Market Question - How do sites like Silk Road handle BTC purchases
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How do sites such as Silk Road handle BTC volatility? I’m thinking about how we handle our Market:
Ex: What if it’s a 3 day auction and Feathercoin shoots up or down 1.5 days into the auction?
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[quote name=“justabitoftime” post=“12758” timestamp=“1370925628”]
How do sites such as Silk Road handle BTC volatility? I’m thinking about how we handle our Market:Ex: What if it’s a 3 day auction and Feathercoin shoots up or down 1.5 days into the auction?
[/quote]Add a conversion calc to the auction entry page FTC/BTC (or USD?)
Lock in the FTC/BTC (or USD) ratio at time of auction start.
Have auction price fluctuate accordingly.Sounds like a horrible idea. lel
I tried to cover any variance I was willing to accept (and figured a buyer would) when I set the price.
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They don’t handle it. They just suck it up.
I’ll think of something.
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BTC price doesn’t change much within a day or two, so they can afford it either way.
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[quote name=“zerodrama” post=“12922” timestamp=“1370948063”]
They don’t handle it. They just suck it up.I’ll think of something.
[/quote]I thought they used some type of hedging, are you sure they just suck it up?
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[quote name=“justabitoftime” post=“12961” timestamp=“1370953408”]
[quote author=zerodrama link=topic=1585.msg12922#msg12922 date=1370948063]
They don’t handle it. They just suck it up.I’ll think of something.
[/quote]I thought they used some type of hedging, are you sure they just suck it up?
[/quote]By all accounts they are expensive, so they must be factoring any price deviations in to the price and then some…
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I am not entirely sure but I think I heard somewhere that you can pin your sell price to the dollar conversion rate of BTC to USD. As in when the funds get placed into escrow under dread pirate roberts, if there is a dispute half of the funds get sent back to each party, and if the price changes rapidly while the funds are in escrow and you have pegged it to the dollar, the dread pirate realizes any losses or gains.
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Ok so this begs the question in my mind is the intent to peg FTC to a currency? Is that currency then USD as opposed to BTC such as on BTC-e? If that’s the case should we be working towards an FTC <> USD exchange rather than FTC <> BTC?
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Could there also be an option to list an item as either USD equivalent or flat rate? That way the seller can take the risk of conversion rate between the time its listed and the time it finishes, and likewise bidders knowingly take the same risk when they bid.
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Sellers have an option to list it in BTC or USD. If it’s listed in USD, the price you see in BTC is converted given the data from the exchanges hi/lo average from the prior day.
Sellers have an option to “hedge” their sales. If hedging is turned on, when the funds are deposited, they’re exchanged for USD at current market price. When the order confirms, they’re bought at current market price. That way the seller always makes the specified amount of USD in BTC. This is also true in the case of a canceled order, so if you pay 1 BTC at 100 dollars, then the price goes up 10 dollars and you get a refund, you’ll get 1.1 BTC back… if it’s hedged.
Both of these options are at the sellers discretion, and when you buy something it will tell you if the price is hedged or not.
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That makes sense. I could live with that.
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The seller takes on the risk of the volatility. My advice place your price above your target so if price drops you at least had some cushion.
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[quote name=“Smoothie” post=“13132” timestamp=“1370978430”]
The seller takes on the risk of the volatility. My advice place your price above your target so if price drops you at least had some cushion.
[/quote]Exactly.
