Silk Road forums
Discussion => Newbie discussion => Topic started by: tracer289 on August 27, 2013, 07:14 pm
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http://dkn255hz262ypmii.onion/index.php?topic=36795.msg420634#msg420634
"bad move squid. if you wanted to understand how the hedging system works so you could tell others, you should've come to me, the person who designed it. As it is, you are making up terms like virtual conversion and making it more complicated than it is. There is an explanation in the buyer's guide for this exact thing. If anything is unclear, that is what should be discussed." Dread Pirate Roberts
So I order
purchase transaction #9c07a0d9e6 ฿-5.80 ฿2.92 August 26, 2013, 11:04 pm UTC
12 hours later the seller cancels the order
refund transaction #9c07a0d9e6 ฿5.25 ฿5.38 August 27, 2013, 11:23 am UTC
So to allow my btc to sit in escrow for 12 hours, then have the seller cancel the transaction, I paid .55btc?!?!?!
Here's my questions which I'm asking to clarify what I read in the and which weren't addressed in the buyers guide,
1) To whom did the .55btc go? The vendor or SR?
2) Why is a cancelled order treated as if its a refund.
3) Why is the buyer charged the fee and not the seller? If the vendor is the one who implements and is protected by hedging, shouldn't the vendor be paying any associated fees? Especially if they decide to cancel the transaction?
4) Why am I being charged for his hedging, on his cancelled order?? Shouldn't he be paying for this?!?!
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Your hedging loss went to SR.
What happens if vendors does not hedge is this.
You put in an order when BTC is $100=1 for .44 BTC, so in essense your .44 BTC is worth $44. If the vendor Hedges then no matter when you release funds or if they cancel you or the vendor would get back $44.00.
Now if they are not hedged and when you buy the BTC is $100=1 and you bought for .44 BTC, then if you release funds or they cancel and now the BTC is only worth BTC $50=1 your .44BTC is only worth $22. And same thing with if you went through and finalized.
Now you ask why wouldn't a vendor hedge? Well in the instance that they think BTC's are going up.
If they hedge and when you first bought 1BTC=$100 and you bought .44, then you finalize and 1BTC=$200 then that .44 BTC would give the vendor $88 if they didn't hedge but if they hedged they would only get $44.
Make sense?
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TSCrew, thanks for the response.
You stated
"If they hedge and when you first bought 1BTC=$100 and you bought .44, then you finalize and 1BTC=$200 then that .44 BTC would give the vendor $88 if they didn't hedge but if they hedged they would only get $44."
So my hypothetical question is;
I place an order for a hedged product for .44btc. The .44btc goes into escrow. While I wait for arrival to finalize, BTC does fluctuate and as in your example above, BTC goes from $100 per to $200 per. The seller gets .22btc which is $44 , So does SR refund to me .22btc? Or does it keep it for itself?
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Your hedging loss went to SR.
What happens if vendors does not hedge is this.
You put in an order when BTC is $100=1 for .44 BTC, so in essense your .44 BTC is worth $44. If the vendor Hedges then no matter when you release funds or if they cancel you or the vendor would get back $44.00.
Now if they are not hedged and when you buy the BTC is $100=1 and you bought for .44 BTC, then if you release funds or they cancel and now the BTC is only worth BTC $50=1 your .44BTC is only worth $22. And same thing with if you went through and finalized.
Now you ask why wouldn't a vendor hedge? Well in the instance that they think BTC's are going up.
If they hedge and when you first bought 1BTC=$100 and you bought .44, then you finalize and 1BTC=$200 then that .44 BTC would give the vendor $88 if they didn't hedge but if they hedged they would only get $44.
Make sense?
that cleared everything. thanks.