Silk Road forums
Discussion => Newbie discussion => Topic started by: HenryC0833 on July 10, 2013, 07:32 pm
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Hmm...
Started with .99 BTC (when BTC was in high 90's USD)
Placed one hedged order
Vendor was no-show no-call so I cancelled order
Now I only have .88 BTC in account. (BTC is in high 80's USD)
?
Must be missing some non-refundable fees in there?
Don't get me wrong, not gonna get my panties wadded up over eight bucks, but still curious how this thing works...
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Refunds are given at the current value of bitcoins when you cancel. Not the value when you placed the order, unfortunately.
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Thanks for the reply.
Yeah that's fair enough I guess. One way of dealing with exchange rate exposure. There are others but that's fair enough.
I think probably the best counter strategy for buyers is to get into the habit of buying the same dollar amount of btc on the same day every month. For example, I might say "I'm gonna buy $100 of BTC on the first of every month." When it's high you don't buy as many, when it's low you get more, your cost averages out over time and you're less likely to take a hit on a single transaction.
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Thanks for the reply.
Yeah that's fair enough I guess. One way of dealing with exchange rate exposure. There are others but that's fair enough.
I think probably the best counter strategy for buyers is to get into the habit of buying the same dollar amount of btc on the same day every month. For example, I might say "I'm gonna buy $100 of BTC on the first of every month." When it's high you don't buy as many, when it's low you get more, your cost averages out over time and you're less likely to take a hit on a single transaction.
That strategy will not work because the value of the BTC fluctuates wildly and cannot be predicted (worse than stocks and shares in that respect).
Also, much depends on whether the vendor hedged the funds while in Escrow. There is a lot more about this in the SR Wiki (bottom right hand side next to "community forums" but since this question gets asked a lot I'll quote some of it below:
"Unfortunately, the Bitcoin exchange rate isn't as stable as we would all like it to be, and can fluctuate wildly in a matter of hours, let alone the days or weeks it takes for a package to arrive. Because of this, there is a real danger that the Bitcoins being held in your escrow account will lose value by the time your vendor gets paid or you are refunded. So, we've given the option to vendors to hedge the future payments they are expecting from escrow such that the dollar value of the payment doesn't change as the Bitcoin exchange rate changes.
For example, a seller is hedging the escrow for a 10 btc order you place with them, and the dollar value of your order when you purchase it is $100. Now, let's say your order never arrives and your vendor agrees to a full refund, but those 10 btc are no longer worth $100, they're worth $50! Because your vendor hedged the escrow, you won't get a refund of 10 btc, you'll get 20 btc equaling the original value of $100. Of course, the opposite is also true. If Bitcoins appreciate in value while your order is in escrow, your refund will be fewer Bitcoins, but still equaling the original dollar value.
When checking out, you will see which orders will be hedged and which won't. After the order is placed, your escrow balance will reflect the dollar value of your hedged orders and the Bitcoin value of your unhedged orders. All hedged orders are hedged as soon as the order is placed. So when getting a refund for hedged items, don't be surprised if the number of Bitcoins you get back is not the same as the amount you paid. "
It is well worth reading the whole SR Wiki, you will find stacks of information and it is worth checking their FAQ's before posting a question on here.