9 Day bitUSD Loan Result: 19,821 BitShares and 199 ZAPPL for Free
I wanted to give another example of shorting the USD via BitShares and bitUSD loans. Please see my previous post for more details on how this works (along with the links within that post).
Since the price of BitShares has been going up quite a bit lately, I went a little bigger this time with a $3,000 bitUSD loan 9 days ago and bought bitShares with it.
6 days ago when I heard about the opportunity to support @zappl by purchasing ZAPPL on OpenLedger, I went ahead and adjusted my debt by another $200 which got me 199 ZAPPL:
Today, I saw my collateral ratio sitting at a nice 7.51 (I started at 5.00) and decided it might be a good time to close things out:
So I placed an order to buy up 3,200 bitUSD at $.065 per BitShare:
Once that hit, I had my bitUSD to pay back my loan.
I simply clicked Close position in OpenLedger:
Entered my password and closed things out:
Which eliminated my debt:
So in just nine days, I got to support @zappl to the tune of $200 for free while also netting myself 19,821 BitShares which as of right now is worth around $1,225. Not bad considering I didn't do any real work here, and it didn't involve any additional investment of capital. I was simply using my own BitShare holdings as collateral to borrow bitUSD into existence via a smart contract.
Anyone can do this. Imagine if we all started shorting the value of the dollar against cryptocurrency using bitUSD and BitShares/OpenLedger?
Smart contracts are going to change the world. If you haven't yet, sign up for the EOS mailing list at http://eos.io/ to keep track of Dan Larimer's next project which is all about smart contracts via messaging.
Related Posts:
- A Simple Example of Shorting the U.S. Dollar With BitShares
- Playing in the Margins: bitUSD and BitShares on Open Ledger
- My Altcoin Investments: A Steemit Story
I am always hesitant to even do basic trading. I can't seem to be convinced that is any different than regular gambling.
That's not a bad comparison, for sure. Many games of chance which make up a large portion of gambling are structured to cause the house to win and the gambler to lose, which is irrational, unless approached as paying for entertainment (i.e. spending $100 to win $50 because the feeling of winning $50 is worth more to the gambler than $50 spent doing some other form of entertainment). That said, I think games like Texas Hold'em are quite interesting because they are based more on psychology and understanding human behavior than on the cards involved. To me, that gets closer to what goes on with trading. It's a skill which can be learned. I know people that do very well trading on a daily basis. They're comfort level with risk is much higher than mine, and yet I can't deny the increase in value they consistently get. For me, it's an interesting study of human behavior and taking advantage of irrational decisions using rational ones. Reminds me of this Buffett quote:
Cryptocurrency trading, to me, is all about the patient benefitting from the collapse of fiat currency and the innovation of new, beneficial technologies for humanity (even if they are more than a few years off from mass adoption).
Thing is, in trading there are whales that can practically sketch the trend lines. How one knows what ir real and what is not. P&D initiatives are based on this. It is one thing to understand basic psychology of the markets and another to have telepathic abilities to know which players are in the game and how they are moving the threads.
This is why I am an investor and not a trader.
I'm also mostly an investor, but I watched bitcoin go from $1200 down to $250 and I never sold. I could have sold and bought back later to have much more now. There are reasonable, rational reasons to make changes like that and since then I've been trying to learn them.
I agree P&D initiatives create a lot of "fake" signals. but that's much like bluffing in Texas Hold'em. Once you know it happens, it becomes another psychological input to the system.
Either way, I don't think you can lose out too much with buy and hold.
I admit I had weak hands once it hit 1000. Sold half my stash then. Didn't buy much after. I rather hold on my LTC stash which pays quite well today.
I don't know man. Way too much going on in forums. One can't simply trust what people say. If you are good at this kind of thing, then I tip you my hat.
I never lost with Buy & Hold, in anything I have invested so far. (I don't it much though)
This is cool! I've dabbled in OpenLedger every now and then to trade BTS and DGD, but I don't know much about bitUSD and didn't realize this aspect of the platform existed. I'm going to have to read up on this now, looks like some good opportunities to be found here.
One thing I love about the crypto world: there's always something new and interesting to learn!
Always SO MUCH to learn for sure. The more I learn, the more I realize how little I know.
Hey… that's wild!
I'm really uncomfortable with the whole thing tho!
@shayne
What aspects of it concern you?
Well, like, taking a loan to pay for a thing to pay for a loan.
The key here is you're taking a loan from yourself and you already own (more than enough) value to pay back the loan as part of the smart contract. I go with a 5 to 1 collateral ratio meaning I have way more collateral than loan amount. The price of bitshares would have to tank hard before my loan was ever called which would initiate a forced sell. I wouldn't lose anything, it would just cause a sell on a market downturn instead of when the market is up.
Curious, do you have the same concerns using USD?
That's just paper created by central bankers out of nothing. No backing, no collateral. That's a real ponzi, prompted up by the U.S. Military Industrial complex.
This, to me, is far more honest. It just exposes the dwindling value of fiat currency in a way that those paying attention and getting into crypto can profit from it.
I have far more concern over the fiat monetary systems and financial markets than any crypto-based system that I know of. I just try to avoid debt of any kind as a general rule. Nothing against this deal you've got worked out. :P
I agree, paying off traditional debt is hugely important (which is why I paid off my house). What I like about this is it gets people to think about the very nature of money and what gives it value in the first place. This allows every day people to use the same knowledge the central bankers do to capitalize on the increasing wealth of the world that is otherwise being siphoned off via inflation of fiat currency.
I actually just got into playing with this today, I'd been wanting to try it for a while. It was also nice that I could just google "bitshares short USD" and your article was the first result. I'd remembered seeing it a while back.
Unfortunately I'm starting with a much lesser balance, so we're talking $10 instead of $1000 but I'm already hooked!
After doing a bit of research I also decided to start building a holding of OBITS. With the dissatisfaction people have at Poloniex and other exchanges, I can't believe the OpenLedger system isn't already much bigger than it is.
I'm considering powering down one cycle worth of Steem and sending it over to OpenLedger to play with, but I just have such an emotional attachment to my STEEM! We'll see if I pull the trigger.
Nice! Thanks for letting me know.
You have to start somewhere. I didn't start with $1,000 either. :)
OBITS is interesting. I purchased a little bit as well, but I did so with BTS which has gone way up in value since then so it would have made more sense just to hold BTS and buy OBITS later. Then again... it might be a chicken / egg problem because projects like OBITS are what give BTS value.
I feel the same way. I sold some BTS to get some ZClassic before the fork which will create ZenCash. Was difficult to part with my beloved BTS.
Good job Sir!!
Nice play!
This Is OutStanding! Up voted and Followed!
Thank you!
Your most welcome. I love it here in Nashville.
Been a while since I've been downtown to any events but wonderful to meet a fellow Nashvillian...😊
Is interest being charged on loans if yes at what rate?
thanks
No, not interest. It's just creating bitUSD out of nothing based on your collateral of BitShares.