the BTC will be worth more.

Title: Re: Do vendors prices change with Bitcoin exchange rate?
Post by: Ron Swanson on April 24, 2013, 02:38 am
i'm pretty sure vendors decide when they create the listing whether they tie their price to btc or $, from then the btc price could change with the weighted average or not... i just mean the price can change if you have an item in your cart for a while not after you've placed the order. jeez i've been using this site almost 2 years and you're making me question the whole damn system haha
Title: Re: Do vendors prices change with Bitcoin exchange rate?
Post by: Safadexia on April 24, 2013, 03:19 am
I had the same question and this thread was tremendously helpful. Thank you.
Title: Re: Do vendors prices change with Bitcoin exchange rate?
Post by: sante on April 24, 2013, 04:16 am
agfdme