Why pin to fiat doesn't matter for miner boxen: PIN TO PROFIT TIME
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There are items on the market for several thousand coins. Just days ago FTC/BTC was 0.00016, or $0.09. Now it’s $0.50. If the seller had sold earlier they would have made 5x their worth originally. If people had bought earlier, they would be feeling ripped off and might not want to use the market.
We’re in a volatile market due to both the One Troo Coin cultists and pumps.
If you are buying or selling miners, you don’t need to hesitate.
For buyers: Don’t hesitate to pay a higher price. Sure you could build several miners yourself at the higher price, but that’s a temporary issue. Once it pays itself off you would make more coins.
For sellers: Don’t hesitate to sell at a lower price. Sure you could build several miners at the higher price, but that’s a temporary issue. People won’t feel ripped off and might buy more miners.These points might seem to contradict each other, but the real issue is that hesitation hurts both sides. If I made tens of thousands of FTCs selling my machine, I would sell half those FTCs and build more miners to deal with future difficulty jumps as people see more value in FTC. Then I would also sell some of those miners, which means you would be able to buy miners at the new price.
The way to pin miners is how long 'til you profit. So what if you pay a higher price? The difficulty won’t jump that fast while people are in love with litecoin. You’ll be able to make a higher profit than before:
BEFORE:
47500 = $2000 (ish)
Difficulty = Easy
Break even = Soon
Profit after even = Some percentage of $2000 a monthAFTER:
47500 = $11000 (ish)
Difficulty = A lil bit higher
Break even = A lil bit longer
Profit after even = A lil bit less percentage of $11000 a monthO.O
I would be happy to make some percentage of $11000 a month rather than $2000 a month. Sure I could have built 5x as many machines. But I would actually have to LOSE A WEEK waiting for parts and another 3 days tweaking to perfection. Less hassle.
If a miner costs more because of FTC price you will make more as FTC difficulty is low due to overshadowing by litecoin.
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[quote name=“zerodrama” post=“35985” timestamp=“1385232630”]Now it’s $0.50.
[/quote]False.
It’s $0.25
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[quote name=“JohnsonX” post=“36042” timestamp=“1385242842”]
[quote author=zerodrama link=topic=4655.msg35985#msg35985 date=1385232630]Now it’s $0.50.
[/quote]False.
It’s $0.25
[/quote]BTC/USD and FTC/USD have both been moving. So from 0.5 to 0.25 and back can happen in a single day
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+1 ZD.
I’m not a fan of the pin to fiat feature. I see why people want it, but I feel pretty strongly that it is the opposite of the direction the currency needs to go in: It can’t be considered “money” until it can be used as a long term store of value, and that means a stabilized price. Exchanges damage the valuation of the coin because they are susceptible to market manipulation, causing unwarranted swings in what should be otherwise a trivial thing to discover a price for. The reason this is true is because people don’t have benchmarks by which they can compare… EXCEPT for traditional currency. So while it’s easy to understand that a gallon of milk costs $4.50 down at the supermarket, it’s not obvious that it costs 35 Feathercoins, because people aren’t selling milk for 35 Feathercoins… YET.
And that’s where you come in. By establishing a marketplace where you pin the price of the currency to real world items, you’re setting your own exchange rate. By creating competition for prices, you’re enabling actual price discovery as opposed to this shell game that the exchange pump and dumpers are running.
By adding a ‘pin to fiat’ conversion, you’re effectively eliminating that discovery, and enabling the marketplace to participate in the manipulation. So while I understand it’s a requested feature, I strongly urge you to consider not using it. By turning it on, you’re making the problem of market manipulation more widespread.
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I take that point but I think if we can come up with some kind of price smoothing feature that will try to stop the peaks and troughs and stabilise the price then this could help counter the destabilisation the markets cause.
Prices are always going to be in flux just as fiat is in flux but if we can smooth the trends this should help.I think that your right in that until people start thinking in terms of coins and associate a value with them then the coins wont be able to be used properly. But I think because its so early days maybe we are asking too much. Any interaction with users and FTC is a win in my book. Maybe once the market is established people will naturally start to use FTC price rather than pin to fiat. I think this could be some way off yet.
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ZD, on the point of building your own miners. I guess it depends on location. For me, if I didn’t have FTC and had to buy FTC to then buy the miner - well, I could just drive to the nearest NCIX and pick the parts up, assemble the thing and have it running within hours.
I think the pin to fiat is an optional feature that for certain things might make sense. It’s an option a seller should have. Especially if you’ve got overhead costs and need to convert to fiat [even just cost, with profit staying in FTC] within a short period of time from selling the item to cover running them. As the price becomes less volatile, it will be easier to sell in FTC without pinning.
Just my two cents.
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[quote name=“mnstrcck” post=“36068” timestamp=“1385252684”]
As the price becomes less volatile, it will be easier to sell in FTC without pinning.
[/quote]The price will become less volatile WHEN people sell in FTC without pinning. That’s the point I’m trying to make, and why using it should be considered harmful.
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[quote name=“mnstrcck” post=“36068” timestamp=“1385252684”]
Just my two cents.
[/quote]Your two what now?
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Kevlar:
Hmm, I’m of the opinion that the current volume of transactions on the market will in no way impact the volatility that’s actually created with the trading on BTC-e. I see your point, but I think that it’ll take a lot of volume on the market for an effect to be seen currency wise. I don’t think traders really care about the market, for the most part, they only care about short-term exchange profits.
I imagine we’re looking at something like 100-250 BTC worth of FTC transacted a day. And we’re a looooong way to that on here.
Until then, it’s a feature that’s been requested by a few sellers and it’s not a bad idea from a business point of view.
Chris:
Sorry, that’s my 1/14th of an FTC.
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[quote name=“mnstrcck” post=“36071” timestamp=“1385253608”]
Hmm, I’m of the opinion that the current volume of transactions on the market will in no way impact the volatility that’s actually created with the trading on BTC-e. I see your point, but I think that it’ll take a lot of volume on the market for an effect to be seen currency wise. I don’t think traders really care about the market, for the most part, they only care about short-term exchange profits.
[/quote]Ok, but for how long do you accept that as the status quo? The point I’m making is that unless many people all put their faith in the currency, this problem can’t be overcome. It’s only when, as you correctly pointed out, the volume is significant, that it matters, and it’s only when people get serious about selling their stuff for FTC that the volume becomes significant, and it’s only when the price stabilizes that people become serious about selling their stuff for FTC, and it’s only when people stop pinning their sales to fiat that the price will stabilize.
It’s an investment. By selling items consistently under exchange prices, and then holding onto the FTC, you decrease volatility, which increases utility, which drives the price up, which makes your initial loss a gain.
