The case for bitGOLD and bitSILVER
What if #bitshares became the go-to platform for precious metals ETFs on the blockchain?
Just in case things had changed in the mean time, I opened the #bitshares client to confirm that the situation in these markets is still bleak.
(It is).
Some of you may not have noticed, but the people at https://digix.io/ have slowly been gaining traction in the ethereum space. If you don't know them, essentially they have a DGX token, which is backed by real gold, secured in a vault they control. There's some fancy proof of audit (by a 3rd party) scheme going on as well, not worth going into.
There's also the DGD token, which pays quarterly dividends (!) for hodlers, the funds come from DGX transfer fees.
They're aiming to use "gold as money" online, and being a frequent lurker in their slack, I can tell you that their concerns about fraud are keeping the company on edge -- just you wait until DGX begins being used for illegal activity .. in their case, there IS a central company the "authorities" can go after.
In fact, Digix recently announced that they'll be requiring KYC/AML documents (yet another company that can pull identity theft on you, fantastic!) for simply purchasing DGX at their exchange (https://app.digix.io) !
Now, of course, one can simply pull the DGX from another source (DGX will likely be available at shapeshift, poloniex, in the near (<3mo? guesstimation) future.
But it speaks volumes about the bind they've got themselves into.
Now, when people ask me about gold and silver, I give them the standard answer that unless you have the real physical deal, then you don't really own it. And to a large extent, I still stand by that.
But these tokenised assets in the blockchain do, I believe, bring something new to the game .. it is considerably different to own a gold etf, backed by empty promises, and which may or may not be redeemed for fiat at a time of your choosing, and owning a "gold etf-token" in the blockchain .. which, provided there is enough liquidity, traders can always get rid of, or acquire, at will.
I believe we're missing on a giant piece of the cake here, by not having these markets liquid. Sure, fiat currency mpa are also fine for this, but many people (yours truly included) like having some considerable hedging for them with metals.
We can position ourselves - favorably, even - against Digix. Other than dividends, #bitshares does everything their platform does, and at least as far as I can see, better. Our DGD is BTS, our DGX is bitGold.
If only BTS paid dividends :) But I digress.. and I don't think that by itself, that's enough reason to say Digix is a superior solution.
Of course there is no real gold behind bitGold, so there is that, some people will be turned off by that, others (who just want price exposition) couldn't care less. There's plenty of space for healthy competition, and while there is significant overlap in what DGX and bitGold can offer (mainly using gold for trading / saving online), each solution has its own unique advantages and disadvantages as well.
I do believe we are not making enough (any) of an effort to let this be known.
While Digix is gaining slow but very steady traction in the ethereum camp, how many people outside of #bitshares know of bitGold and bitSilver?
(also, can we have bitPalladium? :])
Hell, later on we can even get together and scheme for a shiny plastic gold card, and market it as "the gold-backed debit card!!oneone" .. people will go crazy. Crazy, I tell you.
I think OUR platform is much better for what they're trying to achieve (it has nothing to do with having been brainwashed by the cult of #bitshares! I promise!).
I think that if we mount a coordinated marketing campaign, make some pretty websites, and maybe get a few people together to brainstorm getting that plastic card going, there might be something here.
There's also liquidity, of course, but since we already have the bot infrastructure, it's "only" a matter of putting some pooled funds into them (could we obtain them from a worker proposal?)
Let me know what you think ..
[repost of https://bitsharestalk.org/index.php/topic,22744.0/topicseen.html , by fuzzys' request]
i trade bitSILVER and bitGOLD markets every day as a market maker to provide the much needed liquidity. there seem to be a few others seriously trading those markets, as well, and i imagine we'll keep adding more traders over time when they see the relatively high spreads. Spreads are the incentive for liquidity providers. The bots are great and i applaud everyone deploying them on the DEX, we just need more of them. My take is that we don't need any further fancy incentives, just time for buzz to grow and traders to venture into our markets.
Despite wide spreads, both bitGOLD and bitSILVER provide excellent price exposure to their underlying assets. If you buy at a 10% premium to spot, you'll likely be able to sell again at some point for roughly the same premium and have been able to capture the price movement of the underlying.
Exactly! Lack of liquidity is an opportunity for market makers. If one places a reasonable order it tends to get filled. Just place an order and wait. Because Bitshares doesn't have a maker/taker fee schedule there is no reason for bots to place orders, they just snap up opportunities. Anyone can buy and sell gold for tiny fees and the market is only going to get more liquid.
yup, interesting point re: bots simply lurking in the background and snapping up deals. i also like liquidity provider bots, since they provide some visible depth to our markets.
the last point you made is great and i think the biggest value proposition we offer: "Anyone can buy and sell gold" ...we have no barriers, no bigotry, no political control psychosis, just markets open to the world.
I think Bitshares is a great way to own gold and silver.
I wish we had a more appealing website though for people looking to buy BitAssets - https://digix.io/ - their site looks pretty appealing. But we can do a better job for other commodities or fiat. Its almost like we need a sub site for the technology and the main site to sell the merits of BitAssets.
This is an opportunity on a silver platter (:D) for a budding entrepreneur out there -- create a bitshares wallet that focuses on bitGOLD and bitSILVER, and looks more like a bullion portfolio manager / bullion market than a crypto wallet.
liquidity is first and most serious problem why bitshares is not good solution (at the moment!) for trading gold. All gold volume is made on futures markets and bitGold is not an asset someone would like to have because one day he can wake up and realize that 4 investors that were market makers decided to stop trading bitgold.
Digix platform offers much better but also much much serious solution. As i saw, they are in direct communication with Singapore regulators and even decided to participate in one program where they can close them for 6 months just to check if they are doing honest and serious business without having the process stopped. This is very awesome.
Third but not mentioned here possibility for gold trading will be on Augurs decentralized platform. When someone opens futures market there and gets popularity (like nasdaq for eg.), all other etf-s, certificates and other market pledged asset trading models will get a competitor they will hardly be able to overtake
To conclude - bitshares should focus more on other things they do better and less with things other do better then bitshares community
Can you expand on the last sentence? What do they do better than most others?
+1 the above from me. I got in to bitshares for the decentralised trading platform amongst other reasons but not bitgold. What's everyone else in to bitshares for? Apart from profit that is...